I refer to my appointment as Liquidator of the Company on 16 September 2013.

Transcription

1 15 December 2015 To Creditors Dear Sir/Madam Drilling & Grouting Services Pty Limited (In Liquidation) ACN (the Company) I refer to my appointment as Liquidator of the Company on 16 September A meeting of creditors has been convened for Friday, 8 January 2016 at 10:00am (AWST) at the offices of Ferrier Hodgson, Level 28, 108 St Georges Terrace, Perth WA Enclosed are the following documents: 1. The Liquidator s report as to the current status of the liquidation. 2. Notice of annual meeting of creditors. 3. Proxy form. 4. Proof of debt form. 5. Liquidator s Remuneration Approval Request Report. Should you have any queries in respect of this matter, please do not hesitate to contact Sean Holmes of this office. Yours faithfully Drilling & Grouting Services Pty Limited Darren Weaver Liquidator Encl.

2 Drilling & Grouting Services Pty Limited (In Liquidation) ACN December 2015

3 Table of Contents Section 1. Introduction 1 2. Annual meeting of creditors 1 3. Asset realisations Work in Progress Debtors Distributions Retention monies Plant and equipment 3 4. Kew Street remediation 4 5. Fair Entitlements Guarantee Scheme (FEG) 4 6. Investigation into the Company s affairs Unfair preferences Insolvent trading 6 7. Estimated return to creditors Return to secured creditors Estimated return to priority unsecured creditors (employees) Estimated return to ordinary unsecured creditors 8 8. Summary of Receipts and Payments 8 9. Remuneration Next Steps Further queries 10 Glossary of terms 11 List of Annexures A Notice of Meeting B Form Appointment of Proxy C Proof of Debt Form D Remuneration Approval Request Report 14 December 2015

4 1. Introduction I refer to my appointment as Voluntary Administrator of the Company on 11 June 2013 and to my subsequent appointment as Liquidator of the Company pursuant to a resolution by the Company s creditors on 16 September Andrew Saker retired as liquidator of the Company on 18 August 2014 and Ben Johnson retired as liquidator of the Company on 6 October Pursuant to Section 508(3) of the Act, I now take this opportunity to report to you on the liquidation of the Company and, in particular, as to: An account of the work undertaken by the Liquidator during the winding up of the Company; The Liquidator s outstanding tasks to complete the winding up; Estimated return to creditors from the winding up; and An estimate of the timeframe to complete the winding up. Creditors should note that I, Darren Weaver, am scheduled to retire from the Ferrier Hodgson practice on 31 December Accordingly, at the upcoming meeting of creditors, I will seek approval from creditors that I may be replaced by Martin Jones of Ferrier Hodgson. Martin Jones is a partner of Ferrier Hodgson who I have briefed in respect of the history and remaining steps in the liquidation. Creditors may refer to the Ferrier Hodgson website for further details regarding the background and experience of Martin Jones. 2. Annual meeting of creditors In accordance with the provisions of Section 508(1)(b)(i) of the Act, I advise that a meeting of creditors of the Company will be held on 8 January 2016 at 10:00am (AWST) at the offices of Ferrier Hodgson, Level 28, 108 St Georges Terrace, Perth Western Australia. Enclosed is a Notice of Meeting of Creditors (Annexure A). At this upcoming meeting, creditors will be requested to consider the remuneration of the Liquidator as detailed in the attached Remuneration Approval Request Report (Annexure D). Also attached is a Form 532 Appointment of Proxy (Annexure B) and a Form 535 Proof of Debt (Annexure C) for the purposes of voting at the meeting. Creditors should ensure that the Appointment of Proxy (and Proof of Debt if one has not been lodged previously with the Liquidator) is lodged prior to the meeting to be eligible to vote. 3. Asset realisations Work has been undertaken in respect of the following asset realisation categories to which I now report on. Category Work in progress Debtors Distributions Retention monies Plant and equipment Current status There are no ongoing projects of the Company. Outstanding amount of $616k may be pursued further. Distribution of approximately up to $61k expected in March There are no further amounts to be recovered. The realisation of all plant and equipment of the Company has finalised. Realised to date Estimated future realisations Report Reference $2.4 million Nil 3.1 $1 million Nil 3.2 $623k Up to $61k 3.3 $219k Nil 3.4 $8.1 million Nil December 2015 Page 1

