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Statutory report to creditorsDauid Euolns Group (Queensland) PtA Ltd (In Liquidation)ACN 6oS Z6S zSg("the Cornpang")

I refer to the initial notice to creditors dated ro December zor8 in which I advised you of myappointment as Liquidator and your rights as a creditor in the liquidation.

The purpose ofthis report is to:

o provide you with an update on the progress of the liquidation

. advise you of the likelihood of a dividend being paid in the liquidation

I will also be requesting that you consider my detailed remuneration report and pass a proposal toapprove my remuneration.

1. Update on the progress of the liquidation

r.t Assets and liabilities

The director completed a Report On CompanyActivities And Property (ROCAP) dated 7 Decemberzor8. I have been provided with the Company's physical books and records however I have notreceived the Company's electronic data as at the date of this report. The electronic data is hosted 'inthe cloud'and the hosting service will not release the information on the basis of their unpaid contractcosts. This is further discussed at Section r.5.r of this report.

My knowledge of the Company is limited to information provided by:

o the directorr the former financial controllero physical books and records

. enquires from creditors

. statutorybodieso third parties.

Assets:

Interest in land nil nil nil

Sundrydebtors (i) 83,s58 5O,OOO 45,OOO

Cash at bank (ii) 6,558 6,558 nil

Director's ROCAP Liquidators'estimateBook value Estimatecl valneNotes

Liability limited by a scheme approved under Professional Standards Legislation

PricewsterhouseCoopers, ABN gz 78o 4SS 75748o Queen Street, BRISBANE QLD 4ooo,GPO Box t5o, BRISBANE QLD 4ootT: +6t 7 3zg7 gooo, F: +61 7 S2S7 Sggg,wwwpwc.com.qu

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Plant, equipment and (iii)motor vehicles

72,312 15,OOO 44,64o^

Stock nil nil nil

Director loan (w) t,632,664 nil unknown

Other (v) 9,5oo 9,5oo unknown

Total known Assets tr8o4r5g2 8r,o58 UnknownLiabilities

Secured creditors (vi) nil nil 3O5,205

Employee entitlements nil nil nil

Unpaid superannuation r,57o L,57o L,57o

ATO (vii) 78gBr2 ZBg,3t2 702,46o-

Trade and othercreditors

(viii) t,z63,zt5 t,263,2L5 1,1O1,169

Related party creditors (ix) 2,463,82o 2,465,82o 2,469,82o

Total known Liabilities 4,54\947 4)Sa\917 4$74,224Surplus / (Deficiency)(subject to costs ofliquidation)

(zr7o7rgz5) (+r+Bo,8b9) Unknown

Notes

(i) Sundrydebtors

The ROCAP disclosed net debtors owing to the Company totalling $B3,SS8 however the balanceincreases to 9rr8,957 after adjusting for credit balances (i.e. creditors incorrectly recorded). Creditorsshould note this value in the Company's records has not been audited and I cannot verify the accuracyof same.

The debtors are secured by an all present and after acquired property (ALLPAP) registration on thePersonal Property Securities Register (PPSR). This type of security registration covers all personalproperty over which the Company has an interest at the time the registration is made, and personalproperty acquired after the registration is made. Based on the information available to me, the netproceeds of debtor collections will be paid first toward priority creditors (i.e. the ATO forSuperannuation Guarantee Charge in respect ofunpaid pre-appointment superannuationentitlements) with the balance paid to the secured creditor pursuant to their ALLPAP. Please alsorefer to note (vi) below.

To date I have recovered debtors totalling approximately $3o,ooo. I am unable to accurately estimatethe total recovery from debtors as a large number debtors have disputed amounts as having beencredited, already paid, claiming a set-off against amounts owed to them by the Company or incorrect.Debtor collection efforts are ongoing, and I will provide an update in my next report to creditors orannual administration return.

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(ii) Cash at bank

The Company held two bank accounts with Westpac Banking Corporation (Westpac) with creditbalances totalling $S,rT4 at the date of my appointment. Westpac has claimed a right of set-offinrelation to an outstanding bank guarantee for $r5,ooo that has since been claimed and paid to thebeneficiary for unpaid rent on the former Brendale operating premises. No recoveries will be receivedfrom this source.

(iii) Plant, equipment and motor vehicles

The majority of the Company's plant and equipment was sold prior to the date of my appointment.Further details regarding the business and asset sale agreements entered into are provided below atsection r.7 ofthis report.

The remaining plant and equipment on hand is covered by the ALLPAP security interest. Anagreement was reached with the secured party to secure and realise these assets on their behalf.GraysOnline was engaged to prepare an independent valuation of the residual company assets, whichindicated an auction value of $44,64o (excluding GST).

GraysOnline will conduct an online auction of the residual company assets on rr March zor9. Afurther update will be provided in my next report to creditors or annual administration return. Basedon the information presently available to me, the net proceeds of sale of these assets will be paid to thesecured creditor and no surplus funds will be available to the unsecured creditors.

(iv) Director loan

The ROCAP and management accounts of the Company disclose a loan to Kurt Evans in the amount of$t,692,664. On 17 January 2org I issued a demand to the director requesting payment of this loanaccount.

Mr Evans subsequently became bankrupt following acceptance of his debtor's petition by the OfficialTrustee on zz January 2oLg with David Clout and Patricia Talty of David Clout & Associates appointedas his joint and several Trustees. I am unable to provide an estimate regarding the potential recoveryfrom this source for the benefit of the Company's creditors as it is dependent on the director's personalfinancial position and recoveries made by the Trustees of the bankrupt estate. The Company's claimwill rank as an unsecured creditor in the Bankrupt Estate. I will provide an update to creditors in mynext report to creditors or annual administration return.

