www.pwc.com.au

Administrators report Pursuant to Insolvency Practice Rules (Corporations) 2016: Rule 75-225

15 February 2019

Administrators:

Christopher Hill and Philip Carter

Flow Systems Pty Ltd ACN 136 272 298

Flow Systems Constructors Pty Ltd ACN 605 967 280

Flow Systems Operations Pty Ltd ACN 603 106 305

Cooranbong Water Pty Ltd ACN 169 450 453

Huntlee Water Pty Ltd ACN 167 418 608

Central Park Water Pty Ltd ACN 151 072 838

Discovery Point Water Pty Ltd ACN 142 392 541

Green Square Water Pty Ltd ACN 163 432 906

Pitt Town Water Pty Ltd ACN 141 705 660

Wyee Water Pty Ltd ACN 160 953 775

Loxford Development Holdings Pty Ltd ACN 627 353 191

Loxford Waters Pty Ltd ACN 627 354 867

IDI Loxford Pty Ltd ACN 627 354 803

Inneholde Pty Ltd ACN 627 354 394

Buskas Holdings Pty Ltd ACN 627 354 714

Loxford Energy Pty Ltd ACN 627 353 575

(All Administrators Appointed)

(the Companies)

Table of contents Glossary 1

1 Report Guide 6

2 Executive summary 8

3 Introduction 13

4 Group background 16

5 Conduct of administration 27

6 Company financial background 30

7 Investigations 38

8 Offences and potential liquidation recoveries 46

9 Deed of Company Arrangement (Deed) 50

10 Estimated return to creditors 54

11 Administrators’ opinion 61

12 Enquiries 63

13 Disclaimer 64

Appendices 65

Appendix A – Subsidiary information 66

Appendix B – Appointment of Proxy, Proof of Debt or Claim Form – Form 532 89

Appendix C – Remuneration reports dated 15 February 2019 90

Appendix D – Declaration of Independence, Relevant Relationships and Indemnities 91

Appendix E – Notice of meeting of creditors 92

Appendix F – ASIC Publication: Insolvency information for directors, employees, creditors and shareholders 93

Appendix G – Secured Creditor Registrations 94

Appendix H – ARITA Publication: Creditor information sheet: Offences, recoverable transactions and insolvent trading 95

Appendix I – Federal Court Orders dated 31 December 2018 96

Appendix J – Key information regarding Creditors’ Trust 97

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Glossary Abbreviations Definitions

Act Corporations Act 2001 (Cth)

Administrators Christopher Hill and Philip Carter of PwC as joint and several administrators of each

Group company

Administrators'

Facility

Agreement

means the Facility Agreement dated 24 December 2018 between the Administrators,

EAWH and each Group company

Administrators'

Funding

Agreement

means the Administrators' Facility Agreement and Administrators' GSD

Administrators'

GSD

means the General Security Deed dated 24 December 2018 between the Administrators,

EAWH and each Group company

AEDST Australian Eastern Daylight Savings Time

AER Australian Energy Regulator

APAAP All present and after-acquired property, a term associated with security interests under

the PPSA

ARITA Australian Restructuring Insolvency and Turnaround Association. ARITA was formerly

the Insolvency Practitioners Association of Australia.

ASIC Australian Securities and Investments Commission

ATF As Trustee For

ATO Australian Taxation Office

AUD / A $ / $ Australian Dollars

BFT Capital BFT Capital Pty Ltd ATF the Brinker Family Trust

Board Directors of the Group companies as detailed in Appendix A

Bluesky Water Lifestyle Network Pty Ltd ATF the Bluesky Family Trust

Brookfield

Group

Brookfield Infrastructure

Enwave

EAWH

Tas Gas Networks Pty Ltd ACN 104 499 569

BPIH Pty Ltd ACN 100 364 234

Brookfield

Infrastructure

Brookfield Infrastructure Group (Australia) Pty Ltd ACN 127 051 174, a part of the

Brookfield Group and also the Security Trustee

Brookfield

Secured

Creditors

Enwave

EAWH

Capacity

Agreements

Three separate Capacity Agreements dated on or about 14 November 2018 between FS and

Enwave in relation to the Pitt Town, Huntlee and Shepherds Bay development projects.

Under the Capacity Agreements, Enwave owns the plant and equipment comprising the

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Abbreviations Definitions

local water centre at each development site, with FS operating the infrastructure for a

monthly capacity charge.

Celestino Celestino Pty Ltd ACN 165 629 783

Celestino Developments Pty Ltd (Formerly EJC Developments Pty Ltd) ACN 603 180 712

Central Park

Water

Central Park Water Pty Ltd (Administrators Appointed) ACN 151 072 838

Code ARITA Code of Professional Practice

COI Committee of Inspection

Cooranbong

Water

Cooranbong Water Pty Ltd (Administrators Appointed) ACN 169 450 453

Contracting

Parties

Third parties that the Group has agreements with, such as, developers, owners

corporations, and Councils

Convertible

Notes Deed Poll

the ‘Convertible Notes Deed Poll’ executed by FS in favour of each of EAWH, David

Langley, Katrina Langley and Saddlehill Investments Pty Ltd ATF the Saddlehill Trust

dated on or about 27 February 2013, as amended from time to time, including by the

Amendment and Restatement Deed dated 24 September 2014

Convertible Note

Funding

Funding provided to the Group pursuant to the Convertible Notes Deed Poll

Court Federal Court of Australia

CY Calendar Year (e.g. the calendar year 1 January 2018 to 31 December 2018 would be

expressed as CY18). The Group has a 31 December end of year

Deed or DOCA Deed of Company Arrangement

Deed Companies FS

Cooranbong Water

Huntlee Water

Central Park Water

Discovery Point Water

Green Square Water

Pitt Town Water

Wyee Water

FSO

FSC

(All Administrators Appointed)

Deed

Contribution

The contribution sums to be calculated prior to effectuation of the Deed, but will be no less

than $44M

Deed Proponent Brookfield FS Holdings Pty Ltd ACN 623 300 854

Deed Proposal The Deed proposal received by the Administrators on 4 February 2019

Discovery Point

Water

Discovery Point Water Pty Ltd (Administrators Appointed) ACN 142 392 541

EBITDA Earnings before Interest, Tax, Depreciation and Amortisation

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Abbreviations Definitions

Excluded

Employees

any excluded employees as referred to in s556(2) of the Act.

Excluded

Entities

Companies of the Group that are excluded from the Deed, being the Loxford Group

DoJSB Department of Jobs and Small Business

DIRRI Declaration of Independence, Relevant Relationships and Indemnities, pursuant to

s436DA of the Act and Code.

EAWH EAWH Pty Ltd (Formerly Brookfield Water Holdings Pty Limited) ACN 162 523 533

Enwave Enwave Australia Pty Ltd (Formerly Enwave Energy Pty Ltd) ACN 133 427 022

FEG Fair Entitlements Guarantee, a scheme administered by the DoJSB to provide assistance

to employees owed outstanding employee entitlements following the

insolvency/bankruptcy of an employer

Flow Systems

GSD

the 'General Security Deed – Flow Systems' between the Security Trustee and FS dated on

or about 23 February 2013 as amended from time to time

FS Flow Systems Pty Ltd (Administrators Appointed) ACN 136 272 298

FSC Flow Systems Constructors Pty Ltd (Administrators Appointed) ACN 605 967 280

FSO Flow Systems Operations Pty Ltd (Administrators Appointed) ACN 603 106 305

FS Group or

Flow Systems

Group

FS and subsidiaries in the Group wholly owned by FS, made up of the following:

Cooranbong Water

Huntlee Water

Central Park Water

Discovery Point Water

Green Square Water

Pitt Town Water

Wyee Water

FSO

each company in the Loxford Group

(All Administrators Appointed)

Group The companies subject to the appointment of the Administrators, namely FS Group, FSC

and the Loxford Group

Green Square

Water

Green Square Water Pty Ltd (Administrators Appointed) ACN 163 432 906

Huntlee Water Huntlee Water Pty Ltd (Administrators Appointed) ACN 167 418 608

IPART Independent Pricing and Regulatory Tribunal

IPR Insolvency Practice Rules (Corporations) 2016 (Cth)

k Thousand

KPMG Process the sale process in respect of the Group run on behalf of EAWH by KPMG from around

May 2018 to December 2018 (immediately prior to the Administrators' appointment)

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Abbreviations Definitions

Loxford Group Loxford Development Holdings Pty Ltd ACN 627 353 191 and its subsidiaries as follows:

Loxford Waters Pty Ltd ACN 627 354 867

IDI Loxford Pty Ltd ACN 627 354 803

Inneholde Pty Ltd ACN 627 354 394

Buskas Holdings Pty Ltd ACN 627 354 714

Loxford Energy Pty Ltd ACN 627 353 575

(All Administrators Appointed)

M Million

Major Shareholder

EAWH

M2C Meter2Cash Solutions Pty Ltd ACN 142 710 469. A subsidiary of FS that was not placed into administration and which continues to trade in the ordinary course of business

M2C Share Acquisition Agreement

the 'Share Acquisition Agreement' dated 22 March 2017 in respect of FS' purchase of shares in M2c

Noteholders Holder of convertible notes issued pursuant to the Convertible Notes Deed Poll executed by FS dated on or about 27 February 2013, as amended from time to time including by the Amendment and Restatement Deed dated 24 September 2014

PDA Project Development Agreement

Pitt Town Water Pitt Town Water Pty Ltd (Administrators Appointed) ACN 141 705 660

PMSI Purchase Money Security Interest as defined in the PPSA

Position Statements

Weekly cash positions statements prepared by the Group for the Brookfield Secured Creditors and monthly cash position statements for the Directors

PPSA Personal Property Securities Act 2009 (Cth)

POD Proof of debt

PPSR Personal Property Securities Register – a register set up under the PPSA for the registration of security interests

Recharge Agreement

An agreement between FS and FSC whereby FSC would recharge FS for all development costs that were incurred by FSC, plus a margin

ROCAP Report On Company Activities and Property

RoLR Retailer of Last Resort

Report This report, prepared pursuant to Insolvency Practice Rule 75-225 of the Act about the business, property, affairs and financial circumstances of the Company

s Section of the Act or IPR (as the case may be)

Saddlehill Saddlehill Investments Pty Ltd ATF the Saddlehill Trust

Second Meeting Meeting held pursuant to s439A of the Act where creditors determine the future of the Company scheduled for Monday, 25 February 2019 at 1.00pm AEDST

Secured Creditors

All beneficiaries of the Water Factory Company Security Trust

Brookfield Secured Creditors

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Abbreviations Definitions

Celestino

Securityholders

Agreement

the 'Securityholders Agreement' for an Incorporated Joint Venture between FS, EAWH,

Bluesky, Saddlehill, David Langley, Katrina Langley, St Jorioz and BFT Capital dated on or

about 27 February 2013 as amended from time to time

Security Trustee Brookfield Infrastructure in its capacity ATF the Water Factory Company Security Trust

Security Trust

Deed

the 'Flow Systems Security Trust Deed' between the Security Trustee, FS, Wyee Water (as

‘Obligors’), EAWH, David Langley, Katrina Langley and Saddlehill dated on or about 23

February 2013 as amended from time to time

St Jorioz St Jorioz Pty Ltd ATF the St Jorioz Family Trust

Subscription

Agreements

the 'Subscription Agreement' between FS and each party listed as a Subscriber dated on or

about 27 February 2013 and on or about 24 September 2014, both amended from time to

time

Temporary

Credit Line

Funding

the temporary credit line agreements between EAWH and FS dated 28 February 2018, 4

May 2018, 28 May 2018, 28 June 2018, 7 August 2018 and 22 August 2018

WICA Water Industry Competition Act 2006 (NSW)

Wyee Water Wyee Water Pty Ltd (Administrators Appointed)

Wyee Water GSD the 'General Security Deed – Wyee Water' between the Security Trustee and Wyee Water

dated on or about 23 February 2013 as amended from time to time

Woodland Anthony and Joanna Brinker ATF the Woodland Superannuation Trust

YTD Year to date, a period starting from the beginning of the current financial year and

continuing up to a defined date (e.g. monthly management accounts from 1 July 2018 to

31 January 201 would be expressed as ‘YTD January 2019’

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1 Report Guide

1.1 Consolidated Group reporting

This report is intended to serve as a summary of our investigations and recommendations for each and all Group companies. However, due to the manner in which the Group operated prior to our appointment, Sections 4, 5 and 6 have been completed effectively on a consolidated basis with reference to all Group companies (unless specifically stated otherwise). Specific details for each individual company are included in Appendix A of this report, including each company’s:

Statutory information (directors, shareholders)

Summary of creditor claims

Summary of ROCAPs

Financial statement summaries.

When reading this report, creditors should note that any statements referring to ‘the Group’ encompasses all companies in the Group, including FSC. Any references to Flow Systems Group FS Group or the Loxford Group are in accordance with the below Group structure, and do not include FSC. We have prepared this report on this basis for the following reasons:

FSC, FS, and FSO are the main operating companies in the Group, primarily contracting with creditors, external customers and contracting parties along with holding regulatory licences.

Some of the subsidiaries own the physical infrastructure assets and regulatory licences, while others are largely dormant.

The Loxford Group of entities was established for the purposes of a separate development that is in its early stages.

Historically, notwithstanding this legal structure, the Group reported and operated on a consolidated basis without any formal agreements or policies dictating how the use of assets and funds are accounted for between entities.

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Creditors are also advised that while this report is provided on a consolidated basis for ease of reference, all resolutions proposed at the Second Meeting will be separate and specific resolutions for and voted upon only by the specific creditors of each company in the Group.

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2 Executive summary 2.1 Appointment background

Christopher Hill and Philip Carter were appointed joint and several Administrators of the Group companies on Thursday, 20 December 2018 pursuant to resolutions of the boards of directors under s436A of the Act.

2.2 Purpose of this report

The purpose of this report is to table the findings of our investigations into the Groups’ business, property, affairs and financial circumstances, as well as setting out our opinion on the three options available to creditors in deciding the future of each Group company, being:

1. The company be wound up;

2. The company executes a Deed of Company Arrangement; or

3. The administration should end and the company is returned to its directors.

2.3 Administrators’ opinion

We have received one Deed proposal from the Deed Proponent, an entity associated with the Major Shareholder. The Deed has been proposed for the Deed Companies, being all Group companies with the exception of the Loxford Group.

Having assessed the estimated outcome under the proposed Deed against the likely outcome should the Deed Companies be wound up, we are of the opinion that it is in the best interests of creditors of each Deed Company that they vote in favour of the proposed Deed, rather than a winding up.

No Deed proposal has been received at the time of writing this report for the Loxford Group. Accordingly, it is our opinion that it is in the best interests of the creditors of each Loxford Group company that they vote in favour of their winding up, as they are, or are likely to become insolvent, and thus should not be returned to the directors.

A summary of our recommendations is below.

Group company Administrators’ recommendation

FS Execute the Deed as proposed FSC Execute the Deed as proposed FSO Execute the Deed as proposed Cooranbong Water Execute the Deed as proposed Huntlee Water Execute the Deed as proposed Central Park Water Execute the Deed as proposed Discovery Point Water Execute the Deed as proposed Green Square Water Execute the Deed as proposed Pitt Town Water Execute the Deed as proposed Wyee Water Execute the Deed as proposed Loxford Development Holdings Pty Ltd Wind up the company Loxford Waters Pty Ltd Wind up the company

IDI Loxford Pty Ltd Wind up the company

Inneholde Pty Ltd Wind up the company

Buskas Holdings Pty Ltd Wind up the company

Loxford Energy Pty Ltd Wind up the company

A summary of the key terms of the proposed Deed is included in Section 9 of this report. A comparison of the estimated outcome in a liquidation scenario is included at Section 10.

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2.4 Second meeting of creditors

The Second meeting of creditors (Second Meeting) will be held on:

Date: Monday, 25 February 2019

Registration: 12.30pm AEDST

Meeting time: 1.00pm AEDST

Location Novotel Sydney on Darling Harbour

The Hunters Room

100 Murray Street

Pyrmont NSW 2009

To register attendance and be entitled to vote at the Second Meeting, creditors must complete and submit the following forms attached at Appendix B:

Form 532 – Appointment of Proxy

POD form.

Forms must be submitted by no later than 3.00pm AEDST Friday, 22 February 2019 to this office or by email to michelle.budiarso@pwc.com

If you have previously submitted a POD, and have not received separate correspondence on your proof from the Administrators, you do not need to complete a new POD form. However, you will need to complete a new proxy form.

2.5 Deed of Company Arrangement

We received a Deed proposal (detailed in Section 9) for the Deed Companies. This proposal was received from the Deed Proponent, and has the following key features:

An anticipated minimum contribution of $44m, to be utilised in satisfaction of:

- Repaying in full all amounts owing to the Security Trustee including the Brookfield Secured Creditors (c.$34m)

- Paying administrator, deed administrator and creditors trustee costs in full

- Providing an amount of c.$2.8m to provide a dividend to participating unsecured creditors of the Deed Companies.

Preservation of all employee entitlements (with the exception of Excluded Employees) will continue on the same terms and conditions as presently employed following effectuation of the Deed.

The prompt return of the Deed Companies to solvency, with a newly appointed Board of Directors via use of a creditors’ trust. Under the creditors trust structure, creditors will receive a right to receive a dividend from the creditors’ trust, which will be based upon their unsecured claim as at the date of appointment of Administrators (20 December 2018).

Pursuant to an order of the court under s444GA of the Act, the Proponent (or its nominee, each being entities associated with the Majority Shareholder) will assume full ownership of the FS Group, without any additional payment being made to the remaining shareholders.

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2.6 Estimated return to creditors

We estimate creditors’ returns under a liquidation scenario and a Deed scenario to be:

Creditor type Liquidation Cents in

the dollar

Deed

Cents in the dollar

Secured creditors FS FSO FSC Cooranbong Water Huntlee Water Central Park Water Discovery Point Water Green Square Water Pitt Town Water Wyee Water The Loxford Group

10-20

Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil

100 100 100 100 100 100 100 100 100 100

N/A Employees FS FSC

40-60

Nil

100 100

Unsecured creditors FS FSO FSC Cooranbong Water Huntlee Water Central Park Water Discovery Point Water Green Square Water Pitt Town Water Wyee Water

The Loxford Group

Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil

60 60 60 60 60 60 60 60 60 60

N/A

2.7 Offences and liquidation recoveries

Our preliminary view is that the Group did not trade while insolvent in the period leading up to our appointment, albeit the Group relied on ongoing support and funding provided by various Security holders, including secured convertible note funding and a sale funding loan provided by the Major Shareholder along with unsecured temporary credit lines. While this funding support continued, it would appear that the Group had the means to continue to meet its liabilities as and when they fell due. At the time this support was withdrawn, the directors of the Group moved to immediately appoint the Administrators.

We have identified one potential voidable transaction, relating to a security interest granted by FS in the days immediately preceding the appointment of the Administrators. A liquidator, if appointed, will conduct further investigations into this matter. However, given the quantum of other confirmed secured and priority creditor claims, and the estimated net realisations in a liquidation, it is our preliminary view that successfully pursuing any such voidable transaction would not result in any additional return to creditors.

Further detail on the investigations we have undertaken is included in Section 7 of this report.

2.8 Administrators’ overview

2.8.1 Conduct of administration

Since our appointment as Administrators we have, amongst other things:

Continued to operate the Group on a ‘business as usual’ basis

Secured a line of funding from the Group’s Major Shareholder to allow us to continue to trade

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Successfully applied to the Court for an extension of the convening period to allow completion of a sale campaign

Conducted a sale campaign which resulted in six offers (refer Section 5.5) including the Deed proposal outlined in Section 9

Liaised with key stakeholders, including customers, secured creditors, suppliers and employees to ensure ongoing support to the Group, which in turn allowed for the business to continue to trade

Regularly reported to relevant regulators regarding the status of the administration of the Group

Held the first meetings of creditors of the Group

Conducted preliminary investigations for the purpose of reporting to creditors

Prepared this report and convened the Second Meeting of Creditors.

2.8.2 Group financial background

The Group generally operated on a consolidated basis with the exception of FSC, where separate financial reporting was maintained. A summary of the financial performance is provided below.

The FS Group incurred consecutive losses in CY16, CY17 and CY18, while FSC was effectively break even over the same period (reflecting the fact that the internal arrangement between FS and FSC was to enable FSC to meet its overheads through a recharge arrangement).

At an EBITDA level, the FS Group generated positive EBITDA in CY16 ($4.2m) and CY17 ($2.3m), however in CY18, the FS Group generated negative EBITDA of $3.2m.

While the Group generated positive EBITDA in CY16 and CY17, it also incurred high levels of capital expenditure, which effectively utilised the generated EBITDA.

The deterioration in performance in CY18 is reflective of the fact that both developer and consulting revenue declined significantly in CY18, as new developments slowed down. In relation to one particular development (Cooranbong), the FS Group agreed to fund significant development costs upfront ($8.0m) in CY18, leading to further cash outflows.

While customer revenue grew significantly, based on an increasing customer base as new lots/apartments/energy sites came on line, this was directly offset by higher direct costs in serving the customers, in the form of higher wholesale energy costs.

Notwithstanding the decline in revenue in CY18, the overhead base remained consistently high throughout CY18, resulting in an EBITDA loss.

The EBITDA loss, coupled with the ongoing capital expenditure associated with projects, led to the Group being reliant on external funding to continue to trade.

2.8.3 Reasons for the Group’s difficulties

The key reasons for the Group’s difficulties are considered to be as follows:

Lack of stable, recurring revenue streams to fund working capital, a high fixed overhead structure and the significant capital outflow associated with new projects.

Insufficient capital to enable the business to reach sufficient scale, coupled with ongoing delays to developments

Withdrawal of ongoing funding support from the Brookfield Secured Creditors

An inability to attract additional funding in the form of either debt or equity.

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2.9 Remuneration

We are seeking approval for our remuneration (excluding GST) at the Second Meeting as summarised below:

20 December 2018 to 8 February

2019

8 February 2019 to

execution of DOCA

Execution to conclusion

of DOCA

Commencement to finalisation of

the Creditors’ Trust

22 February 2019

to conclusion of Liquidation

FS 907,165 200,000 100,000 100,000 100,000

FC 103,680 100,000 40,000 40,000 40,000

FSO 6,712 4,996 10,000 10,000 10,000

Cooranbong Water 6,660 5,000 10,000 10,000 10,000

Discovery Point Water 6,518 4,996 10,000 10,000 10,000

Green Square Water 6,483 4,996 10,000 10,000 10,000

Pitt Town Water 6,430 4,996 10,000 10,000 10,000

Wyee Water 6,448 4,996 10,000 10,000 10,000

Central Park Water 6,518 4,996 10,000 10,000 10,000

Huntlee Water 7,269 5,000 10,000 10,000 10,000

Loxford Development Holdings 2,995 2,500 N/A N/A 10,000

IDI Loxford 2,643 2,500 N/A N/A 10,000

Inneholde 4,089 2,500 N/A N/A 10,000

Buskas Holdings 1,959 2,500 N/A N/A 10,000

Loxford Energy 2,393 2,500 N/A N/A 10,000

Loxford Waters 2,787 2,500 N/A N/A 10,000

Total 1,080,745 354,976 220,000 220,000 280,000

Prospective liquidators’ remuneration will not be sought if creditors elect to form a COI.

Please refer to our Remuneration Report at Appendix C for full details of key activities undertaken by us, our partners and staff and the remuneration approval sought.

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3 Introduction 3.1 Appointment information

The Administrators were appointed on Thursday, 20 December 2018 pursuant to resolutions of the boards of directors of each Group company under s436A of the Act.

3.2 Declaration of Independence, Relevant Relationships and Indemnities

Our DIRRI is provided at Appendix D. The DIRRI discloses information regarding any prior personal or professional relationships the Administrators, their previous firm and PwC had with the Group or related parties, our independence and any indemnities received relating to this appointment.

3.3 Purpose of this report

The Administrators are required to investigate the Group’s business, property, affairs and financial circumstances and report to creditors on the Administrators’ opinion on the options available to creditors of the Group, being that the:

The Group companies be wound up (liquidation),

The Group companies execute a deed of company arrangement if one is proposed, or

The Administration of any Group company should end (with control of any Group company reverting to that company’s directors).

3.4 Purpose of Second Meeting

The Second Meeting for each company will:

address the contents of this Report

respond to questions from creditors

determine the company’s future by resolving one of the three available options

seek approval of:

- Administrators’ remuneration

- future remuneration of the liquidators or deed administrators (as applicable)

- should creditors desire, the formation of a COI.

The current Administrators automatically become the deed administrators or liquidators unless creditors resolve to replace them.

The options available to creditors and the Administrators’ opinion on each option are set out in detail in Section 11.

It is our opinion that for the ten Deed Companies, it is in the creditors’ best interests that the Deed Companies execute a Deed.

It is our opinion that for the six Loxford Group companies, it is in the creditors’ best interests to wind up the Loxford Group companies.

3.5 Second Meeting convening period

The Act stipulates the timing of the Second Meeting. Generally, the Second Meeting must be convened between 15-25 business days, or 20-30 business days in the event the appointment occurs

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immediately prior to Christmas or Easter (as is applicable in this instance), from the date the administration begins. The court may extend the convening period if circumstances require.

On our application, the Court extended the convening period until 29 March 2019. We sought the convening period extension to enable additional time for a sale and recapitalisation process in relation to the Group to be undertaken, particularly in view of the fact that our appointment occurred on 20 December 2018.

Further details on the extension of the convening period are available on our website using the following link:

https://www.pwc.com.au/business-restructuring/insolvency-cases/flow-systems-pty-ltd.html

3.6 Second meeting details

The Second Meeting will be held on Monday, 25 February 2019 at 1.00pm AEDST. Formal notification Form 529 – Notice of Meeting of Creditors is attached at Appendix E.

3.7 Meeting registration

To register attendance and be entitled to vote at the Second Meeting, creditors must complete and submit the following forms attached at Appendix B:

Registration forms Information

Form 532 –

Appointment of Proxy

(IPR s75-150)

A new proxy form is required to be completed for each creditors’ meeting (i.e.

proxy forms provided for the first creditors’ meeting are invalid for the Second

Meeting).

If a corporate creditor (i.e. a company) wants to be represented at the Second

Meeting, it must appoint an individual to act on its behalf by providing an

executed proxy form in accordance with section 75-150 of the IPR. For example, a

director of a company needs to complete a proxy form with themselves as the

proxy for the company.

Individuals may choose to appoint a representative to vote on their behalf by

executing a proxy form. If an individual is attending in person a proxy form is not

required.

A person may also be represented by attorney pursuant to s75-155 of the IPR and

if a body corporate by corporate representative pursuant to s250D of the Act.

Form 535 – Proof of

Debt or Claim Form

(IPR s75-85 and sub

regulation 5.6.49(2) of

the Corporations

Regulations 2001 (Cth)

This form is required to be completed to entitle a creditor to vote at the Second

Meeting in accordance with s 75-85 of the IPR. Documents to support the amount

claimed (e.g. unpaid invoices) must also be provided.

There is no requirement for creditors to resubmit a proof of debt form if

previously filed with the Administrators unless the amount claimed has changed.

Please take care when completing the form to ensure the correct party is named as

the creditor. As an example, this may include XYZ Pty Ltd as trustee for the ABC

Family Superannuation Fund.

Only creditors of the relevant companies are entitled to vote at the Second Meeting.

Creditors are encouraged to arrive as early as possible after the registration time to enable the orderly registration of attendees so that the meeting can commence on time.

3.8 Committee of Inspection (COI)

Creditors may wish to establish a COI at the Second Meeting, typically to assist and guide the liquidator or deed administrator (as applicable). A minimum of two members is required to form a COI.

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We recommend that creditors establish a COI regardless of whether the creditors resolve to wind up the relevant Company or that it executes a Deed, because this will assist in with the efficient management of either the liquidation or the Deed.

Creditors should consider whether they are in a position to be a COI member, as membership of a COI requires attendance at meetings (telephone facilities will be made available so members do not have to attend in person). When attending and considering matters, as members of the COI, the member must have regard to the interests of the creditor group as a whole, and not the interests of the creditor to which they may be connected.

Importantly, for a creditor to be eligible for appointment as a member of a COI, they must either:

be in attendance at the Second Meeting; or

appoint a general power of attorney to attend the Second Meeting on their behalf; or

authorise a person in writing to be a member of the COI on their behalf.

3.9 Further information

To assist creditors, employees, and shareholders to understand the voluntary administration process, ASIC has released a package of insolvency information sheets endorsed by ARITA.

Enclosed at Appendix F is ASIC’s publication titled ‘Insolvency information for directors, employees, creditors and shareholders’, which provides an index of all the information sheets that are available. You can download these information sheets from:

www.asic.gov.au

www.arita.com.au

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4 Group background 4.1 Group structure

The Group operating structure at our appointment date is provided below.

4.2 Group overview

The Group operates as a water utility and energy solutions provider in Australia, delivering sustainable water delivery systems to developers, governments and communities along with energy solutions to multi-unit or mixed residential communities. The FS Group commenced with the incorporation of FS on 27 March 2009. Wholly owned subsidiaries were then incorporated at the time the Group entered into PDAs, with the subsidiaries established for the purposes of the Group complying with its obligations under the relevant PDAs both in terms of holding regulatory licences and constructing/operating the relevant infrastructure assets. FSC was incorporated in May 2015 and is an entity that undertakes the physical construction of local water centres and associated infrastructure under a design and construct style arrangement with FS. We note the following in relation to the Group:

FS is the retailer within the Group (ie. the contracted provider to the end users) as well as the corporate services entity. FS holds a retail suppliers’ licence under the WICA and is an authorised retailer under the National Energy Retail Law (E17004). FS employs the majority (29) of the Group’s employees, and is the primary operating entity.

FSC was established for the purposes of managing the physical development of FS infrastructure in accordance with a Recharge Agreement with FS. It houses the scheme implementation team, including scheme infrastructure design, construction and associated workflows. In essence, FSC is the construction entity of the Group. FSC employs 6 employees of the Group. FSC and FS are parties to an agreeemnt whereby FSC would recharge FS for all development costs that FSC incurred plus an agreed margin.

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FSO was established for the purposes of holding all network operating licences for schemes entered into after Novermber 2014. Prior to this date, the individual subsidiaries related to each scheme held the relevant network operating licence (refer below).

The six companies in the Loxford Group were established in June 2018 as special purpose companies relating to an acquisition of a parcel of land and future development at Kurri Kurri, New South Wales. This project is in the very early stages of development and, aside from the initial agreements, no further transactions have been entered into on behalf of the companies in the Loxford Group.

All FS subsidiaries (excluding FSO and M2C) are scheme specific special purpose companies established in respect of each individual scheme to deliver the Group’s water, energy and multi-utility solutions, which are either completed and operating or in various stages of development. Each of these subsidiaries (along with FSO) hold the relevant WICA network operating licence required for the construction and operation of the water infrastructure.

M2C was not placed into administration and continues to trade outside of the administration, without the need for funding support from the Group.

The Group operates from a leasehold premises located on George Street, Sydney. All employees have contracts with FS (29 employees) or FSC (6 employees). Information regarding the Groups’ financial background is discussed in Section 6. Further information on the Groups’ operations and history is available on the Group’ website https://flowsystems.com.au. We have not altered any material on the Groups’ website that existed at the time of our appointment.

4.3 Corporate Timeline

Following incorporation, FS’ first major project was Pitt Town, a land and housing development in Western Sydney with the first connection occurring in December 2011. This was followed by:

Discovery Point Water – PDA signed in December 2012 to provide waste water, recycled water

and drinking water services to an apartment complex with 1,600 customers and commercial tenants

Central Park Water – Obtained WICA licence in January 2013 to provide waste water, recycled water and drinking water services to an apartment complex with 2,100 customers and commercial tennants.

In February 2013, EAWH, an entity within the Brookfield Group, took a majority economic interest in the Group by way of subscription for convertible notes issued by FS. At the time, other parties associated with the founding shareholders also subscribed for convertible notes. The convertible notes were secured by a general security agreement over FS and Wyee Water and housed in a security trust, with Brookfield Infrastructure as Security Trustee. During the period 2013 to 2016, certain Group companies continued to enter into PDAs or similar agreements to design, construct and manage the implementation of local water utility infrastructure for large scale developments, in an effort to move the business to one of scale that would become self-funding. These included:

Wyee Water – PDA signed in June 2013 to provide waste water, recycled water and drinking water services to a land and housing commuity scheme with 954 residential customers

Huntlee Water – PDA signed in December 2013 to provide waste water, recycled water and drinking water services to a land and housing commuity scheme with 7,500 customers and a town centre

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Cooranbong Water – PDA signed in February 2014 to provide waste water, recycled water and drinking water services to a land and housing commuity scheme with 2,100 customers and town centre

Bellbird – PDA signed in June 2014 to provide waste water, recycled water and drinking water services to a land and housing commuity scheme with 2,200 customers

Box Hill– PDA signed in May 2015 to provide waste water and recycled water services to a land and housing commuity scheme with 5,000 customers and a town centre

Green Square Town Centre - Obtained WIC Act licence in September 2015 to provide waste water, recycled water and drinking water services to an appartment complex with 4,100 customers and commercial tenants

Shepherd’s Bay - PDA signed in June 2016 to provide waste water, recycled water, drinking water, electricty and thermal (hot water and gas) services to an appartment complex scheme with 1,700 customers.

In March 2017, FS then acquired the Brisbane based utility billing and collections specialist business M2C (serving approximately 30,000 customers throughout 500 communities), in order to strengthen its multi-utility offering to energy customers. In September 2017, FS was successful in its application to the AER to become an authorised energy retailer, enabling it to provide energy retailing services direct to end customers within embedded energy networks.

During the period September 2017 to December 2018 the Group entered into nine agreements to be the priority provider of energy to retail customers at several sites, including Sky Tower, Star of the Sea and South Port Central.

Notwithstanding the growth of the Group as outlined above, in February 2018 the Group commenced a process to recapitalise its balance sheet, primarily due to:

the continuing challenges presented by developer delays

challenges on major projects and cost increases across the project development book

underperformance with respect to business development

losses incurred on secured projects

insufficient working capital to withstand unforeseen project claims.

Between February 2018 and May 2018, interim funding was provided by EAWH and other Securityholders through an unsecured temporary line of credit facility, while negotiations regarding the recapitalisation took place between shareholders in accordance with the Securityholder arrangements. By April 2018, the Group was in default of its funding facilities, and entered into a forbearance arrangement with EAWH (as the majority Noteholder) pursuant to which EAWH agreed that it will not instruct the Security Trustee to take enforcement action under the Security Trustee's securities and take any enforcement action available to EAWH under other documents. In May 2018 EAWH, in its capacity as Major Shareholder and majority Noteholder, conducted a review of its options and the future funding requirements of the Group. The review subsequently lead to EAWH providing continued support to the Group via an additional unsecured temporary credit line facility and it was also agreed that the KPMG Process would be undertaken.

Further secured funding was provided to the Group by EAWH ($9.2m) throughout the KPMG Process to ensure it was able to operate as a going concern. The funding was provided under three separate loan agreements and ranked in priority to the convertible note funding (as outlined in Section 4.5.2).

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The KPMG Process did not result in any bids that were acceptable to the Group’s Securityholders, resulting in the withdrawal of ongoing support from the Brookfield Secured Creditors. Immediately subsequent to this, the directors of FS appointed us as administrators of FS on 20 December 2018.

Following our appointment as administrators of FS, we were also appointed to the remainder of the FS Group (with the exception of M2C) and FSC on 20 December 2018, as all Group entities were reliant on FS for ongoing funding and support, which was no longer certain once FS was placed into administration.

4.4 Statutory information

Details of each of the Company’s directors, other officers and shareholders based on ASIC’s database are provided in Appendix A.

We are not aware of any inaccuracy in ASIC’s records.

4.5 Creditors’ claims

The following table summarises the estimated claims for the Group. Creditors’ claims in each of the individual companies is provided in Appendix A.

Group creditor claims

Creditor class Number of creditors Amount ($) Report section

Secured creditors

Secured Creditors 24* 45,382,015 4.5.2

Employee entitlements

Priority creditors 33 382,585 4.5.4

Excluded employee entitlements (unsecured creditors)

2 252,824 4.5.5

Unsecured creditors

Trade/External creditors 167 8,892,295 4.6

Related entitles 9 36,624,049 4.6

Total creditor claims 235 91,533,768

Contingent creditors

Contingent Secured Creditors 2 94,932,149** 4.6

Contingent Unsecured Creditors 6 49,058,309** 4.6

Total contingent creditors 8 143,990,458

Total Claim 243 235,524,226

*Based on registrations on the PPSR

**Amounts claimed

The amounts listed above are subject to revision and have been derived from the:

ROCAP provided by the directors (Section 6.2);

Group’s books and records; and

formal proof of debt or claim forms submitted by creditors to date.

Loxford Group and Green Square

We note that the books and records of The Loxford Group and Green Square do not record any creditors outstanding as at 20 December 2018. However, we are advised by Management that FS has made several payments on behalf of these companies, including ASIC filing fees and IPART water licence fees and as such, FS is likely to be a creditor of these entities. As outlined in Section 1.1, the Group generally operated on a consolidated basis and did not regularly record intercompany transactions in the individual financial statements for each Group company.

The Loxford Group and Green Square Water do not hold any assets or other liabilities, and would be unable to operate without the support of their associated parent companies.

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4.5.1 Secured creditors

A secured creditor is a creditor that holds a security interest over some or all of a company’s assets. To be valid, the security interest must be registered on the PPSR or, in the case of land and buildings, at the relevant Land Titles Office. Security interests can be over:

circulating assets (also known as ‘floating’ assets) e.g. debtors, stock and cash

non-circulating assets (also known as ‘fixed’ assets) e.g. property, plant and equipment, land, goodwill and rights to dividends.

A search of the PPSR revealed a number of security interests registered over the Group’s assets as at 20 December 2018. We have summarised these registrations by Company in Appendix G.

4.5.2 Secured Creditor Funding

From February 2013 onwards, the Group’s operations have been financed by the following arrangements:

the Securityholders Agreement;

the Subscription Agreements;

the Convertible Notes Deed Poll;

the Security Trust Deed;

the Flow Systems GSD;

the Wyee Water GSD,

(together, the Transaction Documents).

By force of the Security Trust Deed, the Flow Systems GSD and Wyee Water GSD provided security in favour of the Security Trustee for the obligations of each of FS and Wyee Water in respect of and in connection with the Subscription Agreements and was held on behalf of the Security Trustee and the ‘Beneficiaries’ as security for the secured obligations of the ‘Obligors’ in respect of the Transaction Documents.

EAWH is the ‘Major Beneficiary’ under the Security Trust Deed and to this end, is entitled to instruct the Security Trustee (in its capacity as Majority Beneficiary under the Security Trust Deed) to take enforcement action under the Security Trust Deed and the Flow Systems GSD and to (amongst other things) take any enforcement action available to it under any of the Transaction Documents and vote at any creditors' meeting.

In addition to the above, Enwave (an entity associated with EAWH and the Security Trustee), is a secured creditor of FS in respect of amounts owing to Enwave by FS under the Capacity Agreements.

Further details of the secured funding arrangements provided to the Group are outlined below.

Convertible Note Funding

Pursuant to the Convertible Notes Deed Poll, FS issued secured Class A and Class B Convertible Notes on or around February 2013. These notes were to mature in 7 years from the date of issuance, at which point the Convertible Notes would convert into Conversion Shares (as defined in the Convertible Notes Deed Poll).

Further to this, on or around September 2014, FS issued additional secured Class C Notes in line with the Amended and Restated Convertible Notes Deed Poll in order to raise additional funding for working capital requirements.

The below table sets out the relevant holdings for each Class of Convertible Noteholder in relation to the notes issued by FS.

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Convertible Noteholder Convertible Note (CN) Holding

at Appointment

CN Original Face Value ($)

Class A:

EAWH

12,732,441

9,000,000

Class B:

Katrina Langley

David Langley

Saddlehill

785,953

785,953

1,571,906

500,000

500,000

1,000,000

Class C – Tranche A:

EAWH

Ronald Langley & Rhonda Langley

Woodland

Blue Sky

3,678,261

1,061,037

212,207

1,061,037

2,600,000

750,000

150,000

750,000

Class C – Tranche B:

EAWH

2,334,281

1,650,000

Class A

Class B

Class C: Tranche A

Class C: Tranche B

12,732,441

3,143,812

6,012,542

2,334,281

9,000,000

2,000,000

4,250,000

1,650,000

Total 24,223,076 16,900,000

The maturity date of the Class C Notes was 24 June 2017. Pursuant to the Convertible Notes Deed Poll, on the maturity date FS was required to pay to the Class C Noteholders an amount equal to the Face Value of the Class C Notes (Redemption Amount). However, if FS was unable to pay the Redemption Amount, then each Class C Noteholder had the right to convert the Redemption Amount that FS was unable to repay into shares of FS. Due to FS experiencing working capital difficulties at the time, 100% of the Class C Notes plus outstanding interest converted to Ordinary Shares on 31 December 2017.

As at the date of our appointment, a total of 15,876,253 convertible notes issued by FS remain outstanding, with interest accruing at a default rate of 17% per annum. The below table sets out amounts currently owed to the Convertible Noteholders.

Convertible

Noteholder

CN Holding CN Face Value

($)

CN Interest ($) CN Balance ($)

Class A:

EAWH

12,732,441

9,000,000

7,825,461

16,825,461

Class B:

Saddlehill

1,571,906

1,000,000

864,883

1,864,883

Katrina Langley 785,953 500,000 432,441 932,441

David Langley 785,953 500,000 432,441 932,441

Class A

Class B

12,732,441

3,143,812

9,000,000

2,000,000

7,825,461

1,729,765

16,825,461

3,729,765

Total 15,876,253 11,000,000 9,555,226 20,555,226

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These notes are secured pursuant to the Flow Systems GSD, which was registered on the PPSR on 1 March 2013 (PPSR registration number 201303010085043). This security is granted in favour of the Security Trustee of the Security Trust, of which each Noteholder is a beneficiary. The Flow Systems GSD is subordinated only to:

i. a general security deed in favour of Celestino relating to performance obligations associated with the Box Hill North and Jacaranda Ponds developments; and

ii. the general security deed granted in favour of EAWH for amounts drawn from the Administrators’ Interim Funding facility.

As noted above, the Security Trustee effectively acts on behalf of all Noteholders with EAWH (being the Majority Beneficiary) being able to direct the Security Trustee with respect to the release and discharge of the securities held on behalf of the beneficiaries of the Water Factory Company Security Trust. In this regard, the Security Trustee is able to vote at any meeting of creditors on behalf of all Noteholders.

Sale funding to FS from EAWH

To enable the Group to continue operations in the ordinary course throughout the KPMG Process, EAWH agreed to provide FS with separate additional funding for working capital requirements during this time. Funding was provided pursuant to 3 Sale Funding Loan Agreements dated 21 September 2018, 7 November 2018 and 7 December 2018, with an amount of $9,248,218.94 remaining outstanding (including accrued interest) as at 20 December 2018, with interest continuing to accrue at a rate of 15% per annum.

The repayment of this is secured by the Flow Systems GSD. The Security Trustee shall apply any money received by it towards repayment of the Sale Funding Loan Agreements in full, before any payment of the Convertible Note Funding.

Shepherds Bay Project Cooperation Agreement Loan with Enwave

FS and FSO, along with Enwave, secured an opportunity to develop and operate multi-utility infrastructure for a residential development at Shepherds Bay. To enable FS to design, procure, install and commission the FSO scheme infrastructure, Enwave agreed to provide an interest free loan of $6,989,990 pursuant to the Shepherds Bay Project Cooperation Agreement dated 22 December 2016 (Shepherds Bay Cooperation Agreement). Pursuant to the Shepherds Bay Cooperation Agreement, Enwave was to pay for and own the scheme infrastructure, with FS and FSO paying Enwave a capacity charge for the use of the Water Scheme Infrastructure and Energy Scheme Infrastructure.

As at 20 December 2018, FS had drawn down an amount of $4,344,990 under this loan. The repayment of this amount is secured by a security interest over FS in favour of Enwave, registered on the PPSR on 18 December 2018 (PPSR registration number 201812180086382) pursuant to a General Security Deed entered into between FS and Enwave dated 17 December 2018.

