SDI LIMITED — Management Reports 2003

Apr 7, 2003

INTERNATIONAL DENTAL SHOW REPORT TO SHAREHOI DERS

As previously advised, shareholders would be aware that SDI Ltd attended the International Dental Show (IDS) in Cologne, Germany, late last month. The IDS is traditionally the showcase for the world's dental industry and it is used by manufacturers to demonstrate existing and new products to the dental market which consists of dentists, dealers, distributors and University academics. This year's IDS was well attended with record visitor numbers (over 60,000) in spite of war and travel concerns.

For SDI, the IDS was a resounding success measured by the number of customers (country distributors and dealers) who visited the Company booth over the 5 day event and their enthusiasm toward both existing and new SDI products. Record over the counter sales for our German subsidiary were taken.

SDI released 11 new products or "product additions" at the show. The "product additions" were related to the growing 'POLA' tooth whitening system, additional composite restoratives related to existing products, a general purpose adhesive system and a new design for the growing 'Points' product - single use applicators. The main emphasis was on 4 new and innovative products, brand named 'RADII', 'RIVA', 'ROK' and 'ICE'.

Our products were enthusiastically received by customers who confirmed that these high quality products have further complemented SDI's extensive product range which will strengthen the company's market share globally.

Offices and subsidiaries in Brazil, Canada, Germany and the United States of America

RADII - a Light Emission Diode (LED) device for the setting of most composite resin restoratives

The Radii reflects the latest technology available in high intensity LED light transmission and cures (sets) composite restoratives faster and more accurately than other curing devices, called 'Halogen' curing lights. The Radii incorporates state of the art technical systems but is extremely simple to use, a feature which made it very popular with customers, It is most competitively priced to the end user (the dentist) allowing dealers and distributors the ability of enjoying good profit margins whilst competing with manufacturers who sell direct to the profession. At the same time the simplicity of manufacture allows SDI excellent margins. Earlier forecasts of unit sales volumes have been substantially increased after discussions with SDI country managers and distributors.

Devices in competition to the Radii include those manufactured by 3M Espe (www.3mespe.com) and Kerr Dental (www.kerrdental.com).

RIVA - a self cure Glass lonomer Cement system (GIC) restorative for restorative use The introduction of this major and profitable product to the SDI range of restoratives gives SDI a most attractive product group for its customer base. There are few manufacturers of this quality material world-wide and Riva is the result of over 4 years of intensive R&D,

partially sponsored by the Federal Government (START scheme).

The company's distributor customers were enthusiastic about this new product due to their inability to source competitive products (the 2 main manufacturers restrict their distribution in some countries). As well, the Riva GIC system offers the end user clear advantages over existing competitive products. For example, the easier-to-use Riva capsule system delivers an additional 10% of restorative material for the dentist to use. Riva has been priced to again deliver good margins to SDI customers which should result in a rapid market entry.

Although this initial product is but one of a family of additional GIC products that will follow, Riva will be competing in a substantial margin environment with two well known manufacturers, GC Japan (www.gcamerica.com) and 3M Espe (3mespe.com). Additional Riva GIC variants will enter the market over the next 12 months and will be well placed to compete in the world market which is estimated to be valued at USD 300 million and increasing rapidly.

ROK- a true alternative to amalgam for posterior (back) teeth.

SDI claims, with considerable credibility, to manufacture the world's most superior silver amalgam and hence is very knowledgeable in what a 'true' alternative material should be. Rok is such a material and is a tooth coloured composite which is dispensed in a unique delivery system consistent with normal amalgam delivery systems. Rok handles, finishes and has similar physical properties to silver amalgam.

Whilst SDI has the greatest confidence in the long term future of silver mercury amalgam the Company recognises that more esthetic restorations are desirable, particularly in countries with economies that can afford such materials.

There are several so called 'amalgam alternatives' available and again these are manufactured by 3M Espe (who does not manufacture amalgam) as well as Kerr and Dentsply (who do manufacture amalgams). We believe that Rok will match or exceed the quality of competing posterior composite products.

Offices and subsidiaries in Brazil, Canada, Germany and the United States of America

ICE- a high polish Anterior (Front)/Posterior (Back) composite resin system

SDI manufactures 'Glacier' which is a similar material and the introduction of Ice heralds a new approach to these materials. Extremely strong and stain resistant, Ice exhibits a lustre which adapts to the host tooth colour thereby making the restoration virtually undetectable. Ice is presented in several delivery systems but it has a number of competitor products. However, the growth of SDI's esthetic range and business will be enhanced considerably by this exciting product.

In summary, the IDS has further confirmed the strong position that SDI Ltd is developing in the enormous dental market, a position which will strengthen over the medium to longer term. The new products, as described briefly above, will increase SDI sales considerably in 2003/04 and in future years - additional products derived from this range will ensure that the company maintains a competitive product line resulting in continual high margin sales growth.

Further details of these new products will shortly be available on www.sdi.com.au as well as being included in a mailer to all shareholders with the next dividend payment.

Jeffery Cheetham, Managing Director

8 April 2003