TO CREDITORS PO Box - Ferrier Hodgson...2010/10/21 · to creditors together with a schedule setting out the Deed Administrators’ likely tasks. Page 3 Remuneration of Liquidators

MELBOURNE

Level 29 600 Bourke Street

Melbourne VIC 3000 Australia

PO Box 290 Collins Street West

Melbourne VIC 8007

phone +61 3 9600 4922

fax +61 3 9642 5887

email [email protected]

www.ferrierhodgson.com

DX 125 Melbourne

Adelaide

Brisbane

Perth

Sydney

Jakarta

Kuala Lumpur

Singapore

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Affiliated through

Zolfo Cooper

United States

United Kingdom

caribbean

and

KLC Kennic Lui & Co

Hong Kong

china

Ferrier Hodgson is an affiliation of independent partnerships/entities.

Liability limited by a scheme approved under the Professional Standards Legislation.

When replying please quote: Our Ref:SJ:KJ:A1/B9 G:\JRL\Munday Group\Prec\prec\Drafts for 439a report 18102010\VA162.doc

21 October 2010

TO CREDITORS

Dear Sir/Madam

RE: HAMDAY PTY LTD

(TRADING AS „THE GRAND FRANKSTON‟)

(RECEIVERS AND MANAGERS APPOINTED)

(ADMINISTRATORS APPOINTED)

ACN 113 225 979

SPAR HOLDINGS PTY LTD

(TRADING AS „SUGAR GUM HOTEL‟)



ACN 100 379 628

JODAY PTY LTD

(TRADING AS „PLAYERS ON LYGON‟)



ACN 111 105 509

UPDAY PTY LTD

(TRADING AS „GOLDEN FLEECE HOTEL‟)



ACN 106 215 356

MAGDAY PTY LTD

(TRADING AS „GOLDEN NUGGET‟)



ACN 113 225 657

YADNUM PTY LTD

(TRADING AS „THE COVE HOTEL‟)



ACN 106 053 212

PIEDAY PTY LTD

(TRADING AS „COURT JESTER‟)



ACN 109 800 357

COLLECTIVELY “THE GAMING COMPANIES”

Peter McCluskey and I were appointed Administrators of the Gaming Companies on 9

April 2010.

Creditors confirmed the appointment at a first meeting of creditors held on 21 April 2010. At

that meeting, creditors did not resolve to appoint a Committee of Creditors.

It is proposed that the Gaming Companies and its creditors enter into a DOCA which may

affect your legal rights. A meeting to consider, and if thought fit, approve the proposed

DOCA, has been convened.

If a majority in number and a majority in value of those creditors voting at the meeting,

approve the proposal, the DOCA, upon execution by the Gaming Companies and the Deed

Administrators, will bind all creditors affected by its terms.

I enclose the following regarding the meeting of creditors.

1. Notice of Meeting. Please note that the meeting commences at 11.00am. You

should arrive for registration at least 30 minutes prior to the meeting.

Page 2

2. Informal Claim Form for Voting Purposes. If you submitted one of these for the

purposes of the first meeting of creditors, you do not need to submit another one for

this meeting.

A person is not entitled to vote at the meeting unless they provide particulars of the

debt or claim to the Administrators before the meeting. Please note this form is

for voting purposes only. All creditors must furnish full details of their claims,

indicating whether they rank as secured, preferential or unsecured, and whether

they claim title to any goods supplied to the Group or any lien/pledge over goods in

their possession which are property of the Group.

3. Appointment of Proxy form. The form enables you to appoint another person to act

on your behalf at the meeting. Proxy Forms submitted for the first meeting of

creditors are not valid for this meeting.

The Informal Claim Form for Voting Purposes and Proxy Form should be lodged with

this office before the meeting and, in any event, not later than 4.00pm on the

business day prior to the meeting. Forms can be sent by facsimile on (03) 9642 5887

marked to the attention of Ms Susanne Jing or scanned and emailed to

[email protected]. However, Corporations Regulation 5.6.36A requires lodgement

of the original of the Proxy Form with the Administrators’ office within 72 hours of lodging

the faxed/emailed copy.

4. Administrators’ report to creditors pursuant to section 439A(4)(a) of the Act 2001

which includes an opinion, with supporting reasons, on each of the following matters:

Whether it would be in the creditors' interests for the Gaming Companies to

execute a DOCA.

Whether it would be in the creditors' interests for the Gaming Companies to

be wound up.

Whether it would be in the creditors' interests for the administrations to end.

The Administrators‟ Remuneration

The Administrators’ report includes a remuneration report explaining their remuneration

claim setting out:

(a) Details of time spent by category of staff at the rates applicable for such staff; and,

(b) A summary of the work undertaken by the Administrators and their staff in the

administration.

Remuneration of Deed Administrators

Where creditors resolve that the Gaming Companies execute the proposed DOCA, the

Deed Administrators intend that their remuneration be fixed on the basis of time spent by

them and their staff of an appropriate level having regard to the nature and complexity of

the work and calculated by reference to the hourly rates set out in the schedule

accompanying the Notice of Meeting of Creditors sent out for the purposes of the first

meeting of creditors. A further copy of the schedule is included in the Administrators’ report

to creditors together with a schedule setting out the Deed Administrators’ likely tasks.

Page 3

Remuneration of Liquidators

Where creditors resolve that the Gaming Companies be wound up, the Liquidators intend

that their remuneration be fixed on the basis of time spent by them and their staff of an

appropriate level having regard to the nature and complexity of the work and calculated by

reference to the hourly rates set out in the schedule accompanying the Notice of Meeting of

Creditors sent out for the purposes of the first meeting of creditors. A further copy of the

schedule is included in the Administrators’ report to creditors together with a schedule

setting out the Liquidators’ likely tasks.

For further information concerning the Voluntary Administration process and Ferrier

Hodgson, you may wish to visit our website at www.ferrierhodgson.com. Queries regarding

the administration should be directed to Ms Jing on (03) 9604 5658.

Yours faithfully

JOHN LINDHOLM

ADMINISTRATOR

Encl.

http://www.ferrierhodgson.com/

Ref: A1/B9

G:\JRL\Munday Group\Prec\prec\Drafts for 439a report 18102010\VA163.doc

FORM 529

CORPORATIONS ACT 2001

Subregulation 5.6.12(2)

HAMDAY PTY LTD

(TRADING AS ‘THE GRAND FRANKSTON’)



ACN 113 225 979


(TRADING AS ‘SUGAR GUM HOTEL’)



ACN 100 379 628

JODAY PTY LTD

(TRADING AS ‘PLAYERS ON LYGON’)



ACN 111 105 509

UPDAY PTY LTD

(TRADING AS ‘GOLDEN FLEECE HOTEL’)



ACN 106 215 356

MAGDAY PTY LTD

(TRADING AS ‘GOLDEN NUGGET’)



ACN 113 225 657

YADNUM PTY LTD

(TRADING AS ‘THE COVE HOTEL’)



ACN 106 053 212

PIEDAY PTY LTD

(TRADING AS ‘COURT JESTER’)



ACN 109 800 357

COLLECTIVELY ‘THE GAMING COMPANIES’

NOTICE OF A CONCURRENT MEETING OF

CREDITORS OF COMPANIES UNDER ADMINISTRATION

NOTICE is given that a concurrent meeting of the creditors of the Gaming Companies will be held at

the Institute of Chartered Accountants Australia, Level 3, 600 Bourke Street, Melbourne, Victoria on

29 October 2010 at 11.00am.

AGENDA

1. To consider the statements by the director about the Gaming Companies’ business, property,

affairs and financial circumstances.

2. To consider the circumstances leading up to the administrations and the various options

available to creditors.

3. To determine the remuneration of the Voluntary Administrators.

4. For creditors to resolve upon one of the following:

That the Gaming Companies execute a Deed of Company Arrangement; or

That the administrations should end; or

That the Gaming Companies be wound up.

5. If a Deed of Company Arrangement is resolved upon, to determine the remuneration of the

Deed Administrators.

Page 2

6. If the Gaming Companies are wound up, to consider the appointment of Committees of

Inspection.

7. If the Gaming Companies are wound up and no Committee is appointed, to fix the

remuneration of the Liquidators.

8. Any other business that may be lawfully brought forward.

Proxies to be used at the meeting should be lodged at the office of the Administrators by 4.00pm on

the business day prior to the meeting. A corporation may only be represented by proxy or by an

attorney appointed pursuant to Corporations Regulations 5.6.28 and 5.6.31 respectively or,

by a representative appointed under Section 250D of the Corporations Act 2001.

In accordance with Regulation 5.6.23(1) of the Corporations Regulations, creditors will not be

entitled to vote at the meeting unless they have previously lodged particulars of their claims against

the Group with the Administrators.

DATED this 21st day of October 2010

JOHN LINDHOLM

ADMINISTRATOR

Ref: C-

G:\JRL\Munday Group\Prec\prec\Drafts for 439a report 18102010\VA166.doc

INFORMAL PROOF OF DEBT FORM

Regulation 5.6.47

Please tick relevant company you are a creditor of:

HAMDAY PTY LTD

(TRADING AS ‘THE GRAND FRANKSTON’) SPAR HOLDINGS PTY LTD

(TRADING AS ‘SUGAR GUM HOTEL’)

JODAY PTY LTD

(TRADING AS ‘PLAYERS ON LYGON’) UPDAY PTY LTD

(TRADING AS ‘GOLDEN FLEECE HOTEL’)

MAGDAY PTY LTD

(TRADING AS ‘GOLDEN NUGGET’) YADNUM PTY LTD

(TRADING AS ‘THE COVE HOTEL’)

PIEDAY PTY LTD

(TRADING AS ‘COURT JESTER’)

Name of creditor:

Amount of debt claimed: (see note)

Consideration for debt:

Whether debt secured or unsecured:

If secured, give details of security including dates, etc:

Balance, if any, after deducting value of security (see note):

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

Creditor (or person authorised by creditor)

NOTE:

Under the Corporations Regulations, a creditor is not entitled to vote at a meeting unless (Regulation

5.6.23):

a. his claim has been admitted, wholly or in part, by the Administrator; or

b. he has lodged with the Administrator particulars of the debt or claim, or if required, a formal

proof of debt.

For the purposes of Part 5.3A, a secured creditor may vote (Regulation 5.6.24) for the whole of his

debt without regard to the estimated value of his security.

Proxies must be made available to the Administrator.

Ref: C-

G:\JRL\Munday Group\Prec\prec\Drafts for 439a report 18102010\VA167 - Hamday.docx

FORM 532


Regulation 5.6.29

HAMDAY PTY LTD

(TRADING AS ‘THE GRAND FRANKSTON’) (RECEIVERS AND MANAGERS APPOINTED)

(ADMINISTRATORS APPOINTED) ACN 113 225 979

APPOINTMENT OF PROXY FOR CREDITORS MEETING

*I/*We1 .................................................................................................................................................................

of .................................................................................................................................................................

a creditor of Hamday Pty Ltd appoint2 .......................................................................................................................................

or in his absence ......................................................................................................................................................................... .

as *my/our *(i) general OR *(ii) special proxy3 to vote at the meeting of creditors to be held on 29 October 2010, or at any

adjournment of that meeting, to vote

(i) on all matters arising at the meeting; OR

(ii) on each of the following kinds of resolutions in the manner specified:

For Against Abstain

(a) A resolution that the company be required to execute a Deed of

Company Arrangement

(a) A resolution that the company be wound up

(b) A resolution that the Administration end

(c) A resolution that the Administrators’ remuneration for the period 9 April

2010 to 18 October 2010, be fixed in accordance with the Ferrier

Hodgson hourly rates in the sum of $25,971.11, and also that the

Administrators’ remuneration for the period from 19 October 2010 to the

end of the Administration period be fixed in accordance with the Ferrier

Hodgson hourly rates to a maximum sum of $9,471 (plus GST if

applicable)

(d) A resolution that the remuneration of the Administrators of the Deed of

Company Arrangement, be approved up to the sum of $7,143 plus any

applicable GST but subject to upward revision by resolution of creditors

(d) A resolution that the Liquidators’ remuneration be fixed in accordance

with the Ferrier Hodgson hourly rates up to a maximum sum of $18,182

but subject to upward adjustment by resolution of creditors / committee of

inspection

(e) A resolution that a Committee of Inspection be appointed

(f) A resolution that creditors authorise the Liquidator(s) under Section

477(2A) of the Corporations Act 2001, to compromise a debt owed to the

company of any amount

* Strike out if inapplicable 1 If a firm, strike out “I” and set out the full name of the firm.

2 Insert the name, address and description of the person appointed.

3 If a special proxy add the words "to vote for" or the words "to vote against" and specify the particular resolution.

Page 2

(g) A resolution that the books and records of the company be disposed of

12 months after the dissolution of the company or earlier at the discretion

of the ASIC

I am an unsecured creditor and the total amount owed to me is $

OR

I am a secured creditor and the total amount owed to me is $

DATED this day of 2010

...................................................................... OR The Common Seal of4

Signature5 of individual or person

6

authorised by corporate resolution to was hereunto affixed in the

represent the corporation presence of

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

Director

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

Secretary

CERTIFICATE OF WITNESS7

I, ..................................................................................... of ..........................................................................................................

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

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


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

Signature of Witness

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

Description

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

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

Place of Residence

4 The method of affixing the Common Seal is prescribed in Section 127(2) of the Corporations Act 2001 and, usually, the creditor corporation’s constitution.

5 The signature of the creditor is not to be attested by the person nominated as proxy.

6 A corporation may only be represented by proxy or by an attorney appointed pursuant to Corporations Regulations 5.6.28 and 5.6.31A respectively or, by a representative appointed under Section 250D of the Corporations Act 2001. Copy of authority/power of attorney to be annexed.

7 This certificate is to be completed only where the person giving it is blind.

Ref: C-

G:\JRL\Munday Group\Prec\prec\Drafts for 439a report 18102010\VA167 - Joday.docx

FORM 532


Regulation 5.6.29

JODAY PTY LTD

(TRADING AS ‘PLAYERS ON LYGON’) (RECEIVERS AND MANAGERS APPOINTED)



*I/*We1 .................................................................................................................................................................

of .................................................................................................................................................................

a creditor of Joday Pty Ltd appoint2 ...........................................................................................................................................

or in his absence ......................................................................................................................................................................... .





For Against Abstain


Company Arrangement









applicable)







inspection








Page 2



of the ASIC


OR





6



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

Director

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

Secretary


I, ..................................................................................... of ..........................................................................................................




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


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

Description

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

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

Place of Residence





Ref: C-

G:\JRL\Munday Group\Prec\prec\Drafts for 439a report 18102010\VA167 - Magday.docx

FORM 532


Regulation 5.6.29

MAGDAY PTY LTD

(TRADING AS ‘GOLDEN NUGGET’) (RECEIVERS AND MANAGERS APPOINTED)



*I/*We1 .................................................................................................................................................................

of .................................................................................................................................................................

a creditor of Magday Pty Ltd appoint2 .......................................................................................................................................

or in his absence ......................................................................................................................................................................... .





For Against Abstain


Company Arrangement









applicable)







inspection








Page 2



of the ASIC


OR





6



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

Director

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

Secretary


I, ..................................................................................... of ..........................................................................................................




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


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

Description

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

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

Place of Residence





Ref: C-

G:\JRL\Munday Group\Prec\prec\Drafts for 439a report 18102010\VA167 - Pieday.docx

FORM 532


Regulation 5.6.29

PIEDAY PTY LTD

(TRADING AS ‘COURT JESTER’) (RECEIVERS AND MANAGERS APPOINTED)



*I/*We1 .................................................................................................................................................................

of .................................................................................................................................................................

a creditor of Pieday Pty Ltd appoint2 .........................................................................................................................................

or in his absence ......................................................................................................................................................................... .





