ZAPTRONIX LIMITED

(Registration number 1997/014928/06)

GROUP FINANCIAL STATEMENTS

for the year ended 30 April 2004

Page 1

ZAPTRONIX LIMITED GROUP FINANCIAL STATEMENTS

for the year ended 30 April 2004 The reports and statements set out below comprise the annual financial statements as presented to shareholders:

Index Page

Information page 2

Secretary’s report 3

Auditors’ report 4

Directors’ report 5 - 9

Balance sheets 10

Income statements 11

Statements of changes in equity 12

Cash flow statements 13

Notes to the financial statements 14 - 22

Notice of Annual General Meeting 23 - 25

Form of Proxy for Annual General Meeting Attached

Approval

The consolidated annual financial statements, which appear on pages 5 to 22 were approved by the directors on 10 August 2004.

The directors are responsible for the maintenance of adequate accounting records and the preparation and integrity of the financial statements and related information. The auditors are responsible for reporting on the fair presentation of the financial statements. The financial statements have been prepared in accordance with South African Generally Accepted Accounting Practice and in the manner required by the South African Companies Act, 1973.

The directors are also responsible for the company's system of internal financial controls. These are designed to provide reasonable, but not absolute, assurance as to the reliability of the financial statements, and to adequately safeguard, verify and maintain accountability of assets, and to prevent and detect misstatement and loss. Nothing has come to the attention of the directors to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred during the year under review.

The financial statements have been prepared on the going concern basis, since the directors have every reason to believe that the company has adequate resources in place to continue in operation for the foreseeable future.

_____________________________________ ______________________________________ JP Nel J Stratenwerth Chairman Executive Director Pretoria 10 August 2004

Page 2

ZAPTRONIX LIMITED CORPORATE INFORMATION

Country of incorporation South Africa

Nature of business To be involved in all aspects of the electronics and communications industry, specifically in regard to energy resource management and mobile asset management solutions

Directors JP Nel - Non-executive Chairman J Stratenwerth - Executive KJ Gribnitz - Non-executive PE du Preez - Non-executive

Business address Sihotha House Gazelle Close Corporate Park Midrand South Africa

Postal address Postnet 208 Private Bag 9 Weltevreden Park 1715 South Africa

Bankers ABSA Limited

Auditors Compendium (Pretoria) Incorporated Chartered Accountants (S.A.) Registered Accountants and Auditors

Secretaries The secretaries of the company are: Company secretary Share registrars M van den Berg

(appointed 1/7/2004) Computershare Investor Services 2004 (Pty) Limited

Mirkwood Estate 70 Marshall Street Farm Klipkop JR396 Johannesburg Gauteng 2001

Company registration number 1997/014928/06

Employees The average number of employees during the year was 2 (2003: 6)

Page 3

REPORT OF THE COMPANY SECRETARY TO THE SHAREHOLDERS OF ZAPTRONIX LIMITED

Certification In terms of section 268G(d) of the Companies Act, 1973, as amended, I hereby certify that, to the best of my knowledge and belief and after having made the necessary enquiries, the company has lodged with the Registrar of Companies all such returns required by the Companies Act and that such returns are true, correct and up to date in all material respects.

M van den Berg Secretary 10 August 2004

Page 4

REPORT OF THE INDEPENDENT AUDITORS TO THE SHAREHOLDERS OF ZAPTRONIX LIMITED

We have audited the annual financial statements and group annual financial statements of Zaptronix Limited set out on pages 5 to 22 for the year ended 30 April 2004. These financial statements are the responsibility of the company's directors. Our responsibility is to express an opinion on these financial statements based on our audit.

Scope

We conducted our audit in accordance with Statements of South African Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement.

An audit includes:

• examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,

• assessing the accounting principles used and significant estimates made by management, and

• evaluating the overall financial statement presentation.

Audit opinion

In our opinion, the financial statements and consolidated financial statements fairly present in all material respect, the financial position of the company and the group at 30 April 2004, and the results of its operations, change in equity and cash flows for the year then ended in accordance with South African Generally Accepted Accounting Practice, and in the manner required by the Companies Act in South Africa.

Going concern

Without qualifying our opinion, we draw attention to the paragraph that deals with going concern within the “Report of the Directors”, which indicates the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern.

Compendium (Pretoria) Incorporated Chartered Accountants (S.A.) Registered Accountants and Auditors Pretoria 10 August 2004

ZAPTRONIX LIMITED

REPORT OF THE DIRECTORS for the year ended 30 April 2004

Page 5

The board of directors submits its annual report on the activities of the company and group for the 12-month period ended 30 April 2004. The report forms part of the audited annual financial statements of the group, which along with the notes thereto, fully detail and fairly present the financial position, changes in equity, results of operations and cash flows of the company and group. NATURE OF BUSINESS Zaptronix is involved in different aspects of the electronics and communications industry, specifically in regard to energy resource management, payment systems utilising smart card technology and mobile asset management solutions. It specialises in the development and supply of products, solutions and services in the field of energy management. These include metering, load management, remote monitoring and control solutions. The energy management solutions division is currently the primary source of revenue in the group. The proposed reverse-acquisition of DuO Solutions Provider Ltd (“DuO”) was announced after year-end (refer to the section on subsequent events). The new combined entity will seek to leverage against the existing technology and expertise of both Zaptronix, in the areas of energy management and payment solutions, and DuO, in the areas of fleet management and vehicle monitoring. This will enable the company to realise its strategic vision of vertically integrating and expanding its service offering into the financial solutions domain. A second component of the Zaptronix strategic vision is to also horizontally grow its number of solution channels beyond Zaptronix’s current energy resource management and DuO’s current mobile asset management. Implementation of this new vision will clearly not have an immediate effect but will form the core of the board’s focus over the course of at least the next two years. REVIEW OF OPERATIONS AND FINANCIAL RESULTS The financial results of the company and the group for the year under review are given in the annual financial statements as set out on pages 5 to 22. Reflecting the ongoing restructuring of the group, trading losses declined substantially in the 2004 financial year: an attributable loss of 1.5 cents per share (“cps”) and a headline loss of 1.3 cps were recorded compared to an attributable loss of 6.9 cps and a headline loss of 4.5 cps in 2003. Management has further optimised operational efficiencies by contracting out most support activities. A service agreement was entered into with DuO for most of the administrative and financial functions, allowing the Zaptronix core team to concentrate on the rollout and implementation of its revisited strategy. The carrying values of the company’s subsidiaries, all of which are dormant at this stage, were written down to nominal value. The improvement in the group’s cash flows from operating activities gives perhaps the best indication of the extent to which the turnaround in the business is taking effect: cash absorbed by operations in 2004 reduced to one-tenth of the outflow of R3.3 million in 2003. On the down side, the loss for the period translated into a deterioration in the group’s Net Asset Value to 0.1 cps (2003: 1.6 cps). Excluding capitalised development costs, the group’s Net Tangible Asset Value amounted to a negative 0.3 cps as at 30 April 2004 (2003: positive 0.5 cps). The end of the April-2004 reporting period marks a watershed for the company, operating at break-even levels with most strategic initiatives in place and the proposed reverse-acquisition of DuO on the horizon. Management is in the process of establishing representatives in all areas of its commercial activities, which process will also be aimed at facilitating the appointment of a strong strategic empowerment partner and/or shareholder, probably with board representation. The directors are confident that the successful implementation of both the DuO transaction and the strategic initiatives of the combined entity should see a significantly improved financial and trading position by the end of the next annual reporting period. GOING CONCERN The company and group are commercially solvent and will continue trading as a going concern. In addition, the loan of R375 000 from DuO has been subordinated in favour of other creditors. The ongoing business remains dependant, though, on the conclusion of further contracts, the recapitalisation of the business and/or the successful conclusion of the DuO reverse-acquisition transaction. Accordingly, the financial statements will include an emphasis of matter paragraph regarding the going concern.

