CVC Sustainable Investments Limited ABN

2005 CVC Sustainable Investments Limited ABN 35 088 731 837

NNUAL REPORT COMPANY PARTICULARS REGISTERED OFFICE Level 42, AAP Centre, 259 George Street Sydney NSW 2000 DIRECTORS Vanda Gould Susan Gosling John Read Alexander Beard Phillip Toyne SECRETARY Alexander Beard BANKERS Suncorp-Metway Limited Westpac Banking Corporation Limited AUDITORS HLB Mann Judd (NSW Partnership) Chartered Accountants Level 19, 207 Kent Street Sydney NSW 2000 TABLE OF CONTENTS 1 Chairman s Report 2 Directors Report 4 Statement of Financial Performance 5 Statement of Financial Position 6 Statement of Cash Flows 7 Notes to the Financial Statements 15 Directors Declaration 16 Auditors Independence Declaration 17 Independent Auditors Report SHARE REGISTRY Gould Ralph Pty Limited Level 42, AAP Centre, 259 George Street Sydney NSW 2000 Environmental information to be inserted here by Spectrum.

2005 ANNUAL REPORT CHAIRMAN S REPORT VANDA GOULD Dear Shareholder, On behalf of the Board of Directors I am pleased to present the fourth annual report for CVC Sustainable Investments Limited (formerly The Eco Fund Limited) ("the Company"). I am very pleased to report a net profit for the year ended 30 June 2005 of $1,002,881 ($136,221 in 2004). This profit performance is especially gratifying considering the Company s relatively small asset base and equates to a return on average equity of 19.3%. During the year the Company paid tax exempt dividends totalling 1.5 cents (1.0 cent in 2004). The dividends paid in 2005 are equivalent to a (tax exempt) yield of 7.5% on the original, split adjusted price of 20 cents per share. The 2005 profit result was largely due to a realisation of the Company s shareholding in Pro-Pac Group Limited. The history of this investment is worth reviewing. CVC Sustainable Investments made an investment of $1.0 million in June 2003 in Pro-Pac Group Limited, purchasing 11.5% of the company s shares. In March and April 2005, we received dividends totalling $144,051. At the IPO in May 2005 the Company received cash of $1,055,854 and 1,634,333 shares in Pro-Pac Packaging, or 4.1% of the issued shares. At the IPO, the shares in Pro-Pac Packaging had a value of $817,167, delivering CVC Sustainable Investments a total partially realised profit of over $1.0 million on its investment. Two people deserve acknowledgment for this outstanding result. One is Pro-Pac s chief executive, Mr Jonathan Kahn, who since 1987 has grown Pro-Pac from a start-up into a superb environmentally friendly business. Since the CVC Group has been involved with the company, Jonathan has been ably assisted by Mr Elliott Kaplan, a non-executive director of Pro-Pac and Managing Director of CVC Private Equity. Elliott was instrumental in the successful listing of the business and has played an integral role in each of the acquisitions that the company has completed since the CVC Group first invested in the business. During the year the Company divested most of its remaining holding in Geodynamics Limited, a fledgling geothermal energy producer with operations in the Cooper Basin in South Australia. In 2005 the Company sold Geodynamics shares for $288,947 realising a gross profit of approximately $200,000. Our key disappointment in financial year 2005 was the protracted delay our investee Wind Corporation Australia experienced in obtaining development approval for its 38 megawatt wind farm at Black Springs. Despite this setback, which remains unresolved, Wind Corporation Australia is likely to benefit from the upcoming ASX listing of Global Wind Partners which should result in overall returns to the Company that are acceptable. The Black Springs delays had a direct impact on our own capital raising plans as the Company had entered into an agreement with Wind Corporation Australia to invest up to $18 million in the project. The delays with the project caused us to discontinue our own pre-ipo marketing, a step that effectively halted our capital raising programme. However, in addition to growing the Company s financial assets through investment activity, the management team and the Board of Directors remain committed to expanding the size of the Company by raising more capital. Plans are currently underway to raise approximately $5.6m. We also retain the objective of listing the Company s shares on ASX as soon as practicable. In 2005 three investments were added to our portfolio: > $385,000 was invested as equity and loan in Soilwise Pty Limited, a producer of high grade aerobic compost based in the Murrumbidgee Irrigation Area; > $500,000 was invested in the ordinary shares of Traffic Technologies Limited, an ASX listed manufacturer of a light emitting diode (LED) traffic light that consumes up to 80% less electricity than conventional incandescent and halogen lights; and > $255,865 was invested in preference shares in Plantic Technologies Limited, a producer of packaging and display trays that use the company s patented Plantic plastic substitute technology which is made from renewable resources, is compostable and will dissolve in water. As of 1 August 2005 the Company has generated a further $334,056 in unrealised profits attributable to these new investments largely as a result of the 62.5% increase in the share price of ASX listed Traffic Technologies. During the financial year, over 28% of investors holding Company options expiring in 2007 chose to exercise those options to purchase additional shares. This injected $417,250 of new equity into the Company. The Board was pleased to accept this endorsement of both the mission and the current performance of the Company. Once again I thank you for supporting CVC Sustainable Investments which I am pleased to report is proving it is possible to earn above average returns from environmentally sustainable investing. Vanda Gould Chairman August 2005 CVC Sustainable Investments Limited 1