For Against Abstain


Company Arrangement






Administrators’ remuneration for the period from the 19 October 2010 to

the end of the Administration period be fixed in accordance with the

Ferrier Hodgson hourly rates to a maximum sum of $9,471 (plus GST if

applicable)







inspection








Page 2



of the ASIC


OR





6



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

Director

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

Secretary


I, ..................................................................................... of ..........................................................................................................




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


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

Description

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

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

Place of Residence





Ref: C-

G:\JRL\Munday Group\Prec\prec\Drafts for 439a report 18102010\VA167 - Spar Holdings.docx

FORM 532


Regulation 5.6.29


(TRADING AS ‘SUGAR GUM HOTEL’) (RECEIVERS AND MANAGERS APPOINTED)


ACN 100 379 628


*I/*We1 .................................................................................................................................................................

of .................................................................................................................................................................

a creditor of Spar Holdings Pty Ltd appoint2 .............................................................................................................................

or in his absence ......................................................................................................................................................................... .





For Against Abstain


Company Arrangement









applicable)







inspection








Page 2



of the ASIC


OR





6



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

Director

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

Secretary


I, ..................................................................................... of ..........................................................................................................




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


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

Description

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

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

Place of Residence





Ref: C-

G:\JRL\Munday Group\Prec\prec\Drafts for 439a report 18102010\VA167 - Upday.docx

FORM 532


Regulation 5.6.29

UPDAY PTY LTD

(TRADING AS ‘GOLDEN FLEECE HOTEL’) (RECEIVERS AND MANAGERS APPOINTED)


ACN 106 215 356


*I/*We1 .................................................................................................................................................................

of .................................................................................................................................................................

a creditor of Upday Pty Ltd appoint2 ..........................................................................................................................................

or in his absence ......................................................................................................................................................................... .





For Against Abstain


Company Arrangement









applicable)







inspection








Page 2



of the ASIC


OR





6



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

Director

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

Secretary


I, ..................................................................................... of ..........................................................................................................




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


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

Description

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

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

Place of Residence





Ref: C-

G:\JRL\Munday Group\Prec\prec\Drafts for 439a report 18102010\VA167 - Yadnum.docx

FORM 532


Regulation 5.6.29

YADNUM PTY LTD

(TRADING AS ‘THE COVE HOTEL’) (RECEIVERS AND MANAGERS APPOINTED)



*I/*We1 .................................................................................................................................................................

of .................................................................................................................................................................

a creditor of Yadnum Pty Ltd appoint2 .......................................................................................................................................

or in his absence ......................................................................................................................................................................... .





For Against Abstain


Company Arrangement









applicable)







inspection








Page 2



of the ASIC


OR





6



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

Director

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

Secretary


I, ..................................................................................... of ..........................................................................................................




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


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

Description

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

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

Place of Residence





FERRIER HODGSON

LEVEL 29, 600 BOURKE STREET MELBOURNE VIC 3000

PO BOX 290 MELBOURNE VIC 8007

TELEPHONE 03 9600 4922 FACSIMILE 03 9642 5887

G:\JRL\MUNDAY GROUP\PREC\PREC\VA165A – 439A REPORT 20102010

HAMDAY PTY LTD (TRADING AS „THE GRAND FRANKSTON‟) ACN 113 225 979

JODAY PTY LTD (TRADING AS „PLAYERS ON LYGON‟)

ACN 111 105 509

MAGDAY PTY LTD (TRADING AS „GOLDEN NUGGET‟) ACN 113 225 657

PIEDAY PTY LTD (TRADING AS „COURT JESTER‟)

ACN 109 800 357

SPAR HOLDINGS PTY LTD (TRADING AS „SUGAR GUM HOTEL‟) ACN 100 379 628

UPDAY PTY LTD (TRADING AS „GOLDEN FLEECE HOTEL‟)

ACN 106 215 356

YADNUM PTY LTD (TRADING AS „THE COVE HOTEL‟) ACN 106 053 212

(ALL RECEIVERS AND MANAGERS AND ADMINISTRATORS APPOINTED)

COLLECTIVELY THE “GAMING COMPANIES”

Report by Administrators Pursuant to Section 439A(4)(a) of

The Corporations Act 2001

John Lindholm and Peter McCluskey

21 October 2010

Section 439A(4)(a) Report by Administrators 21 October 2010

Table of Contents

Glossary of terms 1.

1. Executive summary 3.

2. Introduction 5.

3. Group information 8.

4. Historical financial information 11.

5. Statement by director 14.

6. Trading by Receivers 15.

7. Sale of businesses 15.

8. Statutory investigations 16.

9. Proposal for DOCA 27.

10. Creditors’ options, dividend estimates and cost estimates 29.

11. Administrators’ opinion 31.

12. Administrators’ remuneration report 31.

13. Further queries 31.

Section 439A(4)(a) Report by Administrators 21 October 2010 Page 1

Glossary of terms

Abbreviation Description

ABN Australian Business Number

ACN Australian Company Number

Act The Corporations Act 2001

ASIC Australian Securities and Investments Commission

ATO Australian Taxation Office

Bank; or NAB National Australia Bank Limited

BAS Business Activity Statement

BNZA Bank of New Zealand Australia

COD Cash on Delivery

DIRRI Declaration of Independence, Relevant Relationships and Indemnities

DOCA Deed of Company Arrangement

Dontaris Dontaris Pty Ltd

EBITDA Earnings before Income Tax, Depreciation and Amortisation

ERV Estimated Realisable Value

Extended Companies Dontaris Pty Ltd, Fishermen‟s Pier Pty Ltd, Hamday Pty Ltd, Joday Pty Ltd, Magday Pty Ltd, Munday Group Holdings Pty Ltd, Munday Tiger Pty Ltd, Pieday Pty Ltd, Spar Holdings Pty Ltd, Taylor McKay Pty Ltd, Upday Pty Ltd, and Yadnum Pty Ltd.

Federal Court Federal Court of Australia, Victorian District Registry

Ferrier Hodgson Forensics Ferrier Hodgson Forensics Pty Ltd

Fishermen‟s Pier Fishermen‟s Pier Pty Ltd trading as „Fishermen‟s Pier Restaurant‟

FY Financial Year

Gaming Companies Hamday Pty Ltd, Joday Pty Ltd, Magday Pty Ltd, Pieday Pty Ltd, Spar Holdings Pty Ltd, Upday Pty Ltd, and Yadnum Pty Ltd.

GEERS General Employee Entitlements Redundancy Scheme

GST Goods and Services Tax

Hamday Hamday Pty Ltd trading as „The Grand Frankston‟

Hot Summers Hot Summers Pty Ltd formerly trading as „Lorne Hotel‟

ICAA Institute of Chartered Accountants of Australia

IPA Insolvency Practitioners Association of Australia

Joday Joday Pty Ltd trading as „Players on Lygon‟

Liquidation Companies Hot Summers Pty Ltd, MGQ Ayr Pty Ltd, Munday Group Pty Ltd, Ricnic Pty Ltd and SRAM Nominees Pty Ltd

Magday Magday Pty Ltd trading as „Golden Nugget‟

MGQ Ayr MGQ Ayr Pty Ltd formerly trading as „Ayr Hotel‟

MRC Victorian Amateur Turf Club (Incorporating) The Melbourne Racing Club

Munday Group Munday Group Pty Ltd

Munday Group Holdings Munday Group Holdings Pty Ltd

Munday Tiger Munday Tiger Pty Ltd trading as „Man-Bo Towers‟

PAYG Pay As You Go Withholding Tax

P&E Plant and Equipment


Rowland Projects Peter Rowland Catering Pty Ltd trading as Rowland Projects

Pieday Pieday Pty Ltd trading as „Court Jester‟

Receivers and Managers; or Receivers

Ian Carson, Craig Crosbie and Stephen Longley of PPB

Restaurants Fishermen‟s Pier and Man-Bo Towers

Ricnic Ricnic Pty Ltd

ROT Retention of Title

SGC Superannuation Guarantee Charge

Spar Holdings Spar Holdings Pty Ltd trading as „Sugar Gum Hotel‟

SRAM Nominees SRAM Nominees Pty Ltd formerly trading as „Torquay Hotel‟

Statement Directors‟ Statement about the Company‟s Business, Property, Affairs and Financial Circumstances

SRO State Revenue Office

Taylor McKay Taylor McKay Pty Ltd trading as „Whalers Inn‟

The Group; or The Companies

Munday Group of Companies including Dontaris Pty Ltd, Fishermen‟s Pier Pty Ltd, Hamday Pty Ltd, Hot Summers Pty Ltd, Joday Pty Ltd, Magday Pty Ltd, MGQ Ayr Pty Ltd, Munday Group Pty Ltd, Munday Group Holdings Pty Ltd, Munday Tiger Pty Ltd, Pieday Pty Ltd, Ricnic Pty Ltd, Spar Holdings Pty Ltd, SRAM Nominees Pty Ltd, Taylor McKay Pty Ltd, Upday Pty Ltd, and Yadnum Pty Ltd.

Trading Companies Fishermen‟s Pier Pty Ltd, Hamday Pty Ltd, Joday Pty Ltd, Magday Pty Ltd, Munday Tiger Pty Ltd, Pieday Pty Ltd, Spar Holdings Pty Ltd, Taylor McKay Pty Ltd, Upday Pty Ltd, and Yadnum Pty Ltd.

TSA Transfer and Sale Agreement between Dontaris Pty Ltd, Munday Group Holdings Pty Ltd, Victoria Amateur Turf Club (Incorporating) the Melbourne Racing Club trading as the Melbourne Racing Club, and the Receivers

Upday Upday Pty Ltd trading as „Golden Fleece Hotel‟

WBC Westpac Banking Corporation Ltd

WHK WHK Pty Ltd

Yadnum Yadnum Pty Ltd trading as „The Cove Hotel‟

YTD Year to Date

Listing of annexures Annexure 1 Statutory Information Summary

Annexure 2 Historical Profit and Loss Summary

Annexure 3 Historical Balance Sheet Summary

Annexure 4 Director‟s Statement Summary

Annexure 5 IPA - Creditor Information Sheet – Offences, Recoverable

Transactions and Insolvent Trading Annexure 6 Administrators‟ Remuneration Report


1. Executive Summary 1.1 Appointments My partner, Peter McCluskey, and I were appointed Administrators of the following entities of the Group on 9 April 2010, pursuant to Section 436C of the Act:

Hamday trading as „The Grand Frankston‟;

Joday trading as „Players on Lygon‟;

Magday trading as „Golden Nugget‟;

Pieday trading as „Court Jester‟;

Spar Holdings trading as „Sugar Gum Hotel‟;

Taylor McKay trading as „Whalers Inn‟;

Upday trading as „Golden Fleece Hotel‟; and

Yadnum trading as „The Cove Hotel‟. We were subsequently appointed Voluntary Administrators of the remaining enties of the Group on 12 April 2010, being: Dontaris;

Fishermen‟s Pier trading as „Fishermen‟s Pier Restaurant‟;

Hot Summers formerly trading as „Lorne Hotel‟;

MGQ Ayr formerly trading as „Ayr Hotel‟;

Munday Group;

Munday Group Holdings;

Munday Tiger trading as „Man-Bo Towers‟;

Ricnic; and

SRAM Nominees formerly trading as „Torquay Hotel‟. On 9 April 2010, Ian Carson and Craig Crosbie of PPB were appointed Receivers and Managers (“Receivers”) of the Group. Stephen Longley was subsequently appointed as an additional joint and several Receiver on 17 May 2010.

1.2 Creditors Meetings Creditors ratified our appointment as Administrators at the first concurrent meeting of creditors held on 21 April 2010. A Committee of Creditors was not formed at that meeting. With the support of the creditors present at the meeting, an application was made to extend the Administration convening period for up to 60 days, and on 7 May 2010 the Federal Court made that order. The application was made to allow sufficient time for the gaming auctions to be concluded, which occurred on 13 May 2010, and for the Receivers to conduct a marketing campaign for the sale of the Group‟s businesses. To date, five dormant companies have been wound up and we were appointed Liquidators of: Hot Summers formerly trading as „Lorne Hotel‟;

MGQ Ayr formerly trading as „Ayr Hotel‟;

Munday Group;

Ricnic; and

SRAM Nominees formerly trading as „Torquay Hotel‟.


Together, these are referred to as the „Liquidation Companies‟.

1.3 Extension of Administration Period for Certain Trading Companies An application was made to further extend the Administration convening period for the following entities until 27 November 2010: Dontaris;

Fishermen‟s Pier trading as „Fishermen‟s Pier Restaurant‟;

Hamday trading as „The Grand Frankston‟;

Joday trading as „Players on Lygon‟;

Magday trading as „Golden Nugget‟;

Munday Group Holdings;

Munday Tiger trading as „Man-Bo Towers‟;

Pieday trading as „Court Jester‟;

Spar Holdings trading as „Sugar Gum Hotel‟;

Taylor McKay trading as „Whalers Inn‟;

Upday trading as „Golden Fleece Hotel‟; and

Yadnum trading as „The Cove Hotel‟.

These are referred to as the „Extended Companies‟ and on 1 July 2010, the Federal Court made that

order. The second application was made to enable more time for a thorough consideration of all the factors affecting the Administrators‟ recommendations to creditors including: The outcome of the Receivers' sale processes;

The advantages and disadvantages of the Extended Companies executing a DOCA and the nature of any DOCA put forth; and

An investigation of issues that may impact on the return to creditors, including but not limited to any possible voidable transactions that may be recovered.

1.4 Sale Process The Receivers have secured a purchaser who will buy seven of the eight gaming venues, being:

The Grand Frankston;

Players on Lygon;

Golden Nugget;

Court Jester;

Sugar Gum Hotel;

Golden Fleece Hotel; and

The Cove Hotel.

referred to collectively as the „Gaming Companies‟. The sale contract is subject to conditions precedent to be completed by the end of November 2010.


1.5 Investigations Investigations undertaken by the Administrators are detailed in Section 8 of this report. The main issues arising from the investigations are: The Group appears to have been insolvent from October 2009

Our preliminary investigations reveal unfair preference payments or voidable transactions

Our investigations are ongoing in relation to other possible breaches of the law

1.6 Second Meeting of Creditors The second meeting of creditors for the Gaming Companies is convened for 29 October 2010 and will be held at the Institute of Chartered Accountants of Australia, Level 3, 600 Bourke Street, Melbourne, Victoria at 11 am. The Receivers have proposed a DOCA to facilitate the sale of the gaming venues which provides for: The Deed Administrators to transfer the shares of the Gaming Companies and to transfer the

units relating to the trusts associated with the Gaming Companies, to the purchaser.

Outstanding employee entitlements to be adjusted for on completion of the sale.

A contribution of $200,000 into a creditors‟ trust fund to be administered by the Deed Administrators, for the benefit of the unsecured creditors of the Gaming Companies.

Based on unsecured creditor debts known to us at this stage, we anticipate a return to unsecured creditors of 5 cents in the dollar under the proposed DOCA, as compared to no return in a liquidation. Accordingly, in our opinion, we recommend that creditors accept the DOCA proposal at the second meeting of creditors.

