BABYLON PUMP & POWER LIMITED - Capital/Financing Update 2011

IM MEDICAL LIMITED ACN 009 436 908

PROSPECTUS

For the Offer of up to 1,000 Shares each at an issue price of 0.5 cents together with one free attaching New Option for each Share subscribed for.

THIS PROSPECTUS IS BEING ISSUED UNDER SECTION 708A(11) OF THE CORPORATIONS ACT FOR THE PURPOSE OF FACILITATING SECONDARY TRADING OF THE PLACEMENT SECURITIES

AND

THIS PROSPECTUS IS BEING ISSUED TO FACILITATE SECONDARY TRADING OF THE UNDERLYING SECURITIES TO BE ISSUED UPON EXERCISE OF THE PLACEMENT OPTIONS, PURSUANT TO ASIC CLASS ORDER C04/671

THIS OFFER CLOSES AT 5.00PM AEST ON 16 NOVEMBER 2011

VALID ACCEPTANCES MUST BE RECEIVED BEFORE THAT TIME.

Please read the instructions in this Prospectus and on the accompanying Application Form prior to applying for Shares under the Offer.

THIS IS AN IMPORTANT DOCUMENT AND REQUIRES YOUR IMMEDIATE ATTENTION. IT SHOULD BE READ IN ITS ENTIRETY. THE SECURITIES OFFERED BY THIS PROSPECTUS ARE OF A SPECULATIVE NATURE. IF YOU ARE IN DOUBT ABOUT WHAT TO DO, YOU SHOULD CONSULT YOUR PROFESSIONAL ADVISER WITHOUT DELAY.

IMPORTANT INFORMATION

This Prospectus is dated 14 November 2011 and was lodged with ASIC on that date. ASIC and ASX take no responsibility for the contents of this Prospectus.

No Securities will be issued on the basis of this Prospectus any later than 13 months after the date of this Prospectus (being the expiry date of this Prospectus).

A copy of this Prospectus is available for inspection at the registered office of the Company at Level 1, 117 Church Street, Hawthorn, Victoria, during normal business hours. The Company will also provide copies of other documents on request (see Section 4.4).

The Company will apply to ASX within 7 days of the date of this Prospectus for Official Quotation by ASX of the Shares and New Options offered by this Prospectus.

The Securities offered by this Prospectus should be considered speculative. Please refer to Section 2 for details relating to investment risks.

The Prospectus will be made available in electronic form. Persons having received a copy of this Prospectus in its electronic form may obtain an additional paper copy of this Prospectus and the Application Form (free of charge) from the Company's principal place of business by contacting the Company. The Offer contemplated by this Prospectus is only available in electronic form to persons receiving an electronic version of this Prospectus within Australia.

Applications for Securities will only be accepted on an Application Form which is attached to, or provided by the Company with a copy of this Prospectus either in paper or electronic form. The Corporations Act prohibits any person from passing on to another person an Application Form unless it is accompanied by a complete and unaltered copy of this Prospectus.

Revenues and expenditures disclosed in this Prospectus are recognised exclusive of the amount of goods and services tax, unless otherwise disclosed.

No person is authorised to give any information or to make any representation in connection with the Offer which is not contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with the Offer.

No action has been taken to permit the offer of Shares under this Prospectus in any jurisdiction other than Australia.

The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and therefore persons into whose possession this document comes should seek advice on and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of those laws. This Prospectus does not constitute an offer of Shares in any jurisdiction where, or to any person to whom, it would be unlawful to issue this Prospectus.

This document is important and should be read in its entirety before deciding to participate in the Offer. This does not take into account the investment objectives, financial or taxation or particular needs of any Applicant. Before making any investment in the Company, each Applicant should consider whether such an investment is appropriate to his/her particular needs, and considering their individual risk profile for speculative investments, investment objectives and individual financial circumstances. Each Applicant should consult his/her stockbroker, solicitor, accountant or other professional adviser without delay. Some of the risk factors that should be considered by potential investors are outlined in Section 2.

By returning an Application Form, you acknowledge that you have received and read this Prospectus and you have acted in accordance with the terms of the Offer detailed in this Prospectus.

Definitions of certain terms used in this Prospectus are contained in Section 6. All references to currency are to Australian dollars and all references to time are to WST, unless otherwise indicated.

CORPORATE DIRECTORY

Directors

Mr Nigel Blaze Mr Paul Quarrell Dr Mark Scott Mr Richard Wadley

Share Registry*

Security Transfer Registrars Pty Limited 770 Canning Highway APPLECROSS WA 6153

Telephone: +61 (0)8 9315 2333 Facsimile: +61 (0)8 9315 2233

Company Secretary

Mr Richard Wadley

Registered Office

Level 1, 117 Church Street, HAWTHORN VIC 3122 Telephone: +61 (0)3 9860 0904 Facsimile: +61 (0)3 9860 0999

Solicitors to the Company

GTP Legal Level 1, 28 Ord Street WEST PERTH WA 6005

ASX Code: IMI

Website: www.immedical.com.au

*This entity has not been involved in the preparation of this Prospectus and has not consented to being named in this Prospectus. Its name is included for information purposes only.

INDEX

	INDEX
Clause	Page No
IMPORTANT INFORMATION ......................................................................................... 2
CORPORATE DIRECTORY ............................................................................................ 3
1.	Details of the Offer ............................................................................................ 5
2.	Risk Factors .................................................................................................... 10
3.	Financial Information ...................................................................................... 14
4.	Additional information .................................................................................... 19
5.	Authorisation................................................................................................... 25
6.	Glossary of Terms .......................................................................................... 26

Page No

1. Details of the Offer

1.1 The Offer

The Company is offering pursuant to this Prospectus 1,000 Shares each at an issue price of 0.5 cents, together with one free attaching New Option (exercisable at 1 cent per Share on or before 30 September 2016) for each Share subscribed for ( Offer ).

Refer to Section 4.1 for a summary of the rights attaching to the Shares and Schedule 1 for the terms and conditions of the New Options.

