ENERGY TECHNOLOGIES LIMITED — Annual Report 2007

Sep 26, 2007

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DULHUNTY POWER

DULHUNTY POWER LIMITED ABN 38 002 679 469

Annual Financial Report

for the year ended 30 June 2007

Dulhunty Power Limited – 2007 Annual Report

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Corporate Information

ABN 38 002 679 469

Directors

Martin H. Thomas (Chairman) Tony J. Wingrove (Managing Director) Alfred J. Chown (Non-Executive Director) Richard K. Llewellyn (Non-Executive Director) Philip W. Dulhunty (Non-Executive Director)

Alternate Directors

Brian C. Mathiesen (alternate to Alfred J.Chown) Peter W. Dulhunty (alternate to Philip W. Dulhunty)

Company Secretary

Gregory R. Knoke

Registered Office

Building 2, Ground Floor, 35-41 Waterloo Road MACQUARIE PARK NSW 2113

Bankers

Australia and New Zealand Banking Group Limited 20 Martin Place SYDNEY NSW 2000

National Australia Bank Limited NAB House, 255 George Street SYDNEY NSW 2000

Share Register

Computershare Investor Services Pty Ltd Level 3, 60 Carrington Street Sydney NSW 2000 Telephone:- (02) 8234 5000 Facsimile:- (02) 8235 8150

Auditors

Gould Ralph & Company Chartered Accountants Level 42, Suncorp Place 259 George Street SYDNEY NSW 2000

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Dulhunty Power Limited – 2007 Annual Report

Contents

Chairman’s Report	3
Directors Report	4
Remuneration Report	9
Corporate Governance Statement	11
Auditor’s Independence Declaration	14
Income Statement	15
Balance Sheet	16
Statement of Changes in Equity	17
Cash Flow Statement	18
Notes to the Financial Statements	19
Director’s Declaration	44
Independent Auditors’ Report	45
ASX Additional Information	47

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Dulhunty Power Limited – 2007 Annual Report

Chairman’s Report

Dulhunty Power Limited (DUL) continues to strengthen. Following last year’s balance sheet consolidation your company undertook a modest capital raising of $1.68M to retire debt, provide for continued expansion of the main operating company Dulhunty Engineering Limited and its Controlled Entities (DEL) and establish itself for the acquisition of further businesses consistent with its mission and business plan. A key element of this positioning has been to appoint Mr Tony Wingrove, a highly experienced senior executive in the Australian power industry, as the DUL Managing Director. Mr Alfred Chown, who had been holding this position on a part time basis, moved to become a Non Executive Director of the DUL Board while continuing as Chairman of DEL.

In line with the long-term business plan for DUL, due diligence of a short list of potential business acquisitions is in hand. In due course, subject to meeting stringent acquisition criteria set by the Board, appropriate levels of new capital will be raised to underpin DUL’s planned growth and development.

DUL’s principal operating company, DEL, again had a profitable year, reporting overall revenue growth of 17.5% to $15.1 million ($12.9 million in FY06), an EBIT profit of $536,626 ($411,061 in FY06 – up 30.5%) and NPAT of $285,951 ($270,473 in FY06 – up 5.7%). This result includes for the first time DEL’s newly acquired subsidiary Dulhunty Power (Malaysia) Sdn Bhd which is 51% owned by DEL.

Although DEL’s results were encouraging they were below the targets set by the company and accepted by the DUL Board. There was strong sales growth in DEL’s subsidiaries in China, New Zealand and Thailand, as well as the strong maiden performance by the newly acquired Malaysian business. Development of these businesses drew on working capital, as expected, but it must be acknowledged that second half sales in Australia were lower than forecast. However early indications for FY08 show this trend to be reversing strongly. Record levels of orders are in hand at the time of writing, especially in the Australian market.

Growth in DEL has brought with it new management challenges which the DUL Board has addressed. A number of steps have been taken to formalise management structures, implement new operating initiatives and reporting formats and to engage key staff to provide for the planned strong future development in the burgeoning international power market.

In closing I again express my congratulations and appreciation to every member of the company’s dedicated management and staff. I am confident of continuing progress in the directions set by the Board.

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Martin Thomas AM Chairman

Sydney, 27 September 2007

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Dulhunty Power Limited – 2007 Annual Report

Directors Report

Your Directors submit their report for the year ended 30 June 2007.

DIRECTORS

The names and details of the Company's Directors in office during the year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Names, qualifications, experience and special responsibilities

Martin H. Thomas AM FTSE HonFIEAust (Age 73) (Chairman) Appointed 13th October 2005.

Mr Thomas gained his degree in Mechanical Sciences from Cambridge University in 1957. He came to Australia in 1967 joining Merz Australia. Following a merger he became a Principal of Sinclair Knight Merz. Mr Thomas served as chairman of Austenergy (6 years in 1980’s), the New South Wales Electricity Council (1988-1995) and the Sydney 2000 Olympic Energy Panel (1995-2000). With Austenergy Mr Thomas lead missions through the Asia Pacific region to establish technological, institutional and potential export relationships. From 1995-1998 he was appointed Managing Director of the Cooperative Research Centre for Renewable Energy. He is a past Director of the Tyree Group and EnviroMission Limited. He was President of the Institution of Engineers, Australia from 1991-1992 and elected a Fellow of the Australian Academy of Technological Sciences and Engineering in 1991. From 1992 to 1994 he was President of the Federation of Engineering Organisations of South East Asia and the Pacific. He was President of the Australian Institute of Energy from 2000 to 2002. In 1992 he was awarded the James Kirby Memorial Award of the Institution of Electrical Engineers, Australasian Region. He was appointed a Member of the Order of Australia in 1993 for services to engineering and energy management and was awarded an Australian Centenary Medal in 2003. Mr Thomas is a member of the Audit Committee.

Tony J. Wingrove ARMIT, FAIMM (Age 63) (Managing Director) Appointed 16th April 2007. Tony Wingrove joined Dulhunty Power in 2007 with the aim of identifying and completing suitable acquisitions intended to increase the footprint of the company in the infrastructure sector.

Mr Wingrove has long experience in metallurgical industries with an emphasis on electrical products and has advised companies operating in the transport, communication and electrical power sectors. He is a former director of Extruded Metals, Luke and Singer and Tycan Australia and was Group General Manager of the Pacific Dunlop Cables Group. In recent years he has advised many manufacturing companies, in particular, Pirelli Cables and Systems during the construction of the Basslink project.

Alfred J. Chown, B.Econ (Age 46) (Director) Appointed 4th July 1997.

Born in 1960, Mr. Chown is an Australian citizen, married and resident in Hong Kong. Founding Partner of E.L Consult Hong Kong Ltd ("E.L Consult") and Dulhunty Engineering Limited, he has been involved in commercial activities in China since 1983. Following the establishment of E.L Consult's Hong Kong office in 1987, Mr. Chown has been active in human resource issues throughout Asia. With Dulhunty Engineering Limited, he was among the first westerners to enter the PRC electricity fittings industry. E.L Consult is an executive recruitment firm with offices in Hong Kong, Singapore, Shanghai, Beijing and Shenzhen, with affiliates in most related major centres. Mr Chown holds a Bachelor of Economics Degree from Monash University, and is a former Chairman of the Australian Chamber of Commerce in Hong Kong. He has travelled extensively in the Asian region and is well connected with regional business leaders over a range of industries. Mr Chown is also a member of the Remuneration Committee, Nomination Committee and Audit Committee.

Philip W. Dulhunty OAM (Age 83) (Non-Executive Director) Appointed 31st March 2003. Founder of Dulhunty Power (Aust) Pty Ltd, importers, exporters and distributors of electrical power transmission equipment. Honorary Life Member and distinguished member of the international electrical transmission industry body, CIGRE and Honorary Life Senior member of IEEE. Holder of Centenary Medal for Contribution to Australian Industry. Mr Dulhunty is a member of the Remuneration Committee and Nomination Committee.

Marcus Everard (Age 48) (Non-Executive Director) Appointed 31st March 2003, resigned 31st December 2006 Born June 1959, educated at Oundle School and Brasenose College, Oxford, MA Hons Chemistry, 1982. Employed by Credit Suisse First Boston (CSFB) from 1982 until 2001, covering Fixed Income, Derivatives and Investment Banking. In 1999 moved to Hong Kong to run Global Emerging Markets and Asia Pacific Investment Banking for CSFB. Since leaving CSFB Mr. Everard has built a portfolio of private equity business interests spanning Asia, Europe and the US.

Richard K. Llewellyn, (Age 56) (Non-Executive Director) Appointed 20th September 2005.

Company Director with 35 years experience in many senior marketing and management roles primarily in the financial services and IT&T sectors. CEO of an Australian IT company that grew 10 fold in five years. Vice president and member of the Executive Committee of a NYSE listed IT&T company. Over the past fifteen years involved in managing numerous corporate advisory and funding projects with a total value in excess of $A1 billion. National judge Telstra Small Business Awards. Founding member of the AICD and Fellow of AIM. Director and founder of Nextec Strategic Capital. Mr Llewellyn is a member of the Audit Committee.

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Dulhunty Power Limited – 2007 Annual Report

Brian C. Mathiesen, NZCE Electronics (Age 62) (Alternate Director to Alfred J. Chown) Appointed 1st December 2003 After more than twelve years service in the Royal NZ Navy where Mr Mathiesen attained the rank of Warrant Officer, he was appointed head sales engineer with Dulmison NZ Limited and was responsible for introducing preformed fittings into the NZ market. Mr Mathiesen was appointed General Manager of Dulmison NZ in 1976 and eventually General Manager of Dulmison UK from 1989 until 1996. Mr Mathiesen was a founder of Dulhunty Power (NZ) Limited and is currently General Manager of Dulhunty Power (NZ) Limited and International Sales Director for the Dulhunty Power Group.

Peter W. Dulhunty, Cert Mech Eng (Marketing) (Age 52) (Alternate Director to Philip Dulhunty) Appointed 1st March 2004 Peter Dulhunty has extensive experience in the industry of over 30 years, having previously worked with the Dulmison Group of companies and most recently assisted in the foundation of Dulhunty Power (Aust) Pty Limited. Peter is a member of I.E.C. and is the Dulhunty Power representative on CIGRE, holding numerous positions of importance with this body.

Paul Grotowski (Age 39) (Alternate Director to Marcus Everard) Appointed 26th July 2005, resigned 31st December 2006.

Born October 1967, graduated from Australian National University with a Bachelor of Economics and a Bachelor of Arts (Asian Studies). Over 10 years investment banking experience with Credit Suisse First Boston (CSFB) and Merrill Lynch, primarily working in Tokyo, Hong Kong and London covering fixed income and foreign exchange. Currently based in Hong Kong with a focus on private equity Asian investment opportunities.

