SAFEROADS HOLDINGS LIMITED — AGM Information 2008

Oct 19, 2008

SAFEROADS HOLDINGS LIMITED

ANNUAL GENERAL MEETING

21 October 2008

Chairman’s address followed by the Managing Director’s address

Chairman’s Address – Mr Gary Bertuch

I am pleased to present this third Chairman’s Review for Saferoads Holdings Limited.

The Company has delivered another strong annual result with key measures demonstrating sustained substantial growth and progress since our listing on the Australian Stock Exchange in December 2005.

The Board is pleased to announce that compared with the previous year,

sales have grown by 41% to $57 million and NPAT has grown by 12% to $4.98 million.

Directors are comfortable that the Company is on track to achieve the company’s strategic plan revenue target of $100 million by the end of fiscal year 2011.

Since listing in 2005, the Company’s strategy has been to broaden the customer, product and geographical distribution base, in order to make the Company more robust and less reliant on particular customers or products. We are pleased to report that over the past 12 months the percentage of total revenue from our largest customer has fallen from 29% to 18% and that the percentage of total revenue from the top ten customers has fallen from 67% to 61%. The percentage of total revenue generated in Victoria has fallen from 51% to 46%, indicating a growth in importance of the interstate operations. From a product diversification perspective, percentage of total revenue from the dominant Temporary Barrier product portfolio has decreased from 44% to 36% over the past two years,

The implementation of this strategy has had particular significance over the past 12 months given the major structural changes which have taken place within our largest customer. Whilst our percentage NPAT has declined, primarily due to a drop in sales of one of our higher profit margin product lines, we have been able to demonstrate a healthy growth in NPAT in absolute terms. We have also set the foundations for strong future growth in both sales and NPAT.

During the year the Company made two significant acquisitions.

The first acquisition was Bob Panich Consultancy Pty Ltd which is a manufacturer of traffic signal equipment and which was acquired by Saferoads in April of this year. Supply of traffic signal equipment in Australia is primarily the domain of two companies, of which Bob Panich is one. Our competition has a significantly larger market share which provides us with significant opportunities for growth in the future, both in Australia and overseas. The principle focus this year will be to fully integrate the acquisition and to increase sales through our national distribution network.

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The second acquisition was that of Guardrail Installations which was a division of Traffic Technologies Ltd. This acquisition was principally for plant, equipment and an order book, and provided us with an opportunity to improve our national coverage in this product and service portfolio. In addition, it has given us access to the world leading “Turchi” installation equipment which will enable us to improve our guardrail installation efficiencies and reduce our costs.

Road safety remains the Company’s core business, and the acquisitions made this year were consistent with that business strategy. With spending announced in recent State and Federal Governments on road infrastructure remaining at historically high levels, the Company is strategically placed to continue to grow revenue and profitability.

The Board has noted with a good deal of concern the decline in share value since our previous Annual General Meeting. The accompanying slide is a graph from the ASX web site which shows the movement in the share price of Saferoads Holdings Limited, shown in red, compared with the average movement in the S&P/ASX All Ords, shown in blue, over the last twelve months. Whilst we are not happy with the decline in share price, it is generally in line with the All Ordinaries index and the S&P/ASX Small Ordinaries index. With respect to Saferoads, our earnings per share has increased over the past 12 months, but our price earnings ratio has declined by over 50% to around 7, which seems to be consistent with the average All Ordinaries PE ratios at the present time and reflects the mood of the markets in general.

The Directors have declared a total dividend for 2007-08 of 10.0 cents per share, of which 5.0 cents per share was paid in April 07, and the final dividend of 5.0 cents per share will be paid in November 08. The Board anticipates that dividends will continue to grow in the future in line with movements in profitability.

On behalf of the Board, I would like to thank our Managing Director, Darren Hotchkin, our General Manager, Richard Purser and our talented and passionate team around Australia for their total commitment to the Company’s success.

I would also like to thank my fellow Directors for their generous participation and wise counsel.

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Gary Bertuch Chairman

Managing Director’s address – Mr Darren Hotchkin

Ladies and Gentlemen, it is my pleasure to report to you today on the performance of our Company during the financial year to 30[th] of June 2008, and to provide an update on our expectations for the forthcoming year.

FINANCIAL PERFORMANCE

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For purposes of internal reporting and performance management and review we segment our business according to the application of the products we provide to the Road Safety market. These product segments are Guide Posts and Flexible Signage, Crash Cushions and Barriers, Traffic Calming, Traffic Control, Temporary Barriers, Civil Services, Public Lighting, and finally the acquisition made in April 2008 – Traffic Signals.

I will use this framework to review the operations and achievements of the 2008 financial year.

The guide post and flexible signage portfolio comprises the foundation product portfolio of the Company. The Company was originally incorporated in 1992 to develop and market a flexible guide post made from recyled car tyres. In 07-08, sales in this portfolio grew by 37% and represented 6% of total sales. We continued to experience strong competitive pressure in this portfolio but were able to maintain the historical gross margin percentage. Of particular interest in this portfolio was the successful testing of our Snaploc flexible guide post against the relative Australian standards, giving us two fully tested and compliant guide posts to offer to the market.

Sales in the Crash Cushions and Barriers portfolio grew by 55% and also represented 6% of our sales. This portfolio benefited from the recently completed EastLink project and the ongoing Monash Upgrade project where many of the company’s “Quadguard” crash barriers were installed. In spite of competitive pressure from alternative imported products we were able to maintain the historical gross margin.

