Circular to Creditors

Transcription

1 Mining Management Group Pty Limited (In Liquidation) ACN ( MMG ) MMG Drill & Blast Pty Limited (In Liquidation) ACN ( MMG D&B ) ( the Companies ) Circular to Creditors I refer to the creditors voluntary liquidation of the Companies. Pursuant to Section 508 of the Corporations Act 2001, a liquidator is required to convene an annual meeting of creditors when a voluntary liquidation continues beyond twelve months. Please find enclosed: a notice of meeting for the annual meeting of creditors for MMG; and notices of meetings for the annual meeting of creditors and final meeting of members and creditors for MMG D&B, which are to be held concurrently. The meetings will be held at McGrathNicol, Level 12, 20 Martin Place, Sydney NSW 2000 on Tuesday, 5 September 2017; at 12:00pm for MMG; and at 12:30pm for MMG D&B. If you are unable to attend, but wish to send a representative, I enclose a proxy form for your use. The meetings are a statutory procedure and attendance by creditors is not required. Creditors are of course welcome to attend, or to address enquiries at any time to Joshua Crick of this office on (02) Dated 31 July 2017 Jason Preston Joint and Several Liquidator D MINIMIN02-CreditorCircular-JCTD

2 Enclosure(s) 1. Liquidators Report to Creditors 2(a). Notice of Annual Meeting of Creditors of MMG 2(b). Notice of Annual Meeting of Creditors of MMG D&B 2(c). Notice of Final Meeting of Members and Creditors of MMG D&B 3(a). Proof of debt (MMG) 3(b). Proof of debt (MMG D&B) 4. Instructions for completion of Proof of Debt 5(a). Special Proxy Form (MMG) 5(b). Special Proxy Form (MMG D&B) 6. Instructions for completion of a Proxy Form 7. General information for attending and voting at Meeting of Creditors 8. Schedule of Remuneration 9. Insolvency information for Directors, Employees, Creditors and Shareholders Page 2

3 Mining Management Group Pty Limited (In Liquidation) and MMG Drill & Blast Pty Limited (In Liquidation) Combined Annual Report to Creditors of MMG and Annual and Final Report to Creditors of MMG D&B 31 July 2017

4 Glossary of Terms Term Annual Report ARITA ARITA Code ASIC ATO Definition This Annual Report to the creditors of MMG and Annual and Final Report to the creditors of MMG D&B dated 31 July 2017 Australian Restructuring, Insolvency & Turnaround Association (formerly the Insolvency Practitioners Association) ARITA Code of Professional Practice Australian Securities and Investments Commission Australian Taxation Office c. Circa Companies the Court DIRRI FEG MMG and MMG D&B (collectively referred to as the Companies) The Federal Court of Australia Declaration of Independence, Relevant Relationships and Indemnities Fair Entitlements Guarantee First Annual Report The first Annual Report to creditors of MMG and MMG D&B dated 10 August 2016 GSA Liquidators MMG MMG D&B POD PPSR General Security Agreement Jason Preston and Rob Kirman as Joint and Several Liquidators Mining Management Group Pty Limited (In Liquidation) MMG Drill & Blast Pty Limited (In Liquidation) Proof of Debt Personal Property Securities Register s439a Meeting Second meeting of creditors of the Companies held on 6 July 2015 s439a Report SGC the Act or Corporations Act Voluntary Administrators or Administrators Westpac or secured creditor Report to creditors of the Companies pursuant to Section 439A of the Act dated 29 June 2015 Superannuation Guarantee Charge The Corporations Act 2001 (Cth) Jason Preston and Rob Kirman as Joint and Several Voluntary Administrators Westpac Banking Corporation MMG and MMG D&B Report to Creditors 1

5 Contents Executive summary... 3 Declaration of Independence, Relevant Relationships and Indemnities ( DIRRI )... 3 Update on liquidations... 4 Receipts and payments... 6 Estimated return to creditors... 8 Finalisation of the liquidations Remuneration Books and records Creditor meeting details MMG and MMG D&B Report to Creditors 2

6 I refer to: Executive summary the appointment of Rob Kirman and I as Joint and Several Voluntary Administrators of Mining Management Group Pty Ltd (In Liquidation) ( MMG ) and MMG Drill & Blast Pty Ltd (In Liquidation) ( MMG D&B ) (collectively the Companies ) on 1 June 2015; our s439a report to creditors dated 29 June 2015 ( s439a Report ); our subsequent appointment as Joint and Several Liquidators of the Companies on 6 July 2015; and our first annual report dated 10 August 2016 ( First Annual Report ). This report is issued in respect of the forthcoming meetings of creditors of the Companies. The following meetings of creditors will be held for the Companies: an annual meeting of creditors of MMG pursuant to section 508 of the Corporations Act; and a final meeting of creditors of MMG D&B pursuant to section 509 of the Corporations Act. The annual meeting of creditors for MMG is to be held at 12:00pm on Tuesday, 5 September 2017 at McGrathNicol, Level 12, 20 Martin Place, Sydney NSW The combined annual and final meeting of creditors for MMG D&B is to be held following the annual meeting of creditors of MMG at 12:30pm at the same location listed above. This report has been prepared to provide creditors with an update on the progress of the liquidations of the Companies since the First Annual Report was issued on 10 August This report to creditors covers the liquidation period 6 August 2016 to 28 July 2017 (unless specifically stated) and sets out the following: an update on the liquidation generally; an updated estimated return to creditors; an update on the Liquidators investigations; an update on the timeline for the finalisation of the liquidations; and the fees incurred and approval sought by the Liquidators for work to finalise the MMG liquidation. This report is the final report to creditors of MMG D&B and is issued to creditors ahead of the final meeting of creditors for MMG D&B. Declaration of Independence, Relevant Relationships and Indemnities ( DIRRI ) In accordance with section 436D of the Act and the ARITA Code, a DIRRI was enclosed with our first communications to creditors dated 4 June 2015 and has been included at Appendix A of this report. The DIRRI was also tabled at the first meeting of creditors on 12 June As at the date of this report, there is no change to the information provided in the DIRRI and I remain of the view that there are no potential conflicts of interest. MMG and MMG D&B Report to Creditors 3

7 Update on liquidations Set out below is an update on the liquidations of the Companies subsequent to the First Annual Report. Please note you should read this update in conjunction with the s439a Report and the First Annual Report in order to obtain a comprehensive understanding of the assets of the Companies, and realisations by the Administrators and Liquidators. Priority claims All priority claims against the Companies have now been paid in full. Department of Employment As detailed in the First Annual Report, the Liquidators of MMG received $55,051 in funding from the Department of Employment pursuant to the FEG program. All funds received as part of the FEG program have been remitted to former employees and the Australian Taxation Office ( ATO ) as required and the Liquidators have paid a priority dividend to the Department of Employment in the amount of $55,051. ATO In accordance with the First Annual Report, the books and records of the Companies indicated that there was preappointment superannuation owing to a number of former employees of the Companies. These amounts fall within the Superannuation Guarantee Charge ( SGC ) regime and were payable to the ATO rather than directly to the employees superannuation funds. The Liquidators have paid a priority dividend to the ATO in the amount of $187,543 for MMG and $ for MMG D&B. Voidable transactions The Liquidators noted in the First Annual Report that there may be recoveries available to creditors of the Companies in respect of voidable transactions in the form of supplier preference payments. The Liquidators conducted investigations to identify suppliers which received payments during the period when the Companies where insolvent that may be classified as preferential payments. The Liquidators issued correspondence to certain suppliers which demanded repayment of the full amount of the unfair preference claims identified. The Liquidators considered the response to each letter of demand on a case-by-case basis, considering the merits of the arguments raised by the creditors, the commerciality of pursuing each claim, the value of the potential recoveries and the costs of further pursuit and commencing litigation. These recoveries are in addition to the preference claim recovered from the ATO referred to in our previous Annual Report. These recoveries totalled $600,000 whereby $550,000 was recovered for the benefit of creditors of MMG, and $50,000 was recovered for the benefit of MMG D&B. Set out below is further detail regarding other preference recoveries. MMG The Liquidators recovered a total of $55,577 from preferential payments made to suppliers of MMG in addition to the amount received from the ATO. These recoveries improve the return to unsecured creditors in the liquidation of MMG. The Liquidators have reached a settlement with one creditor in the amount of $50,000 (included in the total) but are yet to receive these funds. Based on the review undertaken, the Liquidators do not expect there to be any further recoveries in respect of voidable transactions without commencing legal action, and do not consider it commercial to pursue legal action in respect of any other claims available to MMG. MMG D&B There were no recoveries made in respect of voidable transactions for MMG D&B. Based on the review undertaken, the Liquidators do not expect there to be any further recoveries in respect of voidable transactions without commencing legal action, and do not consider it commercial to pursue legal action in respect of any other claims available to MMG D&B. MMG and MMG D&B Report to Creditors 4

