CYCLOPHARM LIMITED

Cyclopharm Limited Appendix 4E

==> picture [120 x 31] intentionally omitted <==

1. Company details

Name of entity

ABN or equivalent company reference Financial year ended (‘current period’) 74 116 931 250 31 December 2009 2. Results for announcement to the market	ABN or equivalent company reference Financial year ended (‘current period’) 74 116 931 250 31 December 2009 2. Results for announcement to the market	Financial year ended (‘previous period’) 31 December 2008
up 1.9% up 19.9% up 19.9% 2.1 Revenues from ordinary activates 2.2 Profit from ordinary activities after tax attributable to members 2.3 Net profit for the period attributable to members		to 11,098,579 to 2,044,490 to 2,044,490
2.4 Dividends	Amount per security	Franked amount per security
Final dividendproposed	Not applicable	Not applicable
Interim dividend	Not applicable	Not applicable
Not applicable Refer Attachment 1. 2.5 Record date for determining entitlements for the final dividend 2.6 Brief explanation of any of the figures in 2.1 to 2.4 above necessary to enable the figures to be understood.

Cyclopharm Limited Appendix 4E

==> picture [120 x 31] intentionally omitted <==

3. Statement of financial performance

Refer Attachment 1.

4. Statement of financial position

Refer Attachment 1.

5. Statement of cash flows

Refer Attachment 1.

6. Dividends

Not applicable

7. Dividend reinvestment plans

Not applicable

8. Statement of retained earnings

Refer Attachment 1.

9. Net tangible assets

R e er f Att ac h men t 1 .

10. Entities over which control has been gained or lost during the period

Control over entities

Name of entity (or group of entities)

Loss of control over entities

Name of entity (or group of entities)

Refer Attachment 1. Refer Attachment 1.

Cyclopharm Limited Appendix 4E

11. Details of associates and joint venture entities

==> picture [120 x 31] intentionally omitted <==

Refer Attachment 1.

12. Significant Information

Refer Attachment 1.

13. Foreign Entities

Refer Attachment 1.

14. Commentary on results for the period

Refer Attachment 1.

15. A statement as to whether the report is based on accounts which have been audited or subject to review, are in the

The accounts are in the process of being audited.

16. If the accounts have not yet been audited or subject to review and are likely to be subject to dispute or qualification, details are described below

The accounts are unlikely to be subject to dispute or qualification.

17. If the accounts have been audited or subject to review and are subject to dispute or qualification, details are described below

Not applicable

Contact details:

Mr William Richardson Company Secretary Cyclopharm Limited

Phone: 03 9867 2811 Email: [email protected]

Appendix 4E Preliminary Final Report For the year ended 31 December 2009

==> picture [154 x 618] intentionally omitted <==

Cyclopharm Limited and its Controlled Entities ABN 74 116 931 250

==> picture [151 x 45] intentionally omitted <==

Appendix 4E Commentary

Full Year Results of Cyclopharm Limited and its Controlled Entities (“Company”) For the 12 months ended 31 December 2009

Features

It is with pleasure that I provide you with the overview of Cyclopharm Limited’s (“Cyclopharm”) performance for 2009. This past year will prove to be a significant year in your company’s history as our foundations are now well established to position Cyclopharm towards becoming Australia’s leading nuclear medicine company. During the year we continued to develop our first PET facility at Macquarie University Hospital. We furthered our progress towards Technegas approval into the United States market and we diversified our offering by expanding into the provision of clinical medical imaging.

The combined sales of the Company’s key products TechnegasPlus generators (“Generators”) and Patient Administration Sets (“PAS”), increased from $10.88m to $11.09m or 2%, a modest increase but favourable given the global molybdenum shortage which dampened demand for all nuclear medicine products. Molybdenum is used to make Technetium[99] which is an essential component of Technegas.

Pleasingly, the Company generated a record profit after tax of $2,044,490 (2008: $1,705,260). The result included certain non-recurring revenues and costs relating to a case against Clinquest Inc. Clinquest Inc was engaged as the Company’s adviser, to obtain approval to sell Technegas in the United States from 2000 to 2007. The parties settled their arbitration in December 2009 with a favourable US$1.80m outcome for Cyclopharm. After accounting for legal and other costs and impairment write-downs of $0.80m and $0.69m respectively, Cyclopharm recorded a net gain before tax of $0.52m. Although the compensation seems disproportionate to the costs expended and time forgone, your Directors are pleased that this disappointing saga in the Company’s history is over.

The Molecular Imaging business did not contribute revenue during 2009. Equipment costs of $2.77m were capitalised during the year.

The Directors are encouraged by the strong underlying performance of the Company’s businesses in 2009 and the progress made in delivering on our business plan for future growth.

Cyclopharm Limited Appendix 4E 1

Managing Director’s Review Continued

==> picture [151 x 49] intentionally omitted <==

Operating review

Technegas

Technegas is a lung imaging device used primarily to diagnose the presence of blood clots in the lungs known as Pulmonary Emboli (PE). For the last 20 years, over 2,400,000 patients have benefited from the Technegas system. Your directors are pleased with the level of sales given the two major challenges faced in 2009. Firstly, we continued to experience growing competition from Computed Tomography Pulmonary Angiogram (“CTPA”) and secondly, a global molybdenum shortage dampened demand for all nuclear medicine products. Molybdenum is used to make Technetium[99] which is an essential component of Technegas. In spite of these hurdles Technegas has demonstrated its resilience and has once again produced strong sales and cash flows.

Revenue Composition

Overall sales revenue of $11.09 million from the Company’s key products, Generators and PAS were comparable with the preceding year (2008: $10.88 million). PAS or consumable revenue declined 2% to $9.13 million (163,250 units) for the current period compared to that of the previous year (2008: $9.29 million or 167,650 units). Sales margins were consistent with the prior year.

We recorded 57 Generator sales in 2009, an improvement on the prior year (2008: 44). Sales were consistent across regions. Sales margins improved as the mix of generators shifted to favour more TechnegasPlus generators (which yield higher margins) over refurbished Technegas Classic machines.

==> picture [226 x 134] intentionally omitted <==

==> picture [217 x 122] intentionally omitted <==

Cyclopharm Limited Appendix 4E 2

Managing Director’s Review Continued

==> picture [151 x 49] intentionally omitted <==

Regional Review (continued)

Europe

Sales revenue decreased 2% on the same time last year despite higher Generator sales. 24 Generators were sold in 2009 compared with 22 in the prior year. Revenues from PAS sales were 5% lower than 2008 due to a 9% decrease in volumes offset by a 4% increase in the average PAS price. Our strategy to focus on higher margin PAS sales was successful and resulted in satisfactory profit margins.

North America

North America continued to grow its market share with total revenues from Technegas related products increasing by 7%. Generator revenues were 20% higher than 2008 while PAS revenues experienced a more modest growth of 4%. We have been pleased with the success of Technegas in Canada as this is the 6[th] year of consecutive growth in PAS unit sales. Canada is now Technegas’s third largest market and a strong indicator for anticipated take up rates in the US, should approval to sell Technegas be obtained from the FDA.

Asia Pacific

Revenues in the Asia Pacific region were 10% higher than 2008. In Australia, where Technegas enjoys a very high market share total revenues grew by 11%. In Asia, the contribution of 5 generator sales (2008: 1) drove the increase in revenues of 64% over the prior year. We expect Australia to maintain its market share in spite of growing competition from CTPA and for future sales growth to occur in markets such as South Korea, Japan and China.

==> picture [208 x 154] intentionally omitted <==

==> picture [214 x 156] intentionally omitted <==

==> picture [211 x 147] intentionally omitted <==

==> picture [210 x 147] intentionally omitted <==

Cyclopharm Limited Appendix 4E 3

Managing Director’s Review Continued

==> picture [151 x 49] intentionally omitted <==

Molecular Imaging

In the Company’s listing Prospectus the strategy to establish a new revenue stream for the Company, in the form of the Molecular Imaging division was outlined. The premise for the new division was the growth in the incidence of Australians affected by cancer (1 in 3 males and 1 in 4 females before the age of 75) and the impact PET (Positron Emission Tomography) imaging was having in Europe and the United States on cancer sufferers. PET is clinically proven to better identify the location and extent of certain active cancer cells in the body and to assist physicians to refine the course of resection or therapy. The Directors’ maintain their vision to establish PET Facilities in major Australian capital cities which will supply PET radiopharmaceuticals to hospitals for use in PET scans.

Our first Molecular Imaging facility will be based at Macquarie University Hospital (MUH). MUH’s 183 bed facility supporting 12 operating theatres is designed to be a clinical centre of excellence in oncology and neurology. It will be Australia’s first privately owned, campus-based university hospital and will combine academic medicine with group practice. As Australia’s newest university hospital, MUH will support the advancement of future surgeons and leaders of the medical profession.

Adjacent to the hospital is the Macquarie University Clinic. The clinic building will house 18 specialist departments servicing over 100 specialists. Also located in the clinic building is the Australian School of Advanced Medicine. The school has brought together a group of world class clinicians, surgeons, researchers and medical educators to create innovative training programs unique to Australia.

The Company’s PET Facility at MUH is the most technologically advanced cyclotron facility in Australia. The facility is scheduled to be commissioned during the first quarter of 2010 with the first commercial radioisotopes scheduled for production in the second quarter of 2010. PET radiopharmaceuticals will be supplied on-site to Macquarie Medical Imaging and other hospitals predominately located in New South Wales. Other revenue streams generated from the PET radiopharmaceutical production facility include opportunities for Phase III clinical trials and pharmaceutical drug development.

Macquarie Medical Imaging

Expanding from our strategic base at MUH, your Company formed a joint venture with Alfred Health Solutions to provide all imaging services on-site at the hospital. The new venture named Macquarie Medical Imaging (“MMI”) represents a rare strategic opportunity to provide a fully aligned and integrated diagnostic, therapeutic and research platform. The new venture will offer a range of diagnostic radiology, interventional radiology, nuclear medicine and molecular imaging services for inpatient and outpatients.

The combination of state of the art imaging equipment, a GE cyclotron located on the grounds of MUH, leading surgeons, clinicians and academics will ensure that MMI will become the leading centre of imaging excellence. MMI is expected to be operational in the first half of 2010.

New Drug Application to sell Technegas in the USA

Over half of the world’s nuclear medicine departments are located in the United States. Although, not all nuclear medicine departments perform lung imaging, the significance of this market for Technegas is undeniable. It has been a strategy of the Company to obtain approval to sell Technegas for over 10 years.

During the year, Cyclopharm settled its arbitration with Clinquest Inc, the Company’s previous advisor engaged to gain access to sell Technegas in the US market from 2000 to 2007.

Certus International (Certus), were engaged to take over the role as the Company’s adviser in 2008. In December 2008, we submitted a New Drug Application (“NDA”) to the United States Food and Drug Administration (“FDA”). Based on the FDA’s feedback, Certus have developed and submitted a Special Protocol Assessment (“SPA”) to the FDA which includes the requirement to conduct a Phase III clinical trial. A response has been received from the agency requiring modifications to our protocol design. The Agency provided several recommendations and comments that will assist us toward developing a protocol that will ensure success. The US remains the largest untapped market for Technegas and your Directors will continue to sensibly pursue entry into this market.

Cyclopharm Limited Appendix 4E 4

Managing Director’s Review Continued

==> picture [151 x 49] intentionally omitted <==

OUTLOOK

In 2010, your Directors expect growth in Technegas revenues to result from targeted marketing campaigns in Japan, Russia and South America. We forecast a change in the mix of Technegas products. We anticipate more generators (lower margins) relative to PAS box sales and therefore lower profit margins. Your directors expect revenues from PET Facility at MUH to ramp up throughout the year following commencement in the second quarter of 2010. We expect operating costs to be lower than 2009 due to the absence of one-off legal costs but expect additional expenses for items such as rent and labour relating to the Molecular Imaging division. Depreciation and finance costs are also expected to be higher following commissioning of the Molecular Imaging division. The Director’s maintain their view that the PET facility is a major investment that will yield significant long term returns for the Company but recognise that the interim working capital shortfall will require funding from the Technegas business.