ZAPTRONIX LIMITED

REPORT OF THE DIRECTORS (continued)

Page 6

SHARE CAPITAL No shares were issued or repurchased and cancelled during the year under review. DIVIDEND No dividend has been declared and cash will be retained in the business. SUBSEQUENT EVENTS It was announced on 20 July 2004 that agreement has been reached between Zaptronix and DuO in terms of which Zaptronix will extend an offer to the shareholders of DuO for the acquisition of all of their DuO shares ("the offer") for the consideration as set out below ("the acquisition" or "the transaction"). The acquisition, which will be implemented by means of a scheme of arrangement ("the scheme") in terms of section 311 of the Companies Act, 1973, as amended ("the Act") will, subject to the fulfilment of the conditions precedent, result in DuO becoming a wholly owned subsidiary of Zaptronix. The scheme between DuO and all DuO shareholders will result in Zaptronix acquiring the entire shareholding of DuO. The implementation of the scheme will be subject to the approval of the acquisition by Zaptronix shareholders at a general meeting, the approval of the scheme by the requisite majority of DuO shareholders at a scheme meeting of DuO shareholders, the sanctioning of the scheme by the High Court of South Africa and the registration of the Order of Court by the Registrar of Companies. In terms of the scheme (and post the restructuring of the Zaptronix share capital as detailed below), Zaptronix will issue 306 916 667 consolidated Zaptronix shares, representing 81% of the consolidated shares in issue at the time, to the shareholders of DuO, registered as such at the close of business 48 hours before the convening of the scheme meeting, in a ratio of one consolidated Zaptronix share for every one DuO share held. The shares will be issued at one cent per share, equating to a consideration of R3 069 167, and will rank pari passu with existing Zaptronix shares. DuO had a Net Asset Value of R5 775 949 as at 29 February 2004. DuO is a public unlisted company involved in the supply chain, logistics and fleet management and vehicle monitoring markets. DuO owns the software and patents to its own advanced fleet management system, which is complemented by a 24-hour bureau monitoring service. In addition to continual software enhancement to stay ahead of a changing market environment, the company’s next generation hardware and software, currently under development, will enable its customers to assume complete control over their logistics management function, whilst still enjoying the benefits of DuO’s bureau service. Zaptronix will continue its business and expand its current offering of providing products, turnkey solutions and services to the metering and utility industry in combination with DuO’s bureau services and annuity business model. The synergies between the two businesses will create a technologically advanced logistics and utilities management company providing a 24/7 bureau and comprehensive service offering. In terms of the transaction, the Zaptronix share capital will be consolidated on a 1:2 basis, which will result in a reduction of the authorised share capital from 200 000 000 ordinary shares to 100 000 000 consolidated shares and a reduction of the issued share capital from 144 804 526 ordinary shares to 72 402 263 consolidated shares. Subsequent to the consolidation and in order to implement the acquisition, the authorised shares will be increased by 400 000 000 shares to 500 000 000 shares and the issued shares will be increased by 306 916 667 to 379 318 930 ordinary issued shares. It is intended that on approval by shareholders of the transaction, the board of directors will be reconstituted to include the appointments of Deon Oberholzer and Antonio De Canio, from the DuO board of directors, who will act as Chief Executive Officer and Chief Financial Officer of the new combined entity. Jens Stratenwerth will continue to serve as an executive director, whilst Karl Gribnitz and Jan Nel will continue to act as non-executive directors. The transaction is subject to the normal conditions precedent that would be applicable to a transaction of this nature, which conditions are indivisible and include, inter alia, the following: • approval of the JSE, the Securities Regulation Panel ("SRP"), the South African Reserve Bank and any other

regulatory authorities to the extent required; • the High Court of South Africa ("the Court") granting an Order convening a meeting of DuO shareholders to vote on

the scheme;

ZAPTRONIX LIMITED

REPORT OF THE DIRECTORS (continued)

Page 7

• the scheme being approved by a majority of DuO shareholders representing not less than 75% of the votes exercisable by the scheme members present and voting, either in person or by proxy, at the scheme meeting;

• the sanctioning by the Court of the scheme and a certified copy of the Order of Court being registered by the Registrar of Companies in terms of the Act; and

• the approval of resolutions relating, inter alia, to the acquisition, the share capital restructure and the reconstitution of the board of directors by the requisite majority of Zaptronix shareholders at a general meeting convened for the purpose.

