Liabilities No. $ Priority Claims: Unpaid Superannuation 1 24,125 Unsecured Claims ,604 Total Known Claims ,729

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1 Our ref: v.1 21 March 2018 To the creditor as addressed Dear Sir/Madam Melgold Holdings Pty Ltd (In Liquidation) (the Company) ACN Initial notice to creditors - Appointment of Liquidators The purpose of this document is to provide you with information about the liquidation of Melgold Holdings Pty Ltd and your rights as a creditor. We were appointed Liquidators of the Company on 22 February 2018 on the application of the Deputy Commissioner of Taxation. Our Declaration of Independence, Relevant Relationships and Indemnities (DIRRI) is attached at Appendix A. The DIRRI assists you to understand any relevant relationships that we have, and any indemnities or upfront payments that have been provided to us. None of the relationships disclosed in this document affect our independence. 1. What is a court liquidation? A court liquidation is where an order to place a company into liquidation is made by the court. Usually this is on application of a creditor where the company has not paid its outstanding debt. This may mean that the company is insolvent. According to the Company s records you are a creditor of the Company. 2. Update on liquidation to date The Company was based in Kalgoorlie and operated a heavy haulage business from approximately 2012 to the date of our appointment. The director has not provided us with a Report as to Affairs (RATA) which has hindered our initial investigations. We will continue to pursue the director for a completed RATA. The Company s accountant has provided access to the Company s MYOB file and some books and records. The following assets have been identified: - Cash at bank of approximately $30,000. The Company s bank accounts have been frozen and these funds will be transferred into our liquidation bank account in due course Toyota Landcruiser, 2000 Kenworth Prime Mover and 2004 Freightliner Prime Mover, all financed by Morris Finance Limited. As there was no equity in these vehicles we disclaimed the finance contracts and advised Morris Finance Limited to collect the vehicles. Level 21, 140 St Georges Terrace Perth WA 6000 PO Box 7761 Cloisters Square WA 6850 t: f: PPB Pty Ltd trading as PPB Advisory ABN Liability limited by a scheme approved under Professional Standards Legislation

2 Toyota Landcruiser. The director s husband has advised that the vehicle is no longer in working condition. We intend to disclaim the van shortly as it is likely that the costs of realising it would be greater than any proceeds received from a sale. The Company s known liabilities are presented below: Liabilities No. $ Priority Claims: Unpaid Superannuation 1 24,125 Unsecured Claims ,604 Total Known Claims , What happens to your debt? All creditors of the company are now creditors in the liquidation. As a creditor, you have certain rights, although your debt will be dealt with in the liquidation. If you have leased the Company property, have a retention of title claim or hold a Personal Property Security in relation to the Company, please contact this office as soon as possible. 4. Your rights as a creditor Information regarding your rights as a creditor is provided in the Information Sheet included at Appendix B. This includes your right to: make reasonable requests for information make reasonable requests for a meeting give directions to us appoint a reviewing liquidator replace us as Liquidators. 5. Costs of the liquidation Included at Appendix C is our Initial Remuneration Notice. This document provides you with information about how we will get paid for undertaking the liquidation. We may write and ask that you approve my remuneration for the work that we do in completing the liquidation. If we do, we will provide you with detailed information so that you can understand what tasks we have undertaken and the costs of those tasks. 6. What happens next? We will proceed with the liquidation, including: recovering and selling any available property investigating the Company s affairs reporting to the Australian Securities and Investments Commission (ASIC). If we receive a request for a meeting that complies with the guidelines set out in the creditor rights information sheet, we will hold a meeting of creditors. We will provide a further report to creditors within 3 months. 2

3 7. Where can you get more information? You can access additional information on the following websites: ARITA at ASIC at 8. About PPB Advisory PPB Advisory is a national firm operating throughout Australia, specialising in restructuring and insolvency. For further information regarding the firm, please visit our website at Yours faithfully Melissa Humann and Simon Theobald Liquidators Enc Appendices A. Declaration of Independence, Relevant Relationships and Indemnities B. Information sheet Creditors rights in liquidations C. Initial Remuneration Notice Date of appointment: 22 February 2018 Contact name: Liam Clarke Telephone number: lclarke@ppbadvisory.com 3

