SERVICE STREAM LIMITED — AGM Information 2011

Sep 22, 2011

Service Stream Limited ACN 072 369 870

Notice of annual general meeting

Notice is given that the annual general meeting of members of Service Stream Limited ( Company ) will be held at the Intercontinental Melbourne – The Rialto, 495 Collins Street, Melbourne, Victoria on Wednesday 26 October 2011 at 10:30am.

Annual financial and other reports

To receive the Company’s financial report, directors’ report and auditor’s report for the financial year ended 30 June 2011.

Resolution 1 — Adoption of remuneration report

To consider and if thought fit pass the following resolution as an ordinary resolution :

“That the remuneration report for the year ended 30 June 2011 be adopted.”

Note: The remuneration report is set out on pages 26 to 32 of the Company’s 2011 annual report. The vote on this resolution is advisory only and does not bind the directors of the Company.

Resolution 2 — Re-election of Peter Dempsey

To consider and if thought fit pass the following resolution as an ordinary resolution :

“That Peter Dempsey, who retires in accordance with rule 7.1(d) of the Company’s constitution and, being eligible, stands for re-election, be re-elected as a director of the Company.”

Resolution 3 — Re-election of Stephe Wilks

To consider and if thought fit pass the following resolution as an ordinary resolution :

“That Stephe Wilks, who retires by rotation in accordance with rule 7.1(f) of the Company’s constitution and, being eligible, stands for re-election, be re-elected as a director of the Company.”

Resolution 4 — Issue of securities under the Service Stream ESOP

To consider and if thought fit pass the following resolution as an ordinary resolution :

“That the issue of securities in the Company under the Service Stream employee share ownership plan 2007 ( Service Stream ESOP ), the terms of which are summarised in the explanatory statement accompanying the notice of this meeting, be approved as an exception to rule 7.1 of the ASX Listing Rules, for the purpose of exception 9 of rule 7.2 of the ASX Listing Rules and for all other purposes.”

Notice of meeting

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Resolution 5 — Acquisition of securities by Bob Grant or his associate under the 2011 financial year tranche of the Service Stream ESOP

To consider and if thought fit pass the following resolution as an ordinary resolution :

“That the acquisition by Bob Grant or his associate of 626,959 performance rights under the 2011 financial year tranche of the Service Stream ESOP (and up to 626,959 fully paid ordinary shares in the Company underlying, and issued in accordance with the terms of, those performance rights) on the terms summarised in the explanatory statement accompanying the notice of this meeting, be approved for the purpose of rule 10.14 of the ASX Listing Rules and for all other purposes.”

Resolution 6 — Acquisition of securities by Bob Grant or his associate, under the 2012 financial year tranche of the Service Stream ESOP

To consider and if thought fit pass the following resolution as an ordinary resolution :

“That the acquisition by Bob Grant or his associate of 430,063 performance rights under the 2012 financial year tranche of the Service Stream ESOP (and up to 430,063 fully paid ordinary shares in the Company underlying, and issued in accordance with the terms of, those performance rights) on the terms summarised in the explanatory statement accompanying the notice of this meeting, be approved for the purpose of rule 10.14 of the ASX Listing Rules and for all other purposes.”

Resolution 7 — Acquisition of securities by Graeme Sumner or his associate, under the 2012 financial year tranche of the Service Stream ESOP

To consider and if thought fit pass the following resolution as an ordinary resolution :

“That the acquisition by Graeme Sumner or his associate of 1,560,543 performance rights under the 2012 financial year tranche of the Service Stream ESOP (and up to 1,560,543 fully paid ordinary shares in the Company underlying, and issued in accordance with the terms of, those performance rights) on the terms summarised in the explanatory statement accompanying the notice of this meeting, be approved for the purpose of rule 10.14 of the ASX Listing Rules and for all other purposes.”

By order of the board

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Jessica Lyons Company Secretary

Date: 7 September 2011

Notice of meeting

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Notes:

1. A member entitled to attend and vote at this meeting is entitled to appoint one proxy or, if the member is entitled to cast two or more votes at the meeting, two proxies to attend and vote on behalf and instead of the member.

2. Where two proxies are appointed, the proxies may vote only if each proxy is appointed to represent a specified proportion of the member’s voting rights.

3. A proxy need not be a member.

4. A proxy form accompanies this notice. To be valid, the proxy form together with the power of attorney or other authority (if any) under which the form is signed, or a certified copy of that power or authority, must be:

5. (a) received by the Company’s share registrar, Computershare Investor Services Pty Limited by:

   • (1) hand delivery to “Yarra Falls”, 452 Johnston Street, Abbotsford, Victoria 3067;

   • (2) post to GPO Box 242, Melbourne, Victoria, 8060; or

   • (3) facsimile on 1800 783 447 (within Australia) or +61 3 9473 2555 (outside Australia)

before 10:30am (Melbourne time) on Monday 24 October 2011; or

• (b) received by the Company (addressed to the attention of Ms Jessica Lyons, General Counsel and Company Secretary):

• (1) at its office at Level 1, 355 Spencer Street, West Melbourne, Victoria, 3003; or

• (2) by facsimile on 03 9677 8877;

before 10:30am (Melbourne time) on Monday 24 October 2011.

