FIN RESOURCES LIMITED - Annual Report 2007

==> picture [217 x 112] intentionally omitted <==

(formerly Monitor Holdings Limited) and Controlled Entities ABN 25 009 121 644

Annual Financial Report For the Year Ended 30 June 2007

==> picture [34 x 842] intentionally omitted <==

CONTENTS
Chairman’s Letter	1
Corporate Directory	2
Directors’ Report	3
Auditors’ Independence Declaration	9
Independent Audit Report To The Members of Monitor Energy Limited	10
Directors’ Declaration	12
Income Statement	13
Balance Sheet	14
Cash Flow Statement	15
Statement of Changes in Equity	16
Notes to the Financial Statements	18
Corporate Governance Statement	39
Shareholder Information	43

CHAIRMAN’S LETTER

Dear Shareholder

During the past year the Company carried out a large amount of technical work over its five oil and gas licences in the Kyrgyz Republic, an acreage position which totals over 11,000 sq. km in this prospective but very underexplored country. In doing so the Company has followed its strategy of using cost-effective exploration methods to add value to areas which are shown by past exploration to have petroleum prospectivity, but which require modern techniques to prove up working petroleum systems.

Consistent with this approach, during the year the Company secured the services of Mr Jon Roestenburg as Managing Director and Mr Hamed Naim as Technical Manager. Together they bring a wealth of industry experience to the Company and I would like to take this opportunity to commend them for their efforts during the year, which have resulted in a large body of very high-technical work which has already considerable upgraded the Company’s Kyrgyz assets. The exploration activity which they are managing so ably is now ready to go the next stage, based on a much more sophisticated understanding of the petroleum geology of the area.

This understanding has been derived from the geo-referencing and interpretation of a large amount of existing geological data from Soviet-era exploration. A range of play types and leads have been identified across the licences, including four-way dip and fault dependent anticlines, fractured and karsted carbonates, stratigraphic pinch-outs and salt-related diapirs. Both Paleozoic and Cenozoic sediment thicknesses of over 5,000 meters are indicated in the basin troughs, which are considered to provide sufficient burial for hydrocarbon generation.

At the time of writing a gravity survey over potentially prospective areas on the Company’s licences is well advanced. Preliminary examination of the data obtained indicates that it is of good quality and can be expected both to substantiate the Company’s geological interpretation and to help with the optimal design of a new seismic survey. This is the essential next step in the exploration cycle and the Company is making preparations for a costeffective survey, including discussions, now at an advanced stage, with potential industry partners to share the cost and the risk.

Towards the end of the year under review the Company entered into a Joint Venture with Leopard Minerals plc to explore for uranium on a total of 5 licences. In the Soviet period Kyrgyzstan was one of the leading uraniumproducing regions of the USSR, and one of the Company’s licences contains the Kashkasu deposit, located adjacent to an historic mining centre, which was extensively explored up to the preparation of a mining plan. These licences are regarded as a strategic asset of the Company and the work programme is aimed at confirming JORC-compliant reserves estimates.

The Company is also evaluating other petroleum opportunities, with the benefit of Mr Roestenburg’s and Mr Naim’s many years’ experience in some of the main oil provinces of the world, including China, Indonesia and the former Soviet Union. We now look forward to achieving more positive results both on the Company’s existing licences and in adding to the portfolio new projects which meet the Company’s technical and commercial criteria.

Yours sincerely

==> picture [115 x 38] intentionally omitted <==

Scott Spencer Chairman

==> picture [217 x 112] intentionally omitted <==

CORPORATE DIRECTORY

NON-EXECUTIVE CHAIRMAN

Scott Spencer

MANAGING DIRECTOR

Jon Roestenburg

EXECUTIVE DIRECTOR

Mark Gwynne

COMPANY SECRETARY

Suzie Foreman

PRINCIPAL & REGISTERED OFFICE

Level 1, 35 Richardson Street WEST PERTH WA 6005 Telephone: (08) 9211 1555 Facsimile: (08) 9211 15 00

AUDITORS

Deloitte Touche Tohmatsu Level 14, 240 St Georges Terrace PERTH WA 6000

SHARE REGISTRAR

Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St Georges Terrace PERTH WA 6000 Telephone: 1300 557 010 International: (08) 9323 2000 Facsimile: (08) 9323 2033

STOCK EXCHANGE LISTING

Australian Stock Exchange (Home Exchange: Perth, Western Australia) Code: MHL

==> picture [217 x 112] intentionally omitted <==

BANKERS

Westpac Banking Corporation 109 St Georges Terrace PERTH WA 6000

DIRECTORS' REPORT

principal activities during the financial year.

3. RESULTS

Your directors present their report on the Company and its’ consolidated entities (“Group”) for the financial year ended 30 June 2007.

1. DIRECTORS

The names of directors in office at any time during or since the end of the financial year are:

Mark Gwynne

Jon Roestenburg (appointed 12 April 2007)

Scott Spencer David Steinepreis (resigned 13 June 2007)

Gary Steinepreis (resigned 18 January 2007)

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

COMPANY SECRETARY

Mr Gary Steinepreis held the position of Company secretary until his resignation on 30 March 2007. Ms Suzie Foreman was appointed as company secretary on the same date and held the position of company secretary at the end of the financial year:

Ms Suzie Foreman – Chartered Accountant

Ms Foreman is a Chartered Accountant with over 10 years of experience within the UK and Australia. Ms Foreman has 9 years’ combined experience with KPMG and a third tier accounting firm specialising in the areas of Audit, Advisory and Corporate Services. Ms Foreman has extensive skills in the areas of Audit, Corporate Services, due diligence and ASX corporate compliance. Ms Foreman is a director of Mining Corporate Pty Ltd and had been involved in the listing of six exploration companies on the ASX and AIM markets in the last three years with capital raisings exceeding $34 million. Ms Foreman is also Company Secretary to ASX listed entity Cortona Resources Limited and Redfork Energy Limited.

2. PRINCIPAL ACTIVITIES

The principal activity of the economic entity during the financial year was the exploration and evaluation of oil and gas opportunities in the Kyrgyz Republic. During the year the economic entity also ventured into uranium opportunities within the Kyrgyz Republic. Other than mentioned above, there were no significant changes in the nature of the entity’s

==> picture [255 x 181] intentionally omitted <==

Oil and gas operations

The loss of the economic entity attributable to members amounted to $1,471,046 (2006:$ 944,019).

4. DIVIDENDS

The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the date of this report.

5. REVIEW OF OPERATIONS

Overview

Monitor Energy Ltd (“Monitor” or the “Company”) changed its name from Monitor Holdings Limited at a general meeting held in Perth on April 12th, 2007. The new focus for the company is energy through petroleum and uranium exploration assets in the Kyrgyz Republic. The Company has appointed new management, leadership and technical team which have the qualifications, experience and capabilities to undertake the work programs in both oil & gas and uranium assets and grow the company. Monitor has engaged with joint venture partners in its efforts to leverage skills, equipment and costs sharing to ensure early value outcomes for its shareholders in an environmentally responsible manner.

Monitor Energy Ltd owns five petroleum licenses in the Kyrgyz Republic which are known as (Issy-Kul, Energy) Lake Issyk-Kul license, (Asianeftegas) Karakol license, (White Valley Oil) At Bashi,-East At bashi – Arpa license and (Tyup Oil) Tyup license. Although very little petroleum exploration was has ever been carried out in the area of the licenses, there exists a number of geologically similar commercial oil and gas fields in adjacent basins and oil & gas shows in old Soviet era wells the licenses. During the year, Monitor’s technical staff have acquired, translated, georeferenced and reinterpreted all available data (seismic, wells, geological maps and sections) relative to the license areas and wells therein. All data are stored and managed in the Company’s digital database.

Petroleum Operations

The Monitor petroleum licenses are stratigraphically and geologically analogous to the nearby Tarim Basin and Junggar Basins, both proven oil

==> picture [210 x 237] intentionally omitted <==

provinces with well in excess of 200 billion barrels of oil and over 700 trillion cubic feet of gas in proven reserves. Although, the license areas are frontier for petroleum exploration, the recent high oil prices support renewed focus and exploration activities and in particular the smart application of new technologies. With this as part of its exploration strategy, Monitor acquired its own gravity equipment which gives the Company a competitive advantage in that it can apply its own survey equipment on its licenses in conjunction with expert field acquisition contractors which are in short supply under traditional service contracts. The demand for this type of exploration equipment and its deployment in other existing and future license areas or by third parties is part of Monitor’s strategy to be an industry leader.

During the reporting year, Monitor has acquired all available geophysical, geological and well data for its five license areas. Detailed geological mapping, structural analysis, geochemical sampling and sample analyses programs have been finalized. A field reconnaissance survey has been completed to define the recent structuring episodes and to delineate and confirm structures identified from the satellite based structural geology analysis. The professional integration and re-interpretation of all geological data has underscored Monitor’s confidence in the potential of the area thereby resulting in an aggressive exploration and partnering strategy forward.

All geophysical data were re-interpreted after integration of both surface and subsurface geological results.

The southern license areas at At Bashi, which is adjacent to Santos Limited’s acreage, currently being explored, indicate several trusted and imbricated anticlines with large four way dip closures and salt related diapirism. Salt diapers outcrop immediately north of the license boundary. Subsurface salt evacuation structures are seen on the license and these are a major catalyst for the ongoing gravity survey, which is particularly sensitive to low density salt formations. Reinterpretation of the old Soviet era seismic data has confirmed several sub-thrust plays and ramp over anticlines that may form part of the shallow targeted

==> picture [228 x 171] intentionally omitted <==

drilling opportunities in the next field seasons.

The northern Issyk – kul area license contain similar trust anticlines showing en-echelon form and surface expression. Old well data on the licenses confirm the intersection oil and gas shows and the exploration effort is focus on those areas. The gravity survey is currently deployed in the area.

Uranium Operations

Monitor Energy Ltd acquired two uranium licenses in its own right during the year as part of the diversification into a broader energy portfolio. Monitor entered into a Joint Venture Agreement with Leopard Minerals PLC (“Leopard”) for a further three uranium licenses – making a total of five uranium licenses. The new Joint Venture has access to fit for purpose drilling equipment and uranium personnel with which to explor and develop the uranium assets, allowing Monitor to focus on its core oil and gas business. The joint venture is called the Central Asian Uranium Joint Venture (CAUJV) and is managed and operated by Leopard on a 50:50 cost basis with Monitor. The principle area of interest in the Kavak Mining Centre license and Kashkasu deposit.

The Kashkasu deposit was extensively explored up to the preparation of a mining plan but development was not proceeded with, apparently due to the discovery of large sandstone hosted deposits in Kazakhstan located closer to the Soviet nuclear industry No data is available on production at Kavak, but 4 tailings dams are located in the area which are believed to contain approximately 2,000,000 tonnes of tailings. These tailings dams are not located on the Licence.

The Company has copies of original geological and mineralisation models, including mining block models, underground development maps and section plans.

These data indicate underground workings to a depth of approximately 160m and a strike length of approximately 800 metres. Uranium mineralisation is hosted by coal measures and adjacent sandstones. Current data indicates that the previously sampled mineralised units remain open at depth with interpretation of increasing width and grade.

Mineralised seam widths vary from 4.2-6.6m reported. Sampled grades typically vary from about 0.03-0.2% uranium, and are up to 1.4% in places.

Currently the access road to the Kashkasu area has been cleared and the deployment of field personnel and drilling equipment is in progress.

