RAIDEN RESOURCES LIMITED — Interim / Quarterly Report 2006

Mar 15, 2006

MEDICAL MONITORS LIMITED

ABN 68 009 161 522

APPENDIX 4(d) AND

INTERIM FINANCIAL REPORT

FOR THE HALF YEAR ENDED 31 DECEMBER 2005

THIS INTERIM FINANCIAL REPORT IS TO BE READ IN CONJUNCTION WITH THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2005

MEDICAL MONITORS LIMITED

INTERIM FINANCIAL REPORT

31 DECEMBER 2005

Contents

Results for Announcement to the Market
Directors' Report	2
Auditors Independence Declaration	3
Independent Review Report	4
Directors' Declaration	6
Income Statement
Balance Sheet	8
Statement of Changes in Equity	9
Cash Flow Statement	10
Notes to and Forming Part of the Financial Statements	11

Company Particulars

Directors:	Dr Allan Shell (Chairman & Managing Director)Mr Neville BuchMr John GennerMr Boris PatkinMr Harry Platt
Company Secretary:	Richard Hyman
Registered Office:	Suite 407 Office TowerWestfield Eastgardens152 Bunnerong RoadEASTGARDENS NSW 2036
Administration Office:	Suite 407 Office TowerWestfield Eastgardens152 Bunnerong RoadEASTGARDENS NSW 2036
Share Registry:	Computershare Investor Services Pty LimitedLevel 2, 45 St Georges TerracePERTH WA 6000
Auditors:	Sneddon McKeownLevel 2, 175 Scott StNEWCASTLE NSW 2300
Stock Exchange Listing:	Medical Monitors Limited shares are quoted on the Australian StockExchange

RESULTS FOR ANNOUNCEMENT TO THE MARKET FOR THE HALF YEAR ENDED 31 DECEMBER 2005

				$A
Revenues from ordinary activities	up	857%	to	1,138,060
Loss from ordinary activities after tax attributable to members	down	170%	to	(939,903)
Loss from extraordinary items after tax attributable to members				NIL
Net Loss for the period attributable to members	down	170%	to	(939,903)

Dividends (distributions)	Amt per Security	Franked amountper Security
Interim dividend	NIL	NIL
Previous corresponding period	NIL	NIL
Record date for determining entitlements to the dividend		N/A

Brief explanation of any of the figures reported above and short details of any bonus or cash issue or other item(s) of importance not previously released to the market:

The consolidated entity had a significant increase in revenue ($1,138,060) from ordinary activities of 857%, and a reduction in operating losses of 170 %, when compared to the corresponding period in the previous year. This was due mainly to the growth of the monitoring business in the USA, and the related sales revenue stream of $755,430 to the Company.

Improved loss position of 170% was associated with the increased revenue position and the overall general cost reduction in operation. Additional R&D write downs were not incurred, as in 2004.

DIRECTORS' REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2005

Your directors submit the financial report of the economic entity for the half-year ended 31 December 2005.

Directors

The names of directors in office at any time during or since the end of the half-year:

Dr Allan Shell (Chairman & Managing Director) Mr Neville Buch Mr John Genner Mr Boris Patkin Mr Harry Platt

Review of Operations

The Company had a very successful year, with a number of important milestones achieved over the past months. These are as follows:

• The Company has increased its sales, through Primedical International (Medpri) to the cardiac monitoring entity in Chicago, iCardia Healthcare, which has been operational since October, 2004. Sales revenue for FY2006 is expected to increase further, as the venture broadens its market share in the USA.
• The Company previously announced that it had entered into a Heads Of Agreement with two UK entities, $\bullet$ Medpri Limited and Belgravia Telecom plc, (through its association with Medpri). Final discussions are in progress for an AIM listing in the UK. It is anticipated that the Company will gain considerable benefit from this entity as it undertakes new business activities into the UK and Europe, as well as in the USA.
• The operations in Australia have remained stable with upward growth in revenue. However, the market for the Company's products and services remain in the overseas markets and the ongoing assistance of the Australian and State governments, with export marketing grants and NSW State and Regional Development grants have been actively sort. This has accounted for a further $250,000 received in grants money over the past half-year. The Directors are aware of the grants programmes and remain active in applying for eligible activities for the Company.

Auditor's Declaration

The auditor's independence declaration for the half-year ended 31 December 2005 has been received and can be found on page 3 of the financial report.

