looking interesting, page-8

re: nice turn around stock Chairman’s Report

At the conclusion of my first year as your Chairman I am proud to report on the improved performance of Dulhunty
Power Limited. The strengthening of our balance sheet with the conversion of founders’ debt to equity earlier in
the year was a first important step in our move to profitability.

Importantly this growing strength has been underpinned by the development of our core business. Recent
months have seen a near continuous succession of winning tenders in our target electricity transmission industry
market. Contracts in Morocco, USA, Peru, China, Australia, New Zealand, Thailand, Hong Kong, Malaysia, the
Pacific Islands and New Guinea have all contributed to a significant growth in turnover in the reporting year with
the promise of improved growth in the year ahead.

Of personal significance it was my pleasure to represent the company in May at the dedication of the American
Electric Power (AEP) 765kV transmission line in Virginia USA. This project, for which Dulhunty Power
successfully tendered it’s newly designed and tested hexagonal spacer dampers, is one of the highest profile high
voltage transmission projects in the USA. Our client AEP was well pleased with the quality and value of the
Dulhunty Power product and its timely delivery. AEP’s upcoming and far larger I-765 project from Virginia to New
Jersey highlights the significant opportunities open to Dulhunty Power in the USA market.

Expansion of the company has inevitably placed demands on the need for additional capital. To this end a capital
raising program is under review and strong growth is planned and anticipated.

In closing I again express my sincere appreciation of the dedication and competence of the company’s
management and staff. I am confident of continuing progress in the directions set by the Board.


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 these for the 2007 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 in particular to tender for new business on an international level and to win a
majority of tenders entered Develop new agencies for emerging technologies and product groups and to expand on current successful agencies Obtain full approval 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 main aim to increase growth through acquisition Retention of key executives and employees



REVIEW AND RESULTS OF OPERATIONS
Dulhunty Power Limited experienced a successful year for the 2005/06 financial period, reporting it’s first full year
consolidated net profit since it’s restructuring. It recorded a consolidated EBIT before minorities of $336,979 and the
Dulhunty Engineering Limited operating group reported an EBIT of $411,061.

Whilst margins were hurt by increased raw material prices, it was the conscious pursuit of new markets and building project
references via competitive bidding that impacted most on the bottom line. This situation will reverse in time as the company
builds its presence in the markets it has now entered.

The Dulhunty Power Group has been operating in its current form since March 2003 and since that time has grown reported
revenues from $4,280,573 to $12,973,339. Much has been accomplished at the operating level, such as building a full
range of line fitting products, establishing a factory in Thailand to service the exciting South East Asian markets, entering the
lucrative US markets, the Russian market, the North African market, and greatly expanding sales in China, Australia, New
Zealand, the Middle East and the Pacific. As a result, the company is now poised to win more and more line fitting projects
in these markets as utilities in developed countries struggle to refurbish their aging networks to meet the ever increasing
demand for power from consumers and those in developing countries push to play catch up in building power grids essential
to the expansion of their economies.

At the listed level, much has also been attained with non-performing assets written down and the company undergoing a
thorough clean up that positions it for expansion in the future.

With many of the tasks set in 2003 to build both the operating and listed business now successfully completed the Board
has spent the best part of the last 6 months formulating a comprehensive business plan that will take the company through
to 2010 and beyond.

The plan calls for a major expansion of the operating business on the back of the foundations that have been laid that will
take advantage of very favourable demand conditions for line fitting products across the markets the operating company
now serves.

To enable this expansion, the operating company will require increased capital, which will be supplied by way of debt and
equity. The listed company will fulfil its obligations in this regard by raising capital to meet the needs of the operating
company. In addition, the listed company will raise funds that will enable it to establish a small management team that will
focus on reviewing potential acquisitions brought in by the operating company and on potential acquisition outside the
operating company but in energy related fields that do not compete with the operating company. In essence, at the listed
level a strong and experienced Board of Directors is determined to build and support a management team that leverages off
the experience of the Board and current senior management, and the market and business knowledge contained therein, to
rapidly create a major electricity supply focused business.

The Board of Directors of both the listed and operating company and the staff of the operating business are extremely
positive and excited by the way the operating business is progressing and expanded sales and increased profits are
expected.