8 Future recoveries All assets have now been realised and the Liquidators do not expect any further recoveries in either of the liquidations apart from the preference settlement noted above in respect of MMG. MMG and MMG D&B Report to Creditors 5

9 Receipts and payments The receipts and payments for the Companies are set out in the tables below. Please note the below tables summarise the receipts and payments of the Companies for the following periods: MMG 28 July 2016 to 28 July 2017; and MMG D&B 1 June 2015 to 28 July 2017 (being the entire period since the date of administration). Pursuant to section 539(5) of the Act, I advise that accounts of receipts and payments for the period of the winding up have been prepared and lodged with ASIC. MMG Receipts and payments for MMG for the period 28 July 2016 to 28 July 2017 Account Amount Cash at bank 28 July ,969,852 Receipts GST received from the ATO 32,834 Insurance refunds 9,107 Supplier preference recovery 5,577 Interest income 2,725 Total receipts 50,243 Payments Distributions to Secured Creditor (2,287,403) Appointee fees and disbursements (299,408) Distribution to priority creditors (pre-appointment superannuation paid to ATO) (187,543) Distribution to priority creditors (Department of Employment) (55,051) Books and records (2,437) GST paid to the ATO (738) Bank charges (75) Total payments (2,832,655) Cash at bank 28 July ,440 MMG and MMG D&B Report to Creditors 6

10 MMG D&B Receipts and payments for MMG D&B for the period 1 June 2015 to 28 July 2017 Account Amount Opening cash balance 8,761 Receipts Life insurance receipt 888,989 Proceeds from sale of heavy and light motor vehicles 116,155 ATO preference recovery 50,000 Post-appointment trading revenue receipts 38,423 Pre-appointment debtor recoveries 6,759 GST received from the ATO 6,100 Other trading receipts 1,940 Interest income 574 Insurance refund 544 Total receipts 1,118,245 Payments Distributions to the Secured Creditor (926,532) Appointee fees and disbursements (79,590) Distribution to leased vehicle financier (44,002) Legal fees (30,385) Life insurance premiums (16,380) GST paid to the ATO (9,260) Agents' fees and commission (4,544) Asset valuation fee (2,220) Motor vehicle insurance (2,194) Marketing and advertising costs (1,571) Distribution to priority creditors (pre-appointment superannuation paid to the ATO) (994) Rental expense (280) Bank charges (166) Stamp duty (90) Repairs and maintenance (37) Total payments (1,118,245) Cash at bank 28 July MMG and MMG D&B Report to Creditors 7

11 Estimated return to creditors Set out below is a summary of the distributions made, or amounts available for distribution to each category of creditor since the appointment of the Administrators. MMG Secured creditor Westpac, the secured creditor held a general security agreement over all the assets of MMG. To date, it has received a total of $2,329,357 in distributions from the proceeds of circulating and non-circulating assets. This represents a return equivalent to 99 cents in the dollar on the total claim at appointment of the Administrators, however the secured creditor s claim is likely to have increased as a result of interest and other charges accrued since the appointment of the Administrators. The Secured Creditor is entitled to claim as an unsecured creditor for any shortfall of this debt. The Liquidators do not yet know the quantum of interest and other charges but any charges may increase the Secured Creditors unsecured claim against MMG. Capital Finance, Macquarie Leasing and the Bank of Queensland held specific charges over certain light motor vehicles. These light motor vehicles have been realised and distributions from the net proceeds totalling $79,046 have been paid to these financiers, representing a return equivalent to 100 cents in the dollar. Priority creditors The priority creditors have received a total of $242,594 in distributions from proceeds of circulating assets. This represents a return equivalent to 100 cents in the dollar to priority creditors. Unsecured creditors No distributions have been made to unsecured creditors to date. Based on the current position, the Liquidators expect there to be an amount of $153,839 available for distribution to unsecured creditors calculated as follows: Estimated amount available for distribution to unsecured creditors Item *The Liquidators have entered into a settlement agreement with a supplier of MMG and expect to receive payment of $50,000 in the coming weeks. Dividend to unsecured creditors of MMG As noted in section above, $153,839 is available to declare a dividend to unsecured creditors of MMG. While the adjudication process for proofs of debt ( POD ) for unsecured creditors of MMG has not yet occurred, the Liquidators have received claims of c.$6.5 million to date. If all those amounts were admitted in full, the distribution to unsecured creditors would be equivalent to c.2 cents in the dollar. Set out below is an indicative timeline in respect of the dividend to unsecured creditors of MMG. Amount Cash at bank 187,440 Proceeds from settlement in relation to supplier preference payment* 50,000 June 2016 BAS refund 4,000 Total cash available 241,440 Estimated fees to finalisation (77,601) Provision for other liabilities (10,000) Estimated funds available for distribution to unsecured creditors 153,839 MMG and MMG D&B Report to Creditors 8

12 Item Indicative date Advertise notice of intention to declare a dividend to unsecured creditors 1 August 2017 Final date for receipt of PODs 15 August 2017 Adjudicate on PODs September 2017 Pay dividend to unsecured creditors October 2017 MMG D&B Secured creditor Westpac, the secured creditor held a general security agreement over the assets of MMG D&B. To date, it has received a total of $926,532 in distributions from the proceeds of circulating and non-circulating assets. This represents a return equivalent to 88 cents in the dollar on the total claim at appointment of the Administrators, however the secured creditor s claim is likely to increase as a result of interest and other charges accrued since the appointment of the Administrators. Bank of Queensland held a specific charge over certain heavy and light motor vehicles. These motor vehicles have been realised and distributions from the net proceeds totalling $44,002 have been paid to the Bank of Queensland. The secured creditors are entitled to claim as an unsecured creditor for any shortfall of this debt. The Liquidators do not yet know the quantum of interest and other charges but any charges may increase the secured creditors unsecured claims against MMG. The Liquidators note that given the cross collateralisation of the Westpac s security against the Companies, it is entitled to claim for the shortfall of its claim in MMG D&B as an unsecured creditor of MMG. Priority creditors The priority creditors have received a total of $994 in distributions from proceeds of circulating assets. This represents a return equivalent to 100 cents in the dollar to priority creditors. Unsecured creditors Given the shortfall to the secured creditor, and the lack of recoveries from the Liquidators investigations and recovery actions, there are insufficient funds to declare a dividend to the unsecured creditors of MMG D&B. MMG and MMG D&B Report to Creditors 9

