Tua Moala Pty Ltd (In Liquidation) ACN 151511054 (the Company)

Liquidator’s Statutory Report to Creditors

Friday, 27 October 2017

Cameron Crichton

Joint and Several Liquidator

T (07) 3222 0200

E cameron.crichton@au.gt.com

Michael Gerard McCann

Joint and Several Liquidator

T (07) 3222 0200

E michael.mccann@au.gt.com

Introduction

I refer to my initial correspondence to creditors dated Friday, 25 August in which I advised you of

Michael McCann and my appointment as liquidator and your rights as a creditor in the liquidation.

The purpose of this report is to:

Provide you with an update on the progress of the liquidation.

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

We have relied on information provided from numerous sources to prepare the report, including:

Discussions with the Director of the Company, Mr Tua Moala.

Discussions with the Secured Creditor, TL Rentals Pty Ltd

Discussions with the Company’s current and former accountants.

Information available from public sources, such as, Australian Securities and Investments.

Commission (ASIC) and the Personal Property Securities Register (PPSR).

A review of the Company's books and records provided to date.

Whilst I have no reason to doubt the accuracy of any information, I have not performed an audit

and reserve the right to alter my conclusions, should the underlying data prove to be inaccurate or

change materially from the date of this report.

Update on the progress of the liquidation

Circumstances leading to winding up

The Company was registered on 16 June 2011 and operated from North Lakes QLD 4509. The

Company operated in the Media and Telecommunication sector and provided telecommunications

services for Service Stream Pty Ltd.

On the 17 June 2017, prior to our appointment, a related party to the director (understood to be his

sister - Nofomuli Moala) registered i50Four Technology Pty Ltd with a view to taking an assignment

of the Company’s business assets and liabilities. Our investigations have indicated that on 01 July

2017 staff who were previously employed by the Company were transferred to i50Four Technology

Pty Ltd.

Our investigations confirm that the Company did not formally assign the assets to I50 Four

Technology Pty Ltd prior to our appointment.

The Company had one customer, Service Stream, who terminated their engagement following the

appointment of the Liquidators.

Assets and liabilities

The Director of the Company is required to complete and provide to the Joint and Several

Liquidators a statement about the Company's business, property, affairs and financial

circumstances, also known as the Report as to Affairs (RATA). The RATA is a snapshot in time as

at the date of my appointment of the assets and liabilities of the Company, disclosing book values

and the Director’s opinion on the estimated realisable value (ERV) for assets.

On Friday, 04 August 2017 a written request was issued to the Director to complete the RATA for

the Company.

On 23 August 2017 the Report as to Affairs and Director’s Questionnaire was submitted by the

director.

Below is an analysis of the assets and liabilities of the company, and comparison to the RATA as

provided by the Director. The estimated realisable value for the motor vehicle has been withheld

due to the commercial sensitivity of the asset.

Director's RATA Liquidator's

Item Book Value

($) ERV

($) ERV ($)

Assets

Interest in land - - -

Sundry Debtors 37,687 37,687 37,687

Cash on hand - - -

Cash at bank 3,304 3,304 1,023

Stock on hand - -

Work in progress - - -

Plant and Equipment - 1,000

Other Assets - - 2,000

Sub Total 40,991 40,991 41,710

Assets subject to specific charges 296,739 - Withheld

Less amounts owed to secured creditors (270,779) - 300,338

Total Estimated Realisable Values 66,951 40,991 N/A

Liabilities

Employee Entitlements - - -

Amounts owing to secured creditors - - -

Preferential claims ranked behind secured

creditors - - -

Amounts owing to partly secured creditors - - -

Unsecured creditors - - 253,884

Total amounts claimed - - 253,884

Estimated Surplus/ (deficiency) N/A

The below table outlines the known creditors of the Company as at our appointment

Creditor Address Debt ($) Related Party

ATO (Insolvency) PO Box 9003 Penrith NSW 2740 241,298 No

Singtel Optus Pty Ltd Locked Bag 993 North Sydney NSW 2059 2,048 No

FlexiRent Capital Pty Ltd Locked Bag 5005 Royal Exchange NSW 1225 10,538 No

VISIS Accounting Service GPO Box 7043 Brisbane Qld 4001 4,202 No

TL Rentals Pty Ltd PO Box 1234 Chatswood NSW 2057 59,981 No

Total 318,067

Receipts and Payments to date

The table below contains the details of receipts and payments in the liquidation period from 04

August 2017 to 25 October 2017.

