circular to creditors - mcgrathnicol · 2019-10-20 · b61 has a second ranking gsa security over...

1. D14-160728-MINIMIN02-CreditorCircular-TD

Mining Management Group Pty Limited (In Liquidation) ACN 112 172 022 (“MMG”)

MMG Drill & Blast Pty Limited (In Liquidation) ACN 122 840 582 (“MMG D&B”)

(“the Companies”)

Circular to Creditors

I refer to the creditors’ voluntary liquidation of the Companies.

Pursuant to Section 508 of the Corporations Act 2001, a liquidator is required to convene an annual

meeting of creditors when a voluntary liquidation continues beyond twelve months.

Please find enclosed a notice of meeting relating to the concurrent annual meetings of creditors for the

Companies which are to be held at McGrathNicol, Level 12, 20 Martin Place, Sydney NSW 2000 on

Wednesday 24 August 2016 at 12:00pm.

If you are unable to attend, but wish to send a representative, I enclose a proxy form for your use.

The meetings are a statutory procedure and attendance by creditors is not required. Creditors are of course

welcome to attend, or to address enquiries at any time to Timothy Duncan of this office on (02) 9248 9913.

Dated 10 August 2016.

Jason Preston

Joint and Several Liquidator

Enclosure(s):

1. Liquidators’ Report to Creditors

2. Notice of Meeting

3(a). Proof of debt (MMG)

3(b). Proof of debt (MMG D&B)

4. Instructions for completion of Proof of Debt

5(a). Special Proxy Form (MMG)

5(b). Special Proxy Form (MMG D&B)

6. Instructions for completion of a Proxy Form

7. General information for attending and voting at Meeting of Creditors

8. Schedule of Remuneration

9. Insolvency information for Directors, Employees, Creditors and Shareholders

Mining Management Group Pty Limited (In Liquidation) and MMG Drill & Blast Pty Limited (In Liquidation)

Annual report to creditors

10 August 2016

D14-160810-MINIMIN02-AnnualReport-TD 1

Glossary of Terms

Term Definition

Anglo American Anglo American Coal Pty Ltd

Annual Report This Annual Report to the creditors of MMG and MMG D&B dated 10 August 2016

ARITA Australian Restructuring, Insolvency & Turnaround Association (formerly the Insolvency Practitioners Association)

ARITA Code ARITA Code of Professional Practice

ASIC Australian Securities and Investments Commission

ATO Australian Taxation Office

B61 B61 Investments Pty Ltd

Director Phillip John Gunter

Companies MMG and MMG D&B (collectively referred to as the Companies)

DIRRI Declaration of Independence, Relevant Relationships and Indemnities

FEG Fair Entitlements Guarantee

Grays Grays Auctioneers and Valuers

GSA General Security Agreement

Liquidators Jason Preston and Rob Kirman as Joint and Several Liquidators

Mayfield Mayfield Operations Pty Ltd

MMG Mining Management Group Pty Limited (In Liquidation)

MMG D&B MMG Drill & Blast Pty Limited (In Liquidation)

PGI Phillip Gunter Investments Pty Ltd

POD Proof of Debt

PPSR Personal Property Securities Register

s439A Meeting Second meeting of creditors of the Companies held on 6 July 2015

s439A Report Report to creditors of the Companies pursuant to Section 439A of the Act dated 29 June 2015

s533 Report Report to ASIC pursuant to Section 533 of the Act.

SGC Superannuation Guarantee Charge

the Act The Corporations Act 2001 (Cth)

Voluntary Administrators Jason Preston and Rob Kirman as Joint and Several Voluntary Administrators

Westpac Westpac Banking Corporation


Contents

Executive Summary ....................................................................................................................................................................................................... 3 1

DIRRI ..................................................................................................................................................................................................................................... 4 2

Asset Realisation............................................................................................................................................................................................................. 5 3

Employee entitlements ................................................................................................................................................................................................ 7 4

Investigations ................................................................................................................................................................................................................... 8 5

Life Insurance recovery ............................................................................................................................................................................................... 9 6

Estimated return to creditors ................................................................................................................................................................................ 10 7

Receipts and Payments ............................................................................................................................................................................................ 14 8

Next steps in the liquidation ................................................................................................................................................................................. 15 9

Remuneration................................................................................................................................................................................................................ 16 10

Books and records ...................................................................................................................................................................................................... 31 11

Creditor meeting details .......................................................................................................................................................................................... 32 12


Executive Summary 1

I refer to:

the appointment of my partner, Rob Kirman and I as Joint and Several Voluntary Administrators of the Companies

on 1 June 2015;

our s439A report to creditors dated 29 June 2015; and

our subsequent appointment as Joint and Several Liquidators of the Companies on 6 July 2015.

This Annual Report is issued in respect of the forthcoming annual meetings of creditors of the Companies to be held

concurrently, pursuant to Section 508 of the Act.

The meetings of creditors are to be held at 12:00pm on Wednesday, 24 August 2016 at McGrathNicol, Level 12, 20

Martin Place, Sydney NSW 2000.

This Annual report has been prepared to provide creditors with an update on the progress of the liquidations of the

Companies since the resolutions to appoint Liquidators were passed on 6 July 2015.

This report to creditors covers the Liquidation period 6 July 2015 to 5 August 2016 (unless specifically stated) and sets out

the following:

an update on the Liquidation generally, reporting on the finalised trading position of the Companies;

the steps taken by the Liquidators to realise the assets of the Companies;

details of the Liquidators’ steps to declare a first and final dividend to priority creditors, discharging their claim in

full;

an updated estimated return to creditors;

an update of the Liquidators’ investigations to date; and

the fees incurred and approval sought by the Liquidators for work completed while the Companies have been

under external administration.


DIRRI 2

In accordance with Section 436D of the Act and the ARITA Code, a DIRRI was enclosed with our first communications to

creditors dated 4 June 2015 and has been included at Appendix A of this report.

The DIRRI was also tabled at the first meeting of creditors on 12 June 2015.

As at the date of this report, there is no change to the information provided in the DIRRI and I remain of the view that

there are no potential conflicts of interest.


Asset Realisation 3

MMG 3.1

Heavy and light motor vehicles 3.1.1

The Liquidators engaged Grays to conduct an online sale of MMG’s heavy motor vehicles (including dump trucks and

excavators) and light motor vehicles that were not leased or noted as having a security interest registration on the PPSR.

A claim was also lodged with Vero Insurance Limited for two stolen fuel tanks being held at a warehouse facility in

Singleton. The gross proceeds from the sale and insurance payment totalled $325,666.70 (inclusive of GST).

MMG – asset realisations

Asset type Sale proceeds ($)

Heavy and Light Motor Vehicles 318,666.70

Fuel Tanks 7,000.00

Total sale proceeds 325,666.70

These funds net of realisation costs are currently being held by the Liquidators.

Light motor vehicle sale to Mayfield 3.1.2

A number of MMG’s light vehicles were sold to Mayfield for $136,401 (inclusive of GST and maintenance costs).

Details of the distributions to MMG’s financiers from the sale of light motor vehicles are as follows:

MMG - asset realisations and distributions from the Mayfield sale

Financiers Distribution ($) Nature of security

Capital Finance 3,541.34 Leased assets and PPSR registration

Macquarie leasing 35,276.22 Leased assets and PPSR registration

Bank of Queensland 40,228.60 Leased assets and PPSR registration

Total financier distributions 79,046.16

I note that there was equity of $41,953.84 from this sale available to MMG. These funds were distributed to Westpac as

the secured creditor of MMG under its GSA.

B61 asset sale 3.1.3

B61 has a second ranking GSA security over the assets of MMG.

There was some uncertainty as to the inter-creditor arrangements between B61 and the first ranking GSA security holder,

Westpac.

An agreement was reached between Westpac, B61 and the Liquidators, whereby the Liquidators agreed to sell two heavy

motor vehicles to B61 for $190,000. Tiger Asset Group determined this price to be the fair market value of the assets. An

agreement was reached whereby B61’s debt of $3,200,000 was reduced by $190,000 in consideration for this sale and the

terms of the security between B61 and Westpac were resolved.

B61 transferred to the Liquidators $19,000 (representing the GST component of the transaction) which has been remitted

to the ATO.

Office furniture 3.1.4

Office furniture in the amount of $1,127.50 (inclusive of GST) was sold to PGI, a company owned by the Director. The

office furniture was sold at fair market value as determined by Grays.


MMG D&B 3.2

Heavy and light motor vehicles 3.2.1

The Liquidators engaged Grays to conduct an online sale of MMG D&B’s heavy and light motor vehicles. The assets

realised for MMG D&B included a blast-hole drill and two light motor vehicles.

The gross proceeds from this sale totalled $78,560. Subsequent to the sale, the Liquidators distributed $44,002 to Bank of

Queensland - the lessors of the blast-hole drill.

The balance of the sale proceeds (net of realisation costs) are currently being held by the Liquidators.

Light motor vehicle sale to Mayfield 3.2.2

The Liquidators sold two of MMG D&B’s light motor vehicles to Mayfield for $37,595 (inclusive of GST). There were no

realisation costs associated with this sale.

As the light motor vehicles were not subject to finance, net sale proceeds of $33,000 were distributed to Westpac as the

secured creditor of MMG D&B under its GSA.

Post-appointment trading collection 3.3

Prior to the realisation of the Companies’ assets, the Liquidators continued to hire out several of the Companies’ heavy

vehicles to Mayfield and Anglo American. Details of the funds collected by the Liquidators for the hiring of the heavy

vehicles are set out below:

Post-appointment trading collections (including GST)

Customer MMG ($) MMG D&B ($)

Mayfield 127,777.71 22,253.00

Anglo American - 16,170.00

Total trading revenue 127,777.71 38,423.00

Legal costs 3.4

The Liquidators engaged legal advisors to provide advice and commentary on a number of matters relating to the

liquidations, including:

advising on validity of PPSR and registrations;

assisting with the realisation of assets and associated transaction documents;

assisting with recovery actions; and

advising on employment matters.

MMG 3.4.1

Legal fees incurred to date on circulating charge asset realisations are $6,359.88 (excluding GST).

Legal fees incurred to date on non-circulating charge asset realisations are $89,306.49 (excluding GST).

MMG D&B 3.4.2

Legal fees incurred to date on circulating charge asset realisations are $8,840.94 (excluding GST).

Legal fees incurred to date on non-circulating charge asset realisations are $18,781.51 (excluding GST).


Employee entitlements 4

Fair Entitlements Guarantee 4.1

The Liquidators received $55,051 in funding from the Department of Employment pursuant to the FEG program. All funds

received as part of the FEG program have been remitted to employees and the ATO as required.

In this regard, all outstanding employee entitlements (with the exception of pre-appointment superannuation) have now

been paid to former employees of the Companies.

Set out below is a break-down of the funds paid to employees through the FEG program, net of any tax remitted to the

ATO.

MMG - distributions made under Fair Entitlements Guarantee

Distribution Date paid Number of recipients Net distribution ($)

1 17/11/2015 1 28,778.49

2 20/04/2016 1 18,312.43

Total 2 47,090.92

At as the date of our appointment, MMG D&B had no employee entitlements owing to former employees.

The Department of Employment ranks as a priority creditor for $55,051 in the liquidation of MMG.

Pre-appointment superannuation 4.2

The books and records of the Companies indicated that there was pre-appointment superannuation owing to a number of

employees of the Companies. As these amounts are aged, they are caught by the SGC regime and are payable to the

ATO in the first instance. Details of the outstanding superannuation calculated by the Liquidators in accordance with the

Companies books and records are set out below.

Outstanding pre-appointment superannuation

Company Number of employees Pre-appointment super owing ($)

MMG 82 187,543.09

MMG D&B 18 993.73

Total 100 188,536.82

Upon payment of any priority dividend to the ATO, the ATO will distribute the amount outstanding to the employees’

respective superannuation funds.

Subsequent to the forthcoming meeting of creditors, the Liquidators will take steps to promptly declare and pay a first and

final dividend to priority creditors with a payment to the Department of Employment in relation to the FEG program and

the ATO in relation the SGC owing.


Investigations 5

The Liquidators have investigated the affairs of the Companies to assess other possible recoveries that may be available for

creditors’ benefit in the liquidations.

