Mercury Motorsport Australia Pty Ltd (In Liquidation) ACN (the Company) ABN

Transcription

1 Mercury Motorsport Australia Pty Ltd (In Liquidation) ACN (the Company) ABN Liquidator s Statutory Report to Creditors 9 February 2018 Cameron Crichton Liquidator T (07) E cameron.crichton@au.gt.com

2 0 GraritThornton An instinct for growth Introduction I refer to my initial correspondence to creditors dated 10 November 2017 in which I advised you of my appointment as liquidator on 10 November 2017 and your rights as a creditor in the liquidation. The purpose of this report is to: Provide you with an update on the progress of the liquidation. Advise you of the likelihood of a dividend being paid in the liquidation. Notify you that a meeting of creditors will be held to discuss the above in further detail and to my detailed remuneration report and pass a proposal to approve my remuneration. I have relied on information provided from numerous sources to prepare the report, including: Discussions with the Director of the Company Mr Trent Whyte. Discussions with the landlord and tenants of the Company's premises. Discussions with Secured Creditor Capital Finance. Information available from public sources, such as, Australian Securities and Investments. Commission (ASIC) and the Personal Property Securities Register (PPSR). Update on the progress of the liquidation Company Background The Company was registered on 24 January 2008 and its registered office is care of Nexia Brisbane Pty Ltd, Level 28, 10 Eagle Street, Brisbane, The Company operated a customising workshop for high end Japanese petrol vehicles, providing bespoke modifications to cars at premises located at 113 Delta St, Geebung, Brisbane. My investigations suggest that the Company acquired a substantial portion of the business assets from a director related Company named Mercury Motorsport Pty Ltd (In Liquidation)'MMPL")(now deregistered). MMPL was placed in Liquidation in 2008 and the business sale was affected by way of a contract of sale executed by the Director of the Company and MacGillvary's Solicitors on 13 July The Director has stated the following reasons for the Company's financial difficulties and the ultimate need to have the Company placed in external administration. High overheads Lack of ongoing capital Expensive relocation of Company Less profitable jobs The Director alleged that all Company books and records (including detailed debtor and creditor listings) were stolen in the weeks prior to Clouts' appointment as liquidators. The Company's accountant maintained books and records of the Company up until July There are no financial records that I am aware of pertaining to the Company after July Accordingly, I am unable to verify the accuracy of the Director's assertions.

3 0 Grantlhornton An instinct for growth Business Status on Appointment On 23 October 2017, the Director of the Company appointed David Clout and Trish Tally of David Clout and Associates as Voluntary Administrators to the Company pursuant to s436a of the Corporations Act My appointment as Court Appointed Liquidator was made on 10 November I am advised by the former Administrators that the Company had ceased trading prior their appointment and that as a consequence of the absence tenure at the site (the landlord had entered possession of the premises) and any working capital (no cash or stock was available on appointment) the business operations were unable to be restored. Assets and liabilities The Director of the Company is required to complete and provide to the Liquidator a statement about the Company's business, property, affairs and financial circumstances, also known as the Report as to Affairs (RATA). The RATA is a snapshot in time as at the date of my appointment of the assets and liabilities of the Company, disclosing book values and the Directors opinion on the estimated realisable value (ERV) for assets. On 29 November 2017 the Director provided a RATA for the Company. Attached at Appendix D is an analysis of the assets and liabilities of the company, and comparison to the RATA as provided by the Director. Asset Realisations On appointment various items of the Company's plant and equipment remained located at the premises at 113 Delta Rd, Geebung. After extensive negotiations with the Landlord's solicitor, it was agreed that the Landlord would provide access to the site to allow my agents to remove the Company's unaffixed assets from the site. This process was undertaken by my agents Grays over a number of days and the assets relocated to their premises in preparation for sale. An auction was completed by Grays Online on 18 December 2017 from which net proceeds of $66, were received. Receipts and Payments to date Attached at Appendix B are details of all receipts and payments in the liquidation to date. To date no payments have been made during the liquidation.

4 0 Grantlhornton An instinct for growth Investigations and possible recovery actions PPSR Investigations Our initial PPSR review indicated that there was a number of security interests registered against the company. The below table details these registrations. Limited 1 1 No Wurth Australia Ply Ltd 1 1 No Capital Finance Australia Limited 1 1 No Air Liquide Australia Limited 1 1 No Air Liquide Australia Solutions Ply Ltd 1 1 No Air Liquide W.A. Ply Ltd 1 1 No See Jay Electrical Services Ply Ltd 1 1 No 29/ /02/ /11/ /11/ /11/ /10J2017 My investigations of the security interests included: Reviewing the registration on the PPSA; Reviewing terms and conditions of the agreement; and Correspondence with individuals with a registered security interest. I have also been involved in lengthy discussions with various parties regarding the status and location of a Dyno Dynamics machine which is the subject of the See Jay Electrical Services Pty Ltd PPSR registration. The Director has alleged that the Dyno was sold to his father prior to the appointment of clouts as voluntary administrators. I have requested evidence of the transaction. are also reviewing the possibility that title to the subject assets vested in the company on appointment of Administrators pursuant to the Personal Property Securities Act (2009). I have sought legal opinion in respect of the above. Investigations undertaken I have completed my initial investigations into the affairs of the company prior to my appointment and any potential recovery actions that may be available to the Liquidator to pursue. To date, I have undertaken the following investigations: What happened to the business of the company (outlined above) Adequacy of Books and Records If there were any potential insolvent trading claims or voidable transactions. My findings of these investigations are detailed below. Given the absence of limited time that has passed in the liquidation, and that further investigations may be undertaken, the below findings are preliminary and may be subject to change. Books and Records The Director alleged that all Company books and records (including detailed debtor and creditor listings) were stolen in the weeks prior to Clouts' appointment as liquidators. The Company's accountant maintained books and records of the Company up until July There are no financial records that I am aware of pertaining to the Company after July Based on the above, I have concerns that the director may have kept inadequate books and records of the Company (including employee entitlements). Insolvent trading To date I have not been provided with the Company's books and records and therefore I am unable to review or accurately comment on the financial position of the Company. The Director alleges that a robbery at the premises resulted in the theft of the computers used for record keeping in the week prior to the Company being placed in liquidation.

