JackGreen Limited1

“A quote to go in here.”

– Team at Jack Green

“The company is concentrating on driving its core business.”

“Jackgreen is crossing the threshold this year into a high growth, profitable business.”

“Our forecast customer levels are being met, revenue per customer will rise significantly … and wholesale energy prices have been reduced.”“The Mark ll strategy positions the company for sustained growth.”

“The company remains on track to achieve its 2010 forecast earnings.”

“Jackgreen is Australia’s dedicated renewable energy retailer. It is licensed in New South Wales, ACT, Queensland, South Australia and Victoria. The company also operates Easy Being Green – one of Australia’s leading creators of carbon credits through the provision of energy efficient products.”

Annual Report 2009

“Jackgreen now has the enviable opportunity of being a leading Green and Sustainable Living business”

“The emphasis is on serving our customers well and delivering on our projects to investors.”

Highlights

Registered office Level 5 52 William St East Sydney NSW 2011

Tel: (02) 8302 3800

Website: www.jackgreen.com.au

Principal place of businessLevel 5 52 William St East Sydney NSW 2011

Tel: (02) 8302 3800

Share RegistryLink Market Services LimitedLevel 4333 Collins StreetMelbourne VIC 30001300 554 474

AuditorWilliam Buck (NSW) Pty Ltd

Jackgreen LimitedABN: 46 006 768 332

JackGreen Limited3

OVERVIEW.................................................................................... 4HIGHLIGHTS ................................................................................. 7CHAIRMAN’S REPORT ................................................................... 8CHIEF EXECUTIVE OFFICER’S REPORT ............................................. 9PERFORMANCE .......................................................................... 10BOARD OF DIRECTORS ................................................................ 14SUSTAINABILITY REPORT ............................................................. 16FINANCIAL REPORT ..................................................................... 18DIRECTORS’ REPORT ................................................................... 19CONSOLIDATED INCOME STATEMENT............................................ 37CONSOLIDATED BALANCE SHEETS ............................................... 38CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ..................... 39CONSOLIDATED CASH FLOW STATEMENT ...................................... 41NOTES TO THE FINANCIAL STATEMENTS ........................................ 42

1. GENERAL INFORMATION ................................................ 42 2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES ....... 42 3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS .... 51 4. SEGMENT REPORTING .................................................. 52 5. FINANCIAL RISK MANAGEMENT ..................................... 53 6. INCOME ...................................................................... 56 7. PROFIT FROM ORDINARY ACTIVITIES .............................. 56 8. INCOME TAX EXPENSE .................................................. 57

9. AUDITORS’ REMUNERATION ............................... 5810. EARNINGS PER SHARE ...................................... 5911. CASH ASSETS................................................... 5912. CURRENT RECEIVABLES ..................................... 5913. INVENTORIES .................................................... 5914. FINANCIAL ASSETS............................................ 6015. OTHER ASSETS ................................................. 6016. PROPERTY, PLANT AND EQUIPMENT .................... 6017. INTANGIBLE ASSETS .......................................... 6118. JOINT VENTURES............................................... 6119. CONTROLLED ENTITIES ...................................... 6220. PAYABLES ......................................................... 6221. PROVISIONS ..................................................... 6322. INTEREST BEARING LIABILITIES .......................... 6323. CONTRIBUTED EQUITY ....................................... 6324. RESERVES AND RETAINED LOSSES ..................... 6425. CASH FLOW INFORMATION ................................. 6526. SHARE BASED PAYMENTS .................................. 6527. RELATED PARTY TRANSACTIONS ......................... 6728. KEY MANAGEMENT PERSONNEL DISCLOSURES ... 6829. CAPITAL AND LEASING COMMITMENTS ............... 7030. EVENTS SUBSEQUENT TO REPORTING DATE ........ 71

Jackgreen is Australia’s dedicated ‘renewable’ energy retailer and one of Australia’s largest creators of carbon credits through its subsidiary Easy Being Green Pty Ltd.

This past year has been one of consolidation; we have made some difficult decisions and continued to grow despite increasing working capital requirements and a demanding economic climate. The launch of our Mark II strategy provides the Company with a solid framework from which to build in the next 12 months as we continue to expand into new products and move towards a maiden full year profit.

The results of the Company’s efforts in achieving our goals for the year are outlined in this report, as are the steps we are taking to build Australia’s only dedicated ‘renewable’ energy retailer.

CONTENTS

4JackGreen Limited

GreenPower Customers

Revenue from Operating ActivityCompany ProfileJackgreen is Australia’s only dedicated renewable energy greentailer. With our initial focus on the residential market along the eastern seaboard, it remains the only energy retailer to provide GreenPower accreditation on every product it sells. Every Jackgreen customer makes a voluntary contribution by reducing carbon emissions that impact climate change.

Jackgreen is a 100% Australian owned renewable energy retailer, is endorsed by Planet Ark, and offers consumers a way to reduce their impact on the environment by off-setting greenhouse gas emissions from their household energy use.

Jackgreen’s philosophy is “Incremental change by many will make a significant difference”. With this in mind, Jackgreen has created a portfolio of products that allows consumers to make a difference for their community and environment while removing the barriers including cost. Jackgreen Energy has been rated the most cost effective GreenPower provider in several independent surveys.

In its 5 years of operation, Jackgreen Energy has grown to 75,000 GreenPower customers. Since its inception in 2004, Jackgreen has transitioned to become a provider of complete home sustainability solutions. With its enviro-subsidiary Easy Being Green, Jackgreen has been able to make available new avenues for customers to reduce their carbon footprint without incurring significant costs. The combined businesses have facilitated the abatement of over 4 million tonnes of carbon emissions from the environment.

This year the company is planning to launch a sustainable business solutions product range. With the changes in emissions reporting requirements for business and the strong focus on a sustainable approach to business, it is essential for businesses to understand their impact on the environment and implement solutions to reduce this impact. Easy Being Green provides a full solution to business including an easy assessment of current emissions and a plan to reduce emissions with products and services to support the change including offset arrangements.

With a strong suite of products and a team dedicated to making a difference in the community for the environment, the organisation is fast becoming the leader in domestic and business sustainable living solutions.

OVERVIEW

10

2007 2008 2009

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Revenue (FY)

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2007 2008 2009

Customers (FY)

10,000

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30,000

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JackGreen Limited5

Brand Portfolio

36% 7.5% C

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Rainwater tanks

Eco

Tips

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increase in GreenPower customers

GreenPower market share

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Car

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Solar hot water

6JackGreen Limited

OVERVIEW

Core Principles

• Jackgreen makes it easy for Australians to choose a greener lifestyle. Every product or service that we offer leads to a better environmental outcome.

• Jackgreen is committed to delivering a positive customer experience. We want our customers to feel they are part of a community which is working towards positive environmental change.

• Our people are essential to our success and we are focussed on their ongoing personal development. We are committed to creating Australian jobs.

By honouring these core principles we will increase shareholder value and demonstrate our care and respect for the environment that future generations of Australians will inherit from us.

Marketing material for Easy Being Green: DL brochure

JackGreen Limited7

Snapshot of Results

The Highlights

HIGHLIGHTS

2009 2008 % Change 2007 2006

Operating ResultTrading Revenue 66,330,440 44,147,310 50% 23,154,025 7,466,855

Loss after interest and tax (7,089,205) (3,275,566) 116% (9,194,447) (7,789,208)

Financial PositionShareholders’ Funds 13,177,604 16,774,808 (21%) 14,274,663 10,970,677

Total Assets 45,610,439 37,842,830 21% 28,404,749 14,463,252

Total Liabilities 32,432,835 21,068,023 54% 14,130,086 3,492,575

Key Data Per ShareLoss per share (cents) 3.51 cents 1.64 cents (114%) 7.2 cents 8.1 cents

Key MeasuresEmployees 106 84 69 46

• The Company’s revenue grew by 50% for the consolidated group.

• Jackgreen Energy grew its customer base by

20,000 customers (36%).

• Easy Being Green launched the sale of solar hot water and solar heat pump products, growing its

revenue by 277% to $3.37 million.

• Receipts from customers increased by 77% to $57.7 million.

2006 2007 2008 2009

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

Illustration of growth in electricity purchased on behalf of customers over past 4 years:

8JackGreen Limited

I am pleased to report to shareholders on the progress and development of your company in this my first report as your new Chairman. Jackgreen is unique in being Australia’s only dedicated renewable energy retailer with a genuine sense of social purpose and a commitment to making a difference from its various energy related business activities.

The financial year was marked by continued strong growth in revenue and customer numbers as the Jackgreen Energy business reached a level of critical mass on which to build a sustainable and differentiated energy retailer that provides a real point of difference for energy consumers concerned to voluntarily and affordably reduce their carbon footprint at home.

The financial results reveal a write-off of $6.6m in doubtful debts, including making provisions relating to historical debtors as well as for additional wholesale network cost accrual’s. This “clearing of the decks” rules a line under the first period of the Company’s history as it grew to achieve a level of critical mass.

The future strategy and direction for the company is embodied in what has been dubbed as ‘Jackgreen Mark II”. The Mark II strategy was announced in July 2009 and has been developed to delineate between the first period of the company’s history and the next phase of growth and development.

The strategy has three core components; Board Renewal, Building Capability and Building on key Stakeholder Relationships. We can report that good progress has already been made on each of these strategies.

Board renewal has commenced, along with the composition of the Board. We expect to present the outcomes of this process to shareholders for their consideration at the Annual General Meeting in November 2009.

As has already been announced Jackgreen’s founder and inaugural Managing Director, Andrew Randall, has stood down from that role and will pass the baton to a new CEO to lead the next phase of growth of the company. Andy continues to work in and support the business during this transitional period and on behalf of the Board we record our thanks and appreciation for Andy’s vision, drive and enthusiasm in creating a truly unique energy retail business.

We have been heavily focused on our operational capability with considerable time and effort going into

the streamlining of our back office procedures and billing system. We are also working hard to develop the capability of our people and have continued to develop our talent pool to support our business growth aspirations. This process will continue as the new financial year unfolds.

One of our key stakeholder relationships is with Jackgreen’s shareholder base. In view of their changed circumstances, we were pleased to announce the sale of Babcock & Brown’s stake in the company. This sell down has enabled us to add new institutional and professional investors to the register and we both welcome and look forward to a mutually rewarding association with our new shareholders. In addition to this sell down, a further $3.2 million in capital has been raised from new share placements.

We are focused on employing wholesale risk management strategies that reduce and mitigate, as far as is possible, the risk caused by volatility in the wholesale electricity spot market in periods of peak demand and pricing. Our intention is to have adequate hedge cover in place to financially protect the business from periods of above average consumption and volatile wholesale electricity prices.

Turning briefly to the new financial year, the 2009 winter has been considerably milder than previous winter’s and this has been reflected in electricity sales and revenues in the first few week’s of the new financial year. The planned, but unbudgeted, entry into the commercial SME market with accredited GreenPower products along with cost containment measures are expected to offset the impact of the softness of winter electricity sales.

Jackgreen remains focused on attracting and retaining customers who share our vision of making a personal difference to their environmental footprint by purchasing accredited green energy, products and services. To that end, our wholly owned subsidiary, Easy Being Green, is now selling solar hot water systems, solar heat pumps, home insulation and undertaking home sustainability assessments.

The Company is forecast to continue its strong revenue growth in the 2010 financial year and attain both a maiden operating profit and positive cash flow. The company is committed to delivering our Mark II strategy, including delivering a maiden operating profit for the current financial year.

In conclusion, I would like to take this opportunity to thank all of our shareholders, business partners and staff for their ongoing support of Australia’s only dedicated renewable energy greentailer.

CHAIRMAN Report

Greg Martin (Chairman)

JackGreen Limited9

Our year was marked with a continuation of strong customer and revenue growth, This was achieved amid tough financial and economic conditions. With our base of GreenPower customers now reaching a critical mass, the company is ready to transition to its rightful sustainable future.

We take great pride in attracting Greg Martin to join our business in the interim role of Executive Chairman. He figured strongly in the role out our Mark II strategy. As the founder and inaugural managing director of Jackgreen, it was considered an appropriate time to pass over the reins. Greg’s expertise and energy will ensure a vibrant future for the business as we push our credentials as the pre-eminent Australian greentailer.

As part of our Mark II strategy rollout it was considered prudent to take a conservative approach to areas of the business that have had legacy issues. While this has impacted our results for the year, it assists the business to deliver its promise moving forward.

Wholesale electricity prices have remained low and have allowed the business to hedge at good rates over the next year and shortly into 2011, which further de-risks the operations and assists to lock in margin.

The major events for the year included:

• The achievement of reaching 75,000 customer sign ups;

• Large retail price increases awarded in key states from 1 July 2009.

• Locking in of longer term wholesale hedge contracts;

• Profitable restart of the Easy Being Green business and expansion for 2010;

• The company’s operating profit trading by the last quarter of the year.

We are on track to be the leading provider of simple green solutions in Australia. This will be a key factor of building the brand with significant external expertise assisting us to make this happen.

Objectives Jackgreen’s financial goals are to:

• reach 100,000 customers by 30 June 2010;

• build strong margins through a low cost to serve and cost to acquire operation;

• continue brand build as the pre-eminent greentailer in Australia,

• increasing profit and reducing risk by product diversification; and to

• deliver superior returns to shareholders over time.

The company has a strong social commitment to make change in the community. We firmly believe, like our partner Planet Ark, by providing simple green solutions for consumers, we will make a significant contribution to our society and environment. We strive for our employees to enjoy being part of something positive and help them to grow as the company grows. And we are committed to keeping and building Australian jobs.

OutlookIt would be difficult to find another Company with brighter prospects than Jackgreen. After the long hard road to build a customer base that will provide sustainable profits, the company is now enjoying the benefit of 20%+ price increases in its major market. The company is now a profitable, continued high growth concern, and perfectly situated as a dedicated greentailer.

The roll out and implementation of the Jackgreen Mark II strategy post June 30, secures long term growth and success for the business. At this point we have begun renewal of the Board with Greg Martin, ex Managing Director AGL, taking the helm as Chairman. Management rejuvenation is under way to reflect a more mature business, and has me stepping out of the chief role in the new year. We have helped exit Babcock and Brown from the register as a perceived overhang of stock and also raised a further $3 million in capital.

I have very much enjoyed building a business that provides positive environmental action as a profitable concern and thank every stakeholder for their support to make this happen.

Andrew Randall (Chief Executive Officer)

CHIEF EXECUTIVE OFFICERReport

10JackGreen Limited

As a result of addressing legacy issues this year, the Company’s full year result has been impacted by higher than expected doubtful debt write offs and provisions. The growth of the Easy Being Green business was managed with a focus on embedding logistics and sales processes. Despite these challenges, the Company has continued to take significant steps in growing a quality business that delivers simple environmental solutions to the community. Jackgreen has been able to continue its impressive growth in revenue, increasing by 50% to $66 million from $44 million in 2008. The net loss has increased to $7.089 million from $3.275 million in 2008.

The launch of the Company’s Mark II strategy in July announced that we have drawn a line in the Company’s development in order to launch into our first full year profit with a renewed focus on key performance targets. The company is now well positioned to produce its first full year of profit based on customer growth, wholesale electricity prices, regulated tariff changes and the growth of the energy efficiency product suite. The profit result will be driven by continued impressive customer and revenue growth. The Easy Being Green business has allowed the company to diversify product and establish an effective

PERFORMANCE

2009 2008 2007 2006 2005

$ $ $ $ $

Revenue 676,251 16,239 300,159 4,514,203 4,242,625

Net Profit/(loss) (737,810) 6,824,726 (9,751,889) (120,737) (1,608,977)

Share Price at Year-end 9 cents 11 cents 24 cents 41.5 cents 7.5 cents

Market Capitalisation 20,794,831 22,344,142 38,205,796 45,336,087 6,637,519

Dividends Paid NIL NIL NIL NIL NIL

cross selling platform. As a leading energy efficiency provider, Easy Being Green has rolled out the sale of solar hot water and solar heat pump products during the year and will roll out new profitable products in the coming year including home sustainability audits, insulation and rain water tanks. Easy Being Green will continue to provide Jackgreen with a low cost sales channel.

The following table shows the gross revenue, profits and dividends for the last five years for the listed entity, as well as the share price and market capitalisation at the end of the respective financial years. Analysis of the actual figures reflects the fact that the parent company

now operates solely as the owner of the electricity and energy efficiency businesses. The market capitalisation of the company has decreased in the year but managed to withstand the impact of the global economic crisis in financial markets reasonably well. The Directors believe the market capitalisation of the company will grow as the customer base of the electricity business expands and as results from the introduction and expansion of the Easy Being Green business are recognised. The Company is clearly focused on delivering a full year profit which will also provide the share price with the support needed for a positive re-rating.

The above table represents the results for the Parent Company only. For a review of the revenue growth from the electricity business, refer to Note 6 on page 54, which indicates revenue has grown from $43.6 million in 2008 to $62.4 million in 2009. The energy efficiency business revenue growth has also been significant, increasing from $898k in 2008 to $3.37 million in 2009.

The directors are focused on addressing the share price performance. As part of the Mark II strategy, the Company is engaging with more analysts to increase the coverage

of the Company in the financial markets to increase awareness of our plans and progress. Given the continued instability in the financial markets in 2009, the company has done reasonably well to maintain the share price in these difficult times.

Jackgreen EnergyThe electricity retail business has continued to grow through the year predominantly in New South Wales and Queensland. Regulatory pricing decisions in NSW and QLD put pressure on our gross margins, which flowed through

JackGreen Limited11

to the cash flow of the business, resulting in the need to constrain growth in the second half of the year for a period of time while additional working capital was raised. Despite these events we were able to grow our customer and revenue base. At the end of the year we had 75,000 signed customers.

The business continued to undertake process improvement initiatives during the year to ensure office systems were working as efficiently as possible. The company has addressed all of the historical problems with billing and collections and has made further doubtful debt write offs and provisions in the year to conclude these matters. The Company is now positioned to ensure all billing and collection activity is undertaken in a timely and efficient manner.

