POWERS Questions and Answers

1. What are POWERS?

POWERS are preferred, cumulative, exchangeable, redeemable, reset units in the POWERS Trust, a registered managed investment scheme. They:

• entitle POWERS holders to preferred, cumulative Distributions
• are Exchangeable into DUET Stapled Units or cash on Reset Dates and on Exchange Events (when POWERS holders will receive cash or DUET Stapled Units)
• are compulsorily redeemable on 7 August 2013, being the 10th anniversary of the Initial Issue Date (or before that date at the election of the Issuer or in limited circumstances as a result of the election of POWERS holders)
• are quoted on the ASX
• are effectively subordinated to Senior Debt provided by Senior Lenders to the Asset Owning Groups in that the Senior Lenders can indirectly restrict the POWERS Trust’s ability to pay Distributions or the proceeds of a redemption
• are resettable in that the Distribution Rate, Exchange Discount and period until the next Reset Date may be reset by the Issuer on Reset Dates. The Initial Reset Date is 1 September 2008

2. What is the POWERS Trust?

The POWERS Trust is a registered managed investment scheme that has been established to issue POWERS and lend the proceeds of such issues to DUET. The POWERS Trust is a sub-trust of DUET, as the DUET Responsible Entities own all of the Ordinary Units. The POWERS Trust is governed by the POWERS Trust Constitution, which includes the POWERS Terms.

3. What is DUET?

DUET is an ASX listed energy utility investment vehicle that was established to make investments in energy utility assets principally in Australia and New Zealand. DUET consists of four stapled entities, three registered managed investment schemes (Diversified Utility and Energy Trust No 1 and Diversified Utility and Energy Trust No 2 and Diversified Utility and Energy Trust No 3) and an Australian company, DUET Investment Holdings Limited (DIHL).

4. What interests do POWERS holders have in DUET?

POWERS holders hold preferred units in the POWERS Trust. They do not have any ownership interest in DUET (unless they are issued with DUET Stapled Units on Exchange).

5. What are the significant benefits of POWERS?

• POWERS holders are entitled to cumulative, preferred distributions
• POWERS are Exchangeable into DUET Stapled Units or cash on Reset Dates and on Exchange Events. On exchange POWERS holders will receive (at the Issuer’s election) cash or DUET Stapled Units
• POWERS have an Investment Grade issue credit rating from Standard & Poor’s (BBB–). Issues rated BBB– or higher by Standard & Poor’s are considered to be Investment Grade
• POWERS mature on 7 August 2013 (unless Exchanged or otherwise redeemed early)

6. What are the potential significant risks of an investment in POWERS?

• Unless Exchanged or otherwise redeemed in specific circumstances, POWERS can only be realised by sale through ASX. The Issuer may compulsorily redeem POWERS and may reset certain Terms on Reset Dates. On Exchange the holder may receive cash or DUET Stapled Units at the Issuer’s election
• The distribution rate on POWERS is a floating rate and may vary
• A Senior Debt Lock-Up or increase in Senior Debt interest rates, or adverse effects on the financial performance of the Asset Companies, may prevent Distributions being made or reduce the amount of these Distributions
• There is a risk of potential loss of Assets under a forced sale at a market price if a co-owner exercises their default rights on a change of control of DUET (including where a DUET Responsible Entity is replaced without the co-owner’s consent)

7. How are Distributions on POWERS be funded?

Distributions in respect of POWERS will be paid out of the interest received by the POWERS Trust from DUET under the First Onlending Agreement (FOLA) , which will be paid from income generated from DUET’s subordinated loans to the companies it has invested in.

8. When are Distributions paid?

Distributions are payable semi-annually in arrears in respect of a six month period ending on 1 March and 1 September each year (Distribution Payment Dates).

9. What is the Distribution Rate?

Up to 1 September 2008

Until 1 September 2008, the Distribution Rate will be the Bank Bill Rate plus the Initial Margin of 2.65%, expressed as a percentage per annum of the Face Value of each POWERS. POWERS holders will be exposed to variations in the Bank Bill Rate, which is a floating rate.

After 1 September 2008

The Issuer may reset the Distribution Rate for successive periods of not less than 12 months, commencing on or after 1 September 2008. The Distribution Rate will increase by 0.3% per annum if the rating assigned to POWERS by Standard & Poor’s falls below the current BBB– credit rating (but only while the rating remains below BBB–).

10. When can I request an Exchange of my POWERS?

A POWERS holder may request the Issuer to Exchange all or part of their holding of POWERS:

• on a Reset Date
• on the occurrence of an Exchange Event

A POWERS holder may request the Issuer to Exchange all or part of their holding of POWERS by giving an Exchange Notice to the Issuer:

• at least 30 Business Days prior to a Reset Date
• after an Exchange Event occurs, but not later than 30 Business Days after notification of the Exchange Event by the Issuer

11. What information do POWERS holders receive?

• holding statements
• an annual report
• concise financial statements
• a half-yearly update
• distribution advice statements
• annual tax statements