Business outlook and future development

The Company is continually assessing its strategy to deliver shareholder value and as such is in the final stages of negotiations with an Oil & Gas Joint Venture Partner to assist with the next exploration phase, seismic acquisition and well drilling on the Petroleum licenses. Working with joint venture partners in both uranium and petroleum allows the Company to continue to build its energy portfolio in other geomarkets. The Company is currently appraising early production opportunities in China, South East Asia and the former Soviet Union areas

6. CHANGES IN STATE OF AFFAIRS

On 13 April 2007, Monitor Holdings Limited changed its name to Monitor Energy Limited.

The Group also ventured into uranium opportunities within the Kyrgyz Republic, acquiring a 100% interest in the Kalmaksu uranium license situated in the north-eastern region of the Kyrgyz Republic, and 97.5% of the East Kokmoinok uranium license.

In June 2007, the Group entered into a Joint Venture Operation known as the Central Asian Uranium Joint Venture, with Leopard Minerals plc. The terms of the joint venture are:

Each party will own 50% of the Joint Venture;
Leopard will be the manager and provide technical services of uranium geologists;
All parties will contribute equally to exploration expenditure;
Each party is to reimburse 50% of the cost of acquisition of the respective licenses, resulting in a net reimbursement to Monitor of US$100,000;
The Joint Venture has agreed an area of mutual interest being the whole of the Kyrgyz Republic for uranium and related minerals.

7. FUTURE DEVELOPMENTS

The Group will continue its mineral exploration activity at and around its exploration projects with the object of identifying commercial resources.

8. ENVIRONMENTAL ISSUES

The Group is aware of its environmental obligations with regards to its exploration activities and ensures that it complies with all regulations when carrying out any exploration work. The Group is not aware of any environmental breaches during the current year.

9. INFORMATION ON DIRECTORS

Mr Scott Spencer Non-Executive Chairman

Experience Scott Spencer studied languages, history and politics at the University of Western Australia and St Antony’s College, Oxford. He joined the Australian Foreign Service in 1972 and spent nearly 20 years working on international political and economic issues with the Australian Government. He was First Secretary at the Australian Embassy, Moscow, in 1987 – 89 and in 1990 – 93 was Regional Director of the Department of Foreign Affairs and Trade in Western Australia. He then entered the private sector, working on international resources projects. In the three years immediately before the end of the financial year he was a Director of Hardman Resources Ltd, resigning from this position on 12 April 2006. Hardman Resources Ltd is an ASX/AIM listed petroleum E & P company which was AIM International Company of the Year in 2004.

Interest in Shares and Options

Ordinary Shares 8,000,000

Jon Roestenburg Managing Director

Experience Mr Roestenburg is a highly experienced petroleum industry professional, having graduated in geology from Curtin University and began work in 1976 as an exploration geologist. In 1984 he joined Schlumberger, and in 1988-95 he was a Chief Geologist with Schlumberger, covering South East Asia and China. He subsequently held senior exploration positions with Ampolex and Mobil, before becoming Managing Director of Geotransformations Pty Ltd. In this capacity he managed numerous geoscience consulting contracts with oil companies such as Murphy Oil, ConocoPhillips, OMV Australia, Daewoo International and Cairn Energy. In 2005 Mr Roestenburg completed a Master’s degree in Leadership and Management at the Curtin Graduate School of Business.

Interest in Shares and Options

Ordinary Shares 2,500,000 3.5 Cent, 31 December 2009 Options 2,500,000 5 Cent, 31 December 2010 Options 5,000,000 7.5 Cent, 31 December 2011 Options 5,000,000

Mark Gwynne Executive Director Experience Mark Gwynne has been involved in gold exploration and mining for over 12 years, predominantly in Western Australia. Mark has held management positions on mine sites and in the private sector of the mining industry, including general manager of an exploration consultancy. Mark has demonstrated extensive skills in exploration and mining logistics and management. In the three years immediately before the end of the financial year he has been a Director of Jackson Gold Ltd.

Interest in Shares and Options Ordinary Shares 8,500,000

Directorships of other listed companie s

Directorships of other listed companies held by directors currently, or in the 3 years immediately before the end of the financial year are as follows:

Name Company Period of directorship Scott Spencer Hardman Appointed 19 July Resources Limited 1994 to Limited 12 April 2006 Mark Gwynne Jackson Gold Appointed 12 Limited February 2002 to date Jon Roestenburg None N/A

10. REMUNERATION REPORT

Key management personnel details

The following persons had authority and responsibility for planning, directing and controlling the activities of the Group during the current and prior financial years. The key management personnel of the Group are also that of the Company.

2007

Scott Spencer - Non-Executive Chairman Jon Roestenburg – Managing Director (appointed 12 April 2007)

Mark Gwynne - Executive Director David Steinepreis - Non-Executive Director (resigned 13 June 2007)

Gary Steinepreis – Non-Executive Director (resigned 18 January 2007)

(a) Remuneration Policy

Directors’ remuneration and other terms of employment are reviewed annually by the non-executive directors having regard to performance against goals set at the start of the year, relative comparative information and independent expert advice.

Except as detailed in the remuneration report, no director has received or become entitled to receive, during or since the financial year, a benefit because of a contract made by the Company or a related body corporate with a director, a firm of which a director is a member or an entity in which a director has a substantial financial interest.

This statement excludes a benefit included in the aggregate amount of emoluments received or due and receivable by directors and shown in the remuneration report, prepared in accordance with the Corporations regulations, or the fixed salary of a full time employee of the Company.

Remuneration Policy

The Board of Directors, mainly comprising of nonexecutive directors for the majority of the year, is responsible for determining and reviewing compensation arrangements for the executive team. The Board will assess the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team.

The remuneration policy of Monitor has been designed to align director objectives with shareholder and business objectives by providing a fixed remuneration component which is assessed on an annual basis in line with market rates. The Board of Monitor believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best directors to run

and manage the company, as well as create goal congruence between directors and shareholders.

The Board’s policy for determining the nature and amount of remuneration for board members is as follows:

The remuneration policy, setting the terms and conditions for the executive directors and other senior staff members, was developed by the managing director and approved by the board after seeking professional advice from independent external consultants.

In determining competitive remuneration rates, the Board seeks independent advice on local and international trends among comparative companies and industry generally. It examines terms and conditions for employee incentive schemes, benefit plans and share plans. Independent advice is obtained to confirm that executive remuneration is in line with market practice and is reasonable in the context of Australian executive reward practices.

All executives receive a base salary (which is based on factors such as length of service and experience), superannuation and fringe benefits.

The Group is an exploration entity, and therefore speculative in terms of performance. Consistent with attracting and retaining talented executives, directors and senior executives are paid market rates associated with individuals in similar positions, within the same industry. The Board does not endorse the use of bonus payments for directors and senior executives at this point in time, however options are issued to directors and executives as performance incentives and to align director, executive and shareholder goals.

Further options or bonus performance incentives will be issued in the event that the entity moves from exploration to producing entity, and key performance indicators such as profits and growth can be used as measurements for assessing Board performance.

The executive directors and executives receive a superannuation guarantee contribution required by the government, which is currently 9% and do not receive any other retirement benefits. Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards superannuation.

All remuneration paid to directors is valued at the cost to the Company and expensed. Options are valued using the Black-Scholes methodology.

The Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The managing director in consultation with independent advisors determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting. Fees for non-executive directors are not linked to the performance of the Company. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the company and are able to participate in the employee option plan.

Options Issued as Part of Remuneration

Options are issued to directors and executives as part of their remuneration. The options are not issued based on performance criteria, but are issued to some directors of Monitor Energy Limited and its subsidiaries to increase goal congruence between executives, directors and shareholders.

(b) Director and executive remuneration

The directors of the Group received the following amounts of compensation for the current year as set out below. During the financial year there were no executives other than the Directors. There was no compensation of any type, to the Directors, other than as reported below for the provision of management services.

Short Term Employee Benefits	Share Based Payments	Post- employment Benefits
Salary and Fees $ 55,000 57,796 45,000 104,593 37,500	Options Superanuation $ $ - - 141,083 3,732 - - - 750 - -		TOTAL $ 55,000 202,611 45,000 105,343 37,500

299,899	141,083	4,482	445,454

Notes

The fees paid to Director related entities were for the provision of management services of the particular director, to the Group, as follows:

(a) Aubrey Consulting Pty Ltd, an entity associated with Scott Spencer.
(b) Ord Street Services, an entity associated with David Steinepreis.
(c) SilverWest Corporation Pty Ltd an entity associated with Mark Gwynne.
(d) Leisurewest Consulting Pty Ltd, an entity associated with Gary Steinepreis.

(c) Value of Options Issued to Directors and Executives

The following table summarises the value of options granted, exercised or lapsed during the annual reporting period to the identified directors and executives:

Jon Roestenburg	O G	ptions Options Options Total value Value of options Percentage of ranted Exercised Lapsed of options included in total granted, remuneration for remuneration alue at Value at Value at exercised the year for the year nt date exercise date time of lapse and lapsed that consists (i) of options
	V gra
	$ $ $ $ $ % 286,000 50,250 - 336,250 141,083 69.63

(i) The value of options granted during the period is recognised in compensation over the vesting period of the grant, in accordance with Australian Accounting Standards.

(d) Service Agreements

The Company entered into an Executive Service Agreement with Mr Jon Roestenburg to provide services to the Company for one year from 1 March 2007.

Mr Roestenburg was appointed as an Executive and the remuneration to be paid to him under the Agreement is $132,000 per annum plus statutory superannuation contributions at 9%, based upon the Executive working three days per week. In the event that he works more than three days in any one week the Company will pay $1,250 for each additional day worked in that week, upon a written record from the Executive of the additional hours worked. In addition to the salary the Company has provided use of a car bay, and 15 million options exercisable between 2 cents and 7.5 cents (as detailed in Note 28).

The Company or Mr Roestenburg can terminate the Agreement at any time by giving to the other not less than 6 months notice in writing. The Company can terminate the Agreement by three month’s notice if Mr Roestenburg is unable to perform his duties due to illness or incapacity and has been unable to do so for 9 months or more, whether or not consecutive, within the 12 months prior to the notice. The Company can also terminate the Agreement with one months notice if Mr Roestenburg neglects to perform his duties, or without notice of if he engages in any conduct which brings the Company into disrepute or becomes bankrupt or is convicted of a major criminal offence. There is no provision for termination payment.

The Agreement contains other terms and conditions with respect to confidentiality, performance and employee entitlements considered standard for this type of agreement.

11. MEETINGS OF DIRECTORS

The number of directors' meetings (including committees) held during the financial year and the number of meetings attended by each director are:

	Directors’ Meetings	Directors’ Meetings
	Number Eligible	Meetings
Director	to attend	Attended
S Spencer	3	3
M Gwynne	3	3
D Steinepreis	3	3
J Roestenburg	2	2
G Steinepreis	1	1

There were no audit committee meetings held during or since the end of the financial year, as the audit committee function is performed by the board as a whole.

12. INDEMNIFYING OFFICERS

During or since the end of the financial year, the Company has not indemnified or entered into any agreements to indemnify, or paid or agreed to pay any insurance premiums on behalf of the Director’s or auditors of the Company against a liability incurred as such by an officer or auditor.

13. OPTIONS

Share Options Granted to Directors and Executives

During or since the end of the year the financial year, an aggregate of 15,000,000 share options were issued to the following directors of the Company and the Group as part of their remuneration.

