SAFEROADS HOLDINGS LIMITED — AGM Information 2006

Oct 1, 2006

$-$ saferoads $-$

ANNUAL GENERAL MEETING - Tuesday October 3, 2006

• $\blacktriangleleft$ Chairman's Address
• $\overline{2}$ Managing Director's Address

CHAIRMAN'S ADDRESS

I am very pleased to present this first Chairman's address for Saferoads Holdings Limited.

The Company listed on the Australian Stock Exchange in December, 2005 and Directors were delighted to note that the Company's initial public offering attracted a wide spread of shareholdings from both private and institutional investors. It is especially pleasing that the Company's shares have been well supported since listing.

Saferoads Holdings Ltd celebrated its first period as a publicly listed company with a strong financial performance in the 2006 financial year. Net profit after tax was $2.88 million which was 31% higher than the 2004-05 result and 10.5 per cent above the prospectus forecast. The Company ended the year with a robust working capital ratio of 2:1 and a strong balance sheet which is virtually debt free.

The Directors declared interim and final dividends for 2005-06 in line with the prospectus forecast and we anticipate that dividends will grow in the future in line with movements in profitability.

The Directors are delighted that the Company has performed better than the prospectus forecasts, and we are confident about the financial prospects for the Company in 2006-07, our first full year as a listed company. Performance so far this year is ahead of budget.

Underlying the Company's solid performance, and its future growth prospects, is the Company's very favourable operating environment. There has been a substantial increase in infrastructure spending by both Federal and State Governments - particularly on roads. Road safety is the Company's core market, and it remains a high priority for governments at all levels. Supplementing this, occupational health and safety requirements are creating additional opportunities for the Company, particularly from the need to provide safe work conditions during road construction.

In the longer term, the Directors anticipate significant growth through both organic growth of existing businesses and through selective acquisitions. Our strategic plan targets revenue and market capitalization of $100 million by the end of fiscal year 2011. Any acquisitions will be carefully chosen to ensure that they are earnings-accretive. Senior management is investing a great deal of energy in finding suitable acquisitions and the Directors are very pleased to advise that our first acquisition, that of the Swift Tech group, was concluded yesterday. Swift Tech is a manufacturer of decorative street light poles and the acquisition introduces us to an exciting market segment within the road safety industry.

Finally, I would like to congratulate our talented and dedicated professional team for their efforts over the past year. Their commitment is a key factor in Saferoad's success.

I will now hand over to our Managing Director, Darren Hotchkin who will review the business and its operations.

StBerkich

Gary Bertuch

Chairman

ADDRESS OF THE MANAGING DIRECTOR

Ladies and gentlemen, it is my pleasure to report to you today on the performance of our Company during the financial year to $30th$ of June 2006, and at the same time, provide an update on our strategic direction.

But first, because we are a recently listed company, let me spend a few minutes on our background, our market and our diverse product range.

BACKGROUND

First, a little history on myself. I am a motor mechanic by trade. I did my apprenticeship with a country farm machinery business, working on tractors and other typical farming equipment.

When I finished my apprenticeship I left the farm machinery business and opened up my own motor vehicle mechanical repairs workshop. This business was very successful, but after several years I sold the business and started a tyre service.

Back in those days, there were very limited alternatives for disposing of used tyres apart from dumping them to land fill. Shortly after opening the tyre business I began to explore ways of reducing this environmental impact.

After a lot of research and experimenting, a local engineer and myself built a machine to separate the tread section of the tyres from the two sidewalls. We then vulcanized two tread sections together, painted the product white, applied two reflectors, and there we had a flexible guide post that would withstand many impacts.

I sold the tyre business, and in 1992, with support from my wife Jenny, my father Harold, and our accountant, Duncan Smith, we started up a company to further develop and to market the flexible guide post.

From there, the Company has grown and diversified into a listed company with over one hundred different products supplied to the road safety market.

OUR MARKET

We are in the road safety business. We offer total road safety solutions. Our business and our products are about protecting motor vehicle drivers, pedestrians, and road workers.

The Company operates primarily in a wholesale environment. Our major customers are State Government authorities such as VicRoads, Road and Traffic Authority

(NSW), and the Queensland Department of Main Roads. We also sell to Shire Councils; to road equipment hire companies; and to road construction companies.