The directors of Zaptronix are unanimously of the opinion that the terms of the proposed transaction are fair and reasonable to shareholders and will assist in unlocking the value of the Zaptronix listing. Shareholders are cautioned that due to the fact that this transaction is a reverse takeover according the JSE rules, the continued listing of the company remains subject to the JSE’s assessment of the suitability of the company for listing after the transaction. Furthermore, because this transaction is a related party transaction due to the fact that Gandalf Trust is the controlling shareholder in both companies, the circular to shareholders will include a fair and reasonable opinion by an independent third party. Documentation in respect of the scheme and the offer is in the process of being prepared and a circular will be mailed to Zaptronix shareholders in due course. Further details in respect of the scheme incorporating a notice of scheme meeting will be mailed to DuO shareholders in due course. DIRECTORS The directors of the company during the accounting year and up to the date of this report were as follows: Director Appointed Resigned

JF Heath 30 May 2003 C Fujiwara (Japanese) 23 July 2003 J Stratenwerth KJ Gribnitz* 15 August 2003 JP Nel* 15 August 2003 PE du Preez* 15 August 2003 * Non-executive Directors’ interests in the issued share capital of the company were as follows:

Beneficial Non-beneficial Director Direct Indirect % Direct Indirect % As at 30 April 2004 and as at date of this report J Stratenwerth - 472 700 0.3 - - - KJ Gribnitz*/JP Nel* - 90 916 885 62.8 - - - PE du Preez - - - - - -

Total - 91 389 585 63.1 - - - As at 30 April 2003 JF Heath 37 766 100 - 26.1 - - - C Fujiwara (Japanese) - - - - - - J Stratenwerth - 472 700 0.3 - - -

Total 37 766 100 472 700 26.4 - - - * Reflects combined interests held through Gandalf Trust, a discretionary trust, with Strider Holdings (Pty) Ltd as its

nominee. The share allocation between Messrs Gribnitz and Nel is yet to be decided. SHAREHOLDERS’ INFORMATION The company had the following shareholders’ spread as at 30 April 2004:

Shareholder spread No of shareholders % No of shares %

1 – 1,000 shares 133 19.9 91 873 0.1 1,001 – 5,000 shares 200 29.9 624 801 0.4 5,001 – 10,000 shares 105 15.7 916 500 0.6 10,001 – 100,000 shares 167 25.0 6 598 401 4.6 over 100,000 63 9.4 136 572 951 94.3

ZAPTRONIX LIMITED

REPORT OF THE DIRECTORS (continued)

Page 8

The company had the following public and non-public shareholders as at 30 April 2004: Public and non-public shareholders No of shareholders % No of shares %

Non-public shareholders Directors 3 0.4 91 389 585 63.1 Public shareholders General public 665 99.6 53 414 941 36.9

Shareholders holding more than 5% of the issued share capital as at 30 April 2004:

Main shareholders No of shares %

As at 30 April 2004 Strider Holdings (Pty) Ltd 90 916 885 62.8 The Nic Adams Family Trust 10 128 524 7.0 As at 30 April 2003 Hitachi Europe Limited 39 001 859 26.9 JF Heath 37 766 100 26.1 The Nic Adams Family Trust 15 117 200 10.4 Applied Systems Engineering (UK) Limited 12 475 000 8.6

SUBSIDIARIES AND ASSOCIATE Details of the company’s subsidiaries and associate are set out on page 17. SPECIAL RESOLUTIONS A full list of special resolutions passed by the company and its subsidiaries will be made available on request. CORPORATE GOVERNANCE REPORT The directors of the company confirm their commitment to the principles of sound corporate governance as advocated in the second King repot on Corporate Governance. Policies brought to the decision table are implemented with openness, integrity and accountability in an effort to provide stakeholders with assurances that the company’s affairs are being managed in an ethical, transparent and responsible manner. Board of directors The company has a unitary board, which is comprised of a non-executive chairman, one executive director and two non-executive directors. The directors acknowledge that the current composition of the board is not consistent with the recommendations of the second King Report, but this situation will be rectified on the implementation of the acquisition of DuO Solutions Provider (as detailed in the paragraph on subsequent events above) at which stage, two new executive directors will be appointed to the board. The board is responsible for the effective management and control of the company and participates in the determination of the strategic direction and policy of the group, discussions regarding transactions and disposals, approval of major capital expenditure, diverse financial and administrative activities and any other matters that may materially impact on the business of the company. The directors bring a wide range of experience, diversity, insight and independence of judgment on issues of strategy, performance, resources and standards of conduct to the board and the board, as currently constituted, has extensive experience in the restructuring of companies. The directors have access to all company information, records, documents and property as well as the advice and services of the company secretary. Directors are furthermore entitled to seek independent and professional advice about the affairs of the company. Internal financial and operating controls The board is responsible for the company’s system of internal control. The internal controls and systems are designed to provide reasonable, but not absolute, assurance of the integrity and reliability of the financial statements and to adequately safeguard, verify and maintain accountability of the assets.

ZAPTRONIX LIMITED

REPORT OF THE DIRECTORS (continued)

Page 9

Audit committee The board recognises the importance of a strong audit committee with responsibility for ensuring the overall effectiveness of corporate governance within the company. The board has adopted terms of reference for the establishment of an audit committee, however, as a result of the ongoing restructuring activities in the company, the audit committee has not as yet been formally convened. The committee will, however, be tasked with ensuring a sound system of internal control to safeguard stakeholders interests and company assets; ensuring the integrity of the company’s accounting and financial reporting systems; implementing systems for the monitoring of risk, financial control and compliance with the law and codes of conduct; evaluating the effectiveness of the company’s risk- and compliance-management functions; advising on the appointment of the external auditors to handle non-audit functions; reviewing the scope, quality, independence and objectivity of the audit and reporting on the going concern concept. Remuneration committee On implementation of the proposed DuO acquisition, the reconstituted board will establish a remuneration committee. The committee will be tasked with making recommendations to the board, within agreed terms of reference, on the company’s framework of executive remuneration and will ensure that levels of remuneration are sufficient to attract and retain directors and senior management needed to run the company successfully. Communication with stakeholders A policy of effective communication and engagement with all stakeholders relating to the affairs of the company is and will continue to be adhered to. Closed periods The company enforces a restricted period for dealing in shares. In accordance with this policy, any dealings in shares by all directors and other affected employees is disallowed by the board from the time that the reporting period has elapsed to the time that the results are released and at any time that the company is trading under a cautionary announcement. Code of ethics The board subscribes to the highest levels of professionalism and integrity in conducting the company’s business and in dealing with all its stakeholders. In adhering to this code of ethics, the board is guided by the following broad principles: • businesses should operate and compete in accordance with the principles of free enterprise; • free enterprise is constrained by the observance of relevant legislation and generally accepted principles regarding

ethical behaviour in business; • ethical behaviour is predicated on the concept of utmost good faith and characterised by integrity, reliability and a

commitment to avoiding harm; • business activities are to benefit all participants through a fair exchange of value or satisfaction or need; and • equivalent standards of ethical behaviour are expected from individuals and companies with whom business is

conducted.

