- D-Strategy Australia Pty Ltd is now in liquidation. - The first Creditors Meeting is being held on Thursday, 18 September 2014 at 3:30 PM.

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1 Thursday, 4 September 2014 To the Director / Credit Manager The Creditor as Addressed Dear Creditor REPORT TO CREDITORS D-Strategy Australia Pty Ltd (In Liquidation) ABN This is the first Report to Creditors of the above company. The company resolved on Tuesday, 26 August 2014 that D-Strategy Australia Pty Ltd be wound up and that I, Cliff Sanderson, of Dissolve Pty Ltd be appointed as liquidator. The company is being wound up as a creditors voluntary liquidation. What you need to know - D-Strategy Australia Pty Ltd is now in liquidation. - The first Creditors Meeting is being held on Thursday, 18 September 2014 at 3:30 PM. What you need to do - Complete and return the Formal Proof of Debt form (Form 535) - Complete and return the Appointment of Proxy form. If you are on the creditors list under a company name, please nominate the individual attending the meeting on the company s behalf as your proxy. - If you can t attend the meeting but still want to vote you may want to tick the boxes in the attached Special Proxy Form and appoint the Chairperson to cast your vote. Meeting of Creditors & Statutory Notices A meeting of creditors will be held on Thursday, 18 September 2014 at 3:30 PM. Attached are a number of important notices: 1. A list of creditors, based on information provided by the directors. 2. A Form 529 being a Notice of Meeting of Creditors. 3. A Form 532 being an Appointment of Proxy. If creditors wish to direct the proxy holder how to vote a particular way they should complete Annexure A to the Proxy. Companies must appoint a proxy. 4. A Form 535, being a Formal Proof of Debt or Claim. This is to be completed by creditors who have not already submitted a proof of debt or wish to amend their proof of debt. In order to vote at the meeting you must have submitted a proof of debt and I must determine whether the proof of debt can be admitted for voting purposes. 5. A Form 509, being a Summary of Affairs of the Company. 6. My Declaration of Independence, Relevant Relationships and Indemnities. 7. My Remuneration Report. 8. ASIC Fact Sheet Insolvency information for directors, employees, creditors and shareholders.

2 Telephone conference facilities are available for the meeting. At the time designated for the commencement of the meeting please ring You will be asked for a conference room number which is Follow the prompts and you will be linked into the teleconference. If you are not a creditor yourself, but are representing your company, employer or another person, a proxy will need to be provided to me prior to the meeting. Preliminary Findings I have only recently been appointed as Liquidator. The Corporations Act requires that I call a meeting of creditors shortly after appointment. I am yet to receive all of the company s books and records and I have not yet begun a detailed investigation into the company s affairs. I can advise the following preliminary findings: Dividend to Creditors - Based on the information available to me from my preliminary investigations it is unlikely that there will be any return to creditors. Nature of Business - The Company provided web design services, and was based in East Brisbane QLD. Trade on / Cessation of Trading - The Company has ceased trading. The company will not be incurring any further liabilities or accepting any supply of goods or services. Future Actions As I have only recently been appointed, the liquidation process is not complete. The following matters will be attended to subsequent to the meeting of creditors: Complete my investigations into the affairs of the company and report on the results of those investigations to ASIC and creditors. Investigate matters including whether any creditors have received unfair preferences, whether there have been any uncommercial transactions that are recoverable and whether the company was trading while insolvent. Take recovery actions if the results of the investigation warrant such action. Realise assets. Deal with creditor inquiries. I will be able to provide you with an update on the progress of the liquidation at the meeting of creditors. List of Creditors Based on information provided by the Directors, I have provided (on the following page) a list of creditors, their addresses and the amounts they are owed (where available). Please contact me or Kristine Hu of my office on (02) or by at kristine@dissolve.com.au if you have any questions. Yours faithfully D-Strategy Australia Pty Ltd (In Liquidation) Cliff Sanderson Liquidator

3 Creditor Listing D-Strategy Australia Pty Ltd (In Liquidation) All Creditors UNSECURED CREDITORS Creditor Name Address RATA Australian Taxation Office PO BOX 9003 Penrith NSW 2740 TBA Lovell, Vanessa (Ms) 21 Huxtable Street Chermside West QLD 4032 TBA Totals for Unsecured Creditors 2 TBA Totals for All Creditors: 2 TBA A full list of creditors has yet to be provided by the director of the company. A supplementary report will be sent to the creditors based on information to be provided.