This report is made in accordance with a resolution of the directors.

Dr Allan Shell Managing Director

16 March 2006

AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF MEDICAL MONITORS LIMITED

I declare that, to the best of my knowledge and belief, during the half-year ended 31 December 2005 there have been:

• no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in $(i)$ relation to the audit; and
• no contraventions of any applicable code of professional conduct in relation to the audit ${ii}$

SNEDDON McKEOWN

MEGAN MAYBURY Partner

16 March 2006 175 Scott Street, Newcastle NSW 2300

Chartered Accountants 2nd Hoor, hunter molt chambers 175 stalk street newcastle nsw 2000. phone: 02.4907.7222. fax: 02.4929.6759.

Chartesed Accountants Liability limited by a scheme approved under Professional Standards Logislation

INDEPENDENT REVIEW REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2005

TO THE MEMBERS OF MEDICAL MONITORS LIMITED

SCOPE

We have reviewed the financial report of Medical Monitors Limited for the half-year ended 31 December 2005 as set out on pages 6 to 24. The financial report includes the consolidated financial statements of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year. The company's directors are responsible for the financial report.

We have performed an independent review of the financial report in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report is not presented fairly in accordance with Accounting Standard AASB 134; Interim Financial Reporting and other mandatory professional reporting requirements in Australia and statutory requirements, so as to present a view which is consistent with our understanding of the company's financial position, and performance as represented by the results of its operations and Its cash flows, and in order for the company to lodge the financial report with the Australian Securities & Investments Commission/Australian Stock Exchange Limited.

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

INDEPENDENCE

In conducting our review, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

In accordance with ASIC Class Order 05/83, we declare to the best of our knowledge and belief that the auditor's independence declaration set out on page 3 of the financial report has not changed as at the date of providing our review opinion.

STATEMENT

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the halfvear financial report of Medical Monitors Limited is not in accordance with:

• (a) the Corporations Act 2001, including;
  • giving a true and fair view of the company's financial position as at 31 December 2005 and of its (i) performance for the half-year ended on that date; and
  • complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations (ii) Regulations 2001; and
• (b) other mandatory professional reporting requirements in Australia.

Chartered Accountants 2nd floor, hunter moth chambers 175 scall street newcastle nsw 2300. phone: 02-4907-7222 - fax: 02-4929-6759

Chartarad Áccoustants Lubbisty similate by a substite approved under Professional Standards Legislation

INHERENT UNCERTAINTY REGARDING CONTINUATION AS A GOING CONCERN

Without qualification to the review opinion expressed above, attention is drawn to the following matter. As a result of matter described by the Directors in Note 1(o), there is inherent uncertainty surrounding the ability of the consolidated entity to continue as a going concern and therefore realise the asset and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

Should the consolidated entity be unable to achieve the matters referred to in Note 1(o), the consolidated entity may not be able to realise the full value of its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

SNEDDON McKEOWN

Mma MEGAN MAYBUR

Partner

16 March, 2006 175 Scott Street, Newcastle, NSW, 2300

Chartered Accountants Zed floor, huster mall chambers 175 scot street newcastle nsw 2300. phone: 02 4907 7222 fax: 02 4929 6759

Chartered Arresponsis Unbility Smited by a scheme approved under Professional Stondards (egistation

DIRECTORS' DECLARATION FOR THE HALF YEAR ENDED 31 DECEMBER 2005

The directors of the company declare that:

• $\ddagger$ . The financial statements and notes as set out on pages 7 to 24:
  • (a) comply with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations; and
  • (b) give a true and fair view of the economic entity's financial position as at 31 December 2005 and of its performance for the half-year ended on that date.
• $2.$ In the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors

Dr Allan Shell Managing Director

16 March, 2006

CONSOLIDATED INCOME STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2005

		Economic Entity
		31.12.05$	31.12.04$
Revenue from ordinary activities		1,138,060	118,957
Cost of good sold		(420, 993)	(16, 519)
Write-down in value of inventory		(137,060)	(330, 873)
Occupancy expenses		(107,005)	(128, 838)
Staff expenses		(261, 334)	(314, 421)
Administration expenses		(88, 255)	(93, 454)
Consulting and professional services fees		(464, 300)	(451,900)
Foreign exchange gain/(loss)		79,065	(22, 357)
International marketing expenses		(56, 774)	(287, 857)
Depreciation and amortisation		(377, 072)	(439, 562)
Write-down in value of capitalised R&D			(390, 428)
Borrowing costs		(61,073)	(45, 142)
Other expenses		(183, 162)	(135, 377)
Loss from ordinary activities before income tax expense		(939, 903)	(2,537,772)
Income tax expense
Net loss attributable to members of Medical Monitors Limited and
controlled entity		(939, 903)	(2,537,772)
Basic earnings per share (cents)	6	(0.3)	(1.2)

