GENESIS BIOMEDICAL LTD A.B.N. 48 083 274 024

ANNUAL FINANCIAL REPORT

for the year ended 30 June 2008

CORPORATE DIRECTORY	2
DIRECTORS' REPORT	3
AUDITOR'S INDEPENDENCE DECLARATION	13
INCOME STATEMENT	14
BALANCE SHEET	15
STATEMENT OF CHANGES IN EQUITY	16
CASH FLOW STATEMENT	17
NOTES TO THE FINANCIAL STATEMENTS	18
DIRECTORS' DECLARATION	45
INDEPENDENT AUDIT REPORT	46
CORPORATE GOVERNANCE STATEMENT	48

CORPORATE DIRECTORY

GENESIS BIOMEDICAL LTD A.B.N. 48 083 274 024

Directors

Mr Roger Smith Non - Executive Chairman

Mr Donald Valentino Managing Director

Mr Gordon Hatch Non Executive Director

Company Secretary Mr David Semmens

Registered Office

Level 1, 248 Hay Street SUBIACO Western Australia 6008 Telephone: 08 9381 6922 Facsimile: 08 9381 6060 e-mail: [email protected] Web : www.genbiomed.com

Share Registry

Computershare Investor Services Pty Ltd Level 2, 45 St George's Terrace PERTH Western Australia 6000 Telephone: 1300 557 010

Auditors

K Westaway & Associates Chartered Accountants Suite 7, 29 Hood Street SUBIACO Western Australia 6008

Solicitors

Steinepreis Paganin Level 4, NEXT Building 16 Milligan Street PERTH Western Australia 6000

Bankers

Westpac 1257 Hay Street WEST PERTH Western Australia 6005

DIRECTORS' REPORT

Your directors submit their report for the Company and its controlled entities ("the Consolidated Entity") for the year ended 30 June 2008.

DIRECTORS

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

Mr Rodger Johnston	Non Executive Chairman (Resigned 5th September 2008)Appointed effective 7 December 2005 Mr Johnston has a Bachelor of Economicsdegree from the University of Sydney and was a member of the CPA Australiafrom 1976 to 1996. He commenced his career as an insolvency specialist, rising tothe level of Senior Management.
	Mr Johnston is a non-executive director of ASX listed mining company WestAustralian Metals Limited and non-executive director of Peoples Merchant BankLimited which is listed on the Colombo Stock Exchange. He was non-executivechairman of ASX listed IC2 Global Limited and was a non-executive director ofASX listed mining company Rusina Mining NL
Mr Donald Valentino	Managing DirectorMr Valentino was appointed to the Board as Managing Director effective 25 May2006. Previously, Mr Valentino was Western Australian state manager of SigmaPharmaceuticals Ltd a position he held for ten years. He possesses a reputation as aleading negotiator, public speaker and leader in the pharmacy and related medicalproducts field.
	In his previous roles he has been successful in building businesses and drivinggrowth through increased sales and strict operating cost management. Over theyears Mr Valentino has developed an extensive network of medical industryparticipants and industry peers.
	For the 25 years prior to joining Sigma, was employed by FH Faulding & Co untildeparting as Marketing Manager.
Mr Roger Smith	Non-executive DirectorAppointed 21 February 2005, Mr Smith has many years experience in retail trade.He has held a number of proprietary company directorships and has beensuccessful in the operation of a number of wholesale/retail businesses in Australia.During the past five years Mr Smith has been a non-executive director of MultiChannel Solutions Limited, an ASX listed Company.
Mr Gordon Hatch	Non-executive Director (Appointed 18 September 2008)Mr Hatch has in excess of 25 years of practical experience in management,commerce and mining associated with both local and overseas directorships of hisown companies. In particular, he has been responsible for negotiating andintroducing new systems to various industries with a broad range of clienteleincluding publicly listed national companies and government.He has a proven track record in contract negotiation which will add support to theBoard, particularly in its endeavours to source company enhancing projectsincluding resource based opportunities.

Mr Russell Black Non-executive Director (Resigned 4th July 2007) Appointed 28 November 2005, Mr Black was a Certified Practicing Accountant for in excess of 20 years and remains the managing partner of the Western Australian based Goldfinch Black Public Accountants. The practice attends to the needs of a diverse range of small business clients from four locations in Perth and the Pilbara with extended services of financial planning, finance broking and real estate investments.

Directorships of other listed companies

Directorships of other listed companies held by directors in the last three years immediately before the end of the financial year are as follows:

Name	Company	Period of Directorship
Mr Rodger Johnston	IC2 Global Limited	25/08/05 to 11/08/08
	Rusina Mining NL	29/11/00 to 23/08/06
	West Australian Metals	16/09/05 to current
	Limited
Mr Donald Valentino	Nil	N/A
Mr Russell Black	Transerv Australia Limited	9/12/05 to 24/07/06
Mr Roger Smith	Multi Channel Solutions	June 1988 to current
	Limited

OTHER OFFICERS

Mr David Semmens Company Secretary

Appointed effective 14 July 2006, Mr Semmens has experience in providing company secretarial, financial and corporate and other related services to organisations listed on ASX.

PRINCIPAL ACTIVITIES

The principal activities of the Consolidated Entity during the course of the financial year were the continued development and attempted commercial exploitation of either owned or partnered medical device technologies and investment in a mining tenement Farmin Agreement.

OPERATING RESULTS

The Consolidated Entity's operating loss after tax for the year ended 30 June 2008 was $1,265,011 (2007: loss of $844,443).

REVIEW OF OPERATIONS

The year ended 30 June 2008 incorporated a high level of activity including further funding for our Sepsis Project in conjunction with the University of Western Australia (UWA), diversification into mining through our Unaly Hill Farm In Agreement located south of Sandstone township in the East Murchison Mineral Field, Western Australia, and a capital raising. In addition continuous assessment and due diligence on various commercial opportunities were conducted during the reporting year.

Sepsis Project – Therapeutic for Severe Sepsis

Sepsis is caused by an over reaction to infection and can result in organ failure and death. Severe Sepsis is one of the most significant challenges in critical care. Over five thousand patients with Severe Sepsis die annually in Australia. The worldwide economic cost is estimated to be in excess of AUD30 billion per annum, with the United States of America accounting for approximately AUD17 billion.

Genesis Biomedical initially advanced $60,000 to allow for animal studies in New Orleans USA and Proof of Concept.

After the initial studies were concluded, Genesis Biomedical provided a further $60,000 during the year ended 30 June 2008 to be expended on trials to determine the effect of an established drug on the survival of knock-out mice with induced sepsis.

Medical Research Scientist, Dr Suzanna Temple and Respiratory Physician, Associate Professor Grant Waterer from the University of Western Australia Department of Medicine and Pharmacology, have identified a compound that has enormous potential as a pharmacological agent in pneumonia and sepsis. Studies funded by Genesis support the in vitro cellular effects of the compound. Funding has been advanced to further research on optimising the delivery and activity of the compound at animal facilities in Perth as a pre-requisite to human trials.

Genesis has obtained exclusive rights to exploit and commercialise the UWA intellectual property under a worldwide "licence rights" agreement which includes research, development, manufacture, sales and marketing of any product derived from it in the field.

Unaly Hill Prospect (E57/420) Farm In Agreement

To broaden and diversify its investment base, Genesis entered into a Farm In Agreement with Plato Mining Pty Ltd for the exploration rights on the Unaly Hill tenement at a cost of $100,000 The prospect is associated with the Atley Layered Intrusion and situated on the Youanmi fault near Sandstone. The tenement, immediately North of Youanmi is within the Yilgarn geological province of Western Australia.

Field inspections by independent experts together with reconnaissance geochemical soil sampling have confirmed the presence of favourable layered mafic rock sequences that are believed to be similarly prospective to Victory Bore to the North.

At the Victory Bore magnetite/vanadium prospect (E57/550) reconnaissance diamond and RC drilling encountered a magnetite enriched zone hosted by the Atley Layered Intrusive Complex that within their tenement area reportedly has a strike length of some eleven kilometres. Airborne magnetic surveys and geological mapping by others indicates that the same mineralised rock sequences extend south from Victory Bore into E57/420.

In early 2008 a brief geochemical sampling programme was carried out with a total of 157 samples being collected from 12 sample line traverses from E57/420.

In addition to base metal mineralisation, anomalous gold value identified from the soil sampling programme are believed to warrant drill investigation. A programme of work is planned that will initially comprise ground magnetic traverses in an attempt to confirm the presence of vanadium bearing titanomagnetic lenses that are known to be present at the Victory Bore prospect.

It should be noted that Unaly Hill has a past history of gold mining along its western contact with mafic volcanics.

