Eruma PLC  ('Eruma' or the 'Company')

Extract from the Chairman's Report

2006, the first full 12 month trading period for Eruma was highly successful with the company exceeding its objectives. Investment in people, processes and marketing activity resulted in significant growth. Orders for the year showed an increase of more than seven fold and installations for the year showed an almost six fold increase over the reported revenues for 2005. This increase has been brought about by recruitment of high calibre sales professionals, focused campaigns in our chosen vertical markets, ongoing training of staff with particular emphasis in the sales function.

Achievements

• Strengthening of the sales function with the recruitment of a Business Development Director, the establishment of a marketing department and the recruitment of high level sales executives.

• The signing of a Sales and Distribution Licence with an American partner. The first significant order was received prior to the year end.

• Broadening of the customer base in the areas of education, particularly schools and universities, financial institutions, utilities and various police constabularies.

• Significant repeat business is being obtained from our major blue chip client base.

• Increase in average order value coupled with a higher gross margin.

Outlook and Trading Update

I am pleased to report that the outlook for 2007 remains strong with our outsourcing strategy progressing well with the appointment of two companies to assist with our manufacturing demand.

The investment in marketing activities has led to the identification of significant sales opportunities which we are now pursuing. Your board is committed to expanding the Company's business outside of the UK, in Europe and the USA and is optimistic about the substantial revenue opportunities available in these areas.

I am particularly delighted to be able to report that the orders taken by your Company to the end of May 2007 already exceed our total revenue for 2006. I am confident that we will continue to deliver high levels of growth for the remainder of the year.

Philip Barnett  Chairman