GENESIS RESOURCES LIMITED — Annual Report 2009

Oct 22, 2009

GENESIS RESOURCES LIMITED

FINANCIAL REPORT FOR THE YEAR ENDED

30 JUNE 2007

ACN 114 787 469

GENESIS RESOURCES LIMITED DIRECTORS' REPORT For the year ended 30 June 2007

The Directors present their report together with the financial report of Genesis Resources Limited (the "Company") for the financial year ended 30 June 2007 and the auditor's report thereon.

1. DIRECTORS

The directors of the Company at any time during or since the end of the financial year were:

Name & Qualifications	Age	Experience and Special Responsibilities
Mr Peter G Hepburn-Brown BSc Non-Executive Chairman	50	Peter has over 25 years mining industry experience having previously worked for Siberia Mining Corporation, Harmony Gold (Australia). Great Central Mines and with mining operations for Niugini Mining and Western Mining Corporation.
		Peter is currently an Executive Director of Kasbah Resources Limited and Alloy Resources Limited.
Mr Pedro Kastellorizos BSc Managing Director	34	Pedro has over 10 years exploration experience specialising in the Northern Territory. Pedro was most recently Exploration Director for Batavia Mining, an ASX-listed company. Prior to joining Batavia, he was Exploration Manager for Thor Mining plc, an AIM-listed company focused on molybdenum, tungsten and uranium exploration in the Northern Territory.
		Pedro gained significant exploration experience in the Northern Territory with Tennant Creek Gold, Burnside Operations, Northern Gold, the Northern Territory Geological Survey and Afmeco Mining & Exploration.
Mr Ahmet K Sener BSc, MSc Non-Executive Director	31	Kerim has over 8 years of exploration experience, having worked for Independence Gold Mining Pvt. Ltd. (a subsidiary of LSE-listed Lonmin plc) in Zimbabwe and ASX-listed Northern Gold in the Northern Territory. While undertaking his PhD, he completed a number of consulting projects for clients in Western Australia, including the exploration for manganese mineralisation with Consolidated Minerals.
		Kerim is currently Managing Director of Ariana Resources plc, an AIM-listed exploration company focused on precious metals in Turkey.
Mr Anthony S Veitch BCom, MBA Non-Executive Director/Public Officer	39	Tony previously worked with the ASX, as Manager of Corporate Finance for the London Stock Exchange plc and as a consultant to listed and private companies.
		Tony is currently an Executive Director of Citadel Capital Pty Ltd, an investment and advisory business based in Perth.

2. COMPANY SECRETARY

Mr Anthony S Veitch was appointed Company Secretary of the Company on 15 August 2006. Mr Veitch's qualifications and experience are outlined above. Mr Pedro Kastellorizos resigned as Company Secretary on 15 August 2006.

3. PRINCIPAL ACTIVITIES

The principal activities of the entity during the year were exploration for and evaluation of gold, manganese and base metals. Other than the sale of the Company's Hayes Creek project in March 2007 for cash, there was no significant change in the nature of the Company's activities during the year.

4. RESULTS

The profit after tax of the Company for the financial year was \$49,305 (2006: loss \$47,118).

$\sim$ 0.000 $\pm$ 0.000 measurements as a set of $\sim$ 0.000 $\pm$

5. DIRECTORS' MEETINGS

The number of directors' meetings and number of meetings attended by each of the directors of the Company during the financial year were:

Director	Directors Meetings
Mr P Kastellorizos
Mr A K Sener		8
Mr A S Veitch (appointed 15 August 2006)
Mr P G Hepburn-Brown (appointed 15 August 2006)

A - Number of meetings attended

B - Number of meetings (including Circular Resolutions) held while the director held office

6. STATE OF AFFAIRS

There were no significant changes in the state of affairs of the Company during the financial year.

7. LIKELY DEVELOPMENTS

The Company will continue exploration and development activities and will also assess new joint venture and commercial opportunities that the Directors believe can create value for shareholders, including the acquisition of interests in additional projects should they arise. Because of the unpredictable nature of these opportunities, devel occur at short notice.

