POWER & TECHNOLOGY DIVISION

The external revenue contribution from our Power & Technology Division increased 23.4% to $69.3 million in FY2009. This is equivalent to 30.6% of overall Group revenue. The superior performance is due to improved meter sales which contributed to a 210.6% surge in profit before interest and tax to $8.5 million.

The sales strategy for the Power and Technology Division is to export meters to overseas markets and the division had shipped out 246,000 meters in FY2009 compared to 208,000 meters in FY2008.

The bulk of revenue achieved for this division came from the Australasia market, which was boosted by full scale deliveries of meters under our contract with NGC. This is followed by the sale of meters to the United Kingdom which saw an increased take-up due to regulatory requirements to install smart meters for gas and electricity in all households within the next 10 years. Unfortunately, the sale of meters to the ASEAN segment declined due to lower sales after the completion of the Advanced Metering Readers ("AMR") project in Thailand. Following initial market penetration to new markets such as Africa and the Middle East in FY2008, we have seen improved sales in FY2009 and the outlook of meter sales looks promising for FY2010.

In 2009, the Division benefited from the appreciation of the Australian and New Zealand dollars which led to a foreign exchange gain of $3.1 million in FY2009 compared to a loss of $2.3 million in FY2008, when we started pricing our contracts in local currencies. Our division's available-for-sale investments in BGlobal Plc which is listed on the AIM market of the London Stock Exchange, recovered from a write-down in FY2008 due to improved market conditions.

In a bid to improve operational efficiency, our operations in Singapore have gone SAP in August by adopting a business software that comprises enterprise resource planning and related applications such as supply chain management, customer relationship management, product life cycle management and supplier management. We believe that this is the first step in the right direction to take the Division closer to world class operating standards.

We are now actively expanding our market reach and have participated in the prestigious Metering Europe Exhibition in Barcelona, Spain in October 2009 in order to boost brand awareness and generate further interest in our metering products. To keep in line with the greater marketing efforts, the Division has also revamped and relaunched the company website www.edmi-meters.com to feature the latest and up-to-date products and solutions on offer, including the latest news about the activities within the company.

Following completion of the acquisition of Atlas Measurement Pty Ltd ("Atlas") in May 2009 to its name change to EDMI Gas Pty Ltd and its subsequent launch at the end of October 2009 in Victoria, Australia, we have now gained an established foothold into the gas metering market segment in the Australia market. We have since started manufacturing and marketing the U8 and U10 gas meters and introduced the TR143 and TR200 Gas Regulators, which were recently added into our growing metering portfolio.

Looking forward, we are expecting the momentum towards the adoption of Advanced Metering Infrastructure ("AMI") and AMR to accelerate and we are targeting upcoming project opportunities in Australia, Europe, Thailand and Malaysia. We see growth opportunities for this division as smart metering solutions are now at the forefront of a global revolution towards smart grids. We hope to seize on opportunities presented by the EU-wide target for 80% of electricity users in Europe to have smart meters installed by 2020^. Not one to rest on our laurels, we will continue to invest into research and development for the AMI, AMR and the technologies associated with the Smart Grid. Our strategy is to participate in test-bedding projects overseas with the aim of establishing a base that leads to eventual market penetration in the long term.

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