COMPANY SECRETARY

Gregory R. Knoke, B. Com, CA (Age 54) (Company Secretary and Chief Financial Officer) Appointed 30[th] April 2003. Director of Cogenic Pty Limited and Dulhunty Yangzhou Line Fittings Co. Mr Knoke was a director of Dulhunty Power Limited from May 2000 until 30 April 2003, resigned upon acceptance of the position of CFO. Born in 1952, educated at University of NSW and graduated in 1973 with major in accountancy, he holds a Bachelor of Commerce degree with merit. Mr Knoke is a Chartered Accountant and Associate member of the Institute of Chartered Accountants in Australia since 1979, an affiliate member of Chartered Secretaries of Australia and member of the Australia China Business Council. Business consultant and advisor, with extensive work experience throughout Asia and Europe, Mr Knoke spent 13 years in Hong Kong as Asian Group Financial Controller and Director for BIL Asia Holdings Limited and subsidiaries of the Brierley Investments Limited Group.

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

The principal activities during the year of entities within the consolidated entity were:

• The manufacture and sale of electricity transmission and distribution products and services, anchor systems and foundry products; and,

• The development of energy generation technology

There were no significant changes in the nature of the activities of the consolidated entity during the year.

The consolidated entities objectives and targets to achieve for the 2008 financial year and beyond are:

• Continue to grow market share for existing business and increase revenue and operating activities

• Continue to develop sales globally and to consolidate success in several international markets

• Develop new agencies for emerging technologies and product groups and to expand on current successful agencies

• Complete approvals for local sales in Thailand from our established manufacturing facility

• Consider strategic alliances in development of the Dulhunty Power Groups energy generation technology

• Capital raising with the aim to increase growth through acquisition

• Retention of key executives and employees

• Commence production of new product range for electrical distribution

• Increase sales from the recently established Malaysian operation

REVIEW AND RESULTS OF OPERATIONS

Dulhunty Power Limited achieved a further solid increase in sales for the consolidated entity, from $12,973,339 in 2006 to $15,123,358 in 2007, a growth of 16.57%.

This was due to strong performances in China, New Zealand and Thailand together with a pleasing result from the new 51% owned subsidiary, Dulhunty Power (Malaysia) Sdn Bhd. This venture was part of the planned expansion foreshadowed in our report in 2006 and the new operation has received a favourable response from Malaysian power authorities.

Although operating margins were generally in line with expectations in each market addressed by the Company, results were affected by a slowing of orders received in Australia during the early part of 2007. This trend has been reversed but as a result net profit after tax grew by only 5.7% to $285,951, slightly lower than had been expected.

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Dulhunty Power Limited – 2007 Annual Report

Factory loading in China was very strong throughout the year and remains so with significant orders for Russia and the USA in addition to growing sales within China providing a continued basis for manufacturing operations.

Dulhunty Power Thailand gained approval from Thai authorities for important transmission products and sales of these together with exports to the USA and Hong Kong resulted in heavy factory loadings.

Restructuring of the listed entity in preparation for growth opportunities took place in the second half of the year and costs associated with these activities together with normal listing costs, resulted in a consolidated loss after tax of $280,626 (2006: Net profit after tax of $21,499).

Discussions held with several parties associated with the electrical and infrastructure sectors are likely to lead to additional operations being added to the Company during the next 12 months. It is expected that new operations will include a technology transfer agreement allowing the introduction of innovative technology to the electrical distribution industry in Australia.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Other than as disclosed elsewhere in this financial report, no significant changes in the state of affairs of the company occurred during the year.

DIVIDENDS

No dividends were paid or declared since the start of the financial year. No recommendation for payment of a dividend has been made.

NON-AUDIT SERVICES

During the year Gould Ralph & Company, the Company’s auditor, performed certain other services in addition to their statutory duties.

The board has considered the non-audit services provided during the year by the auditor and in accordance with written advice provided by resolution of the audit committee, is satisfied that the provision of those non-audit services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001.

The reasons for this are that all non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the audit committee to ensure they do not impact the integrity and objectivity of the auditor; and the non-audit services provided do not undermine the general principles relating to auditor independence as set out in Professional Statement F1 Professional independence , as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

Details of the amounts paid to the auditor for audit and non-audit services provided during the year are set out in note 6 to the financial statements. In addition, amounts paid to other auditors for the statutory audit have been disclosed in that note.

A copy of the lead auditors’ independence declaration as required under Section 307C of the Corporations Act is included in the Directors’ report.

EVENTS SUBSEQUENT TO REPORTING DATE

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity, in future financial years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

The consolidated entity expects to maintain the present status and level of operations and hence there are no likely developments in the entity's operations.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The company's operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a State or Territory.

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Dulhunty Power Limited – 2007 Annual Report

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

Indemnification

The Company has entered into Deeds of Indemnity and Access with persons who are an Officer or Director of the Company or a related body corporate, indemnifying such persons against a liability incurred by them in their capacity as an Officer or Director, including costs and expenses of defending legal proceedings and providing them with access to company records where a claim is made or threatened against such Officer or Director.

Insurance Premiums

The Company has not, during or since the end of the financial year, in respect of any person who is or has been an officer or auditor of the Company or a related body corporate paid or agreed to pay a premium in respect of a contract insuring against a liability for costs or expenses of defending legal proceedings.

The Company has paid insurance premiums in respect of Directors' and Officers' liability and legal expense insurance for Directors and Officers of the Company. In accordance with subsection 300(9) of the Corporations Act 2001, further details have not been disclosed due to confidentiality provisions contained in the insurance contract.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.

The company was not a party to any such proceedings during the year.

EMPLOYEES

The consolidated entity employed 135 employees as at 30 June 2007 (2006: 122 employees).

REMUNERATION REPORT

The remuneration report is set out on page 9 and forms part of the directors’ report for the financial year ended 30 June 2007.

DIRECTORS' MEETINGS

The numbers of meetings of Directors (including meetings of Committees of Directors) held during the year and the number of meetings attended by each director were as follows:

	Meeting of the	Meetings of	Meetings of	Meeting of	Meeting of the
	Board of	the	the Audit	the OHS	Nomination
	Directors'	Remuneration	Committee	Committee	Committee
		Committee
**Number of meetings held: **	7	2	2	4	3
Number of meetings attended:
Martin H. Thomas	6	-	1	-	-
Alfred J. Chown	7	2	2	-	3
Marcus Everard – resigned 31st December 2006	2	-	-	-	-
Philip W. Dulhunty	7	1	-	-	3
Tony J. Wingrove – appointed 16th April 2007	1	-	-	-	-
Richard K. Llewellyn	6	-	-	-	-
Brian C. Mathiesen - as Alternate Director to	-	-	-	-	-
Alfred J Chown
Peter W. Dulhunty - as Alternate Director to	-	-	-	2	-
Philip W. Dulhunty
Paul Grotowski - as Alternate Director to Marcus	1	-	-	-	-
Everard, resigned on 31st December 2006

Committee membership

As at the date of this report, the members of the Audit Committee are Mr Martin Thomas (Chairman), Mr Richard Llewellyn and Mr Alfred Chown; members of the Remuneration Committee are Mr. Alfred Chown, Mr. Philip Dulhunty and Mr. Jack Roughan, CEO of the DEL group; and members of the Nomination Committee are Mr Alfred Chown and Mr Philip Dulhunty.

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Dulhunty Power Limited – 2007 Annual Report

INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE

The relevant interest of each director in the shares, and options over such instruments, issued by the companies within the consolidated entity and other related bodies corporate, as notified by the directors to the Australian Stock Exchange in accordance with S205G(1) of the Corporations Act 2001, at the date of this report is as follows:

	Dulhunty Power Ltd	Dulhunty Power Ltd	Dulhunty Engineering Ltd
	Ordinary Shares	Options	Ordinary Shares
Alfred J. Chown	19,160,091	100,000	59,724
Philip W Dulhunty	-	100,000	-
Marcus Everard	2,000,000	100,000	1,313,850
Martin H. Thomas	509,011	-	-
Richard K. Llewellyn	332,088	-	-
Peter W. Dulhunty	6,110,000	190,826	-
BrianC. Mathiesen	1,465,039	150,000	-

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of the Company support and have adhered to the principles of corporate governance. The Company's corporate governance principles are contained in the Corporate Governance Statement.

CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER DECLARATIONS

The chief executive officer and the chief financial officer declared in writing to the board that the financial records of the Company for the financial year have been properly maintained, the Company’s financial reports for the year ended 30 June 2007 comply with accounting standards and present a true and fair view of the Company’s financial condition and operational results. This statement is required annually.

AUDITOR’S INDEPENDENCE DECLARATION

The lead auditor’s independence declaration under Section 307C of the Corporations Act 2001 is set out on page 14 and forms part of the Director’s Report for the year ended 30 June 2007.

Signed in accordance with a resolution of the Directors.

Tony Wingrove Managing Director

Sydney, 27 September 2007

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Dulhunty Power Limited – 2007 Annual Report

Remuneration Report

The Remuneration Committee of the Board of Directors is responsible for determining and reviewing compensation arrangements for the directors, the chief executive officer and the executive team. Remuneration levels are set to attract and retain appropriately qualified and experienced Directors and senior executives. The Remuneration Committee obtains independent advice on the appropriateness of remuneration packages, given trends in comparative companies both locally and internationally. The Remuneration Committee also assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team. Such officers are given the opportunity to receive their base emolument in a variety of forms including cash and fringe benefits such as motor vehicles. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the company.

Executive remuneration packages include a mix of fixed remuneration and performance based remuneration.

Fixed Remuneration

Fixed remuneration consists of base remuneration as well as employer contributions to superannuation funds. Remuneration levels are reviewed annually by the Remuneration Committee through a process that considers individual, segment and overall performance of the consolidated and operating entity. A senior executive’s remuneration is also reviewed on promotion.

Performance – linked Remuneration

The Remuneration Committee links the nature and amount of each directors’ and executives’ emoluments to the company’s financial and operational performance. All senior executives have the opportunity to qualify for participation in the Employee Bonus Plan, which currently provides incentives where specified criteria are met including criteria relating to profitability.

Performance linked remuneration includes both short term and long term incentives and is designed to reward executive directors and senior executives for meeting or exceeding financial and personal objectives. The short term incentive is an at risk bonus provided in the form of cash, and is based on the relevant operating subsidiaries’ results and on achieving a preset target. The long term incentive is provided as ordinary shares of Dulhunty Power Limited or options over ordinary shares of Dulhunty Power Limited under the rules of the Dulhunty Power Employee Share Option Plan.

The remuneration structures result in and took into account:

• The overall level of remuneration for each director and executive

• The executive’s ability to control performance

• The amount of incentives within each executive’s remuneration.

Short term incentive

Each half year the remuneration committee sets the key performance indicators, which generally include measures relating to the operating group, the relevant segment and the individual, and are based on financial, customer and strategy measures. The measures directly align the reward to the key performance indicators and the operating group performance. The financial performance objectives are operating group turnover and gross margin and profit after tax compared to budgeted amounts on a regional and consolidated basis. The non financial objectives vary with position and responsibility and include measures such as achieving strategic outcomes, safety and business development.

