Rawfactory Pty Ltd (In Liquidation) Formerly trading as Rawsome ACN (the Company)

Transcription

1 Statutory Report to Creditors 14 June 2018 Rawfactory Pty Ltd (In Liquidation) Formerly trading as Rawsome ACN (the Company) PPB Pty Limited trading as PPB Advisory ABN Liability limited by a scheme approved under Professional Standards Legislation PPB Pty Ltd has associated but independent entities and partnerships

2 Table of contents 1. Appointment 3 2. Purpose of the report 3 3. Company background 3 4. Causes for failure 3 5. Trading outcomes 3 6. Sale of business 4 7. Dividend likelihood 4 8. Financial position and deficiency at liquidation 5 9. Investigations Investigations undertaken Findings and possible recoveries Findings Possible recoveries Finalising our investigations Reporting to ASIC Costs of the liquidation What happens next? What to do next 10 Appendix A. Remuneration Approval Report B. Meeting Documents

3 1. Appointment We refer to our initial information for creditors dated 28 March 2018 in which we advised you of our appointment as liquidators and your rights as a creditor in the liquidation. 2. Purpose of the report The purpose of this report is to: provide you with an update on the progress of the liquidation advise you of the likelihood of a dividend being paid in the liquidation advise you of the creditors meeting to be held on 29 June Company background The Company was incorporated in May 2016 and manufactured and distributed raw protein balls and health foods from its premises at Unit 1, 8 Zeta Crescent, O Connor WA 6163 (Premises). The Company s key customers included IGA stores, Miss Maud stores and local cafes. The Company s sole director is Laila Gampfer (Director). 4. Causes for failure The Director has attributed the cause of failure to: ongoing legacy issues arising from a previous related company s debt (noting that company is in liquidation) cool room malfunction resulting in a significant loss of stock which was not covered by insurance. Further to the above, we believe the following contributed to the cause of failure: poor management of financial records resulting in the inability to understand the Company s true financial performance and position insufficient cash flow with the Company incurring average monthly losses of c$8.7k failure to address ongoing trading losses through cost reduction strategies on a timely basis non-payment of Australian Taxation Office (ATO) statutory and employee obligations increasing aged payables over 90 days overdue indicating the inability to pay Company debts as they were due. 5. Trading outcomes We continued to operate and trade the Company on a business as usual basis while we undertook a short sale of business campaign. We ceased trading on Thursday 29 March 2018 when we completed the sale of the Company s business and assets to Raw So Me Australia Pty Ltd as Trustee for the Raw So Me Unit Trust (the Purchaser). We were able to achieve a marginal profit from our period of trading (detailed below) partly due to: rent being paid in advance for the month ended 31 March 2018 the Director, with our supervision, continuing to manage the day-to-day trading of the business and not drawing a wage. PPB Advisory Report to creditors 3

4 Trading Outcome Note Amount excl GST Sales 1 19,323 Operating expenses Fuel (301) Ingredients (4,778) Insurance (1,297) Packaging (244) Sundry (67) Wages 2 (8,238) Superannuation (783) PAYG paid (868) Provision for Telstra 3 (1,000) Total expenses (17,574) Net profit 1,749 Notes 1. c$18.3k (95%) of trading sales have been collected. We are pursuing payment of the outstanding c$1k. 2. All employees were retained on a casual basis during the trade-on period and terminated when we ceased trading on 29 March Current invoice received from Telstra is disputed due to incorrect charges for services transferred to the Director and the Purchaser. We are liaising with Telstra regarding an amended invoice. 6. Sale of business Following our appointment we contacted nine parties operating in similar industries or competitors of the Company regarding a sale of the Company s business and assets. We received two offers, one of which was an offer of $10 per lead customer. On 29 March 2018 we completed a sale of the business and assets to the Purchaser, an entity controlled by the Director, for $16.5k (including GST), allocated as follows: Plant and equipment 4, Intellectual property 8, Stock 3, Goodwill Business contracts Food licence Total 16, $ 7. Dividend likelihood The likelihood of a dividend being paid to creditors is affected by a number of factors including: the size and complexity of the liquidation the amount of assets realisable and the costs of realising those assets the statutory priority of certain claims and costs the value of various classes of claims including secured, priority and unsecured creditor claims, and the volume of enquiries by creditors and other stakeholders. PPB Advisory Report to creditors 4

