Ann: Preliminary Final Report, page-71

Good Morning 2000,

The Distribution numbers in the spread sheet are certainly forming a pattern of GP 25 % and Nett profit heading towards 10 % as the volumes grow and the 10,000 sales units required to cover Corporate costs becomes a very small part of the whole.

The thing that will really give profits a boost is the profits that should emerge from the Manufacturing JV.

Two things of interest there are that Charles has mentioned that the current two production lines can produce 160,000 units a year with very little increase in cost. Whilst that remains to be seen the Administration costs include all the R&D as none of that expense is capitalised. I imaging that is a large part of the cost that will probably be relatively fixed as volumes grow. I'm hoping that the GP margin in manufacturing will be circa 25 % and that once they achieve decent volumes the nett profit will head towards 10%. That is a profit supercharger in the system that will start to cut in shortly.

Nice to have our largest shareholder also holding the reins.

A lot to like about our VMT.