The Liquidators have concluded that with the exception of unfair preference payments, there were no further recoveries

available to creditors relating to insolvent trading, uncommercial transactions or a breach in directors duties. The

Liquidators have lodged a s533 report to ASIC in this regard.

The Liquidators have investigated certain transactions that occurred prior to the appointment of the Voluntary

Administrators that may be recovered by the Liquidators as voidable transactions.

Creditors are advised that, for the purposes of examining voidable transactions, the Liquidators would review transactions

that occurred during the relevant time period (as prescribed under that Act for each of the relevant transaction types),

looking back from the "relation back day". The relation back day for the Companies is the date that the Voluntary

Administrators were appointed, being 1 June 2015.

Preference recoveries 5.1

The Liquidators have concluded that the Companies were insolvent from at least 1 December 2014. Pursuant to the Act

the liquidator may treat payments made to statutory authorities and other suppliers within the 6 months prior to the

company entering external administration as potentially voidable unfair preference payments.

Pursuant to Section 588FE of the Act, a transaction constitutes an unfair preference if:

the company and the creditor are parties to the transaction; and

the transaction results in the creditor receiving from the company, in respect of an unsecured debt that the

company owes to the creditor, more than the creditor would receive from the company in respect of the debt if

the transaction was set aside, and the creditor were to prove for the debt in a winding up of the company.

ATO 5.1.1

The Liquidators submitted a comprehensive report to the ATO on 23 December 2015, lodging a claim against the ATO to

recover payments made in the six months prior to our appointment as Voluntary Administrators.

The Liquidators lodged a claim against the ATO in the following amounts:

MMG – $663,563;

MMG D&B – $115,000.

Following negotiations with the ATO, the ATO offered to settle the claims lodged by the Liquidators for the following

amounts:

MMG – $550,000;

MMG D&B – $50,000.

In the interest of expediting the matters and reducing costs, the Liquidators accepted these revised offers on 19 May 2016

and have now received the funds from the ATO.

Other suppliers 5.1.2

The Liquidators have conducted a review into preference payments made to other suppliers. The Liquidators consider it is

possible that certain other creditors may have received preferential payments during the period when the Companies were

insolvent.

As a result of our investigations, the Liquidators have identified that there may be potential further recoveries available to

creditors of MMG of up to $400,000 (net of any costs incurred in realising potential preference payments).

Recoveries from voidable transactions may improve the return to unsecured creditors of MMG in the liquidation. The

Liquidators will consider each claim on a case by case basis assessing the commerciality of pursuing each claim, bearing in

mind the value of the potential recoveries and costs of further pursuit and commencing litigation.


Life Insurance recovery 6

The Companies each own a life insurance policy that pays a death benefit for the insured individual.

The insured individual for each policy is the Director of the Companies.

The benefit of each company life insurance policy is detailed below:

MMG - $1,912,272; and

MMG D&B - $819,545.

The policies are the subject of the security held by Westpac against each of the Companies.

The Liquidators have maintained the policies, paying the monthly premiums since our appointment as Voluntary

Administrators. During the Liquidation period the Director has passed away. As a result, the Liquidators have lodged a

claim against each of the policies.

The Liquidators received payment under the life insurance policies on 19 July 2016.


Estimated return to creditors 7

MMG 7.1

The Liquidators have conducted a review of the estimated return to creditors of MMG.

Based on current recoveries, the Liquidators expect that;

there will be sufficient funds to pay priority creditors in full;

there will not be sufficient funds to repay Westpac’s facilities in full; and

there may be a small pool of funds available for a distribution to unsecured creditors of MMG.

The Liquidators estimate that Westpac will receive a distribution of 98 cents in the dollar. The Liquidators estimate that

unsecured creditors will receive a distribution in the range of 2 to 5 cents in the dollar.

The range of this return to unsecured creditors is dependent upon future recoveries from other supplier preference

payments.

The Liquidators’ current assessment of the estimated return to creditors is set out below.

MMG - Estimated Return to Creditors

Item

Report

Section

(Low)

($)

(High)

($)

Circulating Assets

Cash at appointment 108,598 108,598

Pre-appointment debtor collections 213,205 213,205

Post-appointment trading collections 3.3 116,162 116,162

Trading expenses (85,578) (75,578)

Insurance - Willis (689) (689)

Total 351,698 361,698

Voluntary Administrators' fees and expenses (circulating) 10.2.1 (73,173) (73,173)

Liquidators' fees and expenses (circulating) 10.2.3 (66,490) (66,490)

Legal fees (circulating) 3.4.1 (6,360) (6,360)

Net surplus/(deficit) from circulating assets 205,675 215,675

Non-Circulating Assets

Grays sale of heavy and light motor vehicles (net of realisation costs) 3.1.1 264,542 264,542

Sale of light motor vehicles to Mayfield 3.1.2 124,001 124,001

B61 asset sale 3.1.3 190,000 190,000

Other asset recoveries – office furniture 3.1.4 1,025 1,025

Life insurance (company policy) 6 2,073,517 2,073,517

Distribution to financiers from proceeds of Mayfield sale 3.1.2 (79,046) (79,046)

B61 distribution 3.1.3 (190,000) (190,000)

Insurance costs - Willis (10,568) (10,568)

Asset valuation expense (8,220) (8,220)

Insurance costs - life insurance premiums 6 (33,331) (33,331)

Total 2,331,920 2,331,920

Voluntary Administrators' fees and expenses (non-circulating) 10.2.1 (62,148) (62,148)

Liquidators' fees and expenses (non-circulating) 10.2.3 (66,784) (66,784)

Legal fees (non-circulating) 3.4.1 (89,306) (89,306)

Net surplus/(deficit) from non-circulating assets 2,113,682 2,113,682


Item

(Low)

($)

(High)

($)

Preference recoveries

ATO preference recovery 5.1.1 550,000 550,000

Potential future supplier preference recoveries (net of costs incurred) 5.1.2 - 400,000

Liquidators' fees and expenses 10.2.2 (134,155) (174,155)

Net surplus/(deficit) from ATO preference recovery 415,845 775,845

The Liquidators note that the above Estimated Return to Creditors contains figures which are net of GST and costs of realisation.

Accordingly the above amounts differ from the gross figures reported in the corresponding section of the report.

MMG – Creditor Waterfall

$

(Low)

($)

(High)

($)

Priority Creditors

Recoveries after costs from circulating assets 205,675 215,675

Less: funds owing to FEG from advances (55,051) (55,051)

Less: outstanding superannuation (187,543) (187,543)

Contribution from preference recovery 36,919 26,919

Estimated return 100 cents/$ 100 cents/$

Surplus funds available to secured creditor - -

First Ranking Secured Creditor

Recoveries after costs from non-circulating assets 2,113,682 2,113,682

Remaining funds available from circulating assets - -

Subrogation of preference claim 205,675 215,675

Total owed to first ranking secured creditors (2,353,419) (2,353,419)


Shortfall of funds to first ranking secured creditor (34,062) (24,062)

Second Ranking Secured Creditor

Surplus funds available to second ranking secured creditor (MMG) - -

B61 asset sale agreement 190,000 190,000

Total owed to second ranking secured creditor (3,200,000) (3,200,000)


Shortfall to second ranking secured creditor (3,010,000) (3,010,000)

Unsecured Creditors

Remaining preference recovery 173,251 533,251

Total owed to unsecured creditors 9,318,627 9,748,627


The Liquidators note that Westpac’s security is cross collateralised. The above tables do not take into account the cross-collateralisation

of Westpac’s debt.


MMG D&B 7.2

The Liquidators have conducted a review of the estimated return to creditors of MMG D&B.

Based on current recoveries, the Liquidators expect that;

there will be sufficient funds to pay priority creditors in full;

there will not be sufficient funds to repay Westpac’s facilities in full; and

there will not be sufficient funds available for a distribution to unsecured creditors of MMG D&B.

The Liquidators estimate that Westpac will receive a distribution of 88 cents in the dollar.

The Liquidators’ current assessment of the estimated return to creditors is set out below.

MMG D&B - Estimated Return to Creditors

$

Report

Section

(Low)

($)

(High)

($)

Circulating Assets

Cash at appointment 8,761 8,761

Pre-appointment debtor collections 6,759 6,759

Post-appointment trading collections 3.3 34,930 34,930

Trading recoveries 1,791 1,791

Insurance - Willis (100) (100)

Total 52,141 52,141

Voluntary Administrators' fees and expenses (circulating) 10.3.3.1 (759) (759)

Liquidators' fees and expenses (circulating) 10.3.3.2 (3,742) (3,742)

Legal fees (circulating) 3.4.2 (8,841) (8,841)

Net surplus/(deficit) from circulating assets 38,799 38,799

Non-Circulating Assets

Grays sale of light motor vehicles 3.2.1 21,856 21,856

Sale of light motor vehicles to Mayfield 3.2.2 34,177 34,177

Life insurance (company policy) 6 888,989 888,989

Insurance - Willis (1,985) (1,985)

Asset valuation expense (2,018) (2,018)

Insurance costs - life insurance premiums 6 (16,380) (16,380)

Total 924,639 924,639

Voluntary Administrators' fees and expenses (non-circulating) 10.3.3.1 (5,293) (5,293)

Liquidators' fees and expenses (non-circulating) 10.3.3.2 (12,831) (12,831)

Legal fees (non-circulating) 3.4.2 (18,782) (18,782)

Net surplus/(deficit) from non-circulating assets 887,733 887,733

Preference Recoveries

ATO preference recovery 5.1.1 50,000 50,000

Administrators' / Liquidators' fees and expenses 10.3.2 (42,991) (42,991)

Net surplus/(deficit) from ATO preference recovery 7,009 7,009

The Liquidators note that the above Estimated Return to Creditors contains figures which are net of GST and costs of realisation.

Accordingly the above amounts differ from the gross figures reported in the corresponding section of the report.


MMG D&B – Creditor Waterfall

Item

(Low)

($)

(High)

($)

Priority Creditors

Recoveries after costs from circulating assets 38,799 38,799

Less: outstanding superannuation (994) (994)

Contribution from preference recovery - -


Surplus funds available to secured creditor 37,805 37,805

First ranking Secured Creditor

Recoveries after costs from non-circulating assets 887,733 887,733

Remaining funds available from circulating assets 37,805 37,805

Subrogation of preference claim 994 994

Total owed to first ranking secured creditors (1,049,427) (1,049,427)


Shortfall of funds to first ranking secured creditor (122,895) (122,895)

Second ranking Secured Creditor

Surplus funds available to second ranking secured creditor (D&B) - -

Total owed to second ranking secured creditor (3,010,000) (3,010,000)

Estimated return - -

Shortfall to second ranking secured creditor 3,010,000 3,010,000

Unsecured Creditors

Remaining preference recovery 6,015 6,015

Total owed to unsecured creditors 3,773,679 3,773,679

Estimated return - -

The Liquidators note that Westpac’s security is cross collateralised. The above tables do not take into account the cross-collateralisation

of Westpac’s debt.


Receipts and Payments 8

A summary of the receipts and payments for the Companies for the period 1 June 2015 to 27 July 2016 is attached at

Appendix B of this report.


Next steps in the liquidation 9

The Liquidators have now completed the majority of tasks in the liquidations. Set out below is a brief outline and timeline

of key areas of focus for the Liquidators going forward.

Area Key steps Estimated completion date

Annual meeting of creditors. Prepare and attend annual meeting of creditors.

August 2016.

Pay outstanding pre-appointment

employee superannuation.

Distribute superannuation to the ATO.

September 2016.

Payment to the Department of

Employment as a priority creditor in

the MMG liquidation.

Payment to Department of Employment.

September 2016.

Distribution to secured creditor. Payment to secured creditor. August 2016.

Additional Insolvent trading and

voidable transaction recovery

pursuit.

Consider claims on a case by case basis.

Asses the commerciality of pursuing each claim.

September 2016 to October 2016.

Distributions to unsecured creditors

(MMG), if funds permit.

Call for proof of debts. Convene meeting of creditors to

seek approval to pay dividend to unsecured creditors.

Declare and distribute dividend to creditors.

November 2016.

Attend to administrative

requirements and finalisation

matters.

