DATADOT TECHNOLOGY LIMITED — Management Reports 2009

Oct 1, 2009

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Shareholder Update October 2009

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Who we are

DataDot Technology Limited (DataDot) is a global leader in providing asset identification, protection and authentication solutions.

1. DataDot is a leading solutions provider with highly innovative technologies. We create new methods of asset identification, protection and authentication which lead to new markets for our products

2. DataDot is the preferred asset identification solutions provider to governments, police, insurers, and blue-chip customers within the automotive industry in an increasing number of countries

3. DataDot has an increasing global presence and coverage with highly scalable operations. We are rapidly gaining acceptance in markets in which we operate

4. DataDot has growth in revenue and revenue streams

5. DataDot is in the early growth stages in most of the markets in which we operate with enormous potential to expand into new countries/markets

Our lobal network g

Positioned to grow into new and emerging markets.

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Regional HQ
For Europe
DDT UK
72%
DDT USA
100%
Regional HQ
for The Americas
Global HQ
Asia Pacific and
Eastern Europe HQ
DDT South Africa - royalty
manufacture under licence
DDT Aust. 100%
DataTraceDNA
Regional HQ 50%
For Africa
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Our strate gy

• In 2008 the Board sought to an new CEO and CFO.

• New management was recruited and tasked with five key roles:

• i. Increase and diversify sales throughout the world

• ii. Increase manufacturing efficiencies and reduce costs

• iii. Reduce expenses and overheads

• iv. Restructure staffing and distribution arrangements to focus on driving shareholder returns

• v. In partnership with CSIRO, to exploit opportunities to commercialise the unique intellectual property within the DataTrace joint venture

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Our strate - continued gy

After nine months of extensive restructuring and cost reduction, DataDot is now positioned to be a profitable growth-oriented global business.

Additional strategies include:

• DataDot will target organic growth, strategic alliances and complimentary

acquisitions to secure shareholder value over time

• DataDot will use the remodelled distribution network in Australia as a

template for the rest of the world

• DataDot will use the per-capita performance of Australia as an indicator of

market opportunity and a benchmark for new Distribution networks worldwide

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Our roducts p

Unique DNA-like solutions for asset identification, protection and authentication

• DataDotDNA[®]

• DataThreadDNA[TM]

• DataBaseDNA[TM]

• DataTraceDNA[®]

• DD Secure[TM]

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DataDotDNA[®]

Giving assets their own permanent unique DNA identification tag

• DataDots are tiny microdots laser-etched with multiple lines of code like a microscopic label

• The unique code is stored on our worldwide verification database, DataBaseDNA

• The identifying tags contain information such as VINs, HINs, PINs or business names

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Actual Size 1mm

Magnified DataDot

October 2009 1.VIN: Vehicle Identification Number, 2.HIN: Hull Identification Number, 3.PIN: Personal Identification Number (DDT derived code)

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DataBaseDNA

Significant contributor to preventing theft of high-value assets

• A global web-based database for law enforcement and insurance investigators

• Brings together all registered asset information onto one central database

• DataBaseDNA now hold over one million unique records placing this as a strong value generator for the business in the future

• DataDot will strive to ensure DataBaseDNA will evolve to be a national ‘equipment bureau’ with the collaboration of equipment associations, insurance and financial service providers

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DataTraceDNA[®] - commercialised technology

A leading global solution incorporating CSIRO patented technology

• Joint venture company with CSIRO

• Engineered micro particles with unique tracers

• Unique physical properties – not replicable

• Presence and concentration detectable by specially developed portable reader – “The Authenticator®”

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- DataTraceDNA[®] a lications pp

DataTraceDNA® is an engineered particle that when scanned by “The Authenticator” generates unique digital codes. The particle is lications. invisible to the naked eye and is suitable for a number app

Vector Applications Ink Liquid surfactant or powder Polymer Masterbatch	Vector Applications Ink Liquid surfactant or powder Polymer Masterbatch	Vector Applications Ink Liquid surfactant or powder Polymer Masterbatch	Vector Applications Ink Liquid surfactant or powder Polymer Masterbatch
	Vector	Applications
	Ink	Liquid surfactant or powder
	Polymer	Masterbatch
	Paints & Coatings	Liquid surfactant or powder
	Fibre	Masterbatch
	Paper & Packaging	Liquid surfactant or powder
	Explosives	Powder
	Metal/Glass	Powder for Dynamic
Metalization process Concrete Liquid surfactant or powder		Metalization process
	Concrete	Liquid surfactant or powder

DataTraceDNA® is targeted for brand protection from counterfeiting, diversion and manufacturing over-runs. Its features include:

• Suitable for use in solvent and water

• based lacquers in a variety of applications

• Surfactant for paints and coatings

• Masterbatch for polymers

• Powder for other applications

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DataDotDNA[®] and DataTraceDNA[®]

Combined use creates an enhanced range of security solutions.