ZAPTRONIX LIMITED

Page 10

BALANCE SHEETS as at 30 April 2004

Notes

Group 2004

R

Group 2003

R

Company 2004

R

Company 2003

R ASSETS Non-current assets 1 084 249 2 710 242 1 074 461 2 733 189 Property, plant and equipment 2 174 223 435 669 174 223 435 669 Development cost 3 495 419 1 623 562 495 419 1 623 562 Investment in subsidiaries 4 - - 4 269 143 Investment in associate 4 414 607 651 011 404 815 404 815 Current assets 705 501 554 648 609 517 465 229 Inventory 5 251 592 110 304 251 592 110 304 Accounts receivable 215 608 263 193 171 642 222 217 Deposits 26 602 - 26 602 - Cash and cash equivalents 211 699 181 151 159 681 132 708 Total assets 1 789 750 3 264 890 1 683 978 3 198 418 EQUITY AND LIABILITIES Capital and reserves 133 688 2 331 822 114 034 2 345 038 Ordinary share capital 6 1 448 045 1 448 045 1 448 045 1 448 045 Share premium 7 25 301 075 25 301 075 25 301 075 25 301 075 Non-distributable reserve 8 167 907 167 771 - - Accumulated losses (26 783 339) (24 585 069) (26 635 086) (24 404 082) Non-current liabilities 375 093 427 934 375 093 427 934 Borrowings 9 375 093 - 375 093 - Deferred taxation 10 - 427 934 - 427 934 Current liabilities 1 280 969 505 134 1 194 851 425 446 Accounts payable and accruals 977 699 501 921 891 581 422 233 Taxation - 3 213 - 3 213 Provisions 11 303 270 - 303 270 - Total equity and liabilities 1 789 750 3 264 890 1 683 978 3 198 418 Net asset value per share (cents) 20.1 0.09 1.61 Net tangible asset value per share (cents)

20.2 (0.25) 0.49

ZAPTRONIX LIMITED

Page 11

INCOME STATEMENTS for the year ended 30 April 2004

Notes

Group 2004

R

Group 2003

R

Company 2004

R

Company 2003

R Revenue 12 3 164 382 2 244 277 3 164 382 2 244 277 Cost of sales (1 691 776) (1 524 586) (1 691 776) (1 524 586) Gross profit 1 472 606 719 691 1 472 606 719 691 Other income 80 687 - 80 687 - Operating costs (3 943 106) (12 065 830) (4 212 244) (12 065 830) Operating loss before interest and taxation 13 (2 389 813) (11 346 139) (2 658 951) (11 346 139) Interest received 152 130 191 152 130 191 Interest paid 15 (139) (825) (139) (825) Net operating loss after investment income (2 389 800) (11 216 773) (2 658 938) (11 216 773) Share of associate profit/(loss) (236 404) 168 367 - - Net loss before taxation (2 626 204) (11 048 406) (2 658 938) (11 216 773) Taxation 18 427 934 1 025 675 427 934 1 025 675 Net loss for the period (2 198 270) (10 022 731) (2 231 004) (10 191 098) Loss per ordinary share (cents) 19 (1.52) (6.92) Headline loss per ordinary share (cents) 19 (1.27) (4.50)

ZAPTRONIX LIMITED

Page 12

STATEMENTS OF CHANGES IN EQUITY for the year ended 30 April 2004

COMPANY Share

capital R

Share

premium R

Non-distributable

reserve R

Accumulated

loss R

Total R

Balance at 1 May 2002 1 448 045 25 301 075 - (14 212 984) 12 536 136 Net loss for the period - - - (10 191 098) (10 191 098) Balance at 1 May 2003 1 448 045 25 301 075 - (24 404 082) 2 345 038 Net loss for the period - - - (2 231 004) (2 231 004) Balance at 30 April 2004 1 448 045 25 301 075 - (26 635 086) 114 034

GROUP Share

capital R

Share

premium R

Non-distributable

reserve R

Accumulated

profit R

Total R

Balance at 1 May 2002 1 448 045 25 301 075 168 388 (14 562 338) 12 355 170 Foreign currency translation reserve - - (617) - (617) Net loss for the period - - - (10 022 731) (10 022 731) Balance at 1 May 2003 1 448 045 25 301 075 167 771 (24 585 069) 2 331 822 Foreign currency translation reserve - - 136 - 136 Net loss for the period - - - (2 198 270) (2 198 270) Balance at 30 April 2004 1 448 045 25 301 075 167 907 (26 783 339) 133 688

ZAPTRONIX LIMITED

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CASH FLOW STATEMENTS for the year ended 30 April 2004

Notes

Group 2004

R

Group 2003

R

Company 2004

R

Company 2003

R Cash flows from operating activities (321 319) (3 316 888) (324 758) (3 305 980) Cash receipts from customers 3 295 644 2 803 743 3 295 644 2 785 425 Cash paid to suppliers and employees (3 613 763) (6 249 997) (3 617 202) (6 220 771) Cash utilised in operating activities 22.1 (318 119) (3 446 254) (321 558) (3 435 346) Interest received 152 130 191 152 130 191 Interest paid (139) (825) (139) (825) Taxation paid 22.2 (3 213) - (3 213) - Cash flows from investing activities (23 226) 338 963 (23 362) 344 308 Cash flow to maintain activities Furniture, fittings and equipment

acquired (23 362) (109 410) (23 362) (109 410) Proceeds from sale of tangible

assets - 448 990 - 448 990 Change in investment in subsidiary - - - 4 728

Foreign currency translation reserve 136 (617) - -

Cash flow from financing activities 375 093 - 375 093 - Loans raised/(repaid) 375 093 - 375 093 - Increase/(Decrease) in cash and cash equivalents 30 548 (2 977 925) 26 973 (2 961 672) Cash and cash equivalents at the beginning of the year 181 151 3 159 076 132 708 3 094 380 Cash and cash equivalents at the end of the year

