Aoliday AU Pty Ltd (Administrators Appointed) ACN 630 582 ... · • A DOCA/Creditors’ Trust will...

Aoliday AU Pty Ltd(Administrators Appointed)ACN 630 582 553 (the Company)

Supplementary Voluntary Administrators’ Report

Date 19 June 2020

Philip Campbell-Wilson

Partner – Financial Advisory

T +61 8297 2400

E [email protected]

John McInerney

Partner – Financial Advisory

T +61 8297 2400

E John [email protected]

2© 2020 Grant Thornton Australia Ltd | Supplementary Voluntary Administrators’ Report | 19 June 2020

Contents

Section Page

1 Executive summary 4

2 Background information 7

3 Actions undertaken since Previous Report 9

4 Proposal for a deed of company arrangement 11

5 Estimated return to creditors 19

6 Administrators’ recommendation 22

7 Remuneration 24

8 Meeting 26

Appendices

A Proposed Deed of Company Arrangement

B Administrators’ Remuneration Report

C Notice of adjourned second meeting of creditors

D Proof of Debt form

E Updated Proxy form


Glossary

the Act Corporations Act 2001

Administrators Philip Campbell-Wilson and John McInerney, Joint & Several Voluntary

Administrators of the Company appointed under Part 5.3A of the

Corporations Act 2001

Aoliday Holdings Aoliday Holdings Pty Ltd

ARITA Australian Restructuring Insolvency and Turnaround Association

ASIC Australian Securities and Investments Commission

ATO Australian Taxation Office

c. Circa

the Company Aoliday AU Pty Ltd

Director Tien-Yi (Emaily) Lo

DIRRI Declaration of Independence, Relevant Relationships and Indemnities

DJSB Department of Jobs and Small Business

DOCA Deed of Company Arrangement under Part 5.3A of the Act

EBITDA Earnings before interest, taxes, depreciation and amortisation

ERV Estimated realisable value

FYXX Financial year ended 30 June 20XX

GDST GDST Pty Ltd (Subject to Deed of Company Arrangement)

GST Goods and Services Tax

IP Intellectual Property

IPR Insolvency Practice Rules (Corporations) 2016

K Thousands

M Millions

PAYG Pay As You Go

Portal MYOB Insolvency Creditor Portal

PPSA Personal Property Securities Act

PPSR Personal Property Securities Register

Previous Report Voluntary Administrators’ Report (dated 30 April 2020)

Prospective Financial

Information

Financial information based on assumptions about events that may occur

in the future and possible action by an entity. It is highly subjective in

nature and its preparation requires the exercise of considerable

judgement.

Statutory priorities The priority for the payment of unsecured creditor claims set down in

Subsection 553, 560 and 561 of the Act.

Voluntary Administrators'

Report

A report on a company's business, property, affairs and financial

circumstances required to be given to creditors pursuant to Section 75-

225 of the Insolvency Practice Rules.

A statement pursuant to Section 75-225(3)(b) of the Insolvency Practice

Rules, setting out the Administrators' opinion and reasons as to each of

the options available under Section 439C of the Act in respect of a

company's future.

Yiyou Beijing Yi You Feng Guang Guo Ji Lu Xing She You Xian Gong Si

Yiyou Chengdu Beijing Yi You Feng Guang Guo Ji Lu Xing She You Xian Gong Si

(Chengdu)


Section 1: Executive summary

01. Executive summary

02. Background information

03. Actions since Previous Report

04. Proposal for a deed of company arrangement

05. Estimated return to creditors

06. Administrators' recommendation

07. Remuneration

08. Meeting


Executive summary

Section

Background • On 24 March 2020, Philip Campbell-Wilson and John McInerney were appointed Joint and Several Administrators of the Company.

• On 30 April 2020, the Administrators’ Report (“Previous Report”) was published on Grant Thornton’s website. This report should be read

in conjunction with our Previous Report.

• At the second meeting of creditors of the Company on 7 May 2020, the Chairman adjourned the second meeting of creditors for the

Administrators to consider changes made to the Deed of Company Arrangement proposal by the DOCA Proponent on 6 May 2020.

2

Actions Since Previous Report • Since the Previous Report, we and our solicitors have continued discussions with the DOCA proponent and their solicitors in relation to

the content of the revised DOCA.

• On 26 May 2020, following the withdrawal of the opposition to the Company’s registered trademark applications for the word ITRIP and

visual representation of itrip.com, the trademarks were registered in the name of the Company.

• We have prepared and sent an information memorandum regarding the major debtors, Yiyou and Yiyou Chengdu, to a litigation funder

who showed interest in the matter.

• We have also obtained a quote from a law firm in China for the costs of conducting due diligence in preparation for potential litigation

action for recovery of the Yiyou Debt.

• Despite our follow up requests for the debtors’ financial information, the information provided by the debtors to date has been limited.

3

Proposal for a Deed of Company

Arrangement (“DOCA”)• A DOCA is a mechanism for dealing with creditors claims. A DOCA, if approved by creditors, binds all creditors of the Company arising

on or before the date of the appointment of the Administrators unless otherwise specified.

• At the date of this report, a revised DOCA proposal has been received from Aoliday Holdings, a related entity:

Key terms of DOCA proposal

• Aoliday Holdings will provide Trust Contributions of $300K to be held on trust and refundable if the DOCA is not approved and executed.

• All creditors claims are to be bound by the terms of the DOCA (excluding secured creditors).

• Aoliday Pty Ltd, Aoliday Holdings and the Director are excluded creditors in the DOCA and Creditors’ Trust

• The Company will transfer the IP to Aoliday Holdings as consideration for the debts compromised in the DOCA.

• A Creditors’ Trust is to be established for the purposes of the DOCA and the DOCA will effectuate upon its establishment.

• Upon effectuation of the DOCA, control of the Company will revert to the Director.

• The Creditors’ Trust will receive Further Contributions from the Company that is the greater of $50K or 50% of EBITDA of the Company

from establishment of the Creditors Trust to 30 June 2022 which will be available for distribution to admitted creditors.

• The Trustees have the power and right to pursue the Yiyou debt.

4


Executive summary (cont’d)

Section

Estimated return to creditors • The estimated return to creditors in a liquidation scenario is between 1 to 9 cents / dollar.

• The estimated return to creditors under the proposed Deed of Company Arrangement is a minimum of 12 cents / dollar.

• Creditors should note the revised DOCA proposal provides for additional Further Contributions comprising of the greater of $50K or 50%

of the Company’s EBITDA up to 30 June 2022. This amount can not be quantified as at the date of this report due to the uncertainty

around the Company’s trading performance during the next two (2) financial years.

• Please note that this is an estimate only and is subject to change.

5

Administrators’

RecommendationSection 75-225(3)(b) of the Insolvency Practice Schedule requires the Administrators of the company to prepare a statement setting out

their opinion on the outcome of the company.

In this report we have recommended to creditors that the Company execute the proposed DOCA for the following reasons:

• A return under a DOCA is estimated to be higher than liquidation in both low and high scenarios.

• Entering into a DOCA will not prevent the Deed Administrators/Trustees from pursuing debtor recoveries.

• We estimate the return in a high liquidation scenario to be lower than the return in a DOCA/Credit Trust scenario, despite assuming full

recovery of the estimated insolvent trading claim against the Director which may not be achievable in practice.

• A DOCA/Creditors’ Trust will preserve the ability of creditors to participate in any future profitable trading of the business.

6

Remuneration • The Administrators' remuneration is to be approved by creditors at the upcoming meeting of creditors.

• To date, no remuneration has been approved or paid during the Administration. The Administrators’ did not seek creditor approval for

their remuneration at the second meeting of creditors on 7 May 2020.

• An updated Remuneration Report is enclosed at Appendix B, providing details of work performed to date, estimated future

remuneration up to the second meeting of creditors and estimated remuneration of the Liquidators/Deed Administrators/Trustees

depending on the creditors' decision of the outcome of the Company at the adjourned second meeting.

7

Meeting • The adjourned second meeting of creditors is to be held via webinar at 11:30AM (AEST) on Friday, 26 June 2020.

• The notice in regards to this meeting is enclosed at Appendix C.

• A Proof of Debt and updated Proxy Form are enclosed at Appendices D and E and are to be returned to our office by 4:00PM (AEST)

on Wednesday, 24 June 2020. We encourage creditors to submit the updated Proxy attached at Appendix E.

8


Section 2: Background information







07. Remuneration

08. Meeting


Background information

Second Meeting

The second meeting of creditors was convened via webinar at 2:30 PM on 7 May 2020.

This meeting was adjourned for up to forty-five (45) business days.

The reconvened second meeting of creditors will be held via webinar at 11:30 AM on 26

June 2020 in accordance with ASIC and ARITA guidelines as released in response to the

COVID-19 pandemic.

At the reconvened second meeting, creditors will be asked to make a decision by passing a

resolution with respect to the options available to them, being:

• The Company enter a deed of company arrangement (DOCA)

• The Company be placed into liquidation, or

• Control of the Company be returned to the Director.

The meeting will be open to creditors for questions and general discussion. Should you wish

to have us address any particular issue in detail please advise us prior to the meeting date.

This will allow sufficient time to prepare a detailed response to your question.

Supplementary Administrators’ Report

• This Supplementary Administrators’ Report should be read in conjunction with our

Previous Report.

• The purpose of this report is to provide creditors with any additional information received

from the time of the Previous Report to allow them to make an informed decision about

the future of the Company.

• This report summarises the actions undertaken since we issued our Previous Report

and includes details on the options available to creditors and the Administrators’

recommendation in relation to those above options.

Appointment of Administrators

We, Philip Campbell-Wilson and John McInerney were appointed Joint and Several

Voluntary Administrators of the Company pursuant to Part 5.3A of the Act on 24 March

2020 by resolution of the Company’s Director.

The purpose of the appointment of an administrator is to allow for an independent

insolvency practitioner to take control of and investigate the affairs of an insolvent company.

During that time creditors' claims are put on hold. At the end of that period we are required

to provide creditors with information and recommendations to assist creditors to decide

upon the Company's future.

First Meeting

The first meeting of the Company's creditors was held on 3 April 2020 via webinar. Due to

government restrictions imposed by the COVID-19 pandemic we did not offer a location for

creditors to attend in person. The virtual meeting was run in accordance with both ASIC and

ARITA guidelines as released in response to the COVID-19 pandemic.

At this meeting, there was no nomination for an alternate administrator. On that basis, John

McInerney and I continued to act as Joint and Several Voluntary Administrators of the

Company.

Also at this meeting, it was resolved to form a Committee of Inspection. The members of the

Committee of Inspection are as follows:

• Lei Meng on behalf of Escape to WA (Chinese Input Pty Ltd)

• Cheng Sen Lin on behalf of both Intertrips (AU/NZ) Pty Ltd and Holiday Xperience Pty

Ltd

The minutes of the first meeting of creditors of the Company were lodged with ASIC on 20

April 2020 and are available for download at the GTAL website.


Section 3: Actions since Previous Report







07. Remuneration

08. Meeting


Section 3: Actions since Previous Report

Intellectual Property

• Since our Previous Report, the opposition to the Company’s registered trademark

applications for the word ITRIP and visual representation of itrip.com was withdrawn.

• We have instructed the Company’s solicitors to complete the registration of the above

trademarks.

• On 26 May 2020, the trademarks were registered in the name of the Company.

• This IP will be transferred to Aoliday Holdings as consideration for the debt released by

Aoliday Pty Ltd and Aoliday Holdings in the DOCA (c. $5.3M), if the proposed DOCA is

accepted.

Debtors (Unrelated Parties)

As discussed in our Previous Report, Yiyou and Yiyou Chengdu are the two (2) major

debtors of Aoliday with total outstanding balances to the Company of c. $3.25M and

$6.25M respectively. Since our previous report we have:

• Held discussions with a litigation funder in relation to potential funding for the debts.

• Prepared and sent an information memorandum regarding the debtors to the litigation

funder who showed interest in the matter.

• Continued to liaise with the debtors regarding their financial position.

• Sought an estimate for legal costs and steps that may be undertaken to pursue the

debtors in China.

• Issued further correspondence to the debtors seeking payment of amounts owed.

• Requested and reviewed financial information of the debtors to assess their financial

position and ability to repay the outstanding amounts.

Creditors should note that we will continue to pursue collection of this debt regardless of

the outcome of the Administration process. However, due to the uncertainty surrounding

the claim, we are not in a position to provide an estimated return to creditors.

Related Party Debtors

• As discussed in our Previous Report, GDST, a related entity, went into

Administration owing c. $547K to the Company.

