ALL CREDITORS AS ADDRESSED Grant Thornton Australia ... · Grant Thornton Australia Limited Level 17 383 Kent Street Sydney NSW 2000 T +61 2 8297 2400 ABN-41 127 556 389 ACN-127 556

Grant Thornton Australia Limited Level 17 383 Kent Street Sydney NSW 2000 T +61 2 8297 2400

ABN-41 127 556 389 ACN-127 556 389

Grant Thornton Australia Ltd ABN 41 127 556 389 ACN 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation.

www.grantthornton.com.au

ALL CREDITORS AS ADDRESSED

3 August 2020

Dear Sir / Madam

Orient House Investments Pty. Limited (Administrators Appointed)

ACN 100 192 989 (“the Company”)

I refer to the Administrators’ Report dated 29 May 2020 (“Administrators’ Report”) and Second Meeting

of Creditors on 9 June 2020 wherein we recommended, and creditors voted to accept, that the second

meeting be adjourned for a maximum of 45 business days.

The adjournment was recommended for the following reasons:

1. A dividend of 100c in the dollar to creditors being contingent on recovery of AUD$13 million

commission from American Precious Metals Refining Inc. (“APMR”) and that additional time

was required to investigate the status and collectability of this amount;

2. The option to wind-up the Company remained available to creditors at the reconvened Second

Meeting;

3. The Administrators’ powers of investigation and sale remain for the entirety of the voluntary

administration and that the Administrators would continue to take steps to collect all relevant

information to be able to realise the Company’s share and unit holdings during the adjournment

period; and

4. Should the Administrators have determined the 45 business day adjournment was no longer

warranted, they could reconvene the second meeting at any time.

The purpose of this short report is to provide creditors with sufficient information to make an informed

decision about the future of the Company. The report includes:

An update on the findings from our continued investigations;

Details of the proposed Deed of Company Arrangement; and

The options available to creditors and our opinion on what is in creditors’ best interest.

Notice of the reconvened second meeting is attached as Appendix A.

Independence

As disclosed in our Initial Notification to Creditors dated 6 May 2020, we undertook a proper assessment

of the risks in relation to our independence prior to accepting the appointment. Our assessment

identified no real or potential risk to our independence. We confirm that there have not been changes to

© 2019 Grant Thornton Australia Limited. 2

our Declaration of Independence, Relevant Relationships or Indemnities since the Initial Notification to

Creditors.

Reconvened Second Meeting

The reconvened Second Meeting of Creditors will be held via teleconference facilities on Tuesday, 11

August 2020 at 11.00am. Due to the current COVID-19 restrictions, no physical meeting location will be

provided to creditors.

At the reconvened Second Meeting of Creditors, creditors will amongst other things be able to vote on

the Company’s future and to resolve either that:

a. The Company execute a Deed of Company Arrangement;

b. The administration should end; or

c. The Company be wound up.

Attached as Appendix A is formal notice of the meeting.

Proxy forms and Proof of Debts for the meeting are attached as Appendix B and C, respectively. New

Proxy forms are required for the meeting. However, if creditors have already submitted their Proof of

Debt to our office there is no need to submit again.

Administrators’ Report / Update to creditors

There has been no material changes to the Administrators’ Report since it was issued in May 2020,

including any investigation findings. We have provided an update to creditors below.

1. AUD$13 Million Commission

In the Administrators’ Report we reported that the Company acted as an intermediary for a US based

entity, APMR, in respect of a gold bullion trade in January 2020. The Company’s director advised the

Company was due to receive AUD$13 million commission from the trade. We also reported that the

Company’s director expected the commission would be released to the Company by the end of July

2020. At the date of this report, this has not occurred.

The steps required to release the commission to the Company included The High Court for the State of

Telangana, Hyderabad, India stamping the “proof of claim” and once stamped by the Court, approval of

the Reserve Bank of India is required. The most recent update received from the Company’s director is

that the proof of claim is still with the Court for approval and that there had been a delay due to COVID-

19. The Company’s director advised it was expected that the Court would action the proof of claim prior

to 31 July 2020. We have not received any evidence to confirm this has occurred. The Company’s

director also advised that payment in full of the commission into the Company’s bank account (which we

control) is expected by the end of August 2020. No documentation or evidence to support these

statements has been provided despite us requesting same.

In our Administrators’ Report, we also reported that we had put APMR and its director, Mr. Felix Negron,

on notice of our appointment and that the transfer of the commission must be to a bank account the

Administrators control. Despite numerous requests made by this office, Mr. Negron has not been

available for regular weekly update calls. The Company’s director has also failed to respond to written

requests for an update on the status of the commission payment, in breach of his duties as a director of

the Company.

During the course of the voluntary administration, we have continued to communicate with Mr. Negron in

writing requesting an update and asserting the Company’s interest in the commission. Responses from

Mr. Negron have been limited.

At the date of this report, we have not been able to obtain sufficient comfort supported by documentary

evidence from either the Company’s director or Mr. Negron that the commission will be received by 31

August 2020, if at all.


A further update will be provided at the reconvened Second Meeting of Creditors.

2. Other Assets

In our Administrators’ Report, we reported that the Company has a shareholding/unit entitlement in

various entities. During the course of the voluntary administration we have continued to issue

correspondence to the related and third parties in which the Company holds an interest. Noted below is

an update:

SCM ARIE Fund: We have received an investor statement from Strategic Capital Management

Limited (“SCML”) which as at 31 March 2020, valued the Company shareholding in the SCM ARIE

Fund at c. $1.01 million.

In our Administrators Report, we reported that we had received an investor statement from SCML,

which as at January 2020 valued the Company's unit holding at c. $3.15 million. SCML has advised

that the decline in value of c. $2.14 million was largely attributed to the fund’s investment in Netlinkz

which received a qualified audit opinion with an emphasis of matter due to a material uncertainty in

relation to it continuing to operate as a going concern.

Since February 2020, Netlinkz has entered into numerous trading halts and suspensions from

official quotations. On 31 July 2020, Netlinkz announced that subject to the approval of existing

shareholders it intends to raise up to $18 million through the issue of convertible notes to be used to

payout existing loans and to continue to grow sales in China, relying on its existing infrastructure

and targeting multiple growth opportunities in other regions, such as Japan.

In light of the above, it would appear that a hold strategy be adopted over the coming weeks/

months until a further announcement is made regarding funding.

SCML has advised that an updated investor statement for the quarter ended 30 June 2020 will be

issued shortly. We will disclose the details at the reconvened second meeting if available, together

with an update on the value of the Company’s interest.

NuBlend Pty Ltd: Despite issuing several rounds of formal correspondence to the directors of

NuBlend Pty Ltd (“NuBlend”) seeking financial information to be able to determine the value of the

Company’s interest, we are yet to receive a response. We note the Company’s director is also a

director of this entity.

If creditors resolve to place the Company into liquidation at the reconvened second meeting, we will

continue to pursue NuBlend, which will likely involve us engaging a solicitor to represent us.

