KS Contractors Pty Ltd (In Liquidation) ACN ( the Company )

Transcription

1 KS Contractors Pty Ltd (In Liquidation) ACN ( the Company ) Liquidator s Statutory Report to Creditors Thursday, 5 July 2018 Cameron Crichton Liquidator T (07) E Cameron.Crichton@au.gt.com

2 Introduction I refer to my initial correspondence to creditors dated 3 May 2018 in which I advised you of my appointment as Liquidator on 6 April 2018 and your rights as a creditor in the liquidation. The purpose of this report is to: Provide you with an update on the progress of the liquidation; Advise you of the likelihood of a dividend being paid in the liquidation; and Advise you that the liquidation will be completed in approximately 9 12 months. I am also seeking for you to consider my detailed remuneration approval report and consider proposals to approve my remuneration, disbursements and for approval of early destruction of the Company s books and records. I have relied on information provided from numerous sources to prepare this report, including: Discussions with the Company s Director, Kevin John Sergiacomi; Discussions with the Company s primary customer, Barbera Farms Pty Ltd; Discussions with the Company s bookkeeper; Information available from public sources, such as the Australian Securities and Investments Commission ( ASIC ), the Australian Business Register ( ABR ) and the Personal Property Securities Register ( PPSR ); and A review of the Company's books and records provided to date. Whilst I have no reason to doubt the accuracy of any information, I have not performed an audit and reserve the right to alter my conclusions, should the underlying data prove to be inaccurate or change materially from the date of this report. Company Background The Company was incorporated on 11 May 2011 and traded from 84 Blairs Road, Sharon, Bundaberg. On appointment, the Company was the Trustee of the KS Family Trust (the Trust ). Due to the insolvency of the Company, it was vacated from its role as Trustee. I obtained legal advice on this issue and it was considered that reappointing the Company as Trustee of the Trust would simplify dealing with the Trust assets and creditors. The Director (as beneficiary of the Trust) assisted in affecting the reappointment of the Company as Trustee of the Trust. The Company operated a labour hire business and provided staff to its sole customer, Barbera Farms Pty Ltd, who operated a farm in Bundaberg picking fruit and vegetables. The Company appears to have employed staff on a casual basis and staff appear to have been primarily non-residents undertaking farming work. The Company appears to have had a high volume of staff turnover and over the course of its trading history, employing c1,300 employees over the years. As the Company provided labour hire services, it did not hold any significant chattel assets other than a Ford Ranger Utility financed from Toyota. The Company s primary asset was outstanding trade receivables due from Barbera Farms Pty Ltd.

3 Causes of the Company s Failure The Director advised that the reason for the failure of the business was that Barbera Farms Pty Ltd did not discharge an outstanding debt of c$435k. I understand that Barbera Farms has historically encountered its own financial difficulties and in 2011 went through a receivership process. As mentioned above, the Company provided labour hire services to its customer. The business model of the Company was to pay its employees an hourly rate. The Company generated its revenue based on the quantity of fruit picked by the workers it provided to the farm. Depending on the amount of fruit picked by the workers, the revenue generated by the employees was not necessarily sufficient to cover the costs of the labour being provided. Having regard to the above, the Company appears to have incurred trading losses where the level of fruit picked was not of a sufficient level to meet the employee costs, the result being that it was unable to discharge its employee entitlement (such as superannuation) and statutory debts (such as GST, income tax and payroll tax) that were accruing as they fell due. My review of the Company s financial records suggest that while Barbera s delay in payment was a significant contributor to the Company s failure, underlying trading losses appear to be the primary driver behind the failure of the Company. Update on the progress of the liquidation Trading on appointment On appointment, the Company was trading and providing services to Barbera Farms Pty Ltd. I engaged with the Director to undertake an immediate assessment of the trading position and the viability to continue going forward. Following a number of conversations with the Director it was decided to continue to trade for a limited time for the following reasons: Trading on would facilitate collection of the c$50,000 of debtors outstanding for the two week trading period prior to my appointment (which has been collected in full); Employees were on-site at Barbera Farms providing services and any disruption to services could result in an off-set claim by Barbera Farm Pty Ltd against the Company for the outstanding debt of c$435k; Initial discussions with the Director indicated that trading was profitable. Accordingly, I considered that it was appropriate to continue to trade the business on for a limited period. Trading ceased on 24 April 2018 when Barbera Farms Pty Ltd took on the responsibility for employing pickers for their farm directly.

