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1 Grant Thornton (Qld) Pty Ltd ABN ACN Ground Floor 102 Adelaide Street Brisbane Queensland 4000 GPO Box 1008 Brisbane Queensland 4001 T F E info.qld@grantthornton.com.au W Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia. Liability limited by a scheme approved under Professional Standards legislation. Our Ref: _1.DOC

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3 FORM 532 Corporations Act 2001 (Cwlth) ACN Regulation APPOINTMENT OF PROXY (1) *I/We.. of a *Creditor / Member of FR Innsol Electrical Pty Ltd (In Liquidation) appoint (2) or in *his / her absence as *my / our proxy to vote at the meeting of creditors of the company to be held on Thursday, 10 June 2010 at 11:00am or at any adjournment of that meeting. Generally as *he / she determines on *my / our behalf; OR Specifically in accordance with the following instructions: (3) Please complete for special proxy only. (circle one) For Against Abstain * I / we authorise.. to represent *me / us on the Committee of Creditors should one be elected. Dated... (4) Signature... (If a Company - Sign under Seal if required by Constitution) Proxies should be returned to the offices of Grant Thornton, Ground Floor, Grant Thornton House, 102 Adelaide Street, Brisbane Qld by 5.00 pm Wednesday, 9 June (5) CERTIFICATE OF WITNESS (Special Cases) I,... of... certify that the above 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/her before *he/she attached *his/her signature or mark to the instrument. DATED this day of Signature of Witness... Description... Place of Residence... * Strike out if inapplicable. INSTRUCTIONS 1 Insert name and address of individual or corporation. 2 Appoint name of person to be appointed as proxy. 3 To vote in favour of either or both of the two options tick ( ) the for box next to the desired option. In order to vote against either or both of the options tick ( ) the against box next to the desired option. 4 The method of affixing the common seal should be prescribed by the creditor corporation s Constitution. 5 This certificate is to be completed only where the person giving the proxy is blind or incapable of writing.

4 FORM 535 Corporations Act 2001 (Cwlth) Subregulation (2) FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM) To the Liquidator of: FR Innsol Electrical Pty Ltd (In Liquidation) ACN: : 1. This is to state that the company was, on 15 December 2008 and still is, justly and truly indebted to..... (full name and address of the creditor and, if applicable, the creditor's partners. If prepared by an employee or agent of the creditor, also insert a description of the occupation of the creditor) for dollars and.cents. ABN of the Creditor: Date Consideration (state how the debt arose) Amount $ c Remarks (include details of substantiation of payment) 2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or received any satisfaction or security for the sum or any part of it except for the following: (insert particulars of all securities held. If the securities are on the property of the company, assess the value of those securities. If any bills or other negotiable securities are held, show them in a schedule in the following form). Date Drawer Acceptor Amount $ c Due Date *3. I am employed by the creditor and authorised in writing by the creditor to make this statement. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. *3 I am the creditor's agent authorised in writing to make this statement in writing. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. Dated this day of Signature Occupation... Address... *Delete if this proof is made by the creditor personally.

5 Liquidators Report to Members and Creditors FR Innsol Electrical Pty Limited (In Liquidation) 20 May Grant Thornton 20 May

6 Contents Index Annexures 1 Introduction Update on Progress of Liquidation Estimated Outcome Statement Remuneration Meeting of Members and Creditors...11 A B C Summary of Receipts and Payments Charge Out Rates Remuneration Reports 2010 Grant Thornton 20 May

7 1 Introduction Graham Robert Killer and I, Michael Gerard McCann were appointed Voluntary Administrators of FR Innsol Electrical Pty Ltd ( the Company ) on 15 December 2008 and subsequently Liquidators on 28 January This report sets out an account of the Liquidators acts and dealings and the conduct of the winding up of the Company since my last report to creditors. An annual meeting of creditors and annual general meeting of the members is jointly called for Thursday, 10 June 2010 at am AEST at the offices of Grant Thornton, Ground Floor, 102 Adelaide Street, Brisbane QLD A notice of the meeting is attached to the front of this report. Members and creditors are directed to the Creditor Information Sheets produced by the Insolvency Practitioners Association and the Australian Securities and Investment Commission, specifically to Information Sheet 85 under the publication tab, which is available for download at The purpose of this meeting of members and creditors is to: - Provide members and creditors with an update on the progress of the liquidation; Consider the remuneration of the Liquidators; and Consider any general business raised by the members and creditors of the Company Grant Thornton 20 May

