++ data and comment ++ update, page-41

re: ++ agm--md's address ++ MANAGING DIRECTOR’S ADDRESS TO SHAREHOLDERS

"The last year has seen Lumacom focusing heavily on its advertising revenue sharing model for the European market with the installation of its first screen in Barcelona, Spain at the famous and high exposure Maremagnum tourist area.

On the heels of the European focus, Lumacom entered into the huge North American advertising market with its launch pad being the high profile and flagship site, The Conde Naste building (otherwise commonly referred to as the Nasdaq building) in Times Square New York.

The delivery of Lumacom’s unique technology, with its competitively low capital and operating costs is the very foundation upon which the advertising revenue share model is achievable, has been coordinated in cooperation with The Mega group of outdoor advertising specialist companies covering most of the European region and Totius Media in New York, a subsidiary of The Totius Group, specialising and committed to the development of the Lumacom commercialisation in North America.

The Joint Venture arrangements between the groups are predicated on the model of 50/50 joint ownership of screens on sites secured by the respective partners and equally sharing the net profit earned from these installations. The Joint Venture model has been developed in such a manner that ownership can vary between the partners provided that Lumacom always owns a minimum of 50% of its screens and always ensuring that it will enjoy a good level of recurring profit.

Our partnership business model is the ideal method for commercialising our technology. It allows us ready access to the key decision makers in the sign purchase, outdoor advertising and marketing industries, a position which would take many years to develop from a standing start. Securing these partnerships and managing these key relationships is the primary limb to our business model.

However, this partnership represents only the first phase of the process of getting an operating, revenue generating sign on a site. Sites must be identified and assessed for their potential as locations for LumaSigns. Negotiations must be conducted with site owners to secure the sites and regulatory approvals must be obtained, if they are not already held for electronic signs at the site. Simultaneously, advertising companies need to be alerted to the opportunity for advertisers, and advertisers secured for the site.

All this might sound complex and its achievement difficult however, our partners have been selected for their skills in managing exactly these processes, and while each step takes time to complete, they are run in parallel; however, this will provide you with some background and perhaps a better understanding of the reasons for the time between the announcement of our partnerships to closure of advertising contracts in relation to specific sites.

Europe The Maremagnum screen is on a 50/50 ownership. Advertising sales are secured in cooperation with Mega’s home office in London dealing with European international clients and Mega’s Barcelona based constituent; a well established outdoor group which was the first Spanish company to commence the business of “Mega Banners” throughout Spain.

Currently, the Maremagnum installation is the benchmark for Lumacom’s video product manufactured and supported under Lumacom’s cooperation with leading electronic sign manufacturer; Opto Tech – a publicly listed optical electronics manufacturer based in Taiwan with turnover in the order of $200million.

Maremagnum was launched in July 2004 and revenue per month has been steadily increasing and is within start up expectations. Full revenue is expected to flow in the New Year, with the commitment of long term advertising contracts with international advertisers being finalised for this site.

Once the advertising space on this sign is sold to its operational capacity, the net revenue to Lumacom is within the previously announced range of A$800,000 per year for this site as supported by The Mega group.

Since the Maremagnum launch, the Company has announced the identification of some 30-50 sites throughout the European region. My personal commitment to the European region has been focussed upon assessing these identified sites and systematically developing them into finalised deals.

All of which are currently in negotiation and are “REAL and ACHIEVABLE” deals for Lumacom. Under the requirements of Continuous Disclosure for ASX listed companies and Lumacom’s internal policy of announcing specific deals only “as and when they occur” we cannot announce specific details of each of these.

However, by country, current transactions under negotiation represent the following: 2 additional screens in Spain –(in addition to the Maremagnum sign). 6 screens in Germany; 4 screens in Scandinavia; 8 screens in Russia (this does not include the strategically important direct sale to Pepsi in Moscow) 2 screens in Greece – (giving us an opportunity during the Olympics); 4 screens for Turkey; and a further 20 others covering the Mega and non affiliate members throughout Europe.