5 Outlined below is the estimated return to creditors. Notes High Low Cash at bank 43,439 43,439 Debtors (trading) Debtors (pre-appointment) 5,206 1,421 Voidable transactions 1 TBC - GST refund 3,451 3,511 Total assets 49,256 45,410 Less: Liquidators' remuneration 2 (36,306) (36,306) Liquidators' disbursements (550) (1,100) Disputed invoice (1,100) (1,210) GST payable (2,673) (2,667) PAYG liability (309) (309) Funds available for creditors 8,318 3,818 Priority creditors 3 107, ,078 Est. return to priority creditors Shortfall to priority creditors 4 (98,760) (103,261) Unsecured creditors 5 145, ,645 Total shortfall to creditors (244,405) (248,906) Notes 1. As our investigations are ongoing we have yet to finalise our position on potential voidable transaction recoveries. Refer to section Creditor approval will be sought for liquidators remuneration of $33k + GST at the upcoming creditors meeting to be held on Friday 29 June Refer to section As we have not formally called for proofs of debt, the above creditor values are estimates only. The ATO have lodged a claim for unpaid superannuation for the amount of $97, Per Company records, outstanding superannuation at appointment was $40, Subject to any amendment to the ATO s proof of debt, the return to priority creditors may increase/decrease. 4. Employee claims are paid in priority to unsecured creditors pursuant to Section 556 of the Corporations Act 2001 (the Act). Priority claims in order are: 1. wages and superannuation 2. annual leave 3. long service leave 4. redundancy. We aim to declare a dividend to priority creditors within the next three months subject to voidable transaction recoveries. 5. It is unlikely there will be sufficient funds available to enable a distribution to unsecured creditors. 8. Financial position and deficiency at liquidation We received a Report as to Affairs (RATA) from the Director on 15 March A summary of the RATA is detailed below. Our knowledge of the Company is limited to information provided by: the Director creditors statutory bodies third parties. PPB Advisory Report to creditors 5

6 Notes RATA Valuation Director ERV Liquidator ERV Assets Debtors 1 29,992 26,392 26,491 Cash at bank Stock Work in progress (WIP) 4 2,040 4,000 1,500 Plant and equipment 5 4, Other assets ,110 Total assets 36,742 31,342 43,101 Liabilities Secured creditor 7 (9,981) (9,981) - Priority (employee) creditors (107,078) Unsecured creditors 9 (200,488) (200,488) (145,645) Contingent liabilities 10 (10,688) (10,688) - Total liabilities (221,157) (221,157) (252,723) Net asset Deficiency (184,415) (189,815) (209,622) Notes 1. Contrary to the Director s RATA outstanding debtors at appointment totalled $30,889. The table below summarises the current debtor position. Balance at appointment 30, Realised to date 24, Outstanding balance 6, Advised debtor in liquidation / Unable to repay (3,199.60) Creditor offset (996.42) Disputed invoice (201.96) Expected future recoveries 2, Estimated total debtor realisations 26, $ 2. The Company s bank account was overdrawn at appointment. 3. Nil realisable value as the products were converted to WIP during our trading period. 4. The RATA does not explain the reasoning for the variance between the valuation and Director s ERV. WIP was converted to post appointment sales and any balance of stock was included in a sale of the business and assets on 29 March 2018 (see section 6). 5. The variance is due to the majority of the plant and equipment being categorised as packaging which has a nil value (trademark identified on the packaging is owned by the Director personally) and not saleable to a third party. 6. This amount consists of: $15k from the sale of the business and assets (refer to section 6) $110 from a pre-appointment insurance refund. 7. The Director has incorrectly allocated unpaid employee wages as secured creditors instead of priority creditors. 8. All employees were employed on a casual basis. We have identified the following employee entitlements: c$97k claimed by the ATO for unpaid superannuation and superannuation guarantee charge. The Company records show outstanding superannuation of c$41.1k of which c$4.8k relates to excluded employees PPB Advisory Report to creditors 6