Comparison Table

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DataDot DNA [®] DataTrace DNA [®]
Overt Covert
Specific Code Generic Code
Identify individual assets Identify manufacturer /owner
Surface application Integrated in manufacturing and surface application
Target identification for individual owner Target identification of mass produced goods
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DD Secure: The system for business asset & property protection

The DD Secure system is designed for:

• Business and retail premises

• Construction and infrastructure sites

• Council, utility and telecom sites

• Hire and rental sites

• Farm and agricultural equipment

• Tradespersons’ vehicles

• � Trucks and trailers

• Marinas

• DataDot has partnered with Crime Stoppers Australia to develop the DD Secure System, enabling organisations to:

  • Control their assets

  • Reduce business costs

  • � Ensure assets are readily identifiable and recoverable

• School and university campuses

• Government facilities

• Business sites suffering from theft

• Residential premises

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DD Secure - s stem com onents y p

Identifiers

• Microdot labels

• Security seals

• Interactive labels (Identifyz)

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• DatatraceDNA[®] forensic security

• Radio Frequency Identification Device (RFID)

• Global Positioning System (GPS)

Signage

• Serialised secure signage and stickers

Communication

• Templates for internal and external communications

Detection

• Low cost detection kits for Police, second hand shops and pawnbrokers

Statistics

• Six and twelve monthly performance comparison to ensure effectiveness

• Incident report database

Ke initiatives in the ast nine months y p

New management team has changed the DataDot culture to be a lean, sales-focused, solutions and service driven company with a proven strategy to expand the business globally.

Strategy / Change Impact on performance Emphasis on high performance culture • Staff selection and training focused on a high performance culture • New staff KPI’s to meet strategic objectives of the company	Strategy / Change Impact on performance Emphasis on high performance culture • Staff selection and training focused on a high performance culture • New staff KPI’s to meet strategic objectives of the company	Strategy / Change Impact on performance Emphasis on high performance culture • Staff selection and training focused on a high performance culture • New staff KPI’s to meet strategic objectives of the company	Strategy / Change Impact on performance Emphasis on high performance culture • Staff selection and training focused on a high performance culture • New staff KPI’s to meet strategic objectives of the company
	Strategy / Change	Impact on performance
	Emphasis on high performance culture	• Staff selection and training focused on a high performance culture • New staff KPI’s to meet strategic objectives of the company
	Targeted marketing on growth markets	• Emphasis on growth of top line • Low cost marketing with direct and measurable results • Marketing with new and existing customers to expand market penetration • Change focus from technology development to customer solutions
	Restructurin of sales team & strate	• Sales team restructured • Remuneration restructured
g gy • Diversifying sales from reliance on automotive manufacturers is showing success • Clear budgets for sales team monitored to ensure performance	g gy	• Diversifying sales from reliance on automotive manufacturers is showing success • Clear budgets for sales team monitored to ensure performance

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Ke initiatives - continued y

Strategy / Change Impact on Performance	Strategy / Change Impact on Performance	Strategy / Change Impact on Performance	Strategy / Change Impact on Performance
	Strategy / Change	Impact on Performance
	New distribution structure worldwide (the key to rapid growth of sales)	• Strategic appointment of new selected Distribution agents • Active management of underperforming Distribution agents • Termination of non-performing Distribution agents • New Distribution agents selected based on capacity and proven credentials/track record and financial capability • Upfront Distribution fees quarantined to ensure appropriate support and training to be provided by DataDot • Licensing structure to cover IP, R&D, branding and other support
		• Implemented ongoing performance monitoring and feedback
	Management Staffing – a leaner business-oriented structure	• Combined Commercial Director, Chief Operating Officer and Chief Executive roles • Combined Financial Controller and CFO roles • New ASX experienced CFO recruited • New company accountant recruited • Restructured finance and admin team – net reduction of two roles
		• Continuing to focus on reducing other overheads.
Focus on Cost Reductions & Monitoring • Reward cost saving initiatives. • Initiated manufacturing efficiency measures – significantly lower staff costs in the medium term.	Focus on Cost Reductions & Monitoring	• Reward cost saving initiatives. • Initiated manufacturing efficiency measures – significantly lower staff costs in the medium term.

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DataDot - future i eline & market o ortunities p p pp

Get DDT Australia right, then use this as a template for the world.

Domestic initiatives

Focus on building revenues in the following market segments:

• Vehicle finance initiatives

• New partnership announced with Crime Stoppers Australia

• Utilities – theft prevention strategies

• Major retailer initiatives for theft prevention

• Strata managers

• Local Government (Brisbane City Council)

• Plant variety rights - seed labelling through AgTechnix Pty. Limited

• DNA

• Enhancement of the commercial capabilities of the substantial DataBase

• Commercial, industrial and farm equipment protection strategies

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DataDot - future i eline & market o ortunities p p pp

Taking what works from DDT Australia to create an effective worldwide distribution model.

