SUREFIRE RESOURCES NL — Interim / Quarterly Report 2002

Mar 13, 2003

Company Update

The Company is pleased to provide the following update on its activities.

Bodyworks Inc

As announced to the market on 12 November 2002 the Company sold its 80% interest in Bodyworks.

The Company is entitled to receive further upside payments totalling $6.7 million for its 80% interest in Bodyworks. This amount of the upside payment is dependent on Bodyworks achieving certain defined EBITDA targets for the 24 months ending 31 July 2004.

To this end, the Company is pleased to report that the recapitalisation of Bodyworks by the new owners has enabled it to successfully commence the supply of its Orthopaedic Walker to a large USA organisation under a contract announced to the market on 13 May 2002.

In addition Bodyworks continues to make good progress in its OEM division and the development of its international distribution network.

The Company is, at this stage, unable to make an accurate assessment on the cumulative EBITDA for the period ending on 31 July 2004 and therefore is not in a position to estimate the amount of further upside payment it will receive.

The directors are encouraged by the performance of Bodyworks to date and will keep the market informed of its progress.

Cell Bionics

As announced to the market on 27 September 2002, Genesis is exploring opportunities for its Cell Bionics therapy.

A leading hospital group in Mexico has agreed that it will conduct trials in bone growth stimulation and treatment of progressive osteoarthritis of the knee using Genesis Cell Bionics® product. These trials are expected to commence within the next 2 months. The market in the USA for bone growth stimulation using this type of therapy is estimated to exceed $US 200 million. More information on the specifics of the trial will be made available closer to trial commencement.

In addition. Genesis has provided an information dossier on Cell Bionics to a major US Company that is in the process of assessing the technology with a view to a potential partnering arrangement. Genesis is hopeful that meaningful discussions can commence in the near future.

Genesis trial results are similar to some equivalent trials of this technology, and in some areas provide the opportunity for existing market participants to potentially improve their existing technology.

Corporate

The Company is pleased to announce that the cost cutting program initiated by the Company and managed by your Directors over the last 18 months, has resulted in significant reductions in the operating costs of the Company. The fixed overhead has been minimised.

The Company is also in negotiations in relation to the sale of its excess clinic equipment as a result of the DBC clinic closedown in 2001.

Going forward, the overheads will be kept at a minimum until the Company is able to more accurately predict the amount of further upside payment to be received from the sale of Bodyworks and the results of the current assessment being conducted in relation to CellGen.

The directors consider that a positive outcome in relation to these assets will have a significant impact on the fortunes of the Company and as a result it is prudent to ensure that maximum value is extracted from these assets.

In addition the Company has, over the last four months, reviewed several investment opportunities. The Directors continue to evaluate these opportunities at this time, and will inform the market of any meaningful progress in these matters.

For further information please contact Mr Wayne Kernaghan on (02) 9252 8455.

Appendix 4B

Half yearly report

Introduced 30/6/2002.

Name of entity
Genesis Biomedical Limited
ABN or equivalent companyHalf yearlyPreliminaryreferencefinal (tick)(iick)				Half year/financial year ended ('current period')
48 083 274 024	31 December 2002
For announcement to the marketExtracts from this report for announcement to the market (see note 1).				SΑ
Revenues from ordinary activities ( item 1.1 )	down	7%	tо	1,660,771
Profit (loss) from ordinary activities after tax attributable tomembers ( item 1.22 )	up	34%	łО	(1,049,793)
Profit (loss) from extraordinary items after tax attributableto members ( item 2.5( d ))	gain (loss)οf
Net profit (loss) for the period attributable to members(item I. II)	up	34%	ŧо	(1,049,793)
Dividends (distributions)	Amount per security			Franked amount persecurity
Final dividend (Preliminary final report only - item 15.4)Interim dividend (Half yearly report only - item 15.6)		¢		¢
Previous corresponding period (Preliminary final report -item 15.5; half yearly report $-$ item 15.7)		¢		¢
*Record date for determining entitlements to thedividend.(in the case of a trust, distribution) (see item $15.2$ )		N/A
Brief explanation of any of the figures reported above (see Note 1) and short details of any bonus or cash issue orother item(s) of importance not previously released to the market:

If this is a half yearly report it is to be read in conjunction with the most recent annual financial report.

+ See chapter 19 for defined terms.

Consolidated statement of financial performance

		Current period - $A	Previous correspondingperiod - $A
1.1	Revenues from ordinary activities (see items 1.23$-1.25$	1,660,771	1,786,000
$1.2^{\circ}$	Expenses from ordinary activities (see items 1.26& 1.27)	(2,776,889)	(3,542,000)
1.31.4	Borrowing costsShare of net profits (losses) of associates and jointventure entities (see item 16.7)	(43,071)	(74,000)
1.5	Profit (loss) from ordinary activities before tax	(1, 159, 189)	(1,830,000)
1.6	Income tax on ordinary activities (see note 4)
1.7	Profit (loss) from ordinary activities after tax	(1, 159, 189)	(1, 830, 000)
1.8	Profit (loss) from extraordinary items after tax(see item $2.5$ )
1.9	Net profit (loss)	(1, 159, 189)	(1,830,000)
1.10	Net profit (loss) attributable to outside $+$ equityinterests	109,396	236,000
1.11	Net profit (loss) for the period attributable tomembers	(1,049,793)	(1, 594, 000)
	Non-owner transaction changes in equity
1.12	Foreign Currency translation Reserve arising onacquisition of subsidiary		1,935,000
1.13	Net exchange differences on translation offinancial report of foreign controlled entity		(302,000)
1.141.15	InitialadjustmentsfromUIGtransitionalprovisions
1.16	Total transactions and adjustments recogniseddirectly in equity (items 1.12 to 1.15)		1,633,000
1.17	Total changes in equity not resulting fromtransactions with owners as owners	(1,049,793)	39,000
	Earnings per security (EPS)	Current period	Previous correspondingperiod