Directors	Number Granted	Issuing Entity	Number of ordinary shares under option
S Spencer	-	-	-
J Roestenburg	15,000,000	Monitor Energy Limited	15,000,000
M Gwynne	-	-	-
D Steinepreis	-	-	-
G Steinepreis	-	-	-

Un-issued Shares Under Option

At the date of this report unissued ordinary shares of the Company under option are:

Expiry Date 31 December 2009 31 December 2010 31 December 2011 Total	Exercise Price 3.5 cents 5 cents 7.5 cents	Number of Shares 2,500,000 5,000,000 5,000,000 12,500,000

The holders of such options do not have the right, by virtue of the option, to participate in any share issue or any other body corporate or registered scheme.

During the financial year ended 30 June 2007 there were 2,500,000 compensation options exercised into fully paid ordinary shares at 2 cents each.

There has been no issue of ordinary shares as a result of the exercise of options since the end of the financial year.

Directors’ holdings of shares and share options have been disclosed in the Remuneration Report.

14. AUDITORS INDEPENDENCE DECLARATION

The auditor’s independence declaration for the year ended 30 June 2007 has been received and can be found on page 9 of the annual report.

15. NON AUDIT SERVICES

The board of directors, are satisfied that no non-audit services were performed during the year by the Group’s auditors.

16. SUBSEQUENT EVENTS

Subsequent to 30 June 2007, Monitor Energy Ltd entered into a Heads of Agreement with Medina Group Ltd for the right to form a Joint Venture in relation to the oil & gas licenses in the Kyrgyz Republic currently held by Monitor.

Except for the aforementioned, there has not been any matter or circumstance that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

Signed on behalf of the board

==> picture [78 x 39] intentionally omitted <==

Jon Roestenburg Managing Director Perth, 28 September 2007

Deloitte Touche Tohmatsu ABN 74 490 121 060

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

The Board of Directors Monitor Energy Limited Level 1, 35 Richardson Street WEST PERTH WA 6005

DX 206

Tel: +61 (0) 8 9365 7000 Fax: +61 (0) 8 9365 7001 www.deloitte.com.au

28 September 2007

Dear Board Members

Monitor Energy Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Monitor Energy Limited.

As lead audit partner for the audit of the financial statements of Monitor Energy Limited for the financial year ended 30 June 2007, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

DELOITTE TOUCHE TOHMATSU

A T Richards Partner Chartered Accountants

==> picture [217 x 111] intentionally omitted <==

Liability limited by a scheme approved under Professional Standards Legislation.

Deloitte Touche Tohmatsu ABN 74 490 121 060

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

DX 206

Tel: +61 (0) 8 9365 7000 Fax: +61 (0) 8 9365 7001 www.deloitte.com.au

Independent Auditor’s Report to the Members of Monitor Energy Limited

We have audited the accompanying financial report of Monitor Energy Limited, which comprises the balance sheet as at 30 June 2007, and the income statement, cash flow statement and statement of changes in equity for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year as set out on pages 12 to 38.

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 control 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. In Note 3, 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 consolidated 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.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial 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 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.

Liability limited by a scheme approved under Professional Standards Legislation.

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

Auditor’s Independence Declaration

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 .

Auditor’s Opinion

In our opinion:

(a) the financial report of Monitor Energy 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 30 June 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 consolidated financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 3.

DELOITTE TOUCHE TOHMATSU

A T Richards Partner Chartered Accountants Perth, 28 September 2007

==> picture [217 x 111] intentionally omitted <==

DIRECTORS' DECLARATION

The directors declare that:

(a) in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;
(b) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001 including compliance with accounting standards and giving a true and fair view of the financial position and performance of the economic entity; and
(c) the directors have been given the declarations required by s.295A of the Corporations Act 2001.

Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.

==> picture [108 x 54] intentionally omitted <==

Jon Roestenburg Managing Director

Perth, 28 September 2007

==> picture [217 x 112] intentionally omitted <==

INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2007

Revenue Employee benefits expense Advisors’ costs Occupancy expense Exploration expenses Administration expenses Travel and accommodation Other expenses Depreciation Foreign exchange gain Loss before tax Income tax expense Loss for the year Loss attributable to members of the parent entity Loss per share: Basic (cents per share) Diluted (cents per share)	Note	Consolidated Company
		2007 2006 2007 2006 $ $ $ $
	5 5 6 20 20	87,674 26,333 87,674 26,333 (731,701) (227,802) (731,701) (227,802) (27,333) (28,000) (27,333) (28,000) (91,507) (78,559) (91,507) (78,559) (359,996) (493,076) (278,210) (493,076) (197,450) (121,685) (197,450) (121,685) (157,074) - (157,074) - (6,495) (21,230) (6,496) (21,230) (25,069) - (4,051) - 37,905 - - -
		(1,471,046) (944,019) (1,406,148) (944,019) - - - -
		(1,471,046) (944,019) (1,406,148) (944,019)
		(1,471,046) (944,019) (1,406,148) (944,019)
		(0.25) (0.29) (0.25) (0.29)

The accompanying notes form part of these financial statements.

==> picture [217 x 112] intentionally omitted <==

BALANCE SHEET AS AT 30 JUNE 2007

Note Current assets Cash and cash equivalents 8 Trade and other receivables 9 Other current assets 10 Total current assets Non-current assets Other financial assets 11 Plant and equipment 12 Exploration and evaluation expenditure - Total non-current assets Total assets Current liabilities Trade and other payables 14 Other financial liabilities 15 Provisions 16 Total current liabilities Total liabilities Net assets Equity Issued capital 17 Reserves 19 Accumulated losses 18 Total equity	Note	Consolidated Company
		2007 2006 2007 2006 $ $ $ $
		1,989,785 1,709,419 1,929,125 1,709,419 24,239 29,954 21,851 29,954 6,448 - 1,783 -
		2,020,472 1,739,373 1,952,759 1,739,373
		- - 2,654,337 1,720,541 116,271 - 8,791 - 13 2,395,356 1,720,541 -
		2,511,627 1,720,541 2,663,128 1,720,541
		4,532,099 3,459,914 4,615,887 3,459,914
		229,893 42,192 139,834 42,192 - 193,000 - 193,000 7,853 - 7,853 -
		237,746 235,192 147,687 235,192
		237,746 235,192 147,687 235,192
		4,294,353 3,224,722 4,468,200 3,224,72
		13,190,317 10,756,190 13,190,317 10,756,190 106,550 - 215,499 - (9,002,514) (7,531,468) (8,937,616) (7,531,468)
		4,294,353 3,224,722 4,468,200 3,224,722

The accompanying notes form part of these financial statements.

==> picture [217 x 112] intentionally omitted <==

CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2007

Note Cash flows from operating activities Payments to suppliers Payments to employees Interest received Other Income Net cash used in operating activities (504,466) Cash flows from investing activities Exploration expenditure on overseas projects Payment for exploration asset Amounts advanced to subsidiary entities Loans to related parties Payments for plant and equipment Net cash used in investing activities (524,321) Cash flows from financing activities Funds held in trust Proceeds from issues of equity securities Refunds for overscription of equity securities Payment for share issue costs Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on the balance of cash held in foreign currencies Cash and cash equivalents at the end of the financial year	Note	Consolidated Company 2007 2006 2007 2006 $ $ $ $ (620,634) (506,209) (620,634) (506,209) (186,417) (24,590) (214,566) (24,590) 80,569 26,333 80,569 26,333 7,105 - 7,105 -
		30 (719,377) (504,466) (747,526)
		(976,362) (453,780) (277,006) (453,780) - (70,541) - (70,541) - - (933,796) - (2,388) - - - (141,340) - (12,842) -
		(1,120,090) (524,321) (1,223,644)
		- 193,000 - 193,000 2,317,000 1,900,000 2,341,000 1,900,000 (60,000) - (60,000) - (90,123) (98,450) (90,123) (98,450)
		2,166,877 1,994,550 2,190,877 1,994,550
		327,410 965,763 219,707 965,763 1,709,419 743,656 1,709,419 743,656 (47,044) - - -
		1,989,785 1,709,419 1,929,126 1,709,419

The accompanying notes form part of these financial statements.

==> picture [217 x 112] intentionally omitted <==

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2007

ECONOMIC ENTITY

*ECONOMIC ENTITY*
				Equity	Equity
				Settled	Settled
	Share Capital		Accumulated	Benefits	Translation
		Ordinary	Losses	Reserve	Reserve	Total
2007		$	$	$	$	$
Balance at 1.7.2006	10,756,190		(7,531,468)	-	-	3,224,722
Loss for year		-	(1,471,046)	-	-	(1,471,046)
Total recognised income and epense		-	(1,471,046)	-	-	(1,471,046)
Issue of shares net of transaction costs		2,383,877	-	-	-	2,383,877
Share based payments		-	-	265,749	-	265,749
Transfer from Equity Settled Benefits Reserve 50,250			-	(50,250)	-	-
Exchange differences arising on translation
of foreign operations		-	-	-	(108,949)	(108,949)
		2,434,127	-	215,499	(108,949)	2,540,677
Balance at 30.06.2007	13,190,317		(9,002,514)	215,499	(108,949)	4,294,353
2006
Balance at 1.7.2005		7,304,640	(6,587,449)	-	-	717,191
Loss for year		-	(944,019)	-	-	(944,019)
Total recognised income and expense		-	(944,019)	-	-	(944,019)
Issue of shares net of transaction costs		3,451,550	-	-	-	3,451,550
		3,451,550	-	-	-	3,451,550
Balance at 30.06.2006	10,756,190		(7,531,468)	-	-	3,224,722

The accompanying notes form part of these financial statements.

==> picture [217 x 112] intentionally omitted <==

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2007

COMPANY

COMPANY
			Equity Settled
	Share Capital	Accumulated	Benefits
	Ordinary	Losses	Reserve	Total
	$	$	$	$
2007
Balance at 1.7.2006	10,756,190	(7,531,468)	-	3,224,722
Loss for year	-	(1,406,148)	-	(1,406,148)
Total recognised income and expense for the year	-	(1,406,148)	-	(1,406,148)
Issue of shares net of transaction costs	2,383,877	-	-	2,383,877
Share options issued to consultants	-	-	265,749	265,749
Transfer from Equity Settled Benefits Reserve	50,250	-	(50,250)	-
	2,434,127	-	215,499	2,649,626
Balance at 30.06.2007	13,190,317	(8,937,616)	215,499	4,468,200
2006
Balance at 1.7.2005	7,304,640	(6,587,449)	-	717,191
Loss for year	-	(944,019)	-	(944,019)
Total recognised income and expense for the year	-	(944,019)	-	(944,019)
Issue of shares net of transaction costs	3,451,550	-	-	3,451,550
	3,451,550	-	-	3,451,550
Balance at 30.06.2006	10,756,190	(7,531,468)	-	3,224,722

The accompanying notes form part of these financial statements.

==> picture [217 x 112] intentionally omitted <==

Notes to the Financial Statements

1. General Information

Monitor Energy Limited (the Company) is a listed public company, incorporated in Australia and operating in Australia and the Kyrgyz Republic.