13 Finalisation of the liquidations MMG The Liquidators have now completed the majority of tasks in the liquidations. Set out below is an outline of key matters to be attended to by the Liquidators. Area Key steps Estimated completion date Annual meeting of creditors. Prepare and attend the meetings of creditors. Lodge the minutes of the meetings. September 2017 Adjudicate on PODs received from unsecured creditors. Call for PODs. Adjudicate on PODs. Notify creditors of rejected claims. September 2017 Distributions to unsecured creditors. Declare and distribute dividend to creditors. Final meeting of creditors. Prepare for and attend the final meeting of creditors. Lodge the minutes of the meeting. October 2017 December 2017 Attend to administrative requirements and finalisation matters. Attend to statutory lodgements. Close liquidation bank account. Finalise liquidation. Attend to deregistration of MMG. December 2017 The Liquidators note that the date of the final meeting of creditors and other finalisation matters will be delayed should there be any unclaimed monies from the distribution to unsecured creditors. In the event there are unclaimed monies from the unsecured creditor distribution, the Liquidators will arrange a payment to ASIC for any unclaimed monies after a period of six months from the date the dividend is declared. MMG D&B The Liquidators have now completed all material matters in the liquidation and are now taking steps to retire. Set out below is an outline of the matters to be attended to by the Liquidators. Area Key steps Estimated completion date Final meeting of creditors. Prepare and attend the meeting of creditors. Lodge the minutes of the meeting. September 2017 Attend to administrative requirements and finalisation matters. Attend to statutory lodgements. Close liquidation bank account. Finalise liquidation. Attend to deregistration of MMG D&B. September 2017 MMG and MMG D&B Report to Creditors 10

14 Remuneration In accordance with section 449E of the Act and the ARITA Code, a Schedule of Remuneration Methods and Hourly Rates was provided to creditors with our initial communication and tabled at the first meetings of creditors on 12 June The Liquidators are seeking approval of our fees after applying a 20% discount to the rates tabled. A liquidator s remuneration can only be fixed by resolution of a Committee of Inspection, the company s creditors or by an application to the Court. Set out in the following sections are details of the necessary and proper work performed for the appropriate conduct of the administration and liquidation of the Companies. Declaration We, Jason Preston and Rob Kirman of McGrathNicol, have undertaken a proper assessment of this remuneration claim for our appointment as Joint and Several Liquidators of the Companies in accordance with the law and applicable professional standards. We are satisfied that the remuneration claimed is in respect of necessary work, properly performed, or to be properly performed, in the conduct of the liquidations. MMG Approval received At the s439a Meeting of creditors on 6 July 2015 and the first annual meeting of creditors on 10 August 2016, approval of the following fees was sought and received: Period Administrators remuneration 1 June July 2015 Liquidators remuneration 6 July August 2016 Liquidators remuneration beyond 6 August 2016 (approved prospectively) Amount (ex GST) $131, $227, $40, Total fees approved $398, Total fees paid (for the period to 19 May 2017) $398, Administrators and Liquidators disbursements $9, Total fees and disbursements approved and paid $407, Summary of approval sought This remuneration report details approval sought for the following fees: Period Current remuneration approval sought: Report reference Amount (ex GST) Resolution 1: 20 May July $27, Resolution 2: 22 July 2017 until completion** $50, Total** $77, Remuneration approval sought at a 20% discount on the rates included in the Schedule of Remuneration Methods and Hourly Rates. ** Approval for the future remuneration sought is based on an estimate of the work necessary to finalise the liquidation and will only be drawn to the extent work is undertaken. Please refer to the report section references detailed in the above table for full details of the calculation and composition of the remuneration approval sought. MMG and MMG D&B Report to Creditors 11

15 Approval sought for Liquidators actual remuneration for the period 20 May 2017 to 21 July 2017 Approval is sought at the forthcoming annual meeting of creditors for the Liquidators actual remuneration of $27, (excluding GST) after applying a discount of 20% to our schedule of rates as previously tabled, for the period 20 May 2017 to 21 July 2017 with the following resolution proposed: That the remuneration of the Liquidators of MMG for the period 20 May 2017 to 21 July 2017 in the amount of $27, (excluding GST) calculated at the hourly rates as detailed in the Schedule of Remuneration Methods and Hourly Rates, after applying a discount of 20% is hereby approved for payment from funds on hand. A description of tasks that have been performed by the Liquidators and their staff is set out below and a schedule of actual fees incurred by staff member during this remuneration period is detailed at Appendix B of this report. Task area General description Includes Creditors hours $14, (ex GST) Reporting to secured creditor Providing written updates to the secured creditor regarding the status of the liquidation. Managing and responding to queries from the secured creditor. Employees Liaising with the ATO in respect of the SGC payment into individual employees accounts. Dealing with employee queries regarding unpaid superannuation. Unsecured creditors Investigating and reviewing the intercompany loan position. Dealing with unsecured creditor queries. Reviewing and considering the quantum of unsecured creditor claims. Preparing dividend distribution timeline. Reporting to creditors Drafting this Annual Report to creditors. Investigations hours $4, (ex GST) Preference claims Pursuing potential unfair preference claims. Finalising investigation in relation to voidable transactions. Preparing deeds of settlement and release in relation to the proposed settlements. Negotiating with legal representatives and principles of identified suppliers who received preference payments. Negotiating with suppliers regarding claimed preference amounts. Finalising liquidators investigation file. Following up parties regarding outstanding amounts. Statutory and administration Planning / review Attending internal discussions and planning in relation to the liquidation. Managing work streams. MMG and MMG D&B Report to Creditors 12

16 Task area General description Includes hours $14, (ex GST) Books and records Arranging for storage of records and early destruction of books and records upon retirement. Dealing with records in storage. Document maintenance/file review/checklist Maintaining and managing files. Conducting file reviews. Updating checklists. Banking Processing receipts and payments. Reviewing and approving payments. Reviewing and reconciling the Liquidators bank account. Preparing bank account reconciliations. Statutory lodgements Preparing and lodging ASIC forms including 505 and 524. Project management Discussing and meeting with engagement team in relation to status of job and outstanding matters. Preparing estimated realisation outcomes ATO & other statutory reporting Preparing and lodging ongoing Business Activity Statements. Dividends 0.60 hours $ (ex GST) Distribution Commencing planning of unsecured creditor distribution. Preparing estimates of the quantum of the first and final dividend to unsecured creditors Note task area outlined above refers to the full amount of fees incurred before the 20% discount has been applied. Future works to be completed Approval is sought at the forthcoming annual meeting of creditors for the Liquidators prospective remuneration of $50, (excluding GST) based on actual hours spent, applying a discount of 20% to our schedule of rates previously tabled, for the period 22 July 2017 until the finalisation of the MMG liquidation. Key tasks required to be completed to finalise the liquidation include: finalising this Annual Report to creditors and convene the annual meeting of creditors; finalising and lodging minutes of the annual meeting; calling for PODs and adjudicate on creditor claims; paying a first and final dividend to unsecured creditors; liaising with ASIC to transfer unclaimed monies; convening a final meeting of creditors; and attending to statutory finalisation tasks including lodging final returns and deregistering MMG. The following resolution will be proposed at the forthcoming annual meeting of creditors convened for 5 September 2017: MMG and MMG D&B Report to Creditors 13