5 3.1 Work in Progress At the time of my appointment as Voluntary Administrator there were a number of ongoing projects on foot. The Administrators assessed the ongoing projects and those that were considered commercially viable were completed. The Company officially ceased to trade at the end of November I confirm that the completion of the commercially viable projects generated approximately $2.4 million (including GST) in revenue during the administration period. All amounts outstanding in respect of the completed projects were received in full, save for the final accounts on two (2) of the projects. The recoverability of these amounts has involved lengthy negotiations with various stakeholders, summarised as follows. The Company was able to successfully negotiate a settlement with one of the parties, achieving a settlement of $76k, being a significant improvement from their initial offer of $27k. The second amount of $11k remains in dispute and is deemed unrecoverable. There is little commercial value in seeking payment of this amount claimed and the debtor requires certain releases which the Liquidator and the Company are unable to provide. 3.2 Debtors At the date of my appointment as Voluntary Administrator, the books and records of the Company indicated that there was $664k in outstanding pre-appointment debtors. During the course of the Administration, the Administrators collected additional amounts that were not included in the Company s debtor schedule. Ultimately, in excess of $1 million was collected in respect of pre-appointment debtors. Further, a former director of the Company, Warren Symons, remains a debtor of the Company for the amount of $616k. The Liquidators wrote to Mr Symons on 1 May 2014 and 22 October 2015 requesting payment of this amount. Despite these requests, I have not received payment and may continue to pursue this matter further, however creditors should note that Mr Symons is disputing the amount claimed and the commercial recovery of the amount is also in question. 3.3 Distributions The Company is a creditor for the amount of $2.5 million in the administration of A.C.N Pty Ltd (Subject to Deed of Company Arrangement) (formally Marine & Civil Construction Pty Ltd) (M&C). This claim has been admitted in full with dividends paid to November 2015 totalling $623k. I have been advised by the Deed Administrators of M&C, WA Insolvency Solutions, that there is likely to be a further distribution to creditors of M&C of up to 2.46 cents in the dollar, which would equate to a further distribution to the Company of up to $61k. It is expected that any final dividend would be paid in approximately 3 months time; i.e. March December 2015 Page 2

6 3.4 Retention monies On appointment, approximately $334k was due and payable to the Company in respect of retention monies. Following my appointment, the Administrators immediately wrote to all retention holders requesting payment. Further investigations into these amounts revealed that approximately $64k of the retention monies had been utilised for repairs or were incorrectly reported in the Company s records. To date, a total of $219k has been recovered, whilst the remaining amount of $52k was deemed unrecoverable on the basis that it required the Liquidators to sign a release and therefore exposing them to personal liability. 3.5 Plant and equipment On my appointment as Voluntary Administrator, the Administrators engaged a valuer to conduct a valuation of the Company s assets, including those subject to specific charges. The valuation indicated that the assets of the Company had a gross auction value of $8,121,526. Due to the shortfall in the Company s cash position, the Administrators immediately (with the assistance of the Directors) reviewed the required financed and leased plant and equipment and issued notices not to exercise property rights with respect to assets with no equity. During the Voluntary Administration period, value from a small volume of surplus non-financed equipment was realised, particularly motor vehicles, which provided the Company with cash to facilitate completion of ongoing projects while the Administrators sought a sale of the business as a going concern. There being no commercial offers to acquire the business as a going concern, the Company was placed into liquidation. The Liquidators immediately engaged with parties who had expressed an interest in the Company s plant and equipment during the Voluntary Administration period and engaged independent auctioneers to formulate a realisation programme to maximise proceeds from a sale of the Company s assets. The majority of the Company s remaining assets were sold at auction on 28 and 29 November Certain assets were sold prior to the auction dates, where the purchase offer exceeded the estimated auction value. Total gross asset realisations totalled $8.1 million. This excludes assets with a total auction value of $1.4 million which were repossessed by the respective financiers shortly following our appointment. 15 December 2015 Page 3

7 4. Kew Street remediation In July 2013, the site landlord, Water Corporation, issued a report advising that the site was contaminated with hydrocarbon impacted soil and that a variety of waste materials such as chemical drums and batteries were required to be removed. It was recommended by the Water Corporation that the entire site was to be excavated within a 3 month deadline and at an estimated cost $120k. Further to the above, the Administrators required ongoing use of this site: To finalise trading activities; As short term storage of plant and equipment; and As a venue to hold an onsite auction of plant and equipment. Accordingly, an extension to the 3 month timeframe was negotiated with the Water Corporation, conditional on completion of the required remedial works. The Administrators subsequently obtained a number of quotes for the required remediation works and the works were completed during January 2013 at a significantly lower cost of approximately $25k. The lease over the site has since been disclaimed. 5. Fair Entitlements Guarantee Scheme (FEG) On 16 September 2013, the government s FEG scheme became available to employees. FEG is a discretionary government funded scheme, which advances funds to meet the outstanding employee entitlements of eligible employees of insolvent companies in circumstances where there are insufficient funds to pay the same. Payment is usually made to employees within a few months of lodging a claim. As the realisation of the Company s assets was likely to take more than a few months and the ultimate amount available to priority creditors was not known, employees were advised to lodge a claim with FEG as soon as possible. Shortly following 16 September 2013, a large number of the Company s former employees lodged claims with FEG, however, there were delays in processing these claims. Once a claim was lodged with FEG, their claims were grouped into a verification report and provided to the Liquidator for review. As summarised in the table below, my office received these reports over the course of 16 months and responded with the requested information within the specified timeframes. Verification report number Date received Date information provided to FEG Number of employee claims verified 1 2 December January January February March March May May July July July July August September January January January January Total claims December 2015 Page 4