2. Adoption of new and revised Accounting Standards

At the date of authorisation of the financial report, a number of Standards and Interpretations were in issue but not yet effective:

Standard / Interpretation	Effective for annual reporting periods beginning on or after	Expected to be initially applied in the financial year ending
AASB 7 ‘Financial Instruments: Disclosures’ and consequential amendments to other accounting standards resulting from its issue	1 January 2007	30 June 2008
AASB ‘Operating Segments‘	1 January 2009	30 June 2010
AASB 101 ‘Presentation of Financial Statements’ – revised standard	1 January 2007	30 June 2008
AASB 123 ‘Borrowing Costs’ – revised standard	1 January 2009	30 June 2010
AASB 2007-1 “Amendments to Australian Accounting Standards arising from AASB Interpretation 11’	1 March 2007	30 June 2008
AASB 2007-2 ‘Amendments to Australian Accounting Standards arising from AASB Interpretation 12’	1 January 2008	30 June 2009
AASB 2007-4 ‘Amendments to Australian Accounting Standards arising from ED 151 and other amendements’	1 July 2007	30 June 2008
AASB 2007-6 ‘Amendments to Australian Acccounting Standards arising from AASB 123’	1 January 2009	30 June 2010
AASB 2007-7 ‘Amendments to Australian Accounting Standards’	1 July 2007	30 June 2008
AASB Interpretation 10 ‘Interim Financial Reporting and Impairment’	1 November 2006	30 June 2008
AASB Interpretation 11 ‘AASB 2 – Group and Treasury Share Transactions’	1 March 2007	30 June 2008
AASB Interpretation 12 ‘Service Concession Arrangements’	1 January 2008	30 June 2009
AASB Intepretation 13 ‘Customer Loyalty Programmes’	1 July 2008	30 June 2009
AASB Interpretation 14 ‘AASB 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction’	1 January 2008	30 June 2009

The directors note that the impact of the initial application of the Standards and Interpretations is not yet known or is not reasonably estimable. These Standards and Interpretations will be first applied in the financial report of the Group that relates to the annual reporting period beginning on or after the effective date of each pronouncement.

==> picture [217 x 112] intentionally omitted <==

3. Significant Accounting Policies

Statement of compliance

The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law. The financial report includes separate financial statements of the Company and the consolidated financial statements of the Group.

Accounting Standards include Australian equivalents to International Financial Reporting Standards (‘A-IFRS’). Compliance with the A-IFRS ensures that the consolidated financial statements and notes of the economic entity comply with International Financial Reporting Standards (‘IFRS’). The parent entity financial statements and notes also comply with IFRS except for the disclosure requirements in IAS 32 ‘Financial Instruments: Disclosure and Presentation’ as the Australian equivalent Accounting Standard AASB 132 ‘Financial Instruments: Disclosure and Presentation’ does not require such disclosures to be presented by the parent entity where its separate financial statements are presented together with the consolidated financial statements of the Group.

The financial statements were recognised for issue by the directors on 28 September 2007.

Basis of preparation

The financial report has been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars unless otherwise stated.

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

(a) Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. In the separate financial statements of the Company, intra-group transactions (‘common control transactions’) are generally accounted for by reference to the existing (consolidated) book value of the items. Where the transaction value of common control transactions differ from their consolidated book value, the difference is recognised as a contribution by or distribution to equity participants by the transacting entities.

Minority interests in the net assets (excluding goodwill) of consolidated subsidiaries are identified separately from the Group’s equity therein. Minority interests consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.

(b) Business Combinations

Acquisitions of subsidiaries and businesses are accounted for using the purchase method. The cost of the business combination is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under AASB 3 ‘Business Combinations’ are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 ‘Non-current Assets Held for Sale and Discontinued Operations’, which are recognised and measured at fair value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

(c) Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

(d) Employee Benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.

Liabilities recognised in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date.

(e) Financial Assets

Investments are recognised and derecognised on trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs except for those financial assets classified as at fair value through profit or loss which are initially measured at fair value.

Subsequent to initial recognition, investments in subsidiaries are measured at cost in the company financial statements.

Other financial assets are classified into the following specified categories: ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Income is recognised on an effective interest rate basis for debt instruments other than those financial assets ‘at fair value through profit or loss’.

Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment.

Interest is recognised by applying the effective interest rate.

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

(f) Foreign currency

Foreign currency transactions

All foreign currency transactions during the financial year are brought to account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined.

Exchange differences are recognised in profit or loss in the period in which they arise except that:

Foreign operations

On consolidation, the assets and liabilities of the economic entity’s overseas operations are translated at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates fluctuate significantly. Exchange differences arising, if any, are recognised in the foreign currency translation reserve, and recognised in profit or loss on disposal of the foreign operation.

(g) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

(i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or

(ii) for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

(h) Impairment of assets

At each reporting date, the economic entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the economic entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately.

(i) Income tax

Current tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred tax

Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, branches, associates and joint ventures except where the economic entity is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the economic entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the company/economic entity intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the income statement, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess.

(j) Payables

Trade payables and other accounts payable are recognised when the economic entity becomes obliged to make future payments resulting from the purchase of goods and services.

(k) Revenue recognition

Interest revenue

Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.

(l) Exploration and Evaluation Expenditure

Exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in, or in relation to, the area of interest are continuing.

Capitalised exploration costs are reviewed each reporting date to whether an indication of impairment exists. If any such indication exists, the recoverable amount of the capitalised exploration costs is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Where a decision is made to proceed with development, accumulated expenditure is tested for impairment and transferred to development properties, and then amortised over the life of the reserves associated with the area of interest once mining operations have commenced. Exploration and evaluation expenditure incurred by the Group subsequent to the acquisition of the rights to explore is expensed as incurred.

(m) Joint Venture Arrangements

Jointly controlled assets

Interests in jointly controlled assets in which the Group is a venturer (and so has joint control) are included in the financial statements by recognising the Group’s share of jointly controlled assets (classified according to their nature), the share of liabilities incurred (including those incurred jointly with other venturers) and the Group’s share of expenses incurred by or in respect of each joint venture.

The Group’s interests in assets where the Group does not have joint control are accounted for in accordance with the substance of the Group’s interest. Where such arrangements give rise to an undivided interest in the individual assets and liabilities of the joint venture, the Group recognises its undivided interest in each asset and liability and classifies and presents those items according to their nature.

Jointly controlled operations

Where the Group is a venturer (and so has joint control) in a jointly controlled operation, the Group recognises the assets that it controls and the liabilities that is incurs, along with the expenses that it incurs and the Group’s share of the income that it earns from the sale of goods or services by the joint venture.

Jointly controlled entities

Interests in jointly controlled entities in which the Group is a venturer (and so has joint control) are accounted for under the equity method in the consolidated financial statements and the cost method in the company financial statements.

Investments in jointly controlled entities where the Group is an investor but does not have joint control over that entity are accounted for as an available-for-sale financial asset or, if the Group has significant influence, by using the equity method.

(n) Plant and Equipment

Plant and equipment, leasehold improvements and equipment under finance lease are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land. Depreciation is calculated on a straight line basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, with the effect of any changes recognised on a prospective basis.

(o) Share Based Payments

Equity-settled share-based payments with employees and others providing similar services are measured at the fair value of the equity instrument at the grant date. Fair value is measured by use of a Black Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of nontransferability, exercise restrictions, and behavioural considerations. Further details on how the fair value of equitysettled share-based transactions has been determined can be found in note 28.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straightline basis over the vesting period, based on the Group’s estimate of shares that will eventually vest.

The above policy is applied to all equity-settled share-based payments that were granted after 7 November 2002 that that vested after 1 January 2005. No amount has been recognised in the financial statements in respect of the other equity-settled shared-based payments.

Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods and services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

For cash-settled share-based payments, a liability equal to the portion of the goods or services received is recognised at the current fair value determined at each reporting date.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group’s accounting policies, which are described in note 3, management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Key Sources of estimation uncertainty

The following the key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:

Recoverability of exploration and evaluation expenditure

The recoverability of the exploration and evaluation expenditure recognised as a non-current asset is dependent upon the successful development, or alternatively sale, of the respective tenements which comprise the assets.

==> picture [217 x 112] intentionally omitted <==

5. Loss from continuing operations Revenue Revenue consisted of the following items: Interest revenue: Bank deposits Other income Employee benefits expense Equity settled share-based payments Salaries Other 6. Income taxes (a) Income tax recognised in loss Tax expense comprises: Current tax expense Deferred tax expense relating to the origination and reversal of temporary differences Total tax expense The prima facie income tax expense on pre-tax accounting loss reconciles to the income tax expense in the financial statements as follows: Loss before taxation Income tax expense calculated at 30% Share based payments Effect of lower rate of tax Other Income tax benefits not recognised Income tax expense	Consolidated Company
	2007 2006 2007 2006 $ $ $ $
	80,569 26,333 80,569 26,333 7,105 - 7,105 -
	87,674 26,333 87,674 26,333
	(265,749) - (265,749) - (418,309) (224,425) (418,309) (224,425) (47,643) (3,377) (47,643) (3,377)
	(731,701) (227,802) (731,701) (227,802)
	- - - - - - - -
	- - - -
	(1,471,046) (944,019) (1,406,148) (944,019)
	(441,313) (283,205) (421,844) (283,205) 79,725 - 79,725 - 70,162 - - - (78,087) 471 (26,643) 471
	(369,514) (282,734) (368,762) (282,734) 369,514 282,734 368,762 282,734
	- - - -

The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when compared with the previous reporting period.

==> picture [217 x 112] intentionally omitted <==

		Consolidated	Consolidated		Company
		2007	2006	2007	2006
		$	$	$	$
6.	Income taxes (continued)
	(b) Deferred tax balances
	Unrecognised deferred tax balances
	The following deferred tax assets have
	not been brought to account as assets:
	Tax losses – revenue	605,997	271,564	605,997	271,564
	Capital Raising Costs	54,932	37,114	54,932	37,114
	Other	58,118	40,850	25,738	9,227
		719,047	349,528	686,667	317,905
		Consolidated			Company
		2007	2006	2007	2006
		$	$	$	$
7.	Remuneration of auditors
	Auditor of the parent entity
	Audit or review of the financial report	31,000	34,245	31,000	34,245
		31,000	34,245	31,000	34,245
	The auditor of Monitor Energy Ltd is Deloitte Touche Tohmatsu.
8.	Cash and Cash Equivalents
	Cash on hand and at bank	1,954,785	1,709,419	1,894,125	1,709,419
	Deposits at call (i)	35,000	-	35,000	-
		1,989,785	1,709,419	1,929,125	1,709,419
	(i) The bank deposits are short term deposits maturing within 11		months, and pay interest at a		rate at 6.6% per
	annum.
9.	Current trade and other receivables
	Goods and services tax (GST) recoverable	11,601	23,550	11,601	23,550
	Other	12,638	6,404	10,250	6,404
		24,239	29,954	21,851	29,954
10.	Other current assets
	Prepayments	6,448	-	1,783	-
		6,448	-	1,783	-

==> picture [217 x 112] intentionally omitted <==

Other non-current finanial assets Investments carried at cost Shares in controlled entities (refer note 24) Loans to subsidiaries	Consolidated Company
	2007 2006 2007 2006 $ $ $ $
	- - 1,720,541 1,720,541 - - 933,796 -
	- - 2,654,337 1,720,541

11. Other non-current finanial assets

The intercompany loans receivable are unsecured and have no fixed terms of repayment. Interest is not charged on the intercompany loans.