The remuneration committee approves the cash incentive to be paid to the individuals.

Long term incentive

Options are issued under the Dulhunty Power Employee Share Option Plan (made in accordance with thresholds set in plans approved by shareholders at the 2003 AGM), and it provides for directors, executives and employees to receive options in total limited to 5% of the issued ordinary capital and exercisable strictly under the terms of the Plan.

The Board considers that the above remuneration structure is generating the desired result. The evidence for this is firstly the sustained growth in turnover, and secondly, the performance linked element appears to be appropriate because the executives achieve a level of performance which qualifies them for bonuses.

The remuneration for all non-executive directors, last voted upon by shareholders at the 1999 AGM, is not to exceed $150,000 per annum. Director’s base fees are presently up to $20,000. Directors receive additional cash benefit of $2,500 for participation and attendance at each board approved committee.

Details of the nature and amount of each element of the emolument of each director of the company and each of the executive officers of the company and the consolidated entity receiving the highest emolument for the financial year are disclosed below in the financial report.

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Dulhunty Power Limited – 2007 Annual Report

Remuneration of key management personnel (audited)

The following table provides the details of all directors of the Company ("specified directors") and the executives of the consolidated entity with the greatest authority ("specified executives"), and the nature and amount of the elements of their remuneration for the year ended 30 June 2007.

2007 Specified Directors Mr M.H. Thomas Mr A. J. Chown Mr T. J. Wingrove Mr R.K. Llewellyn Mr Philip. W. Dulhunty Mr M. Everard Mr Peter W. Dulhunty Mr B. C. Mathiesen Mr P. Grotowski Specified executives Mr T. H. Lee Mr J. C. Roughan Mr G. R. Knoke Mr W Foot Mr K Saul

Short-term benefits Post Employment Benefits Share-based payment Total Cash, salary & commissions Cash bonus Other Super- annuation Equity $ $ $ $ $ $ 12,500 - - - 12,500 25,000 58,459 7,708 - - - 66,167 25,000 - - - - 25,000 12,500 - - - 12,500 25,000 55,000 - - - - 55,000 - - - - - - 109,475 4,084 14,875 10,092 - 138,526 164,509 11,147 - - - 175,656 - - - - - - 110,974 24,661 9,700 5,813 - 151,148 123,277 - 4,613 10,949 - 138,839 118,740 4,400 4,486 10,944 - 138,570 43,398 3,451 12,484 57,518 - 116,851 77,980 2,800 5,518 7,182 - 93,480

911,812 58,251 51,676 102,498 25,000 1,149,237

2006 Specified Directors Mr M.H. Thomas Mr A. J. Chown Mr R.K. Llewellyn Mr Philip W. Dulhunty Mr M. Everard Mr Peter W. Dulhunty Mr B. C. Mathiesen Mr P. Grotowski Specified executives Mr J. C. Roughan Mr G.R. Knoke Mr J. Yung Mr P.Pongpairoj

Short-term benefits Post Employment Benefits Share-based payment Total Cash, salary & commissions Non-cash benefit Super- annuation Equity $ $ $ $ $ 6,250 - - 6,250 12,500 67,689 - - - 67,689 - - - 6,250 6,250 55,000 - - - 55,000 - - - - - 109,227 18,864 9,710 - 137,801 152,146 - - - 152,146 - - - - - 117,125 5,101 10,403 - 132,629 114,477 4,660 10,177 - 129,314 108,430 - - - 108,430 60,310 - - - 60,310

790,654 28,625 30,290 12,500 862,069

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Dulhunty Power Limited – 2007 Annual Report

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Corporate Governance Statement

Dulhunty Power Limited’s corporate governance practices were in place throughout the year ended 30 June 2007 and were fully compliant with the ASX Corporate Governance Council best practice recommendations, unless otherwise stated below.

Board of Directors

The board of directors guides and monitors the business and affairs of Dulhunty Power Limited on behalf of the shareholders by whom they are elected and to whom they are accountable. The board of directors of Dulhunty Power Limited is responsible for the overall corporate governance of the consolidated entity. To assist the Board in discharging it’s responsibilities it has adopted the following principles of corporate governance that are considered appropriate for the present size of the Consolidated Entity and that unless otherwise explained, follow the recommendations of the Australian Stock Exchange (ASX) Corporate Governance Council. The Board is responsible for:

• formulating strategic direction and monitoring performance objectives

• developing and monitoring adoption of the most appropriate principles of corporate governance

• reviewing and ratifying systems of risk management and internal control, codes of conduct and legal compliance

• approving and monitoring the progress of major capital expenditure projects, funding programmes, acquisitions and divestments

• reviewing and approving annual business plans and budgets

• reviewing and ratifying systems for health, safety and environmental management and controls

• appointing and evaluating the performance of senior executives

• appointing, removing and creating succession policies for directors and senior executives.

• approving and monitoring financial and other reporting. The board has delegated responsibility for operation and day to day administration of the company to the Chief Executive Officer, Chief Financial Officer and executive management.

Board Composition

The composition of the Board is determined in compliance with the Parent Entity’s constitution. The names of the directors of the company in office at the date of this report, their term of office and their skills, experience and relevant expertise are detailed in the director’s report.

The names of independent directors of the company are:

Martin Thomas (Chairman) Richard Llewellyn Philip Dulhunty

An independent director is a director who is not a member of management and who:

• Is not a substantial shareholder of the company or an officer of, or otherwise associated directly with, a substantial shareholder of the company

• Has not within the last three years been employed in an executive capacity by the company or another group member, or been a director after ceasing to hold any such employment

• Within the last three years has not been a principal or employee of a material professional advisor or a material consultant to the company or another group member

• Is not a material supplier or customer of the company or another group member, or an officer of or otherwise associated with a material supplier or customer

• Has no material contractual relationship with the company or another group member other than as a director of the company

• Is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the company

Dulhunty Power Limited has a majority of independent directors on the board. Tony Wingrove joined Dulhunty Power as its new managing director in April 2007.

Board Processes

To assist in the execution of its responsibilities, the board has established a number of committees, including a nomination committee, a remuneration committee and an audit committee. The board has also established a framework for the management of the consolidated entity including regular management committee meetings, internal control systems and the establishment of appropriate ethical standards.

A schedule of directors meetings is detailed in the directors’ report.

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Dulhunty Power Limited – 2007 Annual Report

Nomination Committee

The names and qualifications of those appointed to the nomination committee for the year ended 30 June 2007 and their attendance at meetings of the committee are included in the director’s report. This committee is involved in the overseeing of the appointment and induction process for new directors, committee members and senior management.

Audit Committee

The names and qualifications of those appointed to the audit committee for the year ended 30 June 2007 and their attendance at meetings of the committee are included in the director’s report. The Chief Executive Officer and Chief Financial Officer are invited to audit committee meetings at the discretion of the committee. The external auditor met with members of the committee at least twice during the year.

The responsibilities of the audit committee include:

• Assessing whether non – audit services provided by the external auditor are consistent with maintaining the external auditor’s independence. Each reporting period the external auditor provides an independence declaration in relation to the audit or review.

• Providing advice to the Board in respect of whether the provision of the non – audit services by the external auditor is compatible with the general standard of independence of auditors imposed by the Corporations Act 2001.

Remuneration Committee

The remuneration committee reviews and makes recommendations to the board on remuneration packages and policies applicable to the Chief Executive Officer, senior executives and staff and directors themselves. It is also responsible for share option schemes, employee share issues, incentive performance packages, compliance with superannuation requirements, termination entitlements, fringe benefits policies and professional indemnity and liability insurance policies as applicable.

The names of the members of the remuneration committee and their attendance at meetings of the committee are detailed in the director’s report. The remuneration committee in place for the year ended 30 June 2007 consisted of two directors but did not have a independent majority, due to the size of the company and its board. The Chief Executive Officer and Chief Financial Officer are invited to Remuneration Committee meetings, as required, to discuss senior executives and staff performance and remuneration packages.

There are no schemes for retirement benefits other than statutory superannuation for non-executive directors.

Remuneration Policies

Remuneration levels are set to attract and retain appropriately qualified and experienced directors, senior executives and staff to run the consolidated entity. The board considers that the remuneration structure will be able to attract and retain the best executives with the necessary incentives to work to grow long-term shareholder value.

The remuneration committee obtains independent advice as necessary on the appropriateness of remuneration packages, given trends in comparative companies both locally and internationally. Remuneration includes a mix of fixed remuneration and performance based remuneration. All executives receive a base salary, superannuation, fringe benefits and performance incentives. The remuneration committee reviews executive packages semi annually by reference to company performance, executive performance, comparative industry information and relevant independent advice. The performance of executives is measured against criteria agreed half yearly which is based on the forecast growth of the company’s turnover and profits and shareholders value.

Executives are also entitled to participate in the employee option arrangements.

The amount of remuneration for all directors and the five highest paid executives, including all monetary and non-monetary components, are detailed in the note 5 to the financial report.

The board considers that the above performance linked remuneration structure is generating the desired outcome. The evidence for this is very strong growth in turnover over the recent period and the consistent high level of achievement of executives, which qualifies them for bonus.

12

Dulhunty Power Limited – 2007 Annual Report

Risk Management

The group takes a proactive approach to risk management. The board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that the group's objectives and activities are aligned with the risks and opportunities identified by the board.

The group believes that it is crucial for all board members to be a part of this process, and as such the board has not established a separate risk management committee. Instead sub-committees are convened as appropriate in response to issues and risks identified by the board as a whole, and the sub-committee further examines the issue and reports back to the board.

The board has a number of mechanisms in place to ensure that management's objectives and activities are aligned with the risks identified by the board. These include the following:

• Regular shareholder open days in addition to the AGM, attended by the Board and specified executives, which ensure that the board is cognisant of the diverse needs of various stakeholders and assist in identifying the risks the business may face if those needs are not met. The board holds ongoing discussion of issues raised in these meetings, to specifically review and update the corporate strategy as necessary.

• Board approval of a strategic business plan, which encompasses the entity's vision, mission and strategy statements, designed to meet stakeholder’s needs and manage business risk.

• Implementation of board approved operating plans and budgets and board monitoring of progress against these budgets, including the establishment and monitoring of key performance indicators (KPI's) of both a financial and non-financial nature.

• The establishment of committees to report on specific business risks, including for example, such matters as occupational health and safety.

• Monthly management meetings involving executive directors, specified executives, and staff during which reports are given on production, sales, financial, compliance and strategic issues and decisions taken on operating matters, or referred to the board.

Regular reports and cash forecasts from the CFO and COO which assist in discharging the board's responsibility to manage the organisation's financial risks. The board is advised on such matters as the entity's liquidity, available credit and currency exposures and monitors actions to ensure they are in line with company policy.

Financial Reporting

To assist the Board in approving the Company’s financial report, the Chief Executive Officer and the Chief Financial Officer are required to present a statement with regard to the integrity of the financial statements to confirm to the Board that the Company’s financial statements present a true and fair view in all material respects of the Company’s financial condition and that operational results are in accordance with applicable accounting standards and the Corporations Act 2001.