7 payments totalling c$2.8k paid by the Fair Entitlements Guarantee (FEG) scheme to eligible employees for unpaid wages unpaid wages of c$7.2k due employees who are not eligible or have not received a FEG payment. In the event there are sufficient funds for a distribution to priority (employee) creditors (refer to section 7), per s556(1a) of the Corporations Act 2001 (the Act) excluded employee claims for unpaid superannuation will be capped at $2k per excluded employee. Excluded employees are defined as employees who are either a director, director s spouse or relative of the director. Any claims above the capped amount will rank as an unsecured claim in the liquidation. 9. Per Company records and claims received to date. The largest five creditors are: ATO c$66.5k I Am Foods c$21.7k Go Capital Pty Ltd c$13.8k Kakulas Bros c$8.2k Synergy c$8.1k 10. Advised liability for make good, rent and outgoings at the Premises. We understand that following the acquisition of the business and assets by the Purchaser, the Purchaser agreed a new lease with the landlord in respect of the Premises. 9. Investigations 9.1 Investigations undertaken We have undertaken the following investigations to date: reviewed the Company s records to understand its historical financial performance and position, and to establish any deficiency in the information provided reviewed the Company s bank statements and transaction journals to identify any potential voidable transactions undertaken statutory searches regarding the Company, including searches of records held by the Australian Securities and Investments Commission (ASIC) reviewed registrations on the Personal Property Security Register (PPSR) conducted: - searches with major banks and financial institutions to identify any bank accounts held in the Company s name - a real property search to identify property owned by the Company and the Director. requested information from the ATO. 9.2 Findings and possible recoveries Findings The Company s financial records contain several material inaccuracies which have hindered our investigations into the Company s affairs. These include a: combined cash and accrual approach to recording transactions lack of an accurate management accounting system, making it difficult to accurately assess the Company s financial position in the months leading up to our appointment. As a result, we consider there has been a breach of section 286(1) of the Act, which requires companies to keep written financial records that are correctly recorded and would enable a true and fair view of the financial statements. Section 588E(4) of the Act provides for a presumption of insolvency if a company does not keep or retain financial records in accordance with section 286 of the Act. Our preliminary view is that the Company could be deemed insolvent from 27 May 2016 (the date of its incorporation) and remained PPB Advisory Report to creditors 7

8 insolvent up to the date of our appointment. We will finalise our view on this when we conclude our investigations. Reconstructing the Company s financial records from bank statements would incur significant costs and at this stage we do not consider this to be in the best interest of creditors. Notwithstanding the above, the findings from our initial investigations are summarised below: per Company bank statements, several payment arrangements were entered into with suppliers the Company made net losses in FY16, FY17 and YTD18 totalling c$200k. These losses appear to have been funded by the: o non-payment of ATO and superannuation liabilities o loans from the Director o loan from friends and family o third party loan taken out in August 2016 o o non payment of trade creditors/suppliers credit cards. the Company made losses in at least 15 of the 19 months it traded. the YTD18 aged payable balance decreased steadily in the nine months prior to appointment. We understand from the Director that these balances include amounts owed to two creditors of a previous entity the business had traded under. The percentage of creditors aged over 90 days increased during the nine months prior from 39% to 78% to date we have received a number of proofs of debt from creditors with higher claimed amounts than those identified in the Company s records. This indicates that some aged payables balances may be understated the Company s balance sheet includes several line items with similar account names but allocated both in assets and liabilities resulting in the inaccurate allocation of accounts. Further investigations and discussions with the Director are required to gain an understanding of the adjusted balance sheet position the Company reported a working capital deficiency and net asset deficiency since incorporation Possible recoveries Pursuant to Part 5.7B of the Act, we can seek to recover certain transactions entered into by the Company prior to its winding up. These transactions are commonly known as voidable transactions and include: unfair preference payments uncommercial transactions unfair loans unreasonable director related transactions fraudulent dispositions. To date, we have identified numerous potential preference claims against suppliers. We will conduct further analysis into the nature of the payments and whether these payments are commercially viable for recovery for the benefit of creditors. We will continue to investigate if there are any other voidable transactions (including payments to related entities) that can be commercially pursued for the benefit of creditors. This includes further investigations into the identified balance sheet accounts which appear as loans with the Director, the Director s husband and other parties. As liquidators, we are also able to seek compensation from a director if a Company traded whilst insolvent. Creditors should note that commencing action against the Director and/or de facto director PPB Advisory Report to creditors 8