Although negotiations continue, we expect to make an investment into MMI during the year to part-fund the working capital requirements of the business during its preliminary stages. Our estimates indicate the venture will generate a substantial return on investment in subsequent years.

The investments we have made over the past years are now beginning to bear fruit. I believe that 2010 is destined to be an exciting year for the Company and I look forward to sharing with you the milestones we will achieve this year as we move closer to becoming Australia’s leading nuclear medicine company.

James McBrayer

Managing Director

Cyclopharm Limited Appendix 4E 5

Statement of Comprehensive Income

==> picture [151 x 48] intentionally omitted <==

for the year ended 31 December 2009

		Consolidated	Consolidated	Parent	Parent
		2009	2008	2009	2008
	Notes	$	$	$	$
CONTINUING OPERATIONS
Sales revenue	4	11,098,579	10,888,269	-	-
Finance revenue		93,186	49,377	70,901	14,589
Other revenue	4	2,403,090	52,852	2,805,215	524,320
Total revenue		13,594,855	10,990,498	2,876,116	538,909
Cost of materials and manufacturing	4a	(2,546,484)	(2,531,571)	-	-
Employee benefits expense	4e	(3,537,984)	(3,267,330)	(254,507)	(358,102)
Advertising and promotion expense		(271,165)	(208,304)	-	-
Depreciation and amortisation expense	4c	(450,229)	(331,184)	-	-
Freight and duty expense		(384,682)	(443,921)	-	-
Research and development expense	4d	(39,728)	(35,989)	-	-
Administration expense	4f	(3,566,950)	(1,843,893)	(1,080,326)	(448,738)
Other expenses		(92,629)	(177,871)	-	(148,918)
Profit / (loss) before tax and finance costs		2,705,004	2,150,435	1,541,283	(416,849)
Finance costs	4b	(137,503)	(253,961)	(125,028)	(237,584)
Profit / (loss) before income tax		2,567,501	1,896,474	1,416,255	(654,433)
Income tax (expense) / credit	5	(523,011)	(191,214)	(447,451)	175,243
Net profit / (loss) attributable to members of the parent		2,044,490	1,705,260	968,804	(479,190)
Other comprehensive income after income tax
Exchange differences on translating foreign controlled entities		(1,363,434)	860,234	-	-
Total comprehensive income for the year		681,056	2,565,494	968,804	(479,190)
Earnings per share (cents per share)	6	cents	cents
-basic earnings per share for continuing operations		1.20	1.20
-basic earnings per share		1.20	1.20
-diluted earnings per share		1.20	1.20

The Statement of Comprehensive Income is to be read in conjunction with the notes to the financial statements.

Cyclopharm Limited Appendix 4E 6

Statement of Financial Position

as at 31 December 2009

==> picture [151 x 49] intentionally omitted <==

as at 31 December 2009
		Consolidated		Parent
		2009	2008	2009	2008
	Notes	$	$	$	$
Assets
Current Assets
Cash and cash equivalents	7	4,612,205	4,206,271	2,886,619	2,669,372
Trade and other receivables	8	4,281,369	4,727,077	207,773	1,094,318
Inventories	9	3,242,992	2,855,366	-	-
Other assets		33,227	654,869	-	-
Total Current Assets		12,169,793	12,443,583	3,094,392	3,763,690
Non-current Assets
Trade and other receivables	8	-	-	5,794,748	3,746,699
Property, plant and equipment	10	5,052,951	2,725,834	-	-
Investments in subsidiaries	11	-	-	6,122,017	6,122,017
Intangible assets	12	2,421,667	2,793,853	-	-
Deferred tax assets	5	-	-	158,409	618,330
Total Non-current Assets		7,474,618	5,519,687	12,075,174	10,487,046
Total Assets		19,644,411	17,963,270	15,169,566	14,250,736
Liabilities
Current Liabilities
Trade and other payables	13	1,900,153	1,561,023	66,480	79,357
Interest bearing loans and borrow ings	14	1,757,350	-	1,757,350	-
Provisions	15	498,283	371,534	47,000	53,500
Tax liabilities	5	174,039	5,071	-	-
Total Current Liabilities		4,329,825	1,937,628	1,870,830	132,857
Non-current Liabilities
Interest bearing loans and borrow ings	14	975,900	2,733,250	975,900	2,733,250
Provisions	15	42,741	31,359	-	-
Deferred tax liabilities	5	367,304	50,232	716,976	821,856
Total Non-current Liabilities		1,385,945	2,814,841	1,692,876	3,555,106
Total Liabilities		5,715,770	4,752,469	3,563,706	3,687,963
Net Assets		13,928,641	13,210,801	11,605,860	10,562,773
Equity
Contributed equity	16	11,088,908	11,126,408	11,289,438	11,289,438
Employee equity benefits reserve	23	217,972	143,689	217,972	143,689
Foreign currency translation reserve		(834,454)	528,980	-	-
Retained Profits / (Accumulated losses)		3,456,215	1,411,724	98,450	(870,354)
Total Equity		13,928,641	13,210,801	11,605,860	10,562,773

The Statement of Financial Position is to be read in conjunction with the notes to the financial statements.

Cyclopharm Limited Appendix 4E 7

Statement of Cash Flows

for the year ended 31 December 2009

==> picture [151 x 49] intentionally omitted <==

		Consolidated	Consolidated	Parent
		2009	2008	2009	2008
	Notes	$	$	$	$
Operating activities
Receipts from customers		14,569,018	9,720,857	2,805,215	-
Payments to suppliers and employees		(10,641,452)	(8,030,245)	(467,665)	(2,103,720)
Interest received		93,186	49,377	70,901	14,589
Borrow ing costs paid		(137,503)	(253,961)	(125,028)	(237,585)
Income tax paid		(192,216)	-	-	-
Net cash flows from / (used) operating activities	7	3,691,033	1,486,028	2,283,423	(2,326,716)
Investing activities
Acquisition of minority interest in subsidiaries		-	-	-	(37,501)
Purchase of property, plant and equipment		(2,732,029)	(2,043,060)	-	-
Payments for deferred expenditure		(364,836)	(783,126)	-	-
Net cash flows used in investing activities		(3,096,865)	(2,826,186)	-	(37,501)
Financing activities
Proceeds from issue of shares		-	3,180,000	-	3,180,000
Costs of raising capital		-	(153,820)	-	(153,820)
Proceeds from borrow ings		-	1,221,750	-	1,221,750
Loans to / (repaid) related entities		-	-	(2,066,176)	299,050
Net cash flows from financing activities		-	4,247,930	(2,066,176)	4,546,980
Net increase / (decrease) in cash and cash equivalents		594,168	2,907,772	217,247	2,182,763
Cash and cash equivalents
- at beginning of the period		4,206,271	1,204,543	2,669,372	486,609
- net foreign exchange differences from translation of cash and cash equivalents		(188,234)	93,956	-	-
- at end of the period	7	4,612,205	4,206,271	2,886,619	2,669,372

The Statement of Cash Flows is to be read in conjunction with the notes to the financial statements.

Cyclopharm Limited Appendix 4E 8

Statement of Changes in Equity for the year ended 31 December 2009

==> picture [151 x 49] intentionally omitted <==

CONSOLIDATED	Share capital Other Contributed Equity Total Contributed Equity Accumulated Profits Foreign Currency Translation Reserve Employee Equity Benefits Reserve Attributable to Equity Holders of the Parent Total $ $ $ $ $ $ $ $
Balance at Cost of share based payments Other comprehensive income 1 January 2008	13,349,740 (5,295,657) 8,054,083 (293,448) (331,254) 73,666 7,503,047 7,503,047 - - - - - 70,023 70,023 70,023 - - - - 860,234 - 860,234 860,234
Profit for the year Total income (expense) for the year recognised directly in equity	- - - - 860,234 70,023 930,257 930,257 - - - 1,705,260 - - 1,705,260 1,705,260
Total income (expense) for the year Issue of share capital Capital raising costs Other	- - - 1,705,260 860,234 70,023 2,635,517 2,635,517 3,180,000 - 3,180,000 - - - 3,180,000 3,180,000 (107,674) - (107,674) - - - (107,674) (107,674) - - - (87) - - (87) (87)
Balance at 31 December 2008	- 16,422,066 (5,295,657) 11,126,409 1,411,725 528,980 143,689 13,210,803 13,210,803
Balance at 1 January 2009	16,422,066 (5,295,657) 11,126,409 1,411,725 528,980 143,689 13,210,803 13,210,803
Cost of share based payments Other comprehensive income	- - - - - 74,283 74,283 74,283 - - - - (1,363,434) - (1,363,434) (1,363,434)
Profit for theyear Total income (expense) for the year recognised directly in equity	- - - - (1,363,434) 74,283 (1,289,151) (1,289,151) - - - 2,044,490 - - 2,044,490 2,044,490
Total income (expense) for the year	- - - 2,044,490 (1,363,434) 74,283 755,339 755,339
Other	- (37,501) (37,501) - - - (37,501) (37,501)
Balance at 31 December 2009	16,422,066 (5,333,158) 11,088,908 3,456,215 (834,454) 217,972 13,928,642 13,928,642

The Statement of Changes in Equity is to be read in conjunction with the notes to the financial statements.

Cyclopharm Limited Appendix 4E 9

Statement of Changes in Equity for the year ended 31 December 2009

==> picture [151 x 48] intentionally omitted <==

			Attributable to
		Accumulated	Equity Holders of	Employee Equity
	Share capital	Losses	the Parent	Benefits Reserve	Total
PARENT	$	$	$	$	$
Balance at
1 January 2008	8,217,112	(391,164)	7,825,948	73,666	7,899,614
Cost of share base payment	-	-	-	70,023	70,023
Loss for the year	-	(479,190)	(479,190)	-	(479,190)
Issue of share capital	3,180,000	-	3,180,000	-	3,180,000
Capital raisingcosts	(107,674)	-	(107,674)	-	(107,674)
Balance at
31 December 2008	11,289,438	(870,354)	10,419,084	143,689	10,562,773
Balance at
1 January 2009	11,289,438	(870,354)	10,419,084	143,689	10,562,773
Cost of share base payment	-	-	-	74,283	74,283
Profit for theyear	-	968,804	968,804	-	968,804
Balance at
31 December 2009	11,289,438	98,450	11,387,888	217,972	11,605,860

The Statement of Changes in Equity is to be read in conjunction with the notes to the financial statements.

Cyclopharm Limited Appendix 4E 10

Notes

for the year ended 31 December 2009

==> picture [151 x 49] intentionally omitted <==

1. CORPORATE INFORMATION

Cyclopharm is a Company limited by shares incorporated and domiciled in Australia. The shares are publicly traded on the Australian Securities Exchange (“ASX”).

During the year the principal continuing activities of the consolidated entity consisted of the manufacture and sale of medical equipment and radiopharmaceuticals, including associated research and development.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Preparation

The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards. The financial report has been prepared on a historical cost basis.