Trading Policy

The company’s policy regarding directors and employees trading in its securities is set by the board. The board restricts directors and employees from acting on material information until it has been released to the market and adequate time has been given for this to be reflected in the security’s price.

13

Dulhunty Power Limited – 2007 Annual Report

Auditor’s Independence Declaration

==> picture [196 x 99] intentionally omitted <==

ABN 74 632 161 298 Level 42 Suncorp Place 259 George Street Sydney 2000 Australia Telephone: (02) 9032 3000 Facsimile: (02) 9032 3088 Email: mail@gouldralph.com.au

The Board of Directors Dulhunty Power Limited Building 2, Ground Floor 35-41 Waterloo Road MACQUARIE PARK NSW 2113

27 September 2007

Dear Members of the Board

LEAD AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001

In relation to our audit of the financial report of Dulhunty Power Limited for the year ended 30 June 2007, and in accordance with the provisions of the Corporations Act 2001.

We declare that, to the best of our knowledge and belief, there have been:

• No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to this audit;

• No contraventions of the Code of Professional Conduct of the Institute of Chartered Accountants in Australia in relation to this audit.

Yours faithfully GOULD RALPH & COMPANY

==> picture [87 x 39] intentionally omitted <==

GREGORY C. RALPH, M.Com., F.C.A. Partner

==> picture [313 x 27] intentionally omitted <==

14

Dulhunty Power Limited – 2007 Annual Report

Income Statement

for the year ended 30 June 2007

Note	Consolidated Parent 2007 2006 2007 2006 $ $ $ $
Continuing Operations Sales Revenue 2 Cost of Sales Gross Profit Other income 2 Marketing expenses Occupancy expenses Administrative expenses Finance costs 3 Other expenses Profit/(Loss) before income tax Income tax expense 4 Profit/(Loss) for the year Profit attributable to minority equity interest Profit/(Loss) attributable to members of the parent entity Earnings per share Basic earnings per share (cents per share) 8	14,741,704 12,546,125 - - (9,869,929) (8,898,182) - -
	4,871,775 3,647,943 - - 381,654 427,214 50,057 113,824 (141,629) (136,217) (42,806) - (423,791) (242,992) (2,500) - (3,025,033) (2,226,732) (200,624) (158,888) (193,573) (122,636) (60,282) (20,032) (1,400,944) (1,127,336) (56,167) (10,581)
	68,459 219,244 (312,322) (75,677) (150,762) (62,991) - -
	(82,303) 156,253 (312,322) (75,677) (198,323) (134,754) - -
	(280,626) 21,499 (312,322) (75,677)
	(0.29) 0.03

The accompanying notes form part of these financial statements.

15

Dulhunty Power Limited – 2007 Annual Report

Balance Sheet

as at 30 June 2007

Note	Consolidated Parent 2007 2006 2007 2006 $ $ $ $
CURRENT ASSETS Cash and cash equivalents 9 Trade and other receivables 10 Inventories 11 Other current assets 16 TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables 10 Financial assets 12 Property, plant and equipment 14 Deferred tax assets 19(b) Intangible assets 15 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 17 Short-term borrowings 18 Current tax liabilities 19(a) Short-term provisions 20 TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Trade and other payables 17 Long-term borrowings 18 Other long-term provisions 20 TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 21 Reserves Accumulated losses Parent interest Minority equity interest TOTAL EQUITY	1,427,618 323,385 4,830 15,099 3,761,704 2,651,558 550,769 57,112 3,080,682 2,513,145 - - 316,372 161,865 22,554 19,515
	8,586,376 5,649,953 578,153 91,726
	- - 3,456,926 2,649,230 201,060 201,060 649,097 886,467 1,307,726 1,273,327 780 1,188 93,960 72,655 - - 2,398,932 2,399,886 - -
	4,001,678 3,946,928 4,106,803 3,536,885
	12,588,054 9,596,881 4,684,956 3,628,611
	3,503,217 2,754,708 246,818 584,607 1,698,128 1,523,787 573,121 66,667 48,006 32,659 - - 258,987 137,791 - -
	5,508,338 4,448,945 819,939 651,274
	85,719 64,907 - - 379,913 501,743 43,140 133,333 24,367 12,935 - -
	489,999 579,585 43,140 133,333
	5,998,337 5,028,530 863,079 784,607
	6,589,717 4,568,351 3,821,877 2,844,004
	8,489,500 6,961,936 8,489,500 6,961,936 19,988 27,038 447,716 685,085 (5,594,929) (5,314,303) (5,115,339) (4,803,017)
	2,914,559 1,674,671 3,821,877 2,844,004 3,675,158 2,893,680 - -
	6,589,717 4,568,351 3,821,877 2,844,004

The accompanying notes form part of these financial statements.

16

Dulhunty Power Limited – 2007 Annual Report

Statement of Changes in Equity

for the year ended 30 June 2007

Note	Ordinary Share Capital Reserves Accumulated losses Minority Equity Interest Total $ $ $ $ $
Consolidated Balance at 1 July 2005 Profit attributable to members of parent entity Contributions of equity Profit attributable to minority shareholders Adjustments from translation of foreign controlled entities Balance at 30 June 2006 Shares issued during the year Loss attributable to members of parent entity Profit attributable to minority shareholders Adjustments from translation of foreign controlled entities Dividends paid or provided for 7 Balance at 30 June 2007 Parent Entity Balance at 1 July 2005 Shares issued during the year Loss attributable to members of parent entity Asset revaluations Balance at 30 June 2006 Shares issued during the year Loss attributable to members of parent entity Asset revaluations Balance at 30 June 2007	6,054,101 9,800 (5,335,802) 2,705,107 3,433,206 - - 21,499 - 21,499 907,835 - - - 907,835 - - - 135,237 135,237 - 17,238 - 53,336 70,574
	6,961,936 27,038 (5,314,303) 2,893,680 4,568,351 1,527,564 - - 692,304 2,219,868 - - (280,626) - (280,626) - - - 374,033 374,033 - (7,050) - (234,859) (241,909) - - - (50,000) (50,000)
	8,489,500 19,988 (5,594,929) 3,675,158 6,589,717
	6,054,101 48,804 (4,727,340) - 1,375,565 907,835 - - - 907,835 - - (75,677) - (75,677) - 636,281 - - 636,281
	6,961,936 685,085 (4,803,017) - 2,844,004
	1,527,564 - - - 1,527,564 - - (312,322) - (312,322) - (237,369) - - (237,369)
	8,489,500 447,716 (5,115,339)- 3,821,877

The accompanying notes form part of these financial statements.

17

Dulhunty Power Limited – 2007 Annual Report

Cash Flow Statement

for the year ended 30 June 2007

Note	Consolidated Parent 2007 2006 2007 2006 $ $ $ $
CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Dividends received Interest received Lease incentives received Payments to suppliers and employees Finance costs Income tax paid Net cash provided by (used in) operating activities 26a CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property, plant and equipment Repayment of advances made to related parties Purchase of property, plant and equipment Advances from / (to) related parties Net cash provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Proceeds from borrowings Repayment of borrowings Dividends paid by controlled entities to outside equity interests Net cash provided by (used in) financing activities Net increase / (decrease) in cash held Cash at beginning of financial year Effect of exchange rates on cash holdings in foreign currencies Cash at end of financial year 9	16,609,465 13,426,095 - - - - - 91,235 12,623 4,914 57 2 - 150,000 - - (16,680,658) (13,456,526) (287,731) (167,204) (175,328) (98,731) (60,282) (20,032) (234,695) (107,714) - -
	(468,593) (81,962) (347,956) (95,999)
	1,576 868 - - (220,645) 150,389 - 96,508 (386,536) (490,784) - - - - (1,606,137) -
	(605,605) (339,527)(1,606,137) 96,508
	2,219,868 907,835 1,527,564 907,835 4,328 354,228 - 200,000 (153,238) (982,393) (78,356) (895,336) - (43,300) - -
	2,070,958 236,370 1,449,208 212,499
	996,760 (185,119) (504,885) 213,008 (879,007) (731,269) 15,099 (197,909) (108,574) 37,381 - -
	9,179 (879,007) (489,786) 15,099

The accompanying notes form part of these financial statements.

18

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements

for the year ended 30 June 2007

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards. The financial report has also been prepared on a historical cost basis.

The financial report is presented in Australian dollars unless otherwise stated.

(b) Statement of compliance

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standard ('AIFRS'). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards ('IFRS').

(c) Basis of consolidation

The consolidated financial statements comprise the financial statements of Dulhunty Power Limited (the parent entity) and its subsidiaries as at 30 June each year.

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

All inter-company balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

Controlled entity acquisitions are accounted for using the purchase method of accounting. Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which Dulhunty Power Limited has control.

Changes in ownership interest - New issue of capital by controlled entity

When a controlled entity makes a new issue of capital and the consolidated entity’s percentage ownership changes, the share of retained profits and reserves is attributed to the Company and outside equity interest reflecting the new ownership interest. The adjustment is not reflected in net profit but as a direct adjustment to the specific equity accounts.

(d) Foreign currencies

Both the functional and presentation currency of Dulhunty Power Limited and its Australian subsidiaries is Australian dollars (A$).

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date.

All differences in the consolidated financial report are taken to the income statement with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in the income statement.

Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

19

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

The functional currencies of the overseas subsidiaries are: Dulhunty Power (NZ) Limited – New Zealand Dollars Dulhunty Power (Thailand) Limited – Thai Baht Dulhunty Power Line Fittings Co. Limited – Chinese RenMinBi Dulhunty Power (Malaysia) Sdn Bhd – Malaysian Ringgit

As at the reporting date the assets and liabilities of these overseas subsidiaries are translated into the presentation currency of Dulhunty Power Limited at the rate of exchange ruling at the balance sheet date and the income statements are translated at the weighted average exchange rates for the year.

(e) Property, plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.

Land and buildings are measured at fair value less accumulated depreciation.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows: Buildings & Leasehold Improvements 4.5% Plant and equipment 7.5% to 40% Leased plant & Equipment 15% to 33.3%

Impairment

The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount. The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Impairment losses are recognised in the income statement.

(f) Goodwill

Goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination over the acquirer's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised.

Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

As at the acquisition date, any goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combination's synergies.

Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates.

Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised.

(g) Intangible assets

Intangible assets acquired separately are capitalised at cost as at the date of acquisition. Following initial recognition, the cost model is applied to the class of intangible assets.

The useful lives of Patents, Computer Software and Licenses are assessed and amortised over their useful lives and amortisation charged is taken to the income statement.

20

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Intangible assets are tested for impairment where an indicator of impairment exists either individually or at the cash generating unit level. Useful lives are also examined on an annual basis and adjustments, where applicable, are made on a prospective basis.

(h) Borrowing costs

Borrowing costs are recognised as an expense when incurred.