1.2 Purpose of the Offer

The Company recently completed a placement of 54,500,000 Shares each at an issue price of 0.5 cents ( Placement Shares ), together with one free attaching New Option (exercisable at 1 cent per Share on or before 30 September 2016) for each Share subscribed for ( Placement Option ) to raise $272,500 (before costs) ( Placement ). The Placement Shares and Placement Options (together the Placement Securities ) were issued to either "Sophisticated Investors" or "Professional Investors" within the meaning of sections 708(8) and 708(11) of the Corporations Act.

This Prospectus has been issued to facilitate secondary trading of the Placement Securities as they were issued without disclosure to investors under Part 6D.2 of the Corporations Act. A prospectus is required under the Corporations Act to enable persons who were issued Placement Securities to on-sell those Shares and Options within 12 months of their issue. The Company did not issue the Placement Securities with the purpose of the persons to whom they were issued selling or transferring their Shares and/or Options, or granting, issuing or transferring interests in those Shares and/or Options within 12 months of the issue but this Prospectus provides them the ability to do so should they wish.

This Prospectus has also been issued to facilitate secondary trading of the underlying securities to be issued upon exercise of the Placement Options. Issuing the Placement Options under this Prospectus will enable persons who are issued the Placement Options to on-sell the Shares issued on exercise of the Placement Options pursuant to ASIC Class Order C04/671.

Accordingly, the purpose of this Prospectus is to:

(a) make the Offer;
(b) ensure that the on-sale of the Placement Securities does not breach Section 707(3) of the Corporations Act by relying on the exemption to the secondary trading provisions in Section 708A(11) of the Corporations Act; and
(c) ensure that the on-sale of the underlying securities to be issued upon exercise of the Placement Options is in accordance with ASIC Class Order C04/671.

1.3 Restructure and Recapitalisation of the Company

As set out in the Notice of Annual General Meeting dispatched by the Company to ASX on 24 October 2011 ( Notice of Meeting ), the Company proposes to dispose of 100% of its interest in the Radiology Business to Capitol Health in consideration for:

(a) 45,559,021 ordinary fully paid shares in the capital of Capitol Health; and
(b) up to an aggregate of $600,000 in deferred cash payments depending upon the postsale financial performance of the Radiology Business,

( Radiology Business Sale ) subject to the terms set out in the Notice of Meeting.

On 7 November 2011, the Company announced completion of an Entitlement Issue on the basis of 6 Shares for every 1 Share held on the record date, together with one free attaching New Option for each Share subscribed for to raise $3.3 million.

The $750,000 converting loan entered into by the Company in April 2011 has been repaid by the Company, together with a 20% redemption fee and interest accrued at 10% per annum from the date of drawdown on 15 April 2011.

1.4 Future Direction of the Company

Now that the Company has been recapitalised, the Company intends to investigate acquisition and investment opportunities to restore Shareholder value. The Directors expect to consider opportunities across a range of sectors which may take the Company away from its medical services focus.

Following completion of the Offer, in the first instance the Directors will seek to employ a wellcredentialed Chief Executive Officer ( CEO ) to lead the search for investment opportunities and to lead the rebuilding of the Company. Subject to confirmation regarding Shareholder approval for the sale of the Radiology Business in accordance with Listing Rule 11.2, the Directors will investigate the recruitment of a CEO with resource sector expertise, given that sector is a current focus for investor interest.

If the Company acquires a business or assets or otherwise changes its activities in a way which requires the Company to comply with Chapters 1 and 2 of the Listing Rules, the Company will undertake a consolidation of its capital to comply with Listing Rule 2.1 condition 2.

In the event Shareholders do not approve to sale of the Radiology Business, the Company expects that the management arrangements with Capitol Health (refer to Section 4.2 for further details) will terminate, and the Company’s focus will turn to recruitment of management with the skills and experience to lead the Radiology Business and to try to return it to profitability.

The Directors are confident that once recapitalised, the Company will be capable of attracting the calibre of CEO required to successfully rebuild the Company. At this stage no investment commitments have been made and no specific opportunities have been identified.

The Board will review its composition as opportunities are identified to ensure the Board has appropriate skills and experience to implement the Company’s revitalisation strategy going forward.

1.5 Opening and Closing Dates

The Company will accept Application Forms until 5.00pm AEST on the Closing Date, being 16 November 2011, or such other date as the Directors in their absolute discretion shall determine, subject to the requirements of the Listing Rules.

1.6 Minimum subscription

There is no minimum amount sought to be raised by the Offer. If the Offer is fully subscribed, the Offer will raise approximately $5.00 (before costs of the Offer). The Company will proceed to allot the Shares and New Options if a lesser amount is raised and irrespective of the amount raised. The Company intends to allot the Shares and Options progressively as Applications are received and in any event, will allot all Shares as soon as possible after the Closing Date.

There is no provision for oversubscriptions.

1.7 Application Forms

If you wish to subscribe for Securities pursuant to the Offer, you should complete and return the Application Form, which will be provided with a copy of this Prospectus by the Company at the Board's discretion, in accordance with the instructions in the Application Form. Completed Application Forms and Application Monies must be received by the Company prior to 5.00pm AEST on the Closing Date. Cheques must be made payable to “IM Medical Limited - Subscription Account” and crossed “Not Negotiable”. All cheques must be in Australian currency. Application Forms must be received by the Company prior to 5.00pm (AEST) on the Closing Date. Application Forms should be mailed or delivered to IM Medical Limited Level 1, 117 Church Street, Hawthorn, VIC 3122.

If you are in doubt as to the course of action, you should consult your professional advisor.

Acceptance of a completed Application Form by the Company creates a legally binding contract between the Applicant and the Company for the number of Securities accepted by the Company. The Application Form does not need to be signed to be a binding Acceptance of Securities.

If the Application Form is not completed correctly it may still be treated as valid. The Directors’ decision as to whether to treat the Acceptance as valid and how to construe, amend or complete the Application Form is final.

1.8 Issue and dispatch

The Company may issue the Securities progressively as Applications are received.

Security holder statements will be dispatched, as soon as possible after the issue of the Securities.

It is the responsibility of Applicants to determine their allocation prior to trading in the Shares. Applicants who sell Shares before they receive their holding statements will do so at their own risk.

