.. going up from today?, page-2

re: ..why it is going up... going up from today? Aside from todays ann here's areprint of an interview held in late 2002...nothing uch has changed

INTERMOCO LIMITED 2002-11-18 ASX-SIGNAL-G

HOMEX - Melbourne
+++++++++++++++++++++++++
The following Briefing interview was completed 7 October 2002. A
Concept Equity analyst conducted the interview with Chief Executive
Officer, Mr Allen Roberts.

Concept - your company changed direction in 2000 when it acquired
Australon Enterprises and now operates in the technology sector by
providing Automated Meter Reading solutions. Can you explain what an
Automated Meter Reading solution is?

AMR is essentially aimed at, and used by electricity, gas, and water
utilities. It can provide significant cost savings. It offers a
variety of features such as remote connection and disconnection,
theft detection, demand side management, improvement of supply
quality, electronic billing interfacing, reductions in energy
purchase and settlement risk, automated fault reporting and it can
significantly reduce the cost of working capital. For instance, in
the electricity industry utilities may need to carry as much as 90
days of working capital. By using AMR, billing cycles can be
shortened to 3 days, reducing "work in progress" and providing
substantial savings. I should add that Intermoco does not refer to
its technology as AMR, but rather by is solution name "Utilitgy" -
technology for the utilities industry and a name that more accurately
reflects what we believe to be the first cost effective end-to end
internet-enabled AMR solutions.

Concept - is AMR a recent development?

AMR is not a new idea. AMR devices have been around for about 10
years. Their main function is to capture relevant data. The key issue
however, is to gather that data in a cost-effective manner. To
maximize the benefit from an AMR solution a utility company must be
capable of receiving information from its network in real time. A
meter reading should be taken as frequently as every half hour to
achieve real time reporting. Further, the information must be
delivered to the utility in a manner and format that enables the
utility to have a real understanding of issues relating to their
network almost instantaneously. To take a reading every 30 minutes
will results in a single meter being read in excess of 17,000 times
per annum. Traditional methods of delivering that information have not
been cost effective and, as a consequence, many so-called AMR
solutions have not been commercially successful. Intermoco's solution
uses the latest 2.5G wireless communications technology and the
financial model that we create for the utility no only provides
significant improvement in the provision of real time information but
also provides substantial cost benefits that will translate to an
improved bottom line for the utility.

Concept - for the uninformed how do your AMR devices work?

A Meter Interface Unit is installed in the end user's premises. The
device interrogates the smart meter at the premises and transmits the
data via the powerlines to a Meter Data Concentrator, which is
located at a central point on say a power pole. The data is then
transmitted across a communications network to a network operations
centre. The data can be then provided in any format that the utility
wishes and is accessed by the utility using a standard PC with
internet access to the secure website that Intermoco develops
specifically for each utility using its proprietary technology.

Concept - are your products proprietary and protected by patents?

Yes our products are proprietary and we continually seek patent
protection. We also use software encryption to protect our designs.
We strive to stay at the leading edge in the design and development
of monitoring systems for application across a number of industries.
We look at creating cost-effective solutions that enable utilities
and other clients to better manage their assets.

Concept - do you have specific markets that your AMR targets?

We are initially aiming to secure market share in the electricity
industries in South East Asia particularly Malaysia and the UK. We
have recently visited the UK and demonstrated our technology to two
major utilities in that country. As a consequence of that trip we
believe that there are good opportunities to deploy our technology in
networks over there. In Australia, we have unfortunately confronted
regulatory obstacles and hindrances that we believe may potentially
delay the wide-scale implementation of our solution in the short
term, however, we do see a market for specialist smaller
installations for new estate and building developments, retirement
villages and shopping center complexes as examples. In due course
with deregulation being embraced at all levels, particularly
political and industrial, Australia will also be a major market for
us.

Concept - what is the size of these markets?

There are over 1 billion meters worldwide of which approximately
300-400 million are in first world countries. There are roughly 7.7
million meters in Australian and in places such as Italy there are
over 27 million while in China there are in excess of 100 million, to
highlight the market size. The market we are initially pursuing is
Malaysia where there are over 5.5 million meters on the Malaysian
Peninsula, with another 0.5 million in East Malaysia. We aim to
secure global market share of 13.5 million units within 5 years.

Concept - have you had any successes so far in installing your AMR
devices?

Yes we have had very favorable responses to our technology. We have
completed one trial in Victoria (which has since been converted into
a commercial installation with a local utility), a second
installation in NSW was handed over to Integral Energy several weeks
ago. A third pilot in Malaysia has commenced installation with
handover anticipated by the end of November and we have been
approached by two other utilities to commence trials for them.

Concept - can you identify the locations where these trials have been
conducted?

The Victorian trial took place at the "MAB Newquay" development
located at Docklands, which is supplied by CitiPower. This
development comprises three residential towers where we will be
installing a total of approximately 76 meters. In NSW we have worked
with Integral Energy and installed our technology at 5 different
sites in other suburban Sydney. The other pilot installation is under
way in Malaysia for Tanaga Nasional, which is the national power
utility in peninsula Malaysia.

Concept - do you have any competitors and who are they?

Around the world there are a number of companies that claim to
operate in the area of AMR. During our own internal analysis of our
competitors, we uncovered a number of companies that have some
elements of an AMR solution on offer and there are a number of ways
in which these so called "solutions" are put together. After
undertaking our investigations we came to the conclusion that few if
any offer the total solution that we offer that incorporates the
meters, the technology, the data carriage, storage and presentation
as well as financing and management. For that reason, as well as our
innovative use of new technologies and the cost effective manner in
which the solution can be presented, we feel that we have few, if
any, direct competitors offering the same features and benefits as
ours.

