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The 2010 fiscal year was a challenging yet rewarding time for Hydor-Tech. The challenges we faced throughout the year were to not only maintain the steady growth trend we experienced over the past few years but to also successfully complete the exciting expansion of our Edmonton production facility. This will ultimately position the company for greater success. At the end of the second quarter sales revenues had increased slightly by 1.6 over last year. However it was the second half of the year where we experienced significant changes in our productivity. A relatively mild winter in 2009-2010 was the cause of a slower than normal spring run-off season which typically has a huge bearing on our production levels and more importantly a positive financial impact on the latter part of the fiscal year. Because of this sales revenues were down 9 during the third and fourth quarters compared to 2009 and by 5 for the entire year. The challenge facing everyone was to preserve the stability of the company by encouraging progress to improve its products and services whilst reducing costs. Against the tough economic background we needed to look to the quality of our people and the quality of the balance sheet to make sure they are doing everything necessary to ensure our ongoing health and to make sure we are in the best possible shape to prosper. The reward for Hydor-Tech has been witnessing us doing both of these things during the last year. Hydor- Tech will report a good net profit performance this fiscal year but it will be down considerably compared to 2009. This is due largely to increased operating costs in depreciation with rent and loan interest charges required to finance the expansion project. As the Edmonton facility expansion enters its final phase it is a very exciting time as we look forward to the future. Hydor-Tech is a strong business that will soon be better positioned to capitalise on our specialty equipment and location. We have a strong management team and a clear strategy to deliver value not only to our distributors but also to our stakeholders. Ian Lewis 2010 Annual Report 7