1.9 Application Monies held on trust

All Application Monies received for the Shares will be held in trust in a bank account maintained solely for the purpose of depositing Application Monies received pursuant to this Prospectus until the Shares are issued. All Application Monies will be returned (without interest) if the Shares are not issued.

1.10 ASX quotation

Application will be made to ASX no later than 7 days after the date of this Prospectus for the Official Quotation of the Shares and New Options. If permission is not granted by ASX for the Official Quotation of the Shares and New Options offered by this Prospectus within 3 months after the date of this Prospectus (or such period as ASX allows), the Company will repay, as soon as practicable, without interest, all Application Monies received pursuant to this Prospectus.

1.11 CHESS

The Company participates in the Clearing House Electronic Subregister System, known as CHESS. ASTC, a wholly owned subsidiary of ASX, operates CHESS in accordance with the Listing Rules and Securities Clearing House Business Rules.

Under CHESS, Applicants will not receive a certificate but will receive a statement of their holding of Shares.

If you are broker sponsored, ASTC will send you a CHESS statement.

The CHESS statement will set out the number of Shares issued under this Prospectus, provide details of your holder identification number, the participant identification number of the sponsor and the terms and conditions applicable to the Shares.

If you are registered on the Issuer Sponsored subregister, your statement will be dispatched by Security Transfer Registrars and will contain the number of Shares issued to you under this Prospectus and your security holder reference number.

A CHESS statement or Issuer Sponsored statement will routinely be sent to Shareholders at the end of any calendar month during which the balance of their Shareholding changes. Shareholders may request a statement at any other time, however, a charge may be made for additional statements.

1.12 Residents Outside Australia

This Prospectus, and an accompanying Application Form, do not, and is not intended to, constitute an offer of Securities in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus or the Securities. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

1.13 Risk factors

An investment in Shares should be regarded as speculative. In addition to the general risks applicable to all investments in listed securities, there are specific risks associated with an investment in the Company which are in Section 2.

1.14 Taxation implications

The Directors do not consider it appropriate to give Shareholders advice regarding the taxation consequences of subscribing for Shares under this Prospectus.

The Company, its advisers and its officers do not accept any responsibility or liability for any such taxation consequences to Shareholders. As a result, Shareholders should consult their professional tax adviser in connection with subscribing for Shares under this Prospectus.

1.15 Major activities and financial information

A summary of the major activities and financial information relating to the Company for the financial year ended 30 June 2011 is in the Annual Report which was lodged with ASX on 6 October 2011 and is available at www.asx.com.au.

A summary of activities relating to the Company for the quarter ended 30 September 2011 is in the Quarterly Report, lodged with ASX on 28 October 2011.

The Company's continuous disclosure notices (i.e. ASX announcements) since 6 October 2011 are listed in Section 4.4.

Copies of these documents are available free of charge from the Company. Directors strongly recommend that Shareholders review these and all other announcements prior to deciding whether or not to participate in the Offer.

1.16 Enquiries concerning Prospectus

Enquiries relating to this Prospectus should be directed to the Company Secretary by telephone on 03 9860 0904.

1.17 Privacy

The Company collects information about each Applicant provided on an Application Form for the purposes of processing the Acceptance and, if the Acceptance is successful, to administer the Applicant’s security holding in the Company.

By submitting an Application Form, each Applicant agrees that the Company may use the information provided by an Applicant on the Application Form for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the share registry, the Company’s related bodies corporate, agents, contractors and third party service providers, including mailing houses and professional advisers, and to ASX and regulatory authorities.

If you do not provide the information required on the Application Form, the Company may not be able to accept or process your Acceptance.

An Applicant has an entitlement to gain access to the information that the Company holds about that person subject to certain exemptions under law. A fee may be charged for access. Access requests must be made in writing to the Company’s registered office.

2. Risk Factors

Activities in the Company and its controlled entities, as in any business, are subject to risks, which may impact on the Company’s future performance. The Company and its controlled entities have implemented appropriate strategies, actions, systems and safeguards for known risks, however, some are outside its control.

The Directors consider that the following summary, which is not exhaustive, represents some of the major risk factors which Shareholders need to be aware of in evaluating the Company’s business and risks of increasing your investment in the Company. Shareholders should carefully consider the following factors in addition to the other information presented in this Prospectus.

The principal risks include, but are not limited to, the following:

2.1 Specific Risks associated with the Company

(a) Failure to Complete the Radiology Business Sale

Completion of the Radiology Business Sale is subject to:

(i) Shareholder approval;
(ii) the parties to the agreement for Radiology Business Sale obtaining ASX and any other regulatory approvals as may be required in order to effect the sale of the Radiology Business; and
(iii) there being no prescribed occurrences in respect to Capitol Health, which include, amongst other things, changes to the capital structure of Capitol Health, disposal of a substantial part of its business or property or any insolvency events occurring.

There is a risk that the above conditions may not be met and that the Radiology Business Sale may not be completed. In addition, completion of the Radiology Business Sale is also dependent on Capitol Health meeting its obligations under the applicable sale agreement. If, for whatever reason, this does not occur there is no guarantee that the Company can enforce its contractual rights.

If the Radiology Business Sale does not complete, the Company will retain ownership of the Radiology Business. As outlined in Section 3.3, the Radiology Business is currently making a loss and the Company may not have sufficient funds to support the Radiology Business. Therefore if the Radiology Business Sale does not occur there is a risk that the solvency of the Company may be jeopardised.

The Company has exercised an option to renew a lease for one of its major premises. The exercise is disputed by the landlord. Capitol Health is entitled to reduce the number of shares issued in consideration for the purchase of the Radiology Business by 20% if the renewal is not effective. The Company has received advice that the exercise is effective.

(b) Negative Cash Operating Position

As at the date of this Prospectus the Company is operating on a negative cash operating basis, that is, its operating expenses exceed its revenues. The Company may be unable to enter into new contracts (and meet the requisite deliverables under such contracts) or identify new business opportunities (refer to Section 2.1(c) below) whilst still operating the cash flow negative operating business. As such it is possible

that the Company's cash flow position will remain negative and its financial position may thus worsen. A failure by the Company to successfully mitigate the risk of this occurring may cause the Company’s financial position to deteriorate and affect the Company's ability to operate as a going concern.