. 18-Basic EPS	$(1.38)$ cents	$(2.38)$ cents
1.19Diluted EPS	$(1.38)$ cents	$(2.38)$ cents

$+$ See chapter 19 for defined terms.

Notes to the consolidated statement of financial performance

		Current period - $A	Previous
			corresponding period -
			SА
1.20	Profit (loss) from ordinary activities after tax $(1,159,189)$		(1,830,000)
	(item 1.7)
1.21	Less (plus) outside $+$ equity interests	109,396	236,000
1.22	Profit (loss) from ordinary activities after $(1.049.793)$		(1, 594, 000)
	tax, attributable to members

Profit (loss) from ordinary activities attributable to members

Revenue and expenses from ordinary activities

(see note $15$ )

Revenue		Current period - $A	Previouscorresponding period -
			ŚА
1.23	Revenue from sales or services	1,617,638	1,735,000
1.24	Interest revenue	43,133	51,000
1.25	Total revenue from ordinary activities	1,660,771	1,786,000
1.26	Details of relevant expenses
	Cost of goods sold	709,638	876,000
	Research and development	2,139	272,000
	Employee expenses	607,898	705,000
	Depreciation & amortisation	406,608	680,000
	Write down of listed investments	25,714	35,000
	Property expenses	268,944
	Marketing	93,831
	Professional fees	337,434
	Other expenses from ordinary activities	324,683	974,000
1.27	Total expenses from ordinary activities	2,776,889	3,542,000
Capitalised outlays
1.28	Interest costs capitalised in asset values
1.29	Outlays capitalised in intangibles (unless
	arising from an $\dot{\tau}$ acquisition of a business)

Consolidated retained profits

		Current period -	Previous correspondingperiod -
1.30	Retained profits (accumulated losses) at thebeginning of the financial period	(11,383,652)	(5,555,000)
1.31	Net profit (loss) attributable to members (itemLID	(1,049,793)	(1, 594, 000)
1.32	Elimination due to sale of 80% of Bodyworks	2,487,051
1.33	Net effect of changes in accounting policies		w
1.34	Dividends and other equity distributions paidor payable
1.35	Retained profits (accumulated losses) at endof financial period	(9,946,394)	(7,149,000)

• See chapter 19 for defined terms.

Intangible and extraordinary items

		Consolidated - current period
		Before tax	Related tax	Related	Amount (after
				outside	(ax)attributable to
				$\pm$ equityinterests	members
		(a)	(b)	$\left( c\right)$	(d)
2.1	Amortisation of goodwill
$2.2^{\circ}$	Amortisation of otherintangibles	202,206		40,441	161,765
2.3	Total amortisation ofintangibles	202,206		40,441	161,765
2.4	Extraordinaryitems(details)
2.5	Total extraordinary items

	Comparison of half year profits
.

(Preliminary final report only)

• $3.1$ Consolidated profit (loss) from ordinary activities after tax attributable to members reported for the 1st half year (item 1.22 in the half yearly report)
• Consolidated profit (loss) from ordinary $3.2$ activities after tax attributable to members for the 2nd half year

Current year - $A'000	Previous year - $A'000
N/A	N/A
N/A	N/A

+ See chapter 19 for defined terms.

		endAtοf	As shown in last	As in last half
		current period	annual report	yearly report
	Consolidated statement of financial	A	$Α	$A
position
	Current assets
4.1	Cash	1,441,316	60,299	67,000
4.2	Receivables	8,714	584,449	882,000
4.3	Investments	17,143	42,857	90,000
4.4	Inventories	248,411	902,115	1,043,000
4.5	Tax assets
4.6	Other (provide details if material)	259,614	372,509	233,000
4.7	Total current assets	1,975,198	1,962,229	2,315,000
	Non-current assets
4.8	Receivables	1,511,729
4.9	Investments (equity accounted)
4.10	Other investments	150,000	150,000	150,000
4.11	Inventories
4.12	Exploration and evaluation expenditure
	capitalised (see para .71 of AASB
	1022)
4.13	properties$($ + miningDevelopmententities)
4.14	Other property, plant and equipment(net)	62,500	1,027,277	1,438,000
4.15	Intangibles (net)		4,016,301	7,087,000
4.16	Tax assets
4.17	Other (provide details if material)
4.18	Total non-current assets	1,724,229	5,193,578	8,675,000
4.19	Total assets	3,699,427	7,155,807	10,990,000
	Current liabilities
4.20		40,336	1,405,656	968,000
4.21	PayablesInterest bearing liabilities		1,435,814	1,051,000
4.22	Tax liabilities
4.23	Provisions exc. tax liabilities	166,874	249,222	44,000
4.24	Other (provide details if material)
4.25	Total current liabilities	207,210	3,090,692	2,063,000
	Non-current liabilities
4.26	Payables
4.27	Interest bearing liabilities
4.28	Tax liabilities
4.29	Provisions exc. tax liabilities	259,960	259,960
4.30	Other (provide details if material)
4.31	Total non-current liabilities	259,960	259,960
4.32	Total liabilities	467,170	3,350,652	2,063,000
4.33	Net assets	3,232,257	3,805,155	8,927,000