4 Notice of Meeting FORM 529 Corporations Act 2001 Section 497 NOTICE OF MEETING OF CREDITORS OF D-Strategy Australia Pty Ltd ACN: Notice is given that a meeting of the creditors of D-Strategy Australia Pty Ltd will be held on Thursday, 18 September 2014 at 3:30 PM at the offices of Dissolve Pty Ltd Level 8, 80 Clarence Street, Sydney NSW AGENDA 1. To consider the Report as to Affairs of the company. 2. To consider a statement to the creditors by the director. 3. To determine whether the creditors wish to replace the nominated liquidator with alternate liquidators. 4. To determine whether or not the creditors require the appointment of a Committee of Inspection and, if so, who are to be the members of the Committee. 5. To consider the remuneration of the liquidator and consider the following resolution: That the remuneration for work done and to be done by the Liquidator, his employees and consultants in respect of all Standard Tasks typical in a No-Asset Liquidation be approved at a Fixed Fee of $7,000 plus GST and such remuneration to be drawn on the occurrence of milestones, being, the completion of the 1 st Creditors Meeting ($3,000), Investigation & ASIC Section 533 Report ($3,500) and on issuing Final Report to Creditors ($500). Any Non-Standard Tasks will be charged on a time basis in accordance with the Dissolve Hourly Scale of Rates and capped at $15,000 plus GST to be drawn from funds as they become available. 6. To authorise the liquidators to destroy the books and records of the company within the period of 5 years after dissolution of the company, subject to obtaining prior approval of the Australian Securities & Investments Commission. 7. Any other business. DATED THIS Thursday, 4 September 2014 Cliff Sanderson Liquidator CREDITORS PLEASE NOTE Creditors must lodge a Proof of Debt form (if not already done so) with the appropriate supporting documentation (such as invoices, purchase orders, account statements) to be eligible to vote on resolutions at the meeting. Without the appropriate supporting documentation attached to the proof of debt, the Chairman may not admit the Proof of Debt for voting purposes. A Proxy form must be submitted to our office if you are not attending in person (i.e. you are representing a Company or are representing an individual creditor), the Proxy form must be received by the liquidator before 5.00 p.m. on the day before the meeting or it may not be considered valid. If you elect to complete a Special Proxy in favour of the chairman or another nominated person please also complete the accompanying voting slip. This will authorise the proxy holder to vote in accordance with your particular wishes.

5 FORM 532 Corporations Act 2001 Regulation I/We 1 of a creditor of D-Strategy Australia Pty Ltd, appoint or in his/her absence APPOINTMENT OF PROXY D-Strategy Australia Pty Ltd (IN LIQUIDATION) ACN: ABN: as my/our (tick one) general / special proxy 2 to vote at the meeting of creditors to be held on Thursday, 18 September 2014, or at any adjournment of that meeting. DATED this day of Signature 3 To ensure your vote is counted and cast as you want to vote, tick the special proxy box in the section above and tick all boxes on the following page. To appoint an individual to vote on your company s behalf at their discretion, tick the general proxy box above and do not complete the following page. CERTIFICATE OF WITNESS FOR BLIND CREDITOR 4 I 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 or her before he or she signed or marked the instrument. DATED this day of 2014 of Signature of Witness Description Place of Residence 1 If a firm, strike out I and set out the full name of the firm. 2 If a special proxy, complete the form on the following page. 3 The signature of the creditor is not to be attested by the person nominated as proxy. 4 This certificate is to be completed only where the person giving the proxy is blind or incapable of writing.

6 FORM 532 Annexure A - Special Proxy Voting Slip for Meeting of Creditors of D-Strategy Australia Pty Ltd held on Thursday, 18 September 2014 or any adjournment. Creditor Name Amount of Debt If a Special Proxy I hereby instruct my proxy holder to vote on the following resolutions in the manner indicated. Where I have not indicated I leave the manner of voting to the discretion of the proxy holder. (Please tick one box on each line) Resolution 1 that Cliff Sanderson be appointed as Chairman of the meeting Resolution 2 that the nominated liquidators be replaced with a liquidator nominated by the creditors Resolution 3 that a committee of Inspection be appointed Resolution 4 that the remuneration for work done and to be done by the Liquidator, his employees and consultants in respect of all Standard Tasks typical in a No-Asset Liquidation be approved at a Fixed Fee of $7,000 plus GST and such remuneration to be drawn on the occurrence of milestones, being, the completion of the 1st Creditors Meeting ($3,000), Investigation & ASIC Section 533 Report ($3,500) and on issuing Final Report to Creditors ($500). Any Non-Standard Tasks will be charged on a time basis in accordance with the Dissolve Hourly Scale of Rates and capped at $15,000 plus GST to be drawn from funds as they become available. Resolution 5 to authorise the liquidators to destroy the books and records of the company within the period of 5 years after dissolution of the company, subject to obtaining prior approval of the Australian Securities & Investments Commission Resolution 6 that the meeting be adjourned for up to 21 days FOR AGAINST ABSTAIN Signed Dated