I do not have access to the Company's electronic books and records to complete a detailedinvestigation of when the loan amounts were drawn and if any purpose was recorded. Mr Evansadvises the funds were used for property maintenance and renovations and other lifestyle expenses.Equity in the properties, if any, should be investigated by the Trustees of Mr Evans' bankrupt estate

(v) Other

The ROCAP disclosed other assets of $9,5oo relating to a rental bond held by the landlord of theleased premises at Hamilton Qld. The landlord advises they held a bond for only $5,roo and that rentarrears totalled $t3,o38 (excluding GST). No recoveries will be made from this source.

While my investigations are continuing, I have not identified any further assets capable of commercialrecovery.

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(vi) Secured creditors

A secured creditor is a creditor that holds a security interest over some or all of the Company's assets.To be valid, generally the security interest must be registered on the Personal Property SecuritiesRegister (PPSR) or, in the case of land and buildings, at the relevant Land Titles Office.

The registrations on the PPSR against the Company as at the date of my appointment are summarisedas follows:

The registration is for a contract (rentalof multipurpose building) that Isubsequently disclaimed as onerousproperty on z3 January zotg.

zot6ttttoo5z979Ausco Modular PtyLimited

Classic Funding Group PtyLtdThe Leasing Centre PtyLtdClassic Finance PtyLimitedClassic Cash FlowSolutions Pty LtdClassic Clean EnergyFinance Ptyltd

The registration is for a contract (rentalof photocopiers) that I subsequentlydisclaimed as onerous property on 13

December zor8.

zor6orz8ooo3S89r

CNH Industrial AustraliaPtyLimitedCNH Industrial CapitalAustralia Pty Limited(Cr.un1

2oL1o7o2oog88Zz2o15o7o2oog716t2015o7o2o0387$2ot5o7o2oo374OO2015O7O2Oo37L7o

The registrations were discharged on B

February zor8

CNH advises no debt is outstanding.

Westpac held a guarantee fromBeagrove on account oftheCompanyWestpac retained $z9o,zo5 fromthe settlement for sale of securityproperty held from BeagroveBeagrove will also fund a call on abank guarantee for $r5,ooo issuedbyWestpacBeagrove is claiming subrogation

zor5oBrroooTorB

a

a

a

Westpac BankingCorporation (Westpac)

Westpac holds an ALLPAP registrationon the PPSR.

Solicitors acting for related companyBeagrove Pty Ltd (Beagrove) advised,and provided supportingdocumentation, as follows:

4

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a

rights for the amounts paid toWestpac on account of the CompanyA Deed of Subrogation is beingfinalised.

My independent enquiries haveconfi rmed Beagrove's subrogationrights in the current circumstances.

Given the amount owed to Beagrove (as subrogated secured creditor) and the estimated net proceedsof debtor collections and sale of the company assets, I do not believe any distribution will be made tounsecured creditors from these sources.

(vii) ATO

TheATOlodgedaProof of Debtintheamount of $7o2,46o on3oNovemberzors.Thisamountmayincrease for the Superannuation Guarantee Charge ($r,S7o per the ROCAP). I have written to theformer employees requesting they confirm the amount of superannuation and other entitlements owedto them as at the date of my appointment.

(viii) Trade Creditors

I am advised of trade creditors totalling $r,ror,169 as at the date of this report. This amount differs toinformation provided in the ROCAP where creditors were either not recorded, or have provided aProof of Debt with information that differs from the amount recorded in the ROCAP.

Any creditors holding a personal guarantee from Kurt Evans should contact the office of the Trusteesof his bankrupt estate (by email to Mitchell.Grimmond@clouts.com.au or by telephone on (oZ) goggr5r5) to lodge a claim.

(ix) Related party creditors

The related party creditors are:

No Proof of Debts have been received to date from the above related party creditors.

1.9 Receipts and payments

A summary of all receipts and payments in the liquidation to zo February zorg is disclosed in theRemuneration Approval Report at Appendix A.

5

Alan Walker Pty Ltd 1.4?5.1q?Beasrove Ptv Ltd qzr.c88Bieein Hill (Oueensland) Ptv Ltd 43.328RmEvans&SFadineer 11.q11

z,46s,8zoTotal

Related Party Creditor Debt ($)

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1.4 Investigations undertaken

I have undertaken the following investigations:

o Review of the director's ROCAP

o Review of the books and records provided by the director and third parties

r Review of the running balance account provided by the ATO

. Conductedvehicleandpropertysearcheso Conductedsearches ofstatutorybodiesr Investigated the affairs of the Company including an initial review of the business sale transactions

and voidable transaction provisions

. Investigatedcomparativefinancialstatements

. Conducted an initial review of the solvency of the Company

. Completed a review of registered security interests and ongoing communication and cooperationwith the secured party regarding asset realisations covered by their registration.

1.5

1.5.1

Findings and possible recoveries

Books and records

Section 286 of the Corporations Act zoor (the Act) requires that a company maintainsfinancial records that correctly record and explain its transactions, financial position, andperformance, and which would enable true and fair financial statements to be prepared andaudited.

I have not been able to verifu the Company's compliance with this section of the Act. TheCompany's accounting records are hosted'in the cloud' and this liquidation is without funds topay the service provider to produce a copy of the Company information that is 'in the cloud'.

The hosting service advises they:

(i) maybe able to reconstruct some Company data using backup servers at a cost of $z,ooo(plus GST)

(ii) are not aware of the contents of the data, in particular, whether the data includes ordoes not include the books of the Company

(iii) cannot guarantee the quality or completeness of any data that may be able to bereconstructed

Even if this liquidation had funds to pay these costs, I would be reluctant to incur the costsgiven there is no certainty of the completeness of the information that would be received.

r,5.2 Recovery of preference payments

Section SBSFA ofthe Act provides that a transaction is an unfair preference if, and only if:

(i) the company and the creditor are parties to the transaction (even if someone else is alsoa party); and

6

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(ii) the transaction results in the creditor receiving from the company, in respect of anunsecured debt that the company owes the creditor, more than the creditor wouldreceive from the company in respect of the debt if the transaction were set aside and thecreditor were to prove for the debt in the winding up of the company.

