The first work to be done in terms of R&D was to prove the concept by means of computer simulations and laboratory tests. This was successfully completed by the Southwest Research Institute (in San Antonio, Texas, U.S.A.) in 2002. The results were then presented to the worlds' major carmakers.

The directors of IIL continue to believe that the Smartmatic™ represents the best alternative Automatic Transmission available. It provides all the functions and features of an automatic transmission with no limitations to its applications, and provides major improvements in city stop-start fuel economy and emissions, while also being cheaper, smaller, lighter and more compact than the conventional automatic transmission it replaces.

The R&D phase now before us is to construct demonstration cars that fully showcase the function and benefits of the Smartmatic™.

Further, the demonstration cars will enable potential licensees to evaluate the more subjective aspects of a transmission such as the "feel" of the gearshift quality against other transmission choices available to them.

To this end, the company continues to seek major investors to fund the US$5 million needed to build these cars and fund the day to day running of the company during this work and up to the point of floating on the stock exchange(s). Please see the Professional Investor Information tab on our web site for the latest issue of our Professional Investors Information Booklet. Eligible Investors can return the "Registration of Interest" form to the company's Melbourne Office and the matter will be progressed from there as appropriate.