2. Introduction 2.1 Purpose of Administrators’ Appointment and this Report My partner, Peter McCluskey, and I were appointed Administrators of the Group on 9 April 2010 and 12 April 2010, pursuant to Section 436C of the Act. Ian Carson, Craig Crosbie and subsequently Stephen Longley of PPB were appointed Receivers and Managers of the Group on 9 April 2010 and 17 May 2010 respectively. As Receivers, they have taken over control of the trading operations of the Group and have been working in conjunction with Rowland Projects to manage the Group‟s venues and restaurants. The purpose underlying an Administrator‟s appointment is to allow for independent control and investigation of an insolvent company‟s affairs. During the administration period, creditors‟ claims are put on hold. We are required to provide creditors with information and recommendations to assist creditors to decide upon a company‟s future. Section 439A(4) of the Act explains the purpose of an Administrator‟s report in providing that the notice (of second meeting) must be accompanied by a copy of: (a) A report by the Administrator about the company’s business, property, affairs and financial

circumstances; and


(b) A statement setting out the Administrator’s opinion about each of the following matters:

Whether it would be in the creditors’ interests for the company to execute a Deed of Company Arrangement;

Whether it would be in the creditors’ interest for the administration to end;

Whether it would be in the creditors’ interest for the company to be wound up;

His or her reasons for those opinions; and

(c) If a Deed of Company Arrangement is proposed – a statement setting out details of the proposed deed.

We have undertaken the investigations detailed in Section 8 of this report which have enabled us to form opinions about the Gaming Companies‟ futures. Our opinions are set out in Section 10 of this report.

2.2 First Meeting of Creditors and Committee of Creditors A concurrent first meeting of creditors was held at the ICAA on 21 April 2010. At that meeting, creditors ratified our appointment as Administrators and resolved not to appoint a Committee of Creditors.

2.3 Second Meeting of Creditors 2.3.1 First Extension of Convening Period Pursuant to Section 439A of the Act, the second meeting of creditors of the Group was originally scheduled to be held by 17 May 2010, being within five business days after the end of the Administration convening period. The Administrators were concerned that, unless the convening period was extended, there would not be sufficient time to:

Allow the Receivers the opportunity to complete the steps necessary to enable a sale of the Group‟s businesses as a going concern

Conclude the gaming auctions which were due to be completed by 13 May 2010

Implement an alternative strategy for an orderly realisation of the Group‟s assets should a sale of the businesses not eventuate

Establish what other options are available which could potentially enhance the return to creditors

Accordingly, with the support of creditors, an application was made to extend the Administration convening period for the Group for up to 60 days, and on 7 May 2010, the Federal Court made that order. 2.3.2 Second Extension of Convening Period Notwithstanding the extended convening period, due to the complexities surrounding the gaming venues, including dealing with the outcome of the gaming auctions, extended negotiations with interested parties and landlords, and liaising with the relevant authorities with regard to the gaming and hospitality industries, the Receivers needed more time in order to progress the sale.


The Administrators agreed that a sale of the venues and restaurants would likely provide a better outcome to creditors and employees, and felt that if the second meeting was held in July 2010 as required, without allowing for the sale process to run its course, it would force the entities to be wound up prematurely. Accordingly, the Administrators made a second application to the Federal Court to seek a further extension of the convening period for up to 150 days starting from July 2010, only for the Extended Companies. The Court granted this extension until 27 November 2010. Our investigations into the affairs of the Liquidation Companies established that there were no assets held by these companies, and accordingly recommended to creditors that they be wound up. On 15 July 2010, Hot Summers, MGQ Ayr, Munday Group and SRAM Nominees were placed into liquidation, followed by Ricnic on 22 July 2010. 2.3.3 Second Meeting Pursuant to Section 439A of the Act, a concurrent meeting of creditors of the Gaming Companies is convened for 29 October 2010, at the ICAA, Level 3, 600 Bourke Street, Melbourne, Victoria at 11.00am. At the second meeting, creditors will decide upon the Gaming Companies‟ futures in voting on one of the following options:

That the Administrations should end and control of the Gaming Companies revert to its director; or

That the Gaming Companies should be wound up; or

That the Gaming Companies executes a DOCA. At the time of this report, we have received a DOCA proposal from the Receivers regarding the Gaming Companies. In our view, it is in the best interest of creditors of the Gaming Companies to accept the DOCA proposal.

2.4 Non Disclosure of Certain Information There are sections of this report wherein we considered it inappropriate to disclose certain information to creditors. Such information includes: Valuations of specific assets

Valuation of the business

Commercially sensitive financial information We fully recognise the need to provide creditors with complete disclosure of all necessary information relating to the Gaming Companies. However, we believe this information is commercially sensitive and it is not in creditors‟ interests for us to disclose the information publicly at this stage. Where necessary in this report, we provide a combined figure for potential realisations of assets when comparing estimated dividends under the relevant options.

2.5 Declaration of Independence, Relevant Relationships and Indemnities The Administrators provided a DIRRI to creditors with their first circular to creditors and also tabled the declaration at the first meeting of creditors.


Peter McCluskey and I are partners of Ferrier Hodgson. Ferrier Hodgson is Australia‟s and the Asia-Pacific‟s largest independent corporate restructuring practice with 47 partners and over 440 staff throughout Australia and Asia. Ferrier Hodgson does not provide accounting, audit, legal or taxation services. Peter McCluskey is a Chartered Accountant, Registered Liquidator and member of the IPA with over 23 years experience in corporate insolvency. I am also a Chartered Accountant, Registered Liquidator and member of the IPA with over 20 years experience in corporate insolvency. Further information regarding Ferrier Hodgson and the Administrators can be obtained from the firm‟s website at www.ferrierhodgson.com.

3. Group Information

3.1 Statutory Information Each entity‟s statutory information derived from ASIC‟s database has been summarised at Annexure 1 and we make the following general comments regarding the Gaming Companies: 3.1.1 Group Officers A search of the National Personal Insolvency Index maintained by the Insolvency Trustee Service, Australia, shows that Ricky Munday and John Upham are not bankrupt or subject to a Personal Insolvency Agreement under Part X of the Bankruptcy Act 1966. 3.1.2 Shareholdings We are advised that in May 2008 John Upham sold all of his interests in the Group including the sale and transfer of shares and where appropriate trust units. In conjunction with the sale of his interests, John Upham tendered his resignation as director for each of the entities in the Group in which he was involved. John Upham‟s resignation in Hamday was held over upon the request of Ricky Munday, until consent was obtained from the landlord. John Upham‟s shares in this entity were also retained however proxies for these shares were executed in favour of Ricky Munday. John Upham‟s unit holdings in the Hamday Investment Trust have been transferred. On 27 April 2010, John Upham tendered his resignation as director of Hamday to the Administrators and advised that he is prepared to proceed with a transfer of his shares in Hamday. The transfer of John Upham‟s shares is likely to be finalised as part of the sale of Hamday. 3.1.3 Registered Charges We undertook a review of the secured creditors‟ charges and determined them to be, prima facie, valid. We confirm that the NAB‟s security is cross collateralised across all entities under the Group. In this regard, the total debt owed by the Group to the NAB as at our appointment was $48,523,446. Pursuant to its security, the NAB appointed Receivers and Managers as well as Administrators on 9 April 2010 to realise the Group‟s assets in order to satisfy its debt.

http://www.ferrierhodgson.com/


3.1.4 Winding up Applications There were no winding up applications outstanding as at the date of our appointment for any of the entities in the Group.

3.2 Group History As at our appointment on 9 April 2010, the Group owns and operates eight leasehold gaming venues and two restaurants in Victoria. Location Venue

Melbourne Golden Nugget - Melbourne CBD Players on Lygon - Carlton The Court Jester - Prahran The Grand Hotel - Frankston The Golden Fleece - Melton Sugar Gum Hotel - Sydenham The Cove Hotel - Pattersons Lakes

Regional Victoria The Whalers Inn - Warrnambool Fishermen‟s Pier Restaurant - Geelong Man-Bo Restaurant - Geelong

The operations of the Group were managed from its head office located in Newtown, Victoria. During September 2009 to April 2010, a sale of business program was conducted to divest the Group‟s interests in order to meet Bank debt. However, a suitable buyer was not identified due to a number of factors causing uncertainty in the leisure and gaming market including:

Changes to gaming legislation in Victoria; and

The recently completed auction of gaming entitlements by the State Government whereby

entitlements for every machine were sold via a competitive auction process.

Pursuant to the auction, the Group secured rights to control 411 gaming machines which form part of the asset portfolio available for sale. Since the appointment, all venues have remained open and operations have continued on a business as usual basis, managed by Peter Rowland, and controlled by the Receivers.


3.2.1 The Group Structure and Related Parties

The Group‟s operational structure (including relevant related parties) is summarised as follows:

Munday Group Holdings is the ultimate holding company of the Group and holds the Group‟s

main trading bank account from which funds from the individual venues‟ trading accounts are swept daily. Due to daily cash fluctuations resulting from payouts at each venue, Munday Group Holdings would also ensure sufficient “petty cash” is maintained at the venues by making daily transfers to the respective venues.

The nature of the entities and in particular the manner in which transactions through the bank accounts and ledger accounts occur and are recorded is quite convoluted and complex. As a result, the financial operations of each of the entities are highly intertwined and difficult to untangle.

3.3 Decision to Appoint Administrators The appointment of Administrators and Receivers became necessary as a result of financial difficulties experienced by the Group due to, among other factors: The Group, while profitable on the whole, was cash poor;

Inability to meet its interest commitments or principle repayments to the Bank as a result of:

The use of working capital to fund additional acquisitions and capital expenditure at certain

venues which led to a build up of creditor arrears; and

Head TrustMunday Family Trust(Discretionary Trust)*

TrusteeDontaris Pty Ltd

Sub-TrustMunday Group Holdings

Unit Trust

TrusteeMunday Group Holdings

Pty Ltd

100%

FISHERMEN’S PIER

Fisho’sDiscretionary

Trust (Discretionary

Trust)*

TrusteeFishermen’s Pier Pty Ltd

Ricky Munday

100%

COURT JESTER

Court Jester Hotel Unit

Trust

TrusteePieday Pty Ltd

WHALERS INN

Taylor McKay Unit Trust

TrusteeTaylor McKay

Pty Ltd

GOLDEN NUGGETMagday

Investment Trust

TrusteeMagday Pty

Ltd

COVE HOTEL^

Yadnum Unit Trust

TrusteeYadnum Pty

Ltd

MANBO

Munday Tiger Business

Trust

TrusteeMunday Tiger

Pty Ltd

GRAND HOTEL

HamdayInvestment

Trust

TrusteeHamday Pty

Ltd

SUGAR GUM

Munday Lincolonshire

Unit Trust

TrusteeSpar Holdings

Pty Ltd

PLAYERS

JodayInvestment

Trust

TrusteeJoday Pty Ltd

GOLDEN FLEECE

Upday Unit Trust

TrusteeUpday Pty Ltd

100% 100% 100% 50% 50%50% 20%50% 50% 80% 100% 100%

• Discretionary Trust so therefore no unit holders Mr John Upham is also a Director of this entity^ No unit certificates provided, although it appears that the units are held by Dontaris Pty Ltd ATF Munday Family Trust

50%


Decrease in income caused by general economic conditions affecting the gaming and

hospitality sector.

The unsuccessful sale campaign conducted from September 2009.

Despite increases in the allowable overdraft limit from the secured lender, the business was unable to continue funding operations.

As a result of these factors and in order to keep the restructuring options open for the Group, the NAB, the Group‟s major secured creditor, resolved to appoint Administrators.

3.4 Appointment of Receivers As previously advised, Receivers were appointed by the NAB on 9 April 2010. Since their appointment, the Receivers have taken control of the Group‟s businesses and the Group‟s assets. In this regard, the Receivers, together with Rowland Projects, have continued the trading operations of the Group whilst they explore a sale of its business and/or assets for the benefit of creditors. This report will discuss the sale of the Gaming Companies to the MRC.

4. Historical Financial Information

4.1 Preparation of Financial Statements The Group‟s financial accounts were audited by BDO Kendalls Audit & Assurance (VIC) Pty Ltd. The 30 June 2007 financial statements were the last set of accounts that were audited. The Group also engaged the services of WHK from 29 July 2009. Various management accounts and reports were prepared by head office on a monthly basis and the last available set of management accounts were made up to March 2010. At Section 8.2.3 of this report, we comment on the adequacy of the Extended Companies‟ books and records.

4.2 Profit and Loss Statements and Preliminary Analysis Set out at Annexure 2 is a summary of the Group‟s profit and loss statements for the past three (3) financial years. Due to the high turnover of finance staff at head office, it has been difficult to obtain consistent reports for comparative purposes. In this regard: Data for FY08 and FY09 has been sourced from WHK.

Where FY09 data was not available, we have used YTD 7 March 2009 data which has been sourced from the Group‟s finance team at head office.

Data for YTD 7 March 2010 has been sourced from the Group‟s finance team at head office.


It appears that management reports have only referred to the Trading Companies (i.e. the venues, restaurants and head office), and have ignored the non trading or dormant companies. Accordingly, the management accounts have not reflected a true consolidation of the Group. The Gaming Companies‟ performance for YTD 7 March 2010 has been summarised below, ranked by EBITDA.

We make the following comments: The performance of the Gaming Companies at net profit level is impacted by:

the allocation of interest expense from Munday Group Holdings; and

the distribution of income back to Munday Group Holdings.

From our discussions with management, we understand that interest on Group debt is incurred by Munday Group Holdings who then allocates the expense to each entity on a pro rata basis at year end. In this regard, current management believe that the interest expense may not have been allocated for the 2009 and 2010 financial years, and accordingly interest expense in the individual entities would likely be understated.

Management have also advised that pursuant to the trust structures in place, the Gaming Companies would distribute their income to Munday Group Holdings at year end, which would then be distributed to Dontaris as trustee of The Munday Family Trust.

The better performing venues of Joday, Magday and Pieday recorded high gross profit margins of circa 94%, and maintained healthy EBITDAs.

Pieday‟s operating expenses continued to improve and was the best performing venue of the Group.

It also carried the highest proportion of interest expense at approximately $1 million, when compared to the average interest expense of Joday and Magday of only $300,000.

0

100

200

300

400

500

600

700

800

EBITDA ($'000)


Spar Holdings, Upday and Yadnum were mid range performers based on their EBITDA as a percentage of sales.

Takings at Spar Holdings and Yadnum fell significantly in YTD 2010, however gross margins were maintained. After taking into account the interest allocation assuming FY08 levels, Spar Holdings, Upday and Yadnum would still report a healthy net profit.

Historically, Hamday was one of the poor performers in the Group.

Hamday has historically recorded a net loss before allocation of interest expense and the position would only worsen after the allocation.

4.3 Balance Sheet and Preliminary Analysis Set out at Annexure 3 is a summary of the Gaming Companies‟ balance sheets for the past three (3) financial years. Management advised that the Gaming Companies ceased preparing consolidated financial reports before the end of FY09, and therefore the effect of intercompany accounts have not been eliminated from the following analysis. Illustrated below are the Gaming Companies‟ net asset positions as at 30 June 2008, 2009 and as at 7 March 2010.

We make the following comments: As previously discussed, the Group‟s operations are highly intertwined and the volume of inter-

entity transactions is significant. These transactions are recorded within the Group‟s inter-company loan accounts and management advises that there are 45 inter-company loan ledgers in the system.

Hamday

Joday

Magday

Pieday

Spar Holdings

Upday

Yadnum

-2,000

-1,000

0

1,000

2,000

3,000

4,000

FY08 FY09 YTD

($)


Current management advise that the intercompany loan positions have not been reconciled since 30 June 2009. The loan accounts are used by the respective entities to record: The daily sweeps of the venues‟ bank accounts to Munday Group Holdings.

Transfers made by Munday Group Holdings to the respective venues‟ gaming accounts to

pay various gaming authorities such as Tabcorp and Tattersalls. The purchase and transfer of liquor stock between venues. The main causes of net asset fluctuations of the Gaming Companies relate to movements in the intercompany loan account balances. Hamday‟s net asset position would otherwise be positive.