22.3 211 699 181 151 159 681 132 708

ZAPTRONIX LIMITED

NOTES TO THE FINANCIAL STATEMENTS at 30 April 2004

Page 14

1. Accounting policies The annual financial statements are prepared in accordance with the historical cost basis, except for certain fixed assets, which have been revalued, and incorporate the following principal accounting policies, which are consistent with those of the previous year and conform in all material respects with South African Statements of Generally Accepted Accounting Practice. The principal accounting policies are: Revenue recognition Revenue, which excludes value-added tax and sales between group companies, comprises the invoiced value of goods and services sold or supplied and the value of long-term contract work done. The sale of goods and intellectual property is recognised when the significant risks and rewards of ownership of the goods and knowledge are transferred to the buyer. Dividends are recognised when the right to receive payment is established. Interest is recognised on a time proportion basis, taking account of the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the group. Property, plant and equipment Certain of the tangible assets are stated at cost, while the majority of the tangible assets have been revalued and are depreciated at rates considered appropriate to reduce carrying values to estimated residual values over their estimated useful lives. Revalued assets are valued by professional valuators at periodic intervals of not more than three years. Surpluses on revaluation are transferred to a non-distributable reserve. Any subsequent permanent decline in the value of any tangible assets is adjusted against the revaluation surplus to the extent of such available surplus and thereafter charged against operating profit. The annual rates and methods used for this purpose are: - Computer equipment 33% straight line - Delivery vehicles 25% straight line - Fixtures and fittings 10% straight line - Office equipment 15% straight line - Plant and equipment 10% straight line Intangible assets Where payment is made for the acquisition of intangible assets, they are set off against share premium until approved by a general meeting of shareholders to write off amounts against share premium. Where no share premium account exists, intangible assets are raised and amortised over a period of five years on the straight-line basis. Basis of consolidation The consolidated annual financial statements incorporated the financial statements of the holding company and its subsidiaries. The results of subsidiaries are included from the effective dates of their acquisition until the effective dates of disposal. Unrealised profits arising from transactions within the group are eliminated. Subsidiary company A subsidiary company is any company in which Zaptronix Limited holds greater than a 50% shareholding or where it is able to control the board of directors of that company.

ZAPTRONIX LIMITED

NOTES TO THE FINANCIAL STATEMENTS (continued) at 30 April 2004

Page 15

Associated company An associate company is one over which the group has the ability to exercise significant influence and which it intends to hold as a long-term investment. The group’s share of post-acquisition results of the associate company is incorporated in the financial statements, using the equity method of accounting, from the effective date of its acquisition until the effective date of disposal. The group’s share of earnings of the associate is included in earnings attributable to ordinary shareholders. Inventories Inventories are stated at the lower of cost or net realisable value. Cost is determined on the following basis: - raw materials and consumable goods are stated at cost; and - finished goods and work in progress are valued at raw material costs plus labour cost and a portion of

manufacturing overhead expenses based on normal capacity. Deferred tax Deferred tax liabilities are recognised for all taxable temporary differences, unless the deferred tax liability arises from: - goodwill for which amortisation is not deductible for tax purposes, or - the initial recognition of an asset or liability in a transaction which is not a business combination and which, at

the time of the transaction, affects neither accounting nor taxable profit. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised, unless the deferred tax asset arises from: - negative goodwill, or - the initial recognition of an asset or liability in a transaction which is not a business combination and which, at

the time of the transaction, affects neither accounting nor taxable profit. Foreign currency translation Transactions in foreign currencies are taken into account at the rates of exchange ruling on the transaction date, or at forward rates where forward exchange contracts have been entered into. Foreign assets and liabilities of South African companies, other than those that are covered by forward exchange contracts, are translated into South African Rand at rates ruling at 30 April 2004. Foreign entities Financial statements of foreign subsidiaries are translated into reporting currency as follows: - assets and liabilities at rates of exchange ruling at the group’s financial year-end; - income, expenditure and cash flow items at the weighted average rates of exchange during the financial year; and - exchange differences arising from the translation of foreign entities are taken directly to a foreign currency

translation reserve. Research and development expenditure Research costs are written off in the year in which they are incurred. Development costs are written off as incurred unless the costs are considered recoverable from probable future cost savings or sales revenues. Where development costs are deferred, they are written off on the straight-line basis over three years beginning in the year after the development costs have been deferred. Impairment The book value of assets is reviewed at each balance sheet date to determine if there is any indication of impairment. An impairment loss is recognised in the income statement when the book value exceeds the recoverable amount. The recoverable amount is greater of net realisable value and its value in use.

ZAPTRONIX LIMITED

NOTES TO THE FINANCIAL STATEMENTS (continued) at 30 April 2004

Page 16

Provision Provisions are recognised when there is a legal or constructive obligation as a result of a past event for which it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Retirement benefits Contributions to the provident fund are based on current service and current salary and are recognised in the results for the year. Financial instruments Financial instruments are carried on the balance sheet and include cash and cash equivalents, investments, receivables, payables, leases and borrowings. These instruments are generally carried at their estimated fair value.

2. Property, plant and equipment

GROUP/COMPANY Cost / valuation Accumulated depreciation

Carrying value at end of the year

2004 Owned assets Plant and equipment 358 114 (213 334) 144 780 Computer equipment - - - Fixtures and fittings 50 564 (27 847) 22 717 Office equipment 25 498 (18 772) 6 726 434 176 (259 953) 174 223 2003 Owned assets Computer equipment 800 233 (640 937) 159 296 Delivery vehicles 34 904 (34 904) - Fixtures and fittings 159 466 (110 703) 48 763 Office equipment 56 940 (23 084) 33 856 Plant and equipment 996 860 (803 106) 193 754

2 048 403 (1 612 734) 435 669

Carrying amounts of fixed assets can be reconciled as follows:

2004

Carrying value at the

beginning of the year

Additions/ (Disposals)

Assets scrapped Depreciation

Carrying value at the end of year

Owned assets Computer equipment 159 296 5 860 (31 402) (133 754) - Fixtures and fittings 48 763 - (17 153) (8 893) 22 717 Office equipment 33 856 17 502 (34 195) (10 437) 6 726 Plant and equipment 193 754 - (11 195) (37 779) 144 780 435 669 23 362 (93 945) (190 863) 174 223

2003 Owned assets Computer equipment 249 009 79 391 - (169 104) 159 296 Delivery vehicles 4 363 - - (4 363) - Fixtures and fittings 57 655 - - (8 892) 48 763 Office equipment 17 577 25 579 - (9 300) 33 856 Plant and equipment 723 249 (391 278) - (138 217) 193 754 1 051 853 (286 308) - (329 876) 435 669 Capital commitments: the company had no capital commitments at 30 April 2004 (2003: Nil)

ZAPTRONIX LIMITED

NOTES TO THE FINANCIAL STATEMENTS (continued) at 30 April 2004

Page 17

3. Development costs

GROUP/COMPANY

Carrying value at the beginning of

the year Amortised / written off

Carrying value at the end

of the year 2004 Development cost 1 623 562 (1 128 143) 495 419 2003 Development cost 5 038 762 (3 415 200) 1 623 562