5 0 Grantlhornton An instinct for growth Voidable transactions To date I have not been provided with the Company's books and records and therefore I am unable to review or accurately comment on the existence of any voidable transactions. Whilst my concerns with the conduct of the director have been reported to ASIC it is not my intention to pursue any claim against the director for the following reasons: Due to the likely inability of the director to meet an insolvent trading claim; and The significant cost of commencing and pursuing litigation. I am happy to discuss the above in further detail at the forthcoming meeting of creditors. Further inquiries to be undertaken We will continue our investigations into the location and ownership of the Dyno and various other assets still in contention. We will in the coming weeks submit our report to ASIC pursuant to s533 of the Act and I will liaise with them should a supplementary report be required. As the Director has now been associated with MMPL and MMAPL it is possible that ASIC may choose to take further action against him, according to section 206F of the Corporations Act Estimated Outcome for Creditors The below table demonstrated that under a pessimistic scenario, there are likely to be insufficient assets to support a distribution to any class of creditor. The prospect of a distribution occurring will be predicated on the quantum of any future recoveries from the actions detailed above. Cash at bank Potential future recevehes of assets Funds received from sale of assets Total Funds held ry Motorsport Australia Ply Ltd Optimistic ($) Pessimistic ($) Unknown 66,507 66,507 Unknown 66,507 Estimated Future Costs i Petitioning Creditor Costs Liquidation Remuneration 10/11/2017 to 31101/2018 Liquidator Remuneration 01/02/2018 to finalisation Voluntary Administrator Remuneration 23110/2017 to 10111/2017 Current Disbursements Future Disbursements Total Costs Remaining Funds for Distribution (2,000) (32,784) (15,000) (28219) (755) (250) (79,008) Unknown (3,000) (32,784) (15,000) (28219) (755) (1,000) (80,758) Nil Priority creditors* Dividend Distribution to secured creditors Unsecured Claims Dividend Distribution to unsecured creditors 'Details obtain from FEG documentation 38,740 38,740 Unknown 0.00% 29,331 29,331 Unknown 0.00%

6 0 GrantThornton An instinct for growth Likelihood of a dividend At the current time, it is expected that there will be insufficient funds to pay a distribution to any class of creditor. If I do declare a dividend, any creditor whose claim has not yet been admitted will be contacted and asked to submit a proof of debt. Meeting to be held To date I have not held any meetings of creditors as I have not been required to hold nor have I been requested to hold any meeting of creditors. A meeting of creditors to consider: The contents of this report and a general update for creditors Approving my remuneration as Liquidator for the period 10 November 2017 to 31 January 2018 ($32, ex GST). Approving the basis of my remuneration for the period 1 February 2018 until completion of the file ($15, ex GST) Approving the remuneration of the Voluntary Administrators (David Clout and Trish Tally) for the period of their appointment 23 October 2017 to 10 November 2017 ($25, ex GST). Date: Tuesday, 27 February 2018 Time: 10:00AM Address: King George Central, Level 18, 145 Ann Street, Brisbane, OLD 4000 Cost of the liquidation As a consequence of my appointment by the Court, the previous Administrators were unable to seek approval of their professional time by unsecured creditors. Pursuant to Section 556 of the Corporations Act, the former Voluntary Administrators are entitled to be remunerated for time costs incurred whilst undertaking the Administration. In this respect, we have included a resolution at the forthcoming meeting to consider the remuneration of the former Administrators. Attached at Appendix F is a detailed report on my remuneration, called a Remuneration Approval Report. Attached at Appendix G is a detailed report on the remuneration sought by the Voluntary Administrator. Neither the former Administrators nor I (as Liquidator) am able to pay my remuneration without the approval of creditors or the court. Further meeting information, including notice of meeting and details of the information you are required to provide if you plan to attend the meeting are in Appendix H. To participate in this meeting, you may need to: Submit a proof of debt and information to substantiate your claim. Appoint a person a proxy" or person authorised under a power of attorney to vote on your behalf at the meeting. This may be necessary if you are unable to attend the meeting, or if the creditor is a company. You can appoint the chairperson of the meeting as your proxy and direct the chairperson how you wish your vote to be cast. If you choose to do this, the chairperson must cast your vote as directed. Proof of debt and proxy forms are included with the notice of meeting. To facilitate the conduct of the meeting completed proof of debt and, if applicable, proxy forms must be returned to my office by post, fax or by Friday, 23 February 2018 at 4:00pm.

7 0 GrantThornton An instinct for growth' What happens next in the liquidation? I will proceed with the liquidation, including: Recover any further available property. Conduct a meeting of creditors Finalise my investigations into the Company's affairs. Complete my reporting to the corporate insolvency regulator, ASIC. I will convene the meeting of creditors in accordance with the Notice of Meeting at Appendix H. I may write to you again with further information on the progress of the liquidation. I expect to have completed this liquidation within the next 3 to 6 months. Compliance with best practice I confirm that this report complies with the requirements in the Insolvency Practice Rules (IFR), specifically IPR 70 40, as well as the statements of best practice issued by the Australian Restructuring Insolvency and Turnaround Association (ARITA) with regard to content of the Statutory Report by Liquidator and the Code of Professional Practice with regard to remuneration. What to do next You should now: Read the attached report. Decide whether you are going to attend the meeting. Complete and return your proof of debt, and if required, proxy form by no later than 4:00 PM on Friday, 23 February 2018 to be eligible to vote at the meeting. Where can you get more information? You can access information which may assist you on the following websites: ARITA at ASIC at ww.asic.giv.au (search for 'insolvency information sheets"). Should you have any queries with respect to the above, you may also contact Toby Carrigan of my office on (07) or via on toby.carrigan au.gt.com. There is also information about this liquidation on my firm's website. Dated: Friday, 9 February 2019 Cameron Crichton Liquidator