(i) Investments

All investments are initially recognised at cost, being the fair value of the consideration given and including acquisition charges associated with the investment.

After initial recognition, investments, which are classified as available-for-sale, are measured at fair value. Gains or losses on available-for-sale investments are recognised as a separate component of equity until the investment is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in the income statement.

Amortised cost is calculated by taking into account any discount or premium on acquisition, over the period to maturity.

For investments carried at amortised cost, gains and losses are recognised in income when the investments are derecognised or impaired, as well as through the amortisation process.

For investments where there is no quoted market price, fair value is determined by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of the investment.

(j) Inventories

Manufacturing

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for as follows:

• Raw materials — purchase cost on a first-in, first-out basis;

• Finished goods and work-in-progress — cost of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

(k) Recoverable amounts of assets

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset's value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

(l) Trade and other receivables

Trade receivables are recognised and carried at original invoice amount less an allowance for any uncollectible amounts.

21

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

A provision for doubtful debts is made against specific trade receivables where collection of the debt, either in full or in part, remains uncertain. Bad debts are written off when identified.

(m) Cash and cash equivalents

Cash on hand and in banks and short-term deposits are stated at nominal value.

For the purposes of the Statement of Cash Flows, cash includes cash on hand, in banks and money market investments readily convertible to cash within 2 working days, net of outstanding bank overdrafts.

Bank overdrafts are carried at the principal amount. Interest is charged as an expense as it accrues.

(n) Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement.

Gains and losses are recognised in the income statement when the liabilities are derecognised and as well as through the amortisation process.

(o) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying consolidated benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

(p) Leases

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments.

Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term.

(q) Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Sale of goods

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be measured reliably. Risks and rewards are considered passed to the buyer at the time of delivery of the goods to the customer.

Rendering of services

Revenue is recognised only to the extent of the expenses recognised that are recoverable.

Interest

Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.

22

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Dividends

Revenue is recognised when the shareholders' right to receive the payment is established.

(r) Income tax

Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilized.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

(s) Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

• where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

(t) Contributed equity

Issued and paid up capital is recognised at the fair value of the consideration received by the Company.

Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

(u) Employee benefits

Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs.

Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(v) Payables

Liabilities for trade creditors and other amounts are carried at amortised cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the consolidated entity.

23

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 2 Revenue

Note 2 Revenue
Note Operating activities - sale of goods - dividends received 2(a) - interest received 2(b) - services revenue Total Revenue Non-operating activities - Foreign exchange gains on unhedged transactions - Revaluation of investments Other revenue from non-operating activities Other Income (a) Dividend revenue from: - partly owned subsidiaries Total dividend revenue (b) Interest revenue from: - other persons Total interest revenue	Consolidated Parent 2007 2006 2007 2006 $ $ $ $ 14,741,704 12,546,125 - - - - 50,000 - 12,624 4,901 57 2 22,647 251,571 - -
	14,776,975 12,802,597 50,057 2
	292,141 34,906 - 2,200 - 111,060 - 111,060 54,242 24,776 - 562
	346,383 170,742 - 113,822
	- - 50,000 -
	- - 50,000 -
	12,624 4,901 57 2
	12,624 4,901 57 2

24

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 3 Loss for the Year (a) Expenses Cost of sales Finance costs: - Other persons Total finance costs Impairment of Property Plant & Equipment Foreign currency translation losses Rental expense on operating leases - minimum lease payments Research and development costs Note 4 Income Tax Expense Note (a) The components of tax expense comprise: Current tax Deferred tax 19 Recoupment of prior year tax losses Under provision in respect of prior years (b) The prima facie tax on profit from ordinary activities tax as follows: Prima facie tax payable on profit from ordinary activities before income tax at 30% (2006: 30%) Add: Tax effect of: - non-deductible depreciation and amortisation - other non-allowable items -Prior year tax losses not bought to account -Effect of higher rates of tax on overseas income - Sundry items - Under provision for income tax in prior year Less: Tax effect of: - foreign currency exchange profit not subject to tax - revaluation of shares not subject to income tax - Effect of lower rates of tax on overseas income -Deferred tax asset recognition - Research and development allowance - Tax losses utilised - Over provision for income tax in prior year Income tax attributable to entity The applicable weighted average effective tax rates are as follows:		Consolidated Parent 2007 2006 2007 2006 $ $ $ $ 9,869,929 8,898,182 - - 193,573 122,636 60,282 20,032
		193,573 122,636 60,282 20,032
		- 618 - 618 63,259 61,029 6,826 10,109 409,046 228,026 - - 50,072 7,976 - - 183,775 83,278 - - (21,305) (32,928) - - (11,708) 12,641 - - 150,762 62,991 - - 20,538 65,773 (93,697) (22,703) - 4,123 - - 8,720 3,595 479 - 308,376 75,634 93,049 56,004 488 1,537 - - 17,813 23,205 169 17 - 12,641 - - 355,935 186,508 - 33,318 17,288 210 - - - 33,318 - 33,318 143,554 45,061 - - - 32,928 - - 12,000 12,000 - - 20,623 - - - 11,708 - - - 150,762 62,991 - - 220% 29% 0% 0%

25

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 5 Key Management Personnel Compensation

(a) Names and positions held of consolidated and parent entity key management personal in office at any time during the financial year are:

Key Management Person	Position
Mr M.H. Thomas	Chairman - Non-executive
Mr A. J. Chown	Executive director
Mr T. J. Wingrove	Managing Director
Mr R.K. Llewellyn	Director - Non-executive
Mr Philip. W. Dulhunty	Director - Non-executive
Mr M. Everard	Director - Non-executive
Mr Peter W. Dulhunty	Alternate director and sales manager
Mr B. C. Mathiesen Mr P. Grotowski	Alternate director and NZ manager Alternate director
Mr J. C. Roughan Mr G.R. Knoke Mr W. Foot Mr K. Saul Mr J. Yung Mr P.Pongpairoj	CEO of Dulhunty Engineering Limited CFO of Dulhunty Power Limited and subsidiaries Sales Manager Sales Manager Manager Dulhunty Yangzhou Line Fittings Co. Limited Manager Dulhunty Power (Thailand) Limited

(b) Compensation of Key Management Personnel

(b) Compensation of Key Management Personnel
Short-term employee benefits Post-employment benefits Other long-term benefits Termination benefits Share-based payments	Consolidated Parent 2007 2006 2007 2006 $ $ $ $ 1,021,739 819,279 25,000 6,250 102,498 30,290 - - - - - - - - - - 25,000 12,500 25,000 12,500
	1,149,237 862,069 50,000 18,750

Dulhunty Power Limited has applied the option under Corporations Amendments Regulation 2006 to transfer key management personnel remuneration disclosures required by AASB 124 Related Party Disclosures paragraph Aus 25.4 to Aus 25.7.2 to the Remuneration Report section in the Directors’ report. These transferred disclosures have been audited.

26

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

(c) Options and Rights Holdings

Number of Options Held by Key Management Personnel

2007

Specified directors Mr M. H. Thomas Mr A. J. Chown Mr T. J. Wingrove – appointed 16 April 2007 Mr Philip W. Dulhunty Mr M. Everard – resigned 31 December 2006 Mr Peter W. Dulhunty Mr B. C. Mathiesen Mr P. Grotowski – resigned 31 December 2006 Specified executives Mr J. C. Roughan Mr G.R. Knoke Mr W. Foot Mr K Saul Mr J. Yung Mr P. Pongpairoi	Balance 1 July 2006 Granted as Compensation Options Exercised Net Change Other Balance 30 June 2007 - - - - - 100,000 - - - 100,000 - - - - - 100,000 - - - 100,000 100,000 - - - 100,000 190,826 - - - 190,826 150,000 - - - 150,000 - - - - - 220,000 - - - - 220,000 200,000 - - - 200,000 - - - - - - - - - - - - - - - - - - - -
	1,060,826 - - - 1,060,826

The net change other column above includes those options that have been forfeited by holders as well as options issued during the year under review.

(d) Shareholdings

Number of Shares held by Key Management Personnel

2007 Specified Directors Mr M.H. Thomas Mr A. J. Chown Mr T. J. Wingrove – appointed 16 April 2007 Mr R.K.Llewellyn Mr Philip W. Dulhunty Mr M. Everard – resigned 31 December 2006 Mr Peter W. Dulhunty Mr B. C. Mathiesen Mr P. Grotowski – resigned 31 December 2006 Specified executives Mr J. C. Roughan Mr G. R. Knoke Mr W. Foot Mr K. Saul Mr J. Yung Mr P.Pongpairoj	Balance 1 July 2006 Received as remuneration Purchases Balance 30 June 2007 238,889 193,199 76,923 509,011 19,160,091 - - 19,160,091 - - - - 138,889 193,199 - 332,088 - - - - 2,000,000 - - 2,000,000 6,035,000 - 75,000 6,110,000 1,465,039 - - 1,465,039 - - - - 40,000 - - 40,000 5,335,945 - - 5,335,945 - - - - - - - - - - - - 91,228 - - 91,228
	34,505,081 386,398 151,923 35,043,402

27

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 6 Auditors' Remuneration Remuneration of the auditor of the parent entity for: — auditing or reviewing the financial report — other services Remuneration of other auditors of subsidiaries for. — auditing or reviewing the financial report of subsidiaries — other services Note 7 Dividends No dividends have been paid or proposed for the year ended 30 June 2007 (2006: Nil) (a) Balance of franking account at beginning of year

Consolidated Parent 2007 2006 2007 2006 $ $ $ $ 71,653 54,641 32,108 27,321 4,063 4,000 1,354 2,000 75,716 58,641 33,462 29,321 13,199 10,104 - - 17,020 7,039 - - 30,219 17,143 - - - - 1,868 1,868

- - 1,868 1,868

The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends.

