Decimal Software : Scheme Booklet

Decimal Software Limited

ACN 009 235 956

SCHEME BOOKLET

For a scheme of arrangement between Decimal Software Limited and the holders of Decimal Shares in relation to the proposed acquisition of Decimal Software Limited by Sargon Capital Pty Ltd for cash consideration of $0.0141 (1.41 cents) per Decimal Share acquired pursuant to the Scheme

VOTE IN FAVOUR

The Decimal Directors unanimously recommend that you VOTE IN FAVOUR of the Scheme, in the absence of a Superior Proposal.

The Independent Expert has also concluded that in the absence of any other relevant information and/or a superior proposal, the Scheme is FAIR AND REASONABLE to Decimal Shareholders and therefore is IN THE BEST INTERESTS of Decimal Shareholders.

THIS IS AN IMPORTANT DOCUMENT AND REQUIRES YOUR IMMEDIATE ATTENTION.

You should read it in its entirety before deciding whether or not to vote in favour of the Scheme.

If you are in any doubt about how to deal with this Scheme Booklet, you should contact your broker, financial adviser or legal adviser immediately.

If you are unable to attend the Scheme Meeting in person, you can appoint a proxy to vote on your behalf in respect of the Scheme. To appoint a proxy, you are able to lodge your proxy online atwww.investorvote.com.auor scan the QR code on your proxy form with your smartphone and follow the prompts. Alternatively, you can appoint a proxy by completing the enclosed personalised proxy form in accordance with the instructions and returning it by hand, post or fax. Further information setting out how you may vote by appointment of a proxy is contained in the Notice of Scheme Meeting at Annexure D to this Scheme Booklet.

Important notices

Purpose of this Scheme Booklet

Decimal has announced a proposed Scheme. The Scheme is to be implemented through a members' scheme of arrangement between Decimal and Decimal Shareholders.

The purpose of this Scheme Booklet is to

the Scheme and takes responsibility for that report.

Disclaimer as to forward looking statements

This Scheme Booklet may include various statements about the future. Statements other than statements of historical fact may be forward looking statements. Decimal Shareholders should note that such statements are subject to inherent risks and uncertainties inScheme Meeting. The primary purpose for collecting this personal information is to assist Decimal and Sargon to conduct the Scheme Meeting and implement the Scheme.

Any personal information collected may be disclosed to Sargon's and Decimal's respective share registries, advisers, print and mail service providers and related bodies to the extent necessary to effect the Scheme.

explain the terms of the Scheme, the manner in that they may be affected by a variety of known Decimal Shareholders are entitled underwhich the Scheme will be considered and implemented (if the conditions precedent are satisfied), and to provide the information as is prescribed or otherwise material for Decimal Shareholders when deciding whether or not to vote in favour of the Scheme. This Scheme Booklet includes the explanatory statement for the Scheme required by section 412(1) of the Corporations Act.

You should read this Scheme Booklet in its entirety before making a decision whether or not to vote in favour of the Scheme.

No investment advice

This Scheme Booklet does not take into account the investment objectives, financial situation, tax position or particular needs of any Decimal Shareholder or any other person. Accordingly, this Scheme Booklet should not be relied upon as the sole basis for any decision in relation to Decimal Shares or any other securities. Independent advice should be sought before any such decision is made.

Role of ASIC and ASX

A copy of this Scheme Booklet has been examined by ASIC pursuant to section 411(2) of the Corporations Act and registered by ASIC in accordance with section 412(6) of the Corporations Act. Decimal will request ASIC to provide a statement in accordance with section 411(17) of the Corporations Act stating that ASIC has no objection to the Scheme. If ASIC provides that statement it will be produced to the Court at the Second Court Hearing.

A copy of this Scheme Booklet has been lodged with ASX. Neither ASIC, ASX nor any of their Officers takes responsibility for the contents of this Scheme Booklet.

