Annual Report 2008

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Welcome to the Jackgreen Limited 2008 Annual Report. This past year has been one of milestones, we achieved a profitable second half, reached 50,000 customers and purchased Easy Being Green which made a profit in the five months of operation. The next 12 months represent exciting opportunities for the Company as we launch new products and move towards a full year profit.

Welcome to the Jackgreen Limited 2008 Annual Report. This past year has been one of milestones, we achieved a profitable second half, reached 50,000 customers and purchased Easy Being Green which made a profit in the five months of operation. The next 12 months represent exciting opportunities for the Company as we launch new products and move towards a full year profit.

The results of the Company’s efforts in achieving our goals for the year are well described in this report, as are the steps we are taking to build on these results.

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

The results of the Company’s efforts in achieving our goals for the year are well described in this report, as are the steps we are taking to build on these results.

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

ContentsOVERVIEW .......................................................2

HIGHLIGHTS ....................................................3

CHAIRMAN’S REPORT ....................................4

MANAGING DIRECTOR’S REPORT.................5

PERFORMANCE...............................................6

BOARD OF DIRECTORS ..................................8

SUSTAINABILITY REPORT ...............................9

CORPORATE GOVERNANCE .........................11

FINANCIAL REPORT ......................................19

DIRECTORS’ REPORT ...................................20

INCOME STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008 ......................31

BALANCE SHEETS AS AT 30 JUNE 2008..............................................32

STATEMENTS OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2008 .............33

CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2008 ................................34

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES .......................35

2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS ..............................42

3. FINANCIAL RISK MANAGEMENT .........43

4. INCOME .................................................48

5. PROFIT FROM ORDINARY ACTIVITIES ..49

6. INCOME TAX EXPENSE .........................50

7. AUDITORS’ REMUNERATION ...............51

8. EARNINGS PER SHARE ........................51

9. CASH ASSETS .......................................51

10. RECEIVABLES ........................................52

11. INVENTORIES ........................................52

12. JOINT VENTURES ..................................53

13. OTHER FINANCIAL ASSETS .................54

14. CONTROLLED ENTITIES ........................54

15. PROPERTY, PLANT AND EQUIPMENT ..55

16. INTANGIBLE ASSETS ............................56

17. OTHER ASSETS – CURRENT................56

18. PAYABLES ..............................................56

19. INTEREST BEARING LIABILITIES .........57

20. PROVISIONS ..........................................57

21. NON-CURRENT LIABILITIES .................57

22. CONTRIBUTED EQUITY .........................59

23. RESERVES AND RETAINED PROFITS ...60

24. CASH FLOW INFORMATION .................61

25. EMPLOYEE BENEFITS ...........................62

26. RELATED PARTY TRANSACTIONS ........63

27. KEY MANAGEMENT PERSONNEL DISCLOSURES ......................................64

28. CAPITAL AND LEASING COMMITMENTS ....................................67

29. SHARE-BASED PAYMENTS ..................68

30. EVENTS SUBSEQUENT TO REPORTING DATE .................................68

31. COMPANY DETAILS ...............................68

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OverviewOVERVIEW

Despite some challenging conditions in the year, the Company has taken significant steps in growing a quality business that delivers simple environmental solutions to the community. Jackgreen has been able to almost double its revenue to $44 million from $23 million in 2007 and reduced its net loss to $3.275 million from $9.7 million in 2007. Most importantly the company produced a profit in the second half of the year ahead of the company’s plan. The purchase of Easy Being Green Pty Ltd in January has enabled the company to further its aspirations of being the leading provider of simple environmental solutions in Australia.

The company is ready to produce its first full year of profit and will continue with its impressive customer and revenue growth. The Easy Being Green business has allowed the company to diversify product and establish an effective cross selling platform. As a leading energy efficiency provider, Easy Being Green will roll out new profitable products in the year and provide Jackgreen with a low cost sales channel. Easy Being Green has provided or installed energy efficient light globes to over 650,000 Australian households, providing a tremendous customer database for the company.

OuR VIsIOn

Jackgreen’s vision is ‘To Make a Difference’. Its central philosophy is that incremental change by many can make a significant difference. By building a large customer base of environmentally aware energy users, we can assist to build a better future and provide substantial returns for our shareholders. We strive to reward our customers with high quality customer service and offer an expanding range of environmentally enhancing products and services to meet the needs of our community.

We believe that a focus on educating our community of the benefits of using renewable energy will increase awareness of the influence we have on the environment, and provide some viable solutions to reduce our personal impact.

OuR ObjEctIVEs

To be the leading provider of simple environmental solutions in the community and within the existing regulatory environment. The Company will provide an increasing number of energy efficiency products and take the hurdles away for households and businesses to make the right choices.

To grow our energy customer base by continuing to acquire customers in the National Energy Market regions that support full contestability. The company is striving to achieve an electricity customer base of 100,000 within the next 12 months.

To be a leading creator of carbon credits in Australia. The growing requirement to reduce greenhouse gas emissions and stop the dramatic effects of climate change, provides a significant opportunity for Jackgreen. This year Easy Being Green anticipates being a significant creator of NSW Greenhouse Gas Certificates, Renewable Energy Certificates, Victorian Energy Efficiency Certificates and NSW Energy Efficiency Certificates.

To maximise Profitability by establishing strong margins and a low cost operation and customer acquisition business. We continue to develop our systems and operations to ensure we can build a low cost of acquisition business that is below industry cost standards and above industry returns.

Developing our environmental credentials by supporting new renewable generation and energy efficiency initiatives. We continue to be the only energy retailer that has a GreenPower accreditation in every product we sell.

Jackgreen is committed to continue increasing into profitability and providing returns to shareholders. The Board and management will continue to support the share price with announcements and market updates to ensure the market is aware of our progress. The Board and management are committed to building a significantly profitable business for our shareholders over the coming financial years.

We continue to educate our staff, customers and community in ways we can minimise our impact on the environment by facilitating social benefits via collaborative activities with our partner, Planet Ark, and other community groups. We are looking forward to continuing collaborative efforts with Planet Ark and other community partners that we believe will be informative, educational and a powerful sales tool.

[2] ANNUAL REPORT 2008

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snapshot of Results

2008 2007 % change 2006 2005

Operating Result

Trading Revenue 43,921,032 23,154,025 90% 7,466,855 6,914,018

Loss after interest and tax (3,275,566) (9,194,447) 64% (7,789,208) (4,033,034)

Financial Position

Shareholders’ Funds 16,774,808 14,274,663 18% 10,970,677 12,471,821

Total Assets 37,842,830 28,404,749 33% 14,463,252 16,242,413

Total Liabilities 21,068,023 14,130,086 49% 3,492,575 3,770,592

Key Data Per share

Loss per share (cents) 1.64 cents 7.2 cents 77% 8.1 cents 6.9 cents

Key Measures

Employees 84 69 46 11

Highlights

thE hIghlIghts

The Company’s revenue grew by 90% for the consolidated group.•

Returned a profitable second half of the year after accounting for one off costs.•

The Company purchased Easy Being Green Pty Ltd in January making it a significant player in energy efficiency and carbon credit •creation.

Jackgreen announced it reached 50,000 customers in February 2008. The company successfully entered the Queensland market •in the beginning of the year.

The Company announced its first $1 million in abatement certificate revenue in June 2008.•

Illustration of growth in electricity purchased on behalf of jackgreen customers over past 3 years:

MWh

2006 2007 2008

300000

250000

200000

150000

100000

50000

0

JACKGREEN LIMITED [3]

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Chairman’s ReportThe notes preceding my report have addressed the details of the dramatic performance improvement we have seen within the business. I am grateful to the management team and all the staff who have given of themselves this last year in producing these outstanding results.

I am also very pleased to have Peter Vines on our Board to assist with the

development of the company. Peter has used his vast industry experience to create opportunities for us in a number of important operational and strategic areas.

This report is reflective by nature and gives me the opportunity to review some of the key industry and economic factors that have influenced your Jackgreen over the last year.

The company raised funds early last financial year to fund growth into Queensland and NSW. Almost immediately the National Energy Market (NEM) erupted and the cost of energy based normally at $30-40MWh, more than quadrupled on average but hit $10,000MWh for many periods. Our hedges kicked in but were stressed and used immediate cash. A consequence of the erratic higher prices was the requirement of NEMMCO (the national market operator) to significantly increase our guarantee requirements in October, again drawing on reserves and growth funds. It was a hectic time, the strength of our business model and the credibility of our management saw us through.

As a second tier energy retailer that focuses on building a greenpower community of like minded users we are often the target of market participants and groups that find any commercial “green” company abhorrent. The whole company has worked really hard on establishing and developing our credentials. We support the works of PlanetArk, recycling, Earth Hour, Sustainable Schools and many other initiatives. It is pleasing to report that during the last 12 months we have been embraced by the wider green movement and have been invited to speak at many forums about Jackgreen. This embrace is even more pleasing following the Boards decision to purchase Easy Being Green Pty Ltd. This was a complimentary business in need of management and resources. The positive integration and immediate success of the EBG operation is highlighted in other places in this document.

Feeling that you are doing well is a positive step towards improved performance, when others endorse your company it makes you feel very proud and gives the whole company a lift. Jackgreen has consistently been rated as the Best Value green electricity supplier and more recently received a huge fillip by our selection by CHOICE Magazine as the best value supplier of 100% GreenPower in every market we serve. The ACCC responded to community complaints about Green advertising and fined some of our competitors, allowing our message to ring clearer to the market.

One can’t avoid the chronic global financial market all companies found themselves operating in this last year. We are fortunate that we operate in an industry that is seen as non-discretionary. Even though we have certain rights within our code to collect and disconnect for non-payment we found it prudent to take an extra provision for potential lost income due to older lost customer payment behaviour. As a community based company we do reasonably well with our collections but can and will improve the whole cycle of billing and collection. We are close to industry best practice but have plans in place to take another quantum step to improve that benchmark.

As our industry matures we are seeing the reconstitution of the Generator/Retailer. A combination of a generation plant(s) that uses the Retail customer base to optimize margins and growth. Many of the second tier retailers like Jackgreen have been purchased into these configurations. Recently the likes of Red Energy, Momentum Energy and the Vic operation of Energy Australia have all been sold.

We enter the next year full of enthusiasm and potential, we have established a solid business, have very experienced and professional staff and have proved again that the business model as it was conceived has lots of merit.

Your Board, Management and staff commit again to continue to do all we can to improve the value of your investment in your company.

Sincerely

John A Smith

[4] ANNUAL REPORT 2008

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Managing Director’s ReportThe financial year 2008 has provided significant milestones and challenges for our rapidly growing business. We have been able to steadily increase our energy customers, however tempering our growth at all costs agenda due to the challenges in the market. These challenges related in the first part to cash impacts related to unprecedented energy costs at the end of last year. Secondly to the

troubled share market conditions in the later half of the year. We needed to nurture the business’s cashflow while still continuing to grow. This has been successfully achieved, with our total energy customer sign ups moving to 55,000 by the year end. The purchase of Easy Being Green has allowed us to push forward with our long held plan to be the provider of choice for simple green solutions. We have successfully pushed out with Easy Being Green’s initial product, created a successful cross selling platform and are well on the way to utilising its large customer base for new green products such as solar hot water.

The company will continue to expand into its plan of being the pre-eminent provider of GreenPower and creator of carbon credits in the Australian market. We believe this business will be ever more strategic as the nations climate change agenda unfolds.

Wholesale electricity prices returned to their normal range for the year and we were well hedged for the year resulting in a reasonable gross margin.

The major events for the year included:

– The achievement of reaching 50,000 customer sign ups;– Further strengthening of automated systems and processes;– Purchase of Easy Being Green with its customer database

of 650,000 customers;– Profitable restart of the Easy Being Green business and

expansion for 2009;– The company’s first profitable half of trading in the second

half of 2008.

We continue to have a strong differentiation in our energy product and will endeavour to take full advantage of this in the marketplace.

We are on track to be the leading provider of simple green solutions in Australia.

ObjEctIVEs

Jackgreen’s financial goals are to:

– reach 100,000 customers in 12 months and 200,000 within 3 years;

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

– 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, that incremental change by the greater community can make a significant difference. We also want to make our employees enjoy being part of something positive and help them to grow as the company grows.