+ See chapter 19 for defined terms.

	Equity
4.34	Capital/contributed equity	12,987,985	12,812,985	12,703,000
4.35	Reserves		971,330	1,633,000
4.36	Retained profits (accumulated losses)	(9,946,394)	(11, 383, 652)	(7,149,000)
4.374.38	Equity attributable to members ofthe parent entityOutside + equity interests in controlled	3,041,591	2,400,663	7,187,000
	entities	190,666	1,404,492	1,740,000
4.39	Total equity	3,232,257	3,805,155	8,927,000
4.40	Preference capital included as part of4.37

Notes to the consolidated statement of financial position

Exploration and evaluation expenditure capitalised

(To be completed only by entities with mining interests if amounts are material. Include all expenditure incurred.)

		Current period $A'000	Previouscorresponding period –$A'000
5.1	Opening balance	N/A	N/A
5.2	Expenditure incurred during current period
	Expenditure written off during current period
5.4	Acquisitions, disposals, revaluationincrements, etc.
5.5	Expenditure transferred to DevelopmentProperties
5.6	Closing balance as shown in theconsolidated balance sheet ( item 4.12 )

Development properties

(To be completed only by entities with mining interests if amounts are material)

		Current period $A'000	Previouscorrespondingperiod - $A'000
6.1	Opening balance	N/A	N/A
6.2	Expenditure incurred during current period
6.3	Expenditure transferred from exploration andevaluation
6.4	Expenditure written off during current period
6.5	Acquisitions, disposals, revaluationincrements, etc.
6.6	Expenditure transferred to mine properties
6.7	Closing balance as shown in theconsolidated balance sheet (item 4.13)

+ See chapter 19 for defined terms.

Consolidated statement of cash flows

		Current period $A	Previous
			corresponding period
			- $A
	Cash flows related to operating activities
7.1	Receipts from customers	1,328,406	1,587,000
7.2	Payments to suppliers and employees	(2,368,003)	(2, 835, 000)
7.3	Dividends received from associates
7.4	Other dividends received
7.5	Interest and other items of similar nature	41,133	51,000
7.6	receivedInterest and other costs of finance paid	(43,071)	(46,000)
7.7	Income taxes paid
7.8	Other (provide details if material)
7.9	Net operating cash flows	(1,041,535)	(1,243,000)
	Cash flows related to investing activities
7.10	Payment for purchases of property, plant andequipment		(46,000)
7.11	Proceeds from sale of property, plant andequipment
7.12	Payment for intangibles		(174,000)
7.13	Proceeds from sale of equity investments	2,293,505
7.14	Loans to other entities
7.15	Loans repaid by other entities	1,179,730
7.16	Cash acquired/ (disposed)	(38, 228)	16,000
7.17	Net investing cash flows	3,435,007	(204,000)
7.18	Cash flows related to financing activitiesProceeds from issues of + securities (shares,options, etc.)	175,000	1,023,000

	Cash flows related to financing activities
7.18	Proceeds from issues of + securities (shares,options, etc.)	175,000	1,023,000
7.19	Proceeds from borrowings		487,000
7.20	Repayment of borrowings	(1, 187, 455)
7.21	Dividends paid
7.22	Share issue expense		(92,000)
		(1,012,455)	1,418,000
7.23	Net financing cash flows
7.24	Net increase (decrease) in cash held	1,381,017	(29,000)
7.25	Cash at beginning of period(see Reconciliation of cash)	60,299	96,000
7.26	Exchange rate adjustments to item 7.25.
7.27	Cash at end of period(see Reconciliation of cash)	1,441,316	67,000

+ See chapter 19 for defined terms.

Non-cash financing and investing activities

Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows are as follows. (If an amount is quantified, show comparative amount.)

$\tilde{\phantom{a}}$

Reconciliation of cash

Reconciliation of cash at the end of the period (asshown in the consolidated statement of cash flows) tothe related items in the accounts is as follows.		Current period $A	Previouscorrespondingperiod - $A
8.1	Cash on hand and at bank	441,316	67,000
8.2	Deposits at call	1,000,000
8.3	Bank overdraft.
8.4	Other (provide details)	w
8.5	Total cash at end of period (item 7.27)	1,441,316	67,000

Other notes to the condensed financial statements

Ratios		Current period	Previouscorrespondingperiod
9.1	Profit before tax / revenueConsolidated profit (loss) from ordinaryactivities before tax ( item 1.5 ) as a percentageof revenue (item 1.1)	$-69.8%$	$-102.4%$
9.2	Profit after tax $/$ + equity interestsConsolidated net profit (loss) from ordinaryactivities after tax attributable to members( item 1.11 ) as a percentage of equity (similarlyattributable) at the end of the period (item4.37	$-34.5%$	$-25.5%$

Earnings per security (EPS)

1. Details of basic and diluted EPS reported separately in accordance with paragraph 9 and 18 of AASB 1027: Earnings Per Share are as follows.