(c) New Business Opportunities

Following the sale of the Radiology Business, the sole business of the Company will be the "Intelliheart" business which is currently loss making and under review by the Directors.

The Company intends to focus on pursuing new business opportunities, including opportunities in sectors other than the healthcare services industry in which it currently operates. Should a suitable new business opportunity be identified, it will then need to be assessed for its technical, legal and commercial suitability.

There can be no guarantee that any proposed acquisition of a new business or project will be completed or will be successful. The acquisition of new business opportunities (whether completed or not) may also require payment of monies (as a deposit or exclusivity fee) after only limited due diligence and prior to the completion of comprehensive due diligence.

If any proposed acquisition is not completed, monies already advanced may not be recoverable. Furthermore, notwithstanding that an acquisition may proceed upon the completion of due diligence, the risks associated with operating a new business or project will also apply. Any such new business or project will also be subject to the risks associated with the industry in which they operate.

(d) Negligence and Insurances

As a provider of healthcare and medical services, the Company is exposed to claims of medical negligence. Insofar as it is possible, the Company seeks to limit or exclude liability in its contracts and to maintain professional insurance to cover liabilities in the event of a claim for negligence. However, the Company’s insurance and contractual arrangements may not adequately protect it against liability for all losses. Also, the Company may not be able to maintain insurance at levels of risk coverage or with deductibles that it considers appropriate or guarantee that every contract contains and has properly incorporated adequate limitations on liability. Any losses falling outside the scope of insurance or contractual limits may adversely affect the Company’s earnings and cash flows.

(e) Future Capital Requirements

The Company may have a need to raise funds in the future (whether by way of debt or equity) even if the Radiology Business Sale and the Offer are completed.

The ability of the Company to meet this future requirement, should it arise, will be dependent on the Company’s continued access to credit markets, funding sources and financing facilities.

Recent developments in global financial markets have adversely affected the liquidity of global credit markets, which has resulted in an increase in the cost of funding and in certain cases a reduction in the availability of funding sources throughout global markets. Access to credit markets on less favourable terms will impact the Company’s access to financing facilities should the need arise, and may have a material adverse effect on the Company’s future financial performance and position.

Any additional equity financing may be dilutive to the Company’s existing Shareholders and any debt financing, if available, may involve restrictive covenants,

which limit the Company’s operations and business strategy. The Company’s failure to raise capital if, and when, needed could delay or suspend the Company’s business strategy and could have a material adverse affect on the Company’s activities and its solvency.

2.2 General Risks

(a) General Economic Conditions

The operating and financial performance of the Company is influenced by a variety of general economic and business conditions, including levels of consumer spending, inflation, interest rates, access to debt and capital markets, international economic conditions, significant acts of terrorism, hostilities or war or natural disasters, and government fiscal, monetary and regulatory policies. A prolonged deterioration in general economic condition, including a decrease in commodity demand, may have an adverse impact on the Company’s business or financial condition. No guarantee can be made that the Company’s market performance will not be adversely affected by any such market fluctuations or factor.

(b) Global Credit and Investment Markets

Global credit, commodity and investment markets have recently experienced a high degree of uncertainty and volatility. The factors which have led to this situation have been outside the control of the Company and may continue for some time resulting in continued volatility and uncertainty in world stock markets (including ASX). This may impact the price at which the Shares trade regardless of operating performance and affect the Company's ability to raise additional equity and/or debt to achieve its objectives, if required.

(c) Securityholders' Margin Lending arrangements

Securityholders may, from time to time, enter into margin lending arrangements for the purchase of Securities in the Company on terms and conditions not known to the Company.

The Company is unable to predict the risk of financial failure or default by a Securityholder who has entered into such an arrangement or insolvency or other managerial failure by any party who may have provided such an arrangement to the Securityholder. Such an event may lead to parcels of Securities being made available for sale which may impact negatively on the price of the Securities.

(d) Taxation and government regulations

Changes in taxation and government legislation in a range of areas (for example, the Corporations Act, accounting standards, and taxation law) can have a significant influence on the outlook for companies and the returns to investors.

The recoupment of taxation losses accrued by the Company from any future revenues is subject to the satisfaction of tests outlined in taxation legislation or regulations in the jurisdictions in which the Company operates. There is no guarantee that the Company will satisfy all of these requirements at the time it seeks to recoup its tax losses which may impact on the financial performance and cash flows of the Company.

(e) Securities Investment

Applicants should be aware that there are risks associated with any securities investment. The prices at which Shares trade may be above or below the issue or acquisition price, and may fluctuate in response to a number of factors.

Furthermore, the stock market, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies. These factors may materially affect the market price of the Shares, regardless of the Company’s operational performance.

(f) Share market conditions

Share market conditions may affect the value of Shares regardless of the Company’s operating performance. Share market conditions are affected by many factors such as:

(i) general economic outlook;
(ii) interest rates and inflation rates;
(iii) changes in investor sentiment toward particular market sectors;
(iv) the demand for, and supply of, capital; and
(v) terrorism or other hostilities.

The market price of the Shares may fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company, or any return on an investment in the Company.

2.3 Investment Speculative

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Shares offered under this Prospectus. Therefore, the Shares to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares. Potential investors should consider that the investment in the Company is speculative and should consult their professional adviser before deciding whether to apply for Shares pursuant to this Prospectus.

3. Financial Information

3.1 Capital Structure on completion of the Offer

Balance at the date of this Prospectus To be issued under the Offer Balance after the Offer (if fully subscribed)	Number of Shares Number of Listed Options Number of Unlisted Options 828,364,092(1) 717,814,136(2) 94,563,953(3) 1,000 1,000
	828,365,092 717,815,136 94,563,953

(1) This number includes the 54,500,000 Placement Shares issued on 11 November 2011.

(2) This number includes the 54,500,000 Placement Options issued on 11 November 2011.

(3) Unlisted Options with varying exercise prices and expiry dates. Refer to the Appendix 3B lodged by the Company with ASIC on 22 December 2010 for further details.

3.2 Pro forma statement of financial position

Current Assets Cash and cash equivalents Assets classified as held for sale Investments Prepayments Trade and other receivables Total current assets Non Current Assets Plant and equipment Receivables Total non current assets Total assets Current liabilities Trade and other payables Other financial liabilities Provisions Liabilities classified as held for sale Convertible note Total current liabilities	30 June 2011 (Pro- forma) $ 30 June 2011 $ 2,646,453 382,598 - 2,093,482 1,594,600 - 50,621 41,553 50,621 41,553
	4,333,227 2,568,254
	168,630 217,454 168,630 -
	386,084 168,630
	4,719,311 2,736,884
	1,081,236 951,236 2,457 2,457 5,753 5,753 - 281,428 - 915,617
	1,089,446 2,156,491

Non current liabilities Other financial liabilities - -

Total non current liabilities Total liabilities Net assets Equity Issued capital Reserve Accumulated losses Total equity Net tangible assets per security*	30 June 2011 (Pro- forma) $ 30 June 2011 $
	- -
	1,089,446 2,156,491

	3,629,865 580,393
	24,054,197 20,847,808 - - (20,424,332) (20,267,415)
	3,629,865 580,393
	$0.004 $0.005

Adjusted for the 1 for 50 share Consolidation completed on 25 August 2011.

Basis of Preparation

The above pro forma statement of financial position has been prepared in accordance with the draft ASIC Guide to Disclosing Pro Forma Financial Information (issued July 2005).

The statement of financial position as at 30 June 2011 is in the process of being audited by the Company’s auditors, and has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business.

The statements of financial position as at 30 June 2011 have been prepared to provide Shareholders with information on the assets and liabilities of the Company and pro-forma assets and liabilities of the Company. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

The pro forma statement of financial position is based on the unaudited statement of financial position as at 30 June 2011 and has then been adjusted to reflect the following material transactions, assuming Shareholder approval is obtained for the Offer and the Radiology Business Sale to Capitol Health:

Pro-forma Adjustments – Maximum Subscription

Receipt of proceeds of the Offer net of capital raising costs of $2,950,238 (gross proceeds of the Offer are $3,316,498 and capital raising costs associated with both the Convertible Loans and the Offer are $366,260). This is on the assumption maximum entitlements are taken up under the Offer.
Repayment of the $750,000 Converting Loan including a redemption payment of $150,000 and accrued interest at 10% p.a. from 15 April 2011 to 8 November 2011 (estimated completion date of Offer) of $42,534.
Accrued other related costs of $130,000. Included in this figure is a $100,000 management fee payable by the company to Capitol Health on completion of the Radiology Business Sale.
Completion of the Radiology Business Sale to Capitol Health, resulting in 45,559,021 shares in Capitol Health held as an investment asset pending an in specie distribution

to Shareholders of the Company. Reclassification of assets held for sale $2,093,482 and liabilities held for sale $281,428 as investment of $1,594,600 (45,559,021 Capitol Health ordinary shares at 3.5 cents per share), and extinguishment of liabilities held for sale of $281,428. Receivables of $217,454 represent potential bonus payments in relation to the Radiology Business Sale amounting to up to $600,000 adjusted by the probability of receiving the bonuses and by a discount factor representing the time value over the period until the payments may be due. The value of investments and assets classified as held for sale is based on a share price for Capitol Health of 3.5 cents per share. Any change in the Capitol Health share price will affect the value of these assets.

Receipt of proceeds of placement net of capital raising costs of $256,150 (gross proceeds of the placement are $272,500 and capital raising costs are $16,350).

3.3 Financial Performance of the Radiology Business

The Radiology Business was acquired by the Company from companies associated with a director, Dr Mark Scott, following approval by Company shareholders in July 2010 and completion of the acquisition in August 2010. The Radiology Business is held by the Company’s wholly owned subsidiary, eHealth Imaging Pty Ltd.

Since being acquired by the Company, the trading performance of the Radiology Business has not met expectations and was a significant contributor to the net loss of $4.07 million recorded by the Company in the year to 30 June 2011.

Due to the underperformance of the eHealth Imaging Pty Ltd subsidiary, on 25 March 2011 the Directors of the Company entered into an agreement with Capitol Health to acquire the Radiology Business of the Company, subject to shareholder approval. Pending completion of the sale of the Radiology Business, the Company entered into a management agreement with Capitol Health whereby Capitol Health pays the costs and takes the operating risks relating to the Radiology Business, and receives the operating revenues (refer to Section 4.2 for further information).

The table below shows the financial performance of the Company’s Radiology Business for the period from 1 January 2011 to 30 September 2011.

Radiology Business Divisional Income Statement

. Revenue Radiology Interest income Total revenue Direct Costs Direct personnel costs Other direct costs Total direct costs Gross profit/(loss)	1 Jan 2011 to 31 March 20111 1 April 2011 to 30 September 20112 Total $ $ $ $1,514,758 $3,157,403 $4,672,161 $558 $0 $558
	$1,515,316 $3,157,403 $4,672,719
	$898,572 $2,269,978  $55,530 $271,362 $326,892
	$954,102 $2,541,340 
	$561,214 $616,063 $1,177,277

Indirect Costs Corporate administration Office occupancy Depreciation & Amortisation Consultancy expenses Equipment costs Interest expense Total indirect costs Net profit/(loss) Net profit/(loss) per Month	$392,000 $633,867  $103,125 $214,782 $317,907 $108,150 $1,188 $109,338 $6,173 $79,786 $85,959 $304,151 $230,746 $534,897 $2,800 $0 $2,800
	$916,399 $1,160,369 $2,076,768
	($355,185) ($544,306) ($899,491) ($118,395) ($90,718) ($112,436)

Notes

Managed by the Company during the period. Audited as part of the Company’s consolidated 30 June 2011 audit.
Managed by Capitol Health under a management agreement. The period from 1 April 2011 to 30 June 2011 has been audited as part of the Company’s consolidated 30 June 2011 audit. The period from 1 July 2011 to 30 September 2011 has not been audited.

The Radiology Business was managed by the Company during the period 1 January 2011 to 31 March 2011. The Radiology Business has been managed by Capitol Health under the terms of the management agreement since 1 April 2011. The Radiology Business was loss making when the management agreement with Capitol Health was entered into and continues to be loss making.

The financial results set out above have been audited as part of the Company’s consolidated 30 June 2011 audit for the period 1 January 2011 to 30 June 2011. The financial results for the period from 1 July 2011 to 30 September 2011 are based on management accounts and have not been audited.

3.4 Market price of Shares

The Shares were suspended from trading on ASX from 1 March 2011 until 7 November 2011 when the Company was reinstated to trading following completion of an entitlement issue pursuant to the prospectus dated 20 September 2011.

The highest and lowest market sale prices of the Company’s Shares during the period from the date that the Shares were reinstated to trading and the date of lodgement of this Prospectus with the ASIC and the respective dates of those sales were:

Highest: $0.010 per Share on 8 November 2011. Lowest: $0.050 per Share on 10 November 2011.

The last available market sale price of Shares on ASX prior to the date of this Prospectus was $0.080 per Share on 11 November 2011.

3.5 Dividend policy

The Directors are not able to say when and if dividends will be paid in the future, as the payment of any dividends will depend on the future profitability, financial position and cash requirements of the Company.

4. Additional information

4.1 Rights attaching to Shares

A summary of the rights attaching to Shares in the Company is set out below. This summary is qualified by the full terms of the Constitution (a full copy of the Constitution will be provided by the Company on request free of charge) and does not purport to be exhaustive or to constitute a definitive statement of the rights and liabilities of Shareholders. These rights and liabilities can involve complex questions of law arising from an interaction of the Constitution with statutory and common law requirements. For a Shareholder to obtain a definitive assessment of the rights and liabilities which attach to Shares in specific circumstances, the Shareholder should seek legal advice.

(a) Voting

At a general meeting, on a show of hands every Shareholder present in person has one vote. At the taking of a poll, every Shareholder present in person or by proxy and whose Shares are fully paid has one vote for each of his or her Shares. On a poll, the holder of a partly paid share has a fraction of a vote with respect to the Share. The fraction is equivalent to the proportion which the amount paid (not credited) bears to the total amount paid and payable (excluding amounts credited).

(b) General Meetings

Each Shareholder is entitled to receive notice of, attend and vote at general meetings of the Company and to receive all notices, financial statements and other documents required to be sent to Shareholders under the Constitution, the Corporations Act and the Listing Rules.

(c) Dividends

The Directors may pay to Shareholders any interim and final dividends as, in the Directors' judgement, the financial position of the Company justifies. The Directors may fix the amount, the record date for determining eligibility and the method of payment. All dividends must be paid to the Shareholders in proportion to the number of, and the amount paid on (no credited), the Shares held.

(d) Transfer of Shares

Generally, all Shares in the Company are freely transferable subject to the procedural requirements of the Constitution, and to the provisions of the Corporations Act, the Listing Rules and the ASX Operating Rules. The Directors may decline to register an instrument of transfer received where the transfer is not in registrable form or where refusal is permitted under the Listing Rules or the ASX Operating Rules. If the Directors decline to register a transfer the Company must give reasons for the refusal. The Directors must decline to register a transfer when required by the Corporations Act, the Listing Rules or the ASX Operating Rules.

(e) Variation of Rights

The Company may only modify or vary the rights attaching to any class of shares with the prior approval by a special resolution of the shareholders of the shares of that class, or with the written consent of the holders of at least three-quarters of the issued shares of that class.

(f) Directors

The minimum number of Directors is three. Currently, there are four Directors. Directors, other than the managing Director, must retire on a rotational basis so that one-third of Directors must retire at each annual general meeting. No Director except a Managing Director shall hold office for a period in excess of 3 years, or until the third annual general meeting following his or her appointment. The Directors may appoint a director either in addition to existing Directors or to fill a casual vacancy, who then holds office until the next general meeting.

(g) Decisions of Directors

Questions arising at a meeting of Directors are decided by a majority of votes. The Chairman has a casting vote.

(h) Issue of Further Shares

Subject to the Constitution, the Corporations Act and the Listing Rules, the Directors may issue, or grant options in respect of, Shares to such persons on such terms as they think fit. In particular, the Directors may issue preference shares, including redeemable preference shares, and may issue shares with preferred, deferred or special rights or restrictions in relation to dividends, voting, return of capital and participation in surplus on winding up.

(i) Alteration to the Constitution

The Constitution can only be amended by a special resolution passed by at least 75% of Shareholders present and voting at a general meeting. At least 28 days' notice of the intention to propose the special resolution must be given.

(j) ASX Listing Rules Prevail

To the extent that there are any inconsistencies between the Constitution and the Listing Rules, the Listing Rules prevail.

4.2 Agreement for management of Radiology Business

Pursuant to the management agreement in respect of the Radiology Business, Capitol Health, through its subsidiary Capitol Radiology Pty Ltd ( Capitol Radiology ), has been appointed to manage the operations of the Company's Radiology Business from the commencement date of 28 March 2011 until the earlier of 30 November 2011 (this date was extended from 28 August 2011 by oral agreement between the parties which the parties are in the process of documenting) or the completion of the Radiology Business Sale.

Capitol Radiology will have the right to occupy the business premises at which the Radiology Business is carried out and will have an ability to make use of the Company's assets and financed equipment during the term of the appointment.

During the term of the appointment, Capital Radiology will be entitled to all trading income and moneys receivable by the Radiology Business in connection with the operation of the Radiology Business in order for Capital Radiology to continue managing and conducting the Radiology Business. The Company is required to pay a management fee of $100,000 to Capitol Health following completion of the Radiology Business Sale.

If the management agreement comes to an end by any reasons other than upon completion of the Radiology Business Sale, Capital Radiology must, amongst other things, deliver to the Company the assets of the Radiology Business and give up full and unfettered control of the Radiology Business including the goodwill.

Any profits derived by Capital Radiology must be paid to the Company if the completion of the sale of the Radiology Business does not occur for reasons other than failure of the Company to obtain regulatory approval or shareholder approval.

The Company indemnifies Capitol Radiology in respect of the operation of the Radiology Business prior to the commencement of the management arrangements and Capitol Radiology indemnifies the Company in respect of conduct of the business during the management arrangements.

4.3 Company is a disclosing entity

The Company is a disclosing entity under the Corporations Act. It is subject to regular reporting and disclosure obligations under both the Corporations Act and the Listing Rules. These obligations require the Company to notify ASX of information about specific events and matters as they arise for the purpose of ASX making the information available to the securities market conducted by ASX. In particular, the Company has an obligation under the Listing Rules (subject to certain limited exceptions), to notify ASX once it is, or becomes aware of information concerning the Company which a reasonable person would expect to have a material effect on the price or value of the Securities.

The Company is also required to prepare and lodge with ASIC yearly and half-yearly financial statements accompanied by a Directors' statement and report, and an audit review or report.

Copies of documents lodged with the ASIC in relation to the Company may be obtained from, or inspected at, an ASIC office (see Section 4.4 below).

4.4 Copies of documents

Copies of documents lodged by the Company in connection with its reporting and disclosure obligations may be obtained from, or inspected at, an office of ASIC. The Company will provide free of charge to any person who requests it during the period of the issue, a copy of:

(a) the Annual Report of the Company for the year ended 30 June 2011, being the last financial year for which an annual financial report has been lodged with ASIC in relation to the Company before the issue of this Prospectus;
(b) the Quarterly Report for the period 30 September 2011; and
(c) the following continuous disclosure notices given by the Company to notify ASX of information relating to the Company during the period from the date of lodgement of the Annual Report referred to in paragraph (a) and before the date of issue of this Prospectus are as follows:

Date Lodged	Subject of Announcement
07/11/2011	Completion of Entitlement Issue and Placement
07/11/2011	Reinstatement to Official Quotation
03/11/2011	Entitlement offer closes over subscribed
28/10/2011	Appendix 4C - quarterly
24/10/2011	Notice of Annual General Meeting/Proxy Form
21/10/2011	Results of Meeting
21/10/2011	Chairman`s Address to General Meeting

The following documents are available for inspection throughout the application period of this Prospectus during normal business hours at the registered office of the Company at Level 1, 117 Church Street, Hawthorn, Vic 3122:

(a) this Prospectus;
(b)
Constitution; and
(c) the consents referred to in Section 4.10 and the consents provided by the Directors to the issue of this Prospectus.

4.5 Information excluded from continuous disclosure notices

There is no information which has been excluded from a continuous disclosure notice in accordance with the Listing Rules, and which is required to be set out in this Prospectus.

4.6 Determination by ASIC

ASIC has not made a determination which would prevent the Company from relying on section 713 of the Corporations Act in issuing the Securities under this Prospectus.

4.7 Directors' interests

(a) Directors’ Holdings

Set out in the table below are details of Directors’ relevant interests in the Securities of the Company at the date of this Prospectus:

Director	No. of Shares Held	No. of Options Held
Nigel Blaze	Nil	Nil
Paul Quarrell	Nil	Nil
Mark Scott	Nil	54,847,603
Richard Wadley	Nil	Nil

(b) Remuneration of Directors

No person has paid or agreed to pay any amount or has given any benefit to any Director to induce them to become, or qualify as a Director or for services provided by the Director, in connection with:

(i) the formation or promotion of the Company; or
(ii) the offer of Shares under this Prospectus,

except as set out below or elsewhere in this Prospectus.

The Company’s Constitution provides that the Company may remunerate the Directors. The remuneration shall, subject to any resolution of a general meeting, be fixed by the Directors.

The maximum aggregate amount of fees that can be paid to non-executive Directors is subject to approval by shareholders at a general meeting. Total directors' fees to be paid to all non-executive Directors are not to exceed $250,000 per annum. The agreed director’s fees to be paid to each non-executive Director are $25,000 per annum. Director's fees paid to non-executive Directors accrue on a daily basis. Fees

for non-executive Directors are not linked to the performance of the economic entity. However, to align Directors' interests with shareholder interests, the Directors are encouraged to hold shares in the Company and non-executive Directors may receive incentive options in order to secure and/or retain their services.

Fees cover main board activities only. Non-executive Directors may receive additional remuneration for other services provided to the Company, including but not limited to, membership of committees.

The following table shows the directors’ fees paid to non-executive Directors from 1 July 2009 to 30 June 2011. The executive director, Dr Mark Scott, does not receive director fees:

Non-executive Director	2009/2010 financial year	2010/2011 financial year
Nigel Blaze	N/A	$6,731*
Peter Quarrell	N/A	$6,250*
Richard Wadley	N/A	$6,250*

The non-executive Directors were appointed as Directors in the 2010/2011 financial year.

(c)

Other interests

In addition to interests disclosed elsewhere in this Prospectus, Dr Mark Scott holds, or held at any time during the last 2 years, the following interests in the Company:

(i) During the period from 16 August 2010 to 31 March 2011 the Company paid $417,083 to Melbourne Radiology Services Pty Ltd (an entity controlled by Dr Scott) for consultancy services provided by Melbourne Radiology Services Pty Ltd to the Company.
(ii) From 16 August 2010 until 1 April 2011 the Company paid $55,507 to Dr Scott and Scott Superannuation Nominees Pty Ltd (an entity controlled by Dr Scott) for the lease by the Company of three premises from which the Company operates its Radiology Business. The obligations under these leases were assumed by Capitol Health on and from 1 April 2011.
(iii) Dr Scott sponsored a foreign doctor, who worked for EHealth Imaging Pty Ltd (ABN 18 141 503 595) (a subsidiary of the Company). Dr Scott paid the foreign doctor and was reimbursed for such payments by the Company. Dr Scott received no commercial benefit from this agreement.
(iv) Entities associated with Dr Scott have entered into contracts with the Company. These contracts have subsequently been assigned to Capitol Health.

The Directors (other than Dr Scott) hold, or held at any time during the last 2 years, up to 30 June 2011, the following interests in the Company and Offer:

(i) Consulting fees of $11,005 (including GST) have been paid to the Quarrell Business Trust of which Paul Quarrell is a beneficiary;
(ii) Consulting fees of $41,598 (including GST) have been paid to Nigel Blaze; and

(iii) Consulting fees of $4,890 (including GST) have been paid to Richard Wadley.