9 for insolvent trading and/or voidable transactions, are only commercially justifiable when the defendant has sufficient assets to satisfy a judgement claim made against them. Based on our investigations to date the Company s Director does not own any real property. 9.3 Finalising our investigations We will now: identify any further voidable transactions conduct our investigations into the Director loan accounts to determine whether there are amounts owing to the Company conclude our investigations into the identified related party loan accounts stated on the Company s balance sheet determine the quantum of debts incurred while the Company was insolvent. 10. Reporting to ASIC We will submit a report to ASIC by the end of July 2018 setting out any offences we believe may have been committed by the Company and/or the Director. 11. Costs of the liquidation At the meeting of creditors on 29 June 2018 we will be asking creditors to approve the following remuneration: Period Amount (ex GST) Resolution 1: 14 March 2018 to 8 June 2018 $25, Resolution 2: 9 June 2018 to conclusion of the liquidation $8, Total $33, Attached at Appendix A is a detailed report on our remuneration, called a Remuneration Approval Notice. We are unable to pay our remuneration without the approval of creditors or the court. A meeting of creditors to consider this update and our remuneration will be held as follows: Date: Friday 29 June 2018 Meeting time: 10.30am AWST Venue: Level 21, 140 St Georges Terrace, Perth WA 6000 Meeting documentation is attached at Appendix B including: Appointment of proxy Proof of debt Request to attend by telephone Please return the Proof of debt form and Appointment of proxy to our office by 4.00 pm on Thursday 28 June Creditors who wish to attend by telephone must notify this office at least one business day prior to the meeting to make arrangements. PPB Advisory Report to creditors 9

10 12. What happens next? We will proceed with the liquidation, including: prepare and hold the meeting of creditors realise the remaining debtors complete our investigations into the Company s affairs pursue any identified voidable transactions declare a dividend to priority (employee) creditors attend to all statutory lodgements. We expect to finalise this liquidation within the next six months. 13. What to do next You should now: read the attached report decide whether you will attend the meeting and complete and return your proof of debt and if required, proxy form by Thursday 28 June You can access information which may assist you on the following websites: ARITA at ASIC at You can access information which may assist you on the following websites: ARITA at ASIC at Dated this 14th day of June 2018 Simon Theobald and Melissa Humann Liquidators List of attachments Appendix A - Remuneration Approval Notice Appendix B - Notice of Meeting and other meeting information Date of appointment: 14 March 2018 Contact name: Caitlin Morrissey Telephone number: cmorrissey@ppbadvisory.com PPB Advisory Report to creditors 10

11 A. Remuneration Approval Report Appendix A

12 Remuneration Approval report Rawfactory Pty Ltd (In Liquidation) (the Company) ACN Declaration 2. Executive summary 3. Remuneration 4. Disbursements 5. Summary of receipts and payments 6. Queries

13 This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration. You should read this report and the other documentation that we have sent you and then attend the meeting of creditors on Friday 29 June 2018 in order to voice your opinion by casting your vote on the resolutions put to the meeting. The meeting will also give you an opportunity to ask any questions that you may have. Alternatively, you are also able to appoint a representative to attend on your behalf by lodging a proxy form by Thursday 28 June Lodging a specific proxy form allows you to specify how your proxy must vote. Lodging a general proxy form allows your representative to choose how your vote is exercised. 1. Declaration We, Simon Theobald and Melissa Humann of PPB Advisory, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Liquidators of Rawfactory Pty Ltd 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 liquidation. Dated this 14th day of June 2018 Simon Theobald and Melissa Humann Liquidators 2. Executive summary To date, no remuneration has been approved and paid in this liquidation. Remuneration claimed is summarised below. Period Report Reference Amount (ex GST) Resolution 1: 14 March 2018 to 8 June $25, Resolution 2: 9 June 2018 to conclusion of the liquidation 3 $8, * 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. The total remuneration for this appointment is estimated to be $33, plus GST. Please refer to report section references detailed in the above table for full details of the calculation and composition of the remuneration approval sought. Page 2