Spar Holdings appear to be the only trading entity that is a net lender to other intercompany

entities. The balance sheets are otherwise fairly stable year on year, except for evidence of unpaid statutory liabilities continuing to accrue in Yadnum.

The bank accounts of the Gaming Companies largely mirrored the movement of the trade

creditors‟ balances, supporting management‟s advice that cash funds were being used to pay trade suppliers.

Goodwill represents the largest asset on the balance sheet for all Gaming Companies totalling approximately $38 million.

5. Statement by Director Section 438B of the Act requires the director to give the Administrators a statement about the Extended Companies‟ business, property, affairs and financial circumstances. We received the director‟s Statements on 28 April 2010. We note that in the Statements, the director has advised that he was unable to detail the assets and liabilities of the Gaming Companies due to not having access to the financial records. The Receivers note that access was offered to the director at all times. In this regard, we have summarised at Annexure 4, Statements for the Gaming Companies based on our understanding of the position of each of the entities, pursuant to our investigations into the latest set of management accounts dated 7 March 2010. Please note that the Receivers are in control of the Gaming Companies and we have used the Receiver‟s ERV where appropriate. Due to the sensitive nature of the information to be disclosed in the Statements, and their potential impact on the sale of businesses, the Receivers have omitted the asset values.


Unsecured creditor claims used in the Receivers‟ ERV have been based on the Gaming Companies‟ books and records. We note that since our appointment, some creditors have subsequently submitted proof of debt forms and accordingly creditor balances recorded by the Administrators are significantly different. Save for non disclosure of asset values, there are no other material omissions from the director‟s Statement.

5.1 Explanation for Current Financial Position The director has not provided an explanation for the Gaming Companies‟ current financial position, however it is our view that the Gaming Companies failed as a result of deteriorating economic conditions impacting on turnover as well as uncertainty in the gaming industry. The overall indebtedness of the Group required profitable hotels such as Torquay and Lorne to be sold in order to meet growing Bank debt.

6. Trading by Receivers The Receivers assumed control of the Group‟s businesses upon appointment and continued to engage Peter Rowland to assist with management of the trading operations. Where necessary, the Administrators have assisted the Receivers with disclaiming surplus assets but otherwise have not been involved in the trading function. There have been no receipts and payments recorded by the Administrators during the appointment period.

7. Sale of Businesses Immediately upon appointment, the Receivers commenced a sale program seeking buyers for the Group‟s eight gaming venues and two restaurants. The process was extended due to the timing of the impending gaming machine auctions to be held by the State Government within a few weeks of appointment, wherein it would be determined how many gaming machine entitlements each venue would hold. Given the auction results would impact on the value of the venues, bids were not received from interested parties until after the entitlements were determined. After extensive negotiations and due diligence, the Receivers, Dontaris and Munday Group Holdings have entered into a TSA with the MRC to sell it up to seven gaming venues for a maximum sale price of $50 million. The sale includes: The Grand Frankston

Players on Lygon

Golden Nugget

Court Jester

Sugar Gum Hotel

Golden Fleece Hotel

The Cove Hotel


There will be an adjustment to the sale price for stock, cash and those employees who continue to be employed with the venue after the sale, whereby those employee entitlements are preserved and will continue to accrue. The sale proceeds will also enable the pre appointment entitlements of terminated employees to be paid. There are a number of conditions precedent stipulated in the TSA that may mean the MRC may acquire less than the full seven under contract. The timeframe for the Receivers to satisfy all the conditions is late November 2010. Matters currently delaying settlement of the TSA include: Finalisation of consent documents with landlords regarding the MRC share transfer in order to

effectuate the sale.

Settlement of landlord dispute relating to the Golden Fleece Hotel. The matter is currently before the Federal Court and is expected to be heard on 15 November 2010, after the outcomes of the creditors proposal meetings are known.

Receipt of consent from Ricky Munday to transfer his shares in the Gaming Companies to the purchaser.

It has been proposed that the sale be effectuated through a DOCA and this is discussed further in Section 9 of this report. A successful sale would result in the secured creditor receiving a substantial return on its debt, all employee entitlements would be met, and unsecured creditors would also receive a dividend estimated at five cents in the dollar.

8. Statutory Investigations

8.1 Nature and Scope of Review The Act requires an administrator to carry out preliminary investigations into a company‟s business, property, affairs and financial circumstances. Investigations centre on transactions entered into by a company that a liquidator might seek to void or otherwise challenge where the company is wound up. Investigations allow an administrator to advise creditors what funds might become available to a liquidator such that creditors can properly assess whether to accept a DOCA proposal or resolve to wind up the company. Funds recovered would be available to the general body of unsecured creditors including secured creditors but only to the extent of any shortfall incurred after realising their security. A liquidator may recover funds from each type of transaction detailed in the Creditor Information Sheet described in Annexure 5 of this report. A deed administrator does not have recourse to these voidable transactions. A liquidator may also recover funds through other avenues; for example, through action seeking compensation for insolvent trading or breach of director duties. An administrator is not obliged to carry out investigations to the same extent as a liquidator. A liquidator may require many months of investigation and conduct public examinations before forming a concluded view on recovery action. The dividend estimate in a liquidation scenario set out in Section 10.2 of this report reflects the outcome of our investigations.


The Administrators‟ knowledge of the Gaming Companies‟ affairs comes principally from the following sources:

Communications with the Gaming Companies‟ major unsecured creditors regarding the nature

and amount of the debts owed. Those creditors confirmed that the details disclosed by the

Gaming Companies are substantially correct.

Communications with the secured creditor regarding the nature and amount of the debt owed.

The secured creditor confirmed the information supplied by the Gaming Companies.

The director‟s Statements and questionnaire concerning the Gaming Companies‟ affairs prepared

by the director.

Discussions with the Group‟s finance team.

Discussions with the Receivers and their staff.

A search of the ASIC records relating to the Gaming Companies and any related entities.

Searches obtained from Vicroads and the Victorian Land Titles Offices.

An examination of correspondence received from the Deputy Commissioner of Taxation.

An examination of the Gaming Companies‟ books and records including its financial statements

and management accounts.

8.2 The Gaming Companies’ Solvency 8.2.1 Overview A precursor to the recovery of funds by a liquidator through the voiding of certain transactions or through other legal action, such as seeking compensation from directors for insolvent trading, is establishing a company‟s insolvency at the relevant time. Establishing insolvency is a complex matter due in part to the complexity of corporate financial transactions and the lack of clear prescriptive legal authority on proof of insolvency. Notwithstanding, there are two primary tests used in determining a company‟s solvency, at a particular date; namely: Balance sheet test; and

Cash flow or commercial test. The Courts have widely used the cash flow or commercial test in determining a company‟s solvency at a particular date. Section 95A of the Act also contains a definition of solvency. That definition reflects the commercial test in stating that a person is solvent if “the person is able to pay all the person’s debts as and when they become due and payable”. However, the commercial test is not the sole determinant of solvency. Determining solvency derives from a proper consideration of a company‟s financial position in its entirety and in the context of commercial reality. Relevant issues include, but are not limited to the following: The degree of illiquidity. A temporary lack of liquidity is not conclusive;

Regard should be had to:

Cash resources

Monies available through asset realisations, borrowings against the security of assets or equity/capital raising;


All of a company‟s assets might not be relevant when considering solvency. For example, where a company proposes selling assets which are essential to its business operations, the proceeds of those assets should not be taken into account;

The voluntary and temporary forbearance by creditors not to enforce payment terms; and

It is not appropriate to base an assessment of whether a company can meet its liabilities as and when they fall due on the prospect that a company might trade profitably in the future.

In summary, it is a company‟s inability using such resources as are available to it through the use of its assets, or otherwise, to meet its debts as they fall due, which indicates insolvency. 8.2.2 Preliminary Determination Set out below is a summary of our preliminary investigations and our preliminary determination as to the Extended Companies‟ solvency. Aged Payables Review

The graph below sets out an analysis of the aged payables as at 8 April 2010 as per the Extended Companies‟ records:

$143,3

45

$74,3

53

$165,0

56

$41,6

71

$429,2

08

$171,9

71 $

280,8

19

37%33%

28%55%

57%

56%

37%9%

14%

16%

25%

14%

11% 26%

54%

53%

56%

20%

29%

33% 36%

0

50

100

150

200

250

300

350

400

450

500

Ham

day

Jo

day

Mag

day

Pie

day

Sp

ar H

old

ings

Up

day

Yad

num

$'0

00

0 - 30 DaysAgeing

31 - 60 DaysAgeing

60 + DaysAgeing


We comment on the above analysis as follows: Three of the seven Gaming Companies had at least half of their outstanding trade creditors

aged at 60 plus days.

We understand from discussions with management that most of the suppliers were trading with the Group on COD terms in the two months leading up to the appointment, with many payments made from the venues‟ petty cash. We have been advised that leading up to the appointment, the funds were infrequently reconciled and accordingly query the reliability of the creditors‟ reports.

Management confirmed that cheques were drawn at head office on a regular basis but were not always posted out to creditors immediately. In this regard, the accounts team would maintain a schedule of withheld cheques.

Our review of the books and records indicates that creditors took the following action against the Gaming Companies:

Debt collectors and lawyers were engaged by at least 23 creditors;

A default notice against Spar Holdings was issued to Veda Advantage by one of its creditors;

A complaint against Yadnum was lodged in the Victorian Magistrates Court by one of its creditors;

Utility providers issued disconnection of services warning notices; and

Repayment plans were entered into by some of the Gaming Companies with at least three creditors.

Finance Commitments Review The Group relied heavily on borrowings from the NAB as the primary source of funding to operate its businesses. Leading up to the appointment, the Group was unable to meet their interest commitments or principle repayments to the secured creditor.


Profitability, Cashflow and Working Capital Please refer to Section 4.2 above for the Administrators‟ comments on the profitability of the Gaming Companies. The Gaming Companies‟ current ratio over the past three years has been illustrated below:

On appointment: Only Magday had a current ratio greater than 1.0, followed closely by Pieday and Joday which

were historically good performers.

Net Assets Please refer to Section 4.3 above for the Administrators‟ comments on the net asset position of the Gaming Companies. Payment of Statutory Commitments Including Superannuation Guarantee Charge ATO (GST & PAYG) Our preliminary investigations revealed that all of the Gaming Companies had entered into payment arrangements with the ATO from as early as August 2009. We understand that the entities were complying with their obligations under the respective payment arrangements, however note that as at the date of appointment there was an amount of approximately $145,950 which remained outstanding under these terms. There were three monthly instalments remaining on the payment arrangements prior to the arrangements being paid out in full.

Hamday

Joday

Magday

Pieday

Spar Holdings

UpdayYadnum

0

0.2

0.4

0.6

0.8

1

1.2

1.4

FY08 FY09 YTD


In the six months leading up to the appointment, there were significant arrears noted from the Group‟s records, and we understand from discussions with management and the ATO that all of the Group‟s pre-appointment GST and PAYG reporting obligations had not been met and accordingly lodgements are outstanding since December 2009 relating to both GST and PAYG. Superannuation Our review of the Gaming Companies‟ records reveals a total of $279,227 in superannuation arrears owed to employees relating to the period prior to our appointment. We note that superannuation contributions had not been remitted since January 2010 for Upday. Superannuation contributions for all other entities had not been remitted since October 2009. Payroll Tax and Other Statutory Obligations The Victorian SRO has submitted a claim for outstanding payroll tax for the period 1 July 2008 to 8 April 2010. The total claim across the Gaming Companies is $149,626 which includes an amount of $3,683 representing interest incurred. Sources and Applications of Funds In light of the significant amount of funding received by the Group, we reviewed the Group‟s bank statements to investigate how the funds were used. The Gaming Companies each had at least one bank account, with some venues holding additional accounts to separate the gaming proceeds from the general trading account. We understand from discussions with management that notwithstanding the separate accounts, the funding received from gaming operations had not been well controlled by the Group, and at times gaming funds were taken for petty cash (and vice versa) with no supporting vouchers prepared. The system to reconcile gaming revenue back to the bank accounts was poor, and head office relied heavily on venues to provide the required reports, which were inconsistent between venues. Readily available reports from Tabcorp and Tattersalls which would have assisted with the reconciliations were not accessed until the last few months leading up to the appointment. As noted in Section 3.2.1, the manner in which transactions through the bank accounts and ledger accounts occurred and were recorded was quite convoluted. The inter-entity transactions were highly intertwined. We note from our review of the Group‟s bank statements that the Group conducted a significant number of intercompany transactions between the BNZA trading accounts for each of the entities, primarily sweeping funds in and out of the Munday Group Holdings account on a daily basis. The effect of these transactions was to facilitate the movement of funds between Group entities for working capital purposes. Overall, it appears that the majority of the funds were used during the course of normal trading activities, however there does appear to be preference payments made to creditors and this is discussed further in Section 8.3.1. Administrators’ View Based on the above analysis, it is our preliminary view that the Gaming Companies were more likely than not insolvent from at least October 2009.


Due to the highly intertwined operating nature of the individual entities within the Group, particularly with respect to sourcing of funds for trading operations, the estimated date of insolvency has been estimated for the Gaming Companies based on investigations across these entities.

In forming our initial review into the Gaming Companies‟ date of insolvency, we have had regard to the following: The majority of unpaid creditors are not current and according to the records made available by

management, it appears formal creditor action for payment commenced as early as March 2009.

The Gaming Companies entered into repayment plans with creditors from as early as June 2009.

Statutory arrears are significant and the Gaming Companies entered into payment arrangements with the ATO from as early as August 2009.

All of the seven Gaming Companies had outstanding superannuation obligations of at least 4 months in arrears.

As stated above, this is our initial view only and a liquidator would need to also conduct further investigations, and possibly conduct public examinations of relevant parties, to ultimately determine whether or not the Gaming Companies became insolvent at that time or earlier. 8.2.3 Presumption of Insolvency – Inadequate Books and Records Failure to keep or retain adequate books and records in accordance with Section 286 of the Act provides a rebuttable presumption of insolvency under Section 588E of the Act. A liquidator can rely on the presumption of insolvency in litigation including: Compensation claims arising from insolvent trading; and

Recovery of voidable transactions from related entities. The presumption cannot be relied upon in the recovery of an unfair preference except where the recovery is sought from a related entity. Our preliminary view is that the Group maintained adequate books and records in accordance with Section 286. Accordingly, the presumption of insolvency under Section 588E would not be available. It should be noted however, that while our preliminary view is that the Group maintained adequate books and records, management have noted that the Group‟s records are not of a high standard. This is due to (but not limited to) the following: A high turnover of the finance team during the six (6) months leading up to the appointment.

The current finance team consists of two contractors who have been engaged by the Group since only November 2009 and April 2010 respectively; and also three accounts staff who deal with banking and supplier issues. The longest tenure of one of the accounts staff is only four years.

The Group uses Quicken, an “off the shelf” accounting software system, which has not been customised to efficiently deal with the Group‟s financial structure, in particular the large volume of transactions that occur daily.

Inadequate journals processed at head office and no supporting paperwork maintained at venue level.


The Group‟s head office did not implement a streamlined reporting system with the individual venues and accordingly the reports and information submitted by the venues were ad hoc and inconsistent.

As a result, monthly management accounts were time consuming and labour intensive to produce. Current management advised that they ceased monthly reporting in May 2009 when the reporting template previously used by the former finance team became corrupt.