8 0 Grantlhornton An instinct for growth List of attachments Appendix A Declaration of Independence, Relevant Relationships and Indemnities Appendix B Initial Remuneration Notice Appendix C Initial Information for Creditors Appendix D Assets and Liabilities comparison to RATA Appendix E Liquidators receipts and payments Appendix F Remuneration Approval Report Appendix G Remuneration Report of Voluntary Administrators Appendix H Notice of Meeting and other meeting information

9 0 Grantlhornton An instinct for growtf( Appendix A

10 Declaration of Independence, Relevant Relationships and Indemnities Mercury Motorspert Australia Ply Ltd (In Liquidahon) AM (the Company) Practitioner/s appointed to an insolvent entity are required to make declarations as to. A B their independence generally relationships, including i i iii iv the circumstances of the appointment any relationships with the [company/debtor] and others within the previous 24 months any prior professional services for the [company/debtor] within the previous 24 months 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 ourselves, our partners, Grant Thornton Australia Limited (GTAL) (the Firm) and any of the GTAL's associated entities. A Independence I, Cameron Crichton of Grant Thornton Australia Limited have undertaken a proper assessment of the risks to my independence prior to accepting the appointment as Liquidator of Mercury Motorsport Australia Pty Ltd in accordance with the law and applicable professional standards. This assessment identified no real or potential risks to my independence, I am not aware of any reasons that would prevent me from accepting this appointment. B Declaration of Relationships Circumstances of appointment This appointment was referred to me by Craddock Murry Newman Lawyers ("Craddock") who act on behalf of the petitioning creditor of Mercury Motorsport Australia Pty Ltd. I believe that this referral does not result in a conflict of interest or duty because: was approached by Craddock on Thursday, 17 November 2016 and requested to provide a consent to act for the winding up of the Company. An internal conflict check was completed and a consent to act provided on Monday, 21 November No prior communication regarding the Company was held We have provided no information or advice to the Company, the directors or its advisors prior to our appointment beyond that outlined in this DIRRI.

11 Relevant Relationships (excluding Professional Services to the Insolvent) I or a member of my firm, have, or have had within the preceding 24 months, a relationship with: Name Nature of relationship Reasons Craddock Murray Newman act as lawyers for the Petitioning Creditor, Deputy Commissioner of Taxation and as noted above approached Grant Thornton to act as Liquidators Craddock Murray Newman periodically refers engagements to Grant Thornton. does not result in a conflict of interest or duty because! Each professional engagement undertaken with Craddock Murray Newman is conducted on an entirely separate basis, which has no connection with this appointment. These engagements are only commenced after full regard is given to potential conflicts of interest in relation to all interested stakeholders. Grant Thornton has not undertaken any engagement for the Company. The relationship with Craddock Murray Newman will not influence our ability to fully comply with the statutory and fiduciary obligations associated with the Liquidation of the Company in an objective and impartial manner! Australian Taxation Office (ATO) We have had past dealings with the ATO Our past involvement with the ATO will in its capacity as a creditor of past not influence our ability to kitty comply insolvency administrations conducted by with the statutory and fiduciary us as insolvency practitioners! obligations associated with the conduct of the winding up of the Company in an objective and impartial manner. Prior Professional services to the Insolvent Neither we, nor our firm, have, or have had within the preceding 24 months, any relationships with the Company, associates of the Companies, or any person or entity that has security over the whole or substantially whole of the Company's property. 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 whole of the Company's property that should be disclosed!

12 Indemnities and up front payments We have not been indemnified in relation to this liquidation, other than any indemnities that we may be entitled to under statute and we have not received any up front payments in respect of our remuneration or disbursements Dated: 28 November 2017 CAMERON CRICHTON JOINT AND SEVERAL LIQUIDATOR Note: 1 If circumstances change, or new information is identified, we are required under the Corporations Act 2001 and the 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 CIRRI must not be such that the Practitioner is no longer independent. The purpose of components 13 and C of the CIRRI 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.

13 AML, GrantThornton An instinct for growth Appendix B

14 Initial Remuneration Notice Mercury Motorsport Australia Pty Ltd (In Liquidation) ACN 129 : (the Company) The purpose of the Initial Remuneration Notice is to provide you with information about how my remuneration for undertaking the Court Liquidation will be set. Remuneration Methods There are four basic methods that can be used to calculate the remuneration charged by an insolvency practitioner. They are: 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. 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. Percentage The total fee charged is based on a percentage of a particular variable, such as the gross proceeds of assets realisations. Contingency The practitioners fee is structured to be contingent on a particular outcome being achieved. 2 Method chosen Given the nature of this administration we propose that our remuneration be calculated on the time based / hourly rates method. In our opinion, this is the fairest method for the following reasons: a a We will only be paid for work done, subject to sufficient realisations of the Company assets. Or, if there are insufficient assets realised, subject to the indemnity provided to us (please refer to our Declaration of Independence, Relevant Relationship and Indemnities). It ensures creditors are only charged for work that is performed. Our time is recorded and charged in six minute increments and staff are allocated to duties according to their relevant experience and qualifications. We are required to perform a number of tasks which do not relate to the realisation of assets, for example responding to creditor enquiries, reporting to ASIC, distributing funds in accordance with the provisions of the Corporations Act or the Bankruptcy Act. We are unable to estimate with certainty the total amount of fees necessary to complete all tasks required in the external administration. We have a time recording system that is able to produce a detailed analysis of time spent on each type of task by each individual staff member utilised in the administration, The method provides full accountability in the method of calculation.

