FIN RESOURCES LIMITED — Regulatory Filings 2008

Sep 25, 2008

and Controlled Entities (ABN 25 009 121 644)

Annual Report For the Year Ended 30 June 2008

CONTENTS

Corporate Directory	3
Chairman's Letter	4
Review of Operations	5
Directors' Report	10
Auditors' Independence Declaration	18
Independent Audit Report To The Members of Monitor Energy Limited	19-20
Directors' Declaration	21
Income Statement	22
Balance Sheet	23
Cash Flow Statement	24
Statement of Changes in Equity	25-26
Notes to the Financial Statements	27-52
Corporate Governance Statement	53-62
ASX Additional Information	63-66

CORPORATE DIRECTORY

NON-EXECUTIVE CHAIRMAN Scott Spencer

MANAGING DIRECTOR Jon Roestenburg

EXECUTIVE DIRECTOR Mark Gwynne

COMPANY SECRETARY Martin Stein

PRINCIPAL & REGISTERED OFFICE

Level 1, 35 Richardson Street WEST PERTH WA 6005 Telephone: (08) 9211 1555 Facsimile: (08) 9211 5700

AUDITORS

Ord Partners Chartered Accountants Level 2, 47 Colin Street West Perth, WA, 6005

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 Securities Exchange (Home Exchange: Perth, Western Australia) Share Code: MHL Option Code: MHLO

BANKERS

Westpac Banking Corporation 109 St Georges Terrace PERTH WA 6000

REVIEW OF OPERATIONS

Highlights

• Monitor completed gravity and radiometric surveys which indicate structures capable of maturing into drilling prospects on its Kyrgyz Assets after focussed seismic acquisition.
• The discovery of oil seeps on the Kyrgyz licences adds significant weight to the geological understanding and potential value of the assets.
• The Company has established a viable Petroleum System in east Kyrgyzstan and is undertaking further analyses and test work to establish oil type parameters.
• The Company is continuing to seek third party funding for the Kyrgyz assets through an attractive farmout arrangement and believes the improved geological knowledge and significantly higher oil price will facilitate this.
• Monitor is actively seeking other opportunities for near term production in South America and South-East Asia, using a wide network of industry contacts.
• The Company is in the process of unwinding the uranium joint venture with leopard Minerals Plc for the Kyrgyz uranium licences and intends to seek new partners with the aim of persuing an aggressive exploration program.

Monitor Energy Limited ("Monitor" or "Company") is a junior energy explorer, incorporated in Western Australia with extensive acreage holdings and operations in the Kyrgyz Republic for both petroleum and uranium.

Petroleum Operations

The Company's strategy is to continue building its energy portfolio through a spread of assets from frontier, high reward petroleum plays to near term production field exposure for cash flow, risk reduction and energy diversification.

The Kyrgyz Petroleum licenses are extensive with the potential for large oil and gas structures and petroleum accumulations as they are in close geological proximity to known and proven giant oil and gas fields in China's Tarim and Junggar Basin and in the adjacent Fergana Basin as shown in figure 1.

Figure 1. Monitor Energy Ltd licenses in The Kyrgyz Republic and proximity to producing fields.

During the year the Company has added significant value to its asset through the completion of a comprehensive work program that included over 1100 line kilometers of new age gravity surveying and integrated modelling. Further, the company has established a viable petroleum system exists on its licenses through the discovery of surface oil seeps. Samples collected at these seeps will be analyzed in the near future as part of the remaining 2008 work program. The discovery post dates this report, however is considered relevant to the Company's assets and technical merit.

The 2007 field season work comprised of the detailed gravity survey and its results modelling, which were completed on time and on budget. Outcomes of this effort established excellent basement related structural controls on several leads identified by field reconnaissance work and mapping. These leads will eventually be matured into prospects after further seismic acquisition and interpretation and the outcomes of the Magnetic Telluric Impulse Surveys carried out in August 2008.

Potential early targets emerge from new data modelling.

The recent modelling results have shown that the oil and gas wells drilled during the Soviet Era of the 1960's are off structure. This is shown in the following graphic.

Figure 2. Off structure wells suggesting possible up dip closures are untested

The structures shown in figure 2 are also shown on the map in figure 3. The outcomes of the gravity surveys will assist the Company's technical staff to locate effective geophysical acquisition surveys, thereby reducing the risk of un-necessary seismic expenditures during this early exploration phase. Continuing exploration and interpretation work is being carried out on the Company's southern licenses and will be integrated with the recent magnetic telluric impulse surveys which are part of the 2008 filed season exploration program. Significantly, the Company is encouraged by the occurrence of live oil seeps on its licenses which will form further focus for its integrated interpretation and future work programs.

Figure 3. Gravity delineation of basement related structures on the Issyk-Kul licenses.

Joint Venture in Oil & Gas

During this reporting period, the Company entered into a Conditional Joint Venture Operating Agreement with Sentry Petroleum, as US listed company. The conditionality of the agreement related to Sentry successfully raising sufficient revenue to fund future exploration and possible development of the Kyrgyz oil and gas licences. In late June, the Company was notified by Sentry that it had failed to raise the funds. While this was a setback to the Company and advancement of the Kyrgyz assets, several favourable circumstance have improved the market conditions for potentially a more advantageous deal. Firstly, the Company has added value to the projects via low cost, but valuable exploration and discovery of oil seeps on the licences, and secondly, the price of oil has increased dramatically since the deal was originally contemplated. Several parties have been contacted with expressions of interest as a result. The Company feels that because it now has a demonstrable and viable Petroleum System on its licenses the exploration risk is significantly reduced, a fact that will not be lost on experienced new venture operators and companies seeking reserve replacement under favourable fiscal terms.

Uranium Operations

The Uranium licenses (figure 2) cover approximately 2200Km2 in the Kyrgyz Republic with the two Monitor licences shown in yellow and the Leopard Minerals Plc (JV partner) licenses shown in blue. Leopard Minerals PLC and the Company have agreed to dissolve the joint venture and the two parties are in the process of unwinding their joint venture. This will be completed in the near term. The Company intends to seek a new partner that meet specific criteria to advance to projects in the near term.

Figure 4. Uranium licenses at June 30th, 2008 (Monitor licenses in yellow, Leopard licenses in blue).

East Kokmoinok Uranium (Licence - 1060 MP)

The East Kokmoinok uranium licence (3,600 Ha) ("the Licence") is located immediately west of the historic Minkush uranium mining centre in the central Kyrgyz Republic. The licence contains the Soviet era Kashkasu II uranium deposit.

The Kashkasu II deposit was extensively explored up to the preparation of a mining plan during the Soviet era, but development did not proceed apparently due to the discovery of large sandstone hosted deposits in Kazakhstan, located closer to the Soviet nuclear test sites..

No data is available on production at Minkush, but 4 tailings dams are located at in the area, which are believed to contain approximately 2,000,000 tonnes of material. These tailings dams are not located on the License.

Exploration work was limited to detailed geological mapping and sampling of exposed mineralisation during this field season. Assay results are anticipated in the next month.

Kalmaksu Uranium License

As previously reported, Monitor already holds a 100% interest in an uranium exploration license in the north-eastern region of the Kyrgyz Republic, NW of Lake Issyk-Kul.

The Kalmaksu license is valid for two years between 4 May 2007 and 4 May 2009. The license covers an area of 27,200 hectares (272 square kilometers) and is located north of Lake Issyk-Kul.

Exploration completed this season included regional mapping, ridge and spur sampling and trenching over radioactive anomalism. Assay results are anticipated in the next month.