8. ENVIRONMENTAL REGULATION

As the Company is only conducting preliminary exploration activities there are no environmental issues that will impact the operating performance of the Company. When the Company commences full exploration and development activities the Company will ensure all activities are conducted in accordance with environmental regulations under both Commonwealth and State legislation.

The Board is not aware of any significant breaches of environmental regulations during the period covered by this report.

9. EVENTS SUBSEQUENT TO REPORTING DATE

On 3 July 2007, the Company issued 90,750 fully paid ordinary shares in the capital of the Company to Eldoret Pty Ltd as satisfaction of a fee of \$6,050 payable to Eldoret Pty Ltd. Eldoret Pty Ltd is an entity associated with Mr Hepburn-Brown. a director of the Company.

On 19 July 2007, the Company signed a joint venture agreement over the Plavica project in the Former Yugoslav Republic of Macedonia. Under the joint venture agreement, the Company can earn a 62% interest in the Plavica project by funding all expenditure up to a final feasibility study. The joint venture becomes effective on the renewal of the concessions covering the Plavica project, which is expected to occur before the end of 2007. The Board believes that the Plavica project represents an outstanding opportunity for the Company to capture the benefits of current strong metals prices by pursuing an advanced exploration project with immediate drill targets that has the potential to host economic gold and copper resources.

On 17 September 2007, Genesis signed a mandate letter with Allegra Capital Pty Ltd ("Allegra") whereby the Company appointed Allegra to assist the Company on a best endeavours basis with its plans to raise further capital.

10. DIRECTORS' INTERESTS

The relevant interest of each director in the share capital of the Company, as notified by the directors, at the date of this report is as follows:

Genesis Resources Limited Director

Director	Ordinary shares
Mr P Kastellorizos	6.250.000
Mr A S Veitch	Nil
Mr A K Sener	3,750,000
Mr P G Hepburn-Brown	90.750

11. LEAD AUDITOR'S INDEPENDENCE DECLARATION

The lead auditor's independence declaration is set out on page 5 and forms part of the Directors Report for the year ended 30 June 2007.

GENESIS RESOURCES LIMITED DIRECTORS' REPORT For the year ended 30 June 2007

12. INDEMNIFYING OFFICER OR AUDITOR

The Company, during the financial year, in respect of any person who is or has been an officer or auditor of the Company:

has not indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer or $\bullet$ auditor.

Signed in accordance with a resolution of directors at Perth, WA on 6 November 2007.

$\sqrt{\frac{1}{2}}$

A S Veitch Director

$\ddot{\phantom{a}}$

والأناب وسيسا

LEAD AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001

TO THE DIRECTORS OF GENESIS RESOURCES LIMITED

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2007 there has been:

• No contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
• $\blacksquare$ No contraventions of any applicable code of professional conduct in relation to the audit.

Grand Jhornton (WA) Portrestop

GRANT THORNTON (WA) PARTNERSHIP

$\bigcup$ st

JW VIBERT PARTNER PERTH, WA 6 November 2007.

L1, 10 Kings Park Road
West Perth WA 6005 PO Box 570
West Perth WA 6872
T +61 8 9480 2000 F +61 8 9322 7787 E admin@atwa.com.au W www.grantthornton.com.au

Grant Thornton (WA) Partnership ABN 17 735 344 518

Liability limited by a scheme approved under Professional Standards Legislation.

Grant Thornton (WA) Partnership is an independent business entitled to trade under the international name Grant Thornton Grant Thornton is a trademark owned by Grant Thornton International and used under finence by independent firms and entities throughout the world.

Grant Thornton ®

INDEPENDENT AUDIT REPORT TO THE MEMBERS OF GENESIS RESOURCES LIMITED

REPORT ON THE FINANCIAL REPORT

We have audited the accompanying financial report of Genesis Resources Limited (the company), which comprises the balance sheet as at 30 June 2007 and the income statement, statement of changes in equity and statement of cash flows for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors' declaration.

Directors' Responsibility for the Financial Report

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

Auditor's Responsibility

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

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

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

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, provided to the directors of Genesis Resources Limited on 6 November 2007, would be in the same terms if provided to the directors as at the date of this auditor's report.