Traffic Calming is another foundation product portfolio of the Company. Initially many of these products were made locally from recycled rubber but in recent years the growing tendency has been to source product from China. Sales grew by 23% and represented 6% of total revenue, but competitive pressures led to a small slippage in gross margin percentage.

While Traffic Control products is an older portfolio, it has experienced strong growth in the last two years, growing 65 % in 06-07 and by more than 100 % in 07-08, and now represents 12% of Company sales. Because of strong competition in this portfolio, the gross margin percentage has always been below the Company’s average, but it is a positive contributor to the Company’s financial performance.

The Temporary Barrier portfolio includes the plastic Triton barrier sold under licence to the Quixote Corporation (USA), the T-lok portable concrete barrier manufactured and sold under licence to Rockingham (USA), and the Company’s own Ironman steel portable barrier. Revenue grew by 11%, and represented 35% of total revenue. This portfolio came under particularly strong cost pressure during the year due to increased steel and other input costs. There was also a significant shift in product mix from the more profitable ironman barrier to the less profitable Triton and T-lok barriers. These factors caused the gross margin percentage to slip significantly.

The Civil Services portfolio comprises primarily the supply and installation of guardrail and wire rope safety barriers. This is a more recent addition to the Company’s activities. Sales grew by almost 75%, and represented 21% of total turnover but only 10% of gross profit. It is a very competetive area with only two major suppliers of the raw product in Australia, and with a low “cost-to-entry” for product installers. This portfolio has a significant drag-through effect on the Company’s higher profit portfolios.

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The Public Lighting portfolio was acquired in October 2006 making this year the first full year of trading. Sales for 07-08 were significantly more than the sales of 06-07, and represented 12% of total revenue. Towards the end of the year we were successful in winning a significant Government Tender in NSW which will see us supply light poles over the next three years.

And finally, Traffic Signals.

On 1 April 08 we settled the acquisition of Bob Panich Consultancy Pty Ltd, a Sydney based manufacturer of traffic signals equipment that controls the movement of road vehicles and pedestrians. This equipment includes traffic lanterns (the red, amber and green traffic light sets), pedestrian lanterns and audible pedestrian systems. The audible pedestrian system was pioneered by the owner, Bob Panich, and comprises the audible “beeps” that accompany the changing pedestrian signals. The company also manufactures a range of traffic signal accessories and other accessories. Major customers have included Roads and Traffic Authority (NSW), Telstra Corporation, and State Rail authority (NSW). This business is the Australian distributor of GE Lumination LED aspects.

Based on annualising the three months’ trading, this portfolio would have contributed 8.3% of the Company’s revenue and 8.6% of the Company’s gross profit. We are excited at the prospect of growing this unique business through our national sales team.

In summary, all product portfolios experienced good revenue growth. However, product mix, input costs and competitive pressures have combined to put downward pressure on profit margin.

KEY FACTORS IN THE FINANCIAL PERFORMANCE 07/08

We are pleased to announce an increase of 41% in sales. This growth was achieved across all portfolios and across all mainland states.

We are also pleased to have achieved a growth in Npat of 12% which is generally aligned with the Company’s growth strategy. This growth was achieved in spite of the massive increase in steel cost, and the restructure of Coates that contributed to a drop of more than 83% in sales of the Company’s highly profitable Ironman steel barrier.

The Company’s customer, product and geographic base has broadened, achieved as a result of strategic acquistions and greater market focus.

THE YEAR AHEAD

The outlook for 08/09 is both encouraging and challenging. Federal and State Government budgets have maintained strong spending initiatives. NSW in particular has announced substantial expenditure in roadwork infrastructure.

Our growth strategy for 2008-09 is to consolidate on the strategic acquisitions of the past two years and to maximise the benefits of the increased sales and distribution resources. Our overall growth target for 08-09 is to increase sales by more than 15% over what was achieved in 07-08.

We started the year 08-09 with a healthy order book spread across all product groups. More than 50% of this related to guard rail and wire rope safety barriers, a significant percentage of which is

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in Qld where the product and equipment purchased from Guardrail Installations will come strongly into play.

Throughout 07-08 our R&D personnel were active in developing and testing our own new “Safepole” a light pole capable of containing an impacting car at speeds of up to 110kph. We anticipate this product will be well received in the Australian market as an alternative to slip-base poles that do not perform so well under impact. State approvals of the Safepole are pending.

In June we entered into an agreement with Sensys Traffic AB (Sweden) to become the exclusive distributor in Australia and New Zealand of their high technology products including number plate recognitions systems, red light and speed cameras. Since July we have submitted two multimillion dollar tenders and we are awaiting the outcome. We are in the process of setting up a trial site in NSW for the number plate recognition system, and have approval to establish a trial site in Vic for other products.

Since July this year we have received good orders across most product portfolios and in particluar for Triton Barriers, Variable Message Boards, and our proprietry product the Block-Out Pedestrian Barrier. We have also been awarded a number of civil services tenders, including major installation projects in Qld and Victoria.

We have had a positive start to this new year, with revenue for the first quarter being 6.5% above the first quarter of last year. However, due to product mix, steel price and the weaker Australian dollar, profit margins will continue to be under pressure. We are aware of, and are addressing these issues, but we do not expect to see margin improvement until the second half of 2008/09.

We feel comfortable with projected sales growth, but as outlined above, profit growth will be a greater challenge in the current environment.

In closing, I would like to sincerely thank all our shareholders for their continued support, and for the confidence shown in Saferoads. We look forward confidently to another year of steady, sustainable growth.

Thank you.

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Darren Hotchkin

Managing Director

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