BABYLON PUMP & POWER LIMITED — AGM Information 2008

Oct 21, 2008

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IM MEDICAL LIMITED ABN 47 009 436 908

Notice of Annual General Meeting

And

Explanatory Memorandum

Wednesday, 19th November 2008

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IM MEDICAL LIMITED

ABN 47 009 436 908

Notice of 2007 Annual General Meeting

Notice is given for the 2008 Annual General Meeting of the Company to be held at Boardroom, Level 12, 484 St Kilda Road, Melbourne, Victoria, 3004 at 9:30am on Wednesday, 19 November 2008.

AGENDA

Business items

1. Financial statements and reports

To receive and consider the financial report of the Company and the reports of the directors and auditors for the year ended 30 June 2008.

2. Adoption of the remuneration report

To adopt the remuneration report for the year ended 30 June 2008

3. Election of directors

(a) Mr Dipak Sanghvi

Mr Dipak Sanghvi was appointed to the board as an independent non executive director with an effective date of 6 December 2007 pursuant to clause 13.4 of the constitution of the Company.

Mr Sanghvi retires as required by clause 13.4 of the constitution of the Company, and being eligible, offers himself for election as a director of the Company.

(b) Dr Leon Massage

Dr Leon Massage was appointed to the board as an independent non executive director with an effective date of 10 December 2007 pursuant to clause 13.4 of the constitution of the Company.

Dr Massage retires as required by clause 13.4 of the constitution of the Company, and being eligible, offers himself for election as a director of the Company.

(c) Dr Ross Walker

Dr Ross Walker was appointed to the board as an independent non executive director with an effective date of 12 June 2008 pursuant to clause 13.4 of the constitution of the Company.

Dr Walker retires as required by clause 13.4 of the constitution of the Company, and being eligible, offers himself for election as a director of the Company.

(d) Mr Glenn Dalton

Mr Glenn Dalton pursuant to clause 13.3 of the constitution of the Company offers himself for election as a director.

4. Ratification of share placement

That the Company ratifies, for the purposes of Listing Rule 7.4, the prior issue of 18,324,230 ordinary shares deemed fully paid at an issue price of $0.0081 per share and 3,664,846 Options at an exercise price of $0.009 with an expiry date of 4 September 2011. The voting exclusion is included in the notes attached.

5. Ratification of issue of shares under Executive Service agreement

That the Company ratifies, for the purposes of Listing Rule 7.4, the prior issue of a termination payment covered in the Executive Service Agreement of former CEO and Executive director, Tommas Bonvino, paid by way of issuance of 10,000,000 fully paid ordinary shares of the Company to Mr Tommas Bonvino .

6. Ratification of issue of shares in lieu of consultancy services

That the Company ratifies, for the purposes of Listing Rule 7.4, the prior issue of 8,384,772 ordinary shares to various allottees as listed in the Explanatory Memorandum for the consulting services supplied.

7. Ratification of issue of shares in lieu of salary

That the Company ratifies, for the purposes of Listing Rule 7.4, the prior issue of 315,586 ordinary shares to Chief Financial Officer, Roman Najdecki in lieu of cash component of salary.

Notice of 2008 Annual General Meeting

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Voting exclusions

In accordance with the ASX Listing Rules, the Company will disregard votes cast:

• (a) on resolution 3(a), by Mr Dipak Sanghvi and any associate of Mr Dipak Sanghvi; and

• (b) on resolution 3(b), by Dr Leon Massage and any associate of Dr Leon Massage;

• (c) on resolution 3(c), by Dr Ross Walker and any associate of Dr Ross Walker;

• (d) on resolution 3(d), by Mr Glenn Dalton and any associate of Mr Glenn Dalton;

• (e) on resolution 4, by Fortrend Securities Pty Ltd, which has participated in the issue and any associate of Fortrend Securities Pty Ltd;

• (f) on resolution 5, by Mr Tommas Bonvino and any associate of Mr Tommas Bonvino;

• (g) on resolution 6, by a person who has participated in the issue and a person who might obtain a benefit except a benefit solely in the capacity of a holder of ordinary shares, if the resolution is passed;

• (h) on resolution 7, by Mr Roman Najdecki and any associate of Mr Roman Najdecki.