Unfair preferences apply to transactions entered into in a period of up to six months leadingup to the appointment.

Where a transaction is part of a continuing business relationship, the preference palmentclaim could be reduced to the difference between the maximum amount payable within the sixmonths leading up to the appointment and the amount payable at appointment (a "runningbalance" reduction).

My investigations are limited by the inability to access the electronic accounting records.However, upon my initial review I have identified transactions that may constitute preferencepayments. Further investigations are required to quantifu the amount to be claimed.

1.5.3 Business and asset sale

I am seeking to verify that all asset sale proceeds have been accounted for, either in debtreduction or received into the Company's bank account. A copy of the settlement statementsfor each sale transaction has been requested, but they have not been received as at the date ofthis report.

r.5.4 Insolventtrading

Section 588G of the Act provides that the director is obliged to prevent a company fromincurring debts whilst insolvent.

Section 588H of the Act outlines defences for directors against insolvent trading claims,including where the Directors had reasonable grounds for suspecting that the Companywassolvent.

The Courts have also drawn a distinction between a severe shortage of liquid assets to meetdebts (i.e. insolvency) and a temporary lack of liquidity. If Directors reasonably believe that itis certain or probable (rather than more likely than not or possible) that a company can returnto paying their debts as and when they fall due, then they could be justified in continuing totrade the companywhile pursuing that outcome.

Further investigations will be undertaken into the date the Company became insolvent anddebts incurred by the Company while it was insolvent, so that a claim can be submitted to theTrustees of the bankrupt estate of Kurt Evans.

1.5.5 Other voidable transactions

My investigations to date have not identified any uncommercial and insolvent transactions orunfair loans made to the Company.

7

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a

a

a

The Company books and records identify a loan totalling $$r,632,664 to Kurt Evans, and aproof of debt will be lodged with the trustee of his bankrupt estate. I advised the Trustees ofthe Company's claim against the bankrupt estate.

The Trustees'report to creditors dated r9 February 2019 states an estimated dividend in therange of r.r9 to 3.2 cents in the dollar may be paid to unsecured creditors, subject to the valueofassets recovered and the associated costs ofrealising those assets.

Based on the estimated dividend range the Company should receive approximately $r9,ooo to$5z,ooo.

t.6 Further inquiries to be undertaken

The liquidation currently has limited funds, which necessitates structuring the extent and detail ofinvestigations accordingly. The following further investigations will be undertaken subject to theavailability of sufficient funds to cover the necessary costs:

An in depth solvency analysis to support recovery ofvoidable transactions

Finalise investigations into possible unfair preference payments

Complete the review of the business and asset sale agreements to identify whether considerationwas received in full and that the transactions were for fair / market value

Review property rental agreements with related parties to identify if they were for market valueand whether the agreements may be unreasonable director related transaction provisions

If creditors wish to fund any detailed investigations they may contact my office directly

1.7 What happened to the business of the Company?

The director advises the reasons for the Company's failure was trading losses and the loss of a majorfranchise.

A review of the comparative financial statements received discloses losses for the past three financialyears as follows:

Fr6 are externally prepared accounts, while FYIT and FYIB are management accounts.

The Company's businesses were sold prior to my appointment pursuant to the following agreements:

(i) Asset sale agreement between the Company and MWIFA Pty Ltd ACN 624 gzt 875 dated 13

August 2otB.

a

8

Reported loss 422,L9O 92o,9465ZZ,tZ6332,49LAdd back depreciation zts,6o7zzz,SBB

Adjusted loss r89,6Bs t'49,3o2 7o5,339

FYrSFYr6 FYT$

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This agreement is for sale of the New Holland Dealership assets and business conducted inToowoomba and Gatton premises only.

(ii) Sale of business agreement between the Company and Harvey Black Group Pty Ltd ACN o6q g+g

46o ATF HFB Unit Trust dated zo September zor8.

This agreement is for sale of the Toowoomba and Gatton business and assets however excludesthe assets associated with the New Holland Dealership

(iii) Sale of business agreement between the Company and PosMlle Pty Ltd ACN oS7 zor 626 datedzz June zor8.

This agreement is for sale of the Brendale and Nambour business and assets

I am unable to disclose the sale amounts as this detail is commercial in confidence to each purchaser

I understand the purchasers are not related to the Company or Kurt Evans. As noted earlier in thisreport, I have requested but not yet received the settlement statement for each sale so that I mayconfirm the net sale proceeds have been accounted for, either in debt reduction or received into theCompany's bank account.

I have been contacted by several parties since my appointment advising they would have paid more forthe business/es than the amount for which they were sold. Mr Evans advised during an interview thatsome prospective purchasers for the New Holland franchise were not acceptable to the franchisors andtherefore no transactions could be progressed with those parties. I have no reason not to believe thosecomments, as franchisor approval is usually required of any purchaser in the sale of those types ofbusiness.

2. Likelihood of a dividend

The likelihood of a dividend being paid to creditors is affected by a number of factors including:

r the size and complexity of the liquidationo the amount of assets realisable and the costs of realising those assets

o the statutory priority of certain claims and costs

o the value of various classes of claims including secured, priority and unsecured creditor claims

o the volume of enquiries by creditors and other stakeholders.

At this stage, it is expected:

(i) a dividend will be paid to priority creditors (i.e. to the ATO for superannuation guarantee chargein respect of unpaid pre-appointment superannuation entitlements)

(ii) no dividend will be paid to ordinary unsecured creditors given the estimated net value of assetsand the amounts payable for the Superannuation Guarantee Charge and to the secured creditor.If this position changes I will advise creditors accordingly.

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Preference payment recoveries is a potential dividend source for unsecured creditors, as unsecuredcreditors and secured creditors rank equally for payment of dividends from this source. As notedelsewhere in this report, further investigations are required in this regard.