8 2 Update on Progress of Liquidation Sale of the Company s Plant and Equipment The fixed assets of the company consisted of plant and equipment. The Company s directors provided an estimated realisable value ( ERV ) at the date of my appointment for the plant and equipment in the amount of $157,500. These assets were sold via auction with net proceeds of $129,982 realised. There are no further items of plant and equipment to be sold. Collection of Trade Debtors (Including Retentions Monies) The ERV of trade debtors (including retention monies) as provided by the Company s directors at the date of my appointment was $2,591,077. This balance includes trade debtors raised in the month of my appointment (December 2008). I have pursued the Company s outstanding trade debtors with an amount of $74,884 collected to date. Following unsuccessful attempts by me to recovery the debts owing by Adco Constructions, Broad Construction Services and FK Gardner, which comprise approx 95% of the trade debtor ledger, solicitors were briefed to commence formal recovery action. A summary of the Company s 3 largest debtors which remain outstanding and are subject to formal recovery action is set out below: - $ Debtor 15/12/08 Adco Constructions 1,614,941 Broad Construction Services 498,949 FK Gardner and Sons 347,952 Total 2,461,842 % of Total Debtors 95% I advise that letters of demand were issued to Adco Constructions, Broad Construction Services and FK Gardner. Subsequent to these letters of demand, responses were received refuting the amounts owed to the Company. No reconciliations or supporting evidence was provided. Consequently my lawyers have commenced recovery proceedings given that the warranty/defect periods relating to the majority of projects have now expired Grant Thornton 20 May

9 The nature of the recovery proceedings is complex. As you are aware prior to the company being placed into liquidation there were a number of disputed contract and variation claims. The inability to recover these amounts ultimately contributed to the Company s insolvency. A significant amount of time has been incurred by my staff in performing the following tasks to recover these debts and commence recovery proceedings: - Issuing demands on the debtors Meeting with the Company s directors to understand each debt Reviewing, collating and reconciling the Company s records in respect of each project and debt Correspondence, including meetings and briefings with my lawyers for the commencement of litigation I also note that retention monies of approx $6k are expected to be received within the next few weeks. As a result of the recovery action which is underway, the final quantum of debtors to be realised is uncertain. Within the Estimated Outcome Statement in the following section of this report (refer Section 3 ) I have provided members and creditors with an optimistic and pessimistic range of recoveries for illustrative purposes only. The final quantum recovered will ultimately determine the dividend distribution which may be payable to creditors after conclusion of the recovery proceedings. Priority Creditors I have utilised the General Employee Entitlements Redundancy Scheme ( GEERS ) to pay all employee entitlements with the exception of superannuation, which is specifically excluded. Under GEERS employees are able to claim unpaid wages, annual leave, long service leave, payment in lieu of notice and up to 16 weeks redundancy pay. As GEERS has now paid the entitlements (excluding superannuation) of all employees who lodged Claim Forms GEERS are subrogated into the position of those employees (i.e. GEERS have a priority claim for dividend in place of those employees who have been paid). Employees superannuation remains outstanding and will be remitted to the Australian Taxation Office ( ATO ) if and when a priority dividend is declared. There are a few employees who are yet to lodge a Claim Form with GEERS. If you have not done so already, please lodge a completed Claim Form as soon as possible. I advise that due to the formal proceedings which are underway to recover the Company s debtors it is currently not my intention to declare and pay a dividend to priority creditors. The funds which have been realised to date will be set aside and may be used to fund litigation with the aim of maximising debtor recoveries and ultimately the return to all creditors. Investigations In my report to creditors dated 19 January 2009 ( report ), I identified the following issues that required further investigation: - 1. Preference payments 2. Claims against the directors 1. Preference payments In my report I identified payments totalling approximately $320,000 which were made to 5 creditors that may represent preference payments and may be recoverable by a Liquidator. One of these creditors is a related party and is now de-registered Grant Thornton 20 May

