DATADOT TECHNOLOGY LIMITED — AGM Information 2009

Oct 15, 2009

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ANSWERS TO SHAREHOLDERS’ QUESTIONS ON NOTICE – 2009 AGM

From William Cleugh

1. Is DDT's core business still financially viable?

Yes

1. Do you have a new business model or proposal to combat the current company's dilemma in declining revenues and very excessive overheads?

Please refer to the CEO’s Presentation to the AGM which addresses the company’s strategy to generate additional revenue and contain costs.

1. Have you made any attempts to withdraw from proven unprofitable markets like the USA, Russia and New Zealand?

The USA subsidiary has been restructured, including new management appointed with a sales focus. Russia and New Zealand are being managed as per the strategy outlined in the CEO’s presentation.

1. You have fully impaired all your investments in Data Trace. I need you to confirm if that business is still a going concern and if so, what plans are in place to stem the financial drain on DDT's core operations?

Unfunded R&D is no longer conducted in DataTrace DNA Pty Limited. The technology is now commercialised and generating revenue in some applications. Other applications with significant commercial potential have been announced to the market. Please refer to the CEO’s Presentation to the AGM which expands on the strategy of integrating DataTrace DNA into a broader range of identification, protection and authentication solutions.

1. Could you provide me the financials for DataTrace for FY 2009?

Please refer to page 73 of the Annual Report which contains a summary of DataTrace DNA Pty Limited financials in Note 17.

1. What is the current state of affairs on the dispute between the former CEO and "our company"?

The Board is not able to comment on this dispute as it is currently before the NSW Supreme Court.

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1. You have reported increased 'Bad and Doubtful Debts' of more than $203,000 from previous year. What steps have you taken to recover these debts and how long has this so called ' Bad & Doubtful Debts' been outstanding?

A comprehensive review of all outstanding debtors was conducted at the end of year to ensure recovery, and where this is doubtful, to make adequate provisions. Where appropriate, action is underway to recover debts, including a successful application to the Federal Court to wind up one debtor and appoint a liquidator.

1. I need you to provide the individually breakdown in costs on : (a) Your recent Employee Restructuring programme.

2. (b) Legal, Accounting and other Adminstration fees arising out of the recent capital raising exercise and the Takeovers Panel debacle.

3. (a) At the beginning of November 2008 action was taken to reduce operating overheads by more than $1.5 million per annum. A significant component of this reduction was achieved by the decision of a number of key management personnel to accept substantial pay reductions and by adopting a more performance-based remuneration framework for the sales team. In the seven months to 30 June 2009 this initiative reduced the company’s remuneration costs by more than $1 million (on an annualised basis) and reduced the income of affected personnel by an average of approximately 40%.

In the second-half of the year further necessary savings were achieved by retrenching some staff and not replacing others who resigned. At 30 June 2009 the annualised remuneration costs of permanent employees were 25% lower than at the high point in October 2008.

(b) Legal Fees $91,915 Share Register Management $52,052 Consulting Fees $20,000 _ $163,967 Less amount payable by KTM Capital Pty Ltd under order of Takeovers Panel $18,296 _ Total Paid $145,671

From Robert Schuitema

1. What was the cash position of the company at 30[th] June 2009?

$761,490, as disclosed in the audited financial statements and $1.01 million at 31[st] August 2009 as recently disclosed to the ASX.

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1. Should not the company be reporting Group cashflow under the Appendix 4C disclosure within 30 days of each quarter?

No. This is not a reporting requirement imposed on the company.

1. Shareholders need to know whether DDT needs more money and, if so, how it is going to be raised?

Please refer to the Chairman’s AGM address, which answers this question.

1. How soon after KTM Capital subscribed for the 22.4 million shares at 1 cent per share did you pay them back virtually the same amount in underwriting fees and other charges?

In relation to the 15% share placement, the company paid KTM Capital its fees under the underwriting agreement on 1[st] April 2009.

In relation to the rights issue, the company paid KTM Capital its fees under the underwriting agreement on 14[th] May, 2009.

1. Did the Board know that by introducing a large new shareholder to the DDT register DDT will lose the benefits of some of its significant tax losses under the ATO rules of continuity of shareholding?

Both the Business Continuity Test and Continuity of Ownership Test apply in assessing the validity of carried forward tax losses. The company has good reason to believe it continues to meet the requirements of the Business Continuity Test.

