current share price 26cents; 2014 eps 26cents, page-20

Hi Gizard,

Carbon Conscious and its forestry operations are entirely different from the "tax effective" forestry investment schemes that were popular several years ago.

In simple terms, CCF's business is growing trees in order to sequester carbon dioxide from the atmosphere in the earth (carbon biosequestration). The trees are not grown for harvesting but are allowed to grow for their natural life.

The business model for CCF involves customers signing long-term contracts with CCF to plant and manage trees on their behalf for which the customer earns carbon credits which can be traded to offset their carbon tax liabilities.

The recent passage of the Federal Government's Clean Energy legislation, and the associated Carbon Farming Initiative legislation establishing a Carbon Trading System, provides the legal mechanism for Australian companies which have a carbon tax liability to offset some of their liabilities through carbon credits, which are earned through planting trees.

As CCF indicated in yesterday's ASX announcement, they have received very strong interest from a wide range of potential customers and have a contract deal pipeline worth $1.5 billion in term sheets currently under consideration with clients.

The important point to note about CCF is that they are significantly ahead of the rest of the carbon farming industry in terms of their track record of executing commercial deals and delivering on their promises.

In time, other companies will try to enter the market, but CCF has a substantial advanatge in being the established leader in the field with a strong reputation for providing innovative solutions in the area of developing carbon abatement projects.

As for the risk of the Clean Energy Act being repealed by a future Government, who can say? While this is the policy of the Liberal Party in Opposition at present, they may change their policy before/ after they get into Government. It's certainly a risk, but I would suggest a minimal one at the moment.

Disclaimer: I am an external Investor Relations consultant employed by Carbon Conscious.