It is anticipated the programme of work will be completed during the December quarter 2008 with an estimated cost of $80,000.

Capital Raising

The company completed an underwritten share and option offer on 19 December 2007. The company offered 40,000,000 Shares at an offer price of $0.021 plus 20,000,000 attaching options (on the basis of one option for every two shares subscribed for) to raise a total of $840,000 (before costs of the offer). The options have an exercise price of $0.03 and are able to be exercised on or before 30 November 2010.

Commercial Opportunities

The company reviewed several opportunities both in the biotech and mining sectors. In relation to biotech, lengthy time-frames, high cost and uncertain path to commercialisation deterred the company from proceeding.

The company held advanced discussions with an overseas based mining company with the objective of a joint venture programme. Ultimately, negotiations were terminated following due diligence. It is anticipated that significant prospects will be sourced by the company during the coming year for value determination.

The company continues to seek shareholder wealth creating prospects from a broad base.

FINANCIAL POSITION

At the end of the financial year, the Consolidated Entity had $1,123,977 (2007: $1,195,136) in cash and on deposit.

DIVIDENDS

The directors do not recommend the payment of a dividend for this financial year. No dividends have been paid or declared by the Company since the end of the previous financial year (2007: Nil).

LIKELY DEVELOPMENTS AND FUTURE RESULTS

Other than as referred to in the Review of Operations, further information as to likely developments in the operations of the Consolidated Entity would, in the opinion of the directors, be speculative and may hinder the Consolidated Entity in the achievement of its commercial objectives.

SIGNIFICANT CHANGE IN STATE OF AFFAIRS

Issue of Shares and Options

On 13 July 2007, the Company issued 508,358 fully paid ordinary shares and 1,000,000 listed option exercisable at 3 cents on or before 30 November 2010 in satisfaction of consultancy services payable. The shares and options issued were listed and valued at market value.

Other than the above Issue of Shares and Options, there were no significant changes in the state of affairs of the Consolidated Entity during the financial year, not otherwise disclosed in this Directors' Report or in the Review of Operations.

SIGNIFICANT EVENTS SUBSEQUENT TO BALANCE DATE

Resignation of Rodger Johnston as a Director on 5th September 2008 Appointment of Gordon Hatch as a Director on 18th September 2008

There has not arisen in the interval between the end of the financial year and the date of this report, any other item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect substantially the operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in subsequent financial years.

OPTIONS

Share Options

As at 30 June 2008, there are 115,050,000 (2007: 95,750,000) unissued ordinary shares in respect of which options were outstanding comprising:

Number of Options		Exercise Price	Expiry Date
101,150,000	listed	0.03	30 November 2010
10,500,000	unlisted	0.10	31 December 2011
1,700,000	unlisted	0.04	30 June 2009
1,700,000	unlisted	0.04	31 December 2010

During the year 21,000,000 options were issued and listed on ASX, and at the date of this report the Company had 13,900,000 (2007: 15,600,000) unlisted options on issue.

During, and since the end of the financial year, no (2007: Nil) fully paid ordinary shares were issued by the virtue of the exercise of options.

Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related body corporate.

REMUNERATION REPORT (AUDITED)

This remuneration report outlines the remuneration arrangements for the Company's directors.

Remuneration Policy

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

To ensure this the Company has put in place a remuneration structure:

For its Managing Director role that has helped attract a high quality experienced candidate;
Provides a balance of base compensation and short and long term incentive plans;
Providing market based director fees for its non executive directors.

Remuneration Committee

The Board elected that the Company was of the size that a Remuneration Committee was not warranted and that these issues would be continually considered by the Board.

The full Board is responsible for establishing Genesis's remuneration policies and practices and to ensure they match the group's objectives. The Genesis Board proposed the Managing Directors total remuneration package and is responsible for reviewing the non executive remuneration.

Non-Executive Director and Executive Remuneration

The remuneration of non executive directors may not exceed in aggregate in any financial year the amount fixed by the Company at the general meeting. Currently the non executive directors are remunerated by way of director fees which have been set at $33,333 p.a. per Director, an amount considered reasonable for a company of its size and operational activity.

The Company's only executive Mr Donald Valentino has entered into an Employment Contract with Genesis Biomedical Ltd. Under the terms of this engagement:

Mr Valentino was employed by the Company commencing 22 May 2006 as CEO/Managing Director;
Mr Valentino is employed in the role of CEO/Managing Director;
Covenanted not to compete against Genesis Biomedical Ltd for a period of 3 months after cessation of employment with the Company;
Agree that either party may terminate the Employment Contract by giving three months notice. In addition Genesis may without prior notice terminate the Employment Contract under certain conditions, for example, if the executive commits a serious breach of his obligations, or is guilty of grave misconduct in the discharge of his duties or becomes bankrupt;
The Employment Contract contains otherwise standard terms, including to duties, Genesis owning all intellectual property created by its executives, confidentiality, entitlements to minor benefits in addition to remuneration, and devoting substantially the whole of their time and attention during business hours to the discharge of their duties;

Details of agreed remuneration amounts and structure set out below.

Details of Executives - Employment Contracts

Mr Donald Valentino, Managing Director/CEO is currently under contract and is currently the only executive of the Company and has been remunerated for this role as follows:

(i) Base Salary $200,000 p.a.;
(ii) Statutory Superannuation;
(iii) Provision of a company car;
(iv) Long Term Incentive package; and
(v) Base Director Fees.

Reward for Performance

During the year there was no reward for the performance component of any remuneration package. It is noted that under the terms of Mr Valentino's Employment Contract, a long term incentive component has been implemented. The issue of 5,100,000 Incentive Options was approved by shareholders at the 2006 Annual General Meeting of the Company. 1,700,000 of these Incentive Options lapsed on 31 December 2007.

Key Management Personnel Positions

D Valentino Managing Director (executive): appointed 25 May 2006
R Johnston Non Executive Chairman: appointed 7 December 2005, resigned 5 September 2008
R Smith Director (non-executive): appointed 21 February 2005, Chairman 18 September 2008
R Black Director (non-executive): appointed 28 November 2005, resigned 4 July 2007
G Hatch Director (non-executive): appointed 18 September 2008

Remuneration Report (cont'd)

Remuneration of Directors and named Executives

	Sho	t-terrmemp	loybefieene	ts	Pot-esmpbene	loytmenfits	Shad pbare-setaymen
							Eqityledttu-se
	Salar&feeys$	CahsBonus$	Nontarmoney$	Other$(1)	Superionatannu$	Other$	Shares& units$	Opion&tsrights$	Tolta$	%PerformanceRelatde$
2008
dghnRoJostoern	$531,20	-	-	$668,2	-	-	-	-	$5639,1	-
ldleninoDoVatna	$5513,41	-	$30,747	$668,2	$100,000	-	-	-	$292,428	-
lllackRuBsse	-	-	-	-	-	-	-	-	-	-
RoSmithger	$31,250	-	-	$8,266	$750	-	-	-	$40,266	-
Tol2008ta	$215,915		$30,747	$24,800	$100,750			-	$372,212
2007
RodgJohnstoern	$25,000	-	-	$9,771	-	-	-	$57,900	$92,671	-
ldleninoDoVatna	$225,000	-	$19,040	$9,177	$20,250	-	-	$13,940	$288,001	-
lllackRuBsse	$5,2000	-	-	$9,771	-	-	-	$57,900	$692,71	-
ithRoSmger	$5,2000	-	-	$9,771	-	-	-	$57,900	$692,71	-
Tol2007ta	$300,000		$19,040	$39,084	$20,250			$187,640	$566,014

(1) Represents pro-rata apportionment of directors & officers insurance premium paid during the year.

Options granted as part of remuneration

During the year, there were no options granted as part of remuneration.

(END OF REMUNERATION REPORT)

DIRECTORS' INTERESTS

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

	DIRECT		INDIRECT
	Ordinary Shares	Options	Ordinary Shares	Options
D Valentino	-	3,400,000	12,054,004	6,048,267
G Hatch	300,000	-	1,887,000	-
R Smith	-	3,000,000	6,890,523	1,375,000

Note: Direct holdings are those held in the individuals name, indirect holdings are all other holdings controlled by the individual.

DIRECTORS' MEETINGS

During the year, directors' meetings were held. The number of meetings in which directors were in attendance is as follows:

	Directors' Meetings
	No. of meetings held
	while in office	Meetings attended

D Valentino	10	10
R Johnston	10	10
R Smith	10	10

As at the date of this report, the Consolidated Entity did not have an audit committee, as the directors believe the size of the Consolidated Entity and the size of the Board do not currently warrant its existence.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

During the financial year, the Consolidated Entity has paid premiums in respect of a contract insuring all the directors of Genesis Biomedical Ltd against a liability incurred in their role as directors of the consolidated entity, except where:

(a) the liability arises out of conduct involving a wilful breach of duty;
(b) there has been a contravention of the relevant sections of the Corporations Act;
(c) the conduct involves trading whilst insolvent;
(d) the conduct involves an operation carried on outside Australia.