10 I confirm that letters of demand have been issued to 4 of the creditors which were identified. Details of the creditors and the amounts identified are set out below: - $ Creditor Name Amount National Air (Qld) Pty Ltd 86,285 Icon Industrial Electrics Pty Ltd 29,645 L & H Group 100,000 Australian Taxation Office 60,000 Sub-total 275,930 If I successfully recover monies from this action, this money may assist fund debtor recoveries and/or further investigations into other potential recoveries (i.e. insolvent trading actions against the directors) and may increase the surplus assets available for distribution to creditors. 2. Claims against directors insolvent trading Section 588G of the Act provides that directors are obliged to prevent a company from: - i) Incurring a debt whilst insolvent; or ii) Becoming insolvent by incurring a debt Section 588H provides several defences to directors including that at the time when the debt was incurred there were reasonable grounds to expect, and that the directors did expect, that the company was solvent and would remain solvent even if it incurred that debt and any other debts incurred at that time. If a contravention of Section 588G can be established then Section 588M empowers a Liquidator (or a creditor under certain circumstances) to recover compensation from a director for any loss or damage suffered as a consequence of any such contravention. Investigations The Company s financial and other records suggest that the directors should have given consideration to its solvency in the period preceding my appointment (15 December 2008), possibly back to October I note that there are no board minutes to record any such considerations. Whilst my investigations suggest that October 2008 is a possible date of insolvency, the task of proving such a date is in this case complex. The investigative work to establish the position of the company and the knowledge of the directors as to the Company s actual and declining financial position has largely been undertaken. It would appear that the Company suffered financial hardship as a result of a disputed contract and variation claims and was placed into voluntary administration when a bad debt of approx $409,000 crystallised and it became apparent that it would not be recovered in the short term without litigation. Although the Company s financial position and trading was in decline, commencing approximately 6 months before the appointment of an Administrator, it would appear that the crystallisation of this bad debt resulted in the directors determination that the Company was insolvent or likely to become insolvent and the decision to appoint an Administrator. I have obtained property searches on the directors. Whilst the searches indicate that the directors hold real property, they also indicate that the properties are subject to mortgages. The debts incurred during the months October 2008, November 2008 and December 2008, which remain unpaid, total $81,531, $483,222, and 2010 Grant Thornton 20 May

11 $794,285 respectively. As such $1,359,038 would appear to be the quantum of any potential claim. In determining whether to pursue the directors for insolvent trading, due consideration should be given to the commerciality of such an action, the availability of evidence, potential defences available to the directors and, the ability of the directors to meet any such action. Although the potential claim against directors for insolvent trading is high, in light of the directors actions to put the Company into Voluntary Administration in December 2008 only 2 months after the likely date of insolvency, and the fact that insolvency arose as a result of the crystallisation of a bad debt, an insolvent trading claim may be difficult to establish. The feasibility of pursuing the directors for insolvent trading will be discussed in more detail at the meeting of creditors to be held at 11am on Thursday 10 th June Liquidator s Receipts and Payments An updated summary of the receipts and payments from the date of my appointment, being 15 December 2008 to 30 April 2010 is attached at Annexure A. Committee of Inspection A committee of inspection ( committee ) was formed to assist in this liquidation. The committee members are: - Creditor Civelec CNW Pty Ltd FR Innsol Electrical Pty Ltd GB Electrics Pty Ltd Go Electrical Committee member Jim McCullough Vicky Hicks Brenden Harris Gregory Boncker Adrien Tan 2010 Grant Thornton 20 May