8.3 Potential Liquidator Recoveries - Voidable Transactions 8.3.1 Unfair Preferences Our preliminary investigations into the Gaming Companies‟ affairs identified the following payments which may be voidable as unfair preferences:

Factors which indicate these payments might be unfair preferences are: Payments in response to winding up applications, statutory demands and other pressure from

the creditor;

Repayment plans with the creditor;

Significant „round‟ figure payments were made to the creditor. The payments would be protected if the creditor from whom the liquidator seeks to recover: Became a party to the transaction in good faith; and

At the time when they became a party:

They had no reasonable grounds for suspecting that the company was insolvent at that time, or would become insolvent; and

A reasonable person in that person‟s circumstances would have had no such grounds for so suspecting; and

Provided valuable consideration under the transaction or has changed their position in reliance on the transaction.

A creditor seeking protection must prove all three elements.

Further, where a creditor received a series of payments as part of a so called „running account‟ and their overall indebtedness increases over the same period, the creditor is taken not to have received an unfair preference. This is called ‟the running account defence‟.

Entity

Payments to ATO

pursuant to

repayment plans

Other Payments

to ATO

Payments to

Suppliers /

Others Total

$ $ $ $

Hamday 80,990 35,688 84,089 200,767

Joday 29,365 8,871 10,000 48,236

Magday 53,040 44,057 81,000 178,097

Pieday 52,490 12,800 70,000 135,290

Spar Holdings 115,280 - 40,000 155,280

Upday 90,630 - 20,000 110,630

Yadnum 142,625 68,907 111,467 322,999

Total 564,420 170,323 416,555 1,151,298

Potential Unfair Preferences


A liquidator would likely seek legal advice on the strength of a claim including the applicability of these defences. It is likely any recovery action commenced by a liquidator would be defended. Therefore, costs are a major consideration. Further investigations would be required to be undertaken by a liquidator to confirm the capacity of the creditor to repay any successful court order before the liquidator would seek advice on the strength of any such claims. There is no guarantee that a liquidator will recover funds or that costs ultimately dissipate the benefit to creditors. 8.3.2 Uncommercial Transactions Our preliminary investigations do not disclose any transactions of an uncommercial nature which may lead to recoveries by a liquidator in the event that the Gaming Companies are wound up. A liquidator would conduct further investigations into any uncommercial transactions. 8.3.3 Unfair Loans Notwithstanding that the Group had a significant number of inter-entity and director loan accounts, our preliminary review of the books and records of the Gaming Companies do not reveal any unfair loans payable by or to the Gaming Companies with external parties. A liquidator would conduct further investigations into any unfair loans. 8.3.4 Unreasonable Director-Related Transactions Our preliminary investigations do not disclose any unreasonable director related transactions however a liquidator would conduct further investigations into this. 8.3.5 Obstruction of Creditors’ Rights Our preliminary investigations do not disclose any transactions intended to obstruct creditors‟ rights. A liquidator would conduct further investigations into any obstruction of creditors‟ rights. 8.3.6 Voidable Charges Our preliminary investigations do not reveal any charges which may be deemed void against an Administrator and/or Liquidator.

8.4 Potential Liquidator Recoveries - Insolvent Trading 8.4.1 Director Liability Based on our analysis at Section 8.2.2 of this report, we indicated it was probable that the Gaming Companies were insolvent from at least as early as October 2009, and that the director would have had reasonable grounds for suspecting so. Based on that analysis, we have formed the preliminary view that the Gaming Companies may have traded whilst it was insolvent. In his defence, the director could argue: A reasonable expectation that the entire Group as a whole would remain solvent due to:

Positive trading results achieved by the Trading Companies


The entire Group being marketed for sale by JLL and it could have been expected that a sale sufficient to discharge all liabilities was likely

A reasonable expectation that funding would continue Again, a liquidator would likely seek legal advice on these issues and conduct more investigations possibly including a public examination. The costs of proceeding with an insolvent trading action must be considered as does the personal financial capacity of the directors to pay a judgement obtained against them. Presently, it is our view that an insolvent trading action may not be commercially viable. 8.4.2 Holding Company Liability Munday Group Holdings was the ultimate holding company of the Group at the appropriate times. In our view, the nature and extent of Munday Group Holding‟s control over the individual entities operations was such that it would be reasonable to expect Munday Group Holdings and its director had knowledge of the entities‟ financial position. We stated at Section 8.2.2 that the Gaming Companies may have been insolvent from October 2009. Accordingly, it is arguable that Munday Group Holdings could be held liable under Section 588W for the debts incurred by the Gaming Companies from that date. As Munday Group Holdings is itself insolvent, it is not commercially viable to pursue such recovery.

8.5 Other Potential Liquidator Recoveries 8.5.1 Compensation for Breach of Director Duties Our preliminary investigations have focussed on whether the director may have breached his duties in: Failing to act in good faith;

Failing to discharge his duties with reasonable care and diligence;

Improperly using his position or information; and

Failing to avoid conflicts of interest.

These investigations are ongoing and any breaches identified will be reported to creditors in due course by the liquidator. 8.5.2 Arrangements to Avoid Employee Entitlements Based on our investigations to date, there does not appear to be any contravention of Part 5.8A of the Act by any person.


8.5.3 Debts Incurred by the Company as Trustee Pursuant to Section 197 of the Act, a director of a company, when it incurs a liability while acting or purporting to act as trustee, is liable to discharge the liability if the company: (a) Has not, and cannot, discharge the liability or that part of it; and

(b) Is not entitled to be fully indemnified against the liability out of trust assets. This is so even if the trust does not have enough assets to indemnify the trustee. The person is liable both individually and jointly with the company and anyone else who is liable under the section. As at the date of appointment, we can confirm that the following entities were acting as trustees:

Trustee Trust

Hamday Pty Ltd Hamday Investment Trust

Joday Pty Ltd Joday Investment Trust

Magday Pty Ltd Magday Investment Trust

Pieday Pty Ltd Court Jester Hotel Unit Trust

Spar Holdings Pty Ltd Munday Lincolnshire Discretionary Trust

Upday Pty Ltd Upday Unit Trust

Yadnum Pty Ltd Yadnum Unit Trust

Our investigations reveal that, pursuant to the terms of the trust deeds, the above entities are entitled to be fully indemnified against liability out of the trust assets. Accordingly, the director of the entities is not liable under Section 197 of the Act.

8.6 Possible Offences Based on our preliminary investigations, we cannot rule out the possibility of breaches by the director of his statutory or fiduciary duties. These investigations are ongoing and any breaches identified will be reported to creditors in due course by a liquidator, if appointed.

8.7 Summary of Potential Liquidator Recoveries Our investigations are continuing in relation to a number of transactions and potential claims available to a liquidator. In the event that the Gaming Companies are wound up, further investigations may be conducted in relation to these matters to confirm the existence of any such claim(s). Set out below is a preliminary summary of the potential recoveries by a liquidator in the event the Gaming Companies are wound up:

Potential Recovery Item High ($) Low ($)

Unfair preferences 616,411 423,315

Uncommercial transactions - -

Unfair loans - -

Unreasonable director related transactions - -

Transactions undertaken to obstruct creditors‟ rights - -

Compensation from director for insolvent trading - -

Compensation from holding company for insolvent trading - -

Breaches of directors duties - -

Avoidance of employee entitlements - -

Debts incurred by Company as trustee - -

Total 616,411 423,315


With respect to preference recoveries, a high recovery is based on the assumption that: Payments made to the ATO relating to repayment plans can be recovered at 75%

Non repayment plan payments made to the ATO can be recovered at 40%

All other non ATO payments can be recovered at 30%

The low recovery position assumes only the ATO preferences subject to repayment plans are recoverable.

8.8 Director’s Ability to pay a Liquidator’s Claims We advise that we have not been provided with the director‟s personal financial position. We note that a search of the Victorian Land Titles Office failed to identify any real property as being owned by Ricky Munday. We are not aware of the director having a director‟s and officer‟s insurance policy which would respond to any claims brought by a liquidator. Accordingly, our preliminary view is that the director is unlikely to be able to meet any claims made against him by the Liquidator.

9. Proposal for DOCA We have received a DOCA proposal from the Group‟s Receivers with respect to the Gaming Companies, in order to effectuate the TSA governing the sale of these entities.

9.1 Key Commercial Features The proposed DOCA includes the following key commercial features: The Deed Administrators will be empowered to, with respect to each of the Gaming Companies,

transfer shares (either with the consent of the existing shareholders or with Court leave), remove current directors or secretaries from office, and appoint new directors, as required under the TSA to effectuate the sale.

The DOCA will be completed (“Completion Events”), and terminates when: All sale units have been transferred

All shares have been transferred

The creditors‟ trust has been settled

The Receivers cease to act

The Bank delivers all documents including all Form 312 documents releasing its securities

over each of the Gaming Companies

The purchaser is satisfied that: (i) The Bank has released its securities


(ii) All creditor claims of the Gaming Companies have been or will be released upon termination of the DOCA

The Deed Administrators, as trustees of the creditors‟ trust, receives a total sum of $200,000 (“DOCA Contribution”), to be distributed between the ordinary unsecured creditors of the Gaming Companies.

Upon termination of the DOCA, the Deed Administrators will immediately transfer to the trustees

of the creditors‟ trust, the DOCA contribution.

All creditor claims against the Gaming Companies are compromised or extinguished so that there are no outstanding debts of the Gaming Companies other than as acknowledged under the TSA.

Under the TSA, accrued employee liabilities are to be adjusted for at completion.

The Bank will be bound by, and not prove in the DOCA. The Bank will pay the reasonable fees

and disbursements of the Administrators and the Deed Administrators. If the Completion Events do not occur by 10 December 2010, a further meeting of creditors will

be convened to determine the fate of the Gaming Companies, which may include liquidation or variation of the DOCA.

A draft DOCA will be available for inspection at the second meeting of creditors to be held on 29 October 2010.

9.2 Creditors’ Trust Typically, a creditors‟ trust in a DOCA is a mechanism used to accelerate a company‟s exit from external administration. You may recall our previous discussions at Section 3.2.1 regarding the complex trust ownership structure of the Group whereby the assets of each entity are held in its own respective trust, which are then ultimately collectively held by the Munday Family Trust (controlled by Dontaris). Pursuant to the sale, the purchaser will purchase the Gaming Companies, including the embedded trust structures within, hence the requirement for the transfer of units as one of the Completion Events. Given it is a share / unit trust sale, the Receivers have considered, and we agree, that a creditors‟ trust structure is required to effectuate the orderly sale of the Gaming Companies to the purchaser in a timely manner. Under the proposed DOCA, the Gaming Companies will be unencumbered from all pre appointment liabilities as soon as the Completion Events have occurred and the DOCA is terminated. This is to allow the purchaser immediate ability to continue trading the operations of the businesses without the companies being subject to a DOCA. Creditors will no longer be creditors of the Gaming Companies, but rather beneficiaries of the creditors‟ trust. Given the structure of the DOCA, we have no reason to believe that the creditors‟ trust will inflict a higher risk to creditors, than if the creditors‟ trust was absent. As trustees of the creditors‟ trust, upon effectuation of the DOCA, we will immediately seek formal proofs of debt from unsecured creditors of the Gaming Companies in order to pay a dividend to creditors as quickly as possible from the trust funds.


10. Creditors’ Options, Dividend Estimates and Cost Estimates Pursuant to Section 439A(4)(b) of the Act, we are required to provide creditors with statements setting out our opinions on whether it is in the creditors‟ interests for the: Administrations to end;

Gaming Companies to be wound up; and / or

Gaming Companies to execute a DOCA.

In forming our opinions, it is necessary to consider an estimate of the dividends creditors might expect, and the likely costs, under each option.

10.1 Administrations to End Creditors may resolve that the administrations should end if it appears that any of the Gaming Companies are solvent or, for some other reason, control of any of the Gaming Companies should revert to its director. Based on our preliminary investigations and analysis of each of the Gaming Companies‟ financial information, the Gaming Companies are insolvent. There appears to be no valid commercial reason why control of the Gaming Companies should revert to its director. If the administrations were to end, there is no mechanism controlling an orderly realisation of assets and distribution to creditors. In those circumstances, we are unable to say what the Gaming Companies ultimately pay creditors or what costs it might incur. Therefore, our opinion is that it is not in the creditors‟ interest for the administrations to end.

10.2 Winding up of Gaming Companies Based upon the information in this report, where the Gaming Companies are wound up, we estimate that creditors of these companies will not receive a dividend:

Hamday Joday Magday Pieday Spar Holdings Upday Yadnum TOTAL

$ $ $ $ $ $ $ $

Assets / Recoveries

Preferences - ATO Payment Plan 60,743 22,024 39,780 39,368 86,460 67,973 106,969 423,315

Preferences - ATO Other 14,275 3,548 17,623 5,120 - - 27,563 68,129

Preferences - Non ATO 25,227 3,000 24,300 21,000 12,000 6,000 33,440 124,967

Total Assets / Recoveries 100,244 28,572 81,703 65,488 98,460 73,973 167,972 616,411

Liabilities

Administration Fees and Disbursements (74,949) (72,986) (73,116) (72,611) (73,014) (75,788) (75,060) (517,525)

Liquidation Fees and Disbursements (27,273) (27,273) (27,273) (27,273) (27,273) (27,273) (27,273) (190,909)

Estimated Balance Available (1,977) (71,686) (18,686) (34,397) (1,827) (29,089) 65,639 (92,023)

Priority Claims

Employee claims (excl Super) (99,935) (68,557) (37,995) (14,620) (79,743) (137,375) (115,228) (553,453)

SGC Estimate (44,440) (21,471) (28,138) (19,973) (58,774) (27,352) (89,207) (289,357)

Estimated Return to Priority Creditors - - - - - - 0.32 -

Total Payment to Priority Creditors - - - - - - 65,639 -

Estimated Balance Available for Unsecured Creditors - - - - - - - -

Total Unsecured Creditors 270,655 278,712 334,277 229,557 898,202 889,733 1,616,005 4,517,141

Dividend Estimate - - - - - - - -


There would be no return to unsecured creditors due to: The amount owed to the secured creditor

Extent of employee claims

Costs of administration / liquidation / receivership In the event the sale of businesses cannot be completed, employee claims are expected to materially increase given the entitlements assumed by the purchaser will then be payable, along with redundancy entitlements. Employees may be entitled to claim their entitlements (other than superannuation) under the Federal Government‟s GEERS.

10.3 Execution of Proposed DOCA Based on the creditors‟ trust funds to be made available under the DOCA, we estimate a dividend to creditors as follows:

The above dividend calculations are an estimate only and may change due to the final amount claimed by creditors once proofs of debt are received and adjudicated upon. It is important to note that: Changes in the costs of administering the DOCA will not impact on the dividend return to

unsecured creditors as the cost is borne by the Bank.

All employee entitlements, including pre appointment superannuation and employee entitlements owing to terminated employees will be paid from the sale proceeds and will not affect the DOCA contribution.

It is proposed that all dividends to creditors under the creditors‟ trust be paid as soon as the Completion Events pursuant to the DOCA proposal (see Section 9.1) have been satisfied and the DOCA terminated. Employees should note that GEERS is only available to pay outstanding entitlements where a company is in liquidation. Accordingly, employees do not have access to the scheme if the Gaming Companies enters into the DOCA. However GEERS does not cover superannuation and the DOCA will.

Hamday Joday Magday Pieday

Spar

Holdings Upday Yadnum Total

$ $ $ $ $ $ $ $

DOCA Contribution 8,737 12,825 12,950 8,412 41,005 41,826 74,244 200,000

Liabilities

Administrators' Fees and Disbursements - - - - - - - -

Deed Administrators' Fees and Disbursements - - - - - - - -

Priority Employee Claims - - - - - - - -

Unsecured creditors claims 170,411 250,140 252,574 164,069 799,742 815,760 1,448,033 3,900,730

Dividend Estimate 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05


10.4 Comparison of Proposed DOCA to Liquidation

Below is a comparison of the estimated returns under the proposed DOCA and liquidation:

Report DOCA Liquidation Ref $ $ Estimated funds available before costs 200,000 616,411

Administration costs (remuneration and expenses) - (708,434)

Estimated funds available to unsecured creditors 200,000 -

Estimated return for employee entitlements (c in the $) 100 GEERS

Estimated return to ordinary unsecured creditors (c in the $) 5 -

11. Administrators’ Opinion

As stated in Section 10.1 above, the option of the administrations ending is clearly not viable. The only remaining options available to creditors are to wind up the Gaming Companies or accept the proposed DOCA.

