GrantThornton. An instinct for growth' To the Creditor as Addressed. 19 July Dear Sir / Madam

Transcription

1 GrantThornton An instinct for growth' To the Creditor as Addressed 19 July 2013 Level 18 King George Central 145 Ann Street Brisbane OLD 4000 GPO Box 1008 Brisbane OLD F E intoqldauglcom W Dear Sir / Madam GLOBAL RULE PTY LTD (IN LIQUIDATION) A.C.N ("the Company") ATF The "Global Rule Trust" I refer to my prior reports to creditors and provide hereunder an update on the status of the liquidation. For ease of reference, this report is set out under the following headings and should be read in conjunction with prior reports issued: I Executive Summary 2 Asset Realisations 3 Investigations Update 4 Receipts and Payments 5 Estimated Return to Creditors 6 Remuneration 7 Meeting of Creditors 8 Future Actions Grant Thornton Australia Limited fees ACt Grant Thornton Australia Limited is a rnnrnher Srrrnatthin Grant Thornton tnternatonot Ltd. Grant Thornton international Ltd and the rroornher tlrrns are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related enhties, delivers its services independently in Australia. Liability limited by a scheme approved under Professional Standards Legislation Out Ref e1Done

2 ' GrantThornton An instinct for growth" Executive Summary As you are aware, I was appointed Liquidator of the Company on 9 June 2011 following an application made by the Australian Securities and Investments Commission ("ASIC"). o Investigations into the affairs of the Company, its directors and Company assets have been completed. In respect to asset recoveries, I have: a. Recovered cash and debtors totalling approximately $200k and $97k respectively; b. Crystallised funds invested in share trading on OptionsXpress of approximately $490k; and c. Sold other assets including a residential unit, motor vehicle and yacht recovering net proceeds of $530; o Assets /recoveries yet to be realised in full/pursued further by me as Liquidator, as outlined in Section 2 of this report, are as follows: d. Synetec Pty Ltd loan; e. Mr Hansen's debtor loan account; and f. The FL & MA Partnership loan account. Mr Hansen is now bankrupt and Mr William John Meywes entered into a Personal Insolvency Agreement on 22 October Accordingly any claim against the Directors for their share of any loan account or insolvent trading must be made under the bankruptcy and H A of Mr Hansen and Mr Meywes, respectively. o The ASIC are continuing their investigations into the affairs of the Company and its directors separately which we have been and will continue to assist with over time. o I anticipate that a dividend of approximately 4 cents in the dollar may be payable by or around 31 December Included in this report is a Notice Inviting Formal Proof of debt or claim. To ensure you are included in the payment of any future dividend, please ensure you provide a completed Form 535 prior to 31 August 2013 along with the supporting documentation outlined in Section 5 of this report. A creditors meeting has been convened for Tuesday, 6 August 2013 to seek the approval of the remuneration of the Liquidator and a further extension to the repayment plan from Synetec.

3 Grantlhornton An instinct for growth' 2 Asset Realisations Loan to Synetec Pty Ltd As previously advised Company books and records identified a loan owing from Synetec Pty Ltd ("Synetec") to Global Rule as at the date of my appointment totalling $100,000. The Director of the Company, Mr Frederick Leslie Hansen, was previously a director and shareholder of Synetec, having resigned on 27 February To date I have received funds totalling $97,598 with the balance yet to be repaid. Whilst I anticipate a full recovery of the balance of the loan amount, being $2,402 by 7 August 2013, as advised by Synetec, I am required to put forward a resolution to creditors at the forthcoming meeting to accept the delayed repayment of this amount. Under the Act, a Liquidator is unable to enter into repayment arrangements that are longer than three months, without creditor approval. Accordingly, at the forthcoming meeting, a resolution will be put to creditors to approve a repayment plan whereby the balance of the funds owing will be repaid prior to 30 November 2013 which is prior to the anticipated date for a dividend distribution. Whilst I expect that the balance of the funds will be paid in the short term, this extended period is requested so that a further meeting will not be required seeking further approval from creditors to extend the repayment date beyond 30 November Loan to Les Hansen As indicated previously, I issued a demand to Mr Hansen for $358,053 for the repayment of a loan account. As Mr Hansen failed to repay, this amount, bankruptcy proceedings were commenced with Mr Hansen being declared bankrupt on 27 February Mr Hansen's trustee in bankruptcy is Mr William John Fletcher of Bentleys Corporate Recovery Pty Ltd. Mr Fletcher's investigations in respect to the assets and affairs of Mr Hansen are continuing. Please refer to Sections 2 and 4 below for further details. Property located at 203/50 Riverwalk Avenue, Robina ("the Property") On 8 August 2012, an auction for the sale of the Property was held at the Titan's Centre of Excellence, Robina. Whilst the Property failed to sell at auction, a contract of sale for $330,000 for the Property was entered into on 24 August Following the payment of outstanding rates and body corporate levies along with realisation costs including commission on the sale of the unit, $301,470 was received into the liquidation bank account.