17 That the prospective remuneration of the Liquidators of MMG, to a maximum amount of $50, (excluding GST), calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, after applying a discount of 20% for the period from 22 July 2017 until the work undertaken in the estimation of remuneration is complete, from funds on hand (or as and when they funds are received). The estimate of work to be done by the Liquidators and their staff is set out below, and a schedule of estimated fees by staff member during this period is detailed at Appendix C of this report. Task area General description Includes Creditors hours $22, (ex GST) Reporting to creditors Finalising and issuing this Annual Report to creditors. Holding the annual meeting of creditors on 5 September Preparing and finalising the minutes of the creditors meeting. Managing and responding to queries regarding MMG. Reviewing and preparing correspondence to creditors and their representatives. Calling for proofs of debt and adjudicating on creditor claims. Preparing the advertisement to hold a final meeting of creditors. Prepare and finalising the minutes of the final meeting. Lodging a Form 523 return of the meeting. Secured creditor Providing verbal and written updates to secured creditor regarding status of the liquidation. Managing and responding to queries from Westpac. Statutory and administration hours $15, (ex GST) Statutory tasks and lodgements Completing statutory lodgements with ASIC for the annual and final meetings of creditors. Preparing, reviewing and submitting with ASIC the six monthly form 524. Completing file checklists to ensure compliance. Preparing and lodging ongoing ATO BAS returns. Arranging for cancellation of GST registrations and deregistration of MMG. Planning / review Attending internal discussions and planning in relation to next steps in the finalisation of the job. Banking Preparing, reviewing and approving payment and receipt vouchers. Reviewing and reconciling the Liquidators bank account. Closing the Liquidators bank account. MMG and MMG D&B Report to Creditors 14

18 Task area General description Includes Dividends hours $24, (ex GST) Distribution Determining quantum of the unsecured creditor distribution. Calling for PODs and advertising the notice of intention to declare a dividend on the ASIC published notices website. Engaging with unsecured creditors to obtain EFT details for the distribution. Adjudicating of PODs received from creditors. Notifying creditors of rejected claims. Admitting creditors claims where valid claim is received. Paying final distribution to unsecured creditors. Managing and responding to unsecured creditor queries. Liaising with ASIC to transfer any unpresented cheques to ASIC unclaimed monies. Liaising with the ATO to prove for additional GST and obtain tax clearances. Note task area outlined above refers to the full amount of fees incurred before the 20% discount has been applied. MMG and MMG D&B Report to Creditors 15

19 MMG D&B Approval received At the s439a Meeting of Creditors on 6 July 2015, and the Annual Meeting 10 August 2016, approval of the following fees was sought and received: Period Voluntary Administrators remuneration 1 June July 2015 Liquidators remuneration 6 July August 2016 Liquidators remuneration beyond 6 August 2016 (approved prospectively) Amount (ex GST) $18, $42, $20, Total fees approved $80, Total fees paid (to 19 May 2017) $71, Administrators and Liquidators disbursements $ Total fees and disbursements approved and paid $72, Approval sought Given MMG D&B has remaining approval, no surplus funds and this is a final meeting, the Liquidators are not seeking any further remuneration. Books and records Pursuant to section 542 of the Act, the Liquidators must retain the books and records of a company in liquidation for a period of 5 years from the date of deregistration. Section 524(3) of the Act states that the books and records of a company in liquidation may be destroyed prior to this date subject to the approval of a resolution put to the creditors of the company. At the first annual meeting of creditors, creditors resolved that the books and records of the Companies may be destroyed following the deregistration of the Companies, subject to the consent of ASIC being obtained. Accordingly, the books and records of the Companies will be destroyed immediately following the deregistration of the Companies, subject to consent being received from ASIC. Creditor meeting details The annual meeting of creditors of MMG has been convened to be held at McGrathNicol, Level 12, 20 Martin Place, Sydney NSW 2000, on 5 September 2017, commencing at 12:00pm. The combined annual and final meeting of creditors for MMG D&B is to be held following the meeting of creditors of MMG at 12:30pm at the same location listed above. Creditors who have already lodged a proof of debt do not need to complete a new proof. Under the Act, the proxy forms lodged by creditors for prior creditors meetings cannot be used for the upcoming meetings. Accordingly, creditors who are unable to attend the meetings and wish to be represented should ensure that either a proxy form, power of attorney or evidence of appointment of a company representative is completed. Documents may be lodged with me prior to the meeting or may be brought to the meeting. A formal notice of meeting, proof of debt form and proxy form are attached to this report. Teleconference facilities Creditors wishing to attend by telephone are advised they can utilise a conference facility, please contact Joshua Crick of my staff on (02) to obtain the telephone conference details. Creditors wishing to participate in the meeting by telephone must return to the convenor of the meeting not later than the second last working day before the day of the meeting (i.e. by 4 September 2017): MMG and MMG D&B Report to Creditors 16

20 a written statement setting out the name of the person and of the proxy or attorney, (if any); an address to which notices to the person, proxy or attorney may be sent; a telephone number at which the person, proxy or attorney may be contacted; and any facsimile number to which notices to the person, proxy or attorney may be sent. A person, or the proxy or attorney of a person who participates in the meeting by telephone, must pay any costs incurred in participating and is not entitled to be reimbursed for those costs from the assets of the Companies. Creditors who require any other details should please contact Joshua Crick of this office on (02) or by (jcrick@mcgrathnicol.com). Dated: 31 July 2017 Jason Preston Joint and Several Liquidator Appendices: Appendix A: DIRRI Appendix B: MMG - Actual Liquidators fees for the period 20 May 2017 to 21 July 2017 Appendix C: MMG - Liquidator s prospective remuneration for the period 22 July 2017 until completion MMG and MMG D&B Report to Creditors 17

21 APPENDIX A: Declaration of Independence, relevant relationships and indemnities MMG and MMG D&B Report to Creditors 18

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23 Declaration of Independence, Relevant Relationships and Indemnities Mining Management Group Pty Limited ACN (Administrators Appointed) ( MM Group ) MMG Drill & Blast Pty Limited ACN (Administrators Appointed) ( MMG Drill & Blast ) ( Mining Management Group or the Companies ) The Corporations Act 2001 and professional standards require the Practitioner/s appointed to an insolvent entity to make a declaration as to: A. B. their independence generally; relationships, including a) the circumstances of the appointment; b) any relationships with the company and others within the previous 24 months; c) any prior professional services for the company within the previous 24 months; d) that there are no other relationships to declare; and C. any indemnities given or up-front payments made to the Practitioner. This declaration is made in respect of ourselves, our partners and the firm McGrathNicol. A. Independence We, Jason Preston and Rob Kirman of the firm McGrathNicol have undertaken a proper assessment of the risks to our independence prior to accepting the appointment as Administrators of the Companies in accordance with the law and applicable professional standards. This assessment identified no real or potential risks to our independence. We are not aware of any reasons that would prevent us from accepting this appointment. B. (i) Declaration of Relationships Circumstances of appointment We were introduced to Phillip Gunter, the Director of the Companies by Dermott McVeigh of Avior Consulting, who was assisting the Companies to restructure the business. We had various correspondences (by telephone, and in person) with the Companies and their advisors during the period from 25 May 2015 to 1 June 2015, including the following: Rob Kirman received a telephone call from Dermott McVeigh on 25 May 2015 to advise that the Companies were experiencing financial difficulty and to arrange a conference call with the Director for the next day. Rob Kirman met with Dermott McVeigh on 26 May 2015 and held a teleconference with the Director and his wife, Leona Gunter and following this was sent a number financial records of the Companies. Jason Preston met with the Director and his wife on 28 May 2015 with Rob Kirman and Dermott McVeigh dialling in by way of a teleconference. Jason Preston then met with Westpac and Rodgers Reidy (as advisors to Westpac) and the Director and his wife later that same day. Jason Preston, Barry Kogan (another Partner at McGrathNicol) and Chris King (a Senior Manager of McGrathNicol) met with the Director and his wife in person on 29 May The purpose of these discussions was to: understand the Companies businesses and operations;