The AEMO wholesale electricity prices have been at historical normal levels throughout the year with some volatility in all markets during the summer period. The bushfire season in VIC created some extreme volatility in wholesale pricing resulting in unique market circumstances during January and February where prices were capped across the whole NEM. Our positions provided the necessary protection from these events. The prices in the wholesale market are expected to be reasonably normal through the 2010 financial year, although there is a risk of volatility during summer in NSW and again in VIC and SA due to forecasts of a hotter and drier than normal summer. The pricing beyond the 2010 year is a little less clear with the transition to the Federal Government’s Carbon Pollution Reduction Scheme still not known or widely understood.

Moving forward the company’s gross margins have been positively impacted in 2010 by the decisions of QLD and NSW pricing authorities to recognise the errors in the prior year determinations resulting in significantly higher regulated price increases for the year. These changes have resulted in gross margins for both NSW and QLD returning to levels that enable competition in the market and are at levels consistent with the businesses forecasts for 2010.

With the acquisition of Easy Being Green, the company has established a cross sales operation. We anticipate that 20% - 25% of our future sales can come from this channel which will reduce cost of sales and increases loyalty. The addition of Home Sustainability audits to the product suite will further enhance the capacity of this sales channel for Jackgreen.

Central to success in a highly-competitive market such as energy supply is maintaining the highest possible standards of customer service. Jackgreen was voted ahead of all its major competitors for customer service during the year, a

Marketing material for JackGreen: A1 Posters

result the business has been working very hard to achieve by implementing processes to reduce customer complaints and improve the customer experience. The company is continuing to strive to reduce the number of customer complaints by implementing educational strategies and internal processes to ensure customers receive market best service.

12JackGreen Limited

PERFORMANCE

• Grow our customer base to more than 100,000 customers by 30 June 2010.

• Continue our growth across all States that we operate.

• Maintain retail margins.

• Maintain a low cost posture while improving our capacity and capability.

• Improve communication with the market to improve the stability of our share price.

• Excel in customer service and client communication.

• Develop products and services to satisfy and ensure customer loyalty.

• Provide educational information of the environmental benefits of Jackgreen’s products.

• Continue to recruit bright and enthusiastic people into the business.

• Manage team and individual performances and use available resources effectively.

• Develop our management and employees.

• Retain our people by celebrating successes.

• Build a culture and behaviours to support our vision, values and objectives.

• Identify and prioritise high value opportunities.

• Reward and encourage innovation.

• Learn from experimentation and improvement.

• Build strategic alliances through a strong corporate image, to facilitate our strategic objectives.

• Create valuable relationships by understanding the potential benefits to Jackgreen.

• Work on enhancing the value of our partnerships.

• Comply with statutory and legal requirements as a minimum standard.

• Understand community expectations.

• Proactively manage our significant risks.

• Engage with our community.

Jackgreen’s Strategic Objectives

Returns for our shareholders

Loyal, highly satisfied customers

High performing, motivated teams and leaders who deliver

Growth driven by innovation

Success through strong partnerships

Best practice corporate citizen

JackGreen Limited13

Easy Being GreenThe growth of the Easy Being Green business has not been as expected during the year, however a number of steps have been taken to ensure the roll out of new products in the current year enable the business to deliver on forecasts. During 2009 the company launched the sale of solar hot water systems and solar heat pumps to supplement the energy efficient light globe business. Due to the dramatic fall in the price of NSW greenhouse gas abatement certificates the decision to cease the light globe business was made during the year. The Company continues to review the relevant schemes to determine whether this product can be reintroduced in the future. In the new year the business is planning to launch a number of new products, including Home Sustainability audits, insulation and ran water tanks. The combination of these products with the existing solar products will provide Easy

Being Green with a full suite of energy efficient product offerings that can be partially or in some circumstances fully funded by Government rebate schemes. The introduction of the ANZ Easy Being Green credit card has also provided our customers with an easy way to fund the purchase of our products. The business will continue to work on ways to make the decision of taking positive steps to reduce their environmental footprint ‘easy’.

The Easy Being Green business was able to increase its revenue from less than $1 million in 2008 to $3.3 million in 2009 and expects to achieve significantly higher growth in 2010 with the introduction of the additional prodcucts.

The business is committed to being a pre-eminent creator of Carbon Credits. As state and federal governments roll out new emissions regulations, Easy Being Green will be a significant player in rolling out product that helps meet the targets.

• Sell a suite of energy efficient products and services that reduce emissions.

• Provide simple, cost saving, green solutions.

• Provide cross selling opportunities for the Group.

• Grow product sales to provide a significant profit to the Group.

• Reduce costs of energy business by building a cross selling platform that allows multiple product sales which reduces cost of sales and increases customer loyalty.

Utilise customer base

Profitable contribution to the Group

Easy Being Green Specific Strategic Objectives

Marketing material for Easy Being Green: Coasters and posters

14JackGreen Limited

BOARD OF DIRECTORS

JackGreen Directors The names of Directors in office at any time during or since the end of the year are:

Mr J. Smith

Non Executive Director, Joined the Board on 14 December 2004, a non- executive director, John is a former CEO of Australian Energy Limited and a former group executive of Powercor Limited, with over 10 years experience in the electricity industry.

As an executive of Powercor Limited, he helped shape the customer market share balance of the early Victorian electricity market and, with the opening of the NSW market, established Powercor Limited as the leading national retailer.

Seconded in 1996 to the USA parent company, Pacificorp Inc, Mr. Smith delivered retail market contestable strategies in the western United States. He has spoken at many public forums and has delivered papers to US senatorial committees on retail electricity.

Mr A.M. Randall

Managing Director, BEc, Qualified CPA and graduate of the Securities Institute of Australia, age 48, Joined the Board on 14 December 2004 as Managing Director.

Andrew has been involved in the development of the electricity business since early 2004. He has served on many boards; both listed an unlisted and has over 20 years experience in the financial services, information technology and energy industries.

His business expertise has been used for many successful corporate advisory engagements, including assignments within the energy industry. He has specific expertise in determining growth strategies for emerging businesses in Australia, and implementing those strategies.

Mr Andrew Randall resigned as a Director on 6.08.09.

Mr A.J. Woodward

BBus, ACIS, JP, Qualified Chartered Accountant, age 38 Joined the Board on 28 June 2007 as an executive director.

Andrew has been responsible for the financial and wholesale functions of the electricity retail business since early 2004 and holds the dual roles of Company Secretary and Finance Director.

Company Secretary He was appointed Company Secretary of Jackgreen Limited on 14 December 2004.

Mr P. Vines

Non Executive Director, Chairman of audit committee, age 59. Joined the Board on 5 October 2007 as a non executive director.

Peter has extensive experience as both a non executive and executive director across the utility sector overseas and within Australia, most recently as the Executive General Manager Retail at Origin Energy. Mr Vines is also a director of Melbourne Water Corporation and the NT Water and Power Corporation.

The emphasis is on serving our customers well and delivering on our projects to investors.”

Management TeamLeft to right: Nadia Dimmock – General Manager Corporate Services, Andrew Woodward – Finance Director, Namrata Agarwal – General Manager Sales & Marketing, Andrew Randall – Chief Executive Officer, Don Tribe – General Manager Customer Services

“

JackGreen Limited15

Mr G.J.W. Martin

Chairman, age 50, BEc, LLB has twice attended management programs at IMD in Switzerland.

He joined The Australian Gas Light Company (AGL) in 1981, holding a number of senior operating and corporate management roles in Australia & New Zealand. In 1992 he was seconded for a year to the Office of the President, BC Gas Inc. in Vancouver. In 2001 Greg became Managing Director and CEO of AGL. During his 5-year tenure, AGL was Australia’s largest publicly listed downstream energy company and included in the S&P/ASX 50 (before restructure in 2006). In 2006, Greg joined Challenger Financial Services Group as Chief Executive, Infrastructure and spent 2 years engaged in infrastructure asset origination, acquisition and managing infrastructure investments. Greg is a Non-Executive Director of Energy Developments Limited, Everest Financial Group and the Australian Energy Market Operator. He is Chairman of Gas Valpo S.A.,(Chile) and the Royal Botanic Gardens & Domain Trust of NSW. He was appointed Chairman and Director on 6 July 2009.

16JackGreen Limited

Our PeopleJackgreen recognises the contribution of its people (internal and outsourced labour) who have worked tirelessly to raise awareness of climate change issues, supported the growth of the business and who are integral in delivering our future goals and aspirations. Our people have a genuine care for the environment and the community. Individual staff members have taken volunteer action with involvement in programs such as City to Surf, Giant Steps and World Vision’s Water Health Safety.

Our people are our representative of our brand and without their passion

and commitment, success would not be possible. For this reason,

Jackgreen’s recruitment strategy is tailored to match our brand position. The

company has become actively involved in the Green Skills program under the WPC

Group to form a partnership for employment, education and sustainability. Jackgreen invests in the development of its people by

fostering their ideas to improve operations through the Jackgreen Bright Ideas program

and by offering internal and external training and development opportunities.

Jackgreen, once again, offered all staff influenza injections free of charge and financially supported

quit smoking programs and team sports program throughout the year. Jackgreen’s OH & S committee

provides a consultative forum that can effectively address the Health and Safety matters arising in Jackgreen Limited with particular reference to the requirements of the Occupational Health and Safety Act, 2000.

Our CommunityAs well as being experts in retailing renewable energy, our bigger ambition is to educate the community and drive incremental change for the next generation.

To compliment this, Jackgreen is actively involved in community based projects including National Tree Day, Clean Up Australia Day and the implementation of fundraising programs for schools and other community organisations.

SUSTAINABILITY REPORT

Company Emissions

Emissions offset 88%

JackGreen Limited17

Our Customers Carbon reductionThis year our products installed and supplied will prevent 412,355 tonnes of carbon pollution entering the environment.

Jackgreen has taken an active role in local council sustainability initiatives by providing educational support.

In addition to this, Jackgreen launched, under the banner of Easy Being Green and in conjunction with Channel 9’s Today on Sunday, a 52 week series on sustainable l iving. The series presents one tip each week that will allow consumers to reduce their impact on the environment and save money.

Jackgreen has also supported a number of charities including the Cancer Council, Leukaemia Foundation, Children’s Medical Research Institute and Movember Foundation.

Our EnvironmentCare for the environment forms the basis of the Jackgreen business. The company continues to promote sustainable and responsible practices at work and home. Jackgreen is involved in strategic partnerships to enable better environmental outcomes with groups such as Green Capital and Climate Coolers. Jackgreen has also taken an active role in state and federal government consultation groups in relation to GreenPower and the Carbon Pollution Reduction Scheme. Jackgreen will undertake the Corporate Sustainability Reporting Index this year.

Company’s Carbon Reduction

Total 185.85 tonnes

18JackGreen Limited

FINANCIAL REPORTFor the financial year ended 30 June 2009

19

DIRECTORS’ REPORT The directors of Jackgreen Limited and its controlled entities submit herewith the annual financial report of the consolidated entity for the financial year ended 30 June 2009. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows: 1. Information about the directors and senior management The names of Directors in office at any time during or since the end of the year are: Directors Name Particulars Mr J. Smith Non Executive Director, Joined the Board on 14 December 2004, a non

executive director, John is a former group executive of Powercor Limited, with over 10 years experience in the electricity industry.

As an executive of Powercor Limited, he helped shape the customer market share balance of the early Victorian electricity market and, with the opening of the NSW market, established Powercor Limited as the leading national retailer. Seconded in 1996 to the USA parent company, Pacificorp Inc, Mr. Smith delivered retail market contestable strategies in the western United States. He has spoken at many public forums and has delivered papers to US senatorial committees on retail electricity. Mr A.M. Randall Managing Director, BEc - Qualified CPA and graduate of the Securities Institute of Australia, age 48. Joined the Board on 14 December 2004 as Managing Director. Andrew has been involved in the development of the electricity business since early 2004. He has served on many boards; both listed an unlisted and has over 20 years experience in the financial services, information technology and energy industries. His business expertise has been used for many successful corporate advisory engagements, including assignments within the energy industry. He has specific expertise in determining growth strategies for emerging businesses in Australia, and implementing those strategies. Mr Andrew Randall resigned as a Director on 6 August 2009. Mr A.J. Woodward BBus, ACIS, JP, Qualified Chartered Accountant, age 38. Joined the Board on 28 June 2007 as an executive director, Andrew has been responsible for the financial and wholesale functions of the electricity retail business since early 2004 and holds the dual roles of Company Secretary and Finance Director. Mr P.Vines Non Executive Director, Chairman of audit committee, age 59. Joined the Board on 5 October 2007 as a non executive director. Peter has extensive experience as both a non executive and executive director across the utility sector overseas and within Australia, most recently as the Executive General Manager Retail at Origin Energy. Mr Vines is also a director of Melbourne Water Corporation and the NT Water and Power Corporation.

Mr G.J.W Martin Chairman, age 50, BEc, LLB and has twice attended management programs at IMD, Lausanne, Switzerland.

His career commenced with The Australian Gas Light Company (AGL) in 1981, where he held a number of senior operating and corporate management roles in both Australia & New Zealand. In 1992 Greg was seconded from AGL for a year to work for BC Gas Inc. in Vancouver, British Columbia in the Office of the President. In 2001 Greg was appointed as Managing Director and Chief Executive Officer of AGL. During his 5 year tenure in this position AGL was Australia's largest publicly listed downstream

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energy company and formed part of the S&P/ASX 50 prior to its restructure in 2006. In 2006, Greg joined Sydney based Challenger Financial Services Group as Chief Executive, Infrastructure and spent 2 years engaged in infrastructure asset origination, acquisition and ongoing management of predominantly European, North & South American infrastructure investments made by the principal balance sheet and specialist listed and unlisted infrastructure funds.

Greg is a previous Deputy Chairman of the Australian Gas Association and served as inaugural Chairman of the Energy Supply Association of Australia between 2004 and 2006.

Greg serves as a Non-Executive Director of ASX listed Energy Developments Limited as well as the Australian Energy Market Operator. He is Chairman of Gas Valpo S.A.,(Chile) and the Royal Botanic Gardens & Domain Trust of New South Wales.

Mr Greg Martin was appointed Chairman and Director on 6 July 2009. Directorship of other listed companies Mr Greg Martin has held the following directorships of other listed companies in the past 3 years:

- Energy Developments Limited (from May 2006) - Everest Financial Group (from August 2009)

Director’s shareholdings The following table sets out each director’s relevant interest in shares, debentures, and rights or options in shares or debentures of the company or a related body corporate as at the date of this report.

Jackgreen Limited

Directors Fully paid ordinary shares

Number Share options

Number J.Smith 5,433,036 1,500,000 P.Vines 1,035,069 750,000 A.M. Randall 13,515,548 2,500,000 A.J.Woodward 1,282,764 1,250,000 G.J.W. Martin 1,000,000 10,000,000 Share options granted to directors and senior management During the financial year an aggregate 7,000,000 share options were granted to the following directors and to the five highest remunerated officers of the company as part of their remuneration:

Directors and senior management

Number of options granted Issuing entity

Number of ordinary shares under option

J.Smith 1,500,000 Jackgreen Limited 1,500,000 P.Vines 750,000 Jackgreen Limited 750,000 A.M. Randall 2,500,000 Jackgreen Limited 2,500,000 A.J.Woodward 1,250,000 Jackgreen Limited 1,250,000 N.Agarwal 500,000 Jackgreen Limited 500,000 N.Dimmock 500,000 Jackgreen Limited 500,000 2. Company Secretary The following person held the position of company secretary at the end of the financial year:

• Andrew Woodward - Bachelor of Business (UTS), JP, ACIS, qualified Chartered Accountant. Andrew was appointed company secretary on 14 December 2004. Andrew has been involved with the electricity retail business since early 2004 and holds the dual roles of Company Secretary and Finance Director.

3. Directors’ meetings The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the financial year and the number of meetings attended by each director (while

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they were a director or committee member). During the financial year, 12 board meetings, and 3 audit committee meetings took place. Board of directors Audit committee Directors Held Attended Held Attended P.Vines 12 12 3 3 J.Smith 12 12 - - A.J.Woodward 12 12 3 3 A.M.Randall 12 12 3 3 No meetings of the Remuneration and Nomination Committee were held during the year. Remuneration issues were dealt with at Board level without the need for the committee to meet separately. 4. Corporate Governance Statement Jackgreen’s approach to corporate governance is to have a set of values and behaviours that ensure transparency, fair dealing and protect stakeholder interests. The Board of Jackgreen are committed to good corporate governance practices and oversees an organisation-wide dedication to high standards of legislative compliance and financial and ethical behaviour. The Company has considered the best practice recommendations established by the ASX Corporate Governance Council ‘Principles of Good Corporate Governance and Best Practice Recommendations’ (Recommendations), as amended in August 2007 and, except to the extent indicated below, has complied with the Recommendations throughout the financial year. The company and its controlled entities together are referred to as the Group in this statement. A description of the company's main corporate governance practices is set out below. All these practices, unless otherwise stated, were in place for the entire year. 4.1 Board of directors Role of the Board The relationship between the board and senior management is critical to the Group’s long-term success. The directors are responsible to the shareholders for the performance of the company in both the short and the longer term and seek to balance sometimes competing objectives in the best interests of the Group as a whole. Their focus is to enhance the interests of shareholders and other key stakeholders and to ensure the Group is properly managed. To fulfil this role, the board is responsible for the overall corporate governance of the Group including formulating its strategic direction, approving and monitoring capital expenditure, setting remuneration, appointing, removing and creating succession policies for directors and senior executives, establishing and monitoring the achievement of management’s goals and ensuring the integrity of risk management, internal control, legal compliance and management information systems. It is also responsible for approving and monitoring financial and other reporting. The board operates in accordance with the broad principles set out in its charter which is available from the investor relations information section of the company website at www.jackgreen.com.au. The charter details the board’s composition and responsibilities. Day to day management of the Group’s affairs and the implementation of the corporate strategy and policy initiatives are formally delegated by the board to the Managing Director and the executive team as set out in the Group’s delegations policy. These delegations are reviewed on an annual basis or as required. Board processes The board has established committees to assist in the execution of its duties and to allow detailed consideration of complex issues. Current committees of the board are the nomination and remuneration and audit committees. The committee structure and membership is reviewed on an annual basis. A policy of rotation of committee members applies. Each committee has its own written charter setting out its role and responsibilities, composition, structure, membership requirements and the manner in which the committee is to operate. These

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charters are reviewed on an annual basis and are available on the company website. All matters determined by committees are submitted to the full board as recommendations for board decisions. Minutes of committee meetings are tabled at the subsequent board meeting. Additional requirements for specific reporting by the committees to the board are addressed in the charter of the individual committees. The full board currently holds eleven scheduled meetings each year, plus a strategy meeting and any extraordinary meetings at such other times as may be necessary to address any specific significant matters that may arise. The agenda for meetings is prepared in conjunction with the chairperson and company secretary. Standing items include the Managing Director’s report, financial reports, strategic matters, governance and compliance, sales and marketing and operations reports. Papers are circulated in advance. Executives are regularly involved in board discussions and directors have other opportunities, including visits to business operations, for contact with a wider Group of employees. The two non-executive directors meet regularly during the year without the presence of management, to discuss the operation of the board and a range of other matters. Relevant matters arising from these meetings were shared with the full board. Director and executive education The Group has a formal process to educate new directors about the nature of the business, current issues, the corporate strategy and the expectations of the Group concerning performance of directors. Directors also have the opportunity to visit Group facilities and meet with management to gain a better understanding of business operations. The Group also has a formal process to educate new senior executives upon taking such positions. The induction program includes reviewing the Group’s structure, strategy, operations, financial position and risk management policies. It also familiarises the individual with the respective rights, duties, responsibilities and roles of the individual and the Board. Independent professional advice and access to company information Directors and board committees have the right, in connection with their duties and responsibilities, to seek independent professional advice at the company's expense. Prior written approval of the Chairman is required, but this will not be unreasonably withheld. Each director has the right of access to all relevant Company information and Company executives. Pursuant to the Company’s Constitution and agreements with Directors and to the extent permitted by law, the Company must indemnify Directors and executive officers against liabilities to third parties incurred in their capacity as officers of the Company and against certain legal costs incurred in defending an action for such a liability. Composition of the board The names of the directors of the Company in office at the date of this report, specifying which are independent, are set out in the Directors’ report on page 19 of this report. The composition of the board is determined using the following principles:

• a minimum of three directors, with a broad range of expertise. • the board is to be comprised of both executive and non-executive directors with a majority of

non-executive directors. Non-executive directors bring a fresh perspective to the board’s consideration of strategic, risk and performance matters and are best placed to exercise independent judgement and review and constructively challenge the performance of management. The Board currently does not have a majority of non-executive directors, being comprised of two non-executive and two executive directors. The Board currently considers that the size of the Board is suitable given the size of the Group, however it is the Boards intention to add further non-executive directors in the short term and as the Group grows.