8 Despite having received up to 57 verified employee claims by May 2014, FEG was unable to guarantee a date that funds would be advanced. During this period, FEG received a number of complaints from former employees of the Company and my office which resulted in the matter being escalated. During May and June 2014, FEG became very active with requests for information and a number of additional documents were provided by my office to support each employee s claim in expectation that payment of the claims would be fast tracked. During this time there was a considerable amount of correspondence between my office, FEG and employees to finalise the employee claims as quickly as possible. Following the above, I received 6 advances of funds from FEG which were distributed to former employees in the days following receipt. I table below a summary of the distributions made. Distribution Date funds received Date funds distributed Number of employees 1 24 June June June June July July July July January January January January Total distributions 74 Please note that a number of employees received multiple distributions from FEG due to their initial claims being partially paid. The timeframe (two years from appointment of liquidators) for former employees of the Company to lodged claims with FEG has now passed and FEG has confirmed that there are no further applications under consideration. FEG has advanced in excess of $2 million during the liquidation and pursuant to Section 560 of the Act. FEG is entitled to the same priority as employees in a distribution in the liquidation for the amount advanced pursuant to the provisions of Section 533 of the Act. 6. Investigation into the Company s affairs I am currently finalising the Liquidator s report pursuant to Section 533 of the Act on the outcome of my investigations into the affairs of the Company. Once the report is finalised, it will be filed with the ASIC. 6.1 Unfair preferences Section 588FA of the Act gives the Liquidator the power to recover certain transactions that have had the effect of conferring a priority, preference or advantage to the creditor within six months of the commencement of the winding up (the relation back period). The books and records of the Company identified potential unfair preference payments made to the Australian Taxation Office (ATO) totalling $1.4 million by the Company during the relation back period. It is a preliminary view that the Company was insolvent during the relation back period and that the ATO had reasonable knowledge to suspect the insolvency of the Company at the time of receiving the payments. 15 December 2015 Page 5

9 The Liquidators have received certain information from the ATO pursuant to a request under Freedom of Information laws and I will write to the ATO seeking repayment of the $1.4 million in due course. In circumstances where a recovery is made in respect of this matter, further funds will be made available for distribution to creditors. Please refer to section 7 of this report for the Liquidator s estimate as to potential returns. 6.2 Insolvent trading Section 588G of the Act provides that Directors are obliged to prevent a company from: Incurring a debt whilst insolvent; or Becoming insolvent by incurring a debt. If a contravention of Section 588G can be established then Section 588M empowers a liquidator (or a creditor under certain circumstances) to recover compensation from a director for any loss or damage suffered as a consequence of any such contravention. My review of the available information indicates that the Company may have been insolvent from at least 1 February 2013, based on the following: The Company attempted, but was unable to, source external funding to meet its short term liabilities; The Company failed to comply with its statutory obligations (i.e. unable to pay outstanding income tax liability); The majority of the Company s trade creditors were paid outside their trading terms, indicating that the Company was unable to pay its debts as and when they fell due; and Due to the loss of significant contracts the Company was experiencing significant cash flow shortages. Having regard to the above, it is my opinion that the Company was insolvent from at least 1 February Any decision to commence an action against the Directors for insolvent trading must have regard to the Directors financial position and ability to meet any judgment debt and defences which may be available to the Directors. There are a number of statutory defences available to the Directors which would have to be considered in deciding whether to commence an insolvent trading action. Despite not having quantified the potential insolvent trading claim, the commerciality of pursuing such a claim is also in question. Should creditors have any further information that may assist my investigations into the conduct of the Company s affairs, they should communicate details in writing to this office within 14 days from the date of this report. 15 December 2015 Page 6

10 7. Estimated return to creditors I provide below, the Liquidator s estimate of returns to the following categories of creditors of the Company: 1. Secured Creditors 2. Priority Creditors 3. Unsecured Creditors 7.1 Return to secured creditors AllPAAP Holders As detailed in the Administrators Report dated 9 July 2013, St George and Westpac held the first registered AllPAAP securities against the Company, with GE Capital holding the second registered AllPAAP. As at the date of the Administrators appointment the amounts due under the AllPAAPs were: $2.7 million to St George. $1.7 million to Westpac. $1.3 million to GE Capital. The Directors personal property was cross-collateralised with the debt due to Westpac. Accordingly, on the sale of one of the Directors properties, Westpac allocated the proceeds against the debt due from the Company, which granted the Directors a right of subrogation to claim in the liquidation as a secured creditor of the Company for the amount paid of $595k. There were sufficient realisations from non-circulating assets to pay a dividend of 100 cents in the dollar to St George, Westpac and GE Capital and a partial dividend to the Directors with respect to their subrogated secured claim. There remains an outstanding secured claim of $230k in favour of the Directors. As at the date of this report, I estimate that there will be no further distributions to AllPAAP holders. PMSI Holders A number of creditors held PMSIs over specific assets of the Company (either subject to hire purchase or lease agreements), giving them a priority over the proceeds from the sale of the specific assets ahead of other creditors of the Company. All assets subject to PMSI claims have been sold and the proceeds distributed in accordance with the provisions in the Personal Properties Securities Act In circumstances where there were insufficient net proceeds from the sale of a PMSI asset, the PMSI holder may claim as an unsecured creditor for the balance of their debt. 15 December 2015 Page 7