1. A proxy may also be appointed electronically by:

2. (a) visiting www.investorvote.com.au and following the instructions provided; or

3. (b) visiting www.intermediaryonline.com to submit your voting intentions (for Intermediary Online subscribers (custodians) only);

before 10:30am (Melbourne time) on Monday 24 October 2011. A proxy cannot be appointed online if they are appointed under power of attorney or similar authority.

1. The Company has determined that those persons who are registered as the holders of shares in the Company at 7:00pm (Melbourne time) on Monday 24 October 2011 will be taken to be the holders of shares for the purposes of determining voting entitlements at this meeting.

Notice of meeting

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Voting exclusion statement

The Company will disregard any votes cast on:

1. Resolution 1 (Adoption of remuneration report) by or on behalf of a member of the key management personnel for the Company (details of whose remuneration are included in the remuneration report, including each director) ( KMP Member ), or a closely related party of a KMP Member, unless they are cast by that person as a proxy for a person entitled to vote, in accordance with the directions on the proxy form;

2. Resolutions 4 (Issue of securities under the Service Stream ESOP), 5 (Acquisition of securities by Bob Grant or his associate under the 2011 financial year tranche of the Service Stream ESOP), 6 (Acquisition of securities by Bob Grant or his associate, under the 2012 financial year tranche of the Service Stream ESOP) and 7 (Acquisition of securities by Graeme Sumner or his associate, under the 2012 financial year tranche of the Service Stream ESOP) by a KMP Member or a closely related party of a KMP Member on the basis of their appointment as a proxy, if the appointment does not specify the way the proxy is to vote on the resolution; and

3. Resolutions 4, 5, 6 and 7 by any director of the Company or their associate, unless they are cast by that person as a proxy for a person entitled to vote, in accordance with the directions on the proxy form.

However, the Chairman may cast a vote on resolutions 4, 5, 6 and 7 if appointed as a proxy, and the appointment expressly authorises the Chairman to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a KMP Member.

The Chairman intends to vote undirected proxies held by him in favour of each resolution, other than resolution 1 (because the Chairman is not permitted to vote undirected proxies on that resolution). Please refer to the proxy form accompanying this notice of meeting for more information.

Explanatory statement

1. General information

This explanatory statement is an important document and should be read carefully. It comprises part of, and should be read in conjunction with, the notice of the annual general meeting of members of Service Stream Limited to be held on Wednesday 26 October 2011.

If you have any questions regarding the matters set out in this explanatory statement (or elsewhere in the notice of annual general meeting), please contact the Company, or your stockbroker or other professional adviser.

— 2. Resolution 1 adoption of remuneration report

There will be an opportunity for shareholders at the meeting to comment on and ask questions about the remuneration report, which appears on pages 26 to 32 of the Company’s 2011 annual report.

The vote on the proposed resolution adopting the remuneration report is advisory only and will not bind the Company or its directors. However, the board will take the outcome of the vote into consideration when reviewing the Company’s remuneration policy and practices.

Shareholders may be aware of the introduction earlier this year of a ‘two strikes’ rule in relation to remuneration reports. The following is a summary of the rule:

• (a) If at an annual general meeting 25% or more votes were cast against the resolution that the remuneration report be adopted, the next directors’ report must include an explanation of the board’s proposed action in response to that vote (and any comments made about the remuneration report at the earlier AGM) or, if the board does not propose any action, the board’s reasons for inaction.

• (b) If at the annual general meeting following the earlier AGM 25% or more votes are again cast against the resolution that the remuneration report be adopted, a ‘Spill Resolution’ must be put to the vote at that AGM. The Spill Resolution is that another meeting of shareholders ( Spill Meeting ) be held within 90 days to consider the appointment of new directors in place of those directors (other than the managing director) who were directors at the time the resolution was passed to make the directors’ report (including the remuneration report).

• (c) At the Spill Meeting those directors cease to hold office immediately before the end of the Spill Meeting, and resolutions to appoint persons to offices that will be vacated immediately before the end of the Spill Meeting must be put to the vote at the Spill Meeting.

• (d) If a director is re-appointed as a director by a resolution passed at the Spill Meeting, that director’s term of office runs as if the cessation and appointment had not occurred.