4 Assets and liabilities The Director of the Company is required to complete and provide to the Liquidator a statement about the Company's business, property, affairs and financial circumstances, also known as the Report as to Affairs ( RATA ). The RATA is a snapshot in time as at the date of my appointment of the assets and liabilities of the Company, disclosing book values and the Director s opinion on the estimated realisable value ( ERV ) for assets. On 11 April 2018, a written request was issued to the Director to complete the RATA for the Company. The RATA was subsequently provided to my office on 3 May 2018 and included in my initial advice to creditors. Below is an analysis of the RATA provided by the Director and a comparison to the assets and liabilities of the Company identified through my review of the company records and public database searches. Assets Director's Book Value Director's ERV Liquidator's ERV Debtors 485, ,060 $435,060 Cash at Bank 101, , ,825 Property, Plant and Equipment 12,000 Nil 27,000 Total Assets 598, ,885 $563,885 Liabilities Amounts Payable in Advance of Secured Creditors Nil Nil Nil Amounts owing to Secured Creditors Nil Nil 12,000 Amounts owing to Preferential Creditors Nil Nil Unknown Amounts owing to Partly Secured Creditors Nil Nil Nil Amounts owing to Unsecured Creditors 662, , ,272 Total Creditors 662, ,529 Unknown Total Surplus/(Deficiency) (63,644) (75,644) Unknown Notes: 1. The preferential creditors amounts has been marked Unknown as this has not been correctly accounted for in the Company s records nor has it yet been quantified. I understand this debt is likely in excess of $350,000.

5 Cash at bank The Company holds a bank account with Westpac Banking Corporation with a balance of c$100,000, which it holds in its capacity as Trustee of the Trust. I am currently in the process of confirming the Company s continuing role as Trustee of the Trust to Westpac Banking Corporation and expect recovery of the funds shortly. Debtors The Reports as to Affairs (RATA) completed by the Director stated that the Company held several sundry debtor accounts, all which the Director deemed to be realisable. These were from three separate debtors, Barbera Farms, Barbera Fresh and MBP Farms (together Barbera Farms ), although I understand that all three debtors are effectively the same company. The total outstanding debt is c$435k. I have conducted a review of the supporting information for the debtors and initiated correspondence with the solicitor for Barbera Farms for collection of the outstanding debt. My review so far has not identified any basis for dispute of the debts owed. I will continue seek recovery of the debts from Barbera Farms and will take further steps, including initiating legal action, if required. Initial Asset Searches On appointment, I conducted Personal Property Security Registration ( PPSR ), land title and vehicle registration searches against the Company. These searches identified one asset associated with the Company, a Ford Ranger. The director has submitted an offer to purchase the vehicle for $22,000. A Redbook valuation of the vehicles indicates that the potential valuation of the vehicle is $25,500 to $28,500. I am currently seeking feedback from my sales agents, Grays Online, on the offer and am mindful of the costs associated with repossessing and selling the vehicle. If the offer makes commercial sense, I will take steps to finalise it. I note that the outstanding debt associated with the vehicles is c$12,000, which will be remitted to the secured creditor from any sale.

6 Receipts and Payments to date A summary of the receipts and payments account as at 5 July 2018 is as follows: $ $ Income Sales 95,189 Accounts Receivable (Pre-Appointment) 50,745 Total income 145,935 Expenses Wages and salaries (68,809) Insurance (446) Total expenses (69,254) Cash on hand 76,680 Costs incurred not yet discharged GST payable (8,605) Superannuation payable (6,995) PAYG payable (12,982) Total costs incurred not yet discharged (28,582) Adjusted cash on hand 48,098 Note: adjusted cash on hand does not include a provision for liquidator s time incurred in realising the assets of the Company or the costs of administering the liquidation. Investigations and possible recovery actions Investigations undertaken I have commenced my initial investigations into the affairs of the Company prior to my appointment and any potential recovery actions that may be available to the Liquidator to pursue. To date, I have undertaken investigations regarding the causes behind the Company s failure and: Director s obligation to maintain adequate books and records; Possible breaches of director s duties; Insolvent trading; and Voidable transactions. My findings of these investigations are detailed below. Given the limited time that has passed in the liquidation, and that further investigations may be undertaken, the below findings are preliminary and may be subject to change.

7 Insolvent trading I have reviewed both the cash flow and balance sheet tests of insolvency and have reasons to believe the Company likely became insolvent at least 6 9 months prior to my appointment based on the following factors: Non-payment of statutory debt; Unprofitable trading; and Inability to collect outstanding debtor balances. Further analysis of the Company s records is required to establish a definitive date of insolvency and the total debts incurred since that date that could form an insolvent trading claim against the Director. An insolvent trading claim is predicated by the financial position and ability of the Director to meet such a claim. In this regard, I have conducted property searches against the Director and have identified two properties (a private dwelling and a development site) in his name. I have not confirmed if either of these assets hold any equity. I will further consider the merits and strength of any potential insolvent trading claim in due course. Voidable transactions My preliminary investigations have uncovered a potential preference claim against the ATO, in relation to payments totalling c$55,000 within the 6 months prior to the date of liquidation. From the Company s records, I have identified that the ATO initiated recovery action against the Company in relation to its outstanding tax obligations and a repayment plan of those debts was agreed. Accordingly, the ATO may have been aware of the Company s financial difficulties and possible insolvency. I may submit a preference claim to the ATO once I have received the bank statements from Westpac and confirmed the quantum and circumstances of the payments that were made. Related party debts I have identified two loans to beneficiary parties included in the financial statements of the Trust: A debt due to the Company totalling c$87,000 from the Director; and A debt due to the Company totalling c$37,000 from Sandra Miles. I am advised that Sandra Miles is the ex-partner of the Director. Demand letters will be issued to these debtors to recover the funds owed. Unreasonable director related transactions My investigations to date have identified that the Director may have taken drawings totalling c$270,000 in the 15 months prior to my appointment. A review of the Company s bank statements is required to confirm the quantum of the funds drawn by the Director. If funds totalling c$270,000 have been drawn, this may constitute an unreasonable director related transaction pursuant to s588fda of the Corporations Act 2001 (Clth).