L1, 10 Kings Park Road
West Perth WA 6005 PC Box 570
West Perth WA 6872 $\overline{1}$ +61 8 9480 2000 F +61 8 9322 7787 admin@gtwa.com.au W www.grantthornton.com.au

Grant Thornton (WA) Partnership ABN 17 735 344 518

Liability limited by a scheme approved under Professional Standards Legislation.

Grant Thornton (WA) Partnership is an independent business entitled to trade under the international name Grant Thornton
Grant Thornton is a trademark owned by Grant Thornton International and used under licence by indepen

Basis for Qualified Auditor's Opinion

As this is the first time the company has been audited, and since the balances of opening assets and liabilities enters into determination of the company's results for the 2007 financial year, we were unable to determine whether adjustments to the operating results or opening retained earnings might be necessary for the financial year ended 30 June 2007. Accordingly, we do not express an opinion on the opening balances for the year ended 30 June 2007 and comparative balances for the year ended 30 June 2006.

Qualified Auditor's Opinion

In our opinion, except for the effects on opening balances as at 1 July 2006, of adjustments, if any, as might have been determined to be necessary had the limitation in scope as discussed in the qualification paragraph above not existed, the financial report of Genesis Resources Limited is in accordance with the Corporations Act 2001, including:

• giving a true and fair view of Genesis Resources Limited's financial position as at 30 June $(a)$ 2007 and of its performance for the year ended on that date; and
• $(b)$ complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.

Groot Thombon (WA) Portrephy

GRÄNT THORNTON (WA) PARTNERSHIP

JWVIBERT Partner

DATED at PERTH this 6th day of November 2007

• 1. In the opinion of the directors of Genesis Resources Limited ("the Company"):
• (a) the financial statements and notes set out on pages 9 to 21 are in accordance with the Corporations Act 2001, including;
  • $(i)$ giving a true and fair view of the financial position of the Company as at 30 June 2007 and of its performance, for the financial year ended on that date; and
  • $(ii)$ complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
• (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

Dated at Perth this 6th day of November 2007.

Signed in accordance with a resolution of the directors.

$\mu\hbar/\hbar$

A S Veitch Director

GENESIS RESOURCES LIMITED INCOME STATEMENT For the year ended 30 June 2007

Notes	2007 5	2006 S
		(40,000)
		(3,844)
4(d)	(6,432)	(3,274)
	60.985	(47, 118)
	62,484	(47, 118)
5	(13,179)
	49.305	(47, 118)
13	49.305	(47.118)
	4(a) 4(b) 4(c) 4(e) 4(e)	88,155 (20.738) 1,693 (194) 1,499

. . . . . . . .

$\sim$ $\sim$

The income statement is to be read in conjunction with the notes to the financial statements set out on pages 13 to 21.

$\sim 10^7$

GENESIS RESOURCES LIMITED
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2007

	lssued capital	funds Accumulated	Total
Year ended 30 June 2007		÷A	t.
Opening balance at 1 July 2006	70,002	(48, 618)	21,384
- Share placements Shares issued	121,000		121,000
Transaction costs of share issues	(6,050)		(6,050)
Net profit/(loss) for the period (recognised income and expenses)		49.305	49,305
Closing balance at 30 June 2007	184,952	687	185,639
Year ended 30 June 2006
Opening balance at 1 July 2005	$\mathbf{\tilde{c}}$	(1,500)	(1,498)
Equity settled share based payment transactions	30,000		30,000
Share placements Shares issued	40,000		40,000
Net profit/(loss) for the period (recognised income and expenses)		(47, 118)	(47, 118)
Closing balance at 30 June 2006	70,002	(48, 618)	21,384

The statement of changes in equity is to be read in conjunction with the notes to the financial statements set out on pages 13 to 21. Amounts are stated net of tax, where applicable. Further details of issued capital and reserves are disclosed in Note 14.

GENESIS RESOURCES LIMITED
BALANCE SHEET As at 30 June 2007

Current assets	Notes	2007 S	2006 S
Cash and cash equivalents	7	134.610	14.043
Trade and other receivables	8	1.021	2.054
Total current assets		135,631	16,097
Non current assets
Exploration and evaluation assets	9	75,816	15,832
Total non current assets Total Assets		75,816	15,832
		211,447	31,929
Current liabilities
Trade and other payables	11	9.339	6.485
Loans and borrowings Total current liabilities	12	3.290	4.060
		12,629	10,545
Non current liabilities Deferred tax liabilities
	10	13.179
Total non current liabilities Total liabilities		13,179
		25,808	10,545
Net assets		185,639	21,384
Equity
Share capital	14	184.952	70.002
Retained earnings	13	687	(48,618)
Total Equity		185,639	21,384

i
....................................