24 understand the Companies current financial position; discuss alternative courses of action available to the Companies; and provide general information about various insolvency processes. We did not receive any remuneration for our attendances at these meetings. On 1 June 2015, the Director of the Companies resolved to appoint Jason Preston and Rob Kirman as Voluntary Administrators. In our opinion, the above matters do not affect our independence for the following reasons: it is recognised by the Courts and the Australian Restructuring Insolvency and Turnaround Association s Code of Professional Practice that pre-appointment advice on the insolvency process and available options is necessary and does not amount to an impediment to accepting an appointment; it was limited to the topics listed above, principally to understanding the Companies financial circumstances and options available to them; and the nature of the advice provided was such that it would not be subject to review and challenge during the course of the administration. Nor would the advice influence our ability to be able to fully comply with the statutory and fiduciary obligations associated with the administration in an objective and impartial manner. We have provided no other information or advice to the Companies, their Director or advisors prior to our appointment beyond that outlined in this DIRRI. Further information regarding our prior professional relationship with Avior Consulting is detailed below. (ii) Relevant Relationships (excluding professional services to the Insolvent) We or a member of our firm, have or have had within the preceding 24 months, a relationship with: Name Nature of relationship Reasons Dermott McVeigh Avior Consulting Westpac Banking Corporation Avior Consulting acted as financial advisors to the Companies and referred the Companies to McGrathNicol in order to discuss insolvency options, resulting in our appointment as Voluntary Administrators. Rob Kirman of McGrathNicol has a professional relationship with Dermott McVeigh, a director of Avior Consulting. This is the first referral McGrathNicol has received from Avior Consulting. Westpac holds a circulating and non-circulating security interest We believe this relationship does not result in a conflict of interest or duty because: McGrathNicol has not undertaken any previous engagement for Avior Consulting in respect of the Companies. The relationship with Dermott McVeigh and Avior Consulting is a professional relationship. The referral is unconditional. Professional relationships between business advisors are common practice and there are no arrangements between McGrathNicol or its partners, Avior Consulting or Dermott McVeigh that impact our independence in carrying out our duty as administrators. Given these factors, our independence in acting as Voluntary Administrators of the Companies has not been affected. We believe this relationship does not result in a conflict of interest or duty because:

25 ( Westpac ) Bank of Queensland ( BOQ ) over the whole or substantially the whole of the property of MM Group. McGrathNicol undertakes corporate recovery and advisory work from time to time on instructions from Westpac. BOQ holds a circulating and non-circulating security interest over the whole or substantially the whole of the property of MMG Drill & Blast. McGrathNicol undertakes corporate recovery and advisory work from time to time on instructions from BOQ. Each professional engagement undertaken for Westpac in relation to a particular entity or group of entities is conducted on an entirely separate basis which has no bearing on this appointment. These engagements are only commenced after full regard is given to potential conflicts of interest in relation to all interested stakeholders. McGrathNicol has not undertaken an engagement for Westpac for MM Group previously. Given these factors, our independence in acting as Voluntary Administrators of MM Group has not been affected. We believe this relationship does not result in a conflict of interest or duty because: Each professional engagement undertaken for BOQ in relation to a particular entity or group of entities is conducted on an entirely separate basis which has no bearing on this appointment. These engagements are only commenced after full regard is given to potential conflicts of interest in relation to all interested stakeholders. McGrathNicol has not undertaken an engagement for BOQ for MMG Drill & Blast previously. Given these factors, our independence in acting as Voluntary Administrators of MMG Drill & Blast has not been affected. (iii) Prior professional services to the Insolvent Neither we nor our firm, have provided any professional services to the Companies in the previous 24 months. (iv) No other relevant relationships to disclose There are no other known relevant relationships, including personal, business and professional relationships, from the previous 24 months with the Companies, an associate of the Companies, a former insolvency practitioner appointed to the Companies or any person or entity that has security over the whole or substantially whole of the Companies property that should be disclosed. C. Indemnities and Up-front Payments We have not been indemnified in relation to this Administration, other than any indemnities that we may be entitled to under statute and we have not received any up-front payments in respect of our remuneration or disbursements.

26 D. Appointments to Members of a Corporate Group As specified on page one of this Declaration, the administrators/liquidators have been appointed as Voluntary Administrators of two companies within the Mining Management Group of companies, Mining Management Group Pty Limited and MMG Drill & Blast Pty Limited. The Voluntary Administrators are of the view that the appointment to the Companies will have significant benefits to the conduct of the Administrations, particularly in that this will provide for cost-savings and enable an accurate as possible view to be obtained of the activities and financial position of the Companies as a whole. The Voluntary Administrators are aware that there may be inter-company transactions between the Companies but at this time are not aware of any potential conflicts of interest arising from the appointments over the Companies. However, to the extent it becomes apparent that pre-appointment dealings between the Companies may give rise to a conflict which may impact the outcome for creditors of either company, then the Voluntary Administrators undertake to disclose any such conflicts to the creditors and if appropriate, seek Court directions as to the means of resolving the potential conflict. Dated: 4 June Jason Preston Rob Kirman Note: 1 If the circumstances change or new information is identified, we are required under the Corporations Act 2001 and the ARITA Code of Professional Practice to update this Declaration and provide a copy to the creditors/committee with our next communication, as well as table a copy of any replacement Declaration at the next meeting of the insolvent s creditors/committee. 2 Any relationships, indemnities or up-front payments disclosed in the Declaration of Independence, Relevant Relationships and Indemnities (DIRRI) must not be such that the Practitioner is no longer independent. The purpose of components B and C of the DIRRI is to disclose relationships that, while they do not result in the Practitioner having a conflict of interest or duty, ensure that creditors are aware of those relationships and understand why the Practitioner nevertheless remains independent. Please note that the presentation of the above information is in accordance with the standard format suggested by ARITA.

27 APPENDIX B: MMG - Actual Liquidators fees for the period 20 May 2017 to 21 July 2017 Remuneration for the period 20 May 2017 to 21 July 2017 Total Creditors Statutory and Administration Dividends Investigations Employee Position Rate $/hr hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) Jason Preston Partner Rob Kirman Partner Damien Pasfield Director , , , Timothy Duncan Senior Accountant , , , Timothy Duncan Senior Accountant , , Joshua Crick Senior Accountant , , , Joshua Crick Accountant , , , , Pelin Dundar Accountant Pelin Dundar Undergraduate Various Client Admin/Treasury Total (excluding GST) , , , , Discount (20%) (6,794.40) Total including discount 27, GST 2, Total (including GST) 29,895.36

28 APPENDIX C: MMG Liquidators prospective remuneration for the period 22 July 2017 to finalisation (estimate) Remuneration for the period 22 July 2017 to finalisation Total Creditors Statutory and Administration Dividends Investigations Employee Position Rate $/hr hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) Jason Preston Partner , , , Rob Kirman Partner , , , , Damien Pasfield Director , , , , Timothy Duncan Senior Accountant , , , , Joshua Crick Senior Accountant , , , , Pelin Dundar Accountant , , , , Various Client Admin/Treasury Total (excluding GST) , , , , Discount (20%) (12,605.80) Total including discount 50, GST 5, Total (including GST) 55,465.52

29 FORM 529 Corporations Act (2001) NOTICE OF ANNUAL MEETING OF CREDITORS Subregulation (2) Mining Management Group Pty Limited (In Liquidation) ACN ( MMG )( the Company ) Notice is given that the annual meeting of creditors of the Company will be held at McGrathNicol, Level 12, 20 Martin Place, Sydney NSW 2000 on Tuesday, 5 September 2017 at 12:00 PM. The purpose of the meeting is to: 1. To consider the Liquidators report in relation to the Companies affairs and any other matters raised. 2. To consider and if thought fit approve the Liquidators remuneration. 3. To discuss any other relevant business which may arise. Dated: 31 July 2017 Jason Preston Joint and Several Liquidator McGrathNicol Level 12, 20 Martin Place, Sydney NSW 2000 Telephone: Facsimile:

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31 FORM 529 Corporations Act (2001) NOTICE OF ANNUAL MEETING OF CREDITORS Subregulation (2) MMG Drill & Blast Pty Limited (In Liquidation) ACN ( MMG D&B )( the Company ) Notice is given that the annual meeting of creditors of the Company will be held at McGrathNicol, Level 12, 20 Martin Place, Sydney NSW 2000 on Tuesday, 5 September 2017 at 12:30 PM concurrently with the final meeting of creditors and members. The purpose of the meeting is to: 1. To consider the Liquidators report in relation to the Companies affairs and any other matters raised. 2. To discuss any other relevant business which may arise Dated: 31 July 2017 Jason Preston Joint and Several Liquidator McGrathNicol Level 12, 20 Martin Place, Sydney NSW 2000 Telephone: Facsimile:

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33 FORM 529 Corporations Act (2001) NOTICE OF FINAL MEETING OF MEMBERS AND CREDITORS Subregulation (2) MMG Drill & Blast Pty Limited (In Liquidation) ACN ( MMG D&B )( the Company ) Notice is given that the final meeting of members and creditors of the Company will be held at McGrathNicol, Level 12, 20 Martin Place, Sydney NSW 2000 on Tuesday, 5 September 2017 at 12:30 PM concurrently with the annual meeting of creditors. The purpose of the meeting is to: 1. receive the Liquidators account showing how the winding up has been conducted and the property of the Company has been disposed of, and receive any explanation of the account. The Liquidator s account of receipts and payments has been made up and may be inspected at my office during normal business hours. Dated: 31 July 2017 Jason Preston Joint and Several Liquidator McGrathNicol Level 12, 20 Martin Place, Sydney NSW 2000 Telephone: Facsimile:

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35 Australian Company Number: FORM 535 Corporations Act (2001) Subregulation (2) FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM) To the Liquidators of Mining Management Group Pty Limited (In Liquidation) 1. This is to state that the company was on 6 July 2015 (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 Amount Remarks (include details of Debt arose) $ c 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 *Do not complete if this proof is made by the creditor personally.

36 *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.

37 Australian Company Number: FORM 535 Corporations Act (2001) Subregulation (2) FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM) To the Liquidators of MMG Drill & Blast Pty Limited (In Liquidation) 1. This is to state that the company was on 6 July 2015 (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 Amount Remarks (include details of Debt arose) $ c 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 *Do not complete if this proof is made by the creditor personally.

38 *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.

39 Address: Level 12, 20 Martin Place, Sydney NSW 2000 Contact Name: Joshua Crick Contact Number: Proofs of Debt Notes for your guidance (Please read carefully before filling in Form 535 or Form 536) It is a creditor s responsibility to prove their claim to our satisfaction. When lodging claims, creditors must ensure that: a) the proof of debt form is properly completed in every particular; and b) evidence, such as that detailed below, is attached to the Form 535 or Form 536. Directions for completion of a Proof of Debt 1. Insert the full name and address of the creditor. 2. Under Consideration state how the debt arose, for example goods sold to the company on Under Remarks include details of any documents that substantiate the debt (refer to the section titled Information to support your claim below for further information). 4. Where the space provided for a particular purpose is insufficient to contain all the required information in relation to a particular item, that information should be set out in an annexure. 5. An annexure to the form must have an identifying mark and be endorsed with the words: This is the annexure of pages marked referred to in the Form 535/536 signed by me and dated Signature(s).. Name of Signatory IN BLOCK LETTERS and signed by each person signing the form to which the document is annexed. 6. The pages in the annexure must be numbered consecutively. 7. Where a document, copy of a document or other matter is annexed to a form, reference made in the form to the annexure shall be by its identifying mark, the number of pages in it, and a brief description of the nature of the document and its contents. 8. A reference to an annexure includes a document, copy of a document or any other matter accompanying, attaching to or annexed to a form. Information to support your claim Please note that your debt is not likely to be accepted unless evidence to support its existence is provided. Detailed below are some examples of the type of debt creditors may be claiming and a suggested list of documents, copies of which should accompany a proof of debt for that class of creditor. Trade Creditors Statements and supporting invoices(s) showing the amount of the debt; and Advice(s) to pay outstanding invoice(s) (optional). 1

40 Guarantees/Indemnities Executed guarantee/indemnity; Notice of Demand served on the guarantor; and Calculation of the amount outstanding under the guarantee. Judgment Debt Copy of the judgment; and Documents/details to support the underlying debt as per other categories. Deficiencies on Secured Debt Security Documents (eg. mortgage); Independent valuation of the secured portion of the debt (if not yet realised) or the basis of the creditor s estimated value of the security; Calculation of the deficiency on the security; and Details of income earned and expenses incurred by the secured creditor in respect of the secured asset since the date of appointment. Loans (Bank and Personal) Executed loan agreement; and Loan statements showing payments made, interest accruing and the amount outstanding as at the date of appointment. Tax Debts Documentation that shows the assessment of debts, whether it is an actual debt or an estimate, and separate amounts for the primary debt and any penalties. Employee Debts Basis of calculation of the debt; Type of Claim (eg. wages, holiday pay, etc); Correspondence relating to the debt being claimed; and Contract of Employment (if any). Leases Copy of the lease; and Statement showing amounts outstanding under the lease, differentiating between amounts outstanding at the date of the appointment and any future monies. 2

41 FORM 532 Corporations Act 2001 Regulation Mining Management Group Pty Limited (In Liquidation) ACN ( MMG ) APPOINTMENT OF PROXY I/We (1) of a creditor/member of Mining Management Group Pty Limited (In Liquidation) appoint (2) as my/our special proxy to vote at the meeting of creditors to be held on 5 September 2017 at 12:00pm or at any adjournment of that meeting. Resolution For Against Abstain 1 That the remuneration of the Liquidators of MMG for the period 20 May 2017 to 21 July 2017 in the amount of $27, (excluding GST) calculated at the hourly rates as detailed in the Schedule of Remuneration Methods and Hourly Rates, after applying a discount of 20% is hereby approved for payment from funds on hand. 2 That the prospective remuneration of the Liquidators of MMG, to a maximum amount of $50, (excluding GST), calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, after applying a discount of 20% for the period from 22 July 2017 until the work undertaken in the estimation of remuneration is complete, from funds on hand (or as and when they funds are received). DATED this day of 2017 (4) Signature CERTIFICATE OF WITNESS - only complete if the person given the proxy is blind or incapable of writing. I, of certify that the above instrument appointing a proxy was completed by me in the presence of and at the request of the person appointing the proxy and read to him before he attached his signature or mark to the instrument.