Note 8 Earnings per Share

(a) Reconciliation of earnings to profit or loss Profit / (Loss) Profit attributable to minority equity interest Earnings used to calculate basic EPS Earnings used in the calculation of dilutive EPS There are no securities that have a dilutive effect on the earnings per ordinary share. (b) Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS	Consolidated 2007 2006 $ $ (82,303) 156,253 (198,323) (134,754)
	(280,626) 21,499
	(280,626) 21,499
	No. No. 95,800,080 75,712,547
	95,800,08075,712,547

28

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 9 Cash and Cash Equivalents

Note Cash at bank and on hand Reconciliation of cash Cash at the end of the financial year as shown in the cash flow statement is reconciled to items in the balance sheet as follows: Cash and cash equivalents Bank overdrafts 18 Note 10 Trade and Other Receivables CURRENT Trade receivables Provision for impairment of receivables Other receivables Amounts receivable from: — partly-owned subsidiaries — provision for impairment of receivables associated companies — other related parties - Goods and services tax receivable NON-CURRENT Amounts receivable from: — wholly-owned entities Note 11 Inventories CURRENT At cost Raw materials and stores Work in progress Finished goods		Consolidated Parent 2007 2006 2007 2006 $ $ $ $ 1,427,618 323,385 4,830 15,099 1,427,618 323,385 4,830 15,099 1,427,618 323,385 4,830 15,099 (1,418,439) (1,202,392) (494,616)- 9,179 (879,007) (489,786) 15,099
		3,228,231 2,586,154 - - (9,887) (9,887) - - 3,218,344 2,576,267 - - 468,797 57,535 70,000 - - - 1,429,142 1,014,976 - - (958,646) (958,646) 64,028 16,826 - - 10,535 930 10,273 782 3,761,704 2,651,558 550,769 57,112 - -3,456,926 2,649,230 - -3,456,926 2,649,230 802,841 951,633 - - 104,675 19,300 - - 2,173,166 1,542,212 - - 3,080,682 2,513,145 - -

29

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 12 Other Financial Assets Note NON CURRENT Investment in controlled entities Available-for-sale financial assets 12(a) (a) Available-for-sale financial assets Comprise: NON CURRENT Unlisted investments, at fair value - shares in other corporations	Consolidated Parent 2007 2006 2007 2006 $ $ $ $ - - 448,037 685,407 201,060 201,060 201,060 201,060
	201,060 201,060 649,097 886,467
	201,060 201,060 201,060 201,060

Available-for-sale financial assets comprise investments in the ordinary issued capital of various entities. There are no fixed returns or fixed maturity date attached to these investments.

The investments in unlisted shares consist of an investment in Development Capital investments. The fair value has been determined by directors with reference to prices paid by other investees in the asset. There has been no independent valuation.

Note 13 Controlled Entitles

Note 13 Controlled Entitles
(a)Controlled Entitles Consolidated
Parent Entity:	Country of Incorporation	Percentage Owned (%)* 2007 2006
Dulhunty Power Limited	Australia
Subsidiaries of Dulhunty Power Limited
Cogenic Pty Limited	Australia	97	97
Dulhunty Power (HK) Limited	Hong Kong	100	100
Dulhunty Engineering Limited	British Virgin Islands	51	50
Dulhunty Power (Aust) Pty Limited	Australia	51	50
Duhunty Power (NZ) Limited	New Zealand	51	50
Dulhunty Yangzhou Line Fittings Co Limited	China	51	50
Dulhunty Power (Thailand) Limited	Thailand	51	50
Dulhunty Power (Malaysia) Sdn Bhd	Malaysia	51	-

• Percentage of voting power is in proportion to ownership

30

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 14 Property, Plant and Equipment

LAND AND BUILDINGS Building & Leasehold Improvements at: At cost Less: Accumulated depreciation PLANT AND EQUIPMENT Plant and equipment: At cost Accumulated depreciation Accumulated impairment losses Leased plant and equipment Capitalised leased assets Accumulated amortisation Total plant and equipment Total property, plant and equipment	Consolidated Parent 2007 2006 2007 2006 $ $ $ $ 447,684 467,672 - - (121,134) (107,517) - -
	326,550 360,155 - -
	2,255,916 1,985,385 8,402 8,402 (1,285,249) (1,085,852) (7,622) (6,596) - (618) - (618)
	970,667 898,915 780 1,188
	51,172 51,172 - - (40,663) (36,915) - -
	10,509 14,257 - -
	981,176 913,172 780 1,188
	1,307,726 1,273,327 780 1,188

(a) Movements in Carrying Amounts

Movements in carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year.

Consolidated Entity: Balance at the beginningofyear Additions Disposals Impairment adjustment Depreciation expense write-back on disposals Foreign exchange differences on translation of self sustaining operation Carrying amount at the end of year Parent Entity: Balance at the beginning of year Depreciation expense Carrying amount at the end of year	Building & Leasehold Improvements Plant and Equipment Leased Plant and Equipment Total $ $ $ $ 360,155 898,915 14, 257 1,273,327 15,969 338,035 - 354,004 - (1,443) - (1,443) - - - - (22,679) (237,520) (3,748) (263,947) - - - - (26,895) (27,320) - (54,215)
	326,550 970,667 10,509 1,307,726
	- 1 188 - 1 188 ~~-~~ (408) ~~-~~ (408)
	- 780 - 780

(b) Impairment losses

The total impairment loss recognised in the income statement during the prior period amounted to $Nil (2006: $618).

31

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements

for the year ended 30 June 2007

Note 15 Intangible Assets

Goodwill Cost Net carrying value Trademarks, computer software and licenses Cost Accumulated amortisation and impairment Net carrying value Total intangibles Consolidated Entity: Year ended 30 June 2006 Balance at the beginning of year Additions Repayment of vendor loan owing on goodwill purchase Amortisation charge Closing carrying value at 30 June 2006 Year ended 30 June 2007 Balance at the beginning of the year Additions Amortisation Closing carrying value at the end of the year	Consolidated Parent 2007 2006 2007 2006 $ $ $ $ 2,253,836 2,253,836 - -	Consolidated Parent 2007 2006 2007 2006 $ $ $ $ 2,253,836 2,253,836 - -
	2,253,836 2,253,836 - -
	347,235 242,588 - - (202,139) (96,538) - -
	145,096 146,050 - -
	2,398,932 2,399,886 - -
		Trademarks, Software & Goodwill $ Licenses $ 2,581,963 156,988 - 21,765 (a) (328,127) - - (32,703) 2,253,836 146,050 2,253,836 146,050 - 104,647 - (105,601) 2,253,836 145,096

Intangible assets, other than goodwill have finite useful lives. The current amortisation charges in respect of intangible assets are Included under depreciation and amortisation expense per the income statement. Goodwill has an infinite life.

(a) The amount of $328,127 is the AUD$ equivalent of USD250,000 being the deferred purchase consideration paid to the vendors from whom the company acquired the controlled entity. On 30 November 2005 ordinary paid-up shares were issued at $0.0306 per share in satisfaction of this debt as approved by shareholders at a general meeting held 21 November 2005.

Impairment Disclosures

Goodwill is allocated to cash-generating units which are based on the group's reporting segment

Impairment Disclosures Goodwill is allocated to cash-generating units which are based on the group's reporting segment
Energy segment Total	2007 2006 $ $ 2,253,836 2,253,836
	2,253,836 2,253,836

The recoverable amount of each cash-generating unit above is determined based on value-in-use calculations. Value-in-use is calculated based on the present value of cash flow projections over a 5-year period. The cash flows are discounted using the yield of 5 year government bonds at the beginning of the budget period plus a risk adjusted premium of 5%.

32

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements

for the year ended 30 June 2007

The following assumptions were used in the value-in-use calculations:

Growth Rate Discount Rate Energy segment 13% 10.75%

Management has based the value-in-use calculations on budgets for each reporting segment. These budgets use historical weighted average growth rates to project revenue. Costs are calculated taking into account historical gross margins as well as estimated weighted average inflation rates over the period which are consistent with inflation rates applicable to the locations in which the segments operate. Discount rates are pre-tax and are adjusted to incorporate risks associated with a particular segment.

Note 16 Other Assets

Note16 Other Assets
CURRENT Prepayments Note17 Trade and Other Payables CURRENT Unsecured liabilities Trade payables Sundry payables and accrued expenses Amounts payable to: - partly-owned subsidiaries NON-CURRENT Unsecured liabilities Other payables	Consolidated Parent 2007 2006 2007 2006 $ $ $ $ 316,372 161,865 22,554 19,515
	316,372 161,865 22,554 19,515
	Consolidated Parent 2007 2006 2007 2006 $ $ $ $ 2,623,750 1,569,688 14,118 943 879,467 1,185,020 232,700 206,217 - - - 377,447
	3,503,217 2,754,708 246,818 584,607
	85,719 64,907 - -
	85,719 64,907 - -

33

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 18 Borrowings

Note 18 Borrowings
Note CURRENT Secured liabilities Bank overdrafts 18(a),(b) Bank loans 18(a),(b) Hire purchase liability 18(a),(c) Other loans NON-CURRENT Secured liabilities Bank loans 18(a),(b) Hire purchase liability 18(a),(c) Other loans 18(a),(d),(e) (a) Total current and non-current secured liabilities: Bank overdraft Bank loan Hire purchase liability Other loans	Consolidated Parent 2007 2006 2007 2006 $ $ $ $
	1,418,439 1,202,392 494,616 - 267,784 294,753 78,505 66,667 11,905 26,642 - - - - - -
	1,698,128 1,523,787 573,121 66,667
	43,139 174,414 43,140 133,333 14,655 5,210 - - 322,119 322,119 - -
	379,913 501,743 43,140 133,333
	1,418,439 1,202,392 494,616 - 310,923 469,167 121,645 200,000 26,560 31,852 - - 322,119 322,119 - -
	2,078,041 2,025,530 616,261 200,000

(b) The bank overdraft of $1,247,843, the trade facility for $170,596 and bank loans of $171,271 are secured by a fixed and floating charge over the assets of Dulhunty Power (Aust) Pty Limited, an unlimited guarantee from Dulhunty Power Limited and a standard authority to appropriate and set off the cash deposit amounting to $79,349 held by the bank.

Bank loan totaling $139,652 is secured over the building owned by Dulhunty Yangzhou Line Fittings Co Ltd and guarantee from Dulhunty Engineering Ltd.

• (c) The consolidated entity's hire purchase agreements are secured by the related assets of $10,509, as in the default, the assets revert to the financier.

• (d) Other secured loans amounting to $322,919 do not have fixed repayment date. Interest accrues daily at the bank bill preference rate + 3.00% p.a.

• (e) A 97% owned controlled entity, Cogenic Pty Limited, entered into an option agreement with DEUS (Department of Energy, Utilities and Sustainability) whereby in consideration for the payment of an option premium of $74,000, Cogenic has granted DEUS an option to acquire shares in Cogenic up to a further 2% of the total issued capital of Cogenic at the date of exercise of the option.

34

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 19 Tax

Note 19 Tax
		Note		Consolidated			Parent
			2007	2006	2007		2006
			$	$	$		$
(a)Liabilities
CURRENT
Income Tax			48,006	32,659		-		-
TOTAL			48,006	32,659		-		-
(b)Assets
Deferred tax assets comprise:
Provisions			57,768	48,728		-		-
Other			36,192	23,927		-		-
			93,960	72,655		-		-
(c)Reconciliations
(i) Gross Movements
The overall movement in the deferred tax account is as follows:			72,655	39,727
Opening balance						-		-
(Charge) / credit to income statement	4		21,305	32,928		-		-
Closing balance			93,960	72,655		-		-
(ii) Deferred Tax Assets
The movement in deferred tax assets for each temporary
difference during the year is as follows:
Provisions
Opening balance			48,728	39,727		-		-
Credited to the income statement			9,040	9,001		-		-
Closing Balance			57,768	48,728		-		-
Other
Opening Balance			23,927	-		-		-
Credited/(charged) to the income statement			12,265	23,927		-		-
Closing Balance			36,192	23,927		-		-
			93,960	72,655		-		-

Note 20 Provisions CURRENT Employee Entitlements Opening balance at beginning of year Additional provisions raised during year Balance at end of the year Dividend provision Provision raised during the year Balance at end of the year Total current provisions NON CURRENT Employee Entitlements Opening balance at beginning of year Additional provisions raised during year Balance at end of the year Analysis of Total Provisions Current Non-current	Consolidated Parent 2007 2006 2007 2006 $ $ $ $ 137,791 120,238 - - 21,196 17,553 - -
	158,987 137,791 - -
	100,000 - - -
	100,000 - - -
	258,987 137,791 - -
	12,935 4,904 - - 11,432 8,031 - -
	24,367 12,935 - -
	258,987 137,791 - - 24,367 12,935 - -
	283,354 150,726 - -

Provision for Employee Entitlements

A provision has been recognised for employee entitlements relating to annual leave and long service leave. In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken Is based on historical data. The measurement and recognition criteria relating to employee benefits has been included in Note 1 to this report.