Those for Istanbul are for 2 of the Company’s LumaPanel screens totalling 260 sqm (total value US$780,000). This site has been secured, regulatory approval is pending and negotiations with advertisers are underway. My visit to Istanbul last month, provided me the opportunity to evaluate that market as a burgeoning and valuable market to Lumacom in cooperation with The Kiska Group, whose strength, connections and influence in Istanbul as the largest, privately owned building, construction and land investment group in Istanbul is likely to see the region developed swiftly for Lumacom.

Kiska’s building, construction projects and land owning interests (valued at US$5 billion) also include its property activities in New York, and it was through Totius Media’s property connections that the Kiska deal was achieved.

Lumacom is now in the final stages of negotiations in relation to purchase order agreements for signs that will be the subject of two joint revenue advertising deals for high profile sites in the centre of Athens as a part of its lead up to the 2004 Olympic Games.

Negotiations are underway with the building owners in relation to these sites. This is with local Athens film & television group “Safe Company Limited” via its affiliate Astra International, which has initially ordered 1 Lumacom screen (with another anticipated shortly) under the 50/50 joint ownership/revenue share model.

One screen is a LumaPanel screen destined for a “roof top” application on a high profile government building and the second for a video LumaSign in the centre of Athens. In addition, negotiations have now progressed to a point that we are soon to finalise a wholly owned advertising revenue deal for a 100 sqm sign in an equally high profile site in Berlin Germany, with Mega’s German member for the region and 2 additional screens in Barcelona on the back of its successful first installation there.

The specific nature of these deals; actual locations, revenues and values cannot be released as yet for commercial reasons, but by example; the Berlin screen, expected to be operational in January, 2004, will be break even with only 15% of the available space sold.

Already a major German retail chain is committed to take ad space for an initial minimum period of 2 years. Lumacom marketing officers and myself will be returning to Europe in the new year to continue the progress of turning existing identified sites into finalised deals. 3

United States of America Totius Media has been focussed on its flag ship site located at Number 4 Times Square. To refresh, this involves the installation of approximately 1,200 square metres of LumaPanel screens for the top of the Conde Naste Building, the ONLY building in New York that has approval for roof-top signage of this magnitude.

The site was originally sourced and negotiated by Lumacom under a “no rent” advertising revenue share deal direct with the building owner, The Durst Organization – a major NY property owner which Lumacom and Totius will develop further Lumacom sites owned by them.

Since the appointment of Totius, their specialised team has renegotiated the arrangement with Durst to that of a straight lease deal on terms providing more favourable financial benefits to the Joint Venture and in turn, Lumacom.

Totius has also focussed its efforts through the appointment of its specialist advertising sales Executive; Mr Donn Bennett (previously marketing manager for Sony Jumbotron) on “A-grade” advertisers for this flag ship site. Currently, negotiations are centred on 5 very high profile and highly prized international companies for the advertising rights atop of #4 Times Square. The Lumacom/Totius Joint Venture is very confident in selecting one of these very shortly.

It is important to stress at this point, that the company has already obtained interest from other advertisers for the site but focus has been to secure these A-grade advertisers for the all important strategic reason that this iconic site will represent a major spring board for the rest of the United States and indeed internationally.

A number of sites in addition to the Durst owned Conde Naste building have now been identified and in the process of negotiation, including others as nearby as Times Square and stretching across the US to Hollywood, California.

Upon the finalisation of the advertising contract and installation of 4 LumaPanel signs on Conde Naste, we expect the “spread” of installations to grow similarly to that occurring now in Europe after the official launch of the Maremagnum screen in Barcelona.

I would like to address at this stage an all important matter which in fact has also been the subject of a number of comments the Company has received from Shareholders over the last few months in relation to the finalisation and announcement of deals…. in particular, 4 Times Square. You have already heard that the process of securing the site through to finalising the advertising and installing the sign is time consuming. But let me say that in the case of the Conde Naste building there have also been some practical delays, as a new communications tower has recently been erected on the top of this building to replace those destroyed in the 9/11 attack on the World Trade Centre. However, Totius Media and Lumacom have utilised this time to develop and execute a sophisticated marketing campaign to upgrade this project from 1 sign to 4, and to secure the very best advertisers for this site.