From the calculations set out in Section 10.4 of this report, we estimate that the return to creditors of the Gaming Companies under the proposed DOCA exceeds the estimated return under a winding up. The proposed DOCA is likely to provide a better return to creditors because:

Funds of $200,000 to be provided under the proposed DOCA would not otherwise be available to creditors in a winding up of the Company;

In a liquidation, recoveries from voidable and other transactions referred to in Section 8 of this report are uncertain or unlikely;

The extent of employee claims and the debt owed to the secured creditor will exceed the realisable value of assets in the event of a winding up, whereas these priority claims are dealt with in whole or in part under the proposed DOCA.

Based on the above, it is our opinion that creditors should resolve that the Gaming Companies enter into the proposed DOCA.

12. Administrators’ Remuneration Report

Pursuant to Section 449E of the Act, we enclose as Annexure 6 the Administrators‟ Remuneration Report. At the second meeting of creditors, we intend seeking approval of the remuneration set out in the remuneration report. Details of disbursements incurred are also included in the remuneration report.

13. Further Queries

We will advise creditors in writing, if practicable, of any additional matter that comes to our attention after the dispatch of this report that, in our view, is material to creditors‟ deliberations.

In the meantime, should creditors have any queries, please do not hesitate to contact Ms Susanne Jing of this office on (03) 9604 5658.

DATED this 21st day of October 2010.

JOHN LINDHOLM ADMINISTRATOR

Annexure 1

Statutory Information Derived from ASIC database searches.

Hamday (Trading as ‘The Grand Frankston’) Incorporation date 3 March 2005

Registered office 1/41 West Fyans Street

NEWTOWN VIC 3220

Director & Secretary Ricky John Munday Appointment date 3 March 2005

Director Appointment date Cease date

John Upham 3 March 2005 21 April 2010

Shareholders Shares held Share class

Ricky John Munday John William Upham

12 12

Ordinary Ordinary

Chargeholder NAB Charge type Fixed and floating charge

Charge number 1560502 & 1560476

Creation date 22 November 2007 Registered date 28 November 2007

Joday (Trading as ‘Players on Lygon’) Incorporation date 24 September 2004


NEWTOWN VIC 3220

Director & Secretary Ricky John Munday Appointment date 24 September 2004

Shareholders Ricky John Munday Shares held 24 Share class Ordinary


Charge number 1560503 & 1560512


Magday (Trading as ‘Golden Nugget’) Incorporation date 3 March 2005


NEWTOWN VIC 3220

Director & Secretary Ricky John Munday Appointment date 3 March 2005



Charge number 1560477 & 1560489


Pieday (Trading as ‘Court Jester’) Incorporation date 29 June 2004


NEWTOWN VIC 3220

Director & Secretary Ricky John Munday Appointment date 29 June 2004



Charge number 1560488 & 1560492


Spar Holdings (Trading as ‘Sugar Gum Hotel’) Incorporation date 30 April 2002


NEWTOWN VIC 3220

Director & Secretary Ricky John Munday Appointment date 30 April 2002



Charge number 1560501 & 1560515


Upday (Trading as ‘Golden Fleece Hotel’) Incorporation date 5 September 2003


NEWTOWN VIC 3220

Director & Secretary Ricky John Munday Appointment date 5 September 2003



Charge number 1560499 & 1560517


Yadnum (Trading as ‘The Cove Hotel Incorporation date 26 August 2003


NEWTOWN VIC 3220

Director & Secretary Ricky John Munday Appointment date 26 August 2003



Charge number 1560484 & 1560497


Annexure 2

FY08 FY09 YTD 07/03/10 FY08 FY09 YTD 07/03/10 FY08 FY09 YTD 07/03/10 FY08 YTD 07/03/09 YTD 07/03/10

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Operating Revenue 4,403 3,706 2,195 2,012 2,103 1,383 872 2,774 1,921 2,108 1,646 1,727

COGS (745) (734) (452) (89) (96) (63) (79) (136) (123) (95) (99) (93)

Gross Profit 3,658 2,972 1,743 1,923 2,007 1,320 793 2,638 1,798 2,013 1,547 1,634

Operating Expenses

Administration Expense (56) (77) (44) (54) (46) (32) (22) (189) (69) (41) (35) (38)

Direct Expense (529) (562) (327) (245) (262) (160) (66) (336) (149) (122) (81) (100)

Employement Expense (1,171) (1,230) (767) (471) (439) (297) (215) (736) (459) (470) (319) (306)

Financial Expense (8) (9) (4) (5) (1) (1) (1) (4) (1) (8) (2) (1)

Head Office Expense (100) (99) (70) (100) (100) (64) (29) (100) (70) (90) (69) (70)

Occupancy Expense (908) (746) (521) (496) (496) (343) (233) (729) (476) (475) (365) (367)

Total Operating Expenditure (2,772) (2,723) (1,733) (1,371) (1,344) (897) (566) (2,094) (1,224) (1,206) (871) (882)

EBITDA 886 249 10 552 663 423 227 544 574 807 676 752

Depreciation Expense (127) (123) (92) (35) (20) (17) (40) (141) (107) (14) (11) (33)

Distribution of Income 0 0 0 (191) 0 0 0 0 0 0 0 0

Interest Expenses (773) (5) (2) (326) (2) (1) (328) (2) (1) (1,059) (1,059) (1)

Net Profit/(Loss) (14) 121 (84) 0 641 405 (141) 401 466 (266) (394) 718

FY08 FY09 YTD 07/03/10 FY08 FY09 YTD 07/03/10 FY08 FY09 YTD 07/03/10

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Operating Revenue 5,938 5,961 3,911 4,643 4,760 3,065 6,125 6,179 4,220

COGS (2,193) (2,190) (1,438) (1,364) (1,358) (919) (1,823) (1,820) (1,265)

Gross Profit 3,745 3,771 2,473 3,279 3,402 2,146 4,302 4,359 2,955

Operating Expenses

Administration Expense (75) (80) (50) (51) (93) (52) (65) (114) (82)

Direct Expense (318) (339) (240) (363) (324) (185) (598) (532) (345)

Employement Expense (1,420) (1,462) (981) (1,241) (1,285) (871) (1,793) (1,916) (1,303)

Financial Expense (13) (22) (8) (8) (13) (4) (22) (23) (12)

Head Office Expense (100) (100) (70) (100) (100) (70) (100) (100) (70)

Occupancy Expense (597) (727) (616) (574) (583) (412) (772) (767) (505)

Total Operating Expenditure (2,523) (2,730) (1,965) (2,337) (2,398) (1,594) (3,350) (3,452) (2,317)

EBITDA 1,222 1,041 508 942 1,004 552 952 907 638

Depreciation Expense (129) (96) (48) (471) (38) (32) (74) (66) (51)

Distribution of Income (931) 0 (310) 0 0 (444) 0

Interest Expenses (164) (19) (4) (162) (4) (1) (434) (8) (3)

Net Profit/(Loss) (2) 926 456 (1) 962 519 0 833 584


YadnumSpar Holdings Upday

Annexure 3

FY08 FY09 As at 07/03/10 FY08 FY09 As at 07/03/10 FY08 FY09 As at 07/03/10 FY08 FY09 As at 07/03/10

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Current Assets 189 94 191 169 137 151 176 125 283 142 79 123

Non-Current Assets 8,747 8,644 8,553 4,694 4,690 4,673 10,702 11,272 11,188 6,778 7,187 7,155

Total Assets 8,936 8,738 8,744 4,863 4,827 4,824 10,878 11,397 11,471 6,920 7,266 7,278

Current Liabilities (492) (359) (429) (140) (132) (185) (183) (368) (266) (109) (194) (128)

Non-Current Liabilities (10,037) (9,851) (9,874) (4,573) (3,901) (3,440) (10,947) (10,877) (10,588) (7,239) (6,585) (5,945)

Total Liabilities (10,529) (10,210) (10,303) (4,713) (4,033) (3,625) (11,130) (11,245) (10,854) (7,348) (6,779) (6,073)

Net Assets (1,593) (1,472) (1,559) 150 794 1,199 (252) 152 617 (428) 487 1,205

FY08 FY09 As at 07/03/10 FY08 FY09 As at 07/03/10 FY08 FY09 As at 07/03/10

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Current Assets 172 298 256 192 190 218 300 259 339

Non-Current Assets 4,606 4,563 4,578 3,571 3,582 3,552 7,223 7,213 7,203

Total Assets 4,778 4,861 4,834 3,763 3,772 3,770 7,523 7,472 7,542

Current Liabilities (745) (742) (859) (601) (509) (594) (751) (682) (849)

Non-Current Liabilities (2,033) (1,196) (597) (2,812) (1,953) (1,347) (5,272) (4,472) (3,792)

Total Liabilities (2,778) (1,938) (1,456) (3,413) (2,462) (1,941) (6,023) (5,154) (4,641)

Net Assets 2,000 2,923 3,378 350 1,310 1,829 1,500 2,318 2,901

Yadnum


Spar Holdings Upday

Annexure 4

Statement as at 7 March 2010Book

Value

Receivers'

ERV

Book

Value

Receivers'

ERV

Book

Value

Receivers'

ERV

Book

Value

Receivers'

ERV

Book

Value

Receivers'

ERV

Book

Value

Receivers'

ERV

Book

Value

Receivers'

ERV

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Assets:

Sundry Debtors 3,300 - 34,865 OMITTED - - - - 6,158 OMITTED - OMITTED 63,386 OMITTED

Cash on Hand 135,906 OMITTED 119,870 OMITTED 115,596 OMITTED 75,962 OMITTED 143,080 OMITTED 105,665 OMITTED 143,000 OMITTED

Cash at Bank (7,833) - (16,366) - 24,081 OMITTED (22,878) - 11,172 - 39,710 - 70,730 -

Stock on Hand 42,080 OMITTED 5,690 OMITTED 20,424 OMITTED 8,330 OMITTED 124,489 OMITTED 84,920 OMITTED 61,493 OMITTED

Plant & Equipment 47,453 OMITTED 11,113 OMITTED 862,816 OMITTED 99,373 OMITTED 185,163 OMITTED 52,155 OMITTED 138,421 OMITTED

Fixtures & Fittings 81,926 - 968 - 14,030 - 24,715 - 138,621 - 47,135 - 103,037 -

Office Equipment 8,596 - - - 11,897 - - - - - - - - -

Leasehold Improvements 2,661,470 - 10,912 - 707,626 - 447,340 - 872,013 - 1,762,211 - 658,698 -

Motor Vehicles - - - - - - - - - - - - - -

Deposits & Investments - - - - - - - - - - - - - -

Inter-entity Loans - - - - - - -

Other Assets 5,773,775 - 4,651,295 - 9,604,506 - 6,648,354 - 3,376,987 - 1,690,434 - 6,303,026 -

Sub Total 8,746,673 OMITTED 4,818,347 OMITTED 11,360,975 OMITTED 7,281,196 OMITTED 4,857,683 OMITTED 3,782,230 OMITTED 7,541,791 OMITTED

Assets Subject to Specific Charges - - - - - - - - - - - - - -

Less Amounts Owing Under Charges - - - - - - - - - - - - - -

Total Available Assets 8,746,673 OMITTED 4,818,347 OMITTED 11,360,975 OMITTED 7,281,196 OMITTED 4,857,683 OMITTED 3,782,230 OMITTED 7,541,791 OMITTED

Liabilities:

Less: Priority Creditors

- Employee Entitlements Payable in

Advance of Secured Creditors(142,259) (74,602) (89,006) (47,811) (64,794) (39,198) (34,593) (22,920) (135,718) (83,324) (164,726) (97,403) (204,435) (121,050)

- Secured Creditors (48,523,446) (48,564,572) (48,523,446) (48,564,572) (48,523,446) (48,564,572) (48,523,446) (48,564,572) (48,523,446) (48,564,572) (48,523,446) (48,564,572) (48,523,446) (48,564,572)

- Partly Secured Creditors - - - - - - - - - - - - - -

Total Priority Creditors (48,665,705) (48,639,174) (48,612,452) (48,612,383) (48,588,240) (48,603,770) (48,558,039) (48,587,492) (48,659,164) (48,647,896) (48,688,172) (48,661,975) (48,727,881) (48,685,622)

Contingent Assets - - - - - - - - - - - - -

Contingent Liabilities - - - - - - - - - - - - -

Available to Unsecured Creditors (39,919,032) OMITTED (43,794,105) OMITTED (37,227,265) OMITTED (41,276,843) OMITTED (43,801,481) OMITTED (44,905,943) OMITTED (41,186,091) OMITTED

Ordinary Unsecured Creditor Claims (172,569) (91,708) (94,319) (231,541) (202,189) (214,805) (69,975) (140,283) (419,646) (688,708) (313,742) (703,712) (374,190) (1,173,800)

Estimated Surplus/(Deficiency) (40,091,601) OMITTED (43,888,424) OMITTED (37,429,454) OMITTED (41,346,818) OMITTED (44,221,127) OMITTED (45,219,685) OMITTED (41,560,280) OMITTED

YadnumUpdayHamday Joday Magday Pieday Spar Holdings

Annexure 5

Insolvency Practitioners Association of Australia ABN 28 002 472 362 33 Erskine Street, GPO Box 3921, Sydney NSW 2001 P+61 2 9290 5700 F +61 2 9290 2820 www.ipaa.com.au

Creditor Information Sheet

Offences, Recoverable transactions and Insolvent Trading

Offences A summary of offences that may be identified by the administrator:

180 Failure by officer to exercise a reasonable degree of care and diligence in the exercise of his powers and the discharge of his duties.

181 Failure to act in good faith.

182 Making improper use of position as an officer or employee, to gain, directly or indirectly, an advantage.

183 Making improper use of information acquired by virtue of his position.

184 Reckless or intentional dishonesty in failing to exercise duties in good faith for proper purpose. Use of position or information dishonestly to gain advantage or cause detriment.

206A Contravening an order against taking part in management of a corporation.

206A, B Taking part in management of corporation while being an insolvent under an administration.

206A, B Acting as a director or promoter or taking part in the management of a company within five years after conviction or imprisonment for various offences.

209(3) Dishonest failure to observe requirements on making loans to directors or related companies.

254T Paying dividends except out of profits.

286 Failure to keep proper accounting records.

312 Obstruction of auditor.

314-7 Failure to comply with requirements for financial statement preparation.

437C Performing or exercising a function or power as officer while a company is under administration.

437D(5) Unauthorised dealing with company's property during administration.

438B(4) Failure by directors to assist administrator, deliver records and provide information.

438C(5) Failure to deliver up books and records to administrator.

590 Failure to disclose property, concealed or removed property, concealed a debt due to the company, altered books of the company, fraudulently obtained credit on behalf of the company, material omission from Report as to Affairs or false representation to creditors.

Voidable Transactions

Preferences

A preference is a transaction such as a payment between the company and one or more of its creditors, in which the creditor receiving the payment is preferred over the general body of creditors. The relevant time period is six months before the commencement of the liquidation. The company must have been insolvent at the time of the transaction, or become insolvent as a result of the transaction.