The present value of the Company’s interest in this entity is not known.

Imprezario: This entity is based in the United States of America. Despite issuing several rounds of

formal correspondence to the directors of Imprezario seeking financial information to be able to

determine the value of the Company’s interest, we are yet to receive a response.


continue to pursue Imprezario, which will likely involve us engaging a solicitor to represent us.


Turner Investments: We have been advised that Turner Investments LP has been deregistered

with the U.S. Security and Exchange Commission. We await documentation to confirm this.

The value of the Company’s interest in this entity is considered to be nil (i.e. no value).

Grapple: As detailed in the Administrators’ Report, the shares are held by the director in his own

personal capacity. The director has advised that this was an error. However, to date, Grapple has

not provided us with a response to our queries or advised how we can rectify the error.


continue to pursue Grapple, which will likely involve us engaging a solicitor to represent us.



3. Company books and records / Administrators’ investigations

Despite numerous request and undertakings made by the Company’s director, we are yet to receive any

of the Company’s financial statements by the Company’s director or external accountant (instructed by

the Company’s director to prepare the accounts).

The most recent update provided by the Company’s director was that the external accountant was

unable to complete the preparation of the accounts due to missing Business Activity Statements (BAS)

for 2013.

We do not expect to receive the Company’s financial statements by the time of the reconvened Second

Meeting of Creditors, if at all. Failure to maintain adequate books and records represents a breach of

duties pursuant to Section 286 of the Corporations Act. This breach will be reported to ASIC.

To assist with our investigations, we have requested copies of bank statements for the last 7 years from

the Commonwealth Bank of Australia. Once received, we propose to prepare a summary of the

Company’s source and application of funds to better understand how investor funds have been used

and whether there are any recoveries available to a liquidator if the Company is wound up.

As detailed in the Administrators’ Report, a review of the Company’s bank statements for the 12 months

prior to our appointment disclosed that the Company’s director was using Company funds for personal

living expenses.

Deed of Company Arrangement (“DOCA”)

On 29 July 2020, the Company’s director advised that the terms of the original DOCA were still valid. A

copy is attached at Appendix D. For the same reasons set out in our Administrators Report, we do not

recommend this DOCA to creditors for the following reasons:

1. It does not provide a greater or more certain return to creditors than Liquidation;

2. The Deed Fund is comprised of recovery of the AUD$13 million commission at the exclusion of

the Company’s shareholding in other entities; and

3. There is a stay on creditor action against the Company and Director for 120 days.

On 30 July 2020, the Company’s director provided us with an email for an alternate DOCA on the

following terms:

1. The Company’s director, in his own capacity, to act as an intermediary in a sale and purchase

agreement with a third party for the supply of gold bullion; and

2. Out of the commission payable on the trade payable to the Company’s director in his personal

capacity, AUD$8.33 million be paid into a Deed Fund for the benefit of creditors. The

commission to be received in tranches over a 4 month period and that the Company’s director

be entitled retain $15k per month for living expenses before remitting the balance.

In support of the alternative DOCA, the Company’s director provided us with a copy of a sale agreement.

This agreement is deficient insofar as it has not been signed by the seller and there is no reference to

the payment of a commission to any party. The director advised that an agreement regarding the

payment of a commission would be drawn up in due course.

There are no other terms attached to the alternate DOCA proposal and hence it is not in a form that can

be recommended to the Company’s creditors and hence we do not propose to put the alternative

proposal to creditors at the reconvened second meeting.

Estimated Return to Creditors

In the Administrators’ Report, we estimated that the estimated return to unsecured creditors would be as

follows:

Deed of Company Arrangement: Between Nil and 100 cent in the dollar; and

Liquidation: Between Nil and 100 cent in the dollar.


We note that the estimated dividend is highly dependent upon the commission being received from

APMR. The estimated dividend range also assumes that all creditor claims are accepted in full and that

the claim by the Hall Park Trust ranks as an unsecured claim.

Although it does not affect the estimated dividend range to unsecured creditors, we note that the

estimated realisable value of the ‘other assets’ in the estimated outcome statement at Appendix E has

changed as a result in the significant decrease in the value of the SCM ARIE units. We now estimate the

following estimated realisable value for ‘other assets’:

o Liquidation ‘High Scenario’: c. $2.4 million

o Liquidation ‘Low Scenario’: c. $509k

Attached as Appendix E is the updated estimated outcome statement.

Voluntary Administrators’ Recommendation

For the following reasons, it is the Administrators’ recommendation that the Company be wound up and

placed into Liquidation at the reconvened second meeting of creditors:

1. The Company is insolvent;

2. The DOCA proposal does not provide a better or more certain return to creditors than

Liquidation. The proposed Deed Fund is comprised of the recovery of the AUD $13 million

commission due to the Company and does not include the realisation of the Company’s interest

in other entities. Further, there is a stay on creditor action against the Company and Director for

120 days; and

3. A Liquidator will further investigate the affairs of the Company and conduct of its director.

Voluntary Administrators / Liquidators Remuneration

At the forthcoming reconvened Second Meeting of Creditors, the Administrators will be seeking approval

for their retrospective and future remuneration as follows:

Attached at Appendix F is a copy of the Administrators’ Remuneration Report for creditors review.

Please do not hesitate to contact Lisa Gibb of my office on +61 2 8297 2411 should you have any

queries regarding the above.

Yours faithfully

John McInerney

Joint and Several Administrator

Overview of Remuneration being sought at Reconveyend second meeting $

Administrators' remuneration for the period from 10 June 2020 to 24 July 2020 13,284

Administrators' remuneration for the period from 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting) 6,716

Total Administrators' remuneration (to the date of reconvened Second Meeting) 20,000

Administrators' estimated future remuneration for the period 11 August 2020 to execution of the DOCA (if applicable) 15,000

Administrators' remuneration for the period from commencement of the DOCA to the effectuation of the DOCA (if applicable) 40,000

Liquidators' remuneration for the period from commencement to finalisation of Liquidation (if applicable) 50,000

Appendix A

Insolvency Practice Rules

75-15 - 75-35

Corporations Act 2001

NOTICE OF MEETING OF CREDITORS OF COMPANY


ACN 100 192 989 (the “Company”)

On 4 May 2020 the Company under section 436A of the Corporations Act 2001 (“the Act”) appointed John

McInerney and Said Jahani of Grant Thornton Australia Limited as Joint and Several Administrators of the

Company.

Notice is given that a reconvened Second Meeting of Creditors of the Company will be held as follows:

Date: 11 August 2020

Time: 11:00AM

Address: By teleconference facilities only

Please contact our office ([email protected]) for teleconference details

Agenda

The purpose of the meeting is to:

Consider the Voluntary Administrators’ report and statement and any other matters raised relating to the

Company’s future and then to resolve either that:




Consider the remuneration and internal disbursements of the Administrators;

If the Company executes a Deed of Company Arrangement:

a. To determine the remuneration and internal disbursements of the Deed Administrators;

If the Company is wound up:

a. To determine the remuneration and internal disbursements of the Liquidators;

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

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

finalisation, subject to obtaining ASIC approval (if appropriate).

