Statutory Report by Liquidator

ACN 166 891 158 PTY LTD (IN LIQUIDATION) (FORMERLY MULTIFIX CONSTRUCTIONS (QLD) PTY LTD)

ACN 166 891 158 (the Company)

1 May 2019

Shaun McKinnon

Liquidator

T (07) 3222 0200

E shaun.mckinnon@au.gt.com

Statutory Report to Creditors 2

Introduction

I refer to my initial correspondence to creditors dated 1 March 2019 in which I advised you of my

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

The purpose of this report is to:

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

Provide you with an update of the assets and liabilities of the Company;

Brief you on the investigations undertaken and further inquiries that need to be undertaken;

Advise you of likely recovery actions; and

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

The Liquidator has relied on information provided from numerous sources to prepare the report,

including:

Report on Company Affairs and Property provided to me by the former Director of the Company,

Peter Willaton, on 27 February 2019;

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

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

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

I have not performed an audit and reserve the right to alter my conclusions, should the underlying data

prove to be inaccurate or change materially from the date of this report.

Executive Summary

Appointment

The Australian Taxation Office (ATO) filed a winding up application against the Company on 20 September 2018.

On 1 February 2019, the Federal Court of Australia granted an order appointing Shaun McKinnon as Liquidator of the Company.

Assets The Company is owed a debt of c. $2.2m from Multifix Constructions Pty Ltd ATF Willaton Family Trust, a related party entity, for the provision of labour hire services.

Multifix Constructions Pty Ltd ATF Willaton Family Trust was placed into Voluntary Administration on 11 April 2019. Recoverability of this debt is unknown at this stage.

Liabilities The known liabilities of the Company are as follows: o Priority creditors – c. $480k o Unsecured creditors – c. $1.9m

We note the priority creditor claim is for outstanding superannuation only.

Investigations Initial investigations indicate there may be a number of potential preference payments.

Further, initial investigations indicate there may be a number of potential unreasonable director related transactions.

The Liquidator’s investigations are ongoing into any potential insolvent trading.

Dividend Due to the infancy of my appointment and the uncertain nature of recoveries, the Liquidator is currently unable to comment on the likelihood or quantum of any possible dividend.

Statutory Report to Creditors 3

Company Background

Company Affairs

The Company was incorporated on 21 November 2013, with the Director of the Company at time of

incorporation being Mr Peter Willaton. Mr Willaton ceased being a director of the Company on 31

January 2019 (the day prior to my appointment as Liquidator) with Sarah Arnold appointed Director of

the Company on the same day.

The Company’s name was changed to ACN 166 891 158 Pty Ltd on 1 February 2019, per an ASIC

search on the Company.

The Company employed staff and provided labour hire services to a related party, Multifix Constructions

Pty Ltd ATF Willaton Family Trust (MFC). According to the Company’s MYOB accounting file, the

Company would raise a monthly invoice to MFC for the labour hire services, with the invoiced amount

covering employee wages, PAYG withholding tax, superannuation and other employment related

expenses.

The Company’s MYOB accounting file indicates a National Australia Bank Ltd (NAB) bank account was

utilised to conduct its business transactions (bank account number ending in 0948). However, the NAB

confirmed that the bank account ending in 0948 was held in the name of Multifix Constructions Pty Ltd

as opposed to the Company’s name. Further, NAB advised the last NAB bank account held in the

Company’s name was closed on 18 May 2015.

Further, we note the Company’s MYOB accounting file only contains transaction records from 1 July

2015 onwards. Given the Company was incorporated in November 2013, it appears that we have not

been provided with all of the Company’s books and records at the date of this report. We are following

up the director in relation to the outstanding books and records of the Company.

On 20 September 2018, the Australian Taxation Office (ATO) filed an application to have the Company

wound up. On 1 February 2019, the Federal Court of Australia granted an order appointing me as

Liquidator of the Company.

Causes for the Company’s Failure

The former Director stated the reason for the Company’s financial difficulties and the ultimate need for it

to be wound up was its failure to reach an agreement with the ATO in relation to their outstanding debt,

leading to the Federal Court winding up the Company.

While the non-payment of the ATO debt may have been a cause of the Company’s failure, the financial

positon of the Company’s parent entity, Multifix Constructions Pty Ltd contributed to the Company’s

failure. We note Multifix Constructions Pty Ltd was placed into Voluntary Administration on 11 April

2019, owing c. $2.2m to the Company.