ANNUAL REPORT 2005 DIRECTORS REPORT for the year ended 30 June 2005 The directors present their report together with the financial report of the Company for the year ended 30 June 2005, and the Auditors report thereon. Officers The directors and secretaries in office at the date of this report and at any time during the year are: Vanda Russell Gould (Chairman) B Com (UNSW); M Com (UNSW) Fellow of the Institute of Chartered Accountants in Australia. Chairman of Vita Life Sciences Limited, CVC Limited and CVC Managers Pty Limited and a director of numerous private and public companies including educational establishments. John Douglas Read (Non Executive Director) B Sc (Hons) (Cant.), MBA (AGSM). Director of CVC Limited and CVC Private Equity Limited, Chairman of Environmental Group Limited and Pro-Pac Packaging Limited and Director of Australian Institute for Commercialisation Limited. Mr Read is a Fellow of the Australian Institute of Company Directors. Alexander Damien Harry Beard (Non Executive Director and Company Secretary) B Com (UNSW) Member of the Institute of Chartered Accountants in Australia. Director of CVC Limited, Greens Foods Limited, CVC Private Equity Limited and CVC Managers Pty Limited and numerous private and public companies. Susan Maud Gosling (Non Executive Director) B Sc (Econ), MA, PhD. Graduate Diploma, Environmental Management General Manager, Implemented Consulting, MLC Adjunct Senior Lecturer, Master of Finance, University of NSW Phillip Toyne (Non Executive Director) LLB (Uni. Of Melbourne) Former Head of the Australian Conservation Foundation. Former Deputy Secretary in the Australian Department of Environment. Director of Eco Futures Pty Ltd, Earthmark Pty Limited and ITC Limited. President of the Australian Bush Heritage Fund. John Scott Leaver (Resigned as a director on 9 September 2004) Directors' meetings The number of Directors' Meetings and number of meetings attended by each of the Directors of the Company during the financial year were: Number of Number of meetings attended meetings held Mr V R Gould 4 4 Mr J S Leaver - 1 Mr J D Read 3 4 Mr A D H Beard 2 4 Dr S M Gosling 4 4 Mr P Toyne 3 4 Audit committee meetings The number of Audit Committee meetings and number of meetings attended by each of the Directors of the Company during the financial year were: Number of Number of meetings attended meetings held Mr J D Read 2 2 Dr S M Gosling 1 2 Mr A D H Beard 2 2 Principal activity Investment in a diversified combination of established small Australian companies that offer both strong return potential and improved environmental outcomes. Operating results The operating profit for the Company amounted to $1,002,881 for the year (2004: $136,221). Dividends A dividend of 0.5 cent per share was declared on 31 August 2004, and paid on 16 September 2004. A second dividend of 1 cent per share was declared on 1 June 2005 and paid on 27 June 2005. In the prior year a dividend of 5 cents per pre-split share (equivalent to 1 cent per current share) was declared on 12 September 2003 and paid on 30 September 2003. Significant changes in the state of affairs of the Company At a general meeting of the Company held on 16 July 2004, members approved resolutions to: > change the name of the Company to CVC Sustainable Investments Limited; > novate the Company s management agreement with CVC Investment Managers Pty Limited to CVC Managers Pty Limited; and > split the shares in the Company whereby each current share is to be converted into five new shares. At the same general meeting, members also approved the following resolutions in anticipation of a proposed future capital raising: > issue additional options to the investment manager; 2 CVC Sustainable Investments Limited