35

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 21 Issued Capital

Ordinary shares fully paid 2007: 113,085,510 (2006: 88,301,100)

Consolidated	Consolidated	Parent
2007	2006	2007	2006
$	$	$	$
8,489,500	6,961,936	8,489,500	6,961,936
8,489,500	6,961,936	8,489,500	6,961,936

(a) Ordinary Shares

At the beginning of reporting period Shares issued during year - 30 November 2005 - 15 May 2006 - 20 September 2006 - 21 December 2006 - 9 March 2007 - 20 April 2007 - 10 May 2007 At reporting date	No. No. No. No. 88,301,100 58,764,018 88,301,100 58,764,018 - 29,259,304 - 29,259,304 - 277,778 - 277,778 114,965 - 114,965 - 4,463,047 - 4,463,047 - 9,534,286 - 9,534,286 - 10,285,714 - 10,285,714 - 386,398 - 386,398 -
	113,085,510 88,301,100 113,085,510 88,301,100

On 30 November 2005, the company issued 29,259,304 ordinary shares at $0.0306 per share to the Dulhunty Engineering Limited vendors in settlement of debt owing arising from the acquisition of shares in Dulhunty Engineering Limited.

On 15 May 2006, the company issued 277,778 ordinary shares at $0.045 per share for payment of director’s fees under the director’s equity plan.

On 20 September 2006, the company issued 114,965 ordinary shares at $0.057 per share for payment of director’s fees under the director’s equity plan.

On 21 December 2006, the company issued 4,463,047 ordinary shares at $0.065 per share. These funds were for working capital purposes.

On 9 March 2007, the company issued 9,534,286 ordinary shares at $0.07 per share. These funds raised were used for working capital purposes.

On 20 April 2007, the company issued 10,285,714 ordinary shares at $0.07 per share. These funds raised were used for working capital purposes.

On 10 May 2007, the company issued 386,398 ordinary shares at $0.0647 per share for payment of director’s fees under the director’s equity plan.

Terms and conditions

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders' meetings. In the event of winding up of the company, ordinary shareholders rank after creditors and are fully entitled to any proceeds of liquidation.

Note 22 Reserves

(a) Reserves

Included in reserves are exchange differences arising on translation of foreign controlled subsidiaries.

Note 23 Capital and Leasing Commitments

(a)Operating Lease Commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements Payable — minimum lease payments — not later than 12 months — between 12 months and 5 years — greater than 5 years	Consolidated Parent 2007 2006 2007 2006 $ $ $ $ 603,535 496,113 - - 1,174,638 1,445,699 - - - - - -
	1,778,173 1,941,812 - -

36

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 24 Contingent Liabilities and Contingent Assets

John Fielding Pty Limited - contingent liability considered remote

Previous financial statements of the company have noted a contingent liability to John Fielding Pty Ltd for services carried out prior to 30 June 1995 in regards to amendments to income tax returns. However in accordance with the contract no fee is payable until a cash benefit is received by the Company. As this stage no cash benefit has been received by the Company. The maximum liability is $130,241.

Litigation

On 25 June 2007 Dulhunty Power Limited announced that it’s New Zealand subsidiary had received an interim order to cease the supply of insulators to Tenix in New Zealand. Dulhunty Power has now lodged an appeal against this decision. This action has been brought by another bidder for this contract. This bidder has commenced litigation proceedings against Dulhunty Power Limited, it’s New Zealand subsidiary and specific subsidiary group executives. After analysis of all available information, the Company is confident that it will ultimately be successful in defending it’s position.

Bank Guarantee

The controlled entity has provided indemnities to its bankers in respect of bank guarantees given by the bank to third parties. The maximum liability is $289,220 (2006: $254,459)

Note 25 Segment Reporting

Primary reporting - Business segments

The group’s primary business segment is Energy/Energy Infrastructure products. Therefore the segment details are fully reflected in the results and balances reported in the income statement and balance sheet.

Segment accounting policies

Inter-segment pricing is determined on an arms-length basis and are eliminated on consolidation.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Segment capital expenditure is the total costs incurred during the period to acquire segment assets that are expected to be used for more than one period.

Secondary reporting - Geographic segments

Geographical location: Asia Australia New Zealand Eliminations	Segment Revenues from External Customers Carrying Amount of Segment assets Acquisitions of Non-current Segment Assets 2007 2006 2007 2006 2007 2006 $ $ $ $ $ $ 8,104,714 3,524,286 13,328,408 10,381,276 226,436 270,646 7,714,602 8,783,399 9,268,878 8,321,585 146,417 215,204 2,249,857 1,965,856 1,188,312 692,096 25,048 4,934 (2,945,815) (1,300,201) (11,197,544) (9,798,076) - -
	15,123,358 12,973,340 12,588,054 9,596,881 397,901 490,784

37

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 26 Cash Flow Information

(a) Reconciliation of Cash Flow from Operations with Net (Loss)/Profit after Income Tax Net (Loss)/ Profit after income tax Non-cash flows in profit Depreciation and amortisation Net (increase) /decrease in value of non-current assets Net (increase) /decrease in value of current assets Net movement in provisions Unrealised foreign exchange movements Dividends Net loss on disposal of property, plant and equipment Changes in assets and liabilities, (Increase)/decrease in trade and other receivables (Increase)/decrease in inventories Increase/(decrease) in trade payables and accruals Increase/(decrease) in income taxes payable Increase /(decrease) in group advances Cash flow from operations

Consolidated Parent 2007 2006 2007 2006 $ $ $ $ (82,303) 156,253 (312,322) (75,677) 305,607 246,107 408 734 - 217,685 - 217,685 - - - - 30,135 29,890 - - (21,632) 36,626 6,826 - (100,000) 43,300 - - - 18,941 - - (1,139,703) (360,282) (73,036) 84,960 (836,068) (577,172) - - 1,463,587 151,667 30,168 (323,760) (88,216) (45,035) - - - 58 - 59 (468,593) (81,962) (347,956) (95,999)

(b) Non-cash Financing and Investing Activities

(i) Share issues

On 20 September 2006, the company issued 114,965 ordinary shares at $0.057 per share for payment of directors’ fees under the director’s equity plan.

On 10 May 2007, the company issued 386,398 ordinary shares at $0.0647 per share for payment of directors’ fees under the director’s equity plan.

(c) Credit Standby Arrangements with Banks Credit facility Amount utilised The major facilities are summarised as follows: Bank overdrafts Bank overdraft facilities are arranged with the ANZ Bank with the general terms and variable and subject to adjustment. (d) Loan Facilities Loan facilities Amount utilised	1,850,000 1,350,000 500,000 - (1,418,440) (1,202,393) (494,616) -
	431,560 147,607 5,384 -
	conditions being set and agreed to annually. Interest rates are 331,991 469,167 142,314 - (331,991) (469,167) (142,314) -
	- - - -

Bank overdraft facilities are arranged with the ANZ Bank with the general terms and conditions being set and agreed to annually. Interest rates are variable and subject to adjustment.

The major facilities are Trade and Term loan facilities. Refer Note 18 Borrowing for further details.

38

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 27 Share-based Payments

The following share-based payment arrangements existed at 30 June 2007:

The plan provides for any employee, including a director or officer, who has been an employee, director or officer of the company or any of its controlled entities for more than six months to receive an offer from the company for options over ordinary shares each year for no consideration.

Each option is convertible to one ordinary share and the option holds no voting or dividend rights and are not transferable. There are no voting rights attached to the unissued ordinary shares. Voting rights will be attached to the unissued ordinary shares when the options have been exercised.

Rules of the plan is based on the weighted average price of the Company's shares traded during the twenty trading days preceding the

date of the company offering the option.

Options are exercisable commencing either 1) For employees, directors or officers who have been in the employ of the company or any controlled entity for longer than 12 months, 14 days after the acceptance of the offer by the employee; or 2) for any other employee, director or officer, 14 days after such person completes 12 months of employment with the company or any of its controlled entities. All options expire on the earlier of three years after their issue or 12 months after the termination of the employee's employment.

Outstanding at the beginning of the year Granted Forfeited Exercised Outstanding at year- end	Consolidated 2007 2006 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price $ 1,958,626 4.18 cents 1,958,626 4.18 cents - - 1,958,626 1,958,626

(i) No options were exercised during the year ended 30 June 2007.

(ii) The expiry date for the balance of the options available at 30 June 2007 is 8 December 2007.

Note 28 Events After the Balance Sheet Date

There has not arisen in the interval between the end of the financial year and the date of this report any items, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

39

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 29 Related Party Transactions

Details regarding loans outstanding at the reporting date to specified directors and specified executives, where the individual aggregate loan balance exceeded $100,000 at any time in the reporting period, is as follows:

	Balance at	Balance at	Interest payable in
	1 July 2006	30 June 2007	the reporting period
	$	$	$
Specified directors
Philip W Dulhunty	16,826	64,028	-

Details regarding the aggregate of loans made, guaranteed or secured by any entity in the consolidated entity to each group of specified directors and specified executives, and the number of individuals in each group, are as follows:

			Interest payable in the	Number in group at
	Opening balance	Closing balance	reporting period	30 June
	$	$	$
Specified directors
2007	16,826	64,028	-	1
2006	180,657	16,826	-	1

The above loan is repayable by 30 June 2008. No amounts have been written down or recorded as allowances, as the balance is considered fully collectible.

Other transactions with the company or its controlled entities and director related entities

A number of specified directors and specified executives, or their personally-related entities, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities.

A number of these entities transacted with the company or its subsidiaries in the reporting period. The terms and conditions of those transactions were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to unrelated entities on an arms-length basis.

Details of these transactions are as follows:

Mr Alfred Chown is a director of NLP International Limited. A subsidiary company, Dulhunty Engineering Limited, during the period employed the services of NLP International Limited as consultants. The consideration paid for these services was $66,167 (2006: $67,689) and is included in director’s emoluments.