Weighted average number of ordinary shares outstandingused in calculation of basic earnings per share.	75,966,670	67, 103, 035
Weighted average number of ordinary shares used incalculating diluted earnings per share.	75.966.670	67, 103, 035
The options on issue at the end of the period are not difutive and hence not used in calculation of diluted earningsper share.

+ See chapter 19 for defined terms.

NTA backing(see note $7)$	Current period	Previous correspondingperiod
11.1Net tangible asset backing per $\pm$ ordinarysecurity	$4.22$ cents	$2.62$ cents

Discontinuing Operations

(Entities must report a description of any significant activities or events relating to discontinuing operations in accordance with paragraph 7.5 (g) of $AASB$ 1029; Interim Financial Reporting, or, the details of discontinuing operations they have disclosed in their accounts in accordance with AASB 1042: Discontinuing Operations (see note 17).)

Control gained over entities having material effect

13.1 Name of entity (or group of entities)

$\mathbb{N}/\mathbb{A}$

• 13.2 Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) since the date in the current period on which control was +acquired
• 13.3 Date from which such profit has been calculated
• 13.4 Profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) for the whole of the previous corresponding period

$\mathbb S$	w
	w
$\mathbb S$	w

Loss of control of entities having material effect

14.1	Name of entity (or group of entities)	Bodyworks Inc
14.2	Consolidated profit (loss) from ordinary activities andextraordinary items after tax of the controlled entity (or groupof entities) for the current period to the date of loss of control		S	(464,099)
14.3	Date to which the profit (loss) in item 14.2 has been calculated			31 October 2002

+ See chapter 19 for defined terms.

• 14.4 Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) while controlled during the whole of the previous corresponding period
• 14.5 Contribution to consolidated profit (loss) from ordinary activities and extraordinary items from sale of interest leading to loss of control.

Dividends (in the case of a trust, distributions)

15.1 Date the dividend (distribution) is payable

$\mathsf S$ $(466,000)$ $\mathsf S$ $\ddot{\phantom{0}}$

15.2	+ Record date to determine entitlements to the dividend(distribution) (ie, on the basis of proper instruments of transfer
	received by 5.00 pm if $\dagger$ securities are not $\dagger$ CHESS approved,or security holding balances established by 5.00 pm or such
	later time permitted by SCH Business Rules if $\dot{ }$ securities are
	+ CHESS approved)

15.3 If it is a final dividend, has it been declared? (Preliminary final report only)

$\ddot{}$

$N/A$

$\ddot{\phantom{1}}$

Amount per security

			Amount persecurity		Frankedamount persecurity at %tax (see note		Amount persecurity offoreign sourcedividend
15.4	(Preliminary final report only)Final dividend:	Current year		¢		¢
15.5		Previous year		¢		¢
15.6	(Half yearly and preliminary final reports)Interim dividend: Current year			¢		¢
15.7		Previous year		e		e

Total dividend (distribution) per security (interim plus final)

(Preliminary final report only)

		Current year		Previous year
15.8	+ Ordinary securities		HH
-15.9	Preference +securities		$H +$		$\star$

+ See chapter 19 for defined terms.

Half yearly report - interim dividend (distribution) on all securities or Preliminary final report - final dividend (distribution) on all securities

		Current period $A'000	Previous correspondingperiod - $A'000
15.10	+ Ordinary securities (each class separately)
15.11	Preference + securities (each classseparately)	$\star$	ж
15.12	Other equity instruments (each classseparately)	مد
15.13	Total

The +dividend or distribution plans shown below are in operation.

$\rm N/A$

The last date(s) for receipt of election notices for the +dividend or distribution plans

Any other disclosures in relation to dividends (distributions). (For half yearly reports, provide details in accordance with paragraph 7.5(d) of AASB 1029 Interim Financial Reporting)

$N/A$

Details of aggregate share of profits (losses) of associates and joint venture entities

entities':	Group's share of associates' and joint venture	Current period$A'000	Previouscorresponding period- $A'000
16.1	Profit (loss) from ordinary activities before tax	N/A	N/A
16.2	Income tax on ordinary activities
16.3	Profit (loss) from ordinary activities aftertax
16.4	Extraordinary items net of tax
16.5	Net profit (loss)
16.6	Adjustments		H+
16.7	Share of net profit (loss) of associates andjoint venture entities

+ See chapter 19 for defined terms.

Material interests in entities which are not controlled entities

The economic entity has an interest (that is material to it) in the following entities. (If the interest was acquired or disposed of during either the current or previous corresponding period, indicate date of acquisition ("from dd/mm/yy") or disposal ("to dd/mm/yy").)

