Black Economic Empowerment/Employment Equity Direction

Our current shareholding structure goes some of the way in addressing Government’s requirement for Black Economic Empowerment transformation of the IT Sector. We do however believe that some changes will have to be made in order for us to be in line with the principles behind Black Economic Empowerment and Employment Equity. For this reason, IA Systems have completed a three year plan which consists of the following key elements:

• Transformation of IA Systems to be more representative of South African Society. This includes at a ratio of 4:1 of all new appointments to IA Systems to be from Previously Disadvantaged Communities.

• IA Systems to select an appropriate Black owned partner (company) who will consort with us and will enjoy revenues from assisting us in the implementation of our solutions. At the end of this three-year period, this partner will be able to be a fully-fledged Reseller, independent of IA Systems. We are in the process of selecting such a partner.

• IA Systems to increase its current 40% black owned status to 51% by providing shares to previously disadvantaged individual employees based on a merit basis and at discounted rates.

Although this plan takes three years to fulfill, we believe that if actively managed and assessed and reviewed by our business partners including our customers we are truly in a transformation process and are adding value to the New South Africa equity principles. We have commenced actively working on this plan and have over the last six months increased our HDI profile from 12.5% to 33.3%. It is important to note that the majority of these appointments are Management positions.