The financial report is presented in Australian dollars.

b) Statement of compliance

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

The following standards and amendments were available for early adoption but have not been applied by the consolidated entity in these financial statements:

Reference	Title	Summary	Application date of standard	Impact on Group financial report	Application date for *Group **
AASB 2009-5	Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 5, 8, 101, 107, 117, 118, 136 & 139]	The amendments to some Standards result in accounting changes for presentation, recognition or measurement purposes, while some amendments that relate to terminology and editorial changes are expected to have no or minimal effect on accounting except for the following: The amendment to AASB 117 removes the specific guidance on classifying land as a lease so that only the general guidance remains. Assessing land leases based on the general criteria may result in more land leases being classified as finance leases and if so, the type of asset which is to be recorded (intangible vs. property, plant and equipment) needs to be determined. The amendment to AASB 101 stipulates that the terms of a liability that could result, at	1 January 2010	The Group does not currently have land that could be affected by these amendments. The amendments are not expected to have any impact on the Group’s financial report.	1 October 2010

Cyclopharm Limited Appendix 4E 11

Notes Continued

==> picture [151 x 48] intentionally omitted <==

Reference	Title	Summary	Application date of standard	Impact on Group financial report	Application date for *Group **
		anytime, in its settlement by the issuance of equity instruments at the option of the counterparty do not affect its classification. The amendment to AASB 107 explicitly states that only expenditure that results in a recognised asset can be classified as a cash flow from investing activities. The amendment to AASB 118 provides additional guidance to determine whether an entity is acting as a principal or as an agent. The features indicating an entity is acting as a principal are whether the entity: ►has primary responsibility for providing the goods or service; ►has inventory risk; ►has discretion in establishing prices; ►bears the credit risk.
AASB 2009-5 (con’t)	Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 5, 8, 101, 107, 117, 118, 136 & 139]	The amendment to AASB 136 clarifies that the largest unit permitted for allocating goodwill acquired in a business combination is the operating segment, as defined in IFRS 8 before aggregation for reporting purposes. The main change to AASB 139 clarifies that a prepayment option is considered closely related to the host contract when the exercise price of a prepayment option reimburses the lender up to the approximate present value of lost interest for the remaining term of the host contract. The other changes clarify the scope exemption for business combination contracts and provide clarification in relation to accounting for cash flow hedges.	1 January 2010	The Group does not currently have prepayment options that could be affected by these amendments. The amendments are not expected to have any impact on the Group’s financial report.	1 October 2010
AASB 2009-7	Amendments to	These comprise editorial	1 July 2009	These comprise	1 October

Cyclopharm Limited Appendix 4E 12

Notes Continued

==> picture [151 x 48] intentionally omitted <==

Reference	Title	Summary	Application date of standard	Impact on Group financial report	Application date for *Group **
	Australian Accounting Standards [AASB 5, 7, 107, 112, 136 & 139 and Interpretation 17]	amendments and are expected to have no major impact on the requirements of the amended pronouncements.		editorial amendments and are expected to have no major impact on the requirements of the amended pronouncements.	2009
AASB 2009-8	Amendments to Australian Accounting Standards – Group Cash- settled Share- based Payment Transactions [AASB 2]	This Standard makes amendments to Australian Accounting Standard AASB 2 Share-based Payment_and supersedes Interpretation 8 _Scope of AASB 2_and Interpretation 11_AASB 2 – Group and Treasury Share Transactions. The amendments clarify the accounting for group cash-settled share-based payment transactions in the separate or individual financial statements of the entity receiving the goods or services when the entity has no obligation to settle the share- based payment transaction. The amendments clarify the scope of AASB 2 by requiring an entity that receives goods or services in a share-based payment arrangement to account for those goods or services no matter which entity in the group settles the transaction, and no matter whether the transaction is settled in shares or cash.	1 January 2010	The Group does not currently have any share based payment transactions with an entity that receives goods or services that could be affected by these amendments. The amendments are not expected to have any impact on the Group’s financial report.	1 October 2010
AASB 2009-14	Amendments to Australian Interpretation – Prepayments of a Minimum Funding Requirement	These amendments arise from the issuance of Prepayments of a Minimum Funding Requirement (Amendments to IFRIC 14). The requirements of IFRIC 14 meant that some entities that were subject to minimum funding requirements could not treat any surplus in a defined benefit pension plan as an economic benefit. The amendment requires entities to treat the benefit of such an early payment as a pension	1 January 2011	The Group does not currently have a defined benefit pension plan that could be affected by these amendments. The amendments are not expected to have any impact on the Group’s financial report	1 January 2011

Cyclopharm Limited Appendix 4E 13

Notes Continued

==> picture [151 x 48] intentionally omitted <==

Reference	Title	Summary	Application date of standard	Impact on Group financial report	Application date for *Group **
		asset. Subsequently, the remaining surplus in the plan, if any, is subject to the same analysis as if no prepayment had been made.
Interpretation 19*	Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments	This interpretation clarifies that equity instruments issued to a creditor to extinguish a financial liability are “consideration paid” in accordance with paragraph 41 of IAS 39. As a result, the financial liability is derecognised and the equity instruments issued are treated as consideration paid to extinguish that financial liability. The interpretation states that equity instruments issued in a debt for equity swap should be measured at the fair value of the equity instruments issued, if this can be determined reliably. If the fair value of the equity instruments issued is not reliably determinable, the equity instruments should be measured by reference to the fair value of the financial liability extinguished as of the date of extinguishment.	1 July 2010	The Group does not currently have a defined benefit pension plan that could be affected by these amendments. The amendments are not expected to have any impact on the Group’s financial report	1 January 2011

designates the beginning of the applicable annual reporting period unless otherwise stated

c) Basis of consolidation

The consolidated financial statements comprise the financial statements of Cyclopharm and its subsidiaries as at 31 December each year ('the Group').

Subsidiaries

Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which Cyclopharm has control.

The financial statements of subsidiaries are prepared for the same reporting period as the parent Company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

Transactions eliminated on consolidation

All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

Cyclopharm Limited Appendix 4E 14

Notes Continued

==> picture [151 x 48] intentionally omitted <==

The Directors have identified that the business combination, encompassing the restructure of the Cyclopharm Group that occurred in May 2006 constituted a reverse acquisition as defined under AASB3 Business Combinations . Accordingly the consolidated financial statements have been issued under the name of the new legal parent, Cyclopharm, but reflect a continuation of the financial statements of the economic entity that existed prior to the business combination/reorganisation.

For business combinations involving entities under common control, which are outside the scope of AASB 3 Business Combinations , the Company applies the purchase method of accounting by the legal parent.

d) Foreign currency translation

Functional and presentation currency

The functional currency of each of the group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars (Aud $) which is the parent entity’s functional and presentation currency.

Transactions and balances

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Foreign currency monetary items are translated at the yearend exchange rate. Non-monetary items that are measured in terms of historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate when the fair value was determined.

Exchange differences arising on the translation of monetary items are recognised in the Statement of Comprehensive Income, except where deferred in equity as a qualifying cash flow or net investment hedge. On disposal of a foreign entity the deferred cumulative amount in equity is recognised in the Statement of Comprehensive Income.

Group companies

The functional currency of the overseas subsidiaries Cyclomedica Ireland Limited, Cyclomedica Germany GmbH, Cyclomedica Europe Limited, is European Euro (Euro €) and Cyclomedica Canada Limited is Canadian dollars (Can $).

The financial results and position of foreign operations whose functional currency is different from the group’s presentation currency are translated as follows:

Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date.
Income and expenses are translated at the weighted average exchange rates for the period.
Retained profits are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on the translation of foreign operations are transferred directly to the group’s foreign currency translation reserve in the Statement of Financial Position. These differences are recognised in the Statement of Comprehensive Income in the period in which the entity is disposed. Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the Statement of Comprehensive Income.

e) Income tax

Income tax on the profit and loss for the year comprises current and deferred tax. Income tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised directly to equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the Statement of Financial Position date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the Statement of Financial Position liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based

Cyclopharm Limited Appendix 4E 15

Notes Continued

==> picture [151 x 48] intentionally omitted <==

on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the Statement of Financial Position date and are expected to apply when the deferred tax asset is realised or the deferred tax liability is settled. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Tax consolidation

The Company is the head entity of the tax consolidated group comprising all the Australian wholly owned subsidiaries. The implementation date for the tax consolidated group was 31 May 2006, Current tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax consolidated group are recognised in the separate financial statements of the members of the tax consolidated group using a "stand alone basis without adjusting for intercompany transactions" approach by reference to the carrying amounts of assets and liabilities in the separate financial statements of each entity and the tax values applying under consolidation.

Any current tax Australian liabilities (or assets) and deferred tax assets arising from unused tax losses of the subsidiaries is assumed by the head entity in the tax consolidated group and are recognised as amounts payable (receivable) to (from) other entities in the tax consolidated group. Any difference between these amounts is recognised by the head entity as an equity contribution or distribution.

The Company recognises deferred tax assets arising from unused tax losses of the tax consolidated group to the extent that it is probable that future taxable profits of the tax consolidated group will be available against which the asset can be utilised.

Any subsequent period adjustments to deferred tax assets arising from unused tax losses as a result of revised assessments of the probability of recoverability is recognised by the head entity only.

f) Property, plant and equipment

Plant and equipment is measured at cost less accumulated depreciation and impairment losses.

The cost of fixed assets constructed within the economic entity includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be reliably. All other repairs and maintenance are charged to the Statement of Comprehensive Income during the financial period in which they are incurred.

Certain expenditure in establishing and commissioning Cyclopharm’s PET central Pharmacies has been capitalised. No amortisation has been applied as the asset is not yet deemed held for use. No impairment provision has been deemed appropriate. The Directors are satisfied that the future economic benefits will eventuate to justify the capitalisation of the expenditure incurred.

Impairment

The carrying amount of plant and equipment is reviewed annually by Directors to consider impairment. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Depreciation

The depreciable amount of all fixed assets including capitalised lease assets are depreciated on a straight-line basis over their useful lives commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

Cyclopharm Limited Appendix 4E 16

Notes Continued

==> picture [151 x 48] intentionally omitted <==

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:


Plant and equipment Leasehold Improvements Motor vehicles Useful lives Method used Internally generated / Acquired Impairment test / Recoverable Amount testing	Basis Method
	Annually and where an indicator of impairment exists Amortisation method reviewed at each financial year-end; Reviewed annually for indicator of impairment Indefinite Finite 8 - 10 years - Straight line 8 - 10 years - Straight line Acquired Internally generated 20-50% Straight-line method 20-25% Straight-line method New Patents and licences Technegas Development costs 10-33% Straight-line method

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the Statement of Comprehensive Income in the year the item is derecognised.

g) Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in the Statement of Comprehensive Income in the year in which they are incurred.

Borrowing costs include interest, amortisation of discounts or premiums relating to borrowings, amortisation of ancillary costs incurred in connection with arrangement of borrowings, foreign exchange losses net of hedged amounts on borrowings, including trade creditors and lease finance charges.

h) Intangibles

Intangible assets

Intangible assets acquired separately are capitalised at cost and from a business combination are capitalised at fair value as at the date of acquisition. Following initial recognition, the cost model is applied to the class of intangible assets.

The useful lives of these intangible assets are assessed to be either finite or indefinite. Where amortisation is charged on assets with finite lives, this expense is taken to the Statement of Comprehensive Income through the ‘depreciation and amortisation’ line item.

Intangible assets, excluding development costs, created within the business are not capitalised and expenditure is charged against profits in the year in which the expenditure is incurred.

Intangible assets are tested for impairment where an indicator of impairment exists, and in the case of indefinite life intangibles, annually, either individually or at the cash generating unit level. Useful lives

Cyclopharm Limited Appendix 4E 17

Notes Continued

==> picture [151 x 48] intentionally omitted <==

are also examined on an annual basis and adjustments, where applicable, are made on a prospective basis.

Research and development costs

Expenditure on research activities is recognised as an expense when incurred.

Expenditure on development activities is capitalised only when it is probable that future benefits will exceed deferred costs and these benefits can be reliably measured. Capitalised development expenditure is stated at cost less accumulated amortisation. Amortisation is calculated using a straight-line method to allocate the costs over a period during which the related benefits are expected to be realised.

Expenditure on the development of the TechnegasPlus generator has been capitalised. A useful life of 9 years has been applied and amortisation for the year included in the Statement of Comprehensive Income. No impairment provision has been deemed appropriate. The Directors are satisfied that the future economic benefits will eventuate to justify the capitalisation of the expenditure incurred.