• On 7 May 2020, creditors of GDST accepted a DOCA proposal that would provide

an estimated return to unsecured creditors of 4c in the dollar on admitted claims, as

opposed to a nil return in liquidation.

• We will engage an independent party to adjudicate on the intercompany claim

when a dividend is declared.

Unsecured Creditors

Since our Previous Report we have:

• Attended to further enquiries from creditors

• Reconvened and prepared for the second meeting of creditors

Based on proofs of debt received to date, we estimate that unsecured claims of the

Company total c. $10.4 M. This amount is subject to change as further proofs of debt

are lodged by creditors.

Deed of Company Arrangement

Since our Previous Report we have:

• Held discussions with the DOCA Proponent with regards to the terms of the revised

DOCA so as to improve the return to creditors.

• Assessed the feasibility of the revised DOCA proposal with regards to the future

trading of the business.


Section 4: Proposal for a deed of company arrangement







07. Remuneration

08. Meeting


Proposal for a deed of company arrangementOverview

The provisions of Part 5.3A of the Act allow the Company and its creditors to negotiate a

proposal to deal with the Company’s affairs and in such circumstances execute a Deed of

Company Arrangement (DOCA).

A DOCA is a flexible arrangement which is available to a Company in Voluntary

Administration.

We received a revised DOCA proposal from Aoliday Holdings, a related entity, on 6 May

2020. Further updates have been made to the terms of the DOCA after a number of

discussions following the second meeting of creditors on 7 May 2020. The proposed DOCA

is enclosed at Appendix A. Details of the proposed DOCA are provided following.

The key features of the proposed Deed

• Aoliday Holdings will pay the Administrators the Initial Contributions ($300K)

a) $100,000 prior to the adjourned second meeting

b) $200,000 within 10 business days after the date creditors resolve that the Company

execute the proposed DOCA

• The above amounts are held on trust for Aoliday Holdings and are refundable if the

DOCA is not approved and executed.

• The Administrators are to be appointed Deed Administrators.

• All creditors claims are to be bound by the terms of the DOCA (excluding secured

creditors).

• Upon execution of the DOCA, control of the Company remains with the Deed

Administrators. Control will revert to the Director upon effectuation of the DOCA.

• The Company will transfer the IP to Aoliday Holdings as consideration for the debt

compromised in the DOCA (c. $5.3M).

• A Creditors’ Trust is to be established for the purposes of the DOCA.

• The DOCA will effectuate upon establishment of the Creditors’ Trust.

Further Contributions

During the financial year ending 30 June 2021, the Company must pay to the Trustees the

greater of the following amounts:

i. $20,000; and

ii. an amount comprising 50% of EBITDA (earnings before interest, taxes, depreciation

and amortization) for the financial year ending 30 June 2021.

During the financial year ending 30 June 2022, the Company must pay to the Trustees the

greater of the following amounts:

i. $30,000; and

ii. an amount comprising 50% of EBITDA for the financial year ending 30 June 2022.

• Creditors will be paid a distribution from the Trust Fund.

• Aoliday Pty Ltd, Aoliday Holdings and the Director are excluded creditors and will not

participate in any distribution from the Trust Fund, but are entitled to vote at all meetings

of creditors of the Company.

• The order of distribution of the Trust Fund is as follows:

1. First, the Administrators’ remuneration and costs

2. Second, the Deed Administrators’ remuneration and costs

3. Third, the Trustees’ remuneration and costs

4. Fourth, the admitted claims of creditors that would in a liquidation, be accorded a

priority under section 556, section 560 and section 561 of the Act; and

5. Lastly, the admitted claims of creditors on a pari passu basis


Proposal for a deed of company arrangement (cont'd)EBITDA Forecast and assumptions for future trading of the Company

The DOCA Proponent has provided a cash flow forecast to substantiate that the Company

will trade and generate c. $1.5M EBITDA from July 2020 to 30 June 2022 once control is

returned to the Director.

In preparing the cash flow forecast, the Proponent has relied on the following assumptions:

No revenue is expected from July 2019 to September 2019 due to the COVID-19 pandemic

and travel restrictions.

• A monthly income benchmark based on the historical profit and loss of the Company

from April 2019 to February 2020. The Proponent has estimated income will be 30% of

the benchmark for FY21 and 70% for FY22.

• A 5% gross margin based on the current industry standard.

• A c. 25% reduction in monthly expenses due to the exclusion of IPO related costs which

the company previously expensed.

• Developing a new business plan and optimising trading efficiency due to the downsizing

of the business.

• Potential capital injection from investors when the market has recovered.

Comments on the forecast

We make the following comments in relation to the forecast:

• Given the uncertainty surrounding travel restrictions due to the COVID-19 pandemic

forecasts based on historical trading performance in the travel industry may not be

reliable. As a result, at this point in time future revenue of the Company cannot be

accurately projected.

• Previously, the Company’s trading was heavily reliant on the business relationship with

Yiyou Chengdu. It is uncertain that this relationship will continue due to potential

recovery actions that may be brought by the Trustees for the outstanding debt owing to

the Company.

Comments on the forecast (cont’d)

• The Company’s new business plan is contingent on establishing business relationships

with new customers in China. The investment of additional time and resources may be

required before a profit is made.

• The reduction in expenses may be achievable given the downsizing of the business.

Based on the above, there is a high level of uncertainty in regards to the assumptions made

in preparing the forecast, and we are therefore unable to rely on the estimate of EBITDA to

be made by the Company.

Notwithstanding, we note that if the minimum Further Contributions (i.e. $50K) are

received from the intended trading along with the $300K contribution, it is our view

that unsecured creditors will receive a greater return under the DOCA compared to a

liquidation scenario.

Monitoring and reporting arrangements under the DOCA/Creditors’ Trust

• The Company’s financial information will be provided by the Director on a quarterly

basis. The Trustees have the power to request same.

• The calculation of EBITDA will be in accordance with applicable financial reporting

standards and confirmed by the Trustees.

• The Trustees calculation of the EBITDA will be final and conclusive.

Security provided by the Company

As security for payment of the Further Contributions the Company will provide a charge,

and grant a security interest in, all present and after acquired property of the Company in

favour of the Trustees.

Comparison of estimated return to creditors

Please see Section 5 for details regarding the estimated return to creditors and a

comparison of returns under the DOCA and liquidation scenarios.


Proposal for a deed of company arrangement (cont'd)Creditors' Trust Arrangement

• The DOCA proposal involves a creditors trust.

• A creditors' trust is a mechanism that is utilised to accelerate a company's exit from

external administration. A creditors' trust is established by the creation of a legal trust

and the creditor claims are transferred to the trust. Creditors become beneficiaries of the

trust and no longer receive the statutory protection provided by the Act but are merely

beneficiaries under a trust.

• In the case of the Company, upon establishment of the Creditors Trust, the Company

will exit external administration with control to pass back to the Director upon

effectuation of the DOCA. The claims of creditors will then be transferred to the

creditors' trust.

• It is important that creditors are fully informed in respect of the terms of the creditors'

trust and the risks that a creditors' trust present for creditors. ASIC has issued a

regulatory guide in respect of creditors' trusts and we have followed their guidelines in

respect of disclosures made in this report. ASIC recommends that creditors have the

opportunity to obtain independent professional advice in relation to a proposed creditors'

trust, if they wish.

• In accordance with ASIC's Regulatory Guide 82 'External Administration: Deed of

company arrangements involving a creditors' trust’, we have set out on the following

pages material information creditors should be aware of in relation to a creditors' trust.

• Creditors are not disadvantaged by agreeing to claim in the Trust and hence entry into

the Trust is recommended for the following reasons:

• Control over asset collection remains with independent Trustees (i.e. Yiyou debt);

• The Trust provides for a better return to unsecured creditors than in the liquidation

alternative; and

• The enforceability of the security granted by the Company to ensure the Further

Contributions are received.


Creditors’ Trust

Reasons for the Trust Deed The DOCA has been proposed on the basis a Creditors’ Trust be formed after the Company executes the DOCA.

The effect of this is that once the Creditors’ Trust has been formed and the DOCA effectuated, control of the Company is returned to

the Company’s Director.

The Creditor’s Trust allows for the early termination of the DOCA to be affected so that the Company avoids having to trade “Subject to

DOCA”, which may have an adverse impact on its profitability and its credit terms with suppliers.

The use of DOCA combined with the Creditor's Trust will provide a better return to the creditors than the Liquidation alternative.

As the DOCA proposal includes the creation of the Creditors' Trust, should creditors not approve the Creditors' Trust the DOCA would

fail and the Company will likely go into Liquidation.

Key Events/ Timeline The key events are as follows:

- Creditor approval is required for the Company to execute a DOCA at the second meeting of creditors which is to be held on 26 June

2020.

- The Administrators, the DOCA proponent and the Company will execute the DOCA following the second meeting of creditors.

- This must occur within fifteen (15) business days from the date of the resolution approving the DOCA at the second meeting. If the

DOCA is not executed within this timeframe the Company will be automatically placed to Liquidation.

- The Creditors’ Trust will be established upon the receipt of the Initial Contributions from the DOCA proponent and the completion of

the Implementation Steps.

- Therefore, the Trust Deed must be signed and the Trust created before the DOCA is effectuated.

- Once the DOCA is effectuated, management and control of the Company will return to the Director.

- Claims of creditors will be adjudicated by the Trustees and admitted creditors will receive a dividend from the Trust Fund.

- It is anticipated that an interim dividend will be paid to unsecured creditors, excluding Aoliday Pty Ltd and Aoliday Holdings Pty Ltd,

within six (6) months of the creation of the Creditors' Trust. A final dividend will be declared three months after the Further

Contributions for the 2022 financial year.

Return to creditors/ beneficiaries The funds in the Trust Deed will be distributed in the following order of priority:

- First, the Administrators’ remuneration and costs

- Second, the Deed Administrators’ remuneration and costs

- Third, the Trustees’ remuneration and costs

- Fourth, the admitted claims of creditors that would in a liquidation, be accorded a priority under section 556, section 560 and section

561 of the Act; and

- Lastly, the admitted claims of creditors on a pari passu basis


Creditors’ Trust (cont'd)

Trustee particulars The Administrators/Deed Administrators will be Trustees of the Creditors' Trust.

Philip Campbell-Wilson and John McInerney are registered liquidators and have the relevant experience and necessary skills to

undertake the required duties of the Trustees of the Creditors' Trust.

Philip Campbell-Wilson and John McInerney hold adequate professional insurance that would cover their actions as Trustees of the

Creditors' Trust.

Remuneration The Creditors' Trust will provide for payment of the Administrators, Deed Administrators and Trustees remuneration from the Trust

Fund in priority to payment to priority or ordinary unsecured creditors. This includes:

Any approved remuneration and expenses owing to the Administrators and Deed Administrators that remain 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 as detailed in Appendix

C.

We estimate that the remuneration and costs of the Trustees will be c. $70K. The 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 Insolvency Practice Schedules,

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.

Please refer to Section 7 of this report for details of the relevant remuneration resolutions.

Indemnities 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 Fund.

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. We will notify creditors and seek their feedback prior to the

commencement of any material legal action as it may potentially impact the return to creditors.

This indemnity takes effect from the commencement of the DOCA, is continuing and will endure for the benefit of the Deed

Administrators and Trustees.

No other indemnities have been provided to the Trustees.



Powers The powers of a Deed Administrator are governed by the Act, whilst a Creditors' Trust is governed by the Trust Deed and the Trustees

Act 1925 (NSW).

The Trust will be administered in accordance with the provisions set out in the DOCA and the Trust Deed.

Primarily, the proposed role of the Trustees is to realise the trust fund assets, call for creditor claims, review and adjudicate creditors

claims received, and distribute the funds held in trust in accordance with the DOCA proposal. Further comments in this respect can be

found in the table titled "Estimated Return to Creditors" in Appendix C.

The Trust Deed would also incorporate the powers that would apply to the Deed Administrators.

Claims • Creditors are referred to Section 7 of the proposed DOCA attached at Appendix A.

Other creditor/ beneficiary differences In a DOCA, creditors have the right to request a meeting of creditors or apply to Court to seek orders to amend the DOCA.

Creditors do not have this option under a Creditors’ Trust.

Creditors will have fourteen (14) days to appeal the Trustees’ decision to reject their claim, or a longer period if the Trus tees permit.

As the Trustees are registered liquidators, creditors have the ability to make any complaints about their conduct to ASIC.

