8. Resolution 5 – Reduction of Share Capital

Can someone shed some light on the probable outcome being a YES on Resolution 5?

The Company, as an exempted foreign company incorporated in Bermuda, is
subject to the Bermuda Companies Act 1981. Under Bermuda law, shares may not
be issued for consideration which is below their par value.
In order to provide the Company with the ability to issue additional shares below the
current par value of A$0.01 per Share, the Directors wish to seek Shareholder
approval for a reduction of the Company’s share capital.
Pursuant to Resolution 5, the par value of the Company’s shares (both issued and
unissued) will be reduced from A$0.01 to A$0.001 and the number of shares in the
authorised capital of the Company will be increased from 900,000,000 shares with a
par value of A$0.01 each to 9,000,000,000 shares with a par value of A$0.001 each.
Shareholders should note that if Resolution 5 is approved, the proposed
capital reduction will not change the number of issued and paid-up Shares, or
the percentage interest held by each Shareholder. All Shares on issue and
those issued in future will have a par value of A$0.001 and will each rank pari
passu in all respects with each other. Approval of Resolution 5 will have no
effect on the underlying assets, business operations, management or
financial position of the CompanyThe Company’s shares are fully paid and consequently the proposed capital
reduction will not involve the diminution of any liability in respect of unpaid share
capital. It will also not result in a return of any share capital or other assets to
Shareholders. Any capital cancelled will be credited to the contributed surplus
account of the Company, and will be utilised to partially offset the accumulated
losses of the Company which, based on the audited consolidated financial
statements of the Company and its subsidiaries for the financial year ended
30 June 2014, amounted to approximately A$3,059,197.