8 Further investigations including a review of the Company s bank statements is required to confirm the exact balance of the drawings taken by the Director. Further action for recovery of any potential unreasonable director related transaction will be assessed and taken if required upon receipt and review of the bank statements from Westpac. Further inquiries to be undertaken Further investigations will be undertaken with respect to: 1. Confirming a definitive date the Company became insolvent and considering any potential insolvent trading action claim; 2. Seeking recovery of the potential ATO preference claim; 3. Recovering the related party debts; and 4. Recovering any potential unreasonable director related transaction. I will provide a further update to creditors in due course. Once all investigations have been concluded, we will lodge a report pursuant to Section 533 of the Corporations Act (2001) with ASIC, which will occur prior to 6 October Meetings held To date, I have not been required to hold and therefore have not held any meetings of the Company s creditors. Likelihood of a dividend I expect to be able to pay dividend to creditors in this liquidation, however, I am currently unable to confirm the quantum on any dividend. I am unable to provide an estimated dividend rate for the following reasons: The potential recovery of the outstanding debt due from Barbera Farms is unknown; The infancy of my appointment and investigations means that I am unable to assess the likely quantum of recovery for the numerous issues identified; and I have not been able to quantify the priority creditor claims, primarily superannuation. When I am ready to declare a dividend, any creditor whose claim has not yet been admitted will be contacted and requested to submit a proof of debt. This formalises your claim in the liquidation and is used to determine all claims against the company. At this time, I anticipate issuing my intention to declare a dividend within 6 9 months.

9 Cost of the liquidation Attached in Annexure A is a detailed report on my remuneration, called a Remuneration Approval Report. I am unable to pay my remuneration without the approval of creditors or the Court. I propose to have my remuneration and internal disbursements approved by a proposal without a meeting. Information about passing resolutions without a meeting and a Notice of Proposal to Creditors is enclosed at Annexure B. I request that you return to this office the completed Notice of Proposal to Creditors by Friday, 3 August As previously advised in my initial information to creditors, I had estimated that my total remuneration for the external administration would be $30,000 - $50,000 excluding GST and outlays. Due to the complexities of the liquidation, I now expect that the total cost will be in the region of $60,000 - $75,000 for the following reasons: The protracted nature of dealing with and realising the debt owed from Barbera Farms; Resolving the Trust issues with Westpac Banking Corporations; The likely requirement to undertake a superannuation review for the estimated 1,500 former employees of the Company; and Finalising the number of investigation issues identified. I am also seeking creditor approval for the early destruction of the Company s books and records by way of a proposal without meeting. What happens next in the liquidation? I will proceed with the liquidation, including: Complete my investigations into the Company s affairs; Recover the remaining assets of the Company; Undertake a distribution to the creditors of the Company, should funds permit; and Complete my reporting to the corporate insolvency regulator, ASIC. I expect to have completed the liquidation within 12 months. Compliance with best practice I confirm that this report complies with the requirements in the Insolvency Practice Rules ( IPR ), specifically IPR 70-40, as well as the statements of best practice issued by the Australian Restructuring Insolvency and Turnaround Association ( ARITA ) with regard to content of the Statutory Report by Liquidator.

10 Where can you get more information? You can access information which may assist you on the following websites: ARITA at and ASIC at (search for insolvency information sheets ). Should you have any queries with respect to the above, you may also contact Kegan Nash of my office on or via on kegan.nash@au.gt.com. There is also information about this liquidation on my firm s website at Dated this 5 th of July 2018 Cameron Crichton Liquidator Annexures Annexure A Remuneration approval report Annexure B Notice of proposal to creditors Annexure C Form 535 (proof of debt form)

11 Annexure A Remuneration approval report

12 Remuneration Approval Report KS Contractors Pty Ltd (In Liquidation) ACN ( the Company ) This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of my remuneration for undertaking the Court Liquidation of KS Contractors Pty Ltd. This report has the following information included: Remuneration Approval Report 1 Part 1: Declaration 2 Part 2: Executive Summary 2 Part 3: Remuneration Remuneration claim resolutions Details of remuneration Likely impact on dividends 4 Part 4: Disbursements Internal disbursement claim Future basis of internal disbursements 5 Part 5: Queries 5 Part 6: Approval of remuneration and internal disbursements 5 Schedule A Resolution 1: Table of major tasks for remuneration 7 Schedule B Resolution 2: Table of major tasks for remuneration 9 Schedule 3 Resolution 3: Disbursements 11 ABN ACN Grant Thornton refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another s acts or omissions. In the Australian context only, the use of the term Grant Thornton may refer to Grant Thornton Australia Limited ABN and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

13 Part 1: Declaration I, Cameron Crichton of Grant Thornton Australia Limited have undertaken a proper assessment of this remuneration claim for my appointment as Liquidator of KS Contractors Pty Ltd in accordance with the law and applicable professional standards. I am satisfied that the remuneration claimed is in respect of necessary work, properly performed, or to be properly performed, in the conduct of the Court Liquidation. Part 2: Executive Summary The total remuneration for this appointment is estimated to be $75, (excluding GST) and current disbursements incurred totalling $1, Remuneration currently claimed is summarised below: Period Report Reference Amount (ex GST) Resolution 1 Remuneration: 06 April 2018 to 29 June 2018 Sch 1 $26, Resolution 2 Remuneration: 30 June 2018 to finalisation Sch 2 $48, Resolution 3 - Disbursements: 06 April 2018 to 29 June 2018 Sch 3 $1, Resolution 4: Future disbursements Sch 4 Unknown TOTAL remuneration and disbursements claimed $76, Approval for internal disbursements is also being sought for the liquidation. The basis for these disbursements is outlined in part 4 of this report. Please refer to report section references detailed in the above table for full details of the calculation and composition of the remuneration approval sought. 2.1 Remuneration Resolutions Resolution 1 - Remuneration: 06 April June 2018 The remuneration of the Liquidator and any of the Liquidator s partners or employees in performance of services performed from 06 April 2018 to 29 June 2018 to be fixed at $26, (excluding GST) plus any out of pocket expenses incurred. Approval is given for such amounts approved to be drawn within four weeks of the resolution being passed. Resolution 2 Remuneration: 30 June 2018 to Finalisation That the remuneration of the Liquidator from 30 June 2018 to Finalisation is determined at a sum equal to the costs of time spent by the Liquidator, and his partners and staff, calculated in accordance with the Liquidator s firm s hourly rates that will be increased at a rate of 3% at 1 July each year, up to a capped amount of $48, exclusive of GST and outlays, and that the Liquidator can draw the remuneration on a monthly basis or as required, from assets of the Company. This remuneration amount is based upon a preliminary estimate at the time of my appointment. In the event that my time costs exceed this amount I may seek further approval from creditors in the future. 2.2 Disbursement Resolutions Resolution 3: Disbursements 06 April 2018 to 29 June 2018 The disbursements of the Liquidator from 06 April 2018 to 29 June 2018 to be fixed at the amount of $1, (excl. GST). Approval is given for such amounts approved to be drawn from the assets of the Company.

14 Resolution 4: Disbursements: 30 June 2018 to finalisation Future disbursements provided by firm will be charged to the liquidation on the following basis and that the Liquidators can discharge those disbursements from the assets of the Company. Internal disbursements Courier Postage (large) Postage (small) Fax (interstate) Fax (local) Staff vehicle use Rates applicable for financial year ending 30 June 2019 Rate (excl. GST) At cost $1.91 / page $0.99 / page $2 / page $1 / page $0.66 / km Part 3: Remuneration 3.1 Remuneration claim resolutions I will be seeking approval of the following resolution to approve my remuneration. Details to support the resolution are included in section 3.2 and in the attached Schedule. 3.2 Details of remuneration The basis of calculating the remuneration claims are summarised below and the details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule 1. Resolution 1 from 06 April 2018 to 29 June 2018 The below table sets out the costs for the major tasks performed by the Liquidator and his staff for the period 06 April 2018 to 29 June 2018 which is the basis of the Resolution 1 claim. More detailed descriptions of the tasks likely to be performed within each task area, matching the amounts below, are contained in Schedule 1. Resolution 2 from 30 June 2018 to finalisation: The below table sets out the expected costs for the major tasks likely to be performed by the liquidator and his staff for the period 30 June 2018 to finalisation which is the basis of the Resolution 2 claim. More detailed descriptions of the tasks likely to be performed within each task area, matching the amounts below, are contained in Schedule B. Task Area Total ($) Administration Assets Creditors Investigations Statutory Dividends Total estimate $48, $2, $15, $10, $9, $2, , GST $4, Total (Incl. GST) $53,350.00

15 3.3 Likely impact on dividends The Corporations Act sets the order for payment of claims against the company and it provides for remuneration of the Liquidator to be paid in priority to other claims. This ensures that when there are sufficient funds, the Liquidator receives payment for the work done to recover assets, investigate the company s affairs, report to creditors and ASIC and distribute any available funds. Even if creditors approve my remuneration, this does not guarantee that I will be paid, as I am only paid if sufficient assets are recovered. Any dividend to creditors will also be impacted by the amount of assets that I am able to recover and the amount of creditor claims that are admitted to participate in any dividend, including any claims by priority creditors such as employees. The monies recovered and realised in the Liquidation to date are sufficient to cover the Liquidation costs to date. Currently, I am unable to confirm if there will be sufficient funds to pay a dividend to unsecured creditors. If I do declare a dividend, any creditor whose claim has not yet been admitted will be contacted 3.4 Remuneration recovered from external sources To date there has been no remuneration recovered from any external sources and I am not aware of any remuneration recoverable from any external sources. Part 4: Disbursements Disbursements are divided into three types: Externally provided professional services - these are recovered at cost. An example of an externally provided professional service disbursement is legal fees. Externally provided non-professional costs - these are recovered at cost. Examples of externally provided nonprofessional costs are travel, accommodation and search fees. Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis. Details of the basis of recovery of each of these costs is discussed below. I have undertaken a proper assessment of disbursements claimed for KS Contractors Pty Ltd in accordance with the law and applicable professional standards. I am satisfied that the disbursements claimed are necessary and proper. I will be seeking creditor approval to pay my internal disbursements from creditors. 4.1 Internal disbursement claim The following internal disbursements have been claimed by my firm for the period from 06 April 2018 to 29 June Approval of these disbursements from creditors in the amount of $1, is being sought. Internal Disbursements until 29 June 2018 Amount ($) ABR Search Mail Out 1, ,533.52

16 4.2 Future basis of internal disbursements Future disbursements provided by my firm will be charged to the administration on the following basis: Internal disbursements Courier Postage (large) Postage (small) Fax (interstate) Fax (local) Staff vehicle use Rates applicable for financial year ending 30 June 2019 Rate (excl. GST) At cost $1.91 / page $0.99 / page $2 / page $1 / page $0.66 / km Part 5: Queries If you have any queries in relation to the information in this report, please contact Kegan Nash of my office on or alternatively by at kegan.nash@au.gt.com. You can also access information which may assist you on the following websites: ARITA at ASIC at (search for insolvency information sheets ). Part 6: Approval of remuneration and internal disbursements In summary, approval of the following proposals is being sought: Resolution 1: Resolution 2: The remuneration of the Liquidator and any of the Liquidator s partners or employees in performance of services performed from 06 April 2018 to 29 June 2018 to be fixed at $26, (excluding GST) plus any out of pocket expenses incurred. Approval is given for such amounts approved to be drawn within four weeks of the resolution being passed. That the remuneration of the Liquidator from 30 June 2018 to Finalisation is determined at a sum equal to the costs of time spent by the Liquidator, and his partners and staff, calculated in accordance with the Liquidator s firm s hourly rates that will be increased at a rate of 3% at 1 July each year, up to a capped amount of $48, exclusive of GST and outlays, and that the Liquidator can draw the remuneration on a monthly basis or as required, from assets of the Company. This remuneration amount is based upon a preliminary estimate at the time of my appointment. In the event that my time costs exceed this amount I may seek further approval from creditors in the future. Resolution 3: Resolution 4: The disbursements of the Liquidator from 06 April 2018 to 29 June 2018 to be fixed at the amount of $1, (excl. GST). Approval is given for such amounts approved to be drawn from the assets of the Company. Future disbursements provided by firm will be charged to the liquidation on the following basis and that the Liquidators can discharge those disbursements from the assets of the Company. Enclosed is a Notice of Proposal to creditors form for the above resolutions. I would be grateful if you would complete the form and return it to this office by no later than Friday, 3 August The form can be returned by way of: kegan.nash@au.gt.com Facsimile: Mail: GPO Box 1008, Brisbane QLD 4001

17 Yours Faithfully CAMERON CRICHTON LIQUIDATOR Thursday, 5 July 2018

18 Schedule A Resolution 1: Table of major tasks for remuneration Task Area General Description Includes Initlal notification to creditors Correspondence Statutory Report to creditors Administration 19.8 hrs $5, (excl GST) Document maintenance/file review/checklist Insurance Bank account administration Planning / Review With other appointment holders Filing of documents File reviews Updating checklists Identification of potential issues requiring attention of insurance specialists Correspondence with insurer regarding initial and ongoing insurance requirements Reviewing insurance policies Correspondence with previous brokers Preparing correspondence opening and closing accounts Requesting bank statements Bank account reconciliations Correspondence with bank regarding specific transfers Discussions regarding status of administration All tasks associated with realising a charged asset Assets subject to specific charges Investigations into PPSR charge holdings Dealings with PPSR charge holders regarding issues with realising assets Negotiations with PPSR charge holders regarding release of security interests Assets 26.1 hrs $9, (excl GST) Creditors 21.7 hrs $4, (excl GST) Debtors Other Assets Other Creditor Enquiries, Requests & Directions Secured creditor reporting Obtain legal advice from solicitors regarding PPSR charges Correspondence with debtors Reviewing and assessing debtors ledgers Liaising with valuers, auctioneers and interested parties Reviewing asset listings Tasks associated with realising assets Liaising with solicitors Receive and respond to creditor enquiries Maintaining creditor request log Review and prepare initial correspondence to creditors and their representatives Documenting Considering reasonableness of creditor requests Compiling information requested by creditors Notifying PPSR registered creditors of appointment

