COMPLII FINTECH SOLUTIONS LTD - Annual Report 2007

RETAIL STAR LIMITED ABN 71 098 238 585

ANNUAL FINANCIAL REPORT 31 JULY 2007

	Page
CORPORATE INFORMATION	1
DIRECTORS’ REPORT	2
AUDITOR’S INDEPENDENCE DECLARATION	9
CORPORATE GOVERNANCE STATEMENT	10
INCOME STATEMENTS	14
BALANCE SHEETS	15
STATEMENTS OF CHANGES IN EQUITY	16
CASH FLOW STATEMENTS	17
NOTES TO THE FINANCIAL STATEMENTS	18
DIRECTORS’ DECLARATION	37
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF RETAIL STAR LIMITED	38
ASX ADDITIONAL INFORMATION	40

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

CORPORATE INFORMATION

This annual report covers both Retail Star Limited (the “Company”) as an individual entity and the consolidated entity comprising Retail Star Limited and its subsidiaries (the “Group”).

A description of the Group’s operations and of its principal activities is included in the operating and financial review in the directors’ report on page 2.

DIRECTORS

Mr A Bell (Chairman) Mr I Scott Mr M Yannaghas Mr R Kestel Mr S Nicols

REGISTERED OFFICE

Level 2, 350 Kent Street Sydney NSW 2000

PRINCIPAL PLACE OF BUSINESS

Level 2, 350 Kent Street Sydney NSW 2000

COMPANY SECRETARY

Mr S Headon

POSTAL ADDRESS

PO Box Q191 QVB Post Shop Sydney NSW 1230

AUDITORS

HLB Mann Judd (NSW Partnership) Level 19, 207 Kent Street Sydney NSW 2000

SOLICITORS

Steinepreis Paganin Level 4 Next Building 16 Milligan Street Perth WA 6000

SHARE REGISTRY

Computershare Investor Services Pty Limited Level 3, 60 Carrington Street Sydney NSW 2000

INTERNET ADDRESS

www.retail-star.com.au

ASX CODES

Shares RSL

COUNTRY OF INCORPORATION AND DOMICILE Australia

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

DIRECTORS’ REPORT

Your directors present their report on the company and its controlled entities for the year ended 31 July 2007.

DIRECTORS

The names and details of the Company’s directors in office during the financial year and until the date of this report are as follows. Directors were in office for the entire period unless otherwise stated.

A Bell , MA, LLB (Non-Executive Director) Aged 52

Mr Bell was appointed director and chairman on 6 August 2007. Mr Bell is a former Mining Analyst, Fund Manager, and Investment Banker and is Chairman of Regency Mines plc and of Red Rock Resources plc, both companies listed on the AIM market of the London Stock Exchange. During the past three years he has not served as a director of any other ASX listed companies.

I Scott , Assoc. in Appl. Geol., MAusIMM, AAICD (Executive Director) Aged 55

Mr Scott was appointed director on 6 August 2007. Mr Scott is a Geologist with over 30 years’ experience in mining geology and exploration with major Australian minerals development companies. He has been a group manager and project manager for successful research and development projects delivered to the minerals exploration and mining industry. He has consulted to the minerals industry and State Government. During the past three years he has not served as a director of any other ASX listed companies.

M Yannaghas , BA (Non-Executive Director) Aged 34

Mr Yannaghas was appointed director on 6 August 2007. Mr Yannaghas started working for the global consulting firm Greenwich Associates in New York where as a financial analyst he assisted major international brokerage houses identify market and sales opportunities within the domestic American and continental European markets.

He has designed, negotiated and implemented integrated commercial strategies for two fast growing media businesses, each resulting in significantly increased sales revenues. He has also been involved in numerous “small company” private equity deals where he sourced and restructured a number of companies; led investor groups (which have included institutions such as Flemings Family & Partners) and overseen rapid expansion whilst sitting as a non executive director. In particular Elstat Electronics Ltd a UK based electronics manufacturing company, has expanded from £200,000 to £10m in 3 years. As a director he assisted with commercial planning and participated in all the strategic decisions required by a fast growing business of this nature.

Mr Yannaghas has been working in the natural resources industry for the past 24 months and is currently a director of Goliath Resources Inc. During the past three years he has not served as a director of any other ASX listed companies.

R Kestel , B.Bus, ACA, FCPA, AICD (Non-Executive Director) Aged 52

Mr Kestel was appointed director on 15 August 2006. Mr Kestel is both a Chartered Accountant and Certified Practising Accountant and has been a director of the accounting practice Nissen Kestel Harford since July 1980.

Mr Kestel has acted as a director and company secretary of a number of public companies involved in mineral exploration, mining, mine services, property development, manufacturing and technology industries.

During the past three years he has served as a director of the following ASX listed companies:

Xstate Resources Limited – 6 September 2006 – current
VDM Group Limited – August 2005 – current
DVM International Limited – April 2005 – current
Equigold NL – April 2005 – current
Jabiru Metals Limited – August 2003 – current
Reco Financial Services Limited – June 2006 – current
Northern Mining Limited – April 2005 until June 2007
Lowan Australia Limited – from June 2002 until April 2005
Bone Medical Limited – from December 2003 until November 2004
Orchid Capital Limited – from April 2002 until July 2005
Conquest Mining Limited – February 1999 until May 2006

Mr Kestel is a Registered Company Auditor and a member of the Institute of Company Directors.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

DIRECTORS’ REPORT (continued)

DIRECTORS (continued)

S Nicols , B.Com, CPA, NIA, IPAA (Non-Executive Director) Aged 46

Mr Nicols was appointed director on 15 August 2006. Mr Nicols has a degree in Commerce and is a member of CPA Australia, the N.I.A and I.P.A.A. He is a principal of Nicols and Brien, a specialised accounting practice. He provides advice to businesses for the purposes of reconstruction or profit enhancement. During the past three years he has also served as a director of the following ASX listed companies:

Reco Financial Services Limited – June 2006 – current
DVM International Limited – April 2005 – current

A S Crimmins , BE, ME, Dip Mark, MBA (Non-Executive Director) Aged 42

Mr Crimmins was appointed director on 15 August 2006 and resigned on 6 August 2007. Mr Crimmins has a Master of Chemical Engineering and a Master of Business Administration degree. His previous experience includes being a general manager, business development manager, project manager, and commercialiser of technology based products and services. During the past three years he has also served as a director of the following ASX listed companies:

DVM International Limited – April 2005 – current
Reco Financial Services Limited – June 2006 – current
Xstate Resources Limited – November 2004 until September 2006

COMPANY SECRETARY

S Headon , B.Bus, CPA

Mr Headon has been the company secretary of Retail Star Limited since 15 August 2006. He has been a Certified Practising Accountant for over 14 years.

Mr Headon is not an executive of the Company.

INTEREST IN THE SHARES AND OPTIONS OF THE COMPANY

As at the date of this report, the interests of the directors in the shares and options of the Company were:

A Bell (appointed 6/8/07) I Scott (appointed 6/8/07) M Yannaghas (appointed 6/8/07) R Kestel (appointed 15/8/06) S Nicols (appointed 15/8/06)	Number of Ordinary Shares
	Nil Nil Nil Nil 16,166,000

DIVIDENDS

No dividends were paid or recommended during the year.

PRINCIPAL ACTIVITIES

The principal activity of the economic entity during the financial period was to review business opportunities available to the Company.

OPERATING AND FINANCIAL REVIEW

Operating review

The principal activity of the economic entity during the financial period was to review business opportunities available to the Company.

During the year the Company reached an agreement to acquire 100% of Orion Exploration Pty Ltd (Orion), a uranium exploration company and certain other uranium tenements. Orion is targeting uranium mineralisation at several sites.

The loss for the year was $16,689 (2006: loss of $6,456,362).

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

DIRECTORS’ REPORT (continued)

OPERATING AND FINANCIAL REVIEW (continued)

Significant changes in state of affairs

On 27 March 2006, the Deed Administrators and the Company entered into a Deed of Company Arrangement (DOCA). The Deed Administrators subsequently accepted a proposal for the restructuring and recapitalisation of the Company, including the settlement of all creditor claims.

At a meeting of Shareholders held on 15 August 2006 the shareholders of the Company approved the various resolutions required to complete the restructuring and recapitalisation of the Company.

The shareholders meeting appointed new directors: Steven Nicols, Anthony Stephen Crimmins and Ross Kestel; and the DOCA was terminated.

On 15 August 2006, the DOCA was finalised and the Company’s name changed from G Retail Limited to Retail Star Limited. On 15 August 2006 Gowings Pty Limited changed its name to Star Shopper Pty Limited and Gowings Wholesale Pty Limited changed its name to Star Shopper Wholesale Pty Limited.

During the year a total of 358,000,000 ordinary shares were issued to raise a total of $2,918,000. Details as follows:

On 22 August 2006, 38,000,000 ordinary shares were issued at 0.1 cents each, to raise $38,000.
On 22 August 2006, 160,000,000 ordinary shares were issued 0.6 cents each, to raise $960,000.
On 9 November 2006, 120,000,000 ordinary shares were issued at 1.2 cents each, to raise $1,440,000
On 21 December 2006, 40,000,000 ordinary shares were issued at 1.2 cents each, to raise $480,000.

Funds raised by the Company will be used to assist with the review of opportunities in the area of retail operations in recreational products and general merchandise, fund the review of new acquisitions and/or for working capital purposes.

Likely developments and future results

The board of directors of the Company are continuing to review business opportunities available to the Company.