Capacity Agreements with Enwave

Enwave entered into the following arrangements with FS and other entities in the Group, including (without limitation):

three separate Capacity Agreements dated on or about 14 November 2018 with FS in relation to the Pitt Town, Huntlee and Shepherds Bay development projects

the Shepherds Bay Cooperation Agreement with FS and FSO in relation to the Shepherds Bay development

a Lease and Buyout Agreement dated 26 June 2014 with PT in relation to Stage 1 of the Pitt Town development.

Pursuant to these Capacity Agreements, Enwave owns the plant and equipment comprising the local water centre at each of the development sites and has enabled FS to utilise and operate the local water centre infrastructure for a monthly capacity charge.

In respect of the Capacity Agreements:

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Enwave has reserved its rights on a without prejudice basis regarding the breach of each of the Capacity Agreements due to the insolvency of Flow Systems occurring as at the date of our appointment; and

in the event the Capacity Agreements are terminated, there is an early termination amount that will crystallise under each Capacity Agreement.

Performance of, and any amounts payable under, these agreements is secured by way of an all assets security interest over FS in favour of Enwave pursuant to a General Security Deed entered into between FS and Enwave dated 17 December 2018.

To date, none of the above agreements have been terminated. Were these agreements to be terminated, then the termination payments arising thereunder would become secured liabilities of FS.

General security deed in favour of Celestino Pty Ltd

A general security deed in favour of Celestino Pty Ltd relating to the Box Hill North and Jacaranda Ponds developments was entered into by both FS and FSO. The agreements are in relation to the infrastructure design, construction and associated workflows of installation for the recycled and waste water of home and land packages at the Gables, Box Hill and Glossodia, Jacaranda Ponds.

Security interests were registered on the PPSR in favour of Celestino over FS and FSO in March 2015 in respect of performance obligations associated with the Box Hill and Jacaranda Ponds developments. To date, all performance obligations have been met in respect of these developments and the Administrators are of the view that there is presently no amount owing to Celestino. Were these agreements to be terminated, then a damages claim in favour of Celestino may arise, which if it did so, would become a secured liability of FS and FSO.

Administrators’ Funding Agreement

Immediately following our appointment, we negotiated and secured an interim funding arrangement for an amount not exceeding $5 million with EAWH. The Administrators’ funding arrangement is documented in the Administrators’ Facility Agreement and GSD. On 31 December 2018, the Court granted orders limiting the Administrators personal liability under the Administrators’ Funding Agreement.

This funding has allowed us as Administrators to maintain the day-to-day trading and operations of the Group and enabled us to ensure all relevant payments are made as and when they fall due whilst undertaking our sale of business campaign.

The obligations under the Administrators’ Facility Agreement is guaranteed by each of FS, FSC along with each other entity within the Group, and is secured by a security interest granted by each of the Companies to EAWH in accordance with the Administrators GSD.

4.5.3 Unsecured Funding

Unsecured Temporary Credit Line Funding

Certain of the Noteholders advanced further funds to FS under ‘Temporary Credit Line’ facilities pursuant to letters dated 28 February 2018, 4 May 2018, 28 May 2018, 28 June 2018, 7 August 2018 and 22 August 2018. This additional unsecured funding was provided by those Noteholders to address the continued working capital and operational requirements of FS throughout 2018.

As at 20 December 2018, the below principal amounts were outstanding with interest continuing to accrue at a rate of 15% per annum.

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Securityholder Original Loan

Balance ($)

Additional Loaned

Amount($)

Total Temporary

Credit Loan ($)

EAWH 1,114,000 2,646,225 3,760,225

Bluesky 400,000 1,205,425 1,605,425

Ronald & Rhonda Langley 400,000 641,450 1,041,450

Saddlehill - 300,000 300,000

BFT Capital - 18,150 18,150

Woodland - 24,750 24,750

Total 1,914,000 4,836,000 6,750,000

Pursuant to a Deed of Amendment between FS and the Noteholders dated 21 September 2018, the maturity date for the above loans was extended to 28 February 2019. We understand that after this date, a Conversion Event will occur, whereby shares in FS will be issued within 5 days in respect of all outstanding unpaid principal and any accrued interest amounts. To this end, we are of the opinion that after 28 February 2019, the above amounts will no longer form unsecured claims against FS.

4.5.4 Employee entitlements

Outstanding employee entitlements have a statutory priority for payment over other creditors from proceeds relating to circulating assets. FS and FSC are the only two Group companies with employees.

The table below details all known outstanding employee entitlements based on each of FS’ and FSC’s books and records. Employee entitlements have not yet been verified with individual employees. Additional amounts for payment in lieu of notice and severance pay would also need to be included in the event employees were to be made redundant.

Entitlements FS FSC

Superannuation 41,913 6,544 Annual leave 352,312 48,888 Long service leave 185,752 - Total Priority Creditors excluding redundancy

538,064 48,888

Excluded Employee Entitlements (Refer to Section 4.5.4)

(257,332) -

Total Priority Employee Entitlements excluding payment in lieu of notice and redundancy

280,732 48,888

4.5.5 Excluded employees

Excluded Employees are defined in s556(2) of the Act as directors and their spouses or relatives.

Outstanding priority employee entitlements for Excluded Employees are limited to $2,000 for wages (including superannuation) and $1,500 for unpaid annual leave and long service leave. The balance of their entitlements rank as an unsecured claim under s556(1A) and (1B) of the Act.

In the case of FS, there are 2 Excluded Employees, namely Terence Leckie and Stephen McKewen.

4.5.6 Fair Entitlements Guarantee (FEG)

All employee entitlements will be preserved under the terms of the proposed Deed (refer to Section 9), if creditors vote in favour of the Deed. The entitlements of the Excluded Employees will be subject to the limits referred to above.

In the event the Group companies are placed into liquidation, it is unlikely that there will be sufficient asset recoveries to pay outstanding entitlements in full (refer to Section 10).

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However, in the event that Group companies are placed into liquidation, an employee may be eligible for payment of any shortfall in their employee entitlements (excluding superannuation) under FEG which is administered by the DoJSB.

Former employees must meet eligibility requirements outlined in the Fair Entitlements Guarantee Act 2012.

FEG payments are made by way of an advance to the liquidator, and are repaid to the Government if and when funds become available, in the same priority as the employees’ claims enjoyed before they were paid.

Further information can be found on FEG’s website at http://employment.gov.au/fair-entitlements-guarantee-feg.

4.6 Unsecured creditors and Intercompany claims

The following table summarises the estimated unsecured creditor and intercompany claims for the Group. Unsecured creditors’ claims in each of the individual companies is provided in Appendix A.

Creditor Class Trade/

External Inter-company Total unsecured

FS 7,512,052 28,239,017 35,751,061

Central Park Water 145,016 - 145,016

Cooranbong Water 1 1,816,667 1,816,668

Discovery Point Water - 615,772 615,772

FSO 52,699 - 52,699

Pitt Town Water 1 5,952,591 5,952,592

Wyee Water 252 - 252

FSC 1,258,262 - 1,258,262

Huntlee Water 24,006 - 24,006

Green Square - 1 1

IDI Loxford Pty Ltd 1 - 1

Inneholde Pty Ltd 1 - 1

Loxford Development Holdings Pty Ltd 1 1 1

Loxford Energy Pty Ltd 1 - 1

Loxford Waters Pty Ltd 1 - 1

Buskas Holdings Pty Ltd 1 - 1

Total 8,992,295 36,624,049 45,616,335

We note that no claims have been formally adjudicated upon and hence the numbers above are subject to change.

We note the following with respect to these categories of creditors.

Trade / external creditors

These represent external creditors to the Group, incurred in the ordinary course of business.

This class of creditors also includes “contingent” creditors. Contingent creditors are generally those that hold contracts with the Group that could theoretically be terminated, but to date have not been and currently remain on foot. These creditors have been included in the above table for the nominal sum of $1, on the basis that the Deed contemplates the FS Group continuing as a going concern, including continuation of the relevant contracts.

In the event the contracts were to be terminated, counterparties may be able to claim for damages which, if successful, would increase the quantum of unsecured claims.

Intercompany creditors

We note that as at the date of appointment, management advised historically, intercompany loans were not reflected in the accounting records of the Group.

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To enable a proper understanding of the individual financial position of each Group company, we have calculated the intercompany positions as the net of the following:

Development costs – historically FS was responsible for paying all development costs associated with the construction of assets within the relevant communities, which have then become assets of the relevant subsidiary company, with the exception of Green Square Water.

Developer receipts –developers of certain sites have made contributions to the relevant subsidiary company which are used to fund the development costs. These funds were/are then redirected to FS.

Operational expenses – FS has historically paid for the repairs and maintenance of the assets of each of the subsidiary companies. Whilst there was no formal agreement between FS and the relevant subsidiary, management have advised that these costs should be reflected in the subsidiary company accounts (i.e. the subsidiary company should be liable for these expenses).

Customer revenue – FS has an agreement with third parties to operate the infrastructure of certain subsidiary companies and receives revenue in return, however there is no corresponding formal agreement in place between FS and the subsidiary company for the use of the underlying assets. To reflect these arrangements, management have advised that approximately 80% of the revenue generated should be allocated to the subsidiary company, with the remaining 20% allocated to FS to cover head office/overhead costs.

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5 Conduct of administration 5.1 Statutory and Administrative tasks undertaken for all

Group companies

Since our appointment, we have attended to the following tasks:

Statutory reporting, including notification of our appointment to ASIC and the ATO

Prepared and issued the first creditors report and notice of meeting

Held the first meeting of creditors on 4 January 2019

Held ongoing communications with customers, creditors, suppliers, employees, regulators, key management, parties who expressed interest in the sale or recapitalisation of the business, including the Deed Proponent

Collected available records and undertook initial investigation for the purposes of reporting to creditors

Undertook a robust sale campaign for the business, which has resulted in the Deed Proposal

Managed the trading of the business including cash flow reporting, review and approval of purchase orders and payment of suppliers

Preparation of this report and convening of the Second Meeting for each company.

5.2 First meeting of creditors

The first meeting of creditors of the Group was held on 4 January 2019, pursuant to s436E of the Act.

Creditors at the first meeting resolved that a COI be formed for FS comprising:

Representative names Representing

Penny Dixon (Senior Legal Counsel) Celestino

Terry Leckie (Director) Self and the employees of FS

Ron Langley (sole trader and noteholder) Self

Vlad Vishney (General Counsel) Johnson Property Group

David Proudman (Solicitor) Enwave Australia Pty Ltd

Tas Gas Networks Pty Ltd

EAWH Pty Ltd

Brookfield Infrastructure Group (Australia) Pty Ltd

We have not convened any COI meetings to date.

5.3 Extension of the convening period

The convening period for the Group companies was scheduled to end on 31 January 2019 in accordance with the Corporations Act. On 17 January 2019 we filed an application in the Court for orders to extend the convening period in respect of the Second Meeting of creditors for all Group companies up to 29 March 2019. We considered that an extension was in the best interest of the creditors of the Group for the following reasons:

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Final bids in the sale process were due by 4 February 2019. If the convening period was not extended, we would not have been able to adequately report to creditors on the outcome of the sale process

If the period for the sale process was reduced, we considered that potential buyers would not have had an adequate opportunity to conduct due diligence on the business

In addition, following selection of a preferred bidder, it was likely that it would take a further period of time for any arrangements to complete, particularly given the existence of regulatory licences and other agreements that may need to be transferred or novated to a purchaser. These factors potentially add to the time required to complete any sale and complexity of the process

At the time we considered there was a prospect that a Deed would be proposed by one or more parties – either as part of or separate to any binding bid received in the sale process. It is common that once a Deed proposal is received, further time is required for such a proposal to be developed, negotiated and considered before being put to creditors

Having secured interim funding to continue to trade the business of the Group as a going concern, we did not consider that the extension of the convening period would cause any material prejudice to any creditor or any other interested person.

In summary, we considered that an extension would likely increase the possibility of a greater return to the majority of creditors by allowing sufficient time for sale and/or Deed proposals to be formulated, considered, put to creditors and, if the creditors so resolve, executed.

5.4 Decision to continue to trade the business

The Group provides essential utility services to residential and commercial customers under private contracts, but pursuant to regulatory licences issued under the Water Industry Competition Act 2006 and the National Energy Retail Law. In addition, the Group holds PDAs or similar style agreements with property developers for the construction and future operation and maintenance of local water networks at large scale developments. In the event the Group ceased to trade, it would be highly likely that:

Regulatory licences would be revoked; and

PDAs would be terminated. This would give rise to:

Increased creditor claims, due to crystallisation of contingent claims under terminated contracts

Loss of value and assets as licences were revoked

Increased employee claims due to crystallisation of employee entitlements, including payment in lieu of notice and redundancy claims.

Consequently, a sale as a going concern would likely result in a significantly higher return to creditors than in a scenario whereby the business had ceased to trade. Given the level of interest in the business that had been shown in the KPMG Process, we were confident that a sale could be achieved in an administration sale process, as price expectations were materially different. Accordingly, upon being appointed administrators of the Group, we obtained an interim funding facility of up to $5M under the Administrators’ Funding Agreement (excluding the Loxford Group, for which no funding was provided) from EAWH to ensure there was sufficient cash available to trade the Group on a ‘business as usual’ basis throughout the Administration. In relation to this funding, on 31 December 2018, the Court granted orders limiting the Administrators’ personal liability in relation to the $5m funding facility and any intercompany loans that may arise during the administration. A copy of the Court Orders are attached as Appendix I.

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Since our appointment, the majority of work undertaken has been in relation to the two main trading companies (FS and FSO) and the construction entity (FSC). All FS and FSC employees have been retained during this period to assist with the continued trading of the Group, which has involved the following:

Regular communication with relevant regulatory authorities

Tasks associated with continuing performance of service contracts

Liaising with key suppliers to secure ongoing supplies

Ongoing communication with developers and customers

Assistance with the sale process

Continuing operational aspects of the business on a business as usual basis

Provision of information to assist with investigations of the Group.

5.5 Sale of business

Following our decision to continue to trade the business, we commenced an accelerated sales campaign and recapitalisation process on 7 January 2019, with binding bids being due on 4 February 2019. We adopted an accelerated timetable given the following:

Due to the financial circumstances of the Group, we had a limited time period in which to run the sale and recapitalisation process with the interim funding facility made available under the Administrators’ Funding Agreement expiring on 24 February 2019. We note this will be extended in the event the Deed Proposal is approved by creditors.

The Group was subject to the KPMG Process. Whilst the KPMG Process ultimately proved unsuccessful, a number of interested parties had participated and undertaken a significant amount of due diligence, but were unable to meet shareholder expectations in relation to price. Consequently, we were able to take advantage of interested parties already having a high degree of knowledge and information in relation to the opportunity.

Following commencement of the sale process, approximately 30 parties executed confidentiality agreements and were granted access to the dataroom, with management presentations and site visits being provided upon request. Final bids were due on 4 February 2019, with a total of six interested parties submitting formal offers. The Deed Proposal, which is outlined in Section 9, was received as part of this sale process and was the best offer in terms of:

returns to creditors

continuation of the business as a going concern, with employee entitlements preserved and existing contracts remaining on foot

the business being supported in the future by a well capitalised shareholder. The estimated return to creditors is outlined in Section 10 of this report.

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6 Company financial background

Key Comments

The FS Group incurred consecutive losses in CY16, CY17 and CY18, while FSC was effectively break even over the same period (reflecting the fact that the internal arrangement between FS and FSC was to enable FSC to meet its overheads through a recharge arrangement).

At an EBITDA level, the FS Group generated positive EBITDA in CY16 ($4.2m) and CY17 ($2.3m), however in CY18, the FS Group generated negative EBITDA of $3.2m.

While the Group generated positive EBITDA in CY16 and CY17, it also incurred high levels of capital expenditure which effectively utilised the generated EBITDA.

The deterioration in performance in CY18 is reflective of the fact that both developer and consulting revenue declined significantly in CY18, as new developments slowed down. In relation to one particular development (Cooranbong), the FS Group agreed to fund significant development costs upfront ($8.0m) in CY18, leading to further cash outflows.

While customer revenue grew significantly, based on an increasing customer base as new lots/apartments came on line, this was directly offset by higher direct costs in serving the customers, in the form of higher wholesale energy costs.

Notwithstanding the decline in revenue in CY18, the overhead base remained consistently high throughout CY18, resulting in an EBITDA loss.

The EBITDA loss, coupled with the ongoing capital expenditure associated with the projects, led to the Group needing external funding to continue to trade.

We have completed a preliminary financial analysis on the CY16 to CY18 unaudited financial statements. The Group maintained two sets of accounts, as follows:

1. Accounts were maintained for the FS Group that comprised consolidated accounts for all subsidiaries. They contained allocations to ‘communities’ that effectively accounted for developments by geographic location, however did not necessarily contain allocations that were related to the legal entity that entered into the transaction (for example, all Green Square transactions were entered into by FS but were allocated to the ‘Green Square’ community).

We have provided in Appendix A of this report a representaion of each individual Group company’s profit and loss statement and balance sheet on the basis of transactions being appropriately allocated to the relevant company (for example transaction that are allocated to the Green Square Community have been allocated to a profit and loss statement and balance sheet for Green Square Water Pty Ltd).

2. A separate set of accounts was maintained for FSC.

FS Group financial performance

The financial performance for the three calendar years ended 31 December 2016, 31 December 2017 and 31 December 2018 is summarised in the table below.

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Profit and Loss ('$000) Notes CY16 CY17 CY18

Income

Developer Revenue 1 13,561 28,804 15,604

Customer Revenue 2 3,610 4,566 11,649

Consulting Income 3 3,345 4,109 1,518

Other Income

119 895 837

Total Income

20,634 38,374 29,608

Expenses

Project Construction Cost 4 (4,376) (20,274) (11,375)

Retail Service Expenses

(85) (881) (1,363)

Utility Operating Expenses 5 (2,480) (3,735) (7,604)

Energy Scheme Operating Expenses 6 (16) 219 (4,609)

Business Development 7 (853) (1,863) (3,181)

Other Operating Expenses

(395) (313) (57)

Total Operating Expenses

(8,206) (26,847) (28,189)

Gross Profit

12,428 11,526 1,419

Gross profit %

60.2% 30.0% 4.8%

Employee costs 7 (7,547) (5,485) (3,170)

Other Expenses 8 (750) (3,758) (1,453)

Total Other Expenses

(8,298) (9,242) (4,623)

EBITDA

4,131 2,284 (3,204)

Depreciation & Amortisation

(754) (598) (586)

Interest Expense 9 (3,447) (3,093) 2,052

Income Tax Expense

- 649 68

Net profit / (loss) (70) (757) (1,670)

Note: FS Group reports on a 31 December year end

Notes on FS Group Profit and Loss

1. Developer revenue is generally recognised on a percentage of completion basis. The reduction in CY18 largely relates to there being fewer developments in CY18 on foot compared to CY17, and the FS Group agreeing that Cooranbong would be billed only on completion, as opposed to the other development sites being billed upfront or progressively.

2. Customer revenue represent the sale of water/energy to customers. The increase in CY18 is largely related to the business expanding to nine energy sites where they are the primary supplier of electricity to retail customers.

3. Consulting income largely relates to consulting work undertaken for the Kurri Kurri project in CY17 prior to entering into a formal agreement in relation to the Kurri Kurri site in CY18. The remainder is spread over a number of projects where the FS Group provides consulting services to developers in relation to the design of utility infrastructure.

4. Project construction costs relates to the costs associated with development of utility infrastructure that is not capitalised.

5. Utility operating expenses represents the cost of maintaining water infrastructure to provide customers with continued supply.

6. Energy scheme operating expense represents the cost of maintaining the electricity sites to enable customers with continued supply. This is largely the purchase of electricity at wholesale prices that is billed to customer at retail rates. FS Group entered this market in CY17.

7. Overheads are effectively represented by the combination of business development, employee costs and other expenses (see below).

8. Other expenses relates to professional services, rent, technology, insurance and provision for loss making contracts.

9. Interest expense largely relates to interest on the convertible notes. Class C notes with a face value of $5.9m were converted from debt to equity in December 2017 resulting in the reallocation of $4.7m in interest to equity reserves, in turn creating a positive interest expense.

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FSC financial performance

Profit and Loss ($'000) Notes CY16 CY17 CY18

Income Intercompany Recharge 1 3,925 20,134 14,226

Total Income

3,925 20,134 14,226

Expenses

Project Construction Cost 2 (3,292) (17,726) (12,925)

Other Operating expenses 2 - (98) (45)

Total Operating Expenses

(3,292) (17,824

) (12,970)

Gross Profit

633 2,310 1,256

Gross Profit %

16.1% 11.5% 8.8%

Employee Costs 3 (675) (1,637) (1,499)

Premises

(67) (73) (49)

Other Expenses

(54) (63) (67)

EBITDA

(163) 537 (359)

Depreciation & Amortisation

(14) (38) (21)

Interest Expense

(6) 0 -

Income Tax Expense

- (18) -

Net profit

(183) 481 (380)

Note: FSC reports on a 31 December year end

Notes on FSC Profit and Loss

1. FSC hold construction contracts with the FS Group companies for the physical construction of infrastructure as required pursuant to the relevant PDA. Under these contracts, FSC charges the FS Group on a ‘cost plus 8% margin’ basis (for CY18).

2. Project construction costs and other operating expenses are the costs incurred that are recharged by FS.

3. Employee costs relate to wages and associated employee costs for FSC employees.

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6.1 Company’s financial position (Balance Sheet)

Key Comments

Large upfront development costs on the Cooranbong development (c.$8m outflow) combined with other

development costs resulted with the Group being reliant on external funding throughout CY18 to remain

solvent, represented by an increase in convertible note funding

At the end of CY18, the FS Group had net working capital of ($4m) and net current assets of c.($9m),

highlighting the tight liquidity position of the Group

While the Group holds significant property, plant and equipment the return generated from these assets

(in the form of customer revenue) is currently insufficient to enable the Group to be self funding

Net assets increased year on year largely due to the conversion of convertible notes from debt to equity,

offsetting ongoing retained losses.

FS Group financial performance

The FS Group’s Balance Sheet as at 31 December 2016, 31 December 2017 and 31 December 2018 is summarised below.

Balance Sheet ($'000) Notes CY16 CY17 CY18

Current Assets Cash and Cash Equivalents 1 9,659 970 1,607

Receivables 2 7,996 10,484 4,770

Other Current Assets 3 442 255 2,220

GST Receivable 4 793 904 1,382

Deferred Tax Asset 2,080 4,310 3,893

Total Current Assets 20,970 16,924 13,873

Non-Current Assets Property Plant & Equipment 5 21,291 28,562 37,165

Investments M2C 6 1 8,730 8,730

Intangibles 7 5,313 2,113 1,698

Other Non-Current Assets 1,281 1,161 796

Total Non-Current Assets 27,886 40,566 48,388

Total Assets 48,856 57,490 62,262

Current Liabilities Trade Creditors 8 (1,359) (836) (6,151)

Unearned Income 9 (15,455) (5,993) (4,848)

Accruals 10 (1,984) (4,826) (2,756)

Payroll Liabilities 11 (971) (756) (953)

Provisions - - (841)

GST Liability 4 (1,254) (1,121) (709)

Contingent Consideration 12 - (5,729) (2,215)

Intercompany loans 13 (873) (2,328) (4,280)

Total Current Liabilities (21,896) (21,588) (22,754)

Non-Current Liabilities Hire Purchase Liabilities

(1,875) (1,318) (1,255)

Convertible Notes 14 (24,346) (18,742) (27,682)

Non-current unearned Income 9 - (8,312) -

Other Non-Current Liabilities - (54) (54)

Total Non-Current Liabilities (26,221) (28,372) (28,936)

Total Liabilities (48,117) (49,960) (51,690)

Net Assets 739 7,530 10,571

Equity Issued & Paid Up Capital 15 3,002 10,496 10,496

Capital Raising Costs (178) (178) (178)

Reserves 16 - - 4,711

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Current year profit / (loss) (70) (757) (1,670)

Retained Earnings (2,015) (2,085) (2,843)

Total Equity 739 7,476 10,517

Note: FS Group reports on a 31 December year end Notes on FS Group Balance Sheet

1. The Group’s cash position reduced during CY18 driven by trading losses and capital expenditure requirements on a number of large development projects. FS Group had a funding arrangement with EAWH until 20 December 2018 to support the cash requirements of the Group (see note 14).

2. Receivables includes amounts owing to the FS Group from retail customers, commercial customers and developers. The reduction in CY18 is largely driven from reduced developer invoices, which in turn is driven by fewer developments under construction and the FS Group agreeing that Cooranbong would be billed only on completion, as opposed to the other development sites being billed upfront or progressively.

3. Other current assets include deposits, prepayments, prepaid expenses, accrued income, and other immaterial assets.

4. GST receivable / payable relates to the accrual of the FS Group GST position. We understand that there is a GST refund position of c.$673k as at 20 December 2018.

5. Property plant and equipment comprises all capitalised development assets either completed or under construction (such as those associated with the Box Hill and Cooranbong), expenditure on energy assets, networking infrastructure (energy meters), and upfront costs to obtain energy contracts. The movement in CY18 was largely driven by capitalised development on existing sites and the acquisitions of energy sites.

6. Investments represents the cost of the M2C acquisition. Our appointment as administrators does not extend over M2C.

7. Intangible Assets relates to various licenses, website/software and project development costs. The decline in its value is largely attributable to ongoing amortisation.

8. Trade creditors for CY18 includes:

a. $2.1m relating to payables owed to Enwave

b. $1.6m trade payables

c. $0.5m in relation to the Kurri Kurri development

d. $0.8m associated with the KPMG Process.

9. Unearned income relates to:

a. c.$16m ($8m current and $8m non-current) largely in relation to Box Hill, Pitt Town and Huntlee where developers have made upfront payment to FS Group, however the development work is not complete

b. c.$8m in relation to Cooranbong where work has been completed, however FS Group is not able to invoice the developer as the contract millstone has not been met

c. c.$5m where developers have paid upfront for BASIX kits that are required to be installed just prior to completion. FS Group holds sufficient inventory for approximately one month of BASIX kits installations.

Items a) and c) will above will need to be funded from future cashflows

10. Accruals relates to deposits received, financing liabilities, software licences, and other general accounting accruals for liabilities.

11. Payroll liabilities relate to the monthly annual leave, long service leave, wages and superannuation (as wages are paid monthly in arrears).

12. Contingent consideration relates to earn-out payments in relation to the acquisition of M2C under the M2C Share Acquisition Agreement.

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13. Inter-company loans in CY18 relate to amounts payable to FSC ($3.5m) under the Recharge Agreement.

14. FS Group issued 3 classes of convertible notes in 2013. The majority of the Class C notes were converted to equity in December 2017 (refer to Section 4.5.2). In CY18 a Short Term Line of Convertible Notes was issued.

15. Reserves relates to the conversion of the interest component of the convertible notes.

FSC financial position

The Balance Sheet of FSC as at 31 December 2016, 31 December 2017 and 31 December 2018 is summarised below.

Balance Sheet ($'000) Notes CY16 CY17 CY18

Current Assets Cash and Cash Equivalents 1 72 173 65

Receivables 2 912 2,407 3,479

Other Current Assets

27 24 -

GST Receivable

374 624 677

Deferred Tax Asset

- 67 67

Total Current Assets

1,385 3,295 4,288

Non-Current Assets

Property Plant & Equipment

83 80 35

Intangibles

27 6 7

Total Non-Current Assets

110 87 42

Total Assets

1,495 3,382 4,330

Current Liabilities

Trade Creditors 3 (1,226) (789) (2,513)

Accruals

(45) (760) (1,212)

Payroll Liabilities 4 (154) (227) (96)

GST Liability

(482) (568) (747)

Intercompany loans

- (968) (74)

Total Current Liabilities

(1,907) (3,313) (4,641)

Net Assets

(412) 69 (311)

Equity

Issued & Paid Up Capital

- - -

Current year profit / (loss)

(183) 481 (380)

Retained Earnings

(229) (412) 69

Total Equity

(412) 69 (311)

Note: FSC reports on a 31 December year end

Notes on FSC Balance Sheet

1. Cash and cash equivalents relate to cash held in bank accounts held in FSC’s name.

2. Receivables are largely related to the amount owing from FS under the Recharge Agreement. This is roughly equivalent to the outstanding external liabilities in line with the arrangement for the Recharge Agreement to fund FSC’s costs.

3. Trade creditors represent suppliers and sub-contractors used on the development sites.

4. Payroll liabilities relates to the annual leave accrual, long service leave accrual, wages (as these are paid in arrears following month end) and superannuation.

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6.2 Directors’ Report On Company Activities and Property (ROCAP)

A company director must provide an administrator with a ROCAP outlining the company’s business, property, affairs and financial circumstances at the appointment date (s438B). The ROCAP should include:

net asset book values (based on historical financial records)

estimated asset realisable values

known liabilities.

The directors have provided us with a ROCAP for each Group company in accordance with their responsibilities under the Act.

Directors’ ROCAPs (consolidated)

Book value Notes $’000 Money owed to the company

Intercompany receivables 1 2,962 Customer Receivables 2 3,688

Assets owned by the company Cash at Bank 3 1,491 Inventories 4 637 Prepayments 5 176 Property, Plant and Equipment 6 37,160 Intangibles 7 1,732 Investments 8 8,730 Bank guarantees 9 796

Total Assets 57,372 Less other creditor claims:

Secured creditors 10 Not specified Employee Entitlements (priority) 11 622 Unsecured creditors 12 8,304

Net position 48,446 Plus Contingent assets 13 - Less Contingent liabilities 13 - Net position after contingencies 48,446

Notes

1. One intercompany receivable was identified in FSC that was payable by FS on our appointment relating to the recharge agreement. On the basis that FS is in administration, this is an unsecured claim in FS. We note that there are a number of intercompany receivables between Flow Systems and its subsidiaries that were identified following receipt of the ROCAPs.

2. Customer receivables of $3.7m were identified. We have continued the business on a business as usual basis and anticipate the customer receivables will be recovered in the ordinary course.

3. Cash at bank was $1.5m on our appointment and has been recovered in full.

4. Inventories are largely made up of spare pumps held in supplier factories waiting for installation instructions from developers.

5. Prepayments are for workers compensation and software licences required to operate the Group.

6. Property, plant and equipment is the carrying balance of all capital costs of the Group including purchase and installation of water tanks and the associated water networks infrastructures, purchase of energy rights that provide the Group with the ability to operate a site with the developer or owners corporation, purchase and installation of energy meters and other electrical infrastructure to operate at a site. We note that in a liquidation scenario the Group would lose

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operational control over the majority of the sites it currently operates due either to step-in/termination rights granted to the developer or the invoking of Retailer/Supplier of last resort legislation, the combination of which would significantly deteriorate the value of any assets in a liquidation.

7. Intangibles are for the capitalised costs of licences to operate the Group.

8. Investments reflects the purchase of the M2C entity that was purchased in 2017. The current estimated price for the shares in M2C is commercially sensitive and consequently has been withheld.

9. Bank guarantees are provided as security to operate some sites, to merchant providers, and to support the bond required for the lease agreement at the Sydney office.

10. The Group has a number of secured creditors that were not disclosed in the ROCAP. We understand that this was overlooked in the ROCAP with the directors focused on employee and unsecured creditors. A summary of the secured creditor position is outlined in Section 4.5.2.

11. Employee entitlements consist of the accrued annual leave and long service leave as at 20 December 2018, and superannuation for November 2018. We note that the administrators will pay the December 2018, January 2019 and February 2019 superannuation and this will not form part of any claim against the company.

12. Unsecured creditors represent general suppliers and unsecured funding amounts that were outstanding at our appointment as Administrators. We note there are a number of intercompany receivables between Flow Systems and its subsidiaries that were identified following receipt of the ROCAPs.

13. No contingent assets or liabilities were identified in the ROCAPs. We understand that if the Group was placed into liquidation there is likely to be damages claims resulting from terminated contracts.

We note that ROCAP figures may differ from actual realisable values as:

net book values are based on historical financial records

asset values are not market tested and represent the directors views only

analysis and identification of intercompany loans occurred following receipt of ROCAPs

creditor claims are not yet adjudicated upon and quantified.

However, with the exception of the secured creditor balances that were overlooked, we note the ROCAP’s are largely in line with management accounts outlined in Section 6.2.

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7 Investigations Summary

Our preliminary view is that the Group companies were solvent until immediately prior to the appointment of Administrators, owing primarily to the demonstrated and ongoing support from the Brookfield Secured Creditors and other convertible noteholders as outlined in Section 4.5.2. The provision of ongoing support (including the forbearance agreement in place) meant the Group was able to meet its debts as and when they fell due under formally documented arrangements.

We also note that in light of the agreement to offer the Group for sale in the KPMG Process and the initial expectation that the process would be successful, there was a reasonable expectation that funding would continue until that process was exhausted and a sale was completed.

It wasn’t until this support was withdrawn on 19 December 2018 following the cessation of the KPMG Process, immediately prior to the appointment of the Administrators, that the Group companies’ ability to continue to meet their debts as and when they fell due came into question.

We have conducted investigations into the reasons for the Group companies’ failure to the extent possible in the available time. Further, more detailed investigations would be conducted should creditors vote to wind up the companies at the Second Meeting. A liquidator has greater powers to undertake investigations and pursue recoveries than an administrator or deed administrator.

Our investigations to date have been limited as we have had a relatively short timeframe in which to undertake investigations and report to creditors, given the size and complexity of the trading operations and volume of books and records to review.

At this stage, we have also not conducted formal examinations of the directors, officers or other persons of interest pursuant to the powers available under the Act.

We have based our investigations and opinions on information obtained from:

books and records, including management reports and board reports

electronic financial systems

accounting and database information systems used within the business

directors, officers, management and key staff members (where available)

external professional reports

publicly available information e.g. ASIC.

7.1 Directors’ explanation for the Group’s difficulties

The directors have identified the following factors as significant causes of the Group companies’ current financial position.

Flow Systems

For a large part of 2018, FS relied on funding support in order to continue operating as a going concern. During the second half of 2018 the Brookfield Secured Creditors undertook a sales process in an effort to sell 100% of the issued equity in FS, however this process was ultimately unsuccessful.

The decision to appoint administrators was due to the reasons set out below.

The KPMG Process had been unsuccessful

Ongoing trading being hampered by developer delays and financial constraints

Lack of stable and recurring revenue streams

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No pipeline of secured new near-term cash generative projects to address the company's financial concerns

Uncertain pipeline of opportunities outside the electricity retailing initiative which is in the early stages of implementation

Capex requirements which were being met on an ad hoc basis by the Brookfield Group

Inability to obtain further funding

The withdrawal of a forbearance agreement which crystallised a significant outstanding and payable debt of FS.

Remainder of the companies in the Group

FS effectively provided funding for FSC and all other companies in the Group. Consequently, each company faced similar trading and funding concerns to FS as outlined above.

Following notification that FS had been placed into administration, and in light of the fact that each of the other companies in the Group was reliant on FS for funding and operational functions, it was determined that the remainder of the Group was, or was likely to become, insolvent resulting in the appointment of administrators.

7.2 Administrators’ opinion of the reasons for the Group’s difficulties

In addition to the directors’ stated reasons for the Group companies’ current financial position, we believe the following factors are also relevant to the failure of the Group.

A mismatch of costs versus revenue, due to the structure of certain of the PDAs, whereby signficant upfront costs were incurred, with revenues only being generated over long periods, resulting in significant time before the initial costs were recouped and a positve return generated.

Excessive cost structure, including large overhead base.

7.3 Insolvency of the Group

The manner in which the business was conducted and the interdependencies between them referred to elsewhere in this report, means that the solvency or otherwise of each Group company requires and is, as a matter of commercial reality, wholly dependent on an assessment of their financial position and affairs as a Group.

Our preliminary view is that the Group did not trade while insolvent, albeit the companies in the Group relied on ongoing support and funding provided by the Major Shareholder, convertible noteholders and other Brookfield Group entities. While this support continued, it would appear the Group had the means to continue to meet liabilities as they fell due. At the time this support was withdrawn, the directors of the Group moved to appoint Administrators immediately.

The methods of testing solvency include, but are not limited to, the Cash Flow Test and the Balance Sheet Test, which are examined at a preliminary level below. A company is insolvent if it is unable to pay its debts as and when they become due and payable. Liquidators are required to demonstrate that a company is insolvent in order to pursue certain antecedent or ‘voidable’ transactions that were entered into prior to the appointment of administrators.

Creditors should note that insolvent and other antecedent trading claims are often difficult and costly to pursue, and even if successful, they may not generate an additional return for creditors. As with any litigation, the results are inherently uncertain, both in terms of quantum and timing.

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7.3.1 Cash flow test

The Group prepared the Position Statements in respect of its cash flows on a weekly basis. The Position Statements that we have reviewed provide an estimated cash position at the end of the relevant month and a cash position following the monthly payroll (paid in the first week of the following month in arrears).

We note that we would ordinarily expect a business of the size and nature of the Group to prepare short term cash flow forecast for at least a 13 week period as opposed to a cash position statement that estimated the cash position of the Group for a maximum of four weeks into the future.

The available books and records indicate that the companies in the Group:

were only able to pay their debts as and when they fell due during the period under review due to

ongoing shareholder funding received – however, as outlined above, we consider that while the KPMG Process was being undertaken there was a reasonable expectation the funding would continue to be provided

were not forecasting to have sufficient cash available beyond the date of administration without further funding (initally forecast to be received in January 2019).

We have reviewed eight of the Position Statements leading up to our appointment as administrators, summarised below:

Cash position date 24 Sep 19 5 Oct

19 26 Oct

19 2 Nov

19 23 Nov

19 30 Nov

19 7 Dec

19 17 Dec

19

Opening Cash 4,061 1,847 1,502 576 1,189 660 581 1,792

Forecast receipt in current month 3,135 2,131 1,123 3,140 393 200 4,545 1,910

Forecast payments in current month (6,601) (3,978) (2,914) (3,424) (2,124) (2,123) (5,468) (4,401)

Payroll paid first week of month end (660) (660) - - (600) (595) (595) (595)

Closing Cash position (65) (660) (289) 292 (1,142) (1,857) (938) (1,294)

Owing to related parties (1,486) (1,349) (1,349) (1,349) (1,349) (1,349) (1,349) (1,349)

Closing cash if everything paid (1,552) (2,009) (1,638) (1,057) (2,491) (3,206) (2,287) (2,643)

Funding provided 5,500 - - 2,000 - - 1,500 -

The above is in line with our previous commentary, insofar as:

the Group was generating insufficient cash to meet its debts from ordinary trading

consequently, it was reliant on ongoing support, primarily from the Brookfield Secured Creditors

while the KPMG Process was continuing, that funding continued to be provided, enabling liabilities to be met as and when they fell due.

Secured Creditor Funding

As highlighted earlier in this report, EAWH, a Brookfield Group entity, is the Majority Shareholder of the Group. Pursuant to the Transaction Documents, various forms of secured funding arrangements were provided to the Group, including convertible note funding along with sale funding from September 2018, to enable the Group to continue operations in the ordinary course throughout the KPMG Process.

The sale process was anticipated to conclude in November 2018, however it failed to achieve an outcome acceptable to the Group’s Noteholders. Once it became apparent that an acceptable sale would not likely be achieved, EAWH withdrew ongoing support on 19 December 2018.

A summary of the secured creditor funding provided to the Group prior to administration is tabled below:

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Secured Creditor Funding Outstanding at 20 December 2018 ($000’s)

Convertible Note Funding - Class A (EAWH) 16,825

Convertible Note Funding – Class B 3,730

Sale Funding (EAWH) 9,248

Shepherd’s Bay Project Cooperation Agreement Loan (Enwave)

4,345

Total secured funding 34,148

Convertible Note Funding

EAWH is the holder of approximately 80% of the convertible notes issued by FS. These notes are secured pursuant to the Flow Systems GSD registered on the PPSR on 1 March 2013.

Notwithstanding that defaults existed with respect to the Convertible Notes Deed Poll as early as April 2018, these were then subject to an ongoing forbearance agreement between the Security Trustee and FS. This remained in place until immediately prior to our appointment.

Sale Funding Loan Agreements

In mid-2018, 100% of the Group was offered for sale pursuant to the KPMG Process, which attracted interest from both local and international companies to acquire the Group in its entirety. To enable the Group to continue operations in the ordinary course during the sale process, EAWH agreed to provide separate additional funding to FS under 3 Sale Funding Loan agreements.

Shepherd’s Bay Project Cooperation Agreement Loan

Enwave, a Brookfield Group entity, agreed to provide FS with an interest free loan in relation to the Shepherd’s Bay development. Pursuant to this agreement, Enwave also owns the plant and equipment comprising the local water centre at the Shepherds Bay development.

We note that the amount outstanding was secured by way of a security interest over FS which was registered on 18 December 2018, pursuant to a General Security Deed entered into between FS and Enwave dated 17 December 2018. Given the dates of the agreements in relation to the appointment of Administrators, the granting of this security will likely be investigated further by a Liquidator if appointed, and may be considered a voidable transaction (refer to section 8.1)

Unsecured funding provided

In addition to the above, the Brookfield Group plus other Securityholders on occasion undertook to provide the Group with unsecured funding to fund ongoing trading, along with parent company guarantees related to specific development agreements.

Temporary Credit Line Funding

EAWH advanced further funds to FS under ‘Temporary Credit Line’ facilities to address the continued working capital and operational requirements of FS and to address the anticipated liquidity shortfall of the Group during 2018. As at the date of our appointment, an amount of $4,056,800.52 was outstanding under the Temporary Credit Line Funding.

Parent Company Guarantees

EAWH provided two parent company guarantees, guaranteeing the obligations of FS and FSO to the relevant project counterparty under the Box Hill and Jacaranda Ponds PDAs.

In addition to this, pursuant to a M2C Share Acquisition Agreement, EAWH has provided a parent company guarantee of the purchase price payable by FS thereunder for the shares in M2C. The purchase price is payable over four instalments, with the final instalment being due and payable on 30 September 2019.

A summary of this additional unsecured funding is provided in the table below.

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Unsecured funding provided Outstanding at 20 December 2018 ($000’s)

Temporary Credit Line Funding 4,057

Parent company guarantees (PGs) (EAWH) Withheld*

Total unsecured funding 4,057+ PGs*

*Amounts have been withheld as they are commercially sensitive

**We understand that the Temporary Line of Credit will convert into equity on 28 February 2019.

It is apparent from our review that the Group would not have been able to continue its operations without the funding outlined above. It is our opinion that up until the cessation of the KPMG Process, an appropriate level of ongoing support would have been reasonably expected by the Group’s directors owing to:

the actions of the majority shareholder in extending both secured and unsecured funding under formally documented arrangements on several occasions, and until late December 2018, including the existence of a forbearance agreement.

the ongoing supportive relationship and inherent interest in the success of the Group of the Major Shareholder and secured creditor, including through the provision of parent guarantees.

Following the unsuccessful KPMG Process, and withdrawal of support by the Brookfield Group (including the forbearance agreement), the Group was clearly unable to meet its debts as and when they fell due, leading to the conculsion the Group was insolvent, at that time.

7.3.2 Balance Sheet test

The Balance Sheet Test assesses the solvency of a company with reference to the company’s net asset position (i.e. the level of total assets relative to total liabilities).

Our review of the financial records has found that the Group companies’ reported net asset position was positive throughout the period under review.

CY16 $’000s

CY17 $’000s

CY18 $’000s

Total Assets 48,619 57,384 62,555

Total Liabilities (47,880) (49,908) (52,038)

Net Assets

(Total Assets less Total Liabilities)

739 7,476 10,517

However, we note that the increasing net asset position is almost wholly related to the conversion of convertible notes to equity with equity increasing by $6.7m and $3m in CY17 and CY18 respectively.

Working capital and net current assets

Working capital is an indicator of liquid assets available to pay debts due within 12 months. A working capital ratio of less than one indicates that a company may not be able to pay its debts as and when they fall due.

Our preliminary analysis of the Group’s records relating to working capital and net current assets liquidity issues. The Group’s position is set out below.

