ALFRED ANGELO (AUSTRALIA) PTY LTD (ADMINISTRATORS APPOINTED) A.G.N

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1 y > > > v > > ^ Bentleys THINKING AHEAD ^ Accoiintanls ^ AiitJilors ^ AtlV/iscir>i ALFRED ANGELO (AUSTRALIA) PTY LTD (ADMINISTRATORS APPOINTED) A.G.N REPORT TO CREDITORS Report pursuant to Section 439A(4) of the Corporations Act 2001 Key Data Administrators: Katherine Elizabeth Barnet Hugh Armenis Date of Appointment: 4 August 2017 Meeting of Creditors: Date: 8 September 2017 Time: 11:00AM Venue: Level 3, 1 Castlereagh Street, Sydney NSW Estimated Return: Secured creditors: Nil to.003 cents in the $ Priority employees: 100 cents in the $ Unsecured creditors: Nil Please complete and return the following attached forms: Formal proof of debt form Proxy form Key Contact: Adam Treffiletti T (02) F (02) E atreffiletti@bcr.bentleys.com.au Our Reference: AXT1 / C5 / Date: 31 August 2017 Level 3, 1 Castlereagh Street Sydney NSW 2000 bentleys.com.au

2 2 TABLE OF CONTENTS ABREVIATIONS/DEFINITIONS ANNEXURE LISTING 1. Executive Summary 2. Introduction 3. History of the Group and Background Information. 4. Historical Financial Information 5. Administrators Investigations 6. Director's Report as to Affairs & Reason for Failure 7. Creditor Claims 8. Proposal for a of Deed of Company Arrangement,. 9. Estimated Outcome Statement 10. Alternatives Available to Creditors 11. Administrators' Remuneration 12. Meetings of Creditors 13. Further Information Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

3 3 ABBREVIATIONS / DEFINITIONS Administrators Act ARITA ASIC Directors DiRRI DOCA DOCA Proposal EBITDA EOS FY15 FY16 FY17 HeadCo PPSR RATA Katherine Elizabeth Barnet and Hugh Armenis Corporations Act 2001 Australian Restructuring Insolvency & Turnaround Association Australian Securities and Investments Commission Charles Vowell, Stephen Czech and Richard Anders Declaration of Independence, Relevant Relationships and Indemnities Deed of Company Arrangement Deed of Company Arrangement proposal Earnings before interest, tax, depreciation and amortisation Estimated Outcome Statement Financial year ending 30 June 2015 Financial reporting period 1 July 2015 to 30 June 2016 Financial reporting period 1 July 2016 to 30 June 2017 Alfred Angelo NewCo, Inc Personal Property Security Register Director's Report as to Affairs Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

4 4 ANNEXURE LISTING A Corporate Structure B Declaration of Independence, Relevant Relationships and Indemnities C Information Sheet D Estimated Outcome Statement E Remuneration Report F Summarised Receipts & Payments G Notice of Meeting H Appointment of Proxy Form I Formal Proof of Debt Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

5 5 1.0 Executive Summary 1.1. Purpose of Report We, Katherine Elizabeth Barnet and Hugh Armenis were appointed joint and several Voluntary Administrators ("the Administrators") of Alfred Angelo (Australia) ("the Company") on 4 August The purpose of this report is to provide: > An overview of the Administrators investigations into the Company's business, property, affairs and financial circumstances; and > The Administrators opinion on the options available to creditors in deciding the future the Company Background of the Alfred Angelo Group The Company is the Australian subsidiary of an international wholesaler of wedding gowns and bridesmaid dresses. On 14 July 2017, the US based holding company, Alfred Angelo NewCo, Inc ("HeadCo") and other related entities in the Alfred Angelo Group ("the Group") filed for Chapter 7 in the United States (refer to com/case-documents for further information in relation to the US entities). On that date all companies in the group including the Australian subsidiary ceased operating. The Australian subsidiary was unable to continue to operate without the ongoing support of the HeadCo Dividend Prospects If it is resolved by creditors that the Company is to be placed in liquidation, we currently estimate a return to creditors as follows: Estimated Return by Class of Creditor Secured Creditor Priority Employee Creditors Ordinary Unsecured Creditors Estimated Cents / $ return Estimated Timeframe Low High Nil months months Nil Nil n/a The range of estimated returns is a result of the uncertainty regarding the recoverability and value of the Company's inventory and outstanding trade debtors, which could be minimal or substantial. We will endeavour to provide creditors with updated estimates of returns and timeframes progressively and as soon as further information comes to hand. Our investigations to date have not identified actions available to liquidators (if appointed) regarding voidable transactions, insolvent trading and other claims. A more detailed analysis of the estimated dividend is contained in the Estimated Outcome Statement contained in Annexure D. Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

6 Meeting of Creditors The second meeting of creditors wiii be held as follows: Time: Date Venue: 11:00am 8 September 2017 Bentleys Corporate Recovery Level 3, 1 Castlereagh Street, Sydney, New South Wales The Administrators recommend that the creditors should resolve to place the company into Liquidation at the forthcoming meeting. A formal notice of meeting for the Company is attached to this report. If you have already submitted a formal or an informal proof of debt, you do not need to submit a further claim for the meeting. 2. Introduction 2.1. Appointment of Voluntary Administrators Katherine Barnet and Hugh Armenis were appointed Administrators of the Company by resolution of the directors ("the Directors") of the Company in accordance with section 436A of the Act on Saturday 4 August Purpose and Overview of Voluntary Administration Process The role of the administrators is to assume control of the Company and to generally represent the interest of all creditors. This is reflected in the objective of the voluntary administration process which is to allow for the business, property and affairs of an insolvent (or likely to become insolvent) company to be administered in a way that either: a) maximises the chances of the company, or as much as possible of its business, to continue in existence; or b) if it is not possible for the company or its business to continue in existence, results in a better return for the company's creditors and members than what would result from an immediate winding up. One of the important consequences of the administration process is that substantially all claims against the company are subject to a statutory moratorium (except secured claims in certain circumstances). Absent consent of the administrators or leave of the Court, legal proceedings, winding up proceedings and execution against company property cannot be commenced and any which are already on foot are stayed during the administration period. Further, while a company is in administration, owners and lessors of property that are being used by the company (for example leasehold premises) cannot take possession without the consent of the administrators or leave of the Court. This report has been prepared in accordance with section 439A of the Act and in accordance with the Australian Restructuring Insolvency & Turnaround Association's ("ARITA") Code of Professional Practice for Insolvency Practitioners and informs creditors about the conduct of the administrations and the Administrators preliminary Investigations into the Company's affairs. The Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

7 7 report also provides information about the available alternatives for the future of the companies in the Group and the Administrators' recommendations. This report has been prepared based on information from the following sources: > The books and records of the Company (including electronic records); > Australian Securities & Investment Commission ("ASIC") searches; > Personal Property Securities Register ("PPSR") searches; > Information, reports and discussions with the Directors and key employees; > Information provided by creditors; and > Other publicly available information. The purpose of this report is to provide creditors with sufficient information to make an informed decision about the future of the Company. a) Purpose of the Report and Summary b) Background information about the Company. c) The results of our preliminary investigations regarding Offences, Voidable Transactions and Insolvent Trading d) Estimated return from a winding up; e) Effect on employees; f) Proposal for a deed of Company Arrangement; g) The options available to creditors when deciding on the future of the Company; h) The Administrators' opinion on each of these options, including which option we believe to be in the best interests of creditors; i) Any other Material Information; and j) Details of any Incomplete or additional information. Corporations Regulation 5.3A.02 requires an administrator to specify whether there are any transactions that appear to be voidable transactions in respect of money, property or other benefits which may be recoverable by a liquidator under Part 5.7B of the Act. In order to assist creditors, employees and shareholders understand the VA process the Australian Securities & Investment Commission ("ASIC") has released a package of insolvency information sheets, which have been endorsed by the Australian Restructuring Insolvency & Turnaround Association ("ARITA"). You may download the ASIC publication titled "Insolvency Information for Directors, Employees, Creditors and Shareholders" from ARITA or ASIC websites. This provides an index of the information sheets available. Creditors may also visit the following websites for additional information about corporate insolvency: > > Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

8 Declaration of Independence, Relevant Relationships and Indemnities A Declaration of Independence, Relevant Relationships and Indemnities ("DIRRI") was enclosed with our first circular to creditors in accordance with Section 436DA of the Act and ARITA's Code of Professional Practice. The DIRRI outlines information in relation to the Administrators' independence, prior personal or professional relationships with the Company (if any) and the Administrators' assessment of the risks to his or her independence prior to accepting an appointment. We confirm no change to the information disclosed in the DIRRI. A copy of the DIRRI is attached at (Annexure B). 3. Background Information 3.1. Overview of the Alfred Angelo Group The Alfred Angelo Group of companies had subsidiaries that operated wholesale and retail operations in numerous foreign jurisdictions including, Peru, Mexico, Canada, United Kingdom, China and Australia. The ultimate holding company, Alfred Angelo Newco Holdings LLC ("Headco") was based in the United States. The Alfred Angelo brand has been supplying bridal fashion Internationally since The Australian subsidiary, Alfred Angelo (Australia) Pty Ltd was incorporated on 3 September It supplied wholesale wedding dresses to over 75 retail stores Australia wide. The Company operated from leased premises in Caringbah, NSW and employed 4 staff. Headco provided strategic direction, inventory management, distribution, staffing and financial management to the Australian subsidiary. On 14 July 2017, after being unable to obtain an investor to secure the financial stability of the Group, HeadCo and the numerous entities in the Group filed for Chapter 7 under the United States Bankruptcy Code. As a result, all companies in the Group ceased trading and closed their wholesale and retail operations. Following the Chapter 7 filing in the United States, the Company's Directors resolved to place the Company into Voluntary Administration. FSJC V, LLC ("FSJC"), being an affiliate of private equity firm Czech Asset Management, is a secured creditor over the assets of the Group. FSJC has a charge over the whole or substantially the whole of the Company's property. FSJC is owed USD$61,715, Group Corporate Structure An extract of the Corporate Group Structure, summarising the Company's ownership structure is provided below: Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

9 9 Alfred Angelo New Co Holding, LLC 1 Alfred Angelo Newco, Inc. 1 Alfred Angelo (Australia) Pty Ltd Enclosed at Annexure A is a complete Group corporate structure Statutory Information Set out below is a summary of the key statutory information for the Company from the ASIC database as at the date of the Administrators' appointment: Company statutory information Company name: ACN: ABN: Registration date: State of incorporation: Registered office: Directors: Alfred Angelo (Australia) Pty Ltd September 2004 New South Wales Level 29, 66 Goulburn Street, Sydney NSW 2000 Charles Vowell Appointment Date: 25 September 2009 Richard Michael Anders Appointment Date: 5 July 2014 Stephen James Czech Appointment Date: 5 July 2014 Issued shares: 10 Shareholder: Registered security interests Alfred Angelo Inc (Ultimate Holding Company) FSJC V, LLC Capital Finance Australia Ltd Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