4 Declaration of Independence, Relevant Relationships and Indemnities Melgold Holdings Pty Ltd (In Liquidation) (the Company) ACN A Practitioner appointed to an insolvent entity is required to make declarations as to: A. their independence generally B. relevant relationships, including: i. the circumstances of the appointment ii. any relationships with the Company and others within the previous 24 months iii. any prior professional services for the Company within the previous 24 months iv. any that there are no other relationships to declare and C. any indemnities given, or up-front payments made, to the Practitioner. This declaration is made in respect of us, our partners, PPB Advisory and the related entities of PPB Advisory. A list of related entities of PPB Advisory is included in Schedule A at the end of this document. A. Independence We, Melissa Humann and Simon Theobald of PPB Advisory, Level 21, 140 St Georges Terrace, Perth WA 6000, undertook a proper assessment of the risks to our independence prior to consenting to act as joint Liquidators of the Company in accordance with the law and applicable professional standards. This assessment identified no real or potential risks to our independence. We are not aware of any conflicts arising between consenting to act and the time of our appointment, or any reasons that would prevent us from accepting this appointment. In the event that any conflict arises, we will seek independent legal advice or court directions if appropriate. In the event that this declaration needs to be updated we will issue written notice to all known creditors as per the Company s records. B. Declaration of Relationships i. Circumstances of appointment We confirm we had no prior meetings with the Company prior to our appointment. We were appointed Liquidators by the Court on the application of the Deputy Commissioner of Taxation. We consented to act on the request of Douglas Bowen, a paralegal for the Australian Government Solicitor (AGS) on 23 August The AGS is known to us on a professional basis. In our opinion, this does not affect our independence for the reason that giving a consent to act to a creditor does not result in any duty owed to that creditor that would conflict with our interests or duties. There are no other prior professional or personal relationships that should be disclosed.

5 ii. Relevant relationships (excluding professional services to the insolvent) We, or a member of our firm, have, or have had within the preceding 24 months, a relationship with: Australian Government Solicitor (AGS) Nature of relationship AGS acts for the petitioning creditor and referred this matter to us. We have had previous professional relationships with AGS and their staff for a number of years. We have previously undertaken formal and informal assignments on companies referred to us by AGS. Reasons why no conflict of interest or duty We believe that this relationship does not result in a conflict of interest or duty because: Our previous relationships with AGS were not in relation to the Company s and/or the director s affairs, or related parties of the Company and/or the director. We have a wide referral base and AGS is one of our many referrers of work in the past 24 months. Referrals from solicitors, business advisors or accountants are commonplace and do not impact on our independence in carrying out our duties as Liquidators. Deputy Commissioner of Taxation (petitioning creditor) on behalf of the Australian Taxation Office (ATO) Nature of relationship Various Practitioners within PPB Advisory are regularly requested to provide their consent to act as liquidators and bankruptcy trustees in matters where the Deputy Commissioner of Taxation is the principal creditor. Reasons why no conflict of interest or duty We believe that these relationships do not result in a conflict of interest or duty. Our previous relationships with the Deputy Commissioner of Taxation have not been, and are not in relation to the Company s affairs and/or the Company s director or related parties of the Company. iii. Prior professional services to the insolvent Neither we, nor our firm, have provided any professional services to the Company in the previous 24 months. iv. No other relevant relationships to disclose There are no other known relevant relationships, including personal, business and professional relationships, from the previous 24 months with the Company, an associate of the Company, a former insolvency practitioner appointed to the Company or any person or entity that has security over the whole or substantially the whole of the Company s property that should be disclosed. C. Indemnities and up-front payments We have not been indemnified in relation to this administration, other than any indemnities that we may be entitled to under statute. We have not received any upfront payments in respect of our remuneration or disbursements. Dated this 21 st day of March 2018 Melissa Humann Liquidator Simon Theobald Liquidator