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CY16 $’000s

CY17 $’000s

CY18 $’000s

Current Assets 19,716 15,802 13,164

Current Liabilities (21,659) (18,882) (20,832)

Working Capital

(Current Assets less Current Liabilities)

(1,944) (3,079) (7,668)

Working Capital / Liquidity Ratio

(Current Assets/Current Liabilities)

0.91 0.84 0.63

We note that the low working capital position is attributable to:

unearned income of $6m and $4.8m in relation to development sites where funds were paid in advance and work not yet completed. This would not be considered due and payable in the ordinary course of business in an insolvent trading analysis

intercompany loans to FSC and M2C of $2.3m and $4.3m in CY17 and CY18 respectively. It is unlikely that repayment of these would be demanded if the FS Group did not have the funds to make payment, as they would have caused the immediate insolvency of FS and thus, the Group. Consequently, it is debatable as to whether these would be considered “due and payable”.

7.3.3 Other Indicators of Insolvency

Determining whether a company is insolvent (and the date at which insolvency occurred) is open to interpretation and is ultimately a matter for the courts to decide. The courts have identified fourteen general indicators of insolvency that are considered further in ASIC Regulatory Guide 217.

Our investigations to date have identified that some of these indicators apply, or may apply, to the companies in the Group, as summarised below.

Indicator Present Comment

Continuing trading losses Yes The business has a history of trading losses as it built

towards a sustainable model

Liquidity ratio below one Yes

Liquidity ratio is below one, however within the

liabilities at times there were large creditors that

were either not due and payable or were unlikely to

be enforced due to the related party nature of the

debt

Overdue Commonwealth and state taxes No We understand that the Group is up to date with all

statutory lodgements

Poor relationship with borrower/financier

including inability to borrow additional

funds

No

The primary financier (EAWH) continued to provide

funding support up until the cessation of the KPMG

Process

No access to alternative finance Yes

We are not aware if the Group sought funding from

other sources, however given the quantum of secured

funds already borrowed and the performance of the

business, we consider it would have been difficult for

the Group to source alternate finance.

Inability to raise further equity Yes Given the capital structures of the business, its

performance and longer term forecast, we consider it

unlikely that the Group was in a position to raise

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further equity

Supplier placing debtor on cash on

delivery terms, otherwise demanding

special payments before resuming supply

No We are not aware of any suppliers that were on cash

on delivery terms prior to our appointment

Creditors outside trading terms No

Based on the Group’s books and records, $4M of the

$6M owing to creditors at our appointment was

within or close to payment terms. The remaining

$2M was in relation to a payable to a related entity of

the Brookfield Group

Issuing of post-dated cheques No We are not aware of any post-dated cheques

Dishonoured cheques No We are not aware of any dishonoured cheques

Special arrangements with selected

creditors No

We are not aware of any special arrangements with

selected creditors

Legal action threatened or commenced, or

judgements entered against the company No

The only legal action the Group is a party to is in

relation to a trademark dispute and is not considered

relevant when determining the solvency of the Group

Payments to creditors of rounded figures,

which are irreconcilable to specific

invoices

No We are not aware of any payment plans agreements

with suppliers at our appointment

Inability to produce timely and accurate

financial information to display trading

performance and financial position, and

make reliable forecasts

Subject to

further

investigation

The Group prepared monthly management accounts

for reporting to shareholders, however these were

done on a Group consolidated basis with an inability

to easily distinguish between legal entities

7.3.4 Proving Insolvency

Further investigations into the insolvency of each of the Group companies will be conducted by a liquidator in the event that the company is wound up, but as can be seen from the above table, determining insolvency would not be a straightforward process with respect to the Group. Further, as we have outlined throughout this Report, given the ongoing support provided by the Brookfield Secured Creditors up until the cessation of the KPMG Process, we consider it more likely than not that the Group was solvent up until 19 December 2018.

7.4 Legal actions

We are aware of one legal proceeding currently on foot with the FS Group seeking damages and compensation for loss suffered pertaining to trade mark infringements.

The legal proceedings are currently stayed following the appointment of Administrators and at this stage we have not consented to continuation of the proceedings.

The prospect of these claims will be further investigated should the Group companies be placed into liquidation, but we note they will likely continue in the event the Deed is approved.

7.5 Outstanding or previous winding up applications

We are not aware of any outstanding or previous winding up applications against the Group companies.

Generally there is a stay of proceedings against the company and its property during the administration period except where an administrator has provided consent for the proceedings to continue, or with leave of the court.

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7.6 Books and records

Our preliminary view is that the Group has maintained adequate books and records in that:

the books and records sufficiently disclose transactions that enable the Group’s financial position to be ascertained at any particular time

the Group has kept financial records up to the standard ordinarily used in similar enterprises.

A company must keep written financial records that:

correctly record and explain its transactions, financial position and performance

would enable true and fair financial statements to be prepared and audited

must be kept for seven years after the transactions covered by the records are completed (s286 of the Act).

Directors are responsible for ensuring that adequate financial records are maintained. Directors who fail to take all reasonable steps to ensure compliance with this requirement may be subject to a civil penalty order. This includes shadow and de facto directors.

Failure to maintain books and records may give rise to a presumption of insolvency (pursuant to s588E of the Act).

A liquidator (if appointed) will continue investigations into whether any breaches of the Act have occurred in relation to the maintenance of proper books and records, including:

failure to keep proper financial records (s286 of the Act)

failure to take all reasonable steps to comply with financial records reporting requirements (s344 of the Act)

requiring officers to exercise a reasonable degree of care and diligence in the exercise of their powers and discharge of their duties (s180 of the Act).

While we consider the books and records to be adequate, we do note that the Group only prepared management accounts on a consolidated basis and did not create accounts for the individual entities within the Group, nor were intercompany transactions appropriately recorded.

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8 Offences and potential liquidation recoveries

Key Comments

While our investigations are ongoing, we summarise our preliminary findings below:

It is our preliminary view that the Group did not trade whilst insolvent. Additional investigations by a liquidator would be required before a conclusive view could be formed.

We have identified one potentially voidable transaction relating to the provision of security over the Group on 18 December 2018 to Enwave in connection with the Capacity Agreements, however pursuing a claim to void this transaction will not likely provide any additional return to creditors.

A liquidator has the ability to pursue certain claims that may result in recoveries for creditors. Importantly, these claims are not available to a deed administrator should creditors vote to execute a Deed proposal.

To compare the likely return to creditors under each a Deed and liquidation, administrators must identify claims that a liquidator could pursue, including:

voidable transactions and other potential recoveries

recoveries against past or present directors, secretaries, other officers and the Group’s advisors.

Enclosed at Appendix H is a Creditor Information Sheet: Offences, Recoverable Transactions and Insolvent Trading published by ARITA, which provides general information for creditors on the types of claims that a liquidator can pursue.

8.1 Voidable transactions

The Act requires an administrator to specify whether there are any transactions that appear to the administrator to be voidable transactions in respect of which money, property or other benefits may be recoverable by a liquidator under the Act.

Circulating security interest entered into on 18 December 2018

Enwave Australia Pty Ltd, a Brookfield Group entity, agreed to provide FS and FSO with an interest-free loan $6.9m in relation to the Shepherd’s Bay development (refer to Section 7.3). In addition, Enwave has entered into Capacity Agreements with FS in relation to the Pitt Town and Huntlee developments. These agreements were entered into on or about 14 November 2018. Pursuant to these agreements, Enwave owns the plant and equipment comprising the local water centre at the relevant. development and leases it back to FS in return for a monthly charge. These agreements commence / commenced on the following dates:

Shepherds Bay – 1 January 2022

Pitt Town (Stage 2) – 1 January 2019

Huntlee – 1 January 2019.

Under the Capacity Agreements certain termination amounts become due and payable to Enwave in the event they are terminated.

We note that any amounts outstanding under these agreements were secured by way of a security interest over FS registered on 18 December 2018, pursuant to a general security deed entered into between FS and Enwave dated 17 December 2018. Given the proximity of the date of the agreements to the appointment of the Administrators, and the fact that the original agreements were entered into well before the security was granted (for what appears to be no additional consideration), the circumstances and granting of this security would be investigated further by a liquidator if appointed,

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and may be considered a voidable security interest pursuant to s588FG of the Act. If so, the claim would not have a priority over the circulating assets of FS and would instead be considered as an unsecured claim against the Group.

Notwithstanding our view that this security interest may be void against a liquidator, we note that in the event the FS Group was to be wound up, due to the significantly reduced asset values and the level of pre-existing secured and priority claims, we do not believe there be any additional recovery to creditors.

Other potential claims

Based on our preliminary investigations (refer Section 7), we do not consider there would be any additional recoveries available to a liquidator in relation to the following possible antecedent transactions:

unfair loans to the Group

unreasonable director related transitions

unfair preferences

uncommercial transactions.

8.2 Insolvent trading

Insolvent trading is when a company incurs a debt at a time when:

the company was insolvent or became insolvent by incurring the debt

there were reasonable grounds to suspect the company was insolvent or would become so as a result of incurring the debt.

Company directors have a duty to prevent insolvent trading by not incurring debt when there are reasonable grounds for suspecting that the company is or will be unable to pay its debts as and when they fall due.

The objective test or standard of measure in deciding whether insolvent trading has occurred is whether a director can demonstrate that their actions are at the same degree and level that would be required of an ordinary reasonable person holding a similar position and responsibility in the same circumstances.

A director who fails to prevent a company from incurring a debt at a time when there are reasonable grounds for suspecting that the company is insolvent, or will become insolvent by incurring that debt, contravenes s588G of the Act.

Creditors should note that only a liquidator or an individual creditor with the liquidator’s permission can bring an action against a director for breach of s588G. An administrator or deed administrator can not pursue a director for recoveries from contraventions of s588G of the Act.

A liquidator may recover from a director the amount of loss or damages suffered by a creditor (s588M).

As set out in Section 7.3, our initial investigations into whether the Companies may have traded whilst insolvent suggest that, due to the nature of ongoing financial support provided, the Group was not insolvent until this support was withdrawn on 19 December 2018. Once this support was withdrawn, the Administrators were immediately appointed by the Directors. A liquidator (if appointed) would conduct more thorough investigations in this regard.

8.2.1 Director defences

At this stage, we have not identified an insolvent trading claim against the directors.

In the event such a claim was identified, we note that defences available to directors under the Act in regard to allegations of insolvent trading are as follows:

the director had reasonable grounds to expect, and did expect, that the company was solvent at that time and would continue to be solvent if it incurred the debt.

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the director had reasonable grounds to believe that a competent and reliable person was responsible for providing adequate information about whether the company was solvent and that person was fulfilling the responsibility and it was expected, that on the basis of the information provided, that the company was solvent and would continue to be solvent when the debt was incurred.

at the time the debt was incurred the director, due to illness or other good reason, did not take part in the management of the company.

the director took all reasonable steps to prevent the company from incurring the debt.

the Group had a plan of action that was more likely to lead to a better outcome (the safe harbour test).

For the reasons previously outlined in this report, primarily the continued provision of additional funding while the KPMG Process was undertaken, we consider it is unlikely that an insolvent trading claim against the directors exists. Further, any claim of this nature would be costly to run and also would be likely to be vigorously defended.

8.2.2 Holding company liability

An insolvent trading claim can be brought by the liquidator of a subsidiary company against the holding company where there are reasonable grounds for suspecting that the holding company or its directors knew of the subsidiary’s insolvency. Accordingly, FS as the parent entity may be liable for any insolvent trading of the companies in the Group.

Section 588W of the Act deals with the recovery of compensation for loss resulting from any insolvent trading claim, noting that a company’s liquidator may recover from the holding entity an amount equal to the amount of the loss or damage. It should be noted, however, that the holding company may off-set any monies owing under an intercompany loan account.

8.3 Offences

Directors and others have duties, obligations and responsibilities in relation to common law and statute.

8.3.1 Corporations Act 2001

If a director breaches any duties, obligations and responsibilities, they may be subject to civil and criminal penalties including:

compensation to the company for damages resulting from the contravention

fines (up to $200,000)

imprisonment (up to 5 years)

disqualification from managing corporations.

We have not identified any offences of this nature by the Directors.

8.3.2 Other Legislation

In addition to offences under the Act, directors and others may commit offences in respect of the company under other legislation, for example:

Taxation laws

Competition and Consumer Act 2010 (Cth)

Fair Trading Act 1987 (NSW).

Our preliminary investigations have not identified any other breaches in this regard.

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8.4 Public examinations

The Act provides that an ‘eligible applicant’, such as a liquidator, may examine officers of a company about its ‘examinable affairs’ and any other person who may be able to provide information relating to such affairs. ‘Examinable affairs’ is a comprehensive term with wide ranging application and includes:

the promotion, formation, management, administration or winding up of the company

other affairs of the company

the business affairs of a connected company of the company insofar as they appear to be relevant

to the company or its affairs.

If the Court is satisfied that a summons for examination should be issued, the examinee is usually required to produce at the examination any specified books that are in the person’s possession and relate to the corporation.

Public examinations are costly and, given we have been unable to identify any potential additional recoveries available to a liquidator, we do not believe there would be any material benefit to creditors in examining the directors or other possible persons of interest at this stage.

8.5 Reporting of offences to ASIC

Administrators are required to complete and lodge a report with ASIC pursuant to s438D of the Act where it appears that:

a past or present officer of a company may have committed an offence

money or property has been misapplied or retained

a party is guilty of negligence, default, breach of duty or breach of trust in relation to a company.

A liquidator is required to lodge a report of his findings with ASIC, pursuant to s533 of the Act.

Creditors should also be aware that any report lodged pursuant to s438D (or an investigative report lodged by a liquidator pursuant to s533 of the Act) is not available to the public.

We have not identified any offences at this stage which would require us to report to ASIC.

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9 Deed of Company Arrangement (Deed)

A Deed is a binding agreement between a company and its creditors setting out how a company’s affairs will be dealt with. It aims to maximise the chances of the company, or as much as possible of its business continuing to exist, or providing a better return to creditors than would be achieved by winding up the company.

Creditors can vote that the company execute a Deed at the Second Meeting if one is proposed.

We received a formal Deed proposal for the Group, details of which are set out below in this section.

9.1 Key features of the Deed Proposal received

A detailed Deed Proposal was received by the Administrators on 4 February 2019. The Deed Proponent is Brookfield FS Holdings Pty Ltd, a member of the Brookfield Australia Group. As previously highlighted, companies in the Brookfield Australia Group are the Major Shareholder (EAWH) and secured creditors of the Group (Brookfield Secured Creditors).

In summary, the Deed Proposal allows for:

Continuation of the business as a going concern, with the exception of the Kurri Kurri Development

Employee entitlements to be preserved and all employees retained, with the exception of Terence Leckie and Stephen McKewen

Repayment of secured debt in full

Dividend to unsecured external creditors of c.60 cents in the dollar

No return to related party creditors.

Specifically, the key features of the proposed Deed from the Deed Proponent are as follows:

1) The operation of the Deed applies to the Deed Companies as defined, which comprise all of the Group Companies (except Loxford Development Holdings Pty Ltd (Administrators Appointed) and its subsidiaries (Excluded Entities).

2) Contribution sums under the proposal are to be paid to the Deed Administrators, by way of loan to each Deed Company, within 5 business days following satisfaction or waiver of the 'Conditions Precedent' to the proposal (set out at point 6 below) (Deed Contribution). The precise Deed Contribution will be calculated prior to effectuation of the Deed, but will be no less than $44m and allow for payment:

a) in full of all amounts owing to Noteholders (including all principal, accrued interest and costs) to be paid to the Security Trustee (refer section 7.3 - $20.5M);

b) in full of all amounts owing to Brookfield Secured Creditors, excluding amounts referred to in 2(a) above (refer section 7.3 - $13.5M);

c) of $2,760,471.25 to be paid into a creditors' trust for distribution to creditors with an admissible debt or claim;

d) of $2,200,000 to be paid into a creditors' trust to fund the payment of liabilities and remuneration of the Administrator, Deed Administrator and Creditors' Trustee; and

e) in full satisfaction of the loan made available by EAWH to the Administrators under the Administrators’ Facility Agreement (refer section 4.5.2) (VA Funding Loan).

3) The Deed Contribution will be paid and take the form of a 3 year term loan, to which will attach commercial interest rate. The Deed Proponent may not seek to recover the loan from any of the Deed Companies for a period of at least 12 months.

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4) The funds for distribution for creditors will be limited to the Deed Contribution and will not include any assets of the Deed Companies, which are to be returned to the control of the new board of directors as nominated by the Deed Proponent on effectuation.

5) Conditions Precedent to the Deed, include:

a) The Deed Administrators obtaining an order from the Court granting leave pursuant to section 444GA(1)(b) of the Corporations Act 2001 (Cth) for the Deed Administrators to transfer the issued shares in FS and FSC to the Deed Proponent or its nominee for no consideration and otherwise on terms acceptable to the Deed Proponent (s444GA Order) within 30 days after execution of the Deed, allowing for the transfer of all issued shares in FS and FSC to the Deed Proponent or its nominee for no cash consideration;

b) There be no action taken by any government authority or change in circumstances, , contractual framework or employment of the business of the Deed Companies which is in the reasonable opinion of the Deed Proponent adverse to the business or affairs of the Deed Companies; and

c) Confirmation from each secured creditor of the Deed Companies that they will not take possession of their respective property in any Deed Company’s possession.

(Conditions Precedent). We note that Conditions Precedent are able to be waived by the Deed Proponent.

6) The employment of all employees (except excluded employees) will continue on the same terms and conditions as presently employed following effectuation of the Deed.

7) All entitlements of all the continuing employees (except the Excluded Employees) of the Deed Companies will be preserved and continue notwithstanding effectuation of the Deed, and will be honoured by the Deed Companies in the ordinary course of business.

8) 'Excluded Contracts', specifically defined as the Loxford Waters Sale Agreement between FS and McCloy Group Pty Ltd, and all contracts relating to the Kurri Kurri Project, are to be terminated by the Deed Administrators. Counterparties to any Excluded Contract will not have a claim under the terms of the Deed.

9) Employment contracts of 'Excluded Employees', specifically defined as Terry Leckie and Stephen McKewen, are to be terminated by the Deed Administrators prior to effectuation of the Deed.

10) On satisfaction or waiver of the Conditions Precedent, the Deed Administrators will establish a creditors' trust for the benefit of participating creditors. All participating creditors will become beneficiaries of the creditors' trust.

11) Christopher Clarke Hill and Philip Patrick Carter are to be the Deed Administrators and Creditors' Trustees.

12) The 'Termination Date' under the Administrators’ Facility Agreement will be extended from the date of entry into the Deed until termination of the Deed for any reason.

13) All liabilities incurred on behalf of a Group company in the ordinary course of business by the Administrators or Deed Administrators, will be met in full by the Deed Proponent.

14) The Deed Proposal specifies the voting entitlement of certain parties as follows:

a) The Security Trustee (on behalf of itself and all Noteholders) will be entitled to vote at any meeting of the creditors of the Deed Companies, but shall not prove in the creditors' trust.

b) Individual Noteholders are not entitled to vote at any meeting of creditors and cannot prove in the creditors’ trust.

c) 'Non-Participating Creditors' will be entitled to vote at any meeting of the Creditors of the Deed Companies, but shall not prove in the creditors' trust. The Non-Participating Creditors are defined in the Deed Proposal to be each of the following and 'Related Parties' (as defined in the Deed Proposal) of each of the following:

i) Bluesky;

ii) Saddlehill;

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iii) Barry O’Brien;

iv) St Jorioz;

v) Ronald, Rhonda, Katrina and David Langley;

vi) BFT Capital;

vii) Woodland;

viii) Excluded Entities (referred to in point 1 above) and Excluded Employees (referred to in point 9 above);

ix) Any creditor whose claim arises as a result of, or who is a counterparty to an Excluded Contract (referred to in point 7 above) or beneficiary of a guarantee, indemnity, put, call or other right against any Deed Company in respect of an Excluded Contract; and

x) Any creditor of the Deed Companies whose claims relates to or arises under a contract to which the creditor and the relevant Deed Company are parties, where the contract has been terminated by someone other than the Deed Company.

d) Group members will be entitled to vote at any meeting of the creditors of the Deed Companies (in each Deed Company where such Group member is a creditor), but shall not prove in the creditors' trust.

e) EAWH and Enwave will be entitled to vote at any meeting of the creditors of the Deed Companies with respect to their secured claims, but will not prove in the creditors' trust.

f) EAWH will not be entitled to vote at any meeting of the creditors of the Deed Companies with respect to the Administrators' Facility Agreement and cannot prove in the creditors’ trust for any amounts outstanding in relation to the Administrators' Facility Agreement.

15) The Deed will automatically terminate when one of the following events occur:

a) The day the Deed Administrators give notice to ASIC stating that the Deed has been wholly effectuated.

b) The Court makes an order terminating the Deed.

c) The creditors pass a resolution terminating the Deed.

9.1.1 Administrators’ opinion on the Deed Proposal

The Deed Proposal results in a substantially better position for all classes of creditors than a liquidation scenario (as set out below in Section 10). This improved result is due to a number of factors including:

Continuation of the business as a going concern, mitigating the possibiity of contingent claims crystallising due to the termination of contracts.

Specified contributions to each creditor class by the Deed Proponent, and the agreement of Brookfield Group companies not to prove in a creditors trust.

The preservation of all employee entitlements (and their ongoing employment) in the ordinary course of business.

The likely value of net asset realisations in a liquidation scenario being materially reduced.

Our recommendation in respect of the deed proposal is included in Section 11.

9.1.2 Estimated return to creditors

Section 10 details our calculation of estimated creditors’ returns under the Deed Proposal, by individual company, with a comparison to the estimated returns under the other options available.

9.1.3 Creditors’ Trust arrangement

The Deed Proponent has included consideration that a Creditors Trust be established to allow an accelerated exit from Deed Administration for the Companies. The proposed Trust has the following features:

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We, the Administrators (and proposed Deed Administrators), are the proposed Trustees for the Creditors Trust.

As trustees, we will hold the contribution to the Creditors Trust on trust for the participating creditors to be applied in accordance with the terms of the associated deed (key terms as outline in section 9.1).

Proofs of debt will be lodged and dealt with, and creditors meetings convened and conducted as provided for in the Act as if the Group was in liquidation. In this respect, the applicable provisions of Subdivisions A, B, C and E of Division 6 of Part 5 of the Act and the Corporations Regulations which relate to those subdivisions will apply.

The Deed Administrators will be entitled to be indemnified out of the assets of the Creditors Trust for all costs, expenses and liabilities incurred by them in acting as Administrators, Deed Administrators and Trustees of the companies.

ASIC Regulatory Guide 82 states that there are different and additional risks for creditors where a Deed proposal incorporated a Creditors Trust, and that certain information should be disclosed to creditors. We have set out the material information in Appendix J.

A copy of ASIC Regulatory Guide can be found on ASIC’s web page. The Administrators recommend that creditors review the Regulatory Guide prior to the forthcoming meeting.

9.1.4 Deed contributions from a third party

The Deed has been proposed by the Deed Proponent.

Given the status of the Deed Proponent as a subsidiary of a substantial multinational group, we consider the capacity of the Deed Proponent to make the stated deed contributions to be strong and the risk of non-compliance with the proposal to be extremely low.

9.1.5 Other

Other key items to note in relation to the Deeds are set out in Section 9 including information on:

Deed Administrators including their powers and rights

Control of the Deed Companies

Binding effect of the deeds

Treatment of claims

Releases applicable

Administration of the Deeds

Creditors meetings

Completion and termination.

9.2 Deed general information

If creditors decide to vote for a Deed:

the companies must sign/execute the Deed within 15 business days of the Second Meeting, otherwise the companies automatically proceed into liquidation. The court can allow longer time if required

unsecured creditors will be bound by the Deed, even if they vote against

property owners, lessors, and secured creditors who vote in favour will be bound by the Deed

the court can bind any creditor to the Deed.

In the case of the companies, we would expect to execute the Deeds shortly after the Second Meetings and within the 15 business day period allowed under the Act.

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10 Estimated return to creditors

10.1 Basis of estimate

We have estimated the return to each relevant class of creditor in each Group company in sections 10.2 – 10.12 below.

The classes of creditors concerned are:

priority employee claims (FS and FSC only)

secured creditor claims

unsecured creditor claims.

In the case of each Deed Company, we have provided notes on the rationale for our liquidation outcome estimates, and have then compared that outcome with the Deed outcome for each class of creditor. The outcome for creditors under the Deed proposal is the same for each Deed Company, as the Deed:

offers all employees the option to continue their employment with FS or FSC (as appropriate) and employees will retain all of their priority employee entitlements. As a consequence, we have shown the Deed outcome to employees of FS and FSC as 100 cents in the dollar.

provides a separate fund to pay the “non-Brookfield” Noteholders and Brookfield Secured Creditors’ claims in full, resulting in a Deed outcome to secured creditors of 100 cents in the dollar.

provides a contribution of $2.76m to a Deed Fund for the benefit of unsecured creditors (excluding non-participating creditors) who become beneficiaries of the Creditors’ Trust. The Deed outcome for unsecured creditors will not be known until after POD adjudication exercise and the declaration of a dividend, however we have estimated this outcome as 60 cents in the dollar on information presently held.

10.2 FS

In a liquidation scenario for FS: Assets A RoLR event, including a revocation of authorisation to hold a retailers licence, is likely to occur and

all customers in the name of FS will be required to be transferred to a separate retailer. Residual

debtors as at the date of liquidation will be subject to a collection exercise. For reference, the

receivables were approximately $2.2m as at the date of our appointment.

Any completed water infrastructure owned by Flow is likely to be subject to a RoLR event and be

subject to the use of the incoming supplier. There is significant uncertainty as to how these

infrastructure assets might then be realised under the relevant legislation and to this end, we are

unable to determine the quantum of the value of these assets.

Any incomplete water infrastructure is likely to be subject to step in/termination rights exercised

by the relevant developer, with any subsequent damages claim likely to outweigh the realisation

value of the assets, resulting in a nil return.

Residual property, plant and equipment will be limited to general office equipment, which would

realise minimal amounts at auction.

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Inventories are limited (book value of $67k) and would either be subject to claims by developers

exercising step in rights (for example, in relation to prepayments for BASIX kits) or realised at

auction for limited value.

The investment in M2C would be realised via the Liquidators running a public sale process for the

sale of the shares.

Liabilities

Priority amounts would include the Administrators’ cost and expenses, including the $5m in

Voluntary Administration funding.

Secured debt (refer section 7.3) would crystallise at circa $34m.

Priority claims (from circulating assets) for the 29 employees would crystallise, including payment

in lieu of notice and redundancy claims, noting that employees would be able to receive some of

their anticipated shortfall from FEG).

Capacity Agreements with Enwave would likely be terminated, crystallising termination payments

in excess of $80m. While these are subject to security, given the date the security was granted (18

December 2018), we have made the assumption that these would rank as unsecured amounts.

PDAs and other contracts would also be terminated, likely resulting in damages claims, further

increasing the unsecured creditor pool.

Unsecured claims are estimated at c$7.5m (excluding intercompany and contingent claims).

In light of the above, the only material realisations would occur from the debtor book (benefiting employees) and the shares in M2C (benefiting secured creditors), resulting in the following estimated outcome for creditors:

FS estimated outcome Liquidation Deed

Cents in the dollar

Return to employees (priority)* 40-60 100

Return to secured creditors 10-20 100

Return to unsecured creditors Nil 60

*Before FEG assistance

10.3 FSO

In a liquidation scenario of FSO:

Assets

The only material assets FSO holds are regulatory licences. These are likely to be the subject of a

RoLR event, including a revocation of authorisation to hold the relevant licences. Consequently,

FSO will have minimal realisable assets.

Liabilities

Priority amounts would include Administrators’ cost and expenses, including the $5m in

Voluntary Administration funding.

FSO does not hold employees.

Unsecured creditors would rank behind the priority amounts.

In light of the fact that there would be no material asset realisations, we estimate the outcome to creditors to be as follows:

FSO estimated outcome Liquidation Deed

Cents in the dollar

Return to employees (priority) N/A N/A

Return to secured creditors Nil 100

Return to unsecured creditors Nil 60

56

10.4 FSC

In a liquidation scenario for FSC Assets

The only receivable is an intercompany receivable owed by FS – given FS would also be in

liquidation, this would be unrecoverable (refer outcome for unsecured creditors in FS).

There are also relatively immaterial amounts with respect to cash at bank ($64k) and plant,

property and equipment ($36k).

Liabilities

Priority amounts would include Administrators’ cost and expenses, including the $5m in

Voluntary Administration funding.

Priority claims (from circulating assets) for the 6 employees would crystallise, including payment

in lieu of notice and redundancy claims, noting that employees would be able to receive some of

their anticipated shortfall from FEG.

Unsecured claims are estimated at c$1.2m (excluding intercompany claims).

In light of the fact that there would be no material asset realisations, we estimate the outcome to creditors to be as follows:

FSC estimated outcome Liquidation Deed

Cents in the dollar

Return to employees (priority)* Nil 100

Return to secured creditors Nil 100

Return to unsecured creditors Nil 60

*Before FEG assistance

10.5 Cooranbong Water

In a liquidation scenario for Cooranbong Water: Assets

Cooranbong Water is the development company for the Avondale Greens Development, which is

incomplete.

In a liquidation scenario, we would expect that the developer would exercise step-in

rights/terminate the development agreement and complete the project at its own cost.

The above course of action would likely result in contingent claims crystallising against

Cooranbong Water (and FS) for damages, including the additional costs incurred in completing

the project, which would then be offset against the value of any partially constructed assets,

leaving little to no residual value in the assets for the liquidation.

Liabilities

Priority amounts would include Administrators’ cost and expenses, including the $5m in

Voluntary Administration funding.

As outlined above, in a liquidation scenario, it is likely that the developer would claim

damages under the PDA, including the additional costs to complete the project.

In light of the fact that there would be no material asset realisations, we estimate the outcome to creditors to be as follows:

Cooranbong Water estimated outcome Liquidation Deed

Cents in the dollar

Return to employees (priority) N/A N/A

Return to secured creditors Nil 100

Return to unsecured creditors Nil 60

57

10.6 Huntlee Water

In a liquidation scenario for Huntlee Water: Assets

Huntlee Water is the development company for the Huntlee Development, which is incomplete.

In a liquidation scenario, we would expect that the developer would exercise step-in

rights/terminate the development agreement and complete the project at its own cost.

In addition, the water infrastructure assets at the Huntlee Water centre are owned by Enwave

(and subject to the Capacity Agreements) and thus, Huntlee Water would hold no material assets

of value.

Liabilities

Priority amounts would include Administrators’ cost and expenses, including the $5m in

Voluntary Administration funding.

As outlined above, in a liquidation scenario, it is likely that the developer would claim

damages under the Project Development Agreement, including the additional costs to

complete the project.

In light of the fact that there would be no material asset realisations, we estimate the outcome to creditors to be as follows:

Huntlee Water estimated outcome Liquidation Deed

Cents in the dollar

Return to employees (priority) N/A N/A

Return to secured creditors Nil 100

Return to unsecured creditors Nil 60

10.7 Central Park Water

In a liquidation scenario for Central Park Water: Assets

Central Park Water is the development company for the Central Park Development, which is

complete.

Any completed water infrastructure owned by Discovery Point Water is likely to be subject to a

RoLR event and be subject to the use of the incoming supplier. There is significant uncertainty as

to how these infrastructure assets might be realised under the relevant legislation and to this end,

we are unable to determine the quantum of the value of these assets.

Central Park Water holds no other assets of material value.

Liabilities

Priority amounts would include Administrators’ cost and expenses, including the $5m in

Voluntary Administration funding.

As outlined above, in a liquidation scenario, it is likely that the developer would claim damages

under the Project Development Agreement, including the additional costs to complete the project.

In light of the fact that there would be no material asset realisations, we estimate the outcome to creditors to be as follows:

Central Park Water estimated outcome Liquidation Deed

Cents in the dollar

Return to employees (priority) N/A N/A

Return to secured creditors Nil 100

Return to unsecured creditors Nil 60

58

10.8 Discovery Point Water

In a liquidation scenario for Discovery Point Water: Assets

Discovery Point Water is the developer for the Discovery Point development that is complete and

operational.

Any completed water infrastructure owned by Discovery Point Water is likely to be subject to a

RoLR event and be subject to the use of the incoming supplier. There is significant uncertainty as

to how these infrastructure assets might be realised under the relevant legislation and to this end,

we are unable to determine the quantum of the value of these assets.

Discovery Point holds no other assets of material value.

Liabilities

Priority amounts would include Administrators’ cost and expenses, including the $5m in

Voluntary Administration funding.

The only remaining creditor is an intercompany claim by FS.

In light of the fact that there would be no material asset realisations, we estimate the outcome to creditors to be as follows:

Discovery Point Water estimated outcome Liquidation Deed

Cents in the dollar

Return to employees (priority) N/A N/A

Return to secured creditors Nil 100

Return to unsecured creditors Nil 60

10.9 Green Square Water

In a liquidation scenario for Green Square Water: Assets

Green Square Water is the operator of the water infrastructure at Green Park, under an operations

and maintenance style agreement.

In a liquidation, we would expect this agreement to be terminated by the owner of the

development, which may give rise to a claim for damages.

Green Square Water holds no other assets of material value.

Liabilities

Priority amounts would include Administrators’ cost and expenses, including the $5m in

Voluntary Administration funding.

The only remaining creditor could be the contract counterparty referred to above.

In light of the fact that there would be no material asset realisations, we estimate the outcome to creditors to be as follows:

Green Square Water estimated outcome Liquidation Deed

Cents in the dollar

Return to employees (priority) N/A N/A

Return to secured creditors Nil 100

Return to unsecured creditors Nil 60

59

10.10 Pitt Town Water

In a liquidation scenario for Pitt Town Water: Assets

Pitt Town Water is a development that is complete and operational.

The water infrastructure assets at Pitt Town are owned by Enwave (and subject to the Capacity

Agreements) and thus, Pitt Town Water would hold no material assets of value.

Liabilities

Priority amounts would include Administrators’ cost and expenses, including the $5m in

Voluntary Administration funding.

The only remaining creditor is an intercompany claim by FS.

In light of the fact that there would be no material asset realisations, we estimate the outcome to creditors to be as follows:

Pitt Town Water estimated outcome Liquidation Deed

Cents in the dollar

Return to employees (priority) N/A N/A

Return to secured creditors Nil 100

Return to unsecured creditors Nil 60

10.11 Wyee Water

In a liquidation scenario for Wyee Water: Assets

Wyee Water is a development that is complete and operational.

Any completed water infrastructure owned by Wyee Water is likely to be subject to a RoLR event

and be subject to the use of the incoming supplier. There is significant uncertainty as to how these

infrastructure assets might be realised under the relevant legislation and to this end, we are

unable to determine the quantum of the value of these assets.

Wyee Water holds no other assets of material value.

Liabilities

Priority amounts would include Administrators’ cost and expenses, including the $5m in

Voluntary Administration funding.

Secured debt (refer section 7.3) would crystallise at circa $34m

The only remaining creditor is an intercompany claim by FS.

In light of the fact that there would be no material asset realisations and the size of the secured claim (even after recoveries from FS), we estimate the outcome to creditors to be as follows:

Wyee Water estimated outcome Liquidation Deed

Cents in the dollar

Return to employees (priority) N/A N/A

Return to secured creditors Nil 100

Return to unsecured creditors Nil 60

60

10.12 The Loxford Group

In relation to the Loxford Group, the only activities these entities have been involved in are the entry into the initial transaction documents associated with the Kurri Kurri development. As outlined in the report, this development is yet to physically commence and in a liquidation scenario, it is likely the relevant agreements will be rescinded and/or terminated. Any recission or termination will likely give rise to claims for damages against the Loxford Group by the contract counterparty for damages associated with the Loxford Group’s inability to comply with its obligations under the agreement. Consequently, the Loxford Group will hold no assets for realisation, giving rise to no returns to unsecured creditors.

Loxford Group estimated outcome Liquidation Deed

Cents in the dollar

Return to employees (priority) N/A N/A

Return to secured creditors Nil N/A

Return to unsecured creditors Nil N/A

61

11 Administrators’ opinion As highlighted earlier as Administrators of the Group, we are required to provide our opinion on the options available to creditors, in deciding the future of each company within the Group, being:

1. each of them be wound up (liquidation);

2. each of them execute a Deed of Company Arrangement if one is proposed; or

3. the Administrations of each of them end and the relevant company is returned to the control of its director(s).

In making our recommendation to creditors, we have particular regard to the certainty of both the quantum and timing of any distribution of funds to be made to the creditors.

In light of the above, and having assessed the estimated outcome under the proposed Deed against the likely outcome should the Companies be wound up, we are of the opinion that it is in the best interest of creditors of each of the Deed Companies to vote in favour of the proposed Deed, rather than a winding up.

For the remaining companies, being the Loxford Group, as no Deed proposal has been received at the time of this report, it is our opinion that it is in the best interests of the separate creditors of each of those companies to vote in favour of the winding up of each company within the Loxford Group.

Our opinion of each option available to creditors is discussed below.

11.1 Loxford Group

As no Deed is proposed for the Loxford Group, we are of the opinion that it is in the best interest of creditors of the Loxford Group that these companies be wound up.

We note that as no Deed proposal has been received, the only other option for creditors is for the Loxford Group Companies to be returned to the director(s). However, as outlined in the body of the report, the Loxford Group is a party to certain transactions documents associated with the Kurri Kurri development – without the support of the remainder of the Group, the Loxford Group will be unable to comply with their obligations under these documents and it is likely they will be terminated.

The termination of these agreements is likely to give rise to a claim in damages from the relevant counterparty that the Loxford Group will not be able to meet (as they have been reliant on FS for ongoing funding). Consequently, the Loxford Group would remain insolvent (or likely to become insolvent) and therefore, in our view should not be returned to the directors, but rather wound up.

11.2 Deed Companies

We received a Deed proposal from the Deed Proponent for the following Group companies:

FS

FSC

FSO

Cooranbong Water

Huntlee Water

Central Park Water

Discovery Point Water

Green Square Water

Pitt Town Water

Wyee Water.

62

We are of the opinion that it is in the best interest of creditors of each and all of these companies that their creditors resolve to execute a Deed in accordance with and to give effect to the Deed Proposal.

We are of the view that the return to creditors of each Deed Company, under the proposed Deed will provide a materially better outcome for those creditors than a winding up as highlighted in Section 10 of this report.

11.3 Administration to end

A third option in administration is for creditors to resolve to end the administration and return a company to its directors. This is only available when the relevant company is solvent.

As a consequence, we are of the opinion that it is not in the best interest of creditors to end the administration.

While our investigations are continuing, it is evident that the Group companies are insolvent and are unable to pay their debts as and when they fall due. Accordingly, returning control of the Group to their directors would be inappropriate in the present circumstances.

63

12 Enquiries Should you have any enquiries please contact Brendan Flaherty of PwC Australia on +61 2 8266 4642 or by email at michelle.budiarso@pwc.com.

64

13 Disclaimer In reviewing this Report, creditors should note:

This Report is based upon our preliminary investigations to date. Any additional material issues that are identified subsequent to issuing this Report may be the subject of a further written report and/or tabled at the Second Meeting.

The contents of this Report are based on information obtained from the Groups’ books and records, financial systems, representations from the directors, key management and our own enquiries and investigations.

The statements and opinions given in this Report are given in good faith and in the belief that such statements and opinions are not false or misleading. Except where otherwise stated, we reserve the right to alter any conclusions reached on the basis of any amended or additional information which may be provided to us between the date of this Report and the date of the Second Meeting.

In considering the options available to creditors and formulating our recommendation, the Administrators have necessarily made forecasts of asset realisations and total creditor claims. These forecasts and estimates may change as asset realisations progress and claims are received from creditors. While the forecasts and estimates are based on the Administrators’ best assessment in the circumstances, creditors should note that the eventual outcome for creditors may differ from that estimated in this Report.

Neither the Administrators, PwC nor any member or employee of the firm is responsible in any way whatsoever to any person in respect of any errors in this Report arising from incorrect information provided to us.

The Administrators do not assume or accept any responsibility for any liability or loss sustained by any creditor or any other party as a result of the circulation, publication, reproduction or any use of the information presented in this Report.

This Report is not for general circulation, publication, reproduction or any use other than to assist creditors in evaluating their position as creditors of the companies and must not be disclosed without the prior approval of the Administrators.

Creditors should consider seeking their own independent legal and commercial advice as to their rights and the options available to them at the Second Meeting.

DATED this 15th day of February 2019

Christopher Hill and Philip Carter Administrators

65

Appendices

66

Appendix A – Subsidiary information Flow Systems Pty Ltd A search of ASIC’s database reveals the following details of the Company and its directors, other officers and shareholders. We are not aware of any inaccuracy in ASIC’s records. Company Details

Date of Incorporation Registered Office Principal Place of Business

27 March 2009

Brookfield Australia Investments Ltd Level 22 135 King Street Sydney NSW 2000

Suite 2 Level 40 259 George Street Sydney NSW 2000

Director Details

Directors’ Details Appointment from/to

Cameron Evans 13 February 2017 - Current

Murray Cook 13 February 2017 - Current

Jeffrey Kendrew 1 March 2013 - Current

Terence Leckie 27 March 2009 - Current David McKewen 17 May 2017 – 18 December 2018

Secretary Details

Secretary’s Details Appointment from/to

Steven Samowitz 13 may 2016 - Current Terence Leckie 27 March 2009 - Current

Creditor Claims

The following table summarise the estimated claims in Flow Systems in accordance with the books and records of the company and Section 4.5.

Creditor class Number of creditors Amount ($)

Secured creditors

Secured Creditors 7 45,304,632

Employee entitlements

Priority creditors 27 327,153

Excluded employee entitlements (unsecured creditors)

2 252,824

Unsecured creditors

Trade/External creditors 101 7,512,044

Related entitles 6 28,239,017

Total creditor claims 143 81,635,669

Contingent creditors

Contingent Secured Creditors 2 94,932,149

Contingent Unsecured Creditors 5 49,058,308

Total contingent creditors 7 143,990,457

Total Claims 150 225,626,126

67

Secured Creditors

The following table is a summary of security interest charges over some or all of a Flow Systems' assets.

Creditor class Number of creditors No. of security interest(s) Amount ($)

APAAP* 2 2 45,304,632

Contingent Creditors 2 7 94,932,149

Motor vehicle(s) 1 1 -

Other goods 4 4 -

Total secured creditor claims

9 14 140,236,781

Director’s ROCAPs

Director’s ROCAPs

Book value

$’000

Money owed to the company

Customer Receivables 2,217

Assets owned by the company

Cash at Bank 676

Inventories 637

Prepayments 176

Property, Plant and Equipment 8,541

Intangibles 1,060

Investments 8,730

Bank guarantees 607

Total Assets 22,644

Less other creditor claims:

Secured creditors Not specified

Employee Entitlements (priority) 567

Unsecured creditors 3,259

Net position 18,818

Plus Contingent assets -

Less Contingent liabilities -

Net position after contingencies 18,818

Balance Sheet

Flow Systems’ Balance Sheet as at 31 December 2016, 31 December 2017 and 31 December 2018 is summarised below.

Flow Systems Pty Ltd

Balance Sheet ($'000) Notes CY16 CY17 CY18

Current Assets

(2,734) (39,362) (47,597)

Non-Current Assets 3,313 13,308 14,251

Total Assets 579 (26,053) (33,345)

Current Liabilities

(6,923) (883) 18,034

Non-Current Liabilities (24,346) (19,012) (27,952)

Total Liabilities

(31,269) (19,895) (9,918)

Net Assets (30,689) (45,948) (43,263)

Total Equity (10,085) 142 7,587

68

Profit and Loss Statement

Flow Systems’ Profit and Loss for the three calendar years ended 31 December 2016, 31 December 2017 and 31 December 2018 is summarised in the table below.

Flow Systems Pty Ltd

Profit and Loss ('$000) CY16 CY17 CY18

Income

3,494 5,302 6,842

Operating Expenses (965) (1,994) (8,948)

Gross Profit

2,529 3,308 (2,105)

Overheads (10,012) (8,359) (4,042)

EBITDA (7,483) (5,051) (6,147)

Depreciation, interest and tax (3,411) (3,039) 1,548

Net profit (10,893) (8,091) (4,599)

69

Flow Systems Constructors Pty Ltd

A search of ASIC’s database reveals the following details of the Company and its directors, other officers and shareholders. We are not aware of any inaccuracy in ASIC’s records.