Ongoing lodgements with ASIC and ATO.

Attend to statutory lodgements Finalise liquidation.

February 2017.


Remuneration 10

In accordance with Section 449E of the Act and the ARITA Code, a Schedule of Remuneration Methods and Hourly Rates

was provided to creditors with our initial communication and tabled at the first meetings of creditors on 12 June 2015.

We are seeking approval of our fees after applying a 20% discount to the rates tabled.

A liquidator’s remuneration can only be fixed by resolution of a Committee of Inspection, the company’s creditors or by an

application to the Court. Set out in the following sections are details of the necessary and proper work performed for the

appropriate conduct of the administration and liquidation of the Companies.

Declaration 10.1

I, Jason Preston of McGrathNicol, have undertaken a proper assessment of this remuneration claim for my appointment as

Joint and Several Liquidator of the Companies in accordance with the law and applicable professional standards. I am

satisfied that the remuneration claimed is in respect of necessary work, properly performed, or to be properly performed,

in the conduct of the liquidations.

MMG 10.2

Approval received 10.2.1

At the s439A Meeting of creditors on 6 July 2015, approval of the following fees was sought and received:

Period Amount

(ex GST)

Administrators’ remuneration 1 June 2015 – 6 July 2015

Liquidators’ prospective remuneration

$131,056.00

-

Total fees approved $131,056.00

Total fees paid $131,056.00

Administrators’ and Liquidators’ disbursements $4,265.17

Total fees and disbursements approved and paid $135,321.17

Summary of approval sought 10.2.2

This remuneration report details approval sought for the following fees:

Period Report

reference

Amount

(ex GST)

Current remuneration approval sought:

Resolution 1: 6 July 2015 – 5 August 2016* 10.2.3 $227,429.20

Resolution 2: 5 August 2016 until 31 October 2016* ** 10.2.4 $40,000.00

Total** $267,429.20

* Remuneration approval sought at a 20% discount on the rates included in the Schedule of Remuneration Methods and

Hourly Rates.

** Approval for the future remuneration sought is based on an estimate of the work necessary to progress the liquidation.

If additional work is necessary beyond what is contemplated, a further report will be provided and approval sought from

creditors.

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

of the remuneration approval sought.


Approval sought for Liquidators’ actual remuneration for the period 6 July 2015 to 5 August 2016. 10.2.3

Approval is sought at the forthcoming annual meeting of creditors for the Liquidators’ actual remuneration of $227,429.20

(excluding GST) after applying a discount of 20% to our schedule of rates as previously tabled, for the period 6 July 2015

to 5 August 2016 with the following resolution proposed:

“That the remuneration of the Liquidators of MMG for the period 6 July 2015 to 5 August 2016 in the amount of

$227,429.20 (excluding GST) calculated at the hourly rates as detailed in the Schedule of Remuneration Methods and

Hourly Rates, after applying a discount of 20% is hereby approved for payment from funds on hand”.

A description of tasks that have been performed by the Liquidators and their staff is set out below and a schedule of

actual fees incurred by staff member during this remuneration period is detailed at Appendix C of this report.

Task area* General description Includes

Assets 225.60 hours $78,362.50 (ex GST)

PPSR Identifying and reviewing MMG’s assets.

Reviewing the PPSR and identifying assets subject to a

security registration.

Liaising with PPSR creditors in regards to discharge of

registrations.

Issuing asset disclaimer letters for assets subject to leases.

Liaising with lawyers in regards to correspondence with PPSR

creditors.

Grays auction Reviewing auctioneer proposals and engaging Grays to

undertake valuation and sale of MMG’s assets.

Liaising with Grays regarding asset control and sale process.

Reviewing insurance of assets / organising for ongoing

insurance cover.

Discussion with Grays regarding auction and reviewing

valuation.

Reviewing auction results and asset sale distribution

reconciliation.

Liaising with potential purchasers in relation to status of

certain assets.

Receiving, reviewing and responding to indicative offers from

interested parties.

Liaising with lawyers regarding the sale of assets.

Executing documents and attending to sale completion

matters.

Liaising with relevant parties regarding renewal of

registrations for assets where required.

Ongoing correspondence with the secured creditor and

financiers regarding the asset sale process.

Distributing proceeds from the sale of assets to financiers

and the secured creditor.



Other assets Liaising with Grays regarding the valuation of MMG’s office

furniture.

Liaising with B61 in regards to the asset sale agreement.

Liaising with the purchaser of the office furniture and

attending to sale matters.

Liaising with Mayfield in regards to the sale of light motor

vehicles and attending to sale matters.

Understanding pre-appointment loans made from MMG and

issuing letters to debtors in regards to repayment.

Analysing MMG’s pre-appointment debtors, issuing

correspondence to debtors, collecting debtors and dealing

with queries.

Life insurance policy Understanding the life insurance policy owned by MMG.

Liaising with BT Financial regarding the policy and paying

monthly premiums.

Liaising with the secured creditor in regards to the policy.

Making a claim on the policy.

Trading Discussions with the Director regarding the ongoing trading

of the business.

Hiring out certain MMG equipment to Mayfield and Anglo

American during the liquidations.

Collecting trading revenue from Mayfield and Anglo

American.

Creditors 222.70 hours $68,559.50 (ex GST)

Dealing with creditors Liaising with the secured creditor in relation to the sale of

assets and estimated outcome of the liquidation.

Receiving and following up creditor enquiries generally.

Reviewing and preparing correspondence to creditors and

their representatives.

Reviewing POD documents.



Employees Preparing circular to employees upon appointment.

Preparing employee redundancy letters.

Liaising with union and employees regarding employee

entitlements.

Completing employee Pay As You Go summaries.

Calculating Superannuation Guarantee Charge obligations

and liaising with the ATO in regards to obtaining a notice of

assessment.

Calculating pre-appointment employee entitlements and

receiving funds from the Department of Employment

pursuant to the FEG program.

Distributing FEG funds to employees.

Investigations 186.30 hours $65,676.50 (ex GST)

Preference claims

Liaising with MMG’s accountant in relation to information

needed for voidable transaction investigations.

Reviewing MMG's MYOB accounting software and capability,

and generating reports to determine supplier balances and

invoice payments for the period leading up to appointment

of the Voluntary Administrators.

Reviewing MMG’s emails and books & records to determine

the knowledge the ATO and suppliers had of MMG’s

financial difficulty.

Preparing excel spread sheets of supplier payments to

determine potential preferential payments.

Preparing a detailed report to the ATO in regards to

preference payments, and analysing financial statements,

cash position and insolvency of MMG.

Completing the ATO preference payment claim form.

Internal discussion to determine strategy in regards to

pursuing preference payments.

Negotiations with the ATO in regards to settlement of

preference claim.

s533 report Completing and lodging s533 report with ASIC.

Completing file note supporting conclusions and numbers

included in s533 report.

Statutory and administration 248.60 hours $71,688.00 (ex GST)

Planning / review Attending internal discussions and planning in relation to the

liquidation.

Books and records

Listing records. Arranging for storage of records. Dealing

with records in storage.

Attend warehouse to review books and records.



Document maintenance/file review/checklist

Filing of documents.

Conducting file reviews.

Updating checklists.

Banking Processing receipts and payments.

Preparing bank account reconciliations.

ASIC Form 524 and other forms

Preparing and lodging ASIC forms including 505, 524, 911

and other ASIC forms.

Dealing with Directors and their advisers

Liaising with the Directors in relation to the liquidation

including requests for assistance/confirmation of background

issues etc.

Project management Internal discussions and meetings in regards to status of job

and next steps.

Preparing estimated realisation outcomes

ATO & other statutory reporting

Notifying of appointment.

Preparing Business Activity Statements.

* Note – ‘task area’ outlined above refers to the full amount of fees incurred before the 20% discount has been applied.

Future works to be completed 10.2.4

Approval is sought at the forthcoming annual meeting of creditors for the Liquidators’ prospective remuneration of

$40,000 (excluding GST) after applying a discount of 20% to our schedule of rates previously tabled, for the period

6 August 2016 to 31 October 2016.

Key tasks required to be completed to progress the liquidation in this period include:

finalise this Annual Report to creditors and convene the annual meeting of creditors;

finalise and lodge minutes of the annual meeting;

progress and finalise the Liquidators’ investigations and pursue potential preference actions (where commercial to do

so);

report to Westpac on the finalisation of the Liquidators’ appointment to MMG;

prepare a final distribution to Westpac;

pay a first and final dividend to priority creditors;

call for PODs and adjudicate on creditor claims; and

The following resolution will be proposed at the forthcoming annual meeting of creditors convened for 24 August 2016:

“That the prospective remuneration of the Liquidators of MMG, to a maximum amount of $40,000 (excluding GST),

calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided

to creditors, after applying a discount of 20% for the period from 6 August 2016 until the work undertaken in the

estimation of remuneration is complete, or the time charged for work undertaken exceeds the approved fee amount

(whichever occurs first), is hereby approved for payment, from funds on hand or as and when they come to hand”.


The estimate of work to be done by the Liquidators and their staff is set out below, and a schedule of estimated fees by

staff member during this period is detailed at Appendix D of this report.



Reporting to creditors Finalise and issue this Annual Report to creditors.

Hold the annual meeting of creditors on 24 August 2016.

Prepare and finalise minutes of the creditors meeting.

Manage and respond to queries regarding MMG.

Review and prepare correspondence to creditors and their

representatives.

Call for Proofs of debt and adjudicate on creditor claims.

Secured creditor Provide verbal and written updates to secured creditor

regarding status of the liquidation.

Manage and respond to queries from Westpac.

Pay final distribution to Westpac under its GSA.

Priority creditors Pay final distribution to the ATO and the Department of

Employment.

Manage and respond to priority creditor queries.


Liquidators’ investigations Finalise investigations in relation to voidable transactions.

Consider potential supplier preference payments and

commerciality of pursing.

Distribute letters to third party suppliers.

Obtain legal advice and liaising with defendants and their

advisors where required.

Finalise Liquidators’ investigation file.


Statutory tasks and lodgements

Completing statutory lodgements with ASIC for creditors

meetings.

Prepare, review and submit with ASIC six monthly form 524.

Complete file checklists to ensure compliance.

Preparing and lodging ongoing ATO BAS returns.


Liquidation.

Banking Prepare payment and receipt vouchers.

Reviewing and approving payments.

Review and reconcile Liquidators’ bank account.



MMG D&B 10.3

Approval received 10.3.1

At the second meeting of creditors held on 6 July 2015, there were no fee resolutions put to the meeting of creditors.

Summary Approval sought 10.3.2

This remuneration report details approval sought for the following fees:

Period Report

reference

Amount

(ex GST)

Current remuneration approval sought:

Resolution 3: 1 June 2015 – 6 July 2015 (VA period)* 10.3.3.1 $18,544.40

Resolution 4: 6 July 2015 – 5 August 2016* 10.3.3.2 $42,070.80

Resolution 6: 6 August 2016 until estimated completion* ** 10.3.4 $20,000.00

Total** $80,615.20

* Remuneration approval sought at a 20% discount on the rates included in the Schedule of Remuneration Methods and

Hourly Rates.

** Approval for the future remuneration sought is based on an estimate of the work necessary to progress the liquidation.

If additional work is necessary beyond what is contemplated, a further report will be provided and approval sought from

creditors.

Approval sought for Liquidators’ actual remuneration 10.3.3

Voluntary Administration Period 10.3.3.1

Approval is sought at the forthcoming annual meeting of creditors for the Voluntary Administrators’ actual remuneration

of $18,544.40 (excluding GST) after applying a discount of 20% to our schedule of rates previously tabled, for the period

1 June 2015 to 6 July 2015 with the following resolution proposed:

“That the remuneration of the Voluntary Administrators of MMG D&B for the period 1 June 2015 to 6 July 2015 in

the amount of $18,544.40 (excluding GST) calculated at the hourly rates as detailed in the Schedule of Remuneration

Methods and Hourly Rates, after applying a discount of 20%, is hereby approved for payment from funds on hand”.

A description of tasks that have been performed by the Voluntary Administrators and their staff is set out below and a

schedule of actual fees incurred by staff member during this remuneration period is detailed at Appendix E of this report.