• in recognition of the importance of independent views and the board’s role in supervising the activities of management, the Chairman must be an independent non-executive director, the majority of the board must be independent of management and all directors are required to bring independent judgement to bear in their board decision making.

• the Chairman is elected by the full board and is required to meet regularly with the Managing Director.

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• the company is to maintain a mix of directors on the board from different backgrounds with complementary skills and experience.

The board has adopted specific principles in relation to directors’ independence. These state that when determining independence, a director must be a non-executive and the board should consider whether the director:

• is a substantial shareholder of the company or an officer of, or otherwise associated directly with, a substantial shareholder of the company

• is or has been employed in an executive capacity by the company or any other Group member within three years before commencing to serve on the board

• within the last three years has been a principal of a material professional adviser or a material consultant to the company or any other Group member, or an employee materially associated with the service provided

• is a material supplier or customer of the company or any other Group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer

• has a material contractual relationship with the company or a controlled entity other than as a director of the Group

• is free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s independent exercise of their judgement.

Materiality for these purposes is determined on both quantitative and qualitative bases. An amount of over 5% of annual turnover of the company or Group or 5% of the individual directors’ net worth is considered material for these purposes. In addition, a transaction of any amount or a relationship is deemed material if knowledge of it may impact the shareholders’ understanding of the director’s performance. Recent thinking on corporate governance has introduced the view that a director’s independence may also be perceived to be impacted by lengthy service on the board. To avoid any potential concerns, the board has determined that a director will not be deemed independent if he or she has served on the board of the company for more than ten years. Chairman and Managing Director The Chairman is responsible for leading the board, ensuring directors are properly briefed in all matters relevant to their role and responsibilities, facilitating board discussions and managing the board’s relationship with the company’s senior executives. The Managing Director is responsible for implementing Group strategies and policies. The board charter specifies that these are separate roles to be undertaken by separate people. 4.2 Nomination and Remuneration Committee Given the current size of the Board, the Board determined that it was not practical to have a separate Nomination and Remuneration Committee meeting and as a result has considered relevant issues at the monthly Board meetings. The Company has scheduled two separate meetings for the Committee for the coming year reflecting the growth in the Company and the issues that will be required to be addressed by the Committee in the coming year. The terms and conditions of the appointment and retirement of non-executive directors are set out in a letter of appointment, including expectations of attendance and preparation for all board meetings, minimum hourly commitment, appointments to other boards, the procedures for dealing with conflicts of interest, and the availability of independent professional advice. The remuneration and nomination committee consists of the following non-executive directors:

• Greg Martin (Chairman) - appointed 6 July 2009 • John Smith (Chairman) – resigned 6 July 2009 • Peter Vines

The board policy is that the nomination and remuneration committee will comprise entirely of independent non-executive directors. Given the current size of the board, the committee is limited to two members. The remuneration and nomination committee operates in accordance with its charter which is available on the company website. The functions of the Remuneration and Nomination Committee are:-

• Appointing, evaluating, rewarding or removing the Managing Director

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• Approving appointments, the remuneration or removal of senior management, including the Finance Director and company secretary

• Approving superannuation arrangements, guidelines for employee share plans, remuneration incentive policies, and recruitment, retention and termination policies

• Reviewing succession planning for directors and executives • Monitoring the balance of skills and experience on the board and, when necessary,

appointing new directors, for approval by shareholders. The Committee makes recommendations to the full Board on remuneration arrangements for the Managing Director and senior executives and as appropriate, on other aspects arising from its functions. Details of these directors’ attendance at remuneration and nomination committee meetings are set out in the directors’ report on page 21. When a new director is to be appointed the committee reviews the range of skills, experience and expertise on the board, identifies its needs and prepares a short-list of candidates with appropriate skills and experience. Where necessary, advice is sought from independent search consultants. The full board then appoints the most suitable candidate who must stand for election at the next annual general meeting of the company. The committee’s nomination of existing directors for reappointment is not automatic and is contingent on their past performance, contribution to the company and the current and future needs of the board and company. The remuneration of non-executive Directors is determined by the full Board within a maximum approved by shareholders in general meeting. The maximum is currently an aggregate amount of fees of $500,000 per annum. The Board has no plans to amend this limit. The remuneration of non-executive directors is in the form of a total remuneration basis which may be in the form of cash and superannuation contributions. Non-executive directors are not entitled to performance based remuneration. Non-executive directors are expected to spend at least 20 days a year preparing for and attending board and committee meetings and associated activities. It is the company’s practice to allow its executive directors to accept appointments outside the company with prior written approval of the board. No appointments of this nature were accepted during the year ended 30 June 2009. The commitments of non-executive directors are considered by the board prior to the directors’ appointment to the board of the company and are reviewed each year. Prior to appointment or being submitted for re-election, each non-executive director is required to specifically acknowledge that they have and will continue to have the time available to discharge their responsibilities to the company. Details of the remuneration, nomination, selection and appointment processes are available on the company website. Notices of meetings for the election of directors comply with the ASX Corporate Governance Council’s best practice recommendations. New directors are provided with a letter of appointment setting out the company’s expectations, their responsibilities, rights and the terms and conditions of their employment. All new directors participate in a formal induction program which covers the operation of the board and its committees and financial, strategic, operations and risk management issues. Each member of the executive team signs a formal employment contract at the time of their appointment covering a range of matters including their duties, rights, responsibilities and any entitlements on termination. The standard contract refers to a specific formal job description. This job description is reviewed by the remuneration committee on an annual basis and, where necessary, is revised in consultation with the relevant employee. Further information on directors’ and executives’ remuneration, including principles used to determine remuneration, is set out in this report under the heading ''Remuneration report''. The committee also assumes responsibility for overseeing management succession planning, including the implementation of appropriate executive development programmes and ensuring adequate

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arrangements are in place, so that appropriate candidates are recruited for later promotion to senior positions 4.3 Remuneration Report This remuneration report, which forms part of the directors’ report, sets out information about the remuneration of Jackgreen Limited’s directors and its senior management for the financial year ended 30 June 2009. The prescribed details for each person covered by this report are detailed below under the following headings:

1. Director and senior management details 2. Remuneration policy 3. Relationship between the remuneration policy and company performance 4. Remuneration of directors and senior management 5. Key terms of employment contracts.

The information provided in the remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001. 4.3.1 Director and senior management details The following persons acted as directors of the company during the financial year: Mr J. Smith (Non-executive director, Chairman) Mr A.M. Randall (Managing director, resigned 6 August 2009) Mr A.J. Woodward (Executive director) Mr P.Vines (Non executive director) The term ‘senior management’ is used in this remuneration report to refer to the following persons. Except as noted, the named persons held their current position for the whole of the financial year and since the end of the financial year: N.Agarwal (General Manager – Sales and Marketing) N.Dimmock (General Manager – Corporate Services) J.MacIntosh (National Sales Manager) 4.3.2 Remuneration policy The remuneration policy of Jackgreen Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the economic entity’s financial results. The Board of Jackgreen Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the economic entity, as well as create goal congruence between directors, executives and shareholders. The Board's policy for determining the nature and amount of directors and executives for the Group is as follows: The compensation structure for key management personnel is based on a number of factors, including length of service, particular experience of the individual concerned, and overall performance of the company. The Board aims to ensure that executive reward satisfies the following key criteria for good governance practices:

- competitiveness and reasonableness - acceptability to shareholders - performance alignment of executive compensation - transparency - capital management

The Group seeks to emphasize payment for results through providing various cash bonus reward schemes, specifically, the incorporation of incentive payments based on the achievement of revenue targets, customer acquisitions, compliance targets and return on equity ratios. All bonuses paid are based on these targets. The objective of the reward scheme is to both reinforce the short- and long-term goals of the Group and to provide a common interest between management and shareholders. There has been no alteration to the terms of the bonuses paid since grant date.

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Non-Executive directors The board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The remuneration committee determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting. Directors’ fees Non-executive directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically recommended for approval by shareholders. The maximum currently stands at $500,000 per annum. Fees for non-executive directors are not linked to the performance of the economic entity. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the company. The following fees have applied: Base Fees Chairman $120,000 Other non-executive directors $48,000 Senior management pay The senior management pay and reward framework has two components: - base pay and benefits, including superannuation, and - short-term performance incentives The combination of these comprises the senior management’s total remuneration. The shareholders have approved an Employee Share and Option Plan at last year’s Annual General Meeting to provide the Company with the ability to offer long term incentives to executives and employees. The remuneration committee reviews senior management’s packages annually by reference to the economic entity’s performance, executive performance and comparable information from industry sectors and other listed companies in similar industries. The contracts for service between the company and senior management are on a continuing basis, the terms of which are not expected to change in the immediate future. Upon retirement senior management personnel are paid employee benefit entitlements accrued to date of retirement. Any options not exercised before or on the date of termination lapse. The employment conditions of the managing director, Andrew Randall and other senior management personnel are formalised in contracts of employment. Other than the Managing Director, all other key management personnel are permanent employees of Jackgreen (International) Pty Ltd. Andrew Randall is engaged under a consulting agreement with Obelisk Capital Pty Ltd dated 21 May 2004, which was updated on 1 July 2008. Payments under the agreement commenced from 14 December 2004. The remuneration committee determines the proportion of fixed and variable compensation for each executive. Superannuation The executive directors and senior management personnel except for one receive a superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any other retirement benefits. One senior manager receives a superannuation contribution of 10%. Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards superannuation.

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4.3.3 Relationship between the remuneration policy and company performance

As part of each executive director and senior management remuneration package there is a performance-based component, consisting of key performance indicators (KPIs). The intention of this program is to facilitate goal congruence between directors/senior management with that of the business and shareholders. The KPIs are set annually, with a certain level of consultation with directors/senior management to ensure buy-in. The measures are specifically tailored to the areas each director/senior manager is involved in and has a level of control over. The KPIs target areas the board believes hold greater potential for Group expansion and profit, covering financial and non-financial as well as short- and long-term goals. The level set for each KPI is based on budgeted figures for the Group and respective industry standards. The performance of senior managers is measured against criteria agreed biannually with each senior manager and is based predominantly on the forecast growth of the economic entity’s customer acquisitions, revenue, margins and shareholders’ value. All bonuses and incentives must be linked to predetermined performance criteria. The board may, however, exercise its discretion in relation to approving incentives, bonuses and options, and can recommend changes to the committee’s recommendations. Any changes must be justified by reference to measurable performance criteria. The policy is designed to attract the highest calibre of senior management and reward them for performance that results in long-term growth in shareholder wealth. Performance in relation to the KPIs is assessed bi-annually, with bonuses being awarded depending on the number and deemed difficulty of the KPIs achieved. Following the assessment, the KPIs are reviewed by the remuneration committee in light of the desired and actual outcomes, and their efficiency is assessed in relation to the group’s goals and shareholder wealth, before the KPIs are set for the following year. In determining whether or not a KPI has been achieved, Jackgreen Limited bases the assessment on audited figures. All remuneration paid to directors and senior managers is valued at the cost to the company and expensed. Shares given to directors and senior managers are valued as the difference between the market price of those shares and the amount paid by the director or executive. Options are valued using the Black-Scholes methodology. The relative proportions of remuneration that are linked to performance and those that are fixed are as follows: Name Fixed Remuneration At risk - STI At risk - LTI 2009 2008 2009 2008 2009 2008 Executive directors of Jackgreen Limited Andrew Randall 79% 100% - - 21% - Andrew Woodward 73% 85% 13% 15% 14% -

Other key management of the Group Nadia Dimmock 81% 85% 11% 15% 8% - Namrata Agarwal 79% 85% 14% 15% 7% - John MacIntosh 82% 86% 18% 14% - -

4.3.4 Remuneration of directors and senior management Details of the remuneration of the directors, the senior management personnel of the Group (as defined in AASB 124 Related Party Disclosures) and are set out in the following tables. Short –term employee benefits Post

employment benefits

Share based

payments

2009

Salary & Fees

$ Bonus

$

Non-monetary

$ Other

$ Superannuation

$

Other long term

employee benefits

$

Options & rights

$ Total

$ Non-executive directors J.Smith 60,000 - - - - - 33,561 93,561 P.Vines 28,000 - - - - - 16,780 44,780 Executive officers A.M.Randall* 342,862 - 5,000 - - - 69,024 416,886 A.J.Woodward 180,000 - 5,000 - 16,200 - 34,512 235,712

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N.Agarwal 123,750 - 5,000 - 11,137 - 13,805 153,692 N.Dimmock 147,273 - 5,000 - 14,727 - 13,805 180,805 Other company employees

J.MacIntosh 124,818 - 3,000 - 10,333 - - 138,151

Short –term employee benefits Post

employment benefits

Share based

payments

2008

Salary & Fees

$ Bonus

$

Non-monetary

$ Other

$ Superannuation

$

Other long term

employee benefits

$

Options & rights

$ Total

$ Non-executive directors J.Smith 142,474 - - - - - - 142,474 P.Vines 18,096 - - - - - - 18,096 Executive officers A.M.Randall* 290,386 - 18,000 - - - - 308,386 A.J.Woodward 166,154 - - - 14,954 - - 181,108 N.Agarwal 127,384 7,000 - - 11,475 - - 145,859 N.Dimmock 138,881 7,875 - - 13,888 - - 160,644 Other company employees D.Schweiger 121,865 - - - 10,782 - - 132,647

* Payments are made to Obelisk Capital Pty Ltd under a consulting agreement dated 21 May 2004, which was updated 1 July 2008. Payments commenced under the agreement from 14 December 2004. The amounts paid in 2008 and 2009 include payments relating to services provided in prior periods. Bonuses and share-based payments granted as compensation for the current financial year Bonuses There were no bonuses paid during the financial year ending 30 June 2009. Employee share option plan Jackgreen Limited operates an ownership-based scheme for senior management and non-executive directors of the consolidated entity. In accordance with the provisions of the plan, as approved by shareholders at a general meeting, senior management and non-executive directors of the company may be granted options to purchase parcels of ordinary shares at an exercise price nominated by the Board. Each employee share option converts into one ordinary share of Jackgreen Limited on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry. The options granted expire within three years of their issue, or immediately after the recipient ceases to be an employee or non-executive director of the Company, whichever is the earlier. The Board has discretion to approve that options are retained in the event that a Director or employee ceases to be employed by the Company. During the financial year, the following share-based payment arrangements were in existence

Options series Grant date Expiry date Grant date fair

value Vesting date (1) Issued 21 Nov 08 21/11/08 21/11/11 $0.05 Special conditions(2) Issued 21 Nov 08 21/11/08 21/11/11 $0.05 21/11/09 (3) Issued 21 Nov 08 21/11/08 21/11/11 $0.05 21/11/10 There is no further service or performance criteria that need to be met in relation to options granted under series (2) – (3) before the beneficial interest vests in the recipient. Executives receiving options

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under option series (1) are entitled to the beneficial interest under the option when the recipient has achieved 12 months continuous service with the company and annualised consolidated revenue of $85 million is achieved and/or an EPS result of $0.012 is achieved in either the year to 30 June, 6 months to 31 December or a shorter period as selected by the Board (no shorter than 3 consecutive months). The following grants of share-based payment compensation to directors and senior management relate to the current financial year: During the financial year

Name Option series No.

granted No.

vested

% of grant

vested % of grant

forfeited

% of compensation

for the year consisting of

options J.Smith (2) Issued 21 Nov 08 750,000 - 0% n/a 23.9% J.Smith (3) Issued 21 Nov 08 750,000 - 0% n/a 11.8% P.Vines (2) Issued 21 Nov 08 375,000 - 0% n/a 25.0% P.Vines (3) Issued 21 Nov 08 375,000 - 0% n/a 12.4% A.Randall (1) Issued 21 Nov 08 2,500,000 - 0% n/a 16.5% A.Woodward (1) Issued 21 Nov 08 1,250,000 - 0% n/a 14.6% N.Dimmock (1) Issued 21 Nov 08 500,000 - 0% n/a 7.6% N.Agarwal (1) Issued 21 Nov 08 500,000 - 0% n/a 8.9% There were no options exercised during the financial year ending 30 June 09. The following table summarises the value of options granted, exercised or lapsed during to directors and senior management:

Name

Value of options granted at the grant date (i)

$

Value of options exercised at the exercise date (i)

$

Value of options lapsed at the date of lapse (ii)

$ J.Smith 33,561 - - P.Vines 16,780 - - A.Randall 69,024 - - A.Woodward 34,512 - - N.Dimmock 13,805 - - N.Agarwal 13,805 - - (i) The value of options granted during the period is recognised in compensation over the vesting period of the grant, in accordance with Australian accounting standards. 4.3.5 Key terms of employment contracts On appointment to the Board, non executive directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the office of director. The employment conditions of the Chief Executive Officer, Andrew Randall, and specified senior management personnel are formalised in a consulting agreement or contracts of employment. Other than the Chief Executive Officer, the remaining senior managers are permanent employees of Jackgreen (International) Pty Ltd. The Chief Executive Officer is engaged under a consulting agreement dated 21 May 2004, which was updated 1 July 2008. Payments commenced under the agreement from 14 December 2004. The contract is between Jackgreen and Obelisk Capital Pty Ltd and has no defined term, requires a minimum commitment of three days per week and provides a fixed amount of $90,000 for three days work and $1,000 per day for each additional day worked. The employment contracts stipulate a range of one- to two-month resignation periods. The company may terminate an employment contract without cause by providing one month written notice or making payment in lieu of notice, based on the individual’s annual salary. Termination payments are generally not payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct the company can terminate employment at any time. Any options not exercised before or on the date of termination will lapse.