	Name of entity	Percentage of ownershipdate of disposal	interest held at end of period or	Contribution to net profit (loss) (item1.9)
17.1	Equity accountedassociates andjoint ventureentities	Currentperiod	Previouscorrespondingperiod	Current periodSA'000	Previouscorrespondingperiod-$A'000
		N/A	N/A	N/A	N/A
17.2	Total
17.3	Other materialinterests	N/A	N/A	N/A	N/A
17.4	Total

Issued and quoted securities at end of current period

(Description must include rate of interest and any redemption or conversion rights together with prices and dates)

	Category of + securities	Total number	Number quoted	Issuepricepersecuritynote(see(4)(cents)	Amount paiduppersecurity (seenote $14$ )(cents)
18.1	Preference + securities(description)			м.
18.2	Changes during current period(a) Increases through issues(b) Decreases through returnsof capital, buybacks,redemptions
18.3	+ Ordinary securities	76,550,003	76,550,003	a.
18.4	Changes during current period(a) Increases through issues(b) Decreases through returnsof capital, buybacks	3,500,000	3,500,000	0.05

+ See chapter 19 for defined terms.

18.5	+ Convertible debt securities(description and conversionfactor)
18.6	Changes during current period(a) Increases through issues(b) Decreases throughsecurities matured, converted
18.7	Options (description andconversion factor)	2,450,0001,000,0002,000,000		Exerciseprice$0.25$0.30$0.40	Expirydate$(f(\text{any})$30/6/200323/11/200323/11/2004
18.8	Issued during current period
18.9	Exercised during currentperiod
18.10	Expired during current period	1,300,000	$\ddot{\phantom{1}}$	$0.15	23/11/2003
18.11	Debentures (description)
18.12	Changes during current period(a) Increases through issues
	(b) Decreases throughsecurities matured, converted
18.13	Unsecured notes(description)
18.14	Changes during current period
	(a) Increases through issues
	(b) Decreases throughsecurities matured, converted

Segment reporting

(Information on the business and geographical segments of the entity must be reported for the current period in accordance with AASB 1005: Segment Reporting and for half year reports, AASB 1029: Interim Financial Reporting. Because entities employ different structures a pro forma cannot be provided. Segment information in the layout employed in the entity's $+$ accounts should be reported separately and attached to this report.)

Comments by directors

(Comments on the following matters are required by ASX or, in relation to the half yearly report, by AASB 1029: Interim Financial Reporting. The comments do not take the place of the directors' report and statement (as required by the Corporations Act) and may be incorporated into the directors' report and statement. For both half yearly and preliminary final reports, if there are no comments in a section, state NIL. If there is insufficient space to comment, attach notes to this report.)

+ See chapter 19 for defined terms.

Basis of financial report preparation

• $19.1$ If this report is a half yearly report, it is a general purpose financial report prepared in accordance with the listing rules and AASB 1029: Interim Financial Reporting. It should be read in conjunction with the last "annual report and any announcements to the market made by the entity during the period. The financial statements in this report are "condensed financial statements" as defined in AASB 1029: Interim Financial Reporting. This report does not include all the notes of the type normally included in an annual financial report. [Delete if preliminary final report.]
• Material factors affecting the revenues and expenses of the economic entity for the current period. In a $19.2$ half yearly report, provide explanatory comments about any seasonal or irregular factors affecting operations.

The company sold its 80% shareholding in Bodyworks Inc.

• 19.3 A description of each event since the end of the current period which has had a material effect and which is not already reported elsewhere in this Appendix or in attachments, with financial effect quantified (if possible).
• 19.4 Franking credits available and prospects for paying fully or partly franked dividends for at least the next year.

Nil

19.5 Unless disclosed below, the accounting policies, estimation methods and measurement bases used in this report are the same as those used in the last annual report. Any changes in accounting policies, estimation methods and measurement bases since the last annual report are disclosed as follows. (Disclose changes and differences in the half yearly report in accordance with AASB 1029: Interim Financial Reporting. Disclose changes in accounting policies in the preliminary final report in accordance with $AASB$ 1001: Accounting Policies-Disclosure).

+ See chapter 19 for defined terms.

This half year report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Applicable Accounting Standards including AASB 1029 "Interim Financial Reporting", the Listing Rules and other mandatory professional reporting requirements (Urgent Issues Group Consensus Views).

The half year financial report has been prepared in accordance with the historical cost convention.

The half year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide a full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

The half year financial report should be read in conjunction with the last annual financial report of Genesis Biomedical Limited as at 30 June 2002, together with any announcements to the market made by the entity during the half year ended 31 December 2002 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001 and the Listing Rules of the ASX.

Certain comparative information has been adjusted to conform with changes in presentation for the current financial period.

• 19.6 Revisions in estimates of amounts reported in previous interim periods. For half yearly reports the nature and amount of revisions in estimates of amounts reported in previous +annual reports if those revisions have a material effect in this half year.
• 19.7 Changes in contingent liabilities or assets. For half yearly reports, changes in contingent liabilities and contingent assets since the last * annual report.