10 Registered Security Interests On our appointment, we conducted a search of the PPSR (register of secured creditors) which identified two registered security interests over property of the Company, as set out below: Corporate Entity PMSI Collateral Class Reg. No Reg Date FSJC V, LLC No All PAAP No Exception /1/2012 Capital Finance Australia Ltd Yes Other Goods /7/2016 Further discussion in relation to the above entities is provided at Section 7.1 of this report. 4. Historical Financial Information 4.1. Historical Statement of Financial Performance Summarised below are the Company's Statement of Financial Performance for FY16 and the period 1 July 2016 to 14 July 2017 ("FY17"): Statement of I inancial Performance ($USD) FY17 FY16 Income Cost of sales Gross Profit Expenses Net profit / (loss) 1,225, , , , ,908 1,504, , , , ,840 Source: Company management accounts for FY16 and FY17, maintained by HeadCo. The Company's financial statements reported net profits for both FY16 and FY17, with an increase in net profit of $41,068 in FY17. The Company's gross profit margin increased of 1.9% from FY16 to FY17 (from 38.6% to 40.5% respectively). The financial statements are consistent with our analysis below (section 5.2) that the Company's insolvency was not driven by deterioration in its trading but was contingent on the overall financial position of the Group. 4.2 Historical Statement of Financial Position (Balance Sheet) Summarised below are the Company's Statement of Financial Position (or Balance sheet) as at 30 June 2016, 31 December 2016 and 14 July 2017: Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

11 11 Statement of Financial Position ($USD) ASSETS Current Assets Non-Current Assets TOTAL ASSETS LIABILITIES Current liabilities Non-current liabilities 14 July 17 ($) 31 Dec 16 ($) 30 June 16 ($) 119,329 16,569 (79,180) 16,383 30,113 16, ,898 (62,797) 46, ,062 5, , ,770 TOTAL LIABILITIES 124, , ,770 NET ASSETS / (LIABILITIES) 11,446 (163,235) (206,275) EQUITY 11,446 (163,235) (206,275) Source: Company management accounts for FY16 and FY17, maintained by HeadCo. The Company included in its "Current Assets" an intercompany loan liability owed to HeadCo. As at 30 June 2016, 31 December 2016 and 14 July 2017 the intercompany loan fluctuated between $1.3 and $1.4 million. HeadCo did not charge the Company any interest on the outstanding intercompany loan balance and although payments were made by the Company in respect of the intercompany loan. We are not aware of any effort of HeadCo to enforce recovery of the loan. If the intercompany loan is removed from "Current Assets" then the Company's liquidity ratio is in excess of 1, indicating the Company's ability to pay its short term obligations from cash and other assets readily converted to cash. As at 14 July 2017, the Company's material asset balance was its "Trade Receivables" of $691,220 which is net of a provision for doubtful debts of $289,598. However, based on our analysis of Trade Receivables (Section below) this provision is likely to not fully reflect the recoverability of the trade debtors and will be subject to further investigations. The Company's inventory balance as at 14 July 2017 was $37,820. This amount did not include the value of the sample dresses the Administrators collected from the Company's premises. We have been informed that the Company did not complete a stock take of the sample dresses on site. Further discussion in relation to the sample dresses collected is at Section Overall, our analysis is that the Company's viability was contingent on the support it was receiving from HeadCo and whether the intercompany loan was due and payable. Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

12 12 5. Administrators Investigations 5.1 Overview An administrator is required to conduct an investigation into the business, property, affairs and financial circumstances of a company under administration. The purpose of these investigations is to inform creditors of the potential recovery actions available to a liquidator should creditors resolve to wind up a company. Creditors should note that an administrator (including a deed administrator) does not have the power under the Act to pursue voidable transactions or commence proceedings for insolvent trading. Only a liquidator has those powers. 5.2 The Company's Solvency A company is considered solvent, if and only if it can pay all of its debts, as and when they fall due and payable. A company that is not solvent is considered insolvent. Determining whether a company is insolvent (and the date at which it became insolvent) is often difficult and ultimately maybe a matter for the courts to decide. Our preliminary view is that the solvency of the Company was contingent on the continued financial support it received willingly from HeadCo and FSJC. HeadCo financed this support with FSJC, being secured by the whole or substantially the whole of the Group's assets. Our view is that the Company only became insolvent at such time that HeadCo was unable to meet its obligations under a security agreement with FSJC, whereby it filed for Chapter 7 under the United States Bankruptcy Code on 14 July Notwithstanding, we have undertaken an assessment of various indicia of Insolvency, as set out below: Indicators of Insolvency Comments Continuing Trading Losses No evidence identified. As disclosed in Section 4.3 of this report, the Company recorded profits for both FY16 and FY17. Cash flow difficulties. No evidence identified. The Company was supported by Difficulties selling its inventory, or collecting debts owed to it. an intercompany loan from HeadCo. The Company's records indicate consistent high levels of Trade Receivables. Prior to our appointment, the Company was making an active effort to recover outstanding customer balances. As at 14 July 2017, Trade Receivables were $691,220, being at its lowest since at least 30 June Creditors not being paid on agreed trading terms No evidence Identified. The Company's records indicate that the Company consistently maintained creditors at manageable levels and within agreed trading terms. Overdue Commonwealth and state taxes No evidence identified. The Company's records indicate the Company had $89,984 in accrued payroll tax, workers compensation, federal Income tax, foreign Income tax, GST and VAT as at July Legal action Is threatened or commenced against No evidence Identified. the company, or judgements are entered against the company, In relation to outstanding debts. Strained relationship with major funder Including inability to raise further/alternative finance Inability to produce timely and accurate financial Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N The Company was supported by an intercompany loan from HeadCo and FSJC. It was placed into Administration shortly after support withdrawn. No evidence identified. The Company's financial

13 13 information that shows the company's trading performance and financial position, and make reliable forecasts. Company directors have resigned, citing concerns about the financial position of the company or its ability to produce accurate financial information on the company's affairs. Special arrangements with selected creditors Defaults with financiers The company's financier has appointed an investigative accountant to advise the financier about its funding exposure to the company. Employees, or the company's bookkeeper, accountant or financial controller concerned about the company's ability to meet its financial obligations It is not certain that there are assets that can be sold in a relatively short period of time to provide funds to help meet debts owed, without affecting the company's ongoing ability to continue to trade profitably. information was prepared on a consolidated group basis by HeadCo. No evidence identified. No evidence identified. The Group was funded by FSJC who appeared willing to provide funding up until the period HeadCo and other related entities filed for Chapter 7 in the United States Bankruptcy Code. No evidence identified. No evidence identified. No evidence identified. 5.3 Voidable Transactions Enclosed at Annexure C is an Information Sheet issued by the ARITA, which summarises the following transactions that may be recovered by a liquidator: > A payment made to a creditor or transaction to which the creditor is a party, in the sixmonth period prior to the appointment of an Administrator, or four years if a related creditor, which results in the creditor receiving more than they would if they had proved in the winding up, and is an insolvent transaction of the Company (unfair preference); > A payment made to a non-related creditor during the two years prior to the appointment of an Administrator, or four years if a related creditor, which is an insolvent and uncommercial transaction; > A payment made to a creditor in the ten years prior to the appointment of an Administrator which is fraudulent; > An unfair loan whenever made; > An unreasonable director related transaction; > Arrangements to avoid employee entitlements; and > Ascertain circulating security interests created within the six months prior to our appointment. Of the above transaction classes which may be recovered by a liquidator, the first three classes of payment require that a company be insolvent at the time that payment was made or becomes insolvent by reason of the payment. As set out in Section 10.2 above, our preliminary view is that the Company may have not have been insolvent until such time that HeadCo filed for Chapter 7 in the United States Bankruptcy Code on 14 July 2017 and accordingly the Company (and the Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

14 14 Group generally) defaulted under the charge granted to FSJC, which was secured by all assets of the Group. Our investigations have included: > Reviewing the Company's financial information; and > Liaising with the Group's Vice President of Finance to identify any creditors that had entered into a payment arrangement with the Company or required regular payments to ensure continuity of service; Based on our investigations to date we have not identified any potential Voidable Transactions. However, if considered commercial further investigations may be conducted once a liquidator is appointed. 5.4 Insolvent Trading Creditors may be aware of the general concept that a director may be held personally liable for debts incurred while a company was trading whilst insolvent and when the director knew, or ought to have known, of such insolvency. Having established the likely date a company became insolvent, a liquidator can investigate whether the director incurred debts at a time when he/she suspected, or should have suspected, the company was insolvent (insolvent trading). There is a specific requirement under the Act that directors must take action to avoid insolvent trading. If it is proven that there were any breaches of the Act by the director for insolvent trading, then the director may be held personally liable for any debts incurred whilst the Company traded whilst insolvent. Pursuant to Sections 588G and 588M of the Act, a liquidator may seek to recover from the director/s of a company any debt incurred by the company after a time that a reasonable person would suspect that the company became insolvent. Insolvent trading is governed by Section 588G(1) of the Act and applies if: a) a person is a director at the time the debt is incurred; b) the company is insolvent at that time; and c) at that time, there are reasonable grounds for suspecting that the company is insolvent. This Section is breached if: a) the person is aware at that time that there are grounds for suspecting insolvency; or b) a reasonable person in a like position in a company, in the company's circumstances, would be aware of suspecting insolvency. As outlined, for there to be a breach of these provisions, the company had to be insolvent at the time the debt was incurred. It should be noted that cash flow shortages or problems or short term liquidity problems are not necessarily evidence of insolvency. As mentioned in Section 5.2, the Company was provided continued financial from HeadCo and FSJC (through Headco), being secured by the whole or substantially the whole of the Group's assets. HeadCo did not charge the Company any interest on any financial support provided to Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

15 15 the Company. Accordingly, it is our preliminary view is that the Company only became insolvent at such time that HeadCo was unable to meet its obligations under a security agreement with FSJC, whereby it filed for Chapter 7 under the United States Bankruptcy Code on 14 July Creditors should be aware that it can be difficult for a Liquidator to pursue current and former directors for insolvent trading in the event of Liquidation as directors have several defences available to them, including: a) if it is proved that, at the time the debt was incurred, the person had reasonable grounds to expect, and did expect, that the company was solvent at that time and would remain solvent: b) if the person relied on another person to provide the financial information so that if the information was relied upon, the person expected that the company was solvent and would remain so; c) the person was ill and did not take part in the management of the company; and d) the person took all reasonable steps to prevent the Company from incurring the debt. Another consideration prior to bringing proceedings of this nature, and in the absence of an insurance policy, a liquidator needs to assess the personal financial capacity of the director (or former director) to meet any judgment or order against them. Searches of publically available information do not reveal any real property interests owned by the directors. Based on this information, we are of the view that the Directors may have not have the financial resources to meet any monetary judgment against them, should one arise. Under section 588V of the Act, a holding company can be held liable for the insolvent trading of a subsidiary. In this case, we are unlikely to take steps to pursue the holding company as HeadCo has already filed for Chapter 7 in the United States. A liquidator (if appointed) will be able to investigate a potential insolvent trading claim in greater detail if it is considered commercial to do so. Should it be determined there is a potential claim against the Directors the position would be calculated with reference to the incurring of debts between the date of insolvency and our appointment. 5.5 Offences In accordance with Section 180 to 183 of the Act, directors and officers are generally required to: > Exercise their powers and discharge their duties with a degree of care and diligence of a reasonable person in their position; > Exercise their powers and discharge their duties in good faith and in the best interests of the Company and for a proper purpose; and > Not improperly use their position and information about the Company to gain an advantage for themselves or others or cause detriment to the Company. Should a liquidator be appointed, further investigations would be undertaken to determine the extent to which, if at all, there are breaches of these provisions of the Act. We note that the Australian domiciled director did not have any access to financial information. Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