Cash Assessed the pre-appointment cash position.

Wrote to major Australian banks to identify bank accounts

held by MMG D&B.



Assets Reviewed information relating to the group structure and

asset ownership.

Reviewed historical company information to identify potential

assets.

Discussions with the Director and other stakeholders in

relation to assets.

Liaised with valuers in relation to valuation of asset portfolio.

Attending to and executing documents as required.

Liaising with all relevant parties.

Preparation for auction of surplus assets including liaising

with asset valuers and auctioneers.

Leased property Identified leased equipment and conducted an assessment of

ongoing requirements.

Identified leased equipment surplus to MMG D&B’s

requirements.

Issued notices not to exercise property rights over surplus

leased property.

Issued notices advising of intention to exercise property

rights over leased property in use.

Asset sale and Financiers

Considered the optimal method to realise the assets of the

business.

Initiated a sale process for the business assets.

Meeting and liaising with representatives from Tiger Asset

Group regarding the valuation and sale process of assets.

Communicating with principal financiers advising of the

position of MMG D&B and the sale process.

Liaising with the Administrators’ legal advisors in relation to

the sale process.


Secured creditors Undertook detailed discussions with Westpac regarding their

facilities, the conduct of the Administration and their

estimated return.

Various correspondences with Westpac.

Liaised with financiers to discuss MMG D&B’s requirements

going forward.

Creditor enquiries Liaised with creditors in relation to their claims and the

administration generally.

Reviewed and prepared correspondence to creditors and

their representatives via facsimile, email and post.

Wrote to PPSR creditors requesting information regarding



their claims.

Reviewing PPSR creditor claims.

Creditor reports Prepared creditor reports and notifications (including our

initial circular to creditors and notice of first meeting of

creditors, and DIRRI).

Commenced the preparation of the s439A report and

notifications.

Preparing and distributing the s439A report and notifications.

Dealing with proofs of debt

Reviewed proofs of debt received by the Administrators.

Meeting of creditors Convened the first meeting of creditors held on

12 June 2015.

Prepared for and attended the first meeting of creditors

including preparing the meeting circular, notices, proxies, and

advertisements and co-ordinating meeting logistics.

Prepared meeting file including: Chairman’s notes, agenda,

certificate of postage, attendance register and list of

creditors.

Responded to creditors’ queries and questions immediately

following the meeting of creditors.

Prepared and lodged the minutes to the meeting of creditors

to ASIC.

Convening the second meeting of creditors to be held on 6

July 2015.

Forwarding notice of second meeting to all known creditors.

Preparing for and attending the second meeting of creditors

including preparing the meeting circular, notices, proxies, and

advertisements.

Preparing meeting file including; Chairman’s notes, agenda,

certificate of postage, attendance register, list of creditors,

and advertisement of meeting.

Lodging minutes of meeting of creditors with ASIC.




Conducting investigation Preparing s439A Report.

Various discussions with the Director and key management staff with respect to the financial position and history of MMG D&B.

Reviewing potential liquidator recoveries including unfair preferences, insolvent trading and uncommercial transactions.

Reconstructing historical financial information of MMG D&B.

Conducting further comprehensive investigations to enable the completion of the s439A Report to creditors.

Statutory and Administration 14.30 hours $5,387.00 (ex GST)

Dealing with Director and his advisor

Prepared the notice to Director and the relevant Director’s

pack.

Liaised with the Director regarding the completion of the

RATA.

Wrote to the Director advising of the Director’s obligations

and granting extension of time to complete the RATA.

Liaised with the Director and his advisor regarding DOCA

proposal.

Ongoing correspondence with the Directors with respect to

the Administration, including responding to queries.

Continuing to address queries with respect to preparation of

the RATA.

Planning / review Consider various pieces of information in relation to claims

and disputes, set actions plans, agree priorities and

deadlines.

Review project information, set strategy action plans, agree

priorities, brief lawyers, meetings to instruct staff, meetings

with stakeholders to source information.

Employees Investigating unpaid superannuation claims.

Books and records Attended MMG D&B’s offices to obtain information in

relation to the company’s books and records.

Reviewed and prepared an inventory of MMG D&Bs

company books and records.

Other Reviewing group structure, sourcing and reviewing

background information on various transactions. Identifying

issues relating to the administration, asset realisation and

assessing impact on creditors.

Preparing and lodging statutory lodgements with ASIC.



Insurance Attended to putting in place insurance coverage.

Liaised with the insurance broker regarding the

pre-appointment insurance policy.

Ensured the continuation of the pre-appointment life

insurance policies.

Wrote to Westpac requesting authority for disclosure in

relation to MMG D&B’s life insurance policies.

Statutory notices Prepared and lodged statutory lodgements with ASIC.

Prepared and sent notices to other statutory authorities (e.g.

the ATO and State Revenue offices) and financial institutions

of our appointment.

Banking Set up post-appointment bank accounts.


Liquidation period 10.3.3.2

Approval is sought at the forthcoming annual meeting of creditors for the Liquidators’ actual remuneration of $42,070.80

(excluding GST) after applying a discount of 20% to our schedule of rates previously tabled, for the period 6 July 2015 to

5 August 2016 with the following resolution proposed:

“That the remuneration of the Liquidators of MMG D&B for the period 6 July 2015 to 5 August 2016 in the amount

of $42,070.80 (excluding GST) calculated at the hourly rates as detailed in the Schedule of Remuneration Methods

and Hourly Rates, after applying a discount of 20% is hereby approved for payment from funds on hand”.

A description of tasks that have been performed by the Liquidators and their staff is set out below and a schedule of

actual fees incurred by staff member during this remuneration period is detailed at Appendix F of this report.



Asset realisation Liaising with interested parties.

Receiving, reviewing and responding to indicative offers from

interested parties.

Ongoing correspondence with Financiers regarding the asset

sale process.

Reviewing auctioneer proposals and engaging Grays to

undertake valuation and sale of MMG D&B’s assets.

Liaising with Grays regarding asset control and sale process.

Review insurance of assets / organising for ongoing

insurance cover.

Discussion with Grays regarding auction and reviewing

valuation.

Reviewing auction results and asset sale distribution

reconciliation.

Liaising with lawyers regarding the sale of assets.



Executing documents and attending to sale completion

matters.

Liaising with relevant parties regarding renewal of

registrations for assets where required.

Ongoing correspondence with the secured creditor and

financiers regarding the asset sale process.

Distributing proceeds from the sale of assets to the financier

and secured creditor.

Liaising with Mayfield in regards to the sale of light motor

vehicles and attending to sale matters.

Life insurance policy Understanding the Director life insurance policy owned by

MMG D&B.

Liaising with BT Financial regarding the policy and paying

monthly premiums.

Liaising with the secured creditor in regards to the policy.

Making a claim on the policy.

Trading Discussions with the Director regarding the ongoing trading

of the business.

Hiring out certain MMG D&B equipment to Mayfield and

Anglo American during the liquidations.

Collecting trading revenue from Mayfield and Anglo

American.

Creditors 23.80 hours $8,562.00(ex GST)

Dealing with creditors Liaising with the secured creditor in relation to the sale of

assets and estimated outcome of the liquidation.

Liaising with creditors in relation to their claims and the

liquidation generally.

Reviewing and preparing correspondence to creditors and

their representatives.

Reviewing POD documents.

Employees Calculating Superannuation Guarantee Charge.

Liaising with HWL Ebsworth regarding employee workers

compensation claims.


Preference claims Liaising with MMG D&B’s accountant in relation to

information needed for voidable transaction investigations.

Reviewing MMG D&B's MYOB accounting software and

capability, and generating reports to determine supplier

balances and invoice payments for the period leading up to

appointment of the Voluntary Administrators.

Reviewing MMG D&B’s emails and books & records to

determine the knowledge the ATO and suppliers had of



MMG’s financial difficulty.

Preparing excel spread sheets of supplier payments to

determine potential preferential payments.

Preparing a detailed report to the ATO in regards to

preference payments, and analysing financial statements,

cash position and insolvency of MMG D&B.

Completing the ATO preference payment claim form.

Internal discussion to determine strategy in regards to

pursuing preference payments.

Negotiations with the ATO in regards settlement of

preference claim.

s533 report Preparing and lodging report pursuant to s533 of the Act

with ASIC.

Completing file note supporting conclusions and numbers

included in s533 report.

Statutory and administration 49.30 hours $17,856.00(ex GST)


liquidation.

Books and records Listing company books and records. Arranging for storage

of records. Dealing with records in storage.

Attend warehouse to review books and records.

Document maintenance/file review/checklist

Filing of documents.

Conducting file reviews.

Updating checklists.

Banking Processing receipts and payments.

Preparing bank account reconciliations.

ASIC Form 524 and other forms

Preparing and lodging ASIC forms including 505, 524, 911

and other ASIC forms.

Dealing with Directors and their advisers

Liaising with the Directors in relation to the liquidation

including requests for assistance/confirmation of background

issues etc.

Project management Internal discussions and meetings in regards to status of job

and next steps.

Preparing estimated realisation outcomes

ATO & other statutory reporting

Notifying of appointment.

Preparing Business Activity Statements.



Future works to be completed 10.3.4

Approval is sought at the forthcoming annual meeting of creditors for the Liquidators’ prospective remuneration of

$20,000 (excluding GST) after applying a discount of 20% to our schedule of rates previously tabled, for the period

6 August 2016 until the liquidation has been finalised.

Key tasks required to be completed to progress and finalise the liquidation include:

finalise this Annual Report to creditors and convene the annual meeting of creditors;

finalise and lodge minutes of the annual meeting;

report to Westpac on the finalisation of the Liquidators’ appointment;

prepare and pay a final distribution to Westpac;

pay a first and final dividend to priority creditors; and

statutory finalisation tasks including lodging final returns and deregistering MMG D&B.

The following resolution will be proposed at the forthcoming annual meeting of creditors convened for 24 August 2016:

“That the prospective remuneration of the Liquidators of MMG D&B, to a maximum amount of $20,000 (excluding

GST) calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates

provided to creditors, after applying a discount of 20% for the period from 6 August 2016 until the work undertaken

in the estimation of remuneration is complete, or the time charged for work undertaken exceeds the approved fee

amount (whichever occurs first), is hereby approved for payment, from funds on hand or as and when they come to

hand”.

The estimate of work to be done by the Liquidators and their staff is set out below and a schedule of estimated fees by

staff member during this period is detailed at Appendix G of this report.



Reporting to creditors Finalise and issue this Annual Report to creditors.

Hold the annual meeting of creditors on 24 August 2016.

Prepare and finalise minutes of the creditors meeting.

Manage and respond to queries regarding MMG D&B.

Review and prepare correspondence to creditors and their

representatives.

Secured creditor Provide verbal and written updates to secured creditor

regarding status of the liquidation.

Manage and respond to queries from Westpac.

Pay final distribution to Westpac under its GSA.

Priority creditors Pay final distribution to the ATO.

Manage and respond to priority creditor queries.


Liquidators’ investigations Finalise investigations in relation to voidable transactions.

Consider potential supplier preference payments and

commerciality of pursing.

Distribute letters to third party suppliers.

Finalise liquidator’s investigation file.




Statutory tasks and lodgements

Completing statutory lodgements with ASIC for creditors

meetings.

Prepare, review and submit with ASIC six monthly form 524.

Complete file checklists to ensure compliance.

Preparing and lodging ongoing ATO BAS returns.

Arranging for cancellation and deregistration of MMG D&B.


Liquidation.

Conducting file review.

Banking Prepare payment and receipt vouchers.

Reviewing and approving payments.

Review and reconcile Liquidators’ bank account.


Disbursements 10.4

Disbursements include costs incurred on behalf of the Companies in the course of conducting the liquidation and may be

paid directly from the liquidation bank account.

Other disbursements are paid for by the Liquidators and are recovered from the Liquidation bank account.

Disbursements of this nature which are not yet reflected in the Receipts and Payments are:

Disbursements - excluding GST to 5 August 2016

Disbursement type ($)

Accommodation, meals and travel 888

Trading expenses (motor vehicle expenses) 1,884

Postage, printing and copying 1,171

Statutory charges and searches 322

Total 4,265


Books and records 11

Pursuant to Section 542 of the Act, the Liquidators must retain the books and records of a company in liquidation for a

period of 5 years from the date of deregistration.

