3. Annual report as to the current position of the liquidation, including a summary of receipts and payments to date.

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1 5 August 2010 To Creditors Dear Sir/Madam One.Tel Limited (In Liquidation) ACN I refer to the appointment of Peter Walker and myself as Voluntary Administrators of One.Tel Limited on 29 May 2001 and to our subsequent appointment as Joint Liquidators on 24 July 2001 pursuant to section 439C(c) of the Corporations Act I now enclose: 1. Form 529 Notice of meeting of creditors. 2. Form 532 Form of proxy. In the event that a non-corporate creditor is unable to attend the meeting in person, the Proxy should be completed and returned to this office prior to the meeting. Corporate creditors will be required to complete the Proxy in order to authorise a representative to attend the meeting and vote on its behalf. For a Proxy form to be accepted as valid, corporate creditors will need to execute the Proxy under common seal, or provide details of the authority of any signatory/ies to appoint the proxy, or provide evidence of the proxy s appointment as a representative for the creditor under Section 250D of the Act. Proxies should be received by this office 24 hours before the meeting. 3. Annual report as to the current position of the liquidation, including a summary of receipts and payments to date. 4. Creditors should note that at the conclusion of the One.Tel annual meeting general business, the Special Purpose Liquidator ( SPL ) will be addressing the meeting in relation to the status of his investigations. A separate report issued by the SPL is attached herewith. If you have any queries, please contact Bradley Grimshaw of my office. Yours faithfully One.Tel Limited S J Sherman Liquidator 1. bg100805s.docx A01:19484

2 FORM 529 CORPORATIONS ACT 2001 Section 508 Subregulation (2) NOTICE OF ANNUAL MEETINGS OF CREDITORS AND MEMBERS One.Net Pty Limited ACN One.Tel Digital Pty Limited ACN One.Card Pty Limited ACN all (In Liquidation) Notice is given that annual meetings of creditors and members of the abovenamed Companies will be held concurrently in the Dorothea Mackellar Room of the Sydney Harbour Marriott Hotel, 30 Pitt Street, Sydney on 26 August 2010 at 10:00am. AGENDA 1. To receive an account of the Liquidators acts and dealings and the conduct of the windings up during the year ended 30 May 2010; and 2. Any other relevant business properly brought before the meetings. DATED 5 August 2010 S J Sherman Liquidator Ferrier Hodgson GPO Box 4114 SYDNEY NSW 2001 Telephone: Facsimile: c:\users\dstreefkerk\desktop\one.tel\2. subsform529.doc

3 FORM 532 CORPORATIONS ACT 2001 Regulation APPOINTMENT OF PROXY ANNUAL MEETINGS OF CREDITORS One.Net Pty Limited ACN One.Tel Digital Pty Limited ACN One.Card Pty Limited ACN all (In Liquidation) *I/*We 1 (creditor name)... of (address). a creditor (owed an amount of $...) of: (please tick relevant box) One.Net Pty Limited One.Tel Digital Pty Limited One.Card Pty Limited appoint 2. or in *his/her absence... as *my/our *general/special proxy at the meeting of creditors to be held on 26 August 2010 at 10am, or at any adjournment of that meeting, and to vote on all matters arising at the meeting. DATED this day of August OR The Common Seal of 3 Signature 4 of individual or person 5 authorised by corporate resolution to was hereunto affixed in the represent the corporation presence of... Director... Secretary CERTIFICATE OF WITNESS 6 I,... of... certify that the above instrument appointing a proxy was completed by me in the presence of and at the request of the person appointing the proxy and read to him before he attached his signature or mark to the instrument. DATED this day of August Signature of Witness Description... Place of Residence * Strike out if inapplicable 1 If a company or firm, strike out I and set out the full name of the company or firm. 2 Insert the name, address and description of the person appointed. 3 The method of affixing the Common Seal should be prescribed by the creditor corporation's articles. See Note (5). 4 The signature of the creditor is not to be attested by the person nominated as proxy. 5 Note that a corporation may by resolution of its directors provide standing authority for a person to represent it at members meeting and appoint proxies (Section 249(3)& (5)). Copy of authority to be annexed. 6 This certificate is to be completed only where the person giving it is blind. c:\users\dstreefkerk\desktop\one.tel\3. subsproxy.doc

4 One.Net Pty Limited ACN ( One.Net ) One.Tel Digital Pty Limited ACN ( One.Tel Digital ) One.Card Pty Limited ACN ( One.Card ) all (In Liquidation) collectively known as the One.Tel Group Companies 9 th Annual Report to Creditors Pursuant to Section 508 of the Corporations Act 2001 Steven Sherman & Peter Walker Liquidators 5 August 2010 FERRIER HODGSON LEVEL 13, GROSVENOR PLACE, 225 GEORGE STREET, SYDNEY NSW 2000 AUSTRALIA GPO BOX 4114 SYDNEY NSW 2001 DX SYDNEY STOCK EXCHANGE TELEPHONE FACSIMILE

5 Table of Contents 1. Executive Summary 1 2. Asset Realisations 1 3. Distributions to Creditors One.Net One.Tel Digital ASIC / Finalisation of Liquidations 2 5. Receipts and Payments 2 6. Conclusion 2