19 Discussions with PPSR registered creditors Responding to secured creditor s queries Creditor reports Dealing with proofs of debt Shareholder enquiries Preparing Report by Liquidator, meeting and general reports to creditors Receipting and filing POD when not related to a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend Initial day one letters Statutory 13.6 hrs $4,143.50(excl GST) ASIC and statutory reporting ASIC Form 524 and other forms Notification of appointment Preparing BAS Completing group certificates Preparing statutory investigation reports Liaising with ASIC Disclaiming property Preparing and lodging ASIC forms including 505, 524, 911 etc Correspondence with ASIC regarding statutory forms Collection of company books and records Reviewing company s books and records Review and preparation of company nature and history Investigations 5.3 hrs $2, (excl GST) Conducting investigation ASIC reporting Conducting and summarising statutory searches Preparation of comparative financial statements Review of specific transactions and liaising with directors regarding certain transactions Preparation of investigation file Lodgement of investigation with the ASIC Preparing statutory investigation reports Liaising with ASIC Total (excl GST) $26,500.00

20 Schedule B Resolution 2: Table of major tasks for remuneration The below table provides a description of the work undertaken in each major task area for the period from 30 June 2018 to finalisation. Task Area General Description Includes Six monthly administration reviews Document maintenance/file review/checklist Filing of documents File reviews Updating checklists Preparing correspondence opening and closing accounts Bank account administration Requesting bank statements Bank account reconciliations Administration $2, (excl GST) Assets $15,00.00 (excl GST) Creditors $10, (excl GST) ASIC Form 524 and other forms ATO and other statutory reporting Finalisation Planning / Review Books and records / storage Debtors Creditor Enquiries, Requests & Directions Dealing with proof of debts Creditors/Proposal Correspondence with bank regarding specific transfers Preparing and lodging ASIC forms including 505, 524, 911 etc Correspondence with ASIC regarding statutory forms Preparing BAS Notifying ATO of finalisation Cancelling ABN / GST / PAYG registration Completing checklists Finalising WIP Discussions regarding status of administration Dealing with records in storage Sending job files to storage Correspondence with debtors Tasks associated with receiving / collecting funds Receive and respond to creditor enquiries Maintaining creditor request log Review and prepare correspondence to creditors and their representatives Documenting Considering reasonableness of creditor requests Obtaining legal advice on requests Documenting reasons for complying or not complying with requests or directions Compiling information requested by creditors Receipting and filing POD when not related to a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend Reports to creditors

21 Reviewing company s books and records Review of specific transactions and liaising with directors regarding certain transactions Preparation of investigation file Lodgement of s533 report with the ASIC Statutory $2, (excl GST) Dividends $10, (excl GST) Litigation / Recoveries ASIC reporting Lodgement Documentation/ Dealing with creditors Calculating / Reviewing Distribution Preparing brief of solicitors Liaising with solicitors regarding PPSR dispute Preparing statutory investigation reports Liaising with ASIC Lodging creditor meeting minutes Complying with statutory Obligations Receipting and filing POD when related to a dividend Calculating the distribution to creditors Reviewing the calculation and making payment to creditors Total (excl GST) $48,500.00

22 Schedule 3 Resolution 3: Disbursements Disbursement Date Value ($) Narration PO SAI Global ABR Search 20/06/ April KS Contractors Pty Ltd ABR Search 20/06/ PO SAI Global April KS Contractors Pty Ltd ABR Search 20/06/ PO SAI Global April KS Contractors Pty Ltd Mail Out 11/05/ PO Circular - Bank Freeze letters x 18 PO Circular - First Day Documents x 14 Mail Out 11/05/ PO Circular - TO employees x 1381 Mail Out 14/06/ Total

23 Annexure B Notice of proposal to creditors

24 Thursday, 05 July 2018 NOTICE OF PROPOSAL TO CREDITORS KS CONTRACTORS PTY LTD (IN LIQUIDATION) ACN ( the Company ) Proposal for creditor approval The remuneration of the Liquidator and any of the Liquidator s partners or employees in performance of services performed from 06 April 2018 to 29 June 2018 to be fixed at $26, (excluding GST) plus any out of pocket expenses incurred. Approval is given for such amounts approved to be drawn within four weeks of the resolution being passed. Reasons for the proposal and the likely impact on creditors passed The proposal is a request to creditors for approval of my internal disbursements. If my internal disbursements are approved, I will draw these funds from current and future funds available. This will reduce the dividend payable (if any) to creditors of the Company. Failure to approve internal disbursements via circular resolution means that I shall be required to call a meeting of creditors to seek approval of my disbursements. This action will result in additional fees and costs for which I shall seek approval. Vote on proposal Creditors have the option of approving, not approving or objecting to the proposal being resolved without a meeting of creditors. Please select the appropriate Yes, No or Object box referred to below: Yes I approve the proposal No I do not approve the proposal Object I object to the proposal being resolved without a meeting of creditors Your claim against the Company must be admitted for the purposes of voting by the Creditors Voluntary Liquidation for your vote to count. Please select the option that applies: I have previously submitted a proof of debt form and supporting documents I have enclosed a proof of debt form and supporting documents with this proposal form Creditor details Name of creditor: ACN / ABN (if applicable): I am not a related creditor of the Company. I am a related creditor of the Company, relationship:. Address: Name of creditor / authorised person: Signature: Date: Please complete this document and return with any supporting documents by no later than 27 July 2018 for your vote to be counted, by to Kegan Nash at kegan.nash@au.gt.com. If you have any questions please call (07) Completed forms may also be sent by post attention to Kegan Nash at GPO Box 1008, Brisbane QLD 4001, although you should ensure this is sent with sufficient time to arrive by the date the vote closes, which I cannot guarantee.