However, the Company, need not disregard a vote if:

• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Explanatory Memorandum

The Explanatory Memorandum accompanying this Notice is incorporated into and forms part of this Notice of Annual General Meeting.

Snapshot Date

For the purposes of voting at this meeting, the directors have determined that all shares of the Company that are quoted securities at 7:00pm (Melbourne time) on 17 November 2008 are taken to be held by the persons who are registered as holding them at that time. The entitlement of members to vote at the meeting will be determined by reference to that time.

Questions and Comments

The Chairman will give shareholders a reasonable opportunity to ask questions about or comment on the management of the

Company. The Chairman will also give shareholders a reasonable opportunity to ask the Auditor questions relevant to:

• the conduct of the audit;

• the preparation and content of the audit report;

• the accounting policies adopted by the Company in relation to the preparation of the financial statements; and

• the independence of the Auditor in relation to the conduct of the audit.

Proxies

A shareholder entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy. The proxy may be an individual or a body corporate. A proxy need not be a shareholder of the Company. A shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If a shareholder appoints 2 proxies and the appointment does not specify the proportion or number of the shareholder’s votes each proxy may exercise, each proxy may exercise half of the votes (disregarding fractions).

For an appointment of a proxy to be valid, the form appointing the proxy and, if the form is signed under a power of attorney or other authority, the authority under which the form is signed (or a certified copy of the authority) must be received at the following addresses or by fax at least 48 hours prior to the meeting at which the proxy intends to vote:

IM Medical Limited Share Transfer Registrars Pty Ltd Level 12, 484 St. Kilda Road 770 Canning Highway Melbourne VIC 3004 Applecross WA 6153 Fax: (03) 9860 0999 Fax: (08) 9315 2233

A proxy form accompanies this Notice of Annual General Meeting. Additional proxy forms are available on request from the registered office of the Company or its share registrar.

Bodies Corporate

A body corporate may appoint an individual as a representative to exercise all or any of the powers the body corporate may exercise at meetings of a company’s shareholders or in the capacity of a shareholder’s proxy. The appointment may be a standing one. Unless otherwise specified in the appointment, the representative may exercise, on the body corporate’s behalf, all of the powers that the body could exercise at a meeting or in voting on a resolution.

By order of the Board

Roman Najdecki Company Secretary 15 October 2008

Notice of 2008 Annual General Meeting

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IM MEDICAL LIMITED

ABN 47 009 436 908

Explanatory Memorandum

The following information provides an explanation of each resolution set out in the Notice of Annual General Meeting.

1. Financial statements and reports

As required by section 317 of the Corporations Act 2001, the financial statements and the reports of the directors and auditors will be laid before the meeting. Shareholders have been provided with the Company’s financial statements for the year ended 30 June 2008 in the 2008 Annual Report. There is no requirement in the Corporations Act or the Company’s Constitution for shareholders to vote on, approve or adopt these Reports. Shareholders will have a reasonable opportunity at the meeting to ask questions and make comments on these Reports and on the management of the Company.

The Auditor of the Company is required to attend the meeting and will be available to take shareholders’ questions about the conduct of the audit and the preparation and content of the Auditor’s Report. Shareholders may forward written questions to the Auditor on these matters for response at the meeting. These should be mailed to the Company Secretary, IM Medical Ltd, Level 12 484 St Kilda Road, Melbourne 3004. Questions may be submitted up to 5 business days before the meeting.

The Auditor of the Company will also be available to take shareholders’ questions at the meeting relevant to the accounting policies adopted by the Company in relation to the preparation of the financial statements and the independence of the Auditor in relation to the conduct of the audit.

2. Adoption of remuneration report

The Directors’ Report for the year ended 30 June 2008 contains a Remuneration Report, which sets out the policy for the remuneration of the directors, company secretary and executives. The Corporations Act requires that a resolution be put to the vote that the Remuneration Report be adopted. The Corporations Act expressly provides that the vote is advisory only and does not bind the directors or the Company. However, the Board will take the outcome of the vote into consideration when reviewing the remuneration practices and policies of the Company.

The directors recommend that you vote in favour of this resolution.