Diluted earnings per share is not disclosed as it is not materially different from the basic earnings per share.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2005

	Economic Entity
	31.12.05	30.06.05
	$	$
CURRENT ASSETS
Cash assets	42,001	216,432
Receivables	1,159,669	579,332
Inventories	146,221	232,886
Other current assets	239,640	171,323
TOTAL CURRENT ASSETS	1,587,531	1,199,973
NON-CURRENT ASSETS
Property, plant & equipment	142,114	219,751
Intangibles	4,315,146	4,611,627
Other financial assets	2,946	2,830
TOTAL NON-CURRENT ASSETS	4,460,206	4,834,208
TOTAL ASSETS	6,047,737	6,034,181
CURRENT LIABILITIES
Payables	1,392,992	1,096,458
Interest bearing liabilities	341,681	698,132
Provisions	60,004	75,571
TOTAL CURRENT LIABILITIES	1,794,677	1,870,161
NON-CURRENT LIABILITIES
Interest bearing liabilities	1,630,359	906,918
TOTAL NON-CURRENT LIABILITIES	1,630,359	906,918
TOTAL LIABILITIES	3,425,036	2,777,079
NET ASSETS	2,622,701	3,257,102
EQUITY
Contributed Equity	35,066,633	34,761,131
Researves	493,152	493,152
Accumulated losses	(32, 937, 084)	(31, 997, 181)
TOTAL EQUITY	2,622,701	3,257,102

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31 DECEMBER 2005

	ShareCapital$	Reserves$	AccumulatedLossesS	Total$
BALANCE AT 1 JULY 2004	32,574,548	493,152	(27, 551, 407)	5,516,293
Contributions of equity net of transaction costsProfit attributable to members of the parent entity	195.092		(2,537,772)	195,092(2,537,772)
BALANCE AT 31 DECEMBER 2004	32,769,640	493,152	(30,089,179)	3,173,613
BALANCE AT 1 JULY 2005	34,761,131	493,152	(31,997,181)	3,257,102
Contributions of equity net of transaction costsProfit attributable to members of the parent entity	305,502		(939, 903)	305,502(939,903)
BALANCE AT 31 DECEMBER 2005	35,066,633	493,152	(32, 937, 084)	2,622,701

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2005

	Economic Entity
	31.12.05$	31.12.04$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers	614,506	515,235
Payments to suppliers and employees	(1,340,087)	(979, 223)
Interest received	919	2,011
Borrowing costs paid	(61,073)	(95, 533)
NET CASH FLOWS FROM OPERATING ACTIVITIES	(785, 735)	(557, 510)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for purchases of property, plant and equipment		(69, 492)
Proceeds from government grants		281,737
Refund of security deposits	(115)
NET CASH FLOWS FROM INVESTING ACTIVITIES	(115)	212,245
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issues of securities net of transaction costs	305,502	200,000
Payments for share buyback		(189, 214)
Borrowings - unsecured	305,917	527,525
Repayments of borrowings		(320, 678)
NET CASH FLOWS FROM FINANCING ACTIVITIES	611,419	217,633
NET INCREASE / (DECREASE) IN CASH HELD	(174, 431)	(127, 632)
Cash at beginning of financial year	216,432	341,800
CLOSING CASH CARRIED FORWARD	42,001	214,168

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2005

$\mathbf{1}$ . BASIS OF PREPARATION

The half-year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standard AASB 134: Interim Financial Reporting, Urgent Issues Group Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.

It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2005 and any public announcements made by Medical Monitors Limited and its controlled entities during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act $2001.$

As this is the first interim financial report prepared under Australian equivalents to IFRS, the accounting policies applied are inconsistent with those applied in the 30 June 2005 annual report as this report was presented under previous Australian GAAP. Accordingly, a summary of the significant accounting policies under Australian equivalents to IFRS has been included below. A reconciliation of equity and profit and loss between previous GAAP and Australian Equivalents to IFRS has been prepared per Note 2.