2005 ANNUAL REPORT DIRECTORS REPORT for the year ended 30 June 2005 > authorise the directors to apply for a listing of the Company on The Australian Stock Exchange Limited and approve the adoption of a new constitution of the Company at that time; and > authorise the directors, subject to certain conditions, to apply for a revocation of the Company s pooled development fund ("PDF") status. At the date of this report, the Company has not completed such a capital raising. During the year, the Company sold its investment in Pro-Pac Group Limited as part of the IPO of Pro-Pac Packaging Limited for cash and shares in of Pro-Pac Packaging Limited realising a profit on disposal of $866,507. During the year the Company issued 2,086,250 new shares through the exercise of options. Share options over ordinary shares The Company has two tranches of options to acquire ordinary shares on issue. Options to acquire shares at $1 per share have been issued to shareholders. At 30 June 2005, there were 1,932,000 (2004: 2,349,250) of such options on issue, exercisable from 1 July 2003 and expiring on 5 March 2007. During the current year 417,250 of these options have been exercised. The Company s investment manager, CVC Managers Pty Limited, has 685,875 options to acquire shares at $1 per share. These options expire on 5 March 2012. At 30 June 2005, no shares have been issued through the exercise of any of these options. In conjunction with the 5 for 1 share split approved by members on 16 July 2004, the Company provides a mechanism whereby all option holders are effectively able to elect to treat each option to acquire a share at $1 as five options to acquire shares at 20 cents each. Accordingly, the 2,617,875 options on issue are effectively options to acquire 13,089,375 new shares in the Company. Directors interests in shares and options of the Company Dr S M Gosling has an interest in 35,000 ordinary shares and 3,500 options of the Company. Messrs Gould, Leaver and Beard are directors of Leagou Pty Limited (formerly CVC Investment Managers Pty Limited) and accordingly have an indirect interest in the 95,000 shares and 9,500 options in the Company held by Leagou Pty Limited. Messrs Gould, Leaver and Beard are directors of CVC Managers Pty Limited and accordingly have an indirect interest in the 685,875 options in the Company held by CVC Managers Pty Limited. Mr Beard has a further indirect interest in 120,000 shares in the Company. Events subsequent to balance date Since the end of the financial year, the Company has issued 37,500 further shares through the exercise of options. 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 Company, the results of those operations or the state of affairs of the Company in financial years subsequent to 30 June 2005. Likely developments and future results The future direction of the Company is to continue to invest in small Australian companies that offer both strong return potential and improved environmental outcomes. The Directors are continuing to consider ways of expanding the investment capital of the Company to provide a basis for further and broader investment opportunities. As an investment Company, the results of the Company are dependent on the timing of and opportunities for the realisation of investments. Accordingly, it is not possible at this stage to predict the future results of the Company. Directors' benefits During the year $12,000 each in fees was paid to Phillip Toyne and Susan M Gosling. Further information on Directors benefits is set out in Note 12. Indemnification and insurance of officers and auditors The Company has not, during or since the financial period, in respect of any person who is or has been an auditor or officer of the Company or a related body corporate: (i) Indemnified or made any relevant agreement for indemnifying against a liability, including costs and expenses in successfully defending legal proceedings; or (ii) Paid or agreed to pay a premium in respect of a contract insuring against a liability for the costs or expenses to defend legal proceedings. Insurance premiums have been paid in respect of directors and officers liability and legal expense insurance for directors and officers of the Company. Auditor s Independence Declaration to the Directors of CVC Sustainable Investments Limited A copy of the Independence Declaration given to the Directors by the lead auditor for the audit undertaken by HLB Mann Judd (NSW Partnership) is included on page 16. Signed in accordance with a resolution of the Board of Directors. Dated at Sydney this 28th day of July 2005. V R Gould A D H Beard Director Director CVC Sustainable Investments Limited 3