Important notice associated with the Court order under section 411(1) of the Corporations Act

The fact that the Court has ordered that the Scheme Meeting be convened under section 411(1) of the Corporations Act and has approved this Scheme Booklet does not mean that the Court:

has formed any view as to the merits of the Scheme or as to how Decimal Shareholders should vote at the Scheme Meeting (on this matter Decimal Shareholders must reach their own decision); or

has prepared, or is responsible for, this Scheme Booklet.

Responsibility for information

and unknown risks, variables and other factors, section 173 of the Corporations Act to inspectmany of which are beyond the control of Decimal and Sargon. Actual results, values, performance or achievements may differ materially from results, values, performance or achievements expressed or implied in any forward looking statement.

The statements contained within this Scheme Booklet reflect the views held at the date of this Scheme Booklet.

None of Decimal or Sargon, the Officers of those companies or any person named in this Scheme Booklet with their consent or any person involved in the preparation of this Scheme Booklet makes any representation or warranty (express or implied) as to the accuracy or likelihood of fulfilment of any forward looking statement, or any results, values, performance or achievements express or implied in any forward looking statement, except to the extent required by law. Decimal Shareholders should not place undue reliance on any such statements.

Estimates, targets and forecasts Unless expressly stated otherwise, allreferences in this Scheme Booklet to estimates, Effect of roundingtargets and forecasts (and derivations of the same) are references to estimates, targets and forecasts by Decimal or Sargon management (as applicable). Management estimates, targets and forecasts are based on views held only at the date of this Scheme Booklet.

Each of Decimal and Sargon believes that the estimates, targets and forecasts in this Scheme Booklet that are attributable to it have been made on reasonable grounds and that the assumptions on which those estimates, targets and forecasts are based are reasonable.

Having said this, Decimal Shareholders are cautioned that the estimates, targets and forecasts are subject to a variety of factors that are likely to cause actual results to vary from them, and such variations may be material.

Foreign jurisdictions

This Scheme Booklet has been prepared having regard to Australian disclosure requirements. Other countries may have different legislative and regulatory requirements.

The release, publication, or distribution of this Scheme Booklet in jurisdictions other than Australia may be restricted by law or regulation in such other jurisdictions and persons outside of Australia who come into possession of this Scheme Booklet should seek advice on andThe Decimal Information has been provided by observe any restrictions. Any failure to complyDecimal and is the responsibility of Decimal. Sargon and its advisers do not assume any responsibility for the accuracy or completeness of that information.

The Sargon Information has been provided by Sargon and is the responsibility of Sargon. Decimal and its advisers do not assume any responsibility for the accuracy or completeness of that information.

RSM Corporate Australia Pty Ltd has prepared the Independent Expert's Report in relation to

with such restrictions may constitute a violation of applicable laws or regulations.

Privacy

Personal information may be collected by Decimal and Sargon in the process of implementing the Scheme.

This information may include the name, contact details, security holding details of Decimal Shareholders, and the names of individuals appointed to act as proxy, attorney or corporate representative by a Decimal Shareholder at theand obtain copies of personal information collected. Decimal Shareholders should contact the Decimal Registry in the first instance if they wish to access their personal information.

Diagrams and charts

Any diagrams, charts, maps, graphs and tables appearing in this Scheme Booklet are illustrative only and may not be drawn to scale. Unless expressly stated otherwise, all data contained in such diagrams, charts, maps, graphs or tables is based on information available at the date of this Scheme Booklet.

References to time

Unless expressly stated otherwise, all references in this Scheme Booklet to time relate to the time in Perth, Western Australia, Australia.

References to currency

Unless expressly stated otherwise, all references in this Scheme Booklet to "$", "A$", "cents" or "AUD" are references to Australian currency.

A number of figures, amounts, percentages, prices, estimates, calculations of value and fractions in this Scheme Booklet are subject to the effect of rounding. Accordingly, their actual calculation may differ from the calculations set out in this Scheme Booklet.

Defined terms

A number of defined terms are used in this Scheme Booklet, the meanings of which are set out in the glossary in Section 10 or elsewhere in this Scheme Booklet. Some of the documents reproduced in the Annexures to this Scheme Booklet each have their own defined terms which are sometimes different from those in the rest of this Scheme Booklet.

