ENERGY TECHNOLOGIES LIMITED — AGM Information 2011

Nov 21, 2011

==> picture [99 x 33] intentionally omitted <==

ENERGY TECHNOLOGIES LIMITED

A.B.N. 38 002 679 469

Building 2, Ground Floor,35 Waterloo Road Macquarie Park NSW 2113 Tel: +61 2 98707277 Fax: +61 2 98707299 www.energytechnologies.com.au

ANNUAL GENERAL MEETING TUESDAY 22 NOVEMBER 2011

MADDOCKS LEVEL 21 ANGEL PLACE 123 PITT STREET, SYDNEY NSW 2000 COMMENCING 10.30 AM

CHAIRMAN’S ADDRESS

As I have earlier reported, the dominant activity of the reporting year, and indeed virtually all of the past calendar year, which has impacted and continues to impact significantly upon your company’s performance and costs and its board and management’s time, has been the activities consequent on the unsolicited but attractive offer received in late 2010 from MacLean Power LLC and associated entities (the MacLean Group) of the USA for much of the business of Dulhunty Power International Limited (DPIL). For reasons of the buyers requirements for strict confidentiality, which were properly observed, the transaction was entitled ‘Project Delaware’.

The subsequent Delaware process and its successful outcome were reported in detail to the ASX following the Extraordinary General Meeting of shareholders held on 27 September 2011, with further details given in the current Annual Financial Report. It is therefore not my intention to repeat the historical details of the transaction beyond confirming that the offer was, by a large majority, accepted by shareholders and the company’s name changed from Dulhunty Power Limited to Energy Technologies Limited.

Importantly the full enterprise cash consideration is A$17 million, subject to post-completion net asset value adjustments yet to be finalised. The main part of this consideration has been paid to DPIL. From this payment DPIL has paid transaction costs to date, retired it’s financial obligations and made provision for it’s expected future liabilities associated with winding up it’s remaining operations. DPIL has made a partial distribution of the sale proceeds to it’s shareholders, including EGY. EGY has retired it’s interest bearing liabilities and is holding today a substantial cash balance. The final available balance will not be known with certainty until the Net Asset calculations are complete.

I will come later to the directors’ proposals for the deployment of these funds after commenting first upon the company’s performance in the reporting year to 30 June 2011.

As you know, DPIL provided the bulk of your company’s income in this financial year. Although the performance turnaround upon which I reported last financial year has stabilised, the end of year profit result was disappointingly well below that of 2010. The reasons, while unpalatable, are covered in the Review and Results of Operations appearing in the Directors Report. Any questions on performance detail can be answered by directors later in the meeting.

I reported last year on the successful establishment of the Dulhunty Poles Pty Limited (Poleco) factory at Moolap near Geelong in south western Victoria, set up to produce Titan composite glass fibre reinforced engineered cement power distribution poles (ECPs). Compared to traditional wood and reinforced concrete, Titan poles offer much lighter weight, easier transport and handling, superior fire resistance, a lower carbon footprint, longer life and pollution free final disposal.

Energy Technologies Limited (EGY) currently owns 39.85% of Poleco with options to uplift this later as is intended. During the reporting year considerable progress was made in refining factory production, quality assurance and testing procedures and this continues with capacity addition now paramount with receipt of firm orders. Marketing continues to be intense and utility interest, albeit conservative as expected with an entirely new product, has lifted and continues to lift significantly. Firm sales contracts have been signed with both Australian and overseas utilities sufficient to satisfy current factory capacity. Further Australian manufacturing plants are planned with discussions now progressing in one state.

Our smallest but 100% owned subsidiary, Cogenic Pty Ltd, is exploring the potential for new products including battery storage and gas fired combined heat and power (CHP) tri-generation systems which can produce electricity, process heat and air conditioning at high efficiency. Such distributed generation systems, in contrast to the alternatives of centralised power generation in large power stations and independent supplies of metropolitan natural gas, offer much higher overall thermal efficiency with consequently reduced carbon dioxide emissions. With the recent passage of acts establishing a price on carbon it can be expected that such systems will become more attractive in the market place.

We must however acknowledge, with the preoccupation with Project Delaware and the focus on DPIL over the past year, that development momentum in Cogenic was considerably reduced. However we are now putting in place an agreement for with an Australian university for product development; we are seeking to source an agreement with an advanced battery system developer; and we are exploring the potential and availability of other electricity supply industry technologies and products consistent with Cogenic’s aim to support the growing distributed generation market.

Finally we retain a small number of legacy shares in First Folio (ASX:FFF). It is intended that these be sold at an appropriate time in the market

I turn now to your directors’ proposals for the future of the significantly different company that we have today in Energy Technologies Limited. I would first mention to shareholders that these proposals have been under active discussion for the last nine months or more. However prior to settlement certainty of the Delaware project we have not been able to make real progress. We now look forward to a period of new and rewarding activity for shareholders. Our major proposals are as follows.

Firstly we intend to make new well managed profitable investments in proven electricity supply industry performing companies. Currently one operating company target, with whom we have been in discussion for some three years, is now under detailed Term Sheet negotiation with the owner. If acquired the company will be 100% owned by EGY, thus avoiding the awkward structure associated with the partial investment in DPIL which caused market confusion and possible depression of the share price and difficulty with raising of bank facilities.

Secondly it is our intention to increase the company’s investment in Dulhunty Poles Pty Limited (Poleco). Poleco, conceived some four years ago, is now promising to become a strong and profitable business. The company is currently undertaking a second capital raising by way of a convertible note issue which Energy Technologies Limited has committed to subscribe.

Thirdly your board is moving quickly to reduce significantly the operating and administration costs of EGY, now essentially a holding company for specialist investments. The measures will include relocation of the company’s offices to less costly premises relevant to the new structure. Importantly we will be moving to a smaller board focussing more on the essentials of good governance, effective capital management and legal compliance with operational matters increasingly in the hands of the company’s subsidiaries. Although still work in progress, we intend to have these measures in place by the end of this calendar year and will of course make announcements to the ASX at the appropriate time.

Lastly, and subject to shareholder approval, it is your directors’ intention, as foreshadowed at the September Extraordinary General Meeting, to make a capital distribution to shareholders totalling 2.0 cents per share. Details of this are being prepared and depend upon finalisation of the proceeds of Project Delaware. Once the position on this is quite clear we will call a general meeting of shareholders to resolve the matter.

I conclude this report at a time of dramatic change for your company and the very significant loss of loyal and competent staff. I do however stress that the sale of DPIL carried with it the undertaking to provide security of employment for all those staff who must be greatly admired and warmly thanked for the professional manner in which they continued their duties throughout a difficult period. We sincerely wish them well as they continue within the MacLean Power organisation.

Although required to change the name of our company under the provisions of Delaware, we are nevertheless proud that the name of Philip Dulhunty, to whom we all owe so much for a lifetime of inspiration and dare I say it adventure, continues in Dulhunty Poles – which is where Philip began his illustrious career in the Australian and international electricity distribution industry. It has been, for all of us, directors and staff alike in many countries of the world, an enormous privilege to work with and be inspired by Philip. We all hope that this will continue for many years yet.

Finally I thank my fellow directors and executives for their continued support and huge efforts throughout an extraordinarily difficult and complex year. You the shareholders have shown amazing patience over this time. Many of you have quite reasonably asked questions, some immediately prior to this meeting. Some I trust have been covered in my address; others will be answered either later in the meeting or soon after when the requested details have been assembled.

We hope now, despite challenging world trading and financial conditions, that we can move forward with more confidence towards rewarding shareholders patience and faith. I appreciate your attendance today.

Thank you all.