To discuss any other relevant business which may arise.

Attending and voting at the meeting

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

unless:

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

the debt or claim and the claim has been admitted, wholly or in part, by the Joint and Several Administrators. If

a proof of debt for voting purposes has already been lodged, they do not need to do so again. Refer to Note 1

for further guidance on entitlement to vote.

Proxies or attendance: They are either present in person or by electronic facilities or validly represented by

proxy, attorney or an authorised person under s 250D of the Act. If a corporate creditor or represented, a

proxy form, power of attorney or evidence of appointment of a Company representative pursuant to s 250D of

the Act must be validly completed and provided to the Joint and Several Administrators at or before the

meeting.

A proxy is only valid for a particular meeting and will need to be resubmitted even if previously provided.

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

should be submitted to Chloe Lim on [email protected] by 4:00PM on 10 August 2020.

Electronic facilities

Due to both the state and federal government’s warning regarding the COVID-19 pandemic, we will NOT be

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

meeting, creditors will need to contact our office to obtain relevant teleconference details.

To access those facilities, you need to provide a statement by email to Chloe Lim on [email protected], not

later than 1 business day before the meeting which sets out:

Name: The name of the person and of the proxy or attorney (if any)

Address: An address to which notices to the person, proxy or attorney may be sent

Contact: The method of contacting the person, proxy or attorney for the purposes of the meeting.

On receipt of this statement, you will be provided with instructions on how to access the facilities for the meeting.

Any queries should be directed to [email protected] or +61 2 8297 2437.

Dated 3 August 2020

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

Signature of John McInerney

Joint and Several Administrator

Note 1: Entitlement to vote and completing proofs

IPR (Corp) 75 85 Entitlement to vote at meetings of creditors

(1) A person other than a creditor (or the creditor’s proxy or attorney) is not entitled to vote at a meeting of creditors. (2) Subject to subsections (3), (4) and (5), each creditor is entitled to vote and has one vote. (3) A person is not entitled to vote as a creditor at a meeting of creditors unless:

(a) his or her debt or claim has been admitted wholly or in part by the external administrator; or (b) he or she has lodged, with the person presiding at the meeting, or with the person named in the notice convening

the meeting as the person who may receive particulars of the debt or claim: (i) those particulars; or (ii) if required—a formal proof of the debt or claim.

(4) A creditor must not vote in respect of: (a) an unliquidated debt; or (b) a contingent debt; or (c) an unliquidated or a contingent claim; or (d) a debt the value of which is not established;

unless a just estimate of its value has been made.

(5) A creditor must not vote in respect of a debt or a claim on or secured by a bill of exchange, a promissory note or any other negotiable instrument or security held by the creditor unless he or she is willing to do the following: (a) treat the liability to him or her on the instrument or security of a person covered by subsection (6) as a security in

his or her hands; (b) estimate its value; (c) for the purposes of voting (but not for the purposes of dividend), to deduct it from his or her debt or claim.

(6) A person is covered by this subsection if: (a) the person’s liability is a debt or a claim on, or secured by, a bill of exchange, a promissory note or any other

negotiable instrument or security held by the creditor; and (b) the person is either liable to the Company directly, or may be liable to the Company on the default of another

person with respect to the liability; and (c) the person is not an insolvent under administration or a person against whom a winding up order is in force.

IPR (Corp) 75-110 Voting on resolutions

(1) For the purposes of determining whether a resolution is passed at a meeting of creditors of a Company, the value of a creditor of the Company who: (a) is a related creditor (within the meaning of subsection 75-41(4) of the Insolvency Practice Schedule

(Corporations)), for the purposes of the vote, in relation to the Company; and (b) has been assigned a debt; and (c) is present at the meeting personally, by telephone, by proxy or attorney; and (d) is voting on the resolution;

is to be worked out by taking the value of the assigned debt to be equal to the value of the consideration that the related

creditor gave for the assignment of the debt.

Appendix B

Insolvency Practice Rules, 75-25 Corporations Act 2001

APPOINTMENT OF PROXY


ACN 100 192 989 (the “Company”)

*I/We ______________________ (name of signatory) of _______ (creditor name)

a creditor of Orient House Investments Pty. Limited appoint ________________________________ (name of proxy)

of ___________________________________________________________________________ (address of proxy)

or in his or her absence ______ (details of alternate proxy)

as *my/*our *general/*special proxy to vote at the meeting of creditors to be held on 11 August 2020 at 11am, or at

any adjournment of that meeting.

If a special proxy, specify how you wish your proxy to vote for each of the resolutions.

Resolutions

For Against Abstain

1. Consider the Voluntary Administrators’ report and statement and any other matters raised relating to the Company’s future and then to resolve either that:




2. “That the remuneration of the Joint and Several Administrators for the period from 10 June 2020 to 24 July 2020, is determined at a sum equal to the cost of time spent by the Joint and Several Administrators and their partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $13,284, exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”

3. “That the future remuneration of the Joint and Several Administrators for the period from 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting), is determined at a sum equal to the cost of time spent by the Joint and Several Administrators and their partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $6,716, exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”

IF APPLICABLE (DOCA):

4. “That the future remuneration of the Joint and Several Administrators for the period from 11 August 2020 to execution of the DOCA (if applicable), is determined at a sum equal to the cost of time spent by the Joint and Several Administrators and their partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest

$10), up to a capped amount of $15,000, exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”

IF APPLICABLE (DOCA):

5. “That the future remuneration of the Deed Administrators for the period from

commencement of the DOCA to the effectuation of the DOCA, is determined at a sum equal to the cost of time spent by the Deed Administrators and his partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $40,000, exclusive of GST, and that the Deed Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”

IF APPLICABLE (LIQUIDATION):

6. “That the future remuneration of the Joint and Several Liquidators for the period

from commencement to finalisation of the Liquidation, is determined at a sum equal to the cost of time spent by the Joint and Several Liquidators and their partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $50,000, exclusive of GST, and that the Joint and Several Liquidators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”

7. If the Company executes a Deed of Company Arrangement, to consider the appointment of a Committee of Inspection.

8. If the Company is wound up, to consider the appointment of a Committee of Inspection.

9. If the Company is wound up, to consider authorising the Liquidators to dispose of the books and records of the Company after finalisation, subject to obtaining ASIC approval.

