ZICOM GROUP LIMITED — Capital/Financing Update 2012

Jan 31, 2012

ABN 62 009 816 871 Zicom Group Limited

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38 Goodman Place, Murarrie, Queensland 4172 • Tel: (07) 3908 6088 • Fax: (07) 3390 6898

31 January 2012

Market Announcement Office Australian Securities Exchange Level 6, 20 Bridge Street SYDNEY NSW 2000

Dear Sir,

PROFIT WARNING 2012

The Group wishes to issue a profit warning for the half year’s results to 31 December 2011 as well as for the full year to 30 June 2012.

The Group expects to continue to be profitable for the half year as well as for the full year. However, its half year’s profits after tax are expected to drop by 60-70% as compared with the previous year’s corresponding period and its full year’s profits after tax are expected to drop by 5565% as compared with the previous year.

Confirmed orders as at 31 December 2011 amounted to S$41.6m (31 Dec 2010: S$83.2m).

The reasons for the drop in profits for the half year ended 31 Dec 2011 and for the full year are as follows:-

a) Main Factors

• consolidation in the marine offshore sector which has been our main profit contributor.

• slow integration of expertise in oil and gas sector, giving rise to delays in projects.

• Continuing gestation costs of start-up investments.

b) Consolidation in Marine Offshore, Oil & Gas

As reported in our Annual Report 2011, the marine offshore sector which has been a major profit contributor to the Group, had slackened due to the overhang effect of the 2007-2009 global financial crisis. This has affected the revenue for this financial year.

We have expected the slack to be taken up by the Oil and Gas sector. However due to slower than expected integration of the necessary expertise this has caused some delays to the initial projects resulting in lower margin.

The Group is confident that the marine offshore sector and oil and gas sector would perform better for the ensuing financial year ending 30 June 2013. Demand for its marine deck machinery has resurged strongly in recent months and the Group has secured a significant order of US$3.6m for the supply of deck machinery for a deep-sea offshore vessel. This positions the Group to tap the potentials that have emerged from the huge orders in deep seas offshore rigs that have been awarded to construction yards world-wide in the last 12 months.

The Group is confident of securing higher value projects in turn-key gas processing plants in the near future. After the initial set-backs in integrating its oil and gas expertise, the oil and gas sector is now well positioned to perform better and increase its contribution to the Group in the next financial year.

c) Construction Equipment

1 Profit Warning 2012

The Group’s construction equipment continues to perform well and contribute significantly to the Group’s profits. Notwithstanding the economic challenges ahead, we remain confident that the demand for construction equipment will remain robust for the financial year ending 30 June 2013.

d) Precision Engineering

The precision engineering sector has performed satisfactorily notwithstanding the slackened semi-conductor sector. We are confident that with a diversified base, our precision engineering will maintain or improve on its performance for the financial year ended 30 June 2013.

e) Start-up investments

The start-up investments in Biobot Surgical Pte Ltd (BBS), Curiox Biosystems Pte Ltd (CB) and Orion Systems Integration Pte Ltd (OSI) are not expected to generate income until the middle of 2012.

BBS has undergone senior management changes in November 2011 and since then progress has accelerated. BBS has obtained regulatory approvals from FDA (USA), TGA (Australia), DOH (Taiwan) and HSA (Singapore). We aim to ensure that all the leading edge parameters of this technology are fully addressed before we market the product world-wide. As such we currently continue to focus on live clinical trials with our long standing clinical partners, the Singapore General Hospital, Singapore largest hospital, to refine the technology. We aim to fully commercialise BBS’s product end 2012 world-wide.

CB’s technology has been approved by world leading drug companies and has commenced to sell its products in the USA and Japan. CB has set up an office in San Francisco to market its technology and products to the USA and European customers. CB has appointed 2 distributors in Japan.

Orion’s patented flip-chip bonding technology has been recognised by customers in USA, China, Taiwan, Malaysia and Singapore as a leading edge technology of its class. Orion is expected to secure its first customers by the second quarter of calendar year 2012.

The gestation for these start-ups has been longer than expected. As such the Group’s results for 2012 are affected by the gestation losses. We expect these start-ups to generate revenue and to contribute profits in the financial year ending 30 June 2013. Being destructive technologies we are confident of their exponential growth potentials.

The Group’s core competency is in engineering and machine building. To position it to achieve sustainable growth on a long term basis, it invests in new and destructive technologies so as to neutralise cyclical changes that inevitably affect its organic businesses, and at the same time enable the Group to create new frontiers. The Group is confident that the risks associated with such investments have now been greatly ameliorated.

Notwithstanding this year’s results, the Group is assured that its foundation and fundamentals are strong and it is confident of better performance going forward.

Yours faithfully Zicom Group Limited

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-------------------------------G L Sim Chairman.

2 Profit Warning 2012