Company Details

Date of Incorporation Registered Office Principal Place of Business

21 May 2015

Brookfield Australia Investments Ltd Level 22 135 King Street Sydney NSW 2000

Suite 2 Level 40 259 George Street Sydney NSW 2000

Director Details

Directors’ Details Appointment from/to

Cameron Evans 13 February 2017 - Current

Murray Cook 13 February 2017 - Current

Jeffrey Kendrew 21 May 2015 - Current

Terence Leckie 21 May 2015 - Current

Secretary Details

Secretary’s Details Appointment from/to

Steven Samowitz 13 May 2016 - Current

Creditor Claims

The following table summarise the estimated claims in Flow Systems Operations in accordance with the books and records of the company and Section 4.5.

Creditor class Number of creditors Amount ($)

Secured creditors

Secured Creditors 12 77,383

Employee entitlements

Priority creditors 6 55,432

Excluded employee entitlements (unsecured creditors)

- -

Unsecured creditors

Trade/External creditors 53 1,180,878

Total creditor claims 71 1,313,694

Secured Creditors

The following table is a summary of security interest charges over some or all of a Flow Systems Operations' assets.

Creditor class Number of creditors No. of security interest(s) Amount ($)

Motor vehicle(s) 2 2 3,459

Other goods 10 11 73,925

Total secured creditor claims

12 13 77,383

70

Director’s ROCAPs

Director’s ROCAPs

Book value

$’000

Money owed to the company

Intercompany receivables 2,962

Assets owned by the company

Cash at Bank 65

Property, Plant and Equipment 36

Intangibles 8

Total Assets 3,071

Less other creditor claims:

Secured creditors Not specified

Employee Entitlements (priority) 55

Unsecured creditors 2,688

Net position 328

Plus Contingent assets -

Less Contingent liabilities -

Net position after contingencies 328

Balance Sheet

Flow Systems Constructors’ Balance Sheet as at 31 December 2016, 31 December 2017 and 31 December 2018 is summarised below.

Flow Systems Constructors Pty Ltd

Balance Sheet ($'000) Notes CY16 CY17 CY18

Current Assets

1,385 3,295 4,288

Non-Current Assets 110 87 42

Total Assets 1,495 3,382 4,330

Current Liabilities

(1,907) (3,313) (4,641)

Net Assets (412) 69 (311)

Total Equity (412) 69 (311)

Profit and Loss Statement

Flow Systems Constructors’ Profit and Loss for the three calendar years ended 31 December 2016, 31 December 2017 and 31 December 2018 is summarised in the table below.

Flow Systems Constructors Pty Ltd

Profit and Loss ('$000) CY16 CY17 CY18

Income

3,925 20,134 14,226

Operating Expenses (3,292) (17,824) (12,970)

Gross Profit

633 2,310 1,256

Overheads (163) 537 (359)

EBITDA (20) (56) (21)

Depreciation, interest and tax (183) 481 (380)

Net profit 3,925 20,134 14,226

71

Flow Systems Operations Pty Ltd

A search of ASIC’s database reveals the following details of the Company and its directors, other officers and shareholders. We are not aware of any inaccuracy in ASIC’s records.

Company Details

Date of Incorporation Registered Office Principal Place of Business

28 November 2014

Brookfield Australia Investments Ltd Level 22 135 King Street Sydney NSW 2000

Suite 2 Level 40 259 George Street Sydney NSW 2000

Director Details

Directors’ Details Appointment from/to

Cameron Evans 19 December 2018 - Current

Stephen McKewen 28 November 2014 – 19 December 2019

Terence Leckie 28 November 2014 – 19 December 2019

Stephen Hall 30 March 2016 – 26 March 2018

Secretary Details

Secretary’s Details Appointment from/to

Steven Samowitz 11 May 2016 – 19 December 2018

Creditor Claims

The following table summarise the estimated claims in Flow Systems Operations in accordance with the books and records of the company and Section 4.5.

Creditor class Number of creditors Amount ($)

Secured creditors

Secured Creditors 1 -

Unsecured creditors

Trade/External creditors 7 52,699

Total creditor claims 8 52,699

Contingent creditors

Contingent Secured Creditors 1 14,574,768

Contingent Unsecured Creditors 2 2,645,001

Total contingent creditors 3 17,219,769

Total Claim 11 17,272,468

Secured Creditors

The following table is a summary of security interest charges over some or all of a Flow Systems Operations' assets.

Creditor class Number of creditors No. of security interest(s) Amount ($)

Contingent Creditor 1 6 14,574,768

Other goods 1 1 -

Total secured creditor claims

2 7 14,574,768

72

Director’s ROCAPs

Director’s ROCAPs

Book value

$’000

Money owed to the company

Customer Receivables 840

Assets owned by the company

Property, Plant and Equipment 884

Intangibles 181

Total Assets 1,905

Less other creditor claims:

Secured creditors Not specified

Unsecured creditors 294

Net position 1,611

Plus Contingent assets -

Less Contingent liabilities -

Net position after contingencies 1,611

Balance Sheet

Flow Systems Operations’ Balance Sheet as at 31 December 2016, 31 December 2017 and 31 December 2018 is summarised below.

Flow Systems Operations Pty Ltd

Balance Sheet ($'000) Notes CY16 CY17 CY18

Current Assets

7,860 4,077 10,187

Non-Current Assets 653 679 1,069

Total Assets 8,512 4,757 11,256

Current Liabilities

(7,472) (4,041) (20,103)

Non-Current Liabilities - (6,788) -

Total Liabilities

(7,472) (10,829) (20,103)

Net Assets 1,040 (6,072) (8,847)

Total Equity (2,237) (5,096) (175)

Profit and Loss Statement

Flow Systems Operations’ Profit and Loss for the three calendar years ended 31 December 2016, 31 December 2017 and 31 December 2018 is summarised in the table below.

Flow Systems Operations Pty Ltd

Profit and Loss ('$000) CY16 CY17 CY18

Income

1,710 6,513 6,998

Operating Expenses (1,666) (9,352) (8,555)

Gross Profit

43 (2,839) (1,556)

Overheads (88) 9 (275)

EBITDA (45) (2,829) (1,831)

Depreciation, interest and tax - (3) (34)

Net profit (45) (2,833) (1,866)

73

Cooranbong Water Pty Ltd

A search of ASIC’s database reveals the following details of the Company and its directors, other officers and shareholders. We are not aware of any inaccuracy in ASIC’s records.. Company Details

Date of Incorporation Registered Office Principal Place of Business

08 May 2014

Brookfield Australia Investments Ltd Level 22 135 King Street Sydney NSW 2000

Suite 2 Level 40 259 George Street Sydney NSW 2000

Director Details

Directors’ Details Appointment from/to

Cameron Evans 19 December 2018 - Current

Terence Leckie 8 May 2014 – 19 December 2018

Stephen McKewen 8 May 2014 – 19 December 2018

Stephen Hall 30 September 2015 - 26 March 2018

Secretary Details

Secretary’s Details Appointment from/to

Steven Samowitz 11 May 2016 – 19 December 2018

Creditor Claims

The following table summarise the estimated claims in Cooranbong Water in accordance with the books and records of the company and Section 4.5.

Creditor class Number of creditors Amount ($)

Unsecured creditors

Trade/External creditors 1 1

Related entitles 1 1,816,667

Total creditor claims 2 1,816,668

Contingent creditors

Contingent unsecured Creditors 1 21,755,027

Total contingent creditors 1 21,755,027

Total claims 3 23,571,695

Secured Creditors

This entity does not have PPSR registrations

74

Director’s ROCAPs

Director’s ROCAPs

Book value Estimated value in

liquidation

$’000 $’000

Money owed to the company

Customer Receivables 56

Assets owned by the company

Property, Plant and Equipment 10,781

Intangibles 36

Total Assets 10,873

Less other creditor claims:

Secured creditors Not specified

Net position 10,873

Plus Contingent assets -

Less Contingent liabilities -

Net position after contingencies 10,873

Balance Sheet

Cooranbong Water’s Balance Sheet as at 31 December 2016, 31 December 2017 and 31 December 2018 is summarised below.

Cooranbong Water Pty Ltd

Balance Sheet ($'000) Notes CY16 CY17 CY18

Current Assets

5,673 10,582 13,853

Non-Current Assets 1,457 7,557 10,871

Total Assets 7,130 18,139 24,725

Current Liabilities

(510) (2,147) 1,074

Non-Current Liabilities - - -

Total Liabilities

(510) (2,147) 1,074

Net Assets 6,620 15,992 25,799

Total Equity (2,155) 3,559 8,521

Profit and Loss Statement

Cooranbong Water’s Profit and Loss for the three calendar years ended 31 December 2016, 31 December 2017 and 31 December 2018 is summarised in the table below.

Coorangbong Water Pty Ltd

Profit and Loss ('$000) CY16 CY17 CY18

Income

153 5,681 7,210

Operating Expenses (93) (94) (371)

Gross Profit

60 5,587 6,839

Overheads (4) 214 54

EBITDA 57 5,802 6,893

Depreciation, interest and tax (18) 20 (63)

Net profit 38 5,821 6,830

75

Huntlee Water Pty Ltd

A search of ASIC’s database reveals the following details of the Company and its directors, other officers and shareholders. We are not aware of any inaccuracy in ASIC’s records. Company Details

Date of Incorporation Registered Office Principal Place of Business

06 January 2014

Brookfield Australia Investments Ltd Level 22 135 King Street Sydney NSW 2000

Suite 2 Level 40 259 George Street Sydney NSW 2000

Director Details

Directors’ Details Appointment from/to

Cameron Evans 19 December 2018 - Current

Terence Leckie 6 January 2014 – 19 December 2018

Stephen McKewen 6 January 2014 – 19 December 2018

Stephen Hall 30 September 2015 - 26 March 2018

Secretary Details

Secretary’s Details Appointment from/to

Steven Samowitz 11 May 2016 – 19 December 2018 Terence Leckie 6 January 2014 – 19 December 2018

Creditor Claims

This entity does not have creditor claims. Secured Creditors

This entity does not have PPSR registrations

Director’s ROCAPs

Director’s ROCAPs

Book value

$’000

Money owed to the company

Customer Receivables 500

Assets owned by the company

Cash at Bank 734

Property, Plant and Equipment 1,163

Intangibles 56

Total Assets 2,452

Less other creditor claims:

Secured creditors Not specified

Net position 2,452

Plus Contingent assets -

Less Contingent liabilities -

Net position after contingencies 2,452

76

Balance Sheet

Huntlee Water’s Balance Sheet as at 31 December 2016, 31 December 2017 and 31 December 2018 is summarised below.

Huntlee Water Pty Ltd

Balance Sheet ($'000) Notes CY16 CY17 CY18

Current Assets

6,162 27,074 28,446

Non-Current Assets 4,795 836 1,220

Total Assets 10,956 27,910 29,667

Current Liabilities

(1,079) (6,186) (11,094)

Non-Current Liabilities - (1,524) -

Total Liabilities

(1,079) (7,710) (11,094)

Net Assets 9,877 20,200 18,572

Total Equity 5,785 1,192 811

Profit and Loss Statement

Huntlee Water’s Profit and Loss for the three calendar years ended 31 December 2016, 31 December 2017 and 31 December 2018 is summarised in the table below.

Huntlee Water Pty Ltd

Profit and Loss ('$000) CY16 CY17 CY18

Income

6,526 10,303 2,676

Operating Expenses (517) (5,783) (3,507)

Gross Profit

6,009 4,520 (831)

Overheads 1,995 (1,073) (31)

EBITDA 8,004 3,447 (862)

Depreciation, interest and tax (26) 8 (19)

Net profit 7,978 3,455 (880)

77

Central Park Water Pty Ltd

A search of ASIC’s database reveals the following details of the Company and its directors, other officers and shareholders. We are not aware of any inaccuracy in ASIC’s records. Company Details

Date of Incorporation Registered Office Principal Place of Business

24 May 2011

Brookfield Australia Investments Ltd Level 22 135 King Street Sydney NSW 2000

Suite 2 Level 40 259 George Street Sydney NSW 2000

Director Details

Directors’ Details Appointment from/to

Cameron Evans 19 December - Current

Terence Leckie 24 May 2011 – 19 December 2018

Stephen McKewen 24 May 2011 – 19 December 2018

Stephen Hall 30 September 2015 - 26 March 2018

Secretary Details

Secretary’s Details Appointment from/to

Steven Samowitz 11 May 2016 – 19 December 2018

Creditor Claims

The following table summarise the estimated claims in Central Park Water in accordance with the books and records of the company and Section 4.5.

Creditor class Number of creditors Amount ($)

Unsecured creditors

Trade/External creditors 2 145,016

Total creditor claims 2 145,016

Contingent creditors

Contingent Unsecured Creditors 1 1

Total contingent claims 1 1

Total Claims 3 145,017

Secured Creditors

This entity does not have PPSR registrations

78

Director’s ROCAPs

Director’s ROCAPs

Book value

$’000

Assets owned by the company

Cash at Bank 7

Property, Plant and Equipment 4,595

Intangibles 110

Total Assets 4,712

Less other creditor claims:

Secured creditors Not specified

Unsecured creditors 145

Net position 4,567

Plus Contingent assets -

Less Contingent liabilities -

Net position after contingencies 4,567

Balance Sheet

Central Park Water’s Balance Sheet as at 31 December 2016, 31 December 2017 and 31 December 2018 is summarised below.

Central Park Water Pty Ltd

Balance Sheet ($'000) Notes CY16 CY17 CY18

Current Assets

14 735 758

Non-Current Assets 4,428 4,596 4,698

Total Assets 4,442 5,332 5,456

Current Liabilities

(425) (524) (1,537)

Non-Current Liabilities - - -

Total Liabilities

(425) (524) (1,537)

Net Assets 4,017 4,808 3,919

Total Equity (1,127) (1,156) 2,503

Profit and Loss Statement

Central Park Water’s Profit and Loss for the three calendar years ended 31 December 2016, 31 December 2017 and 31 December 2018 is summarised in the table below.

Central Park Water Pty Ltd

Profit and Loss ('$000) CY16 CY17 CY18

Income

2,274 2,083 1,904

Operating Expenses (1,060) (970) (1,079)

Gross Profit

1,213 1,113 825

Overheads (1) (6) (7)

EBITDA 1,212 1,106 818

Depreciation, interest and tax (147) 1 (6)

Net profit 1,065 1,107 812

79

Discovery Point Water Pty Ltd

A search of ASIC’s database reveals the following details of the Company and its directors, other officers and shareholders. We are not aware of any inaccuracy in ASIC’s records. Company Details

Date of Incorporation Registered Office Principal Place of Business

04 March 2010

Brookfield Australia Investments Ltd Level 22 135 King Street Sydney NSW 2000

Suite 2 Level 40 259 George Street Sydney NSW 2000

Director Details

Directors’ Details Appointment from/to

Cameron Evans 19 December 2018 - Current

Terence Leckie 4 March 2010 – 19 December 2018

Stephen McKewen 4 March 2010 – 19 December 2018

Stephen Hall 30 September 2015 - 26 March 2018

Secretary Details

Secretary’s Details Appointment from/to

Steven Samowitz 11 May 2016 – 19 December 2018

Creditor Claims

The following table summarise the estimated claims in Discovery Point Water in accordance with the books and records of the company and Section 4.5.

Creditor class Number of creditors Amount ($)

Secured creditors

Secured Creditors 1 -

Unsecured creditors

Related entitles 1 615,772

Total creditor claims 2 615,772

Secured Creditors

This entity does not have PPSR registrations

80

Director’s ROCAPs

Director’s ROCAPs

Book value

$’000

Assets owned by the company

Cash at Bank 1

Property, Plant and Equipment 3,472

Intangibles 101

Total Assets 3,574

Less other creditor claims:

Secured creditors Not specified

Net position 3,574

Plus Contingent assets -

Less Contingent liabilities -

Net position after contingencies 3,574

Balance Sheet

Discovery Point Water’s Balance Sheet as at 31 December 2016, 31 December 2017 and 31 December 2018 is summarised below.

Discovery Point Water Pty Ltd

Balance Sheet ($'000) Notes CY16 CY17 CY18

Current Assets

(98) 93 (32)

Non-Current Assets 3,254 3,532 3,568

Total Assets 3,156 3,625 3,537

Current Liabilities

(1,913) (1,868) (2,446)

Non-Current Liabilities - - -

Total Liabilities

(1,913) (1,868) (2,446)

Net Assets 1,243 1,757 1,091

Total Equity (1,973) (1,728) 2,207

Profit and Loss Statement

Discovery Point Water’s Profit and Loss for the three calendar years ended 31 December 2016, 31 December 2017 and 31 December 2018 is summarised in the table below.

Discovery Point Water Pty Ltd

Profit and Loss ('$000) CY16 CY17 CY18

Income

907 1,209 1,353

Operating Expenses (596) (625) (848)

Gross Profit

311 584 504

Overheads 5 (1) (1)

EBITDA 317 583 504

Depreciation, interest and tax (97) (48) 13

Net profit 219 535 516

81

Green Square Water Pty Ltd

A search of ASIC’s database reveals the following details of the Company and its directors, other officers and shareholders. We are not aware of any inaccuracy in ASIC’s records.

Company Details

Date of Incorporation Registered Office Principal Place of Business

23 April 2013

Brookfield Australia Investments Ltd Level 22 135 King Street Sydney NSW 2000

Suite 2 Level 40 259 George Street Sydney NSW 2000

Director Details

Directors’ Details Appointment from/to

Cameron Evans 19 December 2018 - Current

Terence Leckie 23 April 2013 – 19 December 2018

Stephen McKewen 23 April 2013 – 19 December 2018

Stephen Hall 30 September 2015 - 26 March 2018

Secretary Details

Secretary’s Details Appointment from/to

Steven Samowitz 11 May 2016 – 19 December 2018

Terence Leckie 23 April 2013 – 19 December 2018

Creditor Claims

The following table summarise the estimated claims in Green Square Water in accordance with the books and records of the company and Section 4.5.

Creditor class Number of creditors Amount ($)

Secured creditors

Secured Creditors 1 -

Total creditor claims 1 -

Secured Creditors

This entity does not have PPSR registrations

82

Director’s ROCAPs

Director’s ROCAPs

Book value

$’000

Money owed to the company

Customer Receivables 76

Assets owned by the company

Cash at Bank 7

Property, Plant and Equipment 92

Intangibles 19

Bank guarantees 189

Total Assets 383

Less other creditor claims:

Secured creditors Not specified

Net position 383

Plus Contingent assets -

Less Contingent liabilities -

Net position after contingencies 383

Balance Sheet

Green Square Water’s Balance Sheet as at 31 December 2016, 31 December 2017 and 31 December 2018 is summarised below.

Green Square Water Pty Ltd

Balance Sheet ($'000) Notes CY16 CY17 CY18

Current Assets

3,082 4,197 4,543

Non-Current Assets 672 666 300

Total Assets 3,754 4,863 4,843

Current Liabilities

(2,694) (3,594) (4,367)

Non-Current Liabilities - - -

Total Liabilities

(2,694) (3,594) (4,367)

Net Assets 1,060 1,269 475

Total Equity (1,796) (4,056) 937

Profit and Loss Statement

Green Square Water’s Profit and Loss for the three calendar years ended 31 December 2016, 31 December 2017 and 31 December 2018 is summarised in the table below.

Green Square Water Pty Ltd

Profit and Loss ('$000) CY16 CY17 CY18

Income

3,283 99 35

Operating Expenses (2,831) (1,870) (778)

Gross Profit

452 (1,771) (743)

Overheads (53) (15) (10)

EBITDA 400 (1,786) (753)

Depreciation, interest and tax (3) (7) (1)

Net profit 396 (1,793) (754)

83

Pitt Town Water Pty Ltd A search of ASIC’s database reveals the following details of the Company and its directors, other officers and shareholders. We are not aware of any inaccuracy in ASIC’s records..

Company Details

Date of Incorporation Registered Office Principal Place of Business

28 January 2010

Brookfield Australia Investments Ltd Level 22 135 King Street Sydney NSW 2000

Suite 2 Level 40 259 George Street Sydney NSW 2000

Director Details

Directors’ Details Appointment from/to

Cameron Evans 19 December 2018 - Current

Terence Leckie 28 January 2010 – 19 December 2018

Stephen McKewen 28 January 2010 – 19 December 2018

Stephen Hall 30 September 2015 - 26 March 2018

Secretary Details

Secretary’s Details Appointment from/to

Steven Samowitz 11 May 2016 – 19 December 2018

Creditor Claims

The following table summarise the estimated claims in Pitt Town Water in accordance with the books and records of the company and Section 4.5.

Creditor class Number of creditors Amount ($)

Secured creditors

Secured Creditors 1 -

Unsecured creditors

Trade/External creditors 1 1

Related entitles 1 5,952,591

Total creditor claims 3 5,952,592

Secured Creditors

The following table is a summary of security interest charges over some or all of a Pitt Town Water's assets.

Creditor class Number of creditors No. of security interest(s) Amount ($)

APAAP* 1 1 -

Total secured creditor claims

1 1 -

84

Director’s ROCAPs

Director’s ROCAPs

Book value

$’000

Assets owned by the company

Property, Plant and Equipment 4,102

Intangibles 98

Total Assets 4,200

Less other creditor claims:

Secured creditors Not specified

Unsecured creditors 1,917

Net position 2,283

Plus Contingent assets -

Less Contingent liabilities -

Net position after contingencies 2,283

Balance Sheet

Pitt Town Water’s Balance Sheet as at 31 December 2016, 31 December 2017 and 31 December 2018 is summarised below.

Pitt Town Water Pty Ltd

Balance Sheet ($'000) Notes CY16 CY17 CY18

Current Assets

2,359 11,548 12,294

Non-Current Assets 5,797 3,929 4,189

Total Assets 8,156 15,478 16,483

Current Liabilities

(1,524) (4,606) (8,058)

Non-Current Liabilities (1,875) (1,318) (1,255)

Total Liabilities

(3,399) (5,924) (9,312)

Net Assets 4,757 9,554 7,170

Total Equity 739 7,476 10,517

Profit and Loss Statement

Pitt Town Water’s Profit and Loss for the three calendar years ended 31 December 2016, 31 December 2017 and 31 December 2018 is summarised in the table below.

Pitt Town Water Pty Ltd

Profit and Loss ('$000) CY16 CY17 CY18

Income

2,251 7,176 2,299

Operating Expenses (444) (6,148) (4,097)

Gross Profit

1,807 1,028 (1,798)

Overheads (7) (4) (254)

EBITDA 1,801 1,024 (2,053)

Depreciation, interest and tax (403) (175) 93

Net profit 1,398 849 (1,959)

85

Wyee Water Pty Ltd

A search of ASIC’s database reveals the following details of the Company and its directors, other officers and shareholders. We are not aware of any inaccuracy in ASIC’s records. Company Details

Date of Incorporation Registered Office Principal Place of Business

25 October 2012

Brookfield Australia Investments Ltd Level 22 135 King Street Sydney NSW 2000

Suite 2 Level 40 259 George Street Sydney NSW 2000

Director Details

Directors’ Details Appointment from/to

Cameron Evans 19 December 2018 - Current

Terence Leckie 25 October 2012 – 19 December 2018

Stephen McKewen 25 October 2012 – 19 December 2018

Stephen Hall 30 September 2015 - 26 March 2018

Secretary Details

Secretary’s Details Appointment from/to

Steven Samowitz 11 May 2016 – 19 December 201

Creditor Claims

The following table summarise the estimated claims in Wyee Water in accordance with the books and records of the company and Section 4.5.

Creditor class Number of creditors Amount ($)

Secured creditors

Secured Creditors 1 29,803,445

Unsecured creditors

Trade/External creditors 2 252

Total creditor claims 3 29,803,697

Secured Creditors

The following table is a summary of security interest charges over some or all of a Wyee Water’s assets.

Creditor class Number of creditors No. of security interest(s) Amount ($)

APAAP* 1 1 29,803,445

Total secured creditor claims

1 1

29,803,445

86

Director’s ROCAPs

Director’s ROCAPs

Book value

$’000

Assets owned by the company

Property, Plant and Equipment 3,494

Intangibles 63

Total Assets 3,557

Less other creditor claims:

Secured creditors Not specified

Net position 3,557

Plus Contingent assets -

Less Contingent liabilities -

Net position after contingencies 3,557

Balance Sheet

Wyee Water’s Balance Sheet as at 31 December 2016, 31 December 2017 and 31 December 2018 is summarised below.

Wyee Water Pty Ltd

Balance Sheet ($'000) Notes CY16 CY17 CY18

Current Assets

67 78 78

Non-Current Assets 3,518 3,556 3,557

Total Assets 3,585 3,634 3,635

Current Liabilities

(555) (563) (607)

Non-Current Liabilities - - -

Total Liabilities

(555) (563) (607)

Net Assets 3,030 3,070 3,027

Total Equity (2,327) (2,073) 1,658

Profit and Loss Statement

Wyee Water’s Profit and Loss for the three calendar years ended 31 December 2016, 31 December 2017 and 31 December 2018 is summarised in the table below.

Wyee Water Pty Ltd

Profit and Loss ('$000) CY16 CY17 CY18

Income

(21) - -

Operating Expenses (12) (10) (25)

Gross Profit

(33) (10) (25)

Overheads (6) (6) (9)

EBITDA (39) (16) (34)

Depreciation, interest and tax (95) 206 1

Net profit (134) 190 (33)

87

Loxford Energy Pty Ltd

A search of ASIC’s database reveals the following details of the Company and its directors, other officers and shareholders. We are not aware of any inaccuracy in ASIC’s record Company Details

Date of Incorporation Registered Office Principal Place of Business

06 July 2018

Brookfield Australia Investments Ltd Level 22 135 King Street Sydney NSW 2000

Suite 2 Level 40 259 George Street Sydney NSW 2000

Director Details

Directors’ Details Appointment from/to

Cameron Evans 19 December 2018 - Current

Robert Gittins 6 July 2018 – 19 December 2018

Terence Leckie 6 July 2018 – 19 December 2018

Cameron Evans 19 December 2018 - Current

Secretary Details

Secretary’s Details Appointment from/to

Steven Samowitz 6 July 2018 – 19 December 2018

Creditor Claims

The following table summarise the estimated claims in Loxford Energy in accordance with the books and records of the company and Section 4.5.

Creditor class Number of creditors Amount ($)

Contingent creditors -

Contingent Unsecured Creditors 1 1

Total claims 1 1

Secured Creditors

This entity does not have PPSR registrations

Director’s ROCAPs

This entity does not have Director’s ROCAPs.

Balance Sheet

Loxford Energy’s Balance Sheet as at 31 December 2016, 31 December 2017 and 31 December 2018 is summarised below.

Loxford Energy Pty Ltd

Balance Sheet ($'000) Notes CY16 CY17 CY18

Current Assets

(70) 229 305

Non-Current Assets - 1,909 4,665

Total Assets (70) 2,137 4,970

Current Liabilities

(36) (144) (2,507)

Non-Current Liabilities - - -

Total Liabilities

(36) (144) (2,507)

Net Assets (106) 1,994 2,463

Total Equity (2,343) (2,263) 1,705

88

Profit and Loss Statement

Loxford Energy’s Profit and Loss for the three calendar years ended 31 December 2016, 31 December 2017 and 31 December 2018 is summarised in the table below.

Loxford Energy Pty Ltd

Profit and Loss ('$000) CY16 CY17 CY18

Income

- - -

Operating Expenses (22) - 19

Gross Profit

(22) - 19

Overheads (129) (0) (5)

EBITDA (150) (0) 14

Depreciation, interest and tax - - -

Net profit (150) (0) 14

89

Appendix B – Appointment of Proxy, Proof of Debt or Claim Form – Form 532

Office use only – for voting purposes Accept Reject

ACN: 136 272 298 Subregulation 5.6.49(2)

FORM 535 Corporations Act 2001

FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM)

To the Administrators of the Company as specified in the table below. 1. This is to state that the Company was on Thursday, 20 December 2018, and still is, justly and truly

indebted to ....................................................................................................................................(creditor)

(name of creditor) of .....................................................................................................................................

(address of creditor) for $.....................………………..

No. Company Name (all Administrators Appointed) ACN Creditor of

Company (tick)

1 Flow Systems Pty Ltd 136 272 298

2 Flow Systems Constructors Pty Ltd 605 967 280

3 Cooranbong Water Pty Ltd 169 450 453

4 Huntlee Water Pty Ltd 167 418 608

5 Central Park Water Pty Ltd 151 072 838

6 Discovery Point Water Pty Ltd 142 392 541

7 Green Square Water Pty Ltd 163 432 906

8 Pitt Town Water Pty Ltd 141 705 660

9 Wyee Water Pty Ltd 160 953 775

10 Flow Systems Operations Pty Ltd 603 106 305

11 Loxford Development Holdings Pty Ltd 627 353 191

12 Loxford Waters Pty Ltd 627 354 867

13 IDI Loxford Pty Ltd 627 354 803

14 Inneholde Pty Ltd 627 354 394

15 Buskas Holdings Pty Ltd 627 354 714

16 Loxford Energy Pty Ltd 627 353 575

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 Companies, 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

Office use only – for voting purposes Accept Reject

*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 Companies

☐Monthly statements ☐Statutory demand ☐Credit application ☐Guarantee from Companies

☐Creditors authority letter ☐Other documents

Dated ……/…../……. Name …………………………...………Signatory…………….…………………. Phone ………………………………….. Email address………………………………………………………... C

om

ple

te a

ll section

s

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Flow Systems Pty Ltd (Administrators Appointed) (the Company)

ACN 136 272 298 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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $907,164.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $200,000.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $100,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $100,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

5

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $100,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

6 The Company be wound up

7 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

8 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

9

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

10

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Flow Systems Constructors Pty Ltd (Administrators Appointed) (the Company)

ACN 605 967 280 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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $103,680.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $100,000.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $40,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $40,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

5

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $40,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

6 The Company be wound up

7 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

8 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

9

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

10

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Cooranbong Water Pty Ltd (Administrators Appointed) (the Company)

ACN 169 450 453 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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,660.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $5,000.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

5

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

6 The Company be wound up

7 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

8 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

9

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

10

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Huntlee Water Pty Ltd (Administrators Appointed) (the Company)

ACN 167 418 608 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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $7,269.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $5,000.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

5

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

6 The Company be wound up

7 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

8 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

9

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

10

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Central Park Water Pty Ltd (Administrators Appointed) (the Company)

ACN 151 072 838

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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,518.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $4,996.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

5

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

6 The Company be wound up

7 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

8 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

9

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

10

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Discovery Point Water Pty Ltd (Administrators Appointed) (the Company)

ACN 142 392 541

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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,518.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $4,996.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

5

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

6 The Company be wound up

7 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

8 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

9

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

10

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Green Square Water Pty Ltd (Administrators Appointed) (the Company)

ACN 163 432 906

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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,483.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $4,996.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

5

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

6 The Company be wound up

7 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

8 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

9

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

10

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Pitt Town Water Pty Ltd (Administrators Appointed) (the Company)

ACN 141 705 660

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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,430.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $4,996.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

5

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

6 The Company be wound up

7 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

8 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

9

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

10

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Wyee Water Pty Ltd (Administrators Appointed) (the Company)

ACN 160 953 775

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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,448.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $4,996.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

5

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

6 The Company be wound up

7 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

8 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

9

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

10

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Flow Systems Operations Pty Ltd (Administrators Appointed) (the Company)

ACN 603 106 305 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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,711.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $4,996.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

5

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

6 The Company be wound up

7 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

8 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

9

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

10

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Loxford Development Holdings Pty Ltd (Administrators Appointed) (the Company)

ACN 627 353 191

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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $2,994.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the Administration concludes, is fixed and approved to a maximum cap of $2,500.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4 The Company be wound up

5 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

6 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

7

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

8

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Loxford Waters Pty Ltd (Administrators Appointed) (the Company)

ACN 627 354 867

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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $2,786.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the Administration concludes, is fixed and approved to a maximum cap of $2,500.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4 The Company be wound up

5 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

6 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

7

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

8

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

IDI Loxford Pty Ltd (Administrators Appointed) (the Company)

ACN 627 354 803

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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $2,642.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the Administration concludes, is fixed and approved to a maximum cap of $2,500.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4 The Company be wound up

5 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

6 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

7

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

8

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Inneholde Pty Ltd (Administrators Appointed) (the Company)

ACN 627 354 394

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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $4,088.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the Administration concludes, is fixed and approved to a maximum cap of $2,500.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4 The Company be wound up

5 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

6 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

7

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

8

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Buskas Holdings Pty Ltd (Administrators Appointed) (the Company)

ACN 627 354 714

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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $1,958.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the Administration concludes, is fixed and approved to a maximum cap of $2,500.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4 The Company be wound up

5 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

6 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

7

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

8

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

Insolvency Practice Rules (Corporations) 2016 Section 75-25

FORM 532

APPOINTMENT OF PROXY

Loxford Energy Pty Ltd (Administrators Appointed) (the Company)

ACN 627 353 575

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 25 February 2019 at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000 at 12:30 PM or at any adjournment of that meeting. B. Voting directions

Option 1: ☐ 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)

and/or

Option 2: ☐ 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

1

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $2,392.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

☐ ☐ ☐

2

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the Administration concludes, is fixed and approved to a maximum cap of $2,500.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

3

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

☐ ☐ ☐

4 The Company be wound up

5 The Company to execute a Deed of Company Arrangement ☐ ☐ ☐

6 The Administration should end (and control revert back to the Company directors(s)

☐ ☐ ☐

If creditors resolve to wind up the Company:

7

(if applicable)

If the Company is wound up, that a Committee of Inspection be formed comprising representatives as nominated at the meeting of creditors

☐ ☐ ☐

8

(if applicable)

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 ………………………………………………………. Print name

Dated this day of February 2019

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: _________________________________

90

Appendix C – Remuneration reports dated 15 February 2019

Remuneration Approval Report

Flow Systems Pty Ltd (Administrators Appointed) ACN 136 272 298 (the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration, the deed administration, the creditors trust, or liquidation as appropriate.

Dated this 15th day of February 2019 Philip Carter and Christopher Hill Administrators

2. Executive summary

The total remuneration for this appointment is estimated to be $1,307,164.50 (exclusive of

GST) if the Deed is approved or $1,207,164.50 (exclusive of GST) in a liquidation. We note

that the Deed / Creditors Trust and a liquidation are mutually exclusive outcomes in an

administration.

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $907,164.50

Resolution 2: 8 February 2019 to execution of the Deed of Company Arrangement and the end of the Administration*

B2 $200,000.00

Total $1,107,164.50

Deed of Company Arrangement

Resolution 3: Commencement of DOCA to completion (effectuation)* B3 $100,000.00

Creditors’ Trust

Resolution 4: Commencement of Creditors’ Trust to finalisation* B4 $100,000.00

Liquidation

Resolution 5: Commencement to completion* B5 $100,000.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration, deed administration, creditors trust or liquidation (as appropriate). Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors.

3. Remuneration

3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $907,164.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $200,000.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 – Deed Administration

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $100,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 4 – Creditors’ Trust

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $100,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 5 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $100,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of the administration, deed administration, creditors trust or liquidation (as appropriate) 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 of 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 Schedule A1 to A5 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B5 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Deed Administration / Creditors Trust / 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 Deed Administration / Creditors Trust / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Deed Administrators/ Trustees / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Deed Administrators/ Creditors Trust / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

The proposed Deed sets up a separate fund to pay the Administrators / Deed Administrators / Trustees costs from the fund set up to pay creditors.

Participating unsecured creditors of all Deed Companies will have a right to prove for their entitlement in the Creditors Trust and will establish the quantum of their claim via a POD exercise. Given the expected quantum of claims and the known contribution value of the fund ($2.76m), we estimate the dividend to participating unsecured creditors to be approximately 60 cents in the dollar.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments

The summary of receipts and payments for the period from 20 December 2018 to 8 February 2019 is contained in Appendix C.

6. Queries

Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Flow Systems Pty Ltd (Administrators Appointed) ACN 136 272 298 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 164.3 118,296.00 21.50 15,480.00 26.00 18,720.00 6.00 4,320.00 81.30 58,536.00 - - 29.50 21,240.00

Chris Hill Appointee 720 106.9 76,968.00 55.70 40,104.00 23.30 16,776.00 0.50 360.00 12.40 8,928.00 5.80 4,176.00 9.20 6,624.00

Lachy Haynes Partner 720 7.5 5,400.00 7.50 5,400.00 - - - - - - - - - -

Sunil Purba Director 625 75.5 47,187.50 - - - - - - 33.30 20,812.50 17.90 11,187.50 24.30 15,187.50

Danny Touma Director 625 73.2 45,750.00 73.20 45,750.00 - - - - - - - - - -

Shane Ugo Senior Manager 560 196.9 110,264.00 4.30 2,408.00 20.20 11,312.00 - - 158.80 88,928.00 - - 13.60 7,616.00

Katie Pearce Senior Manager 560 73.8 41,328.00 73.80 41,328.00 - - - - - - - - - -

Amy Gelevski Manager 510 260.9 133,059.00 109.20 55,692.00 57.00 29,070.00 5.00 2,550.00 26.70 13,617.00 44.10 22,491.00 18.90 9,639.00

Tim Evans Manager 510 203.3 103,683.00 4.80 2,448.00 64.50 32,895.00 5.10 2,601.00 92.90 47,379.00 29.00 14,790.00 7.00 3,570.00

Andrew Bull Manager 510 30.2 15,402.00 1.90 969.00 8.20 4,182.00 1.70 867.00 8.60 4,386.00 - - 9.80 4,998.00

Brendan Flaherty Consultant 350 199.9 69,965.00 4.00 1,400.00 80.30 28,105.00 15.60 5,460.00 78.10 27,335.00 - - 21.90 7,665.00

Michelle Budiarso Senior Consultant 425 128.2 54,485.00 2.90 1,232.50 60.50 25,712.50 - - 53.40 22,695.00 6.30 2,677.50 5.10 2,167.50

Alessandro Chirico Consultant 350 105.6 36,960.00 105.60 36,960.00 - - - - - - - - - -

Christopher Davies IT Senior Manager 560 11.0 6,160.00 - - - - - - - - 11.00 6,160.00 - -

Bevan Forbes IT Manager 510 22.0 11,220.00 - - - - - - - - 22.00 11,220.00 - -

Tomas Marijanovic IT Consultant 350 33.7 11,795.00 - - - - - - - - 33.70 11,795.00 - -

Specialist 180 66.6 11,988.00 54.80 9,864.00 9.00 1,620.00 - - - - - - 2.80 504.00

Administration Support 180 40.3 7,254.00 - - - - - - 4.90 882.00 - - 35.40 6,372.00

Total 1,799.8 907,164.50 519.2 259,035.50 349.0 168,392.50 33.9 16,158.00 550.4 293,498.50 169.8 84,497.00 177.5 85,583.00

GST 90,716.45

997,880.95

504.04 498.91 482.50 476.64 533.25 497.63 482.16

Total (Including GST)

Average rate (excluding GST)

Assets Creditors Trade-on AdministrationEmployees Investigations

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Flow Systems Pty Ltd (Administrators Appointed) ACN 136 272 298 Calculation of Remuneration

Resolution 2 – Administration for the period 8 February 2019 to the date the DOCA is executed and the Administration concludes

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 35.0 25,200.00 9.00 6,480.00 6.00 4,320.00 8.00 5,760.00 2.00 1,440.00 10.00 7,200.00

Chris Hill Appointee 720 40.0 28,800.00 12.00 8,640.00 4.00 2,880.00 10.00 7,200.00 2.00 1,440.00 12.00 8,640.00

Sunil Purba Director 625 3.0 1,875.00 - - - - 3.00 1,875.00 - - - -

Shane Ugo Senior Manager 560 42.5 23,800.00 34.50 19,320.00 - - 8.00 4,480.00 - - - -

Amy Gelevski Manager 510 75.2 38,352.00 59.00 30,090.00 2.70 1,377.00 11.40 5,814.00 2.10 1,071.00 - -

Tim Evans Manager 510 68.0 34,680.00 48.00 24,480.00 3.00 1,530.00 13.00 6,630.00 4.00 2,040.00 - -

Michelle Budiarso Senior Consultant 425 60.5 25,712.50 45.00 19,125.00 - - 6.00 2,550.00 6.00 2,550.00 3.50 1,487.50

Fleur Combridge Consultant 350 11.0 3,850.00 2.00 700.00 - - 2.00 700.00 2.00 700.00 5.00 1,750.00

Brendan Flaherty Consultant 350 35.6 12,474.50 7.00 2,450.00 2.64 924.50 16.50 5,775.00 - - 9.50 3,325.00

- -

Specialist 180 22.2 3,996.00 9.20 1,656.00 - - 9.00 1,620.00 - - 4.00 720.00

Administration Support 180 7.0 1,260.00 - - - - - - - - 7.00 1,260.00

Total 400.0 200,000.00 225.7 112,941.0 18.3 11,031.50 86.9 42,404.00 18.1 9,241.00 51.0 24,382.50

GST 20,000.00

220,000.00

499.95 500.40 601.45 487.96 510.55 478.09

Trade-on Investigations Administration

Total (Including GST)

Average rate (excluding GST)

Creditors Employees

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Flow Systems Pty Ltd (Administrators Appointed) ACN 136 272 298 Calculation of Remuneration Resolution 3 – Deed Administrator for the period from execution of DOCA to finalisation (effectuation) of the DOCA

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 20.0 14,400.00 10.0 7,200.00 4.0 2,880.00 6.00 4,320.00

Chris Hill Appointee 720 28.0 20,160.00 10.0 7,200.00 6.0 4,320.00 12.00 8,640.00

Sunil Purba Director 625 21.0 13,125.00 15.0 9,375.00 - - 6.00 3,750.00

Shane Ugo Senior Manager 560 14.0 7,840.00 - - 7.0 3,920.00 7.00 3,920.00

Amy Gelevski Manager 510 56.0 28,560.00 35.0 17,850.00 12.0 6,120.00 9.00 4,590.00

Michelle Budiarso Senior Consultant 425 16.1 6,851.00 - - 4.0 1,700.00 12.12 5,151.00

Brendan Flaherty Consultant 350 20.0 7,000.00 - - 6.0 2,100.00 14.00 4,900.00

- - - - - - -

Specialist 180 6.0 1,080.00 - - - - 6.00 1,080.00

Administration Support 180 6.0 1,080.00 - - - - 6.00 1,080.00

Total 187.1 100,000.00 70.0 41,625.00 39.0 21,040.00 78.1 37,431.00

GST 10,000.00

110,000.00

534.42 594.64 539.49 479.15

Administration

Total (Including GST)

Average rate (excluding GST)

Assets Creditors

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A4

Flow Systems Pty Ltd (Administrators Appointed) ACN 136 272 298 Calculation of Remuneration

Resolution 4 – Creditors Trust for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 15.0 10,800.00 10.0 7,200.00 5.0 3,600.00

Chris Hill Appointee 720 15.0 10,800.00 10.0 7,200.00 5.0 3,600.00

Sunil Purba Director 625 18.0 11,250.00 10.0 6,250.00 8.0 5,000.00

Shane Ugo Senior Manager 560 16.0 8,960.00 10.0 5,600.00 6.0 3,360.00

Amy Gelevski Manager 510 19.8 10,109.70 10.0 5,100.00 9.8 5,009.70

Michelle Budiarso Senior Consultant 425 40.0 17,000.00 20.0 8,500.00 20.0 8,500.00

Brendan Flaherty Consultant 350 78.0 27,300.00 43.0 15,050.00 35.0 12,250.00

- - - - - -

Specialist 180 8.0 1,440.00 - 8.0 1,440.00

Administration

Support 180 13.0 2,340.30 - 13.0 2,340.30

Total 222.8 100,000.00 113.0 54,900.00 109.8 45,100.00

GST 10,000.00

110,000.00

448.78 485.84 410.65

Dividend Administration

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A5

Flow Systems Pty Ltd (Administrators Appointed) ACN 136 272 298 Calculation of Remuneration

Resolution 5 – Liquidation for the period 25 February 2019 to the conclusion of the Liquidation Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 25.0 18,000.00 8.0 5,760.00 7.0 5,040.00 4.00 2,880.00 4.00 2,880.00 2.00 1,440.00

Chris Hill Appointee 720 34.0 24,480.00 12.0 8,640.00 11.0 7,920.00 6.00 4,320.00 2.00 1,440.00 3.00 2,160.00