*I/*We authorise *my/*our proxy to vote as a general proxy on resolutions other than those specified above

(delete if not required)

Signature:

Dated:

*Omit if inapplicable

Appendix C

FORM 535

subregulation 5.6.49(2)

Corporations Act 2001

FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM)

To the Administrators of Orient House Investments Pty. Limited (Administrators Appointed) ACN 100 192

989 (the “Company”)

1. This is to state that the Company was on 4 May 2020, and still is, justly and truly indebted to:

full name, ABN and address of the

creditor and, if applicable, the creditor's partners. If prepared by an employee or agent of the creditor, also insert a description of the

occupation of the creditor) for dollars and cents

Particulars of the debt are:

Date Consideration Amount Remarks (state how the debt arose) $ (include details of voucher substantiating payment)

2. To my knowledge or belief the creditor has not, nor has any person by the creditor’s order, had or received

any satisfaction or security for the sum or any part of it except for the following:

(insert particulars of all securities held. If the securities are on the property of the company, assess the value of those securities. If any bills

or other negotiable securities are held, show them in a schedule in the following form).

Date Drawer Acceptor Amount Due Date $

3. Signed by (select option):

󠆤 I am the creditor personally.

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

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

Signature: Dated:

Name: Occupation:

Address:

RECEIVE REPORTS BY EMAIL Yes No

Do you wish to receive all future reports and correspondence from our office via email?

Email……………………………………………………………………………

Appendix D

{KVM\S1968829:1}

PROPOSAL FOR DEED OF COMPANY ARRANGEMENT

29 May 2020

PARTIES

Proponent 1. This proposal is made by Anthony Hartman as Director for Orient House Investments Pty Ltd ACN 100 192 989 (the Company).

Company 2. This proposal is made in relation to Orient House Investments Pty Ltd ACN 100 192 989.

Deed Administrators 3. The Administrators of the proposed Deed of Company Arrangement (DOCA) will be the administrators John McInerney and Said Jahani.

PURPOSE

Purpose and Objective 4. The purpose of this proposal is to provide for the following outcomes:

(a) Maximising the prospects of the Company, or as much as possible of its business, continuing in existence; and

(b) To increase the return to Creditors.

OUTLINE

Stage 1 - setup 5. Prior to 5 June 2020, the Proponent is to pay $50,000.00 into the Grant Thornton, Sydney trust account as security for the proposal. If the proposal is not approved by resolution of the meeting of creditors, the said sum is to be returned to the Proponent, less the aggregate amount of properly incurred expenses of the Administrators and remuneration of the Administrators fixed by creditors or otherwise by law. If the proposal is approved, the sum of $50,000 will be dealt with in accordance with paragraph 6 (b) below.

6. Upon execution of the DOCA: (a) Any monies held by the Administrators will be

transferred into the Deed Fund.

(b) The sum of $50,000.00 referred to in paragraph 5 (Irrevocable Payment) shall be released irrevocably into the Deed Fund.

7. Within 80 days after the execution of the DOCA, the Company anticipates recovering $US9,000,000.00 subject to currency fluctuation) as commission from American Precious Metals Refineries Inc. Of that amount, the Proponent will ensure that:

{KVM\S1968829:1}

2

(a) secured creditor claims of Turner and Hall are

satisfied;

(b) $AUD6,000,000.00 is paid to the Deed Fund for distribution in accordance with this proposal. Any resultant balance will be paid to the Company.

8. Control of the Company will revert to the Directors upon

execution of the DOCA.

Stage 2 9. The Deed Administrators will control and distribute the

Deed Fund in accordance with the priorities set out in section 556(1) of the Corporations Act 2001 (Cth) in satisfaction of:

i. Properly incurred expenses of the

Administrators; ii. Remuneration of the Administrators fixed by

resolution of creditors or otherwise by law; iii. Properly incurred expenses of the Deed

Administrators; iv. Remuneration of the Deed Administrators

fixed by resolution of creditors or otherwise by law; and

v. A claim of a priority, statutory and other class of creditor whose claim is admitted to proof in the Deed Fund

Any balance available after all such admitted claims are satisfied in full with interest upon such amounts, is to be paid to the Company.

10. Subject to paragraph 11 below, the claims of all pre-appointment unsecured creditors will be extinguished if admitted to proof or if within the prescribed time the claim of any such creditor entitled to prove in the Deed is not submitted to proof in the Deed.

11. The Proponent will not participate in the Deed Fund. In that regard, the claim of the Proponent will be preserved but subordinated to the claims of other creditors.

12. The DOCA will be effectuated upon distribution of the Deed Fund in manner specified above.

13. Compliance with the DOCA will be monitored and reported to creditors under the supervision of the Deed Administrators.

14. The DOCA is estimated to produce a return to creditors of 100 c in $ plus interest at the prescribed rate.

{KVM\S1968829:1}

3

15. OTHER TERMS

16. The Proposer nor any related parties will participate as

an unsecured creditor in any way in distributions made under the DOCA.

17. All assets of the company remain in the company and therefore subject to administrator's control until return of control of company to Director.

18. The DOCA will continue in operation until it is terminated.

19. Except to the extent that they are inconsistent with the terms of the deed, the provisions of Schedule 8A of the Corporations Regulations 2001 (Cth) will be included in the DOCA.

20. The DOCA is liable to be terminated in the event that there is a breach of either clauses 6(b) or 7, and otherwise in the circumstances and manner provided for in the Corporations Act 2001 (Cth).

21. The Administrators and Deed Administrators will be entitled to be renumerated out of the Deed Fund in accordance with this proposal.

22. During the period of the deed: (a) Creditors must not apply to wind up the Company

or make any claims of commence proceedings against the Company or any assets of the Company; and

(b) Directors, former directors, shareholders, former shareholders or related parties must not take any steps to wind up the Company or commence proceedings against the Company.

23. During the period of the deed the Proponent will not,

and must procure that the appointor of the ACH Trust does not take any step to remove or replace the Company as trustee for the ACH Trust or vest that trust.

Appendix E

Estimated Outcome Statement

Low High Low High$ $ $ $

AssetsCash at bank - - - - Debtors - 6,000,000 - 13,000,000 Other assets - - 509,584 2,419,167 Voidable TransactionsVoidable transactions N/A N/A - - Insolvent trading N/A N/A - - DOCA contribution 50,000 50,000 - - Total available for priority costs 50,000 6,050,000 509,584 15,419,167 Less: Priority expenseAdministrators' fees and disbursements (98,394) (93,394) (103,394) (83,394) Deed Administrators' fees and disbursements (60,000) (40,000) N/A N/ALiquidators' fees and disbursements N/A N/A (100,000) (50,000) Total priority expenses (158,394) (133,394) (203,394) (133,394) Funds available for distribution (108,394) 5,916,606 306,190 15,285,773 Secured creditorRobert and Carol Turner Principle (2,542,276) (2,542,276) (2,542,276) (2,542,276) Robert and Carol Turner Statutory Interest (estimated) - (114,402) - (133,469) Funds available for unsecured creditors (2,650,670) 3,259,928 (2,236,086) 12,610,028 Unsecured creditorsHall Park Trust (2,589,138) (2,589,138) (2,589,138) (2,589,138) Gills Delaney Lawyers (8,333) (8,333) (8,333) (8,333) Mr Anthony Hartman - - (120,000) (120,000) Unsecured Creditors Statutory Interest (estimated) - (116,886) - (142,667) Surplus/(Deficit) to unsecured creditors (5,248,141) 545,570 (4,953,557) 9,749,890 Dividend rate for unsecured creditors N/A 100 c/$ NA 100 c/$Return to shareholders N/A 545,570 N/A 9,749,890

DOCA Liquidation

Appendix F

Remuneration Approval Report

ORIENT HOUSE INVESTMENTS PTY. LIMITED (ADMINISTRATORS APPOINTED) ACN 100 192 989 (“the Company”)

Remuneration Approval Report 1

This remuneration approval report provides you with the information you need to be able to make an

informed decision regarding the approval of our remuneration for undertaking the Voluntary

Administration of Orient House Investments Pty. Limited.