Section 524(3) of the Act states that the books and records of a company in liquidation may be destroyed prior to this

date subject to the approval of a resolution put to the creditors of the company.

Accordingly, the following resolution will be put to the creditors of the Companies at the forthcoming annual meetings of

creditors:

“That the books and records of the Companies may be destroyed following the deregistration of the Companies,

subject to the consent of ASIC being obtained”.


Creditor meeting details 12

The annual meetings of creditors have been convened to be held at McGrathNicol, Level 12, 20 Martin Place, Sydney NSW

2000, on 24 August 2016, commencing at 12:00pm.

Creditors who have already lodged a proof of debt do not need to complete a new proof.

Under the Act, the proxy forms lodged by creditors for prior creditors meetings cannot be used for the annual meeting.

Accordingly, creditors who are unable to attend the meeting and wish to be represented should ensure that either a proxy

form, power of attorney or evidence of appointment of a company representative is completed. Documents may be

lodged with me prior to the meeting or may be brought to the meeting.

A formal notice of meeting, proof of debt form and proxy form are attached to this report.

Teleconference facilities 12.1

Creditors wishing to attend by telephone are advised they can utilise a conference facility, please contact Timothy Duncan

of my staff on (02) 9248 9913 to obtain the telephone conference details.

Creditors wishing to participate in the meeting by telephone must return to the convenor of the meeting not later than

the second last working day before the day of the meeting (i.e. by 22 August 2016):

a written statement setting out the name of the person and of the proxy or attorney, (if any);

an address to which notices to the person, proxy or attorney may be sent;

a telephone number at which the person, proxy or attorney may be contacted; and

any facsimile number to which notices to the person, proxy or attorney may be sent.

A person, or the proxy or attorney of a person who participates in the meeting by telephone, must pay any costs incurred

in participating and is not entitled to be reimbursed for those costs from the assets of the Companies.

Creditors who require any other details should please contact Timothy Duncan of this office on (02) 9248 9913 or by email

([email protected]).

Dated: 10 August 2016.

Jason Preston


Appendices:

Appendix A: DIRRI

Appendix B: Receipts and payments for the Companies

Appendix C: MMG - Actual Liquidators’ fees for the period 6 July 2015 to 5 August 2016

Appendix D: MMG - Liquidator’s prospective remuneration for the period 6 August 2016 to 31 October 2016

Appendix E: MMG D&B – Actual Voluntary Administrators’ remuneration for the period 1 June 2015 to 6 July 2015

Appendix F: MMG D&B – Actual Liquidators’ remuneration for the period 6 July 2015 to 5 August 2016

Appendix G: MMG D&B – Liquidators’ prospective remuneration for the period 6 August 2016 to finalisation


APPENDIX A: Declaration of Independence, relevant relationships and indemnities

Mining Management Group Pty Limited ACN 112 172 022 (Administrators Appointed)

(“MM Group”)

MMG Drill & Blast Pty Limited ACN 122 840 582 (Administrators Appointed)

(“MMG Drill & Blast”)

(“Mining Management Group” or “the Companies”)

The Corporations Act 2001 and professional standards require the Practitioner/s appointed to an insolvent entity to

make a declaration as to:

their independence generally; A.

relationships, including B.

a) the circumstances of the appointment;

b) any relationships with the company and others within the previous 24 months;

c) any prior professional services for the company within the previous 24 months;

d) that there are no other relationships to declare; and

any indemnities given or up-front payments made to the Practitioner. C.

This declaration is made in respect of ourselves, our partners and the firm McGrathNicol.

Independence A.

We, Jason Preston and Rob Kirman of the firm McGrathNicol have undertaken a proper assessment of the risks to

our independence prior to accepting the appointment as Administrators of the Companies in accordance with the

law and applicable professional standards. This assessment identified no real or potential risks to our independence.

We are not aware of any reasons that would prevent us from accepting this appointment.

Declaration of Relationships B.

Circumstances of appointment (i)

We were introduced to Phillip Gunter, the Director of the Companies by Dermott McVeigh of Avior Consulting, who

was assisting the Companies to restructure the business. We had various correspondences (by telephone, email and

in person) with the Companies and their advisors during the period from 25 May 2015 to 1 June 2015, including the

following:

Rob Kirman received a telephone call from Dermott McVeigh on 25 May 2015 to advise that the

Companies were experiencing financial difficulty and to arrange a conference call with the Director for the

next day.

Rob Kirman met with Dermott McVeigh on 26 May 2015 and held a teleconference with the Director and

his wife, Leona Gunter and following this was sent a number financial records of the Companies.

Jason Preston met with the Director and his wife on 28 May 2015 with Rob Kirman and Dermott McVeigh

dialling in by way of a teleconference. Jason Preston then met with Westpac and Rodgers Reidy (as

advisors to Westpac) and the Director and his wife later that same day.

Jason Preston, Barry Kogan (another Partner at McGrathNicol) and Chris King (a Senior Manager of

McGrathNicol) met with the Director and his wife in person on 29 May 2015.

The purpose of these discussions was to:

understand the Companies’ businesses and operations;

Declaration of Independence, Relevant Relationships and Indemnities

understand the Companies’ current financial position;

discuss alternative courses of action available to the Companies; and

provide general information about various insolvency processes.

We did not receive any remuneration for our attendances at these meetings.

On 1 June 2015, the Director of the Companies resolved to appoint Jason Preston and Rob Kirman as Voluntary

Administrators.

In our opinion, the above matters do not affect our independence for the following reasons:

it is recognised by the Courts and the Australian Restructuring Insolvency and Turnaround Association’s

Code of Professional Practice that pre-appointment advice on the insolvency process and available options

is necessary and does not amount to an impediment to accepting an appointment;

it was limited to the topics listed above, principally to understanding the Companies’ financial

circumstances and options available to them; and

the nature of the advice provided was such that it would not be subject to review and challenge during the

course of the administration. Nor would the advice influence our ability to be able to fully comply with the

statutory and fiduciary obligations associated with the administration in an objective and impartial manner.

We have provided no other information or advice to the Companies, their Director or advisors prior to our

appointment beyond that outlined in this DIRRI. Further information regarding our prior professional relationship

with Avior Consulting is detailed below.

Relevant Relationships (excluding professional services to the Insolvent) (ii)

We or a member of our firm, have or have had within the preceding 24 months, a relationship with:

Name Nature of relationship Reasons

Dermott McVeigh

Avior Consulting

Avior Consulting acted as financial advisors to the Companies and referred the Companies to McGrathNicol in order to discuss insolvency options, resulting in our appointment as Voluntary Administrators.

Rob Kirman of McGrathNicol has a professional relationship with Dermott McVeigh, a director of Avior Consulting. This is the first referral McGrathNicol has received from Avior Consulting.

We believe this relationship does not result in a conflict of interest or duty because:

McGrathNicol has not undertaken any

previous engagement for Avior Consulting

in respect of the Companies.

The relationship with Dermott McVeigh and

Avior Consulting is a professional

relationship.

The referral is unconditional.

Professional relationships between business

advisors are common practice and there

are no arrangements between

McGrathNicol or its partners, Avior

Consulting or Dermott McVeigh that

impact our independence in carrying out

our duty as administrators.

Given these factors, our independence in acting as

Voluntary Administrators of the Companies has not

been affected.

Westpac Banking Corporation

Westpac holds a circulating and non-circulating security interest


(‘Westpac”)

over the whole or substantially the whole of the property of MM Group.

McGrathNicol undertakes corporate recovery and advisory work from time to time on instructions from Westpac.

Each professional engagement undertaken

for Westpac in relation to a particular entity

or group of entities is conducted on an

entirely separate basis which has no

bearing on this appointment.

These engagements are only commenced

after full regard is given to potential

conflicts of interest in relation to all

interested stakeholders.

McGrathNicol has not undertaken an

engagement for Westpac for MM Group

previously.

Given these factors, our independence in acting as Voluntary Administrators of MM Group has not been affected.

Bank of Queensland (“BOQ”)

BOQ holds a circulating and non-circulating security interest over the whole or substantially the whole of the property of MMG Drill & Blast.

McGrathNicol undertakes corporate recovery and advisory work from time to time on instructions from BOQ.


Each professional engagement undertaken

for BOQ in relation to a particular entity or

group of entities is conducted on an

entirely separate basis which has no

bearing on this appointment.

These engagements are only commenced

after full regard is given to potential

conflicts of interest in relation to all

interested stakeholders.

McGrathNicol has not undertaken an

engagement for BOQ for MMG Drill &

Blast previously.

Given these factors, our independence in acting as Voluntary Administrators of MMG Drill & Blast has not been affected.

Prior professional services to the Insolvent (iii)

Neither we nor our firm, have provided any professional services to the Companies in the previous 24 months.

No other relevant relationships to disclose (iv)

There are no other known relevant relationships, including personal, business and professional relationships, from

the previous 24 months with the Companies, an associate of the Companies, a former insolvency practitioner

appointed to the Companies or any person or entity that has security over the whole or substantially whole of the

Companies’ property that should be disclosed.

Indemnities and Up-front Payments C.

We have not been indemnified in relation to this Administration, other than any indemnities that we may be entitled

to under statute and we have not received any up-front payments in respect of our remuneration or disbursements.

Appointments to Members of a Corporate Group D.

As specified on page one of this Declaration, the administrators/liquidators have been appointed as Voluntary

Administrators of two companies within the Mining Management Group of companies, Mining Management Group

Pty Limited and MMG Drill & Blast Pty Limited.

The Voluntary Administrators are of the view that the appointment to the Companies will have significant benefits

to the conduct of the Administrations, particularly in that this will provide for cost-savings and enable an accurate as

possible view to be obtained of the activities and financial position of the Companies as a whole. The Voluntary

Administrators are aware that there may be inter-company transactions between the Companies but at this time are

not aware of any potential conflicts of interest arising from the appointments over the Companies. However, to the

extent it becomes apparent that pre-appointment dealings between the Companies may give rise to a conflict which

may impact the outcome for creditors of either company, then the Voluntary Administrators undertake to disclose

any such conflicts to the creditors and if appropriate, seek Court directions as to the means of resolving the

potential conflict.

Dated: 4 June 2015

.......................................................................... ..............................................................................

Jason Preston Rob Kirman

Note:

1 If the circumstances change or new information is identified, we are required under the Corporations Act

2001 and the ARITA Code of Professional Practice to update this Declaration and provide a copy to the

creditors/Committee with our next communication, as well as table a copy of any replacement Declaration

at the next meeting of the insolvent’s creditors/Committee.

2 Any relationships, indemnities or up-front payments disclosed in the Declaration of Independence, Relevant

Relationships and Indemnities (DIRRI) must not be such that the Practitioner is no longer independent. The

purpose of components B and C of the DIRRI is to disclose relationships that, while they do not result in

the Practitioner having a conflict of interest or duty, ensure that creditors are aware of those relationships

and understand why the Practitioner nevertheless remains independent.

Please note that the presentation of the above information is in accordance with the standard format suggested by

ARITA.