15 3 Explanation of Hourly Rates The rates for our remuneration calculation are set out in the following table together with a general guide showing the qualifications and experience of staff engaged in the administration and the role they take in the administration. The hourly rates charged encompass the total cost of providing professional services and should not be compared to an hourly wage. Position Description Hourly Rate (excl c3st) Registered Liquidator I Trustee. Partner bringing specialist skills to Ac Insolvency matters controlling all matters relating to the assignment Director Qualified accountant (CA/CPA) and may be a registered Liquidator/Trustee. Minimum $ years experience. Likely to be appointed as a director in due course. Highly advanced technical and commercial skills. Planning and control of all Administration and Insolvency tasks. Controlling substantial matters relating to the assignment and reporting to the appointee. Senior Manager Qualified accountant (CA/cPA) years experience. Well developed technical and $500 commercial skills, Planning and control of all Administration and Insolvency tasks. Controlling substantial matters relating to the assignment and reporting to the appointee. Manager Typically CA/CPA Qualified, 5 8 years experience. Well developed technical and $455 commercial skills. Planning and control of Administration and Insolvency tasks with the assistance of the appointee. Senior Associate Typically CA/CPA Qualified. 3 5 years' experience. Required to control the fieldwork on $410 Administrations and Insolvency tasks. Associate Typically undertaking CA/CPA Qualifications. Up to 3 years experience. Required to $300 conduct the fieldwork on smaller Administrations and Insolvency tasks and assist with fieldwork on medium to large Administrations and Insolvency tasks. PNEA/Admin Carries out all secretarial functions relating to an Administration and all aspects relating $igs to administering the accounts function. 4 Estimated remuneration estimate that this liquidation will cost approximately $30,000 to $40,000 to complete, subject to the following variables which may have a significant effect on this estimate and that I am unable to determine at this early stage in the administration: Realisation of assets o Investigations required Liaising with creditors Dividends (if applicable) Any other unforeseen matters 5 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; though some expenses such as telephone calls, photocopying and printing 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.

16 am not required to seek creditor approval for disbursements paid to third parties, but must account to creditors. However, I must be satisfied that these disbursements are appropriate, justified and reasonable. I am required to obtain creditors consent for the payment of internal disbursements where there may be a profit or advantage. Creditors will be asked to approve my 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. Basis of disbursement claim Disbursements Externally provided professional services Externally provided nonprofessional services Internal disbursements Faxes & Photocopies Staff per diem travel allowance Staff vehicle use Scale applicable for financial year ending 2018 At Cost At Cost Rate (ExcI GST) At Cost At Cost Paid at the ATO set rate Date of issue: Tuesday, 28 November 2017

17 ASIC (infl,ps..'nfl Insolvency information for directors, employees, creditors and shareholders ASIC has II insolvency information sheets to assist you if you're affected by a company's insolvency and have little or no knowledge of what's involved. These plain language information sheets give directors, employees, creditors and shareholders a basic understanding of the three most common company insolvency procedures liquidation, voluntary administration and receivership. There is an information sheet on the independence of external administrators and one that explains the process for approving the fees ofexternal administrators. A glossary of commonly used insolvency terms is also provided. The Insolvency Practitioners Association (IPA), the leading professional organisation in Australia for insolvency practitioners, endorses these publications and encourages its members to make their availability known to affected people. List of information sheets INFO 41 Insolvency: a glossary o/temnrc INFO 74 Voli,neai v administration: lion: a guide fin cieditoic INFO 75 Voli,,itarv ac/ninlisli alion: ci guide 1b) ernplovees INFO 45 Liquic/azion: a guide fin creditors INFO 46 Liquidation: a gun/c/or employees INFO 54 Reeeiierchip: a guide /hr creditors INFO 55 Receiiercliip: a guide /or employees INFO 43 Insolvency: a guide/or sliareliolde,.c INFO 42 Insolvency: a guide for dueciorv INFO 84 Independence olexici no1 administrators: a guide/or crediior.c INFO 85!pproving fees: a guide/br creditors Getting copies of the information sheets To get copies of the information sheets, visit ASIC's website at The infomiation sheets are also available from the IPA website at The IPA website also contains the IPA's Code of Professional Practice for Insolvency Professionals, which applies to IPA members. Important note: The information sheets contain a summary of basic information on the topic. It is not a substitute for legal advice. Some provisions of the law referred to may have important exceptions or qualifications. These documents may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances. You will need a qualified professional adviser to take into account your particular circumstances and to tell you how the law applies to you. Australian Securities & Investments Commission, December 2008 Page 1 of I

18 0 GrantThornton An instinct for growth Appendix C

19 Creditor Rights in Liquidations /4% ARITA As a creditor, you have rights to request meetings and information or take certain actions: kiil 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 2: 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 2 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. 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. ARITA Level Clarence Street Sydney NSW 2000 Australia 1 GPO Box I340, Sydney NSW 2001 I e ridmrn@anta soul an I arita.com.au AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOC]A110N

20 ARITA 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. 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. 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: VeisFoir July (LIG) INFO CREDITOR RIGHTS INFORMATION SHEET V10DOCX AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 2

21 0 GrantThornton An instinct for growth Appendix D Assets and Liabilities Comparison to RATA Assets Interest in land Sundry Debtors Cash on Hand Cash at Bank* Stock on hand Work in Progress Plant and Equipment Other Assets Sub Total Directors RATA Liquidators' Book Value ($) ERV ($) ERV ($) 5,000 5,000 I 70,000 35,000 25,000 15,000 66, , ,507 Assets subject to specific charges Less amounts owing to secured creditors Total Estimated Realisable Value 53,000 53,000 53,000 47,000 (3,000) Liabilities Amount payable in advance of secured creditors Amounts owing for employee entitlements Amounts owing and secured by debenture or floating charge over assets Preferential claims ranking behind creditors as Partly Secured Creditors Unsecured Creditors Total Amounts Claimed 23,121 28,272 Contingent Assets Contingent Liabilities Estimated Surplus! (deficiency) (4,393) (72,950) (37,886)J this annount by the Voluntary Administrators on appointment and has been used by them in partial satisfaction of their remuneration as detailed in their attached remuneration report. No cash was available in any of the Company's accounts upon my appointment as Liquidator.