3. Election of director

(a) Mr Dipak Sanghvi

Dipak has been president of the Victorian branch of the Pharmacy Guild of Australia since 2005 and is a Fellow of the Australian Institute of Company Directors. He was vice chairman of Amcal for six years. A practicing pharmacist, he is regarded as one of the industry’s foremost leaders.

The directors (with Mr Dipak Sanghvi abstaining) recommend that you vote in favour of this resolution.

(b) Dr Leon Massage

Dr Massage is currently Executive Director of the Greater South Eastern Division of General Practice, chairman of the South Eastern Subdivision of the Victorian branch of the Australian Medical Association and has managed networks of general practice clinics and has created and administered several companies involved in health education and marketing.

He is a practicising GP specialising in weight loss management.

The directors (with Dr Leon Massage abstaining) recommend that you vote in favour of this resolution .

(c) Dr Ross Walker

Dr Walker is a practicing cardiologist as well as a high-profile author, presenter and media commentator on heart disease and preventative health

Dr Walker is a regular contributor on health issues on commercial radio stations and the Nine Network. He is the author of six books, including If I Eat Another Carrot I’ll Crazy, The Cell Factor and The Life Factor. He lectures extensively throughout the world to major corporations and medical groups on health and lifestyle.

The directors (with Dr Ross Walker abstaining) recommend that you vote in favour of this resolution .

Notice of 2008 Annual General Meeting

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(d) Mr Glenn Dalton

Glenn Dalton graduated as a Physiotherapist from the University of Queensland in 1987 and gained a Graduate Diploma in Public Health in 1997. He has worked in the public sector for Queensland Health since graduating in 1987 and also worked in private practice from 1988-1995, both in rural and capital city environments. He was Vice President of the Qld. Branch of the Australian Physiotherapy Association from 1997-1999 and Chairman of the Qld. Branch of the Australian Council of Professions from 1999-2000. As a physiotherapist in the public sector he was involved in cardiac rehabilitation.

Over the last 8 years he has specialised in Information Technology project management and business intelligence, with experience in implementing and supporting enterprise software applications combined with programming and database administration

4. Ratification of share placement

The Company is seeking approval for the issue on 4 September 2008 to Fortrend Securities Pty Ltd of 18,324,230 ordinary shares at a subscription price of $0.0081 per share and 3,664,846 Options at an exercise price of $0.009 with an expiry date of 4 September 2011.

The shares allotted rank pari passu in all respects with the Company’s other issued fully paid shares. The Company applied for and received official quotation on the ASX of the new shares.

This issue relates to a drawdown notice issued to Fortrend Securities Pty Ltd under the Standby Subscription Agreement that was advised to the market on 4 August 2008..

This issue raised $148,426. The Company sought to undertake this placement to fund working capital requirements.

The Board elected to proceed by way of placement to Fortrend Securities Pty Ltd as a $5 million Standby Subscription Agreement was already in place and quick access to funding was important.

Under the 15% Rule a company may, within a 12 month period, issue new ordinary securities which amount to up to 15% of the company’s issued ordinary securities without the need for shareholder approval. The allotment of 18,324,230 shares represented approximately 1.5% of the Company’s issued ordinary securities. Shares issued and subsequently approved under ASX Listing Rule 7.4 are not counted towards the 15% Rule. Shareholder approval is sought under ASX Listing Rule 7.4 to refresh the Company’s capacity to issue ordinary securities which amount to up to 15% of the Company’s issued ordinary securities under ASX Listing Rule 7.1.

The directors unanimously recommend that shareholders vote in favour of this resolution.

5 Ratification of issue of shares under Executive Service agreement

Shareholder ratification is being sought for the issue to Tommas Bonvino of 10,000,000 ordinary shares in fulfilment of a termination condition of his Executive Service Agreement which covered his employment as CEO. Mr Bonvino terminated from the company on 20 July 2008. The shares were issued on 25 July 2008.

