FIRSTWAVE CLOUD TECHNOLOGY LIMITED — Annual Report 2011

May 5, 2011

TELLUS RESOURCES LTD

ABN 35 144 733 595

FINANCIAL REPORT FOR THE PERIOD ENDED 31 DECEMBER 2010

TELLUS RESOURCES LTD ABN 35 144 733 595 DIRECTORS' REPORT

The Directors present their report together with the financial report of Tellus Resources Ltd (the Company) for the period ended 31 December 2010.

Tellus Resources Ltd is an unlisted public company incorporated on 21 June 2010 and domiciled in Australia.

Directors

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

• Mr Anthony Wehby (appointed 21 June 2010)
• Mr David Ward (appointed 12 November 2010)
• Mr Richard Willson (appointed 12 November 2010)
• Mr Marc Flory (21 June 2010 to 23 August 2010)
• Mr Stephen Woodham (23 August 2010 to 9 September 2010)
• Mr William Hayden (9 September 2010 to 12 November 2010)

• Mr Tully Richards (21 June 2010 to 12 November 2010)

• Non-Executive Chairman

• Executive Technical Director
• Non-Executive Director
• Non-Executive Director
• Non-Executive Director
• Executive Director

Principal Activity

The principal activities of Company are:

• exploration for minerals including gold deposits; and
• the acquistion and devleopment of mineral tenements.

Trading Results

The consolidated loss after tax for the reporting period was \$60,337.

Review of Operations

During the reporting period, the Company was granted the following exploration licences:

• New England: ELA 3984 Cobark and ELA 4014 Glen Morrison; and
• Southeast Lachland Fold Belt: ELA 4054 Yambulla West and ELA 4062 Kooraban.

At the same time preparations for an Initial Public Offering (IPO) scheduled for early 2011 were commenced. In December 2010 the Company completed a share placement raising \$385,000 after costs. Funds from the placement are to be used principally for the IPO including the commissioning of consultants to prepare independent tenement, geological and accounting reports for inclusion in the prospectus.

State of Affairs

There were no significant changes in the state of affairs of the Company during the period ended 31 December 2010 other than as referred to in this report and the Financial Statements or notes thereto.

Events Subsequent To Balance Date

Subsequent to period end, the Southeast Lachlan tenements, being, EL7720, EL7721, EL7722 and EL7723 were granted on 17 March 2011.

Directors are not aware of any other matters or circumstances at the date of this report that have significantly affected or may significantly affect the operations, the results of the operations or the state of affairs of the Company in subsequent financial years.

• Executive Director

TELLUS RESOURCES LTD ABN 35 144 733 595 DIRECTORS' REPORT

Likely Future Developments

No other likely developments of the Company are included in this report as the Directors believe, on reasonable grounds, that inclusion of such information would be likely to result in unreasonable prejudice to the Company.

Proceedings on Behalf of Company

No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

This report is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors.

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CHAIRMAN

17 March 2011 SYDNEY

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TELLUS RESOURCES LTD ABN 35 144 733 595 STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 31 DECEMBER 2010

	21 JUNE TO 31 DEC 2010 S
Revenue from continuing operations
	1,259
Expenses from continuing operations	(61, 596)
Loss before income tax	(60, 337)
Income tax expense relating to ordinary activities
Net loss for the year	(60, 337)
Other comprehensive income, net of tax
Total comprehensive loss attributable to:
Members of the parent entity	(60, 337)
Non controlling interests
	(60, 337)

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

$\sim$

TELLUS RESOURCES LTD ABN 35 144 733 595 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2010

	31 DEC 2010 S
CURRENT ASSETS
Cash and cash equivalents	355,151
Trade and other receivables	28,136
Prepayments	1,400
TOTAL CURRENT ASSETS	384,687
NON-CURRENT ASSETS
Mineral properties	11,095
TOTAL NON-CURRENT ASSETS	11,095
TOTAL ASSETS	395,782
CURRENT LIABILITIES
Trade and other payables	11,619
TOTAL CURRENT LIABILITIES	11,619
TOTAL LIABILITIES	11,619
NET ASSETS	384,163
EQUITY
Issued capital	444,500
Accumulated losses	(60, 337)
TOTAL EQUITY	384,163