Sunil Purba Director 625 6.0 3,750.00 4.0 2,500.00 - - - - 2.00 1,250.00 - -

Shane Ugo Senior Manager 560 11.0 6,160.00 8.0 4,480.00 3.0 1,680.00 - - - - - -

Amy Gelevski Manager 510 51.0 26,010.00 10.0 5,100.00 12.0 6,120.00 - - 23.00 11,730.00 6.00 3,060.00

Michelle Budiarso Senior Consultant 425 13.0 5,525.00 - - - - - 7.00 2,975.00 6.00 2,550.00

Brendan Flaherty Consultant 350 44.0 15,400.00 28.0 9,800.00 - - 3.00 1,050.00 13.00 4,550.00 - -

- - - - - - -

Specialist 180 - - - - - - - -

Administration Support 180 3.8 675.00 - - - - - 3.75 675.00

Total 187.8 100,000.00 70.0 36,280.00 33.0 20,760.00 13.00 8,250.00 51.00 24,825.00 20.75 9,885.00

GST 10,000.00

110,000.00

532.62 518.29 629.09 634.62 486.76 476.39

Investigations Administration

Total (Including GST)

Average rate (excluding GST)

Assets Creditors Employees

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Assets

519.0 hours

$259,035.50

Sale of Business as a Going Concern

Preparing an information memorandum

Reviewing sale information and documentation

Liaising with purchasers and employees

Internal meetings to discuss/review offers received

Attendance at external meetings

Plant and Equipment Reviewing asset listings

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

349.0 hours

$168,392.50

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Retention of Title Claims Search the PPSA register

Notify PMSI creditors identified from PPSA register

Receive initial notification of creditors’ intention to claim

Provision of retention of title claim form to creditors

Receive completed retention of title claim forms

Meeting claimants on site to identify goods

Adjudicate retention of title claims

Forward correspondence to claimants notifying outcome of adjudication

Preparation of payment vouchers to satisfy valid claims

Preparation of correspondence to claimants to accompany payment of claims

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Responding to stakeholder queries and questions immediately following meeting

Employees

33.9 hours

$16,158.00

Employees enquiries

Receive and follow up employee enquiries via telephone

Maintain employee enquiry files

Review and prepare correspondence to employees and their representatives via facsimile, email and post

Preparation of letters to employees advising of their entitlements

Receive and prepare correspondence in response to employees objections to leave entitlements

Calculation of entitlements

Calculating employee entitlements

Reviewing company’s books and records

Reconciling superannuation accounts

Workers compensation claims

Review insurance policies

Receipt of claim

Liaising with claimant

Liaising with insurers and solicitors regarding claims

Identification of potential issues requiring attention of insurance specialists

Other employee issues Correspondence with Child Support

Correspondence with Centrelink

Trade On

550.4 hours

$293,498.50

Trade On Management Liaising with suppliers

Liaising with management and staff

Liaising with regulators

Attendance on site

Authorising purchase orders

Maintaining purchase order registry

Monitoring trading performance

Reviewing daily/weekly performance reports

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with OSR regarding payroll tax issues

Processing receipts and payments

Entering receipts and payments into accounting system

Review supplier reconciliations

Correspondence with employees regarding supplier pay run

Budgeting and financial reporting

Reviewing company’s budgets and financial statements

Preparing financial reports

Meetings with management and staff to discuss

Task Area General Description Includes

trading position

Investigation

169.8 hours

$84,497.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Administration

177.5 hours

$85,583.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC form 505

Lodging ASIC form 507

Liaising with directors for extensions of form 507

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the DOCA is executed or the Administration concludes

Task Area General Description Includes

Creditors

225.7 hours

$112,941.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Retention of Title Claims Adjudicate retention of title claims

Forward correspondence to claimants notifying outcome of adjudication

Preparation of payment vouchers to satisfy valid claims

Preparation of correspondence to claimants to accompany payment of claims

Secured creditor reporting

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor queries

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Employees

18.3 hours

$11,031.50

Employees enquiries

Receive and follow up employee enquiries via telephone

Maintain employee enquiry files

Review and prepare correspondence to employees and their representatives via facsimile, email and post

Preparation of letters to employees advising of their entitlements

Receive and prepare correspondence in response to employees objections to leave entitlements

Calculation of entitlements

Calculating employee entitlements

Reviewing company’s books and records

Reconciling superannuation accounts

Other employee issues Correspondence with Child Support

Correspondence with Centrelink

Trade On

86.9 hours

$42,404.00

Trade On Management Liaising with suppliers

Liaising with management and staff

Liaising with regulators

Attendance on site

Authorising purchase orders

Maintaining purchase order registry

Monitoring trading performance

Reviewing daily/weekly performance reports

Preparing and authorising receipt vouchers

Task Area General Description Includes

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Processing receipts and payments

Entering receipts and payments into accounting system

Review supplier reconciliations

Correspondence with employees regarding supplier pay run

Budgeting and financial reporting

Reviewing company’s budgets and financial statements

Preparing financial reports

Meetings with management and staff to discuss trading position

Investigation

18.1 hours

$9,241.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Administration

51.0 hours

$24,382.50

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC form 505

Lodging ASIC form 507

Liaising with directors for extensions of form 507

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Task Area General Description Includes

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period from the execution of DOCA to finalisation (effectuation) of the DOCA

Task Area General Description Includes

Assets

70.0 hours

$41,624.00

Sale of Business as a Going Concern

Finalising sale

Creditors

39.0 hours

$21,040.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Administration

78.1 hours

$37,431.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Liaising with regulators

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Deed administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B4

Resolution 4

The below table provides a description of the work undertaken in each major task area for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Task Area General Description Includes

Dividend

113.0 hours

$54,900.00

Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD

Receipt of POD

Maintain POD register

Adjudicating POD

Request further information from claimants regarding POD

Preparation of correspondence to claimant advising outcome of adjudication

Dividend procedures Preparation of correspondence to creditors advising of intention to declare dividend

Advertisement of intention to declare dividend

Obtain clearance from ATO to allow distribution of company’s assets

Preparation of dividend calculation

Preparation of correspondence to creditors announcing declaration of dividend

Advertise announcement of dividend

Preparation of distribution

Preparation of dividend file

Preparation of payment vouchers to pay dividend

Preparation of correspondence to creditors enclosing payment of dividend

Administration

109.8 hours

$45,100.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC form 505

Lodging ASIC form 507

Liaising with directors for extensions of form 507

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of the Trust

Books and records / storage

Dealing with records in storage

Sending job files to storage

Task Area General Description Includes

Processing receipts and payments

Entering receipts and payments into accounting system

Schedule B5

Resolution 5

The below table provides a description of the work undertaken in each major task area for the period 25 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Assets

70.0 hours

$36,280.00

Plant and Equipment Assessing ability to sell assets and conducting a Short term sale to realise assets

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

33.0 hours

$20,760.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing section 439A report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Employees

13.0 hours

$8,250.00

Employees enquiries

Receive and follow up employee enquiries via telephone

Maintain employee enquiry files

Review and prepare correspondence to employees and their representatives via facsimile, email and post

Preparation of letters to employees advising of their entitlements

Receive and prepare correspondence in response to employees objections to leave entitlements

Calculation of entitlements

Calculating employee entitlements

Reviewing company’s books and records

Reconciling superannuation accounts

Employee dividend Correspondence with employees regarding dividend

Correspondence with ATO regarding SGC proof of debt

Calculating dividend rate

Preparing dividend file

Advertising dividend notice

Preparing distribution

Receipting POD

Task Area General Description Includes

Adjudicating POD

Ensuring PAYG is remitted to ATO

Investigation

51.0 hours

$24,825.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Administration

20.8 hours

$9,885.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Liaising with regulators

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of Liquidation

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Appendix C - Summary of receipts and payments

Flow Systems Pty Ltd (Administrators Appointed) Summary of Receipts and Payments For the period 20 December 2018 to 8 February 2019

Receipts Amount ($)

Cash at bank at appointment 674,639

Trading Revenue 64,510

Debtor Receipts 460,111

Customer Receipts 716,707

EAWH Funding 1,000,000

Intercompany Loan 730,000

Interest Income 695

Total receipts 3,646,662

Payments Amount ($)

Trading Expenses (2,375,031)

Payroll Expenses (583,607)

Sales Costs (6,000)

EAWH Funding Transfer (432,544)

Bank Charges (7,237)

Total payments (3,404,419)

Net receipts/(payments) 242,243

Remuneration Approval Report

Flow Systems Constructors Pty Ltd (Administrators Appointed) ACN 605 967 280

(the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration, the deed administration, the creditors trust, or liquidation as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary

The total remuneration for this appointment is estimated to be $283,680.00 (exclusive of

GST) if the Deed is approved or $243,680.00 (exclusive of GST) in a liquidation. We note

that the Deed / Creditors Trust and a liquidation are mutually exclusive outcomes in an

administration.

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $103,680.00

Resolution 2: 8 February 2019 to execution of the Deed of Company Arrangement and the end of the Administration*

B2 $100,000.00

Total $203,680.00

Deed of Company Arrangement

Resolution 3: Commencement of DOCA to completion (effectuation)* B3 $40,000.00

Creditors’ Trust

Resolution 4: Commencement of Creditors’ Trust to finalisation* B4 $40,000.00

Liquidation

Resolution 5: Commencement to completion* B5 $40,000.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration, deed administration, creditors trust or liquidation (as appropriate). Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors.

3. Remuneration

3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $103,680.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $100,000.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 – Deed Administration

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $40,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 4 – Creditors’ Trust

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $40,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 5 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $40,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of the administration, deed administration, creditors trust or liquidation (as appropriate) 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 of 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 Schedule A1 to A5 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B5 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Deed Administration / Creditors Trust / 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 Deed Administration / Creditors Trust / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Deed Administrators/ Trustees / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Deed Administrators/ Creditors Trust / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

The proposed Deed sets up a separate fund to pay the Administrators / Deed Administrators / Trustees costs from the fund set up to pay creditors.

Participating unsecured creditors of all Deed Companies will have a right to prove for their entitlement in the Creditors Trust and will establish the quantum of their claim via a POD exercise. Given the expected quantum of claims and the known contribution value of the fund ($2.76m), we estimate the dividend to participating unsecured creditors to be approximately 60 cents in the dollar.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments

The summary of receipts and payments for the period from 20 December 2018 to 8 February 2019 is contained in Appendix C.

6. Queries

Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Flow Systems Constructors Pty Ltd (Administrators Appointed) ACN 605 967 280 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total

Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.5 1,080.0 - - - - - - - - 1.5 1,080.00

Lachy Haynes Partner 720 4.9 3,528.00 4.9 3,528.00 - - - - - - - -

Danny Touma Director 625 24.4 15,250.0 24.4 15,250.00 - - - - - - - -

Shane Ugo Senior Manager 560 59.7 33,432.0 - - - - 59.7 33,432.00 - - - -

Katie Pearce Senior Manager 560 24.6 13,776.00 24.6 13,776.00 - - - - - - - -

Tim Evans Manager 510 4.8 2,448.0 - - 1.2 612.00 0.3 153.00 3.3 1,683.00 - -

Brendan Flaherty Consultant 350 2.7 945.0 - - - - - - - - 2.7 945.00

Shakib Parvez Consultant 350 46.5 16,275.0 - - 46.5 16,275.00 - - - - - -

Alessandro Chirico Consultant 350 35.2 12,320.0 35.2 12,320.00 - - - - - - - -

Specialist 180 19.7 3,546.00 19.7 3,546.00 - - - - - - - -

Administration Support 180 6.0 1,080.0 - - - - 0.7 126.00 - - 5.3 954.00

Total 230.0 103,680.00 108.8 48,420.00 47.7 16,887.00 60.7 33,711.00 3.3 1,683.00 9.5 2,979.00

GST 10,368.00

114,048.00

450.78 445.04 354.03 555.37 510.00 313.58

Trade-on Investigations Administration

Total (Including GST)

Average rate (excluding GST)

Assets Creditors

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Flow Systems Constructors Pty Ltd (Administrators Appointed) ACN 605 967 280 Calculation of Remuneration Resolution 2 – Administration for the period 8 February 2019 to the date the DOCA is executed and the Administration concludes

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 23.0 16,560.00 9.00 6,480.00 2.00 1,440.00 8.00 5,760.00 1.00 720.00 3.00 2,160.00

Chris Hill Appointee 720 19.0 13,680.00 4.00 2,880.00 3.00 2,160.00 10.00 7,200.00 1.00 720.00 1.00 720.00

Shane Ugo Senior Manager 560 16.0 8,960.00 8.00 4,480.00 - - 8.00 4,480.00 - - - -

Amy Gelevski Manager 510 30.2 15,395.00 17.69 9,020.00 1.00 510.00 9.40 4,794.00 2.10 1,071.00 - -

Tim Evans Manager 510 21.0 10,710.00 10.00 5,100.00 3.00 1,530.00 6.00 3,060.00 2.00 1,020.00 - -

Andrew Bull Manager 510 12.7 6,477.00 8.00 4,080.00 1.70 867.00 3.00 1,530.00 - - - -

Michelle Budiarso Senior Consultant 425 25.5 10,837.50 10.00 4,250.00 - - 6.00 2,550.00 6.00 2,550.00 3.50 1,487.50

Brendan Flaherty Consultant 350 23.6 8,274.50 7.00 2,450.00 2.64 924.50 8.00 2,800.00 - - 6.00 2,100.00

Fleur Combridge Consultant 350 11.0 3,850.00 2.00 700.00 - - 2.00 700.00 2.00 700.00 5.00 1,750.00

Specialist 180 22.2 3,996.00 9.20 1,656.00 - - 9.00 1,620.00 - - 4.00 720.00

Administration Support 180 7.0 1,260.00 - - - - - - - - 7.00 1,260.00

Total 211.2 100,000.00 84.9 41,096.00 13.3 7,431.50 69.4 34,494.00 14.1 6,781.00 29.5 10,197.50

GST 10,000.00

110,000.00

473.42 484.13 557.02 497.03 480.92 345.68

Trade-on Investigations Administration

Total (Including GST)

Average rate (excluding GST)

Creditors Employees

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Flow Systems Constructors Pty Ltd (Administrators Appointed) ACN 605 967 280 Calculation of Remuneration Resolution 3 – Deed Administrator for the period from execution of DOCA to finalisation (effectuation) of the DOCA

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 7.0 5,040.00 3.0 2,160.00 2.0 1,440.00 2.0 1,440.00

Chris Hill Appointee 720 10.0 7,200.00 6.0 4,320.00 2.0 1,440.00 2.0 1,440.00

Sunil Purba Director 625 7.5 4,687.50 2.0 1,250.00 4.0 2,500.00 1.5 937.50

Shane Ugo Senior Manager 560 8.0 4,480.00 - - 6.0 3,360.00 2.0 1,120.00

Amy Gelevski Manager 510 14.0 7,140.00 10.0 5,100.00 2.0 1,020.00 2.0 1,020.00

Michelle Budiarso Senior Consultant 425 9.6 4,072.50 - - 6.0 2,550.00 3.6 1,522.50

Brendan Flaherty Consultant 350 18.0 6,300.00 - - 12.0 4,200.00 6.0 2,100.00

Specialist 180 3.0 540.00 3.0 540.00 - - - -

Administration

Support 180 3.0 540.00 - - - - 3.0 540.00

Total 80.1 40,000.00 24.00 13,370.00 34.0 16,510.00 22.1 10,120.00

GST 4,000.00

44,000.00

499.49 557.08 485.59 458.28

AdministrationAssets Creditors

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A4

Flow Systems Constructors Pty Ltd (Administrators Appointed) ACN 605 967 280 Calculation of Remuneration Resolution 4 – Creditors Trust for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 8.0 5,760.00 1.0 720.00 4.0 2,880.00 3.0 2,160.00

Chris Hill Appointee 720 7.0 5,040.00 1.0 720.00 3.0 2,160.00 3.0 2,160.00

Sunil Purba Director 625 6.0 3,750.00 - - 3.0 1,875.00 3.0 1,875.00

Shane Ugo Senior Manager 560 8.0 4,480.00 5.0 2,800.00 - - 3.0 1,680.00

Amy Gelevski Manager 510 5.0 2,550.00 - - 2.0 1,020.00 3.0 1,530.00

Michelle Budiarso Senior Consultant 425 11.0 4,675.00 3.0 1,275.00 2.0 850.00 6.0 2,550.00

Brendan Flaherty Consultant 350 34.1 11,945.00 6.0 2,100.00 13.0 4,550.00 15.1 5,295.00

Specialist 180 7.0 1,260.00 3.0 540.00 4.0 720.00 - -

Administration

Support 180 3.0 540.00 - - - - 3.0 540.00

Total 89.1 40,000.00 19.0 8,155.00 31.0 14,055.00 39.1 17,790.00

GST 4,000.00

44,000.00

448.79 429.21 453.39 454.65

AdministrationEmployees Dividends

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A5

Flow Systems Constructors Pty Ltd (Administrators Appointed) ACN 605 967 280 Calculation of Remuneration Resolution 5 – Liquidation for the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 11.0 7,920.00 4.00 2,880.00 2.0 1,440.00 4.0 2,880.00 1.0 720.00

Chris Hill Appointee 720 17.0 12,240.00 6.00 4,320.00 4.0 2,880.00 6.0 4,320.00 1.0 720.00

Sunil Purba Director 625 2.0 1,250.00 2.00 1,250.00 - - - - - -

Shane Ugo Senior Manager 560 5.0 2,800.00 5.00 2,800.00 - - - - - -

Amy Gelevski Manager 510 17.0 8,670.00 4.00 2,040.00 6.0 3,060.00 5.0 2,550.00 2.0 1,020.00

Michelle Budiarso Senior Consultant 425 6.0 2,550.00 - - 3.0 1,275.00 3.0 1,275.00 - -

Brendan Flaherty Consultant 350 11.5 4,030.00 - - 1.5 530.00 8.0 2,800.00 2.0 700.00

Specialist 180 - - - - - - - - - -

Administration

Support 180 3.0 540.00 - - - - - - 3.0 540.00

Total 72.5 40,000.00 21.00 13,290.00 16.5 9,185.00 26.0 13,825.00 9.0 3,700.00

GST 4,000.00

44,000.00

551.62 632.86 556.19 531.73 411.11

AdministrationAssets Creditors Investigations

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Assets

108.8 hours

$48,420.00

Sale of Business as a Going Concern

Preparing an information memorandum

Reviewing sale information and documentation

Liaising with purchasers and employees

Internal meetings to discuss/review offers received

Attendance at external meetings

Plant and Equipment Reviewing asset listings

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

47.7 hours

$16,887.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Retention of Title Claims Search the PPSA register

Notify PMSI creditors identified from PPSA register

Receive initial notification of creditors’ intention to claim

Provision of retention of title claim form to creditors

Receive completed retention of title claim forms

Meeting claimants on site to identify goods

Adjudicate retention of title claims

Forward correspondence to claimants notifying outcome of adjudication

Preparation of payment vouchers to satisfy valid claims

Preparation of correspondence to claimants to accompany payment of claims

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD

Task Area General Description Includes

when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Responding to stakeholder queries and questions immediately following meeting

Trade On

60.7 hours

$33,711.00

Trade On Management Liaising with suppliers

Liaising with management and staff

Attendance on site

Authorising purchase orders

Maintaining purchase order registry

Monitoring trading performance

Reviewing daily/weekly performance reports

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with OSR regarding payroll tax issues

Processing receipts and payments

Entering receipts and payments into accounting system

Review supplier reconciliations

Correspondence with employees regarding supplier pay run

Budgeting and financial reporting

Reviewing company’s budgets and financial statements

Preparing financial reports

Meetings with management and staff to discuss trading position

Investigation

3.3 hours

$1,683.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Task Area General Description Includes

Administration

9.2 hours

$2,979.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the DOCA is executed and the Administration ends

Task Area General Description Includes

Creditors

84.9 hours

$41,096.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Retention of Title Claims Adjudicate retention of title claims

Forward correspondence to claimants notifying outcome of adjudication

Preparation of payment vouchers to satisfy valid claims

Preparation of correspondence to claimants to accompany payment of claims

Secured creditor reporting

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor queries

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Employees

13.3 hours

$7,431.50

Employees enquiries

Receive and follow up employee enquiries via telephone

Maintain employee enquiry files

Review and prepare correspondence to employees and their representatives via facsimile, email and post

Preparation of letters to employees advising of their entitlements

Receive and prepare correspondence in response to employees objections to leave entitlements

Calculation of entitlements

Calculating employee entitlements

Reviewing company’s books and records

Reconciling superannuation accounts

Other employee issues Correspondence with Child Support

Correspondence with Centrelink

Trade On

69.4 hours

$34,494.00

Trade On Management Liaising with suppliers

Liaising with management and staff

Attendance on site

Authorising purchase orders

Maintaining purchase order registry

Monitoring trading performance

Reviewing daily/weekly performance reports

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Task Area General Description Includes

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Processing receipts and payments

Entering receipts and payments into accounting system

Review supplier reconciliations

Correspondence with employees regarding supplier pay run

Budgeting and financial reporting

Reviewing company’s budgets and financial statements

Preparing financial reports

Meetings with management and staff to discuss trading position

Investigation

14.1 hours

$6,781.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Administration

29.5 hours

$10,197.50

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / Dealing with records in storage

Task Area General Description Includes

storage Sending job files to storage

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period from execution of DOCA to finalisation (effectuation) of the DOCA

Task Area General Description Includes

Assets

24.0 hours

$13,370.00

Sale of Business as a Going Concern

Finalising sale

Plant and Equipment Dealing with assets in accordance with the Deed

Assets subject to specific charges

All tasks associated with dealing with a charged asset

Other Assets Tasks associated with dealing with other assets

Leasing Liaising with owners/lessors

Creditors

34.0 hours

$16,510.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Administration

22.1 hours

$10,120.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Deed administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B4

Resolution 4

The below table provides a description of the work undertaken in each major task area for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Task Area General Description Includes

Employees

19.0 hours

$8,155.00

Employees enquiries

Receive and follow up employee enquiries via telephone

Maintain employee enquiry files

Review and prepare correspondence to employees and their representatives via facsimile, email and post

Preparation of letters to employees advising of their entitlements

Receive and prepare correspondence in response to employees objections to leave entitlements

Calculation of entitlements

Calculating employee entitlements

Reviewing company’s books and records

Reconciling superannuation accounts

Other employee issues Correspondence with Child Support

Correspondence with Centrelink

Dividend

31.0 hours

$14,055.00

Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD

Receipt of POD

Maintain POD register

Adjudicating POD

Request further information from claimants regarding POD

Preparation of correspondence to claimant advising outcome of adjudication

Dividend procedures Preparation of correspondence to creditors advising of intention to declare dividend

Advertisement of intention to declare dividend

Obtain clearance from ATO to allow distribution of company’s assets

Preparation of dividend calculation

Preparation of correspondence to creditors announcing declaration of dividend

Advertise announcement of dividend

Preparation of distribution

Preparation of dividend file

Preparation of payment vouchers to pay dividend

Preparation of correspondence to creditors enclosing payment of dividend

Task Area General Description Includes

Administration

39.1 hours

$17,790.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of the Trust

Books and records / storage

Dealing with records in storage

Sending job files to storage

Processing receipts and payments

Entering receipts and payments into accounting system

Schedule B5

Resolution 5

The below table provides a description of the work undertaken in each major task area for the period 25 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Assets

21.0 hours

$13,290.00

Plant and Equipment Assessing ability to sell assets and conducting a Short term sale to realise assets

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

16.5 hours

$9,185.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing section 439A report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation

26.0 hours

$13,825.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Administration

9.0 hours

$3,700.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Liquidation

Books and records / storage

Dealing with records in storage

Sending job files to storage

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Appendix C - Summary of receipts and payments

Flow Systems Constructors Pty Ltd (Administrators Appointed)

Summary of Receipts and Payments For the period 20 December 2018 to 8 February 2019

Receipts Amount ($)

Cash at bank at appointment 64,994

EAWH Funding 432,544

Interest Income 8

Total receipts 497,547

Payments Trading Expense (401,218)

Payroll Expense (90,856)

Total payments (492,073)

Net receipts/(payments) 5,474

Remuneration Approval Report

Flow Systems Operations Pty Ltd (Administrators Appointed) ACN 603 106 305

(the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration, the deed administration, the creditors trust, or liquidation as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary

The total remuneration for this appointment is estimated to be $31,707.50 (exclusive of GST)

if the Deed is approved or $21,707.50 (exclusive of GST) in a liquidation. We note that the

Deed / Creditors Trust and a liquidation are mutually exclusive outcomes in an

administration.

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $6,711.50

Resolution 2: 8 February 2019 to execution of the Deed of Company Arrangement and the end of the Administration*

B2 $4,996.00

Total $11,707.50

Deed of Company Arrangement

Resolution 4: Commencement of Creditors’ Trust to finalisation* B3 $10,000.00

Creditors’ Trust

Resolution 4: Commencement of Creditors’ Trust to finalisation (effectuation)*

B4 $10,000.00

Liquidation

Resolution 5: Commencement to completion* B5 $10,000.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration, deed administration, creditors trust or liquidation (as appropriate). Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors.

3. Remuneration

3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,711.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $4,996.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 – Deed Administration

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 4 – Creditors’ Trust

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 5 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of the administration, deed administration, creditors trust or liquidation (as appropriate) 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 of 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 Schedule A1 to A5 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B5 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Deed Administration / Creditors Trust / 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 Deed Administration / Creditors Trust / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Deed Administrators/ Trustees / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Deed Administrators/ Creditors Trust / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

The proposed Deed sets up a separate fund to pay the Administrators / Deed Administrators / Trustees costs from the fund set up to pay creditors.

Participating unsecured creditors of all Deed Companies will have a right to prove for their entitlement in the Creditors Trust and will establish the quantum of their claim via a POD exercise. Given the expected quantum of claims and the known contribution value of the fund ($2.76m), we estimate the dividend to participating unsecured creditors to be approximately 60 cents in the dollar.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments

The summary of receipts and payments for the period from 20 December 2018 to 8 February 2019 is contained in Appendix C.

6. Queries

Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Flow Systems Operations Pty Ltd (Administrators Appointed) ACN 603 106 305 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Lachy Haynes Partner 720 0.3 216.0 0.3 216.00 - - - -

Danny Touma Director 625 3.1 1,937.5 3.1 1,937.50 - - - -

Katie Pearce Senior Manager 560 3.1 1,736.0 3.1 1,736.00 - - -

Tim Evans Manager 510 0.4 204.0 - - 0.4 204.00

Michelle Budiarso Senior Consultant 425 0.2 85.0 0.2 85.00 - - - -

Alessandro Chirico Consultant 350 4.4 1,540.0 4.4 1,540.00 - - - -

Brendan Flaherty Consultant 350 0.3 105.0 - - - - 0.3 105.00

Fleur Combridge Consultant 350 1.1 385.0 - - 0.3 105.00 0.8 280.00

Alec Peng Consultant 350 0.1 35.0 - - - - 0.1 35.00

Specialist 180 2.1 378.0 2.1 378.00 - - - -

Administration Support 180 0.5 90.0 - - - 0.5 90.00

Total 15.3 6,711.50 12.9 5,892.50 0.7 309.00 1.7 510.00

GST 671.15

7,382.65

438.66 456.78 441.43 300.00

Administratio

Total (Including GST)

Average rate (excluding GST)

Assets Creditors

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Flow Systems Operations Pty Ltd (Administrators Appointed) ACN 603 106 305 Calculation of Remuneration Resolution 2 – Administration for the period 8 February 2019 to the date the DOCA is executed and the Administration concludes

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 - - 1.0 720.00 - - -

Chris Hill Appointee 720 1.0 720.00 1.0 720.00 - - - - - -

Sunil Purba Director 625 1.0 625.00 - - - - 1.0 625.00 - -

Shane Ugo Senior Manager 560 1.0 560.00 - - 1.0 560.00 - - - -

Amy Gelevski Manager 510 1.0 510.00 1.0 510.00 - - - - - -

Tim Evans Manager 510 1.0 510.00 - 1.0 510.00 - - - -

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - 1.0 425.00 - - -

Brendan Flaherty Consultant 350 1.0 350.00 - - - - 1.0 350.00 - -

Specialist 180 1.0 180.00 - - - - - - 1.0 180.00

Administration

Support 180 2.2 396.00 - - 1.2 216.00 - - 1.0 180.00

Total 11.2 4,996.00 2.0 1,230.00 5.2 2,431.00 2.0 975.00 2.0 360.00

GST 499.60

5,495.60

446.07 615.00 467.50 487.50 180.00

Administratio

nAssets Creditors Trade-on

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Flow Systems Operations Pty Ltd (Administrators Appointed) ACN 603 106 305 Calculation of Remuneration Resolution 3 – Deed Administrator for the period from execution of DOCA to finalisation (effectuation) of the DOCA

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 2.5 1,800.00 - - 1.5 1,080.00 1.0 720.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - 2.0 1,120.00 - -

Amy Gelevski Manager 510 5.0 2,550.00 1.0 510.00 1.0 510.00 2.0 1,020.00 1.0 510.00

Brendan Flaherty Consultant 350 3.0 1,050.00 - - 1.0 350.00 - - 2.0 700.00

Specialist 180 1.9 340.00 - - - - - - 1.9 340.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 20.9 10,000.00 2.0 1,230.00 4.5 2,565.00 7.0 4,205.00 7.4 2,000.00

GST 1,000.00

11,000.00

478.72 615.00 570.00 600.71 270.68

AdministrationAssets Creditors Trade-on

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A4

Flow Systems Operations Pty Ltd (Administrators Appointed) ACN 603 106 305 Calculation of Remuneration Resolution 4 – Creditors Trust for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.5 1,080.00 - - 1.0 720.00 0.5 360.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - 1.0 560.00 - - 1.0 560.00

Amy Gelevski Manager 510 5.9 3,009.00 1.0 510.00 - - 3.0 1,530.00 1.9 969.00

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - - - 1.0 425.00 - -

Brendan Flaherty Consultant 350 2.0 700.00 - - - - 2.0 700.00 - -

Specialist 180 2.9 526.00 - - - - 2.0 360.00 0.9 166.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 21.8 10,000.00 2.0 1,230.00 3.0 1,905.00 10.5 4,720.00 6.3 2,145.00

GST 1,000.00

11,000.00

458.25 615.00 635.00 449.52 339.28

AdministrationAssets Creditors Dividends

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A5

Flow Systems Operations Pty Ltd (Administrators Appointed) ACN 603 106 305 Calculation of Remuneration Resolution 5 – Liquidation for the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.3 945.00 - 1.31 945.00 - - - -

Chris Hill Appointee 720 1.0 720.00 1.00 720.00 - - - - - -

Sunil Purba Director 625 2.0 1,250.00 - 1.00 625.00 - - 1.00 625.00

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - - 2.00 1,120.00 - -

Amy Gelevski Manager 510 3.5 1,785.00 - 0.50 255.00 2.00 1,020.00 1.00 510.00

Tim Evans Manager 510 3.0 1,530.00 2.00 1,020.00 - - - - 1.00 510.00

Michelle Budiarso Senior Consultant 425 2.0 850.00 - - - - - - 2.00 850.00

Brendan Flaherty Consultant 350 4.0 1,400.00 1.00 350.00 2.00 700.00 - - 1.00 350.00

Specialist 180 1.0 180.00 - - - - - - 1.00 180.00

Administration Support 180 1.2 220.00 - - - - - - 1.22 220.00

Total 21.0 10,000.00 4.00 2,090.00 4.81 2,525.00 4.00 2,140.00 8.22 3,245.00

GST 1,000.00

11,000.00

475.40 522.50 524.68 535.00 394.66

AdministrationAssets Creditors Investigation

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Assets

12.9 hours

$5,892.50

Sale of Business as a Going Concern

Preparing an information memorandum

Reviewing sale information and documentation

Liaising with purchasers and employees

Internal meetings to discuss/review offers received

Attendance at external meetings

Plant and Equipment Reviewing asset listings

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

0.7 hours

$309.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Retention of Title Claims Search the PPSA register

Notify PMSI creditors identified from PPSA register

Receive initial notification of creditors’ intention to claim

Provision of retention of title claim form to creditors

Receive completed retention of title claim forms

Meeting claimants on site to identify goods

Adjudicate retention of title claims

Forward correspondence to claimants notifying outcome of adjudication

Preparation of payment vouchers to satisfy valid claims

Preparation of correspondence to claimants to accompany payment of claims

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Task Area General Description Includes

Corresponding with OSR and ATO regarding POD when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Responding to stakeholder queries and questions immediately following meeting

Administration

1.7 hours

$510.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the DOCA is executed and the Administration ends

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Plant and Equipment Dealing with assets in accordance with the Deed

Assets subject to specific charges

All tasks associated with dealing with a charged asset

Other Assets Tasks associated with dealing with other assets

Leasing Liaising with owners/lessors

Creditors

5.2 hours

$2,431.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

2.0 hours

$975.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

2.0 hours

$360.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

Task Area General Description Includes

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period from execution of the Deed to the conclusion (effectuation) of the Deed

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

4.5 hours

$2,565.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

7.0 hours

$4,205.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

7.4 hours

$2,000.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Deed administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B4

Resolution 4

The below table provides a description of the work undertaken in each major task area for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

3.0 hours

$1,905.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Dividend

10.5 hours

$4,720.00

Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD

Receipt of POD

Maintain POD register

Adjudicating POD

Request further information from claimants regarding POD

Preparation of correspondence to claimant advising outcome of adjudication

Dividend procedures Preparation of correspondence to creditors advising of intention to declare dividend

Advertisement of intention to declare dividend

Obtain clearance from ATO to allow distribution of company’s assets

Preparation of dividend calculation

Preparation of correspondence to creditors announcing declaration of dividend

Advertise announcement of dividend

Preparation of distribution

Preparation of dividend file

Preparation of payment vouchers to pay dividend

Preparation of correspondence to creditors enclosing payment of dividend

Task Area General Description Includes

Administration

6.3 hours

$2,145.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Processing receipts and payments

Entering receipts and payments into accounting system

Schedule B5

Resolution 5

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Assets

4.0 hours

$2,090.00

Plant and Equipment Assessing ability to sell assets and conducting a Short term sale to realise assets

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

4.8 hours

$2,525.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing section 439A report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation

4.0 hours

$2,140.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Administration

8.2 hours

$3,245.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Liquidation

Books and records / storage

Dealing with records in storage

Sending job files to storage

Appendix C - Summary of receipts and payments

Flow Systems Operations Pty Ltd (Administrators Appointed)

Summary of Receipts and Payments For the period 20 December 2018 to 8 February 2019

Receipts Amount ($)

Cash at bank at appointment 480

Total receipts 480

Payments Amount ($)

Total payments -

Net receipts/(payments) 480

Remuneration Approval Report

Cooranbong Water Pty Ltd (Administrators Appointed) ACN 169 450 453 (the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration, the deed administration, the creditors trust, or liquidation as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary

The total remuneration for this appointment is estimated to be $31,660.00 (exclusive of

GST) if the Deed is approved or $21,660.00 (exclusive of GST) in a liquidation. We note that

the Deed / Creditors Trust and a liquidation are mutually exclusive outcomes in an

administration.

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $6,660.00

Resolution 2: 8 February 2019 to execution of the Deed of Company Arrangement and the end of the Administration*

B2 $5,000.00

Total $11,660.00

Deed of Company Arrangement

Resolution 3: Commencement of DOCA to completion (effectuation)* B3 $10,000.00

Creditors’ Trust

Resolution 4: Commencement of Creditors’ Trust to finalisation* B4 $10,000.00

Liquidation

Resolution 5: Commencement to completion* B5 $10,000.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration, deed administration, creditors trust or liquidation (as appropriate). Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors.

3. Remuneration

3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,660.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $5,000.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 – Deed Administration

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 4 – Creditors’ Trust

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 5 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of the administration, deed administration, creditors trust or liquidation (as appropriate) 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 of 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 Schedule A1 to A5 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B5 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Deed Administration / Creditors Trust / 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 Deed Administration / Creditors Trust / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Deed Administrators/ Trustees / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Deed Administrators/ Creditors Trust / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

The proposed Deed sets up a separate fund to pay the Administrators / Deed Administrators / Trustees costs from the fund set up to pay creditors.

Participating unsecured creditors of all Deed Companies will have a right to prove for their entitlement in the Creditors Trust and will establish the quantum of their claim via a POD exercise. Given the expected quantum of claims and the known contribution value of the fund ($2.76m), we estimate the dividend to participating unsecured creditors to be approximately 60 cents in the dollar.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments

The summary of receipts and payments for the period from 20 December 2018 to 8 February 2019 is contained in Appendix C.

6. Queries

Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Cooranbong Water Pty Ltd ACN 169 450 453 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Lachy Haynes Partner 720 0.3 216.0 0.30 216.00 - - - -

Danny Touma Director 625 3.1 1,937.5 3.10 1,937.50 - - - -

Katie Pearce Senior Manager 560 3.1 1,736.00 3.10 1,736.00 - - -

Michelle Budiarso Senior Consultant 425 0.1 42.5 0.10 42.50 - - - -

Alessandro Chirico Consultant 350 4.4 1,540.0 4.40 1,540.00 - - - -

Brendan Flaherty Consultant 350 1.0 350.0 - - - - 1.00 350.00

Fleur Combridge Consultant 350 0.7 245.0 - - 0.30 105.00 0.40 140.00

Alec Peng Consultant 350 0.1 35.0 - - - - 0.10 35.00

Specialist 180 2.1 378.00 2.10 378.00 - - - -

Administration Support 180 1.0 180.0 - - - 1.00 180.00

Total 15.6 6,660.00 12.8 5,850.00 0.3 105.00 2.5 705.00

GST 666.00

7,326.00

426.92 457.03 350.00 282.00

Administration

Total (Including GST)

Average rate (excluding GST)

Assets Creditors

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Cooranbong Water Pty Ltd (Administrators Appointed) ACN 169 450 453 Calculation of Remuneration Resolution 2 – Administration for the period 8 February 2019 to the date the DOCA is executed and the Administration concludes

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 - - 1.0 720.00 - - -

Chris Hill Appointee 720 1.0 720.00 1.0 720.00 - - - - - -

Sunil Purba Director 625 1.0 625.00 - - - - 1.0 625.00 - -

Shane Ugo Senior Manager 560 1.0 560.00 - - 1.0 560.00 - - - -

Amy Gelevski Manager 510 1.0 510.00 1.0 510.00 - - - - - -

Tim Evans Manager 510 1.0 510.00 - 1.0 510.00 - - - -

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - 1.0 425.00 - - -

Brendan Flaherty Consultant 350 1.0 350.00 - - - - 1.0 350.00 - -

Specialist 180 1.0 180.00 - - - - - - 1.0 180.00

Administration Support 180 2.2 400.00 - - - - - - 2.2 400.00

Total 11.2 5,000.00 2.0 1,230.00 4.0 2,215.00 2.0 975.00 3.2 580.00

GST 500.00

5,500.00

445.54 615.00 553.75 487.50 180.00

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Trade-on

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Cooranbong Water Pty Ltd (Administrators Appointed) ACN 169 450 453 Calculation of Remuneration Resolution 3 – Deed Administrator for the period from execution of DOCA to finalisation (effectuation) of the DOCA

Employee Position $/hours Total Actual Total Assets

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 2.5 1,800.00 - - 1.5 1,080.00 1.0 720.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - 2.0 1,120.00 - -

Amy Gelevski Manager 510 5.0 2,550.00 1.0 510.00 1.0 510.00 2.0 1,020.00 1.0 510.00

Brendan Flaherty Consultant 350 3.0 1,050.00 - - 1.0 350.00 - - 2.0 700.00

Specialist 180 1.9 340.00 - - - - - - 1.9 340.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 20.9 10,000.00 2.0 1,230.00 4.5 2,565.00 7.0 4,205.00 7.4 2,000.00

GST 1,000.00

Total (Including GST) 11,000.00

478.72 615.00 570.00 600.71 270.68 Average rate (excluding GST)

Trade-onCreditors Administration

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A4

Cooranbong Water Pty Ltd (Administrators Appointed) ACN 169 450 453 Calculation of Remuneration Resolution 4 – Creditors Trust for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.5 1,080.00 - - 1.0 720.00 0.5 360.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - 1.0 560.00 - - 1.0 560.00

Amy Gelevski Manager 510 5.9 3,009.00 1.0 510.00 - - 3.0 1,530.00 1.9 969.00

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - - - 1.0 425.00 - -

Brendan Flaherty Consultant 350 2.0 700.00 - - - - 2.0 700.00 - -

Specialist 180 2.9 526.00 - - - - 2.0 360.00 0.9 166.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 21.8 10,000.00 2.0 1,230.00 3.0 1,905.00 10.5 4,720.00 6.3 2,145.00

GST 1,000.00

11,000.00

458.25 615.00 635.00 449.52 339.28

AdministrationAssets Creditors Dividends

Total (Including GST)

Average rate (excluding GST) Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A5

Cooranbong Water Pty Ltd (Administrators Appointed) ACN 169 450 453 Calculation of Remuneration Resolution 5 – Liquidation for the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.3 945.00 - 1.31 945.00 - - - -

Chris Hill Appointee 720 1.0 720.00 1.00 720.00 - - - - - -

Sunil Purba Director 625 2.0 1,250.00 - 1.00 625.00 - - 1.00 625.00

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - - 2.00 1,120.00 - -

Amy Gelevski Manager 510 3.5 1,785.00 - 0.50 255.00 2.00 1,020.00 1.00 510.00

Tim Evans Manager 510 3.0 1,530.00 2.00 1,020.00 - - - - 1.00 510.00

Michelle Budiarso Senior Consultant 425 2.0 850.00 - - - - - - 2.00 850.00

Brendan Flaherty Consultant 350 4.0 1,400.00 1.00 350.00 2.00 700.00 - - 1.00 350.00

Specialist 180 1.0 180.00 - - - - - - 1.00 180.00

Administration Support 180 1.2 220.00 - - - - - - 1.22 220.00

Total 21.0 10,000.00 4.00 2,090.00 4.81 2,525.00 4.00 2,140.00 8.22 3,245.00

GST 1,000.00

11,000.00

475.40 522.50 524.68 535.00 394.66

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Investigation

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Assets

12.8 hours

$5,850.00

Sale of Business as a Going Concern

Preparing an information memorandum

Reviewing sale information and documentation

Liaising with purchasers and employees

Internal meetings to discuss/review offers received

Attendance at external meetings

Plant and Equipment Reviewing asset listings

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

0.3 hours

$105.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Retention of Title Claims Search the PPSA register

Notify PMSI creditors identified from PPSA register

Receive initial notification of creditors’ intention to claim

Provision of retention of title claim form to creditors

Receive completed retention of title claim forms

Meeting claimants on site to identify goods

Adjudicate retention of title claims

Forward correspondence to claimants notifying outcome of adjudication

Preparation of payment vouchers to satisfy valid claims

Preparation of correspondence to claimants to accompany payment of claims

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Task Area General Description Includes

Corresponding with OSR and ATO regarding POD when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Responding to stakeholder queries and questions immediately following meeting

Administration

2.5 hours

$705.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the DOCA is executed and the Administration ends

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Plant and Equipment Dealing with assets in accordance with the Deed

Assets subject to specific charges

All tasks associated with dealing with a charged asset

Other Assets Tasks associated with dealing with other assets

Leasing Liaising with owners/lessors

Creditors

4.0 hours

$2,215.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

2.0 hours

$975.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

3.2 hours

$580.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

Task Area General Description Includes

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period from execution of the Deed to the conclusion (effectuation) of the Deed

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

4.5 hours

$2,565.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

7.0 hours

$4,205.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

7.4 hours

$2,000.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Deed administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B4

Resolution 4

The below table provides a description of the work undertaken in each major task area for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

3.0 hours

$1,905.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Dividend

10.5 hours

$4,720.00

Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD

Receipt of POD

Maintain POD register

Adjudicating POD

Request further information from claimants regarding POD

Preparation of correspondence to claimant advising outcome of adjudication

Dividend procedures Preparation of correspondence to creditors advising of intention to declare dividend

Advertisement of intention to declare dividend

Obtain clearance from ATO to allow distribution of company’s assets

Preparation of dividend calculation

Preparation of correspondence to creditors announcing declaration of dividend

Advertise announcement of dividend

Preparation of distribution

Preparation of dividend file

Preparation of payment vouchers to pay dividend

Preparation of correspondence to creditors enclosing payment of dividend

Task Area General Description Includes

Administration

6.3 hours

$2,145.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of the Trust

Books and records / storage

Dealing with records in storage

Sending job files to storage

Processing receipts and payments

Entering receipts and payments into accounting system

Schedule B5

Resolution 5

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Assets

4.0 hours

$2,090.00

Plant and Equipment Assessing ability to sell assets and conducting a Short term sale to realise assets

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

4.8 hours

$2,525.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing section 439A report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation

4.0 hours

$2,140.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Administration

8.2 hours

$3,245.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Liquidation

Books and records / storage

Dealing with records in storage

Sending job files to storage

Appendix C - Summary of receipts and payments

Cooranbong Water Pty Ltd (Administrators Appointed) Summary of Receipts and Payments For the period 20 December 2018 to 8 February 2019

Receipts

Amount ($)

Cash at bank at appointment 173

Total receipts 173

Payments

Amount ($)

Total payments -

Net receipts/(payments) 173

Remuneration Approval Report

Huntlee Water Pty Ltd (Administrators Appointed) ACN 167 418 608 (the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration, the deed administration, the creditors trust, or liquidation as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary

The total remuneration for this appointment is estimated to be $32,269.00 (exclusive of

GST) if the Deed is approved or $22,269.00 (exclusive of GST) in a liquidation. We note that

the Deed / Creditors Trust and a liquidation are mutually exclusive outcomes in an

administration.