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Executive directors and senior management are paid performance based bonuses based on proportions of their salary. The remuneration committee has set these bonuses to encourage achievement of specific goals that have been given a high level of importance in relation to the future growth and profitability of the economic entity. The remuneration committee will review the performance bonuses to gauge their effectiveness against achievement of the set goals, and adjust future years’ incentives as they see fit, to ensure use of the most cost effective and efficient methods. 4.4 Audit Committee The audit committee has a documented charter, approved by the board. As the company grows and the size of the Board also grows it is planned that this Committee will comprise only non executive independent directors. The audit committee does not currently consist of only non executive directors due to the current size and composition of the Board. The committee has a Chairman that is not the Chairman of the Board and is a non executive director. The audit committee consists of the following non-executive and executive directors:

• Peter Vines (Chairman) • Andrew Randall (resigned 6 July 2009) • Greg Martin (appointed 6 July 2009) • Andrew Woodward

The committee met three times during the year, details of directors’ qualifications and attendance at audit committee meetings are set out on pages 19 and 21. The external auditors are invited to audit committee meetings at the discretion of the committee. The audit committee has appropriate financial expertise and all members are financially literate and have an appropriate understanding of the industry in which the Group operates. The Chief Executive Officer and Finance Director have made the following certifications to the board:

• that the company’s financial reports are complete and present a true and fair view, in all material respects, of the financial condition and operational results of the company and Group and are in accordance with relevant accounting standards

• that the above statement is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board and that the company’s risk management and internal compliance and control is operating efficiently and effectively in all material respects.

The audit committee’s charter is available on the Company’s website along with information on procedures for the selection and appointment of the external auditor, and for the rotation of external engagement partners. The main responsibilities of the committee are to:

• review, assess and approve the annual report, the half-year financial report and all other financial information published by the company or released to the market

• assist the board in reviewing the effectiveness of the organisation's internal control environment covering: - effectiveness and efficiency of operations - reliability of financial reporting - compliance with applicable laws and regulations - corporate risk assessment processes

• determine the scope of the internal audit function and ensure that its resources are adequate and used effectively, and assess its performance, including independence

• oversee the effective operation of the risk management framework • recommend to the board the appointment, removal and remuneration of the external auditors,

and review the terms of their engagement, the scope and quality of the audit and assess performance

• consider the independence and competence of the external auditor on an ongoing basis • review and approve the level of non-audit services provided by the external auditors and

ensure it does not adversely impact on auditor independence imposed by the Corporations Act 2001

• review and monitor related party transactions and assess their propriety • report to the board on matters relevant to the committee’s role and responsibilities.

In fulfilling its responsibilities, the audit committee:

• receives regular reports from management and external auditors • meets with the external auditors at least twice a year, or more frequently if necessary

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• reviews the processes the Managing Director and Finance Director have in place to support their certifications to the board

• reviews any significant disagreements between the auditors and management, irrespective of whether they have been resolved

• meets separately with the external auditors at least twice a year without the presence of management

• provides the external auditors with a clear line of direct communication at any time to either the Chairman of the audit committee or the Chairman of the Board.

The audit committee has authority, within the scope of its responsibilities, to seek any information it requires from any employee or external party. The audit committee reviews the performance of the external auditors on an annual basis and normally meets with them during the year to:

• discuss the external audit and internal audit plans, identifying any significant changes in structure, operations, internal controls or accounting policies likely to impact the financial statements and to review the fees proposed for the audit work to be performed

• review the half-year and preliminary final report prior to lodgement with the ASX, and any significant adjustments required as a result of the auditor’s findings, and to recommend board approval of these documents, prior to announcement of results

• review the draft annual and half-year financial report, and recommend board approval of the financial report

• review the results and findings of the auditor, the adequacy of accounting and financial controls, and to monitor the implementation of any recommendations made.

4.5 Risk Management Oversight of the risk management system The managers of Jackgreen’s businesses are responsible for identifying and managing risks. The Board (in the case of financial risk as noted above, through the Audit Committee) is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems, satisfying itself that a sound system of risk oversight and management exists and that internal controls are effective, in particular, the Board ensures that:

• The principal strategic, operational and financial risks are identified. • Systems are in place to assess, manage, monitor and report on these risks.

These policies are available on the company website. These matters are analysed and discussed by the Board at each Board meeting as part of the regular review of business performance. The Managing Director and Finance Director have provided assurance, in writing to the board, that the financial reporting risk management and associated compliance and controls have been assessed and found to be operating effectively. The operational and other risk management compliance and controls have also been assessed and found to be operating effectively. Risk Profile Management provide the board on an annual basis with updates to the risk register that outlines the material business risks to the company. Risk reporting includes the status of risks through integrated risk management assessments aimed at ensuring the risks are identified, assessed and appropriately managed. The audit committee reports to the board the status of material business risks as required. Further details of the Company’s risk management policy and internal compliance and control system are available on the Company’s website. Material business risks for the company may arise from such matters as actions by competitors, government policy changes, wholesale energy price movements, occupational health and safety, financial reporting, and the purchase, development and use of information systems. Risk management and assessment Considerable importance is placed on maintaining a strong control environment. There is an organisation structure with clearly drawn lines of accountability and delegation of authority. Adherence

32

to the Code of Conduct is required at all times and the board actively promotes a culture of quality and integrity. In addition to maintaining appropriate insurance and other risk management measures, identified risks are managed through:

• Established policies and procedures for the managing of wholesale electricity purchasing, electricity derivatives, and funding, including the prohibition of speculative transactions. The Board has approved Trading policies regarding exposure to wholesale electricity prices and counterparty risks which includes limits and authority levels. Compliance with these policies is reported to the Board monthly and reviewed by the Audit Committee twice yearly.

• Standards and procedures in relation to environmental, health and safety measures. • Comprehensive management guidelines setting out the standards of behaviour expected of

employees in the conduct of the Company’s business. • Procedures requiring that significant capital and revenue expenditure and other contractual

commitments are approved at an appropriate level of management or by the Board. Detailed control procedures cover management accounting, financial reporting, project appraisal, environment, health and safety, IT security, compliance and other risk management issues. The finance division carries out regular systematic monitoring of control activities and report to both relevant business unit management and the audit committee. In addition each business unit reports on the key business risks in their area to the Compliance Group. The basis for this report is a half-yearly review of the past performance of their area of responsibility, and the current and future risks they face. The review is undertaken by business unit management away from the day to day pressure of their operational activities. The board undertakes a bi-annual self assessment of its collective performance, the performance of the Chairman and of its committees. Management are invited to contribute to this appraisal process which is facilitated by an independent third party. The results and any action plans are documented together with specific performance goals which are agreed for the coming year. The last assessment was undertaken during May 2008 and the next is planned for October 2009. The Chairman undertakes an annual assessment of the performance of individual directors and meets privately with each director to discuss this assessment. Descriptions of the process for performance assessment for the board and senior executives are available on the company website. Compliance The Company has adopted policies requiring compliance with occupational, health and safety, trade practices laws and electricity retail laws and codes. The Company is subject to yearly reviews of its compliance with the electricity laws and codes. The Board receives reports of compliance matters at each Board meeting. The Company has also established a Compliance Committee comprising senior management, including the Managing Director, who is responsible for providing the Board with monthly reports of compliance matters. Information on compliance with significant environmental regulations is set out in the directors’ report. Legislative Framework and Management System Jackgreen is subject to a significant number of statutory and legislative requirements, including the Electricity Supply Act 1995 and regulations, the National Electrical Act 2005 and NSW, Victorian, South Australian, Australian Capital Territory and Queensland Retail Licences. These compliance requirements establish objectives and create obligations for Jackgreen that reflect the importance of a safe and reliable electricity supply for our customers. The Company is subject to the Commonwealth GreenPower scheme and has established a compliance framework to ensure all reporting obligations are met. A condition of participating in this scheme is that annual audits of the Company’s obligations are undertaken on behalf of the regulator. The Group’s operations are not subject to any environmental regulation under either Commonwealth or State legislation. Quality and integrity of personnel Written confirmation of training and understanding of the Company’s Code of Conduct is obtained from all employees. Formal appraisals are conducted at least annually for all employees. Training and

33

development and appropriate remuneration and incentives with regular performance reviews create an environment of cooperation and constructive dialogue with employees and senior management. Financial Reporting The Managing Director and Finance Director have provided assurance in writing to the board that the Company’s financial reports are founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board. Monthly actual results are reported against budgets approved by the directors and revised forecasts for the year are prepared regularly. 4.6 Ethical Standards All directors, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Group. Every employee has a nominated supervisor to whom they may refer any issues arising from the employment. The board reviews the Code of Conduct regularly and processes are in place to promote and communicate these policies. Conflict of interests Directors must keep the board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company. In accordance with the board charter, directors declared their interests in any dealings to the company and took no part in decisions relating to them or the preceding discussions. In addition, those directors did not receive any papers from the Group pertaining to those dealings. Entities connected with Mr Andrew Randall had business dealings with the consolidated entity during the year, as described in note 27 to the financial statements. Code of Conduct The company has developed a statement of values and a Code of Conduct (the Code) which has been fully endorsed by the board and applies to all directors and employees. The Code is regularly reviewed and updated as necessary to ensure it reflects the highest standards of behaviour and professionalism and the practices necessary to maintain confidence in the Group’s integrity. In summary, the Code requires that at all times all company personnel act with the utmost integrity, objectivity and in compliance with the letter and the spirit of the law and company policies. The Code is discussed with each new employee as part of their induction training and all employees are asked to sign a declaration confirming their compliance. The Code requires employees who are aware of unethical practices within the Group to report these to the Compliance Group. This can be done anonymously. The directors are satisfied that the Group has complied with its policies on ethical standards. A copy of the Code is available on the company’s website. Trading in Company securities by directors and employees The Board has a policy that Jackgreen Limited and Group company directors and officers may not buy or sell Jackgreen shares except within three defined trading windows that coincide with major reporting periods of the company, being two days after the announcement of the company’s half yearly and yearly results and after the company’s Annual General Meeting, where it is normal for the company to discuss results and performance. The chairman has the discretion to allow trading outside of these periods providing Directors or management are not in possession of price sensitive ‘insider’ information. The policy supplements the Corporations Act provisions precluding directors and officers from trading in securities when they are in possession of price sensitive information. Share dealings by Directors are promptly notified to the Australian Stock Exchange in accordance with the ASX Listing Rules. Jackgreen Directors are encouraged to hold a minimum of 20,000 shares. A copy of the Share Trading policy is available on the company’s website.

34

Continuous disclosure and shareholder communication The company has written policies and procedures on information disclosure that focus on continuous disclosure of any information concerning the Group that a reasonable person would expect to have a material effect on the price of the company’s securities. These policies and procedures also include the arrangements the company has in place to promote communication with shareholders and encourage effective participation at general meetings. A summary of these policies and procedures is available on the company’s website. The Company Secretary has been nominated as the person responsible for communications with the Australian Stock Exchange (ASX). This role includes responsibility for ensuring compliance with the continuous disclosure requirements in the ASX Listing Rules and overseeing and co-ordinating information disclosure to the ASX, analysts, brokers, shareholders, the media and the public. All information disclosed to the ASX is posted on the company’s website as soon as it is disclosed to the ASX. When analysts are briefed on aspects of the Group’s operations, the material used in the presentation is released to the ASX and posted on the company’s web site. Procedures have also been established for reviewing whether any price sensitive information has been inadvertently disclosed and, if so, this information is also immediately released to the market. All shareholders receive a copy of the company’s annual report, either in print or electronic form. In addition, the company seeks to provide opportunities for shareholders to participate through electronic means. Previous initiatives to facilitate this include making all company announcements, media briefings, details of company meetings, press releases for the last three years and financial reports for the last five years available on the company’s website. The website also includes a feedback mechanism and an option for shareholders to register their email address for direct email updates on company matters. The external auditor attends the annual general meeting to answer questions concerning the conduct of the audit, the preparation and content of the auditor’s report, accounting policies adopted by the Company and the independence of the auditor in relation to the conduct of the audit. The shareholders are requested to vote on the appointment and aggregate remuneration of directors, the granting of options and shares to directors, the Remuneration report and changes to the Constitution. Copies of the constitution are available to any shareholder who requests it. 5. Principal Activities The principal activities of the economic entity during the financial year were:

Licensed retailer of electricity, focused on the residential market; Provider of energy efficient products and services

6. Operating Results The consolidated loss of the economic entity after providing for the income tax amounted to $7,089,205 (2008 - $3,275,566). 7. Review of Operations A review of Jackgreen Group operations and the results for the year ended 30 June 2009 are set out on pages 4 to 13 and 37 to 72. 8. Significant Changes in State of Affairs There was no significant change in the state of affairs of the consolidated entity during the financial year. 9. Subsequent events

• On 6 July 2009 Mr G.Martin was appointed to the Board and assumed the role of Chairman. • On 5 August 2009 Babcock and Brown Power and Service Limited sold their investment in

Jackgreen Limited and ceased to be a substantial stock holder of the company. • On 6 August 2009 Mr A.M.Randall resigned from the role of Managing Director. • On 7 August 2009 the company issued 4,500,000 shares at 11 cents each. • On 7 September 2009 the company issued 24,337,000 shares at 11 cents each and

10,000,000 options convertible to ordinary shares at 12 cents each.

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10. Future developments Disclosure of information regarding likely developments in the operations of the consolidated entity in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the consolidated entity. Accordingly, this information has not been disclosed in this report. 11. Environmental Issues The economic entity’s operations are subject to significant environmental regulation under the law of the Commonwealth and State. The economic entity’s operations are regulated by the Renewable Energy (Electricity) Act 2000 (Cwth) and the NSW Greenhouse Gas Abatement Scheme. These Acts deal with greenhouse emission targets set by the Government. Electricity regulations in a number of states also impose obligations to develop environmental improvement strategies for our customers. The economic entity is compliant with legislation and regulation. 12. Dividends No Dividends were paid or declared during the year. 13. Shares under option or issued on exercise of options

Issuing Entity Number of shares

under option Class of shares Exercise price

of option Expiry date of

options Jackgreen Limited 7,000,000 Ordinary $0.15 28 November 2011 There were no shares or interests issued during or since the end of the financial year as a result of exercise of an option. 14. Indemnification of officers and auditors The company has indemnified or made a relevant agreement to indemnify an officer and key management personnel of the company or of any related body corporate against a liability incurred as such an officer or key management personnel. In addition, the company has not paid, or agreed to pay, a premium in respect of a contract insuring against a liability incurred by an officer or auditor. Subsequent to 30 June 2009 the company has entered into the insurance product for directors and officers liability. 15. Proceedings on Behalf of Company No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings. 16. Non-audit Services The company may decide to employ the auditor or a firm affiliated with the auditor on assignments additional to their statutory audit duties of the auditor where the affiliated firm’s expertise and experience with the company and/or Group are important. Details of the amounts paid or payable to the auditor (William Buck NSW) for audit and to affiliated firms for non-audit services provided during the year are set out below. The board of directors has considered the position and, in accordance with advice received from the audit committee, is satisfied that the provision of these non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of the non-audit services by the auditor’s affiliated firms, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and objectivity of the auditor

• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

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During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non related audit firms: Consolidated Group 2009 2008 $ $ 1. Audit Services William Buck NSW* Audit and review of financial reports 115,000 - Grant Thornton VIC Audit and review of financial reports** 116,943 88,000 Total remuneration for audit services 231,943 88,000 2. Taxation Services William Buck NSW Tax compliance services 27,299 26,275 Total remuneration for taxation services 27,299 26,275 Total non-audit services 27,299 26,275 * For the year ended 30 June 2009, William Buck NSW replaced Grant Thornton VIC, the auditor of the 30 June 2008 financial report. ** Grant Thornton VIC fees represent additional fees incurred in relation to their 30 June 2008 audit. Auditor’s Independence Declaration The lead auditor’s independence declaration for the year ended 30 June 2009 has been received and can be found on page 78. Signed in accordance with a resolution of the Board of Directors.

Greg Martin Andrew Woodward Chairman Finance Director Dated this 30th day of September 2009.