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

TELLUS RESOURCES LTD ABN 35 144 733 595 STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 DECEMBER 2010

	Issued Capital	Accumulated Losses	Total
	\$	\$	\$
Total equity as at 21 June 2010
Total loss and comprehensive income for the period	w.	(60, 337)	(60, 337)
Shares issued during the period	459,499		459,499
Share issue costs	(15,000)	$\tilde{\phantom{a}}$	(15,000)
Balance as at 31 December 2010	444,500	(60, 337)	384,163

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

TELLUS RESOURCES LTD ABN 35 144 733 595 CASH FLOW STATEMENT FOR THE PERIOD ENDED 31 DECEMBER 2010

	31 DEC 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Cash payments in the course of operations	(78, 928)
Interest received	674
Net cash used in operating activities	(78, 254)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for acquisition of tenements	(11, 095)
Net cash used in investing activities	(11,095)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares	444,500
Net cash provided by financing activities	444,500
Net increase in cash held	355,151
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period	355,151

The financial statements should be read in conjunction with the accompanying notes

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

This financial report includes the financial statements and notes of Tellus Resources Ltd for the period ended 31 December 2010. Tellus Resources Limited is an unlisted public company and was incorporated on 21 June 2010, so therefore the financial statements are for the period from that date and there are no comparatives.

$a)$ Basis of preparation

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board. International Financial Reporting Standards ("IFRS") form the basis of Australian Accounting Standards adopted by the Australian Accounting Standards Board, being Australian equivalents to IFRS ("AIFRS"). The financial reports of the Consolidated Entity and the Company also comply with IFRS and interpretations adopted by the International Accounting Standards Board adopted in their entirety.

The financial report has been prepared on an accrual basis and is based on the historical costs modified, where applicable by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

The preparation of a financial report in conformity with Australian Accounting Standards requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. 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.

Judgments made by management in the application of Australian Accounting Standards that have significant effect on the financial report and estimates with a significant risk of material adjustment in the next year are discussed in Note 1 below.

There have been new Australian Accounting Standards and Australian Accounting Interpretations issued or amended and are applicable to the Company but are not yet effective. The Company's assessment of the impact of these new standards and interpretations has been completed with no material effect on the Company's financial report. They have not been adopted in the preparation of the financial report at reporting date.

b) Going concern basis of accounting

The financial report has been prepared on a going concern basis. The Company incurred a net loss of \$60,337 during the period ended 31 December 2010.

The exploration projects currently undertaken by the Company will require additional capital. As such, the Company & Consolidated Entity's ability to continue as a going concern is contingent upon successfully raising additional capital. If additional funds are not raised, the going concern basis may not be appropriate with the result that the Company & consolidated entity may have to realise its assets and extinguish its liabilities, other than in the ordinary course of business and in amounts different from those stated in the financial report.

c) Basis of Consolidation

Controlled entities

Controlled entities are included from the date control commences until the date control ceases. Outside interests in the equity and results of the entities that are controlled by the Company are shown as a separate item in the consolidated financial statements.

$C)$ Basis of Consolidation (continued)

Joint ventures

A joint venture is either an entity or operation that is jointly controlled by the consolidated entity.

Jointly controlled operations and assets

The consolidated entity's interest in unincorporated joint ventures and jointly controlled assets are brought to account by recognising in its financial statements the assets it controls and the liabilities that it incurs and its share of income it earns from the sale of goods or services by the joint venture.

Transactions eliminated on consolidation

Unrealised gains and losses and intragroup balances resulting from transactions with or between controlled entities are eliminated in full on consolidation. Unrealised gains resulting from transactions with jointly controlled entities are eliminated to the extent of the consolidated entity's interest.

Unrealised gains relating to jointly controlled entities are eliminated against the carrying amount of the investment. Unrealised losses are eliminated in the same way as unrealised gains, unless they evidence a recoverable amount impairment.

$d)$ Cash and Cash Equivalents

Cash and cash equivalents comprise cash balances and call deposits.

$e)$ Mineral Properties (Exploration, Evaluation and Development Expenditure)

Pre-licence costs are recognised in the income statement as incurred.