FEG Should creditors resolve to accept the DOCA, employees of the Company will not have access to the FEG.

FEG may only be available if the Company is placed into liquidation.

Compliance opinion It is the Administrators’ opinion that the DOCA proponent is capable of complying with the terms of the Trust Deed and likely to comply

with the obligations to the Trustee, if the DOCA proposal is approved by creditors.

Solvency Statement It is the Administrators' opinion that the Company will become solvent at the date of effectuation of the DOCA as per the proposed

DOCA as all creditor claims against the Company will be extinguished.

Tax (company/trust) A creditors’ trust may potentially create taxation issues when compared to a distribution received from a DOCA. That is, any tax

liabilities that may arise with the administration of the Creditors’ Trust will reduce the funds available to creditors.

The Administrators do not anticipate that there will be any material changes to the funds available as a distribution to creditors under

the proposed Creditors’ Trust.

Tax (creditor / beneficiary) Creditors are advised to seek their own tax advice as there may be some implications for creditors receiving a distribution from a trust

rather than a distribution from a company subject to a DOCA.

The Administrators are unable to provide any advice regarding this issue.

Other No other material aspects or implications have been identified at this stage.



Advantages The return to unsecured creditors is estimated as being greater under the DOCA (and Creditors’ Trust) when compared to the

estimated return in winding up. Additionally, the return is more certain and timely than in winding up.

The costs associated with the DOCA and Creditors’ Trust) are estimated to be less than the costs associated with the winding up of the

Company.

Creditors are not disadvantaged by the DOCA proposal and Creditors’ Trust for the following reasons:

There are upfront payments of $300K from the DOCA Proponent which will be transferred into the Creditors’ Trust after its

establishment.

An interim dividend could be declared within six (6) months of establishment of creditors to provide for a timely distribution to

creditors.

The Trustees retain the power and right to recover the Yiyou debt. Additionally, by reason of the contributions, the Trustees will

be able to set aside some funds to take steps to recover the Yiyou debt.

The Company will provide a charge, and grant a security interest in, all present and after acquired property of the Company in

favour of the Trustees. This provides more certainty to creditors for a better return from the Further Contributions.

The DOCA proponent, Aoliday Holdings Pty Ltd, will be a party to the DOCA/ Creditors’ Trust. This will provide certainty to the

remaining creditors that Aoliday Holdings Pty Ltd will be bound by the DOCA/ Creditor Trust.

Disadvantages Under a DOCA, creditors' rights are regulated by both the terms of the DOCA and the provisions of the Act, which deal with such

matters as calling a creditors' meeting to vary the terms of a DOCA or the right of creditors to appeal against a rejection of a proof of

debt.

Under a creditors' trust, the rights of creditors will transform into the rights of a beneficiary under the terms of the trust instrument with

any additional rights under the Trustee Act 1925 (NSW), and therefore the creditors will lose any protections afforded by the Act.

As a separate matter, creditors will need to be satisfied with the range of return that the DOCA may provide because by entering into

the DOCA and creditors trust, creditors will be compromising their claims in exchange for the estimated minimum return of 12 cents in

the dollar including (as a consequence) any right to pursue insolvent trading and other potential voidable transactions.


Section 5: Estimated return to creditors







07. Remuneration

08. Meeting


Estimated return to creditors

Summary of estimated return to creditors

The estimated return to creditors in both a liquidation scenario and under the proposed

DOCA is summarised in the table opposite.

Key drivers affecting a return to creditors

• Creditors are referred to page 46 of our Previous Report with regard to the recoverability

of debtors. We note for the purposes of calculating the estimated return in a high DOCA

and Liquidation scenario we have not taken into account the potential recovery of debtors

(excepting a nominal balance), due to the uncertainty of recovery at this stage.

• The revised DOCA proposal provides for 50% of the EBITDA of the Company for the

relevant year to be paid to the Trustees as Further Contributions. The future profitability of

the business is uncertain due to the current economic conditions and travel restrictions

resulting from the COVID-19 pandemic.

• We note that the return in a Liquidation scenario is highly contingent on the successful

recovery of the insolvent trading claim. We again note that this is highly uncertain, and is

contingent on the Director’s capacity to meet a judgement (if one is made against them).

Estimated return to unsecured creditors

We estimate that ordinary unsecured creditors will receive a minimum return of 12 cents in

the dollar in the DOCA scenario, and between 1 to 9 cents in the dollar in a Liquidation

scenario. In the event that the Company trades profitably i.e. a positive EBITDA, an additional

return will be available to unsecured creditors from the trading profits of the Company up to

30 June 2022.

We note that under a DOCA scenario, Aoliday Pty Ltd, Aoliday Holdings Pty Ltd and Tien-Yi

Lo will not participate in a distribution.

We again note that the above estimates do not include future debtor recoveries. In the event

that recoveries are made, the returns available to unsecured creditors may be higher under

both DOCA and Liquidation scenarios.

Timing of return to unsecured creditors

Due to uncertainty of the debtor recovery in both liquidation and DOCA scenarios, the

Administrators are not in a position to provide an estimated timeframe for the process of

paying a dividend to unsecured creditors. However, it is anticipated an interim dividend

distribution to creditors will be made within six (6) months from the establishment of the

Creditors’ Trust.

Please note we have not included any value for the Yiyou and Yiyou Chengdu debtor

recovery nor any value for the future EBITDA position. Recoveries from these sources will

increase the DOCA return to creditors.


Estimated return to creditors (cont’d)

Note Commentary

1At the date of this report, cash at bank is $525,236. Since our Previous Report, we received an additional $5K from the DOCA proponent in respect of the meeting adjournment

costs.

2

Creditors are referred to page 43 of our Previous Report, any recovery of this amount will be available in both a DOCA scenario and liquidation. Creditors should note that we will

continue to pursue the collection of the major debtors, Yiyou and Yiyou Chengdu, under both a DOCA and Liquidation scenario. Due to the uncertainty surrounding the claim, we are

not in a position to provide an estimated return to creditors. However, there is a significant amount of uncertainty involved in pursuing these debtors in a foreign jurisdiction so we

have conservatively assumed a nil recovery in both the DOCA and liquidation low case. As discussed on page 44 of our Previous Report, we have not assigned a value to

intercompany loans between the Company and its related entities.

3

Since our Previous Report, we now confirm the Company holds the registered trademark for the word ITRIP and visual representation of itrip.com. At this stage, the Administrators

have not formed the view that these assets may have a material realisable value. The IP will be transferred to Aoliday Holdings as consideration for the debt released by Aoliday Pty

Ltd and Aoliday Holdings in the DOCA (c. $5.3M), if the proposed DOCA is accepted.

4As a result of the execution of the DOCA by GDST, we estimate a return of c. $22K from a dividend distribution in the deed administration of GDST. This is subject to adjudication of

the related party claim by an independent party.

5As discussed on page 12, Aoliday Holdings will make Initial Contributions to the DOCA totalling $300K, which will be available to meet the costs of the administration and for

distribution to creditors.

6As discussed on page 12, the Company must pay to the Trustees the greater of $50,000, or an amount comprising 50% of EBITDA up to 30 June 2022 should creditors accept the

DOCA proposal.

7

As discussed on page 48 of our Previous Report, we have identified a potential claim for trading whilst insolvent for up to c. $965K. We note that the recovery of same is highly

uncertain, and is contingent on the Director’s capacity to meet a judgement (if one is made against them). We note that the l iquidators’ estimated remuneration and disbursements

are significantly higher in the high scenario to reflect the increased costs associated with litigation.

8

Please refer to Section 7: Remuneration of this report and the Administrators’ Remuneration Report at Appendix B for full details of remuneration and disbursements. Please note

that these fees and disbursements are estimates at this stage and subject to creditors’ approval at the second meetings of creditors (remuneration only). The estimated

disbursements in the liquidation are predominately for the potential recovery / legal costs for pursuing the collection of debtors. Disbursements have increased by c. $20K under the

DOCA for the potential costs of conducting preliminary legal due diligence in a foreign jurisdiction.

9We have received additional proofs of debt totalling c. $100K since our Previous Report. Unrelated unsecured creditor claims of the Company total c. $4.9M and relate to

outstanding amounts for supplier bookings. This amount is subject to change upon further proofs of debt lodged by creditors.

10Creditors are referred to page 19 of our Previous Report for a breakdown of related party creditors. We note that under a DOCA scenario, Aoliday Pty Ltd and Aoliday Holdings Pty

Ltd will not participate in a distribution. Other related party creditors claims are subject to further review.


Section 6: Administrators’ recommendation







07. Remuneration

08. Meeting


Administrators' recommendation

Administrators' recommendation

In accordance with Section 75-225 of the IPR, as Administrators, we are required to make

a recommendation to creditors as to which of the options available to them is in their best

interests. The following options are available for creditors to vote on at the meeting

pursuant to Section 439C of the Act:

• That the administration should end.

• That the Company execute the proposed DOCA.

• That the Company be wound up.

1. The administration should end

It is possible that creditors may consider ending the administration which would return

the Company to the control of its Director. Ordinarily, the Director would resume

control of the Company's assets and be able to deal with them as the Director deems

appropriate.

Administrators‘ recommendation: It would not be in the creditors' best interests for

the Administration to end as the Company is insolvent and therefore requires a

mechanism to deal with creditors' claims.

The Company executes a Deed Of Company Arrangement

The provisions of Part 5.3A of the Act allow the Company and its creditors to negotiate

a proposal to deal with the Company’s affairs and in such circumstances execute a

DOCA.

Details of the proposed DOCA are included at Section 4 of this report.

Administrators' recommendation: It is our recommendation that it would be in

creditors’ best interests for the Company to execute a DOCA due to the following:

A return under a DOCA is estimated to be higher than liquidation in both low and

high scenarios.

Entering into a DOCA will not prevent the Deed Administrators/Trustees from

pursuing debtor recoveries.

The proposed DOCA/Creditors’ Trust preserves the ability of creditors to recover

from Yiyou and Yiyou Chengdu debtors and to also participate in any profitable

trading of the business.

To commence proceedings to recover insolvent trading claim, substantial funding

would be required which will need to be provided by creditors or a litigation funder,

which is not guaranteed and our preliminary enquires have not filled us with

confidence. Notwithstanding the above, we estimate the return in a high liquidation

scenario to be lower than the return in the DOCA scenario, despite assuming a full

recovery of the estimated insolvent trading claim against the Director which may not

be achievable in practice.

Even if funding is provided by a litigation funder, and a successful judgment was

obtained and enforced, unsecured creditors would still not receive a materially

higher return then the DOCA, as a success fee of c. 40% would be deducted from

gross recoveries along with legal and liquidation costs.

3. The Company be wound up (liquidation)

Creditors may resolve to wind up the Company which would result in the Company

being placed into liquidation. If creditors do not nominate a different person to be

Liquidator, my joint and several appointee and I will be taken as having been

nominated as Joint and Several Liquidators of the Company.

A more detailed review of the Company’s financial affairs and a report would be

prepared with the findings conveyed to ASIC.

Further investigations in relation to voidable transactions and insolvent trading would

be made as well as a determination to proceed with such claims, if any.

In the event sufficient funds are recovered, monies would be distributed in accordance

with the provisions of Section 556 of the Act.

Administrators' recommendation: Given the risk highlighted in this report in

enforcing the potential insolvent trading claim against the Director along with the

certainty associated with the level of a better return and timing of that return under a

DOCA, we are of the view that it is not in the creditors' best interests for the Company

to be placed into liquidation.

Recommendation:

Given the DOCA provides for a better return to unsecured creditors of the

Company generally, we are of the view that it is in creditors’ interests for the

Company to execute a DOCA.


Section 7: Remuneration







07. Remuneration

08. Meeting


Remuneration

Voluntary Administrators' remuneration (excl GST and disbursements) Remuneration

Enclosed at Appendix B is the updated Administrators’ Remuneration Report, which

provides details of:

• Voluntary Administrators' remuneration to be approved;

• Liquidators' future remuneration to be approved; and

• Deed Administrators‘/Trustees’ remuneration to be approved.

Creditors should note that all works have, and will be, performed by the appropriate level of

staff in order to optimise any potential realisations which may be available to unsecured

creditors.

Voluntary Administrators' remuneration

The remuneration has been split between actual fees incurred for the period 24 March 2020

to 17 June 2020 and the estimated future fees to be incurred for the period 18 June 2020 to

26 June 2020, being the date of the second meeting, and for the period up to the date of

the execution of the DOCA.