16 Conclusion If creditors resolve that the Company be wound up, the Administrators will become the liquidators of the Company. The liquidators may conduct further investigations into the Company's affairs, Liquidators are also required to submit a report to ASIC any offences or breaches of the Corporations Act identified. Creditors should note that an administrator's Investigation Is not as detailed as an investigation conducted by a liquidator. A liquidator Is empowered to conduct further investigations and commence proceedings. 6. Directors' Report as to Affairs and Reasons for Failure 6.1 Directors' Reasons for Failure The Directors have attributed the failure of the Company the business model of the Group, being "special order" dresses, which had become outdated as customers were purchasing product "off the rack". HeadCo was also unable to maintain its obligations to FSJC and consequently was forced to file for Chapter 7 in the United States. We consider that the loss of ongoing financial and management support from the US based Headco was a major contributor to the failure of the company. We have not identified any reasonable basis to disagree with the Directors' reasons for failure. 6.2 Director's Statement - Report as to Affairs Pursuant to Section 438B of the Act, the Directors are required to submit to the Administrators a statement about the business, property, affairs and financial circumstances of the Company as at the date of the appointment of Administrators ("Director's Statement"). One of the Company's Directors, Mr Charles Vowell has provided us with a Director's Statement which is reproduced below alongside the Administrators' opinion: (THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK) Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

17 17 Director's opinion Administrators' opinion Assets Cash at Bank Debtors Property & Equipment Inventory Total assets , , , , Unknown Unknown 18, , Unknown Unknown Unknown Unknown 0 unknown 185, , , ,902 Liabilities Secured creditors 7.1 Unknown Unknown Priority creditors Unsecured creditors Total liabilities 7.2 Unknown 7.3 Unknown Unknown Unknown (78,343,577) (78,343,577) (78,477) (78,477) (36,320) (36,320) Unknown Unknown 78,458,373 78,458,373 Estimated / (deficiency) 185, ,000 Source: Report as to Affairs prepared by Charles Vowel, dated 15 August (78,253,809) (77,970,471) It is difficult to provide any substantive comments in relation to the RATA information provided by the Directors due to the lack of information provided. Our findings in relation to the Company's assets and liabilities as a result of our own enquiries are provided in the proceeding sections. 6.3 Assets Cash at Bank The Company held a business account and term deposit facilities with the ANZ bank ('the Bank'). As at the date of appointment, the facilities had credit balances as follows: Business Banking Facility Term deposit Term deposit Total 180,037 3,592 2, ,888 We requested the above accounts be frozen for debit transactions and the available credit balances be transferred to the Administrators' account. To date we have received $182,359. The accounts continue to remain open to ensure the receipt of payments from the Company's trade debtors (see below for further detail in this regard). Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

18 Trade Debtors The Company's customer base consisted primarily of retail stores which sold the Alfred Angelo bridal line to end consumers. Customers placed orders for dresses with the Company, whereby the dresses were then manufactured in China and distributed directly to the retail stores. Our review of the Company's trade debtor records indicate that the Company had outstanding trade debtors totalling $827,560 from 78 customers as at the date of our appointment. We have issued a letter of demand to all trade debtors requesting payment of outstanding balances in addition to engaging the Company's former staff to assist with the recovery process. To date we have collected $12,342 of this amount. Approximately $492,197 of the outstanding trade debtor balances were aged over 91 days as at 14 July Whilst, we have been informed by the Company's former employees and HeadCo's Vice President of Finance that the all trade debts should be recoverable, we have taken the preliminary view that these accounts have a limited chance of recovery. Our further enquiries have revealed that as a result of the Group's sudden collapse on 14 July 2017, a number of customers were left with unfilled orders, forcing them to issue refunds to end consumers and suffer brand damage as a result. To date, debts totalling $33,349 have been disputed. We are attempting to quantify the value of unfilled orders in order to determine overall recoverability of trade debtors. Our preliminary analysis of the recoverability of the Company's trade debts is provided below. Based on our enquiries to date we have categorised debts as having either a high chance of recoverability based on agreed payment plans (Category 'A'), a medium chance of recoverability due to further investigation being required (Category 'B'), or a low chance of recoverability due to either being disputed or aged over 91 days. Estimated Trade Debt Recoverability Debts recovered to date Category 'A' debts Category 'B' debts Category 'C debts Total High $ Medium $ Low $ 12,342 6, ,338 18, , , , Property & Equipment. Inventory Upon our appointment, we attended the Company's trading premises to conduct a stocktake and collect the Company's inventory, which consisted predominately of sample bridal dresses ("the Inventory") which were used for display at bridal showings and for loan to the Company's retail customer base. Creditors should be aware that the Company's inventory balance of $37,820 in its financial statements only reflected the value of finished dresses in transit to end customers and not the value of the sample dresses. Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

19 19 We are undertaking an assessment of the most efficient and cost effective method for realisation of the Inventory after consultation with our agents and the former employees. Our options to realise the Inventory are as follows: > > > Engage an agent to realise through an auction process; Sale of the inventory directly to the Company's retail customer base with the assistance of former Company staff; and Sale of the inventory directly to end consumers by listing the dresses for sale on various websites. While it is difficult to estimate the recoverable value of the sample dresses, it is our opinion that sales directly to the Company's retail customer base with the assistance of former Company staff may provide a greater return to creditors in the first instance. The Company also owned a quantity of sundry office equipment present at its trading premises. We have concluded that engaging an agent to collect and realise these items through an auction process would not result in a commercial outcome for creditors. 7. Creditor Claims 7.1 Secured Creditors As provided section 3.4 of this report, we identified the following registered security interests over property of the Company: Corporate Entity PMSI Collateral Class Reg. No Reg Date FSJC V, LLC No All PAAP No Exception /1/2012 Capital Finance Australia Ltd Yes Other Goods /7/ FSJC V, LLC FSJC, being an affiliate of private equity firm Czech Asset Management (who acted as the administrative agent of FSJC), holds a security interest which grants it a charge over the whole or substantially the whole of the Company's property. Pursuant to a Deed of Charge dated 22 April 2011, HeadCo, the Company and various other entities within the Group entered into a loan and security agreement with FSJC for an initial secured amount of US$2,500,000 up to a maximum of US$78,400,000. At the date of our appointment, the balance outstanding to FSJC totalled US$61,715,992. To the extent the assets of the Group subject to FSJC's security interest are insufficient to pay the debts owed by the Group, such that FSJC suffer a shortfall in what is owed to them by the Group, then FSJC will be able to prove as an unsecured creditor in a liquidation for the shortfall. Employee claims for outstanding entitlements will receive a priority from circulating asset realisations (e.g cash at bank, trade debtors and inventory) above secured creditors. Alfred Angelo (Australia) Pty Ltd {Administrators Appointed) A.C.N

20 Capital Finance Austraiia Ltd ("CFA") CFA leased telephone equipment to the Company and secured the equipment by registered a purchase money security interest ("PMSI") on the PPSR. A PMSI gives a creditor a "super priority" over other secured creditors. At the date of our appointment the balance of the lease outstanding was $8, We subsequently notified CFA that we did not take possession of the equipment or intend to exercise any rights to the equipment under the lease. To the extent that CPA's security interest is not sufficient to satisfy the outstanding debt owed they will be able to prove as an unsecured creditor in a liquidation for the shortfall. 7.2 Priority Creditors (Employees) Under section 556 of the Act, non-related employee's entitlements are afforded a priority over other unsecured claims. The Company employed 4 staff which were terminated on 14 July Based on our preliminary review of the Company's payroll records, we provide a summary of the estimated amounts owed to employees below: Estimate of employee entitlements Category Claim ($) Wages Superannuation Annual leave Long Service Leave Payment in lieu of notice Redundancy Total Source: Company payroll records, managed by ADP ,888 13,644 13,208 32,716 78,456 The Administrators will further verify employee claims for outstanding entitlements should the Company be placed into liquidation. On the basis that the company is placed into liquidation, any employees that are owed entitlements (and are made redundant) can make a claim through the through the Department of Employment's Fair Entitlements Guarantee Scheme (should sufficient funds not be available in the liquidation). FEG pays entitlements covering: > Unpaid wages up to a maximum of 13 weeks; > Annual leave; > Long service leave; > Payment in lieu of notice up to a maximum of 5 weeks; and > Redundancy pay up to a maximum of 4 weeks per full year of service. Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

21 21 The scheme does not cover outstanding superannuation. Under section 560 of the Act, any funds paid by the Department of Employment to the employees for outstanding entitlements will have the same right of priority as the employees would have in the winding up of the company. If the Company is placed into liquidation, the liquidators will work with employees that have been made redundant to ensure that all claims for outstanding entitlements are submitted and processed through the Fair Entitlements Guarantee Scheme. 7.3 Unsecured Creditors To date we have received informal and formal proof of debts from 1 unsecured creditor with claims totalling $825. Our estimate of total unsecured creditor claims based on our investigations to date is provided below: Unsecured Cfeditor claims Creditor Notes Amount Claimed ($) Australian Taxation Office ("ATO") Intercompany loan account - HeadCo Trade Creditors Estimated unsecured creditor claims 1 19, ,312, ,320 1,371,033 Contingent Unsecured Creditor claims Landlord damages claims Less: Estimated bank guarantees held by landlords Estimated Contingent Unsecured Creditor Claims 4 78,936 (10,296) 68,640 Notes Total Estimated Unsecured Creditor Claims Source: Proofs of debt received from Creditors, ATO portal, management accounts, outstanding Iwoiees sighted 1. Based on a review of the ATO's running balance account, the ATO has a debt in respect of outstanding business activity statements in the amount of $19,076. We are aware that the Company has not lodged income tax returns since FY14. The ATO has not lodged a Proof of Debt. 2. Please refer to Section for details regarding this debt. 3. Based on the Company's records and Proofs of Debt received to date, projected trade creditor debts as at the date of this report total $36, The potential unsecured debt to the landlords has been calculated based on the outstanding rent owed under the remaining years of the tenancy agreement for the Company's leased premises, as summarised below: Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