Whilst the insurance policy does not contain details of the premium paid in respect of individual officers of the Company, the total premium of $24,800 has been apportioned between the Directors in the Remuneration Report

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of the Company support and have adhered to the principles of Corporate Governance.

The consolidated entity's Corporate Governance Statement is contained at page 48 of this annual report.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The directors of the Company monitor compliance with environmental regulations. In the opinion of the directors the Company's operations are not subject to significant environmental regulations.

The Company does not hold any permits in relation to environmental discharge and does not handle or store hazardous materials.

PROCEEDINGS ON BEHALF OF THE COMPANY

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

The Company was not a party to any such proceedings during the year.

AUDITOR INDEPENDENCE

A copy of the auditor's independence declaration as required under Section 307C of the Corporations Act 2001, is set out on the following page.

NON-AUDIT SERVICES

There were no non-audit services provided by the external auditors during the financial year.

SIGNED in accordance with a resolution of the directors

Donald Valentino Managing Director

30 September 2008

AUDITOR'S INDEPENDENCE DECLARATION TO THE DIRECTORS OF GENESIS BIOMEDICAL LIMITED

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Genesis Biomedical Limited for the year ended 30 June 2008, I declare that, to the best of my knowledge and belief, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.

Dated at Subiaco this 30th day of September, 2008.

--------------------------------------------- K. WESTAWAY FCA PRINCIPAL K. WESTAWAY & ASSOCIATES CHARTERED ACCOUNTANTS

GENESIS BIOMEDICAL LTD AND CONTROLLED ENTITIES INCOME STATEMENT YEAR ENDED 30 JUNE 2008

	Notes	Consolidated		Genesis Biomedical Ltd
CONTINUING OPERATIONS		2008$	2007$	2008$	2007$
REVENUES	2	91,446	144,244	91,446	144,244
Depreciation	3	(30,467)	(33,742)	(30,467)	(33,742)
Finance costs	3	(10,368)	(13,371)	(10,368)	(13,371)
Share based payment expense	3	(35,775)	(216,590)	(35,775)	(216,590)
Employee benefits expense		(441,303)	(424,870)	(441,303)	(424,870)
Lease rental payments	3	(47,019)	(39,325)	(47,019)	(39,325)
Professional fees	3	(415,485)	(371,277)	(415,485)	(371,277)
Insurance		(29,782)	(53,465)	(29,782)	(53,465)
Exploration expenses	5	(145,865)	-	(145,865)	-
Writeback provision for non recoveryof receivableDue diligence, travel and		-	299,642	-	299,642
accommodationProvision for non-recovery of related		(95,520)	(12,581)	(95,520)	(12,581)
party loan	3	-	-	-	(60,000)
License fee written off	3	(60,000)	(60,000)	(60,000)	-
Other expenses from ordinary
activities		(44,873)	(63,108)	(44,875)	(63,108)
LOSS BEFORE INCOME TAX		(1,265,011)	(844,443)	(1,265,013)	(844,443)
INCOME TAX EXPENSE	4	-	-	-	-
LOSS ATTRIBUTABLE TOMEMBERS OF GENESISBIOMEDICAL LTD		(1,265,011)	(844,443)	(1,265,013)	(844,443)
Basic loss per share (cents)	16	(0.67)	(0.51)
The company's potential ordinary

shares are not considered dilutive and accordingly basic loss per share is the same as diluted loss per share.

The accompanying notes form part of these financial statements.

GENESIS BIOMEDICAL LTD AND CONTROLLED ENTITIES BALANCE SHEET AT 30 JUNE 2008

	Notes	Consolidated20082007		Genesis Biomedical Ltd20082007
		$	$	$	$
CURRENT ASSETS
Cash and cash equivalents	14	1,123,977	1,195,136	1,123,977	1,195,136
Trade and other receivables	5	-	333,410	-	333,410
Financial assets	7	56,000	-	56,000	-
Other	6	65,219	103,746	65,219	103,746
TOTAL CURRENT ASSETS		1,245,196	1,632,292	1,245,196	1,632,292
NON-CURRENT ASSETS
Financial assets	7	14,617	-	14,618	3
Property, plant and equipment	8	117,993	145,680	117,993	145,680
TOTAL NON-CURRENT ASSETS		132,610	145,680	132,611	145,683
TOTAL ASSETS		1,377,806	1,777,972	1,377,806	1,777,975
CURRENT LIABILITIES
Trade and other payables	10	125,612	75,350	125,612	75,350
Financial liabilities	11	32,498	26,428	32,498	26,428
Short term provisions	12	38,787	23,150	38,787	23,150
TOTAL CURRENT LIABILITIES		196,897	124,928	196,897	124,928
NON-CURRENT LIABILITIES
Financial liabilities	11	65,947	98,446	65,947	98,446
TOTAL NON CURRENT
LIABILITIES		65,947	98,446	65,947	98,446
TOTAL LIABILITIES		262,844	223,374	262,844	223,374
NET ASSETS		1,114,962	1,554,598	1,114,962	1,554,601
EQUITYEquity attributable to equity holders ofthe parent
Issued capital	13	16,338,360	15,531,985	16,338,360	15,531,985
Reserves	13	235,590	216,590	235,590	216,590
Accumulated losses	13	(15,458,988)	(14,193,977)	(15,458,988)	(14,193,974)
TOTAL EQUITY		1,114,962	1,554,598	1,114,962	1,554,601

The accompanying notes form part of these financial statements.

GENESIS BIOMEDICAL LTD AND CONTROLLED ENTITIES STATEMENT OF CHANGES IN EQUITY YEAR ENDED 30 JUNE 2008

Consolidated	Share Capital	Losses	Reserves	Total
	$	$	$	$
Balance at1.7.2006	15,531,985	(13,349,534)	-	2,182,451
Shares issued during the year	-	-	-	-
Share based payments	-	-	216,590	216,590
Net loss recognised directly in equity	-	(844,443)	-	-
Balance at30.06.2007	15,531,985	(14,193,977)	216,590	1,554,598
Balance at1.7.2007	15,531,985	(14,193,977)	216,590	1,554,598
Shares issued during the year	840,000	-	-	840,000
Share based payments	16,775	-	19,000	35,775
Net loss recognised directly in equity	-	(1,265,011)	-	(1,265,011)
Share issue costs	(50,400)	-	-	(50,400)
Balance at30.06.2008	16,338,360	(15,458,988)	235,590	1,114,962

	Accumulated
Genesis Biomedical Ltd	Share Capital	Losses	Reserves	Total
	$	$	$	$
Balance at1.7.2006	15,531,985	(13,349,531)	-	2,182,454
Shares issued during the year	-	-	-	-
Share based payments	-	-	216,590	216,590
Net loss recognised directly in equity	-	(844,443)	-	(844,443)
Share issue costs	-	-	-	-
Balance at30.06.2007	15,531,985	(14,193,974)	216,590	1,554,601
Balance at1.7.2007	15,531,985	(14,193,974)	216,590	1,554,601
Shares issued during the year	840,000	-	-	840,000
Share based payments	16,775	-	19,000	35,775
Net loss recognised directly in equity	-	(1,265,013)	-	(1,265,013)
Share issue costs	(50,400)	-	-	(50,400)
Balance at30.06.2008	16,338,360	(15,458,988)	235,590	1,114,962

GENESIS BIOMEDICAL LTD AND CONTROLLED ENTITIES CASH FLOW STATEMENT YEAR ENDED 30 JUNE 2008

	Notes	2008$	Consolidated2007$	2008$	Genesis Biomedical Ltd2007$
CASH FLOWS FROM
OPERATING ACTIVITIES
Receipts from customersInterest received		091,446	16,573103,708	091,446	16,573103,708
Interest paid		(10,368)	(13,371)	(10,368)	(13,371)
Payments to suppliers and employees		(1,119,573)	(1,090,827)	(1,119,573)	(1,030,827)
NET CASH FLOWS USED IN
OPERATING ACTIVITIES	14(c)	(1,038,495)	(983,917)	(1,038,495)	(923,917)
CASH FLOWS FROM INVESTINGACTIVITIES
Purchase of property, plant andequipment		(2,780)	(881)	(2,780)	(881)
Repayment of loan		325,481	-	325,481	-
Acquisition of investments		(116,000)	-	(116,000)	-
NET CASH FLOWS USED IN
INVESTING ACTIVITIES		206,701	(881)	206,701	(881)
CASH FLOWS FROM
FINANCING ACTIVITIESLoans to related entity		-	-	-	(60,000)
Repayment of borrowings		(28,965)	(16,379)	(28,965)	(16,379)
Proceeds from issue of ordinary shares		840,000	-	840,000	-
Share issue expenses		(50,400)	-	(50,400)	-
NET CASH FLOWS FROM (USED
IN) FINANCING ACTIVITIES		760,635	(16,379)	760,635	(76,379)
NET INCREASE/(DECREASE) IN
CASH AND CASH EQUIVALENTS		(71,159)	(1,001,177)	(71,159)	(1,001,177)
Opening cash brought forward		1,195,136	2,196,313	1,195,136	2,196,313
CASH AND CASH EQUIVALENTSAT END OF PERIOD	14(b)	1,123,977	1,195,136	1,123,977	1,195,136

The accompanying notes form part of these financial statements.

