Hughes Drilling Ltd - McGrathNicol

Hughes Drilling Ltd Australian Gas Drilling Pty Ltd EDMS Metals Pty Ltd Every Day Mine Services Operations Pty Ltd Express Hydraulics (Aust) Pty Ltd G.O.S. Drilling Pty Ltd HD JSW Pty Ltd Hughes Drilling 1 Pty Ltd Hughes Drilling 2 Pty Ltd Hughes Drilling Corporate Pty Ltd Hughes Equipment Hire Pty Ltd Hyd-Elec Australia Pty Ltd JSW Australia Pty Ltd Reichdrill Australia Pty Ltd (Administrators Appointed to all) (Together, “Hughes Group” or the “Companies” or separately, the “Company”) Report to creditors pursuant to Section 439A of the Corporations Act 2001

1 December 2016

D14-161201-S439AReport-HM 2

Contents

Executive summary ........................................................................................................................................................................................................ 6 1

Introduction ................................................................................................................................................................................................................... 10 2

Appointment ................................................................................................................................................................................................................. 10 2.1

Purpose of this report .............................................................................................................................................................................................. 10 2.2

Object of this administration ................................................................................................................................................................................ 10 2.3

First meeting ................................................................................................................................................................................................................. 10 2.4

Extension of convening period ............................................................................................................................................................................ 11 2.5

Second meeting ........................................................................................................................................................................................................... 11 2.6

Administrators’ prior involvement ...................................................................................................................................................................... 12 3

Independence ............................................................................................................................................................................................................... 12 3.1

Indemnities and up-front payments.................................................................................................................................................................. 12 3.2

Ongoing assessment ................................................................................................................................................................................................. 12 3.3

Background and statutory information ............................................................................................................................................................ 13 4

Corporate structure .................................................................................................................................................................................................... 13 4.1

Business operations ................................................................................................................................................................................................... 14 4.2

Administrators’ actions to date ............................................................................................................................................................................ 18 5

Books and records ...................................................................................................................................................................................................... 20 6

Historical financial performance and position .............................................................................................................................................. 23 7

Financial performance .............................................................................................................................................................................................. 23 7.1

Financial position ........................................................................................................................................................................................................ 24 7.2

Cash flow ......................................................................................................................................................................................................................... 25 7.3

Financial position based on Report as to Affairs ........................................................................................................................................ 26 8

Sale of business and assets ................................................................................................................................................................................... 27 9

Pre-appointment sale / fund raising process ............................................................................................................................................... 27 9.1

VA recapitalisation/sale process overview ...................................................................................................................................................... 27 9.2

Explanation of the Companies’ failure ............................................................................................................................................................. 28 10

Directors’ reasons for failure ................................................................................................................................................................................. 28 10.1

Administrators’ view .................................................................................................................................................................................................. 28 10.2

Outstanding winding up applications .............................................................................................................................................................. 28 10.3

Offences, insolvent trading and voidable transactions ............................................................................................................................ 29 11

Statutory recovery actions ...................................................................................................................................................................................... 29 11.1

Determining the date of insolvency .................................................................................................................................................................. 30 11.2

Voidable transactions ................................................................................................................................................................................................ 37 11.3

Uncommercial transactions .................................................................................................................................................................................... 37 11.4

Unfair loans and unreasonable director related transactions ............................................................................................................... 38 11.5

Breach of Directors’ duties ..................................................................................................................................................................................... 38 11.6

Options available to Creditors .............................................................................................................................................................................. 39 12

Deed of Company Arrangement ......................................................................................................................................................................... 39 12.1

Administration to end............................................................................................................................................................................................... 39 12.2

The company to be wound up ............................................................................................................................................................................ 39 12.3


DOCA proposal ............................................................................................................................................................................................................ 40 13

Conditional pre-DOCA restructure: .................................................................................................................................................................... 40 13.1

JSW-HD1 DOCA ........................................................................................................................................................................................................... 40 13.2

HDL DOCA ...................................................................................................................................................................................................................... 45 13.3

Anticipated return to creditors............................................................................................................................................................................. 46 14

Creditor information on remuneration ............................................................................................................................................................ 51 15

Receipts and payments ............................................................................................................................................................................................ 51 16

Committee of inspection ......................................................................................................................................................................................... 51 17

Second Meetings of Creditors .............................................................................................................................................................................. 51 18

Contact ............................................................................................................................................................................................................................. 52 19

Appendices ..................................................................................................................................................................................................................... 53 20


Report Glossary

Term Expanded

1H First half of the financial year, being 1 July to 31 December

1Q First quarter of the financial year, being 1 July to 30 September

2H Second half of the financial year, being 1 January to 30 June

2Q Second quarter of the financial year, being 1 October to 31 December

3Q Third quarter of the financial year, being 1 January to 31 March

4Q Fourth quarter of the financial year, being 1 April to 30 June

Administrators Jason Preston, Shaun Fraser and Jamie Harris of McGrathNicol

Appointment The date the External Administrators were appointed, being 22 September 2016

ARITA Australian Restructuring, Insolvency and Turnaround Association

ASIC Australian Securities and Investment Commission

ASX Australian Securities Exchange

AGD Australia Gas Drilling Pty Ltd, ACN 139 242 890

BV Book value

CEO Andrew Drake, Chief Executive Office

CFO Paul Brenton, Chief Financial Officer

COC Committee of Creditors

COI Committee of Inspection

DIRRI Declaration of Independence, Relevant Relationships and Indemnities

DOCA Deed of Company Arrangement

Hughes Drilling Group or

“the Companies”

AGD, EDMS, EDMSO, EHA, GOS, HDJSW, HDL, HD1, HD2, HDC, HEH, HEA, JSW and REI

EBITDA Earnings before interest, tax, depreciation and amortisation

EDMS EDMS Metals Pty Ltd, ACN 146 399 760

ERV Estimated realisable value

EDMSO Every Day Mine Services Operations Pty Ltd, ACN 003 949 148

EHA Express Hydraulics (Aust) Pty Ltd, ACN 155 845 864

First Meeting of Creditors The first meetings of creditors held on 5 October 2016

FY12 Financial year ending 30 June 2012





GOS G.O.S. Drilling Pty Ltd, ACN 068 520 794

HDJSW HD JSW Pty Ltd, ACN 165 895 072

HDL Hughes Drilling Ltd, ACN 124 279 750


HD1 Hughes Drilling 1 Pty Ltd, ACN 011 007 702

HD2 Hughes Drilling 2 Pty Ltd, ACN 146 399 902

HDC Hughes Drilling Corporate Pty Ltd, ACN 146 398 718

HEH Hughes Equipment Hire Pty Ltd, ACN 146 398 923

HEA Hyd-Elec Australia Pty Ltd, ACN 151 316 611

JSW JSW Australia Pty Ltd, ACN 125 989 791

IM Information Memorandum

Link Market Services Link Market Services Limited

Creditor Hotline: 1300 853 481

Email: [email protected]

Management HDX’s executive management team, led by the CEO

Opex Operating expenditure

PMSI Purchase Money Security Interest

PPSR Personal Properties Securities Register

RATA Report as to Affairs, Form 507

REI Reichdrill Australia Pty Ltd, ACN 162 841 287

Relation back day The date the External Administrators were appointed, being 22 September 2016

Second Meeting of

Creditors

The convened second meeting of creditors, to be held on 8 December 2016 at 1:00pm

AEST / 11:00am AWST at two locations, being:

Cliftons Brisbane, Level 24, 288 Edward Street, Brisbane QLD 4000 and

Cliftons Perth, Level 4, Parmelia House, 191 St Georges Terrace, Perth WA 6000

(via video conference to Brisbane)

Secured Creditor or the

Bank

Westpac Banking Corporation (“WBC”)

the Act The Corporations Act 2001

the Current Directors Andrew John Drake, Jeffrey William Branson, Douglas Jon Grewar and Paul Edward Brenton

the Court Federal Court of Australia

the 439A Report or this

Report

Report to creditors prepared by the Administrators, pursuant to Section 439A of the Act


Executive summary 1

Question

What is Hughes Drilling

Group?

Hughes Drilling Limited is an ASX listed production drilling specialist, with a

number of service contracts in Australia and a manufacturing operation in the

USA.

Hughes Drilling Limited (“HDL”) is the ultimate holding company of the Group,

with eleven wholly owned Australian subsidiaries, two majority owned (96%)

Australian subsidiaries (JSW and Reichdrill Australia) and one US subsidiary.

The Hughes Drilling Group operations comprise:

Contract drilling on the East and West coast of Australia (HD1 and JSW);

Sales & support (EHA, HD2, HEH and HEA);

Rig manufacture & sales (REI); and

Dormant or holding entities (HDJSW, EDMS, EDMSO, GOS and AGD).

What is the purpose of

this report?

The purpose of this report is to provide creditors with details about the

business, property, affairs and financial circumstances of the Hughes Drilling

Group in preparation for the forthcoming second meetings of creditors.

This report also informs creditors about the investigations undertaken by the

Administrators and the Administrators’ opinion about each of the options

available to creditors at the second creditors’ meeting, together with their

opinion as to the course of action the Administrators recommend is in

creditors’ best interests.

What is the status of the

Hughes Drilling Group?

On 22 September 2016, the Hughes Drilling Group were placed into Voluntary

Administration by its Directors, and Partners of McGrathNicol were appointed

Administrators (refer to section 2.1 for full details).

Who controls the Hughes

Drilling Group now?

In an administration, Administrators are empowered by the Act to assume

control of an insolvent company, superseding the powers of the Directors and

Officers, to manage the company’s affairs and deal with its assets in the

interests of its creditors.

What is the ownership

structure of the Hughes

Drilling Group?

The Hughes Drilling Group remains publicly owned but subject to

Administration. Its shares are likely now of no value.

How did the Hughes

Drilling Group business

trade?

The Hughes Drilling Group reported EBITDA in FY14 and FY15 of $14.6 million

and $25.5 million respectively. Its net assets at FY14 and FY15 year-end were

$64.5 million and $74.6 million respectively. The FY16 unaudited management

accounts reported EBITDA of $22.3 million and net assets of $76.8 million.

However, as outlined in our report in sections 7 we have identified material

issues impacting the value of assets recorded in the Companies’ accounts.

Those issues may have resulted in an overstatement of the group’s reported

financial position and financial performance.


Question

Why do the Directors of

the Hughes Drilling Group

believe it became

insolvent?

The directors have advised in their RATAs that they first became aware that the

Hughes Drilling Group was experiencing financial difficulties when the secured

creditor was not willing to advance additional finance from approximately

August 2016. The directors advise that they then sought alternative sources of

funding, which led to receipt of proposals to recapitalise the Hughes Drilling

Group.

The directors appointed Administrators when it became clear that the

recapitalisation proposals were not capable of being completed.

Why do the

Administrators believe the

Hughes Drilling Group

became insolvent?

The drilling industry is competitive. Activity in the industry is directly related to

mining activity and commodity prices. There was a significant deterioration in

the resource prices from about mid 2011 after an extended resources boom.

Hughes Drilling Group was successful in winning work predominantly as a

result of aggressive tendering. It is clear that the Companies’ financial position

suffered due to the Companies entering into marginal or loss making drilling

contracts.

From 2012, Hughes Group pursued a strategy of growth by acquisition. The

acquisition of JSW and Reichdrill were funded by debt. These businesses were

poorly integrated and the servicing of debt for these acquisitions put further

strain on the Group’s increasingly stretched cash resources.

Deficiencies in the reporting and accounting systems would likely have

presented difficulties for management and staff both in tracking and

attempting to understand the reasons for financial difficulties.

What was the outcome of

the sale process?

On Appointment, we immediately sought to identify whether there was interest

in either recapitalising or acquiring the business. We contacted numerous

parties we considered might have interest in investing in the businesses.

The process was conducted in three stages:

Non-Binding Offers (“NBO”): we provided interested parties with access to

data room information to enable them to submit NBO’s by

12 October 2016;

Due Diligence: we selected 6 parties to undertake further detailed due

diligence on the Hughes Drilling Group, undertake site visits, and be

provided access to detailed operational, legal and financial data.

Final Due Diligence: upon confirmation of NBO’s by 11 November 2016,

we selected the offer that, if completed, would result in the best return to

creditors, being a joint proposal from consortium comprising turnaround

fund manager Allegro and NRW, to advance their bid on an exclusive

basis. This process has culminated in the DOCA proposal detailed in this

report.

A consortium comprising turnaround fund manager Allegro and mining

contractor NRW Holdings Limited (“the “DOCA Proponent”) have proposed a

transaction which recapitalises JSW and HD1 via a Deed of Company

Arrangement (“the JSW/HD1 DOCA”) and to place HDL into a holding DOCA

(“the HDL DOCA”) while a sale of the listed entity is pursued.

There is no DOCA proposed for the remaining entities within the group and

creditors should vote for those entities to be placed into liquidation.


Question

What are the terms of the

DOCAs that have been

proposed?

The proposed JSW/HD1 DOCA includes the following features:

Subject to approval by the creditors some employees, assets and inventory

in non-DOCA entities will be transferred to JSW and HD1;

All shares in JSW and HD1 will be transferred to the DOCA Proponent;

Consideration of $20 million cash will be paid into the DOCA as the Deed

Fund;

The DOCA will extinguish the majority of claims against JSW and HD1;

The majority of employees of JSW and HD1 will continue their

employment with all employee entitlements preserved;

A creditor’s trust will be established and the Deed Fund will be paid into

the creditor’s trust;

Claims of creditors will be extinguished against JSW and HD1, and become

claims against the trust;

The Trustee will distribute the funds in the following order:

Administrator, Deed Administrator and Trustees fees, costs, expenses

and liabilities;

Employee creditors;

Secured creditors; and

Unsecured creditors (no payment expected).

The Trustee will realise any remaining assets, and distribute the DOCA

funds in line with the Trust Deed.

The proposed HDL DOCA will allow the Deed Administrators to explore a sale

of the ASX listed shell of HDL. The HDL DOCA will be put in place for 6

months and (unless extended by creditors) will terminate automatically at the

end of that period if a recapitalisation of HDL has not been completed.

Will employees be paid

their outstanding

entitlements?

For the entities (JSW and HD1) where the proposed DOCA is approved, the

majority of employees will continue their employment and their entitlements

will be preserved. For non-transferring employees, their outstanding employee

entitlements will be paid in full via the DOCA.

For the entities that are placed into liquidation, employees can access a

Government scheme called the Fair Entitlements Guarantee Act (“FEG”). FEG

assists employees who have lost their employment due to the liquidation of

their employer and who are owed certain employee entitlements.

Will the Banks be repaid

their debt?

The Banks will be repaid a proportion of what they are owed but are likely to

suffer a significant shortfall. We estimate that the return to the Bank will be

better under the DOCA than if all entities were placed into liquidation.

Apart from employees,

will unsecured creditors

be paid a dividend?

There is no expectation that unsecured creditors will receive a return under any

scenario.

Will shareholders be paid? There is currently no expectation of a return to shareholders.


Question

What claims will a

liquidator investigate?

Whilst the Administrators have considered the underlying causes of the Hughes

Drilling Group’s failure, our investigations into claims arising from those

matters are at an early stage.

We have undertaken preliminary enquiries which will continue after the

appointment of liquidators. In particular, we note there could be voidable

transactions the liquidators will pursue, along with potential claims against

directors for insolvent trading and breach of duties. These claims would require

further work by a liquidator including an assessment of legal costs against

likely recoveries (if any).

What is the purpose of

the second meeting of

creditors?

The purpose of the second meetings is for creditors to resolve the future of

the Hughes Drilling Group. In this regard, the options available include

whether each of the entities comprising the Hughes Drilling Group should be

returned to their Directors; or enter into a Deed of Company Arrangement; or

enter into liquidation.

What do Administrators

recommend creditors

should do?

The Administrators recommend acceptance of the JSW/HD1 DOCA proposal

and the HDL DOCA proposal, by creditors of HDI, JSW and HDL, for the

reasons set out in Section 13.

We have not received a DOCA proposal for AGD, EDMSM, EDMSO, EHA, GOS,

HDJSW, HD2, HDC, HEH, HEA or REI. As these entities are insolvent and no

DOCA has been proposed, the Administrators’ recommend that creditors of

these entities vote in favour of each being placed into liquidation.

Where I can get more

information?

If you require any further information, please review the McGrathNicol website

and contact Link Market Services on 1300 365 798 or by email

[email protected].

D14-161201-S439AReport-HM 10

Introduction 2

Appointment 2.1

Jason Preston, Shaun Fraser and Jamie Harris (“the Administrators”) were appointed Joint and Several Administrators of the

following entities on 22 September 2016 (“Appointment”) by resolution of the Companies’ Directors, pursuant to Section

436A of the Corporations Act 2001 (“the Act”):

Hughes Drilling Ltd ACN 12 124 279 750 (“HDL”);

Australia Gas Drilling Pty Ltd ACN 13 139 242 890 (“AGD”);

EDMS Metals Pty Ltd ACN 29 146 399 760 (“EDMS”);

Every Day Mine Services Operations Pty Ltd ACN 40 003 949 148 (“EDMSO”);

Express Hydraulics (Aust) Pty Ltd ACN 91 155 845 864 (“EHA”);

G.O.S. Drilling Pty Ltd ACN 57 068 520 794 (“GOS”);

HD JSW Pty Ltd ACN 83 165 895 072 (“HDJSW”);

Hughes Drilling 1 Pty Ltd ACN 31 011 007 702 (“HD1”);

Hughes Drilling 2 Pty Ltd ACN 63 146 399 902 (“HD2”);

Hughes Drilling Corporate Pty Ltd ACN 64 146 398 718 (“HDC”);

Hughes Equipment Hire Pty Ltd ACN 23 146 398 923 (“HEH”);

Hyd-Elec Australia Pty Ltd ACN 89 151 316 611 (“HEA”);

JSW Australia Pty Ltd ACN 22 125 989 791 (“JSW”); and

Reichdrill Australia Pty Ltd ACN 69 162 841 287 (“REI”).

(collectively, “the Hughes Drilling Group” or “the Companies”).

Purpose of this report 2.2

The purpose of this report is to provide creditors with details about the Companies’ business, property, affairs and financial

circumstances in preparation for the forthcoming second meetings of creditors.

This report also informs creditors about the investigations undertaken by the Administrators and the Administrators’

opinion about each of the options available to creditors at the second creditors’ meeting, together with their opinion as to

the course of action that the Administrators recommend is in creditors’ best interests.

Object of this administration 2.3

In an administration, Administrators are empowered by the Act to assume control of an insolvent company, superseding

the powers of the Directors and Officers, to manage the company’s affairs and deal with its assets in the interests of its

creditors.

The objective of a voluntary administration is to maximise the prospects of a company, or as much as possible of its

business, continuing in existence or, if that is not possible, to achieve better returns to creditors than would be achieved

by its immediate liquidation. During an administration there is a moratorium over most pre-administration creditor claims.

Administrators are required to investigate the company’s affairs and report to creditors on the Administrators’ opinion as

to which outcome of the administration process is in the creditors’ best interests so as to inform creditors prior to voting

at the second meeting.

First meeting 2.4

Section 436E of the Act requires the Administrators to convene the first meeting of creditors within eight business days of

being appointed.

The first meetings of creditors of the Companies were held on 5 October 2016 and there were no nominations to appoint

an alternative Administrator for either Company.

D14-161201-S439AReport-HM 11

Creditors resolved at the First Meetings of Creditors to appoint a Committee of Creditors (“COC”) to JSW, EHA, HEA and

HD1. Details of the members of each of the COC’s are available in the minutes of the First Meeting of Creditors.

Extension of convening period 2.5

Section 439A of the Act requires the Administrators to convene a second meeting of creditors within the convening period,

being 20 business days (or 25 under certain circumstances) of being appointed.

For the Hughes Drilling Group, the second meetings of creditors were due to be held on or before 28 October 2016.

However, at the First Meeting of Creditors we notified the creditors present of the possibility that we would apply to the

Federal Court of Australia (“the Court”) for an extension of the convening period for up to six weeks.

The Administrators filed an application under section 447A of the Act for orders granting an extension of time for the

convening period for the second meetings of creditors on 17 October 2016. The extension of the convening periods were

sought in order to provide:

A stable environment and additional time to agree terms for a DOCA or negotiate a going concern sale;

Scope to investigate the affairs of the Hughes Drilling Group and report to creditors on potential future recoveries,

and make a recommendation regarding the future of the Hughes Drilling Group.

On 18 October 2016 the Court granted the requested extension of the convening periods to 2 December 2016.

Second meeting 2.6

The purpose of the second meeting is for creditors to:

resolve the future of the Companies. In this regard, the options available include whether the Companies should:

be returned to their Directors; or a.

enter into a Deed of Company Arrangement (“DOCA”); or b.

enter into liquidation. c.

consider and, if thought fit, approve the remuneration of the Administrators and future remuneration of the Deed

Administrators or, Trust where a creditors trust is established; and

if any Company is wound up:

consider and, if thought fit, approve the Liquidators’ remuneration; d.

consider the appointment of a Committee of Inspection; e.

consider authorising the Liquidators to compromise debts of the Company under Section 477(2A) of the f.

Act; and

consider authorising the Liquidators to enter into agreements that may take longer than three months to g.

complete under Section 477(2B) of the Act.

The forthcoming second meeting of creditors for each company has been convened to be held on 8 December 2016 at

1:00pm AEST / 11:00am AWST at two locations, being:

Cliftons Brisbane, Level 24, 288 Edward Street, Brisbane QLD 4000; and

Cliftons Perth, Level 4, Parmelia House, 191 St Georges Terrace, Perth WA 6000 via video conference.

Additional details with respect to the second meeting can be found in Section 18.

D14-161201-S439AReport-HM 12

Administrators’ prior involvement 3

In accordance with Section 436DA of the Act and the Australian Restructuring, Insolvency & Turnaround Association

(“ARITA”) Code of Professional Practice, a Declaration of Independence, Relevant Relationships and Indemnities (“DIRRI”)

was enclosed with our first communication to creditors (and tabled at the first meetings of creditors).

The DIRRI disclosed information regarding our independence, prior personal or professional relationships with the

Companies or related parties and indemnities received in relation to this appointment. For convenience, this has been

summarised and restated below.

Independence 3.1

We, Jason Preston, Shaun Fraser and Jamie Harris of the firm McGrathNicol, have undertaken a proper assessment of the

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

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

are not aware of any reasons that should have prevented us from accepting or continuing this appointment.

Indemnities and up-front payments 3.2

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

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

Following our appointment, we entered into discussions with the Secured Creditor regarding a funding arrangement

(‘Facility”) to enable the businesses operated by the Group to continue to trade. Orders were sought in the Federal Court

of Australia (NSW) on 26 September 2016 pursuant to s 447D of the Act, that the Administrators would not be personally

liable for funds drawn under the Facility. Those Orders were granted.

Ongoing assessment 3.3

Since the date of our appointment, we have continued to assess whether any potential conflict of interest issues have

developed.

At the date of this Report, our opinion has not changed in that there is no change to the information provided in the

DIRRI.

The Administrators remain of the view that their prior professional relationships as outlined in the DIRRI do not create or

give rise to any potential conflict of interest.

D14-161201-S439AReport-HM 13

Background and statutory information 4

Corporate structure 4.1

The corporate structure for the Companies and related entities is set out below:

Key points:

Hughes Drilling Limited is an ASX listed production drilling specialist, with a number of service contracts in Australia

and a manufacturing operation in the USA. The Group has grown through a series of acquisitions since listing on the

ASX in 2012.

Hughes Drilling Limited (“HDL”) is the ultimate holding company of the Group, with eleven wholly owned Australian

subsidiaries, two majority owned (96%) Australian subsidiaries (JSW and Reichdrill Australia) and one US subsidiary.

The Hughes Drilling Group operations comprise:

Contract drilling on the East and West coast of Australia (HD1 and JSW);

Sales & support (EHA, HD2, HEH and HEA);

Rig manufacture & sales (REI); and

Dormant or holding entities (HDJSW, EDMS, EDMSO, GOS and AGD).

Further information regarding the Group’s background, shareholders, office holders and creditors are detailed later in this

section of the report and in Annexure B.

Hughes Drilling 2Pty Ltd

HD JSWPty Ltd

Hyd-ElecAustraliaPty Ltd

ReichdrillAustraliaPty Ltd

Every Day Mine Service Operations

Pty Ltd

Hughes Drilling 1 Pty Ltd

EDMS MetalsPty Ltd

JSW AustraliaPty Ltd

G.O.S. DrillingPty Ltd

Australian Gas Drilling

Pty Ltd

Hughes Equipment

HirePty Ltd

Reichdrill Inc(USA)

Hughes Drilling Ltd

No external appointment

Listed/ corporate

Express Hydraulics

(Aust)Pty Ltd

Hughes Drilling

CorporatePty Ltd

Contract drilling

Rig manufacture & sales

Sales & support

Dormant or holding

D14-161201-S439AReport-HM 14

Business operations 4.2

Business units 4.2.1

The key business segments are set out diagrammatically below (excluding the dormant entities):

Contract drilling

Australia’s largest production and delineation drilling specialists with a client base consisting of Australia’s major

mine operators and owners.

East Coast (HD1) is primarily a production and blast hole drilling business focusing on open cut coal.

West Coast (JSW), acquired in October 2013, provides a broad range of production, drilling and water services.

Drilling services include blast hole (iron ore, gold, bauxite), grade control and water bore.

Sales and support

Express Hydraulics, Hyd-Elec, and Hughes Equipment Hire comprise the internal purchasing arm for the Group and

are also resellers of parts and services to external customers.

Express Hydraulics is the Group’s central purchasing entity and also manufactures spare parts and conducts

maintenance on East Coast and West Coast’s rigs.

Hughes Equipment Hire provides compressors for rental hire to external customers.

Rig manufacture and sales

Reichdrill was acquired in March 2013 and allowed the Group to expand into rigmanufacturing and sales.

Reichdrill designs and constructs drill rigs, consumables and spares for external sales to the global market as well

as for use by the Contract Drilling Operations to deliver on drilling service contracts in Australia.

Contract drilling operations

Sales and support Rig manufacture and sales


(East Coast)

JSW Australia Pty Ltd

(West Coast)

Hughes Equipment Hire Pty Ltd (HEH)

Hughes Drilling Limited

REICHdrill Inc.(USA)

REICHdrill Australia Pty Ltd

(Reichdrill)

Hyd-Elec Australia Pty Ltd

(HEC)

Express Hydraulics Pty Ltd

(EH)

D14-161201-S439AReport-HM 15

Activities 4.2.2

The Hughes Drilling Group’s principal activities are contract production drilling and related services. Key activities and

metrics are outlined in the table below:

Note: we have identified that values for inventories recorded the accounts of the Hughes Drilling Group appear to have

been overstated. If accounts were adjusted then actual earnings would likely be materially lower than reported.

Locations 4.2.3

The diagram below depicts the depots, mines and locations from which the Hughes Drilling Group operates.

Business Unit summary

ItemHD1 (QLD and

NSW)JSW (WA) Express Hydro (QLD)

Hughes Equip (QLD and NSW)

Reichdrill (USA)

Activities Production and blast hole drilling (open cut coal)

Production and blast hole drilling (iron ore, gold, bauxite) and water services.

Sales and distribution of drilling consumables/spares, service and maintenance provider.

Hire of compressors and welding units.

Manufacture, sales and distribution of rigs, consumable and spares.

Key facts FY15 revenue: $40.6m

FY15 EBITDA: $17.6m

210 FTE.

Contract drilling arm for East Coast

39 prod’n rigs c.77% utilisation.

Key customers BHP, Downer and Peabody.

15 delineation rigs 0% utilisation (for sale).

FY15 revenue: $50.7m

FY15 EBITDA: $14.0m

130 FTE.

Contract drilling arm for West Coast

27 prod’n rigs –60% utilisation.

Key customers BHP, South 32, FMG and WA Govt.

FY15 revenue: $3.0m

FY15 EBITDA: $0.3m

35 FTE.

Internal purchasing arm for East Coast, West Coast and Reichdrill and reseller of parts to external customers.

Key customers Rio and BMA.

FY15 revenue: $0.8m

FY15 EBITDA: $0.4m

1 FTE.

38 compressors and 5 welding units.

Key customers Anglo and Glencore.

FY15 revenue: $12.5m

FY15 EBITDA: $(1.1)m

50 FTE. Labour force flexible.

Acquired IP from Novamac for $US4.5 million in Nov-15.

Recently signed distribution agreement with Vulcan.

D14-161201-S439AReport-HM 16

Timeline of key events 4.2.4

Year Description

2012 Listed on the Australian Stock Exchange

March 2013 Acquired Reichdrill Inc

October 2013 Acquired JSW Australia Pty Ltd

27 June 2016 The securities of Hughes Drilling Limited (“HDX”) were suspended from trading (at the request of

HDL) pending an announcement “in relation to material corporate and financial matters which could

impact the Company’s financial restructuring.”

4 July 2016 HDL announced to the market that it had breached certain banking covenants and was working

with its senior financier (Westpac) to restructure its debt facilities.

July to August

2016

During the two months that followed, the Group undertook negotiations with a number of its key

creditors (including the ATO) regarding ongoing payment obligations.

The Board also undertook a review of certain asset classifications (which was likely to have a

significant impact on asset impairments).

The Board together with its advisors (Vantage Performance), pursued various funding options for

urgent working capital requirements whilst they sought offers to recapitalise the Group.

No recapitalisation offers were received that were capable of being accepted and executed within

reasonable timeframes.

22 September

2016

The Board formed the view that without additional funding, the Group was or would likely become

insolvent and responded by placing the Group into Voluntary Administration.

Source: ASIC Company search, ASX announcements

Statutory details 4.2.5

A search of the records maintained by the Australian Securities and Investments Commission (“ASIC”) database as at the

date of our appointment revealed the following details:

The directors of HDL are Andrew Drake, Jeffrey Branson and Douglas Grewar;

The sole director of the thirteen Australian subsidiaries is Paul Brenton; and

The secretary of all fourteen entities is Paul Brenton.

Further statutory details for each of the fourteen entities, including other office holders who held appointed positions in

the twelve months prior to our appointment are provided at Annexure B.

D14-161201-S439AReport-HM 17

Shareholders 4.2.6

Below is a list of the largest registered shareholders of HDL as at the date of our Appointment.

Further details of the shareholders of the subsidiary entities are provided at Annexure B.

Security interests 4.2.7

A search of the Personal Properties Securities Register (“PPSR”) as at the date of our appointment revealed the following

security interests held against the Group:

Westpac holds a charge over the whole or substantially the whole of the property of the Hughes Drilling Group.

The remaining security interests are held by asset financiers and trade suppliers (primarily providers of stock).

Since our appointment:

91 security interests have been discharged;

278 security interests have been enforced and accepted, allowing the charges holders to recover the secured property;

and

15 security interests have been found to be invalid.

In addition, a number of claims remain under review by the Administrators. It is anticipated that the remaining security

interests will be discharged in the coming week.

Further details of the registered secured interests are available to creditors on request.

Shareholders

Rank Shareholder Issued capital %total

1 Learob Pty Ltd (R & L Hughes Family A/C) 71,388,074 34.2%

2 National Nominees Limited 34,264,597 16.4%

3 HSBC Custody Nominees (Australia) Limited 19,171,588 9.2%

4 Bond Street Custodians Limited (Forager Wholesale Value Fd) 6,151,126 3.0%

5 Skye Alba Pty Ltd (The Skye Alba Fund A/C) 5,700,000 2.7%

6 Citicorp Nominees Pty Limited 4,397,611 2.1%

7 Mellett Super Pty Ltd (Mellett A Fund A/C) 3,717,000 1.8%

8 Vanward Investments Limited 3,000,000 1.4%

9 RPM Super Pty Ltd (RPM Super Fund A/C) 2,894,941 1.4%

10 Saabm Pty Ltd (A & M Jacklin Family A/C) 2,434,017 1.2%

Total shares held by top 10 shareholders 153,118,954 73.4%

Total shares held by all other shareholders 55,551,295 26.6%

Total shares on issue 208,670,249 100.0%

Source: A search of ASIC records, on 22 September 2016

Security interests

Creditor group Collatoral class Secured party Number

Banks All present and after-acquired property Westpac 118

Other lenders All present and after-acquired property Various 39

Asset financiers Motor vehicles Various 164

Chattel Paper Chattel Paper Various 4

Suppliers Other goods, intangibles and specific claims Various 169

Total 494


D14-161201-S439AReport-HM 18

Administrators’ actions to date 5

The Administrators and our staff have attended to the following matters since our appointment:

Notifying major financial institutions of our appointments, taking control of available cash, amending bank signatories;

Attending to statutory duties including informing ASIC, the Australian Taxation Office (“ATO”), the Office of State

Revenue and various other statutory authorities of our appointments;

Attending to meetings with the Companies’ Directors and employees to understand the background and financial

position of the Companies;

Securing and insuring assets;

Issuing requests to the Directors to complete a Report as to Affairs, Directors’ Questionnaire and deliver the books

and records of the Companies to the Administrators;

Securing books and records including electronic accounting records;

Reviewing the books and records of the Companies and undertaking preliminary investigations to ascertain the

Companies’ financial position and any transactions that may be recoverable by a Liquidator;

Discussing and entering into a funding arrangement with the Secured Creditor to enable the businesses operated by

members of Hughes Drilling Group to continue to trade. As noted in section 2.5, we sought Orders in the Federal

Court of Australia (NSW) on 26 September 2016 approving the terms of the funding arrangement.

Liaising with key stakeholders, including:

employees;

unsecured creditors; and

ASX and shareholders;

Liaising with landlords in relation to the continuation of the current lease arrangements;

Managing employees and informing staff of their rights and the manner in which the Voluntary Administration process

impacts their entitlements;

Calculating outstanding employee entitlements having regard to Company records and underlying employment

contracts, and providing them with same;

Preparing and issuing circulars to suppliers and creditors;

Continuing to trade the business, including:

negotiating continued supply from key suppliers;

employing additional staff as required;

liaising with customers regarding Hughes Drilling Group’s activities, contract terms and ongoing contract matters;

attending Hughes Drilling Group sites and mine sites to address staff and meet with customers; and

undertaking detailed review of workplace health and safety systems, processes and incidents and retaining the

services of an external contractor to assist in the management of workplace health and safety;

Assessing options to realise the assets of the Companies for the benefit of creditors;

Undertaking a sale and recapitalisation campaign for the Companies and their assets including contacting potentially

interested parties, advertising, preparing information memorandums and due diligence material including establishing

an electronic data room, issuing confidentiality agreements, dealing with interested party enquiries and attending

briefing meetings, and negotiating generally with interested parties;

Instructing lawyers in relation to various legal matters;

Issuing Notices of Appointment and first Circulars to Creditors convening the meetings of creditors held on 5 October

2016;

D14-161201-S439AReport-HM 19

Attending and Chairing the first meetings of creditors held on 5 October 2016 and lodging the minutes of the

meetings with ASIC;

Preparing and filing an application to the Federal Court of Australia under section 439A and 447A of the Corporations

Act 2001 (Cth), for orders granting a six-week extension of the convening period for the second meetings of creditors.

These orders were granted on 18 October 2016 and the timetable for holding the meeting was extended from

28 October 2016 to 9 December 2016 (or earlier, as appropriate). The extension was sought to provide sufficient time

for interested parties to undertake due diligence and for sale negotiations;

Preparing this Report pursuant to Section 439A of the Act including undertaking investigations and preparing

comparative analysis to assist creditors in making a decision in relation to the Companies future and convening the

second meetings of creditors to be held on 8 December 2016; and

Attending to other general and statutory requirements.

D14-161201-S439AReport-HM 20

Books and records 6

One of the matters we are required to provide an opinion on is whether the Companies’ books and records were

maintained in accordance with the requirements of Section 286 of the Act.

This section of the Act requires that a company must keep written financial records that:

correctly record and explain its transactions and financial position and performance; and

would enable true and fair financial statements to be prepared and audited.

Failure to maintain books and records in accordance with Section 286 of the Act provides a presumption of insolvency.

This presumption can be relied upon by a liquidator in an application for compensation for insolvent trading and other

actions for recoveries pursuant to the Act from Directors and other related parties.

We have inspected the books and records of the Companies located at the Companies premises and maintained in both

physical and electronic form.

As outlined in Section 4, the Hughes Drilling Group is comprised of a number of business units. The business units use a

number of different accounting systems and programs with little or no integration. Our comments in the summary below

relate to all business units, except where stated otherwise.

We consider that a company operating this type of business should, as a minimum, maintain the following books and

records in order to comply with Section 286 of the Act. We set out below our comments on the Companies’ compliance

against each:

Compliant books and

records Where kept Administrators’ comments

Accounting files and

associated working papers

MYOB, QuickBooks and

Excel workbooks

The Companies’ accounting files were maintained in

MYOB, QuickBooks and work papers in Excel.

Accounting reports can be printed off as required.

Copies of bank

statements and deposit

books for the last 7 years

The Companies’ head

office at Yatala, and the

JSW premises in Perth

Copies of bank statements were available for each

Hughes Drilling Group entity and related back to the

date at which the account was established.

Management accounts Electronically in Excel Consolidated and subsidiary Management accounts

were prepared on a monthly basis, were based on the

information in MYOB and QuickBooks, and reported in

Excel. Appropriate Management accounts were

prepared by the Hughes Drilling Group’s in-house

finance team.

Reconciliation of bank

accounts

Electronically in MYOB or

QuickBooks and at the

Companies’ head office at

Yatala, and the JSW

premises in Perth

Monthly bank reconciliations were prepared by the

Companies’ finance team.

This was undertaken daily for the JSW business unit.

Supporting

documentation for

payments




Payment records were prepared and maintained by the

Companies’ finance team.

Payroll records Electronically in the

MircoPay system, and in

MYOB for JSW, prepared

from paper timesheets

Payroll and associated records were maintained by the

payroll staff at Yatala for the East Coast operations,

and by the payroll staff in Perth for JSW.

D14-161201-S439AReport-HM 21

Compliant books and


Board meeting minutes Electronically and at the

Companies’ head office at

Yatala

We have obtained signed Board minutes from some

but not all board meetings. We have located unsigned

board minutes for some meetings located on the

Companies’ server.

Asset listing Electronically in Excel for

the East Coast Operations.

JSW’s asset listing was

maintained in Fleet

Maintenance Pro, with

inventory listings

maintained in MYOB.

We obtained a copy of the Companies’ asset registers.

The registers for property, plant and equipment appear

to have been adequately maintained.

There appear to be significant deficiencies in the

Companies’ inventory recording systems which could

result in a material overstatement of values in this

asset class. Any write down in the value of these

assets would reflect an overstatement of book value

because inventory did not exist; was used but not

accounted for in the cost of goods sold; or was

obsolete. Prior to our appointment, Management

assessed a downward adjustment of circa $23 million

should be recorded against inventory. Our analysis

suggests an adjustment in excess of $23 million may

be required.

Financial statements and

Audited financial reports


office at Yatala Financial statements and audited financial reports FY14

and FY15 are available. These were audited by

PricewaterhouseCoopers (“PwC”). BDO were appointed

to act as auditors for FY16. The FY16 accounts had not

been finalised.

In view of the deficiency in the Companies’ inventory

management systems noted above, there is a

likelihood that historical financial statements may have

materially overstated both financial performance and

financial position.

Statutory records The Companies’ head

office at Yatala The Company generally maintained statutory records.

However, a Deed of Cross Guarantee between Group

Companies’ recorded in the statutory accounts has not

been prepared or lodged but was relied upon in the

preparation of the audited financial reports. Other

statutory records of the Companies’ have been lodged

and generally maintained. The Statutory accounts were

prepared on a consolidated basis relying upon an ASIC

class order requiring a Deed of Cross Guarantee. It is

now our understanding that no Deed exists. As a

result, the statutory accounts filed on a consolidated

basis are misleading and non-compliant.

Taxation returns The Companies’ head

office at Yatala and with

the tax agents – currently

BDO and previously PWC

Tax returns have been prepared and generally

maintained. However, there are issues in relation to

the timeliness of lodgements

Debtor and creditor

listings

Electronically in MYOB

and QuickBooks

Listings were maintained.

D14-161201-S439AReport-HM 22

Compliant books and


Lease contracts /

agreements

At the Companies’ head



Property leases and various third party lease

agreements were maintained on file at the Companies’

head office at Yatala for the East Coast Operations, and

at the JSW premises in Perth.

We are advised that some of the Companies’ lease

arrangements are undocumented.

Intercompany transactions

and balances

Electronically in Excel There are a number of intercompany balances that

were owed to and from each of the Companies. These

are recorded in the individual company balance sheets.

We understand that there are no formal loan

agreements that govern interest, amortisation or

repayment arrangements.

Customer contracts and

analysis / information

regarding costs and

profitability of contracts

At the Companies’ head


JSW premises in Perth.

Current customer contracts were maintained on file at

the Companies’ offices at Yatala and Perth.

With the exception of JSW, the Hughes Drilling Group

did not, prior to our appointment, maintain information

relating to costs and profitability on a contract by

contract basis.

ASX and Shareholder /

Investor queries

Maintained by

Computershare

There were no ASX and Shareholder / Investor files

maintained by HDX. Source: Hughes Drilling Group’s books and records

Key points:

Our review of the Companies’ records suggests that the Company operated a number of unintegrated systems which

were augmented by electronic spreadsheets. Our investigations have highlighted significant deficiency in the

Companies’ recording of inventory and that statutory accounts were incorrectly filed on a consolidated basis.

It appears likely that the Hughes Group may have materially overstated inventory values. That situation appears to

have existed for some time. On that basis, we think it likely that Hughes financial position and financial performance

has been overstated historically.

We consider that there may be an argument that the deficiency in the recording of inventory by the Group was so

materially deficient that the Group failed to comply with s286.

Further work will be required to identify specific deficiencies and to quantify the actual value of inventory compared to

that recorded and, to assess the impact of any difference on historical results.

D14-161201-S439AReport-HM 23

Historical financial performance and position 7

This section of the Report sets out historical financial information for the Companies.

We note that audited financials are available for the Group (for years ended 30 June 2014 (“FY14”) and 30 June 2015

(“FY15”) and were prepared on a consolidated basis. In addition, Management has presented us with consolidated

accounts for the year ended 30 June 2016 (“FY16”). However, these accounts are unaudited and were subject to

finalisation upon our appointment.

Notwithstanding the fact that the Group is not subject to a Deed of Cross Guarantee or ASIC Class Order, we have

presented the consolidated financial accounts of the Hughes Drilling Group for reference and comparison to previously

available audited accounts.

We are unaware of any audited financial accounts for stand-alone entities within the Hughes Drilling Group. Accordingly,

management accounts for each of the Companies have been presented in Annexure B.

In the absence of a Deed of Cross Guarantee it is appropriate to consider the financial position of each of the Companies

separately. That said, Westpac holds a GSA over each of the Companies and has cross collateralised all of its facilities. As

a result, each Company is equally liable for the secured balance outstanding to Westpac. We have reported on the

financial position and performance of each stand-alone entity (by reference to management accounts).

The administrators note that we have not carried out an audit, nor have we verified the management accounts presented

below.

Financial performance 7.1

A summary of the Hughes Drilling Group’s Statement of Financial Performance is set out below:

Key points:

The Hughes Drilling Group reported positive earnings across the last three financial years.

The decrease in revenue from FY15 to FY16 was largely due to a decrease in water services work and deferral of a

number of Government projects in JSW. These factors were partially offset by an increase in revenue in HD1, driven by

three new rigs at BMA Blackwater, and one new rig contract for FMG (West Coast).

Reported margins increased in FY16, largely due to a change in revenue mix. The decline in water service revenue,

earning a low margin of cost plus 10%, was replaced by an increase in higher margin work, as well as an increased

focus on cost management across the Group.

Hughes Drilling Group - Consolidated Statement of Financial Performance

Audited Audited Draft

A$'m FY14 FY15 FY16

Revenue 90.6 107.5 90.0

COGS (61.2) (73.7) (57.7)

Margin 29.3 33.9 32.3

Margin % 32% 32% 36%

Other income 0.3 0.3 0.2

Depreciation expense (9.9) (11.9) (15.5)

Overheads (9.4) (8.6) (10.1)

Operating profit 10.3 13.5 6.8

Impairment costs (5.6) - -

Finance (interest) costs (3.1) (3.2) (3.5)

Profit before tax 1.6 10.4 3.3

Income tax (0.2) (2.2) (1.6)

NPAT 1.4 8.2 1.7

EBITDA 14.6 25.5 22.3

Source: Audited annual financial accounts (FY14 and FY15); draft un-audited financial accounts (FY16)

D14-161201-S439AReport-HM 24

However, Management recognised significant deficiencies in inventory recording systems (particularly in HD1) prior to

our appointment. We understand that prior to our appointment Management formed a view that $23.1 million in

stock adjustments would be required to more accurately reflect the actual value of stock.

We also understand a significant amount of expense (wages etc.) was capitalised to the Balance Sheet, largely to plant

and equipment balances.

In the absence of audited accounts it is unclear what (if any) adjustments would have been made to reflect an

accurate stock and plant and equipment position as at FY16 (see comments below in respect of stock valuation).

Financial position 7.2

A summary of the historical financial position of the Companies is as follows:

Key points:

The Hughes Drilling Group reported a net asset position of $76.8 million as at 30 June 2016.

Inventory and WIP was recorded with a book value of c. $55.3 million. Based on an independent review of inventory

undertaken since our appointment, in our view and based on independent valuations further negative inventory value

adjustments would have been required to bring inventory values recorded in the Companies’ balance sheet in line

with accounting standards requiring stock be recorded at the lower of cost or realisable value. Prior to our

appointment management had discussed reducing the carrying value of the inventory by $23.1 million. This was not

reflected however in the draft June 2016 accounts.

Hughes Drilling Group - Consolidated Balance Sheet


A$'m Jun-14 Jun-15 Jun-16 Change ($) Var (%)

Current Assets

Cash and cash equivalents 0.4 1.7 0.8 (0.9) (209.3%)

Trade debtors & receivables 18.1 23.7 14.5 (9.2) (50.9%)

Inventory & WIP 37.8 50.2 55.3 5.2 13.7%

Other current assets 0.1 1.6 1.4 (0.2) (163.4%)

Total Current Assets 56.5 77.2 72.0 (5.1) (9.1%)

Non Current Assets

Property, plant & equipment 63.6 66.4 84.0 17.5 27.6%

Goodwill & intangibles 8.0 12.6 13.0 0.3 4.2%

Deferred tax assets & other assets 4.2 2.6 7.3 4.7 111.9%

Total Non Current assets 75.8 81.6 104.3 22.6 29.8%

Total Assets 132.3 158.8 176.3 17.5 13.2%

Current Liabilities

Trade & other payables (19.2) (26.1) (35.6) (9.4) 49.1%

Bank overdraft (4.3) (11.2) (11.0) 0.2 (4.0%)

Borrowings - current (24.2) (20.4) (41.2) (20.8) 86.0%

Provisions (1.8) (2.8) (4.4) (1.6) 86.0%

Total Current Liabilities (49.5) (60.5) (92.1) (31.6) 63.9%

Non Current Liabilities

Borrowings - non current (17.7) (23.2) (0.2) 23.0 (130.6%)

Deferred tax liabilities - - (6.7) (6.7) N/a

Provisions (0.5) (0.5) (0.5) (0.0) 7.2%

Total Non Current Liabilities (18.2) (23.7) (7.4) 16.3 (89.5%)

Total Liabilities (67.7) (84.2) (99.5) (15.3) 22.7%

Net Assets 64.5 74.6 76.8 2.2 3.3%


Jun-15 to Jun-16

D14-161201-S439AReport-HM 25

The Company included $84.0 million for plant and equipment in the balance sheet as at June 2016. These items

included aged drill rigs which were being used as a source of parts.

The increase year on year of trade payable balances is reflective of the Group’s tightening cash position.

The estimated Group debt to the ATO of c.$19.0 million in respect of unpaid PAYG, GST lodgements and

superannuation amounts is represented in the payable balance as at 30 June 2016. This debt appears to comprise

amounts dating back more than twelve months.

The goodwill balance of $13.0 million is comprised of JSW and Reichdrill goodwill on acquisition.

Cash flow 7.3

A summary of the historical cash flow for the Companies is as follows:

Key points:

The statements of financial performance for FY14 to FY16, show that the Companies held minimal cash balances

(relative to current liabilities) throughout the period FY14 to FY16.

Refer 11.2.2 for further discussion on the historical cash flow of the Hughes Drilling Group.

Hughes Drilling Group - Consolidated Cash Flow Statement


A$'m Jun-14 Jun-15 Jun-16

Cash flow from operating activities

Receipts from customers 83.7 112.9 107.0

Payments to suppliers/employees (73.4) (89.5) (75.8)

Interest received / (paid) (3.1) (3.2) (3.5)

Net cash used in operating activities 7.3 20.2 27.7

Cash flow from investing activities

Purchase of intangible assets - (4.2) (0.2)

Loans to related parties and other (3.2) - 0.0

Payment for PPE (9.4) (23.2) (26.6)

Proceeds from sale of fixed assets 0.5 0.3 0.5

Net cash used in investing activities (12.0) (27.1) (26.3)

Cash flow from financing activities

Other (0.0) - (0.0)

Proceeds from borrowings 14.1 24.1 13.6

Repayment of borrowings (17.9) (22.9) (15.9)

Net cash used in financing activities (3.8) 1.1 (2.3)

Summary

Opening cash 4.7 (3.9) (9.5)

Net increase/(decrease) in cash (8.6) (5.8) (0.9)

Effect of FX movement (0.0) 0.1 0.2

Closing cash (inc. overdraft) (3.9) (9.5) (10.2)

Overdraft balance (4.3) (11.2) (11.0)

Closing cash 0.4 1.7 0.8


D14-161201-S439AReport-HM 26

Financial position based on Report as to Affairs 8

The Directors have prepared and lodged a Report as to Affairs (“RATA”) for each of the entities under External

Administration. A summary of each RATA and other company information is provided in Annexure B.

Summarised below are the key items and themes identified from our review of the RATAs.

For HD1, the directors have disclosed stock at a book value of $24.2 million and fixed assets at a book value of $11.3

million. Whilst the directors have not specified a net realisable value for these assets, we have obtained our own

valuation and consider these values to be significantly overstated, as discussed in section 7.2

For JSW, the directors have disclosed stock at a book value of $9.8 million and fixed assets at a book value of $12.0

million. Whilst the directors have not specified a net realisable value for these assets, we have obtained our own

valuation and consider these values to be significantly overstated, as discussed in section 7.2

Trade receivables according to the RATAs of all trading entities totalled c. $7.9 million (including intercompany

transactions). Whilst the directors have not provided a realisable value, we note that the majority of debtors on

appointment have since been collected.

As previously discussed, the main customer service entities are HD1 and JSW, with EHA providing sales and purchasing

support, predominantly to HD1. As such, the stock on EHA’s balance sheet is likely to be overstated also, and a large

proportion of EHA’s debtor balance is intercompany receivables.

The largest unsecured creditor balances are in HD1 and JSW and relate to stock, drill bits and other consumables as

well as the ATO.

A large balance of the assets and liabilities reported in the entities are intercompany loan balances, which are

unsecured claims against each entity, a summary of which is included in Section 11.2.

D14-161201-S439AReport-HM 27

Sale of business and assets 9

Pre-appointment sale / fund raising process 9.1

Prior to the Appointment, Hughes Drilling Group’s Management had commenced discussions with a number of parties

which had expressed interest in a potential recapitalisation of the entire group. However, these discussions had not

progressed to a stage where any group had submitted a final binding offer. Additionally, all of the offers would have

resulted in a material shortfall to both secured and unsecured creditors.

VA recapitalisation/sale process overview 9.2

On Appointment, we immediately sought to identify whether there was interest in either recapitalising or acquiring the

business. An advertisement was placed in the Australian Financial Review and The Australian on Tuesday, 26 September

2016 calling for expressions of interest in the Group or specific business units/assets. This marketing campaign was

supplemented by direct contact by our staff with parties who had expressed interest in the business or were identified as

potential purchasers prior to our appointment.

Over 40 potential interested parties were contacted during the process, with approximately 15 parties confirming their

interest in gaining access to the data room to conduct further due diligence. The parties conducting diligence include a

mix of trade players and financial buyers.

The process was conducted in three stages:

Non-Binding Offers (“NBO”): we provided interested parties with access to data room information to enable them to

submit NBO’s by 12 October 2016;

Due Diligence: we selected 6 parties to undertake further detailed due diligence on the Hughes Drilling Group,

undertake site visits, and be provided access to detailed operational, legal and financial data.

Final Due Diligence: upon confirmation of NBO’s by 11 November 2016, we selected the offer that, if completed,

would result in the best return to creditors, being a joint proposal from consortium comprising turnaround fund

manager Allegro mining contractor and NRW Limited, to advance their bid on an exclusive basis. This process has

culminated in the DOCA proposal detailed in this report.

D14-161201-S439AReport-HM 28

Explanation of the Companies’ failure 10

Directors’ reasons for failure 10.1

The directors have advised in their RATAs that they first became aware that the Hughes Drilling Group was experiencing

financial difficulties when the secured creditor was not willing to advance additional finance from approximately August

2016. The directors advise that they then sought alternative sources of funding, which led to receipt of proposals to

recapitalise the Hughes Drilling Group.

The directors advise that once they established that recapitalisation proposals were not capable of execution, they resolved

to appoint Voluntary Administrators.

Administrators’ view 10.2

As outlined in section 11, our initial analysis indicates that the Hughes Drilling Group may have been insolvent from at

least March 2016.

Based on our investigations to date, we consider that a combination of the following factors contributed to the Companies

liquidity shortfall and administration:

The drilling industry is competitive. Activity in the industry is directly related to mining activity and commodity prices.

There was a significant deterioration in the resource prices from about mid 2011 after an extended resources boom.

This impacted miners and those servicing the sector with a strong focus by miners on cost reduction. These factors

had a direct impact on businesses like Hughes which, as a result of the downturn, faced fewer opportunities and a

highly competitive market. This put sustained pressure on mining contractor revenues and there have been a number

of other industry players who have entered into insolvency during this period.

Work in the industry is generally won on a tender basis. Hughes Drilling Group was successful in winning work

predominantly as a result of aggressive tendering. It is clear that the Companies’ financial position suffered due to the

Companies entering into marginal or loss making drilling contracts.

We have identified deficiencies in the Companies books and records, in particular:

accounting for individual entities in the Group was undertaken using five separate accounting systems. We

understand that this presented difficulties for finance staff in tracking performance;

inventory management for Hughes Drilling Group appears to be inconsistent across the group. A negative

adjustment to inventory of circa $24 million was processed in June 2016. This was a significant adjustment of circa

50% of the inventory value and indicates that liquidity difficulties were likely masked by the overstated inventory

values; and

the directors have advised that for the East Coast operations, profitability on a contract by contract basis was not

analysed or reported. As a result, (particularly given the competitive, low margin, environment) it is probable that

management did not have a clear view of loss making contracts

From 2012, Hughes Group pursued a strategy of growth by acquisition. The acquisition of JSW and Reichdrill were

funded by debt. These businesses were poorly integrated and the servicing of debt for these acquisitions put further

strain on the Group’s increasingly stretched cash resources.

There are various indicators (discussed further in Section 11) that the Companies were experiencing difficulties with

cash flow for an extended period prior to the appointment of the administrators, including the accrual of significant

unpaid debts to the Australian Taxation Office, unpaid superannuation contributions and a build-up of balances owing

to creditors. We have also identified that there were not sufficient funds available to meet maintenance capital

expenditure for a period prior to the Appointment.

The deficiencies in the reporting and accounting systems outlined above would likely have presented difficulties for

management and staff both in tracking and attempting to understand the reasons for financial difficulties.

Outstanding winding up applications 10.3

We understand that the Companies had not been issued with demands for payment and we are not aware of any winding

up applications against the Companies.

D14-161201-S439AReport-HM 29

Offences, insolvent trading and voidable transactions 11

Statutory recovery actions 11.1

The ARITA has issued an information sheet titled “Offences, Recoverable transactions and Insolvent trading”, providing

general information for creditors about insolvent trading and voidable transactions.

This information sheet is available from the ARITA website (www.arita.com.au). If you are unable to access this website,

please contact Link Market Services on 1300 365 798 or by email [email protected] to obtain a

copy.

The following sections provide an overview of potential recoveries or actions available in liquidation and then give our

estimation of potential recoverable claims. A key element of most of these potential claims is to establish an estimated

timeframe when the Companies can be shown to be insolvent.

Insolvent trading 11.1.1

Other than in cases of fraud, the Directors of a company may only be sued for insolvent trading if the company is in

liquidation. Where a Voluntary Administrator has been appointed, assessment of the issue of insolvent trading can be

important to creditors if they are being asked to choose between a DOCA and a liquidation. In that instance, creditors

have to assess the advantages to them of a DOCA (which does not include proceeds from insolvent trading actions)

compared to the likely return to them in a liquidation (which could include the proceeds of any successful insolvent

trading action). A liquidation also preserves the possibility of individual creditors taking insolvent trading actions in their

own right (with the liquidator's approval or the leave of the Court).

Before a Court will order that a person pay compensation in respect of insolvent trading, a Liquidator must establish that:

the person was a Director of the company at the time the company incurred the debt the subject of the claim;

the company was insolvent at that time or became insolvent by incurring the debt;

at that time, there were reasonable grounds for suspecting that the company was insolvent or would become

insolvent by incurring the debt; and

the creditors to whom debts are owed have suffered loss and damage.

In determining whether the Directors traded the Companies at a time when they were insolvent, we have considered both

a net assets and cash flow assessment. In any legal proceedings requiring a liquidator to establish that a company traded

while insolvent, the Court generally looks to a cash flow test of insolvency, that is can the company pay its debts as and

when they fell due for payment .

Director defences 11.1.2

Section 588H of the Act sets out statutory defences available to Directors in respect of a claim for insolvent trading. These

include:

at the time of incurring debts, the Director had reasonable grounds to expect that the company was solvent;

the Director relied on information provided by a competent and reliable person which concluded that the company

was solvent at the time debts were incurred; and

the Director took reasonable steps to prevent the debts being incurred.

Voidable transactions 11.1.3

A Liquidator has the power to review and recover transactions that occurred prior to the commencement of a winding up,

under Part 5.7B of the Act. This may result in, amongst other things, a requirement for a third party to return property

and/or money to the company and thereby increase the assets available to the Liquidator and creditors. These are known

as voidable transactions.

Corporations Regulation 5.3A.02 requires an Administrator to specify whether there are any transactions that appear to the

Administrator to be voidable transactions in respect of which money, property or other benefits may be recoverable by a

Liquidator under Part 5.7B of the Act. As with the insolvent trading provision outlined above, this issue is relevant to

creditors if they are being asked to choose between a DOCA and a liquidation, because voidable transactions are only

recoverable if a liquidation occurs.

http://www.arita.com.au/

mailto:[email protected]

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Voidable transactions include:

unfair preference claims: transactions between a company and a creditor, resulting in the creditor receiving from the

company, in relation to an unsecured debt owed to the creditor, a greater amount than it would have received in

relation to the debt in a winding up of the company;

uncommercial transactions transactions which a reasonable person in the place of the company would not have:

entered into, taking into account the benefits and the detriment to the company, the respective benefits to the other

parties involved and any other related matters;

unfair loans: being a loan agreement where the interest or charges are considered to be extortionate. Unfair loans

made to the company any time prior to the appointment of the Administrator may potentially be overturned by a

subsequently appointed Liquidator, whether or not the company was insolvent at the time the loan was entered into:

and

Unreasonable director related transactions: transactions which confer a benefit upon a director or close associate of

the director to the detriment of the company.

To the extent that information has been available, we have conducted the following investigations to determine the

existence of voidable transactions:

conducted interviews of the Directors and key staff;

reviewed agreements between the Companies and various third parties;

reviewed the books and records to determine whether there have been any unfair loans made to or from the

Companies; and

reviewed deposits and withdrawals into, or out of, the Companies' bank accounts to determine whether any creditor

has been preferred over the general body of creditors as a result of any transaction.

Breach of Directors’ duties 11.1.4

Sections 180 to 184 of the Act sets out the duties, obligations and responsibilities imposed on Directors which are

designed to promote good governance and ensure that Directors act in the interests of a company. These duties include:

Duty of care and diligence;

Duty of good faith;

Duty not to make improper use of position; and

Duty not to make improper use of information.

Funding to pursue insolvent trading and voidable transactions 11.1.5

Insolvent trading and voidable transactions can only be pursued in a liquidation and further investigation and any

subsequent proceedings may incur significant costs.

Funding may be sought from creditors or litigation funders should the Liquidators (if appointed) seek to commence such

action.

Determining the date of insolvency 11.2

A crucial element of most liquidators’ statutory recovery actions is to establish the date when the Companies became

insolvent. Set about below are comments and preliminary findings on the funding arrangements within the group as well

as a balance sheet and cash flow assessment of the Companies’ financial position.

The Hughes Group consists of 13 Australian entities plus Reichdrill Inc. (the US manufacturing business).

From a funding perspective, the Hughes Group operated on the basis that cash generated by the Group from operating,

financing or investing activities was available to be utilised across the Group by each entity as required. Those fund flows

were accounted for through intercompany loan accounts.

That accounting practice reflected the assumption that the Hughes Group operated subject to a Deed of Cross Guarantee

which had been agreed between all Companies in the Group, under which each Company in the Group guaranteed the

liabilities of other Companies in the Group.

D14-161201-S439AReport-HM 31

Based on our investigations, this assumption appears to have been incorrect. The balances of intercompany loans within

the Group as at the date of appointment of the administrators on 22 September 2016 are set out below:

Determining a company’s solvency at a particular time requires an assessment of cash flows and an assessment as to

whether it is able to meet liabilities as and when they fall due from cash or other available resources (including a pledge of

assets).

Our preliminary assessment is based on the following analysis:

a review of the net current asset position;

a review of overdraft balances against the monthly peak of the overdraft limit; and

a review of aged creditors profile for key trading entities (JSW, HDI, EHA, HDL, HEA); and

a review of statutory payments and unpaid employee entitlements

In undertaking our preliminary solvency analysis for the Group, and in light of the limited time available for investigations

during the voluntary administration period, we have considered the Group's liquidity position on a consolidated basis only.

We note that, as there appears to be no deed of cross guarantee between the group companies, any final analysis

undertaken by a liquidator in the winding up of the Companies would need to consider each entity on a stand-alone basis.

In order to prove that a Company within the Group was insolvent at a particular time, a liquidator would need to

undertake additional work to:

assess actual cash flows, current assets and current liabilities;

better estimate inventory values in past periods in order to assess the cash flow impact of issues identified regarding

the carrying value of inventory and any over-statement of values;

estimate what, if any, accounting adjustments might be appropriate based on the above analysis; and

estimate the date on which each Company became insolvent.

Net assets assessment 11.2.1

For the purpose of our preliminary investigations, we have reviewed the current assets and current liabilities of the Group

on a consolidated basis, as recorded in the Companies’ audited FY14 and FY15 financial statements and the unaudited

Management accounts.

The balance sheets for individual entities for these periods are set out at Annexure B of this report.

Loans between the Companies

A$'000 HDL HD1 HD2 HEH EDMS HEA EDMSO GOS AGD HD JSW JSW RD Aust RD USA EHA HDC

HDL - 9,560 (1,333) (7,552) 91 (644) (7,689) (21,443) 2,538 (8,613) (7,080) (606) (9,694) (3,666) (9,959)

HD1 (9,560) - 497 (156) - - - - - - (601) 500 - 4,454 (435)

HD2 1,333 (497) - (1,643) (19) - 993 6,911 (347) - (843) - - 1,310

HEH 7,552 156 1,643 - 33 - (1,358) (4,498) (5,971) - - 85 - 915 (2,765)

EDMS (91) - 19 (33) - - 219 (208) (36) - - - - - (363)

HEA 644 - - - - - - - - - - - - - 26

EDMSO 4,950 - (993) 1,358 (219) - - (665) (458) - - - - - 682

GOS 15,850 - (6,911) 4,498 208 - 665 - (2,610) - - - - - (251)

AGD (2,538) - 347 5,971 36 - 458 2,610 - - - - - - 931

HD JSW 8,613 - - - - - - - - - - - - - -

JSW 7,385 236 843 - - - - - - - - - - 381 -

RD Aust 606 (500) - (85) - - - - - - - - (3,772) (1,341) (20)

RD USA 10,462 - - - - - - - - - - 3,780 - 261 -

EHA 3,666 (4,454) () (915) - - - - - - (381) 1,341 (260) - (12)

HDC 9,959 435 (1,310) 2,765 363 (26) (682) 251 (931) - - 20 - 12 -

Source: The Companies' books and records

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Set out in the table below is a summary of the net current asset position as reported in the consolidated audited financial

accounts for FY14 and FY15, and the FY16 unaudited Management accounts. To assess whether liquidity issues existed, we

have made the following adjustments to the reported net current asset balances to arrive at an “adjusted net current

assets” value:

Management proposed a total of $23.1 million in write-offs to the Companies’ reported inventory balance across FY15

($6.5 million) and FY16 ($16.6 million); and

other current assets that related largely to prepayments and non-cash deferred tax assets, which we consider reflect

assets which are not convertible to cash to pay current liabilities, have been excluded.

The analysis above shows that:

there was a significant deterioration in net current assets during FY16;

by FY16 the trade and other payables balances had increased by c.$9.4 million to c.$35.6 million and the current

borrowings balance increased by c.$20.8 million to c.$41.2 million;

if Management’s proposed inventory adjustments were recognised in FY15 and FY16 then there is an “Adjusted

net current assets” deficiency of c.$38.1 million in FY16; and

we consider it likely that Management’s proposed FY15 and FY16 inventory revaluation adjustments were

insufficient and may need to be increased. Any further adjustment to the carrying value of inventories would

suggest that the financial position was materially worse than the books and records indicate.

The analysis highlights that during FY16, there was a significant gap between amounts that were owed to creditors

and recorded as current (i.e. due within a 12 month period) and assets available to pay those liabilities. This position

is evidence that the Group's overall financial position was strained.

Cash flow assessment 11.2.2

Assessment of a company’s solvency position on a cash flow basis requires a review of the company’s ability to meet its

ongoing liabilities from its available cash or other resources. This requires consideration of issues such as: cash holdings,

the availability of short term assets convertible to cash or access to borrowings, whether creditors are being paid within

terms and whether the company has complied with its statutory payment obligations.

We note as follows:

Cash holdings 11.2.2.1

The statements of financial position for FY14 to FY16 (set out in section 7), indicate that the Companies held minimal

cash balances throughout the period examined. Payments were generally made from an overdraft facility provided by

Westpac.

The graph below summarises the overdraft balances from March 2016 to September 2016 against the overdraft limit.

The graph also shows that there was declining headroom or cash available from the overdraft facility.

Estimated net current assets position

A$'000 FY14 Audited FY15 Audited FY16 Management

Current assets 56,452 77,154 72,032

Current liabilities (49,529) (60,491) (92,118)

Net current assets 6,923 16,662 (20,086)

Adjustments

Proposed inventory adjustment - (6,500) (16,600)

Other current assets (130) (1,629) (1,416)

Adjusted net current assets 6,793 8,534 (38,102)

Source: Companies' books and records, Discussions with Management, McN analysis

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We have reviewed Management’s monthly consolidated management accounts from March 2016 to September 2016,

along with board and other internal communications for the same period, in order to understand the cash position of

the Companies during the relation back period. The analysis suggests that:

the Group overdraft balance increased from negative c.$9.9 million in March 2016 to negative c.$11.3 million

immediately prior to appointment;

the overdraft balance of negative c.$11.3 million was only marginally within the overdraft limit of $11.8 million and

did not provide the Group with enough cash and cash equivalents to pay its debts as an when they fell due; and

the Group’s strained liquidity was being managed by the deferring various creditor payments well beyond agreed

terms. Creditor balances were growing and by the time of our appointment there were large amounts owing

which were aged in excess of 90 days.

Aged Creditors as at appointment and March 2016 11.2.2.2

The tables below provides an analysis of the aged creditor balance of the key trading entities as at 31 March 2016

(the beginning of the relation back period) and as at the date of our appointment:

(9,879)(11,299)

(11,800)(13,000)

(12,000)

(11,000)

(10,000)

(9,000)

(8,000)

(7,000)

(6,000)

Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16

A$'0

00

Net cash position - March 2016 to September 2016

Ovderdraft balance Overdraft limit

Hughes Drilling Group aged creditors - at March 2016

A$'000 Current 30 days 60 days 90+ days Total

EHA 309 526 434 5,280 6,549

5% 8% 7% 81%

HD1 1,122 1,100 468 386 3,076

36% 36% 15% 13%

HDL 144 104 7 60 314

46% 33% 2% 19%

HEA 32 428 - - 460

7% 93% 0% 0%

HEH 123 33 - 1 157

78% 21% 0% 1%

JSW 996 753 825 1,242 3,816

26% 20% 22% 33%

Total 2,725 2,944 1,734 6,969 14,373

19.0% 20.5% 12.1% 48.5%

Source: Companies’ creditors’ ledgers at 31 March 2016

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This analysis highlights:

trade creditor payment terms were being stretched in March 2016 with in excess of 60% of creditor

claims being aged 60 days and older;

Although the total creditor balance decreased by c.$1.2 million in the period March to September,

creditor aging was deteriorating;

approximately 5 creditors had issued notices of demand indicating that the Group faced a liquidity

challenge; and

staff have advised that some suppliers had placed the Companies on “stop supply” and there were

material difficulties in ordering parts and equipment from those suppliers.

These factors further illustrate the strained liquidity of the Group and support a view that the Group was insolvent

prior to our appointment from at least March 2016.

Hughes Group statutory creditor obligations 11.2.2.3

We have reviewed correspondence between the ATO and EHA dating back to March 2016 and for HD1 dating back to

January 2016. This correspondence relates to taxation payment arrangements (in respect of arrears) being entered

into. Total amounts owing to the ATO as at March 2016 and June 2016 were $1.1 million and $1 million, respectively.

The decrease in the amounts owed to the ATO between March and June reflect the Group’s commitment to adhering

to the agreed payment plans for EHA and HD1 but also the Group’s failure to lodge BAS returns. The increase in

amounts owing to the ATO in September 2016 reflects assessments on overdue BAS and PAYG returns dating back to

July 2015.

The table below provides a summary of the amounts owed to the ATO, based on a review of the Companies’ ATO

Business portals. These amounts comprised:

unpaid GST;

unpaid PAYG; and

interest and charges.

Hughes Drilling Group aged creditors - at appointment

A$'000 Current 30 days 60 days 90+ days Total

EHA 247 400 461 3,583 4,691

5% 9% 10% 76%

HD1 269 1,363 248 1,567 3,447

8% 40% 7% 45%

HDL 3 6 112 129 250

1% 3% 45% 51%

HEA 106 113 87 216 523

20% 22% 17% 41%

HEH 176 34 29 363 602

29% 6% 5% 60%

JSW 324 - 904 2,464 3,692

9% 0% 24% 67%

Total 1,125 1,917 1,842 8,323 13,206

8.5% 14.5% 13.9% 63.0%

Source: Companies’ creditors’ ledgers at 22 September 2016

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In addition to the above, JSW agreed a formal payment arrangement with the WA Office of State Revenue (“WA

OSR”), around 6 April 2016 for outstanding payroll tax liabilities totalling c. $0.4 million. JSW was unable to comply

with the payment plan agreed with the WA OSR.

We reviewed the Companies’ compulsory superannuation guarantee arrears and note that employee super payments

totalling c. $4.4 million dating back to early FY14 were outstanding as at the date of our appointment.

Set out in the table below is a summary of the Hughes Drilling Group’s compulsory superannuation contribution arrears.

There are a number of possible explanations that the Directors may raise in the context of a finding of insolvency which

we have evaluated below:

Capital raisings: we are aware that the Companies were in advanced discussions with several private equity funds in

the period leading up to our appointment (although those discussions were predicated on the secured creditor

accepting a significant discount on the repayment of its principal balance);

Planning to close down or transfer business units to third parties: the Companies’ directors engaged Vantage

Performance in the period prior to our appointment to assist in planning and implementing cost saving initiatives and

the divestment of loss making or marginal businesses. On our assessment, these initiatives were not adequately

implemented;

Seeking debt funding from the secured creditors and third parties: these requests were rejected; and

Seeking interest from third parties to sell specific assets: there is no evidence of directors achieving any material

success in this regard.

Administrators’ conclusions regarding solvency 11.2.3

Solvency is a question of fact to be ascertained from a consideration of a company’s financial position as a whole.

However, Australian Courts have determined that the primary test of solvency is a cash flow test. Our analysis above,

highlights that:

Amounts owed to the ATO

A$'000 March 2016 June 2016 September 2016

EHA 216 75 1,255

HD1 885 - 4,210

HD2 (88) 34 35

HDC 86 866 931

HDL 34 1 (48)

HEA - 49 98

HEH - - 32

JSW (7) - 4,388

Total 1,126 1,025 10,901

Source: Hughes Drilling Group ATO Business Portal statements

Superannuation contribution arrears

A$'000 March 2016 June 2016 September 2016

HD1 1,294,259 1,783,543 2,535,250

HDC 97,518 142,063 214,453

EHA 149,645 208,886 299,009

HEC - - 22,967

HDL 36,933 40,496 43,305

HEH - - 3,569

JSW 393,170 719,189 1,270,639

Hughes Drilling Group total 1,971,526 2,894,177 4,389,192

Source: Hughes Drilling books and records

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By FY16, there was a deficiency in current assets over current liabilities. This position is significantly worse when an

adjustment to the carrying value of inventory is made in June 2016.

The Companies were unable to negotiate any additional debt finance and their assets were fully secured to Westpac.

The Companies consistently operated at or near the limits of the overdraft / debt facilities, notwithstanding that

creditor balances were growing and increasing in age.

Statutory creditors and employee superannuation obligations had fallen substantially behind and the Companies were

unable to meet those obligations as and when they fell due.

These financial challenges appear to have existed from at least March 2016 (and possibly earlier).

After consideration of all of the relevant factors (including the above defences), our preliminary assessment is that, on

balance, a liquidator may have a reasonable basis for arguing that the Companies traded whilst insolvent from at least

31 March 2016.

We emphasise that this conclusion is strictly preliminary and forming a final view would require additional investigation

and analysis by a liquidator of the Companies, should one or more of the Companies be wound up. In deciding whether

to pursue any insolvent trading claim, a liquidator would need to weigh up the costs of pursuing the claim against any

potential recoveries that could be realised for the benefit of creditors (including whether the defendant director has

sufficient resources to meet any claims).

In the event that we are appointed as liquidators of one or more of the Companies, we would conduct further analysis and

assessment of those issues.

Estimated quantification of potential insolvent trading claim 11.2.4

Having estimated that the Companies were potentially insolvent from 31 March 2016, we have reviewed the creditors

whose debts were incurred in the period from 31 March 2016 until the date of appointment of the Administrators.

Personal liability for trading a company whilst insolvent will only apply where Directors have caused the Companies to

incur fresh liabilities at a time when they were insolvent.

An estimate of the value of the debts incurred during this period, by main operating entities, is set out in the table below:

Our preliminary view is that there appears to be evidence supporting a potential claim for insolvent trading against the

Directors of the Companies. This claim (taking into account a broad assumption for costs) may have a face value of

approximately $5.5 million and $4.0 million for JSW and HD1 respectively, based on our preliminary estimates of the debts

incurred during the period when we believe that insolvency may be established.

However, due to the preliminary state of our investigations, there are many factors which cannot be determined.

Attempting to estimate an accurate return from these potential claims would be so challenging as to risk being materially

misleading.

Factors which would need to be taken into account include:

further analysis needed to determine when the unpaid debts were incurred;

further detailed investigation of the date at which insolvency can be determined;

whether statutory defences may be available to all or some of the directors;

risks attendant with our lack of knowledge regarding the financial position of the directors;

Hughes Drilling Group - value of debts incurred from 1 April 2016

A$'000 EHA HD1 HDL HEA HEH JSW Total

Trade creditors 4,691 3,447 250 523 602 3,692 13,206

Superannuation 90 752 3 23 4 551 1,423

Taxation - ATO 1,039 1,216 (82) 98 32 2,940 5,243

Total 5,820 5,415 171 644 638 7,184 19,871

Source: Companies’ creditors’ ledgers at 22 September 2016, ATO Business Portal statements and books and records

Note: Dotted red line around the proposed DOCA entities

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clarification around whether an insurance policy may respond to such a claim;

the significant costs that may be incurred in prosecuting a potential insolvent trading claim; and

challenges with obtaining funding, and potentially exposure to litigation funding costs.

Voidable transactions 11.3

Unfair preference claims – third party trade creditors 11.3.1

Our preliminary investigations have identified payments to a number of creditors in respect of overdue invoices in the

period leading up to our appointment that may constitute unfair preferences recoverable if the Companies are wound up.

The value of the transactions is summarised:

Similar to insolvent trading actions, there are a range of defences available to parties that received a payment identified as

a potential unfair preference. These defences would need to be evaluated prior to commencing recovery action.

We note that our investigations to date are preliminary. If the Company is wound up, further investigations and a cost

benefit analysis of pursuing recovery action will need to be undertaken in relation to the potential matters referred to

above.

We note that the value of the potential preference recovery actions should JSW and HD1 be placed into liquidation may

be materially relevant given that there are DOCA proposals that relate to these two companies. However, there are a range

of matters that might impact the ultimate recovery on these potential preference claims that include:

the possible application of the running account principle, which may reduce the face value of the claims identified;

the availability of statutory defences and other counter arguments such as that the creditor held security; and

the costs associated with collection, including possibly litigating the claims, with the attendant litigation risk.

As a consequence, we consider that placing a value on the potential outcome of such claims may be materially misleading

and in addition, given the extent of foreshadowed shortfall to unsecured creditors set out in section 14 below, the

potential quantum of recoveries from unfair preferences has no impact on the outcome for this class of creditors.

Uncommercial transactions 11.4

We were advised that there may have been instances where Reichdrill Inc. (based in the USA) overcharged for goods

supplied to the Companies (primarily HD1 and JSW). This issue would require further investigation and it is possible that

the transactions were accounted for in intercompany loan accounts and balances with no cash impact. Ultimately we

believe that there is a low likelihood of recovery and therefore have not placed any monetary value on this potential claim

for the purposes of this report.

To date there have been no other uncommercial transaction identified. If the Company is wound up, further investigations

and a cost benefit analysis of pursuing recovery action on any transactions subsequently identified would need to be

undertaken.

Potential preference claims

A$'000 EHA HD1 HDC HDL HEH JSW Total

Creditor 1 120 300 203 20 - 255 899

Creditor 2 - - - 206 - - 206

Creditor 3 - - - - 121 - 121

Creditor 4 - - - - - 75 75

Creditor 5 - - - - - 163 163

Creditor 6 66 - - - - - 66

Creditor 7 67 - - - - - 67

Total 253 300 203 226 121 493 1,597

Note: Red dotted line around proposed DOCA entities

Source: Companies’ books and records

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Unfair loans and unreasonable director related transactions 11.5

At this stage, we have not identified any transactions that would be considered unfair loans by any of the Companies in

the Group under the Act. Nor have we identified any unreasonable director related transactions that may be recoverable

as against the directors of the Companies.

Breach of Directors’ duties 11.6

Our preliminary investigations indicate that the Companies’ Directors may have breached their duties in respect of:

As outlined in Section 6 titled “Books and Records”, we believe that there may be a possible failure to comply with

s286 of the Act. Our review of the Companies books and records indicated that there was a significant deficiency in

the Companies’ inventory management system. This deficiency may have led to a material overstatement of inventory

values in the Companies’ financial statements. These issues may be so material that there is a failure to comply with

s286.

Deed of Cross Guarantee:

The Company’s financial statements (Note 32 of the Hughes Drilling Limited FY15 audited accounts, and other

historical audited accounts) identified a Deed of Cross Guarantee (“the Deed”) which purportedly existed between

the Group entities under which each entity guaranteed the debts of the others. It would have also enabled the

Companies to prepare consolidated financial accounts, under ASIC Class Order 98/1418. The Group’s consolidated

financial report were also prepared on this basis;

On investigation, it appears that there was no Deed. A review of ASIC’s lodgement records confirmed that a Deed

had not been lodged with ASIC; and

The Administrators have requested a copy of the Deed from the current and previous auditors of the Companies,

with both parties confirming that they do not hold a copy of the Deed. The auditors who signed off the FY15

accounts have indicated that they now believe Note 32 to be an error.

It is our current understanding that no Deed exists.

These issues would require further investigation by a liquidator if appointed to one or more of the Companies, including a

legal analysis of what parties, if any, have a right to claim and the quantification of that claim.

D14-161201-S439AReport-HM 39

Options available to Creditors 12

As Administrators, we are required to provide creditors with a statement of our opinion about each of the courses of

action in respect of which creditors are entitled to vote at the meetings on 8 December 2016.

The matters requiring our opinion are:

whether it would be in the creditors’ interests for the administrations to end with control of the Companies reverting

to the Directors;

whether it would be in the creditors’ interests for the Companies to execute a DOCA; or

whether it would be in the creditors’ interests for the Companies to be wound up.

In addition, creditors are entitled to adjourn the meetings for up to 45 business days.

Deed of Company Arrangement 12.1

A DOCA is a binding arrangement between a company and its creditors governing how the company’s affairs will be dealt

with. It aims to maximise the chances of the company, or as much as possible of its business, continuing, or to provide a

better return for creditors than an immediate winding up. A DOCA binds all unsecured creditors, even if they voted

against the proposal.

The advantages to parties of acquiring the Companies’ assets through a DOCA rather than through an asset sale may

include:

it provides an opportunity for the Companies’ existing structure to be preserved. This has advantages for existing

customer and supplier arrangements;

there may be tax related advantages in relation to continuing the Companies’ business via the existing corporate

structure (e.g. franking credits, capital losses, trading losses); and

it provides flexibility around a sale of the equity and debt.

We have received a joint proposal from turnaround fund manager Allegro and mining contractor NRW to restructure and

recapitalise HD1 and JSW, whilst maintaining (through a "holding DOCA") the status quo in respect of HDL, pending

further investigations and negotiations for the future of HDL.

There is no DOCA proposed for the remaining entities within the group and creditors should vote for those entities to be

placed into liquidation.

Administration to end 12.2

Creditors may consider ending the administrations and returning the control of the Companies to Directors. We do not

believe this is an acceptable option, given the Companies are without funds to meet creditor liabilities and therefore

insolvent.

In our opinion, it is not in the best interests of creditors of any of the Hughes Drilling Group entities to vote for the

administrations to end.

The company to be wound up 12.3

An Administrator would usually recommend that creditors vote for an insolvent company to be wound up in the absence

of an acceptable DOCA proposal. An Administrator would also recommend liquidation in preference to a DOCA if there is

a strong likelihood that recoveries in liquidation which may include voidable transaction recoveries (which are only

recoverable by a liquidator) would improve the return to creditors in comparison to the return expected under a DOCA.

The liquidation of the Companies would involve:

termination of employees and discontinuance of business operations;

sale of the Companies’ assets by a liquidator;

The Administrators recommend acceptance of the Allegro and NRW proposals by creditors of HDI, JSW and HDL.

Further details on the proposed DOCAs are included in Section 13.1 and 13.2.

D14-161201-S439AReport-HM 40

the completion of a more detailed investigation into the affairs of the Companies and the conduct of their Directors

and potentially pursuing claims against directors;

further enquiries with regard to recovering potential insolvent trading and voidable transaction actions;

reporting to ASIC in relation to offences (if any) committed by the Directors of the Companies; and

adjudication of creditor claims and payment of dividends.

The costs of administering the liquidation would depend to a large extent on the time taken to recover assets from remote

locations and sell those assets, pursuing recoveries from customers (which would be problematic where the Companies

have failed to comply with contract terms) and, the outcome of investigations in relation to voidable transactions and

other recovery actions.

DOCA proposal 13

A consortium comprising turnaround fund manager Allegro Funds Pty Ltd (“Allegro”) and mining contractor NRW Holdings

Limited (“NRW”) (“the “DOCA Proponents”) have proposed a transaction which (1) recapitalises JSW and HD1 via one

DOCA ("JSW-HD1 DOCA"); and (2) in effect defers, through a second DOCA ("HDL DOCA"), the final decision in relation to

the future of HDL until a later point in time.. The proposed transaction includes the following features:

Conditional pre-DOCA restructure: 13.1

The Administrators propose, prior to the Second Meeting of Creditors, to transfer the shares of EHA from HD1 to

another non-DOCA entity within the group to facilitate the subsequent implementation of the proposed JSW-HD1

DOCA (where EHA is not part of the JSW-HD1 DOCA proposal and is expected to be wound up with the other non-

DOCA entities).

Subject to approval of the DOCAs by creditors, the Administrators will:

transfer the employment of a limited number of employees from non-DOCA entities to HD1, along with the

employee entitlements for those employees;

transfer certain equipment between JSW and HD1;

transfer certain inventory held by non-DOCA entities to HD1 at a price equal to the current value of that

equipment,

(together, "the Reorganisation").

JSW-HD1 DOCA 13.2

Key terms of the JSW-HD1 DOCA 13.2.1

The Administrators will become the Deed Administrators of the JSW-HD1 DOCA;

The DOCA Proponents will make a payment of $20 million (“the Deed Fund”) as consideration for the shares in JSW

and HD1;

A creditors' trust (“the Trust”) will be immediately established under a Creditors' Trust Deed for the benefit of the

creditors of HD1 and JSW with:

the Deed Fund (less any consideration payable by JSW or HD1 to one or more non-DOCA entities for the transfers

of assets contemplated by the Reorganisation) being paid into the Trust;

the Deed Administrators being appointed trustees of the Trust ("Trustees"); and

the following assets being transferred into the Trust, to be realised by the Trustee.

＞ all cash held by the Administrators or the Deed Administrators in their capacities as administrators or deed

administrators of JSW and HD1; and

We have not received a DOCA proposal for AGD, EDMSM, EDMSO, EHA, GOS, HDJSW, HD2, HDC, HEH, HEA or

REI. As these entities are insolvent and no DOCA has been proposed, the Administrators’ recommend that

creditors of these entities vote in favour of each being placed into liquidation.

D14-161201-S439AReport-HM 41

＞ any intercompany debts owed to JSW or HD1 by another Hughes Drilling group company.

Save for expressly excluded claims, all creditor claims against HD1 and JSW arising before the date of appointment of

the Administrators to JSW and HD1 (that is, 22 September 2016) will be extinguished as against HD1 and JSW, and

will instead become claims against the Trust. In other words, on completion of the DOCA, most creditors of HD1 and

JSW will cease to be creditors of those companies, and will instead become beneficiaries of the Trust.

Excluded claims will include liabilities in respect of:

employees who will continue their employment with JSW or HD1 following completion of the DOCA (other than

liabilities for unpaid superannuation);

certain finance leases;

certain contracts to which JSW or HD1 is a party and which will remain on foot following the execution and

completion of the DOCA; and

insurance proceeds (under third party insurance contracts), which liabilities would have been accorded priority

under section 562 of the Corporations Act, if that section were to apply.

Creditors with excluded claims will continue to be able to claim against JSW and HD1 in respect of those specific

liabilities, following the completion of the DOCA. However, they will not be entitled to participate in any distributions

from the Trust in respect of those claims.

The Trustees will distribute funds in the Trust in the following order:

first, to the Administrators or Deed Administrators for any amount which they are entitled to be paid or

indemnified for under the JSW-HD1 DOCA, including all debts and liabilities incurred by them during the

administration and deed administration of JSW and HD1;

next, to the Trustees of the Creditors' Trust Deed in satisfaction of their remuneration and costs;

next, in satisfaction of any claims of employee-creditors (including the ATO in respect of superannuation

guarantee charges) against JSW and HD1, which claims would have been accorded priority over other unsecured

claims, if sections 556(1)(e), (g) and (h) of the Corporations Act were to apply;

next, to the Bank, as first ranking secured creditor of JSW and HD1;

next, to Nicholas Silverthorne and Maureen Silverthorne as trustees for the Silverthorne Trust (“Silverthorne”), as

second ranking creditor of JSW (however, the Administrators do not expect there to be any residual funds

available for distributions to Silverthorne); and

next, to the unsecured creditors on a pro rata basis (however, the Administrators do not expect there to be any

residual funds available for distributions to unsecured creditors).

All shares in JSW (currently held by HD JSW) will be transferred to Allegro or its nominee. The minority shareholding

in JSW will also be transferred to Allegro or its nominee by agreement with that minority shareholder;

All shares in HD1 will be transferred to NRW or its nominee;

Upon:

the Reorganisation being effected;

the DOCA Proponents (or their nominees) acquiring all of the shares in HD1 and JSW;

payment of the Deed Fund by the DOCA Proponents into the Trust; and

releases of relevant security interests registered against JSW and HD1 being effected,

but before any distributions from the Trust are made, the JSW-HD1 DOCA will be effectuated and terminated, and

HD1 and JSW will cease to be subject to Deed of Company Arrangement.

Pre-conditions to completion of DOCA 13.2.2

The completion of the JSW-HD1 DOCA will be conditional upon, and will occur after, satisfaction of the following

conditions:

Third party consents or waivers being provided in respect of certain contracts to which JSW or HD1 are a party;

D14-161201-S439AReport-HM 42

Certain secured creditors voting in favour of the JSW-HD1 DOCA;

Completion of the Reorganisation;

There being no material work health and safety event in the businesses run by JSW and HD1 in the period prior to

completion of the JSW-HD1 DOCA; and

Execution of the Creditors’ Trust Deed.

Trustees’ details and proposed remuneration 13.2.3

Jason Preston, Shaun Fraser and Jamie Harris, the Administrators, are proposed to be appointed as Trustees of the

Trust. All are Chartered Accountants, registered liquidators and each have in excess of 15 years’ professional

experience in the insolvency industry. The Administrators consider that they have the requisite skill and competencies

to be the Trustees.

They hold professional indemnity insurance in excess of $20 million. No performance bond has been provided as

security and no indemnities will be provided. In accordance with usual practice, the Creditors' Trust Deed will provide

the Trustees with an indemnity out of the Creditors’ Trust assets in a similar manner to the Administrators being

indemnified out of the Company’s assets. We are not aware of any requirements for the Trustees to hold an AFSL for

the purpose of the Creditors Trust.

The basis of the Trustees’ remuneration will be consistent with that of the Administrators and proposed Deed

Administrators, to be calculated based on time spent at McGrathNicol standard hourly rates.

Our estimate of future remuneration covering the activities to be undertaken by the Trustees is included in Annexure E

to this report and is to be drawn as and when incurred (subject to prior creditor approval). The Trustees’

remuneration will retain its priority for payment in a similar manner as the remuneration of the Administrators.

Operation of the Creditors' Trust Deed 13.2.4

The provisions in the Creditors' Trust Deed will adopt the order of priority set out in Section 556(1) of the Act, which

would otherwise be in place if the companies were placed into liquidation and the Trustees were appointed as

Liquidators.

The Trustees will have the responsibility for:

realising any remaining assets;

calling for and adjudicating on creditor (beneficiary) claims; and

payment of distributions to creditors.

The Creditors' Trust Deed will be governed by the law of New South Wales and will be subject to the Trustee Act of

New South Wales (1925 No.14). As a Creditors' Trust is not specifically governed by the Corporations Act, the powers

and responsibilities of the Trustees will be expressly set out in the Trust Deed and as far as possible, mirror the

provisions of the Corporations Act as they apply to Deeds of Company Arrangement.

Accordingly, there are not likely to be any significant deficiencies in the powers of the Trustees to perform the

functions under the DOCA or the Creditors' Trust Deed.

A copy of the Creditors' Trust Deed will be annexed to the DOCA. These documents will be lodged with ASIC and be

publicly available.

Employee claims under a Trust 13.2.5

When a company is placed into liquidation, employee creditors may be entitled to make a claim under the Fair

Entitlement Guarantee Scheme (“FEG”).

This option will not be available to employees of JSW and HD1 under the proposed DOCA and Creditors’ Trust,

however, it is expected that employee-creditors of JSW and HD1 will receive full payment of their crystallised

entitlements under the proposed DOCA/Creditors’ Trust. In addition, the majority of existing employees of JSW and

HD1 will also have the benefit of continued employment with those companies, and their ability to claim against the

companies (other than in respect of unpaid superannuation contributions) will be preserved following effectuation of

the DOCA.

D14-161201-S439AReport-HM 43

In the event the DOCA is terminated (due to the DOCA terms not being achieved), and the Company is placed into

liquidation, employee creditors will be able to lodge a claim under FEG.

Potential tax implications of