Investor Presentaiton

Key Risks There are a number of factors, both specific to Austin and of a general nature, which may affect the future operating and financial performance of Austin, its investment returns and the value of its shares. Many of the circumstances giving rise to these risks are beyond the control of Austin. This section describes certain specific areas that are believed to be the major risks associated with an investment in Austin. Each of the risks described below could, if they eventuate, have a material adverse effect on Austin's operating and financial performance. You should note that the risks in this section are not exhaustive of the risks faced by a potential investor in Austin. You should consider carefully the risks described in this section, as well as other information in this presentation, and consult your financial or other professional adviser before making an investment decision. Operational risks: Austin derives the majority (approximately 70%) of its revenue from the sale of products manufactured primarily at its facilities in Australia, Indonesia and South America. Austin's ability to generate profits is reliant on its ability to maintain sufficient operating capacity and production output at these facilities.. Austin's reliance on its manufacturing and service facilities means that Austin could be significantly and adversely affected by a major operational failure at a facility, or any circumstance that reduces a facility's operational and production capacity, which could also lead to negative impacts on the Company's other operations. The manufacturing processes at Austin's facilities are dependent on equipment and such equipment may incur downtime as a result of planned outages, unanticipated plant outages or equipment failures or other events, such as fires, loss of external energy supply or other required manufacturing inputs and services or industrial action. Production could also be adversely impacted by transportation or raw material disruptions, poor quality of raw materials, adverse weather conditions and interruptions in the supply of essential services. Downturn in the mining industry: Austin derives most of its revenue from the provision of products and services to the resources industry and in relation mining activities. Accordingly, Austin's revenues and earnings are significantly dependent on the level of exploration, development and production activity in those industries. Any significant or extended decline in the level of that activity may adversely impact Austin's operating and financial performance. Any significant or extended decline in mineral or metal prices may reduce the level of exploration, development and production activities and thereby may adversely impact Austin's operating and financial performance. The level of activity in the resources industry can be cyclical and sensitive to a number of factors beyond the control of Austin and may be adversely affected by continuing concerns about global economic growth and turmoil in global credit markets. Reliance on key customer relationships and cancellation or deferral of customer orders and contracts: Austin has established and will continue to establish important customer relationships. The loss of one or more key customers is likely to adversely affect the operating results of Austin. Deterioration in key customer relationships can result in a loss of market share, while the early termination or deferral of customer contracts can result in less than the full value of contracts being realised or revenue from those contracts being deferred to later financial periods. If a key customer terminates the relationship, defers or defaults on its contracts or orders or fails to renew its contracts or orders with Austin, including as a result of financial difficulty or insolvency encountered by a key customer, this may have a material adverse effect on Austin's revenues and profitability. Share price risk: There are general risks associated with an investment in the share market. As such, the value of New Shares may rise above or fall below the Offer Price, depending on the financial position and operating performance of Austin. Further, broader market factors affecting the price of Austin shares are unpredictable and may be unrelated or disproportionate to the financial or operating performance of Austin. Such factors may include the economic conditions in Australia and overseas, investor sentiment in the local and international stock markets, consumer sentiment, changes in fiscal, monetary, regulatory and other government policies, national and international political and economic instability or the instability of national and international financial markets, interest and inflation rates and foreign exchange rates. Recent turmoil in global credit markets has negatively affected economies across the globe and led to increased volatility in stock markets, including ASX. Continued volatility in global markets could negatively impact the value of Austin shares. Competition risk: Austin's products and services compete with products and services provided by competitors and may compete with services and products that may be used as substitutes for Austin's products and services that are introduced by competitors in future. Improvements in the technology, production, pricing or acceptance of these competitive products and services relative to Austin's products and services could result in a significant loss of Austin's market shares or margins and hence reduce Austin's cash flow and profitability. Foreign exchange: A number of Austin's contracts are or may be expressed in terms of foreign currency. To the extent that such exposures are not hedged, fluctuations in the exchange rate between the contract currency and the Australian dollar may adversely affect Austin's revenue in Australian dollar terms. In particular, Austin operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar, Chilean Peso, Indonesian Rupiah, Colombian Peso and Peruvian Nuevo Soles as a result of its operations in the Americas and Indonesia. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities that are denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow forecasting. The Australian dollar is the functional currency for a large part of the group's entities and business activities. Investor Presentation austinengineering LTD

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