11 7.2 Estimated return to priority unsecured creditors (employees) As at the date of this report, outstanding employee entitlements totalled $2.3 million (including FEG s right of subrogation). Based on information currently available, I anticipate that a dividend of between nil and up to 59 cents in the dollar may be available in respect of outstanding employee entitlements. The estimated return is calculated as follows: Statement of Position Low $ '000 High $ '000 Cash at Bank Marine & Civil Final Dividend (refer Section 3.3 of this report) - 61 ATO Preference (refer Section 6.1 of this report) - 1,400 Sub-Total 323 1,784 Less: Liquidator s remuneration and disbursements (estimate) (350) (400) Surplus / (Deficit) to Priority Creditors (27) 1,384 Employee Claims (Including FEG) (2,339) (2,339) Estimated return to Priority Creditors (cents in the dollar) Nil The ultimate quantum and timing of the dividend with respect to outstanding employee entitlements will be dependent upon collection of estimated recoveries and the costs associated with realising the same. I expect that the priority employee entitlements will increase upon calling for formal claims following quantification of non FEG verified claims; i.e. 457 visas or those amounts over the statutory limits. Creditors should note that for the purposes of the above estimate, I have excluded the amount of $616k being claimed from the former Director of the Company as it remains in dispute and the commerciality of recovery is in question. Should this further amount be recoverable, the estimated distribution to priority creditors will increase accordingly. 7.3 Estimated return to ordinary unsecured creditors As demonstrated by the above table at 7.2, it is unlikely that there will be sufficient funds available to pay a dividend to unsecured creditors. Should this position change creditors will be notified in writing. 8. Summary of Receipts and Payments A summary of receipts and payments in the liquidation to 11 December 2015 is provided at Part 9 of the Liquidator s Remuneration Approval Request Report dated 15 December 2015 (Annexure D). 15 December 2015 Page 8

12 9. Remuneration At the Second Creditors Meeting, it was estimated that the costs of the liquidation would be approximately $250k. Creditors should note that FEG requires the Liquidators assistance in verifying employee claims, however there are limits on the amount that it will pay for this service (calculated on a per employee basis), accordingly the Liquidators were paid $18,445 for their assistance with the FEG verification process. The actual additional costs associated with attending to FEG s voluminous queries and the verification process generally, as detailed at section 5 of this report, equated to approximately $200k. Additional unforeseen work was also undertaken in respect of managing the remediation works at 1 Kew Street and pursuit of difficult debtor and retention holder monies. Accordingly, at the upcoming meeting of creditors scheduled to be held on 4 January 2015, I intend to seek approval for the following resolutions: To consider and if thought fit, resolve, "That the remuneration of the Liquidator, as set out in the Remuneration Approval Request Report dated 15 December 2015, for the period from 1 November 2013 to 30 November 2015 in the amount of $333, plus any applicable GST, be approved. To consider and if thought fit, resolve, "That the further remuneration of the Liquidator, as set out in the Remuneration Approval Request Report dated 15 December 2015, for the period from 1 December 2015 to completion of the liquidation in the amount of $50, plus any applicable GST, be approved, but subject to upward revision by resolution of creditors. Creditors should note that the payment of the Liquidator s remuneration, including prospective remuneration is subject to the availability of funds in the liquidation. Further details regarding the work undertaken by the Liquidator and their staff can be found in the attached Remuneration Approval Request Report (Annexure D). 10. Next Steps Prior to finalising the liquidation, the following tasks are required to be completed: Pursue the Australian Taxation Office (ATO) for potential unfair preference payments. Complete investigation of the merit of any insolvent trading claim. Finalise debtor recovery action. Receipt of further dividend from the liquidation of Marine and Civil. Pay a dividend to priority creditors, if applicable. Hold a final meeting of the Company s creditors. Having regard to the above matters, I estimate that the liquidation may be finalised by June December 2015 Page 9

13 11. Further queries Further reports to creditors will be issued in the event that any significant matters come to the Liquidator s attention. Otherwise, I anticipate that a final report to creditors will be issued by June 2016 once the outstanding matters are finalised. Should you have any queries in respect of this matter, please do not hesitate to contact Sean Holmes of this office. Dated this 15 th day of December 2015 Darren Weaver Liquidator 15 December 2015 Page 10