4. Investments in subsidiaries and associate

Group Group Company Company 2004 2003 2004 2003 R R R R Investment in unlisted subsidiary companies: Card Dynamics Limited - 100% of ordinary shares - - 1 220 335 Zaptronix Systems (Proprietary) Limited - 100 ordinary shares of R1.00 each - - 1 100 - - - 3 835 Electronic Golf Network (Proprietary) Limited - 100 ordinary shares of R1.00 each - - 1 100 Loan account - - - 44 673 eClub Network (Proprietary) Limited - 100 ordinary shares of R1.00 each - - 1 100 - - 4 269 143 Investment in unlisted associate company: GIS International Marketing Limited (UK): 25% (2003: 25%) 414 607 651 011 404 815 404 815 414 607 651 011 404 819 673 958

5. Inventories

The amounts attributable to the different categories are as follows: Finished goods 251 592 110 304 251 592 110 304

6. Share capital

Authorised 200 000 000 ordinary shares of R0.01 2 000 000 2 000 000 2 000 000 2 000 000 Issued 144 804 526 ordinary shares of R0.01 1 448 045 1 448 045 1 448 045 1 448 045 The un-issued shares were placed under the control and authority of the directors until the forthcoming annual general meeting.

ZAPTRONIX LIMITED

NOTES TO THE FINANCIAL STATEMENTS (continued) at 30 April 2004

Page 18

Group 2004

R

Group 2003

R

Company 2004

R

Company 2003

R 7. Share premium

Share premium thereon 25 301 075 25 301 075 25 301 075 25 301 075

8. Non-distributable reserve

Foreign currency translation reserve

Opening balance 167 771 168 388 - - Movement 136 (617) - - Closing balance 167 907 167 771 - -

9. Borrowings

DuO Solution Provider Ltd 375 093 - 375 093 -

The loan bears no interest and has no fixed terms of repayment. The loan has been subordinated in favour of other

creditors. 10. Deferred taxation

Liability at the beginning of the year 427 934 1 453 610 427 934 1 453 610 Movements during the year: Temporary differences (427 934) (1 025 676) (427 934) (1 025 676) - 427 934 - 427 934

11. Provisions

Provision for rent 174 901 - 174 901 - Provision for leave pay 55 112 - 55 112 - Provision for audit fees 43 257 - 43 257 - Provision for printing & publishing 30 000 - 30 000 - 303 270 - 303 270 -

12. Gross revenue

Gross revenue comprises turnover, which excludes value added tax and represents the invoiced value of goods and services supplied.

Major classes of revenue comprise: Rendering of services 3 164 382 2 244 277 3 164 382 2 244 277

ZAPTRONIX LIMITED

NOTES TO THE FINANCIAL STATEMENTS (continued) at 30 April 2004

Page 19

Group 2004

R

Group 2003

R

Company 2004

R

Company 2003

R 13. Operating loss

Operating loss is arrived at after taking into account the following:

Operating lease rentals Land and buildings 154 863 178 613 154 863 178 613 Depreciation 190 863 329 876 190 863 329 876 Computer equipment 133 754 169 104 133 754 169 104 Delivery vehicles - 4 363 - 4 363 Fixtures and fittings 8 893 8 892 8 893 8 892 Office equipment 10 437 9 300 10 437 9 300 Plant and equipment 37 779 138 217 37 779 138 217 Development cost – amortised/ written-off

1 128 143

3 415 200

1 128 143

3415 200

Loans to subsidiary companies - - 75 294 - Investments in subsidiary companies - - 220 635 - Management and administration fees 330 000 960 010 330 000 960 020 Salaries and wages 574 551 875 685 574 551 875 685 Loss on assets scrapped 93 945 - 93 945 - Auditors remuneration Audit fees 35 000 66 000 35 000 66 000

14. Directors’ emoluments

Executive directors Salaries: J Heath - 490 541 - 490 541 J Stratenwerth 436 632 445 469 436 632 445 469 JP Nel - - - - KJ Gribnitz - - - - PE du Preez - - - - Other benefits – medical aid and provident fund:

J Heath - 64 164 - 64 164 J Stratenwerth 93 234 93 000 93 234 93 000 JP Nel - - - - KJ Gribnitz - - - - PE du Preez - - - - 529 866 1 093 174 529 866 1 093 174

15. Finance costs

Interest paid 139 825 139 825

ZAPTRONIX LIMITED

NOTES TO THE FINANCIAL STATEMENTS (continued) at 30 April 2004

Page 20

16. Minimum lease payments

2004 Company

1 Year

2003 Company

1 Year Office rental 174 901 128 352 2 - 5 Years 2 - 5 Years Office rental - 174 901 Minimum lease payments for 2004 in terms of contractual agreement with Ryclof-Beleggings (Pty) Ltd for the rental of office space.

17. Related parties Group

2004 R

Group 2003

R

Company 2004

R

Company 2003

R Amounts owed to related parties: DuO Solution Provider Ltd 375 093 - 375 093 - Gandalf Trust / Strider Holdings (Pty) Ltd Gandalf Trust, through its nominee Strider Holdings (Pty) Ltd, owns 62.8% of the ordinary shares of Zaptronix Ltd. DuO Solutions Provider Ltd DuO Solutions Provider Ltd is controlled by Gandalf Trust.

18. Taxation South African normal taxation

- Current tax - - - - - Deferred tax (427 934) (1 025 675) (427 934) (1 025 675) - STC - - - - (427 934) (1 025 675) (427 934) (1 025 675)

The estimated group tax losses available for set off against future taxable income is R26 228 336 (2003: R25 714 147)

ZAPTRONIX LIMITED

NOTES TO THE FINANCIAL STATEMENTS (continued) at 30 April 2004

Page 21

19. Loss and headline loss per share The calculation of loss per ordinary share is based on losses attributable to ordinary shareholders of R2 198 270 (2003 loss: R10 022 731) before extraordinary items, and a weighted number of ordinary shares in issue of 144 804 526 (2003: 144 804 526) throughout the year. The calculation of the headline loss per ordinary share is based on headline earnings attributable to ordinary shareholders of R1 835 187 (2003 loss: R6 522 731) before extraordinary items, and a weighted umber of ordinary shares in issue of 144 804 526 (2003: 144 804 526) throughout the year. Reconciliation between loss and headline loss

2004

Profit

R

Taxation

R

Minority interest

R Net profit

R Net loss (2 198 270) - - (2 198 270) Loss on assets scrapped 93 945 - - 93 945 Impairment of investment 269 138 - - 269 138 Headline loss (1 835 187) - - (1 835 187) 2003 Net loss (10 022 731) - - (10 022 731) Exception items 3 500 000 - - 3 500 000 Headline loss (6 522 731) - - (6 522 731)

20. Net asset value per share and net tangible asset value per share 20.1 Net asset value per share

The net asset value per share is calculated on the number of ordinary shares in issue at year-end of 144 804 526 (2003: 144 804 526) and net assets of R133 688 (2003: R2 331 822).