Date of Scheme Booklet

This Scheme Booklet is dated 31 October 2018.

page i

Table of Contents

Reasons to vote in favour of or against the Scheme 1

Important dates 2

Letter from the Chairman of Decimal 3

Action required by Decimal Shareholders 4

1 Directors' recommendation and matters relevant to your vote on the Scheme 6

2 Summary of the Scheme 13

3 Frequently asked questions 17

4 Profile of Decimal 21

5 Profile of Sargon 28

6 Risk factors 32

7 Taxation implications 36

8 Implementation of the Scheme 38

9 Additional information 46

10 Glossary, definitions and interpretation 53

Annexure A - Independent Expert's Report 64

Annexure B - Scheme of Arrangement 112

Annexure C - Deed Poll 130

Annexure D - Notice of Scheme Meeting 158

Corporate Directory 162

Reasons to vote in favour of or against the Scheme

This section is a summary only. Further details of the reasons why you should vote in favour of, or against, the Scheme are set out in Section 1 of this Scheme Booklet.

• 1 Reasons to vote in favour of the Scheme

  All of the Decimal Directors have unanimously recommended that you vote in favour of the Scheme, in the absence of a Superior Proposal, and intend to vote any Decimal Shares they hold or control in favour of the Scheme, in the absence of a Superior Proposal

  The Independent Expert has concluded that in the absence of any other relevant information and/or a superior proposal, the Scheme is fair and reasonable and therefore is in the best interests of Decimal Shareholders

  No Superior Proposal has emerged since the announcement of the Scheme

  The Scheme Consideration is all cash and provides certainty of value to Decimal Shareholders

  The Scheme Consideration of $0.0141 (1.41 cents) cash per Scheme Share represents an attractive premium over the trading prices of Decimal Shares prior to the announcement of the Scheme

  No brokerage costs or stamp duty will be payable by you on the transfer of your Decimal Shares to Sargon on the implementation of the Scheme

  If the Scheme does not proceed and no Superior Proposal emerges, the future of Decimal as a going concern is uncertain

  The price of Decimal Shares may fall if the Scheme is not implemented and no Superior Proposal emerges

• 2 Possible reasons not to vote in favour of the Scheme

You may disagree with the recommendations by the Independent Expert and the Decimal Directors

You may consider that there is the potential for a Superior Proposal to be made to Decimal in the foreseeable future

You may prefer to participate in the future financial performance of the Decimal business, and may consider that the Scheme does not appropriately capture Decimal's long term potential

You may believe it is the wrong time to divest your Decimal Shares

The tax consequences of the Scheme may not suit your current financial position

Important dates
Date of this Scheme Booklet	31 October 2018
Latest date and time for receipt of proxy forms or powers of attorney for	10.00 am (Perth time) on 4
the Scheme Meeting	December 2018
Time and date for determining eligibility to vote at the Scheme Meeting	4.00 pm (Perth time) on 4
December 2018
Scheme Meeting to be held at the Boardroom of Fogarty Partners, 65	10.00 am (Perth time) on 6
Hay Street, Subiaco, Western Australia 6008	December 2018
If the Scheme is agreed to by Decimal Shareholders
Second Court Date for approval of the Scheme	13 December 2018
Effective Date
Court order lodged with ASIC and announcement to ASX
Last day of trading in Decimal Shares - Decimal Shares suspended from
trading on ASX from close of trading on ASX	13 December 2018
Record Date for Scheme Consideration	5.00 pm (Perth time) on 17
December 2018
Implementation Date
Issue of Scheme Consideration to Scheme Shareholders	24 December 2018

All dates following the date of the Scheme Meeting are indicative only and, among other things, are subject to all necessary approvals from the Court and any other Government Agency. Any changes to the above timetable (which may include an earlier or later date for the Second Court Hearing) will be announced through ASX and notified on Decimal's website atwww.decimal.com.au.

All references to time in this Scheme Booklet are references to Perth time unless otherwise stated. Any obligation to do an act by a specified time in an Australian time zone must be done at the corresponding time in any other jurisdiction.