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CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2009

Note Consolidated Group Jackgreen Limited

2009 2008 2009 2008

$ $ $ $

Revenues from operating activities 6 65,741,668 43,921,032 -

-Write back of JV interest 6 435,626 - 676,494 -

Other income 6 153,146 276,278 ( 243) 16,239

Impairment gain-intercompany loan - - - 9,135,978

Employee benefits expense ( 6,345,477) ( 4,343,767) ( 812,124) ( 166,935) Depreciation and amortisation expense 7 ( 57,448) ( 44,534) - -

Advertising and marketing ( 2,419,812) ( 2,037,281) - -

Borrowing costs expense 7 ( 1,628,340) ( 1,173,734) ( 478,902) ( 269,026)

Consulting fees ( 1,314,929) ( 539,721) - -

Cost of wholesale electricity 7 ( 51,954,227) ( 32,920,494) - - Cost of energy efficient products and services 7 ( 2,208,578) ( 361,050) - -

Doubtful debts 7 ( 6,204,964) ( 1,875,643) - ( 211,945)

Office and administration expenses ( 1,663,902) ( 1,630,642) ( 28,451) ( 16,022) Software licensing & other IT expenses ( 879,050) ( 596,936) - -

Compliance related expenses ( 330,660) ( 418,490) - -

Other expenses ( 1,585,113) ( 1,530,584) ( 460,921) ( 421,649) Loss from ordinary activities before income tax expense ( 10,262,060) ( 3,275,566) ( 1,104,147) 8,066,640 Income tax expense relating to ordinary activities 8 3,172,855 - 366,337 -

Net loss attributable to members of the Jackgreen Limited Group ( 7,089,205) ( 3,275,566) ( 737,810) 8,066,640

Basic earnings per share (cents per share) 10 (3.28) (1.64) - -

Diluted earnings per share (cents per share) 10 (3.28) (1.64) - -

The accompanying notes form part of these financial statements.

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CONSOLIDATED BALANCE SHEETS AS AT 30 JUNE 2009

Note Consolidated Group Jackgreen Limited

2009 2008 2009 2008

$ $ $ $ CURRENT ASSETS

Cash assets 11 2,472,810 3,970,603 3,982 104,774

Receivables 12 7,588,009 9,994,751 4,155,265 241,348

Inventories 13 188,321 25,301 - -

Financial assets 14 190,616 23 - -

Other assets 15 19,249,696 12,470,103 - -

TOTAL CURRENT ASSETS 29,689,452 26,460,781 4,159,247 346,122

NON-CURRENT ASSETS

Financial assets 14 87,500 87,500 41,825,153 41,825,061

Property, plant and equipment 16 256,242 271,585 53,473 59,043

Intangible assets 17 11,005,219 11,005,219 - -

Deferred tax assets 8 4,236,476 - 3,363,269 -

Other assets 15 335,550 17,745 550 550

TOTAL NON-CURRENT ASSETS 15,920,987 11,382,049 45,242,445 41,884,654

TOTAL ASSETS 45,610,439 37,842,830 49,401,692 42,230,776

CURRENT LIABILITIES

Payables 20 14,652,067 8,402,317 3,134,554 907,686

Provisions 21 232,340 690,868 - 511,945

TOTAL CURRENT LIABILITIES 14,884,407 9,093,185 3,134,554 1,419,631

NON-CURRENT LIABILITIES

Payables 20 - 72,279 - 72,279

Deferred tax liabilities 8 858,428 - - -

Interest-bearing liabilities 22 16,690,000 11,902,559 6,690,000 3,800,000

TOTAL NON-CURRENT LIABILITIES 17,548,428 11,974,838 6,690,000 3,872,279

TOTAL LIABILITIES 32,432,835 21,068,023 9,824,554 5,291,910

NET ASSETS 13,177,604 16,774,807 39,577,138 36,938,866

EQUITY

Contributed equity 23 50,132,565 46,937,971 50,132,565 46,937,971

Reserves 24 181,488 ( 115,920) 181,488

-

Retained losses 24 ( 37,136,449) ( 30,047,244) ( 10,736,915) ( 9,999,105)

TOTAL EQUITY 13,177,604 16,774,807 39,577,138 36,938,866

The accompanying notes form part of these financial statements.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2009

Economic Entity Note Share

Capital Ordinary

Retained Earnings / (Losses)

Options Reserve

Hedging Reserve Total

Balance at 30 June 2008 46,937,971 ( 30,047,244) - ( 115,920)

16,774,807

Shares issued during the year 23 3,098,776 - - -

3,098,776

Transaction costs 23 ( 109,375) - - - (109,375) Tax effect of transaction costs relating to share issue, including initial recognition of prior year costs 23 205,193 - - -

205,193 Movement in option reserve 24 - - 181,488 -

181,488

Cash Flow Hedges – change in fair value 24 - - - 115,920

115,920 (Loss) attributable to members of parent entity - ( 7,089,205) - -

(7,089,205) Balance at 30 June 2009 50,132,565 ( 37,136,449)

181,488 -

13,177,604

Parent Entity Note Share

Capital Ordinary

Retained Earnings / (Losses)

Options Reserve

Hedging Reserve

Total

Balance at 30 June 2008 46,937,971 ( 9,999,105) -

- 36,938,866

Shares issued during the year 23 3,098,776 - -

- 3,098,776

Transaction costs 23 ( 109,375) - - - (109,375) Tax effect of transaction costs relating to share issue, including initial recognition of prior year costs 23 205,193 - -

- 205,193 Movement in option reserve 24 - - 181,488

- 181,488

(Loss) attributable to members of parent entity - ( 737,810) -

- (737,810) Balance at 30 June 2009 50,132,565 ( 10,736,915) 181,488

- 39,577,138

The accompanying notes form part of these financial statements.

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Parent Entity Share

Capital Ordinary

Retained Earnings Options Reserve

Total

Balance at 30 June 2007

41,046,341 ( 18,260,745) 195,000 22,980,596

Shares issued during the year 6,070,130 - - 6,070,130 Transaction costs ( 178,500) - - ( 178,500) (Loss) attributable to members of parent entity - 8,066,640 - 8,066,640 Transfer to retained earnings on expiry of options - 195,000 (195,000) - Balance at 30 June 2008

46,937,971 ( 9,999,105) - 36,938,866

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2009 Economic Entity

Share Capital

Ordinary

Retained Earnings

Options Reserve

Hedging Reserve

Total

Balance at 30 June 2007

41,046,341 ( 26,966,678) 195,000 - 14,274,663

Shares issued during the year 6,070,130 - - - 6,070,130 Transaction costs ( 178,500) - - - ( 178,500) (Loss) attributable to members of economic entity - ( 3,275,566) - - ( 3,275,566) Transfer to retained earnings on expiry of options - 195,000 (195,000) - - Cash flow hedges-change in fair value - - - ( 115,920) ( 115,920) Balance at 30 June 2008

46,937,971 ( 30,047,244) - ( 115,920) 16,774,807

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CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2009

Note Consolidated Group Jackgreen Limited

2009 2008 2009 2008 $ $ $ $ CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers 57,684,957 32,633,496

-

- Payments to suppliers and employees ( 9,947,331) ( 14,727,047) ( 786,044) ( 438,075)

Cost of Sales ( 54,162,805) ( 33,281,544) -

- Interest received 150,547 270,619 - 16,239

Net cash provided by (used in) operating activities 25 ( 6,274,632) ( 15,104,476) ( 786,044) ( 421,836) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property, plant and equipment 5,570 - 4,500

-

Loans to Other Entities ( 218,272) - ( 215,000)

- Purchase of property, plant and equipment ( 47,675) ( 116,028) -

-

Purchase of investments - ( 307,500) - ( 220,000)

Net cash provided by (used in) investing activities ( 260,377) ( 423,528) ( 210,500) ( 220,000) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares 1,950,394 5,891,630 1,950,394 5,891,630 Proceeds from borrowings 4,715,162 11,802,559 2,883,500 1,800,000 Loans - related parties - - ( 3,459,240) ( 6,744,892)

Repayment of borrowings

- ( 3,900,000) -

- Borrowing costs ( 1,628,340) ( 1,053,136) ( 478,902) ( 269,026)

Net cash provided by (used in) financing activities 5,037,216 12,741,053 895,752 677,712

Net (decrease) in cash held ( 1,497,793) ( 2,786,951) ( 100,792) 35,876 Cash at 1 July 3,970,603 6,757,554 104,774 68,898 Cash at 30 June 11 2,472,810 3,970,603 3,982 104,774 The accompanying notes form part of these financial statements.

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NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL INFORMATION Jackgreen Limited (the Company) is a public company listed on the Australian Stock Exchange (trading under the code ‘JGL’), incorporated in Australia and operating in Australia. The Company’s registered office and its principal place of business are as follows: Registered office Principal place of business Level 5 Level 5 52 William St 52 William St East Sydney NSW 2011 East Sydney NSW 2011 Tel: (02) 8302 3800 Tel: (02) 8302 3800 Website: www.jackgreen.com.au The entity’s principal activities are the sales of electricity and energy efficient products and services.

2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Statement of compliance The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards (including Australian Accounting Interpretations) and the Corporations Act 2001. The financial report covers the economic entity of Jackgreen Limited and controlled entities, and Jackgreen Limited as an individual parent entity. Jackgreen Limited is a listed public company, incorporated and domiciled in Australia. The Financial Report was authorised for issue by the Directors on 30 September 2009. Basis of Preparation The financial report of Jackgreen Limited and controlled entities (the Group), and Jackgreen Limited as an individual parent entity complies with International Financial Reporting Standards (IFRS). The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied. These consolidated financial statements are presented in Australian dollars, which is the Company’s and Group’s functional currency. The following is a summary of the material accounting policies adopted by the economic entity in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated. Critical accounting judgments and key sources of estimation uncertainty In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Refer to Note 3 for a discussion of critical judgments in applying the entity’s accounting policies, and key sources of estimation uncertainty. Adoption of new and revised Accounting Standards The directors have elected under s.334(5) of the Corporations Act 2001 to apply AASB 8 ‘Operating Segments’ and AASB 2007-3 ‘Amendments to Australian Accounting Standards arising from AASB 8’, even though the Standards are not required to be applied until annual reporting periods beginning on or after 1 January 2009. AASB 8 is a disclosure standard which has resulted in a redesignation of the Group’s reportable segments (see Note 4), but has no impact on the reported results or financial position of the Group.

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The operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. The following significant accounting policies have been adopted in the preparation and presentation of the financial report: Accounting Policies

a) Basis of Consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (referred to as ‘the Group’ in these financial statements). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. A list of controlled entities is contained in Note 19 of the financial statements. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements. All intra-group transactions, balances, income and expenses between entities in the economic entity, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity. Where controlled entities have entered or left the economic entity during the year, their operating results have been included from the date control was obtained or until the date control ceased.

b) Business combinations Acquisitions of subsidiaries and businesses are accounted for using the purchase method. The cost of the business combination is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under AASB 3 ‘Business Combinations’ are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 ‘Non-current Assets Held for Sale and Discontinued Operations’, which are recognised and measured at fair value less costs to sell. Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

c) Interests in Joint Ventures The economic entity’s share of the assets, liabilities, revenue and expenses of joint venture operations are included in the appropriate items of the consolidated balance sheet and income statement. Details of the economic entity’s interests are shown in Note 18. The economic entity’s interests in joint venture entities are brought to account using the equity method of accounting in the consolidated financial statements. The parent entity’s interests in joint venture entities are brought to account using the cost method.

d) Going concern For the year ended 30 June 2009 the Group incurred a loss of $7,089,205 (2008: loss of $3,275,566) and net cash outflows from operating activities of $6,274,632 (2008: $15,104,476). These factors indicate a material uncertainty regarding the Group’s ability to continue as a going concern. On 31 August 2010, the Group’s debtor financing facility of $10,000,000 is due for repayment. Under the requirements of Australian Accounting Standards, the Directors have reviewed whether the Group can continue to operate as a going concern by preparing cash flow projections and assessing the economic entity’s ability to realise its assets and settle its liabilities in the normal course of business and for at least the amounts stated. Based on the review and cash flow projections prepared, the Directors believe that the Group will generate sufficient cash to meet the Group’s obligations as and when they fall due for a period of at least twelve months from the date of these financial statements. Accordingly, the Directors have prepared the financial report on a going concern basis given the following: • Directors forecast the Group will continue to achieve growth in revenue and customer numbers;

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• Directors are confident that the Group will be able to raise capital as and when required. To demonstrate this, on 7 September 2009, the Company raised 24,337,000 shares at 11 cents each and 10,000,000 options convertible to ordinary shares at 12 cents each.

• Directors are confident that the Group will be able source alternative debt funding prior to the Group’s debtor financing facility being due for repayment on 31 August 2010 and have begun preliminary discussions with other debt providers;

• Directors are confident that the Group has significantly addressed the wholesale electricity price risk by entering financial derivative products that protect the Group against significant fluctuations in profit caused by volatility in the electricity spot price.

Notwithstanding the material uncertainties of future events inherent in the above, the Directors consider it is appropriate to prepare the financial statements on a going concern basis and hence no adjustments have been made to the financial report relating to the recoverability and classification of the asset carrying amounts or the amounts and classification of liabilities that might be necessary if the Group does not continue as a going concern.

e) Goods and services tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

i. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or

ii. for receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from or payable to, the taxation authority is included as part of receivables or payables. Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified within operating cash flows.

f) Revenue recognition Revenue is recognised to the extent that it is probable that economic benefit will flow to the Group and that the revenue can be reliably measured. Revenue comprises sales of energy, the value of services and facilities provided and goods sold during the year in the normal course of business. Revenue on energy sales includes an estimate of the value of electricity supplied to customers between the date of the last meter reading and the year end. Unread energy sales are estimated using wholesale electricity purchases compared against consumption billed to the customers. Refer Accrued Revenue in Note15. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. Dividend revenue is recognised when the right to receive a dividend has been established. Dividends received from associates and joint venture entities are accounted for in accordance with the equity method of accounting. All revenue is stated net of the amount of goods and services tax (GST).

g) Share based payments Equity-settled share-based payments with employees and others providing similar services are measured at the fair value of the equity instrument at the grant date. Fair value is measured by use of the Black-Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of exercise restrictions and behavioural considerations. Further details on how the fair value of equity-settled share-based transactions has been determined can be found in Note 26. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight line basis over the vesting period. Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods and services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instrument granted, measured at the date the entity obtains the goods or the counterparty renders the service.

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h) Income Tax The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. The Group’s accounting policy for taxation requires management’s judgement as to the types of arrangements considered to be a tax on income in contrast to an operating cost. Judgement is also required in assessing whether deferred tax assets and certain deferred tax liabilities are recognised on the balance sheet. Deferred tax assets, including those arising from unrecouped tax losses, capital losses and temporary differences, are recognised only where it is considered more likely than not that they will be recovered, which is dependent on the generation of sufficient future taxable profits. Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on management’s estimates of future cash flows. These depend on estimates of future production and sales volumes, operating costs, capital expenditure, dividends and other capital management transactions. Judgements are also required about the application of income tax legislation. These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognised on the balance sheet and the amount of other tax losses and temporary differences not yet recognised. In such circumstances, some or all of the carrying amounts of recognised deferred tax assets and liabilities may require adjustment, resulting in a corresponding credit or charge to the income statement. Tax Consolidation Jackgreen Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. Each entity in the group recognises its own current and deferred tax balances, except for any deferred tax balances resulting from unused tax losses and tax credits, which are immediately assumed by the head entity (Jackgreen Ltd).The current tax liability of each group entity is then subsequently assumed by the head entity. The group notified the Australian Tax Office that it had formed an income tax consolidated group to apply from 1 July 2002. The tax consolidated group has entered a tax sharing agreement whereby each company in the Group contributes to the income tax payable in proportion to their contribution to the net profit before tax of the tax consolidated group.

i) Cash and cash equivalents Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of change in value.

j) Financial Assets Investments are recognised and derecognised on trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs except for those financial assets classified as at fair value through profit or loss which are initially measured at fair value. Subsequent to initial recognition, investments in subsidiaries are measured at cost in the company financial statements.

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Other financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’, ‘held-to-maturity investments’, ‘available-for-sale’ financial assets, and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets at fair value through profit and loss A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management and within the requirements of AASB 139: Recognition and Measurement of Financial Instruments. Derivatives are also categorised as held for trading unless they are designated as hedges. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the income statement in the period in which they arise. Held-to-maturity investments These investments have fixed maturities, and it is the Group’s intention to hold these investments to maturity. Any held-to-maturity investments held by the Group are stated at amortised cost less any impairment loss. Available-for-sale financial assets Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost less any impairment loss. Impairment of financial assets At each reporting date, the group assess whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in the income statement. Financial Assets are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance amount. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit and loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Derecognition of financial assets The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

k) Non-financial assets The carrying amounts of the Group’s non-financial assets, investment property, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, recoverable amount is estimated at each reporting date.

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An impairment loss is recognised if the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in profit and loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss in respect of goodwill is not reversed. In respect to other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have determined, net of depreciation or amortisation, if no impairment loss has been recognised.

l) Inventories Inventories are stated at the lower of cost and net realisable value. Costs are assigned to individual items of inventory on basis of FIFO cost basis. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

m) Property, Plant and Equipment Each class of property, plant and equipment are carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Depreciation The depreciable amount of all fixed assets (including building and capitalised lease assets, but excluding freehold land) is depreciated on a diminishing value basis over their useful lives to the economic entity commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Estimated Useful Life Plant and equipment 8 years Motor Vehicles 5 years Computer Equipment 3 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

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n) Trade receivables Trade receivables do not carry any interest and are measured at cost less an appropriate allowance for irrecoverable receivables. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off by reducing the carrying amount directly. An allowance account (provision for impairment of trade receivables) is used when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 180 days overdue) are considered indicators that the trade receivable is impaired. The amount of the impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. The amount of the impairment loss is recognised in the income statement. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the income statement.

o) Deferred Expenditure Jackgreen Limited treats direct sales commissions relating to the sales of customer contracts as a deferred expenditure and expenses it over the period of 36 months to reflect the lifetime of a contract.

p) Intangibles Goodwill Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. License The license is recorded at cost. As the license is considered to have an indefinite life, no amortisation has been charged.

q) Employee Benefits Wages and salaries, annual leave and sick leave Liabilities for wages and salaries, including non-monetary benefits, annual leave expected to be settled within 12 months of the reporting date are recognised in provisions in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Long service leave The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. The liability is brought into the financial statements after 5 years of service.

r) Provisions Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

s) Financial Instruments Debt and equity instruments Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

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Financial liabilities Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

t) Derivative financial instruments The consolidated entity uses derivative financial instruments to manage its exposure to electricity purchase price risks arising in the normal course of business. The use of derivatives is subject to policies, procedures and limits approved by the Board of Directors. Derivative transactions are not entered into for speculative purposes. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at each reporting date. Derivatives are recognised in the balance sheet as assets when their fair value is positive and as liabilities when their fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are recognised in the profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which case, the timing of the recognition in profit and loss depends on the nature of the hedge relationship. Hedges are classified as fair value hedges when they hedge the exposure to changes in the fair value of recognised assets or liabilities or firm commitments. Hedges are classified as cash flow hedges when they hedge exposure to variability in cash flows of recognised assets or liabilities, or highly probable forecast transactions. At the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions is documented. Assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items, are also documented. Fair value hedge Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedge asset or liability that are attributable to the hedged risk. Hedge accounting is discontinued when the hedge instrument expires or is sold, terminated, exercised or no longer qualifies for hedge accounting. The adjustment to the carrying amount of the hedged item arising from the hedge risk is amortised to profit or loss from that date. Cash flow hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is deferred to a hedge reserve in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement. Amounts accumulated in the hedge reserve in equity are transferred to the income statement in the periods when the hedged item will affect profit or loss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss deferred in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit and loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was deferred in equity is recognised immediately in profit and loss. Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

u) Leases Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

v) Share capital – ordinary shares Incremental costs directly attributable to issue of ordinary shares and share options are recognised as a deduction from equity, net of any related income tax benefit.