Additional disclosure for trusts

• Number of units held by the management 20.1 company or responsible entity or their related parties.
• 20.2 A statement of the fees and commissions payable to the management company or responsible entity.

Identify:

• initial service charges
• management fees
• other fees

+ See chapter 19 for defined terms.

Annual meeting

(Preliminary final report only)

The annual meeting will be held as follows:
Place	$+ +$
Date	$\ddot{}$
Time	$\ddot{}$
Approximate date the "annual report will beavailable	$\ddot{}$
Compliance statement

• $\mathbf{i}$ This report has been prepared in accordance with AASB Standards, other AASB authoritative
• pronouncements and Urgent Issues Group Consensus Views or other standards acceptable to ASX (see note 12).

Identify other standards used

• $\overline{2}$ This report, and the "accounts upon which the report is based (if separate), use the same accounting policies.
• 3 This report does give a true and fair view of the matters disclosed (see note 2).

(Tick one)	This report is based on + accounts to which one of the following applies.	The + accounts have been
	The $^+$ accounts have been $\sqrt{\phantom{0}}$	subject to review.
	The $\alpha$ accounts are in the $\Box$process of being audited orsubject to review.	The "accounts have not yetbeen audited or reviewed.

• 5 If the audit report or review by the auditor is not attached, details of any qualifications are attached/will follow immediately they are available* (delete one). (Half yearly report only the audit report or review by the auditor must be attached to this report if this report is to satisfy the requirements of the Corporations Act.)
• 6 The entity does not have a formally constituted audit committee.

Sign here:		Date: 14 March 2003
	(Company Secretary)

Print name: Michael Musso

$\overline{4}$

+ See chapter 19 for defined terms.

Notes

• $\mathbf{1}$ . For announcement to the market The percentage changes referred to in this section are the percentage changes calculated by comparing the current period's figures with those for the previous corresponding period. Do not show percentage changes if the change is from profit to loss or loss to profit, but still show whether the change was up or down. If changes in accounting policies or procedures have had a material effect on reported figures, do not show either directional or percentage changes in profits. Explain the reason for the omissions in the note at the end of the announcement section. Entities are encouraged to attach notes or fuller explanations of any significant changes to any of the items in page 1. The area at the end of the announcement section can be used to provide a cross reference to any such attachment.
• $\overline{2}$ . True and fair view If this report does not give a true and fair view of a matter (for example, because compliance with an Accounting Standard is required) the entity must attach a note providing additional information and explanations to give a true and fair view.

$31$ Condensed consolidated statement of financial performance

• Item 1.1 The definition of "revenue" and an explanation of "ordinary activities" are set out in AASB 1004: Revenue, and AASB 1018: Statement of Financial Performance.
• Item $1.6$ This item refers to the total tax attributable to the amount shown in item 1.5. Tax includes income tax and capital gains tax (if any) but excludes taxes treated as expenses from ordinary activities (eg, fringe benefits tax).
• $\overline{4}$ . Income tax If the amount provided for income tax in this report differs (or would differ but for compensatory items) by more than 15% from the amount of income tax prima facie payable on the profit before tax, the entity must explain in a note the major items responsible for the difference and their amounts. The rate of tax applicable to the franking amount per dividend should be inserted in the heading for the column "Franked amount per security at % $\text{tax}^*$ for items 15.4 to 15.7.

$5.$ Condensed consolidated statement of financial position

Format The format of the consolidated statement of financial position should be followed as closely as possible. However, additional items may be added if greater clarity of exposition will be achieved, provided the disclosure still meets the requirements of AASB 1029: Interim Financial Reporting, and AASB 1040: Statement of Financial Position. Also, banking institutions, trusts and financial institutions may substitute a clear liquidity ranking for the Current/Non-Current classification.

Basis of revaluation If there has been a material revaluation of non-current assets (including investments) since the last "annual report, the entity must describe the basis of revaluation adopted. The description must meet the requirements of AASB 1010: Accounting for the Revaluation of Non-Current Assets. If the entity has adopted a procedure of regular revaluation, the basis for which has been disclosed and has not changed, no additional disclosure is required.

Condensed consolidated statement of cash flows For definitions of "cash" and other terms 6. used in this report see AASB 1026: Statement of Cash Flows. Entities should follow the form as closely as possible, but variations are permitted if the directors (in the case of a trust, the management company) believe that this presentation is inappropriate. However, the

+ See chapter 19 for defined terms.

presentation adopted must meet the requirements of AASB 1026. +Mining exploration entities may use the form of cash flow statement in Appendix 5B.