12. Plant and equipment

- At cost - Accumulated depreciation Total plant and equipment Reconciliations Reconciliations of the carrying amounts of plant and equipment at the beginning and end of the current and previous financial year. Plant and equipment Carrying amount at the beginning of the year Additions Depreciation expense Carrying amount at the end of the year	139,747 - 12,842 - (23,476) - (4,051) -
	116,271 - 8,791 -
	- - - - 139,747 - 12,842 - (23,476) - (4,051) -
	116,271 - 8,791 -
Other non-currnt assets Oil & Gas Exploration Expenditure Balance brought forward Expenditure incurred during the year Balance at 30 June 2007	1,720,541 - - - 674,815 1,720,541 - -
	2,395,356 1,720,541 - -

Carrying amount at the end of the year	116,271	-	8,791	-
Other non-currnt assets
Oil & Gas Exploration Expenditure
Balance brought forward	1,720,541	-	-	-
Expenditure incurred during the year	674,815	1,720,541	-	-
Balance at 30 June 2007	2,395,356	1,720,541	-	-

13. Other non-currnt assets

The recoverability of these amounts is dependent upon the success of future exploration and the assessment of preliminary exploration data regarding the assets.

14. Current trade and other payables

Current trade and other aables
py Trade payables (i) Sundry payables and accruals Other payables (ii)	43,164 42,192 41,377 42,192 127,841 - 98,457 - 58,888 - - -
	229,893 42,192 139,834 42,192

(i) credit terms averaging 30 days from invoice date apply to payables

(ii) other payables relates to a payment of US$50,000 being the final deferred payment on the acquisition of Business Sphere LLC by White Valley Oil LLC

==> picture [217 x 112] intentionally omitted <==

Other current liabilities Funds held in trust – share capital *	Consolidated Company
	2007 2006 2007 2006 $ $ $ $
	- 193,000 - 193,000
	- 193,000 - 193,000

15. Other current liabilities

Funds related to amounts received in the prior year in relation to share issues post 30 June 2006 that remained open at reporting date.

16. Provisions

Current Employee benefits

- 7,853 7,853

Issued capital fully paid ordinary shares 609,616,768 (2006: 485,116,768) 2,006 converting preference shares (2006: 2,006)	Consolidated Company 2007 2006 2007 2006 $ $ $ $
	13,189,517 10,755,390 13,189,517 10,755,390 800 800 800 800
	13,190,317 10,756,190 13,190,317 10,756,190

17. Issued capital

Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998. Therefore, the company does not have a limited amount of authorised capital and issued shares do not have a par value.

Reconciliation of issued Capital	Consolidated	and Company	Consolidated and Company	Consolidated and Company
		2007		2006
	Number	$	Number	$
Fully paid ordinary shares
Balance at beginning of financial year	485,116,768	10,755,390	272,616,768	7,303,840
Shares issued pursuant to Share
Purchase Plan – 24 July 2006	60,000,000	1,200,000	-	-
Placement of Share Placement
Plan shortfall – 14 August 2006	60,000,000	1,200,000	-	-
Issue of Shares to consultant –17 January 2007	2,000,000	24,000	-	-
Exercise of options – 21 June 2007	2,500,000	50,000	-	-
Transfer from equity settled employee
benefits reserve	-	50,250	-	-
Shares issued at 2 cents each to acquire
White Valley Oil LLC – 18 April 2006	-	-	82,500,000	1,650,000
Shares issued at 1 cent each – 19 January
2006, placement	-	-	40,000,000	400,000
Shares issued at 1 cent each on exercise
of options – 19 January 2006	-	-	30,000,000	300,000
Shares issued at 2 cents each – 26 June 2006,
placement	-	-	60,000,000	1,200,000
Share issue costs	-	(90,123)	-	(98,450)
Balance at end of financial year	609,616,768	13,189,517	485,116,768	10,755,390

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

==> picture [217 x 112] intentionally omitted <==

Issued Capital (continued)

Converting preference shares (CPS) Balance at beginning of financial year Balance at end of financial year Reconciliation	Consolidated and Company Consolidated and Company 2007 2006 Number $ Number $
	2,006 800 2,006 800
	2,006 800 2,006 800

The CPS do not have any voting rights but are entitled to the payment of a dividend.

Share options

There were 23,750,000 share options issued during the year with varying terms. Full details are contained within Note 28, Share Based payments.

During the financial year 2,500,000 unlisted options exercisable at 2 cents each on or before 31 December 2009 were exercised to raise $50,000.

Options carry no rights to dividends and have no voting rights.

18. Accumulated Losses Balance at beginning of financial year Net loss attributable to members of the parent entity Balance at end of financial year	Consolidated Company
	2007 2006 2007 2006 $ $ $ $
	7,531,468 6,587,449 7,531,468 6,587,449 1,471,046 944,019 1,406,148 944,019
	9,002,514 7,531,468 8,937,616 7,531,468

19. Reserves Equity-settled employee benefits reserve (a) Foreign exchange translation reserve (b) Balance at end of financial year (a). Equity-settled employment benefits reserve Balance at beginning of financial year Share based payments Transfer to issued capital Balance at end of financial year (b). Foreign exchange translation reserve Balance at beginning of financial year Translation of foreign operations Balance at end of financial year	Consolidated Company
	2007 2006 2007 2006 $ $ $ $
	215,499 - 215,499 - (108,949) - - -
	106,550 - 215,499 -
	- - - - 265,749 - 265,749 - (50,250) - (50,250) -
	215,499 - 215,499 -
	- - - - (108,949) - - -
	(108,949) - - -

Equity Settled Employee Benefits Reserve

The equity-settled employee benefits reserve arises on the grant of share options to directors, executives and senior employees. Amounts are transferred out of the reserve and into issued capital when the options are exercised. Further information about share-based payments to employees is made in note 28 to the financial statements.

Foreign Currency Translation Reserve

The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary.

Loss per share

Loss per share
Basic / Diluted loss per share: Basic / Diluted loss per share	Consolidated
	2007 2006 Centsper share Centsper share
	(0.25) (0.29)

Basic / Diluted loss per share

The loss and weighted average number of ordinary shares used in the calculation of basic / diluted loss per share are as follows:

Loss for the year Weighted average number of ordinary shares for the purposse of basic / diluted loss per share	2007 2006 $ $
	1,471,046 944,019
	2007 2006 No. No.
	594,734,576 320,842,795

As the economic entity is in a loss position the options outstanding at 30 June 2007 have no dilutive effects on the earnings per share calculation.

21. Commitments for expenditure

The economic entity has certain obligations to perform minimum exploration work programmes on its oil & gas exploration permits in accordance with the licence conditions. Work programmes which have been contracted for at reporting date comprise a minimum amount of at least $820,000.

Due to the speculative nature of the exploration operations of the economic entity and as each licence year of the oil & gas permits and work programmes are negotiated with the geological agency of the Kyrgyz Republic, there are no commitments of the economic entity beyond one year. The directors are therefore not able to determine the expenditure commitments beyond 30 June 2008.

22. Contingent liabilities and contingent assets

The Directors are not aware of any material contingent liabilities or assets at reporting date. (2006: Nil)

23. Interest in exploration licences

At the date of this financial report, the economic entity had interests in the following exploration licences:

	2007	2006
Licence details	%	%
Atbashi-Arpinski (oil & gas)	100	100
East Issyk-Kul (oil & gas)	100	100
North-East Issyk-Kul (oil & gas)	100	-
Tyup (oil & gas)	100	-
Karakol (oil & gas)	100	-
East Kokmoinok (uranium)	50	-
Kashkasu (uranium)	50	-
Dzhilisu (uranium ) – Leopard JV)	50	-
Dalenskoye (uranium) Leopard JV	50	-
Uriukti (uranium) Leopard JV	50	-

Interest in exploration licences

		Ownership interest
	Country of	2007	2006
Name of entity	incorporation	%	%
Parent entity
Monitor Energy Ltd	Australia		-
Subsidiaries
Asian Neftegaz LLC	Kyrgyz Republic	100	100
White Valley Oil LLC	Kyrgyz Republic	100	100
• Tyup Oil LLC	Kyrgyz Republic	99	-
• Issyk Kul Energy LLC	Kyrgyz Republic	100	-
• Business Sphere LLC	Kyrgyz Republic	97.5	-

25. Acquisition of entities

			Proportion of	Cost of
	Principal	Date of	shares acquired	acquisition
Names of businesses acquired	activity	acquisition	%	$
2007
Tyup Oil LLC	Oil & gas exploration	1 August 2006	99	(i)
Issyk Kul Energy LLC	Oil & gas exploration	6 August 2006	100	35,377
Business Sphere LLC	Uranium Exploration	6 June 2007	97.5	271,226
2006:
White Valley Oil LLC	Oil & gas exploration	18 April 2006	100	1,650,000
Asian Neftegaz LLC	Oil & gas exploration	16 May 2006	100	70,541

(i) The company acquired an 100% interest in an exploration license for nil consideration. Due to local laws and regulations, Monitor were required to incorporate an entity locally in order to operate the license. No cost was incurred incorporating the entity.

The only assets of these entities were exploration licences in the Kyrgyz Republic and as such were deemed to fall outside the scope of AASB 3 Business Combinations. The acquisition of entities has been treated as exploration expenditure incurred during the financial year, refer note 13 for details. The fair value of the assets acquired has been determined by the Board with reference to recent historical transactions in the area and preliminary exploration data regarding the asset.

26. Segment information

(a) Primary Segment - Geographical Segments

The Economic Entity has the following geographical segments:

Kyrgyzstan

Kyrgyzstan is the location of the Company’s exploration activities and where its oil and gas and uranium licence interests are held, which comprise 5 interests in oil and gas permits and 2 uranium exploration licenses.

Australia

Australia is the location of the central management and control of Monitor Energy Limited, including where company secretarial services, accounting and cash management operations are performed.

(b) Secondary Segment - Business Segments

Petroleum Exploration

The Economic Entity operates in oil and gas exploration, with interests in five permits situated in Kyrgyzstan.

Uranium Exploration

The Economic Entity operates in uranium exploration, with interests in 2 licenses situated in Kyrgyzstan.

==> picture [153 x 51] intentionally omitted <==

26. Segment information (continued)

30 June 2007 Primary Reporting – Geographical Segments Revenues from ordinary activities Segment result profit / (loss) Segment assets Segment liabilities Depreciation and amortisation Other non-cash expenses/ (income)	$ $ $ $ Australia Kyrgyzstan Eliminations Consolidated 87,674 - 87,674
	(1,406,147) (64,899) (1,471,046)
	4,615,887 2,570,549 (2,654,337) 4,532,099
	147,687 90,059 237,746
	4,051 21,018 25,069
	265,749 - 265,749

During the prior period, the Company’s primary reporting segment was a business segment, comprising oil and gas exploration and uranium exploration.

30 June 2006 Primary Reporting – Business Segments Revenues from ordinary activities Segment result (loss) Segment assets Segment liabilities Depreciation and amortisation Other non-cash expenses	$ $ $ $ Oil and Gas Uranium Eliminations Consolidated 26,333 - 26,333
	(944,019) - - (944,019)
	3,459,914 - - 3,459,914
	(235,192) - (235,192)
	- - -
	- - -

27. Key Management Personnel Compensation

Key management personnel details

2007

Scott Spencer - Non-Executive Chairman

Jon Roestenburg – Managing Director (appointed 12 April 2007)

Mark Gwynne - Executive Director

David Steinepreis - Non-Executive Director (resigned 13 June 2007)

Gary Steinepreis – Non-Executive Director (resigned 18 January 2007)

2006

Scott Spencer (Non-Executive Chairman) (appointed 22 December 2005)

David Steinepreis (Non-Executive Director)

Mark Gwynne (Executive Director) (appointed 18 April 2006)

Gary Steinepreis (Executive Director)

Hugh Warner (Non-Executive Director) (resigned 22 December 2005)

(a) Remuneration Policy

Except as detailed, no director has received or become entitled to receive, during or since the financial year, a benefit because of a contract made by the Company or a related body corporate with a director, a firm of which a director is a member or an entity in which a director has a substantial financial interest.