12 3 Estimated Outcome Statement I have prepared the analysis opposite to provide creditors with an estimate of the returns which maybe available to both priority and unsecured creditors, as at 30 April You will notice that a return ranging from 84 cents to 100 cents in the dollar is expected to be paid to priority unsecured creditors, subject to future costs and recoveries. The estimated return to ordinary unsecured creditors is largely dependent on successful recovery of the Company s trade debtors, preference payment and insolvent trading recoveries as well as the quantum of proof of debt claim forms submitted by creditors. A return to ordinary unsecured creditors is estimated to be in the range of 0 cents up to 32 cents in the dollar. The estimated return to ordinary unsecured creditors has reduced since my last report due to the following reasons: Increase in priority creditor claims by $11,636; and Increase in unsecured creditor claims by $436,966. In summary, the majority of priority creditor claims are likely to be paid. However, ordinary unsecured creditor claims are unlikely to be paid unless substantial net recoveries from debtors are able to be secured. FR Innsol Electrical Pty Ltd (In Liquidation) Notes Optimistic Scenario ($) Pessimistic Scenario ($) Cash at Bank as at 30 April , ,788 Debtor Realisations 1,242, ,847 Preference Payment Recoveries 1 Unknown Unknown Directors - Insolvent Trading Claim Recoveries 1 Unknown Unknown Costs to Complete (61,786) (61,786) Total Assets Available 1,442, ,849 Liquidators's Fees and Disbursements (excl. GST) Liquidators' Remuneration - 28 January 2010 to 14 May ,680 28,680 Liquidators' Remuneration - 15 May 2010 to completion 2 80,000 80,000 Liquidators' Outlays (estimated) 8,000 8,000 Total Costs 116, ,680 Assets Available for Distribution to Creditors 1,326, ,169 Total Priority Creditor Claims 323, ,631 Estimated Return to Priority Creditors 100% 87% Assets Available for Distribution to Unsecured Creditors 1,002,485 (41,462) Total Unsecured Claims 3,149,793 3,249,793 Surplus/(Shortfall) (2,147,308) (3,249,793) Estimated Return to Unsecured Creditors 32% 0% Notes: 1 - No estimate of recoveries from preference payments or recoveries from directors for an insolvent trading action has been provided 2 - Additional fees are subject to creditor approval 2010 Grant Thornton 20 May

13 4 Remuneration Prior Remuneration Approval and Remuneration Drawn At the meeting of members and creditors held on 28 January 2009, the creditors approved the remuneration for the Liquidators of $120,000 (excl GST). The time required to administer the liquidation has exceeded this interim amount and as such, I will be seeking further approval of remuneration at the creditors meeting to be held on 10 June Set out below is a summary of the fees incurred up to 14 May 2010 and the estimated fee approval required from creditors to finalise the liquidation:- FR Innsol Electrical Pty Ltd (In Liquidation) VA remuneration (exc. GST) $ CVL remuneration (exc. GST) $ Total remuneration (exc. GST) $ Remuneration previously approved by creditors (87,732) (120,000) (207,732) Fees incurred up to 14 May , , ,412 Less: adjustment - (10,000) (10,000) Less: remuneration drawn (up to creditor approval) (87,732) (120,000) (207,732) Additional fees incurred (creditor approval required) - 28,680 28,680 Estimated future costs to complete (creditor approval required) - 80,000 80,000 Additional Remuneration Approval Sought - 108, ,680 Grant Thornton Recovery and Reorganisation Charge Rates The Grant Thornton Recovery & Reorganisation Charge Out Rates for the Queensland office are attached to this report as Annexure B. Since the last creditor approval was obtained, the Grant Thornton Recovery & Reorganisation Charge Out Rates for the Queensland office were increased, the latest adjustment occurred on 1 July Liquidators Future Tasks and Finalisation In seeking remuneration approval from creditors for the period 15 May 2010 onwards to completion of the liquidation, the following key matters will be performed subject to creditor approval:- Recovery of pre appointment debtors and retention monies; Instruct solicitors in the collection of pre appointment debtors; Implement recovery action relating to unfair preference payments; Declare a dividend to priority creditors; Declare a dividend to unsecured creditors (subject to funds being available); and Finalise statutory obligations Grant Thornton 20 May