The balance sheet is to be read in conjunction with the notes to the financial statements set out on pages 13 to 21.

GENESIS RESOURCES LIMITED STATEMENT OF CASH FLOWS For the year ended 30 June 2007

and the company

	Notes	2007	2006 s
Cash flows from operating activities Interest received
		1,693
Cash payments to suppliers and employees		(29.203)	(42,687)
Net cash from/(used in) operating activities	16	(27,510)	(42,687)
Cash flows from investing activities
Exploration and evaluation expenditure		(61, 884)	(15, 832)
Proceeds from sale of tenement		89,731
Net cash used in investing activities		27,847	(15, 832)
Cash flows from financing activities
Proceeds from the issue of shares		121,000	70,000
Loans from associates			2,562
Repayment of loans from associates		(770)
Net cash from financing activities		120,230	72,562
Net increase in cash and cash equivalents		120,567	14,043
Cash and cash equivalents at 1 July		14.043
Cash and cash equivalents at 30 June	7	134,610	14,043

The statement of cash flows is to be read in conjunction with the notes to the financial statements set out on pages 13 to 21.

1. REPORTING ENTITY

Genesis Resources Limited (the "Company") is a company domiciled in Australia. The address of the Company's registered office is Level 30, 152-158 St Georges Terrace, Perth. The Company is primarily involved in gold, manganese and base metal exploration and development activities.

2. BASIS OF PREPARATION

(a) Statement of compliance

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards ('AASBs') (including Australian Accounting Interpretations) adopted by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001.

The financial statements were authorised for issue by the Directors on 6 November 2007.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis.

(c) Functional and presentation currency

The financial statements are presented in Australian dollars, which is the Company's functional currency. All financial information has been rounded to the nearest dollar, unless otherwise stated.

(d) Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

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 and in any future periods affected.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in the financial statements, and have been applied consistently by the Company.

(a) Financial instruments

Non-derivative financial instruments

Non-derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash equivalents and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs, except as described below. Subsequent to initial recognition nonderivative financial instruments are measured as described below.

A financial instrument is recognised if the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Company's contractual rights to the cash flows from the financial assets expire or if the Company transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date, i.e., the date that the Company commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Company's obligations specified in the contract expire or are discharged or cancelled.

Cash and cash equivalents comprise cash balances and call deposits.

Accounting for finance income and expense is discussed in note 3(c).

Other

Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.

3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(b) Impairment

(i) Financial assets

A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its current fair value.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in profit or loss. Any cumulative loss in respect of an available-for-sale financial asset recognised previously in equity is transferred to profit or loss.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognised directly in equity.

(ii) Non-financial assets

The carrying amounts of the Company's non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset's recoverable amount is estimated.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in profit or loss.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 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.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. 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.

(c) Finance income and expenses

Finance income comprises interest income on funds invested. Interest income is recognised as it accrues, using the effective interest method.

Finance expenses comprise interest expense.

(d) Income Tax

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss 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 substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(e) Goods and Services Tax

Revenue, 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 taxation authority. 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. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet.

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

(f) Intangible assets

Exploration and evaluation assets

Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the Company has obtained the legal rights to explore an area are recognised in the income statement.

Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:

• the expenditures are expected to be recouped through successful development and exploitation of the area of $(i)$ interest; or
• $(ii)$ 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.

Exploration and evaluation assets are assessed for impairment if:

• sufficient data exists to determine technical feasibility and commercial viability; and $(i)$
• $(ii)$ facts and circumstances suggest that the carrying amount exceeds the recoverable amount (see impairment accounting policy (b)). For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. The cash generating unit shall not be larger than the area of interest.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified from intangible assets to mining property and development assets within property, plant and equipment.