OutlOOK

Our growth prospects continue to be very positive with both the rollout of energy efficiency solutions and Jackgreen energy. We believe a diversified offering of profitable simple green solutions and a cross sales platform will build a powerhouse of positive change and shareholder returns.

Jackgreen will build its customer portfolio and the business will continue to improve its profitability. Next year will reach economies of scale and margin that will provide shareholders significant returns. Easy Being Green will continue with lighting products, roll out solar hot water and a full emission impact business for companies. This will create strong profit and a large amount of carbon credits.

We want to continue to push our advantage as being Australia’s dedicated renewable energy retailer and moving to be a pre-eminent supplier of simple green solutions. We are confident this will create strong returns for our shareholders and give them the satisfaction of an investment in an organisation that is making positive change for our environment and community.

Thank you for your support to date and we look forward to converting our work into solid shareholder growth in the future.

Andrew Randall (Managing Director)

JACKGREEN LIMITED [5]

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PerformanceThe 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. The current year result is a reflection of the fact that the parent company now operates as the owner of the electricity and energy efficiency businesses. The market capitalisation of the company has decreased in the year

however remains significantly higher since the company has been operating the electricity retail business. 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.

2008 2007 2006 2005

$ $ $ $

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

Net Profit/(loss) 8,066,640 (9,751,889) (120,737) (1,608,977)

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

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

Dividends Paid NIL NIL NIL NIL

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 4 on page 48, which indicates revenue has grown from $23.1 million in 2007 to $43 million in 2008.

The directors are disappointed with how the share price has performed during the year, resulting in a reduction in shareholder wealth. It is the intention to maintain promotional activity amongst analysts so as to increase investor awareness of the company and to stabilise the company’s share price in line with an expanding, consistent and stable financial position. Given the instability in the financial markets in 2008, the company has done reasonably well to maintain the share price in these difficult times.

jacKgREEn EnERgy

The electricity retail business has continued to grow through the year particularly in Queensland which opened up for competition in July 2007. The market has come through significant turmoil at the end of the previous year, with unprecedented wholesale electricity prices being recorded in the June 2007 quarter. The cash impact of that event which moved through to this year and the decidedly negative share market caused the company to ease the growth at all costs model. Despite that we were able to consistently grow our customer and revenue base. At the end of the year we had 55,000 signed up customers.

The work continues to be undertaken to improve back office systems working more in the exceptions area which has caused early problems with the company. The company had an historical problem with billing for lost customers being significantly delayed. This caused considerable problems in older accounts being collected. Management decided to take a significant write off of the old debt so that it would not create potential problems

for future results. Systems have been improved to avoid a continuation of this problem.

The NEMMCO wholesale prices for the year returned to reasonable levels from the highs of the previous year. This is expected to continue into financial year 2009, and financial year 2010 is a little less clear with the transition to the Federal Government’s Carbon Pollution Reduction Scheme.

Moving forward the company will have its margins impacted in 2009 by the decisions of QLD and NSW pricing authorities to not fully price increased costs of retailers in setting retail electricity pricing. We expect to more than offset this reduction in margin through the Easy Being Green business. We also expect that retail pricing will increase to reflect the increased costs by 2010.

With the acquisition of Easy Being Green, the company has established a cross sales operation which is proving itself. We anticipate that 20–25% of our future sales can come from this channel which will reduce cost of sales and increases loyalty.

Jackgreen has continued building alliances with environmental groups including its long term alliance with Planet Ark. An initiative undertaken with Sustainable Schools allows fund raising for schools while getting their community to convert to GreenPower.

Central to success in a highly-competitive market such as energy supply is maintaining the highest possible standards of customer service. Despite the significant growth in customer numbers, Jackgreen successfully reduced the number of customer complaints sent to the Ombudsman during the year by 50%. 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.

[6] ANNUAL REPORT 2008

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jacKgREEn’s stRatEgIc ObjEctIVEs

Returns for our shareholders Grow our customer base to more than 100,000 customers in the next 12 months.•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.•

Loyal, highly satisfied customers 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.•

High performing, motivated teams and leaders who deliver

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.•

Growth driven by innovation Identify and prioritise high value opportunities.•Reward and encourage innovation.•Learn from experimentation and improvement.•

Success through strong partnerships

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.•

Best practice corporate citizen Comply with statutory and legal requirements as a minimum standard.•Understand community expectations.•Proactively manage our significant risks.•Engage with our community.•

Easy bEIng gREEn

The acquisition in February of Easy Being Green has enabled the Jackgreen Group to add to its product suite, having relaunched the installation of energy efficient light globes in the financial year. Subsequent to year end the company has launched the business of solar hot water systems, which provides excellent growth opportunities and cross promotional sales leads for the Group.

Since re-establishing the globe install business late in the financial year the company managed to operate at a small profit with significant growth forecast for the coming year.

The roll out of the Globe business has continued into the new year with over 9,000 houses in July being installed with energy efficient globes by Easy Being Green.

The Easy Being Green brand provides the company with opportunities to launch a full suite of energy efficient products and services. The launch of the Easy Being Solar product will provide significant upside for the business and represents the first of the additional product opportunities available to Easy Being Green.

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.

Easy bEIng gREEn sPEcIFIc stRatEgIc ObjEctIVEs

Utilise customer base 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•

Profitable contribution to 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

JACKGREEN LIMITED [7]

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jOhn a sMIth

chairman, age 62

Joined the Board on 14 December 2004, an independent director, John is a former CEO of Australian Energy Limited and a former group executive of Powercor Limited, with over 15 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.

anDREW RanDall

bEc, Qualified cPa and graduate of the securities Institute of australia, age 47 Managing Director

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.

anDREW WOODWaRD

bbus, acIs, Qualified chartered accountant, age 37

Joined the Board on 28 June 2007, an executive director, Andrew has been responsible for the financial functions of the electricity retail business since early 2004 and also holds the role of Company Secretary.

PEtER VInEs

non Executive Director, age 58chairman audit committee

Joined the Board on 5 October 2007, 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.

Board of Directorsjackgreen Directors as at 30 june 2008

company secretaryanDREW WOODWaRD

bbus, acIs, Qualified chartered accountant, age 37Andrew has been involved with the electricity retail business since early 2004 and holds the dual roles of Company Secretary and Finance Director. He was appointed Company Secretary of Jackgreen Limited on 14 December 2004.

[8] ANNUAL REPORT 2008

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Sustainability Report

Our peopleThe past year has again seen our team grow, particularly with the addition of Easy Being Green. The company has maintained its key management personnel and has continued to add a mixture of experience and youth to the team. As the team has expanded the focus has been on ensuring appropriate management skill is directed to the various business departments to continue the development of staff within each department. This year we have also seen a growing number of staff promoted to new departments as vacancies have arisen, providing excellent opportunities for staff to expand their skills.

We have also commenced government funded training programmes for staff that can be attended online and onsite. These programmes enable staff to gain accredited qualifications and assist in the development of a more highly skilled workforce.

The past few years have seen a very tight employment market, resulting in challenges of not only attracting but retaining quality employees. As a result Jackgreen has been focussed on implementing incentive programs that reward individual and team performance. At the Annual General Meeting this year, shareholders will be requested to approve the implementation of an Employee Share and Option Plan (ESOP) whereby employees will be able to participate in the ownership of the company by receipt of shares either as an incentive or salary sacrifice arrangement. The company is proud of this step and considers it a positive step in the retention of staff.

Jackgreen is committed to providing and maintaining a safe and healthy workplace for all employees, suppliers, contractors and visitors. We acknowledge that Occupational Health and Safety (OH&S) is the responsibility of management and each employee and recognise the importance of leading and promoting the highest principles and practices to ensure health and safety across our operations.

This year the company offered all staff free of charge the influenza vaccination and contributed to the cost of a quit smoking programme for relevant staff. Each of these incentives is designed to improve our staffs personal health and productivity.

Our communityThe Jackgreen business was developed on a plan to include the community in its growth and to share the benefits of our products with the community. Jackgreen have again provided financial support to Planet Ark and the Randwick District Rugby Union Football Club in the last year.

This year Jackgreen also supported an educational program for students in Victorian secondary schools resulting in fund raising opportunities for each school that participated. This program is expected to continue through 2008 and provide the schools with access to information on renewable energy choices and continued financial support towards sustainability projects.

The Jackgreen team believe in active participation in community and charity events. This has been facilitated through fundraising activities and donations for charities such as, ‘Surf Lifesaving NSW’, ‘Shave for a Cure’, ‘Jeans for Genes Day’ and ‘Loud Shirt Day’. Jackgreen has made a commitment to match employees charitable contributions made through payroll each month by an equal amount.

Jackgreen again this year sponsored a site on National Tree Day, planting approximately 1,000 trees and participated in Clean Up Australia Day. More recently Jackgreen has commenced working with Salvation Army’s Oasis program to assist disadvantaged and homeless youth back to work.

One of the challenges faced by Jackgreen, indeed by us all, is persuading people that we can all make a difference to climate change and energy security through our collective efforts to reduce energy consumption. Our relationship with Planet Ark, Salvation Army, schools, investors and other community groups provides Jackgreen with a unique opportunity to continue to educate the market of ways to improve the environment that we share.

JACKGREEN LIMITED [9]

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Sustainability Report continuedOur EnvironmentTackling climate change and securing future energy supplies are the twin goals of energy policy in Australia and the world. In line with that, the Federal Government has released a Green Paper outlining its plans for a Carbon Pollution Reduction Scheme (CPRS) to commence in 2010. The CPRS will set an annual limit – which will reduce progressively over time – on the total amount of greenhouse gases that energy producers can emit. At this stage there is not enough detail available to determine the impact of this scheme on Jackgreen and its customers.

There is also the federal target of 20% for the proportion of all energy to be derived from renewable sources by 2020 which will be achieved under the Mandatory Renewable Energy Target (MRET) scheme which currently requires just over 3% of energy to be sourced from renewable energy sources. This dramatic increase will result in significant increases in renewable energy projects and costs to energy users. Jackgreen is strongly positioned as the only energy retailer with GreenPower in every product it sells to capitalise on the growing demand for green energy. Jackgreen will seek to enhance and create value for shareholders from the continued development of our focus on renewable energy products.

The company will continue to provide customers and the community with education of the benefits of using renewable energy and reducing their environmental impact. Our vision is to build the company to a size that ensures additional renewable energy infrastructure projects are required to satisfy our customer’s demand for renewable energy usage. The Federal government initiatives in the CPRS and MRET schemes will assist Jackgreen in this pursuit.

With the purchase of Easy Being Green, the company has launched two products to assist customers with ways they can reduce their energy usage and therefore environmental impact, being the installation of energy efficient light globes and solar hot water systems. Both of these products fit the company’s vision of enabling customers to be more aware of their energy use and impact on the environment.

Jackgreen has taken active steps to include partnerships and companies in our supply chain who share our commitment to sustainability. This includes the ongoing relationship with Planet Ark as well as new relationships with organisations such ECOS Corporation, Think Appliances and Issues Solutions.

Through staff, customer and business GreenPower and Demand Side Abatement, Jackgreen has facilitated the abatement of around 500,000 tonnes of carbon emissions from the environment. Since our inception, the combined Jackgreen and Easy Being Green business have enabled the abatement of over 4 million tonnes of CO2.

Jackgreen has also implemented a Sustainability at Work philosophy that incorporates a focus on recycling, paper use, energy, travel and water and plans to expand this to a formal program that establishes baseline levels.

[10] ANNUAL REPORT 2008

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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 and has elected to early adopt the changes recommended in August 2007. The company and its controlled entities together are referred to as the Group in this statement.

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.

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.

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.

Corporate Governance

JACKGREEN LIMITED [11]

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Corporate Governance continuedthe board of directorsThe 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.

bOaRD cOMPOsItIOn

The charter states:

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 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.

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

REsPOnsIbIlItIEs

The responsibilities of the board include:

providing strategic guidance to the company including •contributing to the development of and approving the corporate strategy.

reviewing and approving business plans, the annual budget and •financial plans including available resources and major capital expenditure initiatives.

overseeing and monitoring:•

organisational performance and the achievement of the −Group’s strategic goals and objectives;

compliance with the company’s Code of Conduct; −

progress of major capital expenditures and other significant −corporate projects including any acquisitions or divestments.

monitoring financial performance including approval of the •annual and half-year financial reports and liaison with the company’s auditors.

considering management recommendations on capital •management, the issue or allotment of equity, borrowings and other financing proposals.

appointment, performance assessment and, if necessary, •removal of the Managing Director.

ratifying the appointment and/or removal and contributing to •the performance assessment for the members of the executive team including the Finance Director and the Company Secretary.

ensuring there are effective management processes in place •and approving major corporate initiatives.

enhancing and protecting the reputation of the organisation.•

overseeing the operation of the Group’s system for compliance •and risk management reporting to shareholders.

bOaRD MEMbERs

Details of the members of the board, their experience, expertise, qualifications, term of office and independent status are set out in the directors’ report under the heading ‘’Information on directors’’.

