RAIDEN RESOURCES LIMITED — Interim / Quarterly Report 2011

Mar 14, 2012

SHELL VILLAGES AND RESORTS LIMITED AND CONTROLLED ENTITIES

ABN: 68 009 161 522

Half-Year Financial Report 31 December 2010

CONTENTS

Page

Directors' Report	1
Auditor's Independence Declaration	2
Consolidated Statement of Comprehensive Income	3
Consolidated Statement of Financial Position	4
Consolidated Statement of Changes in Equity	5
Consolidated Statement of Cash Flows	6
Notes to Consolidated Financial Statements	7
Directors' Declaration	14
Independent Auditor's Review Report	15

DIRECTORS' REPORT

The Directors of Shell Village and Resorts Limited submit the financial report of the consolidated group for the half-year ended 31 December 2010. On 2 September 2011, the Company changed its name to SVC Group Limited.

Directors

The names of Directors who held office during or since the end of the half-year are:

Mr Greg Cornelson (appointed 11 February 2011, resigned 14 February 2011) Mr Anthony Crimmins (appointed 1 September 2011) Mr Brett Crowley (appointed 11 February 2011) Mr David Diamond (Appointed 28 April 2010, resigned 8 February 2011) Mr Ian Dorney (appointed 11 February 2011) Mr Boris Patkin (resigned 31 August 2011) Mr Richard Prichard

Operating Results

The consolidated loss of the consolidated group after providing for income tax for the half-year ended 31 December 2010 was $200,344 (2009: Loss of $234,824).

Review of Operations

The new Board appointed on 28 April 2010 has proceeded to raise capital and work towards satisfying compliance with ASX Listing Rules with a view to have the Company's securities reinstated for trading with ASX. The Board has also been restructuring the group's capital structure as described in Note 1. The new Board has also been reviewing the various past transactions instigated by the previous management to ascertain that they were in the best interests of the consolidated group.

Auditor's Independence Declaration

The auditor's independence declaration under section 307C of the Corporations Act 2001 is set out on page 2.

This report is signed in accordance with a resolution of the Board of Directors.

Richard Pritchard Director

Dated this 13th day of March 2012

AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF SHELL VILLAGES AND RESORTS LIMITED

I declare that, to the best of my knowledge and belief, during the half-year ended 31 December 2010 there have been:

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

This declaration is in respect of Shell Villages and Resorts Limited and the entities it controlled during the period.

PROSPERITY AUDIT SERVICES

LUKE MALONE Associate Director

13 March 2012

Sydney

Sydney

Level 2 580 George Street Sydney NSW 2000 PO Box 20726 World Square NSW 2002 T 02 9261 2288 F 02 9261 2376

Newcastle

Hunter Mall Chambers 2nd Floor, 175 Scott Street Newcastle NSW 2300 PO Box 234 Newcastle NSW 2300 T 02 4907 7222 F 02 4929 6759

Brisbane

Suite 1, Level 3 200 Creek Street Brisbane QLD 4000 GPO Box 2246 Brisbane QLD 4001 T 07 3839 1755 F 07 3839 1037

www.prosperityadvisers.com.au mail@prosperityadvisers.com.au

Chartered Accountants Prosperity Audit Services ABN 87 879 283 831

Chartered Accountants Liability limited by a Scheme approved under the Professional Standards Legislation.

Consolidated Statement of Comprehensive Income

For The Half-Year Ended 31 December 2010

	Half-Yearended 31December2010$	Half-Yearended 31December2009$
Revenue from continuing operations
Other income
Interest income	657	1,832
Expenses
Consulting fees	(48,600)	(23,545)
Directors fees	(31,100)	(80,000)
Finance costs	(75,650)	(60,104)
Legal fees	(15,322)	(27,775)
Other expenses	(30,329)	(45,232)
Loss before income tax expense	(200,344)	(234,824)
Income tax expense	-	-
Loss for the period	(200,344)	(234,824)
Other comprehensive income
Other comprehensive income for the period, net of tax	-	-
Total comprehensive loss for the period	(200,344)	(234,824)
Loss attributable to:
-members of the Parent Entity	(200,344)	(234,824)
Total comprehensive loss attributable to:
-members of the Parent Entity	(200,344)	(234,824)
Loss per share
Basic and diluted loss per share (cents)	(0.5)	(0.5)