This excludes a benefit included in the aggregate amount of emoluments received or due and receivable by directors or the fixed salary of a full time employee of the Company.

27. Key Management Personnel Compensation (continued)

Remuneration Policy

The Board of Directors, mainly comprising of non-executive directors for the majority of the year, is responsible for determining and reviewing compensation arrangements for the executive team. The Board will assess the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team.

The remuneration policy of Monitor Energy Limited has been designed to align director objectives with shareholder and business objectives by providing a fixed remuneration component which is assessed on an annual basis in line with market rates. The board of Monitor Energy Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best directors to run and manage the company, as well as create goal congruence between directors and shareholders.

The Board’s policy for determining the nature and amount of remuneration for board members is as follows:

All executives receive a base salary (which is based on factors such as length of service and experience), superannuation and fringe benefits.

All remuneration paid to directors is valued at the cost to the company and expensed. Options are valued using the Black-Scholes methodology.

Options Issued as Part of Remuneration

==> picture [217 x 112] intentionally omitted <==

27. Key Management Personnel Compensation (continued)

(b) Compensation of Key Management Personnel

The aggregate compensation of each member of the key management personnel of the company and the Group is set out below. During the financial year there were no key management personnel other than the Directors. There was no compensation of any type, to the Directors, other than as reported below for the provision of management services.

Key Management Personnel S Spencer (a) 2007 2006 J Roestenburg 2007 2006 D Steinepreis (b) 2007 2006 M Gwynne (c) 2007 2006 G Steinepreis (d) 2007 2006 H Warner 2007 2006 Total 2007 Total 2006		Short Term Share Based Post- Employee Payments employment Benefits benefits Salary Options Superannuation TOTAL and Fees $ $ $ $ 55,000 - - 55,000 35,000 - - 35,000 57,796 141,083 3,732 202,611 - - - - 45,000 - - 45,000 60,000 - - 60,000 104,593 - 750 105,343 31,902 - - 31,902 37,500 - - 37,500 60,000 - - 60,000 - - - - 27,523 - 2,477 30,000
		299,889 141,083 4,482 445,454
		214,425 - 2,477 216,902

Notes

The fees paid to Director related entities were for the provision of management services of the particular director, to the economic entity, as follows:

(a) Aubrey Consulting Pty Ltd, an entity associated with Scott Spencer.

(b) Ord Street Services, an entity associated with David Steinepreis.

(d) Leisurewest Consulting Pty Ltd, an entity associated with Gary Steinepreis.

(c) Compensation Options: Granted and vested during the year

During the financial year ended 30 June 2007, the following options were granted to directors and key management personnel:

personnel:
				Fair Value
Key				at Grant	Exercise	First
Management	Granted	Vested	Grant	Date	Price	Exercise
Personnel	Number	Number	Date	(cents)	(cents)	Date Expiry date
J Roestenburg	2,500,000	2,500,000	12 April 2007	2.01	2.0	12 April 2007 31 December 2009
J Roestenburg	2,500,000	2,500,000	12 April 2007	1.77	3.5	12 April 2007 31 December 2009
J Roestenburg	5,000,000	-	12 April 2007	1.88	5.0	7 March 2008 31 December 2010
J Roestenburg	5,000,000	-	12 April 2007	1.95	7.5	7 March 2009 31 December 2011

The options were issued free of charge and were valued using a Black-Scholes option pricing model. The calculation of all option valuations included the share price, a volatility factor and a risk-free rate as at the date of grant.

27. Key Management Personnel Compensation (continued)

In accordance with AASB 2, options issued to key management personnel during the year and in previous years have been valued using a Black-Scholes option pricing model, which takes account of factors such as the option exercise price, the current level and volatility of the underlying share price and the time to maturity of the option. Although a value is ascribed and included in total key management personnel, it should be noted that the key management personnel have not received this amount and the option may have no actual financial value unless the options achieve their exercise price.

The options were issued free of charge, and were valued at grant date using the Black & Scholes valuation model. The calculation of all option valuation included the share price on 12 April 2007 of $0.027, a volatility factor of approximately 120% and a risk-free rate of 5.75%. The options expiring 31 December 2009 vested immediately upon issue, the options expiring 31 December 2010 vest on 7 March 2008 and the options expiring 31 December 2011 vest on 7 March 2009. These options were granted following shareholders approval received on 12 April 2007.

(d) Shares Issued on Exercise of Compensation Options

During the financial year 2,500,000 unlisted options exercisable at 2 cents each on or before 31 December 2009 were exercised.

(e) Share and Option holdings

Shares and options are issued to key management personnel as part of their compensation. The options may be issued subject to performance criteria, and are issued to key management personnel of Monitor Energy Limited to increase goal congruence between key management personnel and shareholders.

All other equity dealings with key management personnel have been entered into with terms and conditions no more favourable than those that the entity would have adopted if dealing at arm’s length.

Shares held by Key Management Personnel

Fully paid ordinary shares of Monitor Energy Limited

Year ended 30 June 2007

Year ended 30 June	2007
Key Management Personnel S Spencer J Roestenburg M Gwynne D Steinepreis (i) G Steinepreis (ii)	Balance at Allotment of Options Net change Held at Balance at 01.07.06 shares- Exercised other retirement end of No. Acquisition date 30.06.07
	8,000,000 - - - - 8,000,000 - - 2,500,000 - - 2,500,000 8,500,000 - - - - 8,500,000 7,303,076 750,000 - - (8,053,076) - 17,500,000 750,000 - - (18,250,000) - 41,303,076 1,500,000 2,500,000 - (26,303,076) 19,000,000

(i) Ceased employment 13 June 2007

(ii) Ceased employment 18 January 2007

Year ended 30 June 2006

Year ended 30 June	2006
Key Management Personnel S Spencer H Warner (i) M Gwynne (ii) D Steinepreis G Steinepreis	Balance at Allotment of Options Net change Held at Balance at 01.07.05 shares- Exercised other retirement end of No. Acquisition date 30.06.07
	- 8,000,000 - - - 8,000,000 - - - - - - - 8,500,000 - - - 8,500,000 18,400,000 - 20,000,000 (31,096,924) - 7,303,076 21,850,000 - 20,000,000 (24,350,000) - 17,500,000 40,250,000 16,500,000 40,000,000 (55,446,924) - 41,303,076

(i) Ceased as a director 22 December 2005

(ii) Appointed director 18 April 2006

27. Key Management Personnel Compensation (continued)

Options Held by Key Management Personnel

Year ended 30 June 2007

==> picture [477 x 108] intentionally omitted <==

----- Start of picture text -----

|||||||
|---|---|---|---|---|---|
|Balance at|Granted as|Exercised|Balance|Total|Total|
|01.07.06|Compensation|No.|30.06.07|Vested|Exercisable|
|Key Management|
|Personnel|
|-|-|-|-|-|-|
|S Spencer|
|-|
|J Roestenburg|15,000,000|(2,500,000)|12,500,000|2,500,000|2,500,000|
|-|-|-|-|-|-|
|M Gwynne|
|-|-|-|-|-|-|
|D Steinepreis (i)|
|-|-|-|-|-|-|
|G Steinepreis (ii)|
|-|
|15,000,000|(2,500,000)|12,500,000|2,500,000|2,500,000|

----- End of picture text -----

(i) Ceased employment 13 June 2007

(ii) Ceased employment 18 January 2007

Year ended 30 June 2006

There were no share options held by key management personnel during the prior year.

(f) Service Agreements

The Company entered into an Executive Service Agreement with Mr Jon Roestenburg to provide services to the Company for one year from 1 March 2007.

Mr Roestenburg was appointed as an Executive and the remuneration to be paid to him under the Agreement is $132,000 per annum plus: statutory superannuation contributions at 9%, based upon the Executive working three days per week. In the event that he works more than three days in any one week the Company will pay $1,250 for each additional day worked in that week, upon a written record from the Executive of the additional hours worked. In addition to the salary the Company has provided use of a car bay, and 15 million options exercisable between 2 cents and 7.5 cents (as detailed in Note 28).

The Company or Mr Roestenburg can terminate the Agreement at any time by giving to the other not less than 6 months notice in writing. The Company can terminate the Agreement by three month’s notice if Mr Roestenburg is unable to perform his duties due to illness or incapacity and has been unable to do so for 9 month or more, whether or not consecutive, within the 12 months prior to the notice. The Company can also terminate the Agreement with one months notice if Mr Roestenburg neglects to perform his duties, or without notice of if he engages in any conduct which brings the Company into disrepute or becomes bankrupt or is convicted of a major criminal offence. There is no provision for termination payment.

The Agreement contains other terms and conditions with respect to confidentiality, performance and employee entitlements considered standard for this type of agreement.

(g) Loans to Key Management Personnel

There were no loans to key management personnel during the year.

28 Share Based Payments

Options are issued to key management personnel as part of their compensation under the company’s remuneration policy as described in Note 27. The options issued may be subject to performance criteria and are issued to key management personnel of Monitor Energy Limited to increase goal congruence between key management personnel and shareholders.

==> picture [526 x 153] intentionally omitted <==

----- Start of picture text -----

|||||||||
|---|---|---|---|---|---|---|---|
|Fair Value|
|Option Series|at Grant|Exercise|First|
|Granted|Vested|Date|Price|Exercise|
|Number|Number|Grant Date|(cents)|(cents)|Date|Expiry date|
|Series 1|4,000,000|4,000,000|12 April 2007|2.01|2.0|12 April 2007|31 December 2009|
|Series 2|3,500,000|3,500,000|12 April 2007|1.77|3.5|12 April 2007|31 December 2009|
|Series 3|7,000,000|-|12 April 2007|1.88|5.0|7 March 2008|31 December 2010|
|Series 4|7,000,000|-|12 April 2007|1.95|7.5|7 March 2009|31 December 2011|
|Series 5|500,000|500,000|5 June 2007|3.07|2.0|5 June 2007|31 December 2009|
|Series 6|500,000|500,000|5 June 2007|2.76|3.5|5 June 2007|31 December 2009|
|Series 7|1,250,000|1,250,000|5 June 2007|2.93|3.4|5 June 2007|30 June 2010|

----- End of picture text -----

28. Share Based Payments (continued)

The following table illustrates the number and weighted average exercise prices (WAEP) of and movements in share options issued under the Employee Share Option Plan and to vendors during the year:

At beginning of reporting period Granted during the period - Director remuneration - Employee incentive options Exercised during the period Expired during the period Balance the end of reporting period Exercisable at end of reporting period	2007 2006 Weighted Weighted Average Average Number of Exercise Price Number of Exercise Price Options $ Options $ - - 31,666,667 0.40 15,000,000 0.051 - - 8,750,000 0.044 - - (2,500,000) 0.02 (30,000,000) 0.01 - - (1,666,667) 0.40 21,250,000 0.051 - - 9,750,000 -

(i) The options outstanding at 30 June 2007 had a weighted average exercise price of $0.051 and a weighted average remaining life between 2.5 years and 4.5 years.

(ii) The weighted average fair value of options granted during the year was between $0.044 and $0.051.

(iii) Included under employee benefits expense in the income statement is $265,749 (2006:Nil), and relates, to equity-settled share-based payment transactions.