Explanatory statement

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As the ‘two strikes’ rule only applies to annual general meetings held on or after 1 July 2011, there is no requirement to allow for a possible 'Spill Resolution' at this annual general meeting. In any event, at the Company’s 2010 annual general meeting less than 25% of votes were cast against the resolution that the remuneration report be adopted.

The directors recommend that shareholders vote in favour of resolution 1.

— 3. Resolution 2 re-election of Peter Dempsey

Rule 7.1(d) of the Company’s constitution states that any director appointed by the board (other than the managing director) only holds office until the next general meeting of the Company and must then retire from office.

Peter Dempsey was appointed by the board as a director (and as the Chairman of directors) on 1 November 2010. In accordance with these requirements, Mr Dempsey retires at this year’s annual general meeting and, being eligible, stands for re-election.

Mr Dempsey has extensive development and construction experience and has been involved in the property industry for the last 40 years. In 2003, he retired from A W Baulderstone Pty Ltd after a 30 year career, the last five spent as managing director. Baulderstone undertook some of Australia’s largest building and civil infrastructure projects with annual revenues of up to $1.5 billion during his tenure. The company was also involved in projects for the resources sector and in property development activities, with operations in all Australian mainland states, Papua New Guinea, Indonesia and Vietnam.

Mr Dempsey is a non-executive director of Monadelphous Limited and Becton Property Group Limited, as well as holding other board roles with private construction-related organisations. He has previously served on the boards of industry and charitable and research institutions.

Mr Dempsey holds a Bachelor of Technology (Civil Engineering) from the University of Adelaide and a Graduate Diploma in Business Administration from the South Australian Institute of Technology.

The directors (other than Mr Dempsey) recommend that shareholders vote in favour of resolution 2.

— 4. Resolution 3 re-election of Stephe Wilks

Rule 7.1(f) of the Company’s constitution states that at each annual general meeting of the Company, one third of the directors (or, if their number is not 3 or a multiple of 3, then the number nearest one third) and any other director who has held office for 3 years or more, must retire from office. In determining the number of directors to retire under the ‘one third’ requirement, no account is to be taken of the managing director or of a director appointed as an addition to the existing directors and who only holds office until the next annual general meeting. A retiring director is eligible for re-election.

Explanatory statement

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In accordance with these requirements, Stephe Wilks retires by rotation at this year’s annual general meeting and, being eligible, stands for re-election.

Mr Wilks joined the Company as a non-executive director when Total Communications Infrastructure Limited merged with Service Stream Limited in December 2006. Prior to the merger he had been a director of Total Communications Infrastructure Limited for two years. He is a member of the Company’s Audit and Risk Management Committee, Remuneration and Nomination Committee, and Environment and Safety Committee.

Mr Wilks has over 20 years of hands on experience in the telecommunications industry, both within Australia and overseas.

Mr Wilks is currently a non-executive director of Tel.Pacific Limited and 3Q Holdings Limited and was previously Chairman of Mooter Media Limited. He is on the advisory board of the Network Insight Group and consults to a number of companies, offering advice in relation to the telecommunications, media and technology industries.

Mr Wilks has previously held senior executive positions with BT Asia Pacific, Optus, Hong Kong Telecom, Nextgen Networks and Personal Broadband Australia. He was also a consulting director with N M Rothschild, an investment bank.

Mr Wilks holds degrees in science and laws from Macquarie University and a Master of Laws from the University of Sydney.

The directors (other than Mr Wilks) recommend that shareholders vote in favour of resolution 3.

5. Resolution 4 — Issue of securities under the Service Stream ESOP

In 2007, the directors of the Company established and implemented an employee share ownership plan known as the Service Stream employee share ownership plan 2007 ( Service Stream ESOP ).

Rule 7.1 of the ASX Listing Rules requires the Company to obtain shareholder approval if it wishes to issue, or agrees to issue, equity securities in a 12 month period in excess of 15% of the ordinary securities in the Company on issue at the commencement of the 12 month period. However, rule 7.1 is subject to a number of exceptions set out in rule 7.2.

One of the exceptions set out in rule 7.2 is where shareholders have approved the issue of securities under an employee incentive scheme within 3 years before the date of issue: exception 9.

At the Company’s annual general meeting held on 25 October 2007, shareholders approved the issue of securities under the Service Stream ESOP as an exception to rule 7.1, and hence the ability to issue securities under the Service Stream ESOP as an exception to rule 7.1 expired on 25 October 2010. The purpose of resolution 4 is to refresh the approval of shareholders for further issues of securities under the Service Stream ESOP as an exception to rule 7.1.

Explanatory statement

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Exception 9 requires the notice of meeting to include a summary of the terms of the scheme, and information about the number of securities issued under the scheme since the date of the last approval by shareholders. The scheme, in this case, is the Service Stream ESOP and the terms of the scheme are summarised below.