4 GrantThornton An instinct for growth 2 & 6 Monaco Street, Surfers Paradise As advised in my report to creditors dated 4 April 2102 the registered owners of these two (2) properties are the Director, Mr Frederick Hansen, and his wife Mrs Maria Ann Hansen. Both properties are mortgaged to the Assembly of God Property Holdings Ltd ("AOG"). Whilst we have requested an update on the sale of the properties, and whether AOG have taken steps to realise the properties, we understand from the bankruptcy trustee for Mr Hansen that the amount owing to AOG as at May 2013 was $3.4m. As the value of the 2 properties combined is substantially less than $3.4m it is highly unlikely that there will be any surplus for the benefit of Company creditors following their sale and the repayment in full to AOG. 3 Investigations Update Provided below is an update on the status of my investigations into the Company's affairs, the circumstances surrounding the failure of the Company and actions taken by me as Liquidator against related parties. Unfair Preferences As previously advised, Mr Hansen advised that the Partnership (being the partnership of IVIr Hansen and his wife) "Lenders" were "transferred" into the Company in an attempt to assist the Partnership "Lenders" recover losses incurred prior to the inception of the Company. My initial investigations revealed that substantial payments had been made to the "Lenders" during the relation back period. A further review of these payments indicates that the recipients of these payments will likely have strong defences against any action commenced against them (e.g. creditor was not aware that the Company was insolvent and received the payments in good faith). In light of the above, I do not believe it would be commercial for me to pursue these creditors. Accordingly, we do not expect there will be any recoveries from this source for the benefit of creditors. Liquidator's Recovery Action against Related Parties Personal Financial Position of Directors Mr Hansen is now bankrupt and Mr Meywes entered into a Personal Insolvency Agreement on 22 October Accordingly any claim against the Directors must be made under the bankruptcy and PIA of Mr Hansen and Mr Meywes, respectively. Should the respective trustees of the affairs of lv[r Hansen and Mr Mey'ves recover assets for the benefit of creditors, and have any surplus following the payment of their professional fees and costs, a dividend may be paid to the Company. The Bankruptcy Trustee is yet to conclude his investigations into the affairs of Mr Hansen and accordingly cannot confirm whether a dividend will be paid. It does appear however

5 Grantlhornton An instinct for growth that Mr Hansen holds properties jointly with his wife, Mrs Maria Ann Hansen, which may, contain equity that may be recovered by Mr Hansen's bankruptcy trustee. The Trustee's investigations are continuing. In respect to the PIA entered into by Mr Meywes, I have been advised that a small dividend is expected to be paid by or around the end of In light of the above a return to the Company by way of a dividend, if any, is likely to be minimal. Debtor Loan Accounts 1. Mr Hansen Pursuant to a loan account held with the Company, and after adding associated interest and court costs, Mr Hansen owes Global Rule Pty Ltd $373,836. As this amount was not paid when demanded by me as Liquidator, I applied for a sequestration order against Mr Hansen. A bankruptcy trustee was subsequently appointed to Mr Hansen's affairs on 27 February This amount, which relates to the payment of Directors' fees and drawings, appears unreasonable given their size and nature. Any recoveries from Mr Hansen in respect to this loan account will be dependent upon recoveries received under Mr Hansen's bankruptcy. 2. FL & MA Hansen ("the Partnership') As outlined above, "Lenders" of the Partnership, being the partnership of Mr Hansen and his wife, were "transferred" into the Company in an attempt to assist the Partnership "Lenders" recover carried forward losses incurred by the Partnership prior to the inception of the Company. A balance sheet produced from the MYOB accounts discloses an asset titled "Initial Borrowers as at 1/10/08" in the amount of $8,428,333 being transferred into the Company. On the same date, a MYOB liability account titled "Borrowers funds/capital" was credited for $8,428,333 with the memo "to bring in initial borrower balances as at 1/10/2008". Given the Directors initial representations to me, and the entries referred to above, I have treated the above transaction as a loan to the Partnership occurring at the time of the Company's inception. I note that Mr Hansen's RATA identified a loan owing from him to the Company as at the date of my appointment of Receiver and Manager of $6m. The below table identifies a net loan to the partnership of $6,353,196, after deducting cash held on appointment and funds used to purchase assets.

6 ' ' GrantThornton An instinct for growtht Cash at Bank 158,405 OpfionsXpress Account 1,021, /50 Riverwalk Avenue 529,000 2 & 6 Monaco Street 366,666 Total Asset Contributed 2,075,137 Liabilities Investors Balances as per Company MYOB accounts (8,428,333) Total Liabilities (8,428,333) (5) Net Loan to the Partnership As Mr Hansen is an undischarged bankrupt, I intend to continue to pursue Mrs Hansen in respect to the Partnership loan. Insolvent Trading Pursuant to Sections 588G and 588M of the Act, a Liquidator may seek to recover from the Directors of a Company any outstanding debt incurred by the Company after a time that a reasonable person would suspect that the Company could not pay its debts as and when they fell due (i.e. after the date it became insolvent). My investigations conducted to date indicate the Company's Directors may have a liability for insolvent trading of $10.5 million. Any recoveries from either Mr Hansen or Ivir Meywes in respect to insolvent trading will be dependent upon recoveries received under Mr 1-lansen's bankruptcy or the PTA of Mr Meywes. ASIC Investigations I have reported the outcome of my investigations to the Australian Securities and Investments Commissions ("ASIC") pursuant to Section 533 of the Corporations Act ("the Act"). The ASIC have requested I prepare a supplementary report pursuant to Section 533(2) of the Act, which I am currently in the process of preparing. The purpose of this supplementary report is to provide the ASIC with additional information to enable them to make a decision on whether to pursue Mr Hansen or Mr Meywes further for breaches of the Corporations Act, including whether an order for the disqualification of them from acting as a Director of a corporation in the future. 4 Receipts and Payments Please find attached as Annexure A a summary of the Liquidator's receipts and payments for the period of the liquidation to 17 July Net proceeds in the order of $769,000 are currently held.