14 Glossary of terms Abbreviation ACN Description Australian Company Number Act The Corporations Act 2001 AllPAAP ASIC ATO Company DEEWR Directors FEG GST k Liquidator(s) PMSI All Present and After Acquired Property Australian Securities and Investments Commission Australian Taxation Office Drilling & Grouting Services Pty Limited (In Liquidation) Department of Education, Employment and Workplace Relations Warren Symons and Ivan Carstensen Fair Entitlements Guarantee Goods and Services Tax Thousand Andrew Saker up to 18 August 2014 Ben Johnson up to 6 October 2015 Darren Weaver (current) Purchase Monies Security Interest PPSA Personal Property Securities Act 2009 PPSR Second Creditors Meeting St George Westpac Voluntary Administrators Personal Property Securities Register Meeting held on 16 September 2013 where creditors resolved to appoint the Voluntary Administrators as Liquidators of the Company. St George Bank Limited Westpac Banking Corporation Limited Andrew Saker, Ben Johnson and Darren Weaver of Ferrier Hodgson 15 December 2015 Page 11

15 Annexure A Notice of meeting of creditors Form 529 Notice of annual meeting creditors Corporations Act 2001 Section 508, Subregulation (2) Drilling & Grouting Services Pty Ltd (In Liquidation) ACN (the Company) Notice is given pursuant to Section 508 of the Corporations Act 2001 that a meeting of the creditors of the Company will be held at the offices of Ferrier Hodgson, Level 28, 108 St Georges Terrace, Perth Western Australia 6000 on 8 January 2016 at 10:00am (AWST), for the purpose of having an account laid before them showing the manner in which the winding up has been conducted and the property of the Company disposed of and of hearing any explanations that may be given by the Liquidator. Agenda 1. To hear an account of the Liquidator s dealings in the liquidation to date. 2. To consider and if thought fit, resolve, "That the remuneration of the Liquidator, as set out in the Remuneration Approval Request Report dated 15 December 2015, for the period from 1 November 2013 to 30 November 2015 in the amount of $333, plus any applicable GST, be approved. 3. To consider and if thought fit, resolve, "That the further remuneration of the Liquidator, as set out in the Remuneration Approval Request Report dated 15 December 2015, for the period from 1 December 2015 to completion of the liquidation in the amount of $50, plus any applicable GST, be approved, but subject to upward revision by resolution of creditors. 4. To consider and if thought fit, approve the replacement of Darren Weaver as Liquidator of the Company by Martin Jones of Ferrier Hodgson pursuant to Section 499(5) of the Corporations Act. 5. Any other business that may be lawfully brought forward. DATED this 15 th day of December 2015 Darren Weaver Liquidator 15 December 2015 Page 12

16 Annexure B Appointment of proxy Form 532 Appointment of Proxy Corporations Act 2001 Regulation Drilling & Grouting Services Pty Ltd (In Liquidation) ACN (the Company) Instructions: Please complete Sections A, B, C and D and submit in accordance with the Section E. * Strike out if inapplicable. A. Name and Contact Details of Person or Entity Entitled to Attend Meeting (if entitled in a personal capacity, given name and surname; if a corporate entity, full name of company, etc) of (address) Tel: Fax: B. Appointment of Person to Act as Proxy Note: You may nominate the Chairperson of the meeting as your proxy (or your alternate proxy in the event that the first-named proxy is not in attendance). *I / *We, as named in Section A above, a *creditor / *contributory / *debenture holder / *member of the Company, appoint (name of person appointed as proxy) (address of person appointed as proxy) (name of person appointed as alternate proxy) (address of person appointed as alternate proxy) or in his / her absence as *my / *our proxy to vote at the meeting of creditors to be held on at the offices of Ferrier Hodgson, Level 28, 108 St Georges Terrace, Perth, Western Australia 6000, on 8 January 2016 at 10:00am (AWST), or at any adjournment of that meeting in accordance with the instructions in Section C below. 15 December 2015 Page 13