22 22 10/29 Wurrook Circuit, Caringbah NSW 2229 Robrel Pty Ltd 23 June June 2019 $41,184 (inci. GST) annual $3,432 (incl. GST) p/month $3,432 (inci. GST) p/month $10,296 $78,936 Approximately 23 months remaining We note that the landlord has a positive obligation to mitigate any losses and the quantum of the above claim may be less. We have been unable to confirm if the landlord is currently holding the bank guarantee Intercompany Loan The Company's financial records indicate an outstanding intercompany loan balance to HeadCo of US$1,312,878 as at the date of our appointment. This represented a slight decrease from the FY16 balance of US$1,369,296. Based on our investigations to date, the Company had been provided with continued financial support from HeadCo. Our enquiries indicate that the intercompany loan was used to provide the initial funding to establish the Company's day to day operations in addition to recording the transfer of inventory. HeadCo purchased and paid for all inventory which was manufactured and distributed from China. When inventory was shipped to Australia, the standard cost of the inventory was transferred to the Company. The funds generated from the sale of inventory were used to pay trade creditors, while surplus funds were used to pay down the intercompany loan balance. The Group's Vice President of Finance has informed us that she was still in the process of properly reconciling the intercompany loan account transactions at the time of the Group's closure. At the end of each year, a management and sourcing fee, along with a royalty fee was charged from HeadCo to the Company to cover its portion of design and sourcing costs, and for the management of the Company's operations. A summary of the intercompany loan account from 30 June 2015 to 30 June 2017 is provided below: Summary of Intercompany Loan Account movement ($USD) Opening Balance Unknown Net Movement Unknown Closing Balance 825,747cr Source: Company management accounts, maintained by HeadCo 825,747cr 543,550cr 1,369,297cr 1,369,297cr 56,418dr 1,312,879cr Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

23 23 8. Proposed Deeds of Company Arrangements (DOCA) 8.1 What is a DOCA? A DOCA is a statutory instrument between the company and its creditors, which is binding on all unsecured creditors if the majority of creditors (In value and number) vote In favour that It be accepted at the second meeting of creditors. DOCAs are typically put forward by parties associated with the company, such as Its management or its directors. A DOCA can take any form but they usually require that creditors receive less than payment In full of all monies due to them, or that their debts be paid over an extended period of time. If a DOCA Is put forward and Is capable of acceptance, a company's administrators will express their opinion to creditors on whether they support it in their report to creditors. Creditors can then vote at the second meeting of creditors as to whether they support it, or whether the company should be placed into Liquidation or returned to the control of the company's directors. No Deed proposal has been received. Accordingly, we do not recommend that creditors resolve for the Company to enter Into a Deed of Company Arrangement. 9. Estimated Outcome Statement As set out In the enclosed estimated outcome statement ("EOS") at Annexure D, we estimate the return to creditors as follows: Estimated Return by Class of Creditor Estimated Cents / $ return Estimated Timeframe Low High Secured Creditor Nil months Priority Employee Creditors months Ordinary Unsecured Creditors Nil Nil n/a The EOS includes all potential recoveries and creditor claims. 10. Alternatives Available to Creditors At the meeting of creditors to be held on 8 September 2017, creditors will be asked to resolve the future of the Company. Section 439C of the Act provides creditors with the following options: a) That a company execute a DOCA; b) That the Administration should end; or c) That a company should be wound up. It Is also within the rights of creditors at the meetings to resolve to adjourn the meetings for a period up to 45 business days. Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

24 24 The above options are mutually exclusive. Only one of the options may be resolved at the forthcoming meetings of creditors. Our opinion on the each of the options available to creditors is outlined below That the Company execute a Deed of Company Arrangement No DOCA proposal has been received. We do not recommend that creditors resolve for the Company to execute a DOCA The Administration should end and the Company be returned to the directors control Creditors are able to resolve that the administration should end. Such resolution would result in the Company being released from Voluntarily Administration and control of the company reverting back to the Directors. Creditors would then be free to pursue any debt recovery actions. The Group filed for Chapter 7 in the United States and as a result, all companies in the Group have ceased trading and closed their wholesale and retail operations. Accordingly, we do not recommend that creditors resolve to end the administrations The Company should be wound up in Liquidation We recommend that the Company be wound up. The reasons for our recommendation are: > No DOCA has been proposed; > As a result of the Group filing for Chapter 7 in the United States, it has no access to any financial records, information or services previously provided by HeadCo; > Liquidation may provide a potential return to priority creditors; and > Liquidators will be able to proceed with further investigations into the affairs of the Company. A Liquidator is empowered to conduct further investigations and commence proceedings where rights exist and the action is in the interests of creditors. 11. Administrators' Remuneration Enclosed (Annexure E) is our remuneration report prepared in accordance with Section 449E of the Act and the ARITA Code of Professional Practice. Creditors should refer to this report for detailed information on the remuneration sought by the Administrators or liquidators, if appointed. We have not previously had any amount approved in respect of our remuneration. Accordingly, to date we have not drawn any amount for our remuneration in this Administration. Prior to commencing our appointment as Administrators, we agreed with the Directors and FSJC to a 10% discount on our time costs incurred in the administration. Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

25 25 At the forthcoming meeting of the creditors of the Company, we intend to seek approval of the following resolutions (being calculated at a 10% discount) at the upcoming meeting of creditors scheduled for 8 September 2017 at 11:00am: Resolution 1 - Current Administrators' Remuneration: "That the remuneration of the Administrators, their partners and staff be calculated on a time basis at the hourly rates charged by Bentleys Corporate Recovery and be approved for the period 4 August 2017 to 24 August 2017 inclusive in the fixed amount of $45, excl. GST ($50, inci. GST) plus disbursements and that the Administrators be authorised to draw fees up to this amount at their discretion." Resolution 2 - Future Administrators' Remuneration: "That the remuneration of the Administrators, their partners and staff be calculated on a time basis at the hourly rates charged by Bentleys Corporate Recovery and be approved for the period 25 August 2017 to 8 September 2017 inclusive in the fixed amount of $13,500 excl. GST ($14,850 inci. GST) plus disbursements and that the Administrators be authorised to draw fees up to this amount at their discretion." Resolution 4 - Future Liquidators' Remuneration (if appointed) "That the remuneration of the Liquidators, their partners and staff be calculated on a time basis at the hourly rates charged by Bentleys Corporate Recovery and be approved for the period 9 September 2017 onwards in the interim amount of $36, excl. GST ($39, inci. GST) and disbursements and that the Liquidators be authorised to raw such fees from time to time as they are accrued up to this amount. If this limit is exhausted, the Liquidators will seek further fee approval from a committee of inspection, if any, creditors, or the court." We also enclose a copy of our receipts & payments for the period 4 August 2017 to 31 August 2017 at Annexure F. 12. Meetings of Creditors Enclosed (Annexure G) is our formal Notice of Meeting. We note that the second meetings of creditors has been convened for 8 September 2017 at 11:00am, at the office of Bentleys Corporate Recovery Pty Ltd, Level 3, 1 Castlereagh Street, Sydney NSW 2000 to discuss this report, our recommendations and to obtain a resolution from creditors on the future direction of the Company. Enclosed with this report are: Form Formal Proof of Debt or Claim (Annexure I) Regulation of the Act states that a creditor is not entitled to vote as a creditor at a meeting unless the particulars of its debt has been lodged with the chairperson of the meeting. Accordingly, a POD is provided with this report and must be completed and lodged with the Administrators prior to the meeting to entitle a creditor to participate in the meeting. Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

26 26 Form Appointment of Proxy Also enclosed (Annexure H) is Form 532, Appointment of Proxy. Pursuant to Regulation , a person claiming to be the proxy of a person, so appointed by an appropriate instrument (Form 532), is generally not entitled to speak or vote at the meeting unless the instrument has been received by the Chairperson prior to the meeting. Facsimile copies of proxies are acceptable prior to the meeting, but the original document must be lodged with the Administrators within 72 hours after lodging the faxed copy. Proxies may be executed by companies with or without a common seal if it is signed by or if the seal is fixed to it and the fixing of the seal is witnessed by: (a) two directors of the Company; or (b) a director and secretary of the Company; or (c) a proprietary Company that has a sole director who is also the sole Company secretary - that director. Accordingly, any person claiming to be the attorney of a person entitled to attend and vote must ensure that: (a) (b) The instrument or copy of the instrument by which the person was appointed as attorney has been produced to the chairperson. In the case of a corporation, the instrument must be signed by one of the methods outlined above for proxies. The chairperson is otherwise satisfied that the person claiming to be the attorney of the person or corporation entitled to vote is duly authorised by that person. We request that these documents be forwarded to our office by 4:00 PM on 7 September 2017 to facilitate checking and recording. Telephone conference facilities will be available at the meeting. Creditors can utilise the following conference facility: Telephone number: Password: Should creditors wish to participate in the meeting by telephone, written notification must be provided to our office no later than 4:00 PM on 7 September A person who participates in the meeting by telephone must pay any costs incurred and is not entitled to be reimbursed for those costs from the assets of the Company. 13. Further Information Should creditors require any further information, please contact Adam Treffiletti of this office on (02) or by on atreffiletti@bcr.bentleys.com.au Dated this 31^ dayj5laugust 2017 ijrerine Barnet lint & Several Administrator Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) A.C.N

27 ^ Bentleys THINKING AHEAD Annexure A: Corporate Structure KRESTON 1 A member of Bentleys, a network of independent accounting firms located throughout Australia, New Zealand and China that trade as Bentleys, All members of the Bentleys Network are affiliated only and are separate legal entitles and not in Partnership. Liability limited by a scheme approved under Professional Standards Legislation. Accountants Auditors Advisors