APPENDIX B: Receipts and Payments

B1 MMG

Receipts and payments for MMG for the period 1 June 2015 to 27 July 2016

Account Total ($)

Receipts

Opening cash balance 108,598

Pre-appointment debtors 213,205

Post-appointment trading revenue 127,778

Proceeds from Heavy and Light Motor Vehicles 325,667

Proceeds from Mayfield light motor sale 136,401

Proceeds from B61 asset sale 19,000

Proceeds from office assets 1,128

Willis insurance refunds 10,366

ATO preference recovery 550,000

FEG advance 55,051

Interest income 1,426

Other trading receipts 4,640

GST received from the ATO 11,123

Life insurance payment 2,073,517

Total receipts 3,637,900

Payments

Legal fees (105,233)

Voluntary Administrators' fees and disbursements (148,740)

Life insurance premiums (33,331)

Motor vehicle insurance (22,354)

Stamp duty (358)

Repairs and maintenance (21,262)

Agents' fees and commission (23,532)

Marketing and advertising costs (11,838)

Freight (142)

Rental expense (2,333)

Bank charges (134)

Books and records (8,915)

Utilities (843)

Sundry trading expenses (5,610)

Wages & Salaries (34,094)

Employee reimbursements (501)

FEG claim distribution (55,051)

Superannuation (salary sacrifice witheld) 4,690

Superannuation paid (7,785)

GST paid to the ATO (60,640)

Secured creditor distribution (41,954)

Distribution to leased vehicle financiers (79,046)

Asset valuation fee (9,042)

Total payments (668,049)

Net receipts (payments) for the period 2,969,851


B2 MMG D&B

Receipts and payments for D&B for the period 1 June 2015 to 27 July 2016

Account Total ($)

Receipts

Opening cash balance 8,761

Pre-appointment debtors 6,759

Post-appointment trading revenue 38,423

Proceeds from Heavy and Light motor vehicles 78,560

Proceeds from Mayfield light motor sale 37,595

ATO preference recovery 50,000

Interest income 237

Other trading receipts 1,940

Life insurance payment 888,989

Total receipts 1,111,264

Payments

Legal fees (30,385)

Life insurance premiums (16,380)

Motor vehicle insurance (2,194)

Stamp duty (90)

Repairs and maintenance (37)

Agents' fees and commission (4,544)

Marketing and advertising costs (1,571)

Rental expense (280)

Bank charges (95)

GST paid to the ATO (9,154)

Secured creditor distribution (33,000)

Distribution to leased vehicle financier (44,002)

Asset valuation fee (2,220)

Total payments (143,953)

Net receipts (payments) for the period 967,311


APPENDIX C: MMG - Actual Liquidators’ fees for the period 6 July 2015 to 5 August 2016

Mining Management Group Pty Ltd (In Liquidation)

Remuneration for the period 6 July 2015 to 5 August 2016

Employee Position hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST)

Jason Preston Partner 690 3.50 2,415.00 3.50 2,415.00 - - - - - -

Rob Kirman Partner 690 2.40 1,656.00 - - 0.30 207.00 - - 2.10 1,449.00

Rosemary Winser Director Professional Practice 580 3.30 1,914.00 - - - - - - 3.30 1,914.00

Damien Pasfield Director 580 0.40 232.00 - - 0.40 232.00 - - - -

Damien Pasfield Senior Manager 515 5.60 2,884.00 0.60 309.00 4.10 2,111.50 0.50 257.50 0.40 206.00

Chris King Senior Manager 515 178.00 91,670.00 40.70 20,960.50 38.10 19,621.50 83.40 42,951.00 15.80 8,137.00

Trent Whitbourn Manager 410 13.40 5,494.00 - - 13.40 5,494.00 - - - -

Michael Gray Manager 410 1.00 410.00 - - 1.00 410.00 - - - -

Andrew McEvoy Assistant Manager 370 108.70 40,219.00 - - - - 3.50 1,295.00 105.20 38,924.00

Kate Versey Assistant Manager 370 5.10 1,887.00 5.10 1,887.00 - - - - - -

Hemma Acharya Senior Accountant 285 13.00 3,705.00 - - - - - - 13.00 3,705.00

Timothy Duncan Senior Accountant 285 18.70 5,329.50 18.00 5,130.00 0.70 199.50 - - - -

Timothy Duncan Accountant 245 457.60 112,112.00 150.50 36,872.50 148.90 36,480.50 138.20 33,859.00 20.00 4,900.00

Deidre Math Accountant 245 8.50 2,082.50 - - - - - - 8.50 2,082.50

Joshua Crick Accountant 245 22.90 5,610.50 3.50 857.50 2.00 490.00 - - 17.40 4,263.00

Trent Williams Treasury Manager 210 1.80 378.00 - - 1.80 378.00 - - - -

Various Client Admin/Treasury 160 39.30 6,288.00 0.80 128.00 37.90 6,064.00 - - 0.60 96.00

Total (excluding GST) 883.20 284,286.50 222.70 68,559.50 248.60 71,688.00 225.60 78,362.50 186.30 65,676.50

Discount (20%) 56,857.30

Total including discount 227,429.20

GST 22,742.92

Total (including GST) 250,172.12

Rate

$/hr

Total Creditors Statutory and Administration Assets Investigations


APPENDIX D: MMG – Liquidators’ prospective remuneration for the period 6 August 2016 to 31 October 2016

Mining Management Group Pty Ltd (In Liquidation)

Remuneration for the period 6 August 2016 to 31 October 2016


Jason Preston Partner 690 11.00 7,590.00 6.00 4,140.00 2.00 1,380.00 - - 3.00 2,070.00

Rob Kirman Partner 690 0.50 345.00 - - - - - 0.50 345.00

Rosemary Winser Director Professional Practice 580 1.50 870.00 0.50 290.00 - - - - 1.00 580.00

Damien Pasfield Senior Manager 580 17.00 9,860.00 6.00 3,480.00 5.00 2,900.00 - - 6.00 3,480.00

Andrew McEvoy Assistant Manager 370 20.50 7,585.00 15.00 5,550.00 0.50 185.00 - - 5.00 1,850.00

Timothy Duncan Senior Accountant 285 30.00 8,550.00 15.00 4,275.00 5.00 1,425.00 - - 10.00 2,850.00

Joshua Crick Accountant 245 60.00 14,700.00 30.00 7,350.00 15.00 3,675.00 - - 15.00 3,675.00

Various Client Admin/Treasury 160 7.00 1,120.00 4.00 640.00 3.00 480.00 - - - -

Total (excluding GST) 147.50 50,620.00 76.50 25,725.00 30.50 10,045.00 - - 40.50 14,850.00

Discount (20%) 10,124.00


GST 4,049.60


Rate

$/hr



APPENDIX E: MMG D&B – Voluntary Administrators’ remuneration for the period 1 June 2015 to 6 July 2015 (as

reported in the s439A Report to creditors)

MMG D&B - remuneration for period 1 June 2015 to 19 June 2015 (actual)

Rate

Position Position $/hr (ex GST) Hours Amount Hours Amount Hours Amount Hours Amount Hours Amount

Rob Kirman Partner 690 2.00 1,380.00 0.40 276.00 0.80 552.00 - - 0.80 552.00

Jason Preston Partner 690 2.10 1,449.00 - - 0.50 345.00 - - 1.60 1,104.00

Barry Kogan Partner 690 0.60 414.00 0.20 138.00 - - - - 0.40 276.00

Rosemary Winser Director Professional Practice 580 1.20 696.00 - - 1.20 696.00 - - - -

Chris King Senior Manager 515 3.10 1,596.50 1.50 772.50 1.10 566.50 - - 0.50 257.50

Andrew McEvoy Assistant Manager 370 8.90 3,293.00 - - 2.20 814.00 6.70 2,479.00 - -

Summer Nguyen Assistant Manager 370 0.80 296.00 - - 0.80 296.00 - - - -

Timothy Duncan Accountant 245 20.40 4,998.00 2.00 490.00 11.40 2,793.00 1.50 367.50 5.50 1,347.50

Various Client Admin/Treasury 160 3.30 528.00 - - 1.30 208.00 - - 2.00 320.00

Total (excluding discount) 42.40 14,650.50 4.10 1,676.50 19.30 6,270.50 8.20 2,846.50 10.80 3,857.00

Discount (20%) 2,930.10

Total (including discount) 11,720.40


Total Assets Creditors Investigations

Statutory and

Administration

MMG D&B - remuneration for period 20 June 2015 to 6 July 2015 (estimate)

Rate

Position Position $/hr (ex GST) Hours Amount Hours Amount Hours Amount Hours Amount Hours Amount

Jason Preston Partner 690 2.00 1,380.00 1.00 690.00 - - - - 1.00 690.00

Chris King Senior Manager 515 8.00 4,120.00 5.00 2,575.00 - - 2.00 1,030.00 1.00 515.00

Andrew McEvoy Assistant Manager 370 4.00 1,480.00 - - - - 4.00 1,480.00 - -

Timothy Duncan Accountant 245 6.00 1,470.00 2.00 490.00 1.00 245.00 2.00 490.00 1.00 245.00

Various Client Admin/Treasury 160 0.50 80.00 - - - - - - 0.50 80.00

Total (excluding discount) 20.50 8,530.00 8.00 3,755.00 1.00 245.00 8.00 3,000.00 3.50 1,530.00

Discount (20%) 1,706.00

Total (including discount) 6,824.00


Total Assets Creditors Investigations

Statutory and

Administration


APPENDIX F: MMG D&B – Actual Liquidators’ remuneration for the period 6 July 2015 to 5 August 2016

MMG Drill & Blast Pty Ltd (In Liquidation)

Remuneration for the Liquidation period 6 July 2015 to 5 August 2016


Jason Preston Partner 690 9.60 6,624.00 - - 9.60 6,624.00 - - - -

Rob Kirman Partner 690 2.00 1,380.00 - - 0.40 276.00 - - 1.60 1,104.00

Barry Kogan Partner 690 0.30 207.00 0.30 207.00 - - - - - -

Rosemary Winser Director Professional Practice 580 10.80 6,264.00 0.50 290.00 1.20 696.00 - - 9.10 5,278.00

Damien Pasfield Director 580 0.40 232.00 - - 0.40 232.00 - - - -

Damien Pasfield Senior Manager 515 0.30 154.50 - - 0.30 154.50 - - - -

Chris King Senior Manager 515 28.30 14,574.50 8.30 4,274.50 8.10 4,171.50 10.90 5,613.50 1.00 515.00

Andrew McEvoy Assistant Manager 370 27.30 10,101.00 - - - - - - 27.30 10,101.00

Kate Versey Assistant Manager 370 1.00 370.00 1.00 370.00 - - - - - -

Timothy Duncan Senior Accountant 285 2.30 655.50 1.60 456.00 0.70 199.50 - - - -

Timothy Duncan Accountant 245 37.20 9,114.00 12.10 2,964.50 10.90 2,670.50 10.80 2,646.00 3.40 833.00

Various Client Admin/Treasury 160 18.20 2,912.00 - - 17.70 2,832.00 - - 0.50 80.00

Total (excluding GST) 137.70 52,588.50 23.80 8,562.00 49.30 17,856.00 21.70 8,259.50 42.90 17,911.00

Discount (20%) 10,517.70


GST 4,207.08


Rate

$/hr



APPENDIX G: MMG D&B – Liquidators’ prospective remuneration for the period 6 August 2016 to 31 October 2016

MMG Drill & Blast Pty Ltd (In Liquidation)

Remuneration for the Liquidation period 6 August 2016 to finalisation


Jason Preston Partner 690 6.50 4,485.00 3.00 2,070.00 3.00 2,070.00 - - 0.50 345.00

Rob Kirman Partner 690 - - - - - - - - - -

Damien Pasfield Director 580 11.00 6,380.00 5.00 2,900.00 5.00 2,900.00 - - 1.00 580.00

Andrew McEvoy Assistant Manager 370 - - - - - - - - - -

Timothy Duncan Senior Accountant 285 24.00 6,840.00 12.00 3,420.00 10.00 2,850.00 - - 2.00 570.00

Joshua Crick Accountant 245 30.00 7,350.00 14.00 3,430.00 14.00 3,430.00 - - 2.00 490.00

Various Client Admin/Treasury 160 - - - - - - - - - -

Total (excluding GST) 71.50 25,055.00 34.00 11,820.00 32.00 11,250.00 - - 5.50 1,985.00

Discount (20%) 5,011.00


GST 2,004.40


Rate

$/hr


FORM 529

Corporations Act (2001)

Subregulation 5.6.12 (2)

NOTICE OF ANNUAL MEETING OF

CREDITORS




Notice is given that the annual meetings of creditors of the Companies will be held concurrently at McGrathNicol,

Level 12, 20 Martin Place, Sydney NSW 2000 on Wednesday, 24 August 2016 at 12:00 PM.