Where a creditor receives a preferred payment, the payment is voidable as against a liquidator and is liable to be paid back to the liquidator subject to the creditor being able to successfully maintain any of the defences available to the creditor under either the Corporations Act. Uncommercial Transaction

An uncommercial transaction is one that it may be expected that a reasonable person in the company's circumstances would not have entered into having regard to: • the benefit or detriment to the company; • the respective benefits to other parties; and, • any other relevant matter.

To be voidable, an uncommercial transaction must have occurred during the two years before the liquidation. However, if a related entity is a party to the transaction, the time period is four years and if the intention of the transaction is to defeat creditors, the time period is ten years.

Insolvency Practitioners Association of Australia Creditor Information Sheet s439A report (2) Page 2

The company must have been insolvent at the time of the transaction, or become insolvent as a result of the transaction. Unfair Loan

A loan is unfair if and only if the interest was extortionate when the loan was made or has since become extortionate. There is no time limit on unfair loans – they only have to have been entered into any time on or before the day when the winding up began. Arrangements to avoid employee entitlements

If an employee suffers loss because a person (including a director) enters into an arrangement or transaction to avoid the payment of employee entitlements, the liquidator or the employee may seek to recover compensation from that person. It will only be necessary to satisfy the court that there was a breach on the balance of probabilities. There is no time limit on when the transaction occurred. Unreasonable payments to directors

Liquidators have the power to reclaim "unreasonable payments" made to directors by companies prior to liquidation. The provision relates to transactions made to, on behalf of, or for the benefit of, a director or close associate of a director. To fall within the scope of the section, the transaction must have been unreasonable, and have been entered into during the 4 years leading up to a company's liquidation, regardless of its solvency at the time the transaction occurred. Voidable charges

Certain charges are voidable by a liquidator: • Floating charge created with six months of the liquidation unless it secures a subsequent advance; • Unregistered charges; and • Charges in favour of related parties who attempt to enforce the charge within 6 months of its creation. Insolvent Trading

In the following circumstances, directors may be personally liable for insolvent trading by the company: • a person is a director at the time a company incurs a debt; • the company is insolvent at the time of incurring the debt or becomes insolvent because of incurring the

debt; • at the time the debt was incurred, there were reasonable grounds to suspect that the company was

insolvent; • the director was aware such grounds for suspicion existed; and • a reasonable person in a like position would have been so aware.

The law provides that the liquidator, and in certain circumstances the creditor who suffered the loss, may recover from the director, an amount equal to the loss or damage suffered. Similar provisions exist to pursue holding companies for debts incurred by their subsidiaries.

A defence is available under the law where the director can establish: • there were reasonable grounds to expect that the company was solvent and they actually did so

expect; • they did not take part in management for illness or some other good reason; or, • they took all reasonable steps to prevent the company incurring the debt.

The proceeds of any recovery for insolvent trading by a liquidator are available for distribution to the unsecured creditors before the secured creditors. Important note: This information sheet contains a summary of basic information on the topic. It is not a substitute for legal advice. Some provisions of the law referred to may have important exceptions or qualifications. This document may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances.

Annexure 6

G:\JRL\Munday Group\Prec\prec\Drafts for 439a report 18102010\VA165C Remuneration Report.doc

CORPORATIONS ACT 2001 Section 449E

HAMDAY PTY LTD (TRADING AS ‘THE GRAND FRANKSTON’) (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) ACN 113 225 979

SPAR HOLDINGS PTY LTD (TRADING AS ‘SUGAR GUM HOTEL’) (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) ACN 100 379 628

JODAY PTY LTD (TRADING AS ‘PLAYERS ON LYGON’) (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) ACN 111 105 509

UPDAY PTY LTD (TRADING AS ‘GOLDEN FLEECE HOTEL’) (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) ACN 106 215 356

MAGDAY PTY LTD (TRADING AS ‘GOLDEN NUGGET’) (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) ACN 113 225 657

YADNUM PTY LTD (TRADING AS ‘THE COVE HOTEL’) (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) ACN 106 053 212

PIEDAY PTY LTD (TRADING AS ‘COURT JESTER’) (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) ACN 109 800 357

COLLECTIVELY ‘THE GAMING COMPANIES’

REMUNERATION REPORT

The Administrators’ Remuneration Report, prepared pursuant to Section 449E of the Corporations Act 2001, takes the following format. Part A A1 Schedule of hourly rates and general guide to staff experience. A2 Tasks undertaken by the Administrators and remuneration calculation for the period 9 April

2010 to 18 October 2010. Please note that applicable fees have been apportioned to each relevant entity based on:

General time split between all Munday Group entities; and/or Pro rata of creditor numbers; and/or Pro rata of employee numbers.

A3 Schedule of the Administrators’ anticipated tasks and remuneration estimate for the period 19

October 2010 to 29 October 2010. A4 Where Deed Administrators are appointed, a schedule of the Deed Administrators’ anticipated

tasks and remuneration estimate for the period 29 October 2010 to 28 January 2011. A5 Where Liquidators are appointed, a schedule of the Liquidators’ anticipated tasks and

remuneration estimate from 29 October 2010 to the conclusion of the administration. A6 Remuneration approved and drawn to date. A7 Resolutions to be put to creditors at the meeting convened for 29 October 2010.

2

Part B B1 Administrators’ disbursements B2 Other creditor information on remuneration The Remuneration Report must be read in conjunction with the report to creditors dated 21 October 2010.

3

PART A A1 SCHEDULE OF HOURLY RATES & GENERAL GUIDE TO STAFF EXPERIENCE

Title Rate ($) Experience

Partner/Principal/

Appointee

590 The Partner/Appointee is a registered liquidator and member of the ICAA and, generally, the IPA, bringing specialist skills to the administration or insolvency task. For specific experience and other details of the appointee/s, please visit our website at www.ferrierhodgson.com

Director 535 Generally, minimum of 12 years experience at least 2 years of which is to be at Manager level. University degree; member of the ICAA and, generally, the IPA, with deep knowledge and lengthy experience in relevant insolvency legislation and issues.

Senior Manager 465 Generally, more than 7 years experience with at least 2 years as a Manager. University degree; member of the ICAA and, generally, the IPA; very strong knowledge of relevant insolvency legislation and issues.

Manager 370 Generally, 5-7 years chartered accounting or insolvency management experience. University degree; member of the ICAA and, generally, the IPA; sound knowledge of relevant insolvency legislation and issues.

Supervisor 315 Generally, 4-6 years chartered accounting or insolvency management experience. University degree; member of the ICAA; completing IPA Insolvency Education Program. Good knowledge of relevant insolvency legislation and issues.

Senior 1 280 Generally, 2-4 years chartered accounting or insolvency management experience. University degree; completing the ICAA’s CA, program. Good knowledge of basic insolvency legislation and issues.

Senior 2 250 Generally, 2-3 years chartered accounting or insolvency management experience. University degree, ICAA’s CA program commenced.

Intermediate 1 220 0 to 2 years experience. Has completed or substantially completed a degree in finance/accounting. Under supervision, takes direction from senior staff in completing administrative tasks.

Intermediate 2 185 0 – 1 year’s experience. Undertaking a degree part-time in finance/accounting. Under supervision, takes direction from senior staff in completing more complex administrative tasks.

Professional Staff Junior

145 0 – 1 year’s experience. Undertaking a degree part-time in finance/accounting. Under supervision, takes directions from senior staff in completing administrative tasks.

Senior Secretary 180 Appropriate skills including machine usage.

Computer Operator

120 Appropriate skills including machine usage.

Clerk 145 Generally non qualified administrative assistant. Classification depends on experience, salary and complexity of work to be completed.

Typist 95 Appropriate skills including machine usage.

Office Assistant 65 Completed schooling and plans to undertake further studies. Required to assist in administration and day to day field work under the supervision of more senior staff.

Notes:

1. The hourly rates are exclusive of GST.

2. The guide to staff experience is intended only as a general guide to the qualifications and experience of our staff engaged in the administration. Staff may be engaged under a classification that we consider appropriate for their experience.

3. Time is recorded and charged in six-minute increments.

4. Rates are subject to change from time to time.

http://www.ferrierhodgson.com.au/

4

A2 Tasks undertaken by the Administrators and remuneration calculation for the period 9 April 2010 to 18 October 2010

Creditors

Creditor Enquiries Receive and follow up creditor enquiries via telephone and email

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

Creditor reports/circulars Initial circular to creditors Follow up circulars Prepare report pursuant to section 439A of the Act,

including all investigations necessary to complete report Review and liaise with Receivers regarding DOCA

proposal

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

Corresponding with OSR and ATO regarding POD’s when not related to a dividend

Meeting of Creditors Preparation of meeting notices, proxies and advertisements

Forward notice of meeting to all known creditors Preparation of meeting file, including agenda, certificate

of postage, attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting

Preparation and lodgement minutes of meetings with ASIC

Respond to stakeholder queries and questions immediately following meeting

Attend court to seek two extensions of the convening period

Prepare all court documents including affidavits required for the extension applications

Liaise with solicitors regarding the extension applications

Landlord Dispute – Court Matter Liaise with solicitors and Receivers regarding dispute with landlord

Prepare all court documents including affidavits required for court appearance

Attend court

Employees

Employee enquiries

Receive and follow up employee enquiries via telephone Review and prepare correspondence to employees and

their representatives via facsimile, email and post Preparation of letters to employees advising of their

entitlements and options available

Calculation of entitlements Reviewing company’s books and records

Reconciling superannuation accounts

Investigation

Conducting investigation Review and collection of company books and records Reconstruction of financial statements Reviewing company’s books and records and Report as

to Affairs Review and preparation of company nature and history Conducting and summarising statutory searches Preparation of comparative financial statements Review of specific transactions and liaising with

Management regarding certain transactions Preparation of investigation file

5

Administration Correspondence General correspondence

Document maintenance/file review/checklist

Filing of documents Updating checklists

Insurance Identification of potential issues requiring attention of

insurance specialists

ASIC Form 524 and other forms Preparing and lodging ASIC forms including 505, 524,

911 etc

ATO & other statutory reporting Notification of appointment

Planning / Review Discussions regarding status/strategy of administration

In addition, the below tasks were undertaken for Pieday, Spar Holdings and Upday.

Assets

Leasing Reviewing leasing documents Liaising with Receivers Tasks associated with disclaiming leases

6

A2 (cont) Tasks undertaken by the Administrators and remuneration calculation for the period 9 April 2010 to 18 October 2010

Hamday Pty Ltd

Total

($) hrs $ hrs $ hrs $ hrs $ hrs $

John Lindholm Partner 590 2.5 1,475.00 - - 1.0 590.00 - - 1.0 590.00 0.5 295.00

Yvan Dang Manager 1 465 12.7 5,905.50 - - 8.0 3,720.00 0.8 372.00 1.0 465.00 2.9 1,348.50

Tina Korfiatis Supervisor 315 10.4 3,276.00 - - 4.6 1,449.00 2.4 756.00 - - 3.4 1,071.00

Tina Korfiatis Senior 1 280 31.1 8,708.00 - - 13.0 3,640.00 3.5 980.00 3.2 896.00 11.4 3,192.00

Susanne Jing Intermediate 1 220 9.4 2,068.00 - - 3.3 726.00 3.3 726.00 - - 2.8 616.00

Susanne Jing Intermediate 2 185 23.9 4,421.50 - - 12.0 2,220.00 2.4 444.00 5.5 1,017.50 4.0 740.00

Ruth Paynter Typist 95 1.3 117.11 - - - - 0.0 - - - 1.3 117.11

25,971.11 - - 41.9 12,345.00 12.4 3,278.00 10.7 2,968.50 26.3 7,379.61

2597.11

28,568.22

Average hourly rate 294.63 277.43 280.59264.35

TOTAL

GST

TOTAL (including GST)

Employee Position$/hour

(ex GST)

Total

actual

hours

Task Area

Assets Creditors Investigation AdministrationEmployees

Joday Pty Ltd

Total




Tina Korfiatis Supervisor 315 8.1 2,551.50 - - 4.5 1,417.50 0.0 - - - 3.6 1,134.00




Ruth Paynter Typist 95 1 60.11 - - - - - - - - 0.7 60.11

24,167.61 - - 41.3 12,252.50 7.4 1,876.50 10.6 2,922.00 24.9 7,116.61

2416.76

26,584.37

285.81

TOTAL

GST


Average hourly rate 296.67 253.58 275.66


(ex GST)

Total

actual

hours

Task Area

Assets Creditors Employees Investigation Administration

7


Magday Pty Ltd

Total




Tina Korfiatis Supervisor 315 8.3 2,614.50 - - 4.5 1,417.50 0.2 63.00 - - 3.6 1,134.00





24,204.52 - - 41.4 12,225.50 8.2 2,096.00 10.6 2,922.00 24.3 6,961.02

2420.45

26,624.97

286.46

TOTAL

GST




(ex GST)

Total

actual

hours

Task Area


Pieday Pty Ltd

Total



Yvan Dang Manager 1 465 12.2 5,673.00 0.2 93.00 8.0 3,720.00 0.5 232.50 0.8 372.00 2.7 1,255.50

Tina Korfiatis Supervisor 315 7.6 2,394.00 - - 4.7 1,480.50 0.0 - - - 2.9 913.50





23,787.61 0.2 93.00 41.8 12,332.50 7.0 1,788.50 10.5 2,875.50 23.3 6,698.11

2378.76

26,166.37

287.47

TOTAL

GST


Average hourly rate 465.00 295.04 255.50 273.86


(ex GST)

Total

actual

hours

Task Area


8


Spar Holdings Pty Ltd

Total




Tina Korfiatis Supervisor 315 8.4 2,646.00 0.6 189.00 4.7 1,480.50 0.4 126.00 - - 2.7 850.50





24,246.02 0.6 189.00 42.4 12,440.00 8.1 2,068.50 10.6 2,922.00 23.0 6,626.52

2424.60

26,670.62

288.11

TOTAL

GST




(ex GST)

Total

actual

hours

Task Area


Upday Pty Ltd

Total



Yvan Dang Manager 1 465 14.3 6,649.50 0.8 372.00 9.0 4,185.00 1.0 465.00 0.8 372.00 2.7 1,255.50

Tina Korfiatis Supervisor 315 11.2 3,528.00 1.5 472.50 6.1 1,921.50 0.8 252.00 - - 2.8 882.00


Susanne Jing Intermediate 1 220 9.7 2,134.00 - - 5.3 1,166.00 3.2 704.00 - - 1.2 264.00



26,977.02 2.3 844.50 46.4 13,722.50 10.9 2,845.00 10.5 2,875.50 23.3 6,689.52

2697.70

29,674.72

287.10

TOTAL

GST




(ex GST)

Total

actual

hours

Task Area


9


Yadnum Pty Ltd

Total




Tina Korfiatis Supervisor 315 11.5 3,622.50 - - 5.1 1,606.50 3.4 1,071.00 - - 3.0 945.00


Susanne Jing Intermediate 1 220 9.6 2,112.00 - - 4.6 1,012.00 3.5 770.00 - - 1.5 330.00



26,176.52 - - 43.7 12,788.50 13.6 3,637.00 10.5 2,875.50 24.4 6,875.52

2617.65

28,794.17

281.78

TOTAL

GST




(ex GST)

Total

actual

hours

Task Area


10

A3 Schedule of anticipated tasks and Administrators’ estimated prospective remuneration for the period 19 October 2010 to 29 October 2010

Based on the following anticipated tasks, we estimate the Administrators’ fees for the above period for all entities at approximately $66,297.

Creditors

Creditor Enquiries Receive and follow up creditor enquiries via telephone and email

Secured creditor reporting

Responding to secured creditor’s queries

Creditor reports/circulars Finalising report to creditors pursuant to section 439A of the Act

Liaising with the Receivers and their advisors regarding the creditors report

Dealing with proofs of debt

Receipting and filing POD’s when not related to a dividend

Meeting of Creditors Preparation of meeting notices, proxies and advertisements Forward notice of meeting to all known creditors Preparation of meeting file, including agenda, certificate of

postage, attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting.