There are two non-executive directors, both of whom are deemed independent under the principles set out below, and two executive directors at the date of signing the directors’ report.

The board seeks to ensure that:

at any point in time, its membership represents an appropriate •balance between directors with experience and knowledge of the Group and directors with an external or fresh perspective

the size of the board is conducive to effective discussion and •efficient decision-making.

DIREctORs’ InDEPEnDEncE

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

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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.

nOn-ExEcutIVE DIREctORs

The two non-executive directors met twice during the year, in scheduled sessions 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.

tERM OF OFFIcE

The company’s Constitution specifies that all non-executive directors must retire from office no later than the third annual general meeting (AGM) following their last election. Where eligible, a director may stand for re-election, subject to the following limitations:

no non-executive director may serve more than four terms •(twelve years), and

on attaining the age of 72 years a director will retire, by •agreement, at the next AGM and will not seek re-election.

The Managing Director is not subject to retirement by rotation.

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.

cOMMItMEnt

The board held fifteen board meetings and an additional corporate strategy workshop during the year.

Non-executive directors are expected to spend at least 20 days a year preparing for and attending board and committee meetings and associated activities.

The number of meetings of the company’s board of directors and of each board committee held during the year ended 30 June 2008, and the number of meetings attended by each director is disclosed on page 29.

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 2008.

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.

cOnFlIct OF IntEREsts

Entities connected with Mr Andrew Randall had business dealings with the consolidated entity during the year, as described in note 26 to the financial statements. In accordance with the board charter, the directors concerned declared their interests in those 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.

InDEPEnDEnt PROFEssIOnal aDVIcE

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.

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.

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Corporate Governance continuedPERFORMancE assEssMEnt

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. This assessment was undertaken during May 2008.

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.

cORPORatE REPORtIng

The Managing Director 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.

bOaRD cOMMIttEEs

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. All of these 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.

Given the current size of the Board, the Board has determined that it is not practical to have a separate Nomination and Remuneration Committee and as a result has considered relevant issues at the monthly Board meetings.

As the company grows and the size of the Board also grows it is planned that these Committees 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.

REMunERatIOn anD nOMInatIOn cOMMIttEE

The remuneration and nomination committee consists of the following non-executive directors:

John Smith (Chairman)•

Peter Vines•

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

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 29.

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.

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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.

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 the directors’ 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 arrangements are in place, so that appropriate candidates are recruited for later promotion to senior positions

auDIt cOMMIttEE

The audit committee consists of the following non-executive and executive directors:

Peter Vines (Chairman)•

Andrew Randall•

Andrew Woodward•

Details of these directors’ qualifications and attendance at audit committee meetings are set out in the directors’ report on pages 21 and 29.

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 audit committee operates in accordance with a charter which is available on the company website. 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 −

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

review and monitor related party transactions and assess their •propriety

report to the board on matters relevant to the committee’s role •and responsibilities.

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Corporate Governance continuedIn 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

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.

ExtERnal auDItORs

The company and audit committee policy is to appoint external auditors who clearly demonstrate quality and independence. The performance of the external auditor is reviewed annually and applications for tender of external audit services are requested as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs. Grant Thornton Victoria (previously William Buck Victoria) was appointed as the external auditor in 2003. It is Grant Thornton policy to rotate audit engagement partners on listed companies at least every three years, and in accordance with that policy a new audit engagement partner was introduced for the half year ended 31 December 2007.

An analysis of fees paid to the external auditors, including a break-down of fees for non-audit services, is provided in the directors’ report and in note 7 to the financial statements. It is the policy of the external auditors to provide an annual declaration of their independence to the audit committee.

The external auditor will attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the audit report.

RIsK assEssMEnt anD ManagEMEnt

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.

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 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.

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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.

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 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.

The Code and the company’s trading policy 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 or breaches of the company’s trading policy 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, including trading in securities.

A copy of the Code and the trading policy are available on the company’s website.

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

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Corporate Governance continuedmaking 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.

asx cORPORatE gOVERnancE cOuncIl guIDElInEs

Jackgreen considers that the above corporate governance practices comply with the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations.

The Company’s corporate governance framework is kept under review. The Board considers governance issues on a regular basis at meetings and makes recommendations of improvements necessary to respond to changes to the company’s business or applicable legislation and standards.

Corporate Governance information on Jackgreen’s website at www.jackgreen.com.au is being progressively updated to include more information on corporate governance within Jackgreen and copies of relevant policies and charters.

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Financial ReportFor the financial year ended 30 June 2008

jacKgREEn lIMItEDABN: 46 006 768 332

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Your directors present their report on Jackgreen Ltd and its controlled entities for the financial year ended 30 June 2008.

DIREctORs

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

John Smith (Non Executive Director – Chairman)•

Andrew Randall (Managing Director)•

Andrew Woodward (Executive Director)•

Peter Vines (Non Executive Director), appointed •9th October 2007

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

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.

PRIncIPal actIVItIEs

The principal activities of the economic entity during the financial year were:

Licensed retailer of electricity, focussed on the residential market;•

Carbon Abatement Certificate creator•

OPERatIng REsults

The consolidated loss of the economic entity after providing for income tax amounted to $3,275,566 (2007 – $9,194,447)

DIVIDEnDs PaID OR REcOMMEnDED

No Dividends were paid or declared during the year.

REVIEW OF OPERatIOns

A review of Jackgreen group operations and the results for the year ended 30 June 2008 are set out on pages 2 to 7 and 31 to 68.

assEssMEnt OF thE cOMPany

Information to enable shareholders to make an informed assessment of the Jackgreen group operations, financial position, strategies and prospects for future years is included on pages 2 to 7, 31 to 68. This report omits information about strategies and prospects for future years that would unreasonably prejudice Jackgreen.

sIgnIFIcant changEs In statE OF aFFaIRs

The following significant changes in the state of affairs of the parent entity occurred during the financial year:

I. On 25 October 2007 the company issued 40,000,000 ordinary shares at $0.14 each each to provide additional working capital.

II. On 6 November 2007 the company issued 3,017,750 ordinary shares at $0.12 each to provide additional working capital.

changEs In cOntROllED EntItIEs anD DIVIsIOns:

On 1 February 2008 the company purchased Easy Being Green Pty Ltd.

aFtER balancE DatE EVEnts

On 16 July 2008, the federal government, in line with its previously announced policy, released a Green Paper that outlines a framework for a Carbon Pollution Reduction Scheme (CPRS) proposed to commence on 1 July 2010. At the date of this report there is insufficient information to determine what impact the CPRS might have on the operations of the entity.

There are no other matters or circumstances that have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the consolidated group, the results of those operations, or the state of affairs of the consolidated group in future financial years.

FutuRE DEVElOPMEnts, PROsPEcts anD busInEss stRatEgIEs

To further improve the economic entity’s profit and maximise shareholder wealth, the following developments are intended to be implemented in the near future:

I. Launch of Solar Hot Water product in Easy Being Green. The company has commenced marketing in the month of September and expects sales to grow steadily throughout the coming year.

II. Continued expansion of electricity operations.

These developments, together with the current strategy of continuous improvement and an adherence to quality control in existing markets, are expected to assist in the achievement of the economic entity’s long-term goals and development of new business opportunities.

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.

Directors’ Report

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jackgreen Directors at 30 june 2008jOhn a sMIth

chairman, age 62

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.

anDREW RanDall

bEc, Qualified cPa and graduate of the securities Institute of australia, age 47

Managing Director

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.

anDREW WOODWaRD

bbus, acIs, jP, Qualified chartered accountant, age 37

Joined the Board on 28 June 2007, an executive director, Andrew has been responsible for the financial functions of the electricity retail business since early 2004 and holds the dual roles of Company Secretary and Finance Director.

PEtER VInEs

non Executive Director, chairman of audit committee, age 58

Joined the Board on 5 October 2007, 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.

company secretaryanDREW WOODWaRD

bbus, acIs, jP, Qualified chartered accountant, age 37

Andrew has been involved with the electricity retail business since early 2004 and holds the dual roles of Company Secretary and Finance Director. He was appointed Company Secretary of Jackgreen Limited on 14 December 2004.

DIREctORshIPs OF OthER lIstED cOMPanIEs

The directors have not held any directorships of other listed companies in the past 3 years.

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Directors’ Report continuedRemuneration ReportThe remuneration report is set out under the following main headings:

a Principles used to determine the nature and amount of remuneration

b Details of remuneration

c Service agreements

D Share-based compensation

E Additional information

The information provided in the remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.

a PRIncIPlEs usED tO DEtERMInE thE natuRE anD aMOunt OF REMunERatIOn

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 emphasise 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 tragets 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.

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:

From 1 October 2007

From 14 December 2004 to 1 October 2007

$ $

base Fees

Chairman $120,000 $120,000

Other non-executive directors

$48,000 $36,000

Executive pay

The executive pay and reward framework has two components:

– base pay and benefits, including superannuation, and

– short-term performance incentives

The combination of these comprises the executive’s total remuneration. The Company intends to request shareholders to approve an Employee Share and Option Plan at the Annual General Meeting to provide the Company with the ability to offer long term incentives to executives and employees.

[22] ANNUAL REPORT 2008

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The remuneration committee reviews executive 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 key management personnel are on a continuing basis, the terms of which are not expected to change in the immediate future. Upon retirement key 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 key 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. Payments under this agreement commenced from 14 December 2004.

The company may terminate an employment contract without cause by providing one month’s written notice or making payment in lieu of notice, based on the individual’s annual salary component. 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.

The remuneration committee determines the proportion of fixed and variable compensation for each executive.

superannuation

The executive directors and executives 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 key executive receives a superannuation contribution of 10%. Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards superannuation.

short-term incentives

As part of each executive director and executives remuneration package there is a performance-based component, consisting of key performance indicators (KPI’s). The intention of this program is to facilitate goal congruence between directors/executives with that of the business and shareholders. The KPI’s are set annually, with a certain level of consultation with directors/executives to ensure buy-in. The measures are specifically tailored to the areas each director/executive is involved in and has a level of control over. The KPI’s 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 executives is measured against criteria agreed biannually with each executive 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 executives and reward them for performance that results in long-term growth in shareholder wealth.

Performance in relation to the KPI’s is assessed bi-annually, with bonuses being awarded depending on the number and deemed difficulty of the KPI’s achieved. Following the assessment, the KPI’s 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 KPI’s 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 executives is valued at the cost to the company and expensed. Shares given to directors and executives 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.

JACKGREEN LIMITED [23]

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b DEtaIls OF REMunERatIOn

amounts of remuneration

Details of the remuneration of the directors, the key management personnel of the Group (as defined in AASB 124 Related Party Disclosures) and specified executives of the Group are set out in the following tables.

The key management personnel of the Group are the directors of Jackgreen Limited (refer page10 above) and those executives that report directly to the managing director being:

– Nadia Dimmock (General Manager – Compliance)

– Namrata Agarwal (General Manager – Special Projects)

In addition, the following person must be disclosed under the Corporations Act 2001 as they are among the 5 highest remunerated Group employees:

– Dean Schweiger (General Manager – Information Technology)

Key management personnel of the group and other executives of the company

2008 short-term benefits

Post Employ-

ment

share based

payments long term total

Salary, Fees & Commissions Cash Bonus

Non-Cash Benefits

Super-annuation Options

$ $ $ $ $ $

non-executive directors

John Smith 142,474 – – – – – 142,474

Peter Vines 18,096 – – – – – 18,096

sub-total non-executive directors 160,570 – – – – – 160,570

Executive directors

Andrew Randall * 290,386 – 18,000 – – – 308,386

Andrew Woodward 166,154 – – 14,954 – – 181,108

Other key management personnel

Namrata Agarwal 127,384 7,000 – 11,475 – – 145,859

Nadia Dimmock 138,881 7,875 – 13,888 – – 160,644

Total key management personnel compensation

Other company employees

Dean Schweiger 121,865 – – 10,782 – – 132,647

1,005,250 14,875 18,000 51,099 – – 1,089,214

* Payments are made to Obelisk Capital Pty Ltd under a consulting agreement dated 21 May 2004. Payments commenced under this agreement from 14 December 2004. The amount paid in 2008 includes payments relating to services provided in prior periods.