In the year 2005/06 sales to hire companies represented 39% of our business; sales to Road Construction Companies represented 22%; sales to State Government bodies represented 19%; sales to Councils represented 10%; and the balance of sales were to the private sector and other minor customers.

We operate in a market that is financially secure. Almost 30% of our business is directly with state or local governments. Another 22% of our business is with road construction companies who have contracts with state or local governments. That means that more than 50% of our business is generated either directly or indirectly from various arms of government.

OUR PRODUCTS

Many of our products are designed to reduce the severity of a motor vehicle impact by absorbing the energy generated by the impact, and by controlling the vehicle after the accident.

At the core of our product range are three objectives: products that "Direct", products that "Protect", and products that "Inform".

Products that "direct" include guide posts and signs that direct road users. We have 14 years' experience in this market.

Products that "Protect" include barriers and guard rails that protect people and property. We have seven years' experience in this market.

Products that "Inform" include electronic equipment that capture and / or provide near live information to road users. We have four years' experience in this sector.

Some products such as guide posts, the Ironman Barrier and the Pedestrian Barrier, have been developed by the Saferoads. Other products are imported and distributed by the Company. We also provide installation services.

Some of our products are readily recognized on road construction sites – the water filled orange and white "Triton" plastic barrier, and the Ironman Barrier. Another easily recognized product is the Quadguard crash cushion with its yellow nose cone that you see on most freeway exit points.

In the year ended $30th$ of June 2006, products used in workzone sites accounted for 47% of sales. These products include the Triton Water filled barrier and the Ironman barrier.

Supply and installation of Guardrail and Wire Rope safety barriers accounted for $28%$ of sales.

The remaining 25% of sales were spread over guide posts and flexible signage, traffic control products such as the electronic information and arrow boards, traffic calming products such as speed humps, and crash cushions.

FINANCIAL PERFORMANCE

I am pleased to report that in our first year of operation as a listed company we met all prospectus targets.

We delivered sales of $26.7 million against a target of $26.1 million. Sales were up 17% on the previous year.

We delivered earnings before interest and tax, or EBIT, of $4.1 million against a target of $3.8 million. This is an increase of 32% above the previous year. The improved profit margin relative to the increase in sales reflects our aggressive approach to sourcing materials and products both nationally and internationally. This approach will continue in 2006/07.

We delivered earnings per share of 12.5 cents against a target of 11.8 cents.

Historically we have been growing at around 20% per year per annum, and we maintained this growth in the 2005/06 year.

OTHER HIGHLIGHTS

In the November 2005 prospectus we flagged our expectation of signing a new international Distributor and Licence agreement with Quixote Corporation of the USA. Quixote is the world's leading developer and manufacturer of energy absorbing highway crash cushions, electronic sensing and measuring devices, computerized highway advisory radio, mobile and permanent electronic variable message signs and other transportation safety products and services. This agreement was signed in December 2005.

The agreement ensures that Saferoads remains the sole distributor throughout Australia of Quixote's large range of road safety products for a further period of at least five years.

In the November 2005 prospectus we also referred to our expectation of releasing a new Pedestrian Barrier to the road safety market. We are pleased to announce that

this Pedestrian Barrier was released to the market in June 2006.

Market response to this product has been pleasing, and sales are increasing satisfactorily. This barrier is durable, light and readily portable, and is designed to separate pedestrians from hazards.

During the 2005/06 year we entered into two other international agreements.

The first agreement enables Saferoads to enter the portable concrete barrier market. Recent changes to regulations mean that most of the portable concrete barriers currently being supplied are non-compliant with the amended regulations. We have secured an agreement that allows the Company to manufacture and supply a compliant portable concrete barrier. Manufacture of these barriers commenced in September 2006, and supply commences this month.

The second agreement enables Saferoads to supply a wire rope safety barrier that is tested to a higher level than most of the wire rope safety barrier systems that are currently available in Australia. This agreement also gives Saferoads greater control of its own destiny in this segment of the market, in that the Company is not reliant on supply from other Australian companies which are from time to time in direct competition with us in other markets.

The wire rope safety barrier has some advantages over other wire rope systems currently available, which lead to cost savings that we can pass on to the end user. We are hopeful of winning our first tender for supply and installation of the wire rope safety barrier within the very near future.