Personally related entities to Mr Philip Dulhunty occupy the same premises as a subsidiary of Dulhunty Power Limited. A share of operating expenses and other costs have been charged to these companies.

An entity associated with Richard Llewellyn by the name of Llewellyn & Associates provided brokerage services to Dulhunty Power Limited in relation to the equity raisings during the year. The fee for these services amounted to $30,000.

Note 30 Financial Instruments

(a) Financial Risk Management

The group's financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable and leases.

The main purpose of non-derivative financial instruments is to raise finance for group operations. The group does not speculate in the trading of derivative instruments.

• (i) Treasury Risk Management A finance committee consisting of senior executives of the group meet on a regular basis to analyse currency and interest rate exposure and to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts.

• (ii) Financial Risks The main risks the group is exposed to through its financial instruments are interest rate risk, foreign currency risk, liquidity risk, credit risk and price risk.

Interest rate risk

Interest rate risk is managed with a mixture of fixed and floating rate debt. At 30 June 2007 approximately 3.7% of group debt is fixed. It is the policy of the group to keep between 3% and 5% of debt on fixed interest rates. For further details on interest rate risk refer to Note 30(b)(i).

Foreign currency risk

The group is exposed to fluctuations in foreign currencies arising from the sale and purchase of goods and services in currencies other than the group's measurement currency. Refer to Note 30(b)(i) for further details.

40

Dulhunty Power Limited – 2007 Annual Report

Liquidity risk

The group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities are maintained.

Credit risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date recognised in the financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the balance sheet and notes to the financial statements.

The consolidated entity does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the consolidated entity

(b) Financial Instruments

(i) Interest Rate Risk

The consolidated entity's exposure to interest rate risk, which is the risk that a financial instruments value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities, is as follows:

41

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Effective Weighted Average Interest Rate 2007 2006	Floating Interest Rate $ Within Year $ 1 to 5 years $ Non-interest Bearing $ Total $ 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
Financial Assets: Cash and cash equivalents 2 1.45 Receivables Investments Total Financial Assets Financial Liabilities: Bank and other loans 9 8.37 Trade payables Sundry payables Amounts payable related parties Lease liabilities 8 8 Total Financial Liabilities	1,427,618 246,855 - 76,529 - - - - 1,427,618 323,384 - - - - - - 3,761,704 2,651,558 3,761,704 2,651,558 - - - - - - 201,060 201,060 201,060 201,060
	1,427,618 246,855 - 76,529 - - 3,962,764 2,852,618 5,390,382 3,176,002
	1,729,362 1,845,559 - 79,271 322,119 100,701 - - 2,051,481 2,025,531 - - - - - - 2,623,750 1,569,688 2,623,750 1,569,688 - - - - - - 965,186 1,249,927 965,186 1,249,927 - - - - - - - - - - - - 11,905 - 14,655 - - - 26,560 -
	1,729,362 1,845,559 11,905 79,271 336,774 100,701 3,588,936 2,819,615 5,666,977 4,845,146

42

Dulhunty Power Limited – 2007 Annual Report

Notes to the Financial Statements for the year ended 30 June 2007

Note 31 Change in Accounting Policy

The following Australian Accounting Standards have been issued or amended but are not yet effective and are applicable to the entity. They (a) have not been adopted in preparation of the financial statements at reporting date.

AASB	AASB Standard	Nature of change in	Application date of	Application date for
Amendment	Affected	accounting policy and	the standard	the group
		impact
2004-3	AASB 1: First-time adoption of AIFRS	No change, no impact	1 January 2006	1 July 2006
	AASB 101: Presentation of Financial Statements
	AASB 124: Related Party Disclosures
2005-1	AASB 139: Financial Instruments: Recognition and	No change, no impact	1 January 2006	1 July 2006
	Measurement
2005-5	AASB 1: First-time adoption of AIFRS	No change, no impact	1 January 2006	1 July 2006
	AASB 139: Financial Instruments: Recognition and
	Measurement
2005-06	AASB 3: Business Combinations	No change, no impact	1 January 2006	1 July 2006
2005-10	AASB 139: Financial Instruments: Recognition and	No change, no impact	1 January 2007	1 July 2007
	Measurement
	AASB 101: Presentation of Financial Statements	No change, no impact	1 January 2007	1 July 2007
	AASB 114: Segment Reporting	No change, no impact	1 January 2007	1 July 2007
	AASB 117: Leases	No change, no impact	1 January 2007	1 July 2007
	AASB 133: Earnings per share	No change, no impact	1 January 2007	1 July 2007
	AASB 132: Financial Instruments: Disclosure and	No change, no impact	1 January 2007	1 July 2007
	Presentation
	AASB 1: First-time adoption of AIFRS	No change, no impact	1 January 2007	1 July 2007
	AASB 4: Insurance Contracts	No change, no impact	1 January 2007	1 July 2007
	AASB 1023: General Insurance Contracts	No change, no impact	1 January 2007	1 July 2007
	AASB 1038: Life Insurance Contracts	No change, no impact	1 January 2007	1 July 2007
2006-1	AASB 121: The Effects of Changes in Foreign Exchange	No change, no impact	1 January 2006	1 July 2006
	Rates
New	AASB 7: Financial Instruments: Disclosure	No change, no impact	1 January 2007	1 July 2007
Standard
	AASB 119: Employee Benefits: December 2004	No change, no impact	1 January 2006	1 July 2006

43

Dulhunty Power Limited – 2007 Annual Report

Director’s Declaration

The directors of Dulhunty Power Limited declare that:

1. the financial statements and notes, as set out on pages 15 to 43, are in accordance with the Corporations Act 2001 and:

2. a. comply with Accounting Standards and the Corporations Regulations 2001; and

3. b. give a true and fair view of the financial position as at 30 June 2007 and of the performance for the year ended on that date of the company and consolidated entity;

4. the Chief Executive Officer and Chief Finance Officer have each declared that:

5. a. the financial records of the company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;

6. b. the financial statements and notes for the financial year comply with the Accounting Standards; and

7. c. the financial statements and notes for the financial year give a true and fair view;

8. in the director’s opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

==> picture [497 x 54] intentionally omitted <==

Tony Wingrove Managing Director

Sydney, 27 September 2007

44

Dulhunty Power Limited – 2007 Annual Report

Independent Auditors’ Report

ABN 74 632 161 298 Level 42, Suncorp Place 259 George Street Sydney 2000 Australia Telephone: (02) 9032 3000 Facsimile: (02) 9032 3088 Email: mail@gouldralph.com.au

INDEPENDENT AUDIT REPORT TO THE MEMBERS OF DULHUNTY POWER LIMITED

Report on the Financial Report

We have audited the accompanying financial report of Dulhunty Power Limited (the company) and the consolidated entity, which comprises the balance sheet as at 30 June 2007, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors' declaration. The consolidated entity comprises both the company and the entities it controlled during the year.

As permitted by the Corporations Regulations 2001, the company has disclosed information about the remuneration of directors and executives (remuneration disclosures), required by Accounting Standard AASB 124: Related Party Disclosures, under the heading ‘Remuneration Report’ in the directors report and not in the financial report.

Directors’ responsibility for the financial report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state that the financial report, comprising the financial statements and notes, comply with International Financial Reporting Standards.

The directors are also responsible for preparation and presentation of the remuneration disclosures contained in the director’ report in accordance with the Corporations Regulation 2001.

Auditors’ responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement and that the remuneration disclosures in the directors’ report comply with Accounting Standard AASB 124.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report and the remuneration disclosures in the directors’ report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 .

==> picture [502 x 61] intentionally omitted <==

45

Dulhunty Power Limited – 2007 Annual Report

Auditors’ opinion

In our opinion:

1. the financial report of Dulhunty Power Limited is in accordance with:

2. (a) the Corporations Act 2001 , including:

3. (i) giving a true and fair view of the company's and the consolidated entity’s financial position as at 30 June 2007 and of their performance for the year ended on that date; and

4. (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.

5. (b) other mandatory financial reporting requirements in Australia.

6. the consolidated/parent financial statements and notes or financial report also comply with International Financial Reporting Standards as disclosed in Note 1.

7. the remuneration disclosures that are contained in the remuneration report of the director’s report comply with Accounting Standard AASB 124 Related Party Disclosures.

GOULD RALPH & COMPANY Chartered Accountants

==> picture [502 x 62] intentionally omitted <==

GREGORY C RALPH, M.COM, FCA Partner

Dated this 27[th] day of September 2007

Sydney

46

Dulhunty Power Limited – 2007 Annual Report

ASX Additional Information

Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at 6 September 2007.

(a) Distribution of equity securities

The number of shareholders, by size of holding, in each class of share are:

Ordinary shares
	Number of holders Number of shares
1 - 1,000	94 55,205
1,001 - 5,000	278 689,291
5,001 - 10,000	134 1,011,495
10,001 - 100,000	214 7,832,076
100,001 and over	114 103,497,443
	834 113,085,510
The number of shareholders holding less than a marketable parcel of shares are:	372 744,496

(b) Twenty largest shareholders The names of the twenty largest holders of quoted shares are:

(b) Twenty largest shareholders The names of the twenty largest holders of quoted shares are:
	Listed ordinary shares
	Number of shares Percentage of ordinary shares
1 NLP International Ltd 2 Zurich Square Investments Limited 3 Peter Dulhunty 4 Brendon A. Park 5 G.T. Consultants Ltd 6 Edmund Lacis 7 Alex Hill 8 ANZ Nomineees Ltd 9 Raymond S Willard 10 Kexby Finance 11 Ian Clyne 12 Cathay Ventures Ltd 13 Brian Mathiesen 14 Bond Street Custodians Ltd SRM 199158 A/C 15 Peter Coad 16 Labor Holdings Pty Ltd 17 Smith Supertee Pty Ltd (Smith Superfund Account) 18 Granic Pty Ltd 19 Hamish C Stuart 20 Montclair Pty Ltd (Wassim Gazal Family Account)	18,810,091 16.63% 9,498,375 8.40% 6,110,000 5.40% 5,310,194 4.70% 5,085,945 4.50% 4,878,286 4.31% 4,323,582 3.82% 3,322,709 2.94% 2,142,857 1.89% 2,000,000 1.77% 1,798,895 1.59% 1,481,723 1.31% 1,465,039 1.30% 1,428,572 1.26% 1,428,571 1.26% 1,428,571 1.26% 1,428,571 1.26% 1,350,707 1.19% 1,114,286 0.99% 1,000,000 0.88% 75,406,974 66.68%

47

Dulhunty Power Limited – 2007 Annual Report

ASX Additional Information (cont’d)

(c) Substantial shareholders

The number of shares held by substantial shareholders are:

	Number of Shares
NLP International Ltd	18,810,091
Zurich Square Investments Limited	9,498,375
Peter Dulhunty	6,110,000
Brendon A. Park	5,310,194
G.T. Consultants Ltd	5,085,945

(d) Voting rights

All ordinary shares (whether fully paid or not) carry one vote per share without restriction.

48