Directors’ Report continued

[24] ANNUAL REPORT 2008

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bonuses

Ms Nadia Dimmock was entitled to a cash bonus that was paid on 8 May 2008 for achieving performance criteria relating to the improvement in compliance related issues by 50% and for achieving personal key performance indicators relevant to her role. There have been no changes to the terms or conditions of the grant since the grant date.

Ms Namrata Agarwal was entitled to a cash bonus that was paid on 31 March 2008 for achieving performance criteria relating to the improvement in compliance related issues by 50% and for achieving personal key performance indicators relevant to her. There have been no changes to the terms or conditions of the grant since the grant date.

Key management personnel compensation

2007 short-term benefits

Post Employ-

ment

share based

payments long term total

Salary, Fees & Commissions Cash Bonus

Non-Cash Benefits

Super-annuation Options

$ $ $ $ $ $

non-executive directors

John Smith 140,000 – – – – – 140,000

Ken Harrison 29,166 – – – – – 29,166

Keith Pfahl 14,583 – – – – – 14,583

sub-total non-executive directors 183,749 – – – – – 183,749

Executive directors

Andrew Randall * 150,000 – – – – – 150,000

Other key management personnel

Andrew Woodward** 149,230 – – 4,431 7,200 – 160,861

Geoff Pollard 189,583 – – 17,062 3,600 – 210,245

Nadia Dimmock 127,447 – – 12,744 7,200 – 147,391

Michael Bleasel 110,590 – – 9,953 7,200 – 127,743

910,599 – – 44,190 25,200 – 979,989

* Payments are made to Obelisk Capital Pty Ltd under a consulting agreement dated 21 May 2004. Payments commenced under this agreement from 14 December 2004.

** Until 1 March 2007, payments were made to Obelisk Capital Pty Ltd under a consulting agreement dated 21 May 2004. Payments commenced under this agreement from 14 December 2004.

JACKGREEN LIMITED [25]

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The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:

Fixed Remuneration at risk – stI at risk – ltI

name 2008 2007 2008 2007 2008 2007

Executive directors of jackgreen limited

Andrew Randall 100% 100% – – – –

Andrew Woodward 85% 100% 15% – – –

Other key management of the group

Nadia Dimmock 85% 87% 15% 13% – –

Namrata Agarwal 85% 85% 15% 15% – –

Dean Scwheiger 92% 92% 8% 8% – –

c sERVIcE agREEMEnts

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 managing director, Andrew Randall, and specified executives are formalised in a consulting agreement or contracts of employment. Other than the managing director, the remaining executives are permanent employees of Jackgreen (International) Pty Ltd. The Managing Director is engaged under a contract, which commenced on 21 May 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.

Executive directors and executives 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.

Directors’ Report continued

[26] ANNUAL REPORT 2008

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D shaRE-basED cOMPEnsatIOn

No options were issued during the year.

The terms and conditions of each grant of options affecting remuneration in the previous, this or future reporting periods are as follows:

grant DateDate vested and

exercisable Expiry DateExercise

priceValue per Option

at grant date

14 December 2004 3 April 2006 1 October 2007 $0.20 $0.072

No options were granted or vested in 2008 or 2007.

shares provided on exercise of remuneration options

Details of ordinary shares in the company provided as a result of the exercise of remuneration options to each director of Jackgreen Limited and other key management personnel of the Group are set out below:

Date of Exercise of Options

number of ordinary shares issued on exercise of options

name 2008 2007

Directors of jackgreen limited

John Smith 28 March 2007 – 1,500,000

Andrew Randall 28 March 2007 – 200,000

The amounts paid per ordinary share by each director and other key management personnel on the exercise of options at the date of exercise were as follows:

Exercise Date amount paid per share

28 March 2007 $0.20

No amounts are unpaid on any shares issued on the exercise of options.

Employee share scheme

The company does not currently have an employee share scheme. Shareholders will be requested to approve an employee share and option plan at the Annual General Meeting.

JACKGREEN LIMITED [27]

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E aDDItIOnal InFORMatIOn

Details of remuneration: cash bonuses and options

For each cash bonus and grant of options included in the tables on pages 24 to 27, the percentage of the available bonus or grant that was paid, or that vested, in the financial year, and the percentage that was forfeited because the person or company did not meet the performance criteria is set out below. No part of the bonuses is payable in future years.

cash bonus Options

namePaid

%Forfeited

%year

grantedVested

%Forfeited

%

Financial years in

which options may vest

Minimum total vaule of

grant yet to vest $

Maximum total value of

grant yet to vest $

John Smith – – 2004 100% – – – –

Peter Vines – – – – – – – –

Andrew Randall – – 2004 100% – – – –

Andrew Woodward – – 2004 100% 100% – – –

Nadia Dimmock 35% 65% 2006 100% 100% – – –

Namrata Agarwal 28% 72% 2006 100% 100% – – –

Dean Schweiger 100% 2006 100% 100% – – –

No options were granted in 2008 or 2007.

2008 2007 2006 2005

$ $ $ $

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

Net Profit/(loss) 8,066,640 (9,751,889) (120,737) (1,608,977)

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

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

Dividends Paid NIL NIL NIL NIL

The above table represents the results for the Parent Company only.

Directors’ Report continued

[28] ANNUAL REPORT 2008

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MEEtIngs OF DIREctORs

During the financial year, 17 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows:

Directors’ Meetings

committee Meetings

audit committee

Number eligible to

attendNumber attended

Number eligible to

attendNumber attended

John Smith 15 15 1 1

Andrew Randall 15 15 2 2

Andrew Woodward 15 15 2 2

Peter Vines 10 10 1 1

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.

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.

OPtIOns

At the date of this report, there were no un-issued ordinary shares of Jackgreen Limited under option.

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.

The company was not a party to any such proceedings during the year.

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 (Grant Thornton, previously William Buck – Melbourne) 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.

JACKGREEN LIMITED [29]

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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 2008 2007 $ $

1. audit services

Grant Thornton

Audit and review of financial reports 88,000 69,050

TOTAL REMUNERATION FOR AUDIT SERVICES 88,000 69,050

2. taxation services

William Buck NSW

Tax compliance services 24,375 –

TOTAL REMUNERATION FOR TAXATION SERVICES 24,375 –

3. Other services

William Buck QLD

Independent Expert report 31,304 –

TOTAL OTHER SERVICES 31,304 –

auDItOR’s InDEPEnDEncE DEclaRatIOn

The lead auditor’s independence declaration for the year ended 30 June 2008 has been received and can be found on page 75.

Signed in accordance with a resolution of the Board of Directors.

John Smith Chairman

Andrew Randall Managing Director

Dated this 30th day of September 2008.

Directors’ Report continued

[30] ANNUAL REPORT 2008

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Income statements for the year ended 30 june 2008 consolidated group jackgreen limited 2008 2007 2008 2007 note $ $ $ $

Revenues from operating activities 4 43,921,032 23,154,025 – 58,783

Other Income 4 276,278 348,365 16,239 241,376

Impairment loss reversed following capitalisation of intercompany loan – – 9,135,978 (9,135,978)

Employee benefits expense ( 4,343,767) ( 3,938,971) ( 166,935) ( 183,750)

Depreciation and amortisation expense 5 ( 44,534) ( 50,030) – –

Advertising, Marketing and Commissions ( 2,037,281) ( 2,026,841) – –

Borrowing costs expense ( 1,173,734) ( 233,597) ( 269,026) ( 50,458)

Consulting Fees ( 539,721) ( 916,465) – ( 411,928)

Cost of Wholesale Electricity ( 32,920,494) ( 20,401,244) – –

Cost of Globes ( 361,050) – –

Doubtful Debts ( 1,875,643) ( 1,519,597) ( 211,945) –

Office and Administration Expenses ( 1,630,642) ( 737,896) ( 16,022) ( 22,476)

Software Licensing & other IT Expenses ( 596,936) ( 156,156) – –

Compliance related expenses ( 418,490) (386,961) – –

Write back/(off) of Investments – ( 13) – ( 13)

Other expenses ( 1,530,584) ( 2,329,066) ( 421,649) ( 247,445)

Loss from ordinary activities before income tax expense ( 3,275,566) ( 9,194,447) 8,066,640 ( 9,751,889)

Income tax expense relating to ordinary activities 6 – – – –

Net loss attributable to members of the Jackgreen Limited group ( 3,275,566) ( 9,194,447) 8,066,640 ( 9,751,889)

Basic earnings per share (cents per share) 8 (1.64) (7.20) – –

Diluted earnings per share (cents per share) 8 (1.48) (7.00) – –

The accompanying notes form part of these financial statements.

JACKGREEN LIMITED [31]

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balance sheets as at 30 june 2008 consolidated group jackgreen limited 2008 2007 2008 2007 note $ $ $ $

cuRREnt assEts

Cash assets 9 3,970,603 6,757,554 104,774 68,898

Receivables 10 21,036,736 10,096,549 241,348 15,701,572

Inventories 11 25,301 – – –

Other financial assets 13 23 55,747 – –

Prepayments 17 1,428,118 466,135 – 3,120

TOTAL CURRENT ASSETS 26,460,781 17,375,985 346,122 15,773,590

nOn-cuRREnt assEts

Investments 13 87,500 – 41,825,061 9,991,153

Property, plant and equipment 15 271,585 200,090 59,043 59,043

Intangible assets 16 11,005,219 10,785,219 – –

Other 17 17,745 43,455 550 –

TOTAL NON-CURRENT ASSETS 11,382,049 11,028,764 41,884,654 10,050,196

TOTAL ASSETS 37,842,830 28,404,749 42,230,776 25,823,786

cuRREnt lIabIlItIEs

Payables 18 8,402,317 9,599,334 907,686 477,411

Interest-bearing liabilities 19 – 4,065,779 – 2,065,779

Provisions 20 690,868 464,973 511,945 300,000

TOTAL CURRENT LIABILITIES 9,093,185 14,130,086 1,419,631 2,843,190

nOn-cuRREnt lIabIlItIEs

Payables 21 72,279 – 72,279 –

Interest-bearing liabilities 21 11,902,559 – 3,800,000 –

TOTAL NON-CURRENT LIABILITIES 11,974,838 – 3,872,279 –

TOTAL LIABILITIES 21,068,023 14,130,086 5,291,910 2,843,190

NET ASSETS 16,774,807 14,274,663 36,938,866 22,980,596

EQuIty

Contributed equity 22 46,937,971 41,046,341 46,937,971 41,046,341

Reserves 23 (115,920) 195,000 – 195,000

Retained profits 23 ( 30,047,244) ( 26,966,678) ( 9,999,105) ( 18,260,745)

TOTAL EQUITY 16,774,807 14,274,663 36,938,866 22,980,596

The accompanying notes form part of these financial statements.