14 3. Remuneration 3.1 Remuneration claim resolutions We will be seeking approval of the following resolutions to approve our remuneration. Details to support these resolutions are included in section 3.2 and attached schedules. Resolution 1 That the remuneration of the Liquidators is approved for the period 14 March 2018 to 8 June 2018 of $25, plus GST, as set out in the Remuneration Approval Report dated 14 June 2018 to be drawn from available funds immediately. Resolution 2 That the remuneration of the Liquidators is approved for the period 9 June 2018 to the conclusion of the Liquidation up to a maximum of $8, plus GST, as set out in the Remuneration Approval Report dated 14 June Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of the administration will exceed the maximum which has been approved, in which case, we may seek another resolution for additional remuneration. We will not pay any amount exceeding the maximum without this approval. Where funds are available, we will usually pay approved remuneration at intervals not less than one month. Where funds are not available, remuneration will not be paid. 3.2 Details of remuneration The basis of calculating the remuneration claims are summarised in Appendix A. The details of the major tasks performed and the costs associated with each of those major tasks are contained in Appendix B. 3.3 Total remuneration reconciliation This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 28 March 2018, which estimated a cost of the liquidation of $25, to $30, (excluding GST), for the following reasons: significant time costs involved with dealing with multiple customers incorrectly paying the incorrect bank accounts following the sale of business. This has resulted in additional recording and remittance of these transactions high volume of low value receipts from pre-appointment debtors and trading sales increasing the administrative work involved in realising the assets increased time costs in investigating the Company s financial performance and position as a result of poorly maintained financial records. Creditors should be advised that actual time costs incurred for the period 14 March 2018 to 8 June 2018 totalled $33, As a gesture of goodwill, we will seek a capped amount of $25, for this period. In preparing this remuneration approval report, we have made our best estimate at what we believe the liquidation will cost to complete and we do not anticipate that we will have to ask creditors to approve any further remuneration. However, should the liquidation not proceed as expected, we will advise creditors and we may seek approval of further remuneration and provide details on why the remuneration has changed. 3.4 Likely impact on dividends The Corporations Act sets the order for payment of claims against the company and it provides for remuneration of the Liquidators to be paid in priority to other claims. This ensures that when there Page 3

15 are sufficient funds, the Liquidators receive payment for the work done to recover assets, investigate the company s affairs, report to creditors and ASIC and distribute any available funds. Even if creditors approve our remuneration, this does not guarantee that we will be paid, as we are only paid if sufficient assets are recovered. Any dividend to creditors will also be impacted by the amount of assets that we are able to recover and the amount of creditor claims that are admitted to participate in any dividend, including any claims by priority creditors such as employees. Based on: realisations to date, estimated future realisations, our estimated remuneration to complete the liquidation and the estimated total of creditor claims based on the company s records and claims lodged now, We estimate that a dividend of between 3.6 and 7.8 cents in the dollar will be paid to priority creditors in the liquidation. However, this is subject to a range of variables, particularly future realisations and creditor claims. 3.5 Remuneration recovered from external sources The Liquidators have not received any funding from external sources for their remuneration. 4. Disbursements Disbursements are divided into three types: Externally provided professional services these are recovered at cost. An example of an externally provided professional service disbursement is legal fees. Externally provided non-professional costs these are recovered at cost. Examples of externally provided professional service disbursements are travel, accommodation, search fees, lodgement fees, storage, outsource printing and photocopying services and postage. Internal disbursements these are generally charged at cost although some expenses may be charged at a rate which recoups both variable and fixed costs. Examples of internal disbursements include data room and cloud hosting. PPB Advisory provides private cloud hosting and ediscovery services. If these services are required, the fee charged will be based on units (e.g. number of machines or users), size (e.g. per gigabyte) and/or period of time (e.g. period of hosting). If any internal disbursements are incurred in the liquidation we will seek creditor approval for payment of them. Page 4

16 4.1 Future basis of internal disbursements (if required) Future disbursements incurred by our firm will be charged to the administration on the following basis: Internal Disbursements Rate (Excl GST) Postage At cost * Staff vehicle use At prescribed ATO rates * Data room hosting Private cloud hosting ediscovery services Printing/Scanning/Photocopying $250 plus GST per month Variable Variable Rates applicable as at 1 January 2018 * These internal disbursements do not require approval to be paid as they are charged at cost 5. Summary of receipts and payments The summary of receipts and payments for the period from 14 March 2018 to 13 June 2018 is contained in Appendix C. 6. Queries Please contact Caitlin Morrissey on or by on cmorrissey@ppbadvisory.com should you have any queries or require any further information. You can access additional information on the following websites: ARITA at ASIC at Nil Page 5