Internationally – DataDot

Re-engineer distribution agreements and strengthen international presence:

• Focus on restructuring and terminating existing underperforming territories (no revenue impact)

• Target five to ten new supported and resourced territories per year

• Install new production system (low capital) - significant reduction in labour costs

• Vehicle finance and insurance initiatives – e.g. FGA (Fiat Finance) Italy

• Establishing strategic partnerships with other asset technology providers

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DataTrace - future i eline & market o ortunities p p pp

DataTrace is one of the worlds’ leading anti-counterfeiting solutions available for Brand protection.

Establishing market-segment, distribution agreements to boost sales impact, allowing DataTrace to partner with global authentication solution providers. Initiatives to date include:

• Leading anti counterfeiting solutions in casino chips

• Verify TT – a commercial solution for counterfeit control of textiles, now in final

• stages of testing for initial client

• AgTechnix JV - a new plant variety rights anti-diversion and identification initiative

• New high security printing solutions

• Final stages of an initiative in (non-textile) fashion brand protection

• Final stages of development of a copper/metal/fibre optic cable protection solution

• Developing a fast moving consumer goods (FMCG) authentication initiative

• Developing a new digital media anti-counterfeiting initiative

• Developing a presence in the pharmaceutical industry as an anti-counterfeit and

• authentication solution partner

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New CEO and CFO

Ben Bootle – Chief Executive Officer / Managing Director

Qualifications:

Bachelor and Masters Degree in Agricultural Economics (University of Sydney). Nuffield Scholar (2000).

Member of Institute of Company Directors.

Previous Positions:

CEO – Perich Group of Companies (2002 to 2008)

Responsible for the strategic direction, management and control of businesses in a diversified portfolio including; agriculture, mining, manufacturing, medical research, motor racing circuit operation and property development. The Perich family is in the top 60 of the BRW rich list.

Previous Positions:

• Director – Gargaloo (1994 to 2002)

• Chair & Deputy Chair - Macquarie River Food & Fibre Association Inc. (1996 to 2000)

• Member - Grain Growers Association, Committee of Advice (2001 to 2002)

• Member - Macquarie-Cudgegong River MGMT Committee (1996 to 2000)

• Economic Consultant (1994 to 2000)

• Research Economist - Department of Agriculture (1987 to 1994)

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New CEO and CFO

Ben Bootle - CEO - Continued

Skills And Experience

• Proven business acumen

• Clear strategic leadership

• Risk management experience

• Creating a culture of employee engagement aligned with corporate goals

• Business start-up track record in biotech, manufacturing and mining industries

• Superior communication, people management and negotiation skills

• Listed company experience including alternate board membership and investor relations

• Public and private corporate governance

• Merger and acquisition experience

• Capital raising, funds management and financing skills

• Extensive international business network including the United States, United Kingdom, Canada, Australia and Asia

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New CEO and CFO

Ross Hawkey – Chief Financial Officer Qualifications:

Bachelor of Business Studies and Chartered Accountant

Member of Institute of Company Directors.

Previous Positions:

CFO and CIO – Mission Australia (2006 to 2009)

Provided leadership and accountability for Mission Australia’s Corporate Services functions – Finance, Information Technology, Property, Fleet, Legal, Procurement, Internal Audit and Risk Management.

Director – Many Rivers Opportunities (2007 to present)

Many Rivers Opportunities is a not-for-profit organisation at the forefront of micro-enterprise development within the indigenous communities of Australia.

CFO – Bravura Solutions Limited (2005 to 2006)

CFO of a publicly listed company with overall responsibility for all corporate infrastructure, including accounting and finance, treasury, investor relations, IT, property, HR, insurance, legal, company secretarial requirements, liaison with senior executives and Board members.

Other Positions:

• Finance & Operations Manager – Altiris Asia Pacific (2002 to 2005)

• ANZ Finance Director – Marconi (2000 to 2002)

• Various Finance roles in UK, US and Australia – Sterling Software (1993 to 2000)

• Management Accountant (London) – Morgan Grenfell Asset Mgmt (1991 to 1993)

• Project Accountant (New Zealand) – Reserve Bank of New Zealand (1986 to 1991)

New CEO and CFO

Ross Hawkey - CFO - Continued

Skills And Experience

• Financial and commercial acumen

• Significant finance and accounting background in both domestic and international entities

• Passionate and charismatic leader

• Able to take entrepreneurial approach balanced with sound financial management principles

• Ability to transform vision and strategy into tangible implementation plans

• Company Director with extensive Company Secretarial experience

• Corporate governance and risk management

• IT&T literacy at both strategic and operational levels

• Extensive business network across multiple disciplines

• Listed company experience

• Merger and acquisition experience

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