42 DATED this day of 2017 Signature of witness Description Place of residence Notes: (1) If a firm strike out "I" and set out the full name of the firm. (2) Insert the name of the person appointed. (3) If a special proxy, add the words to vote for or the words to vote against and specify the particular resolution. (4) If the creditor is a sole trader, sign in accordance with the following example: A.B., proprietor. If the creditor is a partnership, sign in accordance with the following example: A.B., a partner of the said firm. If the creditor is a company, then the form of proxy must be under its Common Seal or under the hand of some officer duly authorised in that capacity, and the fact that the officer is so authorised must be stated in accordance with the following example: for the company, A.B. (duly authorised under the Seal of the Company). Proxy forms should have been completed and returned by no later than 5:00 PM on 25 August 2017 to be eligible to vote at the meeting. RETURN TO: Mining Management Group Pty Limited (In Liquidation) of care of McGrathNicol Address: GPO Box 9986, Sydney NSW 2001 Phone: Fax: jcrick@mcgrathnicol.com

43 FORM 532 Corporations Act 2001 Regulation MMG Drill & Blast Pty Limited (In Liquidation) ACN ( MMG D&B ) APPOINTMENT OF PROXY I/We (1) of a creditor/member of MMG Drill & Blast Pty Limited (In Liquidation) appoint (2) as my/our special proxy to vote at the meeting of creditors and final meeting of creditors and members to be held on 5 September 2017 at 12:30pm or at any adjournment of that meeting. There are no resolutions proposed for this meeting. DATED this day of 2017 (4) Signature CERTIFICATE OF WITNESS - only complete if the person given the proxy is blind or incapable of writing. I, of certify that the above instrument appointing a proxy was completed by me in the presence of and at the request of the person appointing the proxy and read to him before he attached his signature or mark to the instrument. DATED this day of 2017 Signature of witness Description Place of residence Notes:

44 (1) If a firm strike out "I" and set out the full name of the firm. (2) Insert the name of the person appointed. (3) If a special proxy, add the words to vote for or the words to vote against and specify the particular resolution. (4) If the creditor is a sole trader, sign in accordance with the following example: A.B., proprietor. If the creditor is a partnership, sign in accordance with the following example: A.B., a partner of the said firm. If the creditor is a company, then the form of proxy must be under its Common Seal or under the hand of some officer duly authorised in that capacity, and the fact that the officer is so authorised must be stated in accordance with the following example: for the company, A.B. (duly authorised under the Seal of the Company). Proxy forms should have been completed and returned by no later than 5:00 PM on 25 August 2017 to be eligible to vote at the meeting. RETURN TO: Mining Management Group Pty Limited (In Liquidation) of care of McGrathNicol Address: GPO Box 9986, Sydney NSW 2001 Phone: Fax: jcrick@mcgrathnicol.com

45 Proxy Notes for your Guidance Insert full name and address of creditor, contributory or member on the top line. On the second line, insert the name of the person you appoint as your proxy. You may insert the Chairperson of the meeting if you wish. On the next line insert the organisation the proxy holder represents or works for (not required if the Chairperson is your proxy). You may appoint an alternate proxy on the fourth line who may act if your first appointed proxy cannot attend the meeting. You may insert the Chairperson of the meeting if you wish. If the proxy is a general proxy the form requires no addition. If the proxy is a special proxy the form must include instructions regarding the use of the proxy (i.e. details of the resolution and whether the proxy holder is to cast a vote in favour or against the resolution or abstain from voting). Date and sign the Proxy form using one of the following various forms of execution: Sole Trader - Sign the proxy yourself. Partnership - e.g. sign Smith & Associates Per John Smith - Partner Company - (i) By a director or secretary, e.g. J Smith Director. (ii) By a person duly authorised to sign on behalf of the company, e.g. Smith & Sons Pty Ltd. ACN: Per: J Smith A person duly authorised to sign on the company s behalf. OR Smith & Sons Pty Ltd. ACN: By its duly constituted attorney J Smith. NB: If signing on behalf of a company the following example is not sufficient: Smith & Sons Pty Ltd. ACN: Per: J Smith Certificate of Witness is only to be used where the Proxy is being completed on behalf of a person who is blind or incapable of writing. In all other cases a witness to the signature of the person appointing the Proxy is not required and you may ignore the section headed Certificate of Witness. 1

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47 Time and Place of Meeting Mining Management Group Pty Limited (In Liquidation) ACN ( MMG ) MMG Drill & Blast Pty Limited (In Liquidation) ACN ( MMG D&B ) ( the Companies ) General Information for Attending and Voting at Meetings of Creditors Pursuant to Corporations Regulation (Regulation) a meeting of creditors must be convened at a time and place most convenient for the majority of creditors entitled to receive notice of the meeting. Quorum Pursuant to Regulation a meeting must not act for any purpose except: the election of a chairperson; and the proving of debts; and the adjournment of the meeting: unless a quorum is present. A quorum is deemed to be present if at least 2 (two) creditors are present at the meeting in person, by proxy, by power of attorney or participating by telephone. A meeting is sufficiently constituted if only one person is present in person if the person represents personally or by proxy or otherwise a number of persons sufficient to constitute a quorum. Chairperson Pursuant to Regulation the Administrator is appointed Chairperson of the meeting. Alternatively, the Administrator may, pursuant to Regulations and , appoint someone else to act as chairperson of the meeting and authorise that person to use any proxies held by the Administrator on the Administrator s behalf. For the second meeting of creditors in a Voluntary Administration, the Administrator must chair the meeting pursuant to Section 439B of the Corporations Act Voting Pursuant to Regulation creditors will not be eligible to vote at the meeting unless they have lodged particulars of their debt or claim prior to or at the meeting. Accordingly, creditors who intend to vote at the meeting should ensure that they lodge a formal proof of debt with the company prior to or at the meeting. Pursuant to Regulation all resolutions put to the meeting will be decided on the voices unless a poll is demanded, before or on the declaration of the result of the voices. A poll may be demanded by: the chairperson; or at least 2 (two) persons present in person, by proxy, by power of attorney or participating by telephone and entitled to vote at the meeting; or a person present in person, by proxy, by power of attorney or participating by telephone and representing not less than 10% of the total voting rights of all persons entitled to vote at the meeting. Pursuant to Regulation , should a poll be demanded: 1

48 a resolution will be carried if a majority in number and a majority in value vote in favour of the resolution; and a resolution will be lost if a majority in number and a majority in value vote against the proposed resolution. In the event of a deadlock, the chairperson may exercise a casting vote. In such situations, the minutes of the meeting must specify the chairperson s reasons for exercising, or not exercising, their casting vote. Proxies Pursuant to Regulation creditors who are entitled to attend and vote at the meeting may appoint a natural person over the age of 18 years as their proxy to attend and vote at the meeting on their behalf. Accordingly, creditors who are unable to attend the meeting but who wish to be represented should ensure that a validly executed proxy form is lodged with the Administrator prior to the meeting. Pursuant to Regulations and A creditors may lodge a facsimile copy of a proxy form with the Administrator prior to the meeting; however, the original of the instrument must be received by the Administrator within 72 hours of receipt of the faxed copy. Pursuant to Regulations , and creditors may lodge a proxy form with the company prior to the meeting by electronic means, however electronic lodgement will only be possible where the convenor has specified an electronic address or other electronic means on the proxy form. Proxy forms lodged via electronic means must be validly executed by signing and scanning the form. Pursuant to Regulation a person may, should they so desire, appoint the Administrator by name or by reference to his or her office to act as his, her or its general or special proxy. Corporate Creditors Corporate creditors who wish to attend the meeting should note that they may only be represented by an individual if that person is validly granted a proxy or power of attorney by that corporation. Alternatively, Section 250D of the Corporations Act 2001 provides that a corporation may, by resolution of its board, provide a standing authority for a specified person to represent the corporation at specified meeting of creditors. A copy of any such resolution should be provided to the Administrator prior to attending the meeting. Committee of Inspection/Committee of Creditors Pursuant to Section 436G of the Corporations Act 2001, a person may only serve as a member of a Committee of Creditors if the person is: a creditor of the company personally; or the attorney of a creditor under a general power of attorney; or authorised in writing by a creditor. Corporate creditors who are members of a Committee of Inspection may be represented by: an officer or employee of the member; or an individual authorised in writing by the member to represent the member on the committee. 2