Concept - you mentioned strategic alliances and partnerships, could
you tell us a little more about these?

We have entered into a collaborative agreement with Macquarie Bank.
The agreement grants Macquarie Bank the exclusive rights to market
the Intermoco range of production in the US, Canada, UK and Europe.
Because Macquarie is active in the infrastructure sector, they
understand the benefits of our technology. As part of the arrangement
we have also granted them 75 million options exercisable at $0.15
cents, subject to them securing orders for up to 2 million devices.
Macquarie may also provide financing to end-users so that the
purchase of our devices will be made easier for them.

In addition to the agreement signed with Macquarie, Intermoco has
also entered into a collaborative agreement with Email Metering. We
are particularly excited by this agreement, as it not only gives
Intermoco access to Email's extensive marketing network (as it is
currently represented in some 35 countries around the world) but the
agreement envisages the two organisations will jointly undertake
co-development work that will result in Email's smart meters being
fully integrated with Intermoco's meter interface technology. As a
consequence of this work we envisage that the manufacturing cost of
the combined devices will be significantly reduced, installation will
be cheaper and more efficient and that the solution will be
considerably more cost effective for the utility industry in general.

Concept - have you developed any other products?

We have also developed monitoring devised for sewerage systems and
LPG tanks. In addition, we have developed a portal called iEnable,
which allows devices such as air conditioners, spas and other home
appliances to be remotely controlled via the internet. This
technology will form the core of the smart home of the future. Other
automation devices have been manufactured and commercialized such as
the Synapse 211 (Physical Layer Repeater) and the Real Time
Scheduler. Both products are used in building automation systems.

Concept - how does one earn income by being a participant in the AMR
market?

We generate revenue from two different streams. The first is through
the sale of our Meter Interface Units and the second is through the
ongoing provision of metering data and presentation, which we supply
to the utility at a fixed annual cost. The cost of the units to the
end-user is a transaction revenue stream. The other revenue source is
a recurring income stream, which we receive through the collection,
storage and presentation of data. This service, which is provided to
a utility, developer, building or facility owner or manager in a
format that they determine) will be a major recurring income stream
for us in the future. Our charges range from $25 per annum per meter
depending on the type of AMR device being deployed and its location.
Importantly once we have achieved the deployment of a significant
number of meters, the ongoing revenues from this source will be
substantial and will continue irrespective of the number of
additional meters, which the company is able to monitor in the
future.

Concept - given the size of the potential market and the numbers you
have just mentioned the returns to Intermoco could be substantial?

I agree. In fact, I am loath to provide forecasts, as they could be
viewed by some as being overly bullish. I can however confirm that
Intermoco is budgeting to rollout a total of 13.5 million devices over
the next five years with only a relatively modest increase in
overheads. We are capable of keeping our overheads at a low level due
to the fact that we will not be undertaking any installation work
(that will be done by the utility companies or their authorized agents
under supervision by Intermoco). Our focus will remain on designing
the engineered solution for the utility client and providing technical
support. In that way, we will maximise profits.

Concept - do you envisage having to go back to the market to raise
further capital?

Not at this stage. Based on our forward budgets we do not envisage a
need to approach the markets for funding to further develop or market
our range of AMR solutions. However, if a strategic acquisition
becomes available we may require additional funding in that
circumstance.

Concept - you have recently had a major capital injection provided by
Newpage. Can you tell us a little more about them and what their
expectations are?

Newpage is an Australian private company with contacts in Malaysia
that invested $9.5 million in Intermoco in February. The principal
behind Newpage is an engineer who recognised the significant potential
of our technology and in particular our AMR solution. He has joined
our Board of Directors and brings with him outstanding introductions
into the Malaysian markets as well as providing valuable R&D, and
marketing contributions.

Concept - when do you expect to breakeven and generate profits?

We expect to be cash breakeven in the 2003 financial year and
profitable by 2004 (ie before any abnormal write-offs). We had
approximately $3 million in cash as at June 2002 with an operating
cost of approximately $250,000 per month. That gives us enough cover
for the next 12 months assuming that, in the unlikely scenario, we do
not generate any income during that period from sales of our products
or surplus assets such as our gold interests.

Concept - are you able to provide us with some numbers in respect to
your forecasts?

I am always reluctant to provide forecasts because of their perceived
bullish nature. We run the risk of losing credibility. To give you an
idea of our forecasts take for example the Malaysian market where
there are roughly 5.5 million meters. A contract for 1 million
devices would give us a gross margin of $50-60 million from the sale
of equipment and approximately $10 million per year in recurring net
revenue. If the size of the contract was to double there would be
only a small increase in the company's total overhead.

Concept - what about your people. Can you give us an insight into
your team?

We have a total staff complement of 24 of which 15 are highly
skilled, young and very bright engineers. The remainder of the team
is engaged in marketing, finance and ancillary services.

Concept - finally, you shares have failed to move. Do you know the
reasons for that?

The recent appetite for investments in companies, which have
interests in "technology", has been generally poor. I feel that this
situation has created skepticism that we can deliver our technology
as promised and secure sizable contracts. We are very confident that
the execution of such contracts is within our reach and we continue
to work hard to achieve that results. I think that any investor that
purchases Intermoco stock at current market levels will not be
disappointed.