25 Thursday, 05 July 2018 NOTICE OF PROPOSAL TO CREDITORS KS CONTRACTORS PTY LTD (IN LIQUIDATION) ACN ( the Company ) Proposal for creditor approval That the remuneration of the Liquidator from 30 June 2018 to Finalisation is determined at a sum equal to the costs of time spent by the Liquidator, and his partners and staff, calculated in accordance with the Liquidator s firm s hourly rates that will be increased at a rate of 3% at 1 July each year, up to a capped amount of $48, exclusive of GST and outlays, and that the Liquidator can draw the remuneration on a monthly basis or as required, from assets of the Company. This remuneration amount is based upon a preliminary estimate at the time of my appointment. In the event that my time costs exceed this amount I may seek further approval from creditors in the future. Reasons for the proposal and the likely impact on creditors passed The proposal is a request to creditors for approval of my internal disbursements. If my internal disbursements are approved, I will draw these funds from current and future funds available. This will reduce the dividend payable (if any) to creditors of the Company. Failure to approve internal disbursements via circular resolution means that I shall be required to call a meeting of creditors to seek approval of my disbursements. This action will result in additional fees and costs for which I shall seek approval. Vote on proposal Creditors have the option of approving, not approving or objecting to the proposal being resolved without a meeting of creditors. Please select the appropriate Yes, No or Object box referred to below: Yes I approve the proposal No I do not approve the proposal Object I object to the proposal being resolved without a meeting of creditors Your claim against the Company must be admitted for the purposes of voting by the Creditors Voluntary Liquidation for your vote to count. Please select the option that applies: I have previously submitted a proof of debt form and supporting documents I have enclosed a proof of debt form and supporting documents with this proposal form Creditor details Name of creditor: ACN / ABN (if applicable): I am not a related creditor of the Company. I am a related creditor of the Company, relationship:. Address: Name of creditor / authorised person: Signature: Date: Please complete this document and return with any supporting documents by no later than 27 July 2018 for your vote to be counted, by to Kegan Nash at kegan.nash@au.gt.com. If you have any questions please call (07) Completed forms may also be sent by post attention to Kegan Nash at GPO Box 1008, Brisbane QLD 4001, although you should ensure this is sent with sufficient time to arrive by the date the vote closes, which I cannot guarantee.

26 Thursday, 05 July 2018 NOTICE OF PROPOSAL TO CREDITORS KS CONTRACTORS PTY LTD (IN LIQUIDATION) ACN ( the Company ) Proposal for creditor approval The disbursements of the Liquidator from 06 April 2018 to 29 June 2018 to be fixed at the amount of $1, (excl. GST). Approval is given for such amounts approved to be drawn from the assets of the Company. Reasons for the proposal and the likely impact on creditors passed The proposal is a request to creditors for approval of my internal disbursements. If my internal disbursements are approved, I will draw these funds from current and future funds available. This will reduce the dividend payable (if any) to creditors of the Company. Failure to approve internal disbursements via circular resolution means that I shall be required to call a meeting of creditors to seek approval of my disbursements. This action will result in additional fees and costs for which I shall seek approval. Vote on proposal Creditors have the option of approving, not approving or objecting to the proposal being resolved without a meeting of creditors. Please select the appropriate Yes, No or Object box referred to below: Yes I approve the proposal No I do not approve the proposal Object I object to the proposal being resolved without a meeting of creditors Your claim against the Company must be admitted for the purposes of voting by the Creditors Voluntary Liquidation for your vote to count. Please select the option that applies: I have previously submitted a proof of debt form and supporting documents I have enclosed a proof of debt form and supporting documents with this proposal form Creditor details Name of creditor: ACN / ABN (if applicable): I am not a related creditor of the Company. I am a related creditor of the Company, relationship:. Address: Name of creditor / authorised person: Signature: Date: Please complete this document and return with any supporting documents by no later than 27 July 2018 for your vote to be counted, by to Kegan Nash at kegan.nash@au.gt.com. If you have any questions please call (07) Completed forms may also be sent by post attention to Kegan Nash at GPO Box 1008, Brisbane QLD 4001, although you should ensure this is sent with sufficient time to arrive by the date the vote closes, which I cannot guarantee.