Assets and liabilities

Outlined in the below table is an analysis of the assets and liabilities of the Company, and comparison

to the Report on Company Activities and Property (ROCAP) as provided by the former Director, Mr

Peter Willaton.

Statutory Report to Creditors 4

ROCAP

As at 1 February 2019

Director’s Book Value

$

Director’s ERV

$

Liquidator’s ERV

$

Assets

Debtors – Multifix Constructions Pty Ltd ATF Willaton Family Trust

Not Provided Not Provided Unknown

Total Income Not Provided Not Provided Unknown

Liabilities

Amounts owing to Priority Creditors 224,273 224,273 478,695

Amounts owing to Secured Creditors Nil Nil Nil

Amounts owing to Unsecured Creditors 2,183,415 2,183,415 1,914,393

Total Creditors 2,407,688 2,407,688 2,393,088

Total Surplus (Deficiency) Unknown Unknown Unknown

To date, we have not received a ROCAP from the current Director, Ms Sarah Arnold due to Ms Arnold’s

the address per the ASIC Company search being invalid (ROCAP documentation issued was returned

to our office noting Ms Arnold no longer lived at the stated address. We are making enquiries into Ms

Arnold’s current mailing address).

Debtors

At the date of my appointment, the Company was owed c. $2.2m in labour hire services since 1 July

2018 from a related party, Multifix Constructions Pty Ltd ATF Willaton Family Trust (MFC). According to

the Company’s books and records, the Company provided labour hire services solely to MFC.

MFC was placed into Voluntary Administration on 11 April 2019, with Nikhil Khatri and Morgan Lane of

Worrells appointed Voluntary Administrators. I intend to lodge a claim in the Voluntary Administration of

MFC in respect to this debt. At this stage, recoverability of this debt is unknown.

Given the limited books and records received to date, further investigations will need to be undertaken

to understand the nature of the relationship between the Company and MFC and contractual obligations

between the parties.

Priority (Employee) Creditors

The ROCAP provided to me by the former Director indicates a superannuation guarantee charge owed

to the Australian Taxation Office totaling c. $224k for the period up to 30 June 2018. The Company’s

books and records indicate a further c. $260k in outstanding superannuation is owed to employees for

the period 1 July 2018 to 31 January 2019.

The Australian Taxation Office has submitted a Proof of Debt in the Liquidation for Superannuation

Guarantee Charge for the period 1 April 2018 to 30 June 2018 totaling c. $221k.

All priority creditor claims are yet to being reviewed or adjudicated on to quantify the total priority

creditor claims.

Unsecured Creditors

The Company’s unsecured creditor position is summarised in the below table, as per the ROCAP and

claims received to date from unsecured creditors.

Statutory Report to Creditors 5

Creditor ROCAP amount

$ Claimed amount

$

Australian Taxation Office $1,966,350 $1,688,776

Office of State Revenue – QLD $112,367 $112,972

Workcover QLD $82,787 $0

Office of State Revenue - NSW $21,915 $29,859

Total Unsecured Creditors $2,183,419 $1,831,606

I am yet to review or adjudicate on any unsecured creditor claims.

Receipts and Payments to date

I have not received any funds, nor processed any payments in the Liquidation to date.

Investigations and recovery actions

Investigations undertaken

I have commenced my initial investigations into the affairs of the Company and any potential recovery

actions that may be available to the Liquidator to pursue.

To date, I have undertaken the following investigations:

Director’s obligation to maintain adequate books and records;

Insolvent Trading; and

Voidable Transactions.

My initial findings of these investigations are detailed below. Given the limited time that has passed in

the liquidation, and that further investigation will be undertaken, the below findings are preliminary and

may be subject to change.

Director’s obligation to maintain adequate books and records

I have been provided with only the company register folder and the Company’s MYOB accounting file. I

have not been provided with any other financial or commercial books and records and as such, I believe

the Director has not complied with the obligation pursuant to s286 of the Act. I note that the MYOB

accounting file only contains transaction records from 1 July 2015 onwards, noting the Company was

incorporated in November 2013.

Insolvent trading

To date, I have only been provided limited books and records in the Liquidation which has hindered the

ability to determine the likely date of insolvency. Further investigations will be conducted and the merits

of any potential claim against the former Director for debts incurred whilst trading insolvent will be

assessed.