The Company has an arrangement in which stock is being sold.

On 6 August 2007, Retail Star Limited shareholders agreed to the acquisition of Orion Exploration Pty Ltd from Red Rock Resources plc (Red Rock). Also included were exploration rights over tenements in Malawi and uranium interests in Western Australia.

Since August, a co-existence agreement has been finalised between Red Rock and Retail Star Limited which confirms the company’s access to the uranium exploration rights in the Mt Alfred lease, in the Yilgarn district of WA (E29/581). Plans are being finalised to follow-up anomalous uranium samples recovered from drilling and sampling by Uranerz (Australia) Pty Ltd in 1976. The target is calcrete-hosted uranium in a large drainage channel. Encounter Resources Limited and Avoca Resources Limited recently announced anomalous uranium in shallow drilling from their McPherson’s Bore prospect, immediately east of the Mt Alfred tenement and in the same drainage channel.

Plans are also being finalised for the exploration program over the tenements in the Northern Territory. There are five tenements covering approximately 770km2 in total area. An additional tenement has been applied for in the Rum Jungle area. The tenements are located along the western margin of the Pine Creek Inlier, between Katherine and Darwin. The region is endowed with mineral deposits, including uranium, gold, copper and iron ore. Whilst the main opportunity for Retail Star Limited is uranium, the tenements have potential for gold and, in some cases, iron ore as well.

Red Rock has been granted a tenement in the Chintheche region in central Malawi. A second tenement in the south of the country is being finalised. Retail Star directors are planning to visit Malawi in November.

Liquidity and capital resources

The consolidated cash flow statement illustrates that there was an increase in cash and cash equivalents in the year ended 31 July 2007 of $112,558 (2006: $72,343). The increase in cash inflow in comparison with the prior year is a result of a number of factors. Operating activities generated a cash outflow of $2,587,012 (2006: $106,003). This increase in outflows compared to 31 July 2006 is a result of the company entering into the Deed of Company Arrangement (DOCA) last financial year and payments to extinguish creditor claims this year. There have been no cash flows from investing activities compared to the cash inflow from 31 July 2006 of $143,346 which was in relation to the proceeds from the sale of property, plant and equipment. Financing activities generated a cash inflow of $2,699,570 (2006: $35,000) which is the net proceeds from the issue of shares.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

DIRECTORS’ REPORT (continued)

OPERATING AND FINANCIAL REVIEW (continued)

Profile of debts

The Group had no debt finance for the last year.

Capital expenditure

There has been no capital expenditure during the year.

Risk management

The Company’s Board recognises the importance of identifying and controlling risks to ensure that they do not have a negative impact on the Company.

Procedures have been established at the Board level, which are designed to safeguard the assets and interests of the Company, and to ensure the integrity of reporting.

Some of the benefits identified in establishing and maintaining risk management procedures are as follows:

More effective strategic planning;
Better cost control;
Enhancing shareholder value by minimising losses and maximising opportunities;
Increased knowledge and understanding of exposure to risk;
A systematic, well-informed and thorough method of decision making;
Increased preparedness for outside review;
Minimised disruptions;
Better utilisation of resources;
Strengthening culture for continued improvement; and
Creating a best practice and quality organisation.

EARNINGS PER SHARE Basic earnings/(loss) per share (cents)	2007 2006 2005
	(0.0050) (17.20) (10.5)

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Total equity increased to $1,411,519 (2006: deficiency $1,271,362), an increase of $2,682,881. The movement was largely the result of the issue of ordinary shares.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

On 6 August 2007 the Company acquired a 100% shareholding in Orion Exploration Pty Ltd. The company paid $1.5 million cash as consideration for the acquisition. The cash consideration was funded through Red Rock Resources plc subscribing for 80 million shares, 20 million unlisted June 2008 options and 20 million Class A Performance Shares.

A further 30 million Class B Performance Shares and 30 million Class C Performance Shares have also been issued to Red Rock Resources Plc in consideration for certain exploration rights in Malawi southern Africa being transferred to Retail Star Limited. One of these Malawi tenements has now been granted to Red Rock Resources Plc and will be transferred to Orion Exploration Pty Ltd in due course.

On 6 August 2007 the Company completed a successful capital raising, placing 37,500,000 Ordinary Shares at 1.5 cents each to raise $562,500 (less costs). As part of their fee arrangement in relation to the capital raising the Company agreed to issue 10,000,000 unlisted June 2008 options to Carmichael Capital Markets Pty Ltd (or its nominee)

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Company’s operations are subject to environmental regulations under Commonwealth and State legislation. The Board believes that the Company has adequate systems in place for the management of its environmental requirements and is not aware of any breach of those environmental requirements as they apply to the Company.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

DIRECTORS’ REPORT (continued)

SHARE OPTIONS

Unissued shares

As at the date of this report, there were 37,435,000 unissued ordinary shares under options (7,435,000 at the reporting date).

Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related body corporate or in the interest issue of any other registered scheme. Options of the Company are not listed.

Shares issued as a result of the exercise of unlisted options

During the financial year no options have been exercised to acquire fully paid ordinary shares.

INDEMNIFICATION OF OFFICERS AND AUDITORS

During the financial year, the company paid a premium in respect of a contract insuring the directors of the company (as named above), the company secretary, Mr S Headon, and all executive officers of the company and of any related body corporate against a liability incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

The company has not otherwise, during or since the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the company or of any related body corporate against a liability incurred as such an officer or auditor.

REMUNERATION REPORT

This report outlines the remuneration arrangements in place for the directors of the Company.

Remuneration Philosophy

The performance of the Company depends upon the quality of its directors and executives. To prosper, the Company must attract, motivate and retain highly skilled directors and executives.

Remuneration Committee

The Company does not have a formal Remuneration Committee. The full Board attends to the matters normally attended to by a Remuneration Committee.

Director Remuneration

Shareholder approval is obtained in relation to the overall limit set for directors’ fees. The directors must set individual Board fees within the limit approved by shareholders.

The level of fees is not linked to the directors’ or the Company’s performance.

Shareholders approve the maximum aggregate remuneration for non-executive directors. The maximum aggregate remuneration approved for directors is currently $210,000.

Further, shareholders must approve the framework for any equity schemes and if a director is recommended for being able to participate in an equity scheme, this participation must be approved by the shareholders.

Senior Management and Executives

The Company did not have any senior management or executives, and did not have any employment contracts in place as at 31 July 2007. Mr Scott was appointed as an executive on 6 August 2007.

Details of remuneration for year ended 31 July 2006

The remuneration for each director and each of the five executive officers of the consolidated entity receiving the highest remuneration during the period was not able to be determined due to the absence of accounting records in respect of the period of Administration.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

DIRECTORS’ REPORT (continued)

REMUNERATION REPORT (continued)

Remuneration of Directors and Named Executives

Table 1: Directors’ remuneration for the year ended 31 July:

			Primary	Benefits		Post Employment	Post Employment
		Salary &	Cash STI		Non	Super-	Retirement	Equity	Other	Total	%
		Fees		LTI	Monetary	annuation		Options			Performance
					Benefits						Related
R Kestel*	2006	-	-	-	-	-	-	-	-	-	-
Director	2007	28,750	-	-	-	-	-	-	-	28,750	-
S Nicols*	2006	-	-	-	-	-	-	-	-	-	-
Director	2007	28,750	-	-	-	-	-	-	-	28,750	-
A Crimmins�	2006	-	-	-	-	-	-	-	-	-	-
Director	2007	28,750	-	-	-	-	-	-	-	28,750	-
I Scott**	2006	-	-	-	-	-	-	-	-	-	-
Director	2007	-	-	-	-	-	-	-	-	-	-
M Yannaghas**	2006	-	-	-	-	-	-	-	-	-	-
Director	2007	-	-	-	-	-	-	-	-	-	-
A Bell**	2006	-	-	-	-	-	-	-	-	-	-
Director	2007	-	-	-	-	-	-	-	-	-	-
Total	2006	-	-	-	-	-	-	-	-	-	-
	2007	86,250	-	-	-	-	-	-	-	86,250	-

Appointed 15 August 2006
** Appointed 6 August 2007
Resigned 6 August 2007.

Due to the lack of accounting records for the year ended 31 July 2006 during which the companies in the consolidated entity were in Administration, information on the remuneration of directors and named executives is not available.

There were no Company executives employed during the year ended 31 July 2007.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

DIRECTORS’ REPORT (continued)

DIRECTORS’ MEETINGS

The number of meetings of directors (including meetings of committees of directors) held during the year and the number of meetings attended by each director were as follows:

		Directors’ Meetings
Number of meetings held		6
Number of meetings attended:
Mr R Kestel		6
Mr S Nicols		6
Mr A Crimmins	(resigned 6/8/07)	6
Mr I Scott	(appointed 6/8/07)	-
Mr M Yannaghas	(appointed 6/8/07)	-
Mr A Bell	(appointed 6/8/07)	-

All directors were eligible to attend all meetings held, except for Mr I Scott, Mr M Yannaghas and Mr A Bell who were not eligible to attend.

COMMITTEE MEMBERSHIP

As at the date of this report, the Company had an Audit Committee established 6 August 2007.

Members of that committee are:

Mr R Kestel (Chairman) Mr S Nicols Mr I Scott

The Company is not at a size that justifies having any other separate committees. However, matters typically dealt with by various committees are dealt with by the full Board of Directors.

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Retail Star Ltd support the principles of corporate governance. The Company’s corporate governance statement is contained on page 10.