Options Exercised

During the financial year ended 30 June 2007 there were 2,500,000 compensation options exercised at 2 cents each.

(a) Transactions with other related parties

Director Related Transactions

Ord Street services a company associated with David Steinepreis provided office accommodation for the Company during the period and charged rent of $30,100 (2006: $39,600).

(b) Parent entities

The parent entity in the economic entity is Monitor Energy Ltd. The ultimate Australian parent entity is Monitor Energy Ltd.

The ultimate parent entity is Monitor Energy Ltd.

29. Subsequent events

Subsequent to 30 June 2007, Monitor entered into a heads of agreement with Medina Group Ltd for the right to form a joint venture for the oil and gas licenses in the Kyrgyz Republic held by Monitor.

Except for the aforementioned, there has not been any matter or circumstance that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the economic entity, the results of those operations, or the state of affairs of the economic entity in future financial years.

==> picture [217 x 112] intentionally omitted <==

30. Notes to the cash flow statement (a) Reconciliation of loss for the period to net cash flows from operating activities Loss for the period Non-cash flows in operating loss: - Depreciation - Share options expensed - Shares issued - Foreign exchange differences - Reclassification of exploration expenses from operating profit Cashflows not in operating loss: Changes in net assets and liabilities, net of effects from acquisition of businesses: (Increase)/decrease in assets: Current receivables Increase/(decrease) in liabilities: Current payables Net cash from operating activities	Consolidated Company
	2007 2006 2007 2006 $ $ $ $
	(1,471,046) (944,019) (1,406,148) (944,019) 25,069 - 4,051 - 265,749 - 265,749 - 24,000 24,000 (37,905) - - - 281,340 453,780 253,006 453,780 5,715 (29,954) 6,322 (29,954) 187,701 15,727 105,494 15,727
	(719,377) (504,466) (747,526) (504,466)

(b) Non-cash financing and investing activities

The economic entity issued 2,000,000 ordinary shares at a fair value of $24,000 for services rendered in the current financial year.

The economic entity issued 82,500,000 ordinary shares at a fair value of $1,650,000 for the acquisition of White Valley Oil LLC in 2006. Refer note 25 for further details.

31. Financial instruments

(a) Financial risk management objectives

The economic entity does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The use of financial derivatives is governed by the economic entity’s policies approved by the board of directors, which provide written principles on the use of financial derivatives.

The economic entity’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates. The economic entity has not entered into any derivative financial instruments.

(b) Significant accounting policies

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 3 to the financial statements.

(c) Foreign currency risk management

The economic entity undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise.

(d) Interest rate risk management

The economic entity is exposed to interest rate risk as it invests funds at both fixed and floating interest rates.

==> picture [217 x 112] intentionally omitted <==

31. Financial instruments (continued)

(e) Maturity profile of financial instruments

The following table details the economic entity’s exposure to interest rate risk as at 30 June 2007:

Financial assets and liabilities at 30 June 2007

Average interest rate 2007 Financial assets Cash & cash equivalents 2.8% Trade & other receivables Financial liabilities Trade and other payables Other financial liabilities Net financial assets (liabilities)	Fixed interest maturing in: Non- Floating 1year or Over 1 year interest interest rate less to 5 years bearing Total $ $ $ $ $ 1,954,785 35,000 - - 1,989,785 - - - 24,239 24,239 1,954,785 35,000 - 24,239 2,014,024 - - - 229,893 229,893 - - - - - 1,954,785 35,000 - (205,654) 1,784,131

The following table details the economic entity’s exposure to interest rate risk as at 30 June 2006:

Financial assets and liabilities at 30 June 2006

Average interest rate 2006 Financial assets Cash & cash equivalents 3.0% Trade & other receivables Financial liabilities Trade and other payables Other financial liabilities Net financial assets (liabilities)	Fixed interest maturing in: Non- Floating 1year or Over 1 year interest interest rate less to 5 years bearing Total $ $ $ $ $ 1,709,419 - - - 1,709,419 - - - 29,954 29,954 1,709,419 - - 29,954 1,739,373 - - - 42,192 42,192 - - - 193,000 193,000 1,709,419 - - (205,238) 1,504,181

(f) Credit risk management

The economic entity does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

(g) Liquidity risk management

The economic entity manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

(h) Fair value of financial instruments

The directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial statements approximates their fair value. (2006: Net fair value).

CORPORATE GOVERNANCE STATEMENT

The Company is committed to implementing the highest standards of corporate governance. In determining what those high standards should involve the Company has considered the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations.

In line with the above, the Board has set out the way forward for the Company in its implementation of its Principles of Good Corporate Governance and Best Practice Recommendations. The approach taken by the board was to set a blueprint for the Company to follow as it introduces elements of the governance process. Due to the current size of the Company and the scale of its operations it is neither practical nor economic for the adoption of all of the recommendations approved via the board charter. Where the Company has not adhered to the recommendations it has stated that fact in the annual report however has set out a mandate for future compliance when the size of the Company and the scale of its operations warrants the introduction of those recommendations.

1. Board of Directors

1.1 Role of the Board

The Board’s role is to govern the Company rather than to manage it. In governing the Company, the Directors must act in the best interests of the Company as a whole. It is the role of senior management to manage the Company in accordance with the direction and delegations of the Board and the responsibility of the Board to oversee the activities of management in carrying out those delegated duties.

In carrying out its governance role, the main task of the Board is to drive the performance of the Company. The Board must also ensure that the Company complies with all of its contractual, statutory and any other legal obligations, including the requirements of any regulatory body. The Board has the final responsibility for the successful operations of the Company.

To assist the Board carry its functions, it has developed a Code of Conduct to guide the Directors.

1.2 Composition of the Board

To add value to the Company the Board has been formed so that it has effective composition, size and commitment to adequately discharge it responsibilities and duties. The names of the Directors and their qualifications and experience are stated in the Directors’ Report along with the term of office held by each of the Directors. Directors are appointed based on the specific skills required by the Company and on their decision-making and judgment.

The Company recognises the importance of Non-Executive Directors and the external perspective and advice that NonExecutive Directors can offer. There is currently one Non-Executive Director on the board of the Company whom is also an independent director.

An Independent Director:

is a Non-Executive Director and;
is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;
within the last three years has not been employed in an executive capacity by the Company or another group member, or been a Director after ceasing to hold any such employment;
within the last three years has not been a principal of a material professional adviser or a material consultant to the Company or another group member, or an employee materially associated with the service provided;
is not a material supplier or customer of the Company or another group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer;
has no material contractual relationship with the Company or other group member other than as a Director of the Company;
has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company; and
is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.

Materiality for the purposes of points 1 to 9 above is determined on the basis of both quantitative and qualitative aspects with regard to the independence of directors. An amount over 5% of the Company’s expenditure or 10% of the particular directors annual gross income is considered to be material. A period of more than six years as a director would be considered material when assessing independence.

Mr S S Spencer is a Non-Executive Director and Chairman of the Company and meets the Company’s criteria for independence. His experience and knowledge of the Company makes his contribution to the Board such that it is appropriate for him to remain on the Board and in his position as Chairman.

Mr M Gwynne is an Executive Director of the Company and does not meet the Company’s criteria for independence. However, his experience and knowledge of the Company makes his contribution to the Board such that it is appropriate for him to remain on the Board.

==> picture [152 x 50] intentionally omitted <==

1.3 Responsibilities of the Board

In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the Company. It is required to do all things that may be necessary to be done in order to carry out the objectives of the Company.

Without intending to limit this general role of the Board, the principal functions and responsibilities of the Board include the following.

Leadership of the Organisation: overseeing the Company and establishing codes that reflect the values of the Company and guide the conduct of the Board.
Strategy Formulation: to set and review the overall strategy and goals for the Company and ensuring that there are policies in place to govern the operation of the Company.
Overseeing Planning Activities: the development of the Company’s strategic plan.
Shareholder Liaison: ensuring effective communications with shareholders through an appropriate communications policy and promoting participation at general meetings of the Company.
Monitoring, Compliance and Risk Management: the development of the Company’s risk management, compliance, control and accountability systems and monitoring and directing the financial and operational performance of the Company.
Company Finances: approving expenses and approving and monitoring acquisitions, divestitures and financial and other reporting.
Human Resources: appointing, and, where appropriate, removing Executive Officers as well as reviewing the performance of Executive Officers and monitoring the performance of senior management in their implementation of the Company’s strategy.
Ensuring the Health, Safety and Well-Being of Employees: in conjunction with the senior management team, developing, overseeing and reviewing the effectiveness of the Company’s occupational health and safety systems to ensure the well-being of all employees.
Delegation of Authority: delegating appropriate powers to the CEO to ensure the effective day-to-day management of the Company and establishing and determining the powers and functions of the Committees of the Board.

Full details of the Board’s role and responsibilities are contained in the Board Charter, a copy of which is available for inspection at the Company’s registered office.

1.4 Board Policies

1.4.1 Conflicts of Interest

Directors must:

disclose to the Board actual or potential conflicts of interest that may or might reasonably be thought to exist between the interests of the Director and the interests of any other parties in carrying out the activities of the Company; and
if requested by the Board, within seven days or such further period as may be permitted, take such necessary and reasonable steps to remove any conflict of interest.

If a Director cannot or is unwilling to remove a conflict of interest then the Director must, as per the Corporations Act, absent himself or herself from the room when discussion and/or voting occurs on matters about which the conflict relates.

1.4.2 Commitments

Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as a Director of the Company.

1.4.3 Confidentiality

In accordance with legal requirements and agreed ethical standards, Directors and key executives of the Company have agreed to keep confidential, information received in the course of the exercise of their duties and will not disclose nonpublic information except where disclosure is authorised or legally mandated.

1.4.4 Continuous Disclosure

The Board has designated the Company Secretary as the person responsible for overseeing and coordinating disclosure of information to the ASX as well as communicating with the ASX. In accordance with the ASX Listing Rules the Company immediately notifies the ASX of information:

concerning the Company that a reasonable person would expect to have a material effect on the price or value of the Company’s securities; and
that would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of the Company’s securities.

1.4.5 Education and Induction

It is the policy of the Company that new Directors undergo an induction process in which they are given a full briefing on the Company. Where possible this includes meetings with key executives, tours of the premises, an induction package and presentations. Information conveyed to new Directors include:

details of the roles and responsibilities of a Director;
formal policies on Director appointment as well as conduct and contribution expectations;
a copy of the Board Charter; and
a copy of the Constitution of the Company.

In order to achieve continuing improvement in Board performance, all Directors are encouraged to undergo continual professional development.

1.4.6 Independent Professional Advice

The Board collectively and each Director has the right to seek independent professional advice at the Company’s expense, up to specified limits, (that limit is currently set at $2,000), to assist them to carry out their responsibilities.

1.4.7 Related Party Transactions

Related party transactions include any financial transaction between a Director and the Company. Unless there is an exemption under the Corporations Act from the requirement to obtain shareholder approval for the related party transaction, the Board cannot approve the transaction.

1.4.8 Shareholder Communication

The Company respects the rights of its shareholders and to facilitate the effective exercise of those rights the Company is committed to:

communicating effectively with shareholders through releases to the market via ASX, information mailed to shareholders and the general meetings of the Company;
giving shareholders ready access to balanced and understandable information about the Company and corporate proposals;
making it easy for shareholders to participate in general meetings of the Company; and
requesting the external auditor to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report.

The Company also makes available a telephone number and email address for shareholders to make enquiries of the Company.