Consolidated Statement of Financial Position

As At 31 December 2010

	31 December2010$	30 June2010$
ASSETS
CURRENT ASSETS
Cash and cash equivalents	38,428	59,852
Financial assets	10,000	10,000
Other current assets	177,847	157,869
TOTAL CURRENT ASSETS	226,275	227,721
TOTAL ASSETS	226,275	227,721
CURRENT LIABILITIES
Trade and other payables	1,392,751	1,252,876
Financial liabilities	1,161,804	1,102,781
TOTAL CURRENT LIABILITIES	2,554,555	2,355,657
TOTAL LIABILITIES	2,554,555	2,355,657
NET LIABILITIES	(2,328,280)	(2,127,936)
EQUITY
Issued capital	42,806,452	42,806,452
Reserves	493,152	493,152
Retained profits	(45,627,884)	(45,427,540)
TOTAL EQUITY	(2,328,280)	(2,127,936)

Consolidated Statement of Changes In Equity

For The Half-Year Ended 31 December 2010

		Reserves
	Issuedcapital$	Optionreserve$	Accumulatedlosses$	Total$
Balance at 1 July 2009	42,806,452	493,152	(45,008,591)	(1,708,987)
Total comprehensive loss for theperiod	-	-	(234,824)	(234,824)
Balance at 31 December 2009	42,806,452	493,152	(45,243,415)	(1,943,811)
Balance at 1 July 2010Total comprehensive loss for the	42,806,452	493,152	(45,427,540)	(2,127,936)
period	-	-	(200,344)	(200,344)
Balance at 31 December 2010	42,806,452	493,152	(45,627,884)	(2,328,280)

Consolidated Statement of Cash Flows

For the Half-Year Ended 31 December 2010

	Half-Yearended 31December2010$	Half-Yearended 31December2009$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees	(21,793)	(117,867)
Interest received	369	1,038
Net cash used in operating activities	(21,424)	(116,829)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings	-	365,000
Net cash provided by financing activities	-	365,000
Net (decrease)/increase in cash and cash equivalents	(21,424)	248,171
Cash and cash equivalents at the beginning of period	59,852	304
Cash and cash equivalents at the end of period	38,428	248,475

Notes to Financial Statements For the Half-Year Ended 31 December 2010

1. Basis of Preparation

These general purpose financial statements for the interim half-year reporting period ended 31 December 2010 have been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134: Interim Financial Reporting

This interim financial report is intended to provide users with an update on the latest annual financial statements of Shell Villages and Resorts Limited and its controlled entities (the Group). As such it does not contain all the notes of the type normally included in an annual financial report. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the Group for the year ended 30 June 2010, together with any public announcements made during the half-year in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The same accounting policies and methods of computation have been followed in this interim financial report as were applied in the most recent annual financial statements.

(a) Impact of new and revised standards

New and revised standards and amendments thereof and interpretations effective for the current reporting period that are relevant to the Group include:

Amendments to AASB 5, 8 101, 107, 117, 118, 136 and 139 as a consequence of AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvement Project.

AASB 2009-5 introduces amendments into Accounting Standards that are equivalent to those made by the IASB under its program of annual improvements to its standards. A number of the amendments are largely technical, clarifying particular terms or eliminating unintended consequences. Other changes are more substantial, such as the current/non-current classification of convertible instruments, the classification of expenditures on unrecognised assets in the statement of cash flows and the classification of leases of land and buildings.

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current reporting period. The adoption of these amendments has not resulted in any changes to the Group's accounting policies and has no effect on the amounts reported for the current or prior periods.

Certain new accounting Standards and Interpretations have been published that are not mandatory at 31 December 2010. Management has assessed the new accounting standards and interpretations that have been published but are not mandatory for the half-year reporting period and concluded that none of these new standards and interpretations is relevant to the Group.

1. Basis of Preparation (continued)

(b) Going concern basis of accounting

During the half-year ended 31 December 2010, the consolidated entity recorded a consolidated operating loss of $200,344 and reported net liabilities of $2,328,280. In addition, the Company has converted total liabilities of $1,674,923 into equity subsequent to balance date. However, the entity continued its reliance upon shareholder capital and unsecured borrowings to meet its business and loan obligations. The continuing viability of the entity and its ability to continue as a going concern and meet its debts and commitments as and when they fall due is dependent upon the following key events:

• ongoing support from the Company's creditors;
• accomplishing a capital raising of $1,700,000; and
• development of new business opportunities and profitable projects.