17 A. Calculations of remuneration schedules Appendix A

18 Remuneration for the period 14 March 2018 to 8 June Rate Total Total Assets Creditors Investigation Trade-on Administration Employees Employee Position (Ex GST) Hours $ Hrs $ Hrs $ Hrs $ Hrs $ Hrs $ Hrs $ STHEOBALD Partner , , AHARPER Senior Manager , , , , , CMORRISSEY Consultant , , , , , , SIERINO Graduate , , ASTONEMAN Executive Assistant Senior Bookkeeper Total , , , , , , Discount (8,638.50) GST 2, Total (Including GST) 27, Average rate (excluding GST) Remuneration for the period 9 June 2018 to conclusion of the liquidation. Rate Total Total Assets Creditors Investigation Administration Dividend Employee Position (Ex GST) Hours $ Hrs $ Hrs $ Hrs $ Hrs $ Hrs $ STHEOBALD Partner , AHARPER Senior Manager , , CMORRISSEY Consultant , , SIERINO Graduate , Total , , , , , GST Total (Including GST) 8, Average rate (excluding GST)

19 B. Tables of major tasks for remuneration Appendix B

20 Schedule B1 Resolution 1 The below table provides a description of the work undertaken in each major task area for the period 14 March 2018 to 8 June Task Area General Description Includes Assets 23.7 hours $8, Creditors 14.6 hours $4, Trade On 29.5 hours $8, Employees 1.9 hours Sale of Business as a Going Concern Plant and Equipment Assets subject to specific charges Debtors Other Assets Leasing Creditor Enquiries Creditor reports Dealing with proofs of debt Meeting of Creditors Trade On Management Processing receipts and payments Budgeting and financial reporting Employees enquiries Liaising with interested parties Internal meetings to discuss/review offers received Reviewing asset listings Search the PPSA register Notify PMSI creditors identified from PPSA register All tasks associated with disclaiming PPSA assets Correspondence with debtors Reviewing and assessing collectability of debtors ledger Liaising with debt collectors and solicitors Tasks associated with realising other assets Reviewing leasing documents Liaising with owners/lessors Tasks associated with disclaiming leases Dealing with creditor enquiries via telephone Reviewing and preparing correspondence to creditors and their representatives via and post Preparing initial notice to creditors and this report Receipting and filing POD when not related to a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend Preparing meeting notices, proxies and advertisement Liaising with suppliers Liaising with management and staff Attendance on site Authorising purchase orders Maintaining purchase order registry Monitoring trading performance Preparing and authorising receipt vouchers Preparing and authorising payment vouchers Liaising with superannuation funds regarding contributions, termination of employees employment Terminating employees Liaising with customers Entering receipts and payments into accounting system Preparing trading budgets Finalising trading cash flow statement Meetings with management to discuss trading position Receive and follow up employee enquiries via telephone Review and prepare correspondence to employees and

21 Task Area General Description Includes $ their representatives via and post Preparation of letters to employees advising of their entitlements Investigation 17.4 hours $4, Administration 25.3hours $7, Total hours $33, Other employee issues Conducting investigation Correspondence Document maintenance/file review/checklist Insurance Bank account administration ASIC Form 524 and other forms ATO and other statutory reporting Finalisation Planning / Review Books and records / storage Dealing with trade on superannuation and payment summaries for employees Collecting company books and records Reviewing company s books and records Reviewing and preparing company nature and history Conducting and summarising statutory searches Preparing comparative financial statements Preparing deficiency statement Reviewing specific transactions and liaising with the Director regarding certain transactions Investigating indicators of insolvency and possible claims for insolvent trading Preparing investigation file General correspondence Regular administration review Filing of documents Updating checklists Review and confirmation of adequacy of cover Identification of potential issues requiring attention of insurance specialists Correspondence with insurer regarding initial and ongoing insurance requirements Reviewing insurance policies Correspondence with previous brokers Preparing correspondence opening and closing accounts Requesting bank statements Bank account reconciliations Correspondence with bank regarding specific transfers Preparing and lodging ASIC forms Correspondence with ASIC regarding statutory forms Preparing BAS Completing group certificates Notifying ATO of finalisation Cancelling ABN / GST / PAYG registration Completing checklists Discussions regarding status of administration Dealing with records in storage Sending job files to storage