Expenditure on costs incurred in the application to the Food & Drug Administration authority have been capitalised. A useful life has not been determined as Cyclopharm have not yet received approval from the Food & Drug Administration authority. During the year, $691,705 was written off the capitalised costs following the settlement of a claim against Clinquest Inc. No impairment provision has been deemed necessary at balance date. The Directors are satisfied that the future economic benefits will eventuate to justify the carrying value of the capitalised expenditure.

Development expenditure is tested annually for impairment or more frequently if events or changes in circumstances indicate that it might be impaired. Capitalised development expenditure is measured at cost less any accumulated amortisation and impairment losses.

i) Inventories

Inventories are valued at the lower of cost and net realisable value where net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Costs incurred in bringing each product to its present location and conditions are accounted for as follows:

Raw materials: purchase cost on a first-in, first-out basis;
Finished goods and work-in-progress: cost of direct materials and labour and an appropriate portion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

j) Trade and other receivables

Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. A specific estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified.

k) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, deposits held at call with banks, short-term deposits with an original maturity of three months or less and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the Statement of Financial Position. For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

l) Trade and other payables

Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise

Cyclopharm Limited Appendix 4E 18

Notes Continued

==> picture [151 x 48] intentionally omitted <==

when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade payables are normally settled within 30 to 60 days.

m) Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs and any discount or premium on settlement. Gains and losses are recognised in the Statement of Comprehensive Income when the liabilities are derecognised and as well as through the amortisation process.

n) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of past events, for which it is probable that an outflow of economic benefits will result and that an outflow can be reliably measured. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the Statement of Comprehensive Income net of any reimbursement.

o) Employee entitlements

Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages and salaries, annual leave and long service leave.

Employee benefits expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled plus related on-costs. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. In determining the present value of future cash outflows, the market yield as at the reporting date on national government bonds, which have terms to maturity approximating the terms of the related liability, are used.

Employee benefit expenses and revenues arising in respect of wages and salaries, non-monetary benefits, annual leave, long service leave and other leave benefits; and other types of employee benefits are recognised against profits on a net basis in their respective categories.

p) Employee share and performance share schemes

The fair value of performance rights issued under the Cyclopharm Long Term Incentive Plan are recognised as a personnel expense over the vesting period with a corresponding increase in Employee Equity Benefits Reserve.

The fair value of performance the implied option attached to shares granted is determined using a pricing model that takes into account factors that include exercise price, the term of the performance option, the vesting and performance criteria, the share price at grant date and the expected price volatility of the underlying share. The fair value calculation excludes the impact of any non market vesting conditions. Non market vesting conditions are included in assumptions about the number of performance options that are expected to become exercisable. At each balance date, the entity revises its estimate of the number of performance rights that are expected to become exercisable. The personnel expense recognised each period takes into account the most recent estimate.

Shares issued under employee and executive share plans are held in trust until vesting date. Unvested shares held by the trust are consolidated into the group financial statements.

Cyclopharm Limited Appendix 4E 19

Notes Continued

==> picture [151 x 48] intentionally omitted <==

q) Leases

Operating Leases

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Comprehensive Income on a straight-line basis over the lease term. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease.

r) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Sale of goods

Revenue is recognised (net of returns, discounts and allowances) when the significant risks and rewards of ownership and therefore control of the goods have passed to the buyer and can be measured reliably. Control is considered to have passed to the buyer at the time of delivery of the goods to the customer.

Interest

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

Dividends

Revenue from quoted investments is recognised in the Statement of Comprehensive Income on the day which the relevant investment is first quoted on an "ex-basis". Dividend revenue is recognised net of any franking credits.

Revenue from distributions from controlled entities is recognised by the Company when they are declared by the controlled entities. Revenue from dividends from associates and other investments is recognised when dividends are received. Dividends received out of pre-acquisition reserves are eliminated against the carrying amount of the investment and not recognised in revenue.

Research and development grants

Where a grant is received relating to research and development costs that have been expensed, the grant is recognised as revenue.

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

s) Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except where the GST incurred is not recoverable from the Australian Taxation Office (“ATO”), and is therefore recognised as part of the asset’s cost or as part of the expense item. Receivables and payables are stated inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables in the Statement of Financial Position. Cash flows are presented in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to the taxation authority are classified as operating cash flows.

t) Financial instruments

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

Cyclopharm Limited Appendix 4E 20

Notes Continued

==> picture [151 x 48] intentionally omitted <==

Financial assets at fair value through profit and loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term, or if so designated by management and within the requirement of AASB139: Recognition and Measurement of Financial Instruments.

Loans and receivables

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

De-recognition of financial instruments

Financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

the rights to receive cash flows from the asset have expired;
the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or
the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration received that the Group could be required to repay.

Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

Impairment of financial assets

The Group assesses at each Statement of Financial Position date whether a financial asset or group of financial assets is impaired.

Financial assets carried at amortised cost

If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced either directly or through use of an allowance account. The amount of the loss is recognised in profit or loss.

The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an

Cyclopharm Limited Appendix 4E 21

Notes Continued

==> picture [151 x 48] intentionally omitted <==

impairment loss is or continues to be recognised are not included in a collective assessment of impairment.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

Financial assets carried at cost

If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value (because its fair value cannot be reliably measured), or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the current market rate of return for a similar financial asset.

u) Contributed equity

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Other contributed equity

In accordance with UIG 1052 Tax Consolidation Accounting , additional contributed equity was recorded to recognise the transfer of tax liabilities from Vita Medical Limited to Vita Life Sciences Limited, being the parent of the Australian tax consolidated group at the relevant time. This event occurred prior to Cyclopharm acquiring its interests in the net assets of Vita Medical Limited.

As part of the restructure a subsidiary of Cyclopharm, Vita Medical Australia Pty Ltd acquired all the assets, liabilities and business from Vita Medical Limited, the former group parent.

With effect from 31 May 2006, Cyclopharm also acquired 100% of the other group operating subsidiaries from the ultimate holding company, Vita Life Sciences Limited. Accordingly, the group comprises Cyclopharm and the following wholly owned subsidiaries:

Cyclomedica Australia Pty Ltd (formerly Vita Medical Australia Pty Ltd)
Cyclomedica Ireland Ltd (formerly Vitamedica Europe Ltd)
Cyclomedica Europe Ltd
Cyclomedica Canada Limited (formerly Vita Medical Canada Ltd)
Cyclomedica Germany GmbH
Allrad 28 Pty Ltd
Allrad 29 Pty Ltd

These entities collectively comprise the medical diagnostic equipment and associated consumables business formerly operated as the Vita Medical Group – now known as the Cyclopharm Group. The transaction has been accounted for as a ‘reverse acquisition’ as defined in AASB 3 Business Combinations whereby Cyclopharm is the legal parent and Cyclomedica Australia Pty Limited is the financial parent, which for accounting purposes is deemed to be the acquirer.

The consideration for the minority interests of the controlled entities and costs of acquisition have been charged to other contributed equity in accordance with AASB 127 Consolidated and Separate Financial Statements .

Cyclopharm Limited Appendix 4E 22

Notes Continued

==> picture [151 x 48] intentionally omitted <==

v) Earnings per share

Basic earnings per share

Basic earnings per share is determined by dividing the net profit/(loss) after income tax attributable to members of the Company by the weighted average number of ordinary shares outstanding during the financial year. Where a change in the number of ordinary shares on issue without a corresponding change in recognised resources during the year the number of ordinary shares for all periods presented are correspondingly adjusted as if the event had occurred at the beginning of the earliest period presented.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. Where a change in the number of ordinary shares on issue without a corresponding change in recognised resources during the year the number of ordinary shares for all periods presented are correspondingly adjusted as if the event had occurred at the beginning of the earliest period presented.

3. SEGMENT REPORTING

The Group's primary segment reporting format is business segments as the Group's risks and returns are affected predominantly by differences in the products and services produced. The Group’s secondary segment is geographical.

The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

The Technegas segment is a supplier of diagnostic equipment and consumables used by physicians in the detection of pulmonary embolism.

The Molecular Imaging segment will produce radiopharmaceuticals to be used by physicians in the detection of cancer, neurological disorders and cardiac disease.

Transfer prices between business segments are set on an arm's length basis in a manner similar to transactions with third parties. Segment revenue, segment expense and segment result include transfers between business segments. Those transfers are eliminated on consolidation.

Business segments

The tables under the heading business segments present revenue and profit information and certain asset and liability information regarding business segments for the years ended 31 December 2009 and 31 December 2008.

Geographical segments

The tables under the heading geographical segment present revenue and profit information and certain asset and liability information regarding geographical segments for the years ended 31 December 2009 and 31 December 2008.

Cyclopharm Limited Appendix 4E 23

Notes Continued

==> picture [151 x 48] intentionally omitted <==

3. SEGMENT REPORTING (continued)

Business Segments


Technegas Molecular Imaging Unallocated Total $ $ $ $ 31 December 2009 Consolidated For the period ended
	Revenue Sales to external customers 11,098,579 - - 11,098,579 Finance revenue 22,285 - 70,901 93,186 Other revenue - - 2,403,090 2,403,090 Total revenue 11,120,864 - 2,473,990 13,594,855 Result
	Profit / (loss) before tax and finance costs 1,950,358 (320,913) 1,075,558 2,705,004 Finance costs (11,731) (744) (125,028) (137,503)
	Profit / (Loss) before income tax 1,938,627 (321,656) 950,530 2,567,501
	Income tax expense (523,011) - - (523,011)
	Profit / (Loss) after income tax 1,415,616 (321,656) 950,530 2,044,490
Assets and liabilities Segment assets 9,739,217 4,952,597 4,952,597 19,644,411 Segment liabilities (1,402,788) (749,276) (3,563,706) (5,715,770) Other segment information Impairment w rite dow ns (691,705) - - (691,705) Depreciation and amortisation (450,229) - - (450,229) Technegas Molecular Imaging Unallocated Total $ $ $ $ For the period ended 31 December 2008 Consolidated	Assets and liabilities Segment assets 9,739,217 4,952,597 4,952,597 19,644,411 Segment liabilities (1,402,788) (749,276) (3,563,706) (5,715,770) Other segment information Impairment w rite dow ns (691,705) - - (691,705)
	Depreciation and amortisation (450,229) - - (450,229)
	Revenue Sales to external customers 10,888,269 - - 10,888,269 Finance revenue 34,788 - 14,589 49,377 Other revenue - - 52,852 52,852 Total revenue 10,923,057 - 67,441 10,990,498 Result Profit / (loss) before tax and finance costs 3,433,856 (299,731) (983,690) 2,150,435 Finance costs (12,692) (3,684) (237,585) (253,961)
	Profit / (Loss) before income tax 3,421,164 (303,415) (1,221,275) 1,896,474
	Income tax expense (191,214) - - (191,214)
	Profit / (Loss) after income tax 3,229,950 (303,415) (1,221,275) 1,705,260
	Assets and liabilities Segment assets 12,457,415 1,895,450 3,610,405 17,963,270 Segment liabilities (1,827,954) (8,176) (2,916,339) (4,752,469) Other segment information Impairment w rite dow ns (140,000) - - (140,000)
	Depreciation and amortisation (331,184) - - (331,184)

Cyclopharm Limited Appendix 4E 24

Notes Continued

==> picture [151 x 48] intentionally omitted <==

3. SEGMENT REPORTING (continued)

Geographical segment


Consolidated Asia Pacific Europe North America Other Total $ $ $ $ $ 31 December 2009 For the year ended
Revenue Sales to external customers 1,886,030 7,309,497 1,734,492 168,560 11,098,579 Finance revenue 89,994 3,192 - - 93,186 Total segment revenue 1,976,024 7,312,689 1,734,492 168,560 11,191,765 Assets and liabilities Segment assets 13,858,482 5,210,112 575,817 - 19,644,411 Segment liabilities (5,082,328) (531,659) (101,783) - (5,715,770)
	Segment assets 13,858,482 5,210,112 575,817 - 19,644,411
	Segment liabilities (5,082,328) (531,659) (101,783) - (5,715,770)