17 C. Voting Instructions Note: A general proxy is entitled to vote on any resolution, subject to Regulation of the Corporations Regulations 2001, as they see fit at the meeting tick the general proxy box. A special proxy in entitled to vote only in accordance with your specific instructions tick the special proxy box and indicate your specific voting instructions by ticking one option only for each resolution for which you wish to give such instructions. Your proxy may act as both a special proxy, in accordance with your instructions in relation to specific resolutions, and as a general proxy, in relation to resolutions where you have not issued specific instructions tick both the general proxy and special proxy boxes. Your proxy will then be authorised to vote specifically in accordance with your instructions in relation to those resolutions where specific instructions have been given, and generally in relation to resolutions where no specific instructions have been given, and other business of the meeting. *My / *Our proxy, as named in Section B above, is entitled to act as *my / *our : general proxy, to vote on *my / *our behalf generally, as *he / *she determines, subject to any specific instructions below, if applicable. and / or special proxy, to vote on *my / *our behalf specifically, in accordance with the following special instructions: (for each resolution for which you wish to give specific voting instructions, please tick one option only) Resolution For Against Abstain 1. That the remuneration of the Liquidator, as set out in the Remuneration Approval Request Report dated 15 December 2015, for the period from 1 November 2013 to 30 November 2015 in the amount of $333, plus any applicable GST, be approved. 2. That the further remuneration of the Liquidator, as set out in the Remuneration Approval Request Report dated 15 December 2015, for the period from 1 December 2015 to completion of the liquidation in the amount of $50, plus any applicable GST, be approved, but subject to upward revision by resolution of creditors. 3. That pursuant to Section 499(5) of the Corporations Act, Martin Jones of Ferrier Hodgson replace Darren Weaver and continue as sole liquidator of the Company. D. Signature Dated: Signature: Name / Capacity # : # If an individual, insert full name If a sole trader, insert in accordance with the following example: full name, proprietor If a partnership, insert in accordance with the following example: full name, partner of the firm named in Section A above If a company, pursuant to Regulations and of the Corporations Regulations 2001, it may only be represented by proxy or attorney respectively, or by a representative appointed under Section 250D of the Corporations Act The document appointing the proxy, attorney 15 December 2015 Page 14

18 or representative must be in executed in accordance with Section 127 of the Corporations Act 2001, in which instance, insert in accordance with the following example: full name, director / secretary / director/secretary of the company named in Section A above 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: full name, or the company named in Section A above (duly authorised under the seal of the company) a copy of authority / power of attorney is to be annexed. Certificate of Witness (to be completed only in special circumstances see below) This certificate is only to be completed only if the person giving the proxy is blind or incapable of writing. The certificate of the creditor, contributory, debenture holder or member must not be witnessed by the person nominated as proxy. I (name of witness) of (address of witness) 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/her before he/she signed or marked the instrument. Dated: Signature: E. Submitting the Proxy For a person to be eligible to attend and vote at the meeting on your behalf, this form is to be completed and submitted by no later than 4:00pm (AWST) on 7 January 2016, to: Drilling & Grouting Services Pty Limited (In Liquidation) c/- Ferrier Hodgson Tel: Fax: sean.holmes@fh.com.au Note: In accordance with Regulation A of the Corporations Regulations 2001, if a proxy is submitted by facsimile, the original document must be lodged within 72 hours after lodging the faxed copy. 15 December 2015 Page 15

19 Annexure C Formal proof of debt form Form 535 Formal Proof of Debt or Claim (General Form) Corporations Act 2001 Regulation (2) Drilling & Grouting Services Pty Limited (In Liquidation) (the Company) ACN Instructions: Please complete Sections A, B and C and submit to: Drilling & Grouting Services Pty Limited (In Liquidation) c/- Ferrier Hodgson Tel: Fax: sean.holmes@fh.com.au * Strike out if inapplicable. A. Name and Contact Details of Creditor (if in a personal capacity, given name and surname; if a corporate entity, full name of company, etc) of (address) ( the Creditor ) Tel: Fax: B. Details of Debt or Claim To the Liquidators of the Company 1. This is to state that the Company was, on Tuesday, 11 June 2013, and still is justly and truly indebted to the Creditor for dollars (amount in words) and cents (inclusive of GST, if applicable). 15 December 2015 Page 16

20 Particulars of the debt are: Date Consideration 1 Net $ GST $ Total $ Remarks 2 1. Under "Consideration" state how the debt arose, for example "goods sold and delivered to the company between the dates of...", "moneys advanced in respect of the Bill of Exchange". 2. Under "Remarks" include details of vouchers 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: (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, indicate refer attached above and show them in a schedule in the following form:) Date Drawer Acceptor Amount $ Due Date 3. *I am employed by the Creditor / *I am the Creditor s agent *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. C. Signature Dated: Signature: Name / Capacity # : # If the Creditor is an individual, insert full name If the Creditor is a sole trader, insert in accordance with the following example: full name, proprietor If the Creditor is a partnership, insert in accordance with the following example: full name, partner of the firm named in Section A above If the Creditor is a company, insert in accordance with the following example: full name, director / secretary / director/secretary of the company named in Section A above 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: full name, for the company named in Section A above (duly authorised under the seal of the company). Where this form is completed by, for example, a solicitor or accountant of the Creditor, sign this form as the Creditor s authorised agent; where this form is completed by an authorised employee of the Creditor, indicate occupation (eg: credit manager, etc). 15 December 2015 Page 17