The following is a summary of the objectives and terms of the Service Stream ESOP:

• (a) Objectives: The objectives of the Service Stream ESOP are:

• (1) to motivate and retain employees and directors of the Company and its subsidiaries ( Group );

• (2) to attract quality employees and directors to the Group;

• (3) to create commonality of purpose between the employees and directors and the Group; and

• (4) to add wealth for all shareholders of the Company through the motivation of the Group’s employees and directors;

by allowing employees and directors to share the rewards of the success of the Group as holders of securities in the Company.

• (b) Participation: Any person who is:

• (1) an employee of the Group; or

• (2) a director of the Company who holds a salaried employment or office in the Group;

( Eligible Person ) is eligible to participate in the Service Stream ESOP. Participation by an eligible director would currently require separate specific shareholder approval under rule 10.14 of the ASX Listing Rules except where the participation is by way of a purchase of securities on the stock market of ASX Limited by, or on behalf of, the eligible director. Participation is by invitation of the directors only.

• (c) Acquisition of securities: The Service Stream ESOP provides for the acquisition by, or for the benefit of, Eligible Persons of ordinary shares in the Company, options over ordinary shares and/or rights to or interests in such shares or options ( Securities ). The acquisition may be made directly by the Eligible Person (or his or her approved nominee) or the Company may arrange for a trust to be established for the benefit of Eligible Persons and for the trustee to acquire and hold the Securities on trust for the Eligible Persons.

• (d) Acquisition price: Securities may be offered for acquisition by, or for the benefit of, an Eligible Person under the Service Stream ESOP at any price determined by the board of directors of the Company, including for nil

Explanatory statement

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consideration. This provides the Company with the greatest flexibility to reward Eligible Persons, including allowing the Company to provide shares to Eligible Persons for no consideration as a bonus. Payment for the acquisition of Securities may be provided by the Company through the provision of loans (see (q) and (r) below), by Eligible Persons or by a combination of both. An Eligible Person may also elect to fund the acquisition of Securities by way of salary sacrifice or sacrifice of cash bonuses and other equivalent entitlements.

• (e) Restrictions: Under the Service Stream ESOP, the directors of the Company may make the allocation or acquisition of Securities by, or on behalf of, an Eligible Person subject to satisfaction of performance, eligibility or other vesting criteria ( Vesting Criteria ) where failure to satisfy any Vesting Criteria may result in the forfeiture of the Eligible Person’s entitlement, in whole or in part. The application of Vesting Criteria (if any) is at the discretion of the directors. In addition, the directors may impose restrictions on dealing in Securities which are acquired under the Service Stream ESOP, e.g. by prohibiting them from being sold, transferred, mortgaged, charged or otherwise disposed of or encumbered for a period of time or until the Vesting Criteria are satisfied. Such restrictions may apply regardless of whether the Securities are subject to Vesting Criteria.

• (f) Control of Securities: Where an Eligible Person participates in the Service Stream ESOP and Securities are acquired by, or for the benefit of, the Eligible Person, the terms of participation may authorise the Company to do all that is necessary or appropriate for the Company to ensure the Securities are not disposed of or encumbered prior to the satisfaction of any Vesting Criteria or the cessation of any restrictions on dealing, including by applying a holding lock in respect of the Securities (if they are uncertificated) or by retaining the certificates in respect of the Securities (if they are certificated).

• (g) Nomination: If approved by the Company, an Eligible Person may nominate an associate to take up or apply for any Securities or loan that the Eligible Person is offered, allocated or invited to apply for under the Service Stream ESOP.

• (h) No limit on issues: There is no maximum limit on the number of Securities that may be acquired by Eligible Persons under the Service Stream ESOP.

• (i) Ranking of shares: Unless the board of directors of the Company otherwise provides, all new fully paid ordinary shares issued to, or for the benefit of, Eligible Persons under the Service Stream ESOP will rank from the date of issue equally with the other fully paid ordinary shares in the Company then on issue (although they will not participate in any dividends the record date for which occurred before the date of issue). Further, the Company will apply to ASX for the quotation of any fully paid ordinary shares issued under the Service Stream ESOP, except if they are subject to restrictions on disposal, in which case quotation may not be applied for unless and until required under the ASX Listing Rules.

Explanatory statement

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• (j) Nature of options: Each option acquired under the Service Stream ESOP will, when the option becomes exercisable, entitle the holder, on payment of the exercise price, to have issued to the holder 1 ordinary share in the Company (subject to adjustment for any bonus issue, rights offer or reconstruction of the share capital of the Company in accordance with the ASX Listing Rules).