22 0 GrantThornton An instinct for growth Appendix F Liqthdator's Receipts and Payments I Mercury Motorsport Australia Pty Ltd Receipts and Payments Receipts Cash Insurance Refund Stock/ Inventory on Hand Total Receipts Payments Wages and Salaries Cost of sale Legal Fees GST Control Sundry expenses Total Payments $ (mci. OST) Net Receipts l(payments) 0 *Net proceeds from the sale of assets totalling $66, are held by our agents, and we are awaiting remittance of these funds,

23 0 GrantThornton An instinct for growth Appendix F Remuneration Approval Report

24 Remuneration Approval Report MERCURY MOTORSPORT AUSTRALIA PTY LTD (IN LIQUIDATION) ACN ("the Company") This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of my remuneration for undertaking the Court Liquidation of Mercury Motorsport Australia Pty Ltd. This report has the following information included: Part1: Declaration Part 2: Executive Summary Remuneration Resolutions Disbursement Resolutions...3 Part3. Remuneration Details of remuneration Total remuneration reconciliation Likely impact on dividends...5 Part4: Disbursements Internal disbursement claim Future basis of internal disbursements...6 Part5: Queries...6 Part 6: Approval of remuneration and internal disbursements...7 Schedule A Resolution 1: Table of major tasks for remuneration...8 Schedule B Resolution 2: Table of major tasks for remuneration...10 What do you need to do next? You should read this report and the other documentation that I have sent you and then attend the meeting of creditors in order to voice your opinion by casting your vote on the resolutions put to the meeting. The meeting will also give you an opportunity to ask any questions that you may have. Alternatively, you are also able to appoint a representative to attend on your behalf by lodging a proxy form. Lodging a specific proxy form allows you to specify how your proxy must vote. Lodging a general proxy form allows your representative to choose how your vote is exercised. Information about the meeting of creditors is provided at part 6 of this report. If you have any questions or need any assistance, please contact Toby Carrigan on (07) or via on toby.carrigan@au.gt.com.

25 Part 1: Declaration I, Cameron Crichton of Grant Thornton Australia Limited have undertaken a proper assessment of this remuneration claim for my appointment as Liquidator of Mercury Motorsport Australia Pty Ltd in accordance with the law and applicable professional standards. I am satisfied that the remuneration claimed is in respect of necessary work, properly performed, or to be properly performed, in the conduct of the Court Liquidation. Part 2: Executive Summary 2.1 Remuneration Resolutions The total remuneration for this appointment is estimated to be $ (excluding GST). To date, no remuneration has been approved and paid during this liquidation. This remuneration report details approval sought for the following fees: Resolution 1:10 November 2017 to 31 January 2018 $ Resolution 2: I February 2018 to finatsation $15, Total $47, Whilst the total amount claimed for costs to date is within my original estimate, my overall costs in this matter will likely exceed my original estimate due to the following unforeseen circumstances that were outside my control, and required additional time intensive work: Negotiating with the landlord and lawyers regarding obtaining and removing Company assets. Investigating third party and customer claims, located at the Company's former premises. Investigating allegations that additional Company assets may have been located offsite controlled by third parties. Investigating the validity of FPSR registrations over significant assets of the Company. To date there has been insufficient assets recovered to pay my remuneration fees in full and any future realisations are uncertain. Approval for the future remuneration sought is based on an estimate of the work necessary for the completion of the liquidation. Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors. Resolution 1: 10 November 2017 to 31 January 2018 "The remuneration of the Liquidator and any of the Liquidators partners or employees in performance of services performed from 10 November 2017 to 31 January 2018 to be fixed at $32, (excluding GST) plus any out of pocket expenses incurred. Approval is given for such amounts approved to be drawn within four weeks of the resolution being passed."

26 Resolution 2: 1 February 2018 to finalisation "That the future remuneration of the Liquidator from 1 February 2018 to finalisation is determined at a sum equal to the costs of time spent by the Liquidator, and his partners and staff, calculated in accordance with the Liquidators' firm's hourly rates that will be increased at a rate of 7.5% at 1 July each year, up to a capped amount of $15, exclusive of GST and outlays, and that the Liquidator can draw the remuneration on a monthly basis or as required, from assets of the Company." 2.2 Disbursement Resolutions The total amount of disbursements is estimated to be $1, (excl. GST). To date, no internal disbursements have been approved and paid in this liquidation. This remuneration report details approval sought for the following disbursements. Disbursements 1:10 November 2017 to 31 January 2018 Disbursements 2:2 February 2018 to finalisation Total $ $1, $1, Approval for the disbursements sought is based on an estimate of the internal disbursements necessary for the completion of the liquidation. Resolution 3: Disbursements 1: 10 November 2017 to 31 January 2018 "The disbursements of the Liquidator from 10 November 2017 to 31 January 2018 be fixed at the amount of $ (excl. GST). Approval is given for such amounts approved to be drawn from the assets of the Company." Resolution 4: Disbursements: 1 February 2018 to finalisation "Future disbursements provided by firm will be charged to the liquidation on the following basis and that the Liquidators can discharge those disbursements from the assets of the Company." couner Postage (large) Postage (small) Fax (interstate) Fax (local) Staff vehicle use Rates applicable for 30 June 2018 At cost $1.91 /page $0.99 page $2/page $1 Ipage $0.66/km Approval of the payment of these disbursements at the above rates is being sought from creditors at the meeting of creditors.