Consolidated Asia Pacific Europe North America Other Total $ $ $ $ $ 31 December 2008 For the year ended
Revenue Sales to external customers 1,886,030 7,309,497 1,734,492 168,560 11,098,579 Finance revenue 89,994 3,192 - - 93,186 Total segment revenue 1,746,214 7,516,229 1,614,409 60,794 10,937,646 Assets and liabilities Segment assets 10,323,946 6,701,320 938,004 - 17,963,270 Segment liabilities (4,237,105) (431,779) (83,585) - (4,752,469)
	Segment liabilities (4,237,105) (431,779) (83,585) - (4,752,469)

Cyclopharm Limited Appendix 4E 25

Notes Continued

==> picture [151 x 48] intentionally omitted <==

4. REVENUES AND EXPENSES

Revenue	Notes	Consolidated	Consolidated	Parent	Parent
		2009 $	2008 $	2009 $	2008 $

Sales revenue		11,098,579	10,888,269	-	-
Other Revenue


Management Fees Realised foreign exchange gains Clinquest settlement proceeds Total other revenue		- 389,249 2,013,841	- 52,852 -	436,727 354,647 2,013,841	524,320 - -
		2,403,090	52,852	2,805,215	524,320
Expenses


a) Cost of materials and manufacturing Cost of materials and manufacturing b) Finance costs Interest paid on loans from external parties c) Depreciation of plant and equipment Depreciation of leasehold improvements Amortisation of intangibles Depreciation and amortisation
		2,546,484	2,531,571	-	-


		137,503	253,961	125,028	237,584


		398,671	284,408	-	-
		6,242	6,220	-	-
		45,317	40,556	-	-
		450,230	331,184	-	-

d) Research & development Research costs
		39,728	35,989	-	-

		39,728	35,989	-	-

e) Employee benefits expense Salaries and w ages Non-Executive Director fees and consultant costs Share-based payments expense	23a
		3,257,153	3,091,500	90,613	197,426
		156,548	105,807	89,611	90,653
		74,283	70,023	74,283	70,023

		3,487,984	3,267,330	254,507	358,102

f) Administration expense Write dow n of capitalsed FDA development cost Legal and Professional costs Office and facility costs Travel and motor vehicle costs
		691,705	-	-	-
		1,581,287	802,987	997,166	(370,627)
		736,873	534,534	71,512	69,406
		557,085	506,372	11,648	8,705

		3,566,950	1,843,893	1,080,326	448,738

Cyclopharm Limited Appendix 4E 26

Notes Continued

==> picture [151 x 48] intentionally omitted <==

5. INCOME TAX

Current income tax (expense) / benefit Deferred tax (expense) / benefit Income tax reported in income statement Accounting profit / (loss) before income tax Statutory income tax rate of 30% Expenditure not allow able for income tax purposes Share based payments for w hich no deduction is obtained Effects of low er rates on overseas income Tax expense offset against carry forw ard tax losses Tax losses not recognised in foreign subsidiaries Total income tax (expense) / benefit Effective income tax rate Current tax liabilities Current income tax (receivable) / liability Deferred tax assets/liabilties Deferred tax assets and liabilities relate to the follow ing: Provisions Tax losses applied in current year Tax losses of parent entity brought to account Tax losses / (payable) transferred from Australian subsidiaries Adjustment to recognise deferred tax asset arising from share issue costs Transfer of deferred tax liability Other Total deferred tax assets A reconciliation of income tax benefit / (expense) applicable to accounting profit before income tax at the statutory income tax rate to income tax expense at the Group's effective income tax rate is as follow s: Deferred tax assets from temporary differences on:	2009 2008 2009 2008 $ $ $ $
	(563,249) (59,593) (424,877) 196,330 40,238 (131,621) (22,574) (21,087)
	(523,011) (191,214) (447,451) 175,243

	2,567,502 1,896,474 1,416,255 (654,433) (770,251) (568,942) (424,877) 196,330 (1,218) (883) (289) (80) (22,285) (21,007) (22,285) (21,007) 207,002 509,349 - - - (104,268) - - 63,741 (5,463) - -
	(523,011) (191,214) (447,451) 175,243
	(20.4%) (10.1%) (31.6%) (26.8%)
	174,039 5,071 - -
	154,629 121,817 1,950 1,950 (447,450) - (447,450) - 384,768 384,768 384,768 384,768 (117,850) 104,268 236,929 146,564 25,901 155,246 25,901 155,246 - (771,625) - - 3 5,526 (43,688) (70,198)
	- - 158,409 618,330

Capitalised expenditure Total deferred tax liabilities Deferred tax liabilities from temporary differences on:
	367,304 50,232 716,976 821,856
	367,304 50,232 716,976 821,856

Cyclopharm Limited Appendix 4E 27

Notes Continued

==> picture [151 x 48] intentionally omitted <==

6. NET TANGIBLE ASSETS AND EARNINGS PER SHARE

Net Tangible Assets per share

	Consolidated
Net assets per share Net tangible assets per share Weighted average number of ordinary shares for net assets per share	2009 2008 $ $
	0.08 0.09 0.07 0.07 Number Number
	171,012,616 141,876,726

Earnings per share


Basic earnings per share for continuing operations Basic earnings per share Diluted earnings per share	2009 2008 cents cents 1.20 1.20 1.20 1.20 1.20 1.20 Consolidated

	Number Number

Weighted average number of ordinary shares for basic earnings per share	171,012,616 141,876,726

Cyclopharm Limited Appendix 4E 28

Notes Continued

==> picture [151 x 48] intentionally omitted <==

7. CASH AND CASH EQUIVALENTS

7. CASH AND CASH EQUIVALENTS
	Consolidated		Parent
	2009	2008	2009	2008
	$	$	$	$
Cash at bank and in hand	4,612,205	4,206,271	2,886,619	2,669,372
Total cash and cash equivalents	4,612,205	4,206,271	2,886,619	2,669,372
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates.
The fair value of cash equivalents is $4,612,205 (2008: $4,206,271).
Reconciliation of Cash Flow Statement	2009	2008	2009	2008
For the purpose of the Cash Flow Statement, cash and cash
equivalents comprise the follow ing:
Cash at bank and in hand	4,612,205	4,206,271	2,886,619	2,669,372
	4,612,205	4,206,271	2,886,619	2,669,372
(a) Reconciliation of net profit / (loss) after tax to net
cash flows from operations
Net profit / (loss) after tax	2,044,491	1,757,062	968,804	(427,388)
Adjustments for non-cash income and expense items:
Depreciation	404,912	290,628	-	-
Amortisation	45,317	40,556	-	-
Impairment w ritedow n	(691,705)	(141,738)	-	-
Movement in equity	325,957	-	-	-
Movement provision for doubtful debts	-	(375,188)	-	-
Movement provision for employee benefits	113,522	66,694	-	-
Movement in foreign exchange	-	766,278	-	-
Movement in employee benefits reserve	74,283	70,023	74,283	70,023
Movement in other provisions	24,609	(19,514)	(6,500)	(6,500)
	2,341,385	2,454,801	1,036,587	(363,865)
Increase/decrease in assets and liabilities:
(Increase) / decrease in receivables	812,099	(783,997)	886,545	(1,073,220)
(Increase) / decrease in inventories	(387,626)	(507,292)	-	-
(Increase) / decrease in other receivables	255,250	(8,227)	-	-
(Increase) / decrease in deferred tax assets	616,379	(288,928)	-	-
Increase / decrease in related party loans	-	-	373,168	(821,389)
Increase / (decrease) in creditors	339,130	308,086	(12,877)	(68,242)
Increase / (decrease) in current tax liabilities	168,968	5,071	-	-
Increase / (decrease) in deferred tax liabilities	(454,552)	306,514	-	-
Net cash from operating activities	3,691,033	1,486,028	2,283,423	(2,326,716)

Cyclopharm Limited Appendix 4E 29

Notes Continued

==> picture [151 x 48] intentionally omitted <==

8. TRADE AND OTHER RECEIVABLES


Current Trade receivables, third parties Related party receivable Other receivables Total trade and other receivables Non-current Loans to related parties Total other receivables	Notes	Consolidated Parent
		2009 2008 2009 2008 $ $ $ $
		3,590,705 4,402,804 - -
		3,590,705 4,402,804 - - - - 197,250 1,071,123 690,664 324,273 10,523 23,195

		4,281,369 4,727,077 207,773 1,094,318
		- - 5,794,748 3,746,699
		- - 5,794,748 3,746,699

Terms and conditions

Terms and conditions relating to the above financial instruments

a. Trade receivables are non-interest bearing and generally on 30 and 60 day terms.
b. Other debtors are non-interest bearing and have repayment terms between 30 and 90 days. c. Related party details are set out in the Note 19 Related party disclosures, controlled entities.

9. INVENTORIES

NVENTORIES	NVENTORIES

Raw materials at cost Finished goods at low er of cost or net realisable value	Consolidated Parent
	2009 2008 2009 2008 $ $ $ $
	853,415 924,729 - - 2,389,577 1,930,637 - -
	3,242,992 2,855,366 - -

Cyclopharm Limited Appendix 4E 30

Notes Continued

==> picture [151 x 48] intentionally omitted <==

10. PROPERTY, PLANT AND EQUIPMENT

Year ended

10. PROPERTY, PLANT AND EQUIPMENT	10. PROPERTY, PLANT AND EQUIPMENT	10. PROPERTY, PLANT AND EQUIPMENT
Year ended
31	Consolidated December 2009	Land and buildings Leasehold improvements Plant and equipment Leased Plant and Equipment Capital Work in Progress Total $ $ $ $ $
	at written down value Additions Disposals / Transfers Depreciation for the year 1 January 2009	161,500 23,945 1,165,043 - 1,375,346 2,725,834 - 1,927 134,134 - 2,770,042 2,906,103 - - (174,074) - - (174,074) - (6,242) (398,671) - - (404,912)
	at written down value Cost value Accumulated depreciation Net carrying amount Cost value Accumulated depreciation Net carrying amount 31 December 2009 31 December 2009 1 January 2009	161,500 19,631 726,432 - 4,145,388 5,052,951 161,500 206,189 2,796,499 114,049 1,375,346 4,653,583 - (182,244) (1,631,456) (114,049) - (1,927,749) 161,500 23,945 1,165,043 - 1,375,346 2,725,834 161,500 208,116 2,527,570 114,049 4,145,388 7,156,623 - (188,485) (1,801,137) (114,049) - (2,103,671) 161,500 19,631 726,433 - 4,145,388 5,052,951

The asset class Capital Work in Progress relates solely to the development of the PET Facility at Macquarie University Hospital, New South Wales. In the current year development costs of $2,770,042 (2008: $1,317,178) incurred in the current year were capitalised.

Consolidated Year ended 31 December 2008	Land and buildings Leasehold improvements Plant and equipment Leased Plant and Equipment Capital Work in Progress Total $ $ $ $ $
at written down value Additions / Transfers Disposals / Transfers Depreciation for the year at written down value Cost value Accumulated depreciation Impairment Net carrying amount Cost value Accumulated depreciation Net carrying amount 1 January 2008 31 December 2008 1 January 2008 31 December 2008	161,500 30,165 781,737 - - 973,402 - - 817,836 - 1,375,346 2,193,182 - - (150,122) - - (150,122) - (6,220) (284,408) - - (290,628)
	161,500 23,945 1,165,043 - 1,375,346 2,725,834
	161,500 206,189 1,978,663 114,049 - 2,460,401 - (176,024) (1,196,926) (114,049) - (1,486,999) - - - -
	161,500 30,165 781,737 - - 973,402
	161,500 206,189 2,796,499 114,049 1,375,346 4,653,583 - (182,244) (1,631,456) (114,049) - (1,927,749)
	161,500 23,945 1,165,043 - 1,375,346 2,725,834

Cyclopharm Limited Appendix 4E 31

Notes Continued

==> picture [151 x 48] intentionally omitted <==

11. INVESTMENTS IN SUBSIDIARIES

Investments in controlled entities at cost Total investments	Consolidated Parent
	2009 2008 2009 2008 $ $ $ $
	- - 6,122,017 6,122,017
	- - 6,122,017 6,122,017

Refer to Note 19 for details of subsidiary names, locations and ownership interests.