4.8 Interests of Named Persons

Except as disclosed in this Prospectus, no expert, promoter or other person named in this Prospectus as performing a function in a professional, advisory or other capacity:

(a) has any interest nor has had any interest in the last two years prior to the date of this Prospectus in the formation or promotion of the Company, the Offer or property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or
(b) has been paid or given or will be paid or given any amount or benefit in connection with the formation or promotion of the Company or the Offer.

GTP Legal and other legal advisers will be paid fees of approximately $5,000 (plus GST) in relation to the preparation of this Prospectus.

4.9 Expenses of issue

The estimated expenses of the issue are as follows:

ASIC lodgement fee Legal expenses Total	Offer $ 2,137 5,000
	7,137

4.10 Consents

The following consents have been given in accordance with the Corporations Act and have not been withdrawn as at the date of lodgement of this Prospectus with ASIC:

GTP Legal has given, and has not withdrawn, its written consent to being named in this Prospectus as solicitors to the Company. GTP Legal have not authorised or caused the issue of this Prospectus or the making of offers under this Prospectus. GTP Legal makes no representation regarding, and to the extent permitted by law exclude any responsibility for, any statements in or omissions from any part of this Prospectus.

5. Authorisation

This Prospectus is authorised by each of the Directors of the Company.

This Prospectus is signed for and on behalf of Company by:

==> picture [91 x 52] intentionally omitted <==

Richard Wadley Director

Dated: 14 November 2011

6. Glossary of Terms

These definitions are provided to assist persons in understanding some of the expressions used in this Prospectus.

$ means Australian dollars.

AEST means Australian Eastern Standard Time.

Annual Report means the financial report lodged by the Company with ASIC in respect to the year ended 30 June 2011 and includes the corporate directory, chairman’s report, review of activities, Shareholder information, financial report of the Company and its controlled entities for the year ended 30 June 2011, together with a Directors’ report in relation to that financial year and the auditor’s report for the year to 30 June 2011.

Applicant means a person who submits an Application Form.

Application means a valid application for Shares made pursuant to this Prospectus on an Application Form.

Application Form or Form means the application form sent with this Prospectus.

Application Monies means application monies for Securities received by the Company.

ASIC means Australian Securities and Investments Commission.

ASTC means ASX Settlement and Transfer Corporation Pty Ltd ACN 008 504 532.

ASX means ASX Limited ACN 008 129 164 and where the context permits the Australian Securities Exchange operated by ASX Limited.

Board means the Directors meeting as a board.

Business Day means Monday to Friday inclusive, other than a day that ASX declares is not a business day.

Capitol Health means Capitol Health Limited ACN 117 391 812

CHESS means ASX Clearing House Electronic Subregister System.

Closing Date means 16 November 2011 or such later date as the Directors may determine.

Company means IM Medical Limited ACN 009 436 908.

Constitution means the constitution of the Company as at the date of this Prospectus.

Corporations Act means Corporations Act (Cth) 2001.

Directors mean the directors of the Company as at the date of this Prospectus.

Entitlement Issue has the meaning in Section 1.3.

Issuer Sponsored means securities issued by an issuer that are held in uncertificated form without the holder entering into a sponsorship agreement with a broker or without the holder being admitted as an institutional participant in CHESS.

Listing Rules means the Listing Rules of ASX.

New Option means an Option exercisable at $0.01 on or before 30 September 2016 and otherwise on the terms and conditions outlined in Schedule 1.

Offer has the meaning in Section 1.1.

Official List means the official list of ASX.

Official Quotation means quotation of Shares on the Official List.

Option means the right to acquire one Share.

Placement has the meaning in Section 1.2.

Placement Options has the meaning in Section 1.2.

Placement Securities has the meaning in Section 1.2.

Placement Shares has the meaning in Section 1.2.

Prospectus means this prospectus dated 14 November 2011.

Radiology Business Sale has the meaning in Section 1.3.

Radiology Business means the Company's radiology services business.

Section means a section of this Prospectus.

Securities means Shares and New Options.

Shareholder means a holder of Shares.

Share means a fully paid ordinary share in the capital of the Company.

Schedule 1 – Terms and Conditions of New Options

Entitlement

Each New Option ( Option ) entitles the holder to subscribe for one Share upon exercise of the Option.

Exercise Price and Expiry Date

The Options have an exercise price of $0.01 ( Exercise Price ) and an expiry date of 30 September 2016 ( Expiry Date ).

Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date.

Notice of Exercise

The Options may be exercised by notice in writing to the Company ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised. Any Notice of Exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then shares of the Company.

Quotation of Shares on exercise

Application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options.

Timing of issue of Shares

After an Option is validly exercised, the Company must, within, 15 Business Days of the notice of exercise and receipt of cleared funds equal to the sum payable on the exercise of the Option:

(a) issue and allot the Share; and
(b) do all such acts, matters and things to obtain the grant of official quotation of the Share on ASX no later than 5 Business Days after issuing the Shares.
Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least ten business days after the issue is announced. This will give the holders of Options the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

Adjustment for bonus issues of Shares

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment):

(a) the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the Optionholder would have received if the Optionholder had exercised the Option before the record date for the bonus issue; and
(b) no change will be made to the Exercise Price.

10. Adjustment for entitlement issue

If the Company makes an issue of Shares pro rata to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of an Option will be reduced according to the following formula:

New exercise price = O - E[P-(S+D)]

N+1

O = the old Exercise Price of the Option.
E =
- the number of underlying Shares into which one Option is exercisable.
P = average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.
- the subscription price of a Share under the pro rata issue.
D = the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).
N = the number of Shares with rights or entitlements that must be held to receive a right to one Share.
Adjustments for reorganisation

If there is any reconstruction of the issued share capital of the Company, the rights of the Optionholders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction.

Quotation of Options

The Options will be listed Options.

Options transferable

The Options are freely transferable.

Lodgement Instructions

Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for shares on exercise of the Options with the appropriate remittance should be lodged at the Company's share registry.

AI assistant

BABYLON PUMP & POWER LIMITED — Capital/Financing Update 2011

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