B. Cost of the liquidation

I am seeking approval of my remuneration for the period z6 November zor8 to zo February zorg inthe amount of $88,329.So (excluding GST) and also approval of my future remuneration from zrFebruary 2019 to conclusion of the liquidation initially capped in the amount of $33,ooo.oo(excluding GST).

Regardless of the amount of creditor approval received, I am only able to draw remuneration from thecosts of realising the assets that are subject to registered security interests and the net proceeds of saleof assets not subject to any security interests. As noted in paragraph t.t note (vi) above, the Company'sassets are subject to an ALLPAP security. The estimated amount available to me to drawremuneration is currently estimated as follows (excluding any recovery of preference payments):

Attached at Appendix A is a detailed report on my remuneration, called a Remuneration ApprovalReport. I am unable to pay any of my remuneration without the approval of creditors or the court.

I am seeking creditor approval of my remuneration by a proposal without a meeting.

To participate in the proposal, please complete and return the following by no later than 19 March2OL9l

z The "proposal without a meeting" form/s included at Appendix B

3 The proof of debt form included at Appendix C which provides information about what thecompany owes you, along with supporting documents for your claim (if not returned previously).

The documents can be scanned and emailed to liam.barnes@pwc.com or returned via post to myoffice, attention Liam Barnes. Ifyou choose to return these documents via post, please ensure that youallow enough time to receive them by the due date.

An information sheet on "proposals without a meeting" is included at Appendix D.

4. What happens next?

I will proceed with the liquidation, including:

continue debtor collections and sale ofthe plant and equipment on behalfofthe secured creditor

recover any further available propertya

a

1O,OOOIndemnity fundingDebtor realisation costs LO,OOO

Plant and equipment (costs of preserving,realisins or settins in the assets)

11,10O

31,1()OTotal

Amount $Source

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. lodge a proofofdebt in the director's Bankrupt Estate

. complete my investigations into the Company's affairs

. pursue voidable transactions identified including any preferential payments made to the ATO

r attend to all statutory lodgements.

If a request for a meeting that complies with the guidelines set out in the initial information providedto you is received, I will hold a meeting of creditors.

I expect to finalise this liquidation within rz months.

5. What to do next

You should now:

. read the attached Remuneration Approval Report and information

. decide if and how you will vote on the proposal

. complete and return your proposal voting forms by t9 March zor9.

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

r ARITAatwww.arita.com.au/creditors. ASIC at http://asic.gov.au/regulatory-resources/insolvency/insolvency-information-sheets

Dated this z5th day of February 2oLg

Michael OwenLiquidator

List of attachmentsAppendix A Remuneration Approval ReportAppendix B Proposal without a meeting - RemunerationAppendix C Proof of debt formAppendix D Information sheet about'Proposals without a meeting'

Date of appointment:

Contact name:

Telephone number:

Email:

z6 November zor8

Liam Barnes

+6t7 3257 6o7r

liam.barnes@pwc.com

11

Appendices

Appendix A - Retnunero,tion Approu al Report

Remuneration Approval Report

David Evans Group (Queensland) Pty Ltd (In Liquidation)ACN6o5 j6S2S9

(the Company)

This remuneration approval report provides you with the information you need to be able tomake an informed decision regarding the approval of my remuneration.

You should read this report and the other documentation that I have sent you.

To minimise the costs in this liquidation, I have elected to seek the approval of creditors formy remuneration without a meeting. You can cast your vote by using the included votingforms. These forms then need to be returned to my office by post, scanned and emailed orfaxed. I need to receive your forms by 19 March zorg for your vote to count. If you choose touse post, please allow enough time for your letter to be delivered.

1. DeclarationI, Michael Owen of PwC, have undertaken a proper assessment of this remuneration claimfor my appointment as Liquidator of David Evans Group (Queensland) Pty Ltd (InLiquidation) in accordance with the law and applicable professional standards. I amsatisfied that the remuneration claimed is in respect of necessary work, properly performed,or to be properly performed, in the conduct of the external administration.

Dated this z5th day of February 2otg

t/--=Michael OwenLiquidator

z. Executive summaryTo date, no remuneration has been approved and paid in this external administration.

Current remuneration approval sought:

Liquidation

ReportReference

Arnount(ex GST)

Pcriod

Resolution r: z6 November zor8 to zo February zolg ts1 $88BZ9.So

Resolution z: zr February 2019 to completion tsl $33,ooo.oo

Total $rzr.,g7g.5o* Approval for the future remuneration sought is based on an estimate of the work necessaryto thecompletion of the external administration. Should additional work be necessary beyond what iscontemplated, further approval may be sought from creditors.

The total remuneration for this appointment is estimated to be $rzr,S79.5o (excluding GST).

Please refer to report section references detailed in the above table for full details ofthecalculation and composition of the remuneration approval sought.

3. Remuneration8.1 Remuneration claimresolutionsI will be seeking approval of the following resolutions to approve my remuneration. Detailsto support these resolutions are included in section 3.2 and the attached schedules.

Resolution rThat the remuneration of the Liquidators is approuedfor the period z6 Nouember zotS tozo February zotg of $88,379.5o plus GS? os set out in the Remuneration Approual Reportdated z5 February 2o1g to be drawnfrom auailable funds immediately or as funds becomeauailable.

Resolution zThat the remuneration of the Liquidators is approuedfor the period zt FebruarA 2o1g tothe conclusion of the liquidation up to a maimum of $ 3g,ooo.oo plus GST, os set out in theRemuneration Report dated z5 February 2o1g to be drawnfrom auailablefunds asincurred or as funds become auailable. This amount may be reuised by resolution ofcreditors or by order ofthe court.

Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost ofthe administration will exceed the maximum which has been approved, in which case, I mayseek another resolution for additional remuneration. I will not pay any amount exceedingthe maximum without this approval.

Where funds are available, I will usually pay approved remuneration at intervals not lessthan one month. Where funds are not available, remuneration will not be paid.