Pursuant to Chapter 7 of the ASX Listing Rules, a company may within a 12 month period allot up to 15% of its issued capital (whether by way of shares or options) without the need to seek shareholder approval. The allotment of 10,000,000 shares represented approximately 0.8% of IM Medical’s existing issued capital. The Company requires subsequent shareholder ratification in order to keep its 15% refreshed. The issue was made pursuant to ASX Listing Rule 7.4 and ratification is being sought to freshen up the Company’s capacity under ASX Listing Rule 7.1. The 10,000,000 ordinary shares, as a termination payment, related to the period after Tommas Bonvino resigned as a director and hence does not require approval under ASX Listing Rule 10.11.

The directors recommend that you vote in favour of this resolution .

6 Ratification of issue of shares in lieu of consultancy services

This resolution seeks shareholder approval to ratify the issue of shares to the following consultants:

1. Dr David Eccleston in recognition of the medical services that have been provided for the year ended 30 June 2008. The Company has issued 4,884,772 fully paid ordinary shares of the Company in lieu of $104,067 in services provided. The shares were issued to JCS Investment Group Pty Ltd, an entity nominated by Dr Eccleston.

2. Fausto Bizziri as payment for securing at least one major hospital in Italy to conduct a pilot of Intelliheart tests. The Company issued 2,000,000 fully paid ordinary shares of the Company at an issue price of $0.04, giving the issue a face value of $80,000. Upon receipt of written commitment by that hospital, the shares were issued on 29 November 2007. Further discussions with hospital management have led to the abandonment of these trials due to excessive costs of the pilot.

Notice of 2008 Annual General Meeting

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1. Brian Hardley as payment for consulting services in relation to Sigma discussions and negotiations. Mr Hardley is an owner of a number of Sigma pharmacies and has continual involvement with the Sigma management. His consultancy was instrumental in IM Medical finally achieving a distribution agreement with Sigma Pharmaceuticals. On 12 June 2008, he was issued 1,500,000 fully paid ordinary shares of the Company at an issue price of $0.022, giving the issue a face value of $33,000.

The Company believes that the services provided to the Company have been of a high standard and the willingness of the consultants to forgo monetary compensation for their services and in lieu thereof, to receive equity in the Company is beneficial to the Company and has provided additional working capital that would not otherwise have been available.

Pursuant to Chapter 7 of the ASX Listing Rules, a company may within a 12 month period allot up to 15% of its issued capital (whether by way of shares or options) without the need to seek shareholder approval. The allotment of 8,384,772 shares represents approximately 0.7% of IM Medical’s existing issued capital. The Company requires subsequent shareholder ratification in order to keep its 15% refreshed. The issue was made pursuant to ASX Listing Rule 7.4 and ratification is being sought to freshen up the Company’s capacity under ASX Listing Rule 7.1.

No funds are being raised from the issue of these securities. The shares issued rank pari passu in all respects with the Company’s other issued fully paid shares.

The directors recommend that you vote in favour of this resolution .

7 Ratification of issue of shares in lieu of salary

Shareholder ratification is being sought for the issue to Roman Najdecki, Chief Financial Officer, of 315,586 ordinary shares in lieu of part of his cash salary. On 5 November 2007, the Company issued 315,586 fully paid ordinary shares of the Company at an issue price of $0.026, giving the issue a face value of $8,208.

The Company believes that the willingness of the Chief Financial Officer to forgo cash payment for his salary and in lieu thereof, to receive equity in the Company is beneficial to the Company and has provided additional working capital that would not otherwise have been available.

Pursuant to Chapter 7 of the ASX Listing Rules, a company may within a 12 month period allot up to 15% of its issued capital (whether by way of shares or options) without the need to seek shareholder approval. The allotment of 315,586 shares represented less than 0.1% of IM Medical’s existing issued capital. The Company requires subsequent shareholder ratification in order to keep its 15% refreshed. The issue was made pursuant to ASX Listing Rule 7.4 and ratification is being sought to freshen up the Company’s capacity under ASX Listing Rule 7.1.

The directors recommend that you vote in favour of this resolution .

Notice of 2008 Annual General Meeting

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PROXY FORM

Shareholder’s name and address

Appointment of proxy

I/We being a member/s of IM Medical Limited and entitled to attend and vote hereby appoint

The Chairman of OR If you are not appointing the Chairman of the the meeting Meeting as your proxy, please write here the full (mark with an “X”) name of the individual or body corporate (excluding the registered securityholder) you are appointing as your proxy.