1. Mr Allan Farrar’s relationship with KTM Capital and its associates needs to be disclosed to shareholders.

Mr Farrar has not and never has had a professional or business relationship with KTM Capital Pty Limited, Bannaby Investments Pty Limited, T M Consulting Pty Limited, or Mr Tod McGrouther. Mr Farrar did have a very limited professional relationship with Mr. Kerridge involving only one business matter 15-20 years ago.

1. Why did you [Allan Farrar] allow the section 249 meeting to be notified to shareholders when you must have known about the representations [KTM Capital Pty Limited) gave to all DDT shareholders?

Under the Corporations Act neither the Chairman nor the Board has a discretion to notify shareholders of receipt of a section 249 notice. Shareholders must be notified within a prescribed period.

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From Robert Graham

What is being done to improve the marketing or sale of DataDot? I live in a large city in Queensland, population 60,000 people, no-one here knows about DataDot. I can’t find anyone or anything to engrave my property.

The company is presently concluding an arrangement that will expand by 70 the number of accredited sites in Australia at which DataDots may be purchased and fitted to vehicles and other assets by trained personnel. An announcement providing details is expected to be made soon. One of these sites is in Hervey Bay, Queensland.

From David Uebergang

When are we going to see some forward movement in the company’s performance and an upward trend in its share price?

The Board recently released a summary of the company’s performance for the first two months of the 2010 financial year. It considers that as the company generates better financial results, the improved performance should be reflected in the share price.

From Warren Davey

What financial consideration and professional tasks were specifically provided to justify the payment of A$224,366 (effectively) to TM Consulting Pty Ltd and Bannaby Investments Pty Ltd as sub-underwriters of the placement underwritten by KTM Capital Ltd, as sought through Resolution 2 of the AGM?

KTM Capital Pty Ltd was engaged to underwrite and manage the subscription of the fully underwritten share placement, in consideration of which the company agreed to an underwriting commission of 5% of the offer price per share and a management fee of 5% of the offer price per share.

From Muriel Dawson

Why is the company failing so miserably?

Please refer to the Chairman’s Address and CEO’s Presentation to the AGM, which explains past performance.

From Jelica Fudge

Once DDT moves past the issues related to the recent placement, what is the strategy for the future of DDT? It is my view that DDT has a viable technology that has not been promoted to its best advantage, to the disadvantage of all stakeholders.

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Please refer to the CEO’s Presentation to the AGM, which addresses the company’s future strategy.

From Robert Wallace

Why is the company issuing 22,436,622 fully paid ordinary shares at 1 cent/share to TM Consulting Pty Ltd and Bannaby Investments Pty Ltd without any scale back whereas ordinary investors/shareholders were all scaled back to the same number regardless of how many shares they previously held? Regardless of whether a cheque was forwarded for $1,000, $5,000 or $10,000 etc the shareholders in the letter of offer in July all were scaled back to 7.071 shares at cost of $70.71.

The scale back did not apply to the placement of 22,436,622 shares in March, but to the shortfall under the subsequent rights issue.

The Takeovers Panel ordered that any scale back policy must be applied "reasonably and fairly having regard to:

1. the number of applicants and shares applied for; and

2. their shareholdings at the close of the rights issue.”

This order provided that scale back could not occur in disregard of shares held at the close of the rights issue.

The scale back formula was independently proposed and recommended by Beerworth + Partners, then reviewed and amended in consultation with the Takeovers Panel and approved by the Takeovers Panel. In the Board’s view the share allocation was conducted fairly in the interests of all shareholders.

From M Ferris

1. What is the sales organization covering potential export markets?

2. Current interested parties and potential dollar values?

3. When will No.2 come to fruition?

4. Are there any new products on offer?

5. Any talk about merger or whatever with other security product markers?

Subject to the Board’s policy not to provide forward estimates or disclose information prematurely, questions 1-4 are addressed in the CEO’s Presentation to the AGM. In relation to question 5, the Board is not engaged in any merger discussions.

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From C Churchill

What is going on with DataDot’s share price? I purchased 20,000 shares at 26 cents on 18 July 2005. As of 16 September 2009 the share price is 1.8 cents. Why?

The Board recently released a summary of the company’s performance for the first two months of the 2010 financial year. It considers that as the company generates better financial results, the improved performance should be reflected in the share price.

From P Long

Could the company not make inroads to India and China where cars are being increasingly manufactured, bought and used by a more affluent society? The same could be said about Korea.

India, China and Korea, along with a number of other countries, are important to the company’s growth strategy. Please refer to the CEO’s Presentation to the AGM, which addresses the company’s future distribution strategy.

