IMEXHS LIMITED — Management Reports 2008

Sep 25, 2008

Australian Biodiesel Group Ltd

C OMPA NY U PDATE

S EPTEMBER 08

ABG remains very confident that it will turn EBITDA positive this quarter while retaining sound cash reserves and achieving its other stated AGM objectives.

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At our AGM the board stated that the key objectives for 2008 were:

•  Drive the company to a cashflow positive position

•  Expand the profitable Scanline used cooking oil, UCO, recycling Business

•  Achieve a Biodiesel Technology sale

•  Bring complimentary prospective technology with a near term profitability potential

•  Dispose of or utilize the New south Wales Berkeley Vale plant.

The board is pleased to report ABG is well on track to achieving the objectives.

Financial progress

As a result of our actions and close management of business fundamentals ABG will achieve its clearly stated goal of bringing the business to a cashflow positive position in the 3[rd] quarter. This represents a significant achievement and turnaround for the business and one that is expected to continue into 2009.

The underlying solidity of our recycling business coupled with the new initiatives continues to set the business on the solid path of recovery that we set out to achieve from March this year.

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Australian Biodiesel Group Ltd

C OMPA NY U PDATE S EPTEMBER 08

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Scanline Expansion:

Scanline collects and aggregates used cooking oils (UCO) in Sydney and surrounding areas. The markets for used cooking oil include animal feed, Biodiesel manufacture and environmentally sound lubrication applications. This business has been a consistent performer returning gross margins of above 50%

Our expansion of this business is going well. We have added new collection equipment in NSW to ensure that it stays at the front of the UCO business in NSW. We have commenced our penetration into

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the south Queensland market operating out of the Narangba facility. Scanline is now achieving revenues of $300k per month with Scanline QLD contributing 15% of the total volume of the recycling business and growing. Overall our contribution has grown by 12 % as a result of our actions. In addition to these initiatives that are driving organic growth Scanline remains quality driven and will continue to provide a high level of service to its clients.

ABG Biodiesel Technology Sales

ABG’s proven success in producing high quality Biodiesel from a wide range of feedstock coupled with the significantly reduced capital costs over competing technologies at its Narangba plant presents the very real possibility of profiting from this experience and knowledge.

ABG updated the market in May with regard to being chosen as the preferred technology supplier for an offshore Biodiesel production company. ABG has been told by the client that the project is likely to proceed in the next 12 months pending the customer securing sufficient feedstock contracts to support the size of the facility.

At the customer’s request and expense, large amounts of engineering have been completed and the final design for the facility has been approved by the customer project team.

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ABG has begun procurement and supply of equipment into the project.

Australian Biodiesel Group Ltd

C OMPA NY U PDATE S EPTEMBER 08

Blending Business

In pursuit of our goal to utilising our existing assets we have investigated the creation of a biodiesel/diesel blending business utilizing the ABG Narangba Asset.

ABG plans to capitalize on the higher margins that can be achieved by selling a product that conforms to the Australian Diesel Standard. In the 4th Quarter of 2008 ABG will commence blending operations with an initial projected volume of 200 tons/month and an objective of expanding this to over 2000 tons of diesel / month by the end of 2009

Alternative Technologies to provide new opportunities for ABG

ABG has now narrowed its choices down to three major opportunities. Each of the options is in an advanced level of discussions on terms and conditions. The board is on course to make a final choice before the end of 2008.

The common theme of the company’s strategy with new technology partners is the utilization of the Berkeley Vale (BKV) and other existing assets in the production of a fuel from waste materials that do not compete with the food or feed industries. These opportunities would allow the conversion of BKV to either:

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 A recycling facility for waste car tyres transforming them into reusable oils, carbon black and scrap steel. ABG has undertaken trials using a preferred technol-

ogy which has yielded encouraging results.

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The next stage would be to move to a commercial demonstration size plant

Australian Biodiesel Group Ltd

C OMPA NY U PDATE S EPTEMBER 08

Alternative Technologies to provide new opportunities for ABG (cont)

•  A renewable alternative diesel fuel production facility based on proven technology. The produced fuel can be derived from very low grade waste oils such as grease trap wastes as well as Used Cooking Oils and Tallow and will overcome the barriers to market that are present with Biodiesel by providing a blend that is more easily able to meet the Australian Diesel Standard. The use of these materials lowers the cost of the feedstock making the product highly competitive with diesel fuel. The Australian fuel tax structure is currently suited to bio-fuel blends that adhere to the Australian Diesel Standard.

•  A revolutionary and recently demonstrated approach to creating renewable bio-fuel from biomass including woody wastes from saw mills or purpose grown crops such as high yield grasses or coppiced shrubs. Notwithstanding the technology’s novelty, the bio-fuel produced in a pilot-scale facility appears to have a variety of attributes that potentially allows it to be used directly as a marine diesel fuel equivalent or sold as an oxygenating additive to either gasoline or petroleum diesel.

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For further information

Australian Biodiesel Group 195 Potassium St Narangba QLD 4504 Ph: (07) 3817 7400 Bevan Dooley

0404 467 024

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