This report has the following information included:

Contents

Part 1: Declaration 3

Part 2: Executive Summary 3

Part 3: Remuneration 5

3.1 Remuneration claim resolutions 5

3.2 Details of remuneration 6

3.3 Total remuneration reconciliation 13

3.4 Likely impact on dividends 13

3.5 Remuneration recovered from external sources 13

Part 4: Disbursements 14

Part 5: Report on Progress of the Administration 14

Part 6: Summary of Receipts and Payments 14

Part 7: Queries 14

Schedule 1 – Resolution 1 Table of major tasks for remuneration 15



Schedule 4 – Resolution 4Table of major tasks for remuneration 18


Schedule 6 – Summary of Receipts and Payments 23

Contents


You should read this report and the other documentation that we have sent you and then attend the

meeting of creditors in order to voice your opinion by casting your vote on the resolutions put to the

meeting. The meeting will also give you an opportunity to ask any questions that you may have.

Alternatively, you are also able to appoint a representative to attend on your behalf by lodging a proxy

form. Lodging a specific proxy form allows you to specify how your proxy must vote. Lodging a general

proxy form allows your representative to choose how your vote is exercised.

Information about the meeting of creditors is provided in the Voluntary Administrators’ Report dated 29

May 2020 and Supplementary Report dated 3 August 2020.

If you have any questions or need any assistance, please contact Chloe Lim on +61 2 8297 2437 or via

email on [email protected].

What do you need to do

next?


Part 1: Declaration John McInerney and Said Jahani of Grant Thornton Australia Limited have undertaken a proper

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

House Investments Pty. Limited in accordance with the law and applicable professional standards. We

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

properly performed, in the conduct of the Voluntary Administration.

Part 2: Executive Summary The total remuneration for this appointment is estimated to be $138,394 (excluding GST) if a Deed of

Company Arrangement is entered into, or $133,394 (excluding GST) if the Company is placed into

Liquidation.

In our Voluntary Administrators’ report dated 29 May 2020, we estimated remuneration for the Voluntary

Administration period (to date of Second Meeting) would be $56,694 (excluding GST) for the Company.

We note that the Voluntary Administration estimate (to date of Second Meeting) was increased to

$63,394 (excluding GST) compared to our previous estimate. This remuneration was approved by

creditors at the Second Meeting of Creditors on 9 June 2020.

We also note that total remuneration for the Voluntary Administration period (to date of reconvened

Second Meeting) is $83,394 (excluding GST) because of the following additional tasks that have been

conducted during the Voluntary Administration:

Preparing for and convening the adjourned Second Meeting of Creditors and preparing a

Supplementary Report to creditors;

Difficulties with receiving information from entities that the Company holds shares in;

Conducting a detailed review in regards to the Company’s current contracts/agreements;

Holding telephone discussions and sending emails to the Director regarding the outstanding

commission;

Notifications and discussions with various third parties; and

Difficulties in obtaining books and records.


Remuneration currently claimed and previously approved is summarised below:

Period Report Reference

Amount (excl. GST)

Past remuneration approved Resolution period: 4 May 2020 to 22 May 2020 31,694.00 Resolution period: 23 May 2020 to 9 June 2020 (date of Second Meeting) 31,700.00

Total past remuneration approved 63,394.00

Remuneration approval sought 1. Voluntary Administration Future Remuneration Claim: Resolution 1: 10 June 2020 to 24 July 2020 Section 3, Sch 1 13,284.00 Resolution 2: 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting)

Section 3, Sch 2 6,716.00

Total – Voluntary Administration $83,394.00

Resolution 3: 11 August 2020 to execution of the DOCA (if applicable) Section 3, Sch 3 15,000.00

2. Deed of Company Arrangement (if applicable)* Future Remuneration Claim: Resolution 4: Commencement of the DOCA to the effectuation of the DOCA (if applicable)

Section 3, Sch 4 40,000.00

Total – Voluntary Administration and Deed of Company Arrangement

$138,394.00

3. Liquidation (if applicable)* Future Remuneration Claim: Resolution 5: Commencement to finalisation of Liquidation Section 3, Sch 5 50,000.00

Total – Voluntary Administration and Liquidation $133,394.00

Total remuneration claimed and approved

Voluntary Administration and Deed of Company Arrangement 138,394.00

Voluntary Administration and Liquidation 133,394.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration. Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors.

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

composition of the remuneration approval sought.


Part 3: Remuneration 3.1 Remuneration claim resolutions

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

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

1. Voluntary Administration

Resolution 1: 10 June 2020 to 24 July 2020: “That the future remuneration of the Joint and Several

Administrators for the period from 10 June 2020 to 24 July 2020, is determined at a sum equal to the

cost of time spent by the Joint and Several Administrators and their partners and staff, calculated at the

hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased

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

$13,284, exclusive of GST, and that the Joint and Several Administrators can draw the remuneration

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


Resolution 2: 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting): “That the

future remuneration of the Joint and Several Administrators for the period from 25 July 2020 to 11

August 2020 (date of reconvened Second Meeting), is determined at a sum equal to the cost of time

spent by the Joint and Several Administrators and their partners and staff, calculated at the hourly rates

as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of

up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $6,716,

exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from

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


Resolution 3: 11 August 2020 to execution of the DOCA (if applicable): “That the future

remuneration of the Joint and Several Administrators for the period from 11 August 2020 to execution of

the DOCA (if applicable), is determined at a sum equal to the cost of time spent by the Joint and Several

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

3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year

(rounded to the nearest $10), up to a capped amount of $15,000, exclusive of GST, and that the Joint

and Several Administrators can draw the remuneration from available funds as time is incurred on a

monthly basis or as funds become available.”

4. Deed of Company Arrangement

Resolution 4: Commencement of the DOCA to the effectuation of the DOCA (if applicable): “That

the future remuneration of the Deed Administrators for the period from commencement of the DOCA to

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

Administrators and his partners and staff, calculated at the hourly rates as detailed in the Report dated 3

August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year

(rounded to the nearest $10), up to a capped amount of $40,000, exclusive of GST, and that the Deed

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

as funds become available.”


5. Liquidation

Resolution 5: Commencement to finalisation of the Liquidation: “That the future remuneration of

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

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

partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided

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

$10), up to a capped amount of $50,000, exclusive of GST, and that the Joint and Several Liquidators

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

become available.”