(g) New standards and interpretations not yet adopted

The following standards, amendments to standards and interpretations have been identified as those which may impact the entity in the period of initial application. They are available for early adoption at 30 June 2007, but have not been applied in preparing this financial report:

• AASB 7 Financial Instruments: Disclosures (August 2005) replaces the presentation requirements of financial instruments in AASB 132. AASB 7 is applicable for annual reporting periods beginning on or after 1 January 2007. and will require extensive additional disclosures with respect to the Company's financial instruments and share capital.
• AASB 2005-10 Amendments to Australian Accounting Standards (September 2005) makes consequential amendments to AASB 132 Financial Instruments: Disclosure and Presentation, AASB 101 Presentation of Financial Statements, AASB 114 Segment Reporting, AASB 117 Leases, AASB 133 Eamings Per Share, AASB 139 Financial Instruments: Recognition and Measurement and AASB 1 First time Adoption of Australian Equivalents to
  Instruments: Recognition and Measurement and AASB 1 First time Adoption of Australian Equivalents to or after 1 January 2007 and is expected to only impact disclosures contained within the consolidated financial report.
• AASB 8 Operating Segments replaces the presentation requirements of segment reporting in AASB 114 Segment Reporting. AASB 8 is applicable for annual reporting periods beginning on or after 1 January 2009 and is not expected to have an impact on the financial results of the Company and the Group as the standard is only concerned with disclosures.
• AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB 8 makes amendments to AASB 5 Non-current Assets Held for Sale and Discontinued Operations, AASB 6 Exploration for and Evaluation of Mineral Resources, AASB 102 Inventories, AASB 107 Cash Flow Statements, AASB 119 Employee Benefits, AASB 127 Consolidated and Separate Financial Statements, AASB 134 Interim Financial Reporting and AASB 136 Impairment Assets. AASB 2007-3 is applicable for annual reporting periods beginning on or after 1 January 2009 and must be adopted in conjunction with AASB 8 Operating Segments. This standard is only expected to impact disclosures contained within the financial report.

4. REVENUE AND EXPENSES

	2007	2006
	5	S
(a) Other income
Net gain on sale of tenement	87,831
Other income	324
Total other income	88.155
(b) Personnel expenses
Directors' fees		(10,000)
Equity settled transactions
- share based payment		(30,000)
		(40,000)
(c) Administration expenses
Audit fee	(3,000)
Corporate and consultant costs	(17, 228)	(2,820)
Office and marketing costs	(218)
Other administration costs	(292)	(1,024)
Total administration expenses	(20, 738)	(3.844)
(d) Other expenses
Travel expenses	(6, 432)	(3,274)
Total other expenses	(6.432)	(3,274)
(e) Net financing income
Interest income
Bank deposits	1,693
Financial Income	1,693
Interest expense
Related parties	(194)
Financial expenses	(194)
Net financing income	1,499
5. INCOME TAX EXPENSE
Deferred tax expense
Origination and reversal of temporary differences	18,745
Utilisation of previously unrecognised tax losses	(5,206)
Adjustments for prior years	(360)
Total income tax expense/(benefit)	13,179
Numerical reconciliation between tax expense
and pre-tax net loss Profit/(loss) for the period
Total income tax expense/(benefit)	49,305	(47, 118)
Profit/(loss) excluding income tax	13,179 62.484
Income tax using the domestic corporation		(47, 118)
tax rate of 30% (2006: 30%)	18745	(14, 136)
Non-deductible expenses		9,020
Borrowing costs written off		(90)
Recognition of previously unrecognised tax losses	(5,206)
Current year losses for which no deferred
tax asset was recognised		5,206
Under / (over) provided in prior years	(360)
Income tax expense on pre-tax net
profit/(loss)	13,179

16

	2007 5	2006 5
6. AUDITORS REMUNERATION
Audit services: Auditors of the Company Grant Thomton: - audit and review of financial reports	3,000 3.000
7. CASH AND CASH EQUIVALENTS
Bank balances	134.610	14.043
Cash and cash equivalents in the statements of cash flows	134,610	14,043
8. TRADE AND OTHER RECEIVABLES
Current Net GST receivable	1,021	2.05

9. EXPLORATION AND EVALUATION ASSETS

Costs carried forward in respect of areas of interest in:

Exploration and evaluation assets
Carrying amount at beginning of year	15.832
Additions	61.884	15.832
Disposals	(1.900)
	75.816 1011144414444444451212121212222222222222	15.832

The recoverability of the carrying amounts of exploration and evaluation assets is dependent on the successful development and commercial exploitation or sale of the respective area of interest.

10. DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets and liabilities are attributable to the following:

	Assets		Liabilities		Net
	2007	2006	2007	2006	2007	2006
Intangible assets
(exploration)			(22.745)	(4,750)	(22.745)	(4.750)
Other items	2.046				2.046
Tax losses	7.520	4.750			7.520	4.750
Tax assets/(liabilities)	9.566	4,750	(22.745)	(4.750)	(13, 179)	$\cdot$
Set off of tax	(9.566)	(4.750)	9.566	4.750
Net tax assets/(liabilities)			(13, 179)		(13.179)

11. TRADE AND OTHER PAYABLES

Current Trade payables and accrued expenses	9.339 0053333393333333333333333333333333343344544444444	6.485
12. LOANS AND BORROWINGS
Current Loans from associates	3.290 166410000000000000000000000000000000000	4.060

$17$

	2007 5	2006 S
13. RETAINED EARNINGS
Balance at 1 July Total recognised income and expenditure Balance at 30 June	(48, 618) 49,305 687	(1,500) (47.118) (48,618)
14. CAPITAL AND RESERVES
Issued Capital
14,815,000 (2006: 13,000,000) Ordinary shares, fully paid	184.952	70.002
Ordinary shares
Movements during the year Balance at 1 July	70,002	2
Shares issued - Share placements	121,000	70,000
Transaction costs of share issues	(6,050)
Balance at 30 June	184,952	70,002

During the year the Company:

• Issued 960,000 shares at 5 cents on 30 October 2006, 480,000 shares at 10 cents on 30 October 2006, 200,000 shares at 5 cents on 10 January 2007, 100,000 shares at 10 cents on 10 January 2007, 50,000 shares at 5 cents on 13 March 2007 and 25,000 shares at 10 cents on 13 March 2007.
• Restructured shares such that 20,000,000 shares worth 0.2 cents each became 10,000,000 shares worth 0.4 cents each on 24 November 2006.
• During the comparative year the Company:
• Issued 20,000,000 shares at 0.2 cents on 16 June 2006 and 3,000,000 shares at 1 cent on 16 June 2006.

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders meetings. In the event of a winding up of the Company, ordinary shareholders rank after all other shareholders and creditors and are fully entitled to any proceeds of liquidation.

Effective 1 July 1998, the Company Law Review Act abolished the concept of par value and the concept of authorised capital. Accordingly, the Company does not have authorised capital or par value in respect of issued shares.

15. SEGMENT INFORMATION

The Company operates in one business segment and one geographical segment, namely gold, manganese and base metals exploration in Australia. The revenues and results of this segment are those of the Company as a whole and are set out in the statement of financial performance.

16. NOTES TO THE STATEMENTS OF CASH FLOWS

Reconciliation of cash flows from operating activities

Profit/(Loss) for the period after income tax Adjustment for:	49.305	(47, 118)
Share issue expenses	(6.050)
Profit on sale of tenement	(87, 831)
Operating (loss)/profit before changes in working capital and provisions	(44.576)	(47, 118)
Decrease/(increase) in receivables	1.033	(2,054)
Increase/(decrease) in other creditors	2.854	6,485
Increase/(decrease) in taxes	13.179
Net cash from operating activities	(27.510)	(42,687)

17. EMPLOYEE BENEFITS

(a) Share based payments
Shares issued	٠	15,000,000
Issue price	********	0.002
Total value	$\ddot{}$ 150000000000000000000000000000000000000	30.000

18. FINANCIAL INSTRUMENTS

Exposure to interest rate, credit and commodity price risks arises in the normal course of the entity's business. The entity currently does not use derivative financial instruments for hedging, trading or investment purposes.