28 Alfred Angelo New Co Holding, LLC (1) i Alfred Angelo Newco, Inc. (2) jk Alfred Angelo Alfred Angelo - The Brides Studio No. (Australia) Pty Ltd 3, Inc. R-4 (3) (15) Alfred Angelo de i' Mexico 1 (4) PF International, [nc Piccone Fashions UK Hacienda Brides, Inc (16) LTD (17) (18) Alfred Angelo de Pern (5) I DJF, LLC Picclone Fashions Ltd. (6) (18) J s > Alfred Angelo - The Company Store, Inc, R-1 (2) Alfred Angelo - The Brides Studio No.1 ^ f R-2 > >.(?) Alfred Angelo - The Brides Studio No. 2, Inc. R-3 {2> AA Bridal, LLC (19) Alfred Angelo Canda UCL (7) < ' AA Florida Bridal Retail Company, LLC R-7 (20) ZN, LLC (8) r AAI II Alfred Angelo - The Alfred Angelo - The ^ AA Bridal Northeast, Brides Studio No. 4, Brides Studio No. 5, * > LLC R-8 LLC R-5 LLC R-6 (21) (24) (25) i Alfred Angelo Investment Company, Limited (Hong Kong) (9) J AA Bridal Nebraska, LLC R-10 I (22) BridalMart, LP Texas (27) China I AAI China ill AA Bridal Midwest, Zhuhai Shantou > LLC R-1Q (10) (12) (23) AAI China II AAI China IV Fu Yang Changde (11) (13) Zhuhai Haipeng Wedding Dress Co., Ltd. (14) [ Key Retail Entities VMiolesale Entities Wholesale & Retail Entities 1 Allied Angeio Newco Hofding, L Inuec, V -! ia:es umued Liaoiii tycofporaiion (Delaware) Alfred Angelo Nnwco, f*. C" Co^porayon <DcJavvarni and Qusufica "SubchaptBr S'Subsidiatiea ifkjrido) (At^iea Anqe'o - Tire Company Slow, m Atfrcd Arvgelci - ThoBrtdei StLKl 10 He 1. ht,. Ali'wd Ar.jehs - Tlw BtWes 1 Studio No 2.lnc.) ) (A^rtEraiiayPty Ltd -Aui^aiarTPrtvAlr as a fcrcjgfsditreflatdttd ntity [Otuwon o( A^rvd Angelo Kewco he) 4 AltrodAfrjBtodol^ewca - Meni^qn sntjly ttea'cd as a foielgn di&regardec «.nlilytdivi»lon cf Atf/tsd H# wca Vic )Su*pflndttd Ope I ton* " 5 Ally04 Angoiodo PIKU - SourJ^ An)on~cftn"oMiy ftformaol) (reoifrd At a (oiolign tjiufcgajdecf eivity idiviliin ofai'rad Aoj^.o Mevrio. Inc i Suspended Ope'Btiori* 6 bj Paihign*, LLC 'Unt»d Ari^'Company YoiX>-Olwon6nufl<l Opflfatscmi 7 Affrnd Angola C&n&dn ULC - Uplimltod UahilifyCompanyiCa/UKta} a ZN. LLC - Urntfrd $Ut!»> Co'npany(K»w - Oltcontrued Opcfi&oot 9 Alfred Angelo fnvbstment Company Limited (aka Meadera Limited) - Hong Kong entity treatetl as a foratgn disregaroad' enuty of Alfred Angelo Newco, inc Zhuhai Free Trade Zone Bai jing Fashions Company LimKeo -China entity treated as a foreign entity of Aifrea Angelo investment Compan^imiied/AlfredAngeio tnc in lum a foreign disregaraea enliiyof Alfrea Angelo Newco, mc 10 Oisconlinued Operations Fu Yang Alfred Angelo Company Limited - China entity treated as a foreign entity of Alfred Angelo investment Company uimhed/alived Angelo Newco, inc in turn a foreign disregarded entity of Alfred Angelo Newco inc Discontinued Xi Operations Sfiantou rak King Garment Comparry Limited - China entity treated as a foreign entity of Alfred Ange/o ftwestment Company umrtea/alfrea Angelo Newco, fnc in (urn a foreign aisregaraea enuty of Alfred Angeio Newco mc Discontinued 1/ Cpwatioo* Chargde CrtyAlfred Ainga^oGarm^nTC&mpany Lim-ted - Cfuna anbty 'jaalsd at a 13 Discontinued Operalions «nbtyof AWr^-d Angelo In^ipnent Coispany Uffl'leo/AIAfd Anjc'o Newco. Inc in iima ftfei^n d»»f«fl4rded erttfiybf Alfred Angeto WeVi'co, K tt^uirai Maipeng Wcdatna Orc«Co. La. -dwna 'icoled ayn fore'ijn ir't,?/o'alfred Angcfo h^flisnent Coiiipan/brnJie^/A^Hjj Arpul'j Newco. in turn a fofe^ Jltf^oaidcd Ai'rcd Angrlo HOMO fa AiiVfid Af^it'a Tnn Srldtfi SCwJiO Wo. 3. kic ^ Subcbaptnn'S' Subivdiary {Dalawaralol Aifrud AngsloN't'/xo kic PF httrnolionai. nc - Umtfld Slam'Subchapter S Cofooration (Oitaworo} U PiCCiO-"^ FavMofii UK L'tO - Ui?ltd ^Irgdor) CCnporatan^Co Raj'itraiiDii s ICSfi^SS^rvglandiWules ]a Prcctora FasSTons LG - United Kingdom Llmriotl Porlr^rjfip AASridal, LLC-Palawan Ui-nileo Llabi^iyCoinpariyof Al^cci At>j*lo Ne^-co Uc " JO AA Fittuda SfSif^ta^Compftriy, LLC -Fionrta umjleil L'»&lllty Company of Affre a Angcfo U r.-^n irjjr AA Brtrtol Hfrb!a9i*a. LLC - OeUiviare L'mjlad Linb-JityCorrtpanv of Aiftod AngelQ N'^wCo Inc iv Ai l^f^datljoriheajl LLC ' D elav^are "LTnitsiJ LTi&^Jrty C oiripany oraffrea 1 Ar-gefo N svito. i>: " 23 A A Bndal LLC - Oa^vaj* Limii*^ liability Cootpaoy of A M«nco. inc m Alfred AngBiQ - Tt-p Br.dg j Sti^d'-o No A. L - 1 J^tpd t.rir L i oil iff d.tattii-^ Company 25 Alfred Angelo"- Th# 3 r-3e't S tud'o ^-o" fl LLC - L ofttlily C ct.npa«y o'ainu Angi»:o Nr.vu ho ^ BonatWart LP -Un.»d 3iai«Ltmneo Pamenii p (T j7 HBl Hncierwa Bridai - 9tAjch»ptoi S : SubiidiaiyiCilifomiaj orarlred Ar-gElof'ilBrtco, IU 28 OZ Hoidinfl Company. LLC - U«5tfd Sla1#» Limiied LiabJ'ityCofflpany(Nn'-v Vork) - 0*i.wfi(inycd Cpara^KWtA

29 Annexure B: Declaration of Independence, Relevant Relationships and Indemnities

30 CORPORATIONS ACT 2001 Section 436DA DECLARATION OF INDEPENDENCE, RELEVANT RELATIONSHIPS AND INDEMNITIES ALFRED ANGELO (AUSTRALIA) PTY LTD (ADMINISTRATORS APPOINTED) ACN This document requires the Practitioner appointed to an insolvent entity to make declarations as to: A. their independence generally; B. relationships, including i. the circumstances of the appointment; ii. ill. Iv. any relationship with the insolvent entity and others within the previous 24 months; any prior professional services for the insolvent entity 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 and Bentleys Corporate Recovery Pty Ltd (our firm). A. Declaration of Independence We, Katherine Elizabeth Barnet and Hugh Armenis of Bentleys Corporate Recovery Pty Ltd have undertaken a proper assessment of the risks to our independence prior to accepting the appointment as joint and several Administrators of Alfred Angelo (Australia) Pty Ltd ("the Company") in accordance with the law and professional standards. This assessment identified no real or potential risks to our independence. We are not aware of any reasons that would prevent us from accepting this appointment. B. Declaration of Relationships (i) Circumstances of Appointment The Company/directors were referred to us by Henry Davis York ("HDY") who act for FSJC V, LLC ("FSJC"), an affiliate of private equity firm Czech Asset Management ("Czech") and secured creditor of the Company. Our firm has a professional relationship with HDY. In the week prior to accepting the appointment, we had the following communications with HDY and Czech:

31 On 25 July 2017, we had a telephone discussion with HDY to discuss a potential appointment as external administrators of the Company and were provided with relevent documents pertaining to the background of the Company and it's relationship with FSJC; On 26 July 2017, we attended a meeting with HDY and Czech to discuss the potential appoinment; On 29 July 2017 and 30 July 2017 we exchanged various s with HDY and Czech regarding the potential appointment; On 31 July 2017, we exchanged various s with HDY and Tripp Scott Attorneys, being the solicitors for Czech, regarding the potential appointment; On 2 August 2017, we received various s with HDY and Tripp Scott Attorneys, being the solicitors for Czech, regarding the potential appointment; On 4 August 2017, we were provided with executed appointment documents from the directors of the Company. All of these meetings/telephone conversations were for the purposes of: Gaining an understanding of the Company, its financial position, its business and its trading history; Discussing the various options available to the Company and the nature and consequences of an insolvency appointment; and. Provide a consent to act and to have executed by the directors my pre-appointment disclosure of proposed basis of remuneration. We received no remuneration for these meetings/ telephone conversations. In our opinion, the above matters do not affect our independence for the following reasons: it is recognised by the Courts and the Australian Restructuring and insolvency Turnaround Association ("ARITA") Code of Professional Practice that pre-appointment advice on the insolvency process and available options is necessary and does not amount to an impediment to accepting an appointment; The nature of the advice provided was such that it would not be subject to review and challenge during the course of the appointment; and The pre-appointment advice provided will not influence our ability to fully comply with the statutory and fiduciary obligations associated with the appointment in an objective and impartial manner. We provided no other information or advice to the Company or any of its directors prior to our appointment beyond that outlined in this DIRRI.

32 (ii) Relevant Relationships (excluding professional services to the Insolvent) Neither we nor our firm, have, or have had within the preceding 24 months, any relationships with the Company, an associate of the Company, a former Insolvency practitioner appointed to the Company or any person or entity that has security over the whole or substantially the whole of the Company's property. (ill) Prior Professional Services to the Insolvent Neither us, nor our firm, have provided any professional services to the Company In the previous 24 months. (iv) No Other Relevant Relationships to Disclose There are no other known relevant relationships, Including personal, business and professional relationships, from the previous 24 months with the Company, an associate of the Company, a former Insolvency Practitioner appointed to the Company or any person or entity that has a charge on the whole or substantially whole of the Company's property that should be disclosed. C. Declaration of 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 THIS 7 th day August 2017 Catherine E Barnet Joint and Several Administrator Hugh Armenis Joint and Several Administrator NOTE: If circumstances change, or new information is identified, we are required under section 60(2) and 506A(5) of the Corporations Act 2001 and the provisions of 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 company's creditors.