Subsequent to 31 December 2011, the Company has issued new shares to private investors on 31 January 2012 and 23 February 2012. In addition, the Company commenced a capital raising of $1.7million. Details of those transactions and a Pro-forma Statement of Financial Position as at 31 December 2011 are set out below. The Pro-forma Statement of Financial Position is prepared on the assumption that all proposed share issues are accomplished as though they occurred at 31 December 2011:

	Actual as at31December2011	Debtrestructureand sharesissuedsubsequentto balancedate(I)	Pro-formabeforeproposedcapitalraising	Proposedcapitalraising(II)	Pro-Formaas at 13March 2012
	$	$	$	$	$
CURRENT ASSETS
Cash and cash equivalents	20,576	27,952	48,528	1,615,000	1,663,528
Financial assets	50,222	-	50,222	-	50,222
Other current assets	38,079	-	38,079	-	38,079
TOTAL CURRENT ASSETS	108,877	27,952	136,829	1,615,000	1,751,829
TOTAL ASSETS	108,877	27,952	136,829	1,615,000	1,751,829
CURRENT LIABILITIES
Trade and other payables	548,778	(269,000)	279,778	-	279,778
Financial liabilities	219,400	(199,400)	20,000	-	20,000
TOTAL CURRENT LIABILITIES	768,178	(468,400)	299,778	-	299,778
TOTAL LIABILITIES	768,178	(468,400)	299,778	-	299,778
NET (LIABILITIES)/ASSETS	(659,301)	496,352	(162,949)	1,615,000	1,452,051
EQUITY
Issued capital	44,918,677	496,352	45,415,029	1,615,000	47,030,029
Reserves	493,152	-	493,152	-	493,152
Accumulated losses	(46,071,130)	-	(46,071,130)	-	(46,071,130)
TOTAL EQUITY	(659,301)	496,352	(162,949)	1,615,000	1,452,051

1. Basis of Preparation (continued)

I. Debt restructure

The Company has accomplished the following debt restructure to convert certain debts into equity subsequent to the balance date:

• (i) The Company has issued 20,000,000 ordinary shares on 1 September 2011 to convert its 1,300,000 convertible notes into equity. The carrying value of the convertible notes as at 30 June 2011 was $796,804.
• (ii) the Company has issued 10,000,000 ordinary shares on 1 September 2011 to Mr B Patkin, a previous director, to settle the amounts owed to Mr B Patkin. This has resulted in a conversion of $691,000 debts into equity.
• (iii) the Company has issued 14,870,000 ordinary shares to the directors on 1 September 2011 to settle the directors' fees payable of $161,695.
• (iv) the Company has issued 2,430,000 ordinary shares and 564,775 ordinary shares on 1 September 2011 and 9 September 2011 respectively to two creditors to settle a total payable balance of $42,064.
• (v) pursuant to a deed dated 18 March 2010 and approval by the annual general meeting at 31 August 2011, the Company agreed to settle a payable balance of $269,000 with a creditor by converting the payable balance into ordinary shares. The share conversion is yet to occur.
• (vi) On 31 January 2012, the Company allotted 39,880,000 fully paid ordinary shares at $0.005 each to raise total capital of $199,400. Total proceeds of $199,400 were received as at 31 December 2011 and recognised as financial liabilities at balance date.
• (vii) On 23 February 2012, the Company issued 18,634,654 fully paid ordinary shares at $0.0015 each to raise total capital of $27,952

II. Proposed capital raising

Subject to shareholders' approval, the Company proposes to issue 10,000,000 pre consolidation shares at $0.0015 each to raise $15,000.

The Company also commenced a capital raising of $1.7 million through a prospectus which is subject to shareholders' approval. These funds will be used to fulfill the Company's obligation under the Hunter Valley JV agreement and other business plan in exploring new investment opportunities.

The figures presented in the pro-forma Statement of Financial Position reflect a gross capital raising of $1,715,000 less estimated share issue cost of $100,000.

The Company's financial position will be strengthened when the share offer is successful.

III. Business plan

In 2008 the then Board of Directors of the Company embarked on a sell down of all the property assets held within the portfolio, 2008 coincided with the GFC and property prices were depressed, at the end of this liquidation period the Company was left in a difficult financial position. The residential property market stabilised in 2009-10 in line with improvements to domestic, economic and financial conditions. The resilience of the labour market has maintained consumer confidence levels and minimised the forced sale of residential homes throughout Australia. The situation in 2010-11 is a slightly more risky one, with rising interest rates and weak levels of dwelling commencements prevailing in the first few months of the year. Longer term, strong population growth combined with a physical shortage of housing is expected to place increased pressure for the development of new housing.

1. Basis of Preparation (continued)

III. Business plan (continued)

With the over-65 demographic growing at double the rate of the rest of the population, Australia would require a minimum of 2100 additional retirement villages, or more than 311,000 dwellings, by 2050, according to the Retirement Village Association.