Landlord Dispute – Court Matter

Liaise with solicitors and Receivers regarding dispute Prepare court documents including affidavits required for

court appearance


Document maintenance / file review / checklist

Filing of documents Updating checklists

ASIC Form 524 and other forms

Preparing and lodging ASIC forms including 505, 524, 911 etc

Correspondence with ASIC regarding statutory forms

ATO & other statutory reporting

Preparing BAS’

Finalisation Notifying ATO of finalisation Cancelling ABN / GST / PAYG registration Completing checklists Finalising WIP


The remuneration estimate for each entity is summarised as follows:

Hamday

Creditors Administration Total

Hours 19.3 13.5 32.8

Amount $5,683 $3,788 $9,471

Joday


Hours 19.2 13.3 32.4

Amount $5,683 $3,788 $9,471

11

Magday


Hours 19.2 13.2 32.5

Amount $5,683 $3,788 $9,471 Pieday


Hours 19.3 13.2 32.4

Amount $5,683 $3,788 $9,471 Spar Holdings


Hours 19.4 13.1 32.5

Amount $5,683 $3,788 $9,471 Upday


Hours 25.6 6.6 32.2

Amount $7,577 $1,894 $9,471 Yadnum


Hours 19.4 13.4 32.9

Amount $5,683 $3,788 $9,471

12

A4 Schedule of anticipated tasks and Deed Administrators’ estimated prospective remuneration for the period 29 October 2010 to 28 January 2011

Based on the following anticipated tasks of the Deed Administrators, I estimate fees for the DOCA administration at approximately $50,000.

Creditors

Creditor Enquiries Receive and follow up creditor enquiries via telephone Maintaining creditor enquiry register Review and prepare correspondence to creditors and

their representatives via facsimile, email and post Correspondence with committee of creditors

members

Secured creditor reporting Preparing reports to secured creditor

Responding to secured creditor’s queries

Creditor reports/circulars Preparing circular to creditors following execution of

the DOCA General reporting to creditors

Creditors’ Trust Account Establish creditors’ trust account

Monitor and receipt contribution payable under the DOCA



Shareholder enquires Liaise with shareholder regarding consent to transfer

of shares

Dividend

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

Receipt of PODs Maintain POD register Adjudicating PODs 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 vouchers to pay dividend Preparation of correspondence to creditors enclosing

payment of dividend

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First month, then 6 monthly administration review Filing of documents File reviews Updating checklists

ASIC Form 524 and other forms Preparing and lodging ASIC forms including 505, 524, 911 etc

Correspondence with ASIC regarding statutory forms Lodge notice that DOCA wholly effectuated

ATO & other statutory reporting Notification of appointment

Preparing BAS’ Completing group certificates


Planning / Review Discussions regarding status of administration

Books and records / storage Dealing with records in storage

Sending job files to storage


Hamday

Creditors Dividend Administration Total

Hours 3.6 16.6 5.1 25.4

Amount $1,071 $4,643 $1,429 $7,143

Joday


Hours 3.6 16.7 5.0 25.3

Amount $1,071 $4,643 $1,429 $7,143 Magday


Hours 3.6 16.7 5.0 25.3

Amount $1,071 $4,643 $1,429 $7,143 Pieday


Hours 3.6 16.7 5.0 25.3

Amount $1,071 $4,643 $1,429 $7,143 Spar Holdings


Hours 3.7 16.7 5.0 25.3

Amount $1,071 $4,643 $1,429 $7,143

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Upday


Hours 3.6 16.6 5.0 25.2

Amount $1,071 $4,643 $1,429 $7,143 Yadnum


Hours 3.7 16.6 5.1 25.4

Amount $1,071 $4,643 $1,429 $7,143

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A5 Schedule of anticipated tasks and Liquidators’ estimated prospective remuneration for the period 29 October 2010 to the conclusion of the administration Based on the following anticipated tasks of the Liquidation, we estimate the Liquidators’ fees for all entities at approximately $127,273.

Creditors

Creditor Enquiries Receive and follow up creditor enquiries via telephone Review and prepare correspondence to creditors and their

representatives via facsimile, email and post Correspondence with committee of creditors members

Secured creditor reporting Responding to secured creditor’s queries

Creditor reports/circulars Preparing general reports to creditors



Meeting of Creditors Preparation meeting notices, proxies and advertisements

Forward notice of meeting to all known creditors

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

Preparation and lodgement of minutes of meetings with ASIC

Respond to stakeholder queries and questions immediately following meeting

Landlord Dispute – Court Matter

Liaise with solicitors and Receivers regarding dispute Prepare court documents including affidavits required for

court appearance Attend court Liaising with owners/lessors Tasks associated with disclaiming leases

Employees

Employee enquiries

Receive and follow up employee enquiries via telephone Review and prepare correspondence to creditors and their

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

representatives via facsimile, email and post Preparation of letters to employees advising of their

entitlements and options available Receive and prepare correspondence in response to

employees objections to leave entitlements

GEERS Correspondence with GEERS Preparing notification spreadsheet Preparing GEERS quotations Preparing GEERS distributions

Calculation of entitlements Calculating employee entitlements Reviewing employee files and company’s books and

records Reconciling superannuation accounts Reviewing awards Liaising with solicitors regarding entitlements

Employee dividend Correspondence with ATO regarding SGC proof of debt Calculating dividend rate Preparing dividend file Advertising dividend notice Preparing distribution Receipting POD’s Adjudicating POD’s

Other employee issues Correspondence with Child Support

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Investigation

Conducting investigation Lodgement of report with the ASIC pursuant to section 533 of the Act

Preparation and lodgement of supplementary report if required

Conduct preference recovery investigations and recovery action

Examinations 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 Internal meetings to discuss status of litigation Preparing brief to solicitors Liaising with solicitors regarding recovery actions Attending to negotiations Attending to settlement matters

ASIC reporting Preparing statutory investigation reports

Preparing affidavits seeking non lodgements assistance Liaising with ASIC



First month, then 6 monthly administration review Filing of documents File reviews Updating checklists

ASIC Form 524 and other forms

Preparing and lodging ASIC forms including 505, 524, 911 etc

Correspondence with ASIC regarding statutory forms

ATO & other statutory reporting

Notification of appointment Preparing BAS’



Books and records / storage Dealing with records in storage

Sending job files to storage


Hamday

Creditors Employees Investigations Administration Total

Hours 9.3 24.1 22.9 9.7 66.0

Amount $2,727 $6,364 $6,364 $2,727 $18,182

Joday


Hours 9.2 25.1 23.1 9.5 66.9

Amount $2,727 $6,364 $6,364 $2,727 $18,182

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Magday


Hours 9.2 24.9 23.1 9.5 66.7

Amount $2,727 $6,364 $6,364 $2,727 $18,182 Pieday


Hours 9.2 24.9 23.2 9.5 66.9

Amount $2,727 $6,364 $6,364 $2,727 $18,182 Spar Holdings


Hours 9.3 24.9 23.1 9.5 66.8

Amount $2,727 $6,364 $6,364 $2,727 $18,182 Upday


Hours 9.2 24.4 23.2 9.5 66.3

Amount $2,727 $6,364 $6,364 $2,727 $18,182 Yadnum


Hours 9.3 27.2 19.9 9.7 66.1

Amount $2,727 $7,273 $5,455 $2,727 $18,182

Please note that the above is an estimate only. If costs exceed the estimate, we will advise creditors accordingly and seek further approval.

A6 Remuneration approved and drawn to date

Creditors have not yet approved the Administrators’ remuneration. A7 Resolutions to be put to creditors at the meeting convened for 29 October 2010 At the meeting of creditors convened for 29 October 2010, creditors will be asked to consider the following resolutions: Hamday "That the remuneration of the Administrators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period 9 April 2010 to 18 October 2010 be fixed and paid in the sum of $25,971.11 plus any applicable GST and, for the period from 19 October 2010, to the end of the administration period be fixed and paid to a maximum amount of $9,471 plus any applicable GST." "That the remuneration of the Administrators of the Deed of Company Arrangement, as set out in the Administrators’ remuneration report dated 21 October 2010 be approved up to the sum of $7,143 plus any applicable GST but subject to upward revision by resolution of creditors and that the Administrators of the Deed of Company Arrangement be authorised to make periodic payments on account of such accruing remuneration."

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"That the remuneration of the Liquidators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period from 29 October 2010 to the conclusion of the administration be approved up to the sum of $18,182 plus any applicable GST but subject to upward revision by resolution of creditors, and that the Liquidators be authorised to make periodic payments on account of such accruing remuneration."

Joday "That the remuneration of the Administrators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period 9 April 2010 to 18 October 2010 be fixed and paid in the sum of $24,167.61 plus any applicable GST and, for the period from 19 October 2010, to the end of the administration period be fixed and paid to a maximum amount of $9,471 plus any applicable GST." "That the remuneration of the Administrators of the Deed of Company Arrangement, as set out in the Administrators’ remuneration report dated 21 October 2010 be approved up to the sum of $7,143 plus any applicable GST but subject to upward revision by resolution of creditors and that the Administrators of the Deed of Company Arrangement be authorised to make periodic payments on account of such accruing remuneration." "That the remuneration of the Liquidators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period from 29 October 2010 to the conclusion of the administration be approved up to the sum of $18,182 plus any applicable GST but subject to upward revision by resolution of creditors, and that the Liquidators be authorised to make periodic payments on account of such accruing remuneration." Magday "That the remuneration of the Administrators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period 9 April 2010 to 18 October 2010 be fixed and paid in the sum of $24,204.52 plus any applicable GST and, for the period from 19 October 2010, to the end of the administration period be fixed and paid to a maximum amount of $9,471 plus any applicable GST." "That the remuneration of the Administrators of the Deed of Company Arrangement, as set out in the Administrators’ remuneration report dated 21 October 2010 be approved up to the sum of $7,143 plus any applicable GST but subject to upward revision by resolution of creditors and that the Administrators of the Deed of Company Arrangement be authorised to make periodic payments on account of such accruing remuneration." "That the remuneration of the Liquidators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period from 29 October 2010 to the conclusion of the administration be approved up to the sum of $18,182 plus any applicable GST but subject to upward revision by resolution of creditors, and that the Liquidators be authorised to make periodic payments on account of such accruing remuneration." Pieday "That the remuneration of the Administrators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period 9 April 2010 to 18 October 2010 be fixed and paid in the sum of $23,787.61 plus any applicable GST and, for the period from 19 October 2010, to the end of the administration period be fixed and paid to a maximum amount of $9,471 plus any applicable GST."

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"That the remuneration of the Administrators of the Deed of Company Arrangement, as set out in the Administrators’ remuneration report dated 21 October 2010 be approved up to the sum of $7,143 plus any applicable GST but subject to upward revision by resolution of creditors and that the Administrators of the Deed of Company Arrangement be authorised to make periodic payments on account of such accruing remuneration." "That the remuneration of the Liquidators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period from 29 October 2010 to the conclusion of the administration be approved up to the sum of $18,182 plus any applicable GST but subject to upward revision by resolution of creditors, and that the Liquidators be authorised to make periodic payments on account of such accruing remuneration." Spar Holdings "That the remuneration of the Administrators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period 9 April 2010 to 18 October 2010 be fixed and paid in the sum of $24,246.02 plus any applicable GST and, for the period from 19 October 2010, to the end of the administration period be fixed and paid to a maximum amount of $9,471 plus any applicable GST." "That the remuneration of the Administrators of the Deed of Company Arrangement, as set out in the Administrators’ remuneration report dated 21 October 2010 be approved up to the sum of $7,143 plus any applicable GST but subject to upward revision by resolution of creditors and that the Administrators of the Deed of Company Arrangement be authorised to make periodic payments on account of such accruing remuneration." "That the remuneration of the Liquidators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period from 29 October 2010 to the conclusion of the administration be approved up to the sum of $18,182 plus any applicable GST but subject to upward revision by resolution of creditors, and that the Liquidators be authorised to make periodic payments on account of such accruing remuneration." Upday "That the remuneration of the Administrators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period 9 April 2010 to 18 October 2010 be fixed and paid in the sum of $26,977.02 plus any applicable GST and, for the period from 19 October 2010, to the end of the administration period be fixed and paid to a maximum amount of $9,471 plus any applicable GST." "That the remuneration of the Administrators of the Deed of Company Arrangement, as set out in the Administrators’ remuneration report dated 21 October 2010 be approved up to the sum of $7,143 plus any applicable GST but subject to upward revision by resolution of creditors and that the Administrators of the Deed of Company Arrangement be authorised to make periodic payments on account of such accruing remuneration." "That the remuneration of the Liquidators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period from 29 October 2010 to the conclusion of the administration be approved up to the sum of $18,182 plus any applicable GST but subject to upward revision by resolution of creditors, and that the Liquidators be authorised to make periodic payments on account of such accruing remuneration."

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Yadnum "That the remuneration of the Administrators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period 9 April 2010 to 18 October 2010 be fixed and paid in the sum of $26,176.52 plus any applicable GST and, for the period from 19 October 2010, to the end of the administration period be fixed and paid to a maximum amount of $9,471 plus any applicable GST." "That the remuneration of the Administrators of the Deed of Company Arrangement, as set out in the Administrators’ remuneration report dated 21 October 2010 be approved up to the sum of $7,143 plus any applicable GST but subject to upward revision by resolution of creditors and that the Administrators of the Deed of Company Arrangement be authorised to make periodic payments on account of such accruing remuneration." "That the remuneration of the Liquidators, as set out in the Administrators’ remuneration report dated 21 October 2010 for the period from 29 October 2010 to the conclusion of the administration be approved up to the sum of $18,182 plus any applicable GST but subject to upward revision by resolution of creditors, and that the Liquidators be authorised to make periodic payments on account of such accruing remuneration."

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PART B

B1 Administrators’ Disbursements

Disbursements are divided into three types D1, D2 and D3.

D1 Disbursements are all externally provided professional services and are recovered at cost. An example of a D1 disbursement is legal fees.

D2 Disbursements are externally provided non professional costs such as travel, accommodation and search fees. D2 disbursements are recovered at cost.

D3 Disbursements are internally provided non professional costs such as photocopying and document storage. D3 disbursements are charged at cost except for photocopying, printing and telephone calls which are charged at a rate which is intended to recoup both variable and fixed costs. The relevant rates are set out below.

Disbursements Charges (Excluding GST)

Postage At cost

Telephone At cost

Photocopying 30 cents per copy

Facsimile $1 per page

File Set Up $40

Advertising At cost

Storage – Per Box At Cost

Storage – Per File At Cost

Couriers At cost

Creditor approval for the payment of disbursements is not required. However, the Administrators must account to creditors. Creditors have the right to question the incurring of disbursements and can challenge disbursements in court.

B2 Other creditor information on remuneration

Generally, the partners of Ferrier Hodgson Melbourne are members of the Insolvency Practitioners Association of Australia. Ferrier Hodgson follows the IPA Code of Professional Practice. A copy of the Code of Professional Practice may be found on the IPA website at www.ipaa.com.au

An information sheet concerning approval of remuneration in external administrations can also be obtained from the IPA website.

Queries regarding remuneration should be directed to Ms Susanne Jing of this office.

Dated this 21st day of October 2010

JOHN LINDHOLM ADMINISTRATOR

http://www.ipaa.com.au/

Documents

TO CREDITORS PO Box - Ferrier Hodgson...2010/10/21 · to creditors together with a schedule setting out the Deed Administrators’ likely tasks. Page 3 Remuneration of Liquidators