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $7,269.00

Resolution 2: 8 February 2019 to execution of the Deed of Company Arrangement and the end of the Administration*

B2 $5,000.00

Total $12,269.00

Deed of Company Arrangement

Resolution 3: Commencement of DOCA to completion (effectuation)* B3 $10,000.00

Creditors’ Trust

Resolution 4: Commencement of Creditors’ Trust to finalisation (effectuation)*

B4 $10,000.00

Liquidation

Resolution 5: Commencement to completion* B5 $10,000.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration, deed administration, creditors trust or liquidation (as appropriate). Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors

3. Remuneration

3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $7,269.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $5,000.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 – Deed Administration

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 4 – Creditors’ Trust

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 5 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of the administration, deed administration, creditors trust or liquidation (as appropriate) 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 Schedule A1 to A5 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B5 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Deed Administration / Creditors Trust / 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 Deed Administration / Creditors Trust / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Deed Administrators/ Trustees / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Deed Administrators/ Creditors Trust / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

The proposed Deed sets up a separate fund to pay the Administrators / Deed Administrators / Trustees costs from the fund set up to pay creditors.

Participating unsecured creditors of all Deed Companies will have a right to prove for their entitlement in the Creditors Trust and will establish the quantum of their claim via a POD exercise. Given the expected quantum of claims and the known contribution value of the fund ($2.76m), we estimate the dividend to participating unsecured creditors to be approximately 60 cents in the dollar.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments

The summary of receipts and payments for the period from 20 December 2018 to 8 February 2019 is contained in Appendix C.

6. Queries

Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Huntlee Water Pty Ltd (Administrators Appointed) ACN 167 418 608 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Lachy Haynes Partner 720 0.3 216.00 0.3 216.00 - - - - - -

Danny Touma Director 625 3.1 1,937.50 3.1 1,937.50 - - - - - -

Katie Pearce Senior Manager 560 3.1 1,736.00 3.1 1,736.00 - - - - -

Shane Ugo Senior Manager 560 0.4 224.00 - - - - 0.4 224.00 - -

Michelle Budiarso Senior Consultant 425 0.1 42.50 0.1 42.50 - - - - - -

Alessandro Chirico Consultant 350 4.4 1,540.00 4.4 1,540.00 - - - - - -

Brendan Flaherty Consultant 350 2.1 735.00 - - - - - - 2.1 735.00

Fleur Combridge Consultant 350 0.7 245.00 - - 0.3 105.00 - - 0.4 140.00

Alec Peng Consultant 350 0.1 35.00 - - - - - - 0.1 35.00

- -

Specialist 180 2.1 378.00 2.1 378.00 - - - - - -

Administration Support 180 1.4 180.00 - - - - 0.4 - 1.0 180.00

Total 17.8 7,269.0 13.1 5,850.0 0.3 105.0 0.8 224.0 3.6 1,090.0

GST 648.30

7,131.30

426.51 446.56 350.00 350.00 296.32

Trade-on Administration

Total (Including GST)

Average rate (excluding GST)

Assets Creditors

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Huntlee Water Pty Ltd (Administrators Appointed) ACN 167 418 608 Calculation of Remuneration Resolution 2 – Administration for the period 8 February 2019 to the date the DOCA is executed and the Administration concludes

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 - - 1.0 720.00 - - -

Chris Hill Appointee 720 1.0 720.00 1.0 720.00 - - - - - -

Sunil Purba Director 625 1.0 625.00 - - - - 1.0 625.00 - -

Shane Ugo Senior Manager 560 1.0 560.00 - - 1.0 560.00 - - - -

Amy Gelevski Manager 510 1.0 510.00 1.0 510.00 - - - - - -

Tim Evans Manager 510 1.0 510.00 - 1.0 510.00 - - - -

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - 1.0 425.00 - - -

Brendan Flaherty Consultant 350 1.0 350.00 - - - - 1.0 350.00 - -

Specialist 180 1.0 180.00 - - - - - - 1.0 180.00

Administration Support 180 2.2 400.00 - - - - - - 2.2 400.00

Total 11.2 5,000.00 2.0 1,230.00 4.0 2,215.00 2.0 975.00 3.2 580.00

GST 500.00

5,500.00

445.54 615.00 553.75 487.50 180.00

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Trade-on

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Huntlee Water Pty Ltd (Administrators Appointed) ACN 167 418 608 Calculation of Remuneration Resolution 3 – Deed Administrator for the period from execution of DOCA to finalisation (effectuation) of the DOCA

Employee Position $/hours Total Actual Total AssetsAdminis

tration

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 2.5 1,800.00 - - 1.5 1,080.00 1.0 720.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - 2.0 1,120.00 - -

Amy Gelevski Manager 510 5.0 2,550.00 1.0 510.00 1.0 510.00 2.0 1,020.00 1.0 510.00

Brendan Flaherty Consultant 350 3.0 1,050.00 - - 1.0 350.00 - - 2.0 700.00

Specialist 180 1.9 340.00 - - - - - - 1.9 340.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 20.9 10,000.00 2.0 1,230.00 4.5 2,565.00 7.0 4,205.00 7.4 2,000.00

GST 1,000.00

Total (Including GST) 11,000.00

Average rate (excluding

GST) 478.72 615.00 570.00 600.71 270.68

Creditors Trade-on

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A4

Huntlee Water Pty Ltd (Administrators Appointed) ACN 167 418 608 Calculation of Remuneration Resolution 4 – Creditors Trust for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.5 1,080.00 - - 1.0 720.00 0.5 360.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - 1.0 560.00 - - 1.0 560.00

Amy Gelevski Manager 510 5.9 3,009.00 1.0 510.00 - - 3.0 1,530.00 1.9 969.00

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - - - 1.0 425.00 - -

Brendan Flaherty Consultant 350 2.0 700.00 - - - - 2.0 700.00 - -

Specialist 180 2.9 526.00 - - - - 2.0 360.00 0.9 166.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 21.8 10,000.00 2.0 1,230.00 3.0 1,905.00 10.5 4,720.00 6.3 2,145.00

GST 1,000.00

Total (Including GST) 11,000.00

Average rate (excluding

GST) 458.25 615.00 635.00 449.52 339.28

Dividends AdministrationAssets Creditors

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A5

Huntlee Water Pty Ltd (Administrators Appointed) ACN 167 418 608 Calculation of Remuneration Resolution 5 – Liquidation for the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.3 945.00 - 1.31 945.00 - - - -

Chris Hill Appointee 720 1.0 720.00 1.00 720.00 - - - - - -

Sunil Purba Director 625 2.0 1,250.00 - 1.00 625.00 - - 1.00 625.00

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - - 2.00 1,120.00 - -

Amy Gelevski Manager 510 3.5 1,785.00 - 0.50 255.00 2.00 1,020.00 1.00 510.00

Tim Evans Manager 510 3.0 1,530.00 2.00 1,020.00 - - - - 1.00 510.00

Michelle Budiarso Senior Consultant 425 2.0 850.00 - - - - - - 2.00 850.00

Brendan Flaherty Consultant 350 4.0 1,400.00 1.00 350.00 2.00 700.00 - - 1.00 350.00

Specialist 180 1.0 180.00 - - - - - - 1.00 180.00

Administration Support 180 1.2 220.00 - - - - - - 1.22 220.00

Total 21.0 10,000.00 4.00 2,090.00 4.81 2,525.00 4.00 2,140.00 8.22 3,245.00

GST 1,000.00

11,000.00

475.40 522.50 524.68 535.00 394.66

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Investigation

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Assets

13.1 hours

$5,850.00

Sale of Business as a Going Concern

Preparing an information memorandum

Reviewing sale information and documentation

Liaising with purchasers and employees

Internal meetings to discuss/review offers received

Attendance at external meetings

Plant and Equipment Reviewing asset listings

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

0.3 hours

$105.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Retention of Title Claims Search the PPSA register

Notify PMSI creditors identified from PPSA register

Receive initial notification of creditors’ intention to claim

Provision of retention of title claim form to creditors

Receive completed retention of title claim forms

Meeting claimants on site to identify goods

Adjudicate retention of title claims

Forward correspondence to claimants notifying outcome of adjudication

Preparation of payment vouchers to satisfy valid claims

Preparation of correspondence to claimants to accompany payment of claims

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD

Task Area General Description Includes

when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Responding to stakeholder queries and questions immediately following meeting

Trade On

0.8 hours

$224.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

3.6 hours

$1,090.00

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the DOCA is executed and the Administration ends

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Plant and Equipment Dealing with assets in accordance with the Deed

Assets subject to specific charges

All tasks associated with dealing with a charged asset

Other Assets Tasks associated with dealing with other assets

Leasing Liaising with owners/lessors

Creditors

4.0 hours

$2,215.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

2.0 hours

$975.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

3.2 hours

$580.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

Task Area General Description Includes

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period from execution of the Deed to the conclusion (effectuation) of the Deed

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

4.5 hours

$2,565.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

7.0 hours

$4,205.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

7.4 hours

$2,000.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Deed administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B4

Resolution 4

The below table provides a description of the work undertaken in each major task area for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

3.0 hours

$1,905.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Dividend

10.5 hours

$4,720.00

Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD

Receipt of POD

Maintain POD register

Adjudicating POD

Request further information from claimants regarding POD

Preparation of correspondence to claimant advising outcome of adjudication

Dividend procedures Preparation of correspondence to creditors advising of intention to declare dividend

Advertisement of intention to declare dividend

Obtain clearance from ATO to allow distribution of company’s assets

Preparation of dividend calculation

Preparation of correspondence to creditors announcing declaration of dividend

Advertise announcement of dividend

Preparation of distribution

Preparation of dividend file

Preparation of payment vouchers to pay dividend

Preparation of correspondence to creditors enclosing payment of dividend

Task Area General Description Includes

Administration

6.3 hours

$2,145.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of the Trust

Books and records / storage

Dealing with records in storage

Sending job files to storage

Processing receipts and payments

Entering receipts and payments into accounting system

Schedule B5

Resolution 5

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Assets

4.0 hours

$2,090.00

Plant and Equipment Assessing ability to sell assets and conducting a Short term sale to realise assets

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

4.8 hours

$2,525.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing section 439A report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation

4.0 hours

$2,140.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Administration

8.2 hours

$3,245.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Liquidation

Books and records / storage

Dealing with records in storage

Sending job files to storage

Appendix C - Summary of receipts and payments

Huntlee Water Pty Ltd (Administrators Appointed) Summary of Receipts and Payments For the period 20 December 2018 to 8 February 2019

Receipts Amount ($)

Cash at bank at appointment 734,166

Development Receipts 248,990

Interest Income 64

Total receipts 983,220

Payments Amount ($)

Intercompany Loan (730,000)

Total payments (730,000)

Net receipts/(payments) 253,220

Remuneration Approval Report

Central Park Water Pty Ltd (Administrators Appointed) ACN 151 072 838 (the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration, the deed administration, the creditors trust, or liquidation as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary

The total remuneration for this appointment is estimated to be $31,514.00 (exclusive of GST)

if the Deed is approved or $21,514.00 (exclusive of GST) in a liquidation. We note that the

Deed / Creditors Trust and a liquidation are mutually exclusive outcomes in an

administration.

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $6,518.00

Resolution 2: 8 February 2019 to execution of the Deed of Company Arrangement and the end of the Administration*

B2 $4,996.00

Total $11,514.00

Deed of Company Arrangement

Resolution 3: Commencement of DOCA to completion (effectuation)* B3 $10,000.00

Creditors’ Trust

Resolution 4: Commencement of Creditors’ Trust to finalisation (effectuation)*

B4 $10,000.00

Liquidation

Resolution 5: Commencement to completion* B5 $10,000.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration, deed administration, creditors trust or liquidation (as appropriate). Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors.

3. Remuneration

3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,518.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $4,996.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 – Deed Administration

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 4 – Creditors’ Trust

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 5 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of the administration, deed administration, creditors trust or liquidation (as appropriate) 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 Schedule A1 to A5 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B5 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Deed Administration / Creditors Trust / 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 Deed Administration / Creditors Trust / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Deed Administrators/ Trustees / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Deed Administrators/ Creditors Trust / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

The proposed Deed sets up a separate fund to pay the Administrators / Deed Administrators / Trustees costs from the fund set up to pay creditors.

Participating unsecured creditors of all Deed Companies will have a right to prove for their entitlement in the Creditors Trust and will establish the quantum of their claim via a POD exercise. Given the expected quantum of claims and the known contribution value of the fund ($2.76m), we estimate the dividend to participating unsecured creditors to be approximately 60 cents in the dollar.3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments

The summary of receipts and payments for the period from 20 December 2018 to 8 February 2019 is contained in Appendix C.

6. Queries

Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Central Park Water Pty Ltd (Administrators Appointed) ACN 151 072 838 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Lachy Haynes Partner 720 0.3 216.00 0.3 216.00 - - - -

Danny Touma Director 625 3.1 1,937.50 3.1 1,937.50 - - - -

Katie Pearce Senior Manager 560 3.1 1,736.00 3.1 1,736.00 - - -

Michelle Budiarso Senior Consultant 425 0.1 42.50 0.1 42.50 - - - -

Alessandro Chirico Consultant 350 4.4 1,540.00 4.4 1,540.00 - - - -

Brendan Flaherty Consultant 350 0.9 315.00 - - - - 0.9 315.00

Fleur Combridge Consultant 350 0.7 210.00 - - 0.3 70.00 0.4 140.00

Alec Peng Consultant 350 0.1 35.00 - - - - 0.1 35.00

Specialist 180 2.1 378.00 2.1 378.00 - - - -

Administration Support 180 0.6 108.00 - - - - 0.6 108.00

Total 15.4 6,518.0 13.1 5,850.0 0.3 70.0 2.0 598.0

GST 648.30

7,131.30

426.51 446.56 350.00 296.32

Administration

Total (Including GST)

Average rate (excluding GST)

Assets Creditors

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Central Park Water Pty Ltd (Administrators Appointed) ACN 151 072 838 Calculation of Remuneration Resolution 2 – Administration for the period 8 February 2019 to the date the DOCA is executed and the Administration concludes

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 - - 1.0 720.00 - - -

Chris Hill Appointee 720 1.0 720.00 1.0 720.00 - - - - - -

Sunil Purba Director 625 1.0 625.00 - - - - 1.0 625.00 - -

Shane Ugo Senior Manager 560 1.0 560.00 - - 1.0 560.00 - - - -

Amy Gelevski Manager 510 1.0 510.00 1.0 510.00 - - - - - -

Tim Evans Manager 510 1.0 510.00 - 1.0 510.00 - - - -

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - 1.0 425.00 - - -

Brendan Flaherty Consultant 350 1.0 350.00 - - - - 1.0 350.00 - -

Specialist 180 1.0 180.00 - - - - - - 1.0 180.00

Administration Support 180 2.2 396.00 - - 1.2 216.00 - - 1.0 180.00

Total 11.2 4,996.00 2.0 1,230.00 5.2 2,431.00 2.0 975.00 2.0 360.00

GST 499.60

5,495.60

446.07 615.00 467.50 487.50 180.00

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Trade-on

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Central Park Water Pty Ltd (Administrators Appointed) ACN 151 072 838 Calculation of Remuneration Resolution 3 – Deed Administrator for the period from execution of DOCA to finalisation (effectuation) of the DOCA

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 2.5 1,800.00 - - 1.5 1,080.00 1.0 720.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - 2.0 1,120.00 - -

Amy Gelevski Manager 510 5.0 2,550.00 1.0 510.00 1.0 510.00 2.0 1,020.00 1.0 510.00

Brendan Flaherty Consultant 350 3.0 1,050.00 - - 1.0 350.00 - - 2.0 700.00

Specialist 180 1.9 340.00 - - - - - - 1.9 340.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 20.9 10,000.00 2.0 1,230.00 4.5 2,565.00 7.0 4,205.00 7.4 2,000.00

GST 1,000.00

11,000.00

478.72 615.00 570.00 600.71 270.68

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Trade-on

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A4

Central Park Water Pty Ltd (Administrators Appointed) ACN 151 072 838 Calculation of Remuneration Resolution 4 – Creditors Trust for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.5 1,080.00 - - 1.0 720.00 0.5 360.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - 1.0 560.00 - - 1.0 560.00

Amy Gelevski Manager 510 5.9 3,009.00 1.0 510.00 - - 3.0 1,530.00 1.9 969.00

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - - - 1.0 425.00 - -

Brendan Flaherty Consultant 350 2.0 700.00 - - - - 2.0 700.00 - -

Specialist 180 2.9 526.00 - - - - 2.0 360.00 0.9 166.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 21.8 10,000.00 2.0 1,230.00 3.0 1,905.00 10.5 4,720.00 6.3 2,145.00

GST 1,000.00

11,000.00

458.25 615.00 635.00 449.52 339.28

AdministrationAssets Creditors Dividends

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A5

Central Park Water Pty Ltd (Administrators Appointed) ACN 151 072 838 Calculation of Remuneration Resolution 5 – Liquidation for the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.3 945.00 - 1.31 945.00 - - - -

Chris Hill Appointee 720 1.0 720.00 1.00 720.00 - - - - - -

Sunil Purba Director 625 2.0 1,250.00 - 1.00 625.00 - - 1.00 625.00

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - - 2.00 1,120.00 - -

Amy Gelevski Manager 510 3.5 1,785.00 - 0.50 255.00 2.00 1,020.00 1.00 510.00

Tim Evans Manager 510 3.0 1,530.00 2.00 1,020.00 - - - - 1.00 510.00

Michelle Budiarso Senior Consultant 425 2.0 850.00 - - - - - - 2.00 850.00

Brendan Flaherty Consultant 350 4.0 1,400.00 1.00 350.00 2.00 700.00 - - 1.00 350.00

Specialist 180 1.0 180.00 - - - - - - 1.00 180.00

Administration Support 180 1.2 220.00 - - - - - - 1.22 220.00

Total 21.0 10,000.00 4.00 2,090.00 4.81 2,525.00 4.00 2,140.00 8.22 3,245.00

GST 1,000.00

11,000.00

475.40 522.50 524.68 535.00 394.66

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Investigation

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Assets

13.1 hours

$5,850.00

Sale of Business as a Going Concern

Preparing an information memorandum

Reviewing sale information and documentation

Liaising with purchasers and employees

Internal meetings to discuss/review offers received

Attendance at external meetings

Plant and Equipment Reviewing asset listings

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

0.3 hours

$70.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Retention of Title Claims Search the PPSA register

Notify PMSI creditors identified from PPSA register

Receive initial notification of creditors’ intention to claim

Provision of retention of title claim form to creditors

Receive completed retention of title claim forms

Meeting claimants on site to identify goods

Adjudicate retention of title claims

Forward correspondence to claimants notifying outcome of adjudication

Preparation of payment vouchers to satisfy valid claims

Preparation of correspondence to claimants to accompany payment of claims

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor queries

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Task Area General Description Includes

Corresponding with OSR and ATO regarding POD when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Responding to stakeholder queries and questions immediately following meeting

Administration

2.0 hours

$598.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the DOCA is executed or the Administration concludes

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Plant and Equipment Dealing with assets in accordance with the Deed

Assets subject to specific charges

All tasks associated with dealing with a charged asset

Other Assets Tasks associated with dealing with other assets

Leasing Liaising with owners/lessors

Creditors

5.2 hours

$2,431.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

2.0 hours

$975.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

2.0 hours

$360.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

Task Area General Description Includes

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Deed

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

4.5 hours

$2,565.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

7.0 hours

$4,205.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

7.4 hours

$2,000.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Deed administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B4

Resolution 4

The below table provides a description of the work undertaken in each major task area for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

3.0 hours

$1,905.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Dividend

10.5 hours

$4,720.00

Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD

Receipt of POD

Maintain POD register

Adjudicating POD

Request further information from claimants regarding POD

Preparation of correspondence to claimant advising outcome of adjudication

Dividend procedures Preparation of correspondence to creditors advising of intention to declare dividend

Advertisement of intention to declare dividend

Obtain clearance from ATO to allow distribution of company’s assets

Preparation of dividend calculation

Preparation of correspondence to creditors announcing declaration of dividend

Advertise announcement of dividend

Preparation of distribution

Preparation of dividend file

Preparation of payment vouchers to pay dividend

Preparation of correspondence to creditors enclosing payment of dividend

Task Area General Description Includes

Administration

6.3 hours

$2,145.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Processing receipts and payments

Entering receipts and payments into accounting system

Schedule B5

Resolution 5

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Assets

4.0 hours

$2,090.00

Plant and Equipment Assessing ability to sell assets and conducting a Short term sale to realise assets

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

4.8 hours

$2,525.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing section 439A report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation

4.0 hours

$2,140.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Administration

8.2 hours

$3,245.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Liquidation

Books and records / storage

Dealing with records in storage

Sending job files to storage

Appendix C - Summary of receipts and payments

Central Park Water Pty Ltd (Administrators Appointed) Summary of Receipts and Payments For the period 20 December 2018 to 8 February 2019

Receipts Amount ($)

Cash at bank at appointment 7,112

Interest Income 6

Total receipts 7,118

Payments Amount ($)

Total payments -

Net receipts/(payments) 7,118

Remuneration Approval Report

Discovery Point Water Pty Ltd (Administrators Appointed) ACN 142 392 541 (the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration, the deed administration, the creditors trust, or liquidation as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary

The total remuneration for this appointment is estimated to be $31,514.00 (exclusive of GST)

if the Deed is approved or $21,514.00 (exclusive of GST) in a liquidation. We note that the

Deed / Creditors Trust and a liquidation are mutually exclusive outcomes in an

administration.

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $6,518.00

Resolution 2: 8 February 2019 to execution of the Deed of Company Arrangement and the end of the Administration*

B2 $4,996.00

Total $11,514.00

Deed of Company Arrangement

Resolution 3: Commencement of DOCA to completion (effectuation)* B3 $10,000.00

Creditors’ Trust

Resolution 4: Commencement of Creditors’ Trust to finalisation* B4 $10,000.00

Liquidation

Resolution 5: Commencement to completion* B5 $10,000.00

* 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.

3. Remuneration

3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,518.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed or the Administration concludes, is fixed and approved to a maximum cap of $4,996.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 – Deed Administration

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 4 – Creditors’ Trust

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 5 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of the administration, deed administration, creditors trust or liquidation (as appropriate) 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 of 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 Schedule A1 to A5 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B5 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Deed Administration / Creditors Trust / 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 Deed Administration / Creditors Trust / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Deed Administrators/ Trustees / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Deed Administrators/ Creditors Trust / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

The proposed Deed sets up a separate fund to pay the Administrators / Deed Administrators / Trustees costs from the fund set up to pay creditors.

Participating unsecured creditors of all Deed Companies will have a right to prove for their entitlement in the Creditors Trust and will establish the quantum of their claim via a POD exercise. Given the expected quantum of claims and the known contribution value of the fund ($2.76m), we estimate the dividend to participating unsecured creditors to be approximately 60 cents in the dollar.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments

The summary of receipts and payments for the period from 20 December 2018 to 8 February 2019 is contained in Appendix C.

6. Queries

Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Discovery Point Water Pty Ltd (Administrators Appointed) ACN 142 392 541 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Lachy Haynes Partner 720 0.3 216.0 0.30 216.00 - - - -

Danny Touma Director 625 3.1 1,937.5 3.10 1,937.50 - - - -

Katie Pearce Senior Manager 560 3.1 1,736.00 3.10 1,736.00 - - -

Michelle Budiarso Senior Consultant 425 0.1 42.5 0.10 42.50 - - - -

Alessandro Chirico Consultant 350 4.4 1,540.0 4.40 1,540.00 - - - -

Brendan Flaherty Consultant 350 0.8 280.0 - - - - 0.80 280.00

Fleur Combridge Consultant 350 0.7 245.0 - - 0.30 105.00 0.40 140.00

Alec Peng Consultant 350 0.1 35.0 - - - - 0.10 35.00

Specialist 180 2.1 378.00 2.10 378.00 - - - -

Administration Support 180 0.6 108.0 - - - 0.60 108.00

Total 15.3 6,518.00 13.1 5,850.00 0.3 105.00 1.9 563.00

GST 651.80

7,169.80

426.01 446.56 350.00 296.32

Administration

Total (Including GST)

Average rate (excluding GST)

Assets Creditors

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Discovery Point Water Pty Ltd (Administrators Appointed) ACN 142 392 541 Calculation of Remuneration Resolution 2 – Administration for the period 8 February 2019 to the date the DOCA is executed and the Administration concludes

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 - - 1.0 720.00 - - -

Chris Hill Appointee 720 1.0 720.00 1.0 720.00 - - - - - -

Sunil Purba Director 625 1.0 625.00 - - - - 1.0 625.00 - -

Shane Ugo Senior Manager 560 1.0 560.00 - - 1.0 560.00 - - - -

Amy Gelevski Manager 510 1.0 510.00 1.0 510.00 - - - - - -

Tim Evans Manager 510 1.0 510.00 - 1.0 510.00 - - - -

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - 1.0 425.00 - - -

Brendan Flaherty Consultant 350 1.0 350.00 - - - - 1.0 350.00 - -

Specialist 180 1.0 180.00 - - - - - - 1.0 180.00

Administration Support 180 2.2 396.00 - - 1.2 216.00 - - 1.0 180.00

Total 11.2 4,996.00 2.0 1,230.00 5.2 2,431.00 2.0 975.00 2.0 360.00

GST 499.60

5,495.60

446.07 615.00 467.50 487.50 180.00

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Trade-on

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Discovery Point Water Pty Ltd (Administrators Appointed) ACN 142 392 541 Calculation of Remuneration Resolution 3 – Deed Administrator for the period from execution of DOCA to finalisation (effectuation) of the Deed

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 2.5 1,800.00 - - 1.5 1,080.00 1.0 720.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - 2.0 1,120.00 - -

Amy Gelevski Manager 510 5.0 2,550.00 1.0 510.00 1.0 510.00 2.0 1,020.00 1.0 510.00

Brendan Flaherty Consultant 350 3.0 1,050.00 - - 1.0 350.00 - - 2.0 700.00

Specialist 180 1.9 340.00 - - - - - - 1.9 340.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 20.9 10,000.00 2.0 1,230.00 4.5 2,565.00 7.0 4,205.00 7.4 2,000.00

GST 1,000.00

11,000.00

478.72 615.00 570.00 600.71 270.68

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Trade-on

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A4

Discovery Point Water Pty Ltd (Administrators Appointed) ACN 142 392 541 Calculation of Remuneration Resolution 4 – Creditors Trust for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.5 1,080.00 - - 1.0 720.00 0.5 360.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - 1.0 560.00 - - 1.0 560.00

Amy Gelevski Manager 510 5.9 3,009.00 1.0 510.00 - - 3.0 1,530.00 1.9 969.00

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - - - 1.0 425.00 - -

Brendan Flaherty Consultant 350 2.0 700.00 - - - - 2.0 700.00 - -

Specialist 180 2.9 526.00 - - - - 2.0 360.00 0.9 166.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 21.8 10,000.00 2.0 1,230.00 3.0 1,905.00 10.5 4,720.00 6.3 2,145.00

GST 1,000.00

11,000.00

458.25 615.00 635.00 449.52 339.28

AdministrationAssets Creditors Dividends

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A5

Discovery Point Water Pty Ltd (Administrators Appointed) ACN 142 392 541 Calculation of Remuneration Resolution 5 – Liquidation for the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.3 945.00 - 1.31 945.00 - - - -

Chris Hill Appointee 720 1.0 720.00 1.00 720.00 - - - - - -

Sunil Purba Director 625 2.0 1,250.00 - 1.00 625.00 - - 1.00 625.00

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - - 2.00 1,120.00 - -

Amy Gelevski Manager 510 3.5 1,785.00 - 0.50 255.00 2.00 1,020.00 1.00 510.00

Tim Evans Manager 510 3.0 1,530.00 2.00 1,020.00 - - - - 1.00 510.00

Michelle Budiarso Senior Consultant 425 2.0 850.00 - - - - - - 2.00 850.00

Brendan Flaherty Consultant 350 4.0 1,400.00 1.00 350.00 2.00 700.00 - - 1.00 350.00

Specialist 180 1.0 180.00 - - - - - - 1.00 180.00

Administration Support 180 1.2 220.00 - - - - - - 1.22 220.00

Total 21.0 10,000.00 4.00 2,090.00 4.81 2,525.00 4.00 2,140.00 8.22 3,245.00

GST 1,000.00

11,000.00

475.40 522.50 524.68 535.00 394.66

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Investigation

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Assets

13.1 hours

$5,850.00

Sale of Business as a Going Concern

Preparing an information memorandum

Reviewing sale information and documentation

Liaising with purchasers and employees

Internal meetings to discuss/review offers received

Attendance at external meetings

Plant and Equipment Reviewing asset listings

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

0.1 hours

$105.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Retention of Title Claims Search the PPSA register

Notify PMSI creditors identified from PPSA register

Receive initial notification of creditors’ intention to claim

Provision of retention of title claim form to creditors

Receive completed retention of title claim forms

Meeting claimants on site to identify goods

Adjudicate retention of title claims

Forward correspondence to claimants notifying outcome of adjudication

Preparation of payment vouchers to satisfy valid claims

Preparation of correspondence to claimants to accompany payment of claims

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Task Area General Description Includes

Corresponding with OSR and ATO regarding POD when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Responding to stakeholder queries and questions immediately following meeting

Administration

1.9 hours

$563.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the DOCA is executed and the Administration ends

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Plant and Equipment Dealing with assets in accordance with the Deed

Assets subject to specific charges

All tasks associated with dealing with a charged asset

Other Assets Tasks associated with dealing with other assets

Leasing Liaising with owners/lessors

Creditors

5.2 hours

$2,431.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

2.0 hours

$975.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

2.0 hours

$360.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

Task Area General Description Includes

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Deed

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

4.5 hours

$2,565.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

7.0 hours

$4,205.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

7.4 hours

$2,000.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Deed administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B4

Resolution 4

The below table provides a description of the work undertaken in each major task area for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

3.0 hours

$1,905.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Dividend

10.5 hours

$4,720.00

Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD

Receipt of POD

Maintain POD register

Adjudicating POD

Request further information from claimants regarding POD

Preparation of correspondence to claimant advising outcome of adjudication

Dividend procedures Preparation of correspondence to creditors advising of intention to declare dividend

Advertisement of intention to declare dividend

Obtain clearance from ATO to allow distribution of company’s assets

Preparation of dividend calculation

Preparation of correspondence to creditors announcing declaration of dividend

Advertise announcement of dividend

Preparation of distribution

Preparation of dividend file

Preparation of payment vouchers to pay dividend

Preparation of correspondence to creditors enclosing payment of dividend

Administration

6.3 hours

$2,145.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

Task Area General Description Includes

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of the Trust

Books and records / storage

Dealing with records in storage

Sending job files to storage

Processing receipts and payments

Entering receipts and payments into accounting system

Schedule B5

Resolution 5

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Assets

4.0 hours

$2,090.00

Plant and Equipment Assessing ability to sell assets and conducting a Short term sale to realise assets

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

4.8 hours

$2,525.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing section 439A report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation

4.0 hours

$2,140.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Administration

8.2 hours

$3,245.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Liquidation

Books and records / storage

Dealing with records in storage

Sending job files to storage

Appendix C - Summary of receipts and payments

Discovery Point Water Pty Ltd (Administrators Appointed)

Summary of Receipts and Payments For the period 20 December 2018 to 8 February 2019

Receipts Amount ($)

Cash at bank at appointment 1,081

Interest Income 1

Total receipts 1,082

Payments Amount ($)

Total payment -

Net receipts/(payments) 1,082

Remuneration Approval Report

Green Square Water Pty Ltd (Administrators Appointed) ACN 163 432 906

(the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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

Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration, the deed administration, the creditors trust, or liquidation as appropriate..

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary

The total remuneration for this appointment is estimated to be $31,479.00 (exclusive of GST)

if the Deed is approved or $21,479.00 (exclusive of GST) in a liquidation. We note that the

Deed / Creditors Trust and a liquidation are mutually exclusive outcomes in an

administration.

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $6,483.00

Resolution 2: 8 February 2019 to execution of the Deed of Company Arrangement and the end of the Administration*

B2 $4,996.00

Total $11,479.00

Deed of Company Arrangement

Resolution 3: Commencement of DOCA to completion (effectuation)* B3 $10,000.00

Creditors’ Trust

Resolution 4: Commencement of Creditors’ Trust to finalisation* B4 $10,000.00

Liquidation

Resolution 5: Commencement to completion* B5 $10,000.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration, deed administration, creditors trust or liquidation (as appropriate). Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors.

3. Remuneration

3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,483.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $4,996.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 – Deed Administration

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 4 – Creditors’ Trust

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 5 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of the administration, deed administration, creditors trust or liquidation (as appropriate) 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 of 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 Schedule A1 to A5 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B5 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Deed Administration / Creditors Trust / 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 Deed Administration / Creditors Trust / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Deed Administrators/ Trustees / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Deed Administrators/ Creditors Trust / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

The proposed Deed sets up a separate fund to pay the Administrators / Deed Administrators / Trustees costs from the fund set up to pay creditors.

Participating unsecured creditors of all Deed Companies will have a right to prove for their entitlement in the Creditors Trust and will establish the quantum of their claim via a POD exercise. Given the expected quantum of claims and the known contribution value of the fund ($2.76m), we estimate the dividend to participating unsecured creditors to be approximately 60 cents in the dollar.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments

The summary of receipts and payments for the period from 20 December 2018 to 8 February 2019 is contained in Appendix C.

6. Queries

Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Green Square Water Pty Ltd (Administrators Appointed) ACN 163 432 906 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Lachy Haynes Partner 720 0.3 216.0 0.30 216.00 - - - -

Danny Touma Director 625 3.1 1,937.5 3.10 1,937.50 - - - -

Katie Pearce Senior Manager 560 3.1 1,736.00 3.10 1,736.00 - - -

Michelle Budiarso Senior Consultant 425 0.1 42.5 0.10 42.50 - - - -

Alessandro Chirico Consultant 350 4.4 1,540.0 4.40 1,540.00 - - - -

Brendan Flaherty Consultant 350 0.8 280.0 - - - - 0.80 280.00

Fleur Combridge Consultant 350 0.6 210.0 - - 0.20 70.00 0.40 140.00

Alec Peng Consultant 350 0.1 35.0 - - - - 0.10 35.00

Specialist 180 2.1 378.00 2.10 378.00 - - - -

Administration Support 180 0.6 108.0 - - - - 0.60 108.00

Total 15.2 6,483.00 13.1 5,850.00 0.2 70.00 1.9 563.00

GST 648.30

7,131.30

426.51 446.56 350.00 296.32

Administration

Total (Including GST)

Average rate (excluding GST)

Assets Creditors

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Green Square Water Pty Ltd (Administrators Appointed) ACN 163 432 906 Calculation of Remuneration Resolution 2 – Administration for the period 8 February 2019 to the date the DOCA is executed and the Administration concludes

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 - - 1.0 720.00 - - -

Chris Hill Appointee 720 1.0 720.00 1.0 720.00 - - - - - -

Sunil Purba Director 625 1.0 625.00 - - - - 1.0 625.00 - -

Shane Ugo Senior Manager 560 1.0 560.00 - - 1.0 560.00 - - - -

Amy Gelevski Manager 510 1.0 510.00 1.0 510.00 - - - - - -

Tim Evans Manager 510 1.0 510.00 - 1.0 510.00 - - - -

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - 1.0 425.00 - - -

Brendan Flaherty Consultant 350 1.0 350.00 - - - - 1.0 350.00 - -

Specialist 180 1.0 180.00 - - - - - - 1.0 180.00

Administration Support 180 2.2 396.00 - - 1.2 216.00 - - 1.0 180.00

Total 11.2 4,996.00 2.0 1,230.00 5.2 2,431.00 2.0 975.00 2.0 360.00

GST 499.60

5,495.60

446.07 615.00 467.50 487.50 180.00

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Trade-on

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Green Square Water Pty Ltd (Administrators Appointed) ACN 163 432 906 Calculation of Remuneration Resolution 3 – Deed Administrator for the period from execution of DOCA to finalisation (effectuation) of the DOCA

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 2.5 1,800.00 - - 1.5 1,080.00 1.0 720.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - 2.0 1,120.00 - -

Amy Gelevski Manager 510 5.0 2,550.00 1.0 510.00 1.0 510.00 2.0 1,020.00 1.0 510.00

Brendan Flaherty Consultant 350 3.0 1,050.00 - - 1.0 350.00 - - 2.0 700.00

Specialist 180 1.9 340.00 - - - - - - 1.9 340.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 20.9 10,000.00 2.0 1,230.00 4.5 2,565.00 7.0 4,205.00 7.4 2,000.00

GST 1,000.00

11,000.00

478.72 615.00 570.00 600.71 270.68

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Trade-on

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A4

Green Square Water Pty Ltd (Administrators Appointed) ACN 163 432 906 Calculation of Remuneration Resolution 4 – Creditors Trust for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.5 1,080.00 - - 1.0 720.00 0.5 360.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - 1.0 560.00 - - 1.0 560.00

Amy Gelevski Manager 510 5.9 3,009.00 1.0 510.00 - - 3.0 1,530.00 1.9 969.00

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - - - 1.0 425.00 - -

Brendan Flaherty Consultant 350 2.0 700.00 - - - - 2.0 700.00 - -

Specialist 180 2.9 526.00 - - - - 2.0 360.00 0.9 166.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 21.8 10,000.00 2.0 1,230.00 3.0 1,905.00 10.5 4,720.00 6.3 2,145.00

GST 1,000.00

11,000.00

458.25 615.00 635.00 449.52 339.28

AdministrationAssets Creditors Dividends

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A5

Green Square Water Pty Ltd (Administrators Appointed) ACN 163 432 906 Calculation of Remuneration Resolution 5 – Liquidation for the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.3 945.00 - 1.3 945.00 - - - -

Chris Hill Appointee 720 1.0 720.00 1.0 720.00 - - - - - -

Sunil Purba Director 625 2.0 1,250.00 - 1.0 625.00 - - 1.0 625.00

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - - 2.0 1,120.00 - -

Amy Gelevski Manager 510 3.5 1,785.00 - 0.5 255.00 2.0 1,020.00 1.0 510.00

Tim Evans Manager 510 3.0 1,530.00 2.0 1,020.00 - - - - 1.0 510.00

Michelle Budiarso Senior Consultant 425 2.0 850.00 - - - - - - 2.0 850.00

Brendan Flaherty Consultant 350 4.0 1,400.00 1.0 350.00 2.0 700.00 - - 1.0 350.00

Specialist 180 1.0 180.00 - - - - - - 1.0 180.00

Administration Support 180 1.2 220.00 - - - - - - 1.2 220.00

Total 21.0 10,000.00 4.0 2,090.00 4.8 2,525.00 4.0 2,140.00 8.2 3,245.00

GST 1,000.00

11,000.00

475.40 522.50 524.68 535.00 394.66

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Investigation

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Assets

13.1 hours

$5,850.00

Sale of Business as a Going Concern

Preparing an information memorandum

Reviewing sale information and documentation

Liaising with purchasers and employees

Internal meetings to discuss/review offers received

Attendance at external meetings

Plant and Equipment Reviewing asset listings

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

0.2 hours

$70.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Retention of Title Claims Search the PPSA register

Notify PMSI creditors identified from PPSA register

Receive initial notification of creditors’ intention to claim

Provision of retention of title claim form to creditors

Receive completed retention of title claim forms

Meeting claimants on site to identify goods

Adjudicate retention of title claims

Forward correspondence to claimants notifying outcome of adjudication

Preparation of payment vouchers to satisfy valid claims

Preparation of correspondence to claimants to accompany payment of claims

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Task Area General Description Includes

Corresponding with OSR and ATO regarding POD when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Responding to stakeholder queries and questions immediately following meeting

Administration

1.9 hours

$563.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the DOCA is executed and the Administration ends

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Plant and Equipment Dealing with assets in accordance with the Deed

Assets subject to specific charges

All tasks associated with dealing with a charged asset

Other Assets Tasks associated with dealing with other assets

Leasing Liaising with owners/lessors

Creditors

5.2 hours

$2,431.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

2.0 hours

$975.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

2.0 hours

$360.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

Task Area General Description Includes

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period from execution of the Deed to the conclusion (effectuation) of the Deed

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

4.5 hours

$2,565.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

7.0 hours

$4,205.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

7.4 hours

$2,000.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Deed administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B4

Resolution 4

The below table provides a description of the work undertaken in each major task area for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Plant and Equipment Dealing with assets in accordance with the Deed

Assets subject to specific charges

All tasks associated with dealing with a charged asset

Other Assets Tasks associated with dealing with other assets

Leasing Liaising with owners/lessors

Creditors

3.0 hours

$1,905.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Dividend

10.5 hours

$4,720.00

Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD

Receipt of POD

Maintain POD register

Adjudicating POD

Request further information from claimants regarding POD

Preparation of correspondence to claimant advising outcome of adjudication

Dividend procedures Preparation of correspondence to creditors advising of intention to declare dividend

Advertisement of intention to declare dividend

Obtain clearance from ATO to allow distribution of company’s assets

Preparation of dividend calculation

Preparation of correspondence to creditors announcing declaration of dividend

Advertise announcement of dividend

Preparation of distribution

Preparation of dividend file

Preparation of payment vouchers to pay dividend

Preparation of correspondence to creditors enclosing payment of dividend

Task Area General Description Includes

Administration

6.3 hours

$2,145.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of the Trust

Books and records / storage

Dealing with records in storage

Sending job files to storage

Processing receipts and payments

Entering receipts and payments into accounting system

Schedule B5

Resolution 5

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Assets

4.0 hours

$2,090.00

Plant and Equipment Assessing ability to sell assets and conducting a Short term sale to realise assets

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

4.8 hours

$2,525.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing section 439A report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation

4.0 hours

$2,140.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Administration

8.2 hours

$3,245.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Liquidation

Books and records / storage

Dealing with records in storage

Sending job files to storage

Appendix C - Summary of receipts and payments

Green Square Water Pty Ltd (Administrators Appointed) Summary of Receipts and Payments For the period 20 December 2018 to 8 February 2019

Receipts Amount ($)

Cash at bank at appointment 6,662

Interest Income 5

Total receipts 6,667

Payments Amount ($)

Total payments -

Net receipts/(payments) 6,667

Remuneration Approval Report

Pitt Town Water Pty Ltd (Administrators Appointed) ACN 141 705 660 (the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration, the deed administration, the creditors trust, or liquidation as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary

The total remuneration for this appointment is estimated to be $31,426.00 (exclusive of

GST) if the Deed is approved or $21,426.00 (exclusive of GST) in a liquidation. We note that

the Deed / Creditors Trust and a liquidation are mutually exclusive outcomes in an

administration.