Deed Administrators‘/Trustees’ future remuneration

It will be necessary for the creditors to approve the drawing of remuneration for the Deed

Administrators/Trustees’ should creditors vote that the company executes a

DOCA/Creditors’ Trust.

At the forthcoming meeting of creditors on 26 June 2020. the creditors will be requested to

approve our remuneration as provided in the tables opposite.

Liquidators’ future remuneration

It will be necessary for the creditors to approve the drawing of remuneration for the

Liquidators, should creditors vote that the company be placed into liquidation.

Note: No remuneration has been approved or paid during the Administration. The

Administrators’ did not seek creditor approval for their remuneration at the second

meeting of creditors on 7 May 2020.

Description Amount ($)

Joint and Several Administrators' remuneration for the period 24

March 2020 to 17 June 2020

187,174.00

Joint and Several Administrators' estimated future remuneration for

the period 18 June 2020 to 26 June 2020, being the date of the

adjourned second meeting

25,000.00

Joint and Several Administrators' estimated future remuneration for

the period 27 June 2020 to the date of the execution of the DOCA

5,000.00

Total Administrators' remuneration 217,174.00

Deed Administrators‘/Trustees’ future remuneration (excl GST and disbursements)

Liquidators' future remuneration (excl GST and disbursements)


Joint and Several Liquidators’ estimated future remuneration for the

period from commencement to completion of the Liquidation

150,000.00


Joint and Several Deed Administrators’ estimated future remuneration

for the period from execution to effectuation of the DOCA

10,000.00

Trustees’ estimated future remuneration for the period from execution

to finalisation of the Creditors’ Trust

70,000.00

Total Deed Administrators’/Trustees’ remuneration 80,000.00


Section 8: Meeting







07. Remuneration

08. Meeting


Adjourned second meeting of creditors

Lodging of proxies

We encourage creditors to submit the updated Proxy attached at Appendix E. Please

ensure that the proxies are signed under seal, where appropriate (if you are a company)

and if the proxy is executed by a power of attorney, that a copy of the power of attorney is

enclosed with the proxy form.

Proxies for the meetings can be lodged in the following ways:

• Post: to arrive no later than 4:00 PM on Wednesday, 24 May 2020.

• Email: by email to [email protected] no later than 4:00PM on Wednesday, 24 May

2020

If proxies are lodged by facsimile or email, the law requires that the original proxy must be

lodged with the Administrators within 72 hours of lodging the faxed or emailed copy.

Contact details

Should you have any queries in relation to any matter raised in this report then please do

not hesitate to contact our office on +61 2 8297 2400.

Yours faithfully


Joint and Several Voluntary Administrator

Adjourned meeting of creditors

The adjourned second meeting of creditors is to be held via webinar at 11:30 AM (AEST)

on 26 June 2020.

The notice in regards to the meeting is enclosed as Appendix C.

The meeting will be open to creditors for questions and general discussion. Should you wish

to have us address any issue in detail please advise us prior to the meeting date. This will

allow sufficient time to prepare a detailed response to your question.

Please note that attendance at the meeting is not compulsory.

Webinar Attendance

Due to government restrictions recently imposed by the COVID-19 pandemic we will not be

offering a location for the meeting for creditors to attend in person. Should creditors wish to

attend the meeting, creditors will need to contact our office to obtain the relevant webinar

details.

Please contact our office at [email protected] no later than 4:00PM on Wednesday, 24

May 2020 to obtain dial in details. In order for webinar details to be issued, you will be

required to submit a proof of debt and proxy in favour of the party attending via webinar as

detailed below.

Lodging of proofs of debt

Should you not have already lodged a proof of debt, you are required to complete the proof

of debt as attached as Appendix D in order to participate in voting at the meeting.

mailto:[email protected]




Appendices

A. Proposed Deed of Company Arrangement

B. Administrators’ Remuneration Report

C. Notice of the adjourned second meeting of creditors

D. Proof of Debt Form

E. Proxy Form


A. Proposed Deed of Company Arrangement

DOCA Proposal – Aoliday AU Pty Ltd Page 1

Aoliday AU Pty Ltd (administrators appointed) Details of proposed Deed of Company Arrangement This document sets out the indicative terms of a deed of company arrangement to be entered into by Aoliday AU Pty Ltd ACN 630 582 553 (administrators appointed) (DOCA). These terms are subject to formal documentation.

1. Background

A. On 24 March 2020 (Appointment Date), Philip Campbell-Wilson and John McInerney (Administrators) were appointed administrators of the Aoliday Au Pty Ltd (administrators appointed) (Company)

B. Aoliday Holdings Pty Ltd ACN 630 466 876 (Aoliday Holdings), the sole shareholder and a major creditor of the Company propounds the DOCA Proposal.

C. Aoliday Holdings proposes a DOCA that:

(a) achieves the objectives of the Act;

(b) pays the Employee Creditors in full, in an expedited fashion, subject to the terms of DOCA; and

(c) for Unsecured Creditors represents both:

(i) a better return; and

(ii) a significantly quicker and more certain return, than if the Company were wound up.

2. DOCA Contribution

2.1 Payment of Initial Contributions

Aoliday Holdings will pay:

(a) to the Administrators the sum of $100,000.00 prior to adjourned second meeting; and

(b) to the Deed Administrators the sum of $200,000.00 within 10 business days after the date that the Company has executed the DOCA.

(together, the Initial Contributions).

2.2 Trust money

(a) Until the DOCA is executed, and the Creditor’s Trust has been established, the Initial Contributions are:

(i) not property of the Company, the Administrators or the Deed Administrators;

(ii) made on the basis that the amount is:

(A) held on trust for Aoliday Holdings; and

(B) immediately returned (and without set off or deduction) to Aoliday Holdings (or as it may direct) in full if the DOCA is not approved and


executed; and

(iii) released from trust and paid, to the Deed Administrators for the purposes of the DOCA immediately upon the establishment of the Creditor’s Trust.

(b) Upon execution of the DOCA, Aoliday Holdings irrevocably directs the Administrators to pay the Initial Contributions (received by the Administrators) to the Deed Administrators to be held in accordance with clause 2.2(a).

3. Administration of the DOCA

(a) Philip Campbell-Wilson and John McInerney shall be the joint and several deed administrators of the DOCA (Deed Administrators).

(b) The Deed Administrators shall have day to day control and management of the Company's business and affairs during the DOCA period.

(c) During the DOCA period, the director must:

(i) co-operate with the Deed Administrators; and

(ii) not exercise or purport to exercise a function or power as a director of the Company, except with the Deed Administrators’ prior written approval.

4. Conditions precedent to Implementation

(a) Implementation is subject to satisfaction or waiver of the following Conditions Precedent:

(i) payment of the Initial Contributions by Aoliday Holdings in accordance with clause 2.1; and

(ii) any other conditions as agreed by the parties in writing.

(b) The Conditions Precedent are for the benefit of the Deed Administrators, who may waive them by notice in writing to the Deed Administrators.

(c) If any of the Conditions Precedent is not satisfied or waived, the Deed Administrators will convene a meeting of Creditors to determine the future of the Company.

(d) The Deed Administrators may, in their absolute discretion, extend any time required to satisfy the Conditions Precedents.

5. Implementation

Subject to satisfaction (or waiver) of the Conditions Precedents, the parties must take and complete the following steps (Implementation Steps):

(a) Establishment of the Creditors’ Trust

The Trustees and the Company executing and exchanging the Creditors' Trust Deed to establish the Creditors’ Trust.

(b) Assignment of YiYu Debt

Execution of documents, required by the Deed Administrators and the Trustees, to


give effect to the YiYu Debt Assignment Transaction set out in clause 9, including:

(i) assignment of the YiYu Debt by the Company to the Trustees; and

(ii) power of attorney in favour of the Trustees for recovery of the YiYu Debt.

(c) Assignment of Trade Debtors

Execution of documents, required by the Deed Administrators and the Trustees, to give effect to the Trade Debtors Assignment Transaction set out in clause 10, including:

(i) assignment of the Trade Debtors by the Company to the Trustees; and

(ii) power of attorney in favour of the Trustees for recovery of the Trade Debtors.

(d) Further Contributions

Execution of documents, required by the Deed Administrators and the Trustees, to give effect to the Further Contributions Transaction set out in clause 11, including:

(i) any document setting out the obligation of the Company to pay the Further Contributions to the Trustees; and

(ii) any security granted in favour of the Trustees, for payment of the Further Contributions.

(e) Assignment of Intellectual Property

Execution of documents, required by the Deed Administrators, to give effect to the Intellectual Property Transaction set out in clause 12, namely:

(i) assignment of the iTrip IP by the Company to Aoliday Holdings; and

(ii) licence of the iTrip IP by Aoliday Holdings to the Company.

(f) Mutual Releases

Execution of documents, required by the Deed Administrators, to give effect to the Mutual Releases set out in clause 13 in relation to claims of the Company, Aoliday Holdings and Aoliday Pty Ltd.

(g) Transfer of Available Property

Execution of documents, required by the Deed Administrators and the Trustees, to assign and/or transfer the Available Property (except the iTrip IP which is transferred to Aoliday Holdings) from the Company to the Trustees of the Creditors’ Trust.

5.2 Miscellaneous

(a) The Implementation Steps are interdependent and (save as otherwise set out in this Deed) must take place, as nearly as possible, simultaneously.

(b) If the Deed Administrators form the opinion that any Implementation Step is not capable of being performed, the Deed Administrators may convene a meeting of Creditors to determine the future of the Company.


(c) The Deed Administrators may, in their absolute discretion, extend any time required to complete the Implementation Steps.

6. Available property

The Available Property comprises:

(a) the Initial Contributions;

(b) the Further Contributions;

(c) any money/cash held by the Company, the Administrators and/or the Deed Administrators;

(d) the iTrip IP which comprises the Company’s rights, title and interest in and to the following intellectual properties:

(i) iTtrip.com (with Registration Number:1937485); and

(ii) “ITRIP” in the form of word (with Registration Number:2003509);

(e) the YiYu Debt which comprises the Company’s rights, title and interest to, and in respect of, the amounts owed to the Company by, or the Company’s claims against:

(i) Yiyoufengguan International Travel Service Co (Chengdu); and

(ii) Yiyoufengguan International Travel Service Co;

including the rights and entitlement to claim against, or recover from, anyone else receiving any benefit arising thereof;

(f) the Trade Debtors (including accounts receivable),

and any other property transferred, paid or assigned to Deed Administrators, the Trustees or the Company, at any time throughout the DOCA period, for the benefit of paying the admitted Claims of Creditors.

7. Establishment of Creditors’ Trust

(a) A creditors’ trust will be established for the purposes of the DOCA and named “Aoliday (AU) Creditors Trust” (Creditors’ Trust).

(b) Philip Campbell-Wilson and John McInerney will jointly and severally be the trustees of the Creditors’ Trust (Trustees).

(c) A Creditors’ Trust fund (Trust Fund) will be established which will comprise the following:

(i) the Available Property transferred to the Trustees (except the iTrip IP which is transferred to Aoliday Holdings); and

(ii) any proceeds of reaslisation of the above.

(d) Upon establishment of the Creditors’ Trust:

(i) save as set out in sub-clause (g) below, all claims of creditors (Creditors) against the Company will be released and discharged; and


(ii) each Creditor will instead be entitled to make a claim against the Trust Fund, in proportion to the amount of their released claim, as set out below.

(e) The Trustees may, in their absolute discretion:

(i) admit all or part of a Claim;

(ii) reject all or part of a Claim; or

(iii) pay any admitted Claim.

(f) The Excluded Creditors (defined below) are not entitled to participate in or receive any distribution from, and will not prove to recover any Claim for the purposes of, and in relation to, the Trust Fund.

(g) The Trustees are entitled to be indemnified out of the Trust Fund for all actions, suits, proceedings, accounts, claims and demands arising out of or relating to the administration of the Company, the DOCA and the Creditors’ Trust which may be commenced, incurred by or made on the Trustees by any person and against all costs, charges and expenses incurred by the Trustees in respect of them, provided that the Trustees shall not be entitled to an indemnity in respect of any liabilities or demands to the extent that the indemnification contravenes the Corporations Act or the Trustee Act.

8. Distribution of Trust Fund

(a) All claims which have arisen before Appointment Date are admissible under the Creditors’ Trust.

(b) Interest will not accrue or be payable on any claim.