21 Annexure D Remuneration Approval Request Report Drilling & Grouting Services Pty Ltd (In Liquidation) ACN (the Company) Remuneration Approval Request Report 1. Declaration I, Darren Weaver of Ferrier Hodgson, have undertaken a proper assessment of this remuneration claim for my appointment as Liquidator of the Company in accordance with the Corporations Act 2001 (Cth) (the Act), the Australian Restructuring Insolvency & Turnaround Association (ARITA) Code of Professional Practice (the Code) and applicable professional standards. I am satisfied that the remuneration claimed is in respect of necessary work, properly performed, or to be properly performed, in the conduct of the administration. 2. Executive Summary To date, remuneration totalling $668, (excluding GST) has been approved and paid in the Administration of the Company and $250, has been approved and paid in the Liquidation of the Company. This remuneration report details approval sought for the following fees. Period Past remuneration approved: Voluntary Administration Report Reference Amount (ex GST) $ 11 June 2013 to 30 June , July 2013 to 16 July , July 2013 to 16 September , July 2013 to 31 August , September 2013 to 16 September , Total Voluntary Administration 668, Liquidation 17 September 2013 to completion 250, Total Liquidation 250, Total past remuneration approved 918, Current remuneration approval sought: Resolution 1: 1 November 2013 to 30 November , December 2015 to completion* , Total remuneration approval sought 383, * 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. 15 December 2015 Page 18

22 3. Schedule of Hourly Rates The hourly rates for my remuneration calculation are set out in the following table together with a general guide showing the qualifications and experience of staff engaged in the liquidation and the role they take. The hourly rates encompass the total cost of providing professional services and should not be compared to an hourly wage. Title Rate ($) Experience Partner / Appointee 595 Director / Specialist 510 Senior Manager 465 Manager 400 Assistant Manager 360 Senior Analyst 305 Analyst 270 Accountant 230 Personal/ Team Assistant Administration Supervisor/Assistant The Partner/Appointee is a registered liquidator and member of the CAANZ and, generally, the ARITA, bringing specialist skills to the administration or insolvency task. For specific experience and other details of the appointee/s, please visit our website at Generally, minimum of 12 years experience at least 2 years of which is to be at Manager level. University degree; member of the CAANZ and, generally, the ARITA, with deep knowledge and lengthy experience in relevant insolvency legislation and issues. Generally, more than 7 years experience with at least 2 years as a Manager. University degree; member of the CAANZ and, generally, the ARITA; very strong knowledge of relevant insolvency legislation and issues. Generally, 5-7 years chartered accounting or insolvency management experience. University degree; member of the CAANZ and generally, the ARITA; sound knowledge of relevant insolvency legislation and issues. Generally, 4-6 years chartered accounting or insolvency management experience. University degree; member of the CAANZ; completing ARITA Insolvency Education Program. Good knowledge of relevant insolvency legislation and issues. Generally, 2-4 years chartered accounting or insolvency management experience. University degree; completing the CAANZ s CA program. Good knowledge of basic insolvency legislation and issues. Generally, 2-3 years chartered accounting or insolvency management experience. University degree, CAANZ s CA program commenced. 0 to 2 years experience. Has completed or substantially completed a degree in finance/accounting. Under supervision, takes direction from senior staff in completing administrative tasks. 180 Appropriate skills including machine usage. 140 Completed schooling and plans to undertake further studies. Required to assist in administration and day to day field work under the supervision of more senior staff. Notes: 1. The hourly rates are exclusive of GST. 2. The guide to staff experience is intended only as a general guide to the qualifications and experience of our staff engaged in the administration. Staff may be engaged under a classification that we consider appropriate for their experience. 3. Time is recorded and charged in six-minute increments. 4. Rates are subject to change from time to time. Creditor approval will be sought prior to the application of any new rates to this administration. 5. The hourly rates reflect the total cost of providing professional services and should not be compared to an hourly rate. See Part B1 for details of disbursements. 15 December 2015 Page 19

23 Part 4.1: Description of work completed Resolution 1 Company: Drilling & Grouting Services Pty Ltd (in Liquidation) Administration Type: Liquidation Practitioners: Darren Weaver of Ferrier Hodgson Period: 1 November 2013 to 30 November 2015 Amount: $333, Task Area General Description Includes: Plant and equipment Liaising with valuers, auctioneers and interested parties. Reviewing asset listings. Negotiations with landlords regarding the storage of plant and equipment. Maintaining asset schedules. Liaising with third parties regarding the removal and transportation of assets. Negotiations with interested parties / purchasers. Re-sale of assets either not sold at initial auction, or where offers have not eventuated. Assets Liaising with financiers to determine strategy hours Liaising with valuers, auctioneers and agents regarding the sale of secured equipment. $69, Reporting to financiers regarding the Assets subject to specific charges progress of realisation strategy. Remittance and accounting of funds returned to financiers. Review of PPSR registers. Preparing reports to secured creditor. Responding to secured creditors queries. Debtors Correspondence with debtors. Reviewing and assessing debtor ledgers. Reviewing leasing documents. Leasing Liaising with owners/lessors. Tasks associated with disclaiming leases. Receive and follow up creditor enquiries via telephone and . Creditor Enquiries Review and prepare correspondence to creditors and their representatives via facsimile, and post. Receive initial notification of creditor s Creditors hours $58, Retention of Title Claims intention to claim. Provision of retention of title claim form to creditor. Receive completed retention of title claim form. Meeting claimant on site to identify goods. Adjudicate retention of title claim. Forward correspondence to claimant notifying outcome of adjudication. Creditor reports/circulars Prepare further reports to creditors. Dealing with proofs of debt Receipting and filing POD s when not related to a dividend. 15 December 2015 Page 20