The half-year report does not include full disclosures of the type normally included in an annual financial report.

Accounting Policies

Principles of Consolidation $(a)$

A controlled entity is any entity controlled by Medical Monitors Limited. Control exists where Medical Monitors Limited has the capacity to dominate the decision-making in relation to the financial and operating policies of another entity so that the other entity operates with Medical Monitors Limited to achieve the objectives of Medical Monitors Limited.

All controlled entities have a June financial year-end.

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

Where controlled entities have entered or left the economic entity during the year, their operating results have been included from the date that control was obtained or until the date control ceased.

$(b)$ Income Tax

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

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

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

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

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2005

$1.$ BASIS OF PREPARATION (CONT'D)

$(b)$ Income Tax (cont'd)

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

Inventories $(c)$

Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on a first-in first-out basis and include direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenses.

$(d)$ Property, Plant and Equipment

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

Plant & Equipment

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

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.

Depreciation

The depreciable amount of all fixed assets are depreciated on a straight-line value basis over their estimated useful lives to the economic entity commencing from the time the asset is held ready for use.

The depreciation rates used for each class of assets are:

Class of Fixed Asset	Depreciation Rate
Plant and Equipment	20.0%
Office Equipment	20.0%
Leased Plant and Equipment	20.0%

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

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

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

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2005

$1.$ BASIS OF PREPARATION (CONT'D)

$(e)$ Leases

Leases of fixed assets, where substantially all the risk and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to the Company are classified as finance leases. Finance leases are capitalised, recording an asset and a liability equal to the present value of the minimum lease payments, including any quaranteed residual values. Leased assets are amortised on a straight-line value basis over their estimated useful lives where it is likely that the Company will obtain ownership of the asset or over the term of the lease. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

Lease incentives under operating leases are recognised as a liability. Lease payments received reduce the liability.

$(f)$ Foreign Currency Transactions and Balances

Foreign currency transactions during the year are converted to Australian currency at the rates of exchange applicable at the dates of the transactions. Amounts receivable and payable in foreign currencies at balance date are converted at the rates of exchange ruling at that date.

The gains and losses from conversion of short-term assets and liabilities, whether realised or unrealised, are included in profit from ordinary activities as they arise.

Employee Entitlements $(g)$

Provision is made for the Economic Entity's liability for employee entitlements arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

Contributions are made by the Company to employee superannuation funds and are charged as expenses when incurred.

$(h)$ Cash

For the purposes of the statement of cash flows, cash includes:

• cash on hand and at call deposits with banks or financial institutions, net of bank overdrafts; and
• investments in money market instruments with less than 14 days to maturity.

$(i)$ Comparative Figures

Where required by Accounting Standards comparative figures have been adjusted to conform with changes in presentation for the current financial year.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2005

1. BASIS OF PREPARATION (CONT'D)

$(i)$ Revenue

Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

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

Intangibles $(k)$

Research and Development

Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably.

Development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project.

Goodwill

Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold..

Intellectual Property

The current accounting policy is to amortise intellectual property on a straight-line basis over 10 years.

$(1)$ Goods and Services Tax (GST)

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

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2005

$\mathbf{1}$ . BASIS OF PREPARATION (CONT'D)

$(m)$ Impairment of Assets

At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, is compared to the asset's carrying value. Any excess of the asset's carrying value over its recoverable amount is expensed to the income statement.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives

Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

$(n)$ Financial Instruments

Recognition

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

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 requirements of AASB 139: Recognition and Measurement of Financial Instruments. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the income statement in the period in which they arise.

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 method.

Held-to-maturity investments

These investments have fixed maturities, and it is the Company's intention to hold these investments to maturity. Any held-to-maturity investments held by the Company are stated at amortised cost using the effective interest method.

Available-for-sale financial assets

Available-for-sale financial assets include any financial assets not included in the above categories. Available-forsale financial assets are reflected at fair value. Unrealised gains and loss arising from changes in fair value are taken directly to equity.

Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2005

BASIS OF PREPARATION (CONT'D) 1.

Financial Instruments (cont'd) $(n)$

Fair Value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arms length transactions, reference to similar instruments and option pricing models. Where fair value for financial assets cannot be reliably measured, such assets have been reflected at cost.

Impairment

At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been impaired. Impairment losses are recognised in the income statement.