20.2 Net tangible asset value per share The net tangible asset value per share is calculated on the number of ordinary shares in issue at year-end of 144 804 526 (2003: 144 804 526) and net tangible assets of negative R361 731 (2003: positive R708 260).

21. Financial instruments Credit risk Financial assets which potentially subject the group to concentrations of credit risk consist principally of cash, short term deposits and trade receivables. The group’s cash equivalents and short term deposits are placed with high credit quality financial institutions (ABSA). Trade receivables as disclosed have been collected subsequent to the year-end. Accordingly, the group has no significant concentration of risk. Fair values At 30 April 2004 and 2003, the carrying amounts of cash and short term deposits, receivables, payables and accrued expenses approximated their fair values due to the short-term maturities of these assets and liabilities. Interest rate risk The group’s interest rate risk is negligible. All cash is held in interest-bearing accounts with high credit quality financial institutions.

ZAPTRONIX LIMITED

NOTES TO THE FINANCIAL STATEMENTS (continued) at 30 April 2004

Page 22

Group Group Company Company

2004

R 2003

R 2004

R 2003

R 22. Cash flow information 22.1 Cash utilised by operations

Loss on ordinary activities before taxation

(2 626 204)

(11 048 406)

(2 658 938)

(11 216 773)

Adjustments: Depreciation / amortisation of development costs 1 319 006

3 745 076

1 319 006

3 745 076

Write-down of investment - 3 500 000 - 3 500 000 Investment income (152) (130 191) (152) (130 191) Finance costs 139 825 139 825 Share of associate’s (profit)/ loss 236 404 (168 367) - - Loss on impairment of investment - - 269 138 - (Profit)/ loss on disposal/ assets scrapped

93 945

(53 272)

93 945

(53 272)

(976 862) (4 154 335) (976 862) (4 154 335) Changes in working capital: 658 743 708 081 655 304 718 989 Change in accounts payable 779 048 (812 620) 772 619 (783 388) Change in accounts receivable 20 983 559 472 23 973 541 148 Change in inventories (141 288) 961 229 (141 288) 961 229 (318 119) (3 446 254) 321 558 (3 435 346)

22.2 Taxation paid

Outstanding at beginning of the year (3 213) (3 213) (3 213) (3 213) Outstanding at end of the year - 3 213 - 3 213 (3 213) - (3 213) -

22.3 Cash and cash equivalents

Bank and cash on hand 211 699 181 151 159 681 132 708

ZAPTRONIX LIMITED

Page 23

NOTICE OF ANNUAL GENERAL MEETING (Incorporated in the Republic of South Africa)

(Registration number: 1997/014928/06) (“Zaptronix” or “the company”)

Notice is hereby given that the Annual General Meeting of the members of Zaptronix Limited will be held in the boardroom at Upper Floor, Sihotha House, Gazelle Close, Corporate Park, Midrand on Friday, 17 September at 10:00, for the purpose of transacting the following business: Ordinary business: 1. To receive and consider the Annual Financial Statements for the year ended 30 April 2004, including the

Directors’ Report and the report of the Auditors thereon; 2. To authorise the directors to determine the remuneration of Compendium (Pretoria) Incorporated for the past audit

and to re-appoint Compendium (Pretoria) Incorporated, as auditors to the company until the next Annual General Meeting;

3. To elect directors in the place of Messrs. Karl Gribnitz and Jan Nel, who retire by rotation and, being eligible, offer themselves for re-election. Biographies of the directors standing for re-election are provided on the page following this notice; and

4. To transact such other business as may be transacted at an Annual General Meeting. Special business In addition, members will be requested to consider and, if deemed fit, to pass, with or without modification, the following resolutions: Ordinary Resolution number 1 “Resolved that the unissued shares of the company be placed under the control of the directors of the company, and that directors are hereby authorised, subject to sections 221 and 222 of the Companies Act of 1973, as amended, and to the rules and regulations of the JSE to allot and/or issue shares to such person or persons on such terms and conditions as they may determine, such authority to expire at the next annual general meeting of the company.” Ordinary Resolution number 2 “Resolved that, subject to not less than 75% of shareholders, present in person or by proxy and entitled to vote at the annual general meeting at which this ordinary resolution is considered, voting in favour thereof, the directors of the company be and are hereby authorised, by way of general authority, to issue all or any of the authorised but unissued shares in the capital of the company for cash as they in their discretion deem fit, subject to the following limitations: - the securities must be of a class already in issue; - the securities must be issued to public shareholders and not to related parties; - the general issue of shares for cash in the aggregate in any one financial year may not exceed 15% of the company’s

issued share capital of that class; - the maximum discount at which securities may be issued is 10% of the weighted average traded price of those

securities over the 30 business days prior to the date that the price of the issue is determined or agreed by the directors of the applicant;

- after the company has issued securities representing, on a cumulative basis within a financial year, 5% or more of the number of securities in issue prior to that issue, the company shall publish an announcement containing full details of the issue, including the effect of the issue on net asset value and earnings per share; and

- the shareholders of the company hereby waive their pre-emptive rights to the shares to be issued shares for cash in terms of this authority.”

Ordinary Resolution number 3 “Resolved that any two directors of the company be and hereby are authorised to do all such things and to sign all documents and take all such action as may be considered necessary to implement the resolutions set out in this notice of Annual General Meeting convening the meeting at which this resolution and such other resolutions are proposed.”