24 Task Area General Description Includes: Meeting of Creditors Preparation of meeting notices, proxies and advertisements. Forward notice of meeting to all known creditors. Preparation of meeting file, including agenda, certificate of postage, attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting. Preparation and lodgement of minutes of meetings with ASIC. Respond to stakeholder queries and questions immediately following meeting. Employee enquiries Receive and follow up employee enquiries via telephone. Review and prepare correspondence to creditors and their representatives via facsimile, and post. Preparation of letters to employees advising of their entitlements and options available. FEG Initial contact with FEG including provision of quote for services. Liaising with FEG regarding employee entitlements. Corresponding with FEG via and telephone. Review of Employee Discrepancy Reports. Receipt and distribution of funding from FEG. Employees Reviewing employee files and the Company s hours $60, books and records. Calculation of entitlements Calculating employee entitlements. Reconciling superannuation accounts. Reviewing awards. Review insurance policies. Receipt of claim. Liaising with claimant. Liaising with insurers and solicitors regarding claims Workers compensation claims Identification of potential issues requiring attention of insurance specialists. Correspondence with Blue Broking regarding initial ongoing workers compensation insurance requirements. Correspondence with previous brokers. Correspondence with Child Support. Other employee issues Correspondence with Centrelink and Unions. Preparation of PAYG and ETP Statements. Liaising with suppliers. Liaising with management and staff. Trade On 56.9 hours Trade On Management Attendance on site. Authorising purchase orders. Maintaining purchase order registry. $18, Preparing and authorising receipt vouchers. Preparing and authorising payment vouchers. Liaising with superannuation funds regarding contributions, termination of employees employment. 15 December 2015 Page 21

25 Task Area General Description Includes: Liaising with OSR regarding payroll tax issues. Attending to remediation works at Kew Street site. Processing receipts and payments Entering receipt and payments into accounting system. Reconstruction of financial statements. Reviewing the Company s books and records and Report as to Affairs. Review and preparation of the Company s nature and history. Liaising with directors regarding certain transactions. Investigation hours $55, Preparation of investigation file. Conducting investigation Attendances on directors. Correspondence with solicitors. Imaging computer servers and hard drives. Indexing of computer images for interrogation. Review evidence in support of potential preference payments, Preparation of internal file notes regarding outcome of investigations. ASIC reporting Preparing statutory investigation reports. Liaising with ASIC. Correspondence General correspondence. Administration hours $72, Document maintenance/file review/checklist Insurance Bank account administration ASIC Form 524 and other forms ATO & other statutory reporting Planning / Review Books and records/storage Six (6) month administration reviews. Filing documents. File reviews. Updating checklists. Identification of potential issues requiring attention of insurance specialists. Correspondence with Blue Broking regarding ongoing insurance requirements. Reviewing insurance policies. Preparing correspondence opening and closing accounts. Requesting bank statements. Bank account reconciliations. Correspondence with bank regarding specific transfers. Preparing and lodging ASIC forms including 505, 524, 5011 etc. Correspondence with ASIC regarding statutory forms. Notification of appointment. Preparing BAS statements. Completing group certificates. Discussions regarding status/strategy of administration. Dealing with records in storage. Sending job files to storage. 15 December 2015 Page 22

26 Task Area Total Assets Creditors Employees Trade On Investigation Admin Employee Position Average Rate ($) Hours ($) Hours ($) Hours ($) Hours ($) Hours ($) Hours ($) Hours ($) Saker, Andrew Partner / Appointee , , , , , ,724 Johnson, Ben Partner / Appointee Powell, Sean Director , Fairhurst, Kate Senior Manager , , , , , , ,984 Geri, Justin Senior Manager , , Smith, Gordon Manager , , Holmes, Sean Manager , ,640 Chu, Kieran Manager Joost, Michelle Assistant Manager , , , , , , ,562 Guthrie, Tom Assistant Manager , , , , , ,719 Bickford, Bob Assistant Manager , , , Stephens, Miranda Practice Manager Thomas, Nadia Senior Analyst Soo, Jason Senior Analyst Hulmes, William Senior Analyst Jing, Susanne Senior Analyst Vakil, Kinjal Analyst , , , , ,100 James, Dana Analyst , ,285 Selby, Peter Analyst MacNaughton, Robert Analyst , , ,260 Xu, Darren Analyst Shah, Nirav Analyst Gould, Max Analyst December 2015 Page 23