7 FORM 535 Corporations Act 2001 Subregulation (2) FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM) To the Liquidator of: D-Strategy Australia Pty Ltd (In Liquidation) ACN: This is to state that the company was on Tuesday, 26 August 2014 and still is, justly and truly indebted to: 5... ABN... for... dollars and...cents. Particulars of the debt are: Date 6 Consideration 7 Total Inclusive of GST $ 8 GST amount of $ 9 Remarks 2. To my knowledge or belief the creditor has not, nor has any person by the creditor s order, had or received any satisfaction or security for the sum or any part of it except for the following: Date Drawer Acceptor Amount ($) Due Date *3. I am employed by the creditor and authorised in writing by the creditor to make this statement. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. *3. I am the creditor s agent authorised in writing to make this statement. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. DATED this day of 2014 Signature... Occupation... Name... Daytime Telephone... Address... Address SEE DIRECTIONS OVERLEAF FOR THE COMPLETION OF THIS FORM OFFICE USE ONLY ADMIT $ CREDITOR CODE: GST INCLUDED ABOVE $ PROOF NO: REJECT $ AMT. Per RATA $ WITHDRAW $ PREP BY/AUTHORISED CONSIDERATION $ TOTAL PROOF $

8 DIRECTIONS: * Do not complete this part, if this proof is made by the creditor personally. 1 Insert full name and address of the creditor and, if applicable, the creditor s partners. If prepared by an employee or agent of the creditor, also insert a description of the occupation of the creditor. 2 Under Consideration state how the debt arose, for example goods sold and delivered to the company between the dates of, moneys advanced in respect of the Bill of Exchange. 3 This total amount is inclusive of GST. 4 Notate separately the GST portion of the total amount. 5 Under Remarks include details of vouchers substantiating payment. 6 Insert particulars of all securities held. Where the securities are on the property of the company, assess the value of those securities. If any bills or other negotiable securities are held, specify them in a schedule in the above form.

9 The Summary of Affairs has not yet been provided by the director of the company. An updated report will be sent to each creditor when it is provided.

10 DECLARATION OF INDEPENDENCE, RELEVANT RELATIONSHIPS AND INDEMNITIES ( DIRRI ) D-Strategy Australia Pty Ltd (In Liquidation) ACN In this document an Insolvency Practitioner appointed to an insolvent entity is required to make their declarations on the following matters: 1. Independence generally; 2. Relevant relationships, including: i. the circumstance of the appointment; ii. relationships with the Insolvent and others with the previous 24 months; iii. prior professional services for the Insolvent within the previous 24 months; iv. that there are no other relationships to declare; 3. Details of Indemnities given, or up-front payments made, to the Practitioner; 4. Appointee s Background Information and Qualifications This declaration is made in respect of me, Cliff Sanderson, and Dissolve Pty Ltd ( Dissolve ). 1 Independence I, Cliff Sanderson have undertaken a proper assessment of the risks to my independence prior to accepting the appointment as Liquidator of D-Strategy Australia Pty Ltd in accordance with the law and applicable professional standards. This assessment identified no real or potential risks to my independence or the independence of Dissolve. I am not aware of any reasons that would prevent me from accepting this appointment. 2 Relevant Relationships (i) Circumstances of Appointment This appointment was referred to me by the company s external accounting adviser, Garry Collins from Eagle Business Solutions. The only advice I, or my staff, have provided to the accountant has been by way of a telephone call on 28 July 2014 that explained the process of a creditors voluntary liquidation. On 31 July 2014 an Appointment Pack was sent to the Director which included my Consent to Act. I received no remuneration for the above. Further, no benefit has been or will be directly or indirectly paid to the director(s), Mr. Claudius, the company s accountant, or any other person in consideration for this matter being referred to me. I believe that this relationship and the advice referred to above does not affect my independence because it constituted generic advice only on the process of liquidation. The Courts and the ARITA s Code of Professional Practice specifically recognise the need for Practitioners to provide advice on the insolvency process and do not consider that such advice results in a conflict or is an impediment to accepting an appointment. No other information or advice was provided to the director(s) or company advisor(s) prior to my appointment beyond that outlined in this DIRRI. (ii) Relevant Relationships Neither I, nor Dissolve, have, or have had within the preceding 24 months, any relationships with D-Strategy Australia Pty Ltd, an associate of D-Strategy Australia Pty Ltd, a former insolvency practitioner appointed to D-Strategy Australia Pty Ltd or any person or entity that has a charge on the whole or substantially whole of the company s property. (iii) Prior Professional Services Neither I, nor Dissolve, have provided any professional services to D-Strategy Australia Pty Ltd or its director(s) in the previous 24 months. I note the company s external accounting adviser, Garry Collins of Eagle Business Solutions, has previously referred matters to me which resulted in me being appointed liquidator to another six unrelated companies in the last two years. I believe such referrals from solicitors, business advisors and accountants are common place and do not impact my independence in carrying out my function as a liquidator.