The purpose of the meetings is to:

1. To consider the Liquidators’ report in relation to the Companies’ affairs and any other matters raised.

2. To consider and if thought fit approve the Liquidators’ remuneration.

3. To consider and if thought fit approve the destruction of the Companies’ books and records; and

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

Dated: 10 August 2016

Jason Preston


McGrathNicol

Level 12, 20 Martin Place, Sydney NSW 2000

Telephone: +61 2 9338 2600 Facsimile: +61 2 9338 2699

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

Australian Company Number: 112 172 022

FORM 535

Subregulation 5.6.49(2)


FORMAL PROOF OF DEBT OR CLAIM

(GENERAL FORM)

To the Liquidators of Mining Management Group Pty Limited (In Liquidation)

1. This is to state that the company was on 6 July 2015 (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:

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

Australian Company Number: 122 840 582

FORM 535

Subregulation 5.6.49(2)


FORMAL PROOF OF DEBT OR CLAIM

(GENERAL FORM)

To the Liquidators of MMG Drill & Blast Pty Limited (In Liquidation)

1. This is to state that the company was on 6 July 2015 (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:

1

Address: Level 12, 20 Martin Place, Sydney NSW 2000

Contact Name: Timothy Duncan

Contact Number: +61 2 9248 9913

Proofs of Debt

Notes for your guidance

(Please read carefully before filling in Form 535 or Form 536)

It is a creditor’s responsibility to prove their claim to our satisfaction.

When lodging claims, creditors must ensure that:

a) the proof of debt form is properly completed in every particular; and

b) evidence, such as that detailed below, is attached to the Form 535 or Form 536.

Directions for completion of a Proof of Debt

1. Insert the full name and address of the creditor.

2. Under “Consideration” state how the debt arose, for example “goods sold to the company on …………….…..”.

3. Under “Remarks” include details of any documents that substantiate the debt (refer to the section titled

“Information to support your claim” below for further information).

4. Where the space provided for a particular purpose is insufficient to contain all the required information in

relation to a particular item, that information should be set out in an annexure.

5. An annexure to the form must have an identifying mark and be endorsed with the words:

“This is the annexure of …… pages marked …… referred to in the Form 535/536 signed by me and

dated …………………

…………………………………… ……………………………………………………..

Signature(s) Name of Signatory “IN BLOCK LETTERS”

and signed by each person signing the form to which the document is annexed.

6. The pages in the annexure must be numbered consecutively.

7. Where a document, copy of a document or other matter is annexed to a form, reference made in the form to

the annexure shall be by its identifying mark, the number of pages in it, and a brief description of the nature of

the document and its contents.

8. A reference to an annexure includes a document, copy of a document or any other matter accompanying,

attaching to or annexed to a form.

Information to support your claim

Please note that your debt is not likely to be accepted unless evidence to support its existence is provided. Detailed

below are some examples of the type of debt creditors may be claiming and a suggested list of documents, copies

of which should accompany a proof of debt for that class of creditor.

Trade Creditors

Statements and supporting invoices(s) showing the amount of the debt; and

Advice(s) to pay outstanding invoice(s) (optional).

2

Guarantees/Indemnities

Executed guarantee/indemnity;

Notice of Demand served on the guarantor; and

Calculation of the amount outstanding under the guarantee.

Judgment Debt

Copy of the judgment; and

Documents/details to support the underlying debt as per other categories.

Deficiencies on Secured Debt

Security Documents (eg. mortgage);

Independent valuation of the secured portion of the debt (if not yet realised) or the basis of the creditor’s

estimated value of the security;

Calculation of the deficiency on the security; and

Details of income earned and expenses incurred by the secured creditor in respect of the secured asset

since the date of appointment.

Loans (Bank and Personal)

Executed loan agreement; and

Loan statements showing payments made, interest accruing and the amount outstanding as at the date of

appointment.

Tax Debts

Documentation that shows the assessment of debts, whether it is an actual debt or an estimate, and

separate amounts for the primary debt and any penalties.

Employee Debts

Basis of calculation of the debt;

Type of Claim (eg. wages, holiday pay, etc);

Correspondence relating to the debt being claimed; and

Contract of Employment (if any).

Leases

Copy of the lease; and

Statement showing amounts outstanding under the lease, differentiating between amounts outstanding at

the date of the appointment and any future monies.

FORM 532

Corporations Act 2001

Regulation 5.6.29

Mining Management Group Pty Limited (In Liquidation)

ACN 112 172 022

(“MMG”)

APPOINTMENT OF PROXY

I/We (1) ____________________________________________ of

______________________________________________________________________

a creditor/member of Mining Management Group Pty Limited (In Liquidation) appoint

(2)_________________________________________ as my/our special proxy to vote at the meeting of creditors to be

held on 24 August 2016 at 12:00pm or at any adjournment of that meeting.

Resolution For Against Abstain

1 That the annual meetings of creditors of Mining Management Group Pty Limited and

MMG Drill & Blast Pty Limited be held concurrently.

2 That the remuneration of the Liquidators of MMG for the period 6 July 2015 to 5

August 2016 in the amount of $227,429.20 (excluding GST) calculated at the hourly

rates as detailed in the Schedule of Remuneration Methods and Hourly Rates, after

applying a discount of 20% is hereby approved for payment from funds on hand.

3 That the prospective remuneration of the Liquidators of MMG, to a maximum amount

of $40,000 (excluding GST), calculated on hours spent at the rates detailed in the

Schedule of Remuneration Methods and Hourly Rates provided to creditors, after

applying a discount of 20% for the period from 6 August 2016 until the work

undertaken in the estimation of remuneration is complete, or the time charged for

work undertaken exceeds the approved fee amount (whichever occurs first), is hereby

approved for payment, from funds on hand or as and when they come to hand.

4 That the books and records of the Companies may be destroyed following the

deregistration of the Companies, subject to the consent of ASIC being obtained.

DATED this _____ day of _____________ 2016

(4) Signature ___________________________________

CERTIFICATE OF WITNESS - only complete if the person given the proxy is blind or incapable of writing.

I, ____________________________________________ of _______________________________________________

certify that the above instrument appointing a proxy was completed by me in the presence of and at the request of the

person appointing the proxy and read to him before he attached his signature or mark to the instrument.

DATED this ___________ day of ________________________ 2016

Signature of witness ___________________________________

Description ___________________________________

Place of residence ___________________________________

___________________________________

Notes:

(1) If a firm strike out "I" and set out the full name of the firm.

(2) Insert the name of the person appointed.

(3) If a special proxy, “add the words ‘to vote for’ or the words ‘to vote against’ and specify the particular resolution”.

(4) If the creditor is a sole trader , sign in accordance with the following example: “A.B., proprietor”.

If the creditor is a partnership, sign in accordance with the following example: “A.B., a partner of the said firm.”

If the creditor is a company, then the form of proxy must be under its Common Seal or under the hand of some officer duly authorised in that capacity, and the fact that the officer is so authorised must be stated in accordance with the following example: “for the company, A.B.” (duly authorised under the Seal of the Company).

Proxy forms should have been completed and returned by no later than 5:00 PM on 23 August 2016 to be eligible to vote at the meeting.

RETURN TO: Mining Management Group Pty Limited (In Liquidation)

of care of McGrathNicol

Address: GPO Box 9986, Sydney NSW 2001

Phone: +61 2 9338 2600

Fax: +61 2 9338 7699

Email: [email protected]

FORM 532

Corporations Act 2001

Regulation 5.6.29

MMG Drill & Blast Pty Limited (In Liquidation)

ACN 122 840 582

(“MMG D&B”)

APPOINTMENT OF PROXY

I/We (1) ____________________________________________ of

______________________________________________________________________

a creditor/member of MMG Drill & Blast Pty Limited (In Liquidation) appoint

(2)_________________________________________ as my/our special proxy to vote at the meeting of creditors to be

held on 24 August 2016 at 12:00pm or at any adjournment of that meeting.

Resolution For Against Abstain

1 That the annual meetings of creditors of Mining Management Group Pty Limited and

MMG Drill & Blast Pty Limited be held concurrently.

2 That the remuneration of the Voluntary Administrators of MMG D&B for the period 1

June 2015 to 6 July 2015 in the amount of $18,544.40 (excluding GST) calculated at

the hourly rates as detailed in the Schedule of Remuneration Methods and Hourly

Rates, after applying a discount of 20%, is hereby approved for payment from funds

on hand.

3 That the remuneration of the Liquidators of MMG D&B for the period 6 July 2015 to 5

August 2016 in the amount of $42,070.80 (excluding GST) calculated at the hourly

rates as detailed in the Schedule of Remuneration Methods and Hourly Rates, after

applying a discount of 20% is hereby approved for payment from funds on hand.

4 That the prospective remuneration of the Liquidators of MMG D&B, to a maximum

amount of $20,000 (excluding GST) calculated on hours spent at the rates detailed in

the Schedule of Remuneration Methods and Hourly Rates provided to creditors, after

applying a discount of 20% for the period from 6 August 2016 until the work

undertaken in the estimation of remuneration is complete, or the time charged for

work undertaken exceeds the approved fee amount (whichever occurs first), is hereby

approved for payment, from funds on hand or as and when they come to hand.

5 That the books and records of the Companies may be destroyed following the

deregistration of the Companies, subject to the consent of ASIC being obtained.

DATED this _____ day of _____________ 2016

(4) Signature ___________________________________

CERTIFICATE OF WITNESS - only complete if the person given the proxy is blind or incapable of writing.

I, ____________________________________________ of _______________________________________________

certify that the above instrument appointing a proxy was completed by me in the presence of and at the request of the

person appointing the proxy and read to him before he attached his signature or mark to the instrument.

DATED this ___________ day of ________________________ 2016

Signature of witness ___________________________________

Description ___________________________________

Place of residence ___________________________________

___________________________________

Notes:

(1) If a firm strike out "I" and set out the full name of the firm.

(2) Insert the name of the person appointed.

(3) If a special proxy, “add the words ‘to vote for’ or the words ‘to vote against’ and specify the particular resolution”.

(4) If the creditor is a sole trader , sign in accordance with the following example: “A.B., proprietor”.

If the creditor is a partnership, sign in accordance with the following example: “A.B., a partner of the said firm.”

If the creditor is a company, then the form of proxy must be under its Common Seal or under the hand of some officer duly authorised in that capacity, and the fact that the officer is so authorised must be stated in accordance with the following example: “for the company, A.B.” (duly authorised under the Seal of the Company).

Proxy forms should have been completed and returned by no later than 5:00 PM on 23 August 2016 to be eligible to vote at the meeting.

RETURN TO: MMG Drill & Blast Pty Limited (In Liquidation)

of care of McGrathNicol

Address: GPO Box 9986, Sydney NSW 2001

Phone: +61 2 9338 2600

Fax: +61 2 9338 7699

Email: [email protected]

Proxy

Notes for your Guidance

Insert full name and address of creditor, contributory or member on the top line.

On the second line, insert the name of the person you appoint as your proxy. You may insert “the Chairperson of the meeting” if you wish.

On the next line insert the organisation the proxy holder represents or works for (not required if the Chairperson is your proxy).

You may appoint an alternate proxy on the fourth line who may act if your first appointed proxy cannot attend the meeting. You may insert “the Chairperson of the meeting” if you wish.

If the proxy is a general proxy the form requires no addition.

If the proxy is a special proxy the form must include instructions regarding the use of the proxy (i.e. details of the resolution and whether the proxy holder is to cast a vote in favour or against the resolution or abstain from voting).

Date and sign the Proxy form using one of the following various forms of execution:

− Sole Trader - Sign the proxy yourself.

− Partnership - e.g. sign – “Smith & Associates Per John Smith - Partner”

− Company - (i) By a director or secretary, e.g. “J Smith – Director”.

(ii) By a person duly authorised to sign on behalf of the company, e.g.

“Smith & Sons Pty Ltd. ACN: ______________

Per: J Smith

A person duly authorised to sign on the company’s behalf”.

OR

“Smith & Sons Pty Ltd. ACN: ______________

By its duly constituted attorney J Smith”.

NB: If signing on behalf of a company the following example is not sufficient: ”Smith & Sons Pty Ltd. ACN: _______________ Per: J Smith”

“Certificate of Witness” is only to be used where the Proxy is being completed on behalf of a person who is blind or incapable of writing. In all other cases a witness to the signature of the person appointing the Proxy is not required and you may ignore the section headed “Certificate of Witness”.