[32] ANNUAL REPORT 2008

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statements of changes in Equity for year ended 30 june 2008EcOnOMIc EntIty

share capital Retained Options hedging Ordinary Earnings Reserve Reserve

balance at 30 june 2006 28,382,641 (17,772,231) 195,000 165,267

Shares issued during the year 12,807,353 – – –

Transaction costs (143,653) – – –

(Loss) attributable to members of economic entity – (9,194,447) – –

Cash flow hedges-change in fair value – – – (165,267)

balance at 30 june 2007 41,046,341 ( 26,966,678) 195,000 –

Shares issued during the year 6,070,130 – – –

Transaction costs ( 178,500) – – –

(Loss) attributable to members of economic entity – ( 3,275,566) – –

Transfer to retained earnings on expiry of options – 195,000 (195,000) –

Cash flow hedges-change in fair value – – – ( 115,920)

balance at 30 june 2008 46,937,971 ( 30,047,244) – ( 115,920)

PaREnt EntIty

share capital Retained Options Ordinary Earnings Reserve

balance at 30 june 2006 28,382,641 (8,508,856) 195,000

Shares issued during the year 12,807,353 – –

Transaction costs (143,653) – –

(Loss) attributable to members of parent entity – (9,751,889) –

balance at 30 june 2007 41,046,341 ( 18,260,745) 195,000

Shares issued during the year 6,070,130 – –

Transaction costs ( 178,500) – –

(Loss) attributable to members of parent entity – 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) –

JACKGREEN LIMITED [33]

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cash Flow statement for the year ended 30 june 2008 consolidated group jackgreen limited 2008 2007 2008 2007 note $ $ $ $

cash FlOWs FROM OPERatIng actIVItIEs

Receipts from customers 32,633,496 13,437,972 – 261,534

Payments to suppliers and employees ( 14,727,047) ( 1,641,281) ( 438,075) ( 832,770)

Cost of Sales ( 33,281,544) ( 22,242,114) – –

Interest received 270,619 51,683 16,239 39,173

Borrowing Costs – (319,210)

Net cash provided by (used in) operating activities 24 ( 15,104,476) ( 10,712,950) ( 421,836) ( 532,063)

cash FlOWs FROM InVEstIng actIVItIEs

Proceeds from sale of property, plant and equipment – 41,818 – –

Proceeds from sale of investments – – – 13

Loans to Other Entities – ( 586,928) – –

Purchase of property, plant and equipment ( 116,028) ( 41,715) – –

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

Net cash provided by (used in) investing activities ( 423,528) ( 586,825) ( 220,000) 13

cash FlOWs FROM FInancIng actIVItIEs

Proceeds from issue of shares 5,891,630 12,663,700 5,891,630 12,663,700

Proceeds from borrowings 11,802,559 4,002,396 1,800,000 2,002,396

Loans to related parties – – ( 6,744,892) ( 15,212,157)

Repayment of borrowings ( 3,900,000) ( 559,759) – ( 527,500)

Borrowing costs ( 1,053,136) – ( 269,026) ( 50,458)

Net cash provided by (used in) financing activities 12,741,053 16,106,337 677,712 ( 1,124,019)

Net increase/(decrease) in cash held ( 2,786,951) 4,806,562 35,876 ( 1,656,069)

Cash at 1 July 6,757,554 1,950,992 68,898 1,724,967

Cash at 30 June 9 3,970,603 6,757,554 104,774 68,898

The accompanying notes form part of these financial statements.

[34] ANNUAL REPORT 2008

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nOtE 1 statEMEnt OF sIgnIFIcant accOuntIng POlIcIEs

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 economic entity. Jackgreen Limited is a listed public company, incorporated and domiciled in Australia.

The Financial Report was authorized for issue by the Directors on 30 September 2008.

basis of Preparation

The financial report of Jackgreen Limited and controlled entities, and Jackgreen Limited as an individual parent entity comply with International Financial Reporting Standards.

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.

accounting Policies

a) Basis of AccountingThe financial statements of the consolidated entity have been prepared on a going concern basis.

The going concern basis assumes that the future revenue generation will be of a magnitude and at a rate that reflects the projections prepared to support the acquisition of the Jackgreen (International) Pty Ltd business. The financial statements take no account of the consequences, if any, of the inability of the consolidated entity to generate adequate new customer take-up.

The consolidated entity’s operations are subject to risks due primarily to the fact that the retailing of electricity continues to be in growth stage. During this phase the generation of sufficient funds from operating and financing activities in

accordance with its current business plan and growth forecasts is dependent on the following:

– The availability of financing facilities to fund working capital requirements;

– Increases in revenue and cash flows from current trading. These increases are dependent upon growth in customer numbers generating a cash inflow to offset the forecast expenditure on marketing and other operating expenses. This is expected as Jackgreen continues the expansion of marketing activities across its operating markets in the coming year; and

– Increased exposure in the operating markets to expand the scope of potential customer numbers. Current forecast include campaigns in Queensland and New South Wales.

While the operating cash of the business develops, the company continues to investigate funding requirements and opportunities. In the event that sufficient cash flows from operations are not generated and/or the financial support of the consolidated entity’s financiers and creditors is not available, the parent entity would implement alternative arrangements including the raising of further funds. Based on the ongoing level of customer take-up and the current level of support being provided by the entities financiers, the Directors believe that the going concern basis is appropriate.

b) Basis of ConsolidationThe 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 14 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.

notes to the Financial statements for year ended 30 june 2008

JACKGREEN LIMITED [35]

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c) Segment ReportingSegment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists.

Segment assets include all assets used by a segment and consist principally of cash, receivables, inventories, intangibles and property, plant and equipment, net of allowances and accumulated depreciation and amortisation. While most such assets can be directly attributed to individual segments, the carrying amount of certain assets used jointly by two or more segments is allocated to the segments on a reasonable basis. Segment liabilities consist principally of accounts payable, employee entitlements, accrued expenses, provisions and borrowings. Segment assets and liabilities do not include deferred income taxes.

Business and Geographical SegmentsBusiness SegmentsThe economic entity has the following two business segments:

Electricity division retails electricity to New South Wales, •Victorian, South Australian and Queensland residential customers;

Greenhouse abatement revenue•

Geographic SegmentThe Group operates in one geographic segment, Australia•

A detailed segment report has not been included due to the immaterial size of the greenhouse abatement business which commenced operating in April 2008.

d) Revenue recognitionRevenue 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 historical consumption patterns.

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).

e) Cash and cash equivalentsCash 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.

f) Trade receivablesTrade 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 120 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.

g) InventoriesInventories 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.

notes to the Financial statements for year ended 30 june 2008

[36] ANNUAL REPORT 2008

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h) Deferred ExpenditureJackgreen 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. If a contract is terminated prior to the completion of the 36 month period, termination fees are adjusted against the amortised commission expense and prepayment.

Change in Accounting PolicyAs reported in the 31 December 2007 half year financial report, Jackgreen Limited changed its accounting policy for the treatment of direct sales commissions relating to the sales of customer contracts. Previously, Jackgreen expensed such costs over the period of three months. These expenses are now expensed over the period of thirty six months to reflect the lifetime of a contract. Management judges that this policy provides reliable and more relevant information because it results in a more consistent treatment of those costs and the revenue derived from the sales. For contracts that are terminated prior to the completion of the thirty six month period, termination fees are adjusted against the amortised commission expense and prepayment.

The impact on the financial statements as at 30 June 2008, are a decrease in direct sales commissions expense of $561,072, a decrease in the consolidated loss of $561,072 and an increase in prepayments of $561,072.

i) Income TaxThe 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.

j) Tax ConsolidationJackgreen 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.

k) Property, Plant and EquipmentEach class of property, plant and equipment are carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

Plant and equipmentPlant 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.

DepreciationThe 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

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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 lifePlant and equipment 8 yearsMotor Vehicles 5 yearsComputer 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.

l) LeasesLease 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.

m) Financial InstrumentsRecognitionNon-derivative financial instruments are initially measured at fair value on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Financial assets at fair value through profit and lossA 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.

Loans and receivablesLoans 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.

Held-to-maturity investmentsThese 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 assetsAvailable-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.

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

Derivative financial instrumentsThe 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.

notes to the Financial statements for year ended 30 june 2008

[38] ANNUAL REPORT 2008

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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.

(i) Fair value hedgeChanges 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.

(ii) Cash flow hedgeThe 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 valueFair 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.

n) Share capital – ordinary sharesIncremental 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.

o) ImpairmentAt 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 AssetsFinancial 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.

Non-financial assetsThe 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.

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

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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.

p) Interests in Joint VenturesThe 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 12.

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.

q) IntangiblesGoodwillGoodwill 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.

LicenseThe license is recorded at cost. As the license is considered to have an indefinite life, no amortisation has been charged.

r) Employee Benefitsi. Wages and salaries, annual leave and sick leaveLiabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables 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.

ii. Long service leaveThe 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.

s) ProvisionsProvisions 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.

t) Share based paymentsEquity-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 a binomial 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 29.

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.

notes to the Financial statements for year ended 30 june 2008

[40] ANNUAL REPORT 2008

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u) Goods and Services Tax (GST)Revenues, expenses and assets are recognised net of the amount of GST, except:

where the amount of GST incurred is not recoverable from •the Australian Tax Office, it is recognised as part of the cost of acquisition of the asset or as part of an item of the expense: or

for receivables and payables in the balance sheet are shown •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 as operating cash flows.

v) New accounting standards and Australian Accounting InterpretationsAASB 7 Financial Instruments: Disclosures is mandatory for reporting periods beginning on or after 1 January 2007. The new Standard replaces and amends disclosure requirements previously set out in AASB 132 Financial Instruments: Presentation and Disclosures. All disclosures relating to financial instruments including all comparative information have been updated to reflect the new requirements.

The following published standards and interpretations are not yet effective and have not been early adopted by the Group:

AASB 8 Operating Segments and AASB 2007-3 •Amendments to Australian Accounting Standards arising from AASB 8

Revised AASB 123 Borrowing Costs and AASB 2007-6 •Amendments to Australian Accounting Standards arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 & AASB 138 and Interpretations 1 & 12]

AASB-I 14 The Limit on a Defined Benefit Asset, Minimum •Funding Requirements and their Interaction

Revised AASB 101 Presentation of Financial Statements •and AASB 2007-8 Amendments to Australian Accounting Standards arising from AASB 101

The impact of these new standards has not been fully analysed and this will be assessed in future accounting periods.

w) Earnings per shareThe 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.

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nOtE 2 cRItIcal accOuntIng EstIMatEs anD juDgEMEnts

critical accounting Estimates and judgments

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.

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. This has been estimated by using historical consumption patterns and takes into consideration estimated consumption by customer. At the balance sheet date, the estimated consumption by customers will either have been billed (estimated billed revenue) or accrued (unbilled revenue). 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 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.

No impairment has been recognised in respect of goodwill or intangible assets for the year ended 30 June 2008 as the Directors do not believe that the projected results will vary materially enough from budget to cause an impairment loss.

notes to the Financial statements for year ended 30 june 2008

[42] ANNUAL REPORT 2008

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nOtE 3 FInancIal RIsK ManagEMEnt

The Group has exposure to the following risks from its use of financial instruments:

Credit risk•Liquidity risk•Commodity risk•Interest rate risk•

a) Credit RiskCredit risk is the risk of financial loss to the Group if a customer or counterparty fails to meet its contractual obligations. Credit risk arising from the Group’s normal commercial operations is controlled by individual business units operating in accordance with Group policies and procedures. Generally, for significant contracts, individual business units enter into contracts or agreements with counterparties having investment grade credit ratings only, or where suitable collateral or other security has been provided. Counterparty credit validation is undertaken prior to contractual commitment.

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, increasing volumes of commodity derivative products are now traded through cleared exchanges to further mitigate credit risk.

Individual counterparty credit exposures are monitored by category of credit risk and are subject to approved limits.

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:

current customers lost customers 2008 2007 2008 2007 $ $ $ $

Not past due 2,074,809 926,846 130,354 79,402

Past due 0-30 days 2,230,815 641,264 140,179 140,836

Past due 31-90 days 1,724,440 859,100 245,264 450,920

Past due 90-180 days 765,465 335,051 412,369 165,322

Past due 180 days to 1 year 702,108 307,319 1,215,185 487,177

Past due more than 1 Year 151,517 66,321 1,205,133 483,147

7,649,154 3,135,901 3,348,484 1,806,803

Less: provision for bad debts (229,000) (125,580) (955,535) (846,420)

7,420,154 3,010,321 2,392,949 960,383

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 does not have trade receivables.

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The movement in the allowance for bad and doubtful debts of trade receivables was:

consolidated group 2008 2007 $ $

Balance at 1 July 972,000 232,445

Increase in allowance for bad and doubtful debts 1,614,029 779,014

Receivables written off during the year as uncollectable (1,401,494) (39,459)

Balance at 30 June 1,184,535 972,000

b) Liquidity riskPrudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount 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. Due to the dynamic nature of the underlying businesses, Group Treasury aims at maintaining flexibility in funding by keeping committed credit lines available with a variety of counterparties.

Financing arrangementsThe Group and the parent entity had access to the following undrawn borrowing facilities at the reporting date:

consolidated group jackgreen limited 2008 2007 2008 2007

$ $ $ $

Floating Rate

Expiring beyond one year 1,897,000 – – –

1,897,000 – – –

The loan facilities may be drawn at any time.