• (k) Terms of options: The number of options to be issued, any consideration for the issue of options, the exercise period and the exercise price will be determined by the directors of the Company. The directors are also given the power to specify vesting conditions which must be satisfied before options can be exercised.

• (l) Ordinary shares issued on exercise of options: The ordinary shares issued on the exercise of options under the Service Stream ESOP will from the date of their issue rank equally with all other fully paid ordinary shares in the Company then on issue (although they will not participate in any dividends the record date for which occurred before the date of issue). Further, the Company will apply to ASX for the quotation of shares issued following the exercise of options, except if they are subject to restrictions on disposal, in which case quotation may not be applied for unless and until required under the ASX Listing Rules.

• (m) Variation to the number and exercise price of options: A holder of options under the Service Stream ESOP will, in accordance with the ASX Listing Rules, be entitled to have the number of options, the exercise price of the options and/or the number of shares underlying the options varied in the event of a bonus issue, rights offer or reconstruction of the share capital of the Company.

• (n) Termination of options: Options which are not exercised by their expiry date will terminate. Options the subject of a vesting condition will also terminate if the vesting condition is not met or cannot be met. Further, the Company may impose any other termination event for any options at the time of acquisition, and also has the power to waive a termination event or vesting condition, or to postpone termination.

• (o) Amendments to the rules of the Service Stream ESOP: The Company may amend the rules of the Service Stream ESOP, subject to any requirements of the Corporations Act 2001 (Cth) and subject to obtaining any approval of shareholders required under the ASX Listing Rules.

• (p) Suspension or termination of the Service Stream ESOP: The Company may suspend the operation of the Service Stream ESOP or terminate it at any time. Suspension or termination would not prejudice the existing rights of any person who previously acquired Securities under the plan.

• (q) Provision of loans: The Service Stream ESOP also allows the Company to provide loans to Eligible Persons to fund:

• (1) the subscription for, or other acquisition of, Securities offered or allocated to, or for the benefit of, Eligible Persons; and/or

• (2) the exercise of options or other rights issued to, or for the benefit of, Eligible Persons.

Explanatory statement

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• (r) Terms of loans: The loans that may be provided to Eligible Persons to fund the acquisition of Securities or exercise of options or other rights that are Securities are to be on such terms as are determined by the directors of the Company. Further, the Service Stream ESOP specifically provides that a loan provided to an Eligible Person may be:

• (1) interest free;

• (2) non-recourse or limited recourse;

• (3) satisfied by payment to the Company of the proceeds of the sale of the Eligible Person’s Securities or by the transfer of those Securities to the Company or its nominee; and

• (4) secured (including by the Company taking security over the shares in the Company acquired by the Eligible Person under the Service Stream ESOP) or unsecured.

Further, where a loan is provided to fund the acquisition of Securities, subject to the terms of the relevant loan agreement, the Securities may not, without the prior written consent of the Company, be sold, transferred, mortgaged, charged or otherwise disposed of or encumbered prior to repayment of the loan.

A copy of the Service Stream ESOP may be inspected at the Company’s office at Level 1, 355 Spencer Street, West Melbourne, Victoria, 3003. Please contact the company secretary, Jessica Lyons, on 03 9677 8888 if you have any questions or wish to make arrangements to inspect the plan.

During the period commencing on 25 October 2007 (being the date the Service Stream ESOP was last approved by shareholders) and the date of the notice of meeting, the Company has:

• (a) not issued any shares or options to acquire shares; and

• (b) issued 2,237,253 performance rights (but no shares underlying any of those performance rights have been subsequently issued);

under the Service Stream ESOP.

The performance rights were issued under the FY11 Tranche of the Service Stream ESOP (see section 6 below).

The directors (other than Graeme Sumner and Bob Grant) recommend that shareholders vote in favour of resolution 4. As Mr Sumner and Mr Grant are eligible to participate in the Service Stream ESOP and, subject to obtaining any necessary shareholder approval, will do so, they do not consider it appropriate for them to make a recommendation in relation to resolution 4.

Explanatory statement

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6. Resolution 5 — Acquisition of securities by Bob Grant or his associate under the 2011 financial year tranche of the Service Stream ESOP

The directors of the Company are entitled from time to time to invite Eligible Persons to acquire Securities on such terms as the directors may determine in accordance with the plan. For the financial year ended 30 June 2011, the directors determined to make available a tranche of up to 2,864,212 performance rights ( FY11 Tranche ) to senior executives of the Company as a long term incentive. To date 2,237,253 of these performance rights have been granted to senior executives or their nominated associates.

Rule 10.14 of the ASX Listing Rules relevantly states than an entity must not permit a director to acquire securities under an employee incentive scheme without the approval of holders of ordinary shares. Subject to shareholder approval, it is proposed that Bob Grant (who is an alternate director) or his associate will acquire performance rights under the terms of the FY11 Tranche (and shares underlying those performance rights).