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.

AUDITOR’S INDEPENDENCE DELCARATION AND NON-AUDIT SERVICES

The directors received the auditor’s independence declaration on page 9 from the auditor of the Company.

No non-audit services were provided by the entity’s auditor.

This declaration forms part of the directors’ report.

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

Ross Kestel Director

Dated 30 October 2007

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

==> picture [96 x 74] intentionally omitted <==

RETAIL STAR LIMITED (AND ITS CONTROLLED ENTITIES)

AUDITOR’S INDEPENDENCE DECLARATION

To the directors of Retail Star Limited:

As lead auditor for the audit of Retail Star Limited and its controlled entities for the year ended 31 July 2007, 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.

==> picture [116 x 43] intentionally omitted <==

Philip B Meade Partner

HLB MANN JUDD (NSW Partnership) Chartered Accountants

Sydney 25 October 2007

CORPORATE GOVERNANCE STATEMENT

The Board of Directors of the Company is responsible for the corporate governance of the Group. The Board guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable.

To ensure that the Board is well equipped to discharge its responsibilities, it has established guidelines for the nomination and selection of directors and for the operation of the Board.

COMPOSITION OF THE BOARD

The composition of the Board is determined in accordance with the following principles and guidelines:

the Board should comprise at least three directors;
the Board should comprise directors with an appropriate range of qualifications and expertise; and
the Board shall meet at regular intervals and follow meeting guidelines set down to ensure all directors are made aware of, and have available all necessary information, to participate in an informed discussion of all agenda items.

When a vacancy exists, through whatever cause, or where it is considered that the Board would benefit from the service of a new director with particular skills, the Board selects a candidate or panel of candidates with the appropriate expertise.

The Board then appoints the most suitable candidate, who must stand for election at the next general meeting of shareholders. The Company does not have a formal Nomination Committee.

REMUNERATION AND NOMINATION COMMITTEES

The Company does not have formal Remuneration or Nomination Committees. The full Board attends to the matters normally attended to by a Remuneration Committee and a Nomination Committee. Remuneration levels are set by the Company in accordance with industry standards to attract suitable qualified and experienced Directors and senior executives.

AUDIT COMMITTEE

An audit committee compromising Mr Kestel as Chairman, Mr Nicols and Mr Scott was established on 6 August 2007. The board follows the Audit Committee Charter, a copy of which is disclosed on the Company’s website.

Prior to the establishment of the formal audit committee, the full Board of Directors attended to the matters normally attended to by an audit committee.

BOARD RESPONSIBILITIES

As the Board acts on behalf of and is accountable to the shareholders, it seeks to identify the expectations of the shareholders, as well as other regulatory and ethical expectations and obligations. In addition, the Board is responsible for identifying areas of significant business risk and ensuring arrangements are in place to adequately manage those risks. The Board seeks to discharge these responsibilities in a number of ways.

The responsibility for the operation and administration of the economic entity is currently attended to by the Board.

The Board is responsible for ensuring that management’s objectives and activities are aligned with the expectations and risks identified by the Board. It has a number of mechanisms in place to ensure this is achieved, including the following:

Board approval of a strategic plan, designed to meet shareholder needs and manage business risk;
implementation of operating plans and budgets by management and Board monitoring progress against budget;
procedures to allow directors, in the furtherance of their duties, to seek independent professional advice at the Company’s expense.

MONITORING OF THE BOARD’S PERFORMANCE

In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner, the performance of all directors is to be reviewed annually by the chairperson. Directors whose performance is unsatisfactory are asked to retire.

BEST PRACTICE RECOMMENDATION

Outlined below are the 10 Principles of Good Corporate Governance and Best Practice Recommendations as outlined by the ASX and the Corporate Governance Council. The Company has complied with the Corporate Governance Best Practice Recommendations except as identified below. Details about the Company’s corporate governance policies are set out on the Company’s website at www.retail-star.com.au.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

CORPORATE GOVERNANCE STATEMENT (continued)

Action taken and reasons

if not adopted

Recognise and publish the respective roles and responsibilities of the board and management

Adopted

Principle 1: Lay solid foundation for management and oversight

1.1 Formalise and disclose the functions reserved to the Board and those delegated to management

Have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties

Principle 2: Structure the board to add value

2.1 A majority of the Board should be independent
2.2 The chairperson should be an independent director
2.3 The roles of chairperson and chief executive officer should not be exercised by the same individual
2.4 The board should establish a nomination committee
2.5 Provide the information indicated in 'Guide to reporting on Principle 2’

Actively promote ethical and responsible decision-making

Adopted except as follow:

2.2 The Chairman does not satisfy the Independence Test. The Board considers that Mr Bell’s position as Chairman of the Board is appropriate given his experience in the resource sector.

2.4 The Company is not of a size that justifies having a separate Nomination Committee. However, matters typically dealt with by such a committee are dealt with by the Board.

Adopted

Principle 3: Promote ethical and responsible decision-making

3.1 Establish a code of conduct to guide the directors, the chief executive officer (or equivalent), the chief financial officer (or equivalent) and any other key executives as to:
3.1.1 the practices necessary to maintain confidence in the Company's integrity
3.1.2 the responsibility and accountability of individuals for reporting or investigating reports of unethical practices
3.2 Disclose the policy concerning trading in Company securities by directors, officers and employees
3.3 Provide the information indicated in 'Guide to Reporting on Principle 3'

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

CORPORATE GOVERNANCE STATEMENT (continued)

Action taken and reasons

if not adopted

Have a structure in place to independently verify and safeguard the integrity of the Company's financial reporting

Adopted except as follows:

Principle 4: Safeguard integrity in financial reporting
4.1 Require the chief executive officer (or equivalent) and the chief financial officer (or equivalent) to state in writing to the Board that the Company's financial reports present a true and fair view, in all material respects, of the Company's financial condition and operational results and are in accordance with relevant accounting standards.
4.2 The Board should establish an audit committee
4.3 Structure the audit committee so that it consists of:
Only non-executive directors
A majority of independent directors
An independent chairperson who is not the chairperson of the Board
At least three members

4.3 The Company established an audit committee on 6 August 2007. The audit committee includes one executive director. This is because he is an Australian based director where the other directors are located overseas. Prior to that date, the Company was not of a size that justifies having a separate audit committee. However, matters typically dealt with by such a committee are dealt with by the Board.

4.4 The audit committee should have a formal operating charter
4.5 Provide the information indicated in the 'Guide to reporting on Principle 4'

Promote timely and balanced disclosure of all material matters concerning the Company

Adopted

Principle 5: Make timely and balanced disclosure

5.1 Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance
5.2 Provide the information indicated in the 'Guide to reporting on Principle 5'

Respect the rights of shareholders and facilitate the effectiveness of those rights

Adopted

Principle 6: Respect the rights of shareholders

6.1 Design and disclose a communications strategy to promote effective communication with shareholders and encourage effective participation at general meetings.
6.2 Request the external audit to attend the annual general meeting and be available to answer shareholder questions about the audit and the preparation and content of the auditor's report

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

CORPORATE GOVERNANCE STATEMENT (continued)

	Action taken and reasons if not adopted
*Establish a sound system of risk oversight and management and* *internal control* Principle 7: Recognise and manage risk 7.1 The Board or appropriate Board committee should establish policies on risk oversight and management 7.2 The chief executive officer (or equivalent) and the chief financial officer (or equivalent) should state to the Board in writing that: 7.2.1 the statement given in accordance with best practice recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board 7.2.2 the Company's risk management and internal compliance and control system is operating efficiently and effectively in all material respects. 7.3 Provide the information indicated in the 'Guide to reporting on Principle 7'	Adopted
*Fairly review and actively encourage enhanced board and* *management effectiveness* Principle 8: Encourage enhanced performance 8.1 Disclose the process for performance evaluation of the Board, its committees and individual directors, and key executives Adopted *Ensure that the level and composition of remuneration is* *sufficient and reasonable and that its relationship to corporate* *and individual performance is defined* Principle 9: Remunerate fairly and responsibly 9.1 Provide disclosure in relation to the Company's remuneration policies to enable investors to understand (i) the cost and benefits of these policies and (ii) the link between remuneration paid to directors and key executives and corporate performance. Adopted except as follows:- 9.2 The Board should establish a remuneration committee 9.3 Clearly distinguish the structure of non-executive directors' remuneration from that of executives 9.4 Ensure that payment of equity-based executive remuneration is made in accordance with thresholds set in plans approved by shareholders 9.2 The Company is not of a size that justifies having a separate Remuneration Committee. However, matters typically dealt with by such committee are dealt with by the full Board. *Recognise the legal and other obligations of all legitimate* *stakeholders* Principle 10: Recognise the legitimate interest of stakeholders 10.1 Establish and disclose a code of conduct to guide compliance with legal and other obligations to legitimate stakeholders Adopted

Action taken and reasons
if not adopted

Establish a sound system of risk oversight and management and
internal control
Principle 7: Recognise and manage risk
7.1
The Board or appropriate Board committee should establish
policies on risk oversight and management
7.2
The chief executive officer (or equivalent) and the chief financial
officer (or equivalent) should state to the Board in writing that:
7.2.1
the statement given in accordance with best practice
recommendation 4.1 (the integrity of financial
statements) is founded on a sound system of risk
management and internal compliance and control which
implements the policies adopted by the Board
7.2.2
the Company's risk management and internal
compliance and control system is operating efficiently
and effectively in all material respects.
7.3
Provide the information indicated in the 'Guide to reporting on
Principle 7'