7 ,40, GrantThornton -5An instinct for growth Estimated Return to Creditors I have prepared an analysis (attached as Annexure B), of the estimated return to creditors in the liquidation on an optimistic and pessimistic basis. This does not include any return that may be forthcoming from the bankrupt estate of Mr Hansen or the NA of Mr Meyves which at this stage is unknown. Until these investigations are complete, any recoveries received and a determination made as to whether there will be any return to creditors from the bankrupt estate of Mr Hansen, I do not intend on paying a dividend to creditors. Subject to the completion of the investigations conducted by Mr Hansen's Trustee in Bankruptcy and a payment of a dividend from the PIA of Mr Meywes, it is likely that a first and final dividend will not be paid until later this year or in early Based on available information it is possible that unsecured creditors may receive a distribution of up to 4.22 cents in the dollar. The estimated return is in line with our prior estimate as at 31 March 2012 under a pessimistic scenario. My prior estimate under an optimistic scenario was on the basis that recoveries may be forthcoming from the recovery of loans to Mr Hansen individually, the Partnership and a higher sale price than what was achieved for the River-walk Avenue unit. The outcome to creditors, as calculated in Annexure B, is dependent upon: successful recovery of the remaining debtor balance of $2,402 from Synetec; and o the final amount claimed by creditors. To date I have received claims from 72 creditors totalling $10,243,026. Given creditor claims to date exceed $lom, resulting in an estimated return of less than 4.5 cents in the dollar, paying an interim distribution may not be feasible. In preparation of a return to creditors in the near future, I am now inviting creditors who have not yet submitted a Formal Proof of Debt to do so. In this regard please refer to the attached Form 534 which formally invites you to complete a Form 535 Formal Proof of Debt by 31 August Please complete the Formal Proof of Debt form ensuring that you also provide documentary evidence of the following: Bank statements identifying the payments made to the Company or the Global Rule Trust; o Details of the bank account in which the above payments were deposited into; A fully executed copy of the Revolving Loan Agreement entered into; and

8 ?çl GrantThornton An instinct for growth Any other information which provides evidence of monies lent to the Company or the Global Rule Trust. Only creditors who have completed and provided me with a Form 535 Formal Proof of Debt form can be considered for any distribution made in the future. 6 Remuneration In order for the Liquidator to receive remuneration, such remuneration is to be approved by creditors or the court. At the reconvened meeting of creditors held on 11 May 2012, creditors approved the Liquidators' remuneration for the period 9 June 2011 to 31 March 2012 totalling $94,186 (excluding GST and disbursements) and 1 April 2012 to finalisation of the liquidation totalling $50,000 (excluding GST and disbursements). Set out below is a summary of the fees incurred up to 14 July 2013 and the estimated fee approval required from creditors to finalise the liquidation: Toe! Lquidoioii To Liquida on Recejv ership Liquidason ToLd Foes Acresi Pu/ire (1) (F) Receivership and Relevant Period to 09/06/11 09/06/I1 to 31103/12 01/04/121014/07/ to 14107/ /13 to Snalisahon Liquidation to floalisadon Remuneration Approved 192,445 94,186 50, ,186 Nil 336,631 Remuneration Incurred 192,445 97,015r 101, ,390 Nil 390,835 Less Adjustments - (2,829)1 (13,420) (16,249) nil (16,249) 192,445 94, , , N i l 374,586 Remuneration Drawn 192,445 94,186 49, ,000 Nil 336,445 Approval Request Nil Nil) , ,000 78,141 I now seek further fee approval from creditors for the time periods detailed below. Remuneration to be Approved -Work to Date At the meeting, creditors will be requested to approve the Liquidator's remuneration for work undertaken from 1 June 2012 to 14 July Remuneration to be Approved - Future Work of the Liquidators At the meeting, creditors will also be asked to consider the approval of the Liquidator's remuneration of future work for the period 15 July 2013 to finalisation of the liquidation. Remuneration will be drawn on a periodic basis from the funds available in the Liquidation. There is no indemnity provided by any third party for remuneration or liabilities. Detailed information on the calculation of remuneration including a breakdown of the expected future work to be undertaken during the Liquidation is provided at Annexure C.