(c) The order of distribution of Trust Fund will be as follows:

(i) Firstly – The Administrators’ remuneration and costs (including remuneration and costs for acting as administrators of the Company);

(ii) Secondly – The Deed Administrators’ remuneration and costs (including remuneration and costs for acting as deed administrators of the DOCA);

(iii) Thirdly – The Trustees’ remuneration and costs (including remuneration and costs for acting as trustees of the Creditors Trust);

(iv) Fourthly – The admitted claims of Creditors that would, in a liquidation, be accorded a priority under section 556, section 560 and section 561 of the Act; and

(v) Lastly – The admitted claims of Creditors (who have not otherwise received a distribution under above paragraphs), on a pari passu basis.

(d) The Trustees may distribute the Trust Fund at such times and in such amounts as it is appropriate and feasible to do so.

(e) The Trustees may make interim distributions.

(f) The Trustees may make a distribution under any one of the categories even though a prior category has not been paid in full, if the Trustees have held back an amount which they consider is reasonably likely to be needed to pay any prior category in full.


9. YiYu Debt Assignment Transaction

(a) Subject to establishment of the Creditors’ Trust, all of the Company’s rights, title, interest and claims to and in respect of the YiYu Debt will:

(i) be assigned by the Company to the Trustees; and

(ii) form part of the Trust Fund.

(b) The Trustees shall be entitled to take whatever steps they consider appropriate for the recovery of the YiYu Debt and in doing so, the Trustees:

(i) shall have full power to deal with the YiYu Debt; and;

(ii) may take any and all actions (including commencing any legal action) in the name of the Company, whether in Australia or in foreign jurisdictions.

(c) The Company and the director will:

(i) co-operate with, and assist, the Trustees, as and when required by the Trustees for recovery of the YiYu Debt;

(ii) account, and pay, to the Trustees any money received by any of them in relation to the YiYu Debt; and

(iii) grant an irrevocable power of attorney in favour of the Trustees for the recovery of the YiYu Debt.

10. Trade Debtors Assignment Transaction

(a) Subject to establishment of the Creditors’ Trust, all of the Company’s rights, title, interest and claims to and in respect of the Trade Debtors will:

(i) be assigned by the Company to the Trustees; and

(ii) form part of the Trust Fund.

(b) The Trustees shall be entitled to take whatever steps they consider appropriate for the recovery of the Trade Debtors, and in doing so, the Trustees:

(i) shall have full power to deal with Trade Debtors; and;

(ii) may take any and all actions (including commencing any legal action) in the name of the Company, whether in Australia or in foreign jurisdictions.

(c) The Company and the director will:

(i) co-operate with, and assist, the Trustees, as and when required by the Trustees for recovery of the Trade Debtors;

(ii) account, and pay, to the Trustees any money received by any of them in relation to the Trade Debtors; and

(iii) grant an irrevocable power of attorney in favour of the Trustees for the recovery of the Trade Debtors.


11. Further Contributions Transaction

(a) The Further Contributions comprise the payments described under clauses 11(c) and 11(c).

(b) During the financial year ending 30 June 2021, the Company must pay to the Trustees the greater of the following amounts:

(i) $20,000; and

(ii) an amount comprising 50% of EBITDA (earnings before interest, taxes, depreciation and amortization) for the financial year ending 30 June 2021.

(c) During the financial year ending 30 June 2022, the Company must pay to the Trustees the greater of the following amounts:

(i) $30,000; and

(ii) an amount comprising 50% of EBITDA for the financial year ending 30 June 2022.

(d) Unless otherwise agreed in writing between the Company and the Trustees, the Further Contributions payable by the Company to the Trustees for each financial year shall be paid no later than 30 business days after the end of each financial year.

(e) The EBITDA for year financial year must be calculated in accordance with the applicable financial reporting standards, and confirmed by the Deed Administrators and/or the Trustees from time to time.

(f) The Trustees’ determination of the EBITDA will (in the absence of manifest error) be final and conclusive.

(g) As security for payment of the Further Contributions, the Company will provide a charge, and grant a security interest in, all present and after acquired property of the Company in favour of the Trustees.

(h) The Company and the director will:

(i) provide the Trustees with any financial, management, accounting and taxation information for the financial quarters of March, June, September and December – and otherwise as and when requested by the Trustees;

(ii) provide the Trustees with any information in the Company’s possession relating to the Company's business and affairs (including accounting information) as and when requested by the Trustees; and

(iii) co-operate with, and assist, the Trustees, to confirm or determine the EBITDA.

(i) The Trustees will agree to keep confidential, any financial information and trade secrets of the Company provided by the Company to the Trustees after the effectuation of the DOCA, unless

(i) it is to the Trustees’ professional legal or accounting advisors, auditors or insurers;

(ii) it is for the Trustees’ compliance of with any obligations imposed on the Trustees under this clause, the Creditors’ Trust, at law, or by any regulatory authority;


(iii) it is for recovery of any Further Contributions or enforcing any security;

(iv) if required under any law or Court order; or

(v) with the prior written consent of the Company.

(j) The Trustees shall notify the Creditors about any failure to pay the Further Contributions as and when required.

(k) The Company and the director must sign any and all documents, required by the Deed Administrators and the Trustees, to give effect to the payment of Further Contributions to the Trustees and any security granted in favour of the Trustees.

12. Intellectual Property Transactions

12.1 Assignment of the iTrip IP

(a) Subject to obtaining the consent of each Secured Creditor having any security interest in the iTrip IP, the Company will use reasonable endeavours to transfer and/or assign the iTrip IP to Aoliday Holdings.

(b) The assignment of the iTrip IP shall only take effect upon the effectuation of the DOCA (and where the DOCA has not otherwise been terminated).

(c) No warranty is given by the Deed Administrators or the Company about the iTrip IP, or the ability of the Company to give effect to any transfer and/or assignment the iTrip IP.

(d) Aoliday Holdings and the Company will use reasonable endeavours, and act in good faith, to negotiate the terms of any transfer and/or assignment the iTrip IP.

12.2 Licence of the iTrip IP

(a) Subject to assignment of the iTrip IP in clause 12.1, Aoliday Holdings will then grant the Company a licence to use the iTrip IP on the following salient terms:

(i) Licence term: 2 years

(ii) Licence fee: $1.00 per annum

(b) The licence of the iTrip IP shall only take effect upon the effectuation of the DOCA (and where the DOCA has not otherwise been terminated).

(c) Aoliday Holdings and the Company will use reasonable endeavours, and act in good faith, to negotiate the terms of the licence.

13. Mutual Releases

(a) Subject to clause 13(b):

(i) the Companies, Aoliday Holdings and Aoliday Pty Ltd will execute deed of release to release any and all claims between them; and

(ii) the deed of release is to take effect upon the effectuation of the DOCA (and where the DOCA has not otherwise been terminated).


(b) Any release contemplated in clause 13(a) must not in any way affect, and otherwise release, any of the Company’s rights title, interest and claims to and in respect of the YiYu Debt which are assigned to the Trustees in accordance with the YiYu Debt Assignment Transaction set out in clause 9.

(c) The parties will use reasonable endeavours, and act in good faith, to negotiate the terms of the deed of release.

14. Excluded Creditors

(a) The Excluded Creditors are:

(i) Aoliday Holdings; and

(ii) Aoliday Pty Ltd,

(iii) Tien-Yi Lo.

(b) The Excluded Creditors:

(i) will be entitled to vote at all meetings of Creditor of the Company; and

(ii) will not participate in any distributions payable from the Trust Fund.

(c) The Excluded Creditors’ claims against the Company will be irrevocably released and extinguished upon effectuation of the DOCA.

15. Employee Creditors

(a) There are no Employee Creditors identified as at the date of this DOCA proposal.

(b) The DOCA and the Creditors’ Trust will include provisions consistent with sections 444DA and 444DB of the Corporations Act.

16. Secured Creditors

(a) Subject to clause 16(b), nothing in the DOCA affect the liabilities of the Company to any Secured Creditor, or the contractual relations between them, in respect of its security to the extent permitted by section 444D(2) of the Corporations Act.

(b) Notwithstanding clause 16(a), the DOCA binds each Secured Creditor who voted in favour of the 439C Resolution.

17. Owners and Lessors

(a) Subject to clause 17(b), nothing in the DOCA restricts a right that an owner or lessor of property who does not vote in favour of 439C Resolution has in relation to the property of that owner or lessor under section 444D(3) of the Corporations Act.

(b) Notwithstanding clause 17(a), the DOCA binds each owner or lessor of property who voted in favour of the 439C Resolution.


18. Moratorium

While the DOCA remains in force, no Creditor, in relation to its Claim, or officer or shareholder of the Company may:

(a) make or concur in an application for an order to wind up the Company;

(b) proceed with such an application for an order to wind up the Company before the DOCA became binding on such person;

(c) begin, revive or continue to take any further steps in any action, suit, mediation or proceeding against the Company or in relation to any of its property;

(d) begin, revive or continue to take any further steps in respect of any enforcement process (as that term is defined in the Corporation Act) in relation to the Company’s property;

(e) commence, continue or take any additional step in any arbitration against the Company to which it is a party;

(f) exercise any right of set-off or defence, cross-claim or cross action to which that Creditor would not have been entitled had the Company been wound up;

(g) take any action whatsoever to seek to recover any part of its Claim; or

(h) otherwise enforce any right it may have or acquire against the Company,

except, in the case only of paragraphs (c) and (d), with the leave of a Court and in accordance with such terms (if any) as a Court imposes.

19. Release and extinguishment of claims

(a) Upon the effectuation of the DOCA (and where the DOCA has not otherwise been terminated), any and all claims by the Creditors against the Company will be released, if not released earlier.

(b) Upon the effectuation of the DOCA (and where the DOCA has not otherwise been terminated):

(i) subject to clause 19(b)(ii), any and all claims by the Company against Tien-Yi Lo in relation to anything that she did in her capacity as a director of the Company will be released; and

(ii) the release contemplated in clause 19(b)(i) does not in any way affect, and otherwise release, any of the Company’s rights, title, interest and claims to and in respect of the YiYu Debt which are assigned to the Trustees in accordance with the YiYu Debt Assignment Transaction set out in clause 9.

20. Powers of the Deed Administrators

(a) The Deed Administrators will administer the DOCA in accordance with its terms and will exercise their powers and perform their functions and duties as agents for and on behalf of the Company.


(b) The Deed Administrators will be entitled to, jointly and severally exercise, all the rights, powers, discretions and authorities conferred on them (to the exclusion of the director) by the DOCA, the Corporations Act and, to the extent they are not inconsistent with the terms of the DOCA, Schedule 8A of the Corporations Regulations.

(c) Where the powers of the Deed Administrators and the Director overlap or are inconsistent, the Deed Administrators' powers operate to the exclusion of the Director’s powers unless the Deed Administrators grant prior consent.

(d) The Deed Administrators will not be personally liable for any debt, liability or other obligation which they incur on behalf of the Company as deed administrators of the DOCA.

21. Remuneration, indemnity and lien

(a) The Administrators, Deed Administrators and Trustees are entitled to remuneration from the Available Property and the Trust Fund for their work as Administrators, Deed Administrators and Trustees on a time cost basis in respect of work done by them, their partners and employees, at the rate charged from time to time for work of this nature.

(b) The Administrators, Deed Administrators and Trustees will be indemnified out of the Available Property and the Trust Fund for their remuneration and all costs, fees, expenses and liabilities incurred by them in connection with the administration of the Company, the deed administration of the DOCA, and the administration of the Creditors’ Trust. This indemnity will be secured by a lien over the Available Property and the Trust Fund.

(c) Save for fraud or gross negligence, the Administrators, Deed the Administrators and the Trustees will not be personally liable for any acts or omissions arising out of or in connection, directly or indirectly, with the voluntary administration of the Company, the deed administration of the DOCA, or the administration of the Creditors’ Trust.

22. Termination of the DOCA

22.1 Effectuation of DOCA – implementation

Subject to completion of the Implementation Steps, the DOCA will effectuate by no later the 10 business day after completion of the last of the Implementation Steps.

22.2 Termination of DOCA – automatic

The DOCA will automatically terminate in the event that:

(a) one of the events described in sections 445C(a) or 445C(b) of the Corporations Act occurs; or

(b) an event which is by the terms of this Deed expressed to automatically terminate the DOCA occurs.

23. Governing law

The DOCA and the Creditors’ Trust will be governed by the laws in force in the state of New South Wales.


24. Boilerplate provisions

The DOCA will include all the standard boilerplate terms and conditions generally found in a deed of company arrangement, and otherwise required under the Act.

25. DOCA to supersede

The terms of the DOCA will supersede the terms of this DOCA Proposal.