Maturities of financial liabilitiesThe tables below analyse the Group’s and the Parent entity’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

6-12 monthsbetween

1 and 2 yearsbetween

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 24,117,444 20,377,153

notes to the Financial statements for year ended 30 june 2008

[44] ANNUAL REPORT 2008

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6-12 monthsbetween

1 and 2 yearsbetween

2 and 5 years

total contractual cash flows

carrying amount

(assets)/liabilities

group – at 30 june 2007 $ $ $ $ $

non-derivatives

Non-interest bearing 9,599,334 – 65,779 9,665,113 9,665,113

Variable rate – – – – –

Fixed rate 4,112,219 – – 4,112,219 4,000,000

TOTAL NON-DERIVATIVES 13,711,553 – 65,779 13,777,332 13,665,113

6-12 monthsbetween

1 and 2 yearsbetween

2 and 5 years

total contractual cash flows

carrying amount

(assets)/liabilities

Parent – at 30 june 2008 $’000 $’000 $’000 $’000 $’000

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

6-12 monthsbetween

1 and 2 yearsbetween

2 and 5 years

total contractual cash flows

carrying amount

(assets)/liabilities

Parent – at 30 june 2007 $ $ $ $ $

non-derivatives

Non-interest bearing 477,411 – 65,779 543,190 543,190

Variable rate – – – – –

Fixed rate 2,056,109 – – 2,056,109 2,000,000

TOTAL NON-DERIVATIVES 2,533,520 – 65,779 2,599,299 2,543,190

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c) Commodity RiskThe sensitivity analysis provided discloses the effect on profit or loss and equity at 30 June 2008 assuming that a reasonably possible change in the relevant commodity price had occurred at 30 June 2008 and been applied to the risk exposures in existence at that date. The reasonably possible changes in commodity prices used in the sensitivity analysis were determined based on calculated or implied volatilities where available or historical data.

2008 2007

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

Commodity prices power (AUD$/MWh)

47 +15 –15 55 +27 –27

(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:

2008 2007

Impact on profit Impact on equity Impact on profit Impact on equity

$ $ $ $

Incremental profit/(loss)

Commodity prices combined – increase

(4,435,284) (4,435,284) (4,349,846) (4,349,846)

Commodity prices combined – decrease

4,435,284 4,435,284 4,349,846 4,349,846

The sensitivity analysis provided is hypothetical only and should be used with caution as the impacts provided are not necessarily indicative of the actual impacts that would be experienced. It should be noted that the impacts provided are indicative only and are based on calculations which do not consider all interrelationships, consequences and effects of such a change in those prices.

HedgingThe 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 has entered into Sydney Futures Exchange 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 2008 was 905,280 (2007: nil). The cash flows for hedges held at year end are expected to occur early October 2008 and hence are expected to impact the profit and loss of the Group in the period July 2008 to December 2008.

During the year the consolidated entity expensed $1,554,123 (2007: $1,051,221) in the profit and loss for hedge costs and recognised $1,783,980 (2007: $1,511,328) for hedge gains.

notes to the Financial statements for year ended 30 june 2008

[46] ANNUAL REPORT 2008

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d) Interest Rate RiskThe 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 2008 and 2007, the Group’s borrowings at variable rate were denominated in Australian Dollars.

As at the reporting date, the Group had the following variable rate borrowings outstanding:

30 june 2008 30 june 2007

Weighted average interest rate balance

Weighted average interest rate balance

% $ % $

Loan Facilities 14.09 8,102,559 – –

The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration refinancing, renewal of existing positions, alternative financing and hedging. Based on these scenarios, the Group calculates the impact on profit and loss of a defined interest rate shift. The scenarios are run only for liabilities that represent the major interest-bearing positions. The simulation is done on a yearly basis to verify that the maximum loss potential is within the limit given by management.

Group sensitivityAt 30 June 2008, if interest rates had changed by -/+ 100 basis points from the year-end rates with all other variables held constant, post-tax profit for the year would have been $48,210 lower/higher (2007 – nil) mainly as a result of higher/lower interest expense on variable rate liabilities. Equity would have been $48,210 lower/higher (2007 – no borrowings exposed to variable rate changes) as a result of an increase/decrease in post-tax profit for the year.

Parent entity sensitivityThe parent entity did not hold any liabilities that were exposed to variable interest rates during the reporting period (2007 – nil).

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nOtE 4 IncOME

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

Revenue from operating activities

– Sale of electricity 43,023,481 23,095,242 – –

– Sale of property developments – 759 – 759

– Greenhouse Abatement Revenue 897,551 – – –

– Management fees – 60,000 – 60,000

– Rental revenue – ( 1,976) – ( 1,976)

43,921,032 23,154,025 – 58,783non-operating activities

– Profit/(loss) on disposal of property, plant and equipment ( 9,965) ( 25,891) – – Interest 270,619 51,683 16,239 39,173

– Dividend revenue – – – –

– Other 15,624 322,573 – 202,203

276,278 348,365 16,239 241,376

TOTAL INCOME 44,147,310 23,502,390 16,239 300,159

notes to the Financial statements for year ended 30 june 2008

[48] ANNUAL REPORT 2008

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nOtE 5 PROFIt FROM ORDInaRy actIVItIEs

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

Profit from ordinary activities before income tax has been determined after

a. Expenses

Cost of wholesale electricity 32,920,494 20,401,244 – –

Cost of Globes 361,050 – – –

Borrowing costs:

– Loan interest 1,053,136 233,597 269,026 50,458

TOTAL BORROWING COSTS 1,053,136 233,597 269,026 50,458

Depreciation of non-current assets:

– Computer equipment 27,235 34,965 – –

– Plant and equipment 15,586 5,085 – –

– Motor vehicles 1,713 9,980 – –

Total depreciation 44,534 50,030 – –

Write-(down)/up of non-current investments to recoverable amount – 13 – 13

Bad and doubtful debts:

– other 1,875,643 1,519,597 – –

TOTAL BAD AND DOUBTFUL DEBTS 1,875,643 1,519,597 – –

Rental expense on operating leases

– minimum lease payments 101,385 107,663 – –

JACKGREEN LIMITED [49]

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nOtE 6 IncOME tax ExPEnsE

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

a. Income tax Expense

Current Tax – – – –

Deferred Tax – – – –

– – – –

b. numerical reconciliation of income tax expense to prima facie tax payable

Profit/(Loss) before income tax expense ( 3,275,566) ( 9,194,447) 8,066,640 ( 9,751,889)

Prima facie income tax expense/(benefit) at the Australian tax rate of 30% (2007 – 30%) ( 982,670) ( 2,758,334) 2,419,992 ( 2,925,567)

Temporary differences and tax losses for which no deferred tax asset or liability have been recognised 982,670 2,758,334 ( 2,419,992) 2,925,567

Total income tax expense/ (benefit) – – – –

c. tax losses

Unused tax losses for which no deferred tax asset has been recognised 12,730,377 7,733,270 12,730,377 7,733,270

Potential tax benefit @ 30% (2007 – 30%) 3,819,133 2,319,981 3,819,133 2,319,981

d. tax consolidation legislation

Jackgreen Limited and its wholly owned Australian controlled entities implemented the tax consolidation legislation from July 2003. The accounting policy in relation to this legislation is set out in note (j).

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.

notes to the Financial statements for year ended 30 june 2008

[50] ANNUAL REPORT 2008

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nOtE 7 auDItORs’ REMunERatIOn

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

Remuneration of the auditor, Grant Thorton, of the parent entity for:

– Auditing or Reviewing the financial report 88,000 69,050 88,000 69,050

– Remuneration of auditor affiliated firms – other services 55,679 – 55,679 –

nOtE 8 EaRnIngs PER shaRE

consolidated group 2008 2007 $ $

a. Reconciliation of earnings to net profit or loss

Net loss ( 3,275,566) ( 9,194,447)

Earnings used in the calculation of basic and dilutive EPS ( 3,275,566) ( 9,194,447)

b. Weighted average number of ordinary shares outstanding during the year used in calculation of basic EPS 199,124,533 126,715,782

Weighted average number of options outstanding – 4,325,315

Weighted average number of convertible notes outstanding 22,099,009 –

Weighted average number of ordinary shares outstanding during the year used in calculation of dilutive EPS 221,223,542 131,041,097

Basic (loss) per share (1.64) cents (7.2) cents

Dilutive (loss) per share (1.48) cents (7.0) cents

nOtE 9 cash assEts

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

Cash at bank and in hand 3,970,603 6,757,554 104,774 68,898

3,970,603 6,757,554 104,774 68,898

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 3,970,603 6,757,554 104,774 68,898

Balances per statement of cash flows 3,970,603 6,757,554 104,774 68,898

JACKGREEN LIMITED [51]

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nOtE 10 REcEIVablEs

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

cuRREnt

Trade receivables 10,997,638 4,942,704 – –

Provision for bad and doubtful debts ( 1,184,535) ( 972,000) – –

Accrued Revenue 11,041,985 4,339,640

20,855,088 8,310,344 – –

Other receivables – 2,383,736 117,820 94,307

Provision for doubtful debts – ( 779,179) – –

Amounts receivable from:

wholly-owned subsidiaries – – – 24,619,715

less provision for impairment loss – – – ( 9,135,978)

Other related parties 181,648 181,648 123,528 123,528

21,036,736 10,096,549 241,348 15,701,572

Movements in the provision for doubtful debts of receivables are outlined in Note 3.

nOtE 11 InVEntORIEs

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

Finished goods:

at cost 25,301 – – –

25,301 – – –

notes to the Financial statements for year ended 30 june 2008

[52] ANNUAL REPORT 2008

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nOtE 12 jOInt VEntuREs

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

a. Interest in joint Venture Operations

Jackgreen Limited has 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 is:

cuRREnt assEts

Receivables 6,501 6,501 6,501 6,501

Development Properties – – – –

Other Assets – – – –6

Total current assets 6,501 6,501 6,501 6,501

nOn-cuRREnt assEts

Receivables – – – –

Total non-current assets – – – –

– – – –

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

cuRREnt lIabIlItIEs

Payables 46,050 46,050 46,050 46,050

Interest Bearing Liabilities 65,779 65,779 65,779 65,779

Other Liabilities 571,159 571,159 571,159 571,159

TOTAL CURRENT LIABILITIES 682,988 682,988 682,988 682,988

TOTAL LIABILITIES 682,988 682,988 682,988 682,988

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

JACKGREEN LIMITED [53]

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nOtE 13 OthER FInancIal assEts

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

cuRREnt

Renewable Energy Certificates – at cost 23 55,747 – –

23 55,747 – –

nOn cuRREnt

Investments at cost comprise:

Shares in Unlisted controlled entities – – 41,825,061 9,991,153

Shares in Unlisted entities 87,500 – – –

87,500 – 41,825,061 9,991,153

shares in unlisted controlled entities

Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting and are carried at cost by the parent entity.

nOtE 14 cOntROllED EntItIEs

Percentage Owned country of Incorporation 2008 2007

a. controlled Entities

Parent Entity: jackgreen limited

Subsidiaries of

jackgreen limited:

Jackgreen (International) Pty Ltd Australia 100 100

Easy Being Green Pty Ltd Australia 100 0

Wynkara Pty Ltd Australia 0 100

b. controlled Entities acquired

On 2nd February 2008 the Company acquired Easy Being Green Pty Ltd

notes to the Financial statements for year ended 30 june 2008

[54] ANNUAL REPORT 2008

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nOtE 15 PROPERty, Plant anD EQuIPMEnt

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

Property – Real Estate at cost 59,043 59,043 59,043 59,043

Plant anD EQuIPMEnt

Plant and equipment

At cost 230,707 102,719 47,497 47,497

Accumulated depreciation ( 72,439) ( 56,852) ( 47,497) ( 47,497)

158,268 45,867 – –Computer Equipment

At cost 155,205 153,659 – –

Accumulated Depreciation ( 106,942) ( 79,707) – –

48,263 73,952 – –Motor Vehicles

At cost 10,272 28,454 – –

Accumulated depreciation ( 4,261) ( 7,226) – –

6,011 21,228 – –

Total Property, Plant and Equipment

Cost 455,227 343,875 106,540 106,540

Accumulated Depreciation ( 183,642) ( 143,785) ( 47,497) ( 47,497)

Total written down amount 271,585 200,090 59,043 59,043

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.

nameProperty –

Real EstatePlant &

Equipmentcomputer

EquipmentMotor

Vehicles total

consolidated group:

Balance at the beginning of year 59,043 45,867 73,952 21,228 200,090

Additions – 127,988 1,546 – 129,533

Disposals – – – (12,576) (12,576)

Depreciation expense – (15,587) (27,235) (2,641) (45,463)

Carrying amount at the end of year 59,043 158,268 48,263 6,011 271,584

Parent Entity:

Balance at the beginning of year 59,043 – – – 59,043

Additions – – – – –

Disposals – – – – –

Depreciation expense – – – – –

Carrying amount at the end of year 59,043 – – – 59,043

JACKGREEN LIMITED [55]

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nOtE 16 IntangIblE assEts

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

Goodwill at cost (i) 1,505,219 1,285,219 – –

Licences at deemed cost (ii) 9,500,000 9,500,000 – –

Accumulated amortisation – – – –

11,005,219 10,785,219 – –

(i) During the financial year, the Group assessed the recoverable amount of goodwill and determined that goodwill associated with the Group’s electricity business had not been impaired (2007: nil). The recoverable amount of the electricity operations was determined based on a value in use calculation which uses cash flow projections based on financial budgets approved by management covering a three year period, and a discount rate of 10% per annum (2007: 10% p.a)

(ii) The Group has assessed that the electricity retail licence has an indefinite useful life and has not recorded any impairment of this asset (2007: nil). The factors used in determining that the license has an indefinite useful life included:

– the licence has no expiry period and could be utilised and managed by subsequent management teams.