49 Schedule of Remuneration Methods and Hourly Rates Initial Advice to Creditors Basis of remuneration Remuneration methods There are four basic methods that can be used to calculate the remuneration charged by an insolvency practitioner. They are: Time based/hourly rates This is the most common method. The total fee charged is based on the hourly rate charged for each person who carried out the work, multiplied by the number of hours spent by each person on each of the tasks performed. Fixed Fee The total fee charged is normally quoted at the commencement of the administration and is the total cost for the administration. Sometimes a practitioner will finalise an administration for a fixed fee. Percentage The total fee charged is based on a percentage of a particular variable, such as the gross proceeds of asset realisations. Contingency The practitioners fee is structured to be contingent on a particular outcome being achieved. Method Proposed We propose that our remuneration will be calculated on a time basis which will be recorded and charged in six minute increments. Details of the hourly rates for different levels of staff are included below. The complexity and demands of the administration will determine the staff to be utilised for this appointment. We have chosen the time based method because this method is considered to be most suitable for this appointment as it ensures creditors are only charged for work that is performed in the external administration, which can be difficult to accurately estimate at the date of appointment. 1

50 Explanation of Hourly Rates The rates for our remuneration calculation are set out in the following table, together with a general guide showing the qualifications and experience of staff engaged in the administration and the role they take in the administration. The hourly rates charged encompass the total cost of providing professional services and should not be compared to an hourly wage. Title Appointee/Partner Director 1 Director Senior Manager Manager 1 Manager Assistant Manager Guide to qualifications and role Registered liquidator, Chartered Accountant or equivalent and generally degree qualified with more than twelve years of experience. Leads assignments with full accountability for strategy and execution. Generally, Chartered Accountant or comparable qualification and degree qualified with more than ten years of experience, including four years of Director or equivalent experience. Autonomously leads complex insolvency appointments reporting to Appointee/Partner. Generally, Chartered Accountant or comparable relevant qualification and degree qualified with more than nine years of experience. Autonomously leads insolvency appointments reporting to Appointee/Partner. Generally, Chartered Accountant or comparable relevant qualification and degree qualified with more than seven years of experience. Self-sufficiently conducts small to medium insolvency appointments and leads major workstreams in larger matters. Generally, Chartered Accountant or comparable relevant qualification and degree qualified with more than six years of experience, including two years of Manager 2 or equivalent experience. Self-sufficiently conducts small to medium insolvency appointments and takes a supervisory role on workstreams in larger matters. Generally, Chartered Accountant or comparable relevant qualification and degree qualified with more than five years of experience. Self-sufficiently conducts small insolvency appointments and takes a supervisory role on workstreams in larger matters. Generally, Chartered Accountant or comparable relevant qualification and degree qualified with more than three years of experience. Autonomously manages workstream activity within appointments. Hourly rate (excl GST) $690 $625 $580 $515 $460 $410 $370 2

51 Title Senior Accountant 1 Senior Accountant Accountant 1 Accountant Undergraduate/ Cadet Practice Services Director Senior Practice Services Senior Client Administration and Senior Treasury Client Administration and Treasury Guide to qualifications and role Generally, degree qualified and undertaking Chartered Accountant s qualification or comparable relevant qualification with more than two years of experience, including one year of Senior Accountant or equivalent experience. Completes multiple tasks within workstreams and appointments. Generally, degree qualified and undertaking Chartered Accountant s qualification or comparable relevant qualification with more than 16 months of experience. Completes tasks within workstreams and appointments under supervision. Generally, degree qualified and undertaking Chartered Accountant s qualification or comparable relevant qualification with at least one year of Accountant or equivalent experience. Assists with tasks within workstreams and appointments under supervision. Generally, degree qualified and undertaking or about to undertake Chartered Accountant s qualification or comparable relevant qualification with less than one year of experience. Assists with tasks within workstreams and appointments under supervision. Undertaking relevant degree. Assists with tasks within workstreams and appointments under supervision. National Practice Service leaders, generally degree qualified with more than ten years of experience and reporting directly to partners. Technical experts in their specific areas and have team management responsibilities. Senior technical, professional or functional expert in national Practice Services. Generally degree qualified with more than seven years of experience. Reports to Practice Service leader and may be responsible for team management. Appropriately experienced and undertakes senior level administrative support activities or senior Treasury activities. May be responsible for day to day management of projects or operations and may have supervisory responsibility for junior staff. Appropriately experienced and undertakes support activities, including but not limited to Client administration, Treasury and document management functions. Hourly rate (excl GST) $320 $285 $250 $245 $210 $580 $410 $210 $160 McGrathNicol reviews its hourly rates six monthly. The hourly rates quoted above remain in force until 31 December or 30 June (whichever occurs first) and McGrathNicol may increase fees for work continuing past that date. Creditors will be advised of any change to the hourly rates for this administration. 3

52 Disbursements There are three categories of disbursements which may be charged: Externally provided professional services these are on-charged at cost. An example of an externally provided professional service disbursement is legal fees. Externally provided non-professional costs such as travel, accommodation, external printing services and search fees these are on-charged at cost. Internal disbursements such as photocopying, printing and postage. These disbursements are generally charged at cost but may include, in the case of disbursements such as such as telephone calls, photocopying and printing, both direct variable and fixed costs. For example the rate per page for printing includes a reasonable and commercial allowance for paper, toner, depreciation, power and maintenance). Creditor approval is not required for disbursements. However, details of the basis of recovering internal disbursements in this administration are provided below and full details of actual costs incurred and to be charged to the administration will be provided in future reports. Basis of Disbursement Claim Internal Disbursements Rate (Excl GST) Advertising Courier Printing - Black and white Printing - Colour Postage Stationery and other incidental disbursements Staff per diem travel allowance* Staff vehicle use Telephony mobile, fixed line and conference calls At cost At cost $0.09 per page $0.28 per page At Cost At Cost $89.00 per day $0.63 per km At cost * Payable when partners or staff are required for business purposes to stay away from their usual place of residence overnight. 4

53 Insolvency information for directors, employees, creditors and shareholders ASIC has 11 insolvency information sheets to assist you if you re affected by a company s insolvency and have little or no knowledge of what s involved. These plain language information sheets give directors, employees, creditors and shareholders a basic understanding of the three most common company insolvency procedures liquidation, voluntary administration and receivership. There is an information sheet on the independence of external administrators and one that explains the process for approving the fees of external administrators. A glossary of commonly used insolvency terms is also provided. The Insolvency Practitioners Association (IPA), the leading professional organisation in Australia for insolvency practitioners, endorses these publications and encourages its members to make their availability known to affected people. List of information sheets INFO 41 Insolvency: a glossary of terms INFO 74 Voluntary administration: a guide for creditors INFO 75 Voluntary administration: a guide for employees INFO 45 Liquidation: a guide for creditors INFO 46 Liquidation: a guide for employees INFO 54 Receivership: a guide for creditors INFO 55 Receivership: a guide for employees INFO 43 Insolvency: a guide for shareholders INFO 42 Insolvency: a guide for directors INFO 84 Independence of external administrators: a guide for creditors INFO 85 Approving fees: a guide for creditors Getting copies of the information sheets To get copies of the information sheets, visit ASIC s website at The information sheets are also available from the IPA website at The IPA website also contains the IPA s Code of Professional Practice for Insolvency Professionals, which applies to IPA members. Important note: The information sheets contain a summary of basic information on the topic. It is not a substitute for legal advice. Some provisions of the law referred to may have important exceptions or qualifications. These documents may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances. You will need a qualified professional adviser to take into account your particular circumstances and to tell you how the law applies to you. Australian Securities & Investments Commission, December 2008 Page 1 of 1