3.2 Details of remuneration

Remuneration Methods

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

practitioner. They are:

A 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.

B 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.

C Percentage: The total fee charged is based on a percentage of a particular variable, such as the

gross proceeds of assets realisations.

D Contingency: The practitioner’s fee is structured to be contingent on a particular outcome being

achieved.

Method chosen

Given the nature of this administration we propose that our remuneration be calculated on time based /

hourly rates method. This is because:

We will only be paid for work done, subject to sufficient realisations of the Company’s assets.

Or, if there are insufficient assets realised, subject to the indemnity provided to us (please refer

to our Declaration of Independence, Relevant Relationship and Indemnities);

It ensures creditors are only charged for work that is performed. Our time is recorded and

charged in six minute increments and staff are allocated to duties according to their relevant

experience and qualifications;

We are required to perform a number of tasks which do not relate to the realisation of assets,

for example responding to creditor enquiries, reporting to ASIC, distributing funds in

accordance with the provisions of the Corporations Act or the Bankruptcy Act;

We are unable to estimate with certainty the total amount of fees necessary to complete all

tasks required in the external administration;

We have a time recording system that is able to produce a detailed analysis of time spent on

each type of task by each individual staff member utilised in the Administration; and

The method provides full accountability in the method of calculation.


Explanation of Hourly Rates

Title Description Hourly Rate (excl. GST)

Appointee Registered Liquidator / Trustee. Partner bringing specialist skills to Administrations and Insolvency matters. Controlling all matters relating to the assignment.

$695

Director Qualified accountant (CA/CPA) and may be a registered Liquidator/Trustee. Minimum 7/8+ years’ experience. Likely to be appointed as a partner or principal in due course. Highly advanced technical and commercial skills. Planning and control of all Administration and Insolvency tasks. Controlling substantial matters relating to the assignment and reporting to the appointee.

$615

Senior Manager Qualified accountant (CA/CPA). 7/8+ years’

experience. Well developed technical and commercial

skills. Planning and control of all Administration and

Insolvency tasks. Controlling substantial matters

relating to the assignment and reporting to the

appointee.

$590

Manager Typically CA/CPA Qualified. 5-8 years’

experience. Well developed technical and commercial

skills. Planning and control of Administration and

Insolvency tasks with the assistance of the appointee.

$530-545

Senior Associate Typically CA/CPA Qualified. 3-5 years’ experience. Required to control the fieldwork on Administrations and Insolvency tasks.

$430-485

Associate Typically undertaking CA/CPA Qualifications. Up to 3 years’ experience. Required to conduct the fieldwork on smaller Administrations and Insolvency tasks and assist with fieldwork on medium to large Administrations and Insolvency tasks.

$285-360

Treasury Specifically responsible for the treasury function of Administrations and Insolvency matters as well as statutory lodgements.

$245

Undergraduate Not CA/CPA Qualified, with less 1-2 years’ experience. Required to conduct the fieldwork on smaller Administrations and Insolvency tasks and assist with fieldwork on medium to large Administrations and Insolvency tasks.

$225

EA/PA Carries out all secretarial functions relating to an Administration and all aspects relating to administering the accounts function.

$220

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

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

to 5.



Resolution 1 from 10 June 2020 to 24 July 2020: “That the future remuneration of the Joint and Several Administrators for the period from 10 June 2020 to

24 July 2020, is determined at a sum equal to the cost of time spent by the Joint and Several Administrators and their partners and staff, calculated at the

hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to

the nearest $10), up to a capped amount of $13,284, exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from

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

The below table sets out time charged to each major task area by staff members working on the Voluntary Administration for the period from 10 June 2020 to

24 July 2020 which is the basis of the Resolution 1 claim. More detailed descriptions of the tasks performed within each task area, matching the amounts

below, are contained in Schedule 1.

Position $/Hr (excl. GST) Total Hours Hrs $ Hrs $ Hrs $ Hrs $ Hrs $

Partner - 1 695.00 6.4 0.3 208.50 3.5 2,432.50 1.1 764.50 1.5 1,042.50

Senior Manager - 2 590.00 12.1 6.0 3,540.00 4.0 2,360.00 2.1 1,239.00

Manager - 1 400.00 0.2 0.2 80.00

Manager - 1 345.00 0.2 0.2 69.00

Associate - 1 285.00 4.6 1.0 285.00 2.0 570.00 1.6 456.00

Treasury 245.00 0.8 0.2 49.00 0.6 147.00

Associate - 1 205.00 0.2 0.2 41.00

24.5 7.3 4,033.50 9.5 5,362.50 3.2 2,003.50 2.1 1,212.50 2.4 672.00

403.35 536.25 200.35 121.25 67.20

7.3 4,436.85 9.5 5,898.75 3.2 2,203.85 2.1 1,333.75 2.4 739.20

607.79 620.92 688.70 635.12 308.00

Total (Incl. GST) 14,612.40

Average hourly rate

Total 13,284.00

GST 1,328.40

Eva Petalio 196.00

Catherine Sawyer 41.00

David Trehy 69.00

Chloe Li Ying Lim 1,311.00

Lisa Gibb 7,139.00

David Trehy 80.00

Administration Statutory

Employee

Total Cost

excl. GST ($)

John McInerney 4,448.00

Assets Creditors Investigations

ARITA TASK AREA



Resolution 2 from 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting): “That the future remuneration of the Joint and Several

Administrators for the period from 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting), is determined at a sum equal to the cost of time

spent by the Joint and Several Administrators and their partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020

provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $6,716,

exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as

funds become available.”

The below table sets out time charged to each major task area by staff members working on the Voluntary Administration for the period from 25 July 2020 to 11

August 2020 (date of reconvened Second Meeting) which is the basis of the Resolution 2 claim. More detailed descriptions of the tasks performed within each

task area, matching the amounts below, are contained in Schedule 2.

Assets Creditors Investigation Administration Statutory

$ $ $ $ $

Total 6,700.00 1,700.00 2,200.00 1,800.00 400.00 600.00

GST 670.00 170.00 220.00 180.00 40.00 60.00

Total (Incl. GST) 7,370.00 1,870.00 2,420.00 1,980.00 440.00 660.00

ARITA Task Area



Resolution 3 from 11 August 2020 to execution of the DOCA (if applicable): “That the future remuneration of the Joint and Several Administrators for the

period from 11 August 2020 to execution of the DOCA (if applicable), is determined at a sum equal to the cost of time spent by the Joint and Several

Administrators and their partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be

increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $15,000, exclusive of GST, and that the Joint and

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

The below table sets out time charged to each major task area by staff members working on the Voluntary Administration for the period from 11 August 2020 to

execution of the DOCA (if applicable) Which is the basis of the Resolution 3 claim. More detailed descriptions of the tasks performed within each task area,

matching the amounts below, are contained in Schedule 3.