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w) New accounting standards and Australian Accounting Interpretations

At the date of authorisation of the financial report, the Standards and Interpretations listed below were in issue but not yet effective. Initial application of the following Standards will not affect any of the amounts recognised in the financial report, but will change the disclosures presently made in relation to the Group and the Company’s financial report. The following published standards and interpretations are not yet effective and have not been early adopted by the Group:

Standard

Effective for annual reporting periods

beginning on or after

Expected to be initially applied in the financial year ending

AASB 8 ‘Operating Segments’, AASB 2007-3 ‘Amendments to Australian Accounting Standards arising from AASB 8’ 1 January 2009

Applied in the current reporting period

AASB 101 ‘Presentation of Financial Statements’ (revised September 2007), AASB 2007-8 ‘Amendments to Australian Accounting Standards arising from AASB 101’, AASB 2007-10 ‘Further Amendments to Australian Accounting Standards arising from AASB 101’

1 January 2009 30 June 2010

AASB 123 ‘Borrowing Costs’ (revised), AASB 2007-6 ‘Amendments to Australian Accounting Standards arising from AASB 123’

1 January 2009 30 June 2010

AASB 2008-1 ‘Amendments to Australian Accounting Standard - Share-based Payments: Vesting Conditions and Cancellations’

1 January 2009 30 June 2010

AASB 2008-2 ‘Amendments to Australian Accounting Standards - Puttable Financial Instruments and Obligations arising on Liquidation’

1 January 2009 30 June 2010

AASB 2008-5 ‘Amendments to Australian Accounting Standards arising from the Annual Improvements Project’

1 January 2009 30 June 2010

AASB 2008-6 ‘Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project’

1 July 2009 30 June 2010

AASB 2008-7 ‘Amendments to Australian Accounting Standards – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

1 January 2009 30 June 2010

AASB 2008-8 ‘Amendments to Australian Accounting Standards – Eligible Hedged Items’

1 July 2009 30 June 2010

AASB Interpretation 15 ‘Agreements for the Construction of Real Estate’

1 January 2009 30 June 2010

AASB Interpretation 16 ‘Hedges 1 October 2008 30 June 2010

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of a Net Investment in a Foreign Operation’ AASB Interpretation 17 ‘Distributions of Non-cash Assets to Owners’, AASB 2008-13 ‘Amendments to Australian Accounting Standards arising from AASB Interpretation 17 – Distributions of Non-cash Assets to Owners’

1 July 2009 30 June 2010

The Group does not expect these requirements to have a material effect on the Group’s financial statements.

x) Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS In the application of the Group’s accounting policies management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments. Actual results may differ from these estimates. Key Estimates - Revenue recognition Revenue on energy sales includes an estimate of the value of electricity supplied to customers between the date of the last meter reading and the year end. Unread energy sales are estimated using wholesale electricity purchases compared against consumption billed to customers. At the balance sheet date, the estimated consumption by customers will either have been billed (estimated billed revenue) or accrued (refer to Accrued Revenue in Note 15). Management applies judgment to the measurement of the quantum of the estimated consumption and to the valuation of that consumption. The judgments applied, and the assumptions underpinning these judgments are considered to be appropriate. However, a change in these assumptions would impact upon the amount of revenue recognised. Key Estimates - Impairment The group assesses impairment for each of its cash-generating units at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates. The Group’s electricity retail business has been assessed as a cash generating unit (CGU). An impairment test of the CGU has been performed by the Directors based on a value in use (VIU) calculation prepared by Moore Stephens Sydney Corporate Finance Pty Limited. The VIU calculation was determined based on the Group’s internal Forecast Model (as amended). The key assumptions used in the impairment test were as follows:

- Net new customers acquired per month: 3,250 - Customer churn rate: 2.7% per month - Discount rate: 17% per annum. - Annual Inflation Factor of 3% per annum. - Projected annual turnover (from the Group’s internal Forecast Model (as amended)):

• 2009/2010: $112,329,000 • 2010/2011: $152,696,000 • 2011/2012: $184,321,000

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The VIU of the electricity retail business has been calculated at a high point of $52,051,000 and low point of $44,282,000. This compares with the CGU’s carrying value at 30 June 2009 of $26,259,000. Based on the above VIU and CGU carrying value, the Directors have concluded that there is no impairment in the year ended 30 June 2009. Key Judgements – Provision for Impairment of Receivables The trade receivables impairment assessment involves judgements on assumptions of collection trends and the effectiveness of ongoing collection procedures. The judgements applied and the assumptions underpinning these are considered to be appropriate, however, a change in these assumptions would impact on the amount of the impairment provided for in these accounts.

4. SEGMENT REPORTING The Group has adopted AASB 8 ‘Operating Segments’ and AASB 2007-3 ‘Amendments to Australian Accounting Standards arising from AASB 8 in advance of their effective dates, with effect from 1 July 2008. AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Managing Director in order to allocate resources to the segment and to assess its performance. In contrast, the predecessor standard required an entity to identify two sets of segments (business and geographical), using a risks and rewards approach, with the entity’s ‘system of internal financial reporting to key management personnel’ serving only as the starting point for the identification of such segments. As a result, following the adoption of AASB 8, the identification of the Group’s reportable segments has changed. Products and services from which reportable segments derive their revenues Information reported to the Group’s Managing Director for the purposes of resource allocation and assessment of performance is on the basis of the types of goods supplied by the Group’s operating divisions. The Group’s reportable segments under AASB 8 are, therefore, as follows:

• Electricity Retailing • Sales of energy efficient products and services

Segment revenues and results The following is an analysis of the Group’s revenue and results by reportable operating segment for the periods under review: Revenue Segment Profit 2009

$ 2008

$ 2009

$ 2008

$ Electricity Retailing 62,368,647 43,023,481 (7,891,776) (1,503,607) Sales – Energy efficient products and services 3,373,021 897,551 (266,410) 81,489

65,741,668 43,921,032 (8,158,186) (1,422,118)

Interest Revenue 150,534 270,619 Finance Costs (1,628,340) (1,053,136) Central administration costs & directors’ salaries (1,064,294) (1,076,590) Other Income 438,226 5,659 Profit/(loss) before tax (10,262,060) (3,275,566)

Segment assets and liabilities The following is an analysis of the Group’s assets and liabilities by reportable operating segment for the periods under review: Assets Liabilities 2009

$ 2008

$ 2009

$ 2008

$ Electricity Retailing 41,592,111 35,294,069 27,567,258 19,019,774 Sales – Energy efficient 901,406 564,384 1,005,862 482,895

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products and services

Total segment assets & liabilities 42,493,517 35,858,453 28,573,120 19,502,669 Unallocated assets & liabilities 3,455,150 1,984,377 4,197,945 1,565,354

Consolidated total assets & liabilities 45,948,667 37,842,830 32,771,065 21,068,023

5. FINANCIAL RISK MANAGEMENT The Group has exposure to the following risks from its use of financial instruments:

a) Credit risk b) Liquidity risk c) Commodity risk d) Interest rate risk

(a) Credit Risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty fails to meet its contractual obligations. Credit risk management for the Group’s regulated businesses is performed in accordance with industry standards as set out by the Regulator and is controlled by the individual business units. Exposure to credit risk in the supply of electricity arises from the potential of a customer defaulting on their invoiced payables. Credit support clauses or side agreements are typically included or entered into to protect the Group against counterparty failure or non-delivery. Within the Supply business, commodity derivative products are traded through cleared exchanges to mitigate credit risk. Trade receivables represent the most significant exposure to credit risk. The trade receivables total includes an allowance for impairment. The ageing of trade receivables for the group at the reporting date was: Consolidated Group Note 2009 2008 $ $ Not past due 3,050,177 2,205,163 Past due 0-30 days 1,412,383 2,370,994 Past due 31-90 days 1,139,787 1,969,704 Past due 90-180 days 3,054,028 1,177,834 Past due 180 days to 1 year - 1,917,293 Past due more than 1 Year - 1,356,650 12 8,656,375 10,997,638 Less: Allowance for bad & doubtful debts 12 (2,325,676) (1,184,535) 6,330,699 9,813,103

The Group has past due debt which has not had an impairment allowance set aside to cover potential credit losses. The Group has certain procedures to pursue customers in significant arrears and believes its impairment policy in relation to such balances is appropriate. The Parent Entity does not have trade receivables. The movement in the allowance for bad and doubtful debts of trade receivables was: Consolidated Group 2009 2008 $ $ Balance at 1 July 1,184,535 972,000 Increase in allowance for bad and doubtful debts 6,629,613 1,614,029

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Receivables written off during the year as uncollectable (5,488,472) (1,401,494) Balance at 30 June 2,325,676 1,184,535

(b) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate source of committed credit facilities and the ability to close out market positions. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Financing arrangements The Group and the parent entity had access to the following undrawn borrowing facilities at the reporting date: Consolidated Group Jackgreen Limited 2009 2008 2009 2008 Floating Rate $ $ $ $ Expiring beyond one year - 1,897,000 - - - 1,897,000 - -

Maturities of financial liabilities The tables below provide an analysis of the financial liabilities attributable to both the Group and Parent entity at the reporting date classified by relevant maturity periods. Amounts disclosed represent the undiscounted contractual cash flows remaining at the reporting date to the contractual maturity date.

6-12 months Between 1 and 2 years

Between 2 and 5 years

Total contractual cash flows

Carrying Amount Assets/(Liabilities) Group - At 30 June 2009

$ $ $ $ $ Non-derivatives Non-interest bearing 14,652,067 - - 14,652,067 14,652,067 Variable rate 1,189,000 10,497,564 - 11,686,564 10,000,000 Fixed rate 802,800 4,596,247 2,760,967 8,160,014 6,690,000

Total non-derivatives 16,643,867 15,093,811 2,760,967 34,498,645 31,342,067 * The $10,000,000 loan facility is due for repayment on 31 August 2010. The Directors are seeking to refinance the facility with an alternative finance provider.

6-12 months Between 1

and 2 years

Between 2 and 5 years

Total contractual cash flows

Carrying Amount (Assets)/Liabilities Group - At 30 June 2008

$ $ $ $ $ Non-derivatives Non-interest bearing 8,402,317 - 72,279 8,474,594 8,474,594 Variable rate 1,165,958 1,165,958 8,514,637 10,846,553 8,102,559 Fixed rate 456,000 456,000 3,884,295 4,796,296 3,800,000 Total non-derivatives 10,024,275 1,621,958 12,471,211 24,117,443 20,377,153

6-12 months Between 1

and 2 years

Between 2 and 5 years

Total contractual cash flows

Carrying Amount (Assets)/Liabilities Parent - At 30 June 2009

$ $ $ $ $ Non-derivatives Non-interest bearing 342,816 - - 342,816 342,816

55

Variable rate - - - - - Fixed rate 802,800 4,596,247 2,760,967 8,160,014 6,690,000 Total non-derivatives 1,145,616 4,596,247 2,760,967 8,502,830 7,032,816

6-12 months Between 1

and 2 years

Between 2 and 5 years

Total contractual cash flows

Carrying Amount Assets/(Liabilities Parent - At 30 June 2008

$ $ $ $ $ Non-derivatives Non-interest bearing 2,149,600 - 72,279 2,221,879 2,221,879 Variable rate - - - - - Fixed rate 456,000 456,000 3,884,295 4,796,296 3,800,000 Total non-derivatives 2,605,600 456,000 3,956,574 7,018,175 6,021,879

(c) Commodity Risk The sensitivity analysis provided discloses the effect on profit or loss and equity at 30 June 2009 assuming that a reasonably possible change in the relevant commodity price had occurred at 30 June 2009 and been applied to the risk exposures in existence at that date. The reasonably possible changes in commodity prices used in the sensitivity analysis have been determined using calculated and/or implied volatilities based on historical data.

2009 2008 Commodity prices power (AUD$/MWh) Commodity prices power (AUD$/MWh)

Base price

(i)

Reasonably possible

increase in variable

Reasonably possible

decrease in variable

Base price

(i)

Reasonably possible

increase in variable

Reasonably possible

decrease in variable

41 18.5 18.5 47 15 15 (i) The base price represents the average market price over the duration of the reporting period. The impacts of reasonably possible changes in commodity prices on profit after taxation based on the rationale described are as follows:

2009 2008 Impact on

profit Impact on

equity Impact on

profit Impact on

equity $ $ $ $

Incremental profit/(loss) Commodity prices combined – increase (3,294,425) (3,294,425) (4,435,284) (4,435,284) Commodity prices combined – decrease 3,294,425 3,294,425 4,435,284 4,435,284 The sensitivity analysis provided is hypothetical only. The impacts provided are not indicative of the actual impacts that would be experienced and are based on calculations which do not consider all interrelationships, including the impact of hedging. Hedging The consolidated entity enters into a variety of derivative instruments to manage its exposure to electricity purchase price risks arising in the normal course of business. During the reporting period, the company traded on the Sydney Futures Exchange relating to electricity swaps to manage the risk of movements in the wholesale electricity spot price. The consolidated entity does not enter onto such instruments for speculative purposes. At year end the consolidated entity held cash flow hedges for forecast transactions. The fair value of hedges at 30 June 2009 was nil (2008: $905,280). During the year the consolidated entity expensed $6,966,977 (2008: $1,554,123) in the profit and loss relating to hedge costs and recognised $1,832,532 (2008: $1,783,980) in hedge gains.

56

(d) Interest Rate Risk

The Group's main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. Group policy is to seek fixed rate borrowings where possible. During 2009 and 2008, the Group’s borrowings at variable rate were denominated in Australian Dollars. As at the reporting date, the Group had the following fixed and variable rate borrowings outstanding: 30 June 2009 30 June 2008

Weighted average

interest rate % Balance

$

Weighted average

interest rate % Balance

$

Loan Facilities (variable rate) 11.87 10,000,000 14.09 8,102,559 Convertible Notes (fixed rate) 12.00 6,690,000 12.00 3,800,000 Group sensitivity At 30 June 2009, if interest rates had changed by -/+ 150 basis points from the year-end rates with all other variables held constant, post-tax profit for the year would have been $150,000 lower/higher (2008 – $48,210) mainly as a result of higher/lower interest expense on variable rate liabilities. Equity would have been $150,000 lower/higher (2008 - $48,210). Parent entity sensitivity

The parent entity did not hold any liabilities that were exposed to variable interest rates during the reporting period (2008 – nil).

Consolidated Group Jackgreen Limited 2009 2008 2009 2008

6. INCOME $ $ $ $

Revenue from operating activities — Sale of electricity 62,368,647 43,023,481 - - — Sale of energy efficient products & services 3,373,021 897,551 - - 65,741,668 43,921,032 - - Non-operating activities — Profit/(loss) on disposal of property, plant

and equipment (6,508) ( 9,965) (1,070) - — Interest income 150,547 270,619 827 16,239 — Write Back of JV interest 435,626 - 676,494 - — Other 9,107 15,624 - - 588,772 276,278 676,251 16,239 Total income 66,330,440 44,197,310 676,251 16,239

Consolidated Group Jackgreen Limited

2009 2008 2009 2008 7. PROFIT FROM ORDINARY ACTIVITIES $ $ $ $

Profit from ordinary activities before income tax has been determined after a. Expenses - - Cost of wholesale electricity 51,954,227 32,920,494 - - Loss/(gain) on electricity hedges 4,647,427 (229,857) - - Cost of energy efficient products and services 2,208,578 361,050 - - Borrowing costs: - - — Loan interest 1,628,340 1,173,734 478,902 269,026 Total borrowing costs 1,628,340 1,173,734 478,902 269,026 Depreciation of non-current assets:

57

— Computer equipment 26,568 27,235 - - — Plant and equipment 30,880 15,586 - - — Motor vehicles - 1,713 - - Total depreciation 57,448 44,534 - - Bad and doubtful debts 6,204,964 1,875,643 - 211,945 Rental expense on operating leases

— Minimum lease payments 123,219 101,385 - -

Consolidated Group Jackgreen Ltd 2009 2008 2009 2008 $ $ $ $

8. INCOME TAX EXPENSE

(a) Income Tax Expense/(Revenue) Current Tax - - - - Deferred Tax (3,172,855) - (366,337) - (b) Numerical reconciliation of income tax expense to prima facie tax payable Profit/(Loss) before income tax expense ( 10,262,060) ( 3,275,566) ( 1,104,147) 8,066,640 Prima facie income tax expense/(benefit) at the Australian tax rate of 30% (2008 - 30%) (3,078,618) ( 982,670) (331,244) 2,419,992

Non assessable income and other adjustments (6,891) - (79,151) -

Temporary differences and tax losses for which no deferred tax asset or liability have been recognised - 982,670 - (2,419,992)

Adjustments in respect of previous years of income (87,346) - 44,058 - Total income tax (benefit) (3,172,855) - (366,337) - (c) Tax Losses Unused tax losses for which no deferred tax asset has been recognised 12,730,377 12,730,377 12,730,377 12,730,377 Potential tax benefit @ 30% (2008 - 30%) 3,819,113 3,819,113 3,819,113 3,819,113

Consolidated Group Jackgreen Ltd

2009 2008 2009 2008

Current income

tax $

Deferred income

tax $

Current income

tax $

Deferred income

tax $

Current income

tax $

Deferred income

tax $

Current income

tax $

Deferred income

tax $

Opening Balance - - - - - - - - Charged to income - 3,172,855 - - 3,158,075 - - - Charged to equity - 205,193 - - 205,193 - - - Closing balance - 3,378,048 - - 3,363,268 - - - Amounts recognised in the balance sheet: Deferred tax asset - 4,236,476 - - 3,363,268 - - - Deferred tax liability - (858,428) - - - - - -

- 3,378,048 - - 3,363,268 - - -

58

Recognised deferred tax assets and liabilities

Consolidated Group Jackgreen Ltd

2009 2008 2009 2008

$ $ $ $

Deferred income tax as at 30 June relates to the following:

Deferred tax assets

Employee entitlements 150,179 - - -

Provisions & accrued expenses 715,703 - 18,000 -

Borrowing costs 25,326 - - -

Share capital raising costs 90,765 - 90,765 -

Recognised tax losses 3,254,503 - 3,254,504 -

4,236,476 - 3,363,269 -

Deferred tax liability

Deferred expenditure (858,428) - - -

(858,428) - - -

(d) Tax consolidation legislation Jackgreen Limited and its wholly owned Australian controlled entities implemented the tax consolidation legislation from July 2002. The accounting policy in relation to this legislation is set out in Note 2 (h). On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement which, in the opinion of the directors, limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity, Jackgreen Limited. The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Jackgreen Limited for any current tax payable assumed and are compensated by Jackgreen Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Jackgreen Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly owned entities’ financial statements. The amounts receivable/payable under the tax funding agreement is due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments.