ANNUAL REPORT 2005 STATEMENT OF FINANCIAL PERFORMANCE for the year ended 30 June 2005 Note 2005 2004 $ $ Revenues from ordinary activities Interest received & receivable 2 167,669 145,304 Proceeds from sale of shares 2 2,162,080 431,578 Dividends received 2 168,688 - Other income 2 15,000 - Total revenues from ordinary activities 2,513,437 576,882 Expenses from ordinary activities Audit fees (9,000) (6,600) Cost of shares sold (1,093,887) (206,000) Director s fees (24,000) (24,000) Insurance (9,494) (8,601) Management & consulting (128,893) (112,730) Printing (9,432) (10,663) Share registry (6,415) (7,557) Unrealised loss on investments (114,403) - Other expenses from ordinary activities (10,833) (18,871) Profit from ordinary activities before related income tax expense 1,107,080 181,860 Income tax expense relating to ordinary activities 4 (104,199) (45,639) Net profit 10 1,002,881 136,221 The statement of financial performance is to be read in conjunction with the notes to the financial statements set out on pages 7 to 14. 4 CVC Sustainable Investments Limited

2005 ANNUAL REPORT STATEMENT OF FINANCIAL POSITION as at 30 June 2005 Note 2005 2004 $ $ Current assets Cash assets 14 2,824,740 2,597,862 Receivables 6 21,783 21,727 Total current assets 2,846,523 2,619,589 Non-current assets Receivables 6 367,687 - Other financial assets 7 2,606,004 2,094,000 Deferred tax assets 4 40,233 14,098 Total non-current assets 3,013,924 2,108,098 Total assets 5,860,447 4,727,687 Current liabilities Payables 8 29,548 15,167 Current tax liabilities 4 128,641 36,637 Total current liabilities 158,189 51,804 Non-current liabilities - - Total liabilities 158,189 51,804 Net assets 5,702,258 4,675,883 Equity Contributed equity 9 5,125,206 4,718,387 Retained profits and accumulated losses 10 577,052 (42,504) Total equity 5,702,258 4,675,883 The statement of financial position is to be read in conjunction with the notes to the financial statements set out on pages 7 to 14. CVC Sustainable Investments Limited 5

ANNUAL REPORT 2005 STATEMENT OF CASH FLOWS for the year ended 30 June 2005 Note 2005 2004 $ $ Cash flows from operating activities Interest received 147,753 145,236 Dividend received 168,688 - Other income received 15,000 - Cash payments in the course of operations (191,944) (192,022) Income tax paid (38,330) - Net cash flows from operating activities 14 101,167 (46,786) Cash flows from investing activities Proceeds from sale of investments 1,338,401 431,578 Payments for investments (896,615) - Loans provided (750,000) - Loans repaid 400,000 - Net cash flows from investing activities 91,786 431,578 Cash flows from financing activities Shares issued 417,250 267,000 Establishment costs - (6,675) Dividends paid (383,325) (229,875) Net cash flows from financing activities 33,925 30,450 Net increase in cash held 226,878 415,242 Cash at the beginning of the financial year 2,597,862 2,182,620 Cash at the end of the financial year 14 2,824,740 2,597,862 The statement of cash flows is to be read in conjunction with the notes to the financial statements set out on pages 7 to 14. 6 CVC Sustainable Investments Limited