Adopted

Fairly review and actively encourage enhanced board and
management effectiveness
Principle 8: Encourage enhanced performance
8.1
Disclose the process for performance evaluation of the Board,
its committees and individual directors, and key executives
Adopted
Ensure that the level and composition of remuneration is
sufficient and reasonable and that its relationship to corporate
and individual performance is defined
Principle 9: Remunerate fairly and responsibly
9.1
Provide disclosure in relation to the Company's remuneration
policies to enable investors to understand (i) the cost and
benefits of these policies and (ii) the link between remuneration
paid to directors and key executives and corporate
performance.
Adopted except as follows:-
9.2
The Board should establish a remuneration committee
9.3
Clearly distinguish the structure of non-executive directors'
remuneration from that of executives
9.4
Ensure that payment of equity-based executive remuneration is
made in accordance with thresholds set in plans approved by
shareholders
9.2 The Company is not of a size that
justifies having a separate Remuneration
Committee. However, matters typically
dealt with by such committee are dealt
with by the full Board.
Recognise the legal and other obligations of all legitimate
stakeholders
Principle 10: Recognise the legitimate interest of stakeholders
10.1 Establish and disclose a code of conduct to guide compliance
with legal and other obligations to legitimate stakeholders
Adopted

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

INCOME STATEMENTS FOR THE YEAR ENDED 31 JULY 2007

Note Revenue from sale of goods 3(a) Other income 3(b) Debts forgiven under Deed of Company Arrangement 3(c) Gowings Hardware Pty Ltd write back on liquidation Occupancy expenses Cost of sales Write off of inventory to net realisable value Other expenses 3(d) Loss before income tax Income tax expense 4 Loss for the year Profit/(loss) attributable to minority equity interest Loss attributable to members of the parent entity Basic earnings/(loss) per share (cents per share) 6 Diluted earnings/(loss) per share (cents per share) 6 Dividends per share (cents)	CONSOLIDATED PARENT ENTITY 2007 $ 2006 $ 2007 $ 2006 $ - 12,924,946 - 12,621,324 79,356 188,986 79,356 215,562 374,476 - 371,390 - - (306,367) - - - (1,662,582) - (1,669,121) - (9,317,535) - (8,466,520) (44,673) - (44,673) - (425,848) (8,283,810) (425,848) (9,170,521)
	(16,689) (6,456,362) (19,775) (6,469,276) - - - -
	(16,689) (6,456,362) (19,775) (6,469,276) - - - -
	(16,689) (6,456,362) (19,775) (6,469,276)
	(0.0050) (17.200) (0.0050) (17.200) - -

The income statements should be read in conjunction with the accompanying notes.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

BALANCE SHEETS AS AT 31 JULY 2007

Note ASSETS Current Assets Cash and cash equivalents 7 Trade and other receivables 8 Inventories 9 Other current assets 10 Total Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables 12 Short-term borrowings 7 Total Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 13 Retained earnings TOTAL EQUITY	CONSOLIDATED PARENT ENTITY 2007 $ 2006 $ 2007 $ 2006 $ 1,419,901 1,345,429 1,419,901 1,345,429 17,098 - 17,098 - 8,500 53,173 8,500 53,173 5,624 - 5,624 -
	1,451,123 1,398,602 1,451,123 1,398,602
	1,451,123 1,398,602 1,451,123 1,398,602
	39,604 2,631,878 39,604 2,666,878 - 38,086 - -
	39,604 2,669,964 39,604 2,666,878
	39,604 2,669,964 39,604 2,666,878
	1,411,519 (1,271,362) 1,411,519 (1,268,276)
	25,522,645 22,823,075 25,522,645 22,823,075 (24,111,126) (24,094,437) (24,111,126) (24,091,351)
	1,411,519 (1,271,362) 1,411,519 (1,268,276)

The balance sheets should be read in conjunction with the accompanying notes.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 JULY 2007

Consolidated Entity Note Balance at 1 August 2005 Loss attributable to members of parent entity Proceeds of share issues Costs of share issues Acquisition by parent company Sub-total Dividends paid or provided for Balance at 31 July 2006 Loss attributable to members of parent entity Proceeds of share issues Costs of share issues Sub-total Dividends paid or provided for Balance at 31 July 2007 Parent Entity Note Balance at 1 August 2005 Loss attributable to members of parent entity Proceeds of share issues Costs of share issues Sub-total Dividends paid or provided for Balance at 31 July 2006 Loss attributable to members of parent entity Proceeds of share issues Costs of share issues Sub-total Dividends paid or provided for Balance at 31 July 2007	Ordinary share capital $ Retained earnings $ Minority equity interests $ Total $ 22,823,075 (17,638,075) - 5,185,000 - (6,456,362) - (6,456,362) - - - - - - - - - - - -
	22,823,075 (24,094,437) - (1,271,362) - - - -
	22,823,075 (24,094,437) - (1,271,362)
	- (16,689) - (16,689) 2,918,000 - - 2,918,000 (218,430) - - (218,430)
	25,522,645 (24,111,126) - 1,411,519 - - - -
	25,522,645 (24,111,126) - 1,411,519
	Ordinary share capital $ Retained earnings $ Minority equity interests $ Total $ 22,823,075 (17,622,075) - 5,201,000 - (6,469,276) - (6,469,276) - - - - - - - -
	22,823,075 (24,091,351) - (1,268,276) - - - -
	22,823,075 (24,091,351) - (1,268,276)
	- (19,775) - (19,775) 2,918,000 - - 2,918,000 (218,430) - - (218,430)
	25,522,645 (24,111,126) - 1,411,519 - - - -
	25,522,645 (24,111,126) - 1,411,519

The statements of changes in equity should be read in conjunction with the accompanying notes.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

CASH FLOW STATEMENTS

FOR THE YEAR ENDED 31 JULY 2007

Note Cash flows from operating activities Receipts from customers Interest received Payment to suppliers and employees Funds paid to Administrator to extinguish creditor claims on successful completion of Deed of Company Arrangement Income tax paid Net cash provided by (used in) operating activities 7 Cash flows from investing activities Proceeds from sale of property, plant and equipment Net cash provided by investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds from borrowings Share issue costs Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 7	CONSOLIDATED PARENT ENTITY 2007 $ 2006 $ 2007 $ 2006 $ - 14,665,841 - 14,307,805 77,128 20,998 77,128 20,387 (407,140) (14,792,842) (407,140) (14,243,412) (2,257,000) - (2,295,086) - - - - -
	(2,587,012) (106,003) (2,625,098) 84,780
	- 143,346 - 96,649
	- 143,346 - 96,649
	2,918,000 - 2,918,000 - - 35,000 - - (218,430) - (218,430) -
	2,699,570 35,000 2,699,570 -
	112,558 72,343 74,472 181,429 1,307,343 1,235,000 1,345,429 1,164,000
	1,419,901 1,307,343 1,419,901 1,345,429

The cash flow statements should be read in conjunction with the accompanying notes.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2007

1. CORPORATE INFORMATION

The financial report of the Company for the year ended 31 July 2007 was authorised for issue in accordance with a resolution of the directors on 30 October 2007.

The Company is limited by shares, incorporated in Australia and its shares are publicly traded on the Australian Securities Exchange.

The principal activity during the financial period of the entities within the consolidated entity, subsequent to entering into a Deed of Reconstruction, was to continue to review business opportunities available to the Company.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation
(b) Statement of Compliance
(c) Changes in Accounting Policy
(d) Basis of Consolidation
(e) Income Tax
(f) Inventories
(g) Impairment of Assets
(h) Employee Benefits
(i) Provisions
(j) Cash and Cash Equivalents
(k) Revenue
(l) Goods and Services Tax (GST)
(m) Comparative Figures
(n) Critical Accounting Estimates and Judgements

(a) Basis of Preparation

The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards, including Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.

The annual 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.

The financial report is presented in Australian dollars.

Retail Star Limited (the “Company”) for the year ended 31 July 2007 comprises the Company and its subsidiaries (together referred to as the “Group”).

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Statement of Compliance

The financial report complies with all International Financial Reporting Standards (IFRS) in their entirety.

The following Australian Accounting Standards and UIG Interpretations that have been recently amended are not applicable to the Group and therefore have no impact.

AASB	Affected
Amendment/UIG	Standard(s)
2005-10	AASB 132:Financial Instruments: Disclosure and Presentation,_AASB 101:_Presentation of
	_Financial Statements,_AASB 114:_Segment Reporting,_AASB 117:_Leases,_AASB 133:
	Earnings per Share,_AASB 139:_Financial Instruments: Recognition and Measurement,
	AASB 1:First-time Adoption of Australian Equivalents to International Financial Reporting
	_Standards,_AASB 4:_Insurance Contracts,_AASB 1023:_General Insurance Contracts_and
	AASB 1038:Life Insurance Contracts
AASB	Affected
Amendment/UIG	Standard(s)
2005-11	AASB 101:_Presentation of Financial Statements,_AASB 112:_Income Taxes,_AASB 132:
	Financial Instruments: Presentation,_AASB 133:_Earnings per Share,_AASB 139:_Financial
	Instruments: Recognition and Measurement_and AASB 141:_Agriculture
2005-12	AASB 1038:Life Insurance Contracts_and AASB 1023:_General Insurance Contracts
2005-13	AAS 25:Financial Reporting by Superannuation Plans
2006-2	AASB 1:First Time Adoption of AIFRS
2006-4	AASB 134:Interim Financial Reporting
101(Revised)	Presentation of Financial Statements
1049	Financial Reporting of General Government Sectors by Governments
UIG7	Applying the Restatement Approach under AASB 129:Financial Reporting in
	Hyperinflationary Economies
UIG8	Scope of AASB 2:Share Based Payment
UIG9	Reassessment of Embedded Derivatives
UIG10	Interim Financial Reporting and Impairment

(c) Changes in accounting policy

The following Australian Accounting Standards and UIG Interpretations are effective for the current year end are not applicable to the Group and therefore have no impact.

AASB	Affected
Amendment/UIG	Standard(s)
2004-3	AASB 1:First Time Adoption of AIFRS
2005-1	AASB 139:Financial Instruments: Recognition and Measurement
2005-2	AASB 1023:General Insurance Contracts
2005-3	AASB 119:Employee Benefits
2005-4	AASB 139:Financial Instruments: Recognition and Measurement,_AASB 132:_Financial
	_Instruments: Disclosure and Presentation,_AASB 1:_First-time adoption of AIFRS,_AASB
	1023:General Insurance Contracts_and AASB 1038:_Life Insurance Contracts
2005-5	AASB 1:First-time adoption of AIFRS, AASB 139: Financial Instruments: Recognition and
	Measurement
2005-6	AASB 3:Business Combinations

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(c) Changes in accounting policy (continued)

2005-9 AASB 4: Insurance contracts , AASB 1023: General Insurance Contracts , AASB 139: Financial Instruments: Recognition and Measurement and AASB 132: Financial Instruments: Disclosure and Presentation

2006-1 AASB 121: The Effects of Changes in Foreign Exchange 2006-3 AASB 1045: Land Under Roads: Amendments to AAS 27A, AAS 29A and AAS 31A New standard AASB 7: Financial Instruments: Disclosures UIG4 Determining whether an Arrangement contains a Lease UIG5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds UIG6 Liabilities arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment

(d) Basis of consolidation

A controlled entity is any entity in respect of which Retail Star Limited has the power to control the financial and operating policies so as to obtain benefits from its activities.

A list of controlled entities is contained in Note 16 to the financial statements.

All inter-company balances and transactions between entities in the consolidated entity, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those policies applied by the parent entity.

Minority equity interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.

(e) Income tax

The change for current income tax expense is based on the profit for the period adjusted for any non-assessable or disallowable items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance 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 consolidated 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.

Retail Star 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 liabilities, except for any deferred tax liabilities resulting from unused tax losses and tax credits which are immediately assumed by the parent entity. The current tax liability of each group entity is then subsequently assumed by the parent entity. 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.

(f) Inventories

Inventories are measured at the lower of cost and net realisable value. Costs are determined using the retail inventory method.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(g) Impairment of Assets

At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

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.

(h) Employee Benefits

Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs.

Employees benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(i) Provisions

Provisions 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.

(j) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

(k) Revenue

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

All revenue is stated net of the amount of goods and services tax (GST).

(l) 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. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of expense.

Receivables and payables in the balance sheet are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(m) Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

(n) Critical Accounting Estimates and Judgements

The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Key estimates – impairment

The group assesses impairment 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.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

		CONSOLIDATED	CONSOLIDATED	PARENT	ENTITY
		2007	2006	2007	2006
		$	$	$	$
3.	REVENUES AND EXPENSES
	*Revenue and Expenses from Continuing*
	*Operations*
(a)	Revenue from sale goods
	Revenue from the sale of goods	-	12,924,946	-	12,621,324
		-	12,924,946	-	12,621,324
(b)	Other income
	Finance revenue – Bank interest	79,356	20,998	79,356	20,387
	Rental and concession income	-	89,594	-	122,099
	Supplier discount and rebates received	-	51,638	-	46,554
	Other income	-	26,756	-	26,522
		79,356	188,986	79,356	215,562
(c)	Other income
	Debts forgiven under Deed of Company
	Arrangement	374,476	-	371,390	-
		374,476	-	371,390	-
(d)	Other expenses
	Administration expenses	177,486	7,771,471	177,486	8,702,617
	Auditors remuneration	65,330	40,000	65,330	40,000
	Borrowing costs	-	9,947	-	6,972
	Directors’ fees	86,250	-	86,250	-
	Distribution expenses	-	45,033	-	45,033
	Due diligence costs	96,782	-	96,782
	Marketing expense	-	281,807	-	247,142
	Selling expenses	-	135,552	-	128,757
		425,848	8,283,810	425,848	9,170,521

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

		CONSOLIDATED	CONSOLIDATED	PARENT ENTITY	PARENT ENTITY
		2007	2006	2007	2006
		$	$	$	$
4.	Income Tax Expense
	The prima facie tax on profit/(loss) from ordinary activities before income tax		is reconciled to the income tax		expense as
	follows:
	Prima facie (benefit)/expense on profit/(loss)
	from ordinary activities (30%)	(5,007)	(1,936,909)	(5,933)	(1,940,783)
	Non assessable income – under Deed of
	Company Arrangement (DOCA)	(112,343)	-	(111,417)	-
	Tax effect of permanent differences	109	-	109	-
		(117,241)	(1,936,909)	(117,241)	(1,940,783)
	Deferred Tax Asset (DTA) permanent differences
	and tax losses not brought to account	117,241	1,936,909	117,241	1,940,783
	Income tax expense for the year	-	-	-	-
	*Deferred tax assets not brought to account*
	*at balance date arise in respect to the*
	*following:*
	Tax losses not brought to account	390,803	5,540,909	390,803	4,979,783
	Other temporary difference	(51,512)	-	(51,512)	-
		339,291	5,540,909	339,291	4,979,783

The DTA not brought to account will only be obtained if:

(a) future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised;

(b) the conditions for deductibility imposed by tax legislation continue to be complied with; and
(c) the company and consolidated entity is able to meet the continuity of business tests and or continuity of ownership.

Tax consolidation

The Company has formed a tax consolidated group.

5. DIVIDENDS PAID AND PROPOSED

No dividends were paid or recommended during the year.

6. EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing net profit/(loss) for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit/(loss) attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

6. EARNINGS PER SHARE (continued)

	CONSOLIDATED	CONSOLIDATED
	2007	2006
	$	$
The following reflects the income and share data used	in the basic and diluted	earnings per
Net loss attributable to ordinary equity holders
of the parent	(16,689)	(6,456,362)
Weighted average number of ordinary shares
(excluding reserved shares) for basic earnings
per share	336,240,712	37,529,753
Effect of dilution:
Share options	6,432,540	-
Weighted average number of ordinary shares
adjusted for the effect of dilution	342,673,252	37,529,753

The following reflects the income and share data used in the basic and diluted earnings per share computations:

There have been transactions involving ordinary shares and potential ordinary shares between the reporting date and the date of completion of these financial statements which have been included in the Earnings per Share (EPS) calculation. Transactions involving ordinary shares and potential ordinary shares that have been included in the above calculation are 117,500,000 ordinary shares and 30,000,000 options which were both allotted on 6 August 2007.

Diluted earnings per share is not reflected as the result is anti-dilutive in nature.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

7. CASH AND CASH EQUIVALENTS Cash at bank and cash in hand	CONSOLIDATED PARENT ENTITY 2007 $ 2006 $ 2007 $ 2006 $ 1,419,901 1,307,343 1,419,901 1,345,429
	1,419,901 1,307,343 1,419,901 1,345,429

Cash at bank earns interest at floating rates based on daily bank deposit rates.

The fair value of cash and cash equivalents is $1,419,901 (2006: $1,307,343).

Reconciliation of cash Cash at the end of the financial year as shown in the cash flow statement is reconciled to items in the balance sheet as follows: Cash and cash equivalents Bank overdrafts	1,419,901 1,345,429 1,419,901 1,345,429 - (38,086) - -
	1,419,901 1,307,343 1,419,901 1,345,429

The bank overdraft at 31 July 2006 was secured over the assets of the Company. The Group has no credit standby arrangements, loan or overdraft facilities for the year ended 31 July 2007.

Reconciliation of net loss after tax to net cash
flows from operations
Net loss
Adjustments for:
Debts forgiven under DOCA
Funds paid to Administrator to extinguish creditor
claims on successful completion of Deed of
Company Arrangement
Write-off of capitalised expenditure
Net loss on disposal of property, plant and
equipment
Net gain on disposal of controlled entity
Write-downs to recoverable amount
Write off of inventory to net realisable value
Impairment loss
Changes in assets and liabilities:
(Increase)/decrease in trade and other
receivables
(Decrease)/increase in trade payables and
accruals
(Increase)/decrease in prepayments
(Increase)/decrease in inventories
Increase/(decrease) in provisions
Net cash from/(used in) operating activities

(16,689)
(6,456,362)
(19,775)
(6,469,276)
(374,476)
-
(371,390)
-
(2,257,000)
-
(2,295,086)
-
-
163,003
-
100,680
-
(1,738,177)
-
(1,759,903)
-
351,463
-
-
-
(9,262)
-
(25,469)
44,673
-
44,673
-
-
45,000
-
45,000
(9,507)
363,265
(9,507)
229,761
31,611
(2,229,000)
31,611
(4,519,267)
(5,624)
222,007
(5,624)
265,582
-
5,545,359
-
7,689,450
-
3,636,701
-
4,528,222

(2,587,012)
(106,003)
(2,625,098)
84,780

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

		CONSOLIDATED	CONSOLIDATED	PARENT ENTITY	PARENT ENTITY
		2007	2006	2007	2006
		$	$	$	$
8.	TRADE AND OTHER RECEIVABLES
	Current
	Accrued income	2,228	-	2,228	-
	Other receivables (i)	14,870	-	14,870	-
		17,098	-	17,098	-
	(i) Other receivables are non-interest bearing and expected to be received		in 30 days.
9.	INVENTORIES
	Current
	At net realisable value
	Finished goods	53,173	53,173	53,173	53,173
	Write off of inventory to net realisable value	(44,673)	-	(44,673)	-
		8,500	53,173	8,500	53,173
10.	OTHER CURRENT ASSETS
	Current
	Prepayments	5,624	-	5,624	-
		5,624	-	5,624	-
11.	INTANGIBLE ASSETS
	Goodwill
	Cost	-	4,959,696	-	4,914,696
	Accumulated impairment losses	-	(4,959,696)	-	(4,914,696)
	Net carrying value	-	-	-	-
	Total Intangibles	-	-	-	-
	The goodwill reflected related to the acquisition of part of Gowings Hardware Pty Limited. The cost of this investment was
	written off during the year ended 31 July 2006.
12.	TRADE AND OTHER PAYABLES
	Current
	Unsecured Liabilities
	Trade payables	19,604	2,478,469	19,604	2,478,469
	Sundry payables and accrued expenses	20,000	161,000	20,000	161,000
	Amounts payable to wholly-owned subsidiaries	-	-	-	35,000
	GST Payable	-	(7,591)	-	(7,591)
		39,604	2,631,878	39,604	2,666,878

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

		CONSOLIDATED	CONSOLIDATED	PARENT ENTITY	PARENT ENTITY
		2007	2006	2007	2006
		$	$	$	$
13.	ISSUED CAPITAL
(a)	Issued capital
	Ordinary shares (i)	25,522,645	22,823,075	25,522,645	22,823,075
		25,522,645	22,823,075	25,522,645	22,823,075
	(i) Ordinary shares
	Issued and fully paid	27,193,334	24,275,334	27,193,334	24,275,334
	Less: equity raising costs	(1,670,689)	(1,452,259)	(1,670,689)	(1,452,259)
		25,522,645	22,823,075	25,522,645	22,823,075

Fully paid ordinary shares have the right to receive dividends as declared and entitle their holder to vote either in person or by proxy at a meeting of the Company.

Effective 1 July 1998, the Corporations legislation abolished the concepts of authorised capital and par value. Accordingly the parent does not have authorised capital or par value in respect of its shares.

Movement in listed ordinary shares on issue At 1 August 2005 At 1 August 2006 Ordinary shares issued on 22 August 2006 Ordinary shares issued on 22 August 2006 Ordinary shares issued on 9 November 2006 Ordinary shares issued on 21 December 2006 Transaction costs on share issue At 31 July 2007 Movements in unlisted options expiring 30 November 2006 exercisable at $1.00 At 1 August 2006 Options expired at 30 November 2006 At 31 July 2007 Movement in unlisted options expiring 31 May 2007 exercisable at $0.60 At 1 August 2006 Options expired at 31 May 2007 At 31 July 2007 Movement in unlisted options expiring 31 May 2008 exercisable at $0.80 At 1 August 2006 At 31 July 2007	CONSOLIDATED PARENT ENTITY Number $ Number $ 37,529,753 22,823,075 37,529,753 22,823,075
	37,529,753 22,823,075 37,529,753 22,823,075 38,000,000 38,000 38,000,000 38,000 160,000,000 960,000 160,000,000 960,000 120,000,000 1,440,000 120,000,000 1,440,000 40,000,000 480,000 40,000,000 480,000 - (218,430) - (218,430)
	395,529,753 25,522,645 395,529,753 25,522,645
	311,000 - 311,000 - (311,000) - (311,000) -
	- - - -
	65,000 - 65,000 - (65,000) - (65,000) -
	- - - -
	65,000 - 65,000 -
	65,000 - 65,000 -

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

13. ISSUED CAPITAL (continued)

Movement in unlisted options expiring 31 May 2008 exercisable at $1.00 At 1 August 2006 At 31 July 2007 Movement in unlisted options expiring 15 December 2009 exercisable at $0.261 At 1 August 2006 At 31 July 2007 Movement in unlisted options expiring 15 December 2010 exercisable at $0.287 At 1 August 2006 At 31 July 2007 Movement in unlisted options expiring 15 December 2011 exercisable at $0.314 At 1 August 2006 At 31 July 2007 Movement in unlisted options expiring 15 December 2009 exercisable at $0.25 At 1 August 2006 At 31 July 2007	CONSOLIDATED PARENT ENTITY Number $ Number $ 70,000 - 70,000 -
	70,000 - 70,000 -
	1,333,334 - 1,333,334 -
	1,333,334 - 1,333,334 -
	1,333,334 - 1,333,334 -
	1,333,334 - 1,333,334 -
	1,333,332 - 1,333,332 -
	1,333,332 - 1,333,332 -
	3,300,000 - 3,300,000 -
	3,300,000 - 3,300,000 -

14. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s principal financial instruments comprise of cash and short-term deposits.

The main purpose of these financial instruments is to finance the Group’s operations. The Group has other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. The main risks arising from the Group’s financial instruments are cash flow interest rate risk, liquidity risk and credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.

Cash flow interest rate risk The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s cash and short-term deposits. Since the Group does not have any long-term debt obligations, the Group’s exposure to this risk is nominal.

Credit risk

The Group’s policy is to trade only with recognised, creditworthy third parties.

It is the Group’s policy that all customers who wish to trade on credit terms will be subject to credit verification procedures.

In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

There are no significant concentrations of credit risk within the Group.

Liquidity risk

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans and capital raising.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

15. FINANCIAL INSTRUMENTS

Fair values

Set out below is a comparison by category of carrying amounts and fair values of all of the Group’s financial instruments recognised in the financial statements.

The fair values of financial assets have been calculated using market interest rates.

CONSOLIDATED Financial assets Cash Trade and other receivables Financial liabilities on balance sheet Trade and other payables Short term borrowings PARENT Financial assets Cash Trade and other receivables Financial liabilities on balance sheet Trade and other payables	Carrying amount Fair value 2007 $ 2006 $ 2007 $ 2006 $ 1,419,901 1,345,429 1,419,901 1,345,429 17,098 - 17,098 -
	39,604 2,631,878 39,604 2,631,878 - 38,086 - 38,086
	1,419,901 1,345,429 1,419,901 1,345,429 17,098 - 17,098 -
	39,604 2,666,878 39,604 2,666,878

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

15. FINANCIAL INSTRUMENTS (continued)

Interest rate risk

The following table sets out the carrying amount, by maturity, of the financial instruments:

Year ended 31/7/2007	<1 year $ >1-<2 years $ >2-<3 years $ >3-<4 years $ >4-<5 years $ >5 years $ Total $ Weighted average effective interest rate %
CONSOLIDATED FINANCIAL ASSETS Floating rate Cash assets Weighted average effective interest rate Fixed rate Trade & other receivables Weighted average effective interest rate FINANCIAL LIABILITIES Floating rate Short-term borrowings Weighted average effective interest rate Fixed rate Trade & other payables Weighted average effective interest rate	1,419,901 - - - - - 1,419,901 5.38%
	5.38% - - - - - 17,098 - - - - - 17,098 0.00%
	0.00% - - - - - - - - - - - - 0.00%
	0.00% - - - - - 39,604 - - - - - 39,604 0.00%
	0.00% - - - - -

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

15. FINANCIAL INSTRUMENTS (continued)

Year ended 31/7/2007	<1 year $ >1-<2 years $ >2-<3 years $ >3-<4 years $ >4-<5 years $ >5 years $ Total $ Weighted average effective interest rate %
PARENT FINANCIAL ASSETS Floating rate Cash assets Weighted average effective interest rate Fixed rate Trade & other receivables Weighted average effective interest rate FINANCIAL LIABILITIES Fixed rate Trade & other payables Weighted average effective interest rate Year ended 31/7/2006	1,419,901 - - - - - 1,419,901 5.38%
	5.38% - - - - - 17,098 - - - - - 17,098 0.00%
	0.00% - - - - - 39,604 - - - - - 39,604 0.00%
	0.00% - - - - - <1 year $ >1-<2 years $ >2-<3 years $ >3-<4 years $ >4-<5 years $ >5 years $ Total $ Weighted average effective interest rate %
CONSOLIDATED FINANCIAL ASSETS Floating rate Cash assets Weighted average effective interest rate Fixed rate Trade receivables Weighted average effective interest rate FINANCIAL LIABILITIES Floating rate Short-term borrowings Weighted average effective interest rate Fixed rate Trade payables Weighted average effective interest rate	1,345,429 - - - - - 1,345,429 -
	- - - - - - - - - - - - - -
	- - - - - - 38,086 - - - - - 38,086 -
	- - - - - - 2,631,878 - - - - - 2,631,878 -
	- - - - - -

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

15. FINANCIAL INSTRUMENTS (continued)

Year ended 30/6/06	<1 year $ >1-<2 years $ >2-<3 years $ >3-<4 years $ >4-<5 years $ >5 years $ Total $ Weighted average effective interest rate %
PARENT FINANCIAL ASSETS Floating rate Cash assets Weighted average effective interest rate Fixed rate Trade receivables Weighted average effective interest rate FINANCIAL LIABILITIES Fixed rate Trade payables Weighted average effective interest rate	1,345,429 - - - - - 1,345,429 -
	- - - - - - - - - - - - - -
	- - - - - - 2,666,878 - - - - - 2,666,878 -
	- - - - - -

Interest on financial instruments classified as floating rate is repriced at intervals of less than one year. Interest on financial instruments classified as fixed rate is fixed until maturity of the instrument.