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $6,430.00

Resolution 2: 8 February 2019 to execution of the Deed of Company Arrangement and the end of the Administration*

B2 $4,996.00

Total $11,426.00

Deed of Company Arrangement

Resolution 3: Commencement of DOCA to completion (effectuation)* B3 $10,000.00

Creditors’ Trust

Resolution 4: Commencement of Creditors’ Trust to finalisation* B4 $10,000.00

Liquidation

Resolution 5: Commencement to completion* B5 $10,000.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration, deed administration, creditors trust or liquidation (as appropriate). Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors.

3. Remuneration

3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,430.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $4,996.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 – Deed Administration

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 4 – Creditors’ Trust

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 5 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of the administration, deed administration, creditors trust or liquidation (as appropriate) 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 of 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 Schedule A1 to A5 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B5 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Deed Administration / Creditors Trust / 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 Deed Administration / Creditors Trust / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Deed Administrators/ Trustees / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Deed Administrators/ Creditors Trust / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

The proposed Deed sets up a separate fund to pay the Administrators / Deed Administrators / Trustees costs from the fund set up to pay creditors.

Participating unsecured creditors of all Deed Companies will have a right to prove for their entitlement in the Creditors Trust and will establish the quantum of their claim via a POD exercise. Given the expected quantum of claims and the known contribution value of the fund ($2.76m), we estimate the dividend to participating unsecured creditors to be approximately 60 cents in the dollar.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments

The summary of receipts and payments for the period from 20 December 2018 to 8 February 2019 is contained in Appendix C.

6. Queries

Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Pitt Town Water Pty Ltd (Administrators Appointed) ACN 141 705 660 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Lachy Haynes Partner 720 0.3 216.00 0.30 216.00 - - - -

Danny Touma Director 625 3.1 1,937.50 3.10 1,937.50 - - - -

Katie Pearce Senior Manager 560 3.1 1,736.00 3.10 1,736.00 - - -

Michelle Budiarso Senior Consultant 425 0.1 42.50 0.10 42.50 - - - -

Alessandro Chirico Consultant 350 4.4 1,540.00 4.40 1,540.00 - - - -

Brendan Flaherty Consultant 350 0.8 245.00 - - - - 0.70 245.00

Fleur Combridge Consultant 350 0.6 210.00 - - 0.30 70.00 0.40 140.00

Alec Peng Consultant 350 0.1 35.00 - - - - 0.10 35.00

-

Specialist 180 2.1 378.00 2.10 378.00 - - - -

Administration Support 180 0.6 90.00 - - - - 0.50 90.00

Total 15.2 6,430.0 13.1 5,850.0 0.3 70.0 1.7 510.0

GST 648.30

7,131.30

426.51 446.56 350.00 296.32

Administration

Total (Including GST)

Average rate (excluding GST)

Assets Creditors

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Pitt Town Water Pty Ltd (Administrators Appointed) ACN 141 705 660 Calculation of Remuneration Resolution 2 – Administration for the period 8 February 2019 to the date the DOCA is executed and the Administration concludes

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 - - 1.0 720.00 - - -

Chris Hill Appointee 720 1.0 720.00 1.0 720.00 - - - - - -

Sunil Purba Director 625 1.0 625.00 - - - - 1.0 625.00 - -

Shane Ugo Senior Manager 560 1.0 560.00 - - 1.0 560.00 - - - -

Amy Gelevski Manager 510 1.0 510.00 1.0 510.00 - - - - - -

Tim Evans Manager 510 1.0 510.00 - 1.0 510.00 - - - -

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - 1.0 425.00 - - -

Brendan Flaherty Consultant 350 1.0 350.00 - - - - 1.0 350.00 - -

Specialist 180 1.0 180.00 - - - - - - 1.0 180.00

Administration Support 180 2.2 396.00 - - 1.2 216.00 - - 1.0 180.00

Total 11.2 4,996.00 2.0 1,230.00 5.2 2,431.00 2.0 975.00 2.0 360.00

GST 499.60

5,495.60

446.07 615.00 467.50 487.50 180.00

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Trade-on

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Pitt Town Water Pty Ltd (Administrators Appointed) ACN 141 705 660 Calculation of Remuneration Resolution 3 – Deed Administrator for the period from execution of DOCA to finalisation (effectuation) of the DOCA

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 2.5 1,800.00 - - 1.5 1,080.00 1.0 720.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - 2.0 1,120.00 - -

Amy Gelevski Manager 510 5.0 2,550.00 1.0 510.00 1.0 510.00 2.0 1,020.00 1.0 510.00

Brendan Flaherty Consultant 350 3.0 1,050.00 - - 1.0 350.00 - - 2.0 700.00

Specialist 180 1.9 340.00 - - - - - - 1.9 340.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 20.9 10,000.00 2.0 1,230.00 4.5 2,565.00 7.0 4,205.00 7.4 2,000.00

GST 1,000.00

11,000.00

478.72 615.00 570.00 600.71 270.68

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Trade-on

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A4

Pitt Town Water Pty Ltd (Administrators Appointed) ACN 141 705 660 Calculation of Remuneration Resolution 4 – Creditors Trust for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.5 1,080.00 - - 1.0 720.00 0.5 360.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - 1.0 560.00 - - 1.0 560.00

Amy Gelevski Manager 510 5.9 3,009.00 1.0 510.00 - - 3.0 1,530.00 1.9 969.00

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - - - 1.0 425.00 - -

Brendan Flaherty Consultant 350 2.0 700.00 - - - - 2.0 700.00 - -

Specialist 180 2.9 526.00 - - - - 2.0 360.00 0.9 166.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 21.8 10,000.00 2.0 1,230.00 3.0 1,905.00 10.5 4,720.00 6.3 2,145.00

GST 1,000.00

11,000.00

458.25 615.00 635.00 449.52 339.28

AdministrationAssets Creditors Dividends

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A5

Pitt Town Water Pty Ltd (Administrators Appointed) ACN 141 705 660 Calculation of Remuneration Resolution 5 – Liquidation for the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.3 945.00 - 1.31 945.00 - - - -

Chris Hill Appointee 720 1.0 720.00 1.00 720.00 - - - - - -

Sunil Purba Director 625 2.0 1,250.00 - 1.00 625.00 - - 1.00 625.00

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - - 2.00 1,120.00 - -

Amy Gelevski Manager 510 3.5 1,785.00 - 0.50 255.00 2.00 1,020.00 1.00 510.00

Tim Evans Manager 510 3.0 1,530.00 2.00 1,020.00 - - - - 1.00 510.00

Michelle Budiarso Senior Consultant 425 2.0 850.00 - - - - - - 2.00 850.00

Brendan Flaherty Consultant 350 4.0 1,400.00 1.00 350.00 2.00 700.00 - - 1.00 350.00

Specialist 180 1.0 180.00 - - - - - - 1.00 180.00

Administration Support 180 1.2 220.00 - - - - - - 1.22 220.00

Total 21.0 10,000.00 4.00 2,090.00 4.81 2,525.00 4.00 2,140.00 8.22 3,245.00

GST 1,000.00

11,000.00

475.40 522.50 524.68 535.00 394.66

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Investigation

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Assets

13.1 hours

$5,850.00

Sale of Business as a Going Concern

Preparing an information memorandum

Reviewing sale information and documentation

Liaising with purchasers and employees

Internal meetings to discuss/review offers received

Attendance at external meetings

Plant and Equipment Reviewing asset listings

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

0.3 hours

$70.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Retention of Title Claims Search the PPSA register

Notify PMSI creditors identified from PPSA register

Receive initial notification of creditors’ intention to claim

Provision of retention of title claim form to creditors

Receive completed retention of title claim forms

Meeting claimants on site to identify goods

Adjudicate retention of title claims

Forward correspondence to claimants notifying outcome of adjudication

Preparation of payment vouchers to satisfy valid claims

Preparation of correspondence to claimants to accompany payment of claims

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD

Task Area General Description Includes

when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Responding to stakeholder queries and questions immediately following meeting

Administration

1.7 hours

$510.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the DOCA is executed and the Administration ends

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Plant and Equipment Dealing with assets in accordance with the Deed

Assets subject to specific charges

All tasks associated with dealing with a charged asset

Other Assets Tasks associated with dealing with other assets

Leasing Liaising with owners/lessors

Creditors

5.2 hours

$2,431.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

2.0 hours

$975.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

2.0 hours

$360.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

Task Area General Description Includes

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period from execution of the Deed to the conclusion (effectuation) of the Deed

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

4.5 hours

$2,565.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

7.0 hours

$4,205.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

7.4 hours

$2,000.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Deed administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B4

Resolution 4

The below table provides a description of the work undertaken in each major task area for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

3.0 hours

$1,905.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Dividend

10.5 hours

$4,720.00

Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD

Receipt of POD

Maintain POD register

Adjudicating POD

Request further information from claimants regarding POD

Preparation of correspondence to claimant advising outcome of adjudication

Dividend procedures Preparation of correspondence to creditors advising of intention to declare dividend

Advertisement of intention to declare dividend

Obtain clearance from ATO to allow distribution of company’s assets

Preparation of dividend calculation

Preparation of correspondence to creditors announcing declaration of dividend

Advertise announcement of dividend

Preparation of distribution

Preparation of dividend file

Preparation of payment vouchers to pay dividend

Preparation of correspondence to creditors enclosing payment of dividend

Task Area General Description Includes

Administration

6.3 hours

$2,145.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of the Trust

Books and records / storage

Dealing with records in storage

Sending job files to storage

Processing receipts and payments

Entering receipts and payments into accounting system

Schedule B5

Resolution 5

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Assets

4.0 hours

$2,090.00

Plant and Equipment Assessing ability to sell assets and conducting a Short term sale to realise assets

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

4.8 hours

$2,525.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing section 439A report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation

4.0 hours

$2,140.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Administration

8.2 hours

$3,245.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Liquidation

Books and records / storage

Dealing with records in storage

Sending job files to storage

Appendix C - Summary of receipts and payments

Pitt Town Water Pty Ltd (Administrators Appointed) Summary of Receipts and Payments For the period 20 December 2018 to 8 February 2019

Receipts Amount ($)

Cash at bank at appointment 386

Total receipts 386

Payments Amount ($)

Total payments -

Net receipts/(payments) 386

Remuneration Approval Report

Wyee Water Pty Ltd (Administrators Appointed) ACN 160 953 775 (the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration, the deed administration, the creditors trust, or liquidation as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary

The total remuneration for this appointment is estimated to be $31,444.00 (exclusive of

GST) if the Deed is approved or $21,444.00 (exclusive of GST) in a liquidation. We note that

the Deed / Creditors Trust and a liquidation are mutually exclusive outcomes in an

administration.

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $6,448.00

Resolution 2: 8 February 2019 to execution of the Deed of Company Arrangement and the end of the Administration*

B2 $4,996.00

Total $11,444.00

Deed of Company Arrangement

Resolution 3: Commencement of DOCA to completion (effectuation)* B3 $10,000.00

Creditors’ Trust

Resolution 4: Commencement of Creditors’ Trust to finalisation* B4 $10,000.00

Liquidation

Resolution 5: Commencement to completion* B5 $10,000.00

* 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.

3. Remuneration

3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $6,448.00 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the DOCA is executed and the Administration concludes, is fixed and approved to a maximum cap of $4,996.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 – Deed Administration

“That the future remuneration of the Deed Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from execution of DOCA to finalisation (effectuation) of the DOCA, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 4 – Creditors’ Trust

“That the future remuneration of the Trustees, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 5 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000.00 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of the administration, deed administration, creditors trust or liquidation (as appropriate) 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 of 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 Schedule A1 to A5 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B5 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Deed Administration / Creditors Trust / 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 Deed Administration / Creditors Trust / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Deed Administrators/ Trustees / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Deed Administrators/ Creditors Trust / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

The proposed Deed sets up a separate fund to pay the Administrators / Deed Administrators / Trustees costs from the fund set up to pay creditors.

Participating unsecured creditors of all Deed Companies will have a right to prove for their entitlement in the Creditors Trust and will establish the quantum of their claim via a POD exercise. Given the expected quantum of claims and the known contribution value of the fund ($2.76m), we estimate the dividend to participating unsecured creditors to be approximately 60 cents in the dollar.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments

The summary of receipts and payments for the period from 20 December 2018 to 8 February 2019 is contained in Appendix C.

6. Queries

Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Wyee Water Pty Ltd (Administrators Appointed) ACN 160 953 775 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Lachy Haynes Partner 720 0.3 216.00 0.3 216.00 - - - -

Danny Touma Director 625 3.1 1,937.50 3.1 1,937.50 - - - -

Katie Pearce Senior Manager 560 3.1 1,736.00 3.1 1,736.00 - - -

Michelle Budiarso Senior Consultant 425 0.1 42.50 0.1 42.50 - - - -

Alessandro Chirico Consultant 350 4.4 1,540.00 4.4 1,540.00 - - - -

Brendan Flaherty Consultant 350 0.8 245.00 - - - - 0.7 245.00

Fleur Combridge Consultant 350 0.6 210.00 - - 0.3 70.00 0.4 140.00

Alec Peng Consultant 350 0.1 35.00 - - - - 0.1 35.00

Specialist 180 2.1 378.00 2.1 378.00 - - - -

Administration Support 180 0.6 108.00 - - - - 0.6 108.00

Total 15.2 6,448.0 13.1 5,850.0 0.3 70.0 1.8 528.0

GST 648.30

7,131.30

426.51 446.56 350.00 296.32

Administration

Total (Including GST)

Average rate (excluding GST)

Assets Creditors

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Wyee Water Pty Ltd (Administrators Appointed) ACN 160 953 775 Calculation of Remuneration Resolution 2 – Administration for the period 8 February 2019 to the date the DOCA is executed and the Administration concludes

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 - - 1.0 720.00 - - -

Chris Hill Appointee 720 1.0 720.00 1.0 720.00 - - - - - -

Sunil Purba Director 625 1.0 625.00 - - - - 1.0 625.00 - -

Shane Ugo Senior Manager 560 1.0 560.00 - - 1.0 560.00 - - - -

Amy Gelevski Manager 510 1.0 510.00 1.0 510.00 - - - - - -

Tim Evans Manager 510 1.0 510.00 - 1.0 510.00 - - - -

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - 1.0 425.00 - - -

Brendan Flaherty Consultant 350 1.0 350.00 - - - - 1.0 350.00 - -

Specialist 180 1.0 180.00 - - - - - - 1.0 180.00

Administration Support 180 2.2 396.00 - - 1.2 216.00 - - 1.0 180.00

Total 11.2 4,996.00 2.0 1,230.00 5.2 2,431.00 2.0 975.00 2.0 360.00

GST 499.60

5,495.60

446.07 615.00 467.50 487.50 180.00

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Trade-on

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Wyee Water Pty Ltd (Administrators Appointed) ACN 160 953 775 Calculation of Remuneration Resolution 3 – Deed Administrator for the period from execution of DOCA to finalisation (effectuation) of the DOCA

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 2.5 1,800.00 - - 1.5 1,080.00 1.0 720.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - 2.0 1,120.00 - -

Amy Gelevski Manager 510 5.0 2,550.00 1.0 510.00 1.0 510.00 2.0 1,020.00 1.0 510.00

Brendan Flaherty Consultant 350 3.0 1,050.00 - - 1.0 350.00 - - 2.0 700.00

Specialist 180 1.9 340.00 - - - - - - 1.9 340.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 20.9 10,000.00 2.0 1,230.00 4.5 2,565.00 7.0 4,205.00 7.4 2,000.00

GST 1,000.00

11,000.00

478.72 615.00 570.00 600.71 270.68

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Trade-on

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A4

Wyee Water Pty Ltd (Administrators Appointed) ACN 160 953 775 Calculation of Remuneration Resolution 4 – Creditors Trust for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.5 1,080.00 - - 1.0 720.00 0.5 360.00 - -

Chris Hill Appointee 720 2.0 1,440.00 1.0 720.00 - - 1.0 720.00 - -

Sunil Purba Director 625 2.0 1,250.00 - - 1.0 625.00 1.0 625.00 - -

Shane Ugo Senior Manager 560 2.0 1,120.00 - - 1.0 560.00 - - 1.0 560.00

Amy Gelevski Manager 510 5.9 3,009.00 1.0 510.00 - - 3.0 1,530.00 1.9 969.00

Michelle Budiarso Senior Consultant 425 1.0 425.00 - - - - 1.0 425.00 - -

Brendan Flaherty Consultant 350 2.0 700.00 - - - - 2.0 700.00 - -

Specialist 180 2.9 526.00 - - - - 2.0 360.00 0.9 166.00

Administration Support 180 2.5 450.00 - - - - - - 2.5 450.00

Total 21.8 10,000.00 2.0 1,230.00 3.0 1,905.00 10.5 4,720.00 6.3 2,145.00

GST 1,000.00

11,000.00

458.25 615.00 635.00 449.52 339.28

AdministrationAssets Creditors Dividends

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A5

Wyee Water Pty Ltd (Administrators Appointed) ACN 160 953 775 Calculation of Remuneration Resolution 5 – Liquidation for the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.3 945.00 - 1.31 945.00 - - - -

Chris Hill Appointee 720 1.0 720.00 1.00 720.00 - - - - - -

Sunil Purba Director 625 2.0 1,250.00 - 1.00 625.00 - - 1.00 625.00

Shane Ugo Senior Manager 560 2.0 1,120.00 - - - - 2.00 1,120.00 - -

Amy Gelevski Manager 510 3.5 1,785.00 - 0.50 255.00 2.00 1,020.00 1.00 510.00

Tim Evans Manager 510 3.0 1,530.00 2.00 1,020.00 - - - - 1.00 510.00

Michelle Budiarso Senior Consultant 425 2.0 850.00 - - - - - - 2.00 850.00

Brendan Flaherty Consultant 350 4.0 1,400.00 1.00 350.00 2.00 700.00 - - 1.00 350.00

Specialist 180 1.0 180.00 - - - - - - 1.00 180.00

Administration Support 180 1.2 220.00 - - - - - - 1.22 220.00

Total 21.0 10,000.00 4.00 2,090.00 4.81 2,525.00 4.00 2,140.00 8.22 3,245.00

GST 1,000.00

11,000.00

475.40 522.50 524.68 535.00 394.66

Total (Including GST)

Average rate (excluding GST)

AdministrationAssets Creditors Investigation

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Assets

13.1 hours

$5,850.00

Sale of Business as a Going Concern

Preparing an information memorandum

Reviewing sale information and documentation

Liaising with purchasers and employees

Internal meetings to discuss/review offers received

Attendance at external meetings

Plant and Equipment Reviewing asset listings

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

0.3 hours

$70.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Retention of Title Claims Search the PPSA register

Notify PMSI creditors identified from PPSA register

Receive initial notification of creditors’ intention to claim

Provision of retention of title claim form to creditors

Receive completed retention of title claim forms

Meeting claimants on site to identify goods

Adjudicate retention of title claims

Forward correspondence to claimants notifying outcome of adjudication

Preparation of payment vouchers to satisfy valid claims

Preparation of correspondence to claimants to accompany payment of claims

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Task Area General Description Includes

Corresponding with OSR and ATO regarding POD when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Responding to stakeholder queries and questions immediately following meeting

Administration

1.8 hours

$528.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the DOCA is executed and the Administration ends

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Plant and Equipment Dealing with assets in accordance with the Deed

Assets subject to specific charges

All tasks associated with dealing with a charged asset

Other Assets Tasks associated with dealing with other assets

Leasing Liaising with owners/lessors

Creditors

5.2 hours

$2,431.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

2.0 hours

$975.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

2.0 hours

$360.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

Task Area General Description Includes

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period from execution of the Deed to the conclusion (effectuation) of the Deed

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

4.5 hours

$2,565.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor queries

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Trade On

7.0 hours

$4,205.00

Trade On Management Liaising with suppliers

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Finalising payments of trade-on costs

Processing receipts and payments

Entering receipts and payments into accounting system

Administration

7.4 hours

$2,000.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Deed administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Schedule B4

Resolution 4

The below table provides a description of the work undertaken in each major task area for the period from the creation of the Creditors’ Trust to the dissolution of the Creditors’ Trust

Task Area General Description Includes

Assets

2.0 hours

$1,230.00

Sale of Business as a Going Concern

Finalising sale

Creditors

3.0 hours

$1,905.00

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Dividend

10.5 hours

$4,720.00

Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD

Receipt of POD

Maintain POD register

Adjudicating POD

Request further information from claimants regarding POD

Preparation of correspondence to claimant advising outcome of adjudication

Dividend procedures Preparation of correspondence to creditors advising of intention to declare dividend

Advertisement of intention to declare dividend

Obtain clearance from ATO to allow distribution of company’s assets

Preparation of dividend calculation

Preparation of correspondence to creditors announcing declaration of dividend

Advertise announcement of dividend

Preparation of distribution

Preparation of dividend file

Preparation of payment vouchers to pay dividend

Preparation of correspondence to creditors enclosing payment of dividend

Task Area General Description Includes

Administration

6.3 hours

$2,145.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Processing receipts and payments

Entering receipts and payments into accounting system

Schedule B5

Resolution 5

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Assets

4.0 hours

$2,090.00

Plant and Equipment Assessing ability to sell assets and conducting a Short term sale to realise assets

Assets subject to specific charges

All tasks associated with realising a charged asset

Debtors Reviewing and assessing collectability of debtors ledger

Other Assets Tasks associated with realising other assets

Leasing Reviewing leasing documents

Liaising with owners/lessors

Creditors

4.8 hours

$2,525.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Secured creditor reporting

Notifying PPSA registered creditors of appointment

Preparing reports to secured creditor

Regular verbal updates to secured creditor

Attendance at update meetings with secured creditor

Responding to secured creditor’s queries

Creditor reports Preparing section 439A report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation

4.0 hours

$2,140.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Preparation and lodgement of supplementary report if required

Administration

8.2 hours

$3,245.00

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance 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

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Appendix C - Summary of receipts and payments

Wyee Water Pty Ltd (Administrators Appointed) Summary of Receipts and Payments For the period 20 December 2018 to 8 February 2019

Receipts Amount ($)

Cash at bank at appointment 181

Total receipts 182

Payments Amount ($)

Total payments -

Net receipts/(payments) 182

Remuneration Approval Report

Loxford Development Holdings Pty Ltd (Administrators Appointed) ACN 627 353 191 (the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration or liquidator as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary

The total remuneration for this appointment is estimated to be $15,494.50 (exclusive of

GST).

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $2,994.50

Resolution 2: 8 February 2019 the end of the Administration* B2 $2,500.00

Total $5,494.50

Liquidation

Resolution 3: Commencement to completion* B3 $10,000.00

* 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.

3. Remuneration

3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $2,994.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the Administration concludes, is fixed and approved to a maximum cap of $2,500.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

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 Schedule A1 to A3 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B3 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Administration / 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 Administrator / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments

There were no receipts and payments for the period 20 December 2018 to 8 February 2019.

6. Queries

Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Loxford Development Holdings Pty Ltd (Administrators Appointed) ACN 627 353 191 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 0.7 504.00 - 0.7 504.00 -

Chris Hill Appointee 720 0.6 432.00 0.6 432.00 - -

Sunil Purba Director 625 1.0 625.00 - 0.6 375.00 0.4 250.00

Amy Gelevski Manager 510 0.6 306.00 - 0.6 306.00 -

Tim Evans Manager 510 0.3 153.00 0.2 102.00 0.1 51.00 -

Michelle Budiarso Senior Consultant 425 0.1 42.50 0.1 42.50 - -

Brendan Flaherty Consultant 350 1.2 420.00 - - 1.2 420.00

Fleur Combridge Consultant 350 1.0 350.00 0.3 105.00 - 0.7 245.00

Administration Support 180 0.9 162.00 - - 0.9 162.00

Total 6.4 2,994.50 1.2 681.50 2.0 1,236.00 3.20 1,077.00

GST 299.45

3,293.95

467.89 567.92 618.00 336.56

AdministrationCreditors Investigation

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Loxford Development Holdings Pty Ltd (Administrators Appointed) ACN 627 353 191 Calculation of Remuneration Resolution 2 - For the period 8 February 2019 to the date the Administration concludes

Employee Position $/hoursTotal

ActualTotal

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 1.0 720.00 - -

Chris Hill Appointee 720 0.7 504.00 0.2 144.00 0.5 360.00 -

Amy Gelevski Manager 510 0.5 255.00 - 0.5 255.00 -

Michelle Budiarso Senior Consultant 425 1.0 425.00 1.0 425.00 - -

Brendan Flaherty Consultant 350 1.0 350.00 - - 1.0 350.00

-

Administration Support 180 1.4 246.00 - - - 1.4 246.00

Total 5.6 2,500.00 2.2 1,289.00 1.0 615.00 2.4 596.00

GST 250.00

2,750.00

449.10 585.91 615.00 251.83

AdministrationCreditors Investigations

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Loxford Development Holdings Pty Ltd (Administrators Appointed) ACN 627 353 191 Calculation of Remuneration Resolution 3 - For the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.4 1,008.00 1.4 1,008.00 - -

Chris Hill Appointee 720 1.0 720.00 0.5 360.00 - 0.5 360.00

Sunil Purba Director 625 3.0 1,875.00 - 2.5 1,562.50 0.5 312.50

Amy Gelevski Manager 510 6.5 3,315.00 1.5 765.00 5.0 2,550.00 -

Michelle Budiarso Senior Consultant 425 4.7 1,997.50 2.5 1,062.50 1.5 637.50 0.7 297.50

Brendan Flaherty Consultant 350 2.6 904.50 - 1.0 350.00 1.6 554.50

Administration Support 180 1.0 180.00 - - 1.0 180.00

Total 20.2 10,000.00 5.9 3,195.50 10.0 5,100.00 4.3 1,704.50

GST 1,000.00

11,000.00

495.43 541.61 510.00 397.85

Total (Including GST)

Average rate (excluding GST)

AdministrationCreditors Investigation

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Creditors

1.2 hours

$681.50

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Investigation

2.0 hours

$1,236.00

Conducting investigation Conducting and summarising statutory searches

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration

3.2 hours

$1,077.00

Document maintenance/file review/checklist

Filing of documents

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the Administration concludes

Task Area General Description Includes

Creditors

2.2 hours

$1,289.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Investigation

1 hours

$615.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration

2.4 hours

$596.00

Document maintenance/file review/checklist

Filing of documents

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Creditors

5.9 hours

$3,195.50

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation

10.0 hours

$5,100.00

Conducting investigation Reviewing company’s books and records

Conducting and summarising statutory searches

Preparation of comparative financial statements

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Remuneration Approval Report

Loxford Waters Pty Ltd (Administrators Appointed) ACN 627 354 867 (the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration or liquidator as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary The total remuneration for this appointment is estimated to be $15,286.50 (exclusive of GST).

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $2,786.50

Resolution 2: 8 February 2019 the end of the Administration* B2 $2,500.00

Total $5,286.50

Liquidation

Resolution 3: Commencement to completion* B3 $10,000.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration or liquidation. Should additional work be necessary beyond what is

contemplated, further approval may be sought from creditors.

3. Remuneration 3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $2,786.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administrations, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the Administration concludes, is fixed and approved to a maximum cap of $2,500.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

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 Schedule A1 to A3 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B3 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Administration / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

• Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments There were no receipts and payments for the period 20 December 2018 to 8 February 2019.

6. Queries Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

• ARITA at www.arita.com.au/creditors • ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-

sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Loxford Waters Pty Ltd (Administrators Appointed) ACN 627 354 867 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 0.7 504.00 - 0.7 504.00 -

Chris Hill Appointee 720 0.6 432.00 0.6 432.00 - -

Sunil Purba Director 625 1.0 625.00 - 0.6 375.00 0.4 250.00

Amy Gelevski Manager 510 0.6 306.00 - 0.6 306.00 -

Tim Evans Manager 510 0.2 102.00 - 0.2 102.00 -

Michelle Budiarso Senior Consultant 425 0.1 42.50 0.1 42.50 - -

Brendan Flaherty Consultant 350 1.2 420.00 - - 1.2 420.00

Fleur Combridge Consultant 350 0.5 175.00 - - 0.5 175.00

Administration Support 180 1.0 180.00 - - 1.0 180.00

Total 5.9 2,786.50 0.7 474.50 2.1 1,287.00 3.1 1,025.00

GST 278.65

3,065.15

472.29 677.86 612.86 330.65

AdministrationCreditors Investigation

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Loxford Waters Pty Ltd (Administrators Appointed) ACN 627 354 867 Calculation of Remuneration Resolution 2 – Administration for the period 8 February 2019 to the date the Administration concludes

Employee Position $/hoursTotal

ActualTotal

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 1.0 720.00 - -

Chris Hill Appointee 720 0.7 504.00 0.2 144.00 0.5 360.00 -

Amy Gelevski Manager 510 0.5 255.00 - 0.5 255.00 -

Michelle Budiarso Senior Consultant 425 1.0 425.00 1.0 425.00 - -

Brendan Flaherty Consultant 350 1.0 350.00 - - 1.0 350.00

-

Administration Support 180 1.4 246.00 - - - 1.4 246.00

Total 5.6 2,500.00 2.2 1,289.00 1.0 615.00 2.4 596.00

GST 250.00

2,750.00

449.10 585.91 615.00 251.83

AdministrationCreditors Investigations

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Loxford Waters Pty Ltd (Administrators Appointed) ACN 627 354 867 Calculation of Remuneration Resolution 3 – Liquidation for the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.4 1,008.00 1.4 1,008.00 - -

Chris Hill Appointee 720 1.0 720.00 0.5 360.00 - 0.5 360.00

Sunil Purba Director 625 3.0 1,875.00 - 2.5 1,562.50 0.5 312.50

Amy Gelevski Manager 510 6.5 3,315.00 1.5 765.00 5.0 2,550.00 -

Michelle Budiarso Senior Consultant 425 4.7 1,997.50 2.5 1,062.50 1.5 637.50 0.7 297.50

Brendan Flaherty Consultant 350 2.6 904.50 - 1.0 350.00 1.6 554.50

Administration Support 180 1.0 180.00 - - 1.0 180.00

Total 20.2 10,000.00 5.9 3,195.50 10.0 5,100.00 4.3 1,704.50

GST 1,000.00

11,000.00

495.43 541.61 510.00 397.85

Total (Including GST)

Average rate (excluding GST)

AdministrationCreditors Investigation

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Creditors 0.7 hours $474.50

Creditor Enquiries Deal with creditor enquiries via telephone Review and prepare correspondence to creditors and their representatives via facsimile, email and post Correspondence with committee of creditors members

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend

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 Conducting first meeting of creditors Preparation and lodgement of minutes of meetings with ASIC

Investigation 2.1 hours $1,287.00

Conducting investigation Conducting and summarising statutory searches Liaising with directors regarding certain transactions Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration 3.1 hours $1,025.00

Document maintenance/file review/checklist

Filing of documents

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period Correspondence with the Court regarding approval to extend the convening period Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the Administration ends

Task Area General Description Includes

Creditors 2.2 hours $1,289.00

Creditor Enquiries Deal with creditor enquiries via telephone Review and prepare correspondence to creditors and their representatives via facsimile, email and post Correspondence with committee of creditors members

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend

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 Conducting first meeting of creditors Preparation and lodgement of minutes of meetings with ASIC

Investigation 1 hours $615.00

Conducting investigation Reviewing company’s books and records Review and preparation of company nature and history Conducting and summarising statutory searches Preparation of comparative financial statements Liaising with directors regarding certain transactions Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration 2.4 hours $596.00

Document maintenance/file review/checklist

Filing of documents

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Creditors 5.9 hours $3,195.50

Creditor Enquiries Deal with creditor enquiries Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation 10.0 hours $5,100.00

Conducting investigation Reviewing company’s books and records Conducting and summarising statutory searches Preparation of comparative financial statements Liaising with directors regarding certain transactions Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration 4.3 hours $1,704.50

Document maintenance/file review/checklist

Filing of documents File reviews Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts Requesting bank statements Bank account reconciliations Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment Correspondence to ATO regarding potential claims and current audit Preparing BAS Completing group certificates

Finalisation Notifying ATO of finalisation Cancelling ABN / GST / PAYG registration Completing checklists Finalising WIP

Planning / Review Discussions regarding status of Liquidation

Books and records / storage

Dealing with records in storage Sending job files to storage

Remuneration Approval Report

IDI Loxford Pty Ltd (Administrators Appointed) ACN 627 354 803

(the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration or liquidator as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary The total remuneration for this appointment is estimated to be $15,142.50 (exclusive of GST).

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $2,642.50

Resolution 2: 8 February 2019 the end of the Administration* B2 $2,500.00

Total $5,142.50

Liquidation

Resolution 3: Commencement to completion* B3 $10,000.00

* 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.

3. Remuneration 3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $2,624.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the Administration concludes, is fixed and approved to a maximum cap of $2,500.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

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 Schedule A1 to A3 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B3 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Administration 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 Administration / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators /Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

• Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper. 4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments There were no receipts and payments for the period 20 December 2018 to 8 February 2019.

6. Queries Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

• ARITA at www.arita.com.au/creditors • ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-

sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

IDI Loxford Pty Ltd (Administrators Appointed) ACN 627 354 803 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 0.7 504.00 - 0.7 504.00 -

Chris Hill Appointee 720 0.1 72.00 0.1 72.00 - -

Sunil Purba Director 625 1.0 625.00 - 0.6 375.00 0.4 250.00

Amy Gelevski Manager 510 0.1 51.00 - 0.1 51.00 -

Tim Evans Manager 510 1.3 663.00 - 1.3 663.00 -

Michelle Budiarso Senior Consultant 425 0.1 42.50 0.1 42.50 - -

Brendan Flaherty Consultant 350 0.9 315.00 - - 0.9 315.00

Fleur Combridge Consultant 350 0.8 280.00 0.3 105.00 - 0.5 175.00

Administration Support 180 0.5 90.00 - - 0.5 90.00

Total 5.5 2,642.50 0.5 219.50 2.7 1,593.00 2.3 830.00

GST 264.25

2,906.75

480.45 439.00 590.00 360.87

AdministrationCreditors Investigation

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

IDI Loxford Pty Ltd (Administrators Appointed) ACN 627 354 803 Calculation of Remuneration Resolution 2 – Administration for the period 8 February 2019 to the date the Administration concludes

Employee Position $/hoursTotal

ActualTotal

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 1.0 720.00 - -

Chris Hill Appointee 720 0.7 504.00 0.2 144.00 0.5 360.00 -

Amy Gelevski Manager 510 0.5 255.00 - 0.5 255.00 -

Michelle Budiarso Senior Consultant 425 1.0 425.00 1.0 425.00 - -

Brendan Flaherty Consultant 350 1.0 350.00 - - 1.0 350.00

-

Administration Support 180 1.4 246.00 - - - 1.4 246.00

Total 5.6 2,500.00 2.2 1,289.00 1.0 615.00 2.4 596.00

GST 250.00

2,750.00

449.10 585.91 615.00 251.83

AdministrationCreditors Investigations

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

IDI Loxford Pty Ltd (Administrators Appointed) ACN 627 354 803 Calculation of Remuneration Resolution 3 – Liquidation for the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.4 1,008.00 1.4 1,008.00 - -

Chris Hill Appointee 720 1.0 720.00 0.5 360.00 - 0.5 360.00

Sunil Purba Director 625 3.0 1,875.00 - 2.5 1,562.50 0.5 312.50

Amy Gelevski Manager 510 6.5 3,315.00 1.5 765.00 5.0 2,550.00 -

Michelle Budiarso Senior Consultant 425 4.7 1,997.50 2.5 1,062.50 1.5 637.50 0.7 297.50

Brendan Flaherty Consultant 350 2.6 904.50 - 1.0 350.00 1.6 554.50

Administration Support 180 1.0 180.00 - - 1.0 180.00

Total 20.2 10,000.00 5.9 3,195.50 10.0 5,100.00 4.3 1,704.50

GST 1,000.00

11,000.00

495.43 541.61 510.00 397.85

Total (Including GST)

Average rate (excluding GST)

AdministrationCreditors Investigation

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Creditors 0.5 hours $219.50

Creditor Enquiries Deal with creditor enquiries via telephone Review and prepare correspondence to creditors and their representatives via facsimile, email and post Correspondence with committee of creditors members

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend

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 Conducting first meeting of creditors Preparation and lodgement of minutes of meetings with ASIC

Investigation 2.7 hours $1,593.00

Conducting investigation Conducting and summarising statutory searches Liaising with directors regarding certain transactions Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration 2.3 hours $830.00

Document maintenance/file review/checklist

Filing of documents

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period Correspondence with the Court regarding approval to extend the convening period Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the Administration concludes

Task Area General Description Includes

Creditors 2.2 hours $1,289.00

Creditor Enquiries Deal with creditor enquiries via telephone Review and prepare correspondence to creditors and their representatives via facsimile, email and post Correspondence with committee of creditors members

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend

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 Conducting first meeting of creditors Preparation and lodgement of minutes of meetings with ASIC

Investigation 1 hours $615.00

Conducting investigation Reviewing company’s books and records Review and preparation of company nature and history Conducting and summarising statutory searches Preparation of comparative financial statements Liaising with directors regarding certain transactions Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration 2.4 hours $596.00

Document maintenance/file review/checklist

Filing of documents

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Creditors 5.9 hours $3,195.50

Creditor Enquiries Deal with creditor enquiries Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation 10.0 hours $5,100.00

Conducting investigation Reviewing company’s books and records Conducting and summarising statutory searches Preparation of comparative financial statements Liaising with directors regarding certain transactions Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration 4.3 hours $1,704.50

Document maintenance/file review/checklist

Filing of documents File reviews Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts Requesting bank statements Bank account reconciliations Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment Correspondence to ATO regarding potential claims and current audit Preparing BAS Completing group certificates

Finalisation Notifying ATO of finalisation Cancelling ABN / GST / PAYG registration Completing checklists Finalising WIP

Planning / Review Discussions regarding status of liquidation

Books and records / storage

Dealing with records in storage Sending job files to storage

Remuneration Approval Report

Inneholde Pty Ltd (Administrators Appointed)

ACN 627 354 394

(the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration or liquidator as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary

The total remuneration for this appointment is estimated to be $16,588.50 (exclusive of

GST).

This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $4,088.50

Resolution 2: 8 February 2019 the end of the Administration* B2 $2,500.00

Total $6,588.50

Liquidation

Resolution 3: Commencement to completion* B3 $10,000.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the

completion of the administration or liquidation as appropriate. Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors.

3. Remuneration

3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $4,088.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the Administration concludes, is fixed and approved to a maximum cap of $2,500.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

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 Schedule A1 to A3 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B3 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Administration / 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 Administration / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the Company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

We will not be seeking creditor approval to pay our disbursements from creditors at this time.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments

There were no receipts and payments for the period 20 December 2018 to 8 February 2019.

6. Queries

Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Inneholde Pty Ltd (Administrators Appointed) ACN 627 354 394 Calculation of Remuneration Resolution 1 - For the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 0.7 504.00 - 0.70 504.00 -

Chris Hill Appointee 720 0.1 72.00 0.10 72.00 - -

Sunil Purba Director 625 1.0 625.00 - 0.60 375.00 0.40 250.00

Amy Gelevski Manager 510 0.1 51.00 - 0.10 51.00 -

Tim Evans Manager 510 4.1 2,091.00 - 4.10 2,091.00 -

Michelle Budiarso Senior Consultant 425 0.1 42.50 0.10 42.50 - -

Brendan Flaherty Consultant 350 0.9 315.00 - - 0.90 315.00

Fleur Combridge Consultant 350 0.8 280.00 0.30 105.00 - 0.50 175.00

Administration Support 180 0.6 108.00 - - 0.60 108.00

Total 8.4 4,088.50 0.50 219.50 5.50 3,021.00 2.40 848.00

GST 408.85

4,497.35

486.73 439.00 549.27 353.33

AdministrationCreditors Investigation

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Inneholde Pty Ltd (Administrators Appointed) ACN 627 354 394 Calculation of Remuneration Resolution 2 - For the period 8 February 2019 to the date the Administration concludes

Employee Position $/hoursTotal

ActualTotal

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 1.0 720.00 - -

Chris Hill Appointee 720 0.7 504.00 0.2 144.00 0.5 360.00 -

Amy Gelevski Manager 510 0.5 255.00 - 0.5 255.00 -

Michelle Budiarso Senior Consultant 425 1.0 425.00 1.0 425.00 - -

Brendan Flaherty Consultant 350 1.0 350.00 - - 1.0 350.00

-

Administration Support 180 1.4 246.00 - - - 1.4 246.00

Total 5.6 2,500.00 2.2 1,289.00 1.0 615.00 2.4 596.00

GST 250.00

2,750.00

449.10 585.91 615.00 251.83

AdministrationCreditors Investigations

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Inneholde Pty Ltd (Administrators Appointed) ACN 627 354 394 Calculation of Remuneration Resolution 3 - For the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.4 1,008.00 1.4 1,008.00 - -

Chris Hill Appointee 720 1.0 720.00 0.5 360.00 - 0.5 360.00

Sunil Purba Director 625 3.0 1,875.00 - 2.5 1,562.50 0.5 312.50

Amy Gelevski Manager 510 6.5 3,315.00 1.5 765.00 5.0 2,550.00 -

Michelle Budiarso Senior Consultant 425 4.7 1,997.50 2.5 1,062.50 1.5 637.50 0.7 297.50

Brendan Flaherty Consultant 350 2.6 904.50 - 1.0 350.00 1.6 554.50

Administration Support 180 1.0 180.00 - - 1.0 180.00

Total 20.2 10,000.00 5.9 3,195.50 10.0 5,100.00 4.3 1,704.50

GST 1,000.00

11,000.00

495.43 541.61 510.00 397.85

Total (Including GST)

Average rate (excluding GST)

AdministrationCreditors Investigation

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Creditors

0.5 hours

$219.50

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Investigation

5.5 hours

$3,012.00

Conducting investigation Conducting and summarising statutory searches

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration

2.4 hours

$848.00

Document maintenance/file review/checklist

Filing of documents

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the Administration concludes

Task Area General Description Includes

Creditors

2.2 hours

$1,289.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Investigation

1 hours

$615.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration

2.4 hours

$596.00

Document maintenance/file review/checklist

Filing of documents

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Creditors

5.9 hours

$3,195.50

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation

10.0 hours

$5,100.00

Conducting investigation Reviewing company’s books and records

Conducting and summarising statutory searches

Preparation of comparative financial statements

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration

4.3 hours

$1,704.50

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage

Dealing with records in storage

Sending job files to storage

Remuneration Approval Report

Buskas Holdings Pty Ltd (Administrators Appointed) ACN 627 354 714 (the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration or liquidator as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary

The total remuneration for this appointment is estimated to be $14,458.50 (exclusive of

GST).

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $1,958.50

Resolution 2: 8 February 2019 the end of the Administration* B2 $2,500.00

Total $4,458.50

Liquidation

Resolution 3: Commencement to completion* B3 $10,000.00

* 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.

3. Remuneration

3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $1,958.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the Administration concludes, is fixed and approved to a maximum cap of $2,500.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

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 Schedule A1 to A3 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B3 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Administration / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments

There were no receipts and payments for the period 20 December 2018 to 8 February 2019.

