Power & Technology Division

Our Power & Technology Division, which contributed to 26.3% of Group revenue, recorded external sales of $56.1 million in FY2008, up 8.0% over FY2007. Profit before interest and tax rose 19.4% from $2.3 million in FY2007 to $2.7 million in FY2008.

Sale of products from this Division increased due to the success of our overseas penetration strategy. We have penetrated key markets for our meters in Europe and Australasia, effectively placing our listed subsidiary, EDMI Limited ("EDMI"), on the global stage as one of the up-and-coming players of the metering market.

We are still in the process of acquiring a substantial stake in ATLAS Measurement Pty Ltd, which is involved in the business of supplying quantity measurement and control equipment in the gas and electricity industries and associated repair services throughout Australia. This acquisition will enable EDMI to enter the gas metering market in Australasia and expand its product offering from electricity metering to include gas metering products. EDMI will also adopt ATLAS' gas metering products for marketing to its global customers if the acquisition is successfully completed.

We closed the London marketing office in January 2008 as it had already served its purpose to kick-start the promotion of EDMI's products, explore business opportunities and achieve market penetration at acceptable level of product/brand recognition in the United Kingdom. With the closure of this office, the technical and marketing support will be provided directly by EDMI out of Singapore. The UK government has mandated the use of smart meters in all households by 2020 to prepare the country for renewable energy feed-in tariffs and smart grid. This presents EDMI with tremendous opportunities for explosive growth over the next 10 years.

In India, our high-end meters are approved by the government and we are now actively marketing them to exploit the opportunities in the Indian market.

In June 2008, we ventured into the Philippines market through the incorporation of a new subsidiary, EDMI Philippines Inc., which will spearhead the company's thrust into the Philippines and engage in the general marketing activities for electrical and electronic products and components such as metering products and systems. This subsidiary will also provide meter reading, technical support and energy management services.

That same month also saw the launch of the Advanced Automatic Meter Management ("AMM") for remote management of meters and load with our partner Wavecom SA ("Wavecom") in Australia and New Zealand. The advanced Atlas series of meters were paired with Wavecom's Wireless CPU to provide a wireless AMM solution for a leading utility in New Zealand.

EDMI has also received a major order to supply and install industrial and residential Atlas series of smart meters, GSM/ GPRS modems, multidrive meter reading software and systems to multi-infrastructural company, Vector Limited in New Zealand as part of an advanced metering infrastructural initiative. This initiative, covering a contractual period of five years, is to install 500,000 meters, modems, software and services. The size of this contract is about US$100 million.

We remain optimistic about the potential growth in demand for our metering products under EDMI. With our wide range of products and ready solution offerings, we are poised to advance our market position in FY2009.

EDMI will also continue to invest in its research & development ("R&D") activities to develop innovative hardware and software solutions with special emphasis on the Advanced Metering Infrastructure ("AMI") and the Advanced Metering Readers ("AMR"). This will not only enable us to keep pace with the multinational manufacturers, but also to differentiate ourselves from other competitors.

Having successfully established our market presence in Europe and Australasia, we will consolidate our market position in traditional markets in the ASEAN region, while continuing to explore and penetrate new and fast-growing infrastructural markets in China, India, Iran, Middle East, Vietnam and South Africa through our distributorships. We are also seeking to develop new businesses in untapped markets so as to leverage on the consumer trend towards efficient energy usage.

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