27 Thursday, 05 July 2018 NOTICE OF PROPOSAL TO CREDITORS KS CONTRACTORS PTY LTD (IN LIQUIDATION) ACN ( the Company ) Proposal for creditor approval Future disbursements provided by firm will be charged to the liquidation on the following basis and that the Liquidators can discharge those disbursements from the assets of the Company. Internal disbursements Courier Postage (large) Postage (small) Fax (interstate) Fax (local) Staff vehicle use Rates applicable for financial year ending 30 June 2019 Rate (excl. GST) At cost $1.91 / page $0.99 / page $2 / page $1 / page $0.66 / km Reasons for the proposal and the likely impact on creditors passed The proposal is a request to creditors for approval of my internal disbursements. If my internal disbursements are approved, I will draw these funds from current and future funds available. This will reduce the dividend payable (if any) to creditors of the Company. Failure to approve internal disbursements via circular resolution means that I shall be required to call a meeting of creditors to seek approval of my disbursements. This action will result in additional fees and costs for which I shall seek approval. Vote on proposal Creditors have the option of approving, not approving or objecting to the proposal being resolved without a meeting of creditors. Please select the appropriate Yes, No or Object box referred to below: Yes I approve the proposal No I do not approve the proposal Object I object to the proposal being resolved without a meeting of creditors Your claim against the Company must be admitted for the purposes of voting by the Creditors Voluntary Liquidation for your vote to count. Please select the option that applies: I have previously submitted a proof of debt form and supporting documents I have enclosed a proof of debt form and supporting documents with this proposal form Creditor details Name of creditor: ACN / ABN (if applicable): I am not a related creditor of the Company. I am a related creditor of the Company, relationship:. Address: Name of creditor / authorised person: Signature: Date: Please complete this document and return with any supporting documents by no later than 27 July 2018 for your vote to be counted, by to Kegan Nash at kegan.nash@au.gt.com. If you have any questions please call (07) Completed forms may also be sent by post attention to Kegan Nash at GPO Box 1008, Brisbane QLD 4001, although you should ensure this is sent with sufficient time to arrive by the date the vote closes, which I cannot guarantee.

28 Thursday, 05 July 2018 NOTICE OF PROPOSAL TO CREDITORS KS CONTRACTORS PTY LTD (IN LIQUIDATION) ACN ( the Company ) Proposal for creditor approval That the Liquidator hereby be authorised to destroy the books and records of the Company three months after the date of its deregistration subject to consent of the Regional Commissioner of the Australian Securities and Investments Commission in accordance with Section 542(4) of the Corporations Act Reasons for the proposal and the likely impact on creditors passed The proposal is a request to creditors for approval of my internal disbursements. If my internal disbursements are approved, I will draw these funds from current and future funds available. This will reduce the dividend payable (if any) to creditors of the Company. Failure to approve internal disbursements via circular resolution means that I shall be required to call a meeting of creditors to seek approval of my disbursements. This action will result in additional fees and costs for which I shall seek approval. Vote on proposal Creditors have the option of approving, not approving or objecting to the proposal being resolved without a meeting of creditors. Please select the appropriate Yes, No or Object box referred to below: Yes I approve the proposal No I do not approve the proposal Object I object to the proposal being resolved without a meeting of creditors Your claim against the Company must be admitted for the purposes of voting by the Creditors Voluntary Liquidation for your vote to count. Please select the option that applies: I have previously submitted a proof of debt form and supporting documents I have enclosed a proof of debt form and supporting documents with this proposal form Creditor details Name of creditor: ACN / ABN (if applicable): I am not a related creditor of the Company. I am a related creditor of the Company, relationship:. Address: Name of creditor / authorised person: Signature: Date: Please complete this document and return with any supporting documents by no later than 27 July 2018 for your vote to be counted, by to Kegan Nash at kegan.nash@au.gt.com. If you have any questions please call (07) Completed forms may also be sent by post attention to Kegan Nash at GPO Box 1008, Brisbane QLD 4001, although you should ensure this is sent with sufficient time to arrive by the date the vote closes, which I cannot guarantee.

29 Annexure C Form 535 (proof of debt form)

30 ACN FORM 535 Corporations Act (2001) Subregulation (2) FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM) To the Liquidator of KS Contractors Pty Ltd (In Liquidation) 1. This is to state that the company was on Friday, 6 April 2018 (date of court order in winding up by the Court, or date of resolution to wind up, if a voluntary winding up), and still is, justly and truly indebted to: (full name and address of the creditor and, if applicable, the creditor's partners. If prepared by an employee or agent of the creditor, also insert a description of the occupation of the creditor) for $ and cents. Date Consideration (state how the Debt arose) Amount $ c Remarks (include details of voucher substantiating payment 2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or received any satisfaction or security for the sum or any part of it except for the following: (insert particulars of all securities held. If the securities are on the property of the company, assess the value of those securities. If any bills or other negotiable securities are held, show them in a schedule in the following form). Date Drawer Acceptor Amount $c Due Date *3. I am employed by the creditor and authorised in writing by the creditor to make this statement. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. *3. I am the creditor's agent authorised in writing to make this statement in writing. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied.... Dated Signature Occupation: Address Proof of Debt Reference: *Do not complete if this proof is made by the creditor personally.