14 Liquidators Remuneration The Liquidators remuneration incurred for the period 28 January 2009 up to 14 May 2010 totals $158,680 (excluding GST and disbursements) and has exceeded my previous fee approval limit of $120,000 (excluding GST and disbursements) by $38,680. I have adjusted the remuneration incurred of $158,680, downwards by $10,000. Accordingly I will be seeking creditors approval to increase the Liquidators remuneration previously approved at the meeting of creditors held on 28 January 2009 to $148,680 (excluding GST and disbursements) at the forthcoming members and creditors meeting. I will also be seeking remuneration approval of $80,000 (excluding GST and disbursements) for the period 15 May 2010 until the finalisation of the liquidation. This remuneration is to be calculated with reference to both the current and future hourly rates of Grant Thornton Recovery and Reorganisation Services. In seeking remuneration approval for work yet to be completed, I undertake to not increase charge rates in excess of 10% of the current charge rates without seeking the approval of the creditors or by application to the court. It should be noted that the amounts payable for remuneration are subject to sufficient funds being available. At the meeting to be held on 10 June 2010 creditors will be asked to consider and approve the following resolutions:- That the remuneration of the Liquidators, their partners and staff for work carried out in relation to the Liquidation of FR Innsol Electrical Pty Ltd be increased from the limit of $120,000 (plus Goods and Services Tax) set at the meeting of creditors held on 28 January 2009 to $148,680 (plus Goods and Services Tax), and may be drawn to the extent of available funds. That the remuneration of the Liquidators, their partners and staff for work carried out in relation to the Liquidation of FR Innsol Electrical Pty Ltd for the period 15 May 2010 until the completion of the Liquidation be hereby calculated by reference to the current and future hourly rates of Grant Thornton-Recovery and Reorganisation Services (plus Goods and Services Tax). Such future hourly rates are not to exceed 10% of the current charge rates without seeking the approval of the creditors or the court. Remuneration is to be capped at $80,000 (plus Goods and Services Tax), and should be drawn to the extent of available funds Grant Thornton 20 May

15 2010 Grant Thornton 20 May

16 Annexure A Summary of Receipts and Payments 2010 Grant Thornton 20 May 2010

17 FR Innsol Electrical Pty Ltd (In Liquidation) Receipts & Payments 30 April 2010 $ Cash at Bank 472,391 Cash on Hand 568 Pre-appointment Debtor Realisations 74,885 GEERS Advance 280,241 GST Refunds 18,723 Interest Income 10,539 Miscellaneous Refunds 2,431 Other Asset Realisations 16,416 Plant and Equipment Realisations 113,565 Total Receipts 989,759 Appointee Costs (14,574) Appointee Fees (228,505) Auctioneer's Charges (10,388) Bank Charges (1,297) Cleaning (297) Consultancy - IT (440) Consulting (668) Debt Collection Costs (340) Electricity (1,359) Employee GEERS Payments (280,241) Interest Paid (157) Insurance (2,299) Legal Fees (79,884) Locksmiths (170) Mail Redirection (227) Payroll Tax (4,678) R/B Expenses (170) Security (173) Security Deposit (80) Statutory Advertising (1,643) Superannuation (6,674) Valuation (2,420) Wages (90,179) Workcover (1,108) Total Payments (727,971) Reconciled Cash at Bank 261,788

18 Annexure B Charge Out Rates 2010 Grant Thornton 20 May 2010

19 Grant Thornton Specialist Advisory Services Charge Rates Staff Classification Rate Per Hour (QLD) from 1/7/09* Partner/Director/Appointee $485 Senior Manager $410 Manager 1 $375 Manager 2 $345 Supervisor/Client Manager $320 Senior Accountant $295 Accountant 1 $240 Accountant 2 $225 Graduate $195 Secretary $150 EDP $150 Under Graduate $165 * Rates are exclusive of GST

