STANILITE PACIFIC LIMITED(SLP)

company deregistered 31/07/2011

a loss declaration has been issued and the capital loss can therefore be claimed in the financial year the declaration is issued

we are informed there is a meeting scheduled for 31 March at which it is hoped a decision will be reached on the outstanding claim

the liquidator advises that the former directors have lodged their defences (in the case against them for insolvent trading) and there is a possibility of mediation - if the mediation or the legal action is ultimately successful there will be a return to shareholders and that is why the liquidator is unable to make a loss declaration - the liquidator is well aware of shareholder angst over not being able to claim losses and is doing everything possible to resolve the matter expeditiously

further to our notes below relative to the appeal against the decision in the case versus the auditors, we understand that costs are still being negotiated - whatever the outcome, this is unlikely to make any difference to shareholders

the case against former directors for insolvent trading has been delayed - not all directors have lodged their defences - it is likely this may drag on for some time, months maybe years - until this case is decided, the liquidators cannot say with assurance that there will be no distribution to shareholders

we understand the liquidator has initiated an action against former directors for insolvent trading - this case is due to be heard in March 2006 - there is a possibility if the case is successful that there will be a return to shareholders

the liquidator confirms a liquidators' declaration (facilitating the crystallisation of a capital loss) has not yet been made

apparently the Stanilite Group was partially successful in the appeal (see below) - damages and costs are still being worked out - however, the liquidators believe it is unlikely that shareholders will receive a return - in that event a declaration of losses will be sent out to shareholders as soon as possible

we understand that the decision in the appeal heard at the end of June could take anywhere between 2 - 6 months - if there is a favourable decision and damages are awarded, (depending on the amount of damages received) there may yet be a dividend to shareholders and therefore the liquidators cannot declare a tax loss

the appeal against the decision in the case Stanilite Pacific Limited (in liquidation) & Anor v Seaton & ors trading as Price Waterhouse was heard over 5 days commencing 20 June 2005

we understand the appeal referred to below is set to be heard from 20-24 June 2005 - it is unlikely that judgement will be delivered immediately

liquidator advises that after consultation with legal counsel and the Committee of Inspection and weighing of the significant potential for return to creditors and shareholders an appeal against the judgement on the damages claim against the auditors was lodged - it is difficult to predict the outcome of the claim - a favourable judgment is likely to result in a return to creditors and possibly shareholders

the judgement on the damages claim brought by the liquidator against the former auditors of Stanilite Pacific was released on 12 May 2004 - the damages claim was unsuccessful

a self funded damages claim was filed by the liquidator against the former auditors - the case was heard during October and December 2003, concluding in December 2003 - judgement on this claim is outstanding and the court has not advised a release date - at this time it is difficult to predict the outcome of the claim - a favourable judgment is likely to result in a return to creditors and shareholders, however, the liquidator is unable to assess the quantum of the return until the judgement is released

liquidators confirm there is no change to the position as outlined in their report which features in the note of 07/04/2003 below

liquidators issue report to creditors and shareholders - the main points have already been covered below - a copy can be viewed at http://www.ey.com/global/content.nsf/australia/stanilitepacific

liquidators continue to pursue preference actions and legal action against auditors

liquidators indicate that it will be about June 2003 before they have a clearer picture as to whether there will be a distribution to shareholders or the issue of a liquidators declaration

Ernst & Young confirm that they are not yet in a position to issue a liquidators' declaration

action commenced against auditors

liquidator files action against auditors

court order to wind up company and appoint Ken Rennie of Ernst & Young as liquidator

Removed from the Official List having failed to lodge Annual Listing Fees in respect of the year ended 30/06/96

receiver and manager appointed

suspended from quotation

issues statement saying company is currently experiencing some revenue shortfalls