The terms of the FY11 Tranche are summarised as follows:

• (a) Each participating senior executive (or their nominated associate) may acquire performance rights for nil consideration. The number of performance rights offered to an executive is calculated by reference to the executive’s fixed annual remuneration, a long term incentive participation rate (50% for Bob Grant) and the volume weighted average price of the Company’s fully paid ordinary shares on ASX during the 10 business days following 27 August 2010, which was the date the Company released its financial results for the 2010 financial year (being 31.9 cents per share).

• (b) Each performance right entitles the holder to be issued one ordinary share in the Company for nil consideration provided that certain conditions have been satisfied, including those described below.

• (c) The number of shares which an executive (or his or her associate) is entitled to acquire is based on the Company’s total shareholder return relative to a relevant peer group of companies (in relation to 50% of the performance rights granted), and the growth in the Company’s earnings per share (in relation to the other 50% of the performance rights granted), in respect of the financial year ended 30 June 2011 and the financial years ending 30 June 2012 and 30 June 2013 ( Performance Period ).

• (d) In relation to earnings per share, there will be proportional vesting of performance rights if the Company’s earnings per share achieves annual growth, from an initial base of 3.85 cents per share, based on the following table:

Explanatory statement

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Of the 50% of the performance rights allocated to growth in earnings per share, the following percentage will vest ...	if the Company achieves the following growth in earnings per share ...
0%	Less than 7.5%
40%	7.5%
Proportional vesting	Greater than 7.5% but less than 10.0%
100%	10.0% and above

The actual number of performance rights which vest (i.e. the number of shares which the holder will be entitled to acquire) is the greater of:

• (1) the percentage of performance rights that vest arising from the extent to which the Company’s growth in earnings per share in each financial year of the Performance Period meets a target in the above table (where each financial year has a weighting of 1/3); and

• (2) the percentage of performance rights that vest arising from the extent to which the Company’s average annual growth in earnings per share over all years comprising the Performance Period meets a target in the above table.

• (e) In relation to relative total shareholder return, there will be proportional vesting of performance rights if the Company’s total shareholder return over the Performance Period compared to a relevant peer group of companies (those companies comprising the ASX200 industrials index) is such that it would rank based on the following table:

Of the 50% of the performance rights allocated to total shareholder return, the following percentage will vest ...	if the Company’s total shareholder return ranks as follows ...
0%	Below the 50th percentile
50%	At the 50th percentile
Proportional vesting	Above the 50th percentile but below the 75th percentile
100%	At the 75th percentile or above

The actual number of performance rights which vest (i.e. the number of shares which the holder will be entitled to acquire) is the greater of:

• (1) the percentage of performance rights that vest arising from the extent to which the Company’s total shareholder return in each financial year of the Performance Period is ranked as set out in the above table (where each financial year has a weighting of 1/3); and

Explanatory statement

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• (2) the percentage of performance rights that vest arising from the extent to which the Company’s total shareholder return over all years comprising the Performance Period ranks as set out in the above table over the entire Performance Period.

• (f) Performance rights vest when the Company determines that the vesting conditions have been met. The shares underlying the performance rights must be issued within 14 days of the later of that date and the date on which the Company releases its results for the financial year ended 30 June 2013.

• (g) The executive (or his or her associate) will not have any rights in respect of shares in the Company underlying any performance rights acquired under the FY11 Tranche (such as dividend and voting rights) unless and until the shares are issued.

• (h) Subject to some exceptions (such as those described below), performance rights will be forfeited if the executive resigns from employment with the Company or a subsidiary, commits an act of fraud in relation to the affairs of the Company or a subsidiary, or is dismissed from employment or office with the Company or a subsidiary as a result of serious misconduct, material breach, gross negligence or any conduct that provides grounds for termination without notice.

• (i) If an executive resigns from the Company or a subsidiary, the directors have a discretion to issue shares to that executive (or his or her associate) in respect of financial years during the Performance Period which ended before the executive’s employment ceased where the directors determine that the executive performed consistently at an outstanding level.

• (j) Further, if an executive ceases employment with the Company or a subsidiary because of his or her death or permanent disability, or because the executive is aged 55 or older and retires from permanent employment, or because the executive’s contract of employment is terminated due to genuine redundancy, the performance rights relating to the financial years during the Performance Period which ended before the executive’s employment ceased that have not vested will not be forfeited.

• (k) If the grant of performance rights to, and acquisition of shares by, Mr Grant or his associate is not approved by shareholders, Mr Grant will be entitled to a cash payment equal to the market value of the shares that would have been issued to him (or his associate) had shareholder approval been obtained.