– The industry is considered stable in which the asset is operated.

nOtE 17 OthER assEts -cuRREnt

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

Prepayments 49,133 41,562 – 3,120

Deferred expenditure – commissions 1,378,985 423,573 – –

1,428,118 466,135 – 3,120

nOn-cuRREnt

Security Deposits 17,745 43,455 550 –

17,745 43,455 550 –

nOtE 18 PayablEs

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

cuRREnt

Unsecured liabilities

Trade payables 3,238,469 2,886,888 103,037 181,025

Other payables 4,996,867 6,515,510 322,000 88,000

Amounts payable to:

– wholly-owned subsidiaries – – 432,049 182,749

– specified key management personnel entities 166,981 196,936 50,600 25,637

8,402,317 9,599,334 907,686 477,411

notes to the Financial statements for year ended 30 june 2008

[56] ANNUAL REPORT 2008

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nOtE 19 IntEREst bEaRIng lIabIlItIEs

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

cuRREnt

Secured liabilities – 4,000,000 – 2,000,000

Other Loans – unsecured – 65,779 – 65,779

– 4,065,779 – 2,065,779

a. security and fair value disclosures

Information about the security relating to each of the secured liabilities and the fair value of each of the borrowings is provided in note 21.

b. Risk exposures

Details of the Group’s exposure to risks arising from current and non-current borrowings are set out in Note 3.

nOtE 20 PROVIsIOns

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

cuRREnt

Other – Keypoint Joint Venture 511,945 300,000 511,945 300,000

Employee benefits 178,923 164,973 – –

690,868 464,973 511,945 300,000

nOtE 21 nOn-cuRREnt lIabIlItIEs

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

IntEREst bEaRIng lIabIlItIEs

Convertible notes 3,800,000 – 3,800,000 –

Secured liabilities 8,102,559 – – –

11,902,559 – 3,800,000 –

PayablEs

Other Loans – unsecured 72,279 – 72,279 –

72,279 – 72,279 –

JACKGREEN LIMITED [57]

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i. Convertible notesThe parent entity issued 15,000,000 12% convertible notes for $1.8 million on 5 November 2007. The notes are convertible into ordinary shares of the parent entity (subject to shareholder approval), at the option of the holder, or repayable on 5 November 2010. The conversion rate is 1 share for each note held, which is based on the market price per share at the date of the issue of the notes ($0.12).

The parent entity issued 20 12% convertible notes for $2 million on 13 July 2007. The notes are convertible into ordinary shares of the parent entity, at the option of the holder, or repayable on 13 July 2010. The conversion rate is calculated by dividing the loan amount by 80% of the volume weighted average share price over the last 30 days at the date of issue.

ii. Secured Liabilities and assets pledged as securityThe total secured liabilities (current and non-current) are as follows:

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

Working Capital facility – 4,000,000 – 2,000,000

Debtor Finance facility 8,102,559 – – –

Total secured liabilities 8,102,559 4,000,000 – 2,000,000

The debtor finance 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, with $1,897,441 undrawn at 30 June 2008.

A secured liability of the group is subject to an operational covenant in relation to customer number growth. The group has not complied with that covenant at times during the year and has not received the benefit of a reduced interest rate. This covenant is being renegotiated with the financier to provide an agreed reduced level for compliance in the future.

notes to the Financial statements for year ended 30 june 2008

[58] ANNUAL REPORT 2008

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nOtE 22 cOntRIbutED EQuIty

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

199,210,816 (2007:159,190,816) fully paid ordinary shares 46,937,971 41,046,341 46,937,971 41,046,341

46,937,971 41,046,341 46,937,971 41,046,341Value:

a. Ordinary shares

At the beginning of the reporting period 41,046,341 28,382,641 41,046,341 28,382,641

Shares issued during the year

– 20,000 on 18 June 2007 – 4,000 – 4,000

– 19,916,667 on 18 June 2007 – 5,875,000 – 5,875,000

– 1,900,000 on 28 March 2007 – 380,000 – 380,000

– 4,000,000 on 13 February 2007 – 1,180,000 – 1,180,000

– 8,012,390 on 24 January 2007 – 1,602,478 – 1,602,478

– 5,871,880 on 14 December 2006 – 1,174,376 – 1,174,376

– 7,746,296 on 19 September 2006 – 2,091,500 – 2,091,500

– 2,500,000 on 22 August 2006 – 500,000 – 500,000

– 40,000,000 on 25 October 2007 5,600,000 – 5,600,000 –

– 3,917,750 on 6 November 2007 470,130 – 470,130 –

Transaction costs relating to share issues (178,500) (143,654) (178,500) (143,654)

At reporting date 46,937,971 41,046,341 46,937,971 41,046,341

number of shares: no. no. no. no.

At the beginning of reporting period 159,210,816 109,243,583 159,210,816 109,243,583

Shares issued during year:

– 18-Jun-07 – 20,000 – 20,000

– 18-Jun-07 – 19,916,667 – 19,916,667

– 28-Mar-07 – 1,900,000 – 1,900,000

– 13-Feb-07 – 4,000,000 – 4,000,000

– 24-Jan-07 – 8,012,390 – 8,012,390

– 14-Dec-06 – 5,871,880 – 5,871,880

– 19-Sep-06 – 7,746,296 – 7,746,296

– 22-Aug-06 – 2,500,000 – 2,500,000

– 25-Jul-07 40,000,000 – 40,000,000 –

– 06-Nov-07 3,917,750 – 3,917,750 –

At reporting date 203,128,566 159,210,816 203,128,566 159,210,816

i. Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.

ii. 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.

iii. Effective 1 July 1998, the Company Law Review Act abolished a concept of par value shares and concept of authorised capital. Accordingly, the company does not have authorised capital or par value in respect of its shares.

JACKGREEN LIMITED [59]

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Options

i. For information relating to share options issued to employees during the financial year, refer to Note 25 .

ii. At 30 June 2008, there were nil (30 June 2007: 1,580,000) un-issued ordinary shares for which options were outstanding.

nOtE 23 REsERVEs anD REtaInED PROFIts

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

a. Reserves

Hedging reserve – cash flow hedges (115,920) – – –

Share-based payments reserve – 195,000 – 195,000

(115,920) 195,000 – 195,000

Movements:

Hedging reserve – cash flow hedges

Balance 1 July 2007 – – – –

Transfer to net profit – gross (115,920) – – –

Balance 30 June 2008 (115,920) – – –

share-based payments reserve

Balance 1 July 2007 195,000 195,000 195,000 195,000

Transfer to retained earnings on expiry of options (195,000) – (195,000) –

Balance 30 June 2008 – 195,000 – 195,000

b. Retained Profits

Retained losses at the beginning of the financial year ( 26,966,678) ( 17,772,231) ( 18,260,745) ( 8,508,856)

Transfer to retained earnings on expiry of options 195,000 – 195,000 –

Net loss attributable to the members of the parent entity ( 3,275,566) ( 9,194,447) 8,066,640 ( 9,751,889)

Retained profits at the end of the financial year (30,047,244) ( 26,966,678) ( 9,999,105) ( 18,260,745)

The hedging reserve is used to record gains or losses on a hedging instruments in a cash flow hedge that are recognised directly in equity, as described in note 1(m). 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•

notes to the Financial statements for year ended 30 june 2008

[60] ANNUAL REPORT 2008

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nOtE 24 cash FlOW InFORMatIOn

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

Reconciliation of cash Flow from Operations with loss from Ordinary activities after Income tax

Profit/(Loss) from ordinary activities after income tax: ( 3,275,566) ( 9,194,447) 8,066,640 ( 9,751,889)

– Finance Costs 1,053,136 – 269,026 50,458

– Operating Profit ( 2,222,430) ( 9,194,447) 8,335,666 ( 9,701,431)

– Depreciation /Amortisation 44,534 37,920 – –

– Impairment – – ( 9,135,978) 9,135,978

– Bad and Doubtful debts – 1,326,433 211,945 –

Changes in working capital: – –

– (Increase)/Decrease in trade receivables ( 6,054,933) ( 3,553,873) – 20,549

– (Increase)/Decrease in other receivables ( 5,042,065) ( 19,375) –

– (Increase)/Decrease in prepayments ( 961,981) ( 418,186) 3,120 13,726

– (Increase)/Decrease in inventory ( 25,301) – – –

– (Increase)/Decrease in provisions 438,430 122,592 – –

– (Increase)/Decrease in other assets 25,710 ( 5,908,145) – –

– Increase/(Decrease) in trade creditors 272,698 1,197,519 ( 41,890) ( 885)

– Increase/(Decrease) in other creditors ( 1,463,218) 5,677,237 224,676 –

– (Increase)/Decrease in hedge reserve ( 115,920) – – –

cash FlOW FROM OPERatIng actIVItIEs ( 15,104,476) ( 10,712,950) ( 421,836) ( 532,063)

JACKGREEN LIMITED [61]

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notes to the Financial statements for year ended 30 june 2008

nOtE 25 EMPlOyEE bEnEFIts

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

a. Movement in the number of share options held by employees are as follows:

Opening balance 1,580,000 1,000,000 1,580,000 1,000,000

Granted during the year – 600,000* – 600,000*

Exercised during the year – (20,000) – (20,000)

Expired during the year 1,580,000 – 1,580,000 –

Closing Balance – 1,580,000 – 1,580,000

* These are options previously approved that have been reallocated during the year.

no. no. no. no.

b. Details of share options outstanding as at end of year:

Grant Expiry Exercise Date and Exercise Date Price

24/1/05 1/10/07 $0.20 – 500,000 – 500,000

5/5/05 1/10/07 $0.20 – 500,000 – 500,000

1/7/06 1/10/07 $0.20 – 580,000 – 580,000

– 1,580,000 – 1,580,000

[62] ANNUAL REPORT 2008

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nOtE 26 RElatED PaRty tRansactIOns

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

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

Transactions with related parties:

i. Ultimate Parent CompanyJackgreen Limited advances and receives interest free loans to and from controlled entities from time to time. These loans are eliminated on consolidation

– Receivable/(Payable) – – – 24,619,715

– – – (9,135,978)

– Payable – – 1,555,464 182,749

ii. Other Related PartiesJackgreen Limited has an intercompany loan account with Keypoint JV. The loan is fully provided for, in the event that the JV is not able to repay the loan. 181,648 181,648 123,528 123,528

iii. Key Management Personnel EntitiesAmounts Payable to director and key management personnel entities:

Energy Revolution Pty Ltd (i) 33,000 25,637 33,000 25,637

Obelisk Capital Pty Ltd (ii) 90,372 156,716 – –

KJR Advisory Services Pty Ltd (iii) – 14,583 – 14,583

Andrew Woodward Superannuation Fund (iv) 4,009 – – –

Pelivin Pty Ltd (v) 39,600 – 39,600 –

166,981 196,936 72,600 40,220

Represented by:

Trade Creditors 103,472 182,353 50,600 40,220

Other Creditors 63,509 14,583 22,000 –

166,981 196,936 72,600 40,220

(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. An amount of $142,474 has been paid to this 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 and Mr Andrew Woodward (for prior periods). In addition, the entity was paid for corporate advisory services. These fees are on normal terms and conditions. A total of $386,678 has been paid for these services during the year, which includes $78,292 for the services of Mr Andrew Woodward.