• Net tangible asset backing Net tangible assets are determined by deducting from total $7.$ tangible assets all claims on those assets ranking ahead of the $+$ ordinary securities (ie, all liabilities, preference shares, outside $+$ equity interests etc). $+$ Mining entities are not required to state a net tangible asset backing per +ordinary security.
• 1. Gain and loss of control over entities The gain or loss must be disclosed if it has a material effect on the "accounts. Details must include the contribution for each gain or loss that increased or decreased the entity's consolidated profit (loss) from ordinary activities and extraordinary items after tax by more than 5% compared to the previous corresponding period.
• 1. Rounding of figures This report anticipates that the information required is given to the nearest $1,000. If an entity reports exact figures, the $A'000 headings must be amended. If an entity qualifies under ASIC Class Order 98/0100 dated 10 July 1998, it may report to the nearest million dollars, or to the nearest $100,000, and the $A'000 headings must be amended.
• Comparative figures Comparative figures are to be presented in accordance with $AASB$ 1018 $10.$ or AASB 1029 Interim Financial Reporting as appropriate and are the unadjusted figures from the latest annual or half year report as appropriate. However, if an adjustment has been made in accordance with an accounting standard or other reason or if there is a lack of comparability, a note explaining the position should be attached. For the statement of financial performance, AASB 1029 Interim Financial Reporting requires information on a year to date basis in addition to the current interim period. Normally an Appendix 4B to which AASB 1029 Interim Financial Reporting applies would be for the half year and consequently the information in the current period is also the year to date. If an Appendix 4B Half yearly version is produced for an additional interim period (eg because of a change of reporting period), the entity must provide the year to date information and comparatives required by AASB 1029 Interim Financial Reporting. This should be in the form of a multi-column version of the consolidated statement of financial performance as an attachment to the additional Appendix 4B.
• $11.$ Additional information An entity may disclose additional information about any matter, and must do so if the information is material to an understanding of the reports. The information may be an expansion of the material contained in this report, or contained in a note attached to the report. The requirement under the listing rules for an entity to complete this report does not prevent the entity issuing reports more frequently. Additional material lodged with the +ASIC under the Corporations Act must also be given to ASX. For example, a director's report and declaration, if lodged with the $+ASiC$ , must be given to ASX.
• $12.$ Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if one exists) must be complied with.
• $13.$ Corporations Act financial statements This report may be able to be used by an entity required to comply with the Corporations Act as part of its half-year financial statements if prepared in accordance with Australian Accounting Standards.
• $14.$ Issued and quoted securities The issue price and amount paid up is not required in items 18.1 and 18.3 for fully paid securities.

+ See chapter 19 for defined terms.

$\overline{15}$ Details of expenses AASB 1018 requires disclosure of expenses from ordinary activities according to either their nature or function. For foreign entities, there are similar requirements in other accounting standards accepted by ASX. AASB ED 105 clarifies that the disclosures required by $AASB$ 1018 must be either all according to nature or all according to function. Entities must disclose details of expenses using the layout (by nature or function) employed in their $+$ accounts.

The information in lines 1.23 to 1.27 may be provided in an attachment to Appendix 4B.

Relevant Items AASB 1018 requires the separate disclosure of specific revenues and expenses which are not extraordinary but which are of a size, nature or incidence that disclosure is relevant in explaining the financial performance of the reporting entity. The term "relevance" is defined in $AASB$ 1018. There is an equivalent requirement in $AASB$ 1029: Interim Financial Reporting. For foreign entities, there are similar requirements in other accounting standards accepted by ASX.

1. Dollars If reporting is not in A$, all references to $A must be changed to the reporting currency. If reporting is not in thousands of dollars, all references to "000" must be changed to the reporting value.

$17.$ Discontinuing operations

Half yearly report

All entities must provide the information required in paragraph 12 for half years beginning on or after 1 July 2001.

Preliminary final report

Entities must either provide a description of any significant activities or events relating to discontinuing operations equivalent to that required by paragraph 7.5 (g) of $AASB$ 1029: Interim Financial Reporting, or, the details of discontinuing operations they are required to disclose in their "accounts in accordance with AASB 1042 Discontinuing Operations.

In any case the information may be provided as an attachment to this Appendix 4B.

18. Format

This form is a Word document but an entity can re-format the document into Excel or similar applications for submission to the Companies Announcements Office in ASX.

+ See chapter 19 for defined terms.

ATTACHMENT A - SEGMENT INFORMATION

The consolidated entity operated during the period in two geographical segments, Australia and the United States. The consolidated entity operated in one business segment being medical technology.

The group generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices. Revenues are attributed to geographic areas based on the location of the assets producing the revenues.

Geographical SegmentRevenue	Australia			United States of AmericaConsolidated Group
	20022001		20022001		20022001
	S	S	$	$	S	S
Sales to customers outsidethe consolidated entity	81,988	113,000	1,578,783	1,673,000	1,660,771	1,786,000
Other revenues fromcustomers outside the
consolidated entity
Intersegment revenueShare of net profit of equityaccounted investments
	81,988	113,000	1,578,783	1,673,000
Total segment revenue
Unallocated revenue
Total consolidated revenue					1,660,771	1,786,000
ResultsTotal Segment and Group
Result	(695,090)	(1,364,000)	(464, 099)	(466,000)	(1, 159, 189)	(1,830,000)
AssetsTotal Segment and GroupAssets	3,699,427	6,893,000		10,742,000	3,699,427	10,990,000*
LiabilitiesTotal Segment and GroupLiabilities:	467,170	1,395,000		668,000	467,170	2,063,000
* There was an inter-company elimination of $6,645,000 for the period.
Other segment information:
Acquisition of property,-plant and equipment,intangible assets and
other non-current assets		174,000		46,000		220,000
Depreciation	97,500	233,000	106,902		204,402	233,000
Amortisation		447,000	202,206		202,206	447,000
Non-cash expenses otherthan depreciation andamortisation	25,714	35,000			25,714	35,000

+ See chapter 19 for defined terms.