1.4.9 Trading in Company Shares

The Company has a Share Trading Policy which states that Directors, members of senior management, certain other employees and their associates likely to be in possession of unpublished price sensitive information may not trade in the Company’s securities prior to that unpublished price sensitive information being released to the market via the ASX.

Unpublished price sensitive information is information regarding the Company, of which the market is not aware, that a reasonable person would expect to have a material effect on the price or value of the Company’s securities.

1.4.10 Performance Review / Evaluation

It is the policy of the Board to conduct evaluation of its performance. The objective of this evaluation is to provide best practice corporate governance to the Company. During the financial year an evaluation of the performance of the Board and its members was not formally carried out. To date, there has been no formal process put in place for performance evaluation. However, a general review of the Board and executives occurs on an on-going basis to ensure that structures suitable to the Company's status as a listed entity are in place.

1.4.11 Attestations by CEO and CFO

It is the Board’s policy, that the CEO and the CFO make the attestations recommended by the ASX Corporate Governance Council as to the Company’s financial condition prior to the Board signing the Annual Report. However, as at the date of this report the Company does not have a designated CEO or CFO. Due to the size and scale of operations of the Company these roles are performed by the Board, the Executive Directors and the Company Secretary and they will make the required attestations.

2. Board Committees

2.1 Audit Committee

Due to the size and scale of operations of the Company, the Company does not have an Audit Committee. The full Board carries out the functions of the Audit Committee. The Board did not meet formally as the Audit Committee during the financial year however any relevant matters were discussed on an as-required basis from time to time during regular meetings of the Board.

2.2 Remuneration Committee

2.2.1 Role

The role of a Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration levels and incentive policies for employees.

As the whole Board only consists of three (3) members, the Company does not have a remuneration committee because it would not be a more efficient mechanism than the full Board for focusing the Company on specific issues, however any relevant matters were discussed on an as-required basis from time to time during regular meetings of the Board.

2.2.2 Remuneration Policy

2.2.2.1 Non-Executive Director Remuneration Policy

Non-Executive Directors are to be paid their fees out of the maximum aggregate amount approved by shareholders for the remuneration of Non-Executive Directors. Non-Executive Directors do not receive performance based bonuses and do not participate in equity schemes of the Company.

Non-Executive Directors are entitled to but not necessarily paid statutory superannuation.

2.2.2.2 Executive Director remuneration is set by the board with the executive director in question not present.

2.2.3 Current Director Remuneration

Full details regarding the remuneration of Directors, is included in the Directors’ Report.

2.3 Nomination Committee

2.3.1 Role

The role of a Nomination Committee is to help achieve a structured Board that adds value to the Company by ensuring an appropriate mix of skills are present in Directors on the Board at all times.

As the whole Board only consists of three (3) members, the Company does not have a nomination committee because it would not be a more efficient mechanism than the full Board for focusing the Company on specific issues. The full Board carries out the functions of the Nomination Committee. The Board did not meet formally as the Nomination Committee during the financial year however any relevant matters were discussed on an as-required basis from time to time during regular meetings of the Board.

2.3.2 Criteria for selection of Directors

Directors are appointed based on the specific governance skills required by the Company. Given the size of the Company and the business that it operates, the Company aims at all times to have at least one Director with experience appropriate to the Company’s target market. In addition, Directors should have the relevant blend of personal experience in:

Accounting and financial management; and
Director-level business experience.

3. Company Code Of Conduct

As part of its commitment to recognising the legitimate interests of stakeholders, the Company has established a Code of Conduct to guide compliance with legal and other obligations to legitimate stakeholders. These stakeholders include employees, clients, customers, government authorities, creditors and the community as whole. The Company Code of Conduct was adopted by resolution of the Board on 30 June 2004. This Code includes the following:

Responsibilities to Shareholders and the Financial Community Generally

The Company complies with the spirit as well as the letter of all laws and regulations that govern shareholders’ rights. The Company has processes in place designed to ensure the truthful and factual presentation of the Company’s financial position and prepares and maintains its financial statements fairly and accurately in accordance with the generally accepted accounting and financial reporting standards.

Responsibilities to Clients, Customers and Consumers

The Company has an obligation to use its best efforts to deal in a fair and responsible manner with each of the Company’s clients, customers and consumers and is committed to providing clients, customers and consumers with fair value.

Employment Practices

The Company policy is to endeavours to provide a safe workplace in which there is equal opportunity for all employees at all levels of the Company. The Company does not tolerate the offering or acceptance of bribes or the misuse of Company assets or resources. As at the date of this report there are no employees who are not also directors.

Obligations Relative to Fair Trading and Dealing

The Company aims to conduct its business fairly and to compete ethically and in accordance with relevant competition laws. The Company strives to deal fairly with the Company’s customers, suppliers and competitors.

Responsibilities to the Community

As part of the community the Company is committed to conducting its business in accordance with applicable environmental laws and regulations

Responsibility to the Individual

The Company is committed to keeping private information from employees, clients, customers, consumers and investors confidential and protected from uses other than those for which it was provided.

Conflicts of Interest

Directors and Employees must avoid conflicts as well as the appearance of conflicts between personal interests and the interests of the Company.

How the Company Complies with Legislation Affecting its Operations

Within Australia, the Company strives to comply with the spirit and the letter of all legislation affecting its operations. Outside Australia, the Company will abide by local laws in all countries in which it operates. Where those laws are not as stringent as the Company’s operating policies, particularly in relation to the environment, workplace practices, intellectual property and the giving of “gifts”, Company policy will prevail.

How the Company Monitors and Ensures Compliance with its Code.

The Board of the Company is committed to implementing this Code of Conduct and each individual is accountable for such compliance. Disciplinary measures may be imposed for violating the Code.

SHAREHOLDER INFORMATION

Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report. This additional information was applicable as at 16 October 2007.

1. DISTRIBUTION OF SECURITY HOLDERS

Analysis of numbers of listed equity security holders by size of holding:

Category 1 - 1,000 1,001-5,000 5,001-10,000 10,001-100,000 100,001 and over Number of shareholders holding less than a marketable parcel of ordinary shares:	Number of Shareholders 36 9 10 278 631
	964
	106

2. STATEMENT OF RESTRICTED SECURITIES

There are no restricted securities as at 16 October 2007.

3. SUBSTANTIAL SHAREHOLDERS

There are no substantial shareholdings as at 16 October 2007.

4. UNQUOTED SECURITIES

There are no unquoted securities as at 16 October 2007.

5. VOTING RIGHTS

The voting rights attaching to the ordinary shares, set out in the Company’s Constitution, are:

At meetings of members, each member is entitled to vote in person or by proxy, attorney or representative; and
On a show of hands, every person present who is a member has one vote, and on a poll every member present has a vote for each fully paid share.

6. ON-MARKET BUY-BACK

There is no current on-market buy-back.

==> picture [217 x 112] intentionally omitted <==

7. Statement of Top 20 Holders of Listed Equity Securities	7. Statement of Top 20 Holders of Listed Equity Securities
Rank	Name	Number of Shares		% of Issued Capital
1	ANZ NOMINEES LIMITED		14,926,872	2.45
2	ZABV LLC		10,500,000	1.72
3	DAEM NOMINEES PTY LTD		8,500,000	1.39
4	SILVERWEST CORP PTY LTD		8,500,000	1.39
5	AUBREY CONSULTING PTY LTD		8,000,000	1.31
6	MR ROBERT LINDAY SHIRLEY & MRS GINA MICHELLE
	SHIRLEY R L		8,000,000	1.31
7	MR STEVEN ITALIANO		7,352,771	1.21
8	KIMBRIKI NOMINEES PTY LTD		7,000,000	1.15
9	MARBLE HILL INVESTMENTS LTD		7,000,000	1.15
10	PETERSVIEW PTY LTD		7,000,000	1.15
11	LEISUREWEST CONSULTING PTY LTD		6,250,000	1.03
12	MR CRAIG MICHAEL LAKE & MRS JUDITY MAY LAKE		5,800,000	0.95
13	FORTY TRADERS LIMITED		5,450,000	0.89
14	BLAMNCO TRADING PTY LTD		5,000,000	0.82
15	LEXDEN PTY LTD		5,000,000	0.82
16	RIVIAN INVESTMENTS PTY LTD		4,450,000	0.73
17	SATELLITE SECURITY SERVICES PTY LTD <PURA SUPER FUND		A/C> 4,300,000	0.71
18	MS JACQUELINE MARY STEINEPREIS		4,250,000	0.70
19	RYMAC HOLDINGS PTY LTD		4,100,000	0.67
20	FOPAR NOMINEES PTY LTD		4,000,000	0.66
			135,379,643	22.21

==> picture [217 x 112] intentionally omitted <==

==> picture [145 x 75] intentionally omitted <==

Principal & Registered Office: Level 1, 35 Richardson Street West Perth WA 6005 Telephone: (08) 9211 1555 Facsimile: (08) 9211 1500

AI assistant

FIN RESOURCES LIMITED — Annual Report 2007

64920_rns_2007-10-30_cac0dbd0-5639-4c00-bb63-95dcaca3a2f1.pdf

CONTENTS

CHAIRMAN’S LETTER

Dear Shareholder

CORPORATE DIRECTORY

NON-EXECUTIVE CHAIRMAN

MANAGING DIRECTOR

EXECUTIVE DIRECTOR

COMPANY SECRETARY

PRINCIPAL & REGISTERED OFFICE

AUDITORS

SHARE REGISTRAR

STOCK EXCHANGE LISTING

BANKERS

DIRECTORS' REPORT

3. RESULTS

1. DIRECTORS

COMPANY SECRETARY

2. PRINCIPAL ACTIVITIES

4. DIVIDENDS

5. REVIEW OF OPERATIONS

Overview

Petroleum Operations

Uranium Operations

Business outlook and future development

6. CHANGES IN STATE OF AFFAIRS

7. FUTURE DEVELOPMENTS

8. ENVIRONMENTAL ISSUES

9. INFORMATION ON DIRECTORS

Mr Scott Spencer Non-Executive Chairman

Jon Roestenburg Managing Director

Directorships of other listed companie s

10. REMUNERATION REPORT

Key management personnel details

2007

(a) Remuneration Policy

Remuneration Policy

Options Issued as Part of Remuneration

(b) Director and executive remuneration

Notes

(c) Value of Options Issued to Directors and Executives

(d) Service Agreements

11. MEETINGS OF DIRECTORS

12. INDEMNIFYING OFFICERS

13. OPTIONS

Share Options Granted to Directors and Executives

Un-issued Shares Under Option

14. AUDITORS INDEPENDENCE DECLARATION

15. NON AUDIT SERVICES

16. SUBSEQUENT EVENTS

Monitor Energy Limited

DELOITTE TOUCHE TOHMATSU

Independent Auditor’s Report to the Members of Monitor Energy Limited

Directors’ Responsibility for the Financial Report

Auditor’s Responsibility

Auditor’s Independence Declaration

Auditor’s Opinion

DELOITTE TOUCHE TOHMATSU

DIRECTORS' DECLARATION

INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2007

CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2007

ECONOMIC ENTITY

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2007

COMPANY

Notes to the Financial Statements

1. General Information

2. Adoption of new and revised Accounting Standards

3. Significant Accounting Policies

Statement of compliance

Basis of preparation

(a) Basis of Consolidation

(b) Business Combinations

(c) Cash and Cash Equivalents

(d) Employee Benefits

(e) Financial Assets

Effective interest method

Loans and receivables

FIN RESOURCES LIMITED Annual Report 2007