Rule 10.14 also states that the notice of meeting to obtain shareholder approval must comply with either rule 10.15 or 10.15A of the ASX Listing Rules. The Company has elected to prepare the notice of meeting so that it complies with rule 10.15A, and provides the following information for that purpose:

• (a) The maximum number of performance rights which may be granted to Bob Grant or his associate under the FY11 Tranche is 626,959 performance rights. Assuming he is entitled to be issued all of the shares

Explanatory statement

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underlying those performance rights, he would be issued 626,959 ordinary shares.

• (b) No consideration is payable by Mr Grant or his associate for any performance rights granted to him (or ordinary shares underlying those performance rights issued to him) under the FY11 Tranche.

• (c) No performance rights have been granted, and no ordinary shares underlying those performance rights have been issued, to Mr Grant or his associates under the FY11 Tranche.

• (d) Mr Grant and his associate are the only directors, associates of directors or other persons referred to in rule 10.14 who may be granted performance rights under the FY11 Tranche (or issued shares underlying those performance rights). As at the date of the notice of meeting, no securities have been issued under the Service Stream ESOP to any director or other person referred to in rule 10.14.

• (e) No loan been given by the Company in relation to the grant of performance rights or acquisition of shares.

• (f) Each annual report of the Company relating to a period in which performance rights or shares have been granted to, or acquired by, a director, an associate of a director or other person referred to in rule 10.14 will include:

• (1) details of any such grant or acquisition; and

• (2) a statement that approval for the issue of those securities to those persons was obtained under rule 10.14 of the ASX Listing Rules.

• (g) Any additional persons referred to in rule 10.14 who become entitled to participate in the FY11 after resolution 5 has been passed and who were not named in the notice of this meeting will not participate in the FY11 Tranche until approval is obtained under rule 10.14 of the ASX Listing Rules.

• (h) Assuming resolution 5 is passed, the performance rights will be granted immediately after the resolution is passed. Any underlying shares which Mr Grant or his associate are entitled to acquire will be issued within 14 days of the later of the date that the Company determines that the vesting conditions have been met and the date on which the Company releases its results for the financial year ended 30 June 2013, which date will be before 26 October 2014.

The directors (other than Mr Sumner and Mr Grant) recommend that shareholders vote in favour of resolution 5.

Explanatory statement

Page 12

7. Resolution 6 and Resolution 7 — Acquisition of securities by Graeme Sumner or his associate, or by Bob Grant or his associate, under the 2012 financial year tranche of the Service Stream ESOP

For the financial year ending 30 June 2012, the directors of the Company have determined to make available another tranche of performance rights ( FY12 Tranche ) on broadly the same terms as the FY11 Tranche. The key differences are as follows:

• (a) The number of performance rights offered to an executive is calculated by reference to the executive’s fixed annual remuneration, a long term incentive participation rate (100% for Graeme Sumner and 50% for Bob Grant) and the volume weighted average price of the Company’s fully paid ordinary shares on ASX during the 10 business days commencing on 25 August 2011, which was the date the Company released its financial results for the 2011 financial year (being 47.9 cents per share).

• (b) The number of shares which an executive (or his or her associate) is entitled to acquire is based on the Company’s total shareholder return relative to a relevant peer group of companies, and the growth in the Company’s earnings per share, in respect of the financial years ending 30 June 2012, 30 June 2013 and 30 June 2014. There are other changes as a consequence of the performance period shifting by 1 year.

• (c) In relation to growth in the Company’s earnings per share, the initial base will be 5.80 cents per share.

As noted above, Service Stream must not permit a director to acquire securities under the Service Stream ESOP without the approval of holders of ordinary shares. Subject to shareholder approval, it is proposed that Graeme Sumner and Bob Grant, or their associates, will acquire performance rights under the terms of the FY12 Tranche.

Rule 10.14 also states that the notice of meeting to obtain shareholder approval must comply with either rule 10.15 or 10.15A of the ASX Listing Rules. The Company has elected to prepare the notice of meeting so that it complies with rule 10.15A, and provides the following information for that purpose:

• (a) The maximum number of performance rights which may be granted to Graeme Sumner and Bob Grant or their associates under the FY12 Tranche is 1,560,543 and 430,063 performance rights respectively. Assuming they are entitled to be issued all of the shares underlying those performance rights, they would be issued 1,560,543 and 430,063 ordinary shares respectively.

• (b) No consideration is payable by Mr Sumner, Mr Grant or any of their associates for any performance rights granted to them (or ordinary shares underlying those performance rights issued to them) under the FY12 Tranche.

• (c) No performance rights have been granted, and no ordinary shares underlying those performance rights have been issued, to Mr Sumner, Mr Grant or their associates under the FY12 Tranche.