In view of the above the Company is broadening its property development focus to a range of development proposals that are available and have the potential for significant returns in the current market, targeting properties with the potential of an uplift in zonings followings the NSW State Government's direction to standardise local Council LEPs, residential subdivisions and development of senior living and affordable housing products.

To enable the search and selection of the most desirable projects SVC has contracted HD Consulting Pty Ltd. to search, propose, and negotiate terms for possible acquisitions. HD Consulting Pty Ltd has an excellent track record in property development in NSW with many successful developments having been sourced and developed successfully on their own behalf, for clients, and syndicates.

In tandem with this business plan the Company will continue to asses other business opportunities within and outside of the property industry.

On 3 October 2011, the Company announced the execution of a Joint Venture Agreement with Coast and Country Developments Pty Ltd to develop a land in the Hunter Valley to size up to 70 low cost homes. The Company has also commenced a capital raising for a minimum share subscription of $1,000,000 to fund the Company's obligation under the Joint Venture Agreement.

The Directors continued their efforts to provide satisfaction to ASX that the Company is in compliance with listing rules to enable the Company to be re-quoted.

The Directors believe that the Company will be successful in the above matters, and realise its assets and settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial report. Accordingly, the directors have prepared the financial report on a going concern basis.

Uncertainties

Prior to the share offer, the Company will restructure its current capital structure to consolidate the total issued capital on a 1 for 7 basis. This is subject to shareholders' approval. In addition, successful share capital raising is subject to the ability of the Company to attract investors to subscribe for new shares. Due to this, there exists uncertainty that the Company will not successfully raise capital and therefore the Company may not be able to realise its 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.

2. Segment reporting

Basis of accounting for purposes of reporting by operating segments

Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with respect to operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group.

The reportable operating segment is corporate office management which is the Group's current principal activity.

Corporate office activities are not allocated to operating segments and form part of the balance of unallocated revenue, expenses, assets and liabilities.

Segment assets

Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location.

Segment liabilities

Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Segment liabilities include trade and other payables.

	Half-year 2011		Half-year 2010
	Corporateoffice$	Total$	Corporateoffice$	Total$
Total segment revenue	657	657	1,832	1,832
Inter-segment revenue	-	-	-	-
Revenue from external customers	657	657	1,832	1,832
Loss before income tax	(200,344)	(200,344)	(234,824)	(234,824)
Depreciation and amortisation	-	-	-	-
Impairment of assets	-	-	-	-
Income tax expense	-	-	-	-
	31 December 2010		30 June 2011
Total segment assets	226,275	226,275	227,721	227,721
Total segment liabilities	2,554,555	2,554,555	2,355,657	2,355,657

3. Contingent liabilities and contingent assets

The Company has sought legal advice in respect of the clawback of assets or their value, disposed of in 2008 and 2009. A claim is currently being quantified but is otherwise subject to legal professional privilege and there will be a further announcement by the directors.

4. Events after Balance Date

There has not arisen in the interval since 31 December 2010 and up to the date of this report, any matter that, in the opinion of the directors, has significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the group in future financial years other than:

• (a) On 15 February 2011 the Company issued 26,250,000 ordinary shares at an issue price of $0.01 each in settlement of debts. This issue of shares was approved by shareholders at a general meeting held on 8 February 2011;
• (b) On 24 February 2011 the Company issued 8,250,000 ordinary shares at an issue price of $0.01 each in settlement of debts. This issue of shares was approved by shareholders at a general meeting held on 8 February 2011;
• (c) On 9 May 2011 the Company issued 4,500,000 ordinary shares at an issue price of $0.01 each to raise $45,000 as working capital. This issue of shares was approved by shareholders at a general meeting held on 8 February 2011;
• (d) On 22 June 2011 the Company issued 1,982,040 shares at a consideration of $0.025 each to convert a payable balance of $49,532 into equity;
• (e) On 1 September 2011 the Company issued 17,300,000 shares at a consideration of $0.01 each and 30,000,000 shares at a consideration of $0.04 each in settlement of debts as approved by shareholders at the annual general meeting held on 31 August 2011;
• (f) On 2 September 2011 the Company changed its name to SVC Group Limited;
• (g) On 9 September 2011 the Company issued 564,775 shares at $0.025 each to convert a payable balance of $14,119 into equity;
• (h) On 3 October 2011 the Company announced the execution of a Joint Venture Agreement with Coast and Country Developments Pty Ltd to develop a land in the Hunter Valley to size up to 70 low cost homes; and
• (i) On 21 October 2011 the Company issued a replacement Prospectus for the issue of up to 200,000,000 shares at $0.01 each to raise up to $2,000,000 with minimum subscription of 100,000,000 shares at $0.01 each to raise $1,000,000. Pursuant to the Prospectus, the Company is also conducting a professional and sophisticated offer of shares to raise $300,000.
• (j) On 20 January 2012, the Company withdrew the Replacement Prospectus issued on 22 October 2011;
• (k) On 31 January 2012, the Company issued 39,880,000 fully paid ordinary shares at $0.005 each for a capital raising of $199,400;
• (l) On 8 February 2012, the Company reached an agreed mandate with Alto Capital (AFSL 279099) of Subiaco, Perth, to raise up to $1,700,000 in capital through a prospectus after approval by shareholders;
• (m) On 8 February 2012, the Board resolved to issue a Notice of Meeting to consider and vote on the following matters by the shareholders:
  • issue of 10,000,000 pre consolidation shares at $0.0015 each to raise $15,000;
  • consolidation of current share capital on a 1 for 7 basis;
  • issue of up to 85,000,000 new shares post share consolidation at 2 cents each to raise $1,700,000; and