Execution Section

EXECUTED for and on behalf of Aoliday Holdings Pty Ltd in accordance with section 127 of the Corporations Act 2001 (Cth) :

Sole director and sole secretary

TIEN-YI LO

Print name

This DOCA Proposal is dated 19 June 2020


B. Administrators' Remuneration Report

Remuneration Approval Report

AOLIDAY AU PTY LTD (ADMINISTRATORS APPOINTED) ACN 630 582 553 (“the Company”) 19 June 2020

Remuneration Approval Report 1

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 for undertaking the Voluntary

Administration, Deed Administration/Creditors’ Trust or Liquidation of the Company.

This report has the following information included:

Part 1: Declaration 3

Part 2: Executive Summary 3

Part 3. Remuneration 4

3.1 Remuneration claim resolutions 4

3.2 Details of remuneration 6

3.3 Total remuneration reconciliation 8

3.4 Likely impact on dividends 9

Part 4: Disbursements 9

Part 5: Summary of Receipts and Payments 9

Part 6: Queries 10

Schedules for Resolutions 1 to 6 11

Schedule 7 – Summary of Receipts and Payments 22

Contents


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.

Information about the meeting of creditors is within the Supplementary Voluntary Administrators’ Report.

If you have any questions or need any assistance, please contact Alan Zhang on +61 2 8297 2643 or via

email on [email protected].

What do you need to do

next?


Part 1: Declaration Philip Campbell-Wilson and John McInerney of Grant Thornton Australia Limited have undertaken a

proper assessment of this remuneration claim for our appointment as Joint and Several Administrators

of the Company 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 Voluntary Administration, Deed Administration/Creditors’ Trust or

Liquidation of the Company.

Part 2: Executive Summary The total remuneration for this appointment is estimated to be up to $297,174.00 (excluding GST) if the Deed of Company Arrangement/Creditors’ Trust is formed or up to $367,174.00 if the Company goes into Liquidation. To date, no remuneration has been approved or paid during the Administration.

We note that the Voluntary Administration estimate has been increased to $217,174.00 (excluding GST)

due to the following additional tasks that have been conducted during the Voluntary Administration:

High levels of telephone and email correspondence with creditors throughout the

Administration. Under the Insolvency Practice Rules, the Administrators are obligated to

respond to all reasonable requests for information;

Convening and holding the second meeting of creditors and the adjourned second meeting of

creditors;

Additional resources required for the first meeting of creditors given the large amount of

attendees;

Holding multiple meetings and telephone discussions with the Director and management team

to discuss the feasibility of the DOCA proposals;

Unforeseen complexities in negotiating the DOCA with DOCA proponents;

Time spent dealing with the Company’s records including paper files which required manual

reviewing and listing in order to be used in investigations;

Complexity of investigations into the Company’s affairs;

Holding multiple discussions with management and staff members to gain a detailed

understanding into the accounting processes, relevant transactions and group structure;

Discussions with the main debtors and understanding their relationship with the group and

conducting further investigations into the background of the main debtor in China;

Holding discussions with four (4) litigation funders in relation to a potential funding request for

debtor recoveries in China;

Seeking legal advice on the DOCA proposals and steps in pursuing the collection of debtors in

an overseas jurisdiction; and

Generally by virtue of the extension of time involved.


Remuneration currently claimed is summarised below:

Period Report Reference

Amount ($) (ex GST)

Remuneration approval sought:

Voluntary Administration

Resolution 1: 24 March 2020 to 17 June 2020 Sch 1 187,174.00

Resolution 2: 18 June 2020 to 26 June 2020* Sch 2 25,000.00

Resolution 3: 27 June 2020 to execution of DOCA* Sch 3 5,000.00

Total – Voluntary Administration 217,174.00

Deed of Company Arrangement/Creditors’ Trust

Resolution 4: Execution of DOCA to effectuation of DOCA* Sch 4 10,000.00

Resolution 5: Execution of the Creditors’ Trust to finalisation of the Creditors’ Trust*

Sch 5 70,000.00

Total – Deed of Company Arrangement/Creditor’s Trust 80,000.00

Total – Voluntary Administration and DOCA/Creditors’ Trust 297,174.00

Liquidation

Resolution 6: Commencement to completion of the Liquidation*

Total – Liquidation

Sch 6

150,000.00

150,000.00

TOTAL – Voluntary Administration and Liquidation 367,174.00

* 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.

Please refer to report section references detailed in the above table for full details of the calculation and

composition of the remuneration approval sought.

Part 3. Remuneration

3.1 Remuneration claim resolutions

We will be seeking approval of the following resolutions to approve our remuneration. Details to support

these resolutions are included in section 3.2 and in the attached Schedules.

Resolution 1 from 24 March 2020 to 17 June 2020: “That the remuneration of the Joint and Several

Administrators, their partners and staff, for the period from 24 March 2020 to 17 June 2020, calculated

at the hours spent at the rates detailed in the Initial Remuneration Notice provided to creditors, is

approved for payment in the amount of $187,174.00, exclusive of GST, to be drawn from available

funds immediately or as funds become available.”

Resolution 2 from 18 June 2020 to 26 June 2020: “That the future remuneration of the Joint and

Several Administrators for the period from 18 June 2020 to 26 June 2020 of the Voluntary

Administration, is determined at a sum equal to the cost of time spent by the Joint and Several

Administrators and their partners and staff, calculated at the hourly rates as detailed in the Initial

Remuneration Notice provided to creditors, up to a capped amount of $25,000.00, exclusive of GST,


and that the Joint and Several Administrators can draw the remuneration from available funds as time is

incurred on a monthly basis or as funds become available.”

Resolution 3 from 27 June 2020 to date of execution of the DOCA: “That the future remuneration of

the Joint and Several Administrators for the period from 27 June 2020 to the date of execution of the

DOCA, is determined at a sum equal to the cost of time spent by the Joint and Several Administrators

and their partners and staff, calculated at the hourly rates as detailed in the Initial Remuneration

provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the

nearest $10), up to a capped amount of $5,000.00, exclusive of GST, and that the Joint and Several

Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or

as funds become available.”

Resolution 4 from date of DOCA execution to date of DOCA effectuation: “That the future

remuneration of the Joint and Several Deed Administrators for the period from the date of DOCA

execution to the date of DOCA effectuation, is determined at a sum equal to the cost of time spent by

the Joint and Several Deed Administrators and their partners and staff, calculated at the hourly rates as

detailed in the Initial Remuneration provided to creditors, that may be increased at a rate of up to 7.5%

at 1 July each year (rounded to the nearest $10), up to a capped amount of $10,000.00, exclusive of

GST, and that the Joint and Several Deed Administrators can draw the remuneration from available

funds as time is incurred on a monthly basis or as funds become available.”

Resolution 5 from date of execution of the Creditors’ Trust to date of finalisation of the Creditor’s

Trust: “That the future remuneration of the Trustees of the Creditors’ Trust for the period from the date

of execution of the Creditors’ Trust to the date of finalisation of the Creditors’ Trust, is determined at a

sum equal to the cost of time spent by the Trustees of the Creditors’ Trust and their partners and staff,

calculated at the hourly rates as detailed in the Initial Remuneration provided to creditors, that may be

increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped

amount of $70,000.00, exclusive of GST, and that the Trustees of the Creditors’ Trust can draw the

remuneration from available funds as time is incurred on a monthly basis or as funds become available.”

Resolution 6 from commencement to completion of the Liquidation: “That the future remuneration

of the Joint and Several Liquidators for the period from commencement to completion of the Liquidation,

is determined at a sum equal to the cost of time spent by the Joint and Several Liquidators and their

partners and staff, calculated at the hourly rates as detailed in the Initial Remuneration Notice provided

to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest

$10), up to a capped amount of $150,000.00, exclusive of GST, and that the Joint and Several

Liquidators can draw the remuneration from available funds as time is incurred on a monthly basis or as

funds become available.”


3.2 Details of remuneration

The basis of calculating the remuneration claims are summarised below and the details of the major

tasks performed and the costs associated with each of those major tasks are contained in Schedules 1

to 6.

Resolution 1 from 24 March 2020 to 17 June 2020: “That the remuneration of the Joint and Several

Administrators, their partners and staff, for the period from 24 March 2020 to 17 June 2020, calculated

at the hours spent at the rates detailed in the Initial Remuneration Notice provided to creditors, is

approved for payment in the amount of $187,174.00, exclusive of GST, to be drawn from available

funds immediately or as funds become available.”

The below table sets out time charged to each major task area by staff members working on the

Voluntary Administration for the period 24 March 2020 to 17 June 2020 which is the basis of the

Resolution 1 claim. More detailed descriptions of the tasks performed within each task area, matching

the amounts below, are contained in Schedule 1.

Resolution 2 from 18 June 2020 to 26 June 2020: “That the future remuneration of the Joint and

Several Administrators for the period from 18 June 2020 to 26 June 2020 of the Voluntary

Administration, is determined at a sum equal to the cost of time spent by the Joint and Several

Administrators and their partners and staff, calculated at the hourly rates as detailed in the Initial

Remuneration Notice provided to creditors, up to a capped amount of $25,000.00, exclusive of GST,

and that the Joint and Several Administrators can draw the remuneration from available funds as time is

incurred on a monthly basis or as funds become available.”


Voluntary Administration for the period 18 June 2020 to 26 June 2020 which is the basis of the



Total ($)

ARITA Task Areas

Assets Creditors Administration

$ $ $

Total 25,000.00 5,000.00 15,000.00 5,000.00 GST 2,500.00 500.00 1,500.00 500.00 Total (Incl. GST) 27,500.00 5,500.00 16,500.00 5,500.00


Resolution 3 from 27 June 2020 to date of execution of the DOCA: “That the future remuneration of

the Joint and Several Administrators for the period from 27 June 2020 to the date of execution of the

DOCA, is determined at a sum equal to the cost of time spent by the Joint and Several Administrators

and their partners and staff, calculated at the hourly rates as detailed in the Initial Remuneration

provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the

nearest $10), up to a capped amount of $5,000.00, exclusive of GST, and that the Joint and Several

Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or

as funds become available.”


Voluntary Administration for the period from 27 June 2020 to the date of execution of the DOCA which is

the basis of the Resolution 3 claim. More detailed descriptions of the tasks performed within each task

area, matching the amounts below, are contained in Schedule 3.

Total ($)

ARITA Task Areas

Creditors Administration Statutory

$ $ $

Total 5,000.00 3,000.00 1,000.00 1,000.00

GST 500.00 300.00 100.00 100.00

Total (Incl. GST) 5,500.00 3,300.00 1,100.00 1,100.00

Resolution 4 from date of DOCA execution to date of DOCA effectuation: “That the future

remuneration of the Joint and Several Deed Administrators for the period from the date of DOCA

execution to the date of DOCA effectuation, is determined at a sum equal to the cost of time spent by

the Joint and Several Deed Administrators and their partners and staff, calculated at the hourly rates as

detailed in the Initial Remuneration provided to creditors, that may be increased at a rate of up to 7.5%

at 1 July each year (rounded to the nearest $10), up to a capped amount of $10,000.00, exclusive of

GST, and that the Joint and Several Deed Administrators can draw the remuneration from available

funds as time is incurred on a monthly basis or as funds become available.”

The below table sets out time charged to each major task area by staff members working on the Deed

Administration for the period from the date of execution of the DOCA to the date of DOCA effectuation

which is the basis of the Resolution 4 claim. More detailed descriptions of the tasks performed within

each task area, matching the amounts below, are contained in Schedule 4.

Total ($)

ARITA Task Areas

Creditors Administration Statutory

$ $ $

Total 10,000.00 6,000.00 2,000.00 2,000.00 GST 1,000.00 600.00 200.00 200.00 Total (Incl. GST) 11,000.00 6,600.00 2,200.00 2,200.00

Resolution 5 from date of execution of the Creditors’ Trust to date of finalisation of the Creditor’s

Trust: “That the future remuneration of the Trustees of the Creditors’ Trust for the period from the date

of execution of the Creditors’ Trust to the date of finalisation of the Creditors’ Trust, is determined at a

sum equal to the cost of time spent by the Trustees of the Creditors’ Trust and their partners and staff,

calculated at the hourly rates as detailed in the Initial Remuneration provided to creditors, that may be

increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped

amount of $70,000.00, exclusive of GST, and that the Trustees of the Creditors’ Trust can draw the

remuneration from available funds as time is incurred on a monthly basis or as funds become available.”