33 Annexure C: ARTIA Creditor Information Sheet

34 Creditor Information Sheet Offences, Recoverable transactions and Insolvent Trading ARITA Offences A summary of offences that may be identified by the administrator: Section Offence 180 Failure by officer to exercise a reasonable degree of care and diligence in the exercise of his powers and the discharge of his duties. 181 Failure to act in good faith. 182 Making improper use of position as an officer or employee, to gain, directly or indirectly, an advantage A 206A, B 206A, B 209(3) 254T Making improper use of information acguired by virtue of his position. Reckless or intentional dishonesty in failing to exercise duties in good faith for proper purpose. Use of position or information dishonestly to gain advantage or cause detriment. Contravening an order against taking part in management of a corporation. Taking part in management of corporation while being an insolvent under an administration, Acting as a director or promoter or taking part in the management of a company within five years after conviction or imprisonment for various offences. Dishonest failure to observe reguirements on making loans to directors or related companies. Paying dividends except out of profits. 286 Failure to keep proper accounting records. 312 Obstruction of auditor. 3U-7 Failure to comply with reguirements for financial statement preparation. 437C Performing or exercising a function or power as officer while a company is under administration. 4370(5) Unauthorised dealing with company's property during administration ) Failure by directors to assist administrator, deliver records and provide information. 4380(5) Failure to deliver up books and records to administrator. 590 Failure to disclose property, concealed or removed property, concealed a debt due to the company, altered books of the company, fraudulently obtained credit on behalf of the company, material omission from Report as to Affairs or false representation to creditors. Voidable Transactions Preferences A preference is a transaction such as a payment between the company and one or more of its creditors, in which the creditor receiving the payment is preferred over the general body of creditors. The relevant time period is six months before the commencement of the liquidation. The company must have been insolvent at the time of the transaction, or become insolvent as a result of the transaction. Where a creditor receives a preferred payment, the payment is voidable as against a liquidator and is liable to be paid back to the liquidator subject to the creditor being able to successfully maintain any of the defences available to the creditor under either the Corporations Act. Uncommercial Transaction An uncommercial transaction is one that it may be expected that a reasonable person in the company's circumstances would not have entered into having regard to: the benefit or detriment to the company; the respective benefits to other parties; and any other relevant matter. To be voidable, an uncommercial transaction must have occurred during the two years before the liquidation. However, if a related entity is a party to the transaction, the time period is four years and if the intention of the transaction is to defeat creditors, the time period is ten years. ARITA ACN Level 5, 33 Erskine Street, Sydney NSW 2Q00 Australia I GPO Box 9985, Sydney NSW 2001 t I f I e adnnin@arita,com.au I arita.com.au AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION

35 % ARITA The company must have been insolvent at the time of the transaction, or become insolvent as a result of the transaction. Unfair Loan A loan is unfair if and only if the interest was extortionate when the loan was made or has since become extortionate. There is no time limit on unfair loans - they only have to have been entered into any time on or before the day when the winding up began. Arrangements to avoid employee entitlements If an employee suffers loss because a person (including a director) enters into an arrangement or transaction to avoid the payment of employee entitlements, the liquidator or the employee may seek to recover compensation from that person. It will only be necessary to satisfy the court that there was a breach on the balance of probabilities. There is no time limit on when the transaction occurred. Unreasonable payments to directors Liquidators have the power to reclaim "unreasonable payments" made to directors by companies prior to liquidation. The provision relates to transactions made to, on behalf of, or for the benefit of, a director or close associate of a director. To fall within the scope of the section, the transaction must have been unreasonable, and have been entered into during the ^ years leading up to a company's liquidation, regardless of its solvency at the time the transaction occurred. Voidable charges Certain charges are voidable by a liquidator: Circulating security interest created with six months of the liquidation unless it secures a subsequent advance; Unregistered charges; and Charges in favour of related parties who attempt to enforce the charge within 6 months of its creation. Insolvent Trading In the following circumstances, directors may be personally liable for insolvent trading by the company; a person is a director at the time a company incurs a debt; the company is insolvent at the time of incurring the debt or becomes insolvent because of incurring the debt; at the time the debt was incurred, there were reasonable grounds to suspect that the company was insolvent; the director was aware such grounds for suspicion existed; and a reasonable person in a like position would have been so aware. The law provides that the liquidator, and in certain circumstances the creditor who suffered the loss, may recover from the director, an amount equal to the loss or damage suffered. Similar provisions exist to pursue holding companies for debts incurred by their subsidiaries. A defence is available under the law where the director can establish: there were reasonable grounds to expect that the company was solvent and they actually did so expect; they did not take part in management for illness or some other good reason; or, they took all reasonable steps to prevent the company incurring the debt. The proceeds of any recovery for insolvent trading by a liquidator are available for distribution to the unsecured creditors before the secured creditors. Important note; This information sheet contains 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. This document may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances. AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 2

36 Annexure D: Estimated Outcome Statement

37 ALFRED ANGELO (AUSTRALIA) PTY LTD ACN ESTIMATED RETURN TO CREDITORS Assets Non-circulating asset realisations High $ Low $ 0 0 Less: Secured Creditor (General Security Agreement) 78,343,577 78,343,577 Net secured non-circulating asset realisations (cfd) ,577 78,343,577 Circulating asset realisations Cash at bank Inventory Trade Debtors 185, ,889 unknown 0 302,014 18, , ,565 Total estimated asset realisations 487, ,565 Priorities pursuant to Section 556 of the Act Costs of Administration (incl. GST) Administrators' disbursements Insurance & Workcover Wages Agents fees and commision Provision Administrators' remuneration Admininstrators' remuneration for the period 4/8/2017 to 24/8/2017 Admininstrators' future remuneration for the period 25/8/2017 to 8/9/2017 1,000 2,000 10,874 10, ,500 1,000 2,000 13,374 16,374 45,644 45,644 13,500 13,500 59,144 59,144 Liquidators' remuneration for the period 6/9/2017 to finalisation 36,000 36, ,518 Total Costs of Administration (incl. GST) 111,518 Priority Creditors Unpaid wages Superannuation Annual Leave Long Service Leave Payment in Lieu of Notice Redundancy ,888 18,888 13,664 13,664 13,208 13,208 32,716 32,716 78,477 78,477 Estimated funds available to Secured Creditor 300,908 14,570 Less: Secured Creditor (bal c/d) 78,343,577 78, Estimated Surplus/ (Deficiency) available to Unsecured Creditors 3 i Unsecured Creditors 1,439,673 1,439,673 Total Suplus/Deficiency 1,439,673 1,439,673 Estimated Dividend to the Unsecured Creditors (cents/s) s E

38 Annexure E: Remuneration Report

39 CORPORATIONS ACT 2001 Section 449E, 473, 495 & 499 Remuneration Report ALFRED ANGELO (AUSTRALIA) PTY LTD (ADMINISTRATORS APPOINTED) ACN Table of Contents Part 1: Part 2: Part 3: Part 4: Part 5: Part 6: Part 7: Part 8; Part 9: Part 10 Part 11 Part 12 Declaration Executive summary Administrators' time costs to date Future Administrators' time costs Future Liquidators' time costs Statement of remuneration claim Remuneration recoverable from external sources Disbursements Summary of receipts and payments Queries Information sheet Initial advice to creditors Part 1: Declaration We, Katherine Elizabeth Barnet and Hugh Armenis, have undertaken a proper assessment of this remuneration claim for our appointment as Voluntary Administrators of Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) 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. Part 2: Executive summary This remuneration report details approval sought for the following resolutions: Period: 4 August 2017 to conclusion Voluntary Administration; Report Amount $ reference (excl. GST) Resolution 1: 4 August 2017 to 24 August 2017 Part 3 45, Resolution 2: 25 August 2017 to 8 September 2017 Part 4 13, Liquidation (if applicable): Resolution 3: 9 September 2017 to finallsatlon Part 5 36, Total 95,143.50

40 Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the Administration and Liquidation (if applicable). Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors. Please refer to the report section references detailed above for full details of the calculation and composition of the remuneration approval sought. Part 3: Administrators' time costs to date Company: Alfred Angelo (Australia) Pty Ltd Period from: 4 August 2017 (Administrators Appointed) Practitioners: Administration type: Katherine Elizabeth Barnet & Hugh Armenis Voluntary Administration Period to: 24 August 2017 Firm: Bentleys Corporate Recovery Task Area General Description Includes Assets Number of hours: 39.4 Actual cost: $ Banking Debtors Stock General > Identifying the whereabouts of the Cash on Hand of the company. > Requesting the closure of the Company's bank accounts. > Transferring funds to the bank account of the administration. > Reviewing and assessing debtors' ledgers. > Cleaning debtor ledger data. > Drafting and reviewing letters of demand issued to debtors. > Attending the premises to retrieve cheques of drawn to the Company. > Discussions conducted with former employees regarding: > Details of the debtors ledger > Engaging the former employees to conduct debtor collections. > Forwarding bespoke s to each debtor of the company. > Creating a debtor register. > Responding to debtor s and phone calls. > Recording all debtor conversations in the debtor register. > Updating outstanding debtor amounts based on payments received. > Attending the premises of the Company to collect the stock. > Liaising with agents regarding the collection and warehousing of the stock. > Organising for photographs and stock listings to be conducted. > Review of creditor ledger. > Receiving and following up on creditor enquiries via telephone and . > Maintaining creditor enquiry register.

41 Task Area General Description Includes > Drafting and circulating correspondence to utilities companies and suppliers regarding the Administration. > Review and prepare correspondence to creditors and their representatives via facsimile, and post. > Liaising with landlord of the property. Creditors Number of hours: 55.3 Actual cost: $21, Investigations Number of hours: Actual cost: $15, Meeting of Creditors Report Employees Secured Creditors Conducting Investigations > Establishing initial contact with the ATO. Preparation of meeting notices, proxies and advertisements. > Forwarding notice of meeting to all known creditors. > Preparation of meeting file, including: > Agenda > Attendance register > Certificate of postage > List of creditors > Proofs of debts; and > Proxies > Convening 1 st meeting of creditors. > Communication with creditors to ensure a quorum is present. > Attending 1 st meeting of creditors. > Preparing a summary of the statement of financial performance and position. > Preparing estimated outcome statement to provide potential return to creditors. > Drafting the report to creditors pursuant to section 439A of the Act > Discussing outstanding issues with employees of the Company. > Establishing contact with the entity which dealt with the payroll of the Company. > Gaining authority to retrieve pertinent employee reports of the Company. > Searching for and reviewing security documents. > Drafting and issuing 433B notice - Notice of Administrator's Intention not to Exercise Property Rights. > Producing and reviewing 1 st day documents. > Reviewing Chapter 7 Documentation. > Sourcing and reviewing statutory searches of the Company. > Liaising with financial institutes to ascertain the cash position of the Company and retrieve bank statements. > Drafting and issuing correspondence to the Directors of the Company. > Reviewing the completed Director's statement about the Company's business, property, affairs and financial information. > Reviewing the completed Director's questionnaire.

42 Task Area General Description Includes > Discussions with the Director regarding the Company. > Communicating with the Company accountants in the US. > Communicating with the CFO of the US Alfred Angeio. > Engaging the CFO to retrieve financial records of the Company. > Attending the premises to retrieve the books and records of the Company. > Liaising with former employees in attempts to gain access to the Company's digital records. > Investigating financials and preparing file notes of findings. > Administration Number of hours: 10.6 Actual cost: $3, Bank account administration Insurance Document maintenance / file review / checklist ASIC Reporting Planning / review > Opening an Administration bank account > Processing receipts and payments. > Conducting bank account reconciliations. > Providing the insurance broker with the details of the Company's operations. > Reviewing insurance policies. > Updating the insurance broker as to the progress of gaining possession of stock. > Uploading and updating the checklist > Filing documents > Processing the creditor details into the accounting system > Preparing and lodging the required statutory lodgements. > Upload the notice of appointment to the ASIC insolvency notices website > Meetings regarding strategy and status of the Administration Total actual hours: Total actual cost: hours $50, excl. GST ($55, incl. GST) Prior to commencing our appointment as Administrators, we agreed to provide a 10% discount on our time costs incurred in the administration. Accordingly, the remuneration sought as Administrators for the period of 4 August 2017 to 24 August 2017 totals $45, excl. GST ($50, incl. GST) being a 10% discount on the above calculated time costs.