22 Resolution 2 Schedule B2 The below table provides a description of the work undertaken in each major task area for the period 9 June 2018 to conclusion of the liquidation. Task Area General Description Includes Assets 1.0 hours $ Creditors 5.0 hours $2, Investigation 8.0 hours $3, Dividend 4.5 hours $1, Debtors Creditor Enquiries Creditor reports Dealing with proofs of debt Meeting of Creditors Conducting investigation ASIC reporting Processing proofs of debt Dividend procedures Correspondence with debtors Reviewing and assessing collectability of debtors ledger Liaising with debt collectors and solicitors Dealing with creditor enquiries via telephone Reviewing and preparing correspondence to creditors and their representatives via and post Preparing this report to creditors Receipting and filing POD when not related to a dividend Preparing meeting notices, proxies and advertisement 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 Conducting meeting of creditors Preparing and lodging of minutes of meeting with ASIC Responding to stakeholder queries and questions immediately following meeting Liaising with directors regarding certain transactions Investigations to identify indicators of insolvency and possible claims for insolvent trading Preparing investigation file Preparation and lodgement of supplementary report if required Preparing statutory investigation reports Preparing correspondence to potential creditors inviting lodgement of POD Receipt of POD Adjudicating POD Request further information from claimants regarding POD 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 Preparation of dividend calculation Preparation of correspondence to creditors announcing declaration of dividend Advertise announcement of dividend Preparation of distribution Preparation of dividend file

23 Task Area General Description Includes Administration 3.8 hours $1, Total 22.3 hours $8, Correspondence Document maintenance/file review/checklist Bank account administration ASIC Form 524 and other forms ATO and other statutory reporting Finalisation Planning / Review Books and records / storage Preparation of payment vouchers to pay dividend Preparation of correspondence to creditors enclosing payment of dividend General correspondence Regular administration review Filing of documents Updating checklists Preparing correspondence closing accounts Requesting bank statements Bank account reconciliations Processing receipts and payments Preparing and lodging ASIC forms Correspondence with ASIC regarding statutory forms Preparing BAS Completing group certificates Notifying ATO of finalisation Cancelling ABN / GST / PAYG registration Completing checklists Discussions regarding status of administration Sending job files to storage

24 Appendix C C. Summary of receipts and payments Receipts Debtors 22, Insurance Refund Sale of business 16, Trading sales 21, Total receipts 61, Payments ATO SGC Costs (23.44) Bank charges (217.20) Fuel (330.55) GST paid (394.00) Ingredients (4,817.73) Insurance (1,421.93) Legal Fees (1,488.30) Stationary (268.15) Sundry expenses (73.80) Superannuation (654.12) Wages (7,928.61) Total payments (17,617.83) Total receipts / (payments) 43,438.50

25 B. Meeting Documents Appendix B

26 Insolvency Practice Rules (Corporations) 2016 ss NOTICE OF MEETING OF CREDITORS Rawfactory Pty Ltd (In Liquidation) (the Company) ACN Notice is given that a meeting of the creditors of the Company will be held at Level 21, 140 St Georges Terrace, Perth WA 6000 on 29 June 2018 at 10:30 AM. AGENDA 1. To receive and consider a report from the Liquidators. 2. To fix or determine the remuneration of the Liquidators. 3. To fix or determine the future remuneration of the Liquidators. 4. To consider the early destruction of books and records. 5. Any other business. Creditors wishing to attend and vote are advised that proof of debts and proxies must be submitted to the Liquidator(s) by Thursday 28 June Dated this 14th day of June 2018 Simon Theobald and Melissa Humann Liquidators Section of the Insolvency Practice Rules (Corporations) sets out the entitlement to vote at meetings of creditors: (1) A person other than a creditor (or the creditor s proxy or attorney) is not entitled to vote at a meeting of creditors. (2) Subject to subsections (3), (4) and (5), each creditor is entitled to vote and has one vote. (3) A person is not entitled to vote as a creditor at a meeting of creditors unless: (a) (b) his or her debt or claim has been admitted wholly or in part by the external administrator; or he or she has lodged, with the person presiding at the meeting, or with the person named in the notice convening the meeting as the person who may receive of the debt or claim: (i) those particulars; or (ii) if required a formal proof of the debt or claim. (4) A creditor must not vote in respect of: (a) an unliquidated debt; or (b) a contingent debt; or (c) an unliquidated or a contingent claim; or (d) a debt the value of which is not established; unless a just estimate of its value has been made. (5) A creditor must not vote in respect of a debt or a claim on or secured by a bill of exchange, a promissory note or any other negotiable instrument or security held by the creditor unless he or she is willing to do the following: (a) treat the liability to him or her on the instrument or security of a person covered by subsection (6) as a security in his or her hands; (b) estimate its value; (c) for the purposes of voting (but not for the purposes of dividend), to deduct it from his or her debt or claim. (6) A person is covered by this subsection if: (a) the person s liability is a debt or a claim on, or secured by, a bill of exchange, a promissory note or any other negotiable instrument or security held by the creditor; and (b) the person is either liable to the company directly, or may be liable to the company on the default of another person with respect to the liability; and (c) the person is not an insolvent under administration or a person against whom a winding up order is in force