Explanatory statement

Page 13

• (d) Mr Sumner, Mr Grant and their associates are the only directors, associates of directors or other persons referred to in rule 10.14 who may be granted performance rights under the FY12 Tranche (or issued shares underlying those performance rights). As at the date of the notice of meeting, no securities have been issued under the Service Stream ESOP to any director or other person referred to in rule 10.14.

• (e) No loan been given by the Company in relation to the grant of performance rights or acquisition of shares.

• (f) Each annual report of the Company relating to a period in which performance rights or shares have been granted to, or acquired by, a director, an associate of a director or other person referred to in rule 10.14 will include:

• (1) details of any such grant or acquisition; and

• (2) a statement that approval for the issue of those securities to those persons was obtained under rule 10.14 of the ASX Listing Rules.

• (g) Any additional persons referred to in rule 10.14 who become entitled to participate in the FY12 Tranche after resolutions 6 or 7 have been passed and who were not named in the notice of this meeting will not participate in the FY12 Tranche until approval is obtained under rule 10.14 of the ASX Listing Rules.

• (h) Assuming each resolution is passed, the performance rights will be granted to the relevant director immediately after the applicable resolution is passed. Any underlying shares which Mr Sumner or his associate, or Mr Grant or his associate, are entitled to acquire will be issued within 14 days of the later of the date that the Company determines that the vesting conditions have been met and the date on which the Company releases its results for the financial year ended 30 June 2014, which date will be before 26 October 2014.

The directors (other than Mr Sumner in relation to resolution 7 and Mr Grant in relation to resolution 6) recommend that shareholders vote in favour of resolutions 6 and 7.

Lodge your vote:

Service Stream Limited

 Online:

www.investorvote.com.au

ABN 46 072 369 870

 By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

000001 000 SSM MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

Proxy Form



Vote online or view the annual report, 24 hours a day, 7 days a week:

www.investorvote.com.au

Your secure access information is: Cast your proxy vote Control Number: 999999 Access the annual report SRN/HIN: I 9999999999 PIN: 99999  PLEASE NOTE: For security reasons it is important that you keep your Review and update your securityholding SRN/HIN confidential.

• For your vote to be effective it must be received by 10.30am (Melbourne time) Monday 24 October 2011

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions for Postal Forms

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

GO ONLINE TO VOTE,  or turn over to complete the form

916CR_0_Sample_Proxy/000001/000001

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ’ X ’) should advise your broker of any changes.

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I9999999999
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I 9999999999 I ND

Proxy Form

Please mark to indicate your directions

Appoint a Proxy to Vote on Your Behalf

XX

I/We being a member/s of Service Stream Limited hereby appoint

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the Chairman OR of the meeting

 PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the Annual General Meeting of Service Stream Limited to be held at the Intercontinental Melbourne - The Rialto, 495 Collins Street, Melbourne, Victoria on Wednesday, 26 October 2011 at 10:30am (Melbourne time and at any adjournment of that meeting. The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business other than in respect of Item 1, where the company has determined that the Chairman is unable to do so. If the Chairman of the Meeting is your proxy (or becomes your proxy by default), you authorise the Chairman to exercise your proxy on Items 4, 5, 6 and 7 even though the item is connected directly or indirectly with the remuneration of a member of key management personnel. For Items 4, 5, 6 and 7, this authority is also subject to you marking the box in the section below.

Important for Items 4, 5, 6 and 7: If the Chairman of the Meeting is your proxy and you have not directed the Chairman how to vote on Items 4, 5, 6 and 7 below, please mark the box in this section. If you do not mark this box and you have not directed your proxy how to vote, the Chairman of the Meeting will not cast your votes on Items 4, 5, 6 and 7 and your votes will not be counted in computing the required majority if a poll is called on this item.

The Chairman of the Meeting intends to vote undirected proxies in favour of Items 4, 5, 6 and 7 of business.

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I/We acknowledge that the Chairman of the Meeting may exercise my proxy even if the Chairman has an interest in the outcome of this item and that votes cast by the Chairman, other than as proxy holder, would be disregarded because of that interest.

 Items of Business

PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

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• Resolution 1 Adoption of remuneration report

• Resolution 2 Re-election of Peter Dempsey

• Resolution 3 Re-election of Stephe Wilks Resolution 4 Issue of securities under the Service Stream ESOP

• Resolution 5 Acquisition of securities by Bob Grant or his associate under the 2011 financial year tranche of the Service Stream ESOP

• Resolution 6 Acquisition of securities by Bob Grant or his associate under the 2012 financial year tranche of the Service Stream ESOP

• Resolution 7 Acquisition of securities by Graeme Sumner or his associate under the 2012 financial year tranche of the Service Stream ESOP

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SIGN Signature of Securityholder(s) This section must be completed.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime / /
Name Telephone Date
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