4. Events after Balance Date (continued)

• issue of 24,000,000 new shares to Alto Capital upon completion of the capital raising in accordance with the Corporate Advisory Mandate Agreement; and
• (n) On 23 February 2012, the Company issued 18,634,654 fully paid ordinary shares at $0.0015 each.

DIRECTORS' DECLARATION

The Directors of the Company declare that:

• 1. The financial statements and notes, as set out on pages 3 to 13 are in accordance with the Corporations Act 2001, including:
  • a) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
  • b) giving a true and fair view of the consolidated entity's financial position as at 31 December 2010 and of its performance for the half-year ended on that date.
• 1. 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.

Richard Pritchard Director

Dated this 13th day of March 2012

INDEPENDENT REVIEW REPORT TO THE MEMBERS OF SHELL VILLAGES AND RESORTS LIMITED FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Report on the Half-Year Financial Report

We have reviewed the accompanying financial report of Shell Villages and Resorts Limited for the half-year ended 31 December 2010, which comprises the statement of financial position as at 31 December 2010, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, other selected explanatory notes and the directors' declaration for the Shell Villages and Resorts group (the consolidated entity). The consolidated entity comprises both Shell Villages and Resorts Limited (the company) and the entities it controlled at the end of the half-year or from time to time during the half-year.

Directors' Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 and for such controls as the directors determine is necessary to enable the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, anything has come to our attention that cases us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity's financial position as at 31 December 2010 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of the company, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. It also includes reading the other information included with the financial report to determine whether it contains any material inconsistencies with the financial report. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Sydney

Level 2 580 George Street Sydney NSW 2000 PO Box 20726 World Square NSW 2002 T 02 9261 2288 F 02 9261 2376

Newcastle

Hunter Mall Chambers 2nd Floor, 175 Scott Street Newcastle NSW 2300 PO Box 234 Newcastle NSW 2300 T 02 4907 7222 F 02 4929 6759

Brisbane

Suite 1, Level 3 200 Creek Street Brisbane QLD 4000 GPO Box 2246 Brisbane QLD 4001 T 07 3839 1755 F 07 3839 1037

www.prosperityadvisers.com.au mail@prosperityadvisers.com.au

Chartered Accountants Liability limited by a Scheme approved under the Professional Prosperity Audit Services ABN 87 879 283 831

INDEPENDENT REVIEW REPORT TO THE MEMBERS OF SHELL VILLAGES AND RESORTS LIMITED FOR THE HALF YEAR ENDED 31 DECEMBER 2010 (con't)

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of the Company a written Auditor's Independence Declaration, a copy of which is included on page 2 of the financial report.

Conclusion

Based on our review, which is not an audit, nothing has come to our attention that causes us believe that the half-year financial report of Shell Villages and Resorts Limited is not in accordance with the Corporations Act 2001, including:

• i. giving a true and fair view of the consolidated entity's financial position as at 31 December 2010 and of its performance for the half-year ended on that date, and
• ii. complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

Material uncertainty in relation to the going concern basis

Without qualifying our conclusion, we draw attention to Note 1 in the half-year financial report which indicates that the consolidated entity incurred a net loss of $200,344 for the half year ended 31 December 2010 and reported net liabilities of $2,328,280 as at 31 December 2010. These conditions along with other matters described in Note 1 indicate the existence of a material uncertainty which may cast significant doubt on the company's ability to continue as a going concern.

PROSPERITY AUDIT SERVICES

LUKE MALONE Associate Director

13 March 2012

Sydney