Going Concern $(0)$

The financial statements have been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. The consolidated entity incurred an operating loss of $939,903 for the half-year ended 31 December 2005, which included a depreciation and amortisation charge of $377,072.

The Directors nevertheless believe that it is appropriate to prepare the financial statements on a Going Concern basis for the following reasons:

• As previously announced, the company has entered into a non-binding Heads of Agreement with two UK entities, Medpri Limited and Belgravia Telecom plc. Under the terms of the Heads of Agreement, Medical Monitors will acquire equity in Belgravia in exchange for its current interest in Medpri and certain intellectual property. Belgravia Telecom proposes to raise additional capital in the form of equity and debt that will be used to fund the expansion of the international business.
• The company believes that it has sufficient working capital facilities available to enable it to meet its debts as and when they fall due. In October 2004, a 'line of credit' facility ($1,000,000) was established by the company with Director Dr A. Shell. As at 31 December 2005 the draw down on this facility was nil. The facility expires on 30 June 2006 but may be renewed subject to the mutual consent of the parties.

The consolidated entity's ability to generate positive net cash flow in the twelve months from the date of this report, as contemplated in the business plan, is dependent on a number of factors but primarily on its ability to finalise the proposed Belgravia/Medpri transaction, ability to raise sufficient capital, and the continued supply of monitoring devices from the manufacturer on a timely basis.

If the Company is unable to successfully develop the business as contemplated in the business plan, alternative strategies may be employed to secure alternate distribution arrangements, either raise additional capital or debt funding, or reduce expenditure through a scale back of the international marketing initiatives.

In the event that the Company does not meet its planned revenue and cashflow targets, or successfully adopts alternative strategies, the Company may not be able to realise its assets, including intangible assets, and extinguish its liabilities in the normal course of business at the amounts stated in the financial report. Accordingly, the going concern basis used in the preparation of the financial report would not be appropriate.

		PreviousGAAP$	Economic EntityAdjustmentson introductionof AIFRS$	AIFRS$
2	FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTSTO INTERNATIONAL FINANCIAL REPORTING STANDARDS(AIFRS)
	Reconciliation of Equity at 1 July 2004
	CURRENT ASSETS
	Cash assets	341,800		341,800
	Receivables	187,407		187,407
	Inventories	390,557		390,557
	Other current assets	434,240		434,240
	TOTAL CURRENT ASSETS	1,354,004		1,354,004
	NON-CURRENT ASSETS
	Property, plant & equipment	328,181		328,181
	Intangibles	5,204,591		5,204,591
	Capitalised research and development	696,334		696,334
	Other financial assets	153,138		153,138
	TOTAL NON-CURRENT ASSETS	6,382,244	$\blacksquare$	6,382,244
	TOTAL ASSETS	7,736,248	$\overline{\phantom{a}}$	7,736,248
	CURRENT LIABILITIES
	Payables	1,010,156		1,010,156
	Interest bearing liabilities	448,425		448,425
	Provisions	49,005		49,005
	TOTAL CURRENT LIABILITIES	1,507,586		1,507,586
	NON-CURRENT LIABILITIES
	Interest bearing liabilities	712,369		712,369
	TOTAL NON-CURRENT LIABILITIES	712,369		712,369
	TOTAL LIABILITIES	2,219,955		2,219,955
	NET ASSETS	5,516,293		5,516,293
	EQUITY
	Contributed Equity	32,574,548		32,574,548
	Researves	493,152		493,152
	Accumulated losses	(27, 551, 407)		(27, 551, 407)
	TOTAL EQUITY	5,516,293		5,516,293

	PreviousGAAP$	Economic EntityAdjustmentson introductionof AIFRS$	AIFRS$
2 FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTSTO INTERNATIONAL FINANCIAL REPORTING STANDARDS(AIFRS) (cont'd)
Reconciliation of Equity at 31 December 2004
CURRENT ASSETS
Cash assets	214,168		214,168
Receivables	93,433		93,433
Inventories	373,170		373,170
Other current assets	222,949		222,949
TOTAL CURRENT ASSETS	903,720		903,720
NON-CURRENT ASSETS
Property, plant & equipment	293,398		293,398
Intangibles	4,644,640	263,466	4,908,106
Other financial assets	6,775		6,775
TOTAL NON-CURRENT ASSETS	4,944,813	263,466	5,208,279
TOTAL ASSETS	5,848,533	263,466	6,111,999
CURRENT LIABILITIES
Payables	1,260,817		1,260,817
Deposits for undelivered sales	295,714		295,714
Interest bearing liabilities	1,272,304		1,272,304
Provisions	64,604		64,604
TOTAL CURRENT LIABILITIES	2,893,439		2,893,439
NON-CURRENT LIABILITIES
Interest bearing liabilities	44,947		44,947
TOTAL NON-CURRENT LIABILITIES	44,947		44,947
TOTAL LIABILITIES	2,938,386		2,938,386
NET ASSETS	2,910,147	263,466	3,173,613
EQUITY
Contributed Equity	32,769,640		32,769,640
Researves	493,152		493,152
Accumulated losses	(30, 352, 645)	263,466	(30,089,179)
TOTAL EQUITY	2,910,147	263,466	3,173,613

