Financials

Full Year Financial Statement And Dividend Announcement

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Proforma Full Year Financial Statements And Dividend Announcement for the Period Ended 31/12/2008

Balance Sheet

Review of Performance

The global economic crisis, coupled with the loss of a major customer, had a severe negative impact on the Group's performance during the year and weakened its financial position and created liquidity problems. This caused the Group to default on its financial obligations. Letters of demand from the Group's various lenders were received subsequent to the year-end in January and February 2009. The Company and its primary subsidiary were placed under judicial management by Court order on February 20, 2009.

As part of the review of the Group's performance and financial position, management, together with the judicial managers, evaluated the realizable value of the Group's assets , resulting in significant write-downs. Fixed assets were written down to their recoverable value. A large portion of the inventory was found to be obsolete or have realizable values below book value. The collectability of long-standing receivables was considered doubtful and provided for. Intangibles, primarily goodwill and deferred development costs were written off entirely. The result of this has been to reduce the Group's financial position to a net liability position as at December 31, 2008.

In addition, the judicial managers identified certain questionable transactions and accounting entries during the year and prior financial years which resulted in the restatement of historical financial statements. The impact of these restatements resulted in substantial losses being incurred in 2007.

Had the prior year adjustments been recorded in historical periods, the Group would have recognised impairment provisions historically. If that had been done, the impairment provisions and write-offs for the current financial period would be lower.

Management also discussed with the judicial managers the existence of certain previously unconsolidated Special Purpose Entities (SPE). The principal activities of these SPE were being conducted on the behalf of the Group and for its benefit. The directorships, shareholdings were primarily held by employees and directors of the Group and its subsidiaries and the decision-making of the SPE resided within the Group. These entities were in substance part of the Group and management now believes should have been consolidated since inception.

These SPE have accumulated losses as at the end of December 31, 2008. Their results have now been consolidated by management, resulting in additional losses for the Group.

These discoveries were in addition to alleged irregularities in the administration of receivables financing facilities noted in an announcement dated December 18, 2008.

Commentary On Current Year Prospects

Subsequent to the financial year-end the Group's business has declined significantly. A considerable number of subsidiaries have ceased operations. In addition, since their appointment, the judicial managers in conjunction with management, have evaluated the viability of the Group's operations and disposed of a number of the Group's businesses. The sale of the Group's remaining businesses as a going concern is currently being evaluated. However, the likely outcome of these actions will result in further losses and leave the Group with a significant shortfall in discharging its obligations to its creditors.

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