Current Uranium Activity

The Company has completed a sufficient exploration program in 2008 comprising remapping and sampling of the deposit, which will be analyses in the latter part of 2008, when laboratory facilities become available in country. The exploration program was completed to ensure that the Company's uranium assets remain in good standing with the governmental licensing authorities. The Company is actively seeking expressions of interest to a new joint venture as a result of the collapse of its previous Joint Venture partner, Leopard Minerals PLC.

New Opportunities

The Company is continuing its focus on near-term production opportunities in two key regions, South-East Asia and Latin America. These regions were chosen due to proven hydrocarbon fields, strong geological understanding and experience by the Company technical team, existing strong business relationships with key companies and individuals in these regions and the opportunity for acquisition of relatively small but high value, though smaller production by junior companies.

South East Asia

As previously stated, the company has lodged a bid for a highly prospective, on-shore petroleum block in Sumatra. The Outcome of the submission will be known in the short term. The Company has also reviewed several other opportunities that meet the criteria of the Company and will be pursued.

Latin America.

The Company has employed a consultant with strong track record of acquiring advanced projects in developed hydrocarbon fields in specific countries in Latin America. Several projects are currently under review by the Company.

DIRECTORS' REPORT

Your directors present their report on the Company and its' consolidated entities ("Group") for the financial year ended 30 June 2008.

1. DIRECTORS

The names of directors in office at any time during or since the end of the financial year are: Scott Spencer Jon Roestenburg Mark Gwynne

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

COMPANY SECRETARY

Ms Suzie Foreman held the position of Company Secretary until her resignation on 1 January 2008. Mr Martin Stein was appointed as Company Secretary on the same date and held the position of Company Secretary at the end of the financial year:

Mr Martin Stein – B. Bus, CA, ACIS

Mr Stein is a Chartered Accountant and Chartered Secretary and is a Director of Aspire Corporate Consultants Pty Ltd, a Company that specialises in the provision of corporate advisory, financial management and company secretarial services to a range of listed and unlisted companies.

Mr Stein has developed a strong level of experience in various security centres, and has obtained overseas experience having worked with PricewaterhouseCoopers in London. Mr Stein brings to Monitor Energy Limited a well developed skills base in financial management and company secretarial duties in conjunction with multiple jurisdiction experience.

2. PRINCIPAL ACTIVITIES

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

3. RESULTS

The loss of the economic entity attributable to members amounted to \$1,978,892 (2007: \$1,471,046).

The economic entity's basic loss per share for the financial year ended 30 June 2008 was 0.31 cents per share.

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

The principal activity of the Group during the year was the continued exploration and evaluation of the oil and gas and uranium assets held in the Kyrgyz Republic.

A more detailed review of the Group's operations during the financial year is set out in the Chairman's Report.

6. CHANGES IN STATE OF AFFAIRS

On 23 October 2007 the Company issued 31,000,000 fully paid ordinary shares at \$0.02 per share to raise \$620,000 before costs of the issue.

On 18 June 2008 the Company issued 88,000,000 fully paid ordinary shares at \$0.014 per share to raise \$1,232,000 before costs of the issue.

On 18 June 2008 the Company announced to the ASX that it intended to proceed with an Option Entitlement Offer to existing shareholders to issue up to approximately 364 million options at \$0.002 per option. The options will have an expiry date of 31 August 2011 and an exercise price of \$0.025 per share.

Further to the ASX announcement on 18 June 2008 mentioned above, the Company entered into an agreement with Melbourne Capital Limited ("MCL") whereby MCL agreed to place on an "all reasonable endeavours basis" any shortfall options from the Option Entitlement Offer mentioned above, as well as a further 250 million options on the same terms as the Option Entitlement Offer.

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

• 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.

Subsequent to the year ended 30 June 2008, both Monitor and Leopard Minerals plc have agreed to unwind the Central Asian Uranium Joint Venture. It is anticipated that a Deed of Annulment will be executed in the near term. This will see the uranium licenses Kashkasu II and Kalmaksu returned to sole ownership of Monitor. Once completed, the Company will seek a new agreement with other third parties for the advancement of these assets.

7. FUTURE DEVELOPMENTS

Likely future developments in the operations of the Company are referred to in the Chairman's report. Other than that referred to in this report, further information as to likely developments in the operations of the Company and expected results of those operations, would, in the opinion of the directors, be speculative and prejudicial to the interests of the Company and its shareholders.

8. ENVIRONMENTAL ISSUES

The economic entity 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 economic entity is not aware of any environmental breaches during the current year.

9. INFORMATION ON DIRECTORS

Mr Scott Spencer Experience	Non-Executive Chairman 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 was 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 Experience	Managing Director Mr Roestenburg is a highly experienced professional, having graduated in geology from Curtin University and begun 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.	petroleum industry
Interest in Shares and Options	Ordinary Shares 3.5 Cent, 31 December 2009 Options 5 Cent, 31 December 2010 Options 7.5 Cent, 31 December 2011 Options	2,500,000 2,500,000 5,000,000 5,000,000
Mark Gwynne	Executive Director
Experience	Mark Gwynne has been involved in gold exploration and mining for over 13 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	5,500,000
Directorships of other listed companies

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	Green Rock Energy Limited	Appointed 29 November 2005 to date
	Hardman Resources Limited	Appointed 19 July 1994 to 12 April 2006
Mark Gwynne	Jackson Gold Limited	Appointed 12 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 economic entity are also that of the company.

Scott Spencer - Non-executive chairman Jon Roestenburg – Managing Director Mark Gwynne - Executive director

(a) Remuneration Policy (audited)

Directors' remuneration and other terms of employment are reviewed annually by the 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 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:

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 economic entity 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 (audited)

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
Key Management Personnel	Salary and Fees \$	Options \$	Superannuation \$	TOTAL \$	Performance Based %
S Spencer (a)
2008	52,050	-	-	52,050	0%
2007	55,000	-	-	55,000	0%
J Roestenburg
2008	179,499	128,332	38,242	346,073	37%
2007	57,796	141,083	3,732	202,611	70%
M Gwynne
2008	112,000	-	9,000	121,000	0%
2007	104,593	-	750	105,343	0%
D Steinepreis (b)
2008	-	-	-	-	0%
2007	45,000	-	-	45,000	0%
G Steinepreis (c)
2008	-	-	-	-	0%
2007	37,500	-	-	37,500	0%
Total 2008	343,549	128,332	47,242	519,123	25%
Total 2007	299,889	141,083	4,482	445,454	32%

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

(c) Value of Options Issued to Directors and Executives (audited)

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

		Options Granted	Options Options Exercised Lapsed		Total value of options	Value of options included in	Percentage of total
		Value at grant date (i)	Value at exercise date	Value at time of lapse	granted, exercised and lapsed	remuneration for the year	remuneration for the year that consists of options
		\$	\$	\$	\$	\$	%
Jon Roestenburg	2008	-	-	-	-	128,332	37.08
	2007	286,000	50,250	-	336,250	114,083	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 (Audited)

The Company has not entered into any Executive Service Agreement with any of the directors to provide services to the Company.

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
Director	Number Eligible to Attend	Meetings Attended
S Spencer	4	4
J Roestenburg	4	4
M Gwynne	4	4

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 of since the end of the year ended 30 June 2008, nil share options have been issued to directors and executives of the Company.

Un-issued Shares Under Option

At the date of this report unissued ordinary shares of the Company under option to directors and executives of the Company are:

Expiry Date	Exercise Price	Number of Shares
31 December 2009	3.5 cents	2,500,000
31 December 2010	5 cents	5,000,000
31 December 2011	7.5 cents	5,000,000
Total		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 2008 there were nil compensation options exercised into fully paid ordinary shares.

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. EMPLOYEES

The Economic Entity had 16 employees as at 30 June 2008.

15. AUDITORS INDEPENDENCE DECLARATION

The auditor's independence declaration for the year ended 30 June 2008 has been received and can be found on page 16 of the annual report.