6 Note: 1. If circumstances change, or new information is identified, we are required under the Corporations Act 2001 and the Australian Restructuring Insolvency & Turnaround Association (ARITA) Code of Professional Practice to update this Declaration and provide a copy to creditors with our next communication as well as table a copy of any replacement declaration at the next meeting of the insolvent s creditors. 2. Any relationships, indemnities or up-front payments disclosed in the DIRRI must not be such that the Practitioner is no longer independent. The purpose of components B and C of the DIRRI is to disclose relationships that, while they do not result in the Practitioner having a conflict of interest or duty, ensure that creditors are aware of those relationships and understand why the Practitioner nevertheless remains independent.

7 Schedule A related entities of PPB Advisory All Australian incorporated related entities of PPB Advisory PPB Pty Limited, Australia subsidiaries PPB Advisory Agribusiness Management Pty Ltd, Australia PPB Advisory Funds Management Holding Pty Limited, Australia PPB Corporate Finance Pty Limited, Australia PPB Corporate Services Pty Ltd, Australia PPB NZ Holdings Pty Limited, Australia PPB Advisory Funds Management Limited, Australia PPB Property Administration Pty Ltd, Australia PPB Property Pty Limited, Australia PPB Real Estate Pty Ltd, Australia PPB NZ Limited As Nominee For PPB NZ Partnership PPB NZ Property Limited PPB NZ Equity Limited Tiago Advisory Pty Limited, Australia A.C.N Pty Limited, Australia PPB Funding Pty Ltd, Australia Litmus Group entities which merged with PPB Advisory as of 1 March 2016 LITMUS Group Pte Limited, Singapore TRUE North Advantage Pte Limited, Singapore

8 Creditor Rights in Liquidations As a creditor, you have rights to request meetings and information or take certain actions: Right to request a meeting Right to request information Right to give directions to liquidator Right to appoint a reviewing liquidator Right to replace liquidator Right to request a meeting In liquidations, no meetings of creditors are held automatically. However, creditors with claims of a certain value can request in writing that the liquidator hold a meeting of creditors. A meeting may be requested in the first 20 business days in a creditors voluntary liquidation by 5% of the value of the debts held by known creditors who are not a related entity of the company. Otherwise, meetings can be requested at any other time or in a court liquidation by: > 10% but < 25% of the known value of creditors on the condition that those creditors provide security for the cost of holding the meeting 25% of the known value of creditors creditors by resolution, or a Committee of Inspection (this is a smaller group of creditors elected by, and to represent, all the creditors). If a request complies with these requirements and is reasonable, the liquidator must hold a meeting of creditors as soon as reasonably practicable. Right to request information Liquidators will communicate important information with creditors as required in a liquidation. In addition to the initial notice, you should receive, at a minimum, a report within the first three months on the likelihood of a dividend being paid. Additionally, creditors have the right to request information at any time. A liquidator must provide a creditor with the requested information if their request is reasonable, the information is relevant to the liquidation, and the provision of the information would not cause the liquidator to breach their duties. A liquidator must provide this information to a creditor within 5 business days of receiving the request, unless a longer period is agreed. If, due to the nature of the information requested, the liquidator requires more time to comply with the request, they can extend the period by notifying the creditor in writing. Requests must be reasonable. They are not reasonable if: Both meetings and information: (a) complying with the request would prejudice the interests of one or more creditors or a third party (b) there is not sufficient available property to comply with the request (c) the request is vexatious Meeting requests only: (d) a meeting of creditors dealing with the same matters has been held, or will be held within 15 business days Information requests only: (e) the information requested would be privileged from production in legal proceedings (f) disclosure would found an action for breach of confidence (g) the information has already been provided (h) the information is required to be provided under law within 20 business days of the request If a request is not reasonable due to (b), (d), (g) or (h) above, the liquidator must comply with the request if the creditor meets the cost of complying with the request. Otherwise, a liquidator must inform a creditor if their meeting or information request is not reasonable and the reason why. ARITA ACN Level 5, 191 Clarence Street, Sydney NSW 2000 Australia GPO Box 4340, Sydney NSW 2001 t e admin@arita.com.au arita.com.au AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION

9 Right to give directions to liquidator Creditors, by resolution, may give a liquidator directions in relation to a liquidation. A liquidator must have regard to these directions, but is not required to comply with the directions. If a liquidator chooses not to comply with a direction given by a resolution of the creditors, they must document their reasons. An individual creditor cannot provide a direction to a liquidator. Right to appoint a reviewing liquidator Creditors, by resolution, may appoint a reviewing liquidator to review a liquidator s remuneration or a cost or expense incurred in a liquidation. The review is limited to: remuneration approved within the six months prior to the appointment of the reviewing liquidator, and expenses incurred in the 12 months prior to the appointment of the reviewing liquidator. The cost of the reviewing liquidator is paid from the assets of the liquidation, in priority to creditor claims. An individual creditor can appoint a reviewing liquidator with the liquidator s consent, however the cost of this reviewing liquidator must be met personally by the creditor making the appointment. Right to replace liquidator Creditors, by resolution, have the right to remove a liquidator and appoint another registered liquidator. For this to happen, there are certain requirements that must be complied with: Meeting request Information and notice Resolution at meeting A meeting must be reasonably requested by the required number of creditors. Creditors must inform the existing liquidator of the purpose of the request for the meeting. Creditors must determine who they wish to act as the new liquidator (this person must be a registered liquidator) and obtain: Consent to Act, and Declaration of Independence, Relevant Relationships and Indemnities (DIRRI). The existing liquidator will send a notice of the meeting to all creditors with this information. If creditors pass a resolution to remove a liquidator, that person ceases to be liquidator once creditors pass a resolution to appoint another registered liquidator. For more information, go to Version: July (LIQ) - INFO - CREDITOR RIGHTS INFORMATION SHEET V1_0 AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 2

10 Initial Remuneration Notice Melgold Holdings Pty Ltd (In Liquidation) (the Company) ACN The purpose of the Initial Remuneration Notice is to provide you with information about how we propose our remuneration for undertaking the Liquidators will be set. Remuneration Method There are four basic methods that can be used to calculate the remuneration charged by an insolvency practitioner. They are: 1. Time based / hourly rates This is the most common method. The total fee charged is based on the hourly rate charged for each person who carried out the work, multiplied by the number of hours spent by each person on each of the tasks performed. 2. Fixed Fee The total fee charged is normally quoted at the commencement of the administration and is the total cost for the administration. Sometimes a practitioner will finalise an administration for a fixed fee. 3. Percentage The total fee charged is based on a percentage of a particular variable, such as the gross proceeds of assets realisations. 4. Contingency The practitioner s fee is structured to be contingent on a particular outcome being achieved. Method chosen Given the nature of this administration we propose that our remuneration as Liquidators be calculated on Hourly Rates. This is because: it ensures that creditors are only charged for work that is performed as Liquidators, we are required to perform a number of tasks which do not necessarily relate to the realisation of assets, for example responding to creditor enquiries, reporting to ASIC and conducting investigations generally, it is difficult to estimate with accuracy the total amount of fees necessary to complete all tasks required in the administration and our firm has a time recording system that can produce a detailed analysis of time spent on each type of task by each individual staff member utilised in the administration Explanation of Hourly Rates The hourly rates charged by PPB Advisory effective from 1 December 2016 are set out within this Initial Remuneration Notice, together with a general guide showing the qualifications and experience of staff engaged in the administration. The hourly rates charged encompass the total cost of providing professional services and are not comparable to an hourly wage. Approval and payment of Remuneration Remuneration is approved by a resolution of the creditors, a creditors committee or a court. Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of the administration will exceed the maximum which has been approved, in which case, we may seek