Consolidated Group Jackgreen Limited 2009 2008 2009 2008

9. AUDITORS’ REMUNERATION $ $ $ $ Remuneration of the auditor* William Buck NSW

Auditing or Reviewing the financial report 115,000 - 115,000 -

Other services 27,299 26,275 27,299 26,275

Total William Buck NSW fees 142,299 26,275 142,299 26,275 Grant Thornton VIC

Auditing or Reviewing the Financial Report 116,943** 88,000 116,943** 88,000 Other services - - - - Total Grant Thornton VIC fees 116,943** 88,000 116,943** 88,000 * For the year ended 30 June 2009, William Buck NSW replaced Grant Thornton VIC, the auditor of the 30 June

59

2008 financial report. ** Grant Thornton VIC fees represent additional fees incurred in relation to their 30 June 2008 audit.

Consolidated Group

10. EARNINGS PER SHARE 2009 2008

a. Reconciliation of earnings to net profit or loss Net loss ( 7,089,205) ( 3,275,566)

Earnings used in the calculation of basic and dilutive EPS ( 7,089,205) ( 3,275,566)

b. Weighted average number of ordinary shares outstanding during the year used in calculation of basic EPS

215,891,633 199,124,533 Weighted average number of options outstanding 1,884,615 -

Weighted average number of convertible notes outstanding 23,455,515 22,099,009

Weighted average number of ordinary shares outstanding during the year used in calculation of dilutive EPS 241,231,763 221,223,542

Basic (loss) per share (3.28) cents (1.64) cents Dilutive (loss) per share (3.28) cents (1.64) cents

Consolidated Group Jackgreen Limited

2009 2008 2009 2008 11. CASH ASSETS $ $ $ $

Cash at bank and in hand 2,472,810 3,970,603 3,982 104,774 2,472,810 3,970,603 3,982 104,774

Reconciliation of Cash

Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the balance sheet as follows: Balances as above 2,472,810 3,970,603 3,982 104,774 Balances per cash flow statement 2,472,810 3,970,603 3,982 104,774

Consolidated Group Jackgreen Limited

12. CURRENT RECEIVABLES 2009 2008 2009 2008 $ $ $ $ Trade receivables 8,656,375 10,997,638 - - Provision for bad and doubtful debts ( 2,325,676) ( 1,184,535) - - Related parties receivables 218,272 181,648 3,116,258 123,528 Other receivables 1,039,038 - 1,039,007 117,820 7,588,009 9,994,751 4,155,265 241,348

Movements in the provision for doubtful debts of receivables are outlined in Note 5(a).

Consolidated Group Jackgreen Limited 2009 2008 2009 2008

13. INVENTORIES $ $ $ $ Finished goods at cost 188,321 25,301 - - 188,321 25,301 - -

60

Consolidated Group Jackgreen Limited 2009 2008 2009 2008

14. FINANCIAL ASSETS $ $ $ $ CURRENT Renewable Energy Certificates – at cost 190,616 23 - - 190,616 23 - - NON CURRENT Investment at cost: Shares in Unlisted controlled entities - - 41,825,153 41,825,061 Shares in Unlisted entities 87,500 87,500 - - 87,500 87,500 41,825,153 41,825,061

Consolidated Group Jackgreen Limited

15. OTHER ASSETS 2009 2008 2009 2008 $ $ $ $ CURRENT Commission Prepayments 2,861,426 1,378,985 - - Prepayments 37,221 49,133 - - Accrued Revenue 16,351,049 11,041,985 - - 19,249,696 12,470,103 - - NON-CURRENT Security Deposits 335,550 17,745 550 550 335,550 17,745 550 550

Consolidated Group Jackgreen Limited

2009 2008 2009 2008 16. PROPERTY, PLANT AND EQUIPMENT $ $ $ $

Property – Real Estate at cost 53,473 59,043 53,473 59,043 PLANT AND EQUIPMENT Plant and equipment At cost 218,601 230,707 - 47,497 Accumulated depreciation (45,245) ( 72,439) - ( 47,497) 173,356 158,268 - - Computer Equipment At cost 172,833 155,205 - - Accumulated Depreciation (143,420) ( 106,942) - - 29,413 48,263 - - Motor Vehicles At cost - 10,272 - - Accumulated depreciation - ( 4,261) - - - 6,011 - - Total Property, Plant and Equipment Cost 444,907 455,227 53,473 106,540 Accumulated Depreciation (188,665) ( 183,642) - ( 47,497) Total written down amount 256,242 271,585 53,473 59,043

61

Movements in Carrying Amounts Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year

Property – Real Estate

Plant & Equipment

Computer Equipment

Motor Vehicles Total

Consolidated Group:

Balance at the beginning of year 59,043 158,268 48,263 6,011 271,585 Additions - 35,391 17,628 - 53,019 Disposals ( 5,570) - ( 6,011) ( 11,581) Depreciation expense - (20,303) ( 36,478) - ( 56,781) Carrying amount at the end of year 53,473 173,356 29,413 - 256,242 Parent Entity: Balance at the beginning of year 59,043 - - - 59,043 Additions - - - - - Disposals ( 5,570) - - - ( 5,570) Depreciation expense - - - - - Carrying amount at the end of year 53,473 - - - 53,473

Consolidated Group Jackgreen Limited

2009 2008 2009 2008 17. INTANGIBLE ASSETS $ $ $ $

Goodwill at cost (i) 1,505,219 1,505,219 - - Licences at deemed cost (ii) 9,500,000 9,500,000 - - Accumulated amortisation - - - - 11,005,219 11,005,219 - -

(i) During the financial year, the Directors assessed the recoverable amount of goodwill and determined that goodwill associated with the Group’s electricity business had not been impaired (2008: nil).

(ii) The Group has assessed that the electricity retail licence has an indefinite useful life as the licence has no expiry date and could be utilised and managed by subsequent management teams. The industry is considered stable in which the asset is operated.

Refer Note 3 for details of impairment testing performed.

Consolidated Group Jackgreen Limited

18. JOINT VENTURES

2009 $

2008 $

2009 $

2008 $

a. Interest in Joint Venture Operations

Jackgreen Limited had a 75.87% interest in the Keypoint Business Park Joint Venture, whose principal activity was the construction of and sale of units in the Business Park.

The economic entity’s share of assets employed in the joint venture was:

CURRENT ASSETS

Receivables - 6,501 - 6,501

Development Properties - - - -

Other Assets - - - -

62

Consolidated Group Jackgreen Limited

18. JOINT VENTURES

2009 $

2008 $

2009 $

2008 $

Total current assets - 6,501 - 6,501

NON-CURRENT ASSETS

Receivables - - - -

Total non-current assets - - - -

- - - -

Share of total assets of joint venture - 6,501 - 6,501

CURRENT LIABILITIES

Payables - 46,050 - 46,050

Interest Bearing Liabilities - 65,779 - 65,779Other Liabilities - 571,159 - 571,159

TOTAL CURRENT LIABILITIES - 682,988 - 682,988

TOTAL LIABILITIES - 682,988 - 682,988

Net interest in joint venture - (676,487) - (676,487)

19. CONTROLLED ENTITIES

Country of Incorporation

Percentage Owned

2009 2008 Parent Entity: Jackgreen Limited Subsidiaries of Jackgreen Limited: Jackgreen (International) Pty Ltd Australia 100 100 Easy Being Green Pty Ltd Australia 100 100

Consolidated Group Jackgreen Limited 2009 2008 2009 2008

20. PAYABLES $ $ $ $ CURRENT Unsecured liabilities Trade payables 6,080,568 3,238,469 65,418 103,037 Accrued expenses 7,034,181 3,282,326 - 222,000 Other payables 1,209,298 1,714,541 112,924 100,000 Amounts payable to:

— wholly-owned subsidiaries - - 2,791,739 432,049

— specified key management personnel entities 328,020 166,981 164,473 50,600

14,652,067 8,402,317 3,134,554 907,686 NON-CURRENT Other Loans - unsecured - 72,279 - 72,279 - 72,279 - 72,279

63

Consolidated Group Jackgreen Limited 2009 2008 2009 2008

21. PROVISIONS $ $ $ $

CURRENT Other – Keypoint Joint Venture - 511,945 - 511,945 Employee benefits 232,340 178,923 - - 232,340 690,868 - 511,945

Consolidated Group Jackgreen Limited

22. INTEREST BEARING LIABILITIES 2009 2008 2009 2008 $ $ $ $ Convertible notes 6,690,000 3,800,000 6,690,000 3,800,000 Loan facility - secured 10,000,000 8,102,559 - - 16,690,000 11,902,559 6,690,000 3,800,000 The secured loan of $10,000,000 is due for repayment on 31 August 2010.

Convertible notes The parent entity issued 22,727,273 12% convertible notes for $2.52 million on 6 June 2009. The notes are convertible into ordinary shares of the parent entity (subject to shareholder approval, which was received at a general meeting on 2 September 2008), at the option of the holder, or repayable on 6 June 2012. The conversion rate is 1 share for each note held at a price of 12 cents per share.

Secured Liabilities and assets pledged as security The total secured liabilities (current and non-current) are as follows:

Consolidated Group Jackgreen Limited 2009 2008 2009 2008

$ $ $ $ Loan facility - secured 10,000,000 8,102,559 - - Total secured liabilities 10,000,000 8,102,559 - -

The loan facility is secured by a fixed and floating charge over the assets of the Group. The total available under the facility is $10,000,000, which was fully drawn as at 30 June 2009. The loan facility incurs interest at 11.87% p.a. (2008:14.09%) Risk exposures Details of the Group’s exposure to risks arising from current and non-current borrowings are set out in Note 5.

Consolidated Group Jackgreen Limited 2009 2008 2009 2008

23. CONTRIBUTED EQUITY $ $ $ $ 231,053,682 (2008:203,128,566) fully paid ordinary shares 50,132,565 46,937,971 50,132,565 46,937,971

Ordinary shares: At the beginning of the reporting period 46,937,971 41,046,341 46,937,971 41,046,341 Shares issued during the year — 40,000,000 on 25 October 2007 - 5,600,000 - 5,600,000 — 3,917,750 on 6 November 2007 - 470,130 - 470,130 — 5,000,000 on 4 July 2008 575,000 - 575,000 - — 22,727,273 on 23 December 2008 2,500,000 - 2,500,000 - — 197,843 on 16 June 2009 22,752 - 22,752 - — Purchase of shares (employee share scheme) (39,224) - (39,224) -

64

— Issue of shares (employee share scheme) 40,248 - 40,248 - Transaction costs relating to share issues (109,375) ( 178,500) (109,375) ( 178,500) Tax effect of transaction costs relating to share issue, including initial recognition of prior year costs 205,193 - 205,193 - At reporting date 50,132,565 46,937,971 50,132,565 46,937,971 Number of shares: No. No. No. No. At the beginning of reporting period 203,128,566 159,210,816 203,128,566 159,210,816 Shares issued during year — 25 October 2007 - 40,000,000 - 40,000,000 — 6 November 2007 - 3,917,750 - 3,917,750 — 4 July 2008 5,000,000 - 5,000,000 - — 23 December 2008 22,727,273 - 22,727,273 - — 16 June 2009 197,843 - 197,843 - At reporting date 231,053,682 203,128,566 231,053,682 203,128,566

• Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to

the number of shares held. • At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each

shareholder has one vote on a show of hands. Options • For information relating to share options issued to employees during the financial year, refer to Note26. • At 30 June 2009, there were 7,000,000 (30 June 2008: nil) un-issued ordinary shares for which options were

outstanding.

Consolidated Group Jackgreen Limited

24. RESERVES AND RETAINED LOSSES 2009 2008 2009 2008 $ $ $ $ a) Reserves Hedging reserve - cash flow hedges - ( 115,920) - - Share-based payments reserve 181,488 - 181,488 - 181,488 ( 115,920) 181,488 - Movements: Hedging reserve - cash flow hedges Balance 1 July ( 115,920) - - - Transfer to net profit - gross 115,920 ( 115,920) - - Balance 30 June - ( 115,920) - - Share-based payments reserve Balance 1 July - 195,000 - 195,000 Option expense 181,488 ( 195,000) 181,488 ( 195,000) Balance 30 June 181,488 - 181,488 - b) Retained Losses Retained losses at the beginning of the financial year ( 30,047,244) ( 26,966,678) ( 9,999,105) ( 18,260,745) Transfer to retained earnings on expiry of options - 195,000 - 195,000 Net loss attributable to the members of the parent entity (7,089,205) ( 3,275,566) ( 737,810) 8,066,640 Retained losses at the end of the financial year ( 37,136,449) ( 30,047,244) ( 10,736,915) ( 9,999,105)

65

The hedging reserve is used to record gains or losses on hedging instruments in a cash flow hedge that are recognised directly in equity, as described in Note 2( t).Amounts are recognised in profit and loss when the associated hedged transaction affects profit and loss.

The share-based payments reserve is used to recognise: • the fair value of options issued to employees but not exercised • the fair value of shares issued to employees

Consolidated Group Jackgreen Limited

25. CASH FLOW INFORMATION 2009 2008 2009 2008

Reconciliation of Cash Flow from Operations with Loss from Ordinary Activities after Income Tax

Profit/(Loss) from ordinary activities after income tax (7,089,205) ( 3,275,566) (737,810) 8,066,640

Finance Costs 1,628,340 1,053,136 478,902 269,026

Operating Profit /(Loss): (5,460,865) (2,222,430) (258,908) 8,335,666

(Gain)/loss on sale or disposal of noncurrent assets (6,508) 1,070

Depreciation /Amortisation 57,448 44,534 - -

Impairment - - - (9,135,978)

Bad and Doubtful debts 6,204,964 - - 211,945

Equity settled share based payments 244,488 - - -

Changes in working capital:

(Increase)/Decrease in trade receivables (3,849,002) ( 6,054,933) 83,951 -

(Increase)/Decrease in other receivables (5,652,015) (5,042,165) - (19,375)

(Increase)/Decrease in prepayments (1,470,530) ( 961,881) - 3,120

(Increase)/Decrease in inventory (353,636) (25,301) - -

Increase/(Decrease) in deferred tax balances (3,378,047) - -

(Increase)/Decrease in provisions 682,613 438,430 (511,945) -

(Increase)/Decrease in other assets (178,933) 25,710 - -

Increase/(Decrease) in trade creditors 3,066,650 272,698 (98,951) ( 41,890)

Increase/(Decrease) in other creditors 3,521,333 (1,463,218) (182,749) 224,676

(Increase)/Decrease in reserves 297,408 (115,920) 181,488 - Cash flow from operating activities (6,274,632) ( 15,104,476) (786,044) ( 421,836)

CA

26. SHARE BASED PAYMENTS W INFORMATION

Employee share option plan Jackgreen Limited operates an ownership-based scheme for senior executives and non-executive directors of the consolidated entity. In accordance with the provisions of the plan, as approved by shareholders at a general meeting, senior executives and non-executive directors of the company may be granted options to purchase parcels of ordinary shares at an exercise price nominated by the Board.

66

Each employee share option converts into one ordinary share of Jackgreen Limited on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry. The options granted expire within three years of their issue, or immediately after the recipient ceases to be an employee or non-executive director of the Company, whichever is the earlier. The Board has discretion to approve that options are retained in the event that a Director or employee ceases to be employed by the Company. During the financial year, the following share-based payment arrangements were in existence.

Options series Grant date Expiry date Grant date fair value Vesting date

(1) Issued 21 Nov 08 21/11/08 21/11/11 $0.05 Special conditions (2) Issued 21 Nov 08 21/11/08 21/11/11 $0.05 21/11/09 (3) Issued 21 Nov 08 21/11/08 21/11/11 $0.05 21/11/10

There is no further service or performance criteria that need to be met in relation to options granted under series (2) – (3) before the beneficial interest vests in the recipient. Executives receiving options under option series (1) are entitled to the beneficial interest under the option when the recipient has achieved 12 months continuous service with the company and annualised consolidated revenue of $85 million is achieved and/or an EPS result of $0.012 is achieved in either the year to 30 June, 6 months to 31 December or a shorter period as selected by the Board (no shorter than 3 consecutive months).