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notes to the Financial statements for year ended 30 june 2008

(iii) KJR Advisory Services Pty Ltd is a related entity of Mr Keith Pfahl. 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. Director resigned 28 June 2007, no fees were paid to the entity during the reporting period.

(iv) 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. A total of $14,400 has been paid to the entity during the year.

(v) 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.

nOtE 27 KEy ManagEMEnt PERsOnnEl DIsclOsuREs

a. Directors

the following persons were directors of jackgreen limited during the financial year:

John Smith Chairman (Non-Executive)Andrew Randall Managing Director (Executive)Peter Vines Director (Non Executive) – appointed 9th October 2007Andrew Woodward Company Secretary and Finance Director (Executive)

b. Other key management personnel

Namrata Agarwal Strategic Project ManagerNadia Dimmock General Manager – ComplianceDean Schweiger Manager – Information Technology

All of the above persons were also key management persons during the year ended 30 June 2007, except Dean Schweiger who is included this year after both Geoff Pollard and Michael Bleasel ceased being key management personnel during the year.

c. Key management personnel compensation

short-term benefitsPost

Employmentshare based

payments long term total

salary, Fees & commissions

cash bonus

non-cash benefits superannuation Options

2008 $ $ $ $ $ $ $

John Smith 142,474 – – – – – 142,474

Andrew Randall * 290,386 – 18,000 – – – 308,396

Peter Vines 18,096 – – – – – 18,096

Andrew Woodward 166,154 – – 14,954 – – 181,108

Namrata Agarwal 127,384 7,000 – 11,475 – – 145,859

Nadia Dimmock 138,881 7,875 – 13,888 – – 160,644

Dean Schweiger 121,865 – – 10,782 – – 132,647

1,005,240 14,875 18,000 51,099 – – 1,089,214

* Payments are made to Obelisk Capital Pty Ltd under a consulting agreement dated 21 May 2004. Payments commenced under this agreement from 14 December 2004. The amount paid in 2008 includes payments relating to services provided in prior periods.

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KEy ManagEMEnt PERsOnnEl cOMPEnsatIOn

short-term benefitsPost

Employmentshare based

payments long term total

salary, Fees & commissions

cash bonus

non-cash benefits superannuation Options

2007 $ $ $ $ $ $ $

John Smith 140,000 – – – – – 140,000

Andrew Randall* 150,000 – – – – – 150,000

Ken Harrison 29,166 – – – – – 29,166

Keith Pfahl 14,583 – – – – – 14,583

Andrew Woodward** 149,230 – – 4,431 7,200 – 160,861

Geoff Pollard 189,583 – – 17,062 3,600 – 210,245

Nadia Dimmock 127,447 – – 12,744 7,200 – 147,391

Michael Bleasel 110,590 – – 9,953 7,200 – 127,743

910,599 – – 44,190 25,200 – 979,989

* Payments are made to Obelisk Capital Pty Ltd under a consulting agreement dated 21 May 2004. Payments commenced under this agreement from 14 December 2004.

** Until 1 March 2007, payments were made to Obelisk Capital Pty Ltd under a consulting agreement dated 21 May 2004. Payments commenced under this agreement from 14 December 2004.

No options were granted during the year.

d. Equity instrument disclosures relating to key management personnel

i. Option holdingsThe numbers of options over ordinary shares in the company held during the financial year by each director of Jackgreen Limited and other key management personnel of the Group, are set out below.

balance 1.7.2007

granted as Remuneration

Options Exercised*

net change Other*

balance 30.6.2008

total vested 30.6.2008

total Exercisable 30.6.2008

total unexercisable

30.6.2008

2008 $ $ $ $ $ $ $ $

Andrew Woodward 300,000 – – (300,000) – – – –

Geoff Pollard 550,000 – – (550,000) – – – –

Nadia Dimmock 100,000 – – (100,000) – – – –

Michael Bleasel 100,000 – – (100,000) – – – –

1,050,000 – – (1,050,000) – – – –

* The net change other column above includes those options that have been forfeited by holders, expired as well as options issued during the year under review.

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notes to the Financial statements for year ended 30 june 2008

balance 1.7.2006

granted as Remuneration

Options Exercised*

net change Other*

balance 30.6.2008

total vested 30.6.2007

total Exercisable 30.6.2007

total unexercisable

30.6.2007

2007 $ $ $ $ $ $ $ $

John Smith 1,500,000 – 1,500,000 – – – – –

Andrew Randall 200,000 – 200,000 – – – – –

Ken Harrison 200,000 – 200,000 – – – – –

Andrew Woodward 200,000 100,000 – – 300,000 300,000 300,000 –

Geoff Pollard 500,000 50,000 – – 550,000 550,000 550,000 –

Nadia Dimmock – 100,000 – – 100,000 100,000 100,000 –

Michael Bleasel – 100,000 – – 100,000 100,000 100,000 –

2,600,000 350,000 1,900,000 – 1,050,000 1,050,000 1,050,000 –

ii. ShareholdingsThe 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. There were no shares granted during the reporting period as compensation.

balance 1.7.2007

Received as Remuneration

Options Exercised

net change Other*

balance 30.6.2008

2008 $ $ $ $ $

Directors

John Smith 4,767,999 – – 416,337 5,184,336

Andrew Randall 12,758,998 – – 690,072 13,449,070

Peter Vines – – – 1,035,069 1,035,069

Andrew Woodward 988,000 – – 236,286 1,224,286

Other key management personnel

Nadia Dimmock 23,500 – – 3,700 27,200

Namrata Agarwal 7,500 – – – 7,500

Dean Schweiger – – – – –

Total 18,545,997 – – 2,381,464 20,927,461

* Net change other refers to shares purchased or sold during the financial year.

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balance 1.7.2006

Received as Remuneration

Options Exercised

net change Other*

balance 30.6.2007

2007 $ $ $ $ $

Directors

John Smith 2,615,266 – 1,500,000 652,733 4,767,999

Andrew Randall 14,659,998 – 200,000 (2,101,000) 12,758,998

Other key management personnel

Andrew Woodward 971,000 – – 17,000 988,000

Geoff Pollard 50,000 – – (50,000) –

Nadia Dimmock – – – 23,500 23,500

Michael Bleasel – – – – –

Total 18,296,264 – 1,700.000 (1,457,767) 18,538,497

* Net change other refers to shares purchased or sold during the financial year.

e. loans to key management personnel

The company has not provided loans to key management personnel in the reporting period 2008.

f. 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 2008 other than outlined in Note 26.

nOtE 28 caPItal anD lEasIng cOMMItMEnts

consolidated group jackgreen limited 2008 2007 2008 2007 $ $ $ $

Operating lease commitments

Non-cancellable operating leases contracted for but not capitalised in the financial statements

Payable

– not later than 1 year 416,557 378,277 – –

– later than 1 year but not later than 5 years 860,621 488,985 – –

– later than 5 years – – – –

1,277,178 867,262 – –

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 can not be calculated at 30 June 2008 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.

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notes to the Financial statements for year ended 30 june 2008

nOtE 29 shaRE-basED PayMEnts

No share-based payment arrangements were present as at 30 June 2008.

Economic Entity Parent Entity

2008 2007 2008 2007

number of Options

Weighted average Exercise

Pricenumber of

Options

Weighted average Exercise

Pricenumber of

Options

Weighted average Exercise

Pricenumber of

Options

Weighted average Exercise

Price

$ $ $ $

Outstanding at the beginning of the year 1,580,000 $0.20 7,000,000 $0.20 1,580,000 $0.20 7,000,000 $0.20

Granted – – – – – – – –

Forfeited – – – – – – – –

Exercised – – 5,420,000 $0.20 – – 5,420,000 $0.20

Expired 1,580,000 $0.20 – – 1,580,000 $0.20 – –

Outstanding at year-end – – 1,580,000 $0.20 – – 1,580,000 $0.20

Exercisable at year-end – – 1,580,000 $0.20 – – 1,158,000 $0.20

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

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 $nil (2005: $133,644), and relates, in full, to equity-settled share-based payment transactions.

nOtE 30 EVEnts subsEQuEnt tO REPORtIng DatE

On 4th July 2008 the Company announced that it had raised $575,000 by the issue of 5,000,000 shares at 11.5 cents for working capital purposes.

nOtE 31 cOMPany DEtaIls

The registered office and principal place of business of the company is:

Jackgreen LimitedLevel 552 William StreetWoolloomooloo NSW 2011

Website: www.jackgreen.com.au

[68] ANNUAL REPORT 2008

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The directors of the company declare that:

1) The financial statements and notes, as set out on pages 21 to 65 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 2008 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.

DirectorAndrew Randall (Managing Director)

Dated this 30th day of September 2008

Director’s Declaration

JACKGREEN LIMITED [69]

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[70] ANNUAL REPORT 2008

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JACKGREEN LIMITED [71]

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[72] ANNUAL REPORT 2008

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The following additional information is required by the Australian Stock Exchange Ltd in respect of listed public companies only.

1. shaREhOlDIng

number Investors Ordinary

a. Distribution of shareholders

category (size of holding)

1 – 1,000 382 73,277

1,001 – 5,000 392 1,227,629

5,001 – 10,000 291 2,476,620

10,001 – 100,000 719 26,285,652

100,001 – and over 163 178,065,388

1,947 208,128,566

b. The number of shareholdings held in less than marketable parcels is 637 representing 665,036 ordinary shares.

c. The names of the substantial shareholders listed in the holding company’s register as at 31 August 2008 are:

number Ordinary %

shareholder

AGSO Property Pty Ltd (Babcock & Brown Prime Broking A/C) 42,245,909 20.30%

Cogent Nominees Pty Limited 40,000,000 19.22%

Hayson Super Investments Pty Ltd (Hayson Super Fund) 14,285,714 6.86%

Zimbia Pty Ltd (The Obelisk trust A/C) 12,303,998 5.91%

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 stock Exchange Information as at 30 september 2008

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e. 20 largest shareholders – Ordinary shares

number of % held Ordinary of Issued Fully Paid Ordinary name shares capital

1. AGSO Property Pty Ltd (Babcock & Brown Prime Broking A/C) 42,245,909 20.30%

2. Cogent Nominees Pty Limited 40,000,000 19.22%

3. Hayson Super Investments Pty Ltd <Hayson Super Fund A/C> 14,285,714 6.86%

4. Zimbia Pty Ltd (The Obelisk trust A/C) 12,303,998 5.91%

5. Bell Potter Nominees Ltd <BB Nominees A/C> 6,555,920 3.15%

6. RBC Dexia Investor Services Australia Nominees Pty Limited 5,835,901 2.80%

7. CVC Sustainable Investments No 2 Limited 2,754,833 1.32%

8. Radelec Investments Pty Limited <The Chiswick Unit> 2,020,000 0.97%

9. UBS Nominees Pty Ltd 2,000,000 0.96%

10. Bonaparte Pty Ltd 1,564,136 0.75%

11. UBS Wealth Management Australia Nominees Pty Ltd 1,322,274 0.64%

12. Prime Securities Investment Group Pty Ltd 1,300,000 0.62%

13. Obelisk Capital Pty Ltd 1,244,500 0.60%

14. Au’gustina Bright Pty Ltd <M Flemming Super Fund> 1,130,750 0.54%

15. Mrs Jodie Therese Woodward <Woodward Family A/C> 1,031,895 0.50%

16. Avanteos Investments Limited <Avanteos No 1 A/C> 1,000,000 0.48%

17. Sixth Kingston Pty Ltd <KHA Superannuation Fund A/C> 900,000 0.43%

18. Mountain And Snowflake Pty Ltd <The Bubble Trust> 894,695 0.43%

19. KAS Developments Pty Limited 865,485 0.42%

20. The Stuart Group Pty Ltd 822,632 0.40%

140,078,642 67.30%

4. cOMPany sEcREtaRy

Mr Andrew Woodward

5. shaRE REgIstRy

Link Market Services LimitedLevel 4333 Collins StreetMelbourne VIC 3000

5. 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.

6. unQuOtED sEcuRItIEs

There were no options on issue as at the end of the reporting period.

additional Information for listed Public companies

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JACKGREEN LIMITED [75]

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notes

[76] ANNUAL REPORT 2008

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www.jackgreen.com.au

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