9 Grantlhornton An instinct for growth Creditor's resolutions At the forthcoming meeting, creditors will be asked to consider the following resolutions: Remuneration to be Approved - Work to Date 'That the remuneration of the Liquidators, their partners and stqfjfor work carried out in relation to the Liquidation of Global Ride Py Ltdfor the period 1 April 2012 to 14 Jul y 2013 be increasedfrom the limit of S30,000(plus Goods and Services Tax) set at the adjourned meetin<y of creditors held on 11 May 2012 to 587,955 (p/us Goods and Services Tax), and may be drawn to the extent of available funds." Remuneration to be Approved - Future Work of the Liquidators 'That the remuneration of the Liquidator, his partners and staj/for work carried out in relation to Global Rule Pçy Ltd (In Liquidation) be hereby calculated by reference to the current andfuture houi(y rates of Grant Thornton-Recoveiy and Reoianisation Services. Such remuneration for the period 15Juy 2013 to The,finalisation of the Liquidation is to be capped at 540,000 excludin,g GST and disbursements, and should be drawn to the extent of available funds. In respect to remuneration calculated by reference to future hou,y rates, aqy annual increase to hourly rates chailled will not exceed 10% of the current orprioryearc hour'y rates of Grant Thornton-Recoveiy and Reoeanisation Services." The increase in remuneration is as a result of: 1. finalising investigations into the affairs of the Company, Mr Hansen and Mr Meywes in respect to preferential payments, related party loans and insolvent trading. 2. Assisting ASIC with its investigations in respect to the affairs of the Company and executing a Statement of Witness in respect to actions against Mr Hansen and Mr Meywes including reviewing Company records held. 3. Preparing this updated report to creditors and convening a Meeting of Creditors. 4. Recovery action against Synetec to obtain further debt reduction of its loan account. Staffing of Administration The Liquidator's staff team is structured such that tasks are completed by staff with the appropriate level of experience. In accordance with the Code of Practice issued by the IPA, please find enclosed an IPA Creditor Information Sheet (as Annexure D) providing information on approval of remuneration and on the liquidation process generally.

10 Grantlhornton An instinct for growte 10 7 Meeting of Creditors A meeting of creditors of Global Rule Pty Ltd (In Liquidation) is to be held as follows: Date: Tuesday, 6 August 2013 Time: 11:00am Place: Level Ann Street Brisbane QLD 4000 At the meeting, creditors will be asked to approve the remuneration of the Liquidator and the extension of the repayment plan to Synetec. Please note that creditors who have already lodged a Proof of Debt form are not required to lodge another unless amending their previous claim. Please ensure that you have provided documentation to support your claim. Please refer to page 5 for a list of the information required. A proxy form is required if a person is representing another legal entity. It should be noted that where the creditor is a Company or Superannuation fund, the attendee (the Director or nominee) is required to hold a proxy in his/her name from the Company or fund signed by the appropriate Director or officer. All proxies lodged by a company must be completed in accordance with its Constitution (i.e. under the Company's Common Seal if the Constitution so requires). The following documents are attached to this report: Annexure A - Receipt and Payments Annexure B - Estimated Return to Creditors Annexure C - Remuneration Report IPA Creditor Information on Liquidations and Approving Remuneration Form Notice of Annual General Meeting of Creditors and Members Form Appointment of Proxy Form Notice Inviting Formal Proof of Debt or Claim Form Formal Proof of Debt or Claim Declaration of Independence, Relevant Relationships and Indemnities Grant Thornton Recovery & Reorganisation Charge out Rates 8 Future Action In order to progress with a view to finalising the Liquidation, I intend to: Hold a meeting of creditors to discuss this report; Continue to pursue collection of the balance of the loan owing by Synetec and the Mrs Hansen in respect to the Partnership debt; Lodge a claim with the Bankruptcy Trustee for Mr Hansen and Ivir Meywes in respect to insolvent trading and unreasonable director related transactions; Adjudicate on all creditor claims received; Declare and pay a dividend to creditors; and Pay a dividend upon completion / realisation of the remaining assets of the Company and Liquidator's recoveries.

11 ,40v Grantlhornton 11 An instinct for growth Should you have any further queries in this matter, please contact Ms Caitlin Wilkinson of this office on (07) Y0114 faithfully / I / Mi / ad McCann Liq idator Enc.

12

13 Global Rule Pty Ltd (In Liquidation) Annexure A Receipts and Payments for the period 9 June 2011 to 17 July June 2911 to 1 April 2012 to Total outts and Payments 31 Match 29i Amount ($) Receipts Accounts Receivable (Pre Appointment) Cash from Administrators GST Received Interest Income Interests in Land Other Income Sale of Assets Transfer from Receivers Account Total Receipts 50,000 37,598 87, , ,071 25,734 25,810 51,544 17,528 26,172 43, , ,000-2,132 2, , , , ,247 1,005, ,713 1,426,920 Payments Agents Fees Appointee Disbursements Appointee Fees Bank Charges Body Corporate GST Paid Insurance Land Tax Legal Fees Locksmith Other Expenses Rates Receivers Fees and Disbursements Stamp Duty Statutory Advertising Utilities Water Rates Total Payments (12,676) (177) (1,511) (21,661) (82,913) (23,240) (214,667) (11,903) (1,090) (158,400) (158) (12,981) (949) (559) (6,017) (80,964) (99) (29) (2,964) (11,679) (736) (93) (2,640) (24,579) (1,090) (158,400) (335) (12,981) (2,460) (22,220) (6,017) (163,877) (99) (23,269) (2,964) (214,667) (11,679) I (736) (93) I (2,640) (356,845) (291,261) (648,106) Cash at Bank as at 17 July ,814 * as outlined in my report to creditors dated 4 April 2012 Grant Thornton Receipts and Payments 19 July 2013