43 Calculation of remuneration The calculation of the Administrators time costs for the period of 4 August 2017 to 24 August 2017 is summarised in the table hereunder: Administration Assets Creditors Investigations Name Position Rate $ Hrs WIP $ Hrs WIP $ Hrs WIP $ Hrs WIP $ Total Hrs Total WIP $ KXB Partner , HXA Partner SXW Senior Manager , , AXT Manager , , , , NXG Intermediate , , , JXM Intermediate , , , , SXN Intermediate , , , , CXK Support Grand Total , , , , Please note that the remuneration sought as Administrators for the period of 4 August 2017 to 24 August 2017 totals $45, excl. GST ($50, incl. GST) being a 10% discount on the above calculated time costs.

44 Part 4: Future Administrators' time costs Company: Alfred Angelo (Australia) Pty Ltd Period from: 25 August 2017 (Administrators Appointed) Practitioners: Administration type: Katherine Elizabeth Barnet & Hugh Armanis Voluntary Administration Period to: 8 September 2017 Firm: Bentleys Corporate Recovery Task Area General Description Includes Assets Number of hours: 15 Estimated cost: $5, Creditors Number of hours: 15 Estimated cost: $5, Stock Debtors Communication with creditors 2 nd Meeting of Creditors > Review engagement proposal from agent/s. > Review photographs and stock listings provided by the agent. > Formulate a strategy about the best way to dispose of the stock. > Engage in the sale of the stock. > Engage former employees to attempt to collect outstanding debtors. > Review of correspondence between the former employees and debtors of the Company. > Process the receipts and update debtor register. > Retrieve and review invoices from the CFG of the parent entity. > Consider conducting legal action for unpaid debtors. > Liaise with the creditors via telephone and regarding the Administration. > Finalise drafting the 439a Report to creditors > Preparation of the Remuneration Report for inclusion in the report. > Prepare a summary of receipts and payments > Prepare statutory documents to convene the meeting of creditors on 5 September > Circulate the report by mail and . > Draft and upload advertisement of the meeting of creditors to be held on 5 September > Review and upload proofs of debt and proxies into the accounting system. > Preparation of meeting file, including: > Agenda > Attendance register > Certificate of postage > List of creditors > Proofs of debt; and > Proxies.

45 Task Area General Description Includes > Convening 2 nd meeting of creditors. > Liaise with the creditors regarding attendance at the 2 nd meeting of creditors. > Attending 2 nd meeting of creditors. > Draft and lodge the minutes of the 2 nd meeting of creditors. Investigations Number of hours: 10 Estimated cost: $3, Administration Number of hours: 5 Estimated cost: $1, Conducting investigations Bank account administration Insurance > Communicating with the Company accountants in the US. > Communicating with the CFG of the US Alfred Angelo. > Investigating financials and preparing file notes of findings. > Process receipt and payment vouchers. > Prepare bank account reconciliations. > Liaise with the insurance broker and provide details of the Company's operations. Document maintenance / file review / checklist > File documents > Update checklists > Prepare correspondence by mail and > Update the creditor details in the accounting system Total estimated hours: Total estimated cost: 45 hours $15, excl. GST ($16, Incl. GST) Prior to commencing our appointment as Administrators, we agreed to provide a 10% discount on our time costs incurred in the administration. Accordingly, the remuneration sought as Administrators for the period of 25 August 2017 to 8 September 2017 totals $13,500 excl. GST ($14,850 incl. GST) being a 10% discount on the above calculated time costs.

46 Part 5: Future Liquidators' time costs Company: Alfred Angelo (Australia) Pty Ltd Period from: 9 September 2017 (Administrators Appointed) Practitioners: Katherine Elizabeth Barnet & Hugh Armenis Period to: Finalisation Administration type: Voluntary Administration Firm: Bentleys Corporate Recovery Task Area General Description Includes Assets Stock > Continue to engage in the sale of the stock. > Number of hours: 40 Debtors > Process the receipts and update debtor register. Anticipated cost: > Consider conducting legal action for unpaid $16,400 debtors. Creditors Number of hours: 20 Anticipated cost: $8, Communication with creditors Meeting of the creditors > Liaise with the creditors via telephone and regarding the Liquidation. > Prepare and circulate notice of any meeting of the creditors. > Draft statutory documents to convene any meeting of the creditors. > Prepare and upload the advertisement of any meeting of the creditors. > Review and upload proofs of debt and proxies into the accounting system > Preparation of meeting file, including: > Agenda > Attendance register. > Certificate of postage > List of creditors > Proofs of debt; and > Proxies. > Liaise with the creditors regarding attendance at any meeting of the creditors. > Attend the final meeting of the creditors. > Draft and lodge the minutes of any meeting of the creditors including the final meeting of the creditors. Investigations Report to ASIC > Prepare a file note summarising the results of the investigations. Number of hours: 15 Anticipated cost: $5, > Prepare the statutory investigation reports. > Liaise with ASIC with regards to any queries raised. > Prepare the Liquidators' report pursuant to

47 Task Area General Description Includes Conduct investigations section 533 of the Act. > Archive the Company's books and records > Review the Company's records. > Investigate financials and prepare file note regarding potential claims. > Finalise the position on potential recovery actions. Dividend Dividend procedures > Draft and circulate correspondence to creditors advising of intention to declare a Number of hours: 15 Anticipated cost: $5, Administration Document maintenance / file Number of hours: 10 review / checklist Anticipated cost: $3, Bank account administration ASIC statutory forms ATO reporting Finalisation dividend, if applicable. > Prepare the dividend file including a time line schedule. > Prepare the dividend calculation spread sheet. > Draft correspondence to creditors announcing the declaration of a dividend. > Draft correspondence to creditors enclosing the payment of dividends. > Administration review. > File documents. > File reviews. > Update checklists. > Prepare receipt and payment vouchers. > Prepare bank account reconciliations. > Lodge ASIC forms. > Draft correspondence with ASIC regarding statutory forms. > Prepare and lodge BAS statements. > Notify the ATO of finalisation. > Cancel ABN / GST / PAYG registrations. > Complete checklists. > Finalise the WIP. Total anticipated hours: Total anticipated cost: 100 hours $40, excl. GST ($44,000 incl. GST) Prior to commencing our appointment as Administrators, we agreed to provide a 10% discount on our time costs incurred in the administration. Accordingly, the remuneration sought as Administrators for the period of 9 September 2017 to finalisation totals $36,000 excl. GST ($39,600 incl. GST) being a 10% discount on the above calculated time costs. Please refer to the statement of remuneration claim for details of the resolutions to be sought at the second meeting of the creditors of the Company to be held on Friday, 8 September 2017 at AM. Details of actual charges and amounts drawn will be available for inspection by creditors on request.

48 Part 6: Statement of remuneration claim We intend to seek creditors' approval of the foilowing fee resoiutions at the meeting of creditors to be heid on Friday, 8 September 2017 at AM. Resolution 1 - Current Administrators' Remuneration: "That the remuneration of the Administrators, their partners and staff be calculated on a time basis at the hourly rates charged by Bentleys Corporate Recovery and be approved for the period 4 August 2017 to 24 August 2017 inclusive in the fixed amount of $45, excl. GST ($50, incl. GST] plus disbursements and that the Administrators be authorised to draw fees up to this amount at their discretion." Resolution 2 - Future Administrators' Remuneration: "That the remuneration of the Administrators, their partners and staff be calculated on a time basis at the hourly rates charged by Bentleys Corporate Recovery and be approved for the period 25 August 2017 to 8 September 2017 inclusive in the fixed amount of $13,500 excl. GST ($14,850 incl. GST) plus disbursements and that the Administrators be authorised to draw fees up to this amount at their discretion." Resolution 4 - Future Liquidators' Remuneration ftf apoointedl "That the remuneration of the Liquidators, their partners and staff be calculated on a time basis at the hourly rates charged by Bentleys Corporate Recovery and be approved for the period 9 September 2017 onwards in the interim amount of $36, excl. GST ($39, incl. GST) and disbursements and that the Liquidators be authorised to raw such fees from time to time as they are accrued up to this amount. If this limit is exhausted, the Liquidators will seek further fee approval from a committee of inspection, if any, creditors, or the court." Creditors are advised that they have the right to obtain further information regarding the Administrators' and the Liquidators' remuneration by advising this office in writing. Creditors are advised that a remuneration information sheet is available at httd://www,asic.qov.au/infosheets. Part 7: Remuneration recoverable from external sources To date we have not received any remuneration from external sources such as the Department of Education, Employment and Workplace Relations or the Australian Securities and Investments Commission. Part 8: Disbursements Disbursements are divided into three types: A, B1, B2. A B1 disbursements are all externally provided professional services and are recovered at cost. An example of an A disbursement is legal fees. disbursements are externally provided non-professional costs such as travel, accommodation and search fees. B1 disbursements are recovered at cost.

49 B2 disbursements are internally provided non-professional costs such as photocopying and document storage. B2 disbursements are charged at cost except for photocopying, printing and telephone calls which are charged at a rate which is intended to recoup both variable and fixed costs. Creditor approval for the payment of disbursements is not required. However, the Administrators must account to creditors and creditors have the right to question the incurring of disbursements and can challenge disbursements in court. I have undertaken a proper assessment of disbursements claimed in accordance with the law and applicable professional standards. I am satisfied that the disbursements claimed are necessary and proper. Basis of disbursement claim: Disbursements Classification Rate (excl. GST) Amount $ Travel B1 At cost Mail Redirect B1 At cost ASIC Insolvency Notice Total B1 At cost Part 9: Summary of receipts and payments A summary of receipts and payments in the Administration is attached to the Report to Creditors dated 31 August Part 10: Queries Should you have any queries in relation to matters outlined in this remuneration report, please contact Mr Scott Norris of this office on (02) or at SNorris@bcr.bentleys.com.au. Part 11: Information sheet The Australian Securities and Investments Commission have prepared an information sheet for creditors providing guidance on approving the remuneration of an external Administrator. The information sheet titled 'Approving Fees: A Guide for Creditors' can be located at

50 Part 12: Initial advice to creditors Remuneration methods There are four basic methods that can be used to calculate the remuneration charged by an insolvency practitioner. They are: Method chosen 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 practitioner's fee is structured to be contingent on a particular outcome being achieved. Given the nature of this Administration we propose that our remuneration be calculated on time based / hourly rates. This is because: > It ensures that creditors are only charged for work that is performed as time is recorded and charged in six minute units. > It is not possible to estimate with certainty the total amount of fees necessary to complete all tasks required in this Administration. Explanation of hourly rates as at 1 July 2016 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.