Creditors’ Trust for the period from the date of execution of the Creditors’ Trust to the date of finalisation


of the Creditors’ Trust which is the basis of the Resolution 5 claim. More detailed descriptions of the

tasks performed within each task area, matching the amounts below, are contained in Schedule 5.

Total ($)

ARITA Task Areas

Assets Creditors Dividend Administration

$ $ $ $

Total 70,000.00 20,000.00 15,000.00 30,000.00 5,000.00 GST 7,000.00 2,000.00 1,500.00 3,000.00 500.00 Total (Incl. GST) 77,000.00 22,000.00 16,500.00 33,000.00 5,500.00

Resolution 6 from commencement to completion of the Liquidation: “That the future remuneration

of the Joint and Several Liquidators for the period from commencement to completion of the Liquidation,

is determined at a sum equal to the cost of time spent by the Joint and Several Liquidators and their

partners and staff, calculated at the hourly rates as detailed in the Initial Remuneration Notice provided

to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest

$10), up to a capped amount of $150,000.00, exclusive of GST, and that the Joint and Several

Liquidators can draw the remuneration from available funds as time is incurred on a monthly basis or as

funds become available.”


liquidation for the period from commencement to completion of the Liquidation which is the basis of the



Total ($)

ARITA Task Areas

Assets Creditors Investigation Administration Statutory Dividend

$ $ $ $ $ $

Total 150,000.00 22,000.00 35,000.00 45,000.00 10,000.00 8,000.00 30,000.00 GST 15,000.00 2,200.00 3,500.00 4,500.00 1,000.00 800.00 3,000.00 Total (Incl. GST) 165,000.00 24,200.00 38,500.00 49,500.00 11,000.00 8,800.00 33,000.00

3.3 Total remuneration reconciliation

At this point in time we estimate that the total remuneration for this Voluntary Administration and Deed of Company Arrangement/formation of a Creditors’ Trust will be will be $297,174.00 (excluding GST) in the event the DOCA/formation of a Creditors’ Trust is accepted. If the Company goes into Liquidation, we estimate that total remuneration for the Voluntary Administration and Liquidation will be up to $367,174.00 (excluding GST).

As noted above in Section 2, we have only previously provided an estimate in remuneration for the

Voluntary Administration period. Our estimate has increased due to the reasons detailed in Section 2 of

this report.

We have provided an explanation of tasks remaining to completion, including our estimated costs to

complete those tasks at Section 3.2 of this report and in Schedules 1 to 6.

In preparing this remuneration approval report, we have provided estimates to the best of our ability on

what we believe the Administration/Deed Administration/Liquidation will cost to complete and we do not

anticipate that we will request creditors to approve any further remuneration. However, should the

Administration/Deed Administration/Liquidation not proceed as expected, we will advise creditors and

we may seek further approval for remuneration and provide details on why the remuneration estimate

has changed. Matters that may affect the progress and cost of the Administration include:

Outcome of the second creditors meeting;

Protracted dealings with DOCA proponents for the execution of the DOCA;


Protracted complications with adjudicating on creditor claims;

Unforeseen complexities in negotiating and administrating the DOCAs;

Potential legal proceedings in a foreign jurisdiction against Yiyou; and

Legal action with respect to the potential insolvent trading, voidable transactions and/or other

claims should the Company be placed into Liquidation.

3.4 Likely impact on dividends

The Corporations Act sets the order for payment of claims against the company and it provides for

remuneration of the Joint and Several Administrators to be paid in priority to other claims. This ensures

that when there are sufficient funds, the Joint and Several Administrators receives payment for the work

done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute

any available funds. Even if creditors approve our remuneration, this does not guarantee that we will be

paid, as we are only paid if sufficient assets are recovered.

We refer creditors to Section 5 of the Supplementary Administrators’ Report to Creditors, wherein we

provide an estimate of the likelihood of a return to creditors in the DOCA/Creditors Trust and Liquidation

scenarios. These estimates are subject to a range of variables, particularly future asset recoveries and

amount of admitted creditor claims.

Part 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. Details of

the basis of recovery of each of these costs is discussed below.

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.

Internal disbursements for the current remuneration claim period have and will be charged at cost.

Therefore, we will not be seeking creditor approval to pay internal disbursements.

Part 5: Summary of Receipts and Payments A summary of the receipts and payments for the Voluntary Administration as at 18 June 2020 is at

Schedule 7 to this report.


Part 6: Queries If you have any queries in relation to the information in this report, please contact our staff:

Contact Name: Alan Zhang

Contact Number: +61 2 8297 2643

Email: [email protected]

You can also access information which may assist you on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at www.asic.giv.au (search for “insolvency information sheets”)


Schedule 1 – Resolution 1 Table of major tasks for remuneration The below table provides a description of the work undertaken in each major task area for the period 24 March

2020 to 17 June 2020.

Task Area General Description Includes

Assets

25.9 hours

$11,875.00

Debtors Correspondence with debtors

Reviewing and assessing debtors’ ledgers

Liaising with the company’s director and management team in relation to debtors, including related parties

Preparing brief to solicitors

Liaising with solicitors regarding recovery actions

Issuing letters of demand to debtors

Other Assets Conducting IP Australia Trade Mark searches

Conducting domain name searches

Liaising with the company’s solicitors to lodge a notice of intention to defend the opposition

Liaising with the company’s solicitors in relation to IP registration

Creditors

260.6 hours

$102,852.00

Creditor Enquiries, Requests & Directions

Receive and respond to creditor enquiries

Maintaining creditor request log

Review and prepare initial correspondence to creditors and their representatives

Considering reasonableness of creditor requests

Documenting reasons for complying or not complying with requests or directions

Compiling information requested by creditors

PPSR Search to the PPSR register

Creditor reports Issuing Initial Notification to Creditors

Issuing Online Notification to Creditors

Preparing Voluntary Administrators’ report, investigation, meeting and general reports to creditors

Preparing Supplementary Voluntary Administrators’ report

DOCA Proposal Holding discussions with the interested party on the terms of the DOCA proposal

Holding further discussions with the interested party on the terms of the revised DOCA proposal and formation of a Creditors’ Trust

Holding discussion internally about the DOCA proposal/ formation of a Creditors’ Trust

Review the DOCA proposals received

Preparation of estimated return to creditors calculations

Assess the feasibility of the revised DOCA terms including future trading of the business

Consider the advantages and disadvantages for creditors of establishment of a Creditors’ Trust

Holding discussions with solicitors for further negotiations of the DOCA terms

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 for the second meeting of creditors held on 7 May 2020

Forward notice of meeting to all known creditors

Preparation of meeting file, including agenda, , attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting

Responding to stakeholder queries and questions

Reconvening the second meeting of creditors and preparation of meeting file

Investigation

75.0 hours

$36,105.00

Conducting investigation Collection of company books and records

Reviewing company’s books and records (management accounts, bank statements and correspondence from third parties, etc.)

Seeking external assistance to obtain a copy of the Company’s email database

Reviewing ROCAP returned from the Director

Review and preparation of Company’s history

Conducting and summarising statutory searches Preparation of comparative financial statements

Review of specific transactions and liaising with Director regarding certain transactions

Conducting investigations into potential voidable transactions and insolvent trading claims

Conducting investigations into the Director’s offences Reviewing sale transaction in relation to aged receivables.

Conduct land title searches on the director and shadow director

Held multiple discussions with the Director and management team in relation to background of the company and related entities

Requested further information/clarifications from the Director and management team to explain the business model between Yiyou and the Company

Administration

38.6 hours

$18,197.00

Correspondence Preparing reviewing and sending notification to various parties advising of the appointment

Document maintenance/file review/checklist

Filing of documents

File reviews

Updating checklists

Insurance Correspondence with insurer regarding initial and ongoing insurance requirements

Reviewing insurance policies

Bank account administration Preparing correspondence opening and closing accounts

Requesting bank statements and account reconciliations

Correspondence with bank regarding specific transfers

Preparation of receipts and payments during the Administration

Planning / Review Discussions regarding status of administration

Books and records / storage Attendance on business premises to secure books and records

Engaging external forensic IT support to access and back up books and records of the company

ASIC forms Preparing and lodging ASIC forms including 505, 531 and 5011



Statutory 33.5 hours $18,145.00

Issue ROCAP to Director upon appointment

Reviewing completed ROCAP

Correspondence with the Director regarding their responses to the ROCAP

Correspondence with ASIC regarding statutory forms

ATO and other statutory reporting

Notification of appointment

Preparing BAS

Request for information

Total

433.6 hours $187,174.00


Schedule 2 – Resolution 2 Table of major tasks for remuneration The below table provides a description of the work to be undertaken in each major task area for the period 18

June 2020 to 26 June 2020.


Assets

$5,000.00

Debtors Liaising with solicitors regarding recovery actions

Holdings further discussions with the litigation funder to consider the next steps for debtor recoveries

Creditors

$15,000.00







Creditor reports Preparing Supplementary Voluntary Administrator’s report

Adjourned Second 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

Holding Adjourned Second Meeting of Creditors

Responding to stakeholder queries and questions immediately following meeting

DOCA Proposal Holding discussions with the DOCA Proponent on the terms of the DOCA proposal/ formation of a Creditors’ Trust

Holding discussions internally about the DOCA proposal/ formation of a Creditors’ Trust

Review the DOCA proposal received

Finalise the DOCA term sheet

Preparation of estimated return to creditors calculations

Administration

$5,000.00

Correspondence Correspondence with various parties


Filing of documents

Updating checklists


Total

$25,000.00


Schedule 3 – Resolution 3 Table of major tasks for remuneration The below table provides a description of the work to be undertaken in each major task area for the period 27

June 2020 to the date of execution of DOCA.


Creditors

$3,000.00




Obtaining legal advice on requests




DOCA Proposal Correspondence with the DOCA proponents and our legal advisors relating to DOCA/Creditors’ Trust execution Liaising with legal advisors to agree the terms of the DOCA and Creditors’ Trust Deed

Review and agree changes to the DOCA/Creditor Trust Deed

Finalise the DOCA/Creditor Trust Deed

Execution of DOCA and Creditor Trust Deed

Administration

$1,000.00

Correspondence Correspondence with various parties


Filing of documents

Updating checklists

Insurance Identification of potential issues requiring attention of insurance specialists

Continue correspondence with insurer regarding initial and ongoing insurance requirements


Statutory

$1,000.00

ASIC Form Preparing and lodging ASIC forms


Documents of Appointment Preparation, review and execution of the documents of appointment

Filing with ASIC all documents of appointment

Statutory obligations Attending to statutory reporting and requirements

Total

$5,000.00


Schedule 4 – Resolution 4 Table of major tasks for remuneration The below table provides a description of the work to be undertaken in each major task area for the period from

execution of the DOCA to the effectuation of the DOCA.


Creditors

$6,000.00




Circular to Creditors Preparation of Circular to Creditors advising of DOCA execution

Dispatch Circular to Creditors by email and mail



DOCA

Correspondence with the DOCA proponents and the Company’s legal advisors relating to DOCA execution

Liaising with legal advisors to agree terms of DOCA

Finalise the DOCA

Complete the implementation steps from DOCA to Creditors’ Trust

Complete the assignment of the IP transfer and Deed of Release

Effectuation of DOCA

Administration

$2,000.00

Correspondence General correspondence to third parties


First month, then six monthly administration reviews

Filing of documents

File reviews

Updating checklists

Bank account administration Preparing correspondence opening and closing accounts (VA to DOCA)

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding payments during the administration

Statutory

$2,000.00

ASIC Forms Preparation of lodgements with ASIC in relation to the execution of DOCA and appointment of Deed Administrators

Preparation of lodgements with ASIC in relation to effectuation of DOCA

Total

$10,000.00


Schedule 5 – Resolution 5 Table of major tasks for remuneration The below table provides a description of the work undertaken in each major task area for the period from

execution of the Creditors’ Trust to the finalisation of the Creditors’ Trust.


Assets

$20,000.00

Creditors’ Trust Assets Preservation of assets held in creditors trust for distribution to creditors

Monitoring financial performance of the Company through periodic reports and enquiries


Liaising with the company’s director and management team in relation to debtors

Liaising with solicitors regarding recovery actions, including legal due diligence and potential litigation (if pursued

Liaising with litigation funders and review of funding agreement (if applicable)

Providing further supporting documents to solicitors for recovery actions

Creditors

$15,000.00




Circular to Creditors Preparation of Circular to Creditors advising of DOCA execution

Dispatch Circular to Creditors by email and mail



Dividend

$30,000.00

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 Consider interim dividend to creditors

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

Legal (if required) Seek legal advice on adjudication of PODs

Receive and respond to creditors or their representatives enquiries regarding adjudication Liaising with solicitors in relation to any legal proceedings commenced following a dispute by a creditor(s) in response to the adjudication of PODs

Administration

$5,000.00

Correspondence General correspondence to third parties


First month, then six monthly administration reviews

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 payments during the administration

ATO Notification of Appointment

Preparing BAS

Notifying ATO of finalisation

Total

$70,000.00


Schedule 6 – Resolution 6 Table of major tasks for remuneration The below table provides a description of the work to be undertaken in each major task area for the period from

commencement to finalisation of the Liquidation.


Assets

$22,000.00


Following up debtors

Reviewing and assessing debtors’ ledgers

Liaising with debt collectors and solicitors to commence recovery actions

Creditors

$35,000.00



Maintaining creditor request log





Circular to creditors Preparation of Circular to Creditors advising the outcome of second meeting of creditors and the appointment of Liquidators

Creditor reports Preparing investigation, general reports and information to creditors

Preparing Statutory Report by Liquidator, investigation, proposal without meeting and general reports to creditors



Meeting of Creditors Preparation of meeting notices, proxies and advertisements

Forward notice of meeting to all known creditors Preparation of meeting file, including agenda, certificate of postage, attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting

Preparation and lodgement of minutes of meetings with ASIC

Responding to stakeholder queries and questions immediately following meeting

Proposals to Creditors (if applicable)

Preparing proposal notices and voting forms

Forward notice of proposal to all known creditors

Reviewing votes and determining outcome of proposal

Preparation and lodgement of proposal outcome with ASIC

Investigation

$45,000.00

Conducting investigation Reviewing Company’s books and records Conducting and summarising further statutory searches

Reconciliation of financial statements

Preparation of investigation file

Lodgement of investigation with the ASIC



Preparation and lodgement of supplementary report if required

Conducting further investigations into potential voidable transactions and insolvent trading claims

Conducting further investigations into director offences

ASIC reporting Preparing statutory investigation reports

Liaising with ASIC

Administration

$10,000.00

Correspondence Correspondence with various parties and stakeholders


Six monthly administration reviews

Filing of documents

File reviews

Updating checklists

Insurance Correspondence with insurer regarding ongoing insurance requirements

ATO and other statutory reporting

Notification of appointment

Preparing BAS

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP


Books and records / storage Dealing with records in storage

Sending job files to storage

Statutory

$8,000.00

ASIC Form Preparing and lodging ASIC forms


Documents of Appointment Preparation, review and execution of the documents of appointment Filling with ASIC all documents of appointment

Statutory obligations Attending to statutory reporting and requirements

Dividend

$30,000.00

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

Legal (if required) Seek legal advice on adjudication of PODs

Receive and respond to creditors or their representatives enquiries regarding adjudication Liaising with solicitors in relation to any legal proceedings commenced following a dispute by a creditor(s) in response to the adjudication of PODs

Total

$150,000.00


Schedule 7 – Summary of Receipts and Payments

Total ($)

Receipts and Payments - 24 March 2020 to 18 June 2020 (incl. GST)

Receipts

Cash at bank at appointment 571,831.82

Pre-appointment customer payments 117.81

Pre-appointment supplier refunds 888.80

Aoliday Holdings Pty Ltd - Contribution for Adjournment Costs 5,000.00

Interest Income 161.38

Total Receipts 577,999.81

Payments

Pre-appointment supplier payments 987.90

Professional fees 1,546.00

Bookkeeping 133.01

Bank fees 87.06

Total Payments 2,753.97

Net Receipts (Payments) 575,245.84

[Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389]

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires.

Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients.

GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions.

In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities.

Liability limited by a scheme approved under Professional Standards Legislation.

© 2019 Grant Thornton Australia Ltd. All rights reserved.


C. Notice of adjourned second meeting of creditors

Insolvency Practice Rules

75-15 - 75-35


NOTICE OF MEETING OF CREDITORS OF COMPANY

Aoliday AU Pty Ltd (Administrators Appointed) ACN 630 582 553 (the “Company”)

On 24 March 2020 the Company under section 436A of the Corporations Act 2001 (“the Act”) appointed Philip

Campbell-Wilson and John McInerney of Grant Thornton Australia Limited as Joint and Several Administrators of

the Company.

Notice is given that a reconvened second meeting of the creditors of the Company will be held as follows:

Date: 26 June 2020

Time: 11:30 AM

Address: By webinar only

Agenda

The purpose of the meeting is to:

1. Consider the Voluntary Administrators' report and statement and any other matters raised relating to the

Company’s future and then to resolve for each company that:

a. the Company execute a deed of company arrangement; or

b. the Administration should end; or

c. the Company be wound up.

2. Consider and if thought fit determine the Administrators’ remuneration.

3. If the Company executes a deed of company arrangement:

a. to determine the remuneration and internal disbursements of the Deed Administrators/Trustees;

and

b. to consider the appointment of a Committee of Inspection (if appropriate).

4. If the company is wound up:

a. to determine the remuneration of the Liquidators;

b. to consider the appointment of a Committee of Inspection (if appropriate); and

c. to consider authorising the Liquidators to dispose of the books and records of the Company after

finalisation, subject to obtaining ASIC approval.

5. To discuss any other relevant business which may arise.

Attending and voting at the meeting

Creditors are invited to attend the meeting, however they are not entitled to participate and vote at a meeting

unless:

Proof of debt for voting purposes: They have lodged with the Joint and Several Administrators particulars

of the debt or claim and the claim has been admitted, wholly or in part, by the Joint and Several

Administrators. If a proof of debt for voting purposes has already been lodged, they do not need to do so

again. Refer to Note 1 for further guidance on entitlement to vote.

Proxies or attendance: They are either present in person or by electronic facilities (if being made available)

or validly represented by proxy, attorney or an authorised person under s250D of the Corporations Act. If a

corporate creditor or represented, a proxy form, power of attorney or evidence of appointment of a company

representative pursuant to Section 250D of the Corporations Act 2001 (“the Act”) must be validly completed

and provided to the Joint and Several Administrators at or before the meeting.

To enable sufficient time to review, proofs of debt and proxies (or document authorising the representation)

should be submitted to our office on [email protected] or Level 17, 383 Kent Street, Sydney NSW 2000 by no

later than 4:00 PM on 24 June 2020. If you choose to return these documents, please allow sufficient time for

the documents to be received prior to the due date.

Electronic facilities

Due to both the state and federal government advice regarding the COVID-19 pandemic, we will not be offering a

location for the meeting for creditors to attend in person. Should creditors wish to attend the adjourned second

meeting, creditors will need to contact our office to obtain relevant teleconference details.

Electronic facilities will be made available at the meeting via webinar. To access those facilities, you need to

provide a statement by email to [email protected], not later than 2 business days before the meeting which

sets out:

Name: The name of the person and of the proxy or attorney (if any);

Address: An address to which notices to the person, proxy or attorney may be sent;

Contact: The method of contacting the person, proxy or attorney for the purposes of the meeting.

On receipt of this statement, you will be provided with instructions on how to access the facilities for the meeting.

Any queries should be directed to [email protected] or +61 2 8297 2643.

Dated 19 June 2020

................................


Joint and Several Administrator

Level 17, 383 Kent Street Sydney NSW 2000

Note 1: Entitlement to vote and completing proofs

IPR (Corp) 75 85 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 particulars 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.

IPR (Corp) 75-110 Voting on resolutions

(1) For the purposes of determining whether a resolution is passed at a meeting of creditors of a company, the value of a creditor of the company who: (a) is a related creditor (within the meaning of subsection 75-41(4) of the Insolvency Practice Schedule

(Corporations)), for the purposes of the vote, in relation to the company; and (b) has been assigned a debt; and (c) is present at the meeting personally, by telephone, by proxy or attorney; and (d) is voting on the resolution;

is to be worked out by taking the value of the assigned debt to be equal to the value of the consideration that the related

creditor gave for the assignment of the debt.


D. Proof of Debt form

FORM 535 subregulation 5.6.49(2)


FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM)

To the Administrators of Aoliday AU Pty Ltd (Administrators Appointed) ACN 630 582 553 (the

“Company”)

1. This is to state that the company was on 24 March 2020, and still is, justly and truly indebted to:

full name, ABN

and address of the creditor and, if applicable, the creditor's partners. If prepared by an employee or agent of the creditor, also insert a

description of the occupation of the creditor) for dollars and cents

Particulars of the debt are:

Date Consideration Amount Remarks (state how the debt arose) $ (include details of voucher substantiating payment)

2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or

received any satisfaction or security for the sum or any part of it except for the following:

(insert particulars of all securities held. If the securities are on the property of the company, assess the value of those securities. If any bills

or other negotiable securities are held, show them in a schedule in the following form).

Date Drawer Acceptor Amount Due Date $

3. Signed by (select option):

󠆤 I am the creditor personally.

󠆤

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.

󠆤

I am the creditor's agent authorised in writing to make this statement in writing. I know the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied.

Signature: Dated:

Name: Occupation:

Address:

RECEIVE REPORTS BY EMAIL Yes No

Do you wish to receive all future reports and correspondence from our office via email?

Email:……………………………………………………………………………


E. Updated Proxy form

Insolvency Practice Rules, 75-25 Corporations Act 2001

APPOINTMENT OF PROXY

Aoliday AU Pty Ltd (Administrators Appointed) ACN 630 582 553 (the “Company”)

*I/*We (name of signatory) of (creditor name)

a creditor of AOLIDAY AU PTY LTD appoint (name of proxy)

of (address of

proxy)

or in his or her absence (details of alternate proxy)

as *my/*our *general/*special proxy to vote at the meeting of creditors to be held on 26 June 2020, or at any

adjournment of that meeting.

If a special proxy, specify how you wish your proxy to vote for each of the resolutions.

Resolutions For Against Abstain

1. Consider the Voluntary Administrators’ report and statement and any other matters raised relating to the Company’s future and then to resolve either that:

a. The Company execute a Deed of Company Arrangement;

b. The administration should end; or

c. The Company be wound up.

2. “That the remuneration of the Joint and Several Administrators, their partners and staff, for the period from 24 March 2020 to 17 June 2020, calculated at the hours spent at the rates detailed in the Initial Remuneration Notice provided to creditors, is approved for payment in the amount of $187,174.00, exclusive of GST, to be drawn from available funds immediately or as funds become available.”

3. “That the future remuneration of the Joint and Several Administrators

for the period from 18 June 2020 to 26 June 2020 of the Voluntary Administration, is determined at a sum equal to the cost of time spent by the Joint and Several Administrators and their partners and staff, calculated at the hourly rates as detailed in the Initial Remuneration Notice provided to creditors, up to a capped amount of $25,000.00, exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”

4. “That the future remuneration of the Joint and Several Administrators for the period from 27 June 2020 to the date of execution of the DOCA, is determined at a sum equal to the cost of time spent by the Joint and Several Administrators and their partners and staff, calculated at the hourly rates as detailed in the Initial Remuneration provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $5,000.00, exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”

5. “That the future remuneration of the Joint and Several Deed Administrators for the period from the date of DOCA execution to the date of DOCA effectuation, is determined at a sum equal to the cost

of time spent by the Joint and Several Deed Administrators and their partners and staff, calculated at the hourly rates as detailed in the Initial Remuneration provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $10,000.00, exclusive of GST, and that the Joint and Several Deed Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”

6. “That the future remuneration of the Trustees of the Creditors’ Trust for the period from the date of execution of the Creditors’ Trust to the date of finalisation of the Creditors’ Trust, is determined at a sum equal to the cost of time spent by the Trustees of the Creditors’ Trust and their partners and staff, calculated at the hourly rates as detailed in the Initial Remuneration provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $70,000.00, exclusive of GST, and that the Trustees of the Creditors’ Trust can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”

7. “That the future remuneration of the Joint and Several Liquidators for the period from commencement to completion of the Liquidation is determined at a sum equal to the cost of time spent by the Joint and Several Liquidators and their partners and staff, calculated at the hourly rates as detailed in the Initial Remuneration Notice provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $150,000.00, exclusive of GST, and that the Joint and Several Liquidators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”

8. If the Company is wound up, to consider the appointment of a Committee of Inspection.

9. If the Company is wound up, to consider authorising the Liquidators to dispose of the books and records of the Company after finalisation, subject to obtaining ASIC approval.

*I/*We authorise *my/*our proxy to vote as a general proxy on resolutions other than those specified above

(delete if not required)

Signature:

Dated:

*Omit if inapplicable

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