14

15 Gk * : L t d (In L Annexure B Estimated Return to Creditors Global Rule Pty Ltd (In Liquidation) - Estimated Outcome Statement as at 17 July 2013 Optimistic Pessimistic Notes (5) (5) Cash at Bank ,81 GST Refunds Owing ,23' Net Cash Available 780, ,0481 Estimated Future Realisations Loan Synetec 1 2,402 Loan Len Hansen 2 Unknown Loan Hansen Partnership 2 Unknown - 2 & 6 Monaco Sheet Total Estimated Future Realisations 2, Estimated Recoveries Unfair Preference Payments Insolvent Trading 2 Unknown - Director Related Transactions 2 Unknown - Total Recoveries Unknown Less costs of the Liquidation Bank Charges (100) (150) Liquidator's Fees owing as at 14 July 2013 (38,141) (38,141) Estimated Liquidator's Fees 15 July 2013 to Finalisation (40,000) (40,000) Estimated Liquidator's Outays to Finalisation 4 (1000) (4,000) Estimated Liquidator's Legal Fees to Finalisation 4 (5,000) (10,000) Total Liquidation Costa (85,241) (82,291) Assets Available for Distribution 697, ,757! Unsecured Creditors Unsecured Creditors 5 (16,530,832) (16,530,832) Total Unsecured Claims (16,530,832) (16,530,832) Estimated Asset Surplus I (Deficiency) (15,833,623) (15,843,075) Estimated Return to Unsecured Creditors (cis) Notes 1 Assumes the balance of the Synetec Ply Ltd loan will be recovered in full under an optimistic scenario. Pessimistic is nil. 2 As any recoveries by a Liquidator from either of the bankrupt estate of Mr Hansen or pursuant to the PIA of Mr Meywes is unknown, if any. Pessimists scenario assumes no funds will be recovered, 3 We do not believe there will be any recoveries from this source for the benefit of creditors. Pessimistic scenario assumes no funds will be recovered, 4 Are estimates only. 5 Unsecured creditors consist mainly of lenders. The figures areas per the POD's received and those in the Company records, This amount may change subject to the teal quantum of formal proofs of debt received. Grant Thornton Estimated Return to Creditors 19 July 2013

16

17 Aoo, GrantThornton An instinct for growth Remuneration Request Approval Report Declaration I, Michael McCann of Grant Thornton Australia Limited, have undertaken a proper assessment of this remuneration claim for my appointment as Liquidator of Global Rule 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 Administration. Executive Summary To date, remuneration totalling $144,186 has been approved and paid in this administration. This remuneration report details approval sought for the following fees: Period Report Amount Reference (ex GST) Past remuneration approved: 9 June 2011 to 31 March 2012 Page 8 $94,186 1 April 2012 to finalisation Page 8 $50,000 Total past remuneration approved Page 8 $144,186 Current remuneration approval sought: Liquidation (if applicable) Page 9 Resolutions: "That the remuneration of the Liquidators, their partners and staff for Increase of work carried out in relation to the Liquidation of Global Rule Pty Ltd for the period I April 2012 to 14 July 2013 be increased from the limit of Page 9 $37,955 $50,000 (plus Goods and Services Tax) set at the adjourned meeting of creditors held on 11 May 2012 to $87,955 (plus Goods and Services Tax), and may be drawn to the extent of available funds." Remuneration to thi alisation * work-caried "That the remuneration of the Liquidator, his partners and staff for out in relation to Global Rule Pty Ltd (In Liquidation) be hereby calculated by reference to the current and future hourly rates of Grant Page 9 $40,000 Thornton-Recovery and Reorganisation Services. Such remuneration for the period 15 July 2013 to the finalisation of the Liquidation is to be capped at $40,000 excluding GST and disbursements, and should be drawn to the extent of available funds. In respect to remuneration calculated by reference to future hourly rates, any annual increase to hourly rates charged will not exceed lo% of the current or prior year's hourly rates of Grant Thornton-Recovery and Reorganisation Services." Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration. Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors.

18 Please refer to report section references detailed above for full details of the calculation and composition of the remuneration approval sought. The above is differs to the estimate of costs provided in the Advice to Creditors dated 4 April 2012 due to the following reasons: o Assistance provided to ASIC in respect to their continued investigations into the Company and its directors, including former directors. Delay in collection of the debt owing from Synetec. Additional investigations required substantiating the loan accounts owing from Mr Hansen and the Partnership to the Company. Assisting the trustee in bankruptcy for Mr Hansen in respect their investigations to date. Description of work completed / to be completed Please refer to the attached descriptions of work completed and to be completed in respect to each resolution sought. Calculation of Remuneration Included in the attached remuneration report is a schedule detailing the work completed and to be completed by employee, position, hourly rate and by task area.