11 (iv) No other relevant relationships There are no other known relationships, including personal, business and professional relationships, from the previous 24 months with D-Strategy Australia Pty Ltd, an associate of the company, a former insolvency practitioner appointed to the company or any person that has a charge on the whole or substantially the whole of the company s property that should be disclosed. 3 Up-front payments and Indemnities I have been provided with an up-front payment for the conduct of this liquidation. The amount of $5, has been placed in the Dissolve Pty Ltd Holding Account by the director of D-Strategy Australia Pty Ltd and will not be drawn to meet my remuneration until such time as it is approved by creditors. There are no conditions on the conduct or outcome of the liquidation attached to the provision of those funds. The funds are to be made available to me in the event that realisations in the liquidation will be insufficient to cover my fees, which is likely to be the case. I may have available to me various Statutory Indemnities, which are Indemnities provided by Law. I have not been provided with any other up-front payments or Indemnities. 4 Appointee s Background Information & Qualifications Cliff Sanderson I advise that I hold the following positions, memberships and designations: (i) Director of Dissolve Pty Limited; (ii) Bachelor of Business degree from the University of Technology, Sydney; (iii) Member of The Institute of Chartered Accountants in Australia; (iv) Registered Liquidator and Official Liquidator; (v) Member of the Australian Restructuring Insolvency & Turnaround Association; (vi) Member of the Turnaround Management Association. Dated: Thursday, 4 September Cliff Sanderson Notes: 1. If circumstances change, or new information is identified, I am required under Section 506A and the ARITA Code of Professional Practice to update this Declaration and provide a copy to creditors with my next communication as well as table a copy of any replacement declaration at the next meeting of the company s creditors. 2. Any relationships, indemnities or up-front payments disclosed in the DIRRI must not be such that I am no longer independent. The purpose of components 1 and 2 of the DIRRI is to disclose relationships that, while they do not result in me having a conflict of interest or duty, ensure that creditors are aware of those relationships and understand why I nevertheless remain independent.

12 Thursday, 4 September 2014 REMUNERATION REPORT D-Strategy Australia Pty Ltd (In Liquidation) ACN I have set out below my Remuneration Report for the above liquidation. The Report complies with the requirements of the Australian Restructuring Insolvency & Turnaround Association Code of Professional Practice and the requirements of the Corporations Act The Report is set out under the following sections: 1.0 Declaration 2.0 Initial Advice to Creditors Remuneration Sought and Method Used 3.0 Fixed Fee Component - $7, Hourly Rate Component $15,000 (if applicable) 5.0 Other Supporting Information: Annexure A - Disbursements Policy Statement; Annexure B - Receipts and Payments to date; Annexure C - Dissolve Scale of Hourly Rates; Annexure D Pre-Appointment Disclosure to Directors regarding Remuneration Annexure E - ASIC Information Sheet 1.0 DECLARATION I, Cliff Sanderson of Dissolve Pty Limited, have undertaken a proper assessment of this remuneration claim for my appointment as Liquidator of D-Strategy Australia Pty Ltd in accordance with the law and applicable professional standards. I am satisfied that the remuneration claimed and disbursements incurred are in respect of necessary work, properly performed, or to be properly performed, in the conduct of the administration. 2.0 INITIAL ADVICE TO CREDITORS REMUNERATION SOUGHT AND METHOD USED There are four basic methods that can be used to calculate the remuneration charged by an insolvency practitioner. They are: Time Based / hourly rates - This is the most common method. The fee charged is based on the hourly rate charged for each person who carried out the work multiplied by the number of hours spent by each person on each of the tasks performed. Fixed fee - The fee charged is normally quoted at the commencement of the administration and is the cost for a component or all of the administration. Percentage - The fee charged is based on a percentage of a particular variable, such as the gross proceeds of asset realisations. Contingency - The practitioner s fee is structured to be contingent on a particular outcome being achieved. To date, no remuneration has been approved or paid in this administration. I am seeking approval as follows: That the remuneration for work done and to be done by the Liquidator, his employees and consultants in respect of all Standard Tasks typical in a No-Asset Liquidation be approved at a Fixed Fee of $7,000 plus GST and such remuneration to be drawn on the occurrence of milestones, being, the completion of the 1st Creditors Meeting ($3,000), Investigation & ASIC Section 533 Report ($3,500) and on issuing Final Report to Creditors ($500). Any Non-Standard Tasks will be charged on a time basis in accordance with the Dissolve Hourly Scale of Rates and capped at $15,000 plus GST to be drawn from funds as they become available.