Notwithstanding this program, your Directors are conscious of the risk associated with any new venture, and has developed a risk management strategy to minimise this new venture risk. Investment of the company’s capital will only be made when advertisers have been secured for sites.

This minimises the revenue risk associated with the site and the risk that expenditure of capital and operating expenses are committed to before assured revenue has been secured. Whilst in some cases, this may delay in the installation of signs, it preserves the company’s capital for low risk short payback projects.

It is also very important that all Shareholders understand that the very nature and identity of the advertisers secured for what we describe as “initial” and “spectacular” sites (typically, Times Square) is as important as securing the site itself. By this I refer to the fact that the securing of an A-Grade advertiser, such as the Pepsi and Cokes of the advertising world is of great priority to Lumacom in establishing its LumaSigns as an outdoor advertising medium as an international and high profile one.

We have indeed been in a position to progress and conclude advertising deals on Times Square, for instance, with US local companies where the commercial arrangement is within expectations for the site, but have made the all important strategic decision to pursue the “blue-chip” advertiser.

This is not to say that we have not positioned these other local advertisers for this or other signs should our primary targets prove unsuccessful….of course we have, but we are very focussed on the big players and we are confident that we will secure these and be in a position to announce them shortly.

All Shareholders need to be patient in that deals such as #4 Times Square are multi-million dollar deals in their own right and, in addition to the fact that a spectacular site such as #4 provides no better launch pad for the rest of the world, we will pursue the best advertiser, as well as the best deal.

This takes time and we are extremely confident and committed to achieving this. It has indeed been a very busy and productive period for us in the 12 months to date. There is a lot of work ahead of us still, however with a lot of ground having been made in Europe and USA with deals systematically coming together, we are confident that our advertising revenue share model is being embraced and will further prove to be successful and value creating for Lumacom.

As more signs are installed, earnings and advertising revenue information will be announced to the market as part of this progress. We hope that we will be in a position to announce this information in the January to March quarter.

The financial year closing provided us with additional working capital of some $5.5 million from the conversion of the companies options issued at the time of the float. This provides a comfortable level of operating cash and given our current operating costs, the Company is in a solid financial position and there is no foreseeable requirement for further capital raisings.

If indeed, growth of the installation of signs is as we expect, additional capital funding of LumaSigns may be funded via a securitized funding program from lending institutions. We are pursuing all opportunities for debt capital raising so as to ensure the Company has a range of alternatives available to finance its expansion.

However, the Company will also pursue opportunities that may present themselves in the equity capital markets should it be determined they provide enhanced shareholder value.

In conclusion, I regret (and with a degree of apology to all Shareholders) that we are not always able to provide full and specific details of deals being negotiated and the parties involved on an “up to date basis”. Unfortunately, the very nature of the deals and the competitive status of the outdoor advertising industry are such that we cannot risk our negotiations, given the commercial sensitivity that applies when dealing with various large advertisers for extremely well identified sites; Times Square being the perfect example.

We have seen strong appreciation in the share price of the Company’s stock since July, 2003 which has been an endorsement of the sales model and strategy of the Company and the improved cash position of the Company. I believe our commercialisation activities are progressing well and the Company sees no reason that we cannot achieve growth in operations and performance at an escalating pace into the New Year.

Once multiple sign deals are in place with a steady flow of revenue to the company, the share price will quickly adjust to measure against profitability.

It is therefore, with all confidence, pride and continued commitment to the program that we thank all Shareholders who have supported us in our beliefs and endeavours over the last few years and, with delight, we welcome all those new Shareholders to the company as we forge aggressively in our growing North American and European markets (and hopefully with the same degree of success planned for the new Lumacom markets of Asia and other select parts of the world) into 2004 and beyond.

Thank you".