6. Queries

Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information. You can access additional information on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Buskas Pty Ltd (Administrators Appointed) ACN 627 354 714 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 0.7 504.00 - 0.7 504.00 -

Sunil Purba Director 625 1.0 625.00 - 0.6 375.00 0.4 250.00

Amy Gelevski Manager 510 0.1 51.00 - 0.1 51.00 -

Tim Evans Manager 510 0.1 51.00 - 0.1 51.00 -

Michelle Budiarso Senior Consultant 425 0.1 42.50 0.1 42.50 - -

Brendan Flaherty Consultant 350 0.9 315.00 - - 0.9 315.00

Fleur Combridge Consultant 350 0.8 280.00 0.3 105.00 - 0.5 175.00

Administration Support 180 0.5 90.00 - - 0.5 90.00

Total 4.2 1,958.50 0.4 147.50 1.5 981.00 2.3 830.00

GST 195.85

2,154.35

466.31 368.75 654.00 360.87

AdministrationCreditors Investigation

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Buskas Pty Ltd (Administrators Appointed) ACN 627 354 714 Calculation of Remuneration Resolution 2 – Administration for the period 8 February 2019 to the date the Administration concludes

Employee Position $/hoursTotal

ActualTotal

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 1.0 720.00 - -

Chris Hill Appointee 720 0.7 504.00 0.2 144.00 0.5 360.00 -

Amy Gelevski Manager 510 0.5 255.00 - 0.5 255.00 -

Michelle Budiarso Senior Consultant 425 1.0 425.00 1.0 425.00 - -

Brendan Flaherty Consultant 350 1.0 350.00 - - 1.0 350.00

-

Administration Support 180 1.4 246.00 - - - 1.4 246.00

Total 5.6 2,500.00 2.2 1,289.00 1.0 615.00 2.4 596.00

GST 250.00

2,750.00

449.10 585.91 615.00 251.83

AdministrationCreditors Investigations

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Buskas Pty Ltd (Administrators Appointed) ACN 627 354 714 Calculation of Remuneration Resolution 3 – Liquidation for the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.4 1,008.00 1.4 1,008.00 - -

Chris Hill Appointee 720 1.0 720.00 0.5 360.00 - 0.5 360.00

Sunil Purba Director 625 3.0 1,875.00 - 2.5 1,562.50 0.5 312.50

Amy Gelevski Manager 510 6.5 3,315.00 1.5 765.00 5.0 2,550.00 -

Michelle Budiarso Senior Consultant 425 4.7 1,997.50 2.5 1,062.50 1.5 637.50 0.7 297.50

Brendan Flaherty Consultant 350 2.6 904.50 - 1.0 350.00 1.6 554.50

Administration Support 180 1.0 180.00 - - 1.0 180.00

Total 20.2 10,000.00 5.9 3,195.50 10.0 5,100.00 4.3 1,704.50

GST 1,000.00

11,000.00

495.43 541.61 510.00 397.85

Total (Including GST)

Average rate (excluding GST)

AdministrationCreditors Investigation

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Creditors

0.4 hours

$147.50

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Investigation

1.5 hours

$981.00

Conducting investigation Conducting and summarising statutory searches

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration

2.3 hours

$830.00

Document maintenance/file review/checklist

Filing of documents

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period

Correspondence with the Court regarding approval to extend the convening period

Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the Administration concludes

Task Area General Description Includes

Creditors

2.2 hours

$1,289.00

Creditor Enquiries Deal with creditor enquiries via telephone

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Correspondence with committee of creditors members

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetings with ASIC

Investigation

1.0 hours

$615.00

Conducting investigation Reviewing company’s books and records

Review and preparation of company nature and history

Conducting and summarising statutory searches

Preparation of comparative financial statements

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration

2.4 hours

$596.00

Document maintenance/file review/checklist

Filing of documents

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Creditors

5.9 hours

$3,195.50

Creditor Enquiries Deal with creditor enquiries

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend

Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation

10.0 hours

$5,100.00

Conducting investigation Reviewing company’s books and records

Conducting and summarising statutory searches

Preparation of comparative financial statements

Liaising with directors regarding certain transactions

Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration

3.5 hours

$1,704.50

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment

Correspondence to ATO regarding potential claims and current audit

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of Liquidation

Books and records / storage

Dealing with records in storage

Sending job files to storage

Remuneration Approval Report

Loxford Energy Pty Ltd (Administrators Appointed) ACN 627 353 575 (the Company)

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration.

You should read this report and the other documentation that we have sent you and then attend the meeting of creditors 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. 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, Philip Carter and Christopher Hill of PwC, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of Flow Systems 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 administration or liquidator as appropriate.

Dated this 15th day of February 2019

Philip Carter and Christopher Hill Administrators

2. Executive summary The total remuneration for this appointment is estimated to be $14,892.50 (exclusive of GST).

This has increased compared to our initial estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

Remuneration currently claimed is summarised below.

Period Report Reference

Amount (ex GST)

Current remuneration claim:

Voluntary Administration

Resolution 1: 20 December 2018 to 8 February 2019 B1 $2,392.50

Resolution 2: 8 February 2019 the end of the Administration* B2 $2,500.00

Total $4,892.50

Liquidation

Resolution 3: Commencement to completion* B3 $10,000.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration or liquidation as appropriate. Should additional work be necessary

beyond what is contemplated, further approval may be sought from creditors.

3. Remuneration 3.1 Remuneration claim resolutions

At the second meeting of creditors to be held on 25 February 2019, 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 – Administration, 20 December 2018 to 8 February 2019

“That the remuneration of the Administrators, their partners and staff, for the period of the administration from 20 December 2018 to 8 February 2019 is fixed at a sum equal to the cost of time spent by the Administrators and the Administrators’ partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019 of fees equalling $2,392.50 plus GST, and that the Administrators can draw the remuneration immediately or as required.”

Resolution 2 - Administration, 8 February 2019 to end of Administration (expected 25 February 2019)

“That the future remuneration of the Administrators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from 8 February 2019 to the date the Administration concludes, is fixed and approved to a maximum cap of $2,500.00 plus GST, and can be drawn as soon as practicable after the conclusion of the second meeting. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Resolution 3 - Liquidation

“That the future remuneration of the Liquidators, their partners and staff, calculated at the hourly rates as detailed in the Remuneration Report of 15 February 2019, for the period from commencement of liquidation to completion of the liquidation, is fixed and approved to a maximum cap of $10,000 plus GST, to be drawn only when incurred on a monthly basis or as required. Should a lesser amount be actually incurred, only the lesser amount will be drawn. Should a greater amount be actually incurred, further approval from creditors will be sought.”

Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of the administration or liquidation as appropriate 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 of 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 Schedule A1 to A3 of Appendix A.

The details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedule B1 to B3 of Appendix B.

3.3 Total remuneration reconciliation

This estimate differs to the estimate of costs provided in the Initial Remuneration Notice dated 20 December 2018 which estimated a cost of the administration of $700,000.00 for the Group (excluding GST). This has increased compared to our estimate because of the extension of the convening period to allow for a longer trading period while we conducted a sale campaign.

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, at section 2.9 of the report and in Appendix B.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Administration / 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 out the order for payment of claims against the company and it provides for remuneration of the Administrators / Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Administrator / Liquidator receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds.

3.5 Remuneration recovered from external sources

While the Administrators have obtained funding to continue operations of the Group, it is not expected that the funding will be used to pay 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 non-professional costs are travel, accommodation and search fees.

• Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We have undertaken a proper assessment of disbursements claimed for the company in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper. 4.2 Future basis of internal disbursements (if required)

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Staff vehicle use 65 cents per kilometre for first 150km of return trip and 40 cents per kilometre thereafter

5. Summary of receipts and payments There were no receipts and payments for the period 20 December 2018 to 8 February 2019.

6. Queries Please contact Michelle Budiarso on +61 2 8266 4642 or by email on Michelle.Budiarso@pwc.com should you have any queries or require any further information.

You can access additional information on the following websites:

• ARITA at www.arita.com.au/creditors • ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-

sheets/

Appendices

Appendix A – Calculations of remuneration schedules

Schedule A1

Loxford Energy Pty Ltd (Administrators Appointed) ACN 627 353 575 Calculation of Remuneration Resolution 1 – Administration for the period 20 December 2018 to 8 February 2019

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 0.7 504.00 - 0.7 504.00 -

Chris Hill Appointee 720 0.1 72.00 0.1 72.00 - -

Sunil Purba Director 625 1.0 625.00 - 0.6 375.00 0.4 250.00

Amy Gelevski Manager 510 0.6 306.00 - 0.6 306.00 -

Tim Evans Manager 510 0.1 51.00 - 0.1 51.00 -

Michelle Budiarso Senior Consultant 425 0.1 42.50 0.1 42.50 - -

Brendan Flaherty Consultant 350 1.0 350.00 - - 1.0 350.00

Fleur Combridge Consultant 350 0.8 280.00 0.3 105.00 - 0.5 175.00

Administration Support 180 0.9 162.00 - - 0.9 162.00

Total 5.3 2,392.50 0.5 219.50 2.0 1,236.00 2.8 937.00

GST 239.25

2,631.75

451.42 439.00 618.00 334.64

AdministrationCreditors Investigation

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A2

Loxford Energy Pty Ltd (Administrators Appointed) ACN 627 353 575 Calculation of Remuneration Resolution 2 – Administration for the period 8 February 2019 to the date the Administration concludes

Employee Position $/hoursTotal

ActualTotal

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.0 720.00 1.0 720.00 - -

Chris Hill Appointee 720 0.7 504.00 0.2 144.00 0.5 360.00 -

Amy Gelevski Manager 510 0.5 255.00 - 0.5 255.00 -

Michelle Budiarso Senior Consultant 425 1.0 425.00 1.0 425.00 - -

Brendan Flaherty Consultant 350 1.0 350.00 - - 1.0 350.00

-

Administration Support 180 1.4 246.00 - - - 1.4 246.00

Total 5.6 2,500.00 2.2 1,289.00 1.0 615.00 2.4 596.00

GST 250.00

2,750.00

449.10 585.91 615.00 251.83

AdministrationCreditors Investigations

Total (Including GST)

Average rate (excluding GST)

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Schedule A3

Loxford Energy Pty Ltd (Administrators Appointed) ACN 627 353 575 Calculation of Remuneration Resolution 3 - Liquidation for the period 25 February 2019 to the conclusion of the Liquidation

Employee Position $/hours Total Actual Total

(Ex GST) Hrs $ Hrs $ Hrs $ Hrs $

Phil Carter Appointee 720 1.4 1,008.00 1.4 1,008.00 - -

Chris Hill Appointee 720 1.0 720.00 0.5 360.00 - 0.5 360.00

Sunil Purba Director 625 3.0 1,875.00 - 2.5 1,562.50 0.5 312.50

Amy Gelevski Manager 510 6.5 3,315.00 1.5 765.00 5.0 2,550.00 -

Michelle Budiarso Senior Consultant 425 4.7 1,997.50 2.5 1,062.50 1.5 637.50 0.7 297.50

Brendan Flaherty Consultant 350 2.6 904.50 - 1.0 350.00 1.6 554.50

Administration Support 180 1.0 180.00 - - 1.0 180.00

Total 20.2 10,000.00 5.9 3,195.50 10.0 5,100.00 4.3 1,704.50

GST 1,000.00

11,000.00

495.43 541.61 510.00 397.85

Total (Including GST)

Average rate (excluding GST)

AdministrationCreditors Investigation

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation. A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at http://www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets

Appendix B – Table of major tasks for remuneration

Schedule B1

Resolution 1

The below table provides a description of the work undertaken in each major task area for the period 20 December 2018 to 8 February 2019

Task Area General Description Includes

Creditors 0.5 hours $219.50

Creditor Enquiries Deal with creditor enquiries via telephone Review and prepare correspondence to creditors and their representatives via facsimile, email and post Correspondence with committee of creditors members

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend

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 Conducting first meeting of creditors Preparation and lodgement of minutes of meetings with ASIC

Investigation 2.0 hours $1,236.00

Conducting investigation Conducting and summarising statutory searches Liaising with directors regarding certain transactions Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration 2.8 hours $937.00

Document maintenance/file review/checklist

Filing of documents

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Convening period Prepare notice to creditors for extensions of convening period Correspondence with the Court regarding approval to extend the convening period Review and execute affidavit for convening period extension

Schedule B2

Resolution 2

The below table provides a description of the work undertaken in each major task area for the period 8 February 2019 to the date the Administration ends

Task Area General Description Includes

Creditors 2.2 hours $1,289.00

Creditor Enquiries Deal with creditor enquiries via telephone Review and prepare correspondence to creditors and their representatives via facsimile, email and post Correspondence with committee of creditors members

Creditor reports Preparing the Administrators Report, investigation, meeting and general reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend

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 Conducting first meeting of creditors Preparation and lodgement of minutes of meetings with ASIC

Investigation 1.0 hours $615.00

Conducting investigation Reviewing company’s books and records Review and preparation of company nature and history Conducting and summarising statutory searches Preparation of comparative financial statements Liaising with directors regarding certain transactions Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration 2.4 hours $596.00

Document maintenance/file review/checklist

Filing of documents

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment Correspondence to ATO regarding potential claims and current audit

Planning / Review Discussions regarding status of administration

Schedule B3

Resolution 3

The below table provides a description of the work undertaken in each major task area for the period 22 February 2019 to the conclusion of the Liquidation

Task Area General Description Includes

Creditors 5.9 hours $3,195.50

Creditor Enquiries Deal with creditor enquiries Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports General reports to creditors

Dealing with proofs of debt

Receipting and filing POD when not related to a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation 10.0 hours $5,100.00

Conducting investigation Reviewing company’s books and records Conducting and summarising statutory searches Preparation of comparative financial statements Liaising with directors regarding certain transactions Investigations to identify indicators of insolvency and possible claims for insolvent trading

Administration 3.5 hours $1,464.50

Document maintenance/file review/checklist

Filing of documents File reviews Updating checklists

Bank account administration

Preparing correspondence opening and closing accounts Requesting bank statements Bank account reconciliations Correspondence with bank regarding specific transfers

ASIC Forms Preparing and lodging ASIC forms

ATO and other statutory reporting

Notification of appointment Correspondence to ATO regarding potential claims and current audit Preparing BAS Completing group certificates

Finalisation Notifying ATO of finalisation Cancelling ABN / GST / PAYG registration Completing checklists Finalising WIP

Planning / Review Discussions regarding status of Liquidation

Books and records / storage

Dealing with records in storage Sending job files to storage

91

Appendix D – Declaration of Independence, Relevant Relationships and Indemnities

92

Appendix E – Notice of meeting of creditors

Insolvency Practice Rules (Corporations) 2016

s 75-225

NOTICE OF MEETING OF CREDITORS

Flow Systems Pty Ltd - ACN 136 272 298

Flow Systems Constructors Pty Ltd - ACN 605 967 280 Flow Systems Operations Pty Ltd - ACN 603 106 305

Cooranbong Water Pty Ltd - ACN 169 450 453 Huntlee Water Pty Ltd - ACN 167 418 608

Central Park Water Pty Ltd - ACN 151 072 838 Discovery Point Water Pty Ltd - ACN 142 392 541 Green Square Water Pty Ltd - ACN 163 432 906

Pitt Town Water Pty Ltd - ACN 141 705 660 Wyee Water Pty Ltd - ACN 160 953 775

Loxford Development Holdings Pty Ltd - ACN 627 353 191 Loxford Waters Pty Ltd - ACN 627 354 867

IDI Loxford Pty Ltd - ACN 627 354 803 Inneholde Pty Ltd - ACN 627 354 394

Buskas Holdings Pty Ltd - ACN 627 354 714 Loxford Energy Pty Ltd - ACN 627 353 575

(All Administrators Appointed) (the Group)

Notice is given that a meeting of the creditors of the Group will be held at Novotel Sydney on Darling Harbour 100 Murray Street, Darling Harbour, NSW 2000, on Monday, 25 February 2019, at 1:00PM. Agenda

1. To receive the report by the joint and several Administrators concerning the Group’s business, property, affairs and financial circumstances.

2. For creditors to consider the options available for each individual company and to resolve that:

(a) the company execute a Deed of Company Arrangement, or

(b) the administration should end, or

(c) the company be wound up.

3. To approve:

(a) the Administrators’ remuneration

(b) the Deed Administrators’ remuneration, if appointed

(c) the Trustees’ remuneration, if appointed

(d) the Liquidators’ remuneration, if appointed.

4. If the company is wound up, to consider the appointment of a Committee of Inspection and, if so, who are to be the committee members

5. If the company is wound up, to consider the the destruction of books and records

6. Any other business.

There will be access to telephone conference facilities for creditors who cannot attend the meeting. Please contact Michelle Budiarso by Thursday, 21 February 2019 if you require access to telephone facilities.*

Creditors wishing to attend and vote are advised that proof of debts and proxies must be submitted to the Adminstrators by Friday, 22 February 2019 at 3.00pm. Dated this 15th day of February 2019 Philip Carter and Christopher Hill Administrators * Telephone conference facility details are as follows:

Telephone number: +61 2 9051 5746 Conference code: Please contact Michelle Budiarso for the conference code

A person, or the proxy or attorney of a person, who wishes to participate in the meeting by telephone must give to me by Thursday, 21 February 2019, a written statement (email to michelle.budiarso@pwc.com will be accepted) setting out:

i. the name of the person and of the proxy or attorney (if any); and

ii. an address to which notices to the person, proxy or attorney may be sent; and

iii. a method by which the person, proxy or attorney may be contacted for the purposes of the meeting.

A person, or the proxy or attorney of a person, who participates in the meeting by telephone must pay any costs incurred by the person, proxy or attorney in participating and is not entitled to be reimbursed for those costs from the assets of the company.

Section 75-85 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) his or her debt or claim has been admitted wholly or in part by the external administrator; or (b) 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

93

Appendix F – ASIC Publication: Insolvency information for directors, employees, creditors and shareholders

Important note: The information sheets contain a summary of basic information on the topic. It is not

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 www.asic.gov.au/insolvencyinfosheets. The information sheets are also available from the IPA website at www.ipaa.com.au. The IPA website also contains the IPA’s Code of Professional Practice for Insolvency Professionals, which applies to IPA members.

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

94

Appendix G – Secured Creditor Registrations

Details of identified secured creditors

Company Name Registration No. Secured Party Collateral Class

Discovery Point Water Pty Ltd

201212140067940 Discovery Point Pty Limited All Present And After-Acquired Property - With Exceptions

Flow Systems Constructors Pty Ltd

201712130031803 Grove Hire Pty Ltd Other Goods

Flow Systems Constructors Pty Ltd

201603210029615 Pentair Flow Control Pacific Pty Limited

Other Goods

Flow Systems Constructors Pty Ltd

201606270071608 All Poly Products Pty Ltd Other Goods

Flow Systems Constructors Pty Ltd

201610100018003 N.H.P. Electrical Engineering Products Proprietary Limited

Other Goods

Flow Systems Constructors Pty Ltd

201611090012717 Xylem Water Solutions Australia Limited

Other Goods

Flow Systems Constructors Pty Ltd

201705160033231 Coates Hire Operations Pty Limited

Other Goods

Flow Systems Constructors Pty Ltd

201705160033306 Coates Hire Operations Pty Limited

Motor Vehicle

Flow Systems Constructors Pty Ltd

201706160046706 Northern Livestock & Property Pty Ltd

Other Goods

Flow Systems Constructors Pty Ltd

201712220006307 Prominent Fluid Controls Pty Limited

Other Goods

Flow Systems Constructors Pty Ltd

201801220046487 Prominent Fluid Controls Pty Limited

Other Goods

Flow Systems Constructors Pty Ltd

201804260037250 Atco Structures & Logistics Pty Ltd

Other Goods

Flow Systems Constructors Pty Ltd

201812130079583 Crown Equipment Pty. Limited Motor Vehicle

Flow Systems Constructors Pty Ltd

201812130079596 Crown Equipment Pty. Limited Other Goods

Flow Systems Operations Pty Ltd

201506030021144 Celestino Developments Pty Limited

Intangible Property - General Intangible

Flow Systems Operations Pty Ltd

201506030022870 Celestino Developments Pty Limited

All Present And After-Acquired Property - With Exceptions

Flow Systems Operations Pty Ltd

201506030024243 Celestino Developments Pty Limited

Other Goods

Flow Systems Operations Pty Ltd

201509080033726 Prominent Fluid Controls Pty Limited

Other Goods

Flow Systems Operations Pty Ltd

201512230081499 Celestino Developments Pty Limited

Other Goods

Flow Systems Operations Pty Ltd

201512230081596 Celestino Developments Pty Limited

Intangible Property - General Intangible

Flow Systems Operations Pty Ltd

201512230081786 Celestino Developments Pty Limited

All Present And After-Acquired Property - With Exceptions

Flow Systems Pty Ltd 201303010085043 Brookfield Infrastructure Group (Australia) Pty Ltd

All Present And After-Acquired Property - With Exceptions

Flow Systems Pty Ltd 201309200075139 Camnet Finance Pty Ltd Other Goods

Flow Systems Pty Ltd 201407280039272 Caps Australia Pty Ltd Other Goods

Flow Systems Pty Ltd 201506030023777 Celestino Developments Pty Limited

All Present And After-Acquired Property - With Exceptions

Flow Systems Pty Ltd 201506030028554 Celestino Developments Pty Limited

Intangible Property - General Intangible

Flow Systems Pty Ltd 201506040023639 Celestino Developments Pty Limited

Other Goods

Company Name Registration No. Secured Party Collateral Class

Flow Systems Pty Ltd 201509210019001 Siemens Ltd. Other Goods Collateral Supplied By The Secured Party

Flow Systems Pty Ltd 201512220092923 Macquarie Leasing Pty Ltd Motor Vehicle

Flow Systems Pty Ltd 201512230083271 Celestino Developments Pty Limited

Other Goods

Flow Systems Pty Ltd 201512230083450 Celestino Developments Pty Limited

Intangible Property - General Intangible

Flow Systems Pty Ltd 201512230083534 Celestino Developments Pty Limited

All Present And After-Acquired Property - With Exceptions

Flow Systems Pty Ltd 201612070033938 Print Management Facilities Australia Pty Ltd

Other Goods

Flow Systems Pty Ltd 201807260015579 Bronson & Jacobs Pty Ltd Other Goods

Flow Systems Pty Ltd 201812180086382 Enwave Australia Pty Ltd All Present And After-Acquired Property - No Exceptions

Huntlee Water Pty Ltd

201508210022958 Pioneer Water Tanks Pty Ltd Other Goods

Pitt Town Water Pty Ltd

201112211543103 #Value! All Present And After-Acquired Property - No Exceptions

Wyee Water Pty Ltd 201303010085619 Brookfield Infrastructure Group (Australia) Pty Ltd

All Present And After-Acquired Property - With Exceptions

95

Appendix H – ARITA Publication: Creditor information sheet: Offences, recoverable transactions and insolvent trading

Specific questions about the voluntary administration should be directed to the voluntary administrator’s office.

AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION

Creditor Rights in Voluntary Administrations

Requests must be reasonable.

They are not reasonable if:

(a) complying with the request would

prejudice the interests of one or more

creditors or a third party

(b) the information requested would be

privileged from production in legal

proceedings

(c) disclosure would found an action for

breach of confidence

(d) there is not sufficient available

property to comply with the request

(e) the information has already been

provided

(f) the information is required to be

provided under law within 20

business days of the request

(g) the request is vexatious

If a request is not reasonable due to (d),

(e) or (f) above, the voluntary

administrator must comply if the creditor

meets the cost of complying with the

request.

Otherwise, a voluntary administrator must

inform a creditor if their information

request is not reasonable and the reason

why.

As a creditor, you have rights to request meetings and information or take certain actions:

Right to request information

Right to give directions to

voluntary administrator

Right to appoint a reviewing liquidator

Right to replace voluntary

administrator

Right to request information

Information is communicated to creditors in a voluntary

administration through reports and meetings.

In a voluntary administration, two meetings of creditors are

automatically held. You should expect to receive reports and notice

of these meetings:

▪ The first meeting is held within 8 business days of the

voluntary administrator’s appointment. A notice of meeting and

other information for this meeting will be issued to all known

creditors.

▪ The second, or decision, meeting is usually held within 6

weeks of the appointment, unless an extension is granted. At

this meeting, creditors will get to make a decision about the

company’s future. Prior to this meeting the voluntary

administrator will provide creditors with a notice of the meeting

and a detailed report to assist in making your decision.

Important information will be communicated to creditors prior to

and during these meetings. Creditors are unable to request

additional meetings in a voluntary administration.

Creditors have the right to request information at any time. A

voluntary administrator must provide a creditor with the requested

information if their request is ‘reasonable’, the information is

relevant to the voluntary administration, and the provision of the

information would not cause the voluntary administrator to breach

their duties.

A voluntary administrator must provide this information to a creditor

within 5 business days of receiving the request, unless a longer

period is agreed. If, due to the nature of the information requested,

the voluntary administrator requires more time to comply with the

request, they can extend the period by notifying the creditor in

writing.

AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 2

12142 (VA) - INFO - CREDITOR RIGHTS INFORMATION SHEET V2_0.DOCX Version: June 2018

Creditors, by resolution, may give a voluntary administrator directions in relation to a voluntary

administration. A voluntary administrator must have regard to these directions, but they are not required to

comply with the directions.

If a voluntary administrator chooses not to comply with a direction given by a resolution of the creditors, they

must document their reasons for not complying.

An individual creditor cannot provide a direction to a voluntary administrator.

Creditors, by resolution, may appoint a reviewing liquidator to review a voluntary administrator’s

remuneration or a cost or expense incurred in a voluntary administration. The review is limited to:

▪ remuneration approved within the six months prior to the appointment of the reviewing liquidator, and

▪ expenses incurred in the 12 months prior to the appointment of the reviewing liquidator.

The cost of the reviewing liquidator is paid from the assets of the voluntary administration, in priority to

creditor claims.

An individual creditor can appoint a reviewing liquidator with the voluntary administrator’s consent, however

the cost of this reviewing liquidator must be met personally by the creditor making the appointment.

At the first meeting, creditors have the right to remove a voluntary administrator and appoint another

registered liquidator to act as voluntary administrator.

A creditor must ensure that they have a consent from another registered liquidator prior to the first meeting if

they wish to seek the removal and replacement of a voluntary administrator.

Creditors also have the opportunity to replace a voluntary administrator at the second meeting of creditors:

▪ If creditors vote to accept a proposed deed of company arrangement, they can appoint a different

registered liquidator as the deed administrator.

▪ If creditors vote to place the company into liquidation, they can appoint a different registered liquidator as

the liquidator.

It is however usual for the voluntary administrator to act as deed administrator or liquidator. It would be

expected that additional costs would be incurred by an alternate deed administrator or liquidator to gain the

level of knowledge of the voluntary administrator.

Like with the first meeting, a creditor must ensure that they have a consent from another registered

liquidator prior to the second meeting if they wish to seek to appoint an alternative registered liquidator as

deed administrator or liquidator.

Right to appoint a reviewing liquidator

Right to replace voluntary administrator

Right to give directions to voluntary administrator

For more information, go to www.arita.com.au/creditors.

Specific queries about the voluntary administration should be directed to the voluntary

administrator’s office.

96

Appendix I – Federal Court Orders dated 31 December 2018

Prepared in the New South Wales District Registry, Federal Court of Australia

Level 17, Law Courts Building, Queens Square, Telephone 02 9230 8567

Federal Court of Australia

District Registry: New South Wales

Division: General No: NSD2415/2018

CHRISTOPHER CLARKE HILL AND PHILIP PATRICK CARTER AS JOINT AND

SEVERAL ADMINISTRATORS OF EACH OF THE COMPANIES NAMED IN THE

SCHEDULE TO THE ORIGINATING PROCESS First Plaintiff

THE COMPANIES NAMED IN THE SCHEDULE TO THE ORIGINATING

PROCESS Second to Seventeenth Plaintiffs

ORDER

JUDGE: JUSTICE GREENWOOD

DATE OF ORDER: 31 December 2018

WHERE MADE: Brisbane

THE COURT ORDERS THAT:

1. The Originating Process be returnable instanter.

2. Until further order, pursuant to section 37AF of the Federal Court of Australia Act 1976 (Cth)

and on the ground that the order is necessary to prevent prejudice to the proper administration

of justice, "Confidential Exhibit CCH2" to the affidavit of Christopher Clarke Hill sworn 30

December 2018 (Hill Affidavit) shall be made confidential and prohibited from disclosure to

any person other than the Judge hearing the matter and the Judge’s staff and assistants.

3. Pursuant to section 90-15 of Schedule 2 – the Insolvency Practice Schedule (Corporations)

(IPSC) to the Corporations Act 2001 (Cth) (Corporations Act), the First Plaintiffs (in their

capacities as administrators of each of the Second to Seventeenth Plaintiffs) are justified in

causing the Second Plaintiff to borrow monies not exceeding the sum of $5 million from

EAWH Pty Ltd pursuant to a "Facility Agreement" dated 24 December 2018 in the form

exhibited at pages 445 to 475 of Confidential Exhibit CCH2 to the Hill Affidavit (Facility

Agreement).

4. Pursuant to section 447A(1) of the Corporations Act, and further or alternatively section 90-15

of the IPSC, Part 5.3A of the Corporations Act is to operate in relation to each of the Second

to Seventeenth Plaintiffs as if section 443A(1) of the Corporations Act provides that the

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Prepared in the New South Wales District Registry, Federal Court of Australia

Level 17, Law Courts Building, Queens Square, Telephone 02 9230 8567

liabilities of the First Plaintiffs incurred under the Facility Agreement, including monies

borrowed, interest incurred in respect of monies borrowed and borrowing costs, are in the

nature of debts incurred by the First Plaintiffs in the performance and exercise of their

functions as joint and several administrators of each of the Second to Seventeenth Plaintiffs.

5. Pursuant to section 447A of the Corporations Act, and further or alternatively section 90-15 of

the IPSC, and notwithstanding the preceding order, Part 5.3A of the Corporations Act is to

operate in respect of each of the Second to Seventeenth Plaintiffs as if section 443A(1) of the

Corporations Act provides that, if the property of the Second to Seventeenth Plaintiffs (where

relevant) is insufficient to satisfy the debts and liabilities incurred by the First Plaintiffs under

the Facility Agreement for which the right of indemnity exists under section 443D of the

Corporations Act, the First Plaintiffs will not be personally liable to repay such debts and

liabilities to the extent of that insufficiency.

6. Pursuant to section 447A of the Corporations Act, and further or alternatively section 90-15 of

the IPSC, Part 5.3A of the Corporations Act is to operate as if the personal liability of each of

the First Plaintiffs under section 443A of the Corporations Act excludes any liability for:

(a) any loans or advances from the Second Plaintiff to any of the Third to Seventeenth

Plaintiffs; and

(b) any loans, advances or other debts between two or more of the Second to Seventeenth

Plaintiffs.

7. Pursuant to section 588FM of the Corporations Act, in respect of any security interests created

by or in connection with the "General Security Deed" dated 24 December 2018 in the form

exhibited at pages 476 to 518 of Confidential Exhibit CCH2 to the Hill Affidavit

(General Security Deed), the registration time for the collateral is fixed to be 21 January

2019, for the purposes of section 588FL(2)(b)(iv) of the Corporations Act, being the time that

is the end of 20 business days after the date of the General Security Deed.

8. Within 2 business days of the making of this order, the First Plaintiffs are to cause notice of

the orders made by this Court to be given to creditors of each of the Second to Seventeenth

Plaintiffs, by:

(a) placing scanned, sealed copies of the Originating Process, the affidavit of Christopher

Clarke Hill sworn 30 December 2018 (excluding exhibit CCH1 and confidential

exhibit CCH 2) and the orders on the website maintained by the First Plaintiffs at

https://www.pwc.com.au/business-restructuring/insolvency-cases.html; and

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Prepared in the New South Wales District Registry, Federal Court of Australia

Level 17, Law Courts Building, Queens Square, Telephone 02 9230 8567

(b) annexing a copy of the sealed orders to the report required to be sent to all creditors of

the Second to Seventeenth Plaintiffs under section 75-225 of the Insolvency Practice

Rules (Corporations) 2016 (Cth).

9. The costs of the application are to be treated as costs in the administrations of each of the

Second to Seventeenth Plaintiffs, jointly and severally, and the First Plaintiffs may allocate

those costs amongst the Second to Seventeenth Plaintiffs on a pro rata basis by reference to

the funding ultimately received by each of the Second to Seventeenth Plaintiffs.

10. The Plaintiffs have liberty to apply.

11. Liberty is reserved to any party affected by the above orders to apply to modify or discharge

them on no less than 48 hours' notice to the First Plaintiffs and to the Court.

Date that entry is stamped: 31 December 2018

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Prepared in the New South Wales District Registry, Federal Court of Australia

Level 17, Law Courts Building, Queens Square, Telephone 02 9230 8567

SCHEDULE: COMPANIES NAMED IN THE SCHEDULE TO THE

ORIGINATING PROCESS

Federal Court of Australia

District Registry: New South Wales

Division: General No: NSD2415/2018

CHRISTOPHER CLARKE HILL AND PHILIP PATRICK CARTER AS JOINT AND

SEVERAL ADMINISTRATORS OF EACH OF THE COMPANIES NAMED IN THE

SCHEDULE TO THE ORIGINATING PROCESS First Plaintiff

THE COMPANIES NAMED IN THE SCHEDULE TO THE ORIGINATING

PROCESS Second to Seventeenth Plaintiffs

First Plaintiffs: Christopher Clarke Hill and Philip Patrick Carter

as joint and several administrators of each of the

companies named in the Schedule to the

Originating Process

Second Plaintiff: Flow Systems Pty Ltd (Administrators Appointed)

ACN 136 272 298

Third Plaintiff: Flow Systems Constructors Pty Ltd

(Administrators Appointed) ACN 605 967 280

Fourth Plaintiff: Buskas Holdings Pty Ltd (Administrators

Appointed) ACN 627 354 714

Fifth Plaintiff: Central Park Water Pty Ltd (Administrators

Appointed) ACN 151 072 838

Sixth Plaintiff: Cooranbong Water Pty Ltd (Administrators

Appointed) ACN 169 450 453

Seventh Plaintiff: Discovery Point Water Pty Ltd (Administrators

Appointed) ACN 142 392 541

Eighth Plaintiff: Flow Systems Operations Pty Ltd (Administrators

Appointed) ACN 603 106 305

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Prepared in the New South Wales District Registry, Federal Court of Australia

Level 17, Law Courts Building, Queens Square, Telephone 02 9230 8567

Ninth Plaintiff: Green Square Water Pty Ltd (Administrators

Appointed) ACN 163 432 906

Tenth Plaintiff: Huntlee Water Pty Ltd (Administrators

Appointed) ACN 167 418 608

Eleventh Plaintiff: IDI Loxford Pty Ltd (Administrators Appointed)

ACN 627 354 803

Twelfth Plaintiff: Inneholde Pty Ltd (Administrators Appointed)

ACN 627 354 394

Thirteenth Plaintiff: Loxford Development Holdings Pty Ltd

(Administrators Appointed) ACN 627 353 191

Fourteenth Plaintiff: Loxford Energy Pty Ltd (Administrators

Appointed) ACN 627 353 575

Fifteenth Plaintiff: Loxford Waters Pty Ltd (Administrators

Appointed) ACN 627 354 867

Sixteenth Plaintiff: Pitt Town Water Pty Ltd (Administrators

Appointed) ACN 141 705 660

Seventeenth Plaintiff: Wyee Water Pty Ltd (Administrators Appointed)

ACN 160 953 775

97

Appendix J – Key information regarding Creditors’ Trust

Appendix J – Key information regarding Creditors' Trust In accordance with ASIC’s Regulatory Guide 82 titled 'External Administrations: deeds of company arrangement

involving a creditors’ trust', we have provided below the information to be disclosed where a DOCA incorporating a

creditors’ trust has been proposed.

Information for creditors Further comments

Reasons for the Trust Deed

RG 82.38–RG 82.40

It is our opinion that the use of a DOCA combined with a Creditors’ Trust

will provide an accelerated exit of the Deed Companies from the DOCA.

It will also allow the Trustees to finalise the Administrators’ and Deed

Administrators’ trading liabilities and responsibilities and deal with the

creditor claims of the Deed Companies.

Key events - timing and

implications

RG 82.41–RG 82.42

The key events are as follows:

Creditor approval is required for each Deed Company to execute

a DOCA at the second meeting of creditors. This second

creditors meeting is scheduled to be held on 25 February 2019

The Administrators, the Purchaser and each Deed Company will

execute the DOCA following the second creditors meeting. This

needs to occur within 15 business days from the date of the

resolution approving the DOCA at the second creditors meeting.

If the DOCA is not executed within this timeframe, the Deed

Companies will automatically be placed into liquidation

Deed Administrators will make the application to the court for

the s 444GA Order (s444GA Application). This is will occur

following the second meeting of creditors

Court approval of the s444GA application – this will take

approximately six weeks from filing the application and on the

basis the application is not contested

The transaction with the Deed Proponent will complete on the

occurrence of the following simultaneous tasks:

FS and FSC share transfer to the Purchaser (pursuant

to the s444GA Order)

Purchaser makes payment of the Deed Contribution to

the Deed Administrators who in turn transfer the

Deed Fund to the Trustees.

DOCA effectuated (completed)

Creditors’ Trust comes into effect

Creditor claims are extinguished in the Deed

Companies (not including Excluded Creditors) with

their claims now against the Creditors’ Trust

Claims of creditors will be adjudicated by the Trustees and

admitted creditors will receive a distribution from the Trust

Fund.

Return to creditors/beneficiaries

RG 82.43

The funds in the Trust Deed will be distributed in the following order of

priority:

First: Amounts approved, but unpaid to Administrators

Second: Amounts approved, but unpaid to the Deed Administrators

Third: All continuing employee priority claims (and to the extent not paid

in full, on a pro-rata basis)

Fourth: Creditors' Trustees' liabilities

Information for creditors Further comments

Fifth: Admitted creditors on a pro-rata basis capped at the entitlement of

60C in the dollar for each admissible claim

Please refer to the relevant section below for further details.

Trustee particulars – identity,

skills, experience and insurance

RG 82.44

The Administrators / Deed Administrators are to be Trustees of the

Creditors’ Trust.

We are registered liquidators and have the relevant experience and

necessary skills to undertake the required duties and tasks. We have

adequate professional indemnity and fidelity insurance that would cover

our role as trustees of the Creditors’ Trust.

A summary of our experience is listed on our company website

https://www.pwc.com.au/business-restructuring.html

Remuneration

RG 82.46–RG 82.47

The Creditors’ Trust will provide for the payment of the Administrators’,

Deed Administrators’ and Trustees’ remuneration from the Trust Fund in

priority to any payment to admitted creditors. This includes:

Any approved remuneration and expenses owing to the

Administrators and Deed Administrators that remained unpaid

at the time of the creation of the Creditors Trust

The Trustees’ remuneration and costs. The Trustees’ costs will

be calculated based on hourly rates and in accordance with PwC

rates as detailed in Appendix C.

We estimate that the remuneration and costs of the Trustees will be

approximately $220k. Our estimate does not consider any litigation or

protracted negotiations when adjudicating on creditor claims. Any

additional costs will be dependent on the time taken to adjudicate claims

and distribute the payment to the beneficiaries of the Creditors’ Trust.

In a voluntary administration and DOCA scenario the approval of fees is

subject to the provisions of the IPS, requiring that remuneration be

approved by either a Committee of Inspection, by a resolution of

creditors or by applying to Court to review the Administrators’ or Deed

Administrator’s remuneration.

In a Creditors’ Trust, there is no equivalent statutory procedure in the

Trustee Act 1925 (NSW) pursuant to which beneficiaries, or the

Committee of Inspection or the Federal Court can agree or approve the

Trustee’s remuneration. However, a beneficiary can apply to the Supreme

Court of New South Wales to seek to review or challenge the Trustee’s

remuneration.

For transparency, included within Appendix C are the details of work

the Trustees will be undertaking to administer the Creditors’ Trust.

Indemnities

RG 82.48

The Trustees are entitled to be indemnified from the Trust Fund for all

actions, suits, proceedings, accounts, claims and demands arising out of

the Trust Deed.

Accordingly, any fees or costs incurred by the Trustees that are associated

with any legal actions that are required to be undertaken or defended will

be met from the funds held in the Creditors’ Trust. While any such

actions may reduce the available funds and diminish the return to

creditors, we do not foresee any material legal actions.

This indemnity takes effect from the commencement of the DOCA, is

continuing and will endure for the benefit of the Deed Administrator and

Trustees.

No other indemnity has been provided to the Trustees.

Powers (Deed

Administrators/Trustee under the

As Trustees we will administer the Trust Fund in accordance

with the provisions set out in the DOCA and the Trust Deed and

do anything incidental to exercising a power set out in the Deed

Information for creditors Further comments

DOCA proposal)

RG 82.49–RG 82.50

and anything else that is necessary or convenient for

administering the Creditors’ Trust.

Primarily, the Trustees’ proposed role is to call for proofs of

debt, adjudicate the creditors’ claims and distribute the Trust

Funds. The Trust Deed also incorporates the powers that would

apply to a Deed Administrator. Details of these powers are in

the draft DOCA and Trust Deed located at the PwC Web-Link.

As mentioned above, a deed administrator is governed by the

Act, whereas a creditors’ trust set up in New South Wales is

governed by the Trust Deed and the Trustees Act 1925 (NSW).

Claims

RG 82.51–RG 82.52

Creditors are referred to Section 4.5 of this report.

Other creditor/beneficiary

differences

RG 82.53–RG 82.56

In a DOCA, creditors have the right to request a meeting of creditors or

apply to Court to seek orders to amend the DOCA. Under a Creditors’

Trust, creditors do not have this option. However, the DOCA will be

operational for at least one month before the creation of the Creditors’

Trust while certain approvals are obtained to transfer the shares to the

Purchaser. This will allow any aggrieved creditor the opportunity to

exercise their statutory rights during this period.

Creditors will have 14 days to appeal the Trustees’ decision to reject their

claim, or a longer period if the Trustees permit. In a liquidation, the Act

stipulates that the appeal must be made within 14 days of the liquidator

giving notice of rejection, or such longer period as the court permits.

Accordingly, we do not believe creditors will be disadvantaged.

As the Trustees are registered liquidators, creditors have the ability to

make any complaints about their conduct to ASIC.

FEG

RG 82.57

Should creditors resolve to accept the DOCA, the employees will not have

access to the FEG. The FEG may only be available if the Deed Companies

are placed into liquidation.

Compliance opinion

RG 82.58

It is our opinion that the Deed Companies are capable of complying with

the terms of the Trust Deed and likely to comply with the obligations to

the Trustee, if the Deed Proposal is approved by the creditors.

Additionally, claims against the Deed Companies are not extinguished

until the funds to satisfy creditor claims are paid into the Trust Fund.

Solvency statement

RG 82.59

It is our opinion that the Deed Companies will become solvent at the date

of effectuation of the DOCA on the terms proposed for the following

reasons:

Creditor claims (not including Excluded Creditors) against the

Deed Companies will be extinguished

The Purchaser will provide the necessary financial support to

enable debts to be paid as and when they fall due.

Tax issues for company/trust

RG 82.61

A Creditors’ Trust may create the potential for some taxation issues when

compared to a distribution received from a DOCA. That is, any taxation

liabilities that may arise with the administration of the Creditors’ Trust

will reduce the funds available to creditors. However, we do not expect

that there will be any material changes to the funds available as a

distribution to creditors under the proposed Creditors’ Trust.

Tax issues for individual

creditor/beneficiary

RG 82.62

Creditors are advised to seek their own taxation advice as there may be

some implications for creditors receiving a distribution from a trust

rather than a distribution from a company subject to DOCA. We are

unable to provide any advice regarding this issue.

Information for creditors Further comments

Other

RG 82.63–RG 82.64

No other material aspects or implications have been identified at this

stage.

Creditor claims

In accordance with the Trust Deed, the Trustees will adjudicate the claims from creditors who had a debt owed by

the Deed Companies as at 20 December 2018. Those creditors with debts that have been adjudicated as valid will be

considered as admitted creditors in the Creditors’ Trust. Excluded creditors and non-participating creditors will not

be able to participate as admitted creditors.

The terms of the Creditors’ Trust provide for one creditor pool to be created for the benefit of those creditors who

have been determined to be admitted creditors by the Trustees. The proposed distribution mechanism of the Trust

Fund to admitted creditors is as follows:

Remuneration and costs of the Administrators

Remuneration and costs of the Deed Administrators for any amount which they are entitled to be paid or

indemnified but which have not been paid or discharged. It is not expected that any Deed Administrators’

remuneration and expenses will be outstanding at the completion of the DOCA

Any continuing employee priority claims, excluding any superannuation debt. Again, it is expected that all

entitlements owing to terminated employees will be paid their entitlements prior to the completion of the

DOCA

Remuneration and costs of the Creditors' Trustees

Admitted creditors on a pro-rata basis in accordance with the dollar value of their admitted claim to an

amount capped at 60c in the dollar for each admissible claim.

The balance of the Trust Fund will be returned to the Deed Proponent

Assuming that there are no delays in adjudicating the claims of creditors it is estimated that a first and final

distribution to admitted creditors will be paid in 3-4 months following the creation of the Creditors’ Trust.

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