ZAPTRONIX LIMITED

Page 24

Voting and proxies All shareholders will be entitled to attend and vote at the Annual General Meeting or any adjournment thereof. On a show of hands, every shareholder of the company who, being an individual, is present or is present by proxy at the general meeting or which, being a company or body corporate, is represented thereat by a representative appointed pursuant to section 188 of the Act, shall have one vote only and on a poll every shareholder of the company (whether an individual or a company or a body corporate) or represented by a proxy at the Annual General Meeting shall have one vote for every share held by such shareholder. The necessary form of proxy is attached for the convenience of certificated shareholders who cannot attend the Annual General Meeting, but who wish to be present thereat. Any shareholder entitled to attend and vote at the Annual General Meeting may appoint one or more persons to attend, speak and vote in place of such shareholder. A proxy so appointed need not be a shareholder of the company. In order to be valid, duly completed proxy forms must be received by the company’s transfer secretaries, Computershare Investor Services 2004 (Pty) Ltd, 70 Marshall Street, Johannesburg 2001 (PO Box 1053, Johannesburg 2000), by no later than 10:00 on Wednesday, 15 September 2004. Holders of dematerialised shares who wish to attend the annual general meeting or vote by way of proxy must contact their Central Securities Depositary Participant (‘CSDP’) or broker who will provide them with the necessary authority to carry out their instructions or to vote by proxy. This must be effected in terms of the agreement entered into between the shareholder and the CSDP or broker. By order of the Board

M van den Berg Company Secretary 10 August 2004

ZAPTRONIX LIMITED

Page 25

BIOGRAPHIES OF THE DIRECTORS STANDING FOR RE-ELECTION MR KJ GRIBNITZ (38) Karl attended Rand Afrikaans University where he completed his Bachelor of Commerce and Bachelor of Commerce (Honours) degrees, specialising in Investment Management. After graduating, he established a number of small businesses and in 1992, commenced a Masters degree in Commerce, which culminated in the publication of his thesis on the Time Value of Money. In August 1994, Karl formed Gandalf Trust to handle specialised transactions relating to mergers, acquisitions and corporate restructures, which he still runs to date as Executive Trustee in charge of strategy and deal structuring. Karl currently serves on the boards of Acuity Group Holdings Limited, Duo Solutions Provider Limited, Proper Group Limited, Spectrum Shipping Limited, Zaptronix Limited and Zenith Concessions Limited. MR JP NEL (41) Jan graduated from RAU in 1989 with a B.Sc. (Honours) degree in Applied Mathematics. He initially pursued an academic career, obtaining his Masters Degree in Applied Mathematics (specialising in Chaotic Dynamics and Fractal Dimensions) and making academic contributions to international conferences. During this time, he undertook contractual research, tuition and software development work at RAU and ran his own small business. Jan is the co-founder of Gandalf Trust and occupies the position of co-Executive Trustee. He is responsible for the overall project and operational management of the business and his strong analytical background has been central to the successful corporate restructure and rescue operations engineered by Gandalf Trust. Jan currently serves on the boards of Acuity Group Holdings Limited, DuO Solutions Provider Limited, Proper Group Limited, Spectrum Shipping Limited, Zaptronix Limited and Zenith Concessions Limited.

ZAPTRONIX LIMITED

(Incorporated in the Republic of South Africa) (Registration number: 1997/014928/06)

(“Zaptronix” or “the company”)

FORM OF PROXY For use at the Annual General Meeting of members to be held in the boardroom, Upper Floor, Sihotha House, Gazelle Close, Corporate Park, Midrand on Friday, 17 September 2004 at 10:00 (the “Annual General Meeting”). I/We _________________________________________________________________________

of ___________________________________________________________________________

being a member/s of Zaptronix Limited, hereby appoint:

1. __________________________________________________or, failing him/her,

2. __________________________________________________or, failing him/her,

3. __________________________________________________or, failing him/her,

4. the Chairman of the Annual General Meeting,

as my proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the company to be held at 10:00 on Friday, 17 September 2004 and at any adjournment thereof and to speak and act for me/us and, on a poll, vote on my/our behalf. My/Our proxy shall vote as follows: Number of shares:

In favour of Against Abstain Adoption of annual financial statements To authorise the directors to determine the remuneration of Compendium (Pretoria) Incorporated for the past audit

To re-appoint Compendium (Pretoria) Inc. as auditors Election of directors: KJ Gribnitz JP Nel Ordinary resolution number 1 Ordinary resolution number 2 Ordinary resolution number 3 (Indicate instruction to proxy by way of a cross in space provided above) Unless otherwise instructed, my/our proxy may vote as he/she thinks fit. Signed this______________day of________________________________________2004 Signature ________________________________________________________________

Please read the notes on the reverse side hereof.

ZAPTRONIX LIMITED

Notes: 1. A member may insert the name of a proxy or the names of two alternative proxies of the member’s choice in the

space/s provided, with or without deleting “the chairman of the general meeting”, but any such deletion must be initialed by the member. The person whose name stands first on the form of proxy and who is present at the general meeting will be entitled to act as proxy to the exclusion of those whose names follow.

2. Please insert an “X” in the relevant spaces according to how you wish your votes to be cast. However, if you

wish to cast your votes in respect of a lesser number of shares than you own in the company, insert the number of ordinary shares held in respect of which you desire to vote. Failure to comply with the above will be deemed to authorise the proxy to vote or to abstain from voting at the Annual General Meeting as he/she deems fit in respect of all the member’s votes exercisable thereat. A member or his/her proxy is not obliged to use all the votes exercisable by the member or by his/her proxy, but the total of the votes cast and in respect whereof abstention is recorded may not exceed the total of the votes exercisable by the member or by his/her proxy.

3. Zaptronix shareholders who hold dematerialised shares through a CSDP or broker, other than those in “own

name”, and who wish to attend the general meeting must request their CSDP or broker to provide them with a Letter of Representation or should advise their CSDP or broker as to what action they wish to take. This must be done in terms of the agreement entered into between them and the CSDP or broker. Zaptronix shareholders who have dematerialised their shares, other than those in “own name”, must not complete and return the attached form of proxy.

4. Forms of proxy must be received by the company’s transfer secretaries, Computershare Investor Services 2004

(Pty) Ltd, 70 Marshall Street, Johannesburg 2001 (PO Box 1053, Johannesburg, 2000) by not later than 10:00 on Wednesday, 15 September 2004.

5. The completion and lodging of this form of proxy will not preclude the relevant member from attending the

Annual General Meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof.

6. Documentary evidence establishing the authority of a person signing this form of proxy in a representative

capacity must be attached to this form of proxy unless previously recorded by the company’s transfer secretaries or waived by the chairman of the Annual General Meeting.

7. Any alteration or correction made to this form of proxy must be initialed by the signatory/ies. 8. A minor must be assisted by his/her parent or guardian unless the relevant documents establishing his/her legal

capacity are produced or have been registered by the transfer secretaries of the company. 9. The chairman of the Annual General Meeting may reject or accept a form of proxy which is completed and/or

received, other than in accordance with these notes, if the chairman is satisfied as to the manner in which the member wishes to vote.