6 1. Executive Summary Pursuant to Section 508 of the Corporations Act 2001 ( the Act ), a liquidator must convene an annual meeting of creditors and members for the purpose of laying before them an account of their acts and dealings and of the conduct of the liquidation during the period. Creditors should note that for a full account of the conduct of the winding up of the One.Tel Group Companies, this report should be read in conjunction with our previous reports to creditors. Our previous annual reports, including this report, can be accessed via the Ferrier Hodgson website: The annual meetings of the members and creditors of the One.Tel Group Companies will be held, concurrently with the annual meeting of the parent company One.Tel Limited (In Liquidation) ( One.Tel ), on 26 August 2010 at 10.00am in the Dorothea Mackellar Room of the Sydney Harbour Marriott Hotel, 30 Pitt Street, Sydney. 2. Asset Realisations During the year ended 30 May 2010 there have been no realisations with respect to the liquidation of the One.Tel Group Companies, with the exception of interest received in respect of monies held an account of One.Net and One.Tel Digital. 3. Distributions to Creditors 3.1 One.Net To date creditors have received dividends representing 81 cents in the dollar on admitted claims. The distributed funds represent monies received by One.Net in its capacity as a creditor of One.Tel Limited ( One.Tel ). Future dividends are fully dependent on any further distributions, which may be received from the liquidation of One.Tel. The estimated timing and quantum of any distribution in this regard is at this time unknown. For further information on the One.Tel liquidation, creditors can view the annual reports at the Creditors Information page of the Ferrier Hodgson website: One.Tel Digital To date creditors have received dividends representing 5.8 cents in the dollar on admitted claims. The timing and quantum of any further distributions is primarily dependent upon the recovery of further dividends from the liquidation of One.Tel. The estimated timing and quantum of any distribution in this regard is at this time unknown. For further information on the One.Tel liquidation, creditors can view the annual reports at the Creditors Information page of the Ferrier Hodgson website: One.Tel Group Companies 5 August 2010 Page 1

7 4. ASIC / Finalisation of Liquidations As previously reported, the Australian Securities & Investments Commission ( ASIC ) has not issued a response to our Section 533 report outlining our findings from our investigations into the affairs of One.Net and One.Card. This had been deferred pending judgment in the litigation initiated by ASIC against Mr Rich et al. As creditors may be aware, the ASIC proceedings were determined during the year, with ASIC being unsuccessful and there being no appeal against the decision. However, we are yet to receive any update as to ASIC s position in relation to the 533 reports. In relation to One.Tel Digital, ASIC has advised that it does not intend to investigate any matter raised at this time. Matters impacting the finalisation of the liquidations are outlined below: One.Net / One.Card ASIC advice of further investigations; and With respect to One.Net, receipt of monies from One.Tel and distribution of further dividend(s) to creditors. One.Tel Digital Receipt of further monies from One.Tel; and Distribution of further dividend(s) to creditors. 5. Receipts and Payments Statement of Receipts and Payments for One.Net and One.Tel Digital are attached as Annexures A and B respectively. There have been no monies received or paid in relation to the liquidation of One.Card. Pursuant to Section 539(5) of the Corporations Act 2001, the Liquidators Statement of Receipts and Payments with respect to all of the One.Tel Group Companies, can be inspected at the offices of Ferrier Hodgson, Level 13, Grosvenor Place, 225 George Street, Sydney NSW, during business hours. 6. Conclusion For the reasons outlined above, I am not yet in a position to finalise the liquidations of One.Net, One.Tel Digital and One.Card. Creditors will be advised of significant developments in due course. Should any creditor require any further information concerning the contents of this report, please do not hesitate to contact Bradley Grimshaw of my office. DATED 5 August 2010 S J Sherman Liquidator One.Tel Group Companies 5 August 2010 Page 2

8 One.Net Pty Limited (In Liquidation) ACN Annexure A Statement of Receipts and Payments Current Year of Liquidation To Date 1 June 2009 to 31 May May 2001 to 31 May 2010 $ $ $ $ $ $ $ $ Opening Cash Balance 27, Receipts Dividends Received - 1,050, GST Refunds - 2, Interest Received , Sale of Business - 438, Sundry Debtors - 500, ,004, Payments Liquidators' Costs GST Payments - 44, Telecommunication Services - 235, Adminstrators' Remuneration - 32, Liquidators' Remuneration - 43, General costs Bank Charges Advertising - 1, Freight & Cartage Postage Printing & Stationery , , Distributions to Creditors 1st Interim Dividend - 1,198, nd Interim Dividend - 419, ,618, ,976, Cash Balance as at 31 May 2010 $ 27, $ 27, Held as follows: Cash at Bank $ 27, $ 27, Cash Invested $ - $ - C:\Users\dstreefkerk\Desktop\One.Tel\5A then 5B. R&Psubsidiaries.xls\One.Net

9 One.Tel Digital Pty Limited (In Liquidation) ACN Annexure B Statement of Receipts and Payments Current Year of Liquidation To Date 1 June 2009 to 31 May May 2001 to 31 May 2010 $ $ $ $ $ $ $ $ Opening Cash Balance 412, Receipts Dividends Received - 370, GST Refunds 4, , Interest Received 3, , , , Payments Liquidators' Costs GST Payments , Legal Costs Liquidators' Remuneration 5, , Liquidators' Expenses General costs Advertising , Bank Charges , , , Distributions to Creditors 1st Interim Dividend 303, , , , , , Cash Balance as at 31 May 2010 $ 110, $ 110, Held as follows: Cash at Bank $ 4, $ 4, Cash Invested $ 106, $ 106, C:\Users\dstreefkerk\Desktop\One.Tel\5A then 5B. R&Psubsidiaries.xls\One.Tel Digital