11 another resolution for additional remuneration. We will not pay any amount exceeding the maximum without this approval. Where funds are available, we will usually pay approved remuneration at intervals not less than one month. Where funds are not available, remuneration will not be paid. Estimate of Remuneration We estimate that the administration will cost approximately $35,000 (exclusive of GST) to complete subject to the unknown variables which may have a significant effect on this estimate and that we are unable to determine at this early stage of the administration. Disbursements Disbursements are divided into three types: Externally provided professional services these are recovered at cost. An example of an externally provided professional service disbursement is legal fees. Externally provided non-professional costs such as travel, accommodation and search fees these are recovered at cost. Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the administration, would generally be charged at cost, although some expenses may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis. We are not required to seek creditor approval for disbursements paid to third parties, but must account to creditors. We must be satisfied that these disbursements are appropriate, justified and reasonable. We are required to obtain creditor approval for the payment of internal disbursements where there is a profit or advantage prior to these disbursements being paid from the administration. Details of the basis of recovering disbursements in this administration are provided below. Full details of any actual costs incurred will be provided with future reporting. Basis of disbursement claim Disbursements Externally provided professional services eg legal fees, valuation fees Externally provided non-professional service eg courier, Searches, advertising Rate (Excl GST) At cost At cost Internal disbursements * Photocopy/Printing Postage Scans Black and white Colour A3 Black and white A3 Colour $0.10 per page $0.50 per page $0.20 per page $0.60 per page At cost $0.05 per page Staff vehicle use Rates applicable as at 1 January 2017 At prescribed ATO rates * approval to be sought by creditors prior to payment

12 Statement of Remuneration Policy Insolvency Practitioners, in common with many professions, have traditionally charged for work done on the basis of hourly rates. PPB Advisory supports the Code of Professional Practice for Insolvency Practitioners. In all matters undertaken by us we seek to charge an appropriate level of fees and expenses. They should be appropriate for us having regard to the complexity and demands of each assignment, and appropriate for our clients having regard to their objectives in seeking our assistance. Accordingly, at all times when seeking approval for remuneration we will provide the following details: type of work undertaken by the Appointees and the firm s staff breakdown of the activity undertaken number of hours charged by each person hourly rate charged for each person total remuneration claimed basis of recovering disbursements. A schedule detailing our rates to apply to administrations for the period commencing 1 December 2016 is set out below, together with general details of Staff Classifications. Position Rate per hour ($) (excl. GST) Partner / Appointee 685 Director / Principal 625 Senior Manager 550 Manager 500 Assistant Manager 460 Senior Consultant 415 Consultant 350 Analyst 275 Administration 160

13 PPB Advisory Classifications Position Partner/Appointee Director Senior Manager Manager Assistant Manager Senior Consultant Consultant Analyst Administration Guide to level of experience and qualifications Registered Liquidator, Official Liquidator and/or Trustee, bringing his or her specialist skills to the administration. Generally, more than eight years experience, with at least four years at manager level. Extensive technical knowledge and capable of controlling all aspects of an administration. Reports directly to Partner. May be qualified to accept appointments in his/her own right. Generally, more than six years experience and two years at manager level. Broad technical knowledge and capable of managing medium to large assignments. Four to seven years experience. Well-developed technical and commercial skills. Capable of managing medium client assignments and parts of larger client files. Supervises a team. Three to six years experience. Capable of managing minor administrations and assists with planning and management of medium to large assignments. Supervises a team. Two to four years experience. Completion of CA Program (or equivalent) during this period. Assists planning and manages small to medium assignments as well as performing some of the more difficult work on larger jobs. Graduate with one to two years experience. Assists with day to day tasks under supervision. Undergraduate or graduate with up to one years experience. Assists with day to day administration tasks under supervision. Appropriate skills and experience to assist with general administration tasks including document management, accounts and statutory processing. The above is taken as a general guide only. From time to time, there may be persons employed who, because of their skills and experience, are employed in positions where they may not necessarily meet all of the above qualifications