GENESIS BIOMEDICAL LTD AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2008

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial report of Genesis Biomedical Ltd (the Company) for the year ended 30 June 2008 was authorised for issue in accordance with a resolution of the directors on 30 September 2008.

The financial report covers the consolidated group of Genesis Biomedical Ltd and controlled entities and Genesis Biomedical Ltd as an individual parent entity. Genesis Biomedical Ltd is a listed public company, incorporated and domiciled in Australia.

(a) Basis of Preparation

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

The financial report has been prepared on an accrual basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

(b) Statement of Compliance

The financial report complies with Australian Accounting Standards, which include Australian equivalents to the International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

At the date of authorisation of this financial report, there were a number of Standards and Interpretations that were issued but not yet effective, however the Directors anticipate that the adoption of these standards and interpretations in future reporting periods will have no material impact on the group.

The following is a summary of the material accounting policies adopted by the consolidated group in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

(c) Principles of Consolidation

A controlled entity is any entity controlled by Genesis Biomedical Limited whereby it has the power to control the financial and operating policies of an entity so as to obtain benefits from its activities.

A list of controlled entities is contained in Note 10 to the financial statements. All controlled entities have a June financial year end.

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

Where controlled entities have entered or left the consolidated group during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

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

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(d) Income Tax

The charge for current income tax expense is based on profit or loss for the year adjusted for any nonassessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the consolidated group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

Since the enactment of the Tax Consolidation legislation, the Genesis consolidated group has elected not to enter the tax consolidation regime.

(e) Financial Instruments

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Impairment

At each reporting date, the group assess whether there is objective evidence that a financial instrument has been impaired. In the case of available-for sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in the income statement.

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(f) Foreign Currency Transactions and Balances

Functional and presentation currency

The functional currency is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity's functional and presentation currency.

Transaction and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Exchange differences arising on the translation of monetary items are recognised in the income statement.

(g) Provisions

Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will results and that outflow can be reliably measured.

(h) Cash and Cash Equivalents

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

(i) Revenue

Interest revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts though the expected life of the financial instrument) to the net carrying amount of the financial asset.

Rental income is recognised upon receipt of rental monies.

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

(j) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.

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

(k) Shares

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2008 (Cont'd)

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(l) Other Current Receivables

Other current receivables are carried at the nominal amounts due. The collectability of debts is assessed continually and specific provision is made for any doubtful debts.

(m) Payables

Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to the company or consolidated entity.

(n) Contributed Equity

Issued and paid up capital is recognised at the fair value of the consideration received by the company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

(o) Employee Benefits

Provision is made for the company's liability for employee entitlement benefits arising from services rendered by employees to balance date. These benefits include wages and salaries and annual leave.

Employee benefits expected to be settled within twelve months of the reporting date are measured at the amounts expected to be paid when the liability is settled plus related on costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(p) Earnings Per Share

Basic loss per share is calculated as net profit/(loss) attributable to members, adjusted to exclude costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted loss per share is calculated as net profit/(loss) attributable to members, adjusted for:

costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares;

divided by the weighted average number of ordinary shares and dilutive potential shares, adjusted for any bonus element.

(q) Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Property, Plant and Equipment

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Depreciation

The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the consolidated group commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are:

Class of Fixed Assets	Depreciation Rate
Plant and equipment	7.5-30%
Motor vehicles	18.75%
Computer equipment	37.5%

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by company proceeds with the carrying amount. These gains and losses are included in the income statement.

(r) Leases

Operating lease payments are recognised as an expense in the income statement on a straight line basis over the lease term.

(s) Critical Accounting Estimates and Judgments

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

Key Estimates – Impairment

The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairments of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(t) Investments and Other Financial Assets

Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit and loss, loans and receivables, held-tomaturity investments, or available-for-sale investments, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transactions costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.

All regular way purchases and sales of financial assets are recognised on the trade date, i.e. the date that the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the marketplace.

(i) Financial Assets at Fair Value through Profit or Loss

Financial assets classified as held for trading are included in the category 'financial assets at fair value through profit or loss'. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in profit or loss.

(ii) Held-to-Maturity Investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as heldto-maturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when the investments are de-recognised or impaired, as well as through the amortisation process.

(iii) Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed and determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

(iv) Available-for-Sale Investments

Available-for-sale investments are those non-derivative financial assets that are designated as available-forsale or are not classified as any of the three preceding categories. After initial recognition available-for-sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the balance sheet date. For investments with no active market, fair value is determined using valuation techniques. Such techniques include using recent arm's length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models.

(u) Impairment of Assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.

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 relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at re-valued amount (in which case the impairment loss is treated as a re-valuation decrease).

An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at re-valued amount, in which case the reversal is treated as a re-valuation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

(v) Share Based Payments

Equity Settled Transactions:

The Group provides benefits to employees (including senior executives) of the Group in the form of sharebased payments, whereby employees render services in exchange for shares or rights over shares (equitysettled transactions).

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a pricing model which incorporates all market vesting conditions.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Genesis Biomedical Ltd (market conditions) if applicable.

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The cost of equity-based transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group's best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If any equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expenses not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

(w) Going concern

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

For the year ended 30 June 2008 the consolidated entity incurred a loss of $ 1,265,011(2007:$ 844,443) and an operating cash outflow of $1,038,495 (2007:$983,917). The Directors hold the view that Genesis Biomedical Limited has adequate cash reserves, funding facilities and prospects to allow it to pay its debts as and when they fall due, and thus the Directors believe that it is appropriate to prepare the financial report on a going concern basis.

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2008 (Cont'd)

NOTE 2. REVENUE

	Consolidated2008	2007	Genesis Biomedical Ltd20082007
	$	$	$	$
Revenues
Revenue from sale of plant &equipment	-	16,574	-	16,574
Finance income	91,446	127,670	91,446	127,670
Total revenues	91,446	144,244	91,446	144,244
NOTE 3.LOSS FOR THE YEAR
Professional Fees
- Audit fees	22,660	11,353	22,660	11,353
- Company secretarial fees	48,520	87,650	48,520	87,650
- Consulting fees	319,508	208,144	319,508	208,144
- Legal fees	13,797	17,234	13,797	17,234
- Accounting fees	6,469	14,730	6,469	14,730
- ASX/share registry fees	4,531	32,166	4,531	32,166
	415,485	371,277	415,485	371,277
Rental expense on operating leases
- Minimum lease payments	47,019	39,325	47,019	39,325
Finance costs
- External	10,368	13,371	10,368	13,371
Provision for non recovery
of related party loan	-	-	-	60,000
License fee written off	60,000	60,000	60,000	-
Depreciation	30,467	33,742	30,467	33,742
Share based payment expense	35,775	216,590	35,775	216,590

		Consolidated	Genesis Biomedical Ltd
	2008$	2007$	2008$	2007$
NOTE 4. INCOME TAX EXPENSE
(a)The prima facie tax on the lossfrom ordinary activities beforeincome tax is reconciled to theincome tax provided in thefinancial statements as follows:
Prima facie tax payable on the lossfrom ordinary activities beforeincome tax at 30% (2007:30%)	(379,503)	(253,333)	(379,503)	(253,333)
Tax effect of:Non deductible depreciationDoubtful debts	3,986-	4,01218,000	3,986-	4,01218,000
Other non allowable items	62,066	44,884	62,066	44,884
Writeback provision for nonrecovery of receivableUnused tax losses and temporaryDifferences not recognised as	-	(89,893)	-	(89,893)
Deferred tax assets	313,451	276,330	313,451	276,330
Income tax expense attributable toordinary activities	-	-	-	-
(b)Unrecognised deferred taxbalances
The following deferred tax assetsand liabilities have not beenbrought to account:
Unrecognised deferred tax assetscomprise:
Losses available for offset againstfuture taxable incomeAccrued expenses and provisions	2,694,86119,3612,714,222	2,381,41029,2962,410,706	2,171,72919,3612,191,090	1,858,27829,2961,887,574
Unrecognised deferred taxliabilities comprise:Nil	-	-	-	-
	2,714,222	2,410,706	2,191,090	1,887,574

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2008 (Cont'd)

The deductible temporary differences and tax losses do not expire under current tax legislation. Potential deferred tax assets attributable to tax losses carried forward have not been brought to account because directors do not believe it is appropriate to regard realisation of the future tax benefit as probable.