In the Annual Report I mentioned that Saferoads successfully achieved accreditation for Occupational Health and Safety against ISO 18000. The safety of our employees is of utmost importance to the Company. We have what we consider is a good safety record; our work cover insurance premium for 2005-06 was below the industry average. Safety will remain high on our priorities for the 2006-07 year.

Accreditation of the Company's Quality and Environment Management Systems against the relevant ISO standards was maintained at the annual audit conducted in April 2006.

LOOKING AHEAD

The outlook for 2006-07 is very encouraging. Both the Federal and State Governments announced increased road spending initiatives in their respective budgets. As well, many large road projects are currently underway or are about to begin. We see increased spending on roads in many states. These spending initiatives will have a positive affect on our hire company customers, our direct business with State and local governments, and our business with Road Construction companies.

As I mentioned in the Annual Report, some of our products have found application in EastLink (Vic), Lane Cove Tunnel (NSW), various Transport South Australia projects and on the Bruce Highway (Qld).

Major road construction projects such as the Pakenham Bypass (Vic), the North South Bypass Tunnel (Old), the duplication of the Gateway Bridge (Old) and the continuing upgrade of the Pacific Highway (NSW) should generate significant demand for our products including Ironman barriers, guard rail and wire rope safety barriers, and crash cushion end treatments.

Recent legislative changes in Queensland and New South Wales have mandated the mounting of attenuators to vehicles such as line marking and other stationary or slow moving trucks. Our truck mounted attenuators have already achieved wide acceptance, and thus we are well placed to benefit from these legislative changes.

We already see positive results from our program of increasing our personnel resources and our market presence in Queensland, New South Wales and South Australia, in line with our expectations. We remain confident that these increased resources will significantly increase our market penetration in those states. We have also recently increased our sales resources in Victoria and we begin to see positive results from these changes.

Our future growth strategy is to combine strong organic growth with strategic acquisitions. Our organic growth target is to increase sales by more than 15% over 2005/06 whilst maintaining our relative profit margins. We will continue with our aggressive approach to sourcing both materials and products both nationally and internationally to maintain and even to improve our market competitiveness.

We mentioned in our Annual Report, and our Chairman has mentioned that we are devoting considerable energy to the process of finding suitable strategic acquisitions. Any potential acquisition will need to be consistent with our core business and will need to be able to demonstrate long term value for the benefit of our shareholders.

OUR FIRST ACQUISITION

It is with pleasure that I confirm our acquisition of the business and assets of Swift Tech Solutions Pty Ltd and Swift Tech Cartage Pty Ltd, which traded as Swift Scapes. This purchase was finalized yesterday, $2nd$ of October 2006.

Swift Tech is a manufacturer of decorative street light poles. The Company has successfully penetrated the street lighting market, predominantly in Victoria, both with normal standard light poles, and more particularly with decorative street

lighting. The light poles find application on freeways, highways, car parks and shopping centers and residential housing estates.

Swift Tech also manufactures and supplies flag poles and bollards, some of which are companion products to the decorative street light poles.

Swift Tech was a family owned business that enjoyed strong growth over recent years. It was established in 1999 and at first operated out of rented premises in Warragul, Victoria. In 2003 the company moved to larger premises in Drouin, about 100 meters from Saferoads.

The audited profit for 2005/06 was $800,000 on sales of $6.2 million.

Our plan is to integrate the Swift Tech business into Saferoads as another product group. We take on all current employees of Swift Tech, including the current management. Manufacture will continue on the premises currently rented by Swift Tech. We believe there will not be any interruption to the existing manufacture and supply of Swift Tech product to meet current and future orders.

The purchase consideration for Swift Tech was payable as $2.3 million in cash and the issue of 560,000 Saferoads shares to the previous owners.

A placement of 2.44 million fully paid ordinary shares has been made by Cartesian Capital Pty Ltd with institutional and professional investors at $1.40 per share.

The funds raised from the issue are to be used primarily to complete the acquisition of the business and assets of Swift Tech, and for working capital.

In closing I would like to sincerely thank all our shareholders for their continued support, and for the confidence they have shown in Saferoads. We look forward confidently to a year of steady, sustainable growth and to an ongoing increase in shareholder value.

I would now like to play you a short video to give you a brief look at our company Saferoads.

Thank you.

Darren Hotchkin