5.2 Details of remunerationThe basis of calculating the remuneration claims are summarised in Appendix A.

The details of the major tasks performed and to be performed and the costs associated witheach of those major tasks are contained in Appendix B.

B.g TotalremunerationreconciliationThis estimate differs to the estimate of costs provided in the Initial Remuneration Noticedated ro December zorS which estimated a cost of the administration of $z5,ooo.oo toSo,ooo.oo (excluding GST), for the following reasons:

r Extensive debtor collections required, including investigating responses from debtorsdisputing amounts detailed in the Company's records

r Work required to facilitate the sale of plant and equipment on behalf of the securedcreditor

o Lackofbooks and records available to the Liquidatorsr Investigation of asset and business sale agreements entered into prior to appointmentr Quantity and frequency of creditor enquires

. Complications involved with the subrogation of the secured creditor's claim.

In preparing this remuneration approval report, I have made my best estimate at what Ibelieve the Creditors Voluntary Liquidation will cost to complete and I do not anticipate thatI will have to ask creditors to approve any further remuneration. However, should theCreditors Voluntary Liquidation not proceed as expected, I will advise creditors and I mayseek approval of further remuneration and provide details on why the remuneration haschanged.

8.4 Likelyimpact on dividends

The Corporations Act sets the order for payment of claims against the company and itprovides for remuneration of the Liquidators to be paid in priority to certain claims. Thisensures that when there are sufficient funds, the Liquidators receives payment for the workdone to recover assets, investigate the company's affairs, report to creditors and ASIC anddistribute any available funds. Even if creditors approve my remuneration, this does notguarantee that I will be paid, as my remuneration is only drawn if sufficient assets arerecovered.

Any dividend to creditors will also be impacted by the amount of assets that are recoveredand the amount of creditor claims that are admitted to participate in any dividend, includingany claims by secured creditors or priority creditors such as employees.

At this time, it is expected that insufficient funds will be recovered to enable a dividend to bepaid to ordinary unsecured creditors. This position is dependent however upon potentialrecoveries made from voidable transactions.

B.S Remuneration recoveredfrom external sources

As noted in my Declaration of Independence, Relevant Relationships and Indemnities datedz9 November 2018, the Liquidators received an indemnity payment of $ro,ooo from theRobin Evans Family Trust.

4. DisbursementsDisbursements are divided into three types:

o Externally provided professional services - these are recovered at cost. Anexample of an externally provided professional service disbursement is legal fees.

o Externallyprovided non-professional costs - these are recovered at cost.Examples of externally provided non-professional costs are travel, accommodationand search fees.

o Internal disbursements such as photocopying, printing and postage. Thesedisbursements, if charged to the external administration, would generally be chargedat cost; though some expenses such as telephone calls, photocopylng and printing maybe charged at a rate which recoups both variable and fixed costs. The recovery ofthesecosts must be on a reasonable commercial basis.

I have undertaken a proper assessment of disbursements claimed for the Company inaccordance with the law and applicable professional standards. I am satisfied that thedisbursements claimed are necessary and proper.

4.2 Basis of internal disbursementsDisbursements incurred by our firm will be charged to the external administration on thefollowing basis:

Basis of disbursement claim

Disbursements Rate (Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Staffvehicle use 65 cents per kilometre for first r5okm ofreturn trip and 4o cents per kilometrethereafter

5. Summary of receipts and paymentsThe summary of receipts and payments for the period from z6 November zorS to zoFebruary 2019 is contained in Appendix C.

6. QueriesPlease contact Liam Barnes on +6t 7 g2S7 6o7t or by email on liam.barnes@pwc.com shouldyou have any queries or require any further information.

You can access additional information on the following websites:

. ARITAatwww.arita.com.au/creditors

. ASIC at www.asic.gov.au/reeulatory-resources/insolvency/insolvency-information-sheets/

Appendices

Appendix A - Calculctions of rernunero;tion schedules

Resolution 1 - z6 November zorS zo February 2tr19

6.6

o.2

'13.0

15.1

0.6

7.3

5.8

4,752.OO

144.OO

8,125.00

6,417.50

255.00

2,555.00

1,044.00

479.27

't6.4

24.'l

10,250.00

'to,242.50

505.99

0.3

3.4

441.22

'187.50

1,445.00

6.9

51.4

0.6

0.3

1.2

0.4

4,3't2.50

21,845.00

2'10.00

105.00

420 00

72.OO

443.50

7.4

20.5

4,625.00

a,712.50

2,660.00

450.63

4,752.OO

144.OO

27,500.00

48,662.50

255.00

210.00

5,320.00

420 00

E,E37.95

1,116.00

467.37

b.b

o.2

44.O

't't4_5

0.6

0.6

15.2

1.2

6.2

720.OO

720.OO

625.00

425.00

425.OO

350.00

350.00

350.00

180.00

I

Appointee

Appointee

Dreclor

Senior Consullant

Senior Consultant

Consultant

Consultant

Consultant

Senior Boold(eeper

Mchael ow en

Grant Sparks

Greg Cocking

Liam Barnes

Ein Lord

Justin Teruya

Alison i/bLaughlin

lvhrcus Bertram

GST

Average rate (excluding GST)

Bn ployees

*E

97,217.45

Pos ition

Total (lncluding GST)

Bn ployee

48.6

E

-

Hrs$

Creditors

IHrs

AssetsTotal

Total 40.5 23,292.503.7 20,492.5060.8 1,632.5035.5 26,964.50

$$

189.1 88,379.50 15,997.50

Adm inistration

$ Fks

Total Actual

Hrs

$/hour

(e Gsr)

lnv6stigation

$ Hrs

Resolution 2 - zr February 2<119 to conclusion

'1.5

0.5

4.0

50

2.5

1,080_00

360.00

2,500.00

2,125.OO

450.00

4E2.59

1.5

5.0

10.0

1,080.00

3,125.00

4,250.00

512.42

1.00

20

7.0

720.00

'l,250.00

2,975.00

494.50

2.5

7.5

1,562.50

3,187.50

475.00

1.00

5.0

10.0

720.OO

3,125.00

4,250.00

505.94

3,600.00

360.00

'I t,562.50

16,787.50

450.00

3,276.00

496.36

50

0.5

18.5

39.5

2.5

720.OO

720.00

625.00

425.00

'180.00

Appointee

Appointee

Dreclor

Senior Consultant

Senior Bookkeeper

Mchael owen

Grant Sparks

Greg Cockng

Lhm Barnes

GST

Average rate (excluding GST)

Ass ets

Total (lncluding GST)

Bn ploye6

13.5

lfs

flvidend

$Hrs

Cr6ditors

$Hrs

Total

36,036.00

Pos ition

Total 16.5 6,515.0010.0 8,455.0010.0 4,9115.0016.0 4,750.00

$$

66.0 32,760.00 8,095.00

Adm inistration

$ Hrs

Total Actual

Hrs

$ihour

(Ex GST)

lnvestigation

$ Hrs

Appendix B - To.ble ofmojor tq.sksforTetnutterstiottSchedule BrResolution r

The below table provides a description of the work undertaken in each major task area forthe period z6 November zor8 to zo February 2otg.

Assets

lgS.S hoursl[$rs,ggz.so]

Plant and Equipment

Debtors Correspondence with debtors via letter/email/callReviewing and assessing collectability of debtorsledger

Receipting of debtor payments

Correspondence with banks regarding debtors paidinto the pre-appointment account

Other Assets Tasks associated with realising other potential assets

Leasing Review of leasing documents

Liaising with owners/lessors

Tasks associated with disclaiming leases

Identify Plant and Equipment not sold as part of thevarious business and asset sale agreements

Liaising with valuers and auctioneers and securedcreditor regarding sale

Review of asset listings

l'askArea Generalf)escription Includes

Creditors[6o.8 hours][$26,96+.So]

Creditor enquiries Deal with creditor enquiries via telephone

Maintaining creditor enquiry filesReview and prepare correspondence to creditors andtheir representatives via facsimile, email and post

Secured creditors Search the PPSA register

Notifying PPSA registered creditors of appointmentand requesting information to deal with their claimRespond to secured creditor's queries

Preparing reports to secured creditorRegular verbal updates to secured creditor

Enter into agreements to insure, collect and realiseassets on behalf of secured creditor

Prepare budget relating to the costs of securing andrealising assets to secured creditor

Creditor reports Preparing reports to creditors

Dealing with proofs ofdebt

Receipting and filing POD when not related to adividend

Corresponding with OSR and ATO regarding PODwhen not related to a dividend

Employees

lg.z hoursl[$r,68z.So]

Employees enquiries Receive and follow up employee enquiries viatelephone

Maintain employee enquiry files

Review and prepare correspondence to employees andtheir representatives via facsimile, email and post

Preparation ofletters to employees regarding theirentitlements

Calculation ofentitlements

Reviewing employee files and company's books andrecords

TaskArea General Description Includes

Other employee issues Facilitate payment summaries to be provided toemployees via third party

Investigation[4o.5 hours][$2o,492.5o]

Conducting investigation Collection of company books and records

Reviewing company's books and records

Review and preparation ofcompany nature andhistoryConducting and summarising statutory searches

Preparation of comparative financial statements

Preparation of defi ciency statement

Review of specific transactions and liaising withdirectors regarding certain transactionsInvestigations to identify indicators of insolvency andpotential voidable transactions

Preparation of investigation fi le

Administration[48.6 hours][$23,292.5o]

Documentmaintenance/filereview/checklist

First month administration review

Filing of documents

File reviews

Updating checklists

Correspondence General correspondence

Insurance Review and confirmation ofadequacy ofcoverIdentification of potential issues requiring attentionof insurance specialists

Correspondence with insurer regarding initial andongoing insurance requirements

Reviewing insurance policies

Correspondence with previous brokers

Preparing correspondence opening and closingaccounts

Requesting bank statements

Bank account reconciliations

Bank accountadministration

ASIC Form 524 and other Preparing and lodging ASIC formsforms Correspondence with ASIC regarding statutory forms

ATO and other statutoryreporting

Notification of appointment

Preparing BAS

Planning / Review Discussions regarding status of administration

Books and records /storage

Collection ofbooks and records and sending tostorage

Schedule Bz

Resolution z

The below table provides a description of the work undertaken in each major task area forthe period zr February 2019 to conclusion

Assets

[16.o hours][$8,o9S.oo]

Creditors[ro.o hours][$4,7So.ool

Dividend (ifrequired)[ro.o hours][$+,9+s.oo]

Plant and Equipment Liaising with valuers and auctioneers and securedcreditor regarding sale

Debtors Correspondence with debtors via letter/email/callReviewing and assessing collectability of debtorsledger

Receipting of debtor payments

Correspondence with banks regarding debtors paidinto the pre-appointment account

Creditor Enquiries Deal with creditor enquiries via telephone

Maintaining creditor enquiry files

Review and prepare correspondence to creditors andtheir representatives via facsimile, email and post

Secured creditors Respond to secured creditor's queries

Preparing reports to secured creditor

Regular verbal updates to secured creditorCollect and realise assets on behalf of securedcreditor

Budgeting relating to the costs of securing andrealising assets to secured creditor

Creditor reports Preparing reports to creditors

Dealing with proofs ofdebt

Receipting and filing POD when not related to adividend

Meeting of Creditors (ifrequired)

Preparation ofmeeting notices, proxies andadvertisements

Forward notice of meeting to all known creditors

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

Conducting first meeting of creditors

Preparation and lodgement of minutes of meetingswithASICResponding to stakeholder queries and questionsimmediately following meeting

Processing proofs of debt Preparation of correspondence to potential creditorsinviting lodgement of POD

Receipt of POD

Maintain POD register

Adjudicating POD

Request further information from claimantsregarding POD

Preparation of correspondence to claimant advisingoutcome of adjudication

Preparation of correspondence to creditors advisingofintention to declare dividend

Advertisement of intention to declare dividend

Obtain clearance from ATO to allow distribution ofcompany's assets

Task Area Generall)escription Includes

Dividend procedures

Preparation of dividend calculation

Preparation of correspondence to creditorsannouncing declaration of dividend

Advertise announcement of dividend

Preparation of distributionPreparation of dividend filePreparation ofpayment vouchers to pay dividend

Preparation of correspondence to creditors enclosingpal.rnent of dividend

InvestigationI16.5 hours][$8,+ss.oo]

Conducting investigation Collection of further company books and records

Reviewing company's books and records

Review of specific transactions and liaising withdirectors regarding certain transactions

Liaising with directors regarding certain transactions

Finalise investigations into the Company's solvencyand potential voidable transactions

Finalise investigation filePreparation and lodgement of supplementary reportifrequired

Litigation / Recoveries (If Preparing briefto solicitorsrequired) Liaising with solicitors regarding recovery actions

Attending to negotiations

Attending to settlement matters

ASIC reporting Preparing statutory investigation reports

Liaising with ASIC

Administration[ry.5 hours][$6,SrS.oo]

Documentmaintenance/filereview/checklist

Correspondence General Correspondence

Six monthly administration review

Filing of documents

File reviews

Updating checklists

Insurance Review and confirmation ofadequacy ofcoverCorrespondence with insurer regarding ongoinginsurance requirements

Preparing correspondence closing accounts

Requesting bank statements

Bank account reconciliations

Correspondence with bank regarding specifictransfers

ASIC Form 524 and other Preparing and lodging ASIC formsforms Correspondence with ASIC regarding statutory forms

ATO and other statutory Preparing BASreporting

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Bank accountadministration

Books and records /storage

Dealing with records in storage

Sending job files to storage

Apryendix C - Surnrno:ry ofreeeipts orndpolAtnents

David Evans Group (Queensland) Pty Ltd(In Liquidation)

Summary of Receipts and Payments for the period z6 November zor8to zo February 2otg

Amount ($)ReceiptsCash on Hand (Petty Cash)Accounts Receiv able (Pre-Appointm ent)Bank Account Interest IncomePre-Appointm ent Refu n ds

Indemnity ReceivedTotal Receipts 43,462

PaymentsInsurance (r,89 z)Total Payments (r,8gz)

Closing Cash Balance 4t16z4

3o3z,g8z

25

4241O,OOO

Appendix B - Proposo,Is without arneeting

Notice of proposal to creditors

Douid. Euants Group (Queensland) PtU Ltd. (In Liquidation)ACN 6og 765 259 fthe Compang)

Instructions1. Place a tick in the boxes below indicating whether you are in favour or against the proposed resolution

and fill in your details.

2. Return to: Liam Barnes by 19 March zorgByemail: liam.barnes@pwc.comByfax: +6t7 gzSZ SgggAddress: PricewaterhouseCoopers, 48o Queen Street, BRISBANE QLD 4ooo

Proposed Resolution rThat the remuneration of the Liquidators is approuedfor the period z6 Nouember zot9 to zo Februaryzotg of $88,979.5o plus GSTas set outinthe RemunerationApproual Report dated z5 February zotg to bedrawnf'rom auailablefunds immediately or asfunds become auailable.

Voting Form

I approve the proposal

I do not approve the proposal

Name of Creditor

Address ofCreditor

AmountClaimedAs Owing

Are you related to the Company?

ContactName

Contact Telephone

Sigrature of authorised officeror CompanySeal

$

Yes / No

Reasons for the proposalThe purpose of the resolution is to approve remuneration of the Liquidators without calling a formal meetingof creditors to minimise costs.

Likelyimpact of passing the proposalThe remuneration will have the effect of decreasing the amount that would otherwise be available tounsecured creditors in the event a dividend ofless than roo cents in the dollar is paid.

Objection to proposalIf you object to the proposal being resolved without a creditors meeting please forward a letter indicatingyour objection to Liam Barnes before the above date.

Notice of proposal to creditors

Daaid Easns Group (Queensland) PtU Ltd.(Inl;iquidotion)ACN 6og 765 259 fthe Cotnpa:ng)

Instructions1. Place a tick in the boxes below indicating whether you are in favour or against the proposed resolution

and fill in your details.

2. Return to: Liam Barnes by 19 March zorgByemail: liam.barnes@pwc.comByfax: +6t7 gz57 ggggAddress: PricewaterhouseCoopers, 4Bo Queen Street, BRISBANE QLD 4ooo

Proposed Resolution zThat the remunerqtion of the Liquidators is approuedfor the period zt FebruarA 2o1g to the conclusion ofthe liquidation up to a maximum of $g3,ooo.oo plus GST, as set out in the Remuneration Report dated z5February 2o1g to be drawn from auailable funds as incurred or as funds become auailable. This amountmay be reuisedby resolution of creditors or by order of the court.

Voting Form

I approve the proposal

I do not approve the proposal

Narne of Creditor

Address of Creditor

Amount ClaimedAs Owing

Are you related to the Company?

Contact Name

Contact Telephone

Signature of authorised officeror CompanySeal

$

Yes / No

Reasons for the proposalThe purpose of the resolution is to approve remuneration of the Liquidators without calling a formal meetingof creditors to minimise costs.

Likely impact of passing the proposalThe remuneration will have the effect of decreasing the amount that would otherwise be available tounsecured creditors in the event a dividend ofless than roo cents in the dollar is paid.

Objection to proposalIf you object to the proposal being resolved without a creditors meeting please forward a letter indicatingyour objection to Liam Barnes before the above date.

Appendix C - Proof of debtforrn

ACN:6o5 T65259 Subregulations.6.+g(z)

FORM 535Corporations Act 2oo1

FORMAL PROOF OF DEBT OR CI-AIM (GENERAL FORM)

To the Liquidators of David Evans Group (Queensland) Pty Ltd (In Liquidation) (the Company)

1. This is to state that the Company was on z6 November 2018, and still is, justly and truly indebted

to ......(creditor)(name of creditor)

of(address ofreditor)

for $............

Particulars ofthe debt are:

2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had orreceived any satisfaction or security for the sum or any part ofit except for the following(insert parttculars of all seanrities held. If the seanrities are on the propertg of the company, assess the ualue of those securities.

If ang bills or other negotiable securities are held, shou themin a schedule in thefollouing form).

*3A. I am employed by the creditor and authorised in writing by the creditor to make this statement. I know that the debtwas incurred for the consideration stated and that the debt, to the best ofmy knowledge and belief, remains unpaidand unsatisfied.

*3B. I am the creditor's agent authorised in writing to make this statement in writing. I know that the debt was incurredfor the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid andunsatisfied.

* Items 3A & 38 - delete both if the creditor is a natural person and this proof is made bg the creditor personallg. In other cases,if,for example, you are the director ofa corporate creditor or the solicitor or accountant ofthe creditor, you sign thisform asthe creditor's authorised agent (delete item 3,A,). If you are an authorised employee of the creditor (credit manager etc), deleteitem 38.

I have attached the following documents (tick as many as appropriate):Elnvoices EJudgement from Court lletters of demand nOrders from Company

lMonthly statements [Statutory demand lCredit application lGuarantee from Company

ECreditors authority letter EOther documents

Dated ....../.....1....... Name

Phone Email address..

6,co.o.,o.O)

=:od)(t,acool

Date(date when the debt arose)

Consideration(state hou debt arose and attechsuppor ting documentation)

Amount ($) Remarks(include details of u ouchersub s tantiating p aA ment )

Date Drawer Acceptor Amorrnt($c)

Due Date

.Signatory

Office use only - for voting purposes Accept n Reject n

Ayryendix D - Inforrno;tion sheet sbout'hoposalsusithout s.rneeting'

lnformation sheet: Proposals without meetings ARITAn;',,::.':::a:):',',u;.'?,',:;;';;:,':,:;,;

/i:titilitl li:rr

You may be a creditor in a liquidation, voluntary administration or deed of company arrangement(collectively referred to as an external administration).

You have been asked by the liquidator, voluntary administrator or deed administrator (collectively

referred to as an external administrator)to consider passing a proposal without a meeting.

This information sheet is to assist you with understanding what a proposalwithout a meeting is and

what your rights as a creditor are.

Meetings of creditors were previously the only way that external administrators could obtain the viewsof the body of creditors. However, meetings can be very expensive to hold.

A proposal without a meeting is a cost effective way for the external administrator to obtain the consentof creditors to a particular course of action.

The external administrator is able to put a range of proposals to creditors by giving notice in writing tothe creditors. There is a restriction under the law that each notice can only contain a single proposal.

However, the external administrator can send more than one notice at any single time.

The notice must:

include a statement of the reasons for the proposal and the likely impact it will have on creditorsif it is passed

invite the creditor to either:o vote yes or no to the proposal, oro object to the proposal being resolved without a meeting, and

specify a period of at least 15 business days for replies to be received by the externaladministrator.

lf you wish to vote or object, you will also need to lodge a Proof of Debt (POD)to substantiate your

claim in the externaladministration. The externaladministratorwill provide you with a POD to complete.You should ensure that you also provide documentation to support your claim.

lf you have already lodged a POD in this external administration, you do not need to lodge another one.

The external administrator must also provide you with enough information for you to be able to make an

informed decision on how to cast your vote on the proposal. With some types of proposals, the law orARITA's Code of Professional Practice sets requirements for the information that you must be provided.

ARITA Level 5, 191 Clarerrce Street. Sydney NSW 2000 Australia I GPO Box 4340, Sydney NSW 2001ACN 0r21l23'i2 t +61 2 8004 4344 | e admin@arita.com.au I arita.com.au

o

a

o

What is a proposalwithout a meeting?

What types of proposals can be put to creditors?

What information must the notice contain?

AUSIRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION

tARITA

For example, if the external administrator is asking you to approve remuneration, you will be provided

with a Remuneration Approval Report, which will provide you with detailed information about how the

external administrator's remuneration for undertaking the external administration has been calculated

You can choose to vote yes, no or object to the proposal being resolved without a meeting

A resolution will be passed if more than 50% in number and 50% in value (of those creditors who didvote) voted in favour of the proposal, but only so long as not more than 25o/o in value objected to theproposal being resolved without a meeting.

lf the proposal doesn't pass and an objection is not received, the externaladministrator can choose toamend the proposal and ask creditors to consider it again or the external administrator can choose tohold a meeting of creditors to consider the proposal.

The external administrator may also be able to go to Court to seek approval.

lf more lhan 25% in value of creditors responding to the proposal object to the proposal being resolvedwithout a meeting, the proposal will not pass even if the required majority vote yes. The external

administrator will also be unable to put the proposal to creditors again without a meeting.

You should be aware that if you choose to object, there will be additional costs associated with

convening a meeting of creditors or the external administrator seeking the approval of the Court. Thiscost will normally be paid from the available assets in the external administration.

This is an important power and you should ensure that it is used appropriately.

The Australian Restructuring lnsolvency and Turnaround Association (ARITA) provides information to

assist creditors with understanding external administrations and insolvency.

This information is available from ARITA's website at artia.com.auicreditors

ASIC also provides information sheets on a range of insolvency topics. These information sheets canbe accessed on ASIC's website at asic.gov.au (search for "insolvency information sheets").

22302 - INFO - Proposals information sheet v1_0.docx

What are your options if you are asked to vote on a proposal without a meeting?

How is a resolution passed?

What happens if the proposal doesn't pass?

What happens if I object to the proposal being resolved without a meeting?

Where can I get more information?

Version: July 2017

AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 2