27 Part 3. Remuneration 3.1 Details of remuneration I will be seeking approval of the following resolutions to approve my remuneration. Details to support these resolutions are included in section 3.2 and in the attached Schedules. Resolution 1:10 November 2017 to 31 January 2018 The below table sets out time charged to each major task area by staff members working on the liquidation for the period 10 November 2017 to 31 January 2018 which is the basis of the Resolution 1 claim. More detailed descriptions of the tasks performed within each task area, matching the amounts below, are contained in Schedule A. Resolution 2: 1 February 2018 to finalisation The below table sets out the expected costs for the major tasks likely to be performed by the liquidation and their staff for the period 1 February 2018 to finalisation which is the basis of the Resolution 2 claim. More detailed descriptions of the tasks likely to be performed within each task area, matching the amounts below, are contained in Schedule B. 3.2 Total remuneration reconciliation In preparing this remuneration approval report, I have made my best estimate at what I believe the Liquidation will cost to complete and I do not anticipate that I will have to ask creditors to approve any further remuneration. However, should the Liquidation not proceed as expected, I will advise creditors and I may seek approval of further remuneration and provide details on why the remuneration has changed. Matters that may affect the progress and cost of the Liquidation include: Conducting further investigations; Meeting of creditors; Dealings with any potential dividend distribution; and Creditor queries and concerns

28 3.3 Likely impact on dividends The Corporations Act sets the order for payment of claims against the company and it provides for remuneration of the Liquidator to be paid in priority to other claims. This ensures that when there are sufficient funds, the Liquidator receives payment for the work done to recover assets, investigate the company's affairs, report to creditors and ASIC and distribute any available funds. Even if creditors approve my remuneration, this does not guarantee that I will be paid, as I am only paid if sufficient assets are recovered. Any dividend to creditors will also be impacted by the amount of assets that I am able to recover and the amount of creditor claims that are admitted to participate in any dividend, including any claims by priority creditors such as employees. As stated previously the monies recovered and realised in the Liquidation to date are insufficient to cover the Liquidation costs. Considering this there is not expected to be sufficient funds to pay a dividend to any type of creditor. If I do declare a dividend, any creditor whose claim has not yet been admitted will be contacted. 3.4 Remuneration recovered from external sources To date there has been no remuneration recovered from any external sources and I am not aware of any remuneration recoverable from any external sources. Part 4: 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 these are recovered at cost. Examples of externally provided non professional costs are travel, accommodation and search fees. Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing 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. Details of the basis of recovery of each of these costs is discussed below. I have undertaken a proper assessment of disbursements claimed for Mercury Motorsport Australia Pty Ltd in accordance with the law and applicable professional standards. I am satisfied that the disbursements claimed are necessary and proper. I will be seeking creditor approval to pay my internal disbursements from creditors.

29 4.1 Internal disbursement claim The following internal disbursements have been claimed by my firm for the period from 10 November 2017 to 31 January Approval of these disbursements from creditors in the amount of $ $ is being sought at a meeting of creditors. Company & Motor vehicle searches Postage Total Future basis of internal disbursements Future disbursements provided by my firm will be charged to the administration on the following basis: Courier Postage (large) Postage (small) Fax (interstate) Fax (local) Staff vehicle use Rates applicable for 30 June 2016 Ra At cost $1.91 (page $0.99 page $2 page $1 /page $0.66/km Approval of the payment of these disbursements at the above rates is to be capped at the amount of $1, Part 5: Queries If you have any queries in relation to the information in this report, please contact my staff: Contact name: Contact number: Toby Carrigan Toby.carriganau.gt.com You can also access information which may assist you on the following websites: ARITA at ASIC at (search for "insolvency information sheets").

30 Part 6: Approval of remuneration and internal disbursements A meeting of creditors to consider the liquidation and our remuneration will be held as follows: Date: Tuesday, 27 February 2018 Time: 10:00 am Address: Level 18, 145 Ann St, Brisbane QLD 4000 Further meeting information, including a notice of meeting and details of the information you are required to provide if you plan to attend the meeting are in Appendix H of the Report to Creditors. To participate in this meeting, you may need to:. Submit a proof of debt and information to substantiate your claim. o Appoint a person a "proxy" or person authorised under a power of attorney to vote on your behalf at the meeting. This may be necessary if you are unable to attend the meeting, or if the creditor is a company. You can appoint the chairperson of the meeting as your proxy and direct the chairperson how you wish your vote to be cast. If you choose to do this, the chairperson must cast your vote as directed. Proof of debt and proxy forms are included with the notice of meeting. To facilitate the conduct of the meeting, completed proof of debt and, if applicable, proxy forms must be returned to our office by post, fax or by 4:00pm Friday, 23 February 2018.