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the Annual General Meeting of IM Medical Limited to be held at Level 12, 484 St Kilda Road, Melbourne, Victoria on Wednesday, 19 November 2008 at 9.30am and at any adjournment of that meeting.

Important: for items 3(a) and 3(b) below

If the Chairman of the Meeting is your nominated proxy, or may be appointed by default, and you have not directed your proxy how to vote on items 3(a), 3(b), 3(c) below, please place a mark in this box. By marking this box, you acknowledge that the Chairman of the Meeting may exercise your proxy even if he has an interest in the outcome of those items and that votes cast by him, other than proxy holder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy bow to vote, the Chairman of the Meeting will not cast your votes on items 3(a), 3(b), 3(c) and your vote will not be counted in computing the required majority if a poll is called on these items. The Chairman of the Meeting intends to vote undirected proxies in favour of each of these items.

Voting directions to your proxy – please mark “X” to indicate your directions

			For		Against		Abstain
Item	2	Adoption of remuneration report for year ended 30 June
		2008
Item	3(a)	Election of director – Mr Dipak Sanghvi
Item	3(b)	Election of director – Dr Leon Massage
Item	3(c)	Election of director – Dr Ross Walker
Item	3(d)	Election of director – Mr Glenn Dalton
Item	4	Ratification of share placement
Item	5	Ratification of share issue under Executive Service
		Agreement
Item	6	Ratification of issue of shares in lieu of consultancy
Item	7	Ratification of issue of shares in lieu of salary

In addition to the intention advised above, the Chairman of the Meeting intends to vote undirected proxies in favour of each of the other items of business. If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

PLEASE SIGN HERE

This section must be signed in accordance with the instructions overleaf to enable you directions to be implemented.

Individual or securityholder 1	Securityholder 2	Securityholder 3
Sole Director and Sole Company	Director	Director/Company Secretary
Secretary
Contact name	Contact daytime telephone	Date

Notice of 2008 Annual General Meeting

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Instructions on how to complete the Proxy Form

Your address

Please insert your name and address as it appears on the company’s share register. Please note that you cannot change ownership of your securities using this form.

Appointment of proxy

If you wish to appoint the Chairman of the Meeting as your proxy, please mark the box. If the individual or body corporate you wish to appoint as your proxy is someone other than the Chairman of the Meeting, please write the full name of that individual or body corporate in the space provided. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a securityholder of the company.

Vote on Items of Business

You may direct your proxy how to vote by placing a mark in one of the boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a porion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item, your vote on that item will be invalid.

Appointment of a second proxy

You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company’s share registry or you may make a copy of this form.

To appoint a second proxy, you must:

• (a) on each of the first Proxy Form and the second Proxy Form, state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.

• (b) Return both forms together in the same envelope.

Signing instructions

You must sign this form as follows in the spaces provided:

• (a) Individual

Where the holding is in one name, the holder must sign

• (b) Joint holding

Where the holding is in more than one name, all of the securityholders should sign

• (c) Power of Attorney

To sign under Power of Attorney, you must have already lodged this document with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

• (d) Companies

Where the company is a sole director who is also the sole company secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a company secretary, a sole director can also sign alone. Otherwise, this form must be signed by a director jointly with either another director or the company secretary. Please indicate the office held by signing in the appropriate place.

Lodgement of Proxy Form

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below no later than 48 hours before the commencement of the meeting at 9:30 am on Wednesday, 19 November 2008. Any Proxy Form received after that time will not be valid for the scheduled meeting.

• (a) In person

  • Registered office: IM Medical Limited, Level 12, 484 St Kilda Road, Melbourne, Victoria, 3004, Australia

  • Share registry: Security Transfer Registrars Pty Ltd, 770 Canning Highway, Applecross, WA, 6153, Australia

• (b) By mail

  • Registered office: IM Medical Limited, Level 12, 484 St Kilda Road, Melbourne, Victoria, 3004, Australia

  • Share registry: Security Transfer Registrars Pty Ltd, PO Box 535, Applecross, WA, 6953, Australia

• (c) By fax

  • Registered office: +61 3 9860 0999

  • Share registry: +61 8 9315 2233

Notice of 2008 Annual General Meeting

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