2005 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2005 Note 1: Statement of significant accounting policies The significant policies adopted in the preparation of this financial report are: Basis of preparation The financial report is a general purpose financial report, which has been prepared in accordance with Australian Accounting Standards, Urgent Issues Group Consensus Views, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. It has been prepared on the basis of historical costs and does not take into account changing money values nor, except where stated, current valuations of non-current assets. These accounting policies are consistent with those of the previous year. Revenue recognition Interest revenue is recognised as it accrues, taking into account the effective yield of the financial asset. Investments Investments in other companies are carried at the lower of cost and recoverable amount. Taxation The Company adopts the liability method of tax effect accounting. Income tax expense is calculated on profit, adjusted for any permanent differences between taxable and accounting income. The tax effect of timing differences which arise from items being brought to account in different periods for income tax and accounting purposes, is carried forward in the statement of financial position or a provision for deferred income tax. Future income tax benefits are not brought to account unless realisation of the asset is assured beyond reasonable doubt. Future income tax benefits relating to tax losses are only brought to account when their realisation is virtually certain. The tax effects of capital losses are not recorded unless realisation is virtually certain. Cash For the purpose of the statements of cash flows, cash includes cash on hand and in banks, and money market investments, readily convertible to cash within 2 working days, net of outstanding bank overdrafts. Receivables Receivables are carried at nominal amounts due and interest is taken up as accrued. The collectability of debts is assessed at balance date and specific provision is made for any doubtful accounts, or if considered not recoverable the debt is written off. Recoverable amount of non-current assets valued on cost basis The carrying amounts of non-current assets valued on the cost basis are reviewed to determine whether they are in excess of their recoverable amount at balance date. If the carrying amount of the non-current asset exceeds the recoverable amount, the asset is written down to the lower amount. The write down is recognised as an expense in the net profit or loss in the reporting period in which it occurs. In assessing recoverable amounts of non-current assets the relevant cash flows have not been discounted to their present value. Payables Liabilities are recognised for amounts to be paid in the future for goods or services received. Trade accounts payable are normally settled within 30 days. Goods and services tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position. Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows. Establishment costs Establishment costs relating to capital raising are incurred by the investment manager and their recovery is sought by the investment manager as capital is raised. These amounts are written off to share capital as they are recovered. CVC Sustainable Investments Limited 7

ANNUAL REPORT 2005 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2005 2005 2004 $ $ Note 2: Revenue from ordinary activities Interest received & receivable 167,669 145,304 Proceeds from sale of shares 2,162,080 431,578 Dividends received 168,688 - Other revenue 15,000 - Total revenue from ordinary activities 2,513,437 576,882 Note 3: Dividends Dividend equivalent to 1 cent per post-split share paid on 30 September 2003 (a) - 229,875 Dividend of 0.5 cent per share paid on 16 September 2004 120,988 - Dividend of 1 cent per share paid on 27 June 2005 262,337-383,325 229,875 (a) The dividend on 30 September 2003 was paid at 5 cents per share at that time. Subsequent to the dividend the share capital of the Company was expanded by way of a 5 for 1 share split. Franking credits available, after allowing for the payment of the estimated year end tax provision, are $241,353 (2004: $38,000). Note 4: Income tax (a) Income tax expense Prima facie income tax on operating profit calculated at 25% (2004: 25%) 276,770 45,465 (Over)/under provision in respect of prior years (2,520) 171 Reduced PDF tax rate on net investment income (115,830) - Franked dividends received (54,221) - Other - 3 Income tax attributable to profit 104,199 45,639 (b) Current tax liability Income tax payable 128,641 36,637 (c) Deferred tax asset Future income tax benefit: Future income tax benefit comprises the estimated future benefit at the expected applicable rate of 25% on the following items: - Capital costs 12,258 17,166 - Unrealised loss on shares 28,600 - - Other (625) (3,068) 40,233 14,098 8 CVC Sustainable Investments Limited

2005 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2005 2005 2004 $ $ Note 5: Auditors remuneration The remuneration of the Auditors of the Company for audit, and the review of the half year financial report, for the year was $9,000 (2004: $6,600). Note 6: Receivables Current Interest receivable 8,000 5,771 GST receivable 2,327 1,999 Other receivables 11,456 13,957 Total current receivables 21,783 21,727 Non-current Secured loans 367,687 - Note 7: Other financial assets Unlisted shares in other corporations 1,290,866 2,000,000 Listed shares at cost 612,375 94,000 Listed shares at market value 702,763 - Total other financial assets 2,606,004 2,094,000 Listed shares comprises shares in Pro-Pac Packaging Limited, Traffic Technologies Limited and Geodynamics Limited. The market value at 30 June 2005 was $1,361,535 (2004: $210,000). Unlisted shares in other corporations comprises: a 20% shareholding in Wind Corporation of Australia Limited at a cost of $1 million (2004: $1 million); a 20% shareholding in Soilwise Pty Limited at a cost of $35,000 (2004: $Nil); and 19,238 preference shares in Plantic Technologies Limited at a cost of $255,866 (2004: $Nil). The balance at 2004 included an investment in Pro-Pac Group Limited at cost of $1,669,200. Note 8: Payables Sundry creditors & accruals 19,117 15,167 Establishment costs 10,431-29,548 15,167 CVC Sustainable Investments Limited 9