12. INTANGIBLE ASSETS

Consolidated	Intellectual property Technegas Development FDA Development Total $ $ $ $
Balance at Arising during the year Amortisation Impairment w rite dow n Balance at Non-Current Non-Current 31 December 2009 Total *1 January 2009* *31 December 2009* 31 December 2008 Total	103,184 192,636 2,498,033 2,793,853
	21,496 - 343,340 364,836 (14,597) (30,720) - (45,317) - - (691,705) (691,705)
	110,083 161,916 2,149,668 2,421,667
	110,083 161,916 2,149,668 2,421,667
	110,083 161,916 2,149,668 2,421,667
	103,184 192,636 2,498,033 2,793,853
	103,184 192,636 2,498,033 2,793,853

The recoverable amount of FDA and Technegas development costs have been assessed using a discounted cash flow methodology forecasting three years of pre-tax cash flows.

The following describes each key assumption on which management has based its value in use calculations:

(a) Three year pre tax cash flow projections, based upon management approved budgets and growth rates covering a one year period, with the subsequent periods based upon management expectations of growth excluding the impact of possible future acquisitions, business improvement capital expenditure and restructuring.
(b) The discount factor used was 15% in 2009 (2008: 12.5%).
(c) The Directors have concluded that the recoverable amount of the FDA development costs and other intangibles exceed their carrying value.
(d) Following the settlement with Clinquest Inc, the Company’s former adviser to obtain approval to sell Technegas in the United States the Director’s have assessed the portion of the FDA Development asset class relating to Clinquest Inc as impaired and consequently wrote down $691,705 during the year.

Cyclopharm Limited Appendix 4E 32

Notes Continued

==> picture [151 x 48] intentionally omitted <==

13. TRADE AND OTHER PAYABLES

Trade payables, third parties Other payables and accruals Total trade and other payables	Consolidated Parent
	2009 2008 2009 2008 $ $ $ $
	1,414,254 915,318 66,480 29,357 485,899 645,705 - 50,000
	1,900,153 1,561,023 66,480 79,357

Terms and conditions

Terms and conditions relating to the above financial instruments:

(i) Trade payables are non-interest bearing and are normally settled on 30-60 day terms.

(ii) Other payables and accruals are non-interest bearing and have an average term of 4 months.

(iii) The non-interest bearing loan, related party loan is payable when called upon. Related party details are set out in the Note 19 Related party disclosures, controlled entities

14. INTEREST BEARING LOANS AND BORROWINGS

Current Bank loan - secured Interest bearing loans and borrowings (current) Non-current Bank loan - secured Interest bearing loans and borrowings (non-current) Total interest bearing loans and borrowings	Consolidated Parent
	2009 2008 2009 2008 $ $ $ $
	1,757,350 - 1,757,350 -
	1,757,350 - 1,757,350 -
	975,900 2,733,250 975,900 2,733,250
	975,900 2,733,250 975,900 2,733,250
	2,733,250 2,733,250 2,733,250 2,733,250

Cyclopharm Limited Appendix 4E 33

Notes Continued

==> picture [151 x 48] intentionally omitted <==

14. INTEREST BEARING LOANS AND BORROWINGS (continued)

(a) Financing facilities available:

At reporting date, the following financing facilities had been negotiated and were available:

Total facilities available: - secured bank loans, third party Facilities used at reporting date: - secured bank loans, third party Facilities unused at reporting date: - secured bank loans, third party Total facilities Facilities used at reporting date: Facilities unused at reporting date:	Notes	Consolidated Parent
		2009 2008 2009 2008 $ $ $ $
	14	6,450,000 6,450,000 6,450,000 6,450,000
		6,450,000 6,450,000 6,450,000 6,450,000
		2,733,250 2,733,250 2,733,250 2,733,250
		2,733,250 2,733,250 2,733,250 2,733,250
		3,716,750 3,716,750 3,716,750 3,716,750
		3,716,750 3,716,750 3,716,750 3,716,750
		6,450,000 6,450,000 6,450,000 6,450,000 (2,733,250) (2,733,250) (2,733,250) (2,733,250)
		3,716,750 3,716,750 3,716,750 3,716,750

(b) Secured Bank Loans

(i) Cyclopharm has an amortising bank bill facility provided by the National Australia Bank of $1.35 million. The entirety of the facility must be repaid by 31 July 2011. The facility is secured by a first registered mortgage debenture over Cyclopharm Limited and a guarantee and indemnity for $6,450,000 from Cyclomedica Australia Pty Ltd, CycloPET Pty Ltd, Allrad No. 28 Pty Ltd and Allrad No. 29 Pty Ltd. Supported by Fixed and Floating Charge and First Registered Debenture charges over these companies.
(ii) Cyclopharm has a 15 month multi-option facility (MOF) provided by the National Australia Bank for $5.1 million. The facility is due for renewal in March 2010. The facility is secured by a first registered mortgage debenture over Cyclopharm Limited and a guarantee and indemnity for $6,450,000 from Cyclomedica Australia Pty Ltd, CycloPET Pty Ltd, Allrad No. 28 Pty Ltd and Allrad No. 29 Pty Ltd. Supported by Fixed and Floating Charge and First Registered Debenture charges over these companies.

Cyclopharm Limited Appendix 4E 34

Notes Continued

==> picture [151 x 48] intentionally omitted <==

15. PROVISIONS

	Consolidated	Parent	Parent
Consolidated Balance at Arising during the year Utilised Balance at Current *1 January 2009* *31 December 2009* 31 December 2009	Employee Entitlements Other Total $ $ $ 349,393 53,500 402,893	Other Total $ $ 53,500 53,500
	186,224 127,505 313,729 (72,702) (102,896) (175,598)	47,000 47,000 (53,500) (53,500)
	462,915 78,109 541,024	47,000	47,000
	420,174 78,109 498,283	47,000	47,000
Non-Current	42,741 - 42,741	-	-

Total	462,915 78,109 541,024	47,000	47,000
Number of employees Number of employees at year end Current Non-Current 31 December 2008	23
	318,034 53,500 371,534 31,359 - 31,359	53,500 -
Total	349,393 53,500 402,893	53,500	53,500
Number of employees Number of employees at year end	35	2

Consolidated

Other provisions consist solely of year-end audit fees accrual of $47,000 (2008: $53,500) and customer deposits of $31,109 (2008: $0).

Parent

Other provisions consist solely of year-end audit fees accrual of $47,000 (2008: $53,500).

Cyclopharm Limited Appendix 4E 35

Notes Continued

==> picture [151 x 48] intentionally omitted <==

16. CONTRIBUTED EQUITY

CONTRIBUTED EQUITY
Issued and paid up capital Ordinary shares Other contributed equity Total issued and paid up capital Ordinary shares (a) Issued and paid up capital Balance at the beinning of the period Issue of 31,800,000 shares at $0.10 (b) Other contributed equity Balance at the beginning of the period Capital raising costs Cancelation of shares to directors and employees Acquisition of minority interests in controlled entities Balance at end of period Balance at end of period Issue of shares to directors and employees	Notes	Consolidated Parent 2009 2008 2009 2008 2009 2008 Number Number $ $ $ $
	(a) (b) (i) (ii) (iii) (iv)	171,112,616 171,112,616 16,422,066 16,422,066 11,289,438 11,289,438 - - (5,333,158) (5,295,657) - -
		171,112,616 171,112,616 11,088,908 11,126,409 11,289,438 11,030,432
		171,112,616 138,712,616 16,422,066 13,349,740 11,289,438 8,217,112 - 31,800,000 - 3,180,000 - 3,180,000 - - - (107,674) - (107,674) - 1,500,000 - - - - - (900,000) - - - -
		171,112,616 171,112,616 16,422,066 16,422,066 11,289,438 11,289,438
		- - (5,295,657) (5,295,657) - - - - (37,501) - - -
		- - (5,333,158) (5,295,657) - -

(i) On 28 November 2008, Cyclopharm allotted 31,800,000 rights issue shares to shareholders in relation to the 1:4.4 non-renounceable rights issue.
(ii) In the prior year the total of costs relating to non-renounceable rights issue was $153,820.
(iii) On 3 June 2008, 1,400,000 LTIP Shares were issued to Mr James McBrayer upon appointment as Cyclopharm’s Managing Director via a non-recourse loan. A further 100,000 shares were issued to other employees on 7 February 2008.
(iv) On 3 June 2008, 900,000 LTIP shares held by Mr John Sharman the former Managing Director were cancelled along with the corresponding non-recourse loan (not accounted for the in the Financial Statements). A further 100,000 shares previously issued to other employees were cancelled.
(v) An adjustment was made to the prior period comparatives to recognise a deferred tax asset arising from share issue costs (accounted for directly in equity) of $259,006.

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

Cyclopharm Limited Appendix 4E 36

Notes Continued

==> picture [151 x 48] intentionally omitted <==

16. CONTRIBUTED EQUITY (continued)

When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns for shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the entity.

Management constantly assess the capital structure to take advantage of favourable costs of capital and/or high returns on assets. As the market in continually changing, management may issue dividends to shareholders, issue new shares, increase its short or long term borrowings or sell assets to reduce borrowings.

The Directors did not declare a dividend during the financial year ended 31 December 2009.

Management monitor capital through the gearing ratio (net debt/total capital). Management aim to ensure that the Group’s gearing ratio does not exceed 45%. The Group has satisfied its year-end externally imposed capital requirements of its banking facilities detailed in Note 14 (b).

Notes Total interet bearing loans and borrowings 14 Less cash and cash equivalents 7 Net (cash) / debt Total equity Gearing ratio A negative ratio denotes that net cash exceeded	Notes	Consolidated Parent
		2009 2008 2009 2008 $ $ $ $
		2,733,250 2,733,250 2,733,250 2,733,250 (4,612,205) (4,206,271) (2,886,619) (2,669,372)
		(1,878,955) (1,473,021) (153,369) 63,878
		13,928,641 13,055,556 11,605,860 10,407,527 (13.5%) (11.3%) (1.3%) 0.6%
		net borrowings at the reporting date

17. FINANCIAL RISK MANAGEMENT OBJECTIVES

The Group’s principal financial instruments comprise receivables, payables, bank loans and overdrafts and cash and short-term deposits. The Group manages its exposure to key financial risks, including interest rate and currency risk in accordance with the Group’s financial risk management policy. The objective of the policy is to support the delivery of the Group’s financial targets while protecting future financial security.

The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate, foreign exchange risk and assessments of market forecasts for interest rate, foreign exchange and commodity prices. Ageing analysis and monitoring of specified credit allowances are undertaken to manage credit risk, liquidity risk is monitored through the development of future rolling cash flow forecasts.

The Board review and agrees policies for managing each of these risks as summarised below.

Primary responsibility for identification and control of financial risks rests with the Audit and Risk Management Committee under the authority from the Board. The Board reviews and agrees policies for managing each of the risks identified below, including for interest rate risk, credit allowances and cash flow forecast projections. It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments shall be undertaken.

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2.

Cyclopharm Limited Appendix 4E 37

Notes Continued

==> picture [151 x 48] intentionally omitted <==

(a) Interest rate risk

The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long term debt obligations with a floating interest rate. The Group’s policy is to manage its interest cost using a mix of fixed and variable rate debt. The Group constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of existing positions, alternative financing, positions and the mix of fixed and variable interest rates.

The following sensitivity analysis is based on the interest rate risk exposures in existence at the Statement of Financial Position date.