20 Annexure C Remuneration Reports 2010 Grant Thornton 20 May 2010

21 FR Innsol Electrical Pty Ltd (In Liquidation) Remuneration Report - Description of Work Completed (Liquidation) Company: FR Innsol Electrical Pty Ltd Period (In Liquidation) From: 28 Jan 2009 To: 14 May 2010 Practitioner: Michael McCann Firm: Grant Thornton Administration Type: Creditors Voluntary Liquidation Task Area Assets 122 Hours $35,121 Creditors Hours $41,118 Employees Hours $38,224 General Description Plant and Equipment Reviewing and assessing debtors ledgers Debtors Liaising with debt collectors and solicitors Write off non-recoverable debtors Reviewing leasing documents Leasing Liaising with owners/lessors Tasks associated with disclaiming leases Receive and follow up creditor enquiries via telephone Creditor Enquiries Maintaining creditor enquiry register Review and prepare correspondence to creditors and their representatives via facsimile, and post Creditor Reports Preparing and distributing May 2010 report to creditors Receipting and filing POD's when not related to a dividend Dealing with Proofs of Debt Corresponding with OSR and ATO regarding POD's when not related to a dividend Receive initial notification of creditor's intention to claim Provision of retention of title claim form to creditor Receive completed retention of title claim form Retention of Title Claims Maintain retention of title claim Adjudicate retention of title claim Forward correspondence to claimant notifying outcome of adjudication Reviewing employee files and company's books and records Calculation of entitlements Reconciling superannuation amounts Reviewing awards Receive and follow up employee enquiries via telephone Maintain employee enquiry register Employees Enquiry Review and prepare correspondence to employees and their representatives via facsimile, and post GEERS Other Employee Issues Includes Liaising with valuers, auctioneers and interested parties Reviewing asset listings Correspondence with debtors Receive and prepare correspondence in response to employees objections to leave entitlements Correspondence with GEERS Preparing notification spreadsheet Preparing GEERS quotations Preparing GEERS distributions Providing employees with statements of payment Correspondence with Child Support

22 Investigation 74.9 Hours $21,647 Administration Hours $22,570 Reviewing company's books and records Preparation of comparative financial statements Preparation of deficiency statement Conducting Investigation Review of specific transactions concerning insolvent trading Review of specific transactions concerning unfair preference recoveries Review of specific transactions and liaising with directors regarding certain transactions Liaising with directors regarding certain transactions Preparation of investigation file Litigation / Recoveries Internal meetings to discuss status of litigation Correspondence Preparing correspondence, opening and closing accounts Bank Account Requesting bank statements Administration Bank account reconciliations Correspondence with bank regarding specific transfers First month, then six monthly administration review Document Maintenance/File Filing of documents Review/Checklist File Reviews Updating checklists ASIC Form 524 and Other Preparing and lodging ASIC forms including 505, 524, 911 etc Forms Correspondence with ASIC regarding statutory forms Bank account reconciliations Bank account administration Notification of appointment ATO and Other Statutory Preparing BAS' Reporting Completing group certificates Planning/Reviewing Discussions regarding status of administration Dealing with records in storage Books and Records/Storage Sending job files to storage Total Hours $158,680

23 FR Innsol Electrical Pty Ltd (In Liquidation) Calculation of Remuneration For the Period 28 January 2009 until 14 May 2010 Hours $ Hours $ Hours $ Hours $ Hours $ Hours $ Hours $ Michael McCann Liquidator $ $9, $1, $3, $1, $1, $1, Michael Connolly Director $ $ $ Michelle Gorrie Senior Manager $ $14, $4, $3, $2, $1, $2, Rodney Miller Manager $ $15, $1, $5, $3, $1, $2, Shane Smith Manager $ $ $ James Jones Supervisor $ $ $ Dean Lawrence Senior Accountant $ $101, $27, $25, $27, $15, $5, Scott Pardey Senior Accountant $ $ $44.00 Chris Lau Accountant $ $1, $ $96.00 Caitlin Bennett Accountant $ $ $ Aidan Dineen Accountant $ $ $ $ Jonathan Thielman Accountant $ $ $48.00 Andrew Lowe Accountant $ $ $ $ Michelle Brkic Graduate $ $ $ Dimity Dwyer Undergraduate $ $2, $ $ $ $33.00 Grace McCarthy Vacationer $ $ $ Rene Nothnagel Administration $ $1, $1, Carolyn Kratz Administration $ $10, $ $1, $ $ $8, Pippa Hocken Administration $ $ $90.00 Melody Williamson Administration $ $ $78.00 Krystal Collins Administration $ $ $52.00 LESS: ADJUSTMENT ($10,000.00) GST Employee SUB-TOTAL LESS: FEES DRAWN TO DATE TOTAL Total (Including GST) Average Hourly Rate Position Average Hourly Rate (ex GST) Total Actual Hours Total $158, $35, $41, $38, $21, $22, ($120,000.00) $28, $2, $31, Task Area Assets Creditors Employees Trade On Investigation Dividend Administration $ $ $ $ $ $207.64