27 Insolvency Practice Rules (Corporations) 2016 Section FORM 532 APPOINTMENT OF PROXY Rawfactory Pty Ltd (In Liquidation) (the Company) ACN A. Appointment of a proxy I/We,... (If a company, strike out I and set out full name of the company) of (address) a creditor of the Company appoint... as my/our proxy, or in his/her absence, to vote at the meeting of creditors to be held on 29 June 2018 at Level 21, 140 St Georges Terrace, Perth WA 6000 at 10.30am or at any adjournment of that meeting. B. Voting directions Option 1: and/or Option 2: If appointed as a general proxy, as he/she determines on my/our behalf (Please proceed to section C ie do not complete the table below) If appointed as a special proxy in the manner set out below: (Please complete the table below before proceeding to section C) No Resolution For Against Abstain That the remuneration of the Liquidators is approved for the period 14 March 2018 to 8 June 2018 of $25, plus GST, as set out in the Remuneration Approval Report dated 14 June 2018 to be drawn from available funds immediately. That the remuneration of the Liquidators is approved for the period 9 June 2018 to the conclusion of the Liquidation up to a maximum of $8, plus GST, as set out in the Remuneration Approval Report dated 14 June That the Company s books and records be destroyed six months after finalisation subject to approval by Australian Securities & Investments Commission. C. Signature (in accordance with Sections 127 or 250D of the Corporations Act 2001) If the creditor is an individual If the creditor is a Company. Director/Company Secretary Dated this day of. Print name

28 CERTIFICATE OF WITNESS Please Note: This certificate is to be completed only where the person giving the proxy is blind or incapable of writing. The signature of the creditor is not to be attested by the person nominated as proxy. I, of certify that the above instrument appointing a proxy was completed by me in the presence of and at the request of the person appointing the proxy and read to him before he attached his signature or mark to the instrument. Signature of witness:

29 Complete all sections ACN: Subregulation (2) FORM 535 Corporations Act 2001 FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM) To the Liquidators of Rawfactory Pty Ltd (In Liquidation) (the Company) 1. This is to state that the Company was on 14 March 2018, and still is, justly and truly indebted to...(creditor) (name of creditor) of... (address of creditor) for $..... Particulars of the debt are: Date (date when the debt arose) Consideration (state how debt arose and attach supporting documentation) Amount ($) Remarks (include details of voucher substantiating payment) 2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or received any satisfaction or security for the sum or any part of it except for the following (insert particulars of all securities held. If the securities are on the property of the company, assess the value of those securities. If any bills or other negotiable securities are held, show them in a schedule in the following form). Date Drawer Acceptor Amount ($c) Due Date *3A. 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. *3B. 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. * Items 3A & 3B - delete both if the creditor is a natural person and this proof is made by the creditor personally. In other cases, if, for example, you are the director of a corporate creditor or the solicitor or accountant of the creditor, you sign this form as the creditor s authorised agent (delete item 3A). If you are an authorised employee of the creditor (credit manager etc), delete item 3B. I have attached the following documents (tick as many as appropriate): Invoices Judgement from Court Letters of demand Orders from Company Monthly statements Statutory demand Credit application Guarantee from Company Creditors authority letter Other documents Dated /../. Name... Signatory.. Phone.. address... Office use only for voting purposes Accept Reject