51 The most current rates are outlined in the table below. Classification Rate Guide to Level of Insolvency Experience Partner 615 Registered Liquidator/Trustee. Partner bringing his/her specialist skills to administrations and/or insolvency tasks. Associate Director/ Principle Typically CA or CPA qualified with in excess of 10 years' experience on insolvency 550 matters with a number of years at manager level. Specialist industry knowledge who assists the appointee with all facets of administrations. Senior Manager 490 Manager 450 Supervisor 390 Senior Senior Intermediate Intermediate Typically qualified. 8+ years' experience. Well-developed technical and commercial skills, bringing additional specialist skills to administrations and/or insolvency tasks. Typically Qualified. 6-8 years' experience. Well-developed technical and commercial skills. Planning and control of all administrations and/or insolvency tasks. Typically qualified. 4-7 years' experience. Co-ordinates planning and control of medium to larger administrations and/or insolvency tasks. Typically graduate/qualified. 2-4 years' experience. Required to control the fieldwork on administrations and/or insolvency tasks. Typically graduate. 1-2 years' experience. Required to control the fieldwork on Administrations and/or Insolvency tasks. Typically graduate. Up to 2 years' experience. Required to control the fieldwork on small administrations and/or insolvency tasks and assist with fieldwork on medium to large administrations and/or insolvency tasks. Typically undergraduate. Up to 2 years' experience. Required to assist in day to day fieldwork of administrations and/or insolvency tasks under the supervision of more senior staff. Support 170 Appropriate skills. Junior 90 Appropriate skills including machine usage.

52 Annexure F: Summarised Receipts & Payments

53 Summarised Receipts & Payments Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) (Administrators Appointed) Transactions From 04 August 2017 To 31 August 2017 Account Net GST Gross Sundry Debtors (B) Cash at Bank $12, $182, $0.00 $12, $0.00 $182, Total Receipts (inc GST) $194, $0.00 $194, Total Payments (inc GST) $0.00 $0.00 $0.00 Balance in Hand - By Bank Account 212 Cheque Account 194, $194,701.91

54 Annexure G: Notice of Meeting

55 FORM 529 CORPORATIONS ACT 2001 Section 439A Subregulation (6) NOTICE OF MEETING OF CREDITORS ALFRED ANGELO (AUSTRALIA) PTY LTD (ADMINISTRATORS APPOINTED) ACN NOTICE is given that a meeting of the creditors of the company wiil be held at the offices of Bentieys Corporate Recovery Pty Ltd, Level 3, 1 Castiereagh Street Sydney NSW 2000 on 8 September 2017 at 11:00 am. AGENDA 1. To receive a Statement about the company's business, property, affairs and financial circumstances. 2. To receive a statement to creditors by one of the directors, explaining the circumstances leading up to the Administration. 3. To receive the report of the Administrator. 4. Questions from creditors. 5. For creditors to resolve: a. that the company execute a Deed of Company Arrangement; or b. that the administration should end; or c. that the company be wound up. 6. To fix the remuneration of the Administrator. 7. If the company is to execute a Deed of Company Arrangement to fix the remuneration of the Deed Administrator. 8. If the company is wound up, to consider appointing a Committee of Inspection. 9. If no Committee is appointed, to fix the remuneration of the Liquidator. 10. If no Committee is appointed, to consider the destruction of the books and records at the conclusion of the winding up. 11. Any other business that may be lawfully brought forward. Telephone conference facilities wiil be available at the meeting. The telephone number to call is (password; ). Please note under Corporations Regulations A: (a) A person, or the proxy or attorney of a person, who wishes to participate in the meeting by telephone must give to the liquidator, not later than the second-last working day before the day on which the meeting is to be held, written statement setting out: (i) the name of the person and of the proxy or attorney (if any); and

56 ALFRED ANGELO (AUSTRALIA) PTY LTD (ADMINISTRATORS APPOINTED) Page 2 (b) (ii) an address to which notices to the person, proxy or attorney may be sent; and (iii) a telephone number at which the person, proxy or attorney may be contacted; and (iv) any facsimile transmission number to which notices to the person, proxy or attorney may be sent. A person, or the proxy or attorney of a person, who participates in the meeting by telephone must pay any costs incurred by the person, proxy or attorney in participating and is not entitled to be reimbursed for those costs from the assets of the company. Proxies to be used at the meeting should be lodged at the office of the Administrator by 4.00pm on the day prior to the meeting. A creditor can only be represented by proxy or by an attorney pursuant to corporations Regulations and (inclusive) and if a body corporate by a representative appointed pursuant to Section 250D. In accordance with Regulation (1) of the Corporations Regulations, creditors will not be entitled to vote at this meeting unless they have previously lodged particulars of their claim against the company in accordance with the Corporations Regulations and that clause has been admitted for voting purposes wholly or in part by the voluntary administrator. n/se DATED thls c jf day of August ^atfierine E 'bsrnet Joint and Several Administrator Bentleys Corporate Recovery Pty Ltd GPO Box 1466 SYDNEY NSW 2001

57 Annexure H: Appointment of Proxy Form

58 Annexure I: Formal Proof of Debt ^ Bentleys* THINKING AHEAD \ KRESTON A member of Bentleys, a network of independent accounting firms located throughout Australia, New Zealand and China that trade as Bentleys. Ali members of the Bentleys Network are affiliated only and are separate iegai entities and not in Partnership. Liability limited by a scheme approved under Professional Standards Legislation. Accountants Auditors Advisors

59 FORM 532 CORPORATIONS ACT 2001 Regulation APPOINTMENT OF PROXY CREDITORS MEETING ALFRED ANGELO (AUSTRALIA) PTY LTD (ADMINISTRATORS APPOINTED) A.C.N (the Company) *l/*we (1) of a creditor of Alfred Angelo (Australia) Pty Ltd (Administrators Appointed), appoint (2) or in his or her absence as *my / our *general / special proxy to vote at the meeting of creditors to be held at 11:00am on Friday 8 September 2017 (AEST) or at any adjournment of that meeting. (3) Resolution For Against Abstain Resolution 1 - Current Administrators' Remuneration: "That the remuneration of the Administrators, their partners and staff be calculated on a time basis at the hourly rates charged by Bentleys Corporate Recovery and be approved for the period 4 August 2017 to 24 August 2017 inclusive in the fixed amount of $45, excl. GST ($50, incl. GST) plus disbursements and that the Administrators be authorised to draw fees up to this amount at their discretion." a a Resolution 2 - Future Administrators' Remuneration: "That the remuneration of the Administrators, their partners and staff be calculated on a time basis at the hourly rates charged by Bentleys Corporate Recovery and be approved for the period 25 August 2017 to 8 September 2017 inclusive in the fixed amount of $13,500 excl. GST ($14,850 incl. GST) plus disbursements and that the Administrators be authorised to draw fees up to this amount at their discretion." Resolution 3 - Future of the Company: The Company be placed in Liquidation "That the Company be placed into Voluntary Liquidation and that Katherine Elizabeth Barnet and Hugh Armanis be appointed Joint and Several Liquidators of the Company."

60 Resolution For Against Abstain Resolution 4 - Future Liquidators' Remuneration (if appointed) "That the remuneration of the Liquidators, their partners and staff be calculated on a time basis at the hourly rates charged by Bentleys Corporate Recovery and be approved for the period 9 September 2017 onwards in the Interim amount of $36, excl. GST ($39, Incl. GST) and disbursements and that the Liquidators be authorised to raw such fees from time to time as they are accrued up to this amount. If this limit is exhausted, the Liquidators will seek further fee approval from a committee of Inspection, if any, creditors, or the court." Resolution 5 - Appointment of a Committee of Inspection: "That subject to the Company being placed in Voluntary Liquidation, a Committee of Inspection be appointed." Resolution 6 - Destruction of Books and Records: "That subject to obtaining the approval from the Australian Securities and Investments Commission pursuant to Section 542(4) of the Corporations Act 2001 the books and records of the Company and of the Joint and Several Liquidators be disposed of by the Joint and Several Liquidators six months after the dissolution of the Company." DATED this day of 2017 Signature

61 CERTIFICATE OF WITNESS This certificate is to be completed only if the person giving the oroxv is blind or incapable of writing. The signature of the creditor, contributory, debenture holder or member must not be witnessed by the person nominated as proxy. I. of certify that the above instrument appointing a proxy was completed by me in the presence of and at the request of the person appointing the proxy and read to him or her before he or she signed or marked the instrument. Dated: Signature of Witness; Description: Place of Residence: (D (2) (3) Strike out if inapplicable If a firm, strike out "I" and set out the full name of the firm. Insert the name, address and description of the person appointed. If a special proxy add the words "to vote for" or the words "to vote against" and specify the particular resolution.

62 FORM 535 CORPORATIONS ACT 2001 Subregulation (2) FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM) ' ALFRED ANGELO (AUSTRALIA) PTY LTD (ADMINISTRATORS APPOINTED) AON To the Administrator of Alfred Angelo (Australia) Pty Ltd (Administrators Appointed) (Subject to Deed of Company Arrangement) This is to state that the company was, on 4 August 2017 ^ and still is, justly and truly indebted to (2) dollars and for cents. Particulars of the debt are: Date Consideration 13 ' Amount GST Remarks' 4 ' $ included $ To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or received any manner of satisfaction or security for the sum or any part of it except for the following:' 5 ' 3.' 6 '* 3.' 6 '* 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, still remains unpaid and unsatisfied. I am the creditor's agent authorised in writing to make this statement in writing. I know that the debt was incurred and for the consideration stated and that the debt, to the best of my knowledge and belief, still remains unpaid and unsatisfied. DATED this day of 2017 Signature of Signatory NAME IN BLOCK LETTERS Occupation Address See Directions overleaf for the completion of this form 1 nominate to receive electronic notification of notices or documents in accordance with section 600G of the Corporations Act 2001 at the following address; address:

63 ALFRED ANGELO (AUSTRALIA) PTY LTD (ADMINISTRATORS APPOINTED) (ADMINISTRATORS APPOINTED) Page 2 Directions Strike out whichever is inapplicable. (1) Insert date of Court Order in winding up by the Court, or date of resolution to wind up, if a voluntary winding up. (2) Insert full name and address (including ABN) 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. (3) Under "Consideration" state how the debt arose, for example "goods sold and delivered to the company between the dates of ", "moneys advanced in respect of the Bill of Exchange". (4) Under "Remarks" include details of vouchers substantiating payment. (5) Insert particulars of all securities held. Where the securities are on the property of the company, assess the value of those securities. If any bills or other negotiable securities are held, specify them in a schedule in the following form: Date Drawer Acceptor Amount Date Due $ $ (6) If proof is made by the creditor personally, strike the two (2) paragraphs numbered 3. Annexures A. If space provided for a particular purpose in a form is insufficient to contain all the required information in relation to a particular item, the information must be set out in an annexure. B. An annexure to a form must: (a) (b) have an identifying mark; and be endorsed with the words: i) "This is the annexure of (insert number of pages) pages marked (insert an identifying mark) referred to in the (insert description of form) signed by me/us and dated (insert date of signing): and (c) be signed by each person signing the form to which the document is annexed. C. The pages in an annexure must be numbered consecutively. D. If a form has a document annexed the following particulars of the annexure must be written on the form: (a) (b) the identifying mark; and the number of pages. A reference to an annexure includes a document that is with a form.