24 FR Innsol Electrical Pty Ltd (In Liquidation) Remuneration Report - Description of Work To Be Completed (Liquidation) Company: FR Innsol Electrical Pty Ltd Period (In Liquidation) From: 15 May 2010 To: Completion Practitioner: Michael McCann Firm: Grant Thornton Administration Type: Creditors Voluntary Liquidation Task Area Assets 82 Hours $26,570 Creditors 40 Hours $11,875 Employees 10 Hours $3,300 Investigation 32 Hours $10,900 General Description Debtors Creditor Enquiries Dealing with proofs of debt Meeting of Creditors Employee Enquiries GEERS Priority Creditor Dividend Conducting Investigations ASIC Reporting Reviewing and assessing debtors ledgers Includes Liaising with solicitors All tasks associated with realising debtors Receive and follow up creditor enquiries via telephone Maintaining creditor enquiry register Review and prepare correspondence to creditors and their representatives via facsimile, and post Correspondence with committee of creditors members Receipting and filing Proofs of Debt (POD) from creditors Preparation meeting notices, proxies and advertisements Forward notice of meeting to all known creditors Preparation of meeting file, including agenda, certificate of postage, attendance register, list of creditors, reports to Prepare and lodge minutes of meetings with ASIC Respond to stakeholder queries and questions Receive and follow up employee enquiries via telephone Maintain employee enquiry register Correspondence with GEERS Preparing GEERS distributions Correspondence with ATO regarding SGC proof of debt Calculating dividend rate Preparing dividend file Advertising dividend notice Preparing distribution Review of specific transactions and liaising with directors regarding certain transactions Issuing preference payment demand request letters Insolvent trading review Liaising with directors regarding certain transactions Preparation of investigation file Lodgement of investigation with the ASIC Preparation and lodgement of supplementary report if required Preparing statutory investigation reports Preparing affidavits seeking non lodgements assistance Liaising with ASIC

25 Dividend 63 Hours $17,835 Administration 41 Hours $9,785 Processing Proofs of Debt Dividend Procedures Preparation of correspondence to potential creditors inviting lodgement of POD Receipt of PODs Maintain POD register Adjudicating PODs Request further information from claimants regarding POD Preparation of correspondence to claimant advising outcome of adjudication Prepare and maintain checklists for the conduct of the administration Preparation of correspondence to creditors advising of intention to declare dividend Advertisement of intention to declare dividend Obtain clearance from ATO to allow distribution of company s assets Preparation of dividend calculation Preparation of correspondence to creditors announcing declaration of dividend Advertise announcement of dividend Preparation of distribution Preparation of dividend file Adjudicating PODs Preparation of payment vouchers to pay dividend Preparation of correspondence to creditors enclosing payment of dividend General Correspondence Prepare and maintain checklists for the conduct of the administration File review/checklist Regular summary review of job status to ensure quality control Bank account reconciliations Bank account administration Settle administration accounts Advertising of meetings Preparing and lodging minutes of the creditors meetings with ASIC ASIC forms Preparing and lodging ASIC forms including 524, 911 etc Correspondence with ASIC regarding statutory forms Notification of ceasing to act ATO Maintaining documents and records to enable compliance with GST obligations Notifying ATO of finalisation Cancelling ABN / GST / PAYG registration Finalisation Completing checklists Finalising WIP Total 258 Hours $80,265

26 FR Innsol Electrical Pty Ltd (In Liquidation) Calculation of Remuneration For the Period from 15 May 2010 to completion Hours $ Hours $ Hours $ Hours $ Hours $ Hours $ Hours $ Michael McCann Liquidator $ , $ $ $2, $ Rodney Miller Manager $ , $9, $3, $ $4, $5, $1, James Jones Supervisor $ , $6, Dean Lawrence Accountant $ , $16, $7, $2, $6, $4, Carolyn Kratz Administration $ , $ $3, $3, TOTAL GST Employee Total (Including GST) Average Hourly Rate Position Average Hourly Rate (ex GST) Total Actual Hours Total $80, $26, $11, $3, $10, $17, $9, $8, $88, Task Area Assets Creditors Employees Trade On Investigation Dividend Administration $ $ $ $ $ $ $238.66