(a) Interest rate risk exposures

The entity's exposure to interest rate risk and the effective interest rate for classes of income-earning financial assets and interest-bearing financial liabilities is set out below:

Effective interest rates and repricing analysis

2007 Financial assets	Note	Effective interest rate	Total	1 year or less	1 to 5 years
Cash assets	7	5.40%	134,610	134,610
			134.610	134,610
2006	Note	Effective interest rate	Total	1 year or less	1 to $5$ years
Financial assets Cash assets		5.25%	14.043 14.043	14,043 14.043	-

(b) Credit risk exposures

Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The credit risk on financial assets, excluding investments, of the entity, which have been recognised on the balance sheet, is the carrying amount, net of any provision for impairment. The Company is not materially exposed to any individu country.

(c) Commodity price risk

The entity is not currently producing any commodity for sale and as such is not exposed to any commodity price risk.

The Company had no outstanding forward and derivative contracts as at 30 June 2007. The entity has no hedging contracts in place at 30 June 2007.

19. RELATED PARTIES DISCLOSURES

Key management personnel disclosures

The following were key management personnel of the Company at any time during the reporting period and unless otherwise indicated were key management personnel for the entire period.

Non-executive directors

Mr P Kastellorizos Mr A K Sener

Mr P G Hepburn-Brown (appointed 15 August 2006)

Mr A S Veitch (appointed 15 August 2006)

Key management personnel compensation

The key management personnel compensation included in 'Personnel expenses' (see Note 4(b)) are as follows:

	2007	2006
Short-term employee benefits		10.000
Post-employment benefits
Termination benefits
Equity compensation benefits		30.000
		40.000

Apart from the details disclosed in this note, no director has entered into a material contract with the Company since the end of the previous financial year and there were no material contracts involving directors' interests existing at year-end.

Other transactions with key management personnel

Key management personnel hold positions in other entities that result in them having control or significant influence over the financial operating policies of those entities.

These entities transacted with the Company in the reporting period. The terms and conditions of those transactions were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to unrelated entities on an arm's length basis.

The aggregate amounts recognised as expenses during the year relating to key management personnel and their personally-related entities were \$5,727 (2006: \$0). Details of the transactions are as follows:

		Note	2007	2006
Directors Mr P Kastellorizos	Transaction Geological Reports	(a)	5.727	$\blacksquare$

(a) Provision of geological consulting and tenement management services at normal commercial rates.

Other related party transactions

Mr Pedro Kastellorizos has loaned funds to the Company through payment of expenses from time to time. The balance of the loan at 30 June 2007 is \$3,290 (2006: \$4,060). Interest is charged on this loan at 6.28% per annum.

During the year, the Company entered into an agreement with Eldoret Pty Ltd, an entity associated with Mr Peter Hepburn-Brown, to issue 1,000,000 fully paid ordinary shares to Eldoret Pty Ltd on the satisfaction of certain milestones. These shares have not been issued as at balance date.

During the year, the Company also entered into an agreement with Castle Gates Australia Pty Ltd, an entity associated with Mr Anthony Veitch, to issue 1,000,000 fully paid ordinary shares and 500,000 options exercisable at the Company's IPO price on the satisfaction of certain milestones. These shares or options have not been issued as at balance date.

20. EVENTS SUBSEQUENT TO REPORTING DATE

20

On 3 July 2007, the Company issued 90,750 fully paid ordinary shares in the capital of the Company to Eldoret Pty Ltd as satisfaction of a fee of \$6,050 payable to Eldoret Pty Ltd. These fees are included in the financial statements as expenses accrued during the year ended 30 June 2007.

On 19 July 2007, the Company signed a joint venture agreement over the Plavica project in the Former Yugoslav Republic of Macedonia. Under the joint venture agreement, the Company can earn a 62% interest in the Plavica project by funding all expenditure up to a final feasibility study. The joint venture becomes effective on the renewal of the eight concessions covering the Plavica project, which is expected to occur before the end of 2007. The B Plavica project represents an outstanding opportunity for the Company to capture the benefits of current strong metals prices by pursuing an advanced exploration project with immediate drill targets that has the potential to host a high-grade vein-style/feeder gold and copper resource.

On 17 September 2007, Genesis signed a mandate letter with Allegra Capital Pty Ltd ("Allegra") whereby the Company appointed Allegra to assist the Company on a best endeavours basis with its plans to raise further capital.

Other than as set out above, there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company, in future financial years.