19 Annexure C REMUNERATION REPORT Calculation of Remuneration Global Rule Pty Ltd (In Liquidation) Remuneration Report - Description of Work Completed from 1 April 2012 to 14 July 2013 Employee Position S/hour Total Total ($) Task Area (ox GST)* actual Administration Investigation Assets Creditors hours Hours S I-louis $ Hours $ Hours $ GraL31 /L /', ,(31 Michael McCann Partner , , , l, ,421,00 Shane Smith Senior Manager )) 20, , , )) 1 3, )) 6, Michelle Come Senior Manager )))) Aheon - Flatness Senior Manager (1.4)) Rodney Taylor Manager )) , , )) 8, James Jones Manager ,415.5)) ((.3)) , Paula Smith Supervisor , )) )) 17,3)) 6,121,50 Dean Lawrence Supervisor ,182.5)) )) 295.0)) David Ninsmr, Senior Accountant )1) - - Camille Grassicls Accountant )) 30, , )) 6, )) 7, , Aaron Previte Graduate , )) 1, Courtney Butler Undergraduate )) )) 175.0)) Alex Collivas Undergraduate )) )) Carol Kratz EDP ,848.0)) , Lynelle Guerin EDP )) 1, , Tanya - - Brown EDP - 17)) Emily Midson Secretary , , Pippa 1-Tocken Secretary ,452.0)) , Chris - Bourke Graduate )) (( )) Claire Kavangh Secretary Yihong - Liu Vacationer TOTAL 358,80 101, , , , , LESS AMOUNT BILLED (49,814.00) (7,845.07) (5,384.43) (6,752.20) (5,018.30) LESS ADJUSTMENTS (13,420.00) (1,236.85) (863.74) (1,336.65) (562.76) NET WIP 38, , , , GST 3, , , , TOTAL WIP (INCLUDING GST) 41, , , , , AVERAGE HOURLY RATE (EXCLUDING GST)

20 Company Global Rule Pty Ltd (In Liquidation) Practitioner(s) Michael McCann Firm Grant Thornton Australia Limited Administration Type Official Liquidation Period 1 April 2012 to 14 July 2013 Task 1\1L (cni ii Includes Description Assets Debtors Correspondence with debtors 61.4 hours Reviewing and assessing debtors ledgers $16,115 Liaising with solicitors regarding recovery of debtors Correspondence issued and received in respect to Mr F-Iansen's Bankruptcy and Mr Meywes' PTA Creditor enquiries Receive and follow up creditor enquiries via telephone and Review and prepare correspondence to creditors and their representatives via facsimile, and post Creditors Creditor reports Preparing report to creditors and notice of meeting hours Preparing estimated dividend to creditors $ Dealing with proofs Receipting and filing Proofs of Debt when not related to a dividend of debt Conducting investigation Review of Directors' personal asset position and conduct various searches Reviewing company's books and records Progress investigations file Investigation Dealings with legal correspondence with solicitors 54.2 hours advisors Meetings with solicitors $17, ASIC reporting Preparing statutory investigation reports (section 533 and supplementary 533 report) Liaising with ASIC Preparing Statement of Witness for lodgement with ASIC Meetings with ASIC to discuss Statement of Witness

21 Task Ai:ea Administration hours $27,327 Total $101,375 Billed ($49,814) Adjustments ($13,420) Net WIP $38,141 General Description Document maintenance/ file review/ checklist Bank account administration ATO & other statutory reporting Planning / Review Includes Filing of documents File reviews Updating checklists Reviewing and distributing incoming mail Preparing and reviewing payments Bank account reconciliations Correspondence with bank regarding specific transfers Preparing and reviewing BAS' Correspondence with the ATO Discussions regarding status of administration Remuneration Methods There are four basic methods that can be used to calculate the remuneration charged by an Insolvency Practitioner. They are: a. 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. b. 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. C. Percentage The total fee charged is based on a percentage of a particular variable, such as the gross proceeds of assets realisations. d. Contingency The practitioner's fee is structured to be contingent on a particular outcome being achieved.

22 Method chosen Given the nature of this administration we propose that our remuneration be calculated on a time based / hourly rated basis. This is because: It ensures that creditors are only charged for work that is performed Our time is recorded and charged in six minute increments. We will be required to perform a number of tasks that do not specifically relate to asset realisation. Explanation of Hourly Rates The rates for our remuneration calculation are set out in the attached 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. Disbursements Disbursements are divided into three types: A, Bi, B2. A BI disbursements are all externally provided professional services. These 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. Bi disbursements are recovered at cost. B2 disbursements are internally provided non-professional costs such as photocopying, printing and postage. B2 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. I have undertaken a proper assessment of disbursements claimed for the Company, in accordance with the law and applicable professional standards. I am satisfied that the disbursements claimed are necessary and proper. All disbursements are claimed at cost except for faxing which is charged as follows: - - Local-$1 per page National - $2 per page

23 - International - $3 per page. Creditors have the right to question the incurring of disbursements and can challenge disbursements in court. IPA Creditor Information Sheet Please fmd attached a copy of the ASIC Creditor Information Sheet that outlines further information regarding the remuneration approval and payment process.