Receipts and payments as at 25 October 2017 $

Receipts

Cash at bank 1,023

Accounts Receivable (Pre Appointment) 37,687

Total Receipts 38,711

Payments

- -

Total Payments -

Net Receipts/ (Payments) 38,711

Actions undertaken to date

Since appointment I have undertaken the following tasks:

Advised creditors of my appointment as liquidator;

Arranged insurance cover;

Issued correspondence to the Director of the Company requesting copies of books and

records and a Report as to Affairs;

Held meetings with the director of the Company;

Commenced my own investigations into matters affecting the Company;

Received and responded to creditor queries regarding the liquidation of the Company;

Realised debts of the Company;

Engaged with I50Four Technology Pty Ltd regarding the sale of plant and equipment and

goodwill of the Company

Engaged with TL Rentals Pty Ltd regarding their security interests registered against the

Company and investigated the validity of those registrations; and

Complied with my statutory obligations

Sale of Business

Following discussions with the director, we were advised that i50Four Technology Pty Ltd wished to

purchase various plant and equipment and goodwill off Tua Moala Pty Ltd. I50 Four Technology

Pty Ltd offered c$3k for the Company’s limited plant and equipment and goodwill. Our agents

advised that the plant and equipment was worth c$1k. As this offer is a superior outcome to that

likely to be achieved from an auction of the equipment (noting goodwill is arguably negligible) the

offer was agreed and an invoice for same has been issued.

Investigations and possible recovery actions

PPSR Investigations

Our initial PPSR review indicated that there were four vehicles subject to security interests (held by

TL Rentals Pty Ltd). Of these four security interests, three were perfected on the PPSR and as no

equity existed in the leases they were disclaimed.

On appointment it was the Liquidator’s view that registration of the security interest for the fourth

vehicle was not perfected. We were of the opinion that section 588FL of the Corporations Act 2001

(Cth) (the “Act”) applies and title of the vehicle vests in the company. The realisable value has been

withheld due to the commercially sensitive nature of the dispute.

Our investigations into the security interest included:

Reviewing the registration on the PPSA;

Reviewing the lease agreement and terms and conditions of the contract;

Reviewing the invoice associated with the sale of the asset;

Reviewing the registration details of the vehicle with the Department of Main Roads; and

Confirming the date the Company obtained possession of the vehicle.

Our negotiations with TL Rentals Pty Ltd continue. The vehicle is currently with our sales agent and

subject to determining the PPSA dispute, a sale campaign will commence shortly.

Investigations undertaken I have commenced my initial investigations into the affairs of the Company prior to my appointment

and any potential recovery actions that may be available to the Joint and Several Liquidators to

pursue.

To date, we have undertaken the following investigations:

What happened to the business of the Company

If there were any potential insolvent trading claims or voidable transactions.

My findings of these investigations are detailed below. While we are satisfied that our investigations

are complete, we reserve the right to undertake further enquiries should further information become

available.

What happened to the business of the Company

The Director has stated the following reasons for the Company's financial difficulties and the

ultimate need to have the Company wound up.

Inefficient cash flow management

Lack of business acumen

My investigations into the affairs of the Company, confirm that the Company's difficulties were

brought about by reasons identified by the Director. In addition, I also note the following

Poor financial control including lack of records;

Poor strategic management of business; and

Inadequate cash flow or high cash use

Insolvent trading I have reviewed both the cash flow and balance sheet tests of insolvency and have determined that

the Company likely became insolvent at least 16 – 24 months prior to our appointment based on

the following factors:

Non-payment of statutory debt;

Unprofitable trading; and

Lack of aged creditor details and incomplete account records.

Our ability to recover funds from any potential insolvent trading claim is predicated by the financial

position of the director. We have conducted a motor vehicle and property search of the director and

to date have not identified any assets in his name. An insolvent trading claim is therefore unlikely to

be pursued.