13 I have chosen the above approach because it provides certainty for creditors in regard to the costs of all Standard Tasks and aligns the interests of the liquidator and creditors in the pursuit of Non-Standard Tasks and correlating the amount of work required to be undertaken in those tasks with the fee to be paid.

14 3.0 FIXED FEE COMPONENT - $7,000 FIXED FEE FOR ALL STANDARD TASKS TYPICAL IN A NO-ASSET LIQIUDATION Period Fixed Fee Excluding GST $ Milestone when Fee can be drawn Description of Major Tasks Date of Appointment to 1 st Creditors Meeting (estimated 2 ½ weeks) 3,000 1 st Creditors Meeting Lodgements and service of all standard notices and letters; 1st Report to Creditors; 1st Creditors Meeting. To Completion of Investigation (around another 1 to 2 months) 3,500 Lodgement of Section 533 Report with ASIC Collection of books and records; Investigation including identification of offences, hidden assets and potential recovery actions; Statutory Report to ASIC under Section 533. To Finalisation (around another 3 to 4 months) 500 On issue of Final Report to Creditors Report to Creditors; Final Meeting; or Application for Deregistration. Notes: Total Fixed Fee $7, The Fixed Fee Component applies to all standard tasks typical in a No-Asset liquidation there is an extensive list of those Tasks in the table below. 2. I have received an Indemnity and/or an advance of $5, for fees and costs of the liquidation (see the DIRRI in the previous section). 3. Disbursements are expected to be between $444 and $1,196 (see Annexure A). 4. Therefore, it is likely that there will be insufficient funds available to fully pay the Fixed Fee Component and the Disbursements. DETAILED DESCRIPTION OF WORK - FIXED FEE COMPONENT - No Asset Liquidation Description Includes Task Area: Assets Estimated 4 Hours Assets subject to specific charges Hidden Assets Leasing Review the validity of Charges over assets Tasks associated with investigation the existence of hidden assets such as plant and equipment, stock and debtors Reviewing leasing documents Liaising with owners/lessors Tasks associated with disclaiming leases Task Area: Creditors Estimated 10 Hours Creditor Enquiries Receive and follow up creditor enquiries via telephone

15 Creditor reports Dealing with proofs of debt 1 st Meeting of Creditors and Final Meeting of Creditors Shareholder enquires Review and prepare correspondence to creditors and their representatives via facsimile, and post Correspondence with committee of creditors members (if elected) Preparing, investigation, meeting and general reports to creditors Receipting and filing POD s when not related to a dividend Corresponding with OSR and ATO regarding POD s 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 ITAA Section (1) declarations Task Area: Employees Estimated 2 Hours Employees enquiry FEG Other employee issues Receive and follow up employee enquiries via telephone Review and prepare correspondence to creditors and their representatives via facsimile, and post Preparation of letters to employees advising of their entitlements and options available Correspondence with Department of Education, Employment and Workplace Relations regarding Fair Entitlements Guarantee (FEG) Advise employees of FEG process Correspondence with Child Support Correspondence with Centrelink Task Area: Trade On Estimated Nil Hours Trade On Management No tasks included in Fixed Fee Task Area: Dividend Estimated Nil Hours Payment of Dividend No tasks included in Fixed Fee Task Area: Investigation Estimated 15 Hours Conducting investigation ASIC reporting Preparation of investigation file Collection of company books and records Correspondence with ASIC to receive assistance in obtaining Review of financial statements and MYOB files Reviewing company s books and records Review and preparation of company nature and history Conducting and summarising statutory searches Review of specific transactions and liaising with directors regarding transactions Preparing statutory investigation reports Lodgement of Section 533 Report with ASIC Preparation and lodgement of supplementary report if required Preparing affidavits seeking non lodgements assistance Liaising with ASIC Task Area: Administration Estimated 7 Hours Correspondence Document maintenance/file review/checklist ASIC Form 524 and other forms ATO & other statutory reporting Finalisation Planning / Review Books and records / storage General correspondence including standard letters First month, then 6 monthly administration review Filing of documents File reviews Updating checklists Preparing and lodging ASIC forms including 505, 524, 911 etc Correspondence with ASIC regarding statutory forms Notification of appointment Preparing BAS Completing group certificates Notifying ATO of finalisation Cancelling ABN / GST / PAYG registration Completing checklists Finalising WIP Discussions regarding status of administration Dealing with records in storage Sending job files to storage