	PreviousGAAP$	Economic EntityAdjustmentson introductionof AIFRS$	AIFRS$
FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTS2TO INTERNATIONAL FINANCIAL REPORTING STANDARDS(AIFRS) (cont'd)
Reconciliation of Equity at 30 June 2005
CURRENT ASSETS
Cash assets	216,432		216,432
Receivables	579,332		579,332
Inventories	232,886		232,886
Other current assets	171,323		171,323
TOTAL CURRENT ASSETS	1,199,973		1,199,973
NON-CURRENT ASSETS
Property, plant & equipment	219,751		219,751
Intangibles	4,348,161	263,466	4,611,627
Other financial assets	2,830		2,830
TOTAL NON-CURRENT ASSETS	4,570,742	263,466	4,834,208
TOTAL ASSETS	5,770,715	263,466	6,034,181
CURRENT LIABILITIES
Payables	1,096,458		1,096,458
Interest bearing liabilities	698,132		698,132
Provisions	75,571		75,571
TOTAL CURRENT LIABILITIES	1,870,161		1,870,161
NON-CURRENT LIABILITIES
Interest bearing liabilities	906,918	÷	906,918
TOTAL NON-CURRENT LIABILITIES	906,918		906,918
TOTAL LIABILITIES	2,777,079		2,777,079
NET ASSETS	2,993,636		3,257,102
EQUITY
Contributed Equity	34,761,131		34,761,131
Researves	493,152		493,152
Accumulated losses	(32, 260, 647)	263,466	(31, 997, 181)
TOTAL EQUITY	2,993,636	263,466	3,257,102

		PreviousGAAP$	Economic EntityAdjustmentson introductionof AIFRSS	AIFRS$
$\mathbf{2}$	FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTSTO INTERNATIONAL FINANCIAL REPORTING STANDARDS(AIFRS) (cont'd)
	Reconciliation of Profit or Loss for the half year ended31 December 2004
	Revenue from ordinary activities	118,957		118,957
	Changes in inventories of finished goods	(16, 519)		(16, 519)
	Write-down in value of inventory	(330, 873)		(330, 873)
	Occupancy expenses	(128, 838)		(128, 838)
	Staff expenses	(314, 421)		(314, 421)
	Administration expenses	(93, 454)		(93, 454)
	Consulting and professional services fees	(451,900)		(451,900)
	Foreign exchange loss(gain)	(22, 357)		(22, 357)
	International marketing expenses	(287, 857)		(287, 857)
	Depreciation and amortisation	(703, 028)	263,466	(439, 562)
	Write-down in value of capitalised R&D	(390, 428)		(390, 428)
	Borrowing costs	(45, 142)		(45, 142)
	Other expenses	(135, 377)		(135, 377)
	Loss from ordinary activities before income tax expense	(2,801,238)	263,466	(2,537,772)
	Income tax expense
	Net loss attributable to members of the parent entity	(2,801,238)	263,466	(2,537,772)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2005

	PreviousGAAP$	Economic EntityAdjustmentson introductionof AIFRS$	AIFRS$
FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTSTO INTERNATIONAL FINANCIAL REPORTING STANDARDS(AIFRS) (cont'd)Reconciliation of Profit or Loss for the full year to30 June 2005
Revenue from ordinary activities	520,843		520,843
Changes in inventories of finished goodsCorporate ExpensesStaff expensesConsulting expensesRent expensesBorrowing costsDepreciation and amortisationForeign currency lossOther expenses from ordinary activitiesProvisions for writedown of intangibles	(263,065)(482, 652)(648, 831)(1,082,086)(112,780)(132, 530)(1,492,969)(4, 364)(325, 694)(253, 224)	526,932	(263,065)(482, 652)(648, 831)(1,082,086)(112,780)(132, 530)(966, 037)(4, 364)(325, 694)(253, 224)
Provisions for writedown of receivables from other entitiesProvision for writedown in prepaymentsInternational Marketing expenses	(131, 119)(319, 887)(244, 348)		(131, 119)(319, 887)(244, 348)
Loss from ordinary activities before income tax expense	(4,972,706)	526,932	(4, 445, 774)
Income tax expense
Net loss attributable to members of the parent entity	(4,972,706)	526,932	(4, 445, 774)
	30.6.2005	Economic Entity31.12.2004	1.7.2004