The potential future income tax benefit will only be obtained if:

(i) the company derives future assessable income of a nature and an amount sufficient to enable the benefit to be realised in accordance with Division 170 of the Income Tax Assessment Act 1997;
(ii) the company continues to comply with the conditions for deductibility imposed by the law; and
(iii) no changes in tax legislation adversely affect the company in realising the benefits.

	Consolidated2008	2007	Genesis Biomedical Ltd20082007
	$	$	$	$
NOTE 5. RECEIVABLES(CURRENT)
Other debtorManawatu Biotech Investments loan	--	9,806376,483	--	9,806376,483
Allowance for non-recovery of MBIL loan	-	(52,879)	-	(52,879)
	-	333,410	-	333,410
NOTE 6. OTHER CURRENT ASSETS
PrepaymentsSecurity deposits in respect of operating leases	65,219-	60,37243,374	65,219-	60,37243,374
	65,219	103,746	65,219	103,746
NOTE 7. FINANCIAL ASSETS
CURRENT
Available for sale financial assets
Unlisted investments at costListed investments at cost	20,00036,000	--	20,00036,000	--
	56,000	-	56,000	-
Available for sale financial assets compriseinvestments in the ordinary issued capital ofvarious entities. There are no fixed returns orfixed maturity date attached to theseinvestments.
Market value of listed investment at 30 June2008 was $32,400. Market value of availablefor sale financial assets at 25 September2008 was $30,720 (Unlisted investment at30 June 2008 became listed on ASX on
1/7/08)
NON CURRENT
Investment in controlled entities(Refer to note 9)	-	-	1	3
Security deposit in respect of
operating lease	14,61714,617	--	14,61714,618	-3

NOTE 8. PROPERTY PLANT AND EQUIPMENT

Plant and equipment:
At cost	25,621	24,234	25,621	24,234
Accumulated depreciation	(10,848)	(6,143)	(10,848)	(6,143)
	14,773	18,091	14,773	18,091
Motor vehicles:
At cost	141,253	141,253	141,253	141,253
Accumulated depreciation	(44,702)	(22,422)	(44,702)	(22,422)
	96,551	118,831	96,551	118,831
Computer equipment:
At cost	15,328	13,935	15,328	13,935
Accumulated depreciation	(8,659)	(5,177)	(8,659)	(5,177)
	6,669	8,758	6,669	8,758
	117,993	145,680	117,993	145,680
Movement in carrying amounts:Movement in the carrying amounts for each class
of plant and equipment between the beginningand the end of the financial year
Plant and equipment:
Balance at the beginning of the year	18,091	23,742	18,091	23,742
Additions	1,387	492	1,387	492
Disposal	-	-	-	-
Depreciation expense	(4,705)	(6,143)	(4,705)	(6,143)
Carrying amount at the end of the year	14,773	18,091	14,773	18,091
Motor vehicle:
Balance at the beginning of the year	118,831	-	118,831	-
Additions	-	141,253	-	141,253
Disposal	-	-	-	-
Depreciation expense	(22,280)	(22,422)	(22,280)	(22,422)
Carrying amount at the end of the year	96,551	118,831	96,551	118,831

Computer equipment:
Balance at the beginning of the year	8,758	13,546	8,758	13,546
AdditionsDisposal	1,393-	389-	1,393-	389-
Depreciation expense	(3,482)	(5,177)	(3,482)	(5,177)
Carrying amount at the end of the year	6,669	8,758	6,669	8,758

	117,993	145,680	117,993	145,680

NOTE 9. INTERESTS IN CONTROLLED ENTITIES

Name	Country ofIncorporation	Percentage of equityinterest held by theconsolidated entity
		2008	2007	2008	2007
Direct				$	$
Genovations Pty Ltd	Australia	100	100	1	1
NewMed Systems Ltd**	Australia	0	100	-	1
Smart Chair Systems Pty Ltd*	Australia	50	50	-	-
Indirect
Back to Health Australasia Ltd**	Australia	0	100	-	1
West Perth Clinic 1 Pty Ltd*	Australia	100	100	-	-
DBC Australia Pty Ltd*	Australia	75	75	-	-
				1	3

For the year ended 30 June 2008, the entities marked with an * were dormant and held no assets or liabilities.

**On 14 October 2007, the Company received notification from the ASIC that the deregistration of the following 100% owned subsidiary companies had been approved:

Back to Health Australasia Ltd (ACN 091 802 130)
Newmed Systems Ltd (ACN 092 200 845)

Entities subject to class order relief

Pursuant to Class Order 95/1418, relief has been granted to the wholly owned subsidiaries from the Corporations Act 2001 requirements for preparation, audit and lodgement of their financial reports.

As a condition of the Class Order, Genesis Biomedical Ltd and the controlled entities subject to the Class Order (the "Closed Group") entered into a Deed of Cross Guarantee on 29 May 2000. The effect of the deed is that Genesis Biomedical Ltd has guaranteed to pay any deficiency in the event of winding up of a controlled entity to which the class order applies. The controlled entities have also given a similar guarantee in the event that Genesis Biomedical Ltd is wound up.

	Consolidated		Genesis Biomedical Ltd
	2008$	2007$	2008$	2007$
NOTE 10. PAYABLES (CURRENT)
Trade payables (i)	94,674	43,643	94,674	43,643
Sundry payables and accrued expenses	30,938	31,707	30,938	31,707
	125,612	75,350	125,612	75,350

(i) Trade payables are non-interest bearing and normally settled in 30 days.

	Consolidated2008$	2007$	Genesis Biomedical Ltd2008$	2007$
NOTE 11. FINANCIAL LIABILITIES
(CURRENT)Hire purchase liability	32,498	26,428	32,498	26,428
(NON CURRENT)Hire purchase liability	65,947	98,446	65,947	98,446
HIRE PURCHASE PAYMENTCOMMITMENTS
Within one year	36,797	36,797	36,797	36,797
One year or later and no later than five years	66,075102,872	102,871139,668	66,075102,872	102,871139,668
Less: Unexpired charges	(4,427)	(14,794)	(4,427)	(14,794)
	98,445	124,874	98,445	124,874
NOTE 12. PROVISIONSCurrentEmployee benefits	38,787	23,150	38,787	23,150
	38,787	23,150	38,787	23,150

NOTE 13. CAPITAL AND RESERVES	Shares2008	Shares2007	$2008	$2007
a) Issued and paid up capitalFully paid ordinary shares	207,158,361	166,650,003	16,338,360	15,531,985
Movement in shares on issue- Issued capital at beginning of financialyear- Shares issued on 13 July 2007 in	166,650,003	166,650,003	15,531,985	15,531,985
consideration of consulting servicesprovided to the company- Shares issued on 21 December 2007	508,358	-	16,775	-
pursuant to an underwritten offer ofshares at 2.1 cents per share- Less expenses of the issue	40,000,000-	--	840,000(50,400)	--
Issued capital at the end of the financial year	207,158,361	166,650,003	16,338,360	15,531,985

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2008 (Cont'd)

NOTE13. CAPITAL AND RESERVES (Cont'd)

Share Options

As at 30 June 2008, there are 115,050,000 (2007: 95,750,000) unissued ordinary shares in respect of which options were outstanding comprising:

Number of Options		Exercise Price	Expiry Date
101,150,000	listed	0.03	30 November 2010
10,500,000	unlisted	0.10	31 December 2011
1,700,000	unlisted	0.04	30 June 2009
1,700,000	unlisted	0.04	31 December 2010

Terms and conditions of contributed equity

Ordinary shares

	Consolidated		Genesis Biomedical Ltd
	2008	2007	2008	2007
	$	$	$	$
b) Option Premium Reserve
Opening balance	216,590	-	216,590	-
Employee share based payments	-	216,590	-	216,590
Consultant share based payments	19,000	-	19,000	-
	235,590	216,590	235,590	216,590

2008

On 13 July 2007, 1,000,000 options exercisable at 3 cents each on or before 30 November 2010 were issued at market value in part satisfaction of consulting services rendered to the Company.