1

1




General Information for Attending and Voting at Meetings of Creditors

Time and Place of Meeting

Pursuant to Corporations Regulation (Regulation) 5.6.14 a meeting of creditors must be convened at a time and

place most convenient for the majority of creditors entitled to receive notice of the meeting.

Quorum

Pursuant to Regulation 5.6.16 a meeting must not act for any purpose except:

the election of a chairperson; and

the proving of debts; and

the adjournment of the meeting:

unless a quorum is present.

A quorum is deemed to be present if at least 2 (two) creditors are present at the meeting in person, by

proxy, by power of attorney or participating by telephone.

A meeting is sufficiently constituted if only one person is present in person if the person represents

personally or by proxy or otherwise a number of persons sufficient to constitute a quorum.

Chairperson

Pursuant to Regulation 5.6.17 the Administrator is appointed Chairperson of the meeting. Alternatively, the

Administrator may, pursuant to Regulations 5.6.17 and 5.6.34, appoint someone else to act as chairperson of the

meeting and authorise that person to use any proxies held by the Administrator on the Administrator’s behalf.

For the second meeting of creditors in a Voluntary Administration, the Administrator must chair the meeting

pursuant to Section 439B of the Corporations Act 2001.

Voting

Pursuant to Regulation 5.6.23 creditors will not be eligible to vote at the meeting unless they have lodged

particulars of their debt or claim prior to or at the meeting.

Accordingly, creditors who intend to vote at the meeting should ensure that they lodge a formal proof of

debt with the company prior to or at the meeting.

Pursuant to Regulation 5.6.19 all resolutions put to the meeting will be decided on the voices unless a poll

is demanded, before or on the declaration of the result of the voices.

A poll may be demanded by:

the chairperson; or

at least 2 (two) persons present in person, by proxy, by power of attorney or participating by

telephone and entitled to vote at the meeting; or

a person present in person, by proxy, by power of attorney or participating by telephone and

representing not less than 10% of the total voting rights of all persons entitled to vote at the

meeting.

Pursuant to Regulation 5.6.21, should a poll be demanded:

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a resolution will be carried if a majority in number and a majority in value vote in favour of the

resolution; and

a resolution will be lost if a majority in number and a majority in value vote against the proposed

resolution.

In the event of a deadlock, the chairperson may exercise a casting vote. In such situations, the minutes of the

meeting must specify the chairperson’s reasons for exercising, or not exercising, their casting vote.

Proxies

Pursuant to Regulation 5.6.28 creditors who are entitled to attend and vote at the meeting may appoint a

natural person over the age of 18 years as their proxy to attend and vote at the meeting on their behalf.

Accordingly, creditors who are unable to attend the meeting but who wish to be represented should ensure

that a validly executed proxy form is lodged with the Administrator prior to the meeting.

Pursuant to Regulations 5.6.28 and 5.6.36A creditors may lodge a facsimile copy of a proxy form with the

Administrator prior to the meeting; however, the original of the instrument must be received by the

Administrator within 72 hours of receipt of the faxed copy.

Pursuant to Regulations 5.6.28, 5.6.29 and 5.6.31 creditors may lodge a proxy form with the company prior

to the meeting by electronic means, however electronic lodgement will only be possible where the

convenor has specified an electronic address or other electronic means on the proxy form. Proxy forms

lodged via electronic means must be validly executed by signing and scanning the form.

Pursuant to Regulation 5.6.32 a person may, should they so desire, appoint the Administrator by name or

by reference to his or her office to act as his, her or its general or special proxy.

Corporate Creditors

Corporate creditors who wish to attend the meeting should note that they may only be represented by an individual

if that person is validly granted a proxy or power of attorney by that corporation.

Alternatively, Section 250D of the Corporations Act 2001 provides that a corporation may, by resolution of its board,

provide a standing authority for a specified person to represent the corporation at specified meeting of creditors. A

copy of any such resolution should be provided to the Administrator prior to attending the meeting.

Committee of Inspection/Committee of Creditors

Pursuant to Section 436G of the Corporations Act 2001, a person may only serve as a member of a Committee of

Creditors if the person is:

a creditor of the company personally; or

the attorney of a creditor under a general power of attorney; or

authorised in writing by a creditor.

Corporate creditors who are members of a Committee of Inspection may be represented by:

an officer or employee of the member; or

an individual authorised in writing by the member to represent the member on the committee.

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Schedule of Remuneration Methods and Hourly Rates

Initial Advice to Creditors

Basis of remuneration 1

Remuneration methods 1.1

There are four basic methods that can be used to calculate the remuneration charged by an insolvency

practitioner. They are:

Time based/hourly rates

This is the most common method. The total fee charged is based on the hourly rate charged for each

person who carried out the work, multiplied by the number of hours spent by each person on each of the

tasks performed.

Fixed Fee

The total fee charged is normally quoted at the commencement of the administration and is the total cost

for the administration. Sometimes a practitioner will finalise an administration for a fixed fee.

Percentage

The total fee charged is based on a percentage of a particular variable, such as the gross proceeds of asset

realisations.

Contingency

The practitioners’ fee is structured to be contingent on a particular outcome being achieved.

Method Proposed 1.2

We propose that our remuneration will be calculated on a time basis which will be recorded and charged in

six minute increments. Details of the hourly rates for different levels of staff are included below. The

complexity and demands of the administration will determine the staff to be utilised for this appointment.

We have chosen the time based method because this method is considered to be most suitable for this

appointment as it ensures creditors are only charged for work that is performed in the external

administration, which can be difficult to accurately estimate at the date of appointment.

2

Explanation of Hourly Rates 2

The rates for our remuneration calculation are set out in the following table, together with a general guide

showing the qualifications and experience of staff engaged in the administration and the role they take in

the administration. The hourly rates charged encompass the total cost of providing professional services

and should not be compared to an hourly wage.

Title Guide to qualifications and role Hourly rate

(excl GST)

Appointee/Partner Registered liquidator, Chartered Accountant or equivalent and

generally degree qualified with more than twelve years of

experience. Leads assignments with full accountability for

strategy and execution.

$690

Director 1 Generally, Chartered Accountant or comparable qualification

and degree qualified with more than ten years of experience,

including four years of Director or equivalent experience.

Autonomously leads complex insolvency appointments

reporting to Appointee/Partner.

$625

Director Generally, Chartered Accountant or comparable relevant

qualification and degree qualified with more than nine years

of experience. Autonomously leads insolvency appointments

reporting to Appointee/Partner.

$580

Senior Manager Generally, Chartered Accountant or comparable relevant

qualification and degree qualified with more than seven years

of experience. Self-sufficiently conducts small to medium

insolvency appointments and leads major workstreams in

larger matters.

$515

Manager 1 Generally, Chartered Accountant or comparable relevant

qualification and degree qualified with more than six years of

experience, including two years of Manager 2 or equivalent

experience. Self-sufficiently conducts small to medium

insolvency appointments and takes a supervisory role on

workstreams in larger matters.

$460

Manager Generally, Chartered Accountant or comparable relevant

qualification and degree qualified with more than five years of

experience. Self-sufficiently conducts small insolvency

appointments and takes a supervisory role on workstreams in

larger matters.

$410

Assistant Manager Generally, Chartered Accountant or comparable relevant

qualification and degree qualified with more than three years

of experience. Autonomously manages workstream activity

within appointments.

$370

3

Title Guide to qualifications and role Hourly rate

(excl GST)

Senior Accountant 1 Generally, degree qualified and undertaking Chartered

Accountant’s qualification or comparable relevant qualification

with more than two years of experience, including one year of

Senior Accountant or equivalent experience. Completes

multiple tasks within workstreams and appointments.

$320

Senior Accountant Generally, degree qualified and undertaking Chartered


with more than 16 months of experience. Completes tasks

within workstreams and appointments under supervision.

$285

Accountant 1 Generally, degree qualified and undertaking Chartered


with at least one year of Accountant or equivalent experience.

Assists with tasks within workstreams and appointments under

supervision.

$250

Accountant Generally, degree qualified and undertaking or about to

undertake Chartered Accountant’s qualification or comparable

relevant qualification with less than one year of experience.

Assists with tasks within workstreams and appointments under

supervision.

$245

Undergraduate/ Cadet Undertaking relevant degree. Assists with tasks within

workstreams and appointments under supervision. $210

Practice Services

Director

National Practice Service leaders, generally degree qualified

with more than ten years of experience and reporting directly

to partners. Technical experts in their specific areas and have

team management responsibilities.

$580

Senior Practice

Services

Senior technical, professional or functional expert in national

Practice Services. Generally degree qualified with more than

seven years of experience. Reports to Practice Service leader

and may be responsible for team management.

$410

Senior Client

Administration and

Senior Treasury

Appropriately experienced and undertakes senior level

administrative support activities or senior Treasury activities.

May be responsible for day to day management of projects or

operations and may have supervisory responsibility for junior

staff.

$210

Client Administration

and Treasury

Appropriately experienced and undertakes support activities,

including but not limited to Client administration, Treasury

and document management functions.

$160

McGrathNicol reviews its hourly rates six monthly. The hourly rates quoted above remain in force until

31 December or 30 June (whichever occurs first) and McGrathNicol may increase fees for work continuing

past that date.

Creditors will be advised of any change to the hourly rates for this administration.

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Disbursements 3

There are three categories of disbursements which may be charged:

Externally provided professional services – these are on-charged at cost. An example of an

externally provided professional service disbursement is legal fees.

Externally provided non-professional costs – such as travel, accommodation, external printing

services and search fees – these are on-charged at cost.

Internal disbursements – such as photocopying, printing and postage. These disbursements are

generally charged at cost but may include, in the case of disbursements such as such as telephone

calls, photocopying and printing, both direct variable and fixed costs. For example the rate per

page for printing includes a reasonable and commercial allowance for paper, toner, depreciation,

power and maintenance).

Creditor approval is not required for disbursements. However, details of the basis of recovering internal

disbursements in this administration are provided below and full details of actual costs incurred and to be

charged to the administration will be provided in future reports.

Basis of Disbursement Claim 3.1

Internal Disbursements Rate

(Excl GST)

Advertising At cost

Courier At cost

Printing - Black and white $0.09 per page

Printing - Colour $0.28 per page

Postage At Cost

Stationery and other incidental disbursements At Cost

Staff per diem travel allowance* $89.00 per day

Staff vehicle use $0.63 per km

Telephony – mobile, fixed line and conference calls At cost

* Payable when partners or staff are required for business purposes to stay away from their usual place of

residence overnight.

Important note: The information sheets contain a summary of basic information on the topic. It is not

Insolvency information for directors, employees, creditors and shareholders ASIC has 11 insolvency information sheets to assist you if you’re affected by a company’s insolvency and have little or no knowledge of what’s involved.

These plain language information sheets give directors, employees, creditors and shareholders a basic understanding of the three most common company insolvency procedures—liquidation, voluntary administration and receivership. There is an information sheet on the independence of external administrators and one that explains the process for approving the fees of external administrators. A glossary of commonly used insolvency terms is also provided.

The Insolvency Practitioners Association (IPA), the leading professional organisation in Australia for insolvency practitioners, endorses these publications and encourages its members to make their availability known to affected people.

List of information sheets • INFO 41 Insolvency: a glossary of terms • INFO 74 Voluntary administration: a guide for creditors • INFO 75 Voluntary administration: a guide for employees • INFO 45 Liquidation: a guide for creditors • INFO 46 Liquidation: a guide for employees • INFO 54 Receivership: a guide for creditors • INFO 55 Receivership: a guide for employees • INFO 43 Insolvency: a guide for shareholders • INFO 42 Insolvency: a guide for directors • INFO 84 Independence of external administrators: a guide for creditors • INFO 85 Approving fees: a guide for creditors

Getting copies of the information sheets To get copies of the information sheets, visit ASIC’s website at www.asic.gov.au/insolvencyinfosheets. The information sheets are also available from the IPA website at www.ipaa.com.au. The IPA website also contains the IPA’s Code of Professional Practice for Insolvency Professionals, which applies to IPA members.

a substitute for legal advice. Some provisions of the law referred to may have important exceptions or qualifications. These documents may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances. You will need a qualified professional adviser to take into account your particular circumstances and to tell you how the law applies to you.

© Australian Securities & Investments Commission, December 2008 Page 1 of 1