Notes to the reconciliations of equity and profit and loss at 1 July 2004, 31 December 2004 and 30 June 2005

(a) Under AASB 3, goodwill is no longer amortised but subject to annual impairment testing. Goodwill amounting to $526,932 previously amortised in the 2005 full finanical year has been reversed in the income statement for the year ended 30 June 2005. Goodwill amounting to $263,466 previously amortised for the 2004 half year has been reversed in the income statement for the half year ended 31 December 2004.

$

$

$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2005

3 DIVIDENDS

31.12.05 31.12.04 $\mathbb{S}$ $.

No dividends have been proposed or paid during the financial year.

4 CONTINGENT LIABILITIES

There were no contingent liabilities or contingent assets at the balance date.

5 EVENTS OCCURING AFTER REPORTING DATE

Heads of Agreement

As previously announced to the market, the company has entered into a Heads Of Agreement with two UK entities, Medpri Limited and Belgravia Telecom plc, (through its association with Medpri). Final discussions are in progress for an AIM listing in the UK. It is anticipated that the Company will gain considerable benefit from this entity as it undertakes new business activities into the UK and Europe, as well as in the USA.

Cash Position

The Company has maintained its continuous disclosure obligations, and has kept the market informed of its cash position since December 31, 2005.

The consolidated entity's ability to generate positive net cash flow in the twelve months from the date of this report as contemplated in the business plan, is dependant on a number of factors but primarily on its ability to successfully develop the US and UK and European markets, through the UK-Belgravia-AIM transaction, and the continued supply of monitoring devices from the manufacturer on a timely basis.

The directors believe that the company has sufficient working capital arrangements in place to be able to achieve its objectives as contemplated in its business plan.

Share Registry

During the annual review process the Directors considered the need to further reduce reporting fees and other ASX associated listing costs. As well, a consolidation of capital was considered appropriate. Shareholder approval was granted on the 23 January, 2006, with the total of ASX listed fully paid ordinary shares reduced to 60,358,705, from the previous 301,793,524 shares.

In addition, the Directors invoked clause 26 of the Company's constitution, on marketable parcels of shares, with the sale of unmarketable parcels of shares being completed on the 15 March, 2006. - providing a reduction of 770 'small shareholders' on the Company's registry, as held by Computershare.

		31.12.05$	31.12.04$
	6 EARNINGS PER SHARE
	Basic earnings per share in cents:	(0.3) c	(1.2) c
	Diluted earnings per share is not disclosed as it is not materially different from the basic earnings per share.
	(a) Weighted average number of ordinaryshares outstanding during the year andused in the calculation of basic earningsper share:	299,719,201	234,095,206
7.	NET TANGIBLE ASSET BACKING
	Net tangible asset backing per ordinarysecurity	(0.6) c	(0.6) c

		31.12.05$	31.12.04$
SEGMENT REPORTING8
	States. Segment revenue below is by location of customers.	The company operates in one industry but in various geographical segments being Australia, United Kingdom and United
Segment Revenue:
- Australia		382,630	114,047
- United Kingdom
- United States of America		755,430	4,910
Total Revenue		1,138,060	118,957
Segment Results:
- Australia		(841,785)	(2,223,806)
- United Kingdom		(9,938)	(64, 466)
- United States of America		(88, 180)	(249, 500)
Net Result		(939, 903)	(2,537,772)
Segment Assets:
- Australia		5,960,616	6,075,881
- United Kingdom		75,176	17,527
- United States of America		11,945	18,591
Total Assets		6,047,737	6,111,999
Segment Liabilities:
- Australia		3,421,841	2,918,080
- United Kingdom		919	16,810
- United States of America		2,276	3,496
Total Liabilities		3,425,036	2,938,386