2007

On 19 December 2006, 10,500,000 share options were granted to Directors and Consultants to accept ordinary shares at an exercise price of $0.10. The options are exercisable on or before 31 December 2011 The weighted average fair value of the options was $0.0193. This price was calculated using the Black Scholes option pricing model.

c) Accumulated Losses
Accumulated losses at the beginning of the
financial year	14,193,977	13,349,534	14,193,977	13,349,531
Net loss attributable to the members of the Parent
Entity	1,265,012	844,443	1,265,012	844,443
Accumulated losses at the end of the financial year	15,458,989	14,193,977	15,458,989	14,193,974

Genesis Biomedical Ltd – Annual Report 2008

NOTE 14. CASH AND CASHEQUIVALENTS			Consolidated		Genesis Biomedical Ltd
		2008$	2007$	2008$	2007$
(a)	Cash at bankShort term deposits	1,7981,122,1791,123,977	3,3781,191,7581,195,136	1,7981,122,1791,123,977	3,3781,191,7581,195,136
(b)	Reconciliation of cashCash at end of financial year as shown inthe cash flow statement is reconciled toitems in the balance sheet as follows:Cash and cash equivalentsBank overdraft	1,123,977-	1,195,136-	1,123,977-	1,195,136-
		1,123,977	1,195,136	1,123,977	1,195,136
(c)	Reconciliation of cash flows fromoperations with operating loss afterincome tax
	Operating loss after income tax	(1,265,011)	(844,443)	(1,265,013)	(844,443)
	Non cash flows in lossDepreciation expenseProvision for non recovery of related	30,467	33,742	30,467	33,742
	loan	-	-	-	60,000
	Licence fee written offShare based payment expenseChanges in assets and liabilities	60,00035,775	60,000216,590	60,00035,775	216,590
	(Increase) decrease in receivablesIncrease (decrease) in allowance for non	9,806	(10,083)	9,806	(10,083)
	recovery of receivables	-	(299,642)	-	(299,642)
	(Increase) decrease in other assets(Increase) decrease in prepayments and	28,756	(1,894)	28,758	(1,894)
	depositsIncrease (decrease) in creditors and	(4,847)	(60,372)	(4,847)	(60,372)
	accruals	50,922	(40,965)	50,922	(40,965)
	Increase (decrease) in provisions	15,637	23,150	15,637	23,150
	Net cash flows used in operatingactivities	(1,038,495)	(923,917)	(1,038,495)	(923,917)

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2008 (Cont'd)

		Consolidated		Genesis Biomedical Ltd
	NOTE 15. CAPITAL & LEASINGCOMMITMENTS	2008$	2007$	2008$	2007$
(a)	Lease expenditure commitmentsOperating leases (non-cancellable)Minimum lease payments
	- not later than one year- later than one year and not later than	42,590	47,829	42,590	47,829
	five yearsAggregate lease expenditure contractedfor at balance date	-42,590	47,82995,658	-42,590	47,82995,658

Aggregate lease expenditure represents lease commitments pursuant to an office accommodation lease entered into effective 1 May 2006 for a period of three years. This lease is for the Company's head office.

(b)	Hire purchase commitments- not later than one year- later than one year and not later than	32,498	26,428	32,498	26,428
	five years	65,947	98,446	65,947	98,446
	Aggregate hire purchase expenditurecontracted for at balance date	98,445	124,874	98,445	124,874
(c)	Administration Services Agreement- not later than one year- later than one year and not later thanfive years	--	150,000-	--	150,000-
	Aggregate administration servicescontracted for at balance date	-	150,000	-	150,000

NOTE 16. SEGMENT INFORMATION

2008 Segment Analysis

The consolidated entity has operated in the biomedical and mining exploration sectors in Australia.

2008 Segment Analysis	Biomedical	Mining &Exploration	Corporate	Consolidated
	$	$	$	$
REVENUE
Other Revenue	-	-	91,446	91,446


SEGMENT RESULT	(60,000)	(145,865)	(1,059,043)	(1,265,011)
ASSETS/ LIABILITIESAssets
Segment assets	-	-	1,377,808	1,377,806
Liabilities
Segment liabilities	-	-	(262,844)	(262,844)
Net Assets				1,114,962

2007 Segment Analysis

During 2007 the consolidated entity operated solely in the biomedical sector, and in one geographical segment being Australia.

NOTE 17. EARNINGS PER SHARE

The following reflects the income and share data used in the calculations of basic and diluted loss per share:

	2008$	2007$
Earnings used to calculate loss per share	(1,265,011)	(844,443)
	Number ofShares	Number ofShares
Weighted average number of ordinary
shares outstanding during the year used in
calculation of basic loss per share	188,234,589	166,650,003

There are options outstanding at the end of the financial year however they have not been included in the loss per share as they are not considered dilutive in nature.

NOTE 18. KEY MANAGEMENT PERSONNEL

(a) Details of Key Management Personnel

D Valentino Managing Director (executive): appointed 25 May 2006
R Johnston Non Executive Chairman: appointed 7 December 2005, resigned 5 September 2008
R Smith Director (non-executive): appointed 21 February 2005
R Black Director (non-executive): appointed 28 November 2005, resigned 4 July 2007

NOTE 18. KEY MANAGEMENT PERSONNEL (Cont'd)

(b) Option holdings of Key Management Personnel

	Balance at1 July2007	Grantedas Remuneration	Net ChangeOther(1)	Balance at30 June2008	TotalVested30 June2008	TotalNotExercisable30 June2008	TotalExercisable30 June2008
D Valentino	9,598,267	-	(1,700,000)1,300,000*	9,198,267	5,798,267	3,400,000	5,798,267
R Johnston	3,000,000	-	500,000**	3,500,000	3,500,000	-	3,500,000
R Smith	4,000,000	-	375,000**	4,375,000	4,375,000	-	4,375,000
Total	16,598,267	-	475,000	17,073,267	13,673,267	3,400,000	13,673,267

* Lapse of 1,700,000 Incentive Options on 31 December 2007

**Participation in Placement of securities approved by shareholders at 2007 AGM

(c) Shareholdings of Key Management Personnel

	Balance at 1July 2007	Granted asRemuneration	On Exercise ofOptions	Net ChangeOther (1)	Balance at 30June 2008
D Valentino	4,798,267	-	-	2,600,000*	7,398,267
R Johnston	-	-	-	1,000,000*	1,000,000
R Smith	6,140,523	-	-	750,000*	6,890,523
Total	10,938,790	-	-	4,350,000	15,288,790

* Participation in Placement of securities approved by shareholders at 2007 AGM

All equity dealings have been entered into with terms and conditions no more favourable that those that the entity would have adopted if dealing at arm's length.

	Consolidated		Genesis Biomedical Ltd
	2008$	2007$	2008$	2007$
NOTE 19. AUDITOR'S REMUNERATIONAmounts received or due and receivable-Audit and review of the financial report ofthe entity and any other entity in the
consolidated entity	22,660	11,353	22,660	11,353
	22,660	11,353	22,660	11,353

NOTE 20. SUBSEQUENT EVENTS

Resignation of Rodger Johnston as a Director on 5 September 2008 Appointment of Gordon Hatch as a Director on 18 September 2008

NOTE 21. FINANCIAL RISK MANAGEMENT

Overview

This note presents information about the Group's exposure to credit, liquidity and market risks, its objectives, policies and processes for measuring and managing risk and the management of capital.

The Group does not use any form of derivatives as it is not at a level of exposure that requires the use of derivatives to hedge its exposure. Exposure limits are reviewed by management on a continuous basis. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The Board of Directors of the Company has overall responsibility for the establishment and oversight of the risk management framework. Management monitors and manages the financial risks relating to the operations of the Company and the Group through regular reviews of the risks.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group's receivables from customers and investment securities. In respect of the parent entity, credit risk also incorporates the exposure of Genesis Biomedical Ltd to the liabilities of all members of the closed group under the Deed of Cross Guarantee (refer Note 9) At the balance sheet date there were no significant concentrations of credit risk.

NOTE 21. FINANCIAL RISK MANAGEMENT (Cont'd)

Cash and cash equivalents

The Group limits its exposure to credit risk by only investing in liquid securities and only with counterparties that have an acceptable credit rating.

Trade and other receivables

As the Group operates primarily in investment and exploration activities, it does not have trade receivables and therefore is not exposed to credit risk in relation to trade receivables.

The Group where necessary establishes an allowance for impairment that represents its estimate of incurred losses in respect of other receivables and investments. Management does not expect any counterparty to fail to meet its obligations.