At 31 December 2009, if interest rates had moved, as illustrated in the table below, with all other variables held constant, pre tax profit would have been affected as follows:


Profit / (loss) before income tax +1.0% (100 basis points) -0.5% (50 basis points) Judgements of reasonably possible movements:	2009 2008 2009 2008 Notes $ $ $ $ Consolidated Parent
	(27,333) (21,224) (27,333) (21,224) 13,666 10,612 13,666 10,612

The movements in profit are due to possible higher or lower interest costs from variable rate debt and cash balances.

Cyclopharm Limited Appendix 4E 38

Notes

Continued

17. FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)

==> picture [151 x 48] intentionally omitted <==

At balance date, the Group had the following mix of financial assets and liabilities exposed to variable interest rate risk:

(a) Cash flow interest rate risk (continued)

Consoli Year en Consoli Year en	dated Total ded Note 1 year or less 1 to 5 years More than 5 years FINANCIAL ASSETS Cash and cash equivalents 7 4.00% - 4,612,205 - - - 4,612,205 Trade and other receivables 8 n/a 4,281,369 - - - - 4,281,369 Floating interest maturing in Weighted average interest rate % 31 December 2009 Floating interest rate Non interest bearing
	Total financial assets 4,281,369 4,612,205 - - - 8,893,574
	FINANCIAL LIABILITIES Trade payables, third parties 13 n/a 1,850,154 - - - - 1,850,154 Secured bank loans, third party 14 5.83% - - 1,757,350 975,900 - 2,733,250 Employee entitlements 15 n/a 462,915 - - - - 462,915
	Total financial liabilities 2,313,069 - 1,757,350 975,900 - 5,046,319

	Net exposure 1,968,300 4,612,205 (1,757,350) (975,900) - 3,847,255
	dated Total ded Note 1 year or less 1 to 5 years More than 5 years FINANCIAL ASSETS Cash and cash equivalents 7 0.25% - 4,206,271 - - - 4,206,271 Trade and other receivables 8 n/a 4,727,077 - - - - 4,727,077 31 December 2008 Weighted average interest rate % Non interest bearing Floating interest rate Floating interest maturing in
	Total financial assets 4,727,077 4,206,271 - - - 8,933,348
	FINANCIAL LIABILITIES Trade payables, third parties 13 n/a 1,561,023 - - - - 1,561,023 Secured bank loans, third party 14 7.72% - - - 2,733,250 - 2,733,250 Employee entitlements 15 n/a 349,393 - - - - 349,393
	Total financial liabilities 1,910,416 - - 2,733,250 - 4,643,666

	Net exposure 2,816,661 4,206,271 - (2,733,250) - 4,289,682

Cyclopharm Limited Appendix 4E 39

Notes Continued

==> picture [151 x 48] intentionally omitted <==

17. FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)

(b) Credit risk

Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and trade and other receivables. The Group’s exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable note.

The Group does not hold any credit derivatives to offset its credit exposure.

The Group trades only with recognised, creditworthy third parties and as such collateral is not requested nor is it the Group’s policy to scrutinise its trade and other receivables. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures such as reviewing their industry reputation, financial position and credit rating. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is constantly managed.

There are no significant unprovided concentrations of credit risk within the Group.

(c) Liquidity risk

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans.

The Group‘s policy is to monitor the maturity of borrowings at all times. At 31 December 2009, 64% of the Group’s debt will mature in less than one year (2008: 0%) however the majority of these facilities are in the process of renewal to extend the maturity dates.

Refer to the table below the heading 17 (a) Cash flow interest rate risk which reflects all contractually fixed pay-offs for settlement of financial liabilities and collection of financial assets. Trade payables and other financial liabilities generally originate from the financing of assets used in our ongoing operations such as investments in working capital eg inventories and trade receivables and investment in property plant and equipment. These assets are considered in the Group’s overall liquidity risk. To monitor existing financial assets and liabilities as well as to enable an effective controlling of future risks, Cyclopharm monitors its Group’s expected settlement of financial assets and liabilities on an ongoing basis.

The Group monitors rolling forecast of liquidity reserves on the basis of expected cash flow. At balance date the Group has $3,716,750 (2008: $3,716,750) in unused credit facilities available for use.

Consolidated		Less than 6	6 months to 1	1 year to 5	Greater than	Total
Year ended	Note	months	year	years	5 years
31 December 2009
Trade payables, third parties	13	1,850,154	-	-	-	1,850,154
Secured bank loans, third party	14	-	1,757,350	975,900	-	2,733,250
31 December 2008
Trade payables, third parties	13	1,561,023	-	-	-	1,561,023
Secured bank loans,thirdparty	14	-	-	2,733,250	-	2,733,250

(d) Commodity price risk

The Group’s exposure to commodity price risk is minimal.

Cyclopharm Limited Appendix 4E 40

Notes Continued

==> picture [151 x 48] intentionally omitted <==

17. FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)

(e) Foreign currency risk

As a result of significant investment operations in Europe, the Group’s Statement of Financial Position can be affected significantly by movements in the EURO / A$ exchange rates. The Group does not hedge this exposure.

The Group also has transactional currency exposures. Such exposure arises from sales or purchases by an operating unit in currencies other than the unit’s functional currency. Approximately 85% (2008: 84%) of the Group’s sales are denominated in currencies other than the functional currency of the operating unit making the sale, whilst approximately 51% (2008: 65%) of costs are denominated in the unit’s functional currency.

At 31 December 2009, the Group had the following financial instrument exposure to foreign currency fluctuations:

currency fluctuations:
	Consolidated			Parent
	2009	2008	2009		2008
	$	$	$		$
United States dollars
Amounts payable	25,064	343,880		-		-
Amounts receivable	103,098	58,917		-		-
Euros
Amounts payable	223,259	166,671		-		-
Amounts receivable	2,881,680	3,613,941		-		-
						-
Canadian dollars
Amounts payable	4,457	-		-		-
Amounts receivable	351,148	458,852		-		-
Net exposure	(3,083,146)	(3,621,159)		-		-

Management believe the balance date risk exposures are representative of the risk exposure inherent in the financial instruments.

Fair values

All of the Group’s financial instruments recognised in the Statement of Financial Position have been assessed as at fair values.

Cyclopharm Limited Appendix 4E 41

Notes Continued

==> picture [151 x 48] intentionally omitted <==

17. FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)

(e) Foreign currency risk (continued)

Foreign currency sensitivity

Currency risk is measured using sensitivity analysis. A portion of Cyclopharm’s receivables and payables are exposed to movements in the values of those currencies relative to the Australian dollar. Cyclopharm management have determined that it is not cost effective to hedge against foreign currency fluctuations.

Cyclopharm is exposed to US Dollars (USD) and European Euro (Euro) movements. The following table details Cyclopharm’s sensitivity to a 10% change in the Australian dollar against respective currencies with all other variables held constant as at reporting date for unhedged foreign exposure risk. A positive number indicates an increase in net profit/equity.

A sensitivity has been selected as this is considered reasonable given the current level of exchange rates and the volatility observed on a historic basis and market expectation for future movement.

	Consolidated	Consolidated	Parent	Parent
	Increase in	Decrease in	Increase in	Decrease in
	AUD of 10%	AUD of 10%	AUD of 10%	AUD of 10%
	$	$	$	$
Euro
31 December 2009
Net profit	(562,378)	707,572		-	-
Equity increase/(decrease)	(562,378)	707,572		-	-
31 December 2008
Net profit	(509,351)	622,538		-	-
Equity increase/(decrease)	(509,351)	622,538		-	-

Cyclopharm Limited Appendix 4E 42

Notes Continued

==> picture [151 x 48] intentionally omitted <==

18. COMMITMENTS

(a) Operating lease commitments

Future minimum rentals payable under non-cancellable operating leases are as follows:

Future minimum rentals payable under non-cancellable operating leases are as follows:	Future minimum rentals payable under non-cancellable operating leases are as follows:

Operating Lease Commitments Minimum lease payments Due not later than one year Due later than 1 year & not later than 5 years More than 5 years Total operating lease commitments Operating lease expenses recognised as an expense during the period:	2009 2008 2009 2008 $ $ $ $ Consolidated Parent
	252,210 170,266 - - 1,540,012 649,356 - - 1,002,000 - - -
	2,794,222 819,622 - -
	199,028 148,579 - -

The Group has entered into commercial leases on office space within certain buildings. These leases have an average life of between 3 to 5 years with renewal options included in the contracts. There are no restrictions placed upon the lessee by entering into these leases.
Cyclopet Pty Ltd has entered into a commercial lease for the PET Facility at Macquarie University Hospital. The lease has a term of 10 years and commences upon commissioning of the Hospital.
The Group also has entered into commercial leases on motor vehicles that have an average life of approximately 3 to 5 years.

(b) Finance lease commitments

The Group had no finance lease commitments for the year ended 31 December 2009.

(c) Other commitments

(c) Other commitments
		Consolidated Parent
	Notes	2009 2008 2009 2008 $ $ $ $

The company has the following other commitments:
Not later than one year Due later than 1 year & not later than 5 years More than 5 years Total	(i) (ii) (ii)	1,757,350 - - - 975,900 2,733,250 975,900 2,733,250 - - - -
		2,733,250 2,733,250 975,900 2,733,250

(i) Cyclopharm has a 15 month multi-option facility (MOF) provided by the National Australia Bank for $5.1 million which was renewed in February 2010. At balance date $1.38 million had been drawn down against this facility.

(ii) Cyclopharm has an amortising bank bill facility provided by the National Australia Bank of $1.35 million. At balance date $1.35 million had been drawn down against this facility. Repayments under the amortising facility are expected to commence in July 2010 and the entirety of the facility must be repaid by 31 July 2011.Of this facility $407,350 is due for repayment in 2010.

Cyclopharm Limited Appendix 4E 43

Notes Continued

==> picture [151 x 48] intentionally omitted <==

18. COMMITMENTS (continued)

(d) Capital commitments

(d) Capital commitments
Due later than 1 year & not later than 5 years Total The company has the following capital expenditure commitments contracted for property, plant and equipment:	Consolidated Parent
	2009 2008 2009 2008 $ $ $ $
	4,352,503 1,615,000 - -

	4,352,503 1,615,000 - -

Cyclopet Pty Ltd entered into a contract with a company specialising in GMP facilities fit outs to fit out the PET facility at Macquarie University Hospital for $1.3m. Works to the value of $0.9m had been completed at year end.
Cyclopet Pty Ltd took delivery of the cyclotron and production tools for the PET Facility at Macquarie University Hospital in October 2009 from GE Healthcare. The equipment with a value of approximately $4.0m is to be settled 90 days from the commissioning of the PET Facility.

19. RELATED PARTY DISCLOSURES

The consolidated financial statements include the financial statements of Cyclopharm and the subsidiaries as stated under the controlled entities note.

The following table provides the total amount of transactions that were entered into with related parties for the relevant financial year (for information regarding outstanding balances at year-end, refer to Note 8 Trade and other receivables, Note 13 Trade and other payables and Note 14 Interest bearing loans and borrowings):

Cyclopharm Limited Appendix 4E 44

Notes Continued

==> picture [151 x 48] intentionally omitted <==

19. RELATED PARTY DISCLOSURES (continued)

		Sales to		Purchases	Other	Amounts owed
		related		from related	Transactions with	by related	Amounts owed
		parties		parties	related parties	parties	to related parties
CONSOLIDATED		$		$	$	$	$
CVC Venture Managers Pty Ltd	2009		-	-	39,160	-	1,870
	2008		-	-	145,107	-	2,035
Nucleus Consulting	2009		-	-	-	-	-
	2008		-	-	63,068	-	-
VA Consulting Pty Ltd	2009		-	-	75,688	-	8,250
	2008		-	-	152,284	-	-
		Sales to		Purchases	Other	Amounts owed
		related		from related	Transactions with	by related	Amounts owed
		parties		parties	related parties	parties	to related parties
PARENT		$		$	$	$	$
CVC Venture Managers Pty Ltd	2009		-	-	39,160	-	1,870
	2008		-	-	145,107	-	2,035
VA Consulting Pty Ltd	2009		-	-	75,688	-	8,250
	2008		-	-	152,284	-	-

Ultimate parent entity

Cyclopharm Limited is the ultimate parent entity in the wholly owned group.