The weighted average fair value of the share options granted during the financial year is $0.051. Options were priced using Black-Scholes option pricing model. Where relevant, the expected life used in the model has been adjusted based on management’s best estimate for the effects of no transferability, exercise restrictions (including the probability of meeting market conditions attached to the option), and behavioral considerations. Expected volatility is based on the historical share price volatility over the past 3 years.

Inputs into the model Option Series Series 1 Series 2 Series 3 Grant date share price 0.12 0.12 0.12 Exercise Price 0.15 0.15 0.15 Expected volatility 70% 70% 70% Option life 3 years 3 years 3 years Dividend yield - - - Risk free interest rate 3.6% 3.6% 3.6%

The following reconciles the outstanding share options granted under the employee share option plan at the beginning and end of the financial year:

Economic Entity Parent Entity 2009 2008 2009 2008

Weighted Average Exercise

Price

Weighted Average Exercise

Price

Weighted Average Exercise

Price

Weighted Average Exercise

Price

Number of

Options

$

Number of

Options

$

Number of

Options

$

Number of

Options

$ Outstanding at the beginning of the year - - 1,580,000 $0.20 7,000,000 $0.15 1,580,000 $0.20 Granted 7,000,000 $0.15 - - - - - - Forfeited - - - - - - - - Exercised - - - - - - - - Expired - - 1,580,000 $0.20 - - 1,580,000 $0.20 Outstanding at year-end 7,000,000 $0.15 - - 7,000,000 $0.15 - - Exercisable at year-end - - - - - - - -

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This price was calculated by using a Black-Scholes option pricing model applying the following inputs:

Inputs into the model Option Series Series 1 Series 2 Series 3 Grant date share price ($) 0.12 0.12 0.12 Exercise Price ($) 0.15 0.15 0.15 Expected volatility 70% 70% 70% Option life 3 years 3 years 3 years Dividend yield - - - Risk free interest rate 3.6% 3.6% 3.6%

Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future tender, which may not eventuate. The life of the options is based on the historical exercise patterns, which may not eventuate in the future. Included under employee benefits expense in the income statement is $244,488 (2008: nil), and relates, in full, to equity-settled share-based payment transactions.

Consolidated Group Jackgreen Limited 2009 2008 2009 2008 a. Movement in the number of share options held by

employees are as follows: Opening balance - 1,580,000 - 1,580,000 Granted during the year 7,000,000 - 7,000,000 - Exercised during the year - - - - Expired during the year - 1,580,000 - 1,580,000 Closing Balance 7,000,000 - 7,000,000 -b. Details of share options outstanding as at end of

year:

Grant Date Expiry and Exercise Date

Exercise Price

21/11/08 21/11/11 $0.15 7,000,000 - 7,000,000 -

27. RELATED PARTY TRANSACTIONS F

Transactions between related parties are on normal commercial terms and conditions no more favorable than those available to other parties unless otherwise stated.

Consolidated Group Jackgreen Limited 2009 2008 2009 2008 $ $ $ $

Transactions with related parties: Jackgreen Limited advances and receives interest free loans to and from controlled entities from time to time. These loans are eliminated on consolidation.

- Receivable - - 3,136,771 -- Payable - - 3,027,250 1,555,464 Key Management Personnel Entities Amounts Payable to director and key management personnel entities: Energy Revolution Pty Ltd (i) 88,000 33,000 88,000 33,000Obelisk Capital Pty Ltd (ii) 215,272 90,372 51,725 -Andrew Woodward Superannuation Fund (iii) 8,807 4,009 - -

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Consolidated Group Jackgreen Limited 2009 2008 2009 2008 $ $ $ $

Pelivin Pty Ltd (iv) 40,148 39,600 35,748 39,600 352,227 166,981 175,473 72,600Represented by: Trade Creditors 341,227 103,472 164,473 50,600Other Creditors 11,000 63,509 11,000 22,000 352,227 166,981 175,473 72,600

i. Energy Revolution Pty Ltd is a related entity of Chairman Mr John Smith. Director fees and

professional service fees are paid to this entity for services provided to the electricity business. These fees are on normal terms and conditions. A total of $60,000 has been paid to the entity during the year.

ii. Obelisk Capital Pty Ltd is a related entity of Mr Andrew Randall. Fees are payable to Obelisk Capital for the services of Mr Andrew Randall. A total of $394,607 has been paid to the entity during the year.

iii. The Andrew Woodward Superannuation Fund is a related entity of Mr Andrew Woodward. Superannuation payments relating to Andrew Woodward’s employment are paid to this entity. The payments are on normal terms and conditions.

iv. Pelivin Pty Ltd is a related entity of Mr Peter Vines. Director fees and professional service fees are paid to this entity for services provided to the electricity business. These fees are on normal terms and conditions. A total of $28,000 has been paid to the entity during the year.

28. KEY MANAGEMENT PERSONNEL DISCLOSURES The following persons acted as directors of the company during or since the end of the financial year: Mr J. Smith (Non-executive director- Chairman) Mr A.M. Randall (Managing director) – Resigned on 6 August 2009 Mr A.J. Woodward (Executive director) Mr P.Vines (Non –executive director) Mr G. Martin (Chairman) – Appointed on 6 July 2009 The term ‘senior management’ is used in this remuneration report to refer to the following persons. Except as noted, the named persons held their current position for the whole of the financial year and since the end of the financial year: N.Agarwal (General Manager – Sales and Marketing) N.Dimmock (General Manager – Corporate Services) J.MacIntosh (National Sales Manager) All of the above persons were also key management persons during the year ended 30 June 2008 except for Mr Greg Martin who was appointed on 6 July 2009.

Short –term employee benefits Post employment

benefits

Share based

payments

2009

Salary & Fees

$ Bonus

$

Non-monetary

$ Other

$ Superannuation

$

Other long term

employee benefits

$

Options & rights

$ Total

$ Non-executive directors J.Smith 60,000 - - - - - 33,561 93,561 P.Vines 28,000 - - - - - 16,780 44,780 Executive officers

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A.M.Randall** 342,862 - 5,000 - - - 69,024 416,886 A.J.Woodward 180,000 - 5,000 - 16,200 - 34,512 235,712 N.Agarwal 123,750 - 5,000 - 11,137 - 13,805 153,692 N.Dimmock 147,273 - 5,000 - 14,727 - 13,805 180,805

Other company employees J.MacIntosh 124,818 - 3,000 - 10,333 - - 138,151

Short –term employee benefits Post

employment benefits

Share based

payments

2008

Salary & Fees

$ Bonus

$

Non-monetary

$ Other

$ Superannuation

$

Other long term

employee benefits

$

Options & rights

$ Total

$ Non-executive directors J.Smith 142,474 - - - - - - 142,474 P.Vines 18,096 - - - - - - 18,096 Executive officers A.M.Randall** 290,386 - 18,000 - - - - 308,386 A.J.Woodward 166,154 - - - 14,954 - - 181,108 N.Agarwal 127,384 7,000 - - 11,475 - - 145,859 N.Dimmock 138,881 7,875 - - 13,888 - - 160,644 Other company employees D.Schweiger 121,865 - - - 10,782 - - 132,647

** Mr Andrew Randall resigned as a Director on 6 August 2009. Payments are made to Obelisk Capital Pty Ltd under a consulting agreement dated 21 May 2004, which was updated 1 July 2008. Payments commenced under the agreement from 14 December 2004. The amounts paid in 2008 and 2009 include payments relating to services provided in prior periods. Number of options granted to directors and senior management personnel are outlined in the tables below:

During the financial year

Name Option series No.

granted No.

vested

% of grant

vested % of grant

forfeited

% of compensation

for the year consisting of

options J.Smith (2) Issued 21 Nov 08 750,000 - 0% n/a 23.9% J.Smith (3) Issued 21 Nov 08 750,000 - 0% n/a 11.8% P.Vines (2) Issued 21 Nov 08 375,000 - 0% n/a 25.0% P.Vines (3) Issued 21 Nov 08 375,000 - 0% n/a 12.4% A.Randall (1) Issued 21 Nov 08 2,500,000 - 0% n/a 16.5% A.Woodward (1) Issued 21 Nov 08 1,250,000 - 0% n/a 14.6% N.Dimmock (1) Issued 21 Nov 08 500,000 - 0% n/a 7.6% N.Agarwal (1) Issued 21 Nov 08 500,000 - 0% n/a 8.9%

There were no options exercised during the financial year ending 30 June 2009. The following table summarises the value of options granted, exercised or lapsed during the year to directors and senior management:

Name

Value of options granted at the grant date (i)

$

Value of options exercised at the exercise date (i)

$

Value of options lapsed at the date of lapse (ii)

$ J.Smith 33,561 - - P.Vines 16,780 - - A.Randall 69,024 - - A.Woodward 34,512 - -

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N.Dimmock 13,805 - - N.Agarwal 13,805 - -

(i) The value of options granted during the period is recognised in compensation over the vesting period of

the grant, in accordance with Australian accounting standards.

Shareholdings The numbers of shares in the company held during the financial year by each director of Jackgreen Limited and other key management personnel of the Group, including their personally related parties, are set out below. 2009 Balance

1.7.2008 Received as

RemunerationOptions

ExercisedNet Change

Other* Balance

30.6.2009 Directors John Smith 5,184,336 - - 248,700 5,433,036Andrew Randall 13,449,070 43,478 - 23,000 13,515,548Peter Vines 1,035,069 - - - 1,035,069Andrew Woodward 1,224,286 43,478 - 15,000 1,282,764Other key management personnel Nadia Dimmock 27,200 43,478 - - 70,678Namrata Agarwal 7,500 43,478 - - 50,978John Macintosh - 26,086 - - 26,086Total 20,927,461 199,998 - 286,700 21,414,159

2008 Balance

1.7.2007 Received as

RemunerationOptions

ExercisedNet Change

Other Balance

30.6.2008 Directors John Smith 4,767,999 - - 416,337 5,184,336Andrew Randall 12,758,998 - - 690,072 13,449,070Peter Vines - - - 1,035,069 1,035,069Andrew Woodward 988,000 - - 236,286 1,224,286Other key management personnel Nadia Dimmock 23,500 - - 3,700 27,200Namrata Agarwal 7,500 - - - 7,500Dean Schweiger - - - - -Total 18,545,997 - - 2,381,464 20,927,461

Loans to key management personnel The company has not provided loans to key management personnel in the reporting period 2009.

Other transactions with key management personnel The company has not entered into other transactions with directors, director related entities or key management personnel in the reporting period 2009 other than outlined in Note 27.

Consolidated Group Jackgreen Limited

29. CAPITAL AND LEASING COMMITMENTS 2009

2008

2009

2008

Operating Lease Commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements Payable

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Consolidated Group Jackgreen Limited

29. CAPITAL AND LEASING COMMITMENTS 2009

2008

2009

2008

— not later than 1 year 303,446 416,557 - -— later than 1 year but not later than 5 years 557,176 860,621 - -— later than 5 years - - - - 860,622 1,277,178 - -

The property lease is a non-cancellable lease with a five-year term, with rent payable monthly in advance. Contingent rental provisions within the lease agreement require the minimum lease payments shall be increased to the market value on the second anniversary. The Company has agreements with electricity generators that provide price certainty for expected future electricity purchases. The value of these contracts cannot be calculated at 30 June 2009 as they are based on future electricity market spot prices and volume. One of these agreements is secured by a call option over the business of Jackgreen (International) Pty Ltd. The contracts are not considered onerous and form part of the company’s management of wholesale electricity price fluctuations.

30. EVENTS SUBSEQUENT TO REPORTING DATE • On 6 July 2009 Mr G.Martin was appointed to the Board and assumed the role of a Chairman. • On 10 August 2009 Babcock and Brown Power Service Limited sold their investment in Jackgreen

Limited and ceased to be a substantial stock holder of the company. • On 6 August 2009 Mr A.M.Randall resigned from the role of Managing Director. • On 7 August 2009 the company issued 4,500,000 shares at 11 cents each. • On 7 September 2009 the company issued 24,337,000 shares at 11 cents each and 10,000,000

options convertible to ordinary shares at 12 cents each.

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DIRECTORS’ DECLARATION

The directors of the company declare that: 1) The financial statements and notes, as set out on pages 19 to 71 are in accordance with the

Corporations Act 2001 and: 2) comply with Accounting Standards and the Corporations Regulations 2001; and 3) give a true and fair view of the financial position as at 30 June 2009 and of the performance for the

year ended on that date of the company and consolidated group; 4) The Managing Director and Chief Finance Officer have each declared that:

i) the financial records of the company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;

ii) the financial statements and notes for the financial year comply with the Accounting Standards; and

iii) the financial statements and notes for the financial year give a true and fair view.

5) In the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

Director Greg Martin (Chairman) Dated this 30th day of September 2009

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INDEPENDENT AUDITOR’S REPORT

To the members of Jackgreen Limited

Report on the Financial Report

We have audited the accompanying financial report of Jackgreen Limited, which comprises the balance sheet as at 30 June 2009, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s Opinion

In our opinion:

a) the financial report of Jackgreen Limited is in accordance with the Corporations Act 2001, including:

i) giving a true and fair view of the company and consolidated entity’s financial position as at 30 June 2009 and of their performance for the year ended on that date; and

ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.

b) the consolidated financial statements and notes also complies with International Financial Reporting Standards as disclosed in Note 2.

Material Uncertainty Regarding Continuation as a Going Concern

Without modification to the conclusion expressed above, we draw attention to the matters described in Note 2(d) of the financial report, including the achievement of an operating loss of $7,089,205 and net cash outflows from operating activities of $6,274,632 during the year ended 30 June 2009. As a result of these matters, there is material uncertainty as to whether Jackgreen Limited will be able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. Report on the Remuneration Report We have audited the Remuneration Report included in pages 25 to 30 of the report of the directors for the year ended 30 June 2009. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with s 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Auditor’s Opinion In our opinion the Remuneration Report of Jackgreen Limited for the year ended 30 June 2009, complies with s 300A of the Corporations Act 2001.

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Matters Relating to the Electronic Presentation of the Audited Financial Report

The auditor’s report relates to the financial report and remuneration report of Jackgreen Limited for the year ended 30 June 2009 included on Jackgreen Limited’s website. The company’s Directors are responsible for the integrity of Jackgreen Limited’s website. We have not been engaged to report on the integrity of Jackgreen Limited’s website. The auditor’s report refers only to the financial report and remuneration report named above. It does not provide an opinion on any other information which may have been hyperlinked to / from these statements or the remuneration report. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report to confirm the information included in the audited financial report and remuneration report presented on this website.

William Buck Chartered Accountants

L.E. Tutt Partner Sydney, 30 September 2009

75

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ADDITIONAL STOCK EXCHANGE INFORMATION AS AT 30 SEPTEMBER

2009 The following additional information is required by the Australian Stock Exchange Ltd in respect of listed public companies only. 1. Shareholding a. Distribution of Shareholders Number Category (size of holding) Investors Ordinary 1 – 1,000 378 70,455 1,001 – 5,000 380 1,195,734 5,001 – 10,000 305 2,615,616 10,001 – 100,000 707 26,999,948 100,001 – and over 221 238,099,840 1,991 268,981,593b. The number of shareholdings held in less than marketable parcels is 778 representing 1,376,528

ordinary shares. c. The names of the substantial shareholders listed in the holding company’s register as at

30 September 2009 are: Number Shareholder Ordinary % Cogent Nominees Pty Limited 43,334,000 16.11 National Nominees Limited 27,278,291 10.14 Hayson Super Investments Pty Ltd (Hayson Super

Fund) 14,285,714 5.31 Merrill Lynch (Australia) Nominees Pty Limited 14,143,000 5.26 d. Voting Rights The voting rights attached to each class of equity security are as follows: Ordinary shares — Each ordinary share is entitled to one vote when a poll is called, otherwise each member

present at a meeting or by proxy has one vote on a show of hands.

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

e. 20 Largest Shareholders — Ordinary Shares

Name

Number of Ordinary Fully Paid Shares

Held % Held of Issued Ordinary Capital

1. Cogent Nominees Pty Limited 43,334,000 16.11 2. National Nominees Limited 27,278,291 10.14 3. Hayson Super Investments Pty Ltd 14,285,714 5.31 4. Merrill Lynch (Australia) Nominees Pty Limited 14,143,000 5.26 5. Prospect Custodian Limited 13,314,062 4.95 6. Zimbia Pty Ltd (The Obelisk Trust) 12,303,998 4.57 7. UBS Nominees Pty Ltd 6,290,428 2.34 8. RBC Dexia Investor Services Australia Nominees

Pty Limited 5,277,992 1.96 9. Mds Tiling Pty Ltd 5,275,024 1.96 10. Bell Potter Nominees Ltd 4,526,920 1.68

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ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES e. 20 Largest Shareholders — Ordinary Shares

Name

Number of Ordinary Fully Paid Shares

Held % Held of Issued Ordinary Capital

11. Admark Investments Pty Ltd 4,340,000 1.61 12. Mr William Wavish 3,546,000 1.32 13. Kerr Enterprises (Qld) Pty Ltd 2,282,963 0.85 14. Hsbc Custody Nominees (Australia) Limited-

GSCO ECA 2,273,000 0.85 15. Radelec Investments Pty Limited 2,020,000 0.75 16. RBC Dexia Investor Services Australia

Nominees Pty Limited 1,884,500 0.70 17. Damhold Pty Ltd 1,819,000 0.68 18. Hosma Shirts Pty Ltd 1,660,000 0.62 19. Bonaparte Pty Ltd 1,578,096 0.59 20 UBS Wealth Management Australia Nominees

Pty Ltd 1,577,402 0.59 169,010,390 62.83%

2. Company Secretary Mr Andrew Woodward 3. Share Registry Link Market Services Limited Level 4 333 Collins Street Melbourne VIC 3000 4. Stock Exchange Listing Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Stock Exchange Limited.

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Auditor’s Independence Declaration

Under Section 307C of the Corporations Act 2001

To the Directors of Jackgreen Limited:

I declare that, to the best of my knowledge and belief, during the year ended 30 June 2009, there have been:

���� no contraventions of the auditor independence requirements as set out in the Corporations Act 2001; and

���� no contraventions of any applicable code of professional conduct in relation to the audit.

William Buck Chartered Accountants

L.E. Tutt Partner Sydney, 30 September 2009

78