Exposure to credit risk

The carrying amount of the Group's financial assets represents the maximum credit exposure. The Group's maximum exposure to credit risk at the reporting date was:

	Group Carrying amount
	2008	2007
Available-for-sale financial assets	56,000	-
Receivables	-	-

Impairment Losses

The Directors do not consider that any of the Company's financial assets are subject to impairment at the reporting date. No impairment expense or reversal of impairment charge has occurred during the reporting period.

Liquidity Risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The Group manages liquidity risk by maintaining adequate cash reserves from funds raised in the market and by continuously monitoring forecast and actual flows. The Group does not have any external borrowings.

The Group anticipates a need to raise additional capital in the next 12 months to meet forecast operational activities. The decision on how the Group will raise future capital will depend on market conditions existing at that time

NOTE 21. FINANCIAL RISK MANAGEMENT (Cont'd)

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

Group and Company 30 June 2008

	Carryingamount	Contractualcash flow	6 mths orless	6-12 mths	1-2 years	2-5 years
Trade and other payables	125,612	125,612	125,612	-	-	-
Interest bearing liabilities	98,445	102,872	18,398	18,398	66,076	-

Group and Company 30 June 2007

	Carryingamount	Contractualcash flow	6 mths orless	6-12 mths	1-2 years	2-5 years
Trade and other payables	75,350	75,350	75,350	-	-	-
Interest bearing liabilities	124,874	139,668	18,398	18,398	36,796	66,076

Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposure within acceptable parameters, while optimising the return.

Currency Risk

The Group does not have any exposure to foreign currency risk.

Interest Rate Risk

The Group is exposed to interest rate risk (primarily on its cash and cash equivalents), which is the risk that a financial instrument's value will fluctuate as a result of changes in the market interest rates on interestbearing financial instruments. The Group does not use derivatives to mitigate these exposures.

NOTE 21. FINANCIAL RISK MANAGEMENT (Cont'd)

The Company adopts a policy of ensuring that as far as possible it maintains excess cash and cash equivalents on short term deposit at best available market interest rates.

Profile

At the reporting date the interest rate profile of the Company's interest-bearing financial instruments was:

	Consolidated and CompanyCarrying amount
	2008	2007
Fixed rate instrumentsFinancial liabilities – hire purchase contract	98,445	124,874
Variable rate instrumentsFinancial assets – cash and cash equivalents	1,123,977	1,195,136

Fair value sensitivity analysis for variable rate instruments

The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss or through equity, therefore a change in interest rates at the reporting date would not affect profit or loss or equity.

Cash flow sensitivity analysis for variable rate instruments

The group has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2007.

Company

	Profit or loss			Equity
	100bpincrease	100bpdecrease	100bpincrease	100bpdecrease
30 June 2008Variable rate instruments	14,068	(14,068)	14,068	(14,068)
30 June 2007Variable rate instruments	20,265	(20,265)	20,265	(20,265)

NOTE 21. FINANCIAL RISK MANAGEMENT (Cont'd)

Fair Values

Fair Values versus carrying amounts

The carrying amounts of financial assets and liabilities as described in the balance sheet equate to their estimated net fair value.

Other Market Price Risk

Other Equity price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices (other than those arising from rate risk or currency), whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market.

Investments are managed on an individual basis and material buy and sell decisions are approved by the Board of Directors. The primary goal of the Group's investment strategy is to maximise investment returns.

The Group's investments are solely in equity instruments. These instruments are classified as available-forsale with fair value changes recognised directly in equity until derecognised.

The following table details the breakdown of the investment assets held by the Group:

	Note	30 June 2008	30 June 2007
Listed equities – Available-for-sale	7	56,000	-

Sensitivity Analysis – Equity Price Risk

All of the Company's equity investments are listed on the Australian Securities Exchange. For such investments classified as available-for-sale, a fifteen percent increase in stock prices at 30 June 2008 would have increased equity by $8,400; an equal change in the opposite direction would have decreased equity by $8,400. No equity investments were held during the financial year ended 30 June 2007.

NOTE 21. FINANCIAL RISK MANAGEMENT (Cont'd)

Capital Management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, so as to maintain a strong capital base sufficient to maintain future exploration and development of its projects. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt. The Group's focus has been to raise sufficient funds through equity to fund the Company's activities. The Group monitors capital on the basis of the gearing ratio, however there are no external borrowings as at balance date.

There were no changes in the Group's approach to capital management during the year. Risk management policies and procedures are established with regular monitoring and reporting.

The Group is not subject to externally imposed capital requirements.

DIRECTORS' DECLARATION

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

(1) In the opinion of the directors:
(a) the financial report and the additional disclosures included in the director's report designated as audited, of the Company and of the Consolidated Entity are in accordance with the Corporations Act 2001 including:
(i) giving a true and fair view of the Company's and Consolidated Entity's financial position as at 30 June 2008 and of their performance for the year ended on that date; and
(ii) complying with Accounting Standards and 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.
(2) This declaration has been made after receiving the declarations required to be made to the directors in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2008.
(3) In the opinion of the directors, as at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified will be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed of Cross Guarantee.

On behalf of the Board

Donald Valentino Managing Director

30 September 2008

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GENESIS BIOMEDICAL LIMITED

Report on the Financial Report

We have audited the accompanying financial report of Genesis Biomedical Limited which comprises the balance sheet as at 30 June, 2008, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year's end or from time to time during the financial year.

We have also audited the remuneration disclosures contained in the Directors' Report under the heading "Remuneration Report" on pages 8 to 11.

Director's Responsibility for the Financial Report

The directors of Genesis Biomedical Limited are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards

( including the Australian Accounting Interpretations ) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Australian Accounting Standard AASB101: Presentation of Financial Statements, that compliance with the Australian equivalents to International financial Reporting Standards (IFRS) ensures that the financial report, comprising the financial statements and notes, complies with IFRS.

The directors are also responsible for the presentation of the remuneration disclosures contained in the Directors' Report.

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, and that the remuneration disclosures in the Directors' Report comply with Accounting Standard AASB 124.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers

internal control relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report and the remuneration disclosures in the Directors' 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.

Auditor's Opinion

In our opinion:

(a) the financial report of Genesis Biomedical Limited is in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the company's and consolidated entity's financial position as at 30 June, 2008 and of their performance for the year ended on that date; and
- (ii) complying with Australian Accounting Standards ( including the Australian Accounting Interpretations ) and the Corporations Regulations 2001.
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1; and
(c) The remuneration disclosures that are contained in pages 8 to 11 of the Directors' Report comply with Accounting Standard AASB 124.

Dated at Subiaco this 30th day of September, 2008.

--------------------------------------------- K. WESTAWAY FCA PRINCIPAL K. WESTAWAY & ASSOCIATES CHARTERED ACCOUNTANTS

CORPORATE GOVERNANCE STATEMENT 30 JUNE 2008

The Board of Directors of Genesis Biomedical Ltd is responsible for the corporate governance of the Consolidated Entity. The Board guides and monitors the business and affairs of Genesis Biomedical Ltd on behalf of the shareholders by whom they are elected and to whom they are accountable. In considering the issue of corporate governance the Board are cognisant of the size of its operations and the fact that the Board consists presently of three members, Mr Roger Smith (Non-executive Chairman), Mr Don Valentino (Managing Director) and Mr Gordon Hatch (Non-executive Director).

Composition of the Board

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

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

The directors in office at the date of this statement and there respective terms in office are as follows:

Name	Position	Term in Office
Roger Smith	Non-executive Chairman	4 years 4 months
Donald Valentino	Managing Director	2 years 4 months
Gordon Hatch	Non-executive Director	1 week

Please refer to the Directors Report for the relevant skills and experience of each of these directors.

Board Responsibilities

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

Corporate Governance – Best Practice Recommendations

In accordance with the ASX Corporate Governance Council's best practice recommendations, the Corporate Governance Statement must contain specific information, and also report on the Company's adoption of the Council's best practice recommendations on an exception basis, whereby disclosure is required of any recommendations that have not been adopted, together with the reasons why they have not been adopted. Genesis's corporate governance principles and policies are therefore structured with reference to the Corporate Governance Council's best practice recommendations, which are as follows:

(i) Lay solid foundations for management and oversight;
(ii) Structure the Board to add value;
(iii) Promote ethical and responsible decision making;
(iv) Safeguard integrity in financial reporting;
(v) Make timely and balanced disclosure;
(vi) Respect the rights of shareholders;
(vii) Recognise and manage risk;
(viii) Encourage enhanced performance;
(ix) Remunerate fairly and responsibly;
(x) Recognise the legitimate interests of stakeholders.

CORPORATE GOVERNANCE STATEMENT 30 JUNE 2008 (Cont'd)

Genesis Biomedical Limited's corporate governance practices were in place throughout the year ended 30th June 2008. As set out below, with the exception of the departures from the ASXCGC recommendations in relation to the independence of the Board, the nomination and audit committee and board performance evaluation, the corporate governance practices of Genesis Biomedical Ltd were compliant with the Council's best practice recommendations.