31 Schedule A Resolution 1: Table of major tasks for remuneration Task Area General Description Includes Assets subject to specific All tasks associated with realising a charged asset charges Investigations into PPSR charge holdings Dealings with PPSR charge holders regarding issues with realising assets Negotiations with PPSR charge holders regarding Assets settlement arrangements Obtain legal advice from solicitors regarding PPSR (excl. GST) charges Debtors Correspondence with debtors Other Assets Liaising with valuers, auctioneers and interested parties Reviewing asset listings Tasks associated with realising assets Creditor Enquiries, Requests & Receive and respond to creditor enquiries Directions Maintaining creditor request log Review and prepare initial correspondence to creditors and their representatives Considering reasonableness of creditor requests Compiling information requested by creditors Secured creditor reporting Notifying PPSR registered creditors of appointment Preparing reports to secured creditor Responding to secured creditor's queries Creditor reports Preparing Report by Liquidator, meeting and general reports to creditors Dealing with proofs of debt Receipting Creditors and filing POD when not related to a dividend 12.6hrs $ Corresponding with OSR and ATO regarding POD (excl. GST' when not related to a dividend / Meeting of Creditors Preparation of 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 creditors, advertisement of meeting and draft minutes of meeting. Preparation and lodgement of minutes of meetings with ASIC Responding to stakeholder queries and questions immediately following meeting Shareholder enquiries Initial day one letters Notification of appointment ASIC reporting Preparing BAS Completing group certificates Statutory Preparing statutory investigation reports 6.4hrs Liaisingwith $ (excl. GST) Disclaiming property ASIC Form 524 and other forms Preparing and lodging ASIC forms including 505, 524, 911 etc Correspondence with ASIC regarding statutory forms Employees Employees Correspondence with employees 8.7hrs Reviewing correspondence and claims from $3, employees (excl. GST) Conducting investigation Attempts to locate Investigations company books and records Review and preparation of 3.4 hrs company nature and $91250 history Conducting and summarising (excl. GST' statutory searches / Liaising with directors regarding certain transactions

32

33 Schedule B Resolution 2: Table of major tasks for remuneration The below table provides a description of the work undertaken in each major task area for the period 1 February 2018 to finalisation. Task Area General Description Includes Creditor Enquiries, Requests & Receive and respond to creditor enquiries Directions Maintaining creditor request log Obtaining legal advice on requests Documenting reasons for complying or not complying with requests or directions Compiling information requested by creditors Creditors Secured creditor reporting Responding to secured creditor's queries $4,000 Dealing with proofs of debt Receipting and filing POD when not related to (excl. ) a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend Creditors meeting Organising creditors meeting Drafting circular to creditors and meeting pack Attending meeting and lodging minutes of meeting Investigations $4, (excl. GST) Assets $2000 (excl. GST) Conducting Investigations Other Assets Correspondence with other appointment holders Liaising with directors Further review of the Company's history Discussions with solicitors and directors of See Jay Investigations regarding PPSR registration Further investigations into Company assets and possible recoveries Continuing to locate and recover Company assets Corresponding with third parties regarding status and location of assets Notification of appointment ASIC reporting Preparing BAS Completing group certificates Statutory Preparing statutory investigation reports $2, Liaising with ASIC (excl. GST) Disclaiming property ASIC Form 524 and other forms Preparing and lodging ASIC forms including 505, 524, 911 etc Correspondence with ASIC regarding statutory forms Employees Correspondence with employees Employees Reviewing correspondence and claims from $1, employees (excl. GST)

34 Correspondence General Correspondence Document maintenance/file Filing of documents review/checklist File reviews Updating checklists Bank account administration Preparing correspondence opening and closing accounts Requesting bank statements Bank account reconciliations Correspondence with bank regarding specific transfers Administration ASIC Form 524 and other forms Preparing and lodging ASIC forms including 505, $2, , 911 etc (excl. GST) Correspondence with ASIC regarding statutory forms ATO and other statutory Preparing BAS reporting Finalisation Notifying ATO of finalisation Cancelling ABN / GST / PAYG registration Completing checklists Finalising WIP Planning / Review Discussions regarding status of administration Books and records / storage Dealing with records in storage Sending job files to storage Total (excl. GST) $15,000.00

35 0 Grantlhornton An instinct for growth Appendix G Remuneration Report of Voluntary Administrators

36 IrA REMUNERATION REQUEST APPROVAL REPORT MERCURY MOTORSPORT AUSTRALIA PT'! LTD (IN LIQUIDATION) ACN ("The Company") Part 1: Declaration We, David Clout and Patricia Talty, have undertaken a proper assessment of this remuneration claim for our former appointment as Joint and Several Administrators of the Company in accordance with the law and applicable professional standards. We are satisfied that the remuneration claimed is in respect of necessary work, properly performed, or to be properly performed, in the conduct of the administration. For additional information regarding the fee approval process titled ASIC Information Sheet 85: Approving fees: a guide for creditors can be found on the ASIC website at the following link: fees guide for creditorsjjdf Part 2: Executive Summary We refer to our Initial Remuneration Notice issued to creditors dated 25 October 2017 in which we estimated the total cost of the administration would be approximately $25,000 to $30,000 (exclusive of GST) subject to the following variables which may have a significant effect on the original estimate and that we were unable to determine until we had commenced the administration: actions of secured creditors (if any); complexity of dealing with assets (if any) and realisation of same number and nature of employee enquiries received; nature and complexity of dealing with Employee claims; quality of the Books and Records of the Company and ease (or otherwise) of interrogation of the same; and any other unforeseen matters as they arise. To date, we have not sought approval for our remuneration, however, we have previously claimed and drawn remuneration totalling $4, (exclusive of GST) pursuant to the statutory maximum remuneration default to which we are entitled without creditor approval. We are now seeking approval for a total amount of $25, (exclusive of GST), which includes the amount of $4, previously drawn. Whilst the total amount claimed is within our original estimate, we note that our costs were higher than anticipated due to the following unforeseen circumstances that were outside our control and which required considerable additional and time intensive work by us: Multiple break ins at the Company's former premises and theft of plant and equipment requiring us to liaise with the Police and other parties to report and recover assets stolen; Negotiating with landlord and their lawyers regarding access to the Company's former premises to recover and realise the Company's assets; and Complying with our statutory obligations to provide copies of all Company books and records and the Administrators' records to the court appointed liquidators. We note that due to the subsequent appointment of the court appointed liquidators, resulting in duplication of numerous tasks and obligations, the overall cost of the successive appointments will add considerable cost to the external administration of the Company. Accordingly, there may be insufficient Company assets or