ANNUAL REPORT 2005 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2005 Note 9: Share capital 2005 2004 No. of Shares $ No. of Shares $ Ordinary shares Opening balance 4,839,505 4,718,387 4,572,500 4,458,063 Shares split (a) 19,358,020 - - - New shares issued - - 220,005 220,005 Options exercised (b) (c) 2,086,250 417,250 47,000 47,000 Establishment costs - (10,431) - (6,681) Balance at end of the year 26,283,775 5,125,206 4,839,505 4,718,387 (a) At a general meeting of the Company held on 16 July 2004, members approved to split the shares in the Company whereby each original share was converted into five new shares. (b) During the year 417,250 options were exercised resulting in 2,086,250 new shares being issued. (c) Since the end of the financial year, the Company has issued 37,500 further shares through the exercise of options. 2005 2004 $ $ Note 10: Retained profits/(accumulated losses) At the beginning of the year (42,504) 51,148 Net profit from operating activities 1,002,881 136,221 Dividends paid (383,325) (229,875) At the end of the year 577,052 (42,504) 10 CVC Sustainable Investments Limited

2005 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2005 Note 11: Additional financial instruments disclosure Interest rate risk The Company s exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets and the financial liabilities is set out below: 2005 Financial assets Cash asset 14 2,824,740 - - - 2,824,740 Receivables 6 - - 367,687 21,783 389,470 Weighted average interest rate 5.5% 15.5% Financial liabilities Payables 8 - - - 29,548 29,548 Weighted average interest rate 2004 Financial asset Cash asset 14 2,597,862 - - - 2,597,862 Receivables 6 - - - 21,727 21,727 Weighted average interest rate 5.1% Financial liabilities Payables 8 - - - 15,167 15,167 Weighted average interest rate Floating interest 1 year 1 to 5 Non-interest Note rate or less years bearing Total Credit risk exposure Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. Recognised financial instruments The credit risk on financial assets, excluding investments, of the company which have been recognised on the statement of financial position, is the carrying amount net of any provision for doubtful debts. Net fair value of financial assets and liabilities Monetary financial assets and financial liabilities not readily traded in an organised financial market are determined by valuing them at the present value of contractual future cash flows on amounts due from customers (reduced for expected credit losses) or due to suppliers. The carrying amounts of bank term deposits, accounts receivable, loans receivable, accounts payable and dividends payable approximate net fair value. The net fair value of investments in unlisted shares in other corporations is determined by reference to the underlying net assets and an assessment of future maintainable earnings and cash flows of the respective corporations. CVC Sustainable Investments Limited 11

ANNUAL REPORT 2005 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2005 2005 2004 $ $ Note 12: Remuneration of directors and executives The remuneration of the directors of the Company was as follows: (a) Total of the income paid or payable or otherwise made available, to all directors and executive officers of the Company directly or indirectly from the entity or any related party: Dr S Gosling - fees 12,000 12,000 Mr P Toyne - fees 12,000 12,000 (b) No retirement allowances were paid to directors and principal executive officers of the Company. 24,000 24,000 (c) Except as detailed above, no other amount of remuneration is paid to directors or executives in connection with the management of the affairs of the Company. Note 13: Related party information Directors Persons holding the positions of directors of CVC Sustainable Investments Limited during the financial year are: V R Gould, A D H Beard, J D Read, S M Gosling, P Toyne and J S Leaver (Resigned as a director on 9 September 2004). Details of directors remuneration, superannuation and retirement benefits are set out in Note 12. Transactions with related parties The Company pays management fees to its investment manager calculated at 2.5% of the net assets of the fund at the end of the previous financial year. During the year the investment manager changed from CVC Investment Managers Pty Limited to CVC Managers Pty Limited. During the year fees of $77,928 were paid to CVC Managers Pty Limited (2004: $Nil) and fees of $38,964 were paid to CVC Investment Managers Pty Limited (2004: $112,730). Messrs Beard, Gould and Leaver were directors of the Company, CVC Managers Pty Limited and CVC Investment Managers Pty Limited during the year. Under the terms of the prospectus issued on 17 August 2001, the Company is committed to reimbursing establishment costs of the investment manager, capped at 2.5% of capital raised. During the year, $10,431 (2004: $6,681) of establishment fees were paid or were payable to the investment manager as a result of capital raised. 12 CVC Sustainable Investments Limited

2005 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2005 Note 14: Cash Reconciliation of cash For the purposes of the statement of cash flows, cash includes cash on hand and at bank and short-term deposits at call. Cash as at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows: 2005 2004 $ $ Cash on hand 30,395 9,958 Cash on deposit 2,794,345 2,587,904 Cash assets 2,824,740 2,597,862 Cash flows from operating activities Cash flows from operating activities are reconciled to operating profit after taxation as follows: Profit from ordinary activities after taxation 1,002,881 136,221 Non-cash items Profit on disposal of investments (1,068,193) (225,578) Unrealised loss on investments 114,403 - Interest income not received (19,916) (66) Change in assets and liabilities: Decrease in receivables 2,173 3,912 Decrease in current tax assets - 6,665 Increase in current tax liabilities 92,004 36,637 Increase/(decrease) in accounts payable 3,950 (11,940) (Increase)/decrease in deferred tax assets (26,135) 7,363 Cash flows from operating activities 101,167 (46,786) Major non-cash items The Company disposed of its investment in Pro-Pac Group Limited for cash and shares in a new ASX listed company, Pro-Pac Packaging Limited. The value of the non-cash consideration was $817,167. Note 15: Segment information The Company predominantly operates in investment activities in Australia. Note 16: Other information The Company was incorporated on 21st July 1999. The Company is registered and domiciled in Australia. Its registered office and principal place of business are at Level 42, AAP Centre, 259 George Street, Sydney NSW 2000. CVC Sustainable Investments Limited 13

ANNUAL REPORT 2005 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2005 Note 17: Australian equivalents to International Financial Reporting Standards ("IFRSs") In July 2004, as part of the process to harmonise Australian Accounting Standards with IFRSs, the Australian Accounting Standards Board issued a suite of new and revised Australian Accounting Standards. These standards do not apply to the current financial reporting period but will apply to all following reporting periods. Notwithstanding that the new standards do not apply to the current reporting period, the Company is required to restate the current reporting period s statements of financial performance, financial position and cash flows applying the new standards, to: - provide comparative information for the financial reporting periods at 31 December 2005 and 30 June 2006; - provide an opening position for future financial reporting using the new standards; - assist shareholders and other users of the financial report to better understand how the new standards will impact on future financial reporting; and - comply with general financial reporting requirements. Subject to final reviews, the Company has completed this exercise and the impacts are discussed below. Impacts on the statement of financial position at 30 June 2005: For the statement of financial position at 30 June 2005 the Company expects that the key changes on Net Assets from the adoption of the new standards will be that: - the carrying values of the Company s listed investments will be revalued to market value; and - a deferred tax liability for the tax that would be payable if the investments were realised at their market values will be reflected. At 30 June 2005, the market value of the Company s listed investments is $46,397 greater than their current carrying values and the additional deferred tax liability that would arise in respect of a profit on sale at these market values, estimated at the PDF tax rate of 25%, is $11,599. The effect of the above expected adjustments on the statement of financial position at 30 June 2005 is that Non-Current Assets, Net Assets and Equity of the Company will rise by the net amount of $34,798. Within the Non-Current Assets classification, Other Financial Assets will increase by $46,397 and Deferred Tax Assets will decrease by $11,599. Within Equity the impacts of the above changes depend on whether the listed investments are considered as being held for trading in the short term or as held for the longer term but available for sale, discussed further below. It is expected that all listed investments will be classified as held for the longer term but available for sale. On this basis, unrealised movements in market values will form part of a revaluation type reserve, rather than being a component of reported profits, causing Retained Profits to increase by $85,802 and an Other Reserve being created with a debit balance of $51,004. Impacts on the statement of financial performance for the year to 30 June 2005: The statement of financial performance for the year to 30 June 2005 under current accounting standards includes an expense of $114,403, and an associated deferred tax credit of $28,600, in relation to the decrease in the market value of the Company s listed investment in Pro-Pac Packaging Limited. Under the new standards, and the classifications discussed above, these items would not form part of reported profits and so the profit for the year would increase by $85,802: with Expenses from Ordinary Activities decreasing by $114,403 and Income Tax Expense increasing by $28,600. Under current accounting standards the sales of Non-Current Assets are reported in the statement of financial performance as gross amounts with Revenue including the value of consideration received and Expenses including the carrying value of the asset at date of sale. Under the new standards only the net profit on sale will be shown. This change has no impact on reported profits but for the year to 30 June 2005 this would reduce each of Revenues and Expenses from Ordinary Activities by $1,093,887. Impacts on the statement of cash flows for the year to 30 June 2005: There are expected to be no impacts on the statement of cash flows from the adoption of the new standards. However, there will be changes to the reconciliation of Cash Flows from Operating Activities from the Profit from Ordinary Activities after Taxation included in the notes to the financial statements to reflect the increased reported profit and adjust for corresponding movements in assets and liabilities discussed above. 14 CVC Sustainable Investments Limited

2005 ANNUAL REPORT DIRECTORS DECLARATION for the year ended 30 June 2005 The directors of the Company declare that in their opinion: (a) The financial statements and associated notes, set out on pages 4 to 14, are in accordance with the Corporations Act 2001 and other mandatory professional reporting requirements including: (i) giving a true and fair view of the financial position of the Company as at 30 June 2005 and of its performance, as represented by the results of its operations and its cash flows, for the year ended on that date; and (ii) complying with Accounting Standards and the Corporations Regulations 2001. And (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of the Board of Directors. Dated at Sydney this 28th day of July 2005. V R Gould Director A D H Beard Director CVC Sustainable Investments Limited 15

ANNUAL REPORT 2005 AUDITORS INDEPENDENCE DECLARATION for the year ended 30 June 2005 To the directors of CVC Sustainable Investments Limited: As lead auditor for the audit of CVC Sustainable Investments Limited for the year ended 30 June 2005, I declare that, to the best of my knowledge and belief, there have been: a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) no contraventions of any applicable code of professional conduct in relation to the audit. P B Meade Partner HLB MANN JUDD (NSW Partnership) Chartered Accountants Sydney, 28th day of July 2005 16 CVC Sustainable Investments Limited

2005 ANNUAL REPORT INDEPENDENT AUDITORS REPORT to the members of CVC Sustainable Investments Limited Scope The financial report and directors responsibility The financial report comprises the statement of financial position as at 30 June 2005, and the statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors declaration for the year ended 30 June 2005 for CVC Sustainable Investments Limited ("the Company") as set out on pages 4 to 15. The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls designed to prevent and detect fraud and error, for the accounting policies and for the accounting estimates within the financial report. Audit approach We conducted an independent audit in order to express an opinion to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards, in order to provide reasonable assurance that the financial report is free of material misstatement. The nature of an audit is influenced by several factors including the use of professional judgement, selective testing, the inherent limitations of internal control and the availability of audit evidence which may be persuasive rather than conclusive. Accordingly, an audit cannot guarantee that all material misstatements have been detected. We performed procedures to assess whether, in all material respects, the financial report presents fairly, in accordance with the Corporations Act 2001, including compliance with Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the Company s financial position, and of its performance as represented by the results of its operations and cash flows. We formed our audit opinion on the basis of these procedures, which included: > examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and > assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors. When determining the nature and extent of our procedures we considered the effectiveness of management s internal controls over financial reporting. Our audit was not designed to provide assurance in relation to internal controls. Independence In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001. Audit opinion In our opinion, the financial report of CVC Sustainable Investments Limited is in accordance with: (a) the Corporations Act 2001, including: (i) giving a true and fair view of the company s financial position as at 30 June 2005 and of its performance for the year ended on that date; and (ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and (b) other mandatory financial reporting requirements in Australia. Dated this 28th day of July 2005 in Sydney. P Meade Partner HLB MANN JUDD (NSW Partnership) Chartered Accountants

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