Genesis Biomedical Limited

Directors' Declaration

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

In the opinion of the directors:

• $\mathbf{1}$ . The financial statements and notes of the consolidated entity:
  • give a true and fair view of the financial position as at 31 December $(i)$ 2002 the performance for the half-year ended on that date of the consolidated entity; and
  • comply with Accounting Standard AASB 1029 "Interim Financial $(ii)$ Reporting" and the Corporations Regulations 2001; and
• $\overline{2}$ . there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

On behalf of the Board

Emmanuel Correia Director Sydney, 14 March 2003

+ See chapter 19 for defined terms.

ATTACHMENT B - GENESIS BIOMEDICAL LIMITED

Director's Report

Your directors submit the financial report for the half-year ended 31 December 2002.

Director's

The names and details of the directors of the consolidated entity in office during the half year and until the date of this report are as follows. Directors were in office for the entire period unless otherwise stated.

Mr. Rupert J Northcott (Non-Executive Director)

Mr. Northcott is an experienced pharmaceutical and healthcare executive with extensive Australian and International marketing experience. During his career he has launched significant new products in the prescription, OTC and Health Food markets. He has worked for large multinational pharmaceutical companies as a senior marketing executive and has more recently been the chief executive of a medical publishing company, the Managing Director of an UK based electronic information distributor and the Managing Director of Australia's leading medical software company.

Mr. Robert F Gilmour B.Sc.MDchD (Non Executive Director)

Dr Gilmour brings extensive experience in medical design and in orthopaedic, orthotic and prosthetic markets to the Genesis board.

Dr Gilmour has taught anatomy at Monash Medical School and Stanford University, California, where he also worked in the Sports Medicine clinic. Dr Gilmour began work in the area of medical design in 1987 and gained quick success in retail markets. Sales of products designed by him have exceeded US $20m in the US market.

Mr. Emmanuel Correia (Non Executive Director)

Mr Correia is an Associate of the Institute of Chartered Accountants of Australia. Over the last ten years, Mr Correia has held a number of corporate finance positions in Europe and in Australia with international accounting firms and investment banks. Mr Correia works in the areas of corporate structuring and strategy, capital raising and mergers and acquisitions.

Results for the Half Year

The consolidated entity's operating loss after tax for the half year ended on 31 December 2002 was $1,049,793 (2001: loss $1,594,245).

Review of Operations

During the half year, the company has focused on three areas:

• $\overline{2}$ . The sale of the 80% shareholding in Bodyworks Inc.
• 1. Supporting the development and clinical testing of the CellGen product.
• $4.$ Restructuring of the organisation to achieve significant cost reductions.

+ See chapter 19 for defined terms.

State of Affairs

In the opinion of the director there were no significant changes in the state of affairs of the consolidated entity that occurred during the half year under review.

Signed in accordance with a resolution of the director's

Emmanuel Correia Director Sydney, 14 March 2003

+ See chapter 19 for defined terms.

To the members of Genesis Biomedical Limited

Scope

We have reviewed the financial report of Genesis Biomedical Limited in the form of Appendix 4B of the Australian Stock Exchange (ASX) Listing Rules, as set out on pages 1 to 21 including the Directors' Declaration for the half-year ended 31 December 2002, but excluding the following sections:

• $\mathbf{1}$ material factors affecting the revenues and expenses of the consolidated entity for the current period (section 19.2, page 14);
• $2)$ compliance statement (page 16).

The financial report includes the consolidated financial statements of the consolidated entity comprising Genesis Biomedical Limited and the entities it controlled at the end of the half-year or from time to time during the half-vear. The disclosing entity's directors are responsible for the financial report. We have performed an independent review of the financial report in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report is not presented fairly in accordance with Accounting Standard AASB 1029 "Interim Financial Reporting" and other mandatory professional reporting requirements in Australia, statutory requirements and ASX Listing Rules as they relate to Appendix 4B, and in order for the company to lodge the financial report with the Australian Securities and Investments Commission and the ASX.

Our review has been conducted in accordance with Australian Auditing Standards applicable to review engagements. Our review was limited primarily to inquiries of the company's personnel and analytical review procedures applied to financial data. These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than that given in an audit. We have not performed an audit and accordingly, we do not express an audit opinion.

Review Statement

As a result of our review, we have not become aware of any matter that makes us believe that the half-year financial report, as defined in the scope section, of Genesis Biomedical Limited is not in accordance with:

• a) the Corporations Act 2001, including:
  • giving a true and fair view of the consolidated entity's financial position as at 31 December $(i)$ 2002 and of its performance for the half-year ended on that date; and
  • complying with Accounting Standard AASB 1029 "Interim Financial Reporting", and the $(ii)$ Corporations Regulations 2001; and
• $b)$ other mandatory professional reporting requirements in Australia and ASX Listing Rules as they relate to Appendix 4B.

Ernst & Young

Christopher D. George Partner

Sydney 14 March 2003