37 recoveries to enable us to be remunerated fully for our time and costs incurred for which we are seeking approval. The tasks which Practitioners undertake can be broadly divided into the following 7 categories: 1. Assets; 2. Creditors; 3. Employees; 4. Trade On; 5. Investigations; 6. Dividend; and 7. Administration. This remuneration report details approval sought for the following fees: Please note we will only be entitled to receive payment in the event sufficient assets are realised and we are seeking approval for the highest amount of fees likely, in order to reduce the cost of convening further meetings for this purpose. At this stage we do not expect to receive all of our remuneration incurred, Additional information regarding the fee approval process titled ASIC Information Sheet 85: Approving fees: a guide for creditors can be found on the ASIC website at the following link: fees guide for creditors.pdf Administrators Remuneration Report Page 2 of 10

38 Part 3: Description of work completed Past Fees drawn for the period 23 October 2017 to 30 October 2017 (Care and Preservation of assets) Company Mercury Motorsport Australia Pty LtdPeriod 23/10/2017 To 30/10/2017 Practitioners David Clout and Patricia Talty Firm David Clout and Associates Administration Type Former Voluntary Administration From Employee Position S/hour Total Total Task Area ox OST) actual (s) Assets hours bra $ Patricia Talty Director Patricia Tally Director Z Employee HA Manager I Employee HA Manager I iea on Patricia Talty, Supervisor Employee MG Assistant I ISO Employee MG Junior Employee MG Junior 195 I c TOTAL HOURS TOTAL REMUNERATION 4, ,04373 Cost Adjustments 000 GST TOTAL (Including GST) 4, Avewge houmyrate (ExcIuduig GET) Plant and Equipment/ Stock Care and Preservation of Assets Reviewing asset listings; liaising with valuers, auctioneers and interested parties, insurance tasks Liaising with Police and others following multiple break ins at former premises and theft of plant and equipment, liaising with parties in connection to recovery of stolen assets dealing landlord and their lawyers following access restriction at former premises, attending premises to negotiate access arrangements with landlord and legal renresentatives, Administrators Remuneration Report Page 3 of 10

39 Past Fees for the Company Practitioners Administration 23 October 2017 to 10 November 2017 Mercury Motorsport Australia Pty Ltd David Clout and Patricia laity Former Voluntary Administration Period 23/10/2017 To 30/10/2017 From Firm David Clout and Associates Plant and Equipment / Stock Asset subject to specific charges Care and Preservation of Assets further to above Reviewing asset listings; liaising with valuers, auctioneers and interested parties, insurance tasks Liaising with Police and others following multiple break ins at former premises and theft of plant and equipment, liaising with parties in connection to recovery of stolen assets dealing landlord and their lawyers following access restriction at former premises, attending premises to negotiate access arrangements with landlord and legal representatives, I Correspondence with secured creditors in respect of PPSR Leasing Correspondence with lessor Secured Creditors Reporting Preparing reports and updates to secured creditors Creditor Enquiries Receive and follow up creditor enquiries via telephone; maintaining creditor enquiry register; review and prepare correspondence to creditors and their representatives via facsimile. and cost Dealings with proofs of debt Receipting and filing POD's when not related to a dividend Report to Creditors Meeting of Creditors Preparing initial report to creditors Preparation of meeting notices, proxies and advertisements; preparation of meeting file, including agenda, certificate of postage, attendance register, list of creditors, report to creditors and minutes of meeting; preparation and lodgement of minutes of meeting with ASIC; liaising with creditors pre Employee Enquiry Conducting investigation Searches ASIC Reporting Transactions Document maintenance/file review/checklist Correspondence ASIC Form 524 and other forms ATO and other statutory reporting Insurance Receive and follow up employees enquiries via telephone; maintain employee enquiry register; review and prepare correspondence to creditors and their representatives via facsimile, and post; prepare correspondence to employees in respect of option available Collection of company books and records; Conducting and summarising statutory searches; collection of books and records of the Company and reviewing same Undertaking additional searches as necessary; assessing bank Considering report to asic potential offences under Section 438D of the Act Preliminary investigations into transaction which may be voidable Filing of documents; Updating checklists General correspondence Preparing and lodging ASIC forms including 505, 484, 205 Appointment Correspondence with insurer regarding initial and ongoing Administrators Remuneration Report Page 4 of 10

40 Administrators Remuneration Report Page 5of 10

41 Administrators Past Fees for the period 23 October 2017 to 10 November 2017 Mercury MotorSport Australia fly Ltd Calculation of Remuneration For Unbiued Remuneration for the period 23 October 2017 to 10 November 2017 Employee Position $1 hour Total T o t a l _ Task Area ex GST) actual (5) Assets creditors Employees F vestigations dminrstration hours lois $ his $ lots $ his 5 his $ Davod Lewis Grout Principal Appointee l2,cc David Lewis Clout Principal Appointee ( EmployeeJK 1 Director EmplOyeeJK Directot 500 OSO , ON Patricia Talbj Director , , ( ,50 Patricia Tatty Director ,80 7, , ZtC , Employee HA Manager , Employee HA Manager ,735, , , ia I Patricia Tally Supervisor Employee MG Assistant Employee MG Assistant , ON 01 '$30 EmployeeoZ Junior ?L Employee MC Junior 150 0,80 120, , Employee Mc JunIor r.5O Employee MG Junior , , Employee MG Junior ,537, , ,00 TOTAL HOURS TOTAL REMUNERATION 21, , , 'O Cost Adjustments 0.00 GIST 2, TOTAL (Including GIST) 23, Average hourly rate (Excluthng GS1)