Terms and conditions of transactions with related parties

During the year payments of $39,160 (2008: $145,107) were made to CVC Venture Managers (an entity of which Mr Sharman and Mr Gould are Non-Executive Directors) in relation to the rental of office space. Mr Gould does not receive any benefits from CVC Venture Managers.
In the prior year payments of $63,068 were made to Nucleus Consulting (an entity controlled by Mr McBrayer) in relation to Mr McBrayer’s role as a consultant prior to his appointment as Managing Director on 3 June 2008.
During the year payments of $75,688 (2008: $152,284) were made to VA Consulting Pty Ltd (an entity controlled by Mr Sharman). Of this amount, payments of $60,688 for his role as litigation case manager and $15,000 for his role as a non-executive director.
Cyclomedica Australia manufactures products that are sold to its overseas subsidiaries.

Cyclopharm Limited Appendix 4E 45

Notes Continued

==> picture [151 x 48] intentionally omitted <==

19. RELATED PARTY DISCLOSURES (continued)

Controlled Entities

		Country of	Percentage of equity	Percentage of equity
Name	Note	Incorporation	interest held
			2009	2008
Cyclopharm Limited	1,2	Australia
Controlled entities
CycloPET Pty Ltd	2	Australia	100%	100%
Cyclomedica Australia Pty Limited	2	Australia	100%	100%
Cyclomedica Ireland Limited	3	Ireland	100%	100%
Cyclomedica Europe Limited	3	Ireland	100%	100%
Cyclomedica Germany GmbH	5	Germany	100%	100%
Cyclomedica Canada Limited	4	Canada	100%	100%
Allrad No 28. Pty Ltd	2	Australia	100%	100%
Allrad No 29. Pty Ltd	2	Australia	100%	100%
Notes
1. Cyclopharm Limited is the ultimate parent entity in the wholly owned group.
2. Audited by Russell Bedford NSW, Australia.
3. Audited by Moore Stephens Nathans, Republic of Ireland.
4. Audited by Schwartz Levitsky & Feldman & LLP, Toronto, Canada.
5. Audited by Bilzanzia GmbH Wirtschaftsprufungsgesellschaft, Germany

Cyclopharm Limited Appendix 4E 46

Notes Continued

==> picture [151 x 48] intentionally omitted <==

20. EVENTS AFTER THE STATEMENT OF FINANCIAL POSITION DATE

BANKING FACILITIES

In February 2010, the Company renewed its $5.1m Multi Option Facility with the National Australia Bank.

21. AUDITORS’ REMUNERATION

The following total remuneration was received, or is due and receivable, by auditors of the Company in respect of:

Audit and review of the financial statements Other services: - tax compliance - share registry Audit of the financial statements Other services Total auditors' remuneration Amounts received or due and receivable by auditors other than Russell Bedford NSW for: Amounts received or due and receivable by Russell Bedford NSW and associated entities for:	Consolidated Parent
	2009 2008 2009 2008 $ $ $ $
	93,000 89,000 93,000 89,000 12,730 8,500 12,730 8,500 12,781 20,917 12,781 20,917
	118,511 118,417 118,511 118,417
	40,303 70,482 - - 53,103 7,982
	93,406 78,464 - -
	211,917 196,881 118,511 118,417

22. DIRECTOR AND KEY MANAGEMENT PERSONNEL DISCLOSURE

In accordance with the Corporations Amendment Regulations 2005 (No.4), the Company has transferred the remuneration disclosures required by AASB 124: Related Party Disclosures from the notes to the financial statements, to the Directors’ Report under the heading of ‘Remuneration Report’.

Cyclopharm Limited Appendix 4E 47

Notes Continued

==> picture [151 x 48] intentionally omitted <==

23. SHARE BASED PAYMENT PLANS

(a) Recognised share-based payment expenses

The expense recognised for employee services received in relation to share based payments during the year is shown in the table below:

Expense arising from equity-settled share- based payment transactions (note 4)	Parent Consolidated
	2009 2008 2009 2008
	$ $ $ $
	74,283 70,023 74,283 70,023

The accumulated share based payment expense to 31 December 2009 was $217,972 (2008: $143,689).

(b) Type of share based payment plans

The share-based payment plan is described below. There have not been any modifications to the Long Term Incentive Plan (“Plan”) following its approval by members at the Annual General Meeting held on 8 May 2007.

Long Term Incentive Plan (“Plan”) Shares (“Shares”) are granted to certain executive Directors and certain employees.

In valuing transactions settled by way of issue of shares, performance conditions and market conditions linked to the price of the shares of Cyclopharm Limited are taken into account. All shares issued have market performance conditions so as to align shareholder return and reward for the Company’s selected management and staff (“Participants”).

The Shares vest upon the satisfaction of certain performance conditions (“Hurdles”) within the term (“Term”) specified for Participants in the Plan. The Board has residual discretion to accelerate vesting (i.e. Reduce or waive the Hurdles) and exercise of Shares in the event of a takeover or merger or any other circumstance in accordance with the terms of the Plan.

Shares in relation to which Hurdles have not been satisfied (i.e. that do not vest) will lapse and will not be able to be exercised, except in the circumstances described below. Shares which have not vested will lapse where a Participant ceases employment with Cyclopharm other than on retirement, redundancy, death or total and permanent disablement or unless as otherwise determined by the Board in its absolute discretion.

Where a Participant has ceased employment with Cyclopharm as a result of resignation, retirement, redundancy, death or total and permanent disablement prior to the end of a performance period only Shares that have vested may be retained by the Participant on a pro-rata basis. If an option holder ceases employment for any reasons mentioned above prior to the first anniversary of the grant date, the Participant forfeits all entitlement to Shares.

LTIP Shares issued

At the Annual General Meeting held on 8 May 2007, Shareholders approved the Company’s Plan.

Cyclopharm Limited Appendix 4E 48

Notes Continued

==> picture [151 x 48] intentionally omitted <==

23. SHARE BASED PAYMENT PLANS (continued)

Options

AASB 2 Share based Payment requires that the benefit to an employee arising from an employee share scheme such as the Cyclopharm Long Term Incentive Plan be treated as an expense in which the benefit is gained. No benefit to the employee arises from the Plan Shares as a corresponding loan applies to the issued Shares (although not required to be accounted for in the Financial Statements) instead the employee benefit is deemed to be the implied option (“Implied Option”) arising from the Plan.

The International Financial Reporting Council have determined that where employee shares are issued under a non-recourse loan payment plan, the loan assets and the increment to share capital should not be recognised at grant date but rather, the transactions be treated as share options. Consequently the value of the discount which has been determined using a binomial pricing model will be charged to the Statement of Comprehensive Income over the vesting period. Other increments to share capital will be recognized as the share loans are settled by the relevant employees.

(c) Summary of shares granted

The following table illustrates the number of movements in share options during the current year:

Exercisable at the end of the year Balance at the beinning of the year Granted during the year Exercised during the year Lapsed during the year Balance at the end of the year Exercise period from To Expiration day Number of recipients Exercise price Weighted average price	Consolidated Consolidated 2009 2008 Number Number
	3,500,000 2,900,000 - 1,500,000 - - (1,100,000) (900,000)
	2,400,000 3,500,000
	- - - 2 - $0.25 to $0.45 - $0.34 - 7/2/08 or 3/6/08 - 7/2/2010 to 3/6/2012 - 7/2/2010 to 3/6/2012

Cyclopharm Limited Appendix 4E 49

Notes Continued

==> picture [151 x 48] intentionally omitted <==

23. SHARE BASED PAYMENT PLANS (continued)

(d) Option pricing models

The following assumptions were used to derive a value for the Implied Options granted using the Black Scholes Option model as at the grant date, taking into account the terms and conditions upon which the Shares were granted:

Exercisepriceper option	$0.25	$0.30	$0.35	$0.35	$0.45	$0.45
Grant Date	3/06/2008	29/06/2007	3/06/2008	29/06/2007	7/02/2008	29/06/2007
Dividend yield	-	-	-	-	-	-
Expected annual volatility	38%	37%	38%	37%	38%	37%
Risk-free interest rate	7.25%	7.00%	7.25%	7.00%	7.00%	7.00%
Expected life of implied option (years)	2 years	2 years	4 years	3 years	2 years	2 years
Fair value per option	$0.042	$0.124	$0.046	$0.123	$0.004	$0.079
Share price at grant date	$0.210	$0.360	$0.210	$0.360	$0.180	$0.360
Model used	Black Scholes	Black Scholes	Black Scholes	Black Scholes	Black Scholes	Black Scholes

Expected volatility percentages used for the Option pricing calculations were determined using historic data over 12 months and were adjusted to reflect comparable companies in terms of industry and market capitalisation. The Implied Options arising from the Plan are not listed and as such do not have a market value

24. PRIOR PERIOD ADJUSTMENTS

Adjustments to prior period comparatives have been made to recognise deferred tax assets arising from share issue costs (accounted for directly in equity) of $259,006, being a deferred tax asset and a corresponding credit to contributed equity in the Balance Sheet and a tax expense of $103,759 was recognised in retained profits to 31 December 2008. The comparatives have been amended in this financial report to reflect the above adjustments.

Cyclopharm Limited Appendix 4E 50

==> picture [151 x 48] intentionally omitted <==

This page has been intentionally left blank.

Cyclopharm Limited Appendix 4E 51

AI assistant

CYCLOPHARM LIMITED — Earnings Release 2009

64741_rns_2010-02-24_8d6ab4c1-f706-49de-a6a9-e847406c0039.pdf

1. Company details

Name of entity

CYCLOPHARM LIMITED

Cyclopharm Limited Appendix 4E

9. Net tangible assets

10. Entities over which control has been gained or lost during the period

Control over entities

Loss of control over entities

Cyclopharm Limited Appendix 4E

11. Details of associates and joint venture entities

12. Significant Information

13. Foreign Entities

14. Commentary on results for the period

15. A statement as to whether the report is based on accounts which have been audited or subject to review, are in the

17. If the accounts have been audited or subject to review and are subject to dispute or qualification, details are described below

Contact details:

Appendix 4E Preliminary Final Report For the year ended 31 December 2009

Appendix 4E Commentary

Full Year Results of Cyclopharm Limited and its Controlled Entities (“Company”) For the 12 months ended 31 December 2009

Features

Managing Director’s Review Continued

Operating review

Technegas

Revenue Composition

Managing Director’s Review Continued

Regional Review (continued)

Europe

North America

Asia Pacific

Molecular Imaging

Macquarie Medical Imaging

New Drug Application to sell Technegas in the USA

Managing Director’s Review Continued

OUTLOOK

James McBrayer

Statement of Comprehensive Income

Statement of Financial Position

as at 31 December 2009

Statement of Cash Flows

for the year ended 31 December 2009

Statement of Changes in Equity for the year ended 31 December 2009

Notes

1. CORPORATE INFORMATION

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Preparation

b) Statement of compliance

Notes Continued

Notes Continued

Notes Continued

c) Basis of consolidation

Subsidiaries

Transactions eliminated on consolidation

d) Foreign currency translation

Functional and presentation currency

Transactions and balances

Group companies

e) Income tax

Tax consolidation

f) Property, plant and equipment

Impairment

Depreciation

g) Borrowing costs

h) Intangibles

Intangible assets

Research and development costs

i) Inventories

j) Trade and other receivables

k) Cash and cash equivalents

l) Trade and other payables

m) Interest-bearing loans and borrowings

n) Provisions

o) Employee entitlements

p) Employee share and performance share schemes

q) Leases

Operating Leases

r) Revenue recognition

Sale of goods

CYCLOPHARM LIMITED Earnings Release 2009