Ann: Corporate and Board update, page-8

Firstly, I am pleased for shareholders that there has been some movement in the board.

However, I don't understand how "The above changes to overheads and director fees will realise cost savings for the Company of over $600k per annum".

Prior to the "governance restructure" there was one Chair, plus four non exec directors plus Tim Dobson - being a total of six people.

Post review and recruitment of the new chair (which has process has already commenced) there will be one Chair, plus three non exec directors plus Tim Dobson, being a total of five.

Therefore, an overall reduction for one non-executive director resulting in a saving of over $600k?

That does not make sense to me, unless they are included the "cost" for accounting purposes of options for directors and its not an actual cash flow saving. Or are there other overhead cost reductions not related to the board, but they want it to make it sound like the board is personally tightening their belts by more than they actually are?

Whilst some action is better than no action, if I was a shareholder I would be asking for clarification of how much of the $600k saving is an actual cash flow saving relating to board changes or are they using smoke and mirrors to make it seem like they are doing more to preserve cash than they actually are.

The other question I would be asking is whether Jim McKerlie is reducing his director fee with immediate effect? They made a point of saying there was no change to compensation for the changing roles of Tim Dobson and Paul White, but were silent of saying that Jim McKerlie's compensation would reduce accordingly after stepping down as chair.

I think Jim McKerlie just stepping down as chair is getting off lightly after having recommended to shareholders to participate in the capital raising at 30 cents, but then only putting in $1,000 himself.