16. NON AUDIT SERVICES

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

17. SUBSEQUENT EVENTS

On 4 July 2008, the Company lodged an Entitlement Issue Prospectus ("Prospectus") with the Australian Securities and Investments Commission. The Prospectus was for a non-renounceable entitlement issue of one option for every two shares held by shareholders on 15 July 2008. The options had an issue price of \$0.002 cents each, with exercise prices of \$0.025 per share and expiry dates of 31 August 2011. The Company had entered into an agreement with Melbourne Capital Limited whereby any shortfall options were to be placed on an "all reasonable endeavors basis" to clients of Melbourne Capital Limited.

On 7 August 2008, the Company issued 153,591,031 entitlement options pursuant to the Prospectus to raise \$307,182 before costs. On 25 August 2008, the Company issued 210,717,353 shortfall options pursuant to the Agreement with Melbourne Capital Limited to raise \$421,435 before costs.

INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2008

			Consolidated		Company
		2008	2007	2008	2007
	Note	\$	\$	\$	\$
Revenue	5	63,454	87,674	23,235	87,674
Employee benefits expense	5	(847,543)	(731,701)	(847,543)	(731,701)
Advisors' costs		(102,104)	(27,333)	(102,104)	(27,333)
Occupancy expense		(106,339)	(91,507)	(106,339)	(91,507)
Exploration expenses		(613,336)	(359,996)	(171,288)	(493,076)
Administration expenses		(270,697)	(197,450)	(243,885)	(197,450)
Travel and accommodation		(162,450)	(157,074)	(162,450)	(157,074)
Loan impairment expense		-	-	(719,815)	-
Other expenses		(70,859)	(6,495)	(62,756)	(6,496)
Depreciation		(5,620)	(25,069)	(4,387)	(4,051)
Foreign exchange gain / (loss)		136,602	37,905	(7,154)	-
Loss before tax		(1,978,892)	(1,471,046)	(2,404,486)	(1,406,148)
Income tax expense	6	-	-	-	-
Loss for the year		(1,978,892)	(1,471,046)	(2,404,486)	(1,406,148)
Loss attributable to members of the
parent entity		(1,978,892)	(1,471,046)	(2,404,486)	(1,406,148)
Loss per share:
Basic (cents per share)	20	(0.31)	(0.25)
Diluted (cents per share)	20	(0.31)	(0.25)

BALANCE SHEET AS AT 30 JUNE 2008

		Consolidated		Company
		2008	2007	2008	2007
	Note	\$	\$	\$	\$
Current assets
Cash and cash equivalents	8	1,231,281	1,989,785	1,207,269	1,929,125
Trade and other receivables	9	5,193	24,239	450	21,851
Inventory	10	8,990	-	-	-
Other current assets	11	4,366	6,448	-	1,783
Total current assets		1,249,830	2,020,472	1,207,719	1,952,759
Non-current assets
Other financial assets	12	-	-	2,997,408	2,654,337
Plant and equipment	13	200,369	116,271	8,008	8,791
Exploration and evaluation expenditure	14	2,837,997	2,395,356	-	-
Total non-current assets		3,038,366	2,511,627	3,005,416	2,663,128
Total assets		4,288,196	4,532,099	4,213,135	4,615,887
Current liabilities
Trade and other payables	15	239,086	229,893	164,025	139,834
Provisions	16	6,754	7,853	6,754	7,853
Total current liabilities		245,840	237,746	170,779	147,687
Total liabilities		245,840	237,746	170,779	147,687
Net assets		4,042,356	4,294,353	4,042,356	4,468,200
Equity
Issued capital	17	14,901,131	13,190,317	14,901,131	13,190,317
Reserves	19	122,631	106,550	483,327	215,499
Accumulated losses	18	(10,981,406)	(9,002,514)	(11,342,102)	(8,937,616)
Total equity		4,042,356	4,294,353	4,042,356	4,468,200

CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2008

	Consolidated		Company
	2008	2007	2008	2007
Note	\$	\$	\$	\$
Cash flows from operating activities
Payments to suppliers and employees	(1,271,078)	(807,051)	(1,257,494)	(835,200)
Interest received	23,235	80,569	23,235	80,569
Other Income	-	7,105	-	7,105
Net cash used in operating activities 30	(1,247,843)	(719,377)	(1,234,259)	(747,526)
Cash flows from investing activities
Exploration and evaluation expenditure	(1,055,978)	(976,362)	(171,288)	(277,006)
Amounts advanced to subsidiary entities	-	-	(1,062,886)	(933,796)
Loans to related parties	-	(2,388)	-	-
Payments for plant and equipment	(127,074)	(141,340)	(3,604)	(12,842)
Net cash used in investing activities	(1,183,052)	(1,120,090)	(1,237,778)	(1,223,644)
Cash flows from financing activities
Proceeds from issues of equity securities	1,852,000	2,317,000	1,852,000	2,341,000
Refunds for overscription of equity securities	-	(60,000)	-	(60,000)
Payment for share issue costs	(101,820)	(90,123)	(101,820)	(90,123)
Net cash provided by financing activities	1,750,180	2,166,877	1,750,180	2,190,877
Net increase / (decrease) in cash and cash
equivalents	(680,715)	327,410	(721,857)	219,707
Cash and cash equivalents at the beginning of the financial year	1,989,785	1,709,419	1,929,126	1,709,419
Effects of exchange rate changes on the balance of cash held in foreign currencies	(77,789)	(47,044)	-	-
Cash and cash equivalents at the end of the financial year	1,231,281	1,989,785	1,207,269	1,929,126

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2008

ECONOMIC ENTITY

	Share Capital Ordinary	Accumulated Losses	Equity Settled Benefits Reserve	Foreign Exchange Translation Reserve	Total
	\$	\$	\$	\$	\$
Balance at 1.7.2007	13,190,317	(9,002,514)	215,499	(108,949)	4,294,353
Loss for year	-	(1,978,892)	-	-	(1,978,892)
Total recognised income and expense for the year	-	(1,978,892)	-	-	(1,978,892)
Issue of shares net of transaction costs	1,750,180	-	-	-	1,750,180
Share based payments - expense	-	-	228,462	-	228,462
Share based payments – capital raising costs	(39,366)	-	39,366	-	-
Exchange differences arising on translation of foreign operations	-	-	-	(251,747)	(251,747)
	1,710,814	-	267,828	(251,747)	1,726,895
Balance at 30.06.2008	14,901,131	(10,981,406)	483,327	(360,696)	4,042,356

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 expense for the year	-	(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

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2008

COMPANY

			Equity Settled
	Share Capital Ordinary	Accumulated Losses	Benefits Reserve	Total
	\$	\$	\$	\$
Balance at 1.7.2007	13,190,317	(8,937,616)	215,499	4,468,200
Loss for year	-	(2,404,486)	-	(2,404,486)
Total recognised income and expense for the year	-	(2,404,486)	-	(2,404,486)
Issue of shares net of transaction costs	1,750,180	-	-	1,750,180
Share based payments - expense	-	-	228,462	228,462
Share based payments – capital raising costs	(39,366)	-	39,366	-
	1,710,814	-	267,828	1,978,642
Balance at 30.06.2008	14,901,131	(11,342,102)	483,327	4,042,356
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

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

The following Australian Accounting Standards and Interpretations that have recently been issued but are not yet effective have not been adopted by the Company for the annual reporting period ending 30 June 2008. Those that are relevant to the company are outlined in the table below:

Reference	Title	Summary	Application date (financial years beginning)	Expected Impact
AASB 8	Operating Segments	New standard – replaces AASB 114	1 January 2009	AASB 8 is a disclosure standard so will have no direct impact on the amounts included in the company's financial statements. However, the amounts may have an impact on the companies segment disclosures as information included in internal management reports are more detailed than is currently reported under AASB 114 Segment Reporting
AASB 2007-3	Amendments to Australian Accounting Standards arising from AASB 8	Amends AASB 5, AASB 6, AASB 102, AASB 107, AASB 119, AASB 127, AASB 134, AASB 136, AASB 1023 & AASB 1038 as a result of issue of AASB 8	1 January 2009	Disclosures only
AASB 123	Borrowing Costs	Revised standard – requires borrowing costs directly attributable to qualifying assets to be capitalised, where previously they could be immediately expensed.	1 January 2009	The amendments to AASB 123 require that all borrowing costs associated with a qualifying asset be capitalised. The company has no borrowing costs associated with qualifying assets and as such the amendments are not expected to have any impact on the company's financial report.
AASB 2007-6	Amendments to Australian Accounting Standards arising from AASB 123	Amends AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 & AASB 138 and Interpretations 1 & 12 as a result of issue of AASB 123	1 January 2009	As above for AASB 123

AASB 101	Presentation of Financial Statements	Further Revised standard	1 January 2009	Disclosures only
AASB 2007-8	Amendments to Australian Accounting Standards arising from AASB 101	Amends the majority of standards and Interpretations as a result of issue of AASB 101	1 January 2009	Disclosures only

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 authorised for issue by the directors on 26 September 2008.

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.

Going Concern

This report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The consolidated entity has incurred a net loss after tax for the year ended 30 June 2008 of \$1,978,892 (June 2007: \$1,471,046) and experienced net cash outflows from operating activities of \$1,247,843 (June 2008: \$719,377). As at 30 June 2008, the consolidated entity had net current assets of \$1,003,990 (June 2007: \$1,782,726).

The Directors believe that there are sufficient funds to meet the consolidated entity's working capital requirements. However, the Directors recognise that the ability of the consolidated entity to continue as a going concern and to pay their debts as and when they fall due is dependent on the ability of the consolidated entity to secure additional funding.

During the period, the consolidated entity successfully raised \$1,852,000 gross of capital raising costs via the issue of 31,000,000 ordinary fully paid shares at \$0.02 per share and 88,000,000 ordinary fully paid shares at \$0.014 per share.

Based on the above, the consolidated entity is confident that it will successfully raise additional funds to meet its financial obligation in the future period.

The directors have reviewed the business outlook and are of the opinion that the use of the going concern basis of accounting is appropriate as they believe the consolidated entity will achieve the matters set out above. As such, the directors believe that they will continue to be successful in securing additional funds through debt or equity issues as and when the need to raise working capital arises.

Notwithstanding this, there is uncertainty whether the consolidated entity will be able to continue as a going

concern.

Should the consolidated entity be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different from those stated in the financial report.

The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that may be necessary should the consolidated entity be unable to continue as a going concern.

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 (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 non-transferability, exercise restrictions, and behavioural considerations. Further details on how the fair value of equity-settled 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 straight-line 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.

4. 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.

5. Loss from continuing operations

Revenue

Employee benefits expense

6. Income taxes

Income tax benefits not recognised 363,305 369,514 415,273 368,762 Income tax expense - - - -

	Consolidated		Company
	2008	2007	2008	2007
Loss from continuing operations	\$	\$	\$	\$
Revenue
Revenue consisted of the following items:
Interest revenue:
Bank deposits	23,235	80,569	23,235	80,569
Other income	40,219	7,105	-	7,105
	63,454	87,674	23,235	87,674
Employee benefits expense
Equity settled share-based payments	(228,462)	(265,749)	(228,462)	(265,749)
Salaries	(566,191)	(418,309)	(566,191)	(418,309)
Other	(52,890)	(47,643)	(52,890)	(47,643)
	(847,543)	(731,701)	(847,543)	(731,701)
(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	(1,978,892)	(1,471,046)	(2,404,486)	(1,406,148)
Income tax expense calculated at 30%	(593,668)	(441,313)	(721,346)	(421,844)
Tax effect of:
Share based payments	68,359	79,725	68,359	79,725
Loan impairment expense	-	-	215,945	-
Effect of lower rate of tax	139,657	70,162	-	-
Other	22,347	(78,087)	21,769	(26,643)
	(363,305)	(369,514)	(415,273)	(368,762)

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.

		Consolidated		Company
		2008	2007	2008	2007
		\$	\$	\$	\$
6.	Income taxes (cont'd)
	(b) Deferred tax balances
	Unrecognised deferred tax balances
	The following deferred tax assets have not
	been brought to account as assets:
	Tax losses – revenue	969,122	605,997	1,021,091	605,997
	Capital Raising Costs	54,932	54,932	54,932	54,932
	Other	58,118	58,118	25,738	25,738
		1,082,172	719,047	1,101,761	686,667

		Consolidated		Company
		2008	2007	2008	2007
		\$	\$	\$	\$
7.	Remuneration of auditors
	Auditor of the parent entity
	Audit or review of the financial report	27,000	31,000	27,000	31,000
	Other auditor for audit of the subsidiary
	companies financial reports	5,000	-	-	-
		32,000	31,000	27,000	31,000

8. Cash and Cash Equivalents

Cash on hand and at bank	1,196,281	1,954,785	1,172,269	1,894,125
Deposits at call (i)	35,000	35,000	35,000	35,000
	1,231,281	1,989,785	1,207,269	1,929,125

(i) The bank deposits are short term deposits maturing within 12 months, and pay interest at a rate at 8.1% per annum.

9. Current trade and other receivables

Goods and services tax (GST) recoverable	-	11,601	-	11,601
Other	5,193	12,638	450	10,250
	5,193	24,239	450	21,851

10. Inventory

Spare parts for exploration equipment 8,990 - - -

11. Other current assets

Other current assets
Prepayments	4,366	6,448	-	1,783
	4,366	6,448	-	1,783

8,990 - - -

Consolidated			Company
2008	2007	2008	2007
\$	\$	\$	\$

12. Other non-current financial assets

Investments carried at cost

Shares in controlled entities	-	-	1,720,541	1,720,541
(refer note 24)
Loans to subsidiaries	-	-	1,996,682	933,796
Provision for impairment	-	-	(719,815)	-
Net loans to subsidiaries	-	-	1,276,867	933,796
	-	-	2,997,408	2,654,337

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

13. Plant and equipment

• At cost 266,821 139,747 16,446 12,842
• Accumulated depreciation (66,452) (23,476) (8,438) (4,051)
• Total plant and equipment 200,369 116,271 8,008 8,791

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	116,271	-	8,791	-
Additions	127,074	139,747	3,604	12,842
Depreciation expense	(5,620)	(23,476)	(4,387)	(4,051)
Foreign exchange movements	(37,356)	-	-	-
Carrying amount at the end of the year	200,369	116,271	8,008	8,791

14. Other non-current assets

Oil & Gas Exploration Expenditure
Balance brought forward	2,395,356	1,720,541	-	-
Expenditure incurred during the year	442,641	674,815	-	-
Balance at 30 June 2008	2,837,997	2,395,356	-	-

The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the discovery of commercial viable oil and gas reserves or other natural mineral deposits and the successful development and commercial exploitation or sale of the respective exploration and evaluation areas of interest.

15. Current trade and other payables

Trade payables (i)	90,276	43,164	89,694	41,377
Sundry payables and accruals	148,810	127,841	74,331	98,457
Other payables (ii)	-	58,888	-	-
	239,086	229,893	164,025	139,834

(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.

16. Provisions

Current

	Employee benefits		6,754 7,853	6,754	7,853
			Consolidated		Company
		2008 \$	2007 \$	2008 \$	2007 \$
17.	Issued capital
	fully paid ordinary shares 728,616,768 (2007: 609,616,768)	14,900,331	13,189,517	14,900,331	13,189,517
	2,006 converting preference shares (2007: 2,006)	800	800	800	800

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.

14,901,131 13,190,317 14,901,131 13,190,317

	2008		2007
	No.	\$	No.	\$
Fully paid ordinary shares
Balance at beginning of financial year	609,616,768	13,189,517	485,116,768	10,755,390
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 – 23 October
2007 placement	31,000,000	620,000	-	-
Shares issued at 1.4 cent each – 18 June 2008
placement	88,000,000	1,232,000	-	-
Share issue costs	-	(141,186)	-	(90,123)
Balance at end of financial year	728,616,768	14,900,331	609,616,768	13,189,517

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

	2008		2007
	No.	\$	No.	\$
Converting preference shares (CPS)
Balance at beginning of financial year	2,006	800	2,006	800
Balance at end of financial year	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 8,000,000 share options issued during the year with varying terms. Full details are contained within Note 28 Share Based payments.

During the financial year there was not any exercise of options.

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

			Consolidated			Company
			2008	2007	2008	2007
			\$	\$	\$	\$
18.	Accumulated losses
	Balance at beginning of financial year Net loss attributable to members of the		9,002,514	7,531,468	8,937,616	7,531,468
	parent entity		1,978,892	1,471,046	2,404,486	1,406,148
	Balance at end of financial year		10,981,406	9,002,514	11,342,102	8,937,616
19.	Reserves
	Share based payments reserve	(a)	483,327	215,499	483,327	215,499
	Foreign exchange translation reserve	(b)	(360,696)	(108,949)	-	-
	Balance at end of financial year		122,631	106,550	483,327	215,499
(a)	Share based payments reserve
	Balance at beginning of financial year		215,499	-	215,499	-
	Share based payments		267,828	265,749	267,828	265,749
	Transfer to issued capital		-	(50,250)	-	(50,250)
	Balance at end of financial year		483,327	215,499	483,327	215,499
(b)	Foreign exchange translation reserve
	Balance at beginning of financial year		(108,949)	-	-	-
	Translation of foreign operations		(251,747)	(108,949)	-	-
	Balance at end of financial year		(360,696)	(108,949)	-	-

Share Based Payments Reserve

The share based payments reserve arises on the grant of share options to directors, executives and senior employees and consultants. 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.

20. Loss per share

	Consolidated
	2008	2007
	Cents per share	Cents per share
Basic / Diluted loss per share:
Basic / Diluted loss per share	(0.31)	(0.25)

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:

	2008	2007
	\$	\$
Loss	1,978,892	1,471,046
	2008	2007
	No.	No.
Weighted average number of ordinary shares for the purposes
of basic / diluted loss per share	633,761,577	594,734,576

As the economic entity is in a loss position the options outstanding at 30 June 2008 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 and uranium 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 \$330,000.

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 2009.

22. Contingent liabilities and contingent assets

The Directors are not aware of any material contingent liabilities or assets at reporting date (2007: Nil).

Over the past few years the Kyrgyz Republic has gone through considerable financial, political and economic changes. With its developing economy, the Kyrgyz Republic does not have a well developed legislation base and business infrastructure usual to a developed market economy. As a result, operating a business in the Kyrgyz Republic results in an exposure to a certain level of risk. There exists uncertainty with regards to future economic and regulatory policy in the Kyrgyz Republic, and risks (including instability in the political, regulatory and financial environments are higher than developed market economy.

23. Interests in exploration licences

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

	2008	2007
Licence details	%	%
Atbashi-Arpinski (oil & gas)	100	100
East Issyk-Kul (oil & gas)	100	100
Tyup (oil & gas)	100	100
Karakol (oil & gas)	100	100
East Kokmoinok (uranium)	50	50
Kashkasu (uranium)	50	50

24. Subsidiaries

		Ownership interest
	Country of	2008	2007
Name of entity	incorporation	%	%
Parent entity
Monitor Energy Ltd	Australia
Subsidiaries
White Valley Oil LLC	Kyrgyz Republic	100	100
Issyk Kul Energy LLC	Kyrgyz Republic	100	100
Business Sphere LLC	Kyrgyz Republic	97.5	97.5
Asian Neftegaz LLC (i)	Kyrgyz Republic	-	100
Tyup Oil LLC (ii)	Kyrgyz Republic	-	99

(i) On 8 May 2008, the assets and liabilities of Asian Neftegatz LLC were combined with White Valley Oil LLC and Asian Neftegatz LLC was deregistered.

(ii) On 8 May 2008, the assets and liabilities of Tyup Oil LLC were combined with White Valley Oil LLC and Tyup Oil LLC was deregistered.

25. Acquisition of entities

Names of businesses acquired	Principal activity	Date of acquisition	Proportion of shares acquired (%)	Cost of acquisition \$
2008:
-	-	-	-	-
2007:
Tyup Oil LLC	Oil & gas	1 August 2006	99	(i)
	exploration
Issyk Kul Energy LLC	Oil & gas	6 August 2006	100	35,377
	exploration
Business Sphere LLC	Uranium	6 June 2007	97.5	271,226
	Exploration

(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 4 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 direct interests in four permits situated in Kyrgyzstan.

Uranium Exploration

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

30 June 2008 Primary Reporting – Geographical Segments	\$ Australia	\$ Kyrgyzstan	\$ Eliminations	\$ Consolidated
Revenues from ordinary activities	23,235	40,219		63,454
Segment result profit / (loss)	(2,404,486)	(698,284)	1,123,878	(1,978,892)
Segment assets	4,213,135	3,072,469	(2,997,408)	4,288,197
Segment liabilities	170,779	75,061		245,840
Depreciation and amortisation	4,387	1,233		5,620
Other non-cash expenses/ (income)	228,462	-		228,462

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

27. Key Management Personnel Compensation

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 economic entity is also that of the Company.

2008

Scott Spencer - Non-executive chairman Jon Roestenburg – Managing Director Mark Gwynne - Executive director

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, 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.

Remuneration Policy

The Board of Directors 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:

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 economic entity 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) 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.

	Short Term Employee Benefits	Share Based Payments	Post employment benefits
Key Management Personnel	Salary and Fees \$	Options \$	Superannuation \$	TOTAL \$
S Spencer (a)
2008	52,050	-	-	52,050
2007	55,000	-	-	55,000
J Roestenburg
2008	179,499	128,332	38,242	346,073
2007	57,796	141,083	3,732	202,611
M Gwynne
2008	112,000	-	9,000	121,000
2007	104,593	-	750	105,343
D Steinepreis (b)
2008	-	-	-	-
2007	45,000	-	-	45,000
G Steinepreis (c)
2008	-	-	-	-
2007	37,500	-	-	37,500
Total 2008	343,549	128,332	47,242	519,123
Total 2007	299,889	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 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.
• (c) 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 2008, nil options were granted to directors and key management personnel. Options that had previously been issued to directors and key management personnel, and which vested during the financial year ended 30 June 2008, were as follows:

				Fair Value at
Key Management	Granted	Vested	Vesting	Grant Date	Exercise Price	Expiry Date
Personnel	Number	Number	Date	(cents)	(cents)
J Roestenburg	5,000,000	5,000,000	7 March 2008	1.88		5.0 31 December 2010

(d) Shares Issued on Exercise of Compensation Options

During the financial year ended 30 June 2008 nil options issued to directors and key management personnel 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 2008
Key	Balance at	Allotment of	Options	Disposals	Held at	Balance at
Management	01.07.07	shares	Exercised		retirement	end of
Personnel	No.	Acquisition			date	30.06.08
S Spencer	8,000,000	-	-	-	-	8,000,000
J Roestenburg	2,500,000	-	-	-	-	2,500,000
M Gwynne	8,500,000	-	-	(3,000,000)	-	5,500,000
	19,000,000	-	-	(3,000,000)	-	16,000,000

Year ended 30 June 2007

Key	Balance at	Allotment of	Options	Disposals	Held at	Balance at
Management	01.07.06	shares	Exercised		retirement	end of
Personnel	No.	Acquisition			date	30.06.07
S Spencer	8,000,000	-	-	-	-	8,000,000
J Roestenburg	-	-	2,500,000	-	-	2,500,000
M Gwynne	8,500,000	-	-	-	-	8,500,000
D Steinepreis (i)	7,303,076	750,000	-	-	(8,053,076)	-
G Steinepreis (ii)	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

Options Held by Key Management Personnel

Year ended 30 June 2008

	Balance at 01.07.07	Granted as Compensation	Exercised No.	Balance at 30.06.08	Total Vested	Total Exercisable
Directors
S Spencer	-	-	-	-	-	-
J Roestenburg	12,500,000	-	-	12,500,000	2,500,000	2,500,000
M Gwynne	-	-	-	-	-	-
	12,500,000	-	-	12,500,000	2,500,000	2,500,000

Year ended 30 June 2007

	Balance at 01.07.06	Granted as Compensation	Exercised No.	Balance at 30.06.07	Total Vested	Total Exercisable
Directors
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

(i) Ceased employment 13 June 2007

(ii) Ceased employment 18 January 2007

(e) Service Agreements

The Company has not entered into any Executive Service Agreements with any of the directors to provide services to the Company.

(f) 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.

				Fair
Option				Value at Grant	Exercise	First Exercise	Expiry Date
Series	Granted Number	Vested Number	Grant Date	Date (cents)	Price (cents)	Date
Series 1	1,500,000	1,500,000	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	7,000,000	12 April 2007	1.88	5.0	1 March 2008	31 December 2010
Series 4	7,000,000	-	12 April 2007	1.95	7.5	1 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
Series 8	2,000,000		2,000,000 23 October 2007	1.97		3.0 23 October 2007	31 March 2009
Series 9	2,500,000	2,500,000	11 March 2008	1.39	2.5	11 March 2008	11 March 2011
Series 10	500,000	500,000	25 March 2008	0.56	3.5		25 March 2008 31 December 2009
Series 11	500,000	500,000	25 March 2008	0.46	5.0		25 March 2008 31 December 2009
Series 12	2,500,000	2,500,000	25 March 2008	0.35	2.5		25 March 2008 31 December 2008

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 and consultants during the year:

		2008	2007
	Number of Options	Weighted Average Exercise Price \$	Number of Options	Weighted Average Exercise Price \$
At beginning of reporting period Granted during the period	21,250,000	0.051	-	-
- Director remuneration	-	-	15,000,000	0.051
- Employee incentive options	3,000,000	0.031	8,750,000	0.044
- Consultant options	5,000,000	0.027	-	-
Exercised during the period	-	-	(2,500,000)	0.02
Expired during the period	-	-	-	-
Balance the end of reporting period	29,250,000	0.037	21,250,000	0.051
Exercisable at end of reporting period	22,250,000		9,750,000

(i) The options outstanding at 30 June 2008 had a weighted average exercise price of \$0.037 and remaining lives of between 0.5 years and 3.5 years.

(ii) The weighted average fair value of options granted during the year was between \$0.011.

(iii) Included under employee benefits expense in the income statement is \$228,462 (2007: \$246,329) related to equity-settled share-based payment transactions.

Options Exercised

During the financial year ended 30 June 2008 there were nil compensation options exercised.

29. Subsequent events

On 4 July 2008, the Company lodged an Entitlement Issue Prospectus ("Prospectus") with the Australian Securities and Investments Commission. The Prospectus was for a nonrenounceable entitlement issue of one option for every two shares held by shareholders on 15 July 2008. The options had an issue price of \$0.002 cents each, with exercise prices of \$0.025 per share and expiry dates of 31 August 2011. The Company had entered into an agreement with Melbourne Capital Limited whereby any shortfall options were to be placed on an "all reasonable endeavors basis" to clients of Melbourne Capital Limited.

On 7 August 2008, the Company issued 153,591,031 entitlement options pursuant to the Prospectus to raise \$307,182 before costs. On 25 August 2008, the Company issued 210,717,353 shortfall options pursuant to the Agreement with Melbourne Capital Limited to raise \$421,435 before costs.

On 25 August 2008 the Company placed a further 250,000,000 options on the same terms as the options above to clients of Melbourne Capital Limited to raise \$500,000 before costs. On the same date, the Company issued a further 28,750,000 options on the same terms to Melbourne Capital Limited as partial consideration to Melbourne Capital Limited for facilitating the placement. The issue of the 250,000,000 options to clients of Melbourne Capital Limited and the issue of 28,750,000 options to Melbourne Capital Limited were approved by shareholders at a General Meeting held on 7 August 2008.

Subsequent to the year ended 30 June 2008, both Monitor and Leopard Minerals plc have agreed to unwind the Central Asian Uranium Joint Venture. It is anticipated that a Deed of Annulment will be executed in the near term. This will see the uranium licenses Kashkasu II and Kalmaksu returned to sole ownership of Monitor. Once completed, the Company will seek a new agreement with other third parties for the advancement of these assets.

				Consolidated	Company
			2008	2006	2008	2006
			\$	\$	\$	\$
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	(1,978,892)	(1,471,046)	(2,404,486)	(1,406,148)
		Non-cash flows in operating loss:
		- Depreciation	5,620	25,069	4,387	4,051
		- Share options expensed	228,462	265,749	228,462	265,749
		- Shares issued	-	24,000	-	24,000
		- Foreign exchange differences	(136,602)	(37,905)	-	-
		- Loan impairment expense	-	-	719,815	-
		- Exploration expenses	613,336	281,340	171,288	253,006
		Changes in net assets and
		liabilities, net of effects from acquisition of businesses:
		(Increase)/decrease in assets:
		Receivables	19,046	5,715	21,401	6,322
		Prepayments	2,082	-	1,783	-
		Inventory	(8,990)	-	-	-
		Increase/(decrease) in liabilities:
		Payables	9,194	187,701	24,190	105,494
		Provisions	(1,099)	-	(1,099)	-
		Net cash from operating
		activities	(1,247,843)	(719,377)	(1,234,259)	(747,526)

(b) Non-cash financing and investing activities

The economic entity issued 2,000,000 options to acquire fully paid ordinary shares at a fair value of \$39,366 as partial consideration for facilitating the placement of 31,000,000 fully paid ordinary shares on 23 October 2007.

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.

(e) Maturity profile of financial instruments

The following table details the economic entity's exposure to interest rate risk as at 30 June 2008:

Financial assets and liabilities at 30 June 2008

The following table details the economic entity's exposure to interest rate risk as at 30 June 2008:

Fixed interest maturing in:
Average interest rate	Floating interest rate	1 year or less	Over 1 year to 5 years	Non interest bearing	Total \$
2.5%	1,167,797	35,000	-	28,484	1,231,281
-	-	-	-	5,193	5,193
	1,167,797	35,000	-	33,677	1,236,474
-	-	-	-	239,086	239,086
	1,167,797	35,000	-	(205,409)	997,388
		\$	\$	\$	\$

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

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

(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) Capital risk management

When managing capital, management's objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the entity.

In order to maintain or adjust the capital structure, the entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, enter into joint ventures or sell assets.

The entity does not have a defined share buy-back plan.

No dividends were paid in 2008 and no dividends are expected to be paid in 2009.

There is no current intention to incur debt funding on behalf of the Company as on-going exploration expenditure will be funded via cash reserves, equity or joint ventures with other companies.

The Company is not subject to any externally imposed capital requirements.

(i) 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. (2007: Net fair value).

(j) Sensitivity Analysis

Interest Rate Risk, Foreign Currency Risk and Price Risk

The Group has performed sensitivity analysis relating to its exposure to interest rate risk, foreign currency risk and price risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.

Interest Rate Sensitivity Analysis

At 30 June 2008, the effect on loss and equity as a result of a 2% increase in the interest rate, with all other variables remaining constant would be a decrease in loss by \$19,000 (2007: \$58,000) and an increase in equity by \$19,000 (2007: \$58,000).

Foreign Currency Risk Sensitivity Analysis

At 30 June 2008, the effect on loss and equity as a result of a 5% improvement in the value of the Australia dollar to the US dollar, with all other variables remaining constant would be a decrease in loss by approximately \$7,000 (2007: approximately \$2,000) and an increase in equity by approximately \$7,000 (2007: approximately \$2,000).

Price Risk Sensitivity Analysis

As the Company does not derive revenue from sale of products, the effect on profit and equity as a result of changes in the price risk is not considered material. The fair value of the mineral projects will be impacted by commodity price changes (predominantly oil and gas and uranium) and could impact future revenues once operational. However, management monitors current and projected commodity prices.

32. Related party transactions

(a) Parent entity – Ultimate Parent Entity is Monitor Energy Limited

Loans provided by the Company to subsidiary companies for the year ended 30 June 2008 amounted to \$1,062,886.

(b) Subsidiaries (Refer to Note 24)

(c) Key Management Personnel (Refer to Note 27)

(d) Transactions with Related Parties

Jackson Minerals Limited, a company of which Mr Mark Gwynne is a director, provided office space to Monitor Energy Limited. Rent and associated costs paid to Jackson Minerals Limited for use of the office for the year ended 30 June 2008 amounted to \$136,780.

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 decisionmaking and judgment.

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

An Independent Director:

• 1. is a Non-Executive Director and;
• 1. is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;
• 1. 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;
• 1. 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;
• 1. 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;
• 1. has no material contractual relationship with the Company or other group member other than as a Director of the Company;
• 1. 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
• 1. 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 8 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 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.

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.

• 1. Leadership of the Organisation: overseeing the Company and establishing codes that reflect the values of the Company and guide the conduct of the Board.
• 1. 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.
• 1. Overseeing Planning Activities: the development of the Company's strategic plan.
• 1. Shareholder Liaison: ensuring effective communications with shareholders through an appropriate communications policy and promoting participation at general meetings of the Company.
• 1. 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.
• 1. Company Finances: approving expenses and approving and monitoring acquisitions, divestitures and financial and other reporting.
• 1. 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.
• 1. 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.
• 1. 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 non-public 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:

• 1. 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
• 1. 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:

1. communicating effectively with shareholders through releases to the market via ASX, information

mailed to shareholders and the general meetings of the Company;

• 1. giving shareholders ready access to balanced and understandable information about the Company and corporate proposals;
• 1. making it easy for shareholders to participate in general meetings of the Company; and
• 1. 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. 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 asrequired 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.

This Corporate Governance Statement sets out Monitor Energy Limited's current compliance with the ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations (Best Practice Recommendations). The Best Practice Recommendations are not mandatory. However, the Company will be required to provide a statement in its future annual reports disclosing the extent to which the Company has followed the Best Practice Recommendations.

	BEST PRACTICE RECOMMENDATION	COMMENT
	.Lay solid foundations for management and oversight
1.1	Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions.	The Company's Corporate Governance Policy includes a Board Charter, which discloses the specific responsibilities of the Board.
1.2	Companies should disclose the process for evaluating the performance of senior executives.	The Board will monitor the performance of senior management, including measuring actual performance against planned performance. The Board has also adopted a policy to assist in evaluating Board performance.
1.3	Companies should provide the information indicated in the Guide to reporting on Principle 1.	The Company will explain any departures (if any) from best practice recommendations 1.1 and 1.2 in its future annual reports.
	Structure the board to add value
2.1	A majority of the board should be independent directors.	A majority of the Board are not independent Directors. There are three Directors on the Board, of which Mr Scott Spencer is independent. Mr Jon Roestenburg and Mr Mark Gwynne are not considered to be independent . Both Mr Roestenburg and Mr Gwynne are Directors with sound knowledge of Monitor's projects. This knowledge is considered important in enabling the Company to capitalize on the value of its projects to create shareholder wealth.

2.2	The chair should be an independent director.	The Chairman, Mr Scott Spencer, is considered to be independent.
2.3	The roles of chair and chief executive officer should not be exercised by the same individual.	The roles of chair and chief executive officer are not exercised by the same individual.
2.4	The board should establish a nomination committee.	No formal nomination committee has been adopted by the Company as yet. The Board, as a whole, currently serves as a nomination committee. The Board considers that the Company is not yet of a size that warrants the establishment of a nomination committee.
2.5	Companies should disclose the process for evaluating the performance of the board, its committees and individual directors.	The Chairman will review the composition of the Board and the performance of each Director to ensure that it continues to have a mix of skills and experience necessary for the conduct of the Company's activities. A new Director will receive an induction appropriate to his or her experience.
2.6	Companies should provide the information indicated in the Guide to reporting on Principle 2.	The Company will provide details of each Director, such as their skills, experience and expertise relevant to their position, together with an explanation of any departures (if any) from best practice recommendations 2.1, 2.2, 2.3, 2.4 and 2.5 in its future annual reports.
3.	Promote ethical and responsible decision making

3.1
	Companies should establish a code of conduct and disclose the code or a summary of the code as to: • the practices necessary to maintain confidence in the company's integrity • the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders • the responsibility and accountability of individuals for reporting and investigating reports of unethical practices	The Company's Corporate Governance Policy includes a Code of Conduct for Directors and Key Executives, which provides a framework for decisions and actions in relation to ethical conduct in employment.
3.2	Companies should establish a policy concerning trading in company securities by directors, senior executives and employees, and disclose the policy or a summary of that policy.	The Corporate Governance Policy includes a Share Trading Policy that provides comprehensive guidelines on trading in Company securities.
3.3	Companies should provide the information indicated in the Guide to reporting on Principle 3.	The Company will explain any departures (if any) from best practice recommendations 3.1, 3.2 and 3.3 in its future annual reports.
4.	Safeguard integrity in financial reporting
4.1		The board should establish an audit committee. No formal audit committee has been adopted by the Company as yet. The Board, as a whole, currently serves as an audit committee. The Board considers that the Company is not yet of a size that warrants the establishment of an audit committee.
4.2	The audit committee should be structured so that it: • consists only of non-executive directors • consists of a majority of independent directors • is chaired by an independent chair, who is not chair of the board • has at least three members.	No formal audit committee has been adopted by the Company as yet. The Board, as a whole, currently serves as an audit committee. The Board considers that the Company is not yet of a size that warrants the establishment of an audit committee.
4.3	The audit committee should have a formal charter.	No formal audit committee has been adopted by the Company as yet. The Board, as a whole, currently serves as an audit committee. The Board considers that the Company is not yet of a size that warrants the establishment of an audit committee.
4.4	Companies should provide the information indicated in the Guide to reporting on Principle 4.	The Company will explain any departures (if any) from best practice recommendations 4.1, 4.2 and 4.3 in its future annual reports.
5.	Make timely and balanced disclosure
5.1	Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.	The Company has a continuous disclosure program in place designed to ensure the compliance with ASX Listing Rule disclosure and to ensure accountability at a Board level for compliance and factual presentation of the Company's financial position.

5.2	Companies should provide the information indicated in Guide to Reporting on Principle 5.	The Company will provide an explanation of any departures (if any) from best practice recommendation 5.1 in its future annual reports.
	Respect the rights of shareholders
6.1	Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.	The Company's Corporate Governance Policy includes a Shareholder Communications Policy, which aims to ensure that the shareholders are informed of all major developments affecting the Company's state of affairs.
6.2	Companies should provide the information indicated in the Guide to reporting on Principle 6.	The Company will provide an explanation of any departures (if any) from best practice recommendation 6.1 in its future annual reports.
	Recognise and manage risk
7.1	Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.	The Board determines the Company's "risk profile" and is responsible for overseeing and approving risk management strategy and policies, internal compliance and internal control. The Company's Corporate Governance Policy includes a Risk Management Policy which aims to ensure that material business risks are identified and mitigated.
7.2	The board should require management to design and implement the risk management and internal control system to manage the company's material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company's management of its material business risks.	The Board requires either the individual performing the role of Chief Executive Officer or the Chief Financial Officer will design and implement risk management and internal control systems and provide a report at the relevant time.
7.3	The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.	The Board will seek this relevant assurance from the individuals performing the role of Chief Executive Officer and the Chief Financial Officer.
7.4	Companies should provide the information indicated in Guide to Reporting on Principle 7.	The Company will provide an explanation of any departures (if any) from best practice recommendations 7.1, 7.2 and 7.3 in its future annual reports.
8.	Remunerate fairly and responsibly
8.1	The board should establish a remuneration committee.	No formal remuneration committee has been adopted by the Company as yet. The Board, acting without the affected Director participating in the decision making process, currently serves as a remuneration committee.

8.2	Companies should clearly distinguish the structure of non-executive directors' remuneration from that of executive directors and senior executives.	The Board will distinguish the structure of non executive Director's remuneration from that of executive Directors and senior executives. Relevantly, the Company's Constitution provides that the remuneration of non-executive Directors will be not be more than the aggregate fixed sum determined by a general meeting. The Board is responsible for determining the remuneration of any Director or senior executives (without the participation of the affected Director).
8.3	Companies should provide the information indicated in the Guide to reporting on Principle 8.	The Company will provide an explanation of any departures (if any) from best practice recommendations 8.1 and 8.2 in its future annual reports.

ASX ADDITIONAL INFORMATION

Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report. This additional information was applicable as at 22 September 2008.

1. DISTRIBUTION OF SECURITY HOLDERS

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

Category			Number of Shareholders	Number of Shares
1	-	1,000	43	4,534
1,001	-	5,000	10	45,300
5,001	-	10,000	35	312,831
10,001	-	100,000	850	49,559,836
100,001	and over		969	678,925,338
			1,907	728,847,839

Number of shareholders holding less than a marketable parcel of ordinary shares: 398 shareholders amounting to 8,548,124 shares.

2. STATEMENT OF RESTRICTED SECURITIES

There are no restricted securities as at 22 September 2008.

3. SUBSTANTIAL SHAREHOLDERS

There are no substantial shareholdings as at 22 September 2008.

4. UNQUOTED SECURITIES

Number	Class
1,500,000	2 cent options expiring 31 December 2009
3,500,000	3.5 cent options expiring 31 December 2009
7,000,000	5 cent options expiring 31 December 2010
7,000,000	7.5 cent options expiring 31 December 2011
1,250,000	3.4 cent options expiring 30 June 2010
500,000	2 cent options expiring 31 December 2009
500,000	3.5 cent options expiring 31 December 2009
2,000,000	3 cent options expiring 31 March 2009
2,500,000	2.5 cent options expiring 11 March 2011
500,000	3.5 cent options expiring 31 December 2009
500,000	5 cent options expiring 31 December 2009
2,500,000	2.5 cent options expiring 31 December 2008

The Company has the following unquoted securities:

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.

7. Statement of Top 20 Holders of Listed Equity Securities

Fully paid ordinary shares

Rank	Name	Number of Shares	% of Issued Capital
1	MUNGALA INVESTMENTS PTY LTD	34,000,000	4.66
2	OLLIES FAMILY RESTAURANTS PTY LTD	13,000,000	1.78
3	CORRIDOR NOMINEES PTY LTD	11,000,000	1.51
4	MR STEVEN ITALIANO	10,800,000	1.48
5	ZABV LLC	10,500,000	1.44
6	MELBOURNE CAPITAL LIMITED	10,000,000	1.37
7	MUNGALA INVESTMENTS PTY LTD	10,000,000	1.37
8	QUEENSWAY INVESTMENTS PTY LTD	9,000,000	1.23
9	DAEM NOMINEES PTY LTD	8,500,000	1.17
10	AUBREY CONSULTING PTY LTD	8,000,000	1.10
11	BODIE INVESTMENTS PTY LTD	7,000,000	0.96
12	MARBLE HILL INVESTMENTS LTD	7,000,000	0.96
13	NUMBER 7 INVESTMENTS PTY LTD	6,750,000	0.93
14	MR CHRISTOPHER CHANDLER	6,500,000	0.89
15	PETERSVIEW PTY LTD	6,500,000	0.89
16	MR VINCENZO BRIZZI MRS RITA LUCIA BRIZZI BRIZZI FAMILY S/F	5,500,000	0.75
17	SILVERWEST CORP PTY LTD <coral reefernACCOUNT>	5,500,000	0.75
18	PARAMOUNT ADVISERS LIMITED	5,000,000	0.69
19	MR CHARLES PETER MERENDY	4,975,000	0.68
20	MR GREGORY PHILLIP SMALL	4,810,097	0.66
		184,335,097	25.27

Share Options Expiring 31 August 2011 and Exercisable at \$0.025 per Share

Rank	Name	Number of Options in Class	% of Options in Class
1	MUNGALA INVESTMENTS PTY LTD	117,000,000	18.20
2	MELBOURNE CAPITAL LIMITED	82,250,000	12.79
3	NUMBER 7 INVESTMENTS PTY LTD	40,000,000	6.22
4	BODIE INVESTMENTS PTY LTD	34,664,853	5.39
5	CORRIDOR NOMINEES PTY LTD	25,500,000	3.97
6	MERRILL LYNCH (AUSTRALIA) NOMINEES PTY	25,000,000	3.89
	LIMITED
7	BLUEBASE PTY LTD	20,000,000	3.11
8	MR MICHAEL EDGAR	20,000,000	3.11
9	OLLIES FAMILY RESTAURANTS PTY LTD	17,500,000	2.72
10	SEVEN TOWERS PTY LTD	16,050,000	2.50
11	SANDHURST TRUSTEES LIMITED	14,913,657	2.32
12	MR GEOFF BARNES	13,500,000	2.10
13	NORTHERN STAR NOMINEES PTY LTD	11,500,000	1.79
14	CHALLAND PTY LTD	10,000,000	1.56
15	MR STEPHEN PETER MITCHELL	7,500,000	1.17
16	MR STEPHEN PETER MITCHELL SUPER FUND A/C	7,500,000	1.17
17	MR DAVID CHRISTIAN STEINEPREIS	7,000,000	1.09
18	LOCKWOOD SUPERANNUATION FUND PTY LTD	5,550,000	0.86
19	DR ALASTAIR ROWLAND BROWN	5,000,000	0.78
20	MS NICOLE GALLIN MR KYLE HAYNES GH SUPER	5,000,000	0.78
	FUND A/C
		485,428,510	75.52

TAX STATUS

The Company is treated as a public company for taxation purposes.

FRANKING CREDITS

The Company has nil franking credits.

TENEMENT SCHEDULE

Project	Interest
Atbashi-Arpinski (oil & gas)	100
East Issyk-Kul (oil & gas)	100
Tyup (oil & gas)	100
Karakol (oil & gas)	100
East Kokmoinok (uranium)	50
Kashkasu (uranium)	50