AUTOMATIC SYSTEMS LTD

Draft

COMMUNIQUÉ

 

Automatic Systems Ltd (‘ASL’) wishes to inform its shareholders and the public of the following:

 

1)            On February 14, 2006, ASL was informed by the Stock Exchange of Mauritius (‘ SEM’) that the latter has been apprised, through the press, of the existence of a binding contract between the Mauritius Turf Club (‘MTC’) and ASL regarding exclusive rights held by ASL onto carry out the use of Tote betting Betting (the ‘Services’) by ASL on bets taken in Mauritius on local races conducted bys, which is, within the control of the MTC.

 

2)            On February 14, 2006, ASL was requested by the SEM to provide it with information in respect of the said contract..

 

3)                   On February 21, 2006, ASL informed the SEM thatas follows:

3)                    

                (a)           ASL had signed a contract with MTC since September 11, 1991.

(b)                However the percentages remitted to MTC by ASL for the running of the Totalisator

              have been re-negotiated several times since 1991.

(c)          ASL and MTC have always proceeded on the understanding that the contract between

               the two of them was on an exclusive basis.

              (d)             ASL and the MTC have had further discussions last year in the light of the ASL’s proposal to extend its Services to foreign races and they had reached the conclusion that:

                                                                       

(a)ASL had signed a contract with MTC since September 11, 1991.

 

(a)However the percentages remitted to MTC by ASL for the running of the Totalisator have been re-negotiated several times since 1991.

 

(a)ASL and MTC have always proceeded on the understanding that the contract between the two of them was on an exclusive basis.

 

(a)ASL and the Club MTC have had further discussions last year in the light of the ASL’s proposal to extend its operations Services to foreign races and they had reached the conclusion that:

 

(i)            it would be in the interest of the racing  industry and that of the MTC would  if                

                                           be  better  served  through betting  on foreign races took place  place by  through  through the  comminglingthe commingling of pools.

                                                                        (ii)                                                       

the most suitable  countrysuitable   withcountry   whichwith   towhich   commingleto commingle would be South Africa

                             and to avoid any problems with respect to communications and  compatibilityand compatibility                    

                             of  systemsof systems the best way forward would be  tobe to  haveadopt  theadopt the same  systemsame system as   

                             the  onebeing the one  usedone   inused   Southin South Africa.

                                    (e)                                   

The change of system referred to above, would necessitate substantial investment  by

               ASL and the latter therefore requested for an express undertaking from MTC for an  

               exclusivity for a period of not less than 10 years  of ton the Serviceshe tote organisation for both local races and  

               foreign races on which the MTC has exclusive broadcasting (delete ‘broadcasting’)rights.

for a period of not less than 10 years..

 

(f)            On 6 December 6, 2005, the the ClubMTC expressed its   agreement to the inclusion of an

              express exclusivity clause whichclause, which would last for a period of a period   of 10   years.  A fresh

               contract incorporating, amongst other things, the exclusivity clause is presently   

               being  drafted   to encompass the agreement set out in the said letter.finalised to incorporate the agreement set out in the said letter.

                                    (g)                                  

In the light of the above, and given the context of continuity, the Directors did not

                            consider that this matter should be notified to the investors or public, in general, by way of         

                            a special communiqué.

 

4)            Upon the request of the SEM, pursuant to the Listing Rules 3.5 (a) ,), ASL agreesd to forthwith publish the present communiqué informing investors and the public in general of the circumstances of which gave give rise to the exclusiveityly agreement between ASL and MTC.

 

5)            ASL has further assured SEM that it will continue to abide as it has always done by  at all times to take all necessary steps to comply with the rules and regulations of the Stock Exchange.

               

                Dated this 2nd day of March 2006

                                                                                                                           By order of the Board

                                                                                                                      B.C.M (Secretaries) Ltd

 

  “This Communiqué is issued pursuant to Listing Rule 11.3.

  The Board of directors of ASL accepts full responsibility for the accuracy of the information contained in this Communiqué”