16 4.0 HOURLY RATE COMPONENT - $15,000 (if applicable) FOR ALL NON-STANDARD TASKS Period Fee Cap Description of Major Tasks Hourly Rate Component Excluding GST $ Throughout liquidation as incurred $15,000 Tasks that do not fall within the description of Tasks as detailed in the Fixed Fee Component (Section 3.0). Employee $/hour (ex GST) Summary of Hours and Fee by Category Total Hours Total $ Assets Note 1 Tasks Investigation Note 2 Dividend Note 3 Admin Note 4 Cliff Sanderson Appointee $ $7, $1,200 $4,800 $1,200 $480 Graduate $ $7, Notes: $900 $4,500 $1,500 $420 Hours Total $15,000 $2,100 $9,300 $2,700 $ Assets Tasks - Realisation of identified assets and/or recovery and sale of hidden assets. 2. Investigation Tasks - Further investigation (post lodgment of the ASIC Section 533 Report) required to initiate the pursuit of recovery actions previously identified and unfunded applications and assistance to ASIC in prosecution of potential offences. 3. Dividend Tasks In the event of successful realisation of assets or recovery actions, processing of Proofs of Debt and payment of Dividend. 4. Administration Tasks additional administration associated with the above three Tasks. 5. Any Non-Standard tasks will be charged on a time basis in accordance with the Dissolve Hourly Scale of Rates and capped at $15,000. The Dissolve Hourly Rates are attached as Annexure C. 6. Remuneration at Hourly Rates will be drawn from funds as they become available. 7. On a commercial level, a fee approval of $15,000 for the task described above is at the low end of the likely fee range if the matter becomes complicated. The fee is pitched to allow a material amount of work to be commenced and sufficient information gathered to either effect a recovery or instruct a Lawyer for a more complicated matter. The Fee Approval is therefore designed to protect Creditors by making it necessary for Dissolve to call another Meeting of Creditors and seek a further, more informed, fee approval. DETAILED DESCRIPTION OF WORK - HOURLY RATE COMPONENT General Description Includes Task Area: Assets Estimated 8.5 Hours Assets subject to specific charges Other Assets Task Area: Investigation Estimated 40.0 Hours All tasks associated with realising an asset Dealing with Secured Creditors Tasks associated with realising other assets Instruction of auctioneers Assessment of offers Completion of sale arrangements Assistance to ASIC Preparing Assetless Administration Fund Requests to ASIC (i.e. EX02, EX03) Preparing Supplementary Reports to ASIC Attending to ASIC s enquiries regarding the above Requests and Reports

17 Approval/Assistance from Creditors Litigation / Recoveries Task Area: Dividend Estimated 12.5 Hours Dividend procedures Processing proofs of debt Task Area: Administration Estimated 3.8 Hours Corresponding with ASIC regarding the above matters. Preparing Indemnity Reports to the ATO or other Statutory Regulator creditors Preparing and holding discussions with the Committee of Inspection Correspondence with Committee of Inspection or Statutory Regulators regarding specifics to the above Report/Meeting. Internal meetings to discuss status of litigation Preparing brief to solicitors Liaising with solicitors regarding recovery actions Attending to negotiations Attending to settlement matters 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, dividend file and payment vouchers to pay dividend 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 Insurance Bank account administration Identification of potential issues requiring attention of insurance specialists Correspondence with AON regarding initial and ongoing insurance requirements Reviewing insurance policies Correspondence with previous brokers Preparing correspondence opening and closing accounts Requesting bank statements Bank account reconciliations Correspondence with bank regarding specific transfers 5.0 OTHER SUPPORTING INFORMATION Attached are the following information sheets and notices: Annexure A - Disbursements Policy Statement; Annexure B - Receipts and Payments to date; Annexure C - Dissolve Scale of Hourly Rates; Annexure D - Pre-Appointment Disclosure to Directors regarding Remuneration (copy) Annexure E - ASIC Information Sheet - Insolvency information for directors, employees, creditors and shareholders. Creditors have the right to obtain further information. Please contact Kristine Hu of my office on (02) or by at kristine@dissolve.com.au if you have any questions or require further information. Yours faithfully D-Strategy Australia Pty Ltd (In Liquidation) Cliff Sanderson Liquidator