From Bob & Colleen McLean

1. Has a new budget estimate for 2009-2010 been carried out identifying incomings and outgoings? If so can I see it?

The Board has approved and adopted a 2010 budget and is tracking performance and liquidity against it. The trading conditions statement issued by the Board for the first two months of the year referred to performance against budget. The Board’s current policy is that the budget will not be released publicly.

1. Will there be any government grants coming to DataDot in 2009?

Yes, export market development grants.

1. Mr Ben Bootle was appointed in April 2009, how come the Annual Report shows that he earned $162,359 for 2 months? Please explain.

Mr Bootle was appointed Chief Operating Officer in December 2008 and Chief Executive Officer in April 2009. His remuneration remained unchanged after this promotion. The remuneration disclosed on page 22 of the Annual report covers both positions for the entire 7 month period to June 30, 2009.

1. Is DataDot expecting any compensation from the NZ Government as a result of the cancellation of the mandatory WOVM policy?

No.

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1. Remuneration: 2007-08 ($2,617,289); 2008-09 ($2,279,129); 2009-10 (?)

At the beginning of November 2008 action was taken to reduce operating overheads by more than $1.5 million per annum. A significant component of this reduction was achieved by the decision of a number of key management personnel to accept substantial pay reductions and by adopting a more performance-based remuneration framework for the sales team. In the seven months to 30 June 2009 this initiative reduced the company’s remuneration costs by more than $1 million (on an annualised basis) and reduced the income of affected personnel by an average of approximately 40%.

In the second-half of the year further necessary savings were achieved by retrenching some staff and not replacing others who resigned. At 30 June 2009 the annualised remuneration costs of permanent employees were 25% lower than at the high point in October 2008.

1. Rent on premises, 19 Rodborough Rd Frenchs Forest: 2008 ($416,129); 2009-10 and beyond ($464,013). Why the increase when the whole community has never had a better financial climate to negotiate a better deal?

Occupany costs disclosed in the financial statements are for the consolidated group and so include premises in Frenchs Forest (Australia ), Spokane (USA) and Norwich (UK). In 2009 binding lease agreements for these properties contained rent increase provisions. Commencing 1 December 2009 occupancy costs at Frenchs Forest have been renegotiated with significant cost savings.

1. Loan outstanding to Ian Allen for about 4 years. Why?

This matter is currently before the court and therefore we are not in a position to discuss this matter today.

1. Legal and professional services costs, $210,380. Why?

The Legal and Professional Costs of related parties as disclosed on page 93 of the Annual Report comprise:

Thomson Playford Cutlers – legal fees

Litigation $151,000 General legal $23,000 _ Total $174,000

WHK Howarth – professional service fees

Corporate advisory services while the company was without the services of a CFO - $36,000.

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1. Travel expenses $274,631. Why?

Travel costs are an indispensable item for a company operating globally. The amount is significantly reduced from $400,376 in the previous year and will continue to be managed carefully.

1. South Africa and America look like train wrecks. How can this be?

Both South Africa and the USA, where our business is heavily reliant on vehicle sales, were particularly hard hit by the global downturn in vehicle sales. Both are now recovering. This highlights the importance of our revenue diversification strategy.

From Paul Brand

It is encouraging to see the DDT share price finally rising, although it is still a long way off the 38 cents I paid in 2006.

I wonder whether the manner in which a substantial holding in our company was virtually handed over to Bannaby Investments/T M Consulting Group, a hand over which would have been larger but for the intervention of Mr William Cleugh and the Takeovers Panel, has not helped the depressed share price. Whilst the Board may have taken “legal advice” regarding the conditions of the placement and rights issue the Board seems to have relied solely on the advice of KTM Capital regarding the decision to accept only 1 cent a share.

Why did the Board apparently rely on this advice alone when the share price during the month prior to finalising the agreement with KTM varied from about 2 cents to nearly 5 cents?

The Board sought advice and an agreement with several other parties in the capital market before appointing KTM Capital as underwriter and making the decision to place shares at 1 cent per share. At the time the critical factors bearing upon this decision were:

• an acute liquidity shortage in the company;

• the profound effect of the global financial crisis on capital markets, indeed, looking back, this was the worst time to raise equity since the market crash of 1929 and the Great Depression;

• a significant share sell off and decline in the company’s share price from 15 to 3.5 cents in the 4 months from October 2008, when it decided to raise additional capital, to February 2009, when the underwriting contract was negotiated;

• owing to the global financial crisis there was a market expectation that a rights issue would be offered at a discount to market;

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• an underwriting group had led the Board to believe it would underwrite a raising at 2.5 cents per share; and

• the offer from KTM Capital was the only offer on the table.