16. CONTROLLED ENTITIES

The consolidated financial statements include the financial statements of Retail Star Limited and the controlled subsidiaries listed in the following table:

subsidiaries listed in the following table:
	*Country of*	*% Equity*	*interest*
	*Incorporation*	31 July	31 July
		2007	2006
Star Shopper Pty Ltd	Australia	100	100
Star Shopper Wholesale Pty Ltd	Australia	100	100
Gowings Hardware Pty Ltd	Australia	NIL	100

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

17. EVENTS AFTER THE BALANCE SHEET DATE

On 6 August 2007 the Company acquired a 100% shareholding in Orion Exploration Pty Ltd. The company paid $1.5 million cash as consideration for the acquisition. The cash consideration was funded through Red Rock Resources Plc subscribing for 80 million Shares, 20 million Unlisted June 2008 Options and 20 million Class A Performance Shares.

On 6 August 2007 the Company completed a successful capital raising, placing 37,500,000 Ordinary Shares at 1.5 cents each to raise $562,500 (less costs).

18. AUDITORS’ REMUNERATION

The auditor of Retail Star Limited is HLB Mann Judd.

Amounts received or due and receivable by HLB Mann Judd for: � An audit or review of the financial report of the entity and any other entity in the consolidated group	CONSOLIDATED PARENT ENTITY 2007 $ 2006 $ 2007 $ 2006 $ 65,330 40,000 65,330 40,000
	65,330 40,000 65,330 40,000

19. CONTINGENT LIABILITIES

At 31 July 2006 the company and consolidated entity were under Administration. At that date the amount payable to unsecured creditors had not yet been determined. Also, quantified claims had not been received by the Administrators in respect of all unsecured creditors.

As a result, the total amount of the liability to unsecured creditors at 31 July 2006 cannot be estimated with reliability. The amount recognised in these financial statements is based on the best available information.

20. SEGMENT INFORMATION

The consolidated entity operates in one business, retailing, and one geographical market: Australia.

21. RELATED PARTY DISCLOSURES

(a) Details of key management personnel

(i) Directors

A Bell Chairman (Non-Executive Director) Appointed 6 August 2007 I Scott (Executive Director) Appointed 6 August 2007 M Yannaghas (Non Executive Director) Appointed 6 August 2007 R Kestel (Non Executive Director) Appointed 15 August 2006 S Nicols (Non Executive Director) Appointed 15 August 2006 A S Crimmins (Non Executive Director) Resigned 6 August 2007

(ii) Company Executives

There were no company executives employed during the year ended 31 July 2007. Mr Scott was appointed as an executive on 6 August 2007

(b) Compensation of directors

Remuneration Philosophy

The performance of the Company depends upon the quality of its directors and executives. To prosper, the Company must attract, motivate and retain highly skilled directors and executives.

Remuneration Committee

The Company does not have a formal Remuneration Committees. The full Board attends to the matters normally attended to by a Remuneration Committee.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 JULY 2007

21. RELATED PARTY DISCLOSURES (continued)

(b) Compensation of directors (continued)

Director Remuneration

Shareholder approval is obtained in relation to the overall limit set for directors’ fees. The directors must set individual Board fees within the limit approved by shareholders.

The level of fees is not linked to directors’ performance.

Shareholders approve the maximum aggregate remuneration for non-executive directors. The maximum aggregate remuneration approved for directors is currently $210,000

Senior Management and Executives

The Company does not have any senior management or executives, and does not have any employment contracts in place for the year ended 31 July 2007. Mr Scott was appointed as an executive on 6 August 2007.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JULY 2007

21. RELATED PARTY DISCLOSURES (continued)

(b) Compensation of directors (continued)

Remuneration of Directors and Named Executives

Table 1: Directors’ remuneration for the year ended 31 July:

			Primary	Benefits		Post Employment	Post Employment
		Salary &	Cash STI		Non	Super-	Retirement	Equity	Other	Total	%
		Fees		LTI	Monetary	annuation		Options			Performance
					Benefits						Related
R Kestel*	2006	-	-	-	-	-	-	-	-	-	-
Director	2007	28,750	-	-	-	-	-	-	-	28,750	-
S Nicols*	2006	-	-	-	-	-	-	-	-	-	-
Director	2007	28,750	-	-	-	-	-	-	-	28,750	-
A Crimmins�	2006	-	-	-	-	-	-	-	-	-	-
��	2007	28,750	-	-	-	-	-	-	-	28,750	-
I Scott**	2006	-	-	-	-	-	-	-	-	-	-
Director	2007	-	-	-	-	-	-	-	-	-	-
M Yannaghas**	2006	-	-	-	-	-	-	-	-	-	-
Director	2007	-	-	-	-	-	-	-	-	-	-
A Bell**	2006	-	-	-	-	-	-	-	-	-	-
Director	2007	-	-	-	-	-	-	-	-	-	-
Total	2006	-	-	-	-	-	-	-	-	-	-
	2007	86,250	-	-	-	-	-	-	-	86,250	-

Appointed 15 August 2006

** Appointed 6 August 2007

Resigned 6 August 2007.

There were no Company executives employed during the year ended 31 July 2007.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2007

21. RELATED PARTY DISCLOSURES (continued)

(c) Shareholdings of directors

Shares held in the Company (number)

Shares held in the Company (number)
31 July 2007	Balance at beginning of period 01-Aug-06 Exercised options Net change Other Balance at 31-Jul-07
R Kestel S Nicols A Crimmins� I Scott M Yannaghas A Bell Total 31 July 2006**	- - - - - - 16,166,000 16,166,000 - - 13,000,000 13,000,000 - - - - - - - - - - - -
	- - 29,166,000 29,166,000
	Balance at beginning of period 01-Aug-05 Exercised options Net change Other Balance at 31-Jul-06
R Kestel S Nicols A Crimmins� Total	- - - - - - - - - - - -
	- - - -

Appointed 15 August 2006

** Appointed 6 August 2007

� Resigned 6 August 2007

(d) Option holdings of directors

No unlisted Options were held by the current directors during the periods ending 31 July 2006 and 31 July 2007.

(e) Other transactions with directors

Other transactions with the Company or its controlled entities

The terms and conditions of transactions with Directors and Executives and their related entities were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-Director related entities on an arms length basis.

The aggregate amount recognised during the year to Specified Directors and Specified Executives and their related entities were as follows:

Mr R Kestel

Fees for accounting services of $17,190 (2006: nil), due diligence costs $32,400 (2006: nil) and corporate secretarial fees of $30,757 (2006: nil) were paid to Mr Kestel’s related company, Nissen Kestel Harford, during the year. Amounts outstanding at the year end were $10,000 (2006: nil).

Mr A Crimmins

Fees for website costs of $1,570 (2006: nil) were paid to Mr Crimmins’ related company, TCCS Pty Ltd, during the year. Amounts outstanding at the year end were nil (2006: nil).

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

DIRECTORS’ DECLARATION FOR THE YEAR ENDED 31 JULY 2007

In accordance with a resolution of the directors, I state that:

In the opinion of the directors:
(a) except for such adjustments or additional disclosures, if any, as might have been determined to be necessary had adequate and sufficient information been available prior to the Company’s release from administration on 15 August 2006, the financial report and notes of the Company and the Consolidated entity are in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 31 July 2007 and of their performance for the year ended on that date; and
- (ii) complying with Accounting Standards and Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2(b); and
(c) 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 has been made after receiving the declarations required to be made to the directors in accordance with sections 295A of the Corporations Act 2001 for the financial year ending 31 July 2007.

On behalf of the Board

==> picture [153 x 49] intentionally omitted <==

Ross Kestel Director

30 October 2007

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

==> picture [95 x 74] intentionally omitted <==

RETAIL STAR LIMITED ABN 71 098 238 585

INDEPENDENT AUDITOR’S REPORT

To the members of Retail Star Limited:

We have audited the accompanying financial report of Retail Star Limited (“the company”), which comprises the balance sheet as at 31 July 2007, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors’ declaration for both the company and the Retail Star Limited group (“the consolidated entity”) as set out on pages 14 to 37. The consolidated entity comprises the company and the entities it controlled at the year’s end or from time to time during the financial year.

As permitted by the Corporations Regulations 2001, the company has disclosed information about the remuneration of directors and executives (“remuneration disclosures”), required by Accounting Standard AASB 124: Related Party Disclosures, under the heading “remuneration report” in pages 6 and 7 of the directors’ report and not in the financial report. We have audited these remuneration disclosures.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

The directors of the company are also responsible for the remuneration disclosures contained in the directors’ report.

In Note 2(a), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. Our responsibility is to also express an opinion on the remuneration disclosures contained in the directors’ report based on our audit.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report and the remuneration disclosures contained in the directors’ report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report and the remuneration disclosures contained in the directors’ report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report and the remuneration disclosures contained in the directors’ report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report and the remuneration disclosures contained in the directors’ report.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

==> picture [57 x 58] intentionally omitted <==

RETAIL STAR LIMITED ABN 71 098 238 585

INDEPENDENT AUDITOR’S REPORT (continued)

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, provided to the directors of Retail Star Limited on 25 October 2007, would be in the same terms if provided to the directors as at the date of this auditor’s report.