18 DISBURSEMENTS POLICY STATEMENT Annexure A The Dissolve policy in regard to incurring and being reimbursed for Disbursements is in accordance with the standards set by the Australian Restructuring Insolvency & Turnaround Association ( ARITA ). Creditor approval for the payment of disbursements is not required, however, I must account to creditors in regard to the disbursements. I have undertaken an assessment of the disbursements claimed and likely to be incurred and I am satisfied that they are necessary and proper. Creditors have the right to question the incurring of the disbursements and can challenge disbursements in court. In accordance with professional standards, disbursements are divided into three types: A B1 Description Disbursements are all externally provided professional services and recovered at cost. An example of an A disbursement is legal fees. Disbursements are externally provided non-professional costs such as travel, accommodation, storage and search fees. B1 disbursements are recovered at cost. Estimated Disbursement Nil $344 to $946 B2 Disbursements are internally provided non-professional costs such as $100 to $250 photocopying and document storage. B2 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. Total $444 to $1,196 Category A Expenses External Professional Services At this stage I do not expect that I will incur any Category A expenses. However, these expenses may occur if I discover material assets, resulting in auctioneer or valuation fees, or if I form the opinion that a recovery action is appropriate, resulting in legal fees. Category B1 Expenses External Non-Professional Services I estimate that my disbursements within category B1 will be as follows: Creditor Meeting Advertising costs $145 to $290 Government Gazette Advertising Costs $66 to $122 Search Fees $18 to $134 Storage $100 to $300 Postage $15 to $100 Total $344 to $946 To date, I have incurred expenses in line with the above estimates. Category B2 Expenses Internal Non-Professional Costs I expect expenses in this Category to be between $100 and $250. Disbursement Faxes Photocopies black and white Photocopies - colour Folders Disbursements claimed will be as follows: Rate (excluding GST) $0.15 per page $0.45 per page $1.50 per page $1.65 per folder Filing Index $1.63

19 Annexure B RECEIPTS AND PAYMENTS SUMMARY D-Strategy Australia Pty Ltd (In Liquidation) Bank, Cash and Cash Investment Accounts: From: 26/08/2014 To: 4/09/2014 (Gross Method) Receipts and Payments Summary Total receipts in prior period: Total receipts in current period: Total receipts to date: Total payments in prior period: Total payments in current period: Total payments to date: Net receipts (payments) to date: nil nil nil nil nil nil nil Cash and Investments Summary Total cash and investments: nil

20 Annexure C DISSOLVE PTY LIMITED SCALE OF HOURLY RATES Classification Guide to level of experience Rate per hour (excluding GST) $ Partner Registered Liquidator. Partner bringing his/her specialist skills to $480 the administration or insolvency task. Principal Qualified. 12+ years of experience. Capable of controlling all $400 Senior Manager Manager Senior Intermediate Graduate Office Manager Administration Notes: aspects of an administration or insolvency task. Qualified. 7+ years of experience. Well developed technical and commercial skills. Assists appointee in the planning and control of all administration or insolvency tasks. Responsible for control and supervision of junior staff. Typically qualified. 6-8 years experience. Well developed technical and commercial skills. Assists appointee in the planning and control of all administration or insolvency tasks. Responsible for control and supervision of junior staff. 2-4 years experience. Often undertaking CA/CPA/IPA study. Assists the planning and control of small to medium sized appointments and performs some more difficult tasks on larger jobs. Assists in supervision of junior staff. 1-2 years experience. Often undertaking CA/CPA/IPA study. Assists the planning and control of small to medium sized appointments and performs some more difficult tasks on larger jobs. 0-1 years experience. Assists in day-to-day fieldwork of administrations under the supervision of a more senior staff member. Assists in the general administration of the office. Also maintains data entry into specialist insolvency computer system, including production of financial information. $350 $300 $250 $200 $150 $175 Assists all levels of staff undertaking general administrative and $100 secretarial duties. 1. The scale of fees is intended to provide a guide as to the qualifications and experience of staff. At times, staff may be classified under an appropriate classification principally due to experience. 2. The term Qualified means the staff member has completed either the Institute of Chartered Accounts or Certified Practicing Accountants education program. 3. The hourly rates charged encompass the total cost of providing professional services and should not be compared to an hourly wage.

21 Annexure D PRE-APPOINTMENT DISCOSURE TO DIRECTOR REGARDING REMUNERATION (copy) You will be aware that, as the liquidation is expected to have no assets (or assets of low value), you will be paying an amount up front of $5, That is your full contribution and I will not be asking you for any further amount for my fees. There is a high level of disclosure required by the Corporations Act and my professional body, ARITA, regarding remuneration most of that disclosure occurs after appointment when I report to creditors. However, for the sake of clarity the main issues are set out in this document to assist you with understanding how remuneration is calculated and paid in an insolvency administration. Remuneration matters You are paying an amount up front which will be held in the Dissolve Holding Account. The actual remuneration drawn in this administration can only be drawn by me after the approval of the Creditors, Committee of Creditors or Court which occurs after I have provided a detailed Remuneration Report in accordance with the requirements set down in the Corporations Act and the ARITA Code of Professional Practice. A copy of this document will be provided to Creditors so they are also fully informed. The actual remuneration that is approved by creditors may exceed the amount of your up front payment. If that is the case, then the difference between the approved amount and your up front payment will either go unpaid, or can be paid from the realisation of other assets of the liquidation. Remuneration Methods There are four basic methods that can be used to calculate the remuneration charged by an insolvency practitioner. They are: Time Based / hourly rates - This is the most common method. The fee charged is based on the hourly rate charged for each person who carried out the work multiplied by the number of hours spent by each person on each of the tasks performed. Fixed fee - The fee charged is normally quoted at the commencement of the administration and is the cost for a component or all of the administration. Percentage - The fee charged is based on a percentage of a particular variable, such as the gross proceeds of asset realisations. Contingency - The practitioner s fee is structured to be contingent on a particular outcome being achieved. It is most likely I will seek the approval of remuneration as follows: remuneration for Standard Tasks typical in a No-Asset Liquidation be approved at a Fixed Fee of $7,000 plus GST Any Non-Standard Tasks will be charged on a time basis in accordance with the Dissolve Hourly Scale of Rates, with an appropriate cap, usually $15,000 plus GST. Therefore I am only likely to draw remuneration at hourly rates if I realise assets other than your up front payment. The Dissolve Hourly Rates are shown in a table on the next page. I have chosen the above approach because it provides certainty for creditors in regard to the costs of all Standard Tasks and aligns the interests of the liquidator and creditors in the pursuit of Non-Standard Tasks and correlating the amount of work required to be undertaken in those tasks with the fee to be paid. Creditors will be advised of the proposed basis of remuneration in my initial remuneration advice to them. Acknowledgement To acknowledge that you have received and understood the information that I have provided to you regarding the basis of remuneration, please sign and date this document and return it to us on or before making the appointment.

22 Annexure E Insolvency information for directors, employees, creditors and shareholders ASIC has 11 insolvency information sheets to assist you if you re affected by a company s insolvency and have little or no knowledge of what s involved. These plain language information sheets give directors, employees, creditors and shareholders a basic understanding of the three most common company insolvency procedures liquidation, voluntary administration and receivership. There is an information sheet on the independence of external administrators and one that explains the process for approving the fees of external administrators. A glossary of commonly used insolvency terms is also provided. The Insolvency Practitioners Association (IPA), the leading professional organisation in Australia for insolvency practitioners, endorses these publications and encourages its members to make their availability known to affected people. List of information sheets INFO 41 Insolvency: a glossary of terms INFO 74 Voluntary administration: a guide for creditors INFO 75 Voluntary administration: a guide for employees INFO 45 Liquidation: a guide for creditors INFO 46 Liquidation: a guide for employees INFO 54 Receivership: a guide for creditors INFO 55 Receivership: a guide for employees INFO 43 Insolvency: a guide for shareholders INFO 42 Insolvency: a guide for directors INFO 84 Independence of external administrators: a guide for creditors INFO 85 Approving fees: a guide for creditors Getting copies of the information sheets To get copies of the information sheets, visit ASIC s website at The information sheets are also available from the IPA website at The IPA website also contains the IPA s Code of Professional Practice for Insolvency Professionals, which applies to IPA members. Important note: The information sheets contain 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. These documents may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances. You will need a qualified professional adviser to take into account your particular circumstances and to tell you how the law applies to you. Page 1 of 1 Australian Securities & Investments Commission, December 2008