24

25 Company Global Rule Pty Ltd (In Liquidation) Practitioner(s) Michael Gerard McCann Firm Grant Thornton Australia Limited Administration Type Period Official Liquithtion From 15 July 2013 to Finalisation Task Area General Description Includes Assets Debtors Continued collection of debtor $1,000 Correspondence with debtor Creditors $7)000 Creditor Enquiries Creditor reports Receive and follow up creditor enquiries Maintaining creditor enquiry register Review and prepare correspondence to creditors and their representatives via facsimile, and post Prepare reports to creditors Dealing with proofs of Receipting and filing Proofs of Debt debt R e v i e w i n g claims received to date and upon receipt in accordance with the Form Notice Inviting Formal Proof of Debt or Claim Meeting of Creditors Preparation of meeting notices, proxies and advertisements Forward notice of meeting to all known creditors Preparation of meeting file, including agenda, certificate of postage, attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting. Preparation and lodgement of minutes of meetings with ASIC Respond to stakeholder queries and questions following meeting Recovery of Partnership Provide the relevant information obtained from investigations and liaise with solicitors in respect to options Loan Account available for recovery Investigations Demand the repayment in full from Mrs Hansen $12,000 Should payment not occur, issue the relevant legal proceedings for recovery of the debt including initiating bankruptcy proceedings Conducting Reviewing Company's books and records

26 Task Area General D '.cupuon Includes Dividend $ Administration $ investigation Recoveries from Mr Hansen and Mr Meywes ASIC reporting Processing proofs of debt Dividend procedures Correspondence Document mamtenance/file review/checklist Continued work on investigation file notes Obtain updates in respect to Mr Hansen's bankruptcy and Mr Meywes PTA on investigations and likelihood of a dividend Finalisation and lodgement of supplementary report (section 533 supplementary report) Liaising with ASIC in respect to any proceedings or requests for information in respect to the Company and its directors, including former directors. Receipt of Proofs of Debt Maintain Proofs of Debt register Adjudicating 150+ Proofs of Debt Request further information from claimants regarding Proofs of Debt Preparation of correspondence to claimant advising outcome of adjudication Preparation of correspondence to creditors advising of intention to declare dividend Advertisement of intention to declare dividend Obtain clearance from A - fo to allow distribution of Company's assets Preparation of dividend calculation Preparation of correspondence to creditors announcing declaration of dividend Advertise announcement of dividend Preparation of distribution Preparation of dividend file Preparation of payment vouchers to pay dividend Preparation of correspondence to creditors enclosing payment of dividend Review of mail and correspondence 6 monthly administration review Filing of documents File reviews Updating checklists

27 Task Area General Description Bank account administration Includes Preparing correspondence regarding closure of accounts Requesting bank statements Bank account reconciliations Correspondence with bank regarding specific transfers Total ASIC Form 524 and other forms ATO & other statutory reporting Finalisation Planning / Review Books and records / storage Preparing and lodging ASIC forms including 505, 524, 911 etc Correspondence with ASIC regarding statutory forms I Notification of ceasing to act Preparing BAS' Completing PAYG Payment Summaries 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 Remuneration Methods There are four basic methods that can be used to calculate the remuneration charged by an Insolvency Practitioner. They are: a. 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. b. Fixed Fee

28 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. C. Percentage The total fee charged is based on a percentage of a particular variable, such as the gross proceeds of assets realisations. d. Contingency The practitioner's fee is structured to be contingent on a particular outcome being achieved. Method chosen Given the nature of this administration we propose that our remuneration be calculated on a time based / hourly rated basis. This is because: It ensures that creditors are only charged for work that is performed. Our time is recorded and charged in six minute increments. We will be required to perform a number of tasks that do not specifically relate to asset realisation. Explanation of Hourly Rates The rates for our remuneration calculation are set out in the attached 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. At the meeting of creditors which is to be held on 6 August 2013, we will be seeking approval from creditors for my future remuneration incurred as Liquidator, totalling $40,000 excluding GST and disbursements. Disbursements Disbursements are divided into three types: A, Bi, B2. A Bi B2 disbursements are all externally provided professional services. These 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. Bi disbursements are recovered at cost. disbursements are internally provided non-professional costs such as photocopying, printing and postage. B2 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.

29 I have undertaken a proper assessment of disbursements claimed for the Company, in accordance with the law and applicable professional standards. I am satisfied that the disbursements claimed are necessary and proper. All disbursements are claimed at cost except for faxing which is charged as follows: Local - $1 per page National - $2 per page International - $3 per page. Creditors have the right to question the incurring of disbursements and can challenge disbursements in court. IPA Creditor Information Sheet Please find attached a copy of the ASIC Creditor Information Sheet that outlines further information regarding the remuneration approval and payment process.

30

31 'AOSTR4I ASIC Australian securities & Investments Commission T -ET 45 Liquidation: a guide for creditors If a company is in financial difficulty, its shareholders, creditors or the court can put the company into liquidation. This information sheet provides general inforniation for unsecured creditors of companies in liquidation. Who is a creditor? You are a creditor of a company if the company owes you money. Usually, a creditor is owed money because they have provided goods or services, or made loans to the company. An employee owed money for unpaid wages and other entitlements is a creditor. A person who may be owed money by the company if a certain event occurs (e.g. if they succeed in a legal claim against the company) is also a creditor, and is sometimes referred to as a 'contingent' creditor. There are generally two categories of creditor: secured and unsecured. A secured creditor is someone who has a security interest (as defined in s12 of the Personal Property Securities Act 2009), such as a charge or a mortgage, over some or all of the company's assets, to secure a debt owed by the company. Lenders usually require a security interest over company assets when they provide a loan. o An unsecured creditor is a creditor who does not have a security interest over the company's assets. Employees are a special class of unsecured creditors. In a liquidation, some of their outstanding entitlements are paid in priority to the claims of other unsecured creditors. If you are an employee, see ASIC's information sheet INFO 46 Liquidation: a guide for employees. All references in this information sheet to 'creditors' relate to unsecured creditors unless otherwise stated. The purpose of liquidation The purpose of liquidation of an insolvent company is to have an independent and suitably qualified person (the liquidator) take control of the company so that its affairs can be wound up in an orderly and fair way for the benefit of all creditors. Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance. Australian Securities & Investments Commission, 30 January 2012 Page 1 of 10

32 LIQUIDATION: A GUIDE FOR CREDITORS There are two types of insolvent liquidation: creditors' voluntary liquidation, and court liquidation. The most common type is a creditors' voluntary liquidation, which usually begins in one of two ways: creditors vote for liquidation following a voluntary administration or a terminated deed of company arrangement, or an insolvent company's shareholders resolve to liquidate the company and appoint a liquidator. Within 11 days of being appointed by shareholders, the liquidator must call a meeting of creditors who may confirm the liquidator's appointment or appoint another liquidator of the creditors' choice. In a court liquidation, a liquidator is appointed by the court to wind up a company, following an application, usually by a creditor. Others, including a director, a shareholder and ASIC, can also make a winding-up application. After a company goes into liquidation, unsecured creditors can no longer commence or continue legal action against the company, unless the court permits. It is possible for a company in liquidation to also be in receivership: see ASIC inforniation sheet INFO 54 Receivership: a guide for creditors. The liquidator's role When a company is being liquidated because it is insolvent, the liquidator has a duty to all the company's creditors. The liquidator's role is to: collect, protect and realise the company's assets investigate and report to creditors about the company's affairs, including any unfair preferences which may be recoverable, any uncommercial transactions which may be set aside, and any possible claims against the company's officers enquire into the failure of the company and possible offences by people involved with the company and report to ASIC after payment of the costs of the liquidation, and subject to the rights of any secured creditor, distribute the proceeds of realisation first to priority creditors, including employees, and then to unsecured creditors, and apply for deregistration of the company on completion of the liquidation. Except for lodging documents and reports required under the Corporations Act 2001 (Corporations Act), a liquidator is not required to do any work unless there are enough assets to pay their costs. If the company is without sufficient assets, one or more creditors may agree to reimburse a liquidator's costs and expenses of taking action to recover further assets for the benefit of creditors. In this case, if additional assets are recovered, the liquidator or particular creditor can apply to the court for the creditor to be compensated for the risk involved in funding the liquidator's recovery action. If a liquidator suspects that people involved with the company may have committed offences and the liquidator reports this to ASIC, the liquidator may also be able to apply to ASIC for funding to carry out a further investigation into the allegations. Australian Securities & Investments Commission, 30 January 2012 Page 2 of 10

33 LIQUIDATION: A GUIDE FOR CREDITORS Recoveries from creditors A liquidator has the ability to recover, for the benefit of all creditors, certain payments (known as unfair preferences) made by the company to individual creditors in the six months before the start of the liquidation. Broadly, a creditor receives an unfair preference if, during the six months prior to liquidation, the company is insolvent, the creditor suspects the company is insolvent, and receives payment of their debt (or part of it) ahead of other creditors. To be an unfair preference, the payment must put the creditor receiving it in a more favourable position than other unsecured creditors. Not all payments from the company to a creditor in the six months before liquidation are unfair preferences. The Corporations Act provides various defences to an unfair preference claim. If a liquidator seeks to recover a payment that has been made to you, you may wish to obtain independent legal advice on the merits of the liquidator's claim before repaying any money. Creditors' meetings A liquidator may call a creditors' meeting from time to time to inform creditors of the progress of the liquidation, to find out their wishes on a particular matter or seek approval of the liquidator's fees. You may also use a creditors' meeting to ask questions about the liquidation and inform the liquidator about your knowledge of the company's affairs. Meetings during a court liquidation In a court liquidation, the liquidator is not required to call a creditors' meeting unless a matter requires creditor approval. The only exception is that if the creditors pass a resolution requiring a creditors' meeting to be called, or at least one-tenth in value of all the creditors request the liquidator in writing to do so, the liquidator must call a creditors' meeting. However, it is unusual for this to happen, as those who make the request or pass the resolution must pay the costs of calling and holding the meeting. Meetings during a creditors' voluntary liquidation In a creditors' voluntary liquidation, the liquidator may choose to hold an annual meeting of the creditors or lodge a report with ASIC on the progress in the administration. If they choose not to hold the meeting, the liquidator must tell creditors that the report has been prepared and give them a copy free of charge if asked. The report must set out: an account of the liquidator's acts and dealings and the conduct of the winding up in the preceding year a summary of the tasks yet to be done in the liquidation, and an estimate of when the liquidation is expected to be finalised. The liquidator in a creditors' voluntary winding up must also hold ajoint meeting of the creditors and members at the end of the winding up. Creditors can require the liquidator to call a creditors' meeting at other times, the same as in a court liquidation, as long as they pay the associated costs. Minutes of meetings The chairperson of a creditors' meeting (usually the liquidator or one of their senior staff) must prepare minutes of the meeting and a record of those who were present at the meeting and lodge them Australian Securities & Investments Commission, 30 January 2012 Page 3 of 10