Voidable transactions

Unfair preference payment

The relation-back period in this matter commenced on 20 March 2018, being 6 months prior to the date

of the winding up application being filed.

My preliminary investigations to date have identified a number of payments that may be considered

preferential.

My investigations are continuing into the circumstances of these payments.

Statutory Report to Creditors 6

Uncommercial transactions – Third Parties

To date, my preliminary investigations have not identified any potential uncommercial transactions.

However, further investigations will be undertaken once further information becomes available.

Unreasonable Director related transactions

My preliminary investigations to date have identified a number of payments during the relation back

period that may be potential unreasonable director related transactions. These payments relate to

Multifix Constructions Pty Ltd, Willaton Family Trust, Willaton Properties Pty Ltd and the former Director.

Further investigations will be undertaken once further information becomes available.

Further inquiries to be undertaken

I plan to undertake the following further investigations:

Review trading history to determine the date the Company became insolvent and consider any

potential insolvent trading claim;

Purse recovery of voidable transactions including preference payments and any uncommercial

transactions; and

Collectability of intercompany loan.

Meetings held

To date, no meeting of the Company’s creditors have been required to be held and therefore, no

meeting of creditors has been convened. Should a meeting of creditors be required in the future,

notification of same will be provided to all creditor.

Likelihood of a dividend

I am unable to provide a dividend estimate of any certainty at this stage of the liquidation given the

uncertain recoverability of the related party loan account and potential voidable transactions. If I do

declare a dividend, any creditor whose claim has not yet been admitted will be contacted and asked to

submit a proof of debt. This formalises your claim in the liquidation and is used to determine all claims

against the Company.

Cost of the liquidation

As outlined in my initial information to creditors, I estimated that my total remuneration for the liquidation

will be $20,000 to $30,000 (excluding GST). Considering the work undertaken to date and future work to

be undertaken, I anticipate my total remuneration for the liquidation will now be $30,000 to $40,000

(excluding GST). At this stage, I am not seeking approval for any amount of this remuneration.

What happens next in the liquidation?

I will proceed with the liquidation, including:

Complete my investigations into the Company’s affairs;

Recover any voidable transactions, if identified;

Correspond with the Voluntary Administrators of Multifix Constructions Pty Ltd in relation to the

related party loan account;

Distribute any available funds to creditors of the Company (subject to available funds);

Statutory Report to Creditors 7

Complete my reporting to the corporate insolvency regulator, the Australian Securities and

Investments Commission (ASIC) as required; and

Any other matters arising in the Liquidation.

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

I expect to have completed this liquidation within 6 to 12 months.

Compliance with best practice

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

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

Insolvency and Turnaround Association (ARITA) with regard to content of the Statutory Report by

Liquidator.

Where can you get more information?

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

1 ARITA at www.arita.com.au/creditors (refer Appendix A)

2 ASIC at www.asic.giv.au (refer Appendix B)

Should you have any queries with respect to the above, you may also contact Nathan Bleakley of my

office on +61 7 3222 0449 or via email on nathan.bleakley@au.gt.com. There is also information about

this liquidation on my firm’s website, www.grantthornton.com.au, under Creditors Information. Creditors

are advised to search “ACN 166 891 158 Pty Ltd (Formerly Multifix Constructions (Qld) Pty Ltd” at the

top of the webpage to easily navigate to the page.

Dated this 1st day of May 2019

Shaun McKinnon

Liquidator

List of attachments

Appendix 1 – Summary of ARITA Insolvency information sheets

Appendix 2 – Summary of ASIC Insolvency information sheets

Appendix 3 - Proof of Debt

Statutory Report to Creditors 8

Summary of ARITA Insolvency information sheets

Appendix 1

Statutory Report to Creditors 9

Statutory Report to Creditors 10

Summary of ASIC Insolvency information sheets

Appendix 2

Statutory Report to Creditors 11

Proof of Debt

Appendix 3

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

ACN 166891158

FORM 535

Subregulation 5.6.49(2)

Corporations Act (2001)

FORMAL PROOF OF DEBT OR CLAIM

(GENERAL FORM)

To the Liquidator of ACN 166 891 158 Pty Ltd (In Liquidation) (Formerly Multifix Constructions (QLD) Pty

Ltd)

1 This is to state that the company was on 1 February 2019 (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.

4 * 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: Phone: Address: Email:

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