Exploration, evaluation and development expenditure, including the costs of acquiring licences, are capitalised on a project by project basis. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves.

Expenditure deemed to be unsuccessful is recognised in the statement of comprehensive income immediately.

Exploration, evaluation and development assets are assessed for impairment if facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

$f$ Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax ("GST"), except where the amount of GST incurred is not recoverable from the Australian Tax Office ("ATO"). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included.

$q)$ Income Tax

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the Statement of Financial Position date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the Statement of Financial Position liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. No temporary differences are recognised on the initial recognition of goodwill

The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the Statement of Financial Position date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

$h)$ Investments

Controlled entities

Investments in controlled entities are carried in the Company's financial statements at the lower of cost and recoverable amount.

i) Calculation of recoverable amount

The recoverable amount of assets is the greater of their net selling price 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 an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

j) Reversal of impairment

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Trade and Other Payables $k)$

Trade and other payables are stated at cost.

Trade and Other Receivables $\vert$

Trade and other receivables are stated at their cost less impairment losses.

	31 DEC 2010	30 JUNE 2010
NOTE 2: MINERAL PROPERTIES Non-producing properties - exploration and evaluation expenditure
Balance at the beginning of the period		۰
Additions - at cost	11.095	$\overline{\phantom{a}}$
Balance at 31 December 2010	11.095

The ultimate recoupment of balances carried forward in relation to areas of interest still in the exploration or valuation phase is dependent on successful development, and commercial exploitation, or alternatively sale of the respective areas. The entity conducts impairment testing on an annual basis unless indicators of impairment are present at the reporting date.

NOTE 3: CONTRIBUTED EQUITY

9,150,000 fully paid ordinary shares.

Movements in ordinary share capital	31 DEC 2010
	NUMBER	\$
Shares issued
21 June 2010	100	4
29 July 2010	5,949,900	59,499
02 December 2010	3,200,000	400,000
02 December 2010		(15,000)
Balance as at 31 December 2010	9,150,000	444,500

Fully paid ordinary shares carry one vote per share and carry the right to dividends. Partly paid ordinary shares entitle the holder to vote, participate in dividends and proceeds on a winding up in proportion to the number of and amounts paid on the shares held.

NOTE 4: CONTINGENT LIABILITIES

There are no contigent liabilites that require disclosure.

NOTE 5: EVENTS SUBSEQUENT TO REPORTING DATE

Subsequent to period end, the Southeast Lachlan tenements, being, EL7720, EL7721, EL7722 and EL7723 were granted on 17 March 2011.

No other matters have arisen in the interval between the end of the period and the date of this report of a material or unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated Entity, in future financial years.

Grant Thornton Audit Ptv Ltd ACN 130 913 594

Level 17, 383 Kent Street Sydney NSW 2000 Locked Bag Q800 QVB Post Office Sydney NSW 1230

T +61 2 8297 2400 F +61 2 9299 4445 E info.nsw@au.gt.com W www.grantthornton.com.au

Independent Auditor's Review Report To the Members of Tellus Resources Limited

We have reviewed the accompanying interim financial report of Tellus Resources Limited ("Company"), which comprises the statement of financial position as at 31 December 2010, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the period ended on that date, a statement of accounting policies, other selected explanatory notes and the directors' declaration

Directors' responsibility for the interim financial report

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

Auditor's responsibility

Our responsibility is to express a conclusion on the interim financial report based on our review. We conducted our review in accordance with the Auditing Standard on Review Engagements ASRE 2410: Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial statements are not prepared, in all material respects, in accordance with Accounting Standard AASB 134: Interim Financial Reporting. As the auditor of Tellus Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of an interim financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance

9

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Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia

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with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we complied with the independence requirements of Accounting Professional and Ethical Standard (APES) 110.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the interim financial report of Tellus Resources Limited is not in accordance with Australian Auditing Standards applicable to review engagements, including:

giving a true and fair view of the consolidated entity's financial position as at 31 a December 2010 and of its performance for the period ended on that date; and

$\mathbf b$ complying with Accounting Standard AASB 134: Interim Financial Reporting.

Great Hemton

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

Cin

A J Archer Director - Audit & Assurance

Sydney, 17th March 2011