Assets Creditors Administration Statutory

$ $ $ $

Total 15,000.00 4,000.00 4,500.00 3,000.00 3,500.00

GST 1,500.00 400.00 450.00 300.00 350.00

Total (Incl. GST) 16,500.00 4,400.00 4,950.00 3,300.00 3,850.00

ARITA Task Area


4. Deed of Company Arrangement

Resolution 4 from commencement of the DOCA to the effectuation of the DOCA (if applicable): “That the future remuneration of the Deed Administrators

for the period from commencement of the DOCA to the effectuation of the DOCA, is determined at a sum equal to the cost of time spent by the Deed

Administrators and his partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be

increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $40,000, exclusive of GST, and that the Deed

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

The below table sets out time charged to each major task area by staff members working on the Deed of Company Arrangement for the period from

commencement of the DOCA to the effectuation of the DOCA (if applicable) which is the basis of the Resolution 4 claim. More detailed descriptions of the

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

Assets Creditors Dividend Administration Statutory

$ $ $ $ $

Total 40,000.00 10,000.00 9,000.00 8,500.00 5,500.00 7,000.00

GST 4,000.00 1,000.00 900.00 850.00 550.00 700.00

Total (Incl. GST) 44,000.00 11,000.00 9,900.00 9,350.00 6,050.00 7,700.00

ARITA Task Area


5. Liquidation

Resolution 5 from commencement to finalisation of the Liquidation: “That the future remuneration of the Joint and Several Liquidators for the period from

commencement to finalisation of the Liquidation, is determined at a sum equal to the cost of time spent by the Joint and Several Liquidators and their partners

and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1

July each year (rounded to the nearest $10), up to a capped amount of $50,000, exclusive of GST, and that the Joint and Several Liquidators can draw the

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

The below table sets out time charged to each major task area by staff members working on the Liquidation for the period from commencement to finalisation

of the Liquidation which is the basis of the Resolution 5 claim. More detailed descriptions of the tasks performed within each task area, matching the amounts

below, are contained in Schedule 5.

Assets Creditors Investigation Dividend Administration Statutory

$ $ $ $ $ $

Total 50,000.00 12,500.00 11,500.00 6,500.00 7,000.00 5,500.00 7,000.00

GST 5,000.00 1,250.00 1,150.00 650.00 700.00 550.00 700.00

Total (Incl. GST) 55,000.00 13,750.00 12,650.00 7,150.00 7,700.00 6,050.00 7,700.00

ARITA Task Area


3.3 Total remuneration reconciliation

At this point in time, we estimate that the total remuneration for the Voluntary Administration (to date of

reconvened Second Meeting) will be $83,394 (excluding GST). In the event a DOCA is voted upon, we

estimate the total remuneration for the Voluntary Administration and Deed of Company Arrangement will

be $138,394 (excluding GST). If the Company enters into Liquidation, we estimate the total

remuneration for the Voluntary Administration and Liquidation will be $133,394 (excluding GST).

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

complete those tasks, to support our current remuneration approval request, at section 3.2 of the report

and in Schedules 1 to 5.

In preparing this remuneration approval report, we have made our best estimate at what we believe the

Voluntary Administration and Deed Administration or Liquidation will cost to complete and we do not

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

Voluntary Administration and Deed Administration or Liquidation not proceed as expected, we will

advise creditors and we may seek approval of further remuneration and provide details on why the

remuneration has changed. Matters that may affect the progress and the cost of the Voluntary

Administration and Deed Administration or Liquidation, include:

Further investigations into the failure of the Company;

Protracted complications with adjudicating on creditor claims;

Further investigations into potential voidable transactions and insolvent trading claims;

Unforeseen complexities in negotiating the DOCA;

Unforeseen complexities in administrating the DOCA; and

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

other claims.

3.4 Likely impact on dividends

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

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

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

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

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

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

Any dividend to creditors will also be impacted by the amount of assets that we are able to recover and

the amount of creditor claims that are admitted to participate in any dividend.

At this stage, we estimate that creditors will be repaid 100 cent in the dollar. However, we note this is

contingent upon the Company receiving the outstanding commission payable. If this is not received, the

dividend will range from 0 to 100 cent in the dollar. If we do declare a dividend, any creditor whose claim

has not yet been admitted will be contacted and asked to submit a proof of debt.

3.5 Remuneration recovered from external sources

As previously advised in our Declaration of Independence, Relevant Relationships and Indemnities

dated 5 May 2020, the Director has provided an indemnity of $50,000. To date, we have received into

our trust account $25,000 which was subsequently called upon to meet the costs of the Administration.

The Director is due to remit a further $25,000 into the trust account. This funding is in respect to any

shortfall in assets to pay claims and expenses arising out of, in connection with or incidental to the

external administration(s) of the Company (including Liquidation). The Administrators (and Liquidators)

may call upon the indemnity funding should the assets of the Company be insufficient to meet the costs

and expenses of the external administration(s).


There are no conditions on the conduct or outcome of the Administration attached to the provision of the

indemnity funding.

Part 4: Disbursements Disbursements are divided into three types:

Externally provided professional services – these are recovered at cost. An example of an

externally provided professional service disbursement is legal fees.

Externally provided non-professional costs – these are recovered at cost. Examples of externally

provided non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if

charged to the Administration, would generally be charged at cost; though some expenses such as

telephone calls, photocopying and printing may be charged at a rate which recoups both variable

and fixed costs. The recovery of these costs must be on a reasonable commercial basis. Details of

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

We have undertaken a proper assessment of disbursements claimed for Orient House Investments Pty.

Limited in accordance with the law and applicable professional standards. We are satisfied that the

disbursements claimed are necessary and proper.

We will not be seeking creditor approval to pay our internal disbursements from creditors.

Part 5: Report on Progress of the Administration A report on the progress of the Voluntary Administration is provided in the Report dated 29 May 2020

and Supplementary Report dated 3 August 2020.

Part 6: Summary of Receipts and Payments A summary of the receipts and payments for the Voluntary Administration as at 30 July 2020 is at

Schedule 6 to this report.

Part 7: Queries If you have any queries in relation to the information in this report, please contact our staff:

Contact Name: Chloe Lim

Contact Number: +61 2 8297 2437

Email: [email protected]

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

ARITA at www.arita.com.au/creditors

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


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

from 10 June 2020 to 24 July 2020.

Task Area General Description Includes

Assets

7.3 hours

$4,033.50

Debtors Continue to follow up APMR

Discussions with the Director re APMR payment

Formal notice and directions to pay to APMR

Other Assets Liaise with entities that the Company holds shares in

Continue to follow up entities that the Company holds shares in

Creditors

9.5 hours

$5,362.50

Secured creditor reporting Responding to secured creditor’s queries

Formal updates to the secured creditor regarding payment from AMPR

Telephone discussions with the secured creditor

Creditor reports Preparing Supplementary Report to Creditors ahead of reconvened Second Meeting of Creditors

Adjourned Second Meeting of Creditors

Preparation of meeting notices, proxy forms and advertisements

Forward notice of meeting to all known creditors

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

DOCA Holding further discussions regarding DOCA proposal with the Director

Discussions internally regarding DOCA proposal

Conducting investigation Review of transactions with APMR

Document maintenance/file review/checklist

Filing of documents

Updating checklists

Investigation

3.2 hours

$2,003.50

General Reviewing bank statements

Review of Company books and records

Emails to third parties

Administration

2.1 hours

$1,212.50

Planning / Review Discussions regarding status of administration

Statutory

2.4 hours

$672.00

ASIC Forms Preparing and lodging ASIC forms

Total

$13,284.00



from 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting).


