Chairman's Letter

In this financial year Wasabi Energy focused on the further market penetration of its three core businesses - renewable power generation, sustainable and secure water supply and biodiesel from renewable resources.

The core businesses operated through three separate companies, Global Geothermal Limited (GGL), a subsidiary which owns the global patents and intellectual property for the Kalina Cycle® power generation technology, Aqua Guardian Group Ltd (AGG), a 47.5% Wasabi owned water technology company with a patented product for water conservation, and Australian Renewable Fuels Ltd (ARW), an Australian Stock Exchange listed company with 17.33% Wasabi ownership, and which has Australia's largest capacity for biodiesel production.

A highlight for the year was the appointments to two key management positions - a Chief Operating Officer and President International. These appointments have helped the business gain further momentum and discipline through improved business processes. The Wasabi Energy management team is actively involved in each of its core businesses. Each business has met major milestones this year that will underpin their operations and continue to build the businesses towards financial profitability and further market growth.

In December 2010, Wasabi Energy listed on the Alternative Investment Market ("AIM") of the London Stock Exchange, the international market for smaller growing companies. As a global company, this listing has attracted new investors to the business and assisted in the international recognition of the company and its technologies. We are pleased that our company is being supported by some major institutional funds in the UK.

Wasabi Energy also divested the majority of its non-core investments in Rum Jungle, Aviva Corporation and Greenearth Energy. These were sold for a profit on the original purchase price.

The Group made a loss for the year to 30 June 2011 of $0.5m (2010 - Loss $8.5m). This loss comprised a gain on investments of $7.9m, including a gain of $6.4m on the reclassification of A R Fuels, as well as profits on the sale of non-core assets of $0.9m. This was offset by $2.7m for the costs of the development of GGL as well as non-cash items such as $1.5m relating to the issue of options to employees of the Group.

The company has grown significantly over the past 12 months and we now have the key platforms in place for continued growth and future profitability. GGL has signed a global license agreement and we have a suite of build, own, operate Kalina Cycle® power plants in development that will transition Wasabi Energy into an independent power producer. Aqua Guardian has successfully deployed its water conservation modules, AquaArmourTM and received positive endorsement from water authorities. ARW has secured a source of feedstock at constant price, whilst also acquiring further refining capacity.

Wasabi Energy continues to deliver on its objectives and is building a portfolio of assets to make it a profitable company that delivers sustainable solutions to environmental issues.

The past year has been transformational in positioning Wasabi Energy for future growth. This could not have happened without the dedication of our team and their excellent work in delivering our objectives. I would like to thank all of them for their hard work and especially for the long time spent away from family and friends on business all over the world. For over 18 months the team has worked on delivering the FL Smidth license agreement and I would especially like to thank Bruce Levy, Mark Mirolli and Bob Dewing who all made significant contributions to this important relationship. My thanks also to our shareholders who have been very supportive and continue to be excited about the future of Wasabi Energy.

Yours Faithfully

John Byrne
Executive Chairman


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