Basis for Qualified Auditor’s Opinion

Our audit report dated 24 January 2007 relating to the financial report for the year ended 31 July 2006 contained the following statement under the heading “Qualification”:

“As stated in Note 21 [to the July 2006 financial report], Administrators were appointed to the companies in the consolidated entity on 8 November 2005, and the companies remained in Administration until 15 August 2006.

As the accounting records maintained during the period in which the companies in the consolidated entity were under Administration are not adequate to permit the application of necessary audit procedures we are unable to obtain all the information and explanations we require in order to form an opinion on the financial report.”

Note 19 of the July 2007 financial report refers to the issue associated with reliably estimating unsecured creditors at 31 July 2006 and also the fact that quantified claims had not been received in respect of all unsecured creditors during the period when the company and consolidated entity were under Administration.

Qualified Auditor’s Opinion

In our opinion, except for the effects on the financial report of the matters referred to in the preceding paragraph:

(a) the financial report of Retail Star Limited is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 31 July 2007 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2(a).

Auditor’s Opinion on the AASB 124 Disclosures contained in the Directors’ Report

In our opinion the remuneration disclosures that are contained in pages 6 and 7 of the directors’ report comply with Accounting Standard AASB 124.

==> picture [159 x 43] intentionally omitted <==

HLB MANN JUDD (NSW Partnership) Chartered Accountants

==> picture [97 x 36] intentionally omitted <==

P B Meade Partner

Sydney 30 October 2007

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

Additional information required by the Australian Securities Exchange Ltd, and not shown elsewhere in this report is as follows. The information is complete up to 22 October 2007.

(a) Distribution of equity securities

(i) Ordinary share capital

513,029,753 fully paid shares held by 1,349 shareholders. All issued ordinary shares carry one vote per share and carry the rights to dividends.

The number of ordinary shareholders, by size of holding are:

1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Holding less than a marketable parcel	Fully Paid Ordinary Shares 122 300 124 488 315
	1,349
	734

(ii) Unlisted Class “A” Performance Shares

20,000,000 Class “A” performance shares are held by Red Rock Resources plc. All issued Class “A” performance shares do not carry the right to vote or receive dividends.

(iii) Unlisted Class “B” Performance Shares

30,000,000 Class “B” performance shares are held by Red Rock Resources plc. All issued Class “A” performance shares do not carry the right to vote or receive dividends.
(iv) Unlisted Class “C” Performance Shares
30,000,000 Class “C” performance shares are held by Red Rock Resources plc. All issued Class “A” performance shares do not carry the right to vote or receive dividends.

(v) Unlisted options expiring 30 June 2008 exercisable at $0.025

20,000,000 unlisted options expiring 30 June 2008 exercisable at $0.025 are held by Red Rock Resources plc and do not carry the right to vote or receive dividends.
(vi) Unlisted options expiring 30 June 2008 exercisable at $0.015
10,000,000 unlisted options expiring 30 June 2008 exercisable at $0.015 do not carry the right to vote or receive dividends.
The only option holder to hold more that 20% of these options is Carmichael Capital Markets Pty Limited who holds 3,500,000 options which is 35% of the total 10,000,000 options in this class.

(vii) Unlisted options expiring 31 May 2008 exercisable at $0.80

65,000 unlisted options expiring 31 May 2008 exercisable at $ 0.80 do not carry the right to vote or receive dividends.

(viii) Unlisted options expiring 31 May 2008 exercisable at $1.00

70,000 unlisted options expiring 31 May 2008 exercisable at $1.00 do not carry the right to vote or receive dividends.
(ix) Unlisted options expiring 15 December 2009 exercisable at $0.261
1,333,334 unlisted options expiring 15 December 2009 exercisable at $0.261 do not carry the right to vote or receive dividends.
(x) Unlisted options expiring 15 December 2010 exercisable at $0.287
1,333,334 unlisted options expiring 15 December 2010 exercisable at $0.287 do not carry the right to vote or receive dividends.

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES (continued)

(a) Distribution of equity securities (continued)

(xi) Unlisted options expiring 15 December 2011 exercisable at $0.314
1,333,332 unlisted options expiring 15 December 2011 exercisable at $0.314 do not carry the right to vote or receive dividends.

(xii) Unlisted options expiring 15 December 2009 exercisable at $0.25

3,300,000 unlisted options expiring 15 December 2009 exercisable at $0.25 do not carry the right to vote or receive dividends.

(b) Substantial Shareholders (fully paid ordinary shares)

Red Rock Resources plc ANZ Nominees Limited	Fully Paid Number Percentage % 80,000,000 15.60 22,814,596 5.27
	102,814,596 20.87%

(c) Twenty largest holders of quoted equity securities (fully paid ordinary shares)

Red Rock Resources plc ANZ Nominees Limited Mr G Sim Suburban Holdings Pty Ltd Sinbad Pty Ltd Mr J Camuglia Mr A Crimmins Armelek Pty Ltd Canemoon Investments Pty Ltd Strategic Value Pty Ltd Mr S Ainsbury Mr G Worth Farlaw No 11 Pty Ltd Gowings Bros Limited WA Halpin Investments Pty Ltd Ms M Matthews Brantaz Pty Ltd HSBC Custody Nominees (Australia) Limited Mr D Anderson Fylpane Pty Ltd	Fully Paid Number Percentage % 80,000,000 15.6% 22,814,596 5.27 14,870,000 3.43 14,000,000 3.23 13,499,334 3.12 12,750,000 2.95 12,500,000 2.89 11,900,000 2.75 11,900,000 2.75 9,832,229 2.27 9,375,000 2.17 7,506,000 1.73 7,500,000 1.73 7,350,001 1.70 6,250,000 1.44 5,355,000 1.24 4,700,000 1.09 4,512,864 1.04 4,500,000 1.04 4,250,000 0.98
	265,365,024 58.42%

RETAIL STAR LIMITED

ANNUAL REPORT 31 JULY 2007

AI assistant

COMPLII FINTECH SOLUTIONS LTD — Annual Report 2007

64639_rns_2007-10-29_c7f9ff59-dcdc-43a9-b242-4ddedc5d64a1.pdf

CONTENTS

DIRECTORS

REGISTERED OFFICE

PRINCIPAL PLACE OF BUSINESS

COMPANY SECRETARY

AUDITORS

SOLICITORS

SHARE REGISTRY

INTERNET ADDRESS

ASX CODES

DIRECTORS

A Bell , MA, LLB (Non-Executive Director) Aged 52

M Yannaghas , BA (Non-Executive Director) Aged 34

R Kestel , B.Bus, ACA, FCPA, AICD (Non-Executive Director) Aged 52

DIRECTORS (continued)

S Nicols , B.Com, CPA, NIA, IPAA (Non-Executive Director) Aged 46

A S Crimmins , BE, ME, Dip Mark, MBA (Non-Executive Director) Aged 42

COMPANY SECRETARY

S Headon , B.Bus, CPA

INTEREST IN THE SHARES AND OPTIONS OF THE COMPANY

DIVIDENDS

PRINCIPAL ACTIVITIES

OPERATING AND FINANCIAL REVIEW

Operating review

OPERATING AND FINANCIAL REVIEW (continued)

Significant changes in state of affairs

Likely developments and future results

Liquidity and capital resources

OPERATING AND FINANCIAL REVIEW (continued)

Profile of debts

Capital expenditure

Risk management

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

ENVIRONMENTAL REGULATION AND PERFORMANCE

DIRECTORS’ REPORT (continued)

SHARE OPTIONS

Unissued shares

Shares issued as a result of the exercise of unlisted options

INDEMNIFICATION OF OFFICERS AND AUDITORS

REMUNERATION REPORT

Remuneration Philosophy

Remuneration Committee

Director Remuneration

Senior Management and Executives

Details of remuneration for year ended 31 July 2006

DIRECTORS’ REPORT (continued)

REMUNERATION REPORT (continued)

Remuneration of Directors and Named Executives

Table 1: Directors’ remuneration for the year ended 31 July:

DIRECTORS’ MEETINGS

COMMITTEE MEMBERSHIP

CORPORATE GOVERNANCE

PROCEEDINGS ON BEHALF OF COMPANY

AUDITOR’S INDEPENDENCE DELCARATION AND NON-AUDIT SERVICES

RETAIL STAR LIMITED (AND ITS CONTROLLED ENTITIES)

AUDITOR’S INDEPENDENCE DECLARATION

HLB MANN JUDD (NSW Partnership) Chartered Accountants

CORPORATE GOVERNANCE STATEMENT

COMPOSITION OF THE BOARD

REMUNERATION AND NOMINATION COMMITTEES

AUDIT COMMITTEE

BOARD RESPONSIBILITIES

MONITORING OF THE BOARD’S PERFORMANCE

BEST PRACTICE RECOMMENDATION

Recognise and publish the respective roles and responsibilities of the board and management

Have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties

Actively promote ethical and responsible decision-making

Action taken and reasons

Have a structure in place to independently verify and safeguard the integrity of the Company's financial reporting

Promote timely and balanced disclosure of all material matters concerning the Company

Respect the rights of shareholders and facilitate the effectiveness of those rights

Principle 6: Respect the rights of shareholders

INCOME STATEMENTS FOR THE YEAR ENDED 31 JULY 2007

CASH FLOW STATEMENTS

FOR THE YEAR ENDED 31 JULY 2007

1. CORPORATE INFORMATION

COMPLII FINTECH SOLUTIONS LTD Annual Report 2007