Independence

ASX Corporate Governance Council ("ASXCGC") best practice recommendation 2.1 requires a majority of the Board to be independent directors and 2.2 recommends the chairperson should be an independent director.

ASXCGC provides a definition of independence to include being independent of management and free of any other business relationships that could materially interfere with – or could reasonably be perceived to materially interfere with – the exercise of their unfettered and independent judgement. In accordance with this definition and further independence guidelines outlined in ASXCGC best practice recommendations, the following Genesis directors are not considered to be independent:

Name	Position
Mr Donald Valentino	Managing Director
Mr Roger Smith	Non – Executive Director

Mr Valentino is considered not to be independent by virtue of being employed in an executive capacity within the Company and his material shareholding in the Company. Mr Valentino has been employed by the Company for his extensive experience in the pharmacy and related medical products field.

Mr Smith is considered not to be independent by virtue of his material shareholding in the Company.

The Board acknowledges the best practice requirement to maintain a majority independent board, however believes that given the Company's size and operational status, the expense associated with establishing such a board profile would not at this stage provide any real benefit to the operation of the Company. This Board structure will be reviewed at the appropriate stages of the Company's development.

When assessing the independence of directors, the ASX recommendations refer to materiality thresholds throughout the independence criteria, specifically in reference to evaluating what may constitute a material relationship.

The Board has adopted the following quantitative thresholds to be used as a guide when considering amounts in context of determining the materiality of certain relationships:

(i) an amount which is equal to or greater than 10% of the appropriate base amount may be presumed to be material unless there is evidence or convincing argument to the contrary;
(ii) an amount which is equal to or less than 5% of the appropriate base amount may be presumed not to be material, unless there is evidence, or convincing argument to the contrary;

As part of discharging its obligations as directors of the Company, the Directors will, from time to time need to seek independent professional advice at the expense of the Company. Accordingly, the board has agreed that where issues or matters arise in relation to the running of the Company, that in the opinion of the directors require independent professional advice to assist in the decision making surrounding the resolution of these issues, the board may engage such professional advice providing it is on standard commercial terms for advice of its nature.

Nomination Committee

ASX Corporate Governance Council ("ASXCGC") best practice recommendation 2.4 recommends the Board should establish a nomination committee.

CORPORATE GOVERNANCE STATEMENT

30 JUNE 2008 (Cont'd)

Audit Committee

ASX Corporate Governance Council ("ASXCGC") best practice recommendation 4.2 recommends the Board should establish an audit committee, 4.3 outlines the recommended structure of the audit committee and 4.4 recommends the audit committee should have a formal charter.

The Board has not established any such committee at this point in the Consolidated Entity's development, it is considered that the size of the Board along with the level of activity of the Company renders this impractical and the full Board considers in detail all of the matters for which the directors are responsible. Although there is no Audit Committee, formal meetings are held between nominated directors and the external auditor, to discuss the findings of the half year review and the year end audit.

In compliance with ASX Corporate Governance Council ("ASXCGC") best practice recommendation 4.1, the Board requires the Managing Director and the Company Secretary provide a written statement that the financial statements of Company and the consolidated entity present a true and fair view, in all material aspects, of the financial position and operational results. In addition, confirmation is provided that all relevant accounting standards have been appropriately applied. A written statement has been provided to the Board for the year ending 30 June 2008.

Financial reporting

The Board relies on senior executives to monitor the internal controls within the Company. Financial performance is monitored on a regular basis by the Managing Director who reports to the Board at the scheduled Board Meetings.

External Auditors

The Company's policy is to appoint external Auditors who clearly demonstrate quality and independence. The Board reviews the performance of the external auditors on an annual basis and meets with them during the year to review findings and assist with Board recommendations. Auditor rotation is required by the Corporations Act 2001.

In compliance with ASX Corporate Governance Council ("ASXCGC") best practice recommendation 6.2, the external auditor is requested 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 audit report.

Risk Management

In compliance with ASX Corporate Governance Council ("ASXCGC") best practice recommendation 7.2, the Managing Director and Company Secretary are required to provide a statement to the Board on the Company's risk management and internal compliance and control systems. During the financial year, such a statement has been provided to the Board.

Board Performance Evaluation

ASX Corporate Governance Council ("ASXCGC") best practice recommendation 8.1 requires the disclosure of the process for performance evaluation of the board, its committees and individual directors, and key executives. Given the current size of the Genesis Board and level of activity of the Company, the Board does not currently have a formal process for the evaluation of individual Directors and would consider the implementation of one at this particular point as impractical. The Directors do consider and gauge the overall performance of the Board in context of the trading price of its shares on the ASX on a regular basis.

Remuneration Committee

ASX Corporate Governance Council ("ASXCGC") best practice recommendation 9.2 recommends the Board should establish a remuneration committee.

Throughout the financial year the Board had not established any such committee as at this point in the Consolidated Entity's development, it was considered that the size of the Board along with the level of activity of the Company renders this impractical and the full Board considers in detail all of the matters for which the directors are responsible. Remuneration to the Non Executive Directors was by way of base directors fees only, with the level of such fees, having been set by the Board to an amount it considers to be commensurate for a company of Genesis's size and level of activity. There is currently no link between performance and remuneration. Further there are no schemes for retirement benefits in existence.

AI assistant

SUREFIRE RESOURCES NL — Annual Report 2008

65857_rns_2008-09-29_5e53db54-e445-44be-9873-78e6633fa4ea.pdf

GENESIS BIOMEDICAL LTD A.B.N. 48 083 274 024

ANNUAL FINANCIAL REPORT

TABLE OF CONTENTS

CORPORATE DIRECTORY

GENESIS BIOMEDICAL LTD A.B.N. 48 083 274 024

Directors

Registered Office

Share Registry

Auditors

Solicitors

Bankers

DIRECTORS' REPORT

DIRECTORS

Directorships of other listed companies

OTHER OFFICERS

Mr David Semmens Company Secretary

PRINCIPAL ACTIVITIES

OPERATING RESULTS

REVIEW OF OPERATIONS

Sepsis Project – Therapeutic for Severe Sepsis

Unaly Hill Prospect (E57/420) Farm In Agreement

Capital Raising

Commercial Opportunities

FINANCIAL POSITION

DIVIDENDS

LIKELY DEVELOPMENTS AND FUTURE RESULTS

SIGNIFICANT CHANGE IN STATE OF AFFAIRS

Issue of Shares and Options

SIGNIFICANT EVENTS SUBSEQUENT TO BALANCE DATE

OPTIONS

REMUNERATION REPORT (AUDITED)

Remuneration Policy

Remuneration Committee

Non-Executive Director and Executive Remuneration

Details of Executives - Employment Contracts

Reward for Performance

Key Management Personnel Positions

Options granted as part of remuneration

(END OF REMUNERATION REPORT)

DIRECTORS' INTERESTS

DIRECTORS' MEETINGS

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

CORPORATE GOVERNANCE

ENVIRONMENTAL REGULATION AND PERFORMANCE

PROCEEDINGS ON BEHALF OF THE COMPANY

AUDITOR INDEPENDENCE

NON-AUDIT SERVICES

SIGNED in accordance with a resolution of the directors

AUDITOR'S INDEPENDENCE DECLARATION TO THE DIRECTORS OF GENESIS BIOMEDICAL LIMITED

GENESIS BIOMEDICAL LTD AND CONTROLLED ENTITIES INCOME STATEMENT YEAR ENDED 30 JUNE 2008

GENESIS BIOMEDICAL LTD AND CONTROLLED ENTITIES BALANCE SHEET AT 30 JUNE 2008

GENESIS BIOMEDICAL LTD AND CONTROLLED ENTITIES STATEMENT OF CHANGES IN EQUITY YEAR ENDED 30 JUNE 2008

GENESIS BIOMEDICAL LTD AND CONTROLLED ENTITIES CASH FLOW STATEMENT YEAR ENDED 30 JUNE 2008

GENESIS BIOMEDICAL LTD AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2008

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

(b) Statement of Compliance

(c) Principles of Consolidation

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(d) Income Tax

(e) Financial Instruments

Recognition

Loans and receivables

Impairment

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(f) Foreign Currency Transactions and Balances

Functional and presentation currency

Transaction and balances

(g) Provisions

(h) Cash and Cash Equivalents

(i) Revenue

(j) Goods and Services Tax (GST)

(k) Shares

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2008 (Cont'd)

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(l) Other Current Receivables

(m) Payables

SUREFIRE RESOURCES NL Annual Report 2008