Assets

$1,700.00





Creditors

$2,200.00



Telephone discussions with the secured creditor

Creditor reports Preparing Supplementary Report to Creditors ahead of reconvened Second Meeting of Creditors

Adjourned Second Meeting of Creditors

Preparation of meeting notices, proxy forms and advertisements

Forward notice of meeting to all known creditors

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

Holding adjourned Second Meeting of Creditors

Preparation and lodgement of minutes of meetings with ASIC

Responding to stakeholder queries and questions immediately following meeting

DOCA Holding further discussions regarding DOCA proposal with the Director

Discussions internally regarding DOCA proposal

Conducting investigation Review of transactions with APMR


Filing of documents

Updating checklists

Investigation

$1,800.00

General Undertaking investigations into the Company’s asset position

Administration

$400.00


Statutory

$600.00


Total

$6,716.00



from 11 August 2020 to execution of the DOCA (if applicable).


Assets

$4,000.00



Formal notice and directions to pay to APMR

Creditors

$4,500.00

Creditor Enquiries, Requests & Directions

Receive and respond to creditor enquiries

Review and prepare correspondence to creditors and their representatives



DOCA Further discussions regarding terms of DOCA proposal

Internal discussions regarding DOCA

Preparation of estimated return to creditors calculations

Finalisation and execution of DOCA

Administration

$3,000.00

Correspondence Preparing correspondence to various parties


Filing of documents

Updating checklists

Bank account administration Requesting bank statements

Bank reconciliations


Statutory

$3,500.00


Attending to statutory reporting and requirements

Total

$15,000.00


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

from commencement of the DOCA to the effectuation of the DOCA (if applicable).


Assets

$10,000.00

Debtors Continue to pursue payment from APMR

Issue formal demand (if required)

Instruct solicitors if required to chase payment from APMR

Creditors

$9,000.00



Review and prepare initial correspondence to creditors and their representatives

Preparing circular to creditors advising of DOCA execution


Formal update to secured creditors

Dealing with proofs of debt Receipting and filing POD

Corresponding with ATO regarding POD

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

Dispatch Circular to Creditors by email and mail

Dividend

$8,500.00

Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD

Receipt of POD

Maintain POD register

Adjudicating POD

Request further information from claimants regarding POD

Preparation of correspondence to claimant advising outcome of adjudication

Dividend procedures Preparation of correspondence to creditors advising of intention to declare dividend

Advertisement of intention to declare dividend

Obtain clearance from ATO to allow distribution of Company’s assets

Preparation of dividend calculation

Preparation of correspondence to creditors announcing declaration of dividend

Advertise announcement of dividend

Preparation of distribution

Preparation of dividend file

Preparation of payment entries to pay dividend

Preparation of correspondence to creditors enclosing payment of dividend

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



Respond to creditors and/or their representatives enquiries regarding adjudication

Administration

$5,500.00

Correspondence General correspondence to various parties


Six monthly administration reviews

Filing of documents

File reviews

Updating checklists

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

Requesting bank statements

Bank account reconciliations

ATO and other statutory reporting

Notification of appointment of Deed Administrators

Planning / Review Discussions regarding status of DOCA

Statutory

$7,000.00

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

Preparation of lodgements with ASIC in relation to effectuation of DOCA

Total

$40,000.00



from commencement to finalisation of the Liquidation.


Assets

$12,500.00

Debtors Continue to pursue payment from AMPR

Issue formal demand (if required)

Instructing solicitors regarding payment from AMPR (if required)



Realising shareholding if payment from AMPR is not received

Creditors

$11,500.00



Review and prepare initial correspondence to creditors and their representatives

Considering reasonableness of creditor requests

Obtaining legal advice on requests


Creditor reports Preparation of Circular to Creditors advising the outcome of Second Meeting of Creditors and the appointment of Liquidators

Preparing Statutory Report by Liquidator, investigation, proposal without meeting

Dealing with proofs of debt Receipting and filing POD when not related to a dividend

Corresponding with ATO regarding POD when not related to a dividend

Proposals to Creditors (if applicable)

Preparing proposal notices and voting forms

Forward notice of proposal to all known creditors

Reviewing votes and determining outcome of proposal

Preparation and lodgement of proposal outcome with ASIC

Investigation

$6,500.00

Conducting investigation Conducting further investigations into director offences

Conducting further investigations into potential voidable transactions and insolvent trading claims

Review of specific transactions and liaising with directors regarding certain transactions

Preparing statutory investigation reports

Preparation of investigation file

Lodgement of investigation with ASIC

Examinations (if applicable) Preparing brief to solicitor

Liaising with solicitor(s) regarding examinations



Attendance at examination

Reviewing examination transcripts

Liaising with solicitor(s) regarding outcome of examinations and further actions available

Litigation / Recoveries (if applicable)

Internal meetings to discuss status of litigation

Preparing brief to solicitors

Liaising with solicitors regarding recovery actions

Attending to negotiations

Attending to settlement matters

Dividend

$7,000.00

Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD

Receipt of POD

Maintain POD register

Adjudicating POD

Request further information from claimants regarding POD

Preparation of correspondence to claimant advising outcome of adjudication

Dividend procedures Preparation of correspondence to creditors advising of intention to declare dividend

Advertisement of intention to declare dividend

Obtain clearance from ATO to allow distribution of company’s assets

Preparation of dividend calculation

Preparation of correspondence to creditors announcing declaration of dividend

Advertise announcement of dividend

Preparation of distribution

Preparation of dividend file

Preparation of payment entries to pay dividend

Preparation of correspondence to creditors enclosing payment of dividend

Administration

$5,500.00

Correspondence Correspondence with various parties


Administration reviews

Filing of documents

File reviews

Updating checklists

Bank account administration Preparing correspondence for closing accounts

Requesting bank statements

Bank account reconciliations

ATO and other statutory reporting

Notification of appointment of Liquidators

Notification of cessation

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / registration

Completing checklists



Finalising WIP


Statutory

$7,000.00

ASIC forms Preparing and lodging ASIC forms

Correspondence with ASIC regarding statutory forms

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

Total

$50,000.00


Schedule 6 – Summary of Receipts and Payments

Administrators' Receipts and Payments as at 30 July 2020

($)

Receipts

Indemnity funding 25,000.00

Interest income 0.68

Total Receipts 25,000.68

Payments

Administrators' remuneration 25,000.00

Bank charges 0.44

Total Payments 25,000.44

Net Receipts / (Payments) 0.24

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