Voidable transactions

My preliminary investigations have not identified any recoverable unfair preference claims,

uncommercial transactions, unfair loans or unreasonable director-related transactions.

Further inquiries to be undertaken

We have submitted our report to ASIC pursuant to s533 of the Act and will liaise with them should a

supplementary report be required. Should no further report be required I do not expect any further

investigations to be undertaken for the following reasons:

There is no evidence of voidable transactions; and

There is no evidence of other recoveries for creditors.

Meetings held

I have not been required to hold and therefore I have not held any meeting for the Company since

my appointment. A meeting will be held in the coming weeks and creditors will be notified of this.

Other matters

Outstanding matters of the liquidation are:

Realise remaining assets;

Finalise investigations;

Hold meeting of creditors; and

Make distribution to creditors, if possible.

Likelihood of a dividend

On realisation of the Toyota Hilux, the position on a dividend to creditors and the quantum of same

can be confirmed.

Currently, we expect to be able to pay:

A dividend to unsecured creditors in the range of 1 to 8 cents in the dollar within 3- 6 months.

When I am ready to declare a dividend, any creditor whose claim has not yet been admitted will be

contacted and asked to submit a proof of debt. This formalises your claim in the liquidation and is

used to determine all claims against the Company.

Cost of the liquidation

I am not seeking approval of any remuneration at this time, however, approval be sought at a

creditors’ meeting to be called in the coming weeks. I will provide creditors with the required

remuneration report and details of same in due course.

What happens next in the liquidation?

We will write to you in the coming weeks in relation to convening the meeting of creditors.

We may write to you again with further information on the progress of the liquidation.

We expect to have completed this liquidation within 3 – 6 months.

Compliance with best practice

I confirm that this report complies with the requirements in the Insolvency Practice Rules (IPR),

specifically IPR 70-40, as well as the statements of best practice issued by the Australian

Restructuring Insolvency and Turnaround Association (ARITA) with regard to content of the

Statutory Report by a Liquidator and the Code of Professional Practice with regard to

remuneration.

What to do next

You should now:

Read the report and appendixes

Contact my office should you have any queries

Complete and return your proof of debt

Where can you get more information?

You can 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”).

Should you have any queries with respect to the above, you may also contact Benjamin Sanders of

my office on (07) 3222 0429 or via email on benjamin.sanders@au.gt.com. There is also

information about this liquidation on our firms’ website.

Dated: Friday, 27 October 2017

Cameron Crichton

Joint and Several Liquidator

List of attachments

Appendix A - Creditor’s rights in a liquidation Appendix B – Proof of debt

Appendix A Creditor’s Rights in a Liquidation

ARITA ACN 002 472 362

Level 5, 191 Clarence Street, Sydney NSW 2000 Australia | GPO Box 4340, Sydney NSW 2001 t +61 2 8004 4344 | e admin@arita.com.au | arita.com.au

AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION

Creditor Rights in Liquidations

Requests must be reasonable.

They are not reasonable if:

Both meetings and information:

(a) complying with the request would

prejudice the interests of one or

more creditors or a third party

(b) there is not sufficient available

property to comply with the request

(c) the request is vexatious

Meeting requests only:

(d) a meeting of creditors dealing with

the same matters has been held, or

will be held within 15 business days

Information requests only:

(e) the information requested would be

privileged from production in legal

proceedings

(f) disclosure would found an action

for breach of confidence

(g) the information has already been

provided

(h) the information is required to be

provided under law within 20

business days of the request

If a request is not reasonable due to (b),

(d), (g) or (h) above, the liquidator must

comply with the request if the creditor

meets the cost of complying with the

request.

Otherwise, a liquidator must inform a

creditor if their meeting or information

request is not reasonable and the

reason why.

As a creditor, you have rights to request meetings and information or take certain actions:

Right to request a meeting

Right to request

information

Right to give directions to

liquidator

Right to appoint a reviewing liquidator

Right to replace

liquidator

Right to request a meeting

Right to request information

In liquidations, no meetings of creditors are held automatically.

However, creditors with claims of a certain value can request in

writing that the liquidator hold a meeting of creditors.

A meeting may be requested in the first 20 business days in a

creditors’ voluntary liquidation by ≥ 5% of the value of the debts held

by known creditors who are not a related entity of the company.

Otherwise, meetings can be requested at any other time or in a court

liquidation by:

▪ > 10% but < 25% of the known value of creditors on the condition

that those creditors provide security for the cost of holding the

meeting

▪ ≥ 25% of the known value of creditors

▪ creditors by resolution, or

▪ a Committee of Inspection (this is a smaller group of creditors

elected by, and to represent, all the creditors).

If a request complies with these requirements and is ‘reasonable’,

the liquidator must hold a meeting of creditors as soon as

reasonably practicable.

Liquidators will communicate important information with creditors as

required in a liquidation. In addition to the initial notice, you should

receive, at a minimum, a report within the first three months on the

likelihood of a dividend being paid.

Additionally, creditors have the right to request information at any

time. A liquidator must provide a creditor with the requested

information if their request is ‘reasonable’, the information is relevant

to the liquidation, and the provision of the information would not

cause the liquidator to breach their duties.

A liquidator must provide this information to a creditor within 5

business days of receiving the request, unless a longer period is

agreed. If, due to the nature of the information requested, the

liquidator requires more time to comply with the request, they can

extend the period by notifying the creditor in writing.

AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 2

12112 (LIQ) - INFO - CREDITOR RIGHTS INFORMATION SHEET V1_0.DOCX Version: July 2017

Creditors, by resolution, may give a liquidator directions in relation to a liquidation. A liquidator must have

regard to these directions, but is not required to comply with the directions.

If a liquidator chooses not to comply with a direction given by a resolution of the creditors, they must

document their reasons.

An individual creditor cannot provide a direction to a liquidator.

Creditors, by resolution, may appoint a reviewing liquidator to review a liquidator’s remuneration or a cost or

expense incurred in a liquidation. The review is limited to:

▪ remuneration approved within the six months prior to the appointment of the reviewing liquidator, and

▪ expenses incurred in the 12 months prior to the appointment of the reviewing liquidator.

The cost of the reviewing liquidator is paid from the assets of the liquidation, in priority to creditor claims.

An individual creditor can appoint a reviewing liquidator with the liquidator’s consent, however the cost of

this reviewing liquidator must be met personally by the creditor making the appointment.

Creditors, by resolution, have the right to remove a liquidator and appoint another registered liquidator.

For this to happen, there are certain requirements that must be complied with:

Meeting request Information and notice Resolution at meeting

Right to appoint a reviewing liquidator

Right to replace liquidator

Right to give directions to liquidator

A meeting must be reasonably

requested by the required

number of creditors.

Creditors must inform the

existing liquidator of the

purpose of the request for the

meeting.

Creditors must determine who

they wish to act as the new

liquidator (this person must be a

registered liquidator) and obtain:

▪ Consent to Act, and

▪ Declaration of

Independence, Relevant

Relationships and

Indemnities (DIRRI).

The existing liquidator will send

a notice of the meeting to all

creditors with this information.

If creditors pass a resolution

to remove a liquidator, that

person ceases to be

liquidator once creditors pass

a resolution to appoint

another registered liquidator.

For more information, go to www.arita.com.au/creditors

Appendix B Proof of Debt

*Do not complete if this proof is made by the creditor personally.

ACN 151511054

FORM 535 Subregulation 5.6.49(2)

Corporations Act (2001)

FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM)

To the Liquidators of Tua Moala Pty Ltd (In Liquidation)

1. This is to state that the company was on Friday, 4 August 2017 (date of court order in winding up by the Court, or date of resolution to wind up, if a voluntary winding up), and still is, justly and truly indebted to:

_________________________________________________________ (full name 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 $_______________and______cents.

Date Consideration (state how the Debt arose)

Amount $ c

Remarks (include details of voucher substantiating payment

2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or received any satisfaction or security for the sum or any part of it except for the following: (insert particulars of all securities held. If the securities are on the property of the company, assess the value of those securities. If any bills or other negotiable securities are held, show them in a schedule in the following form).

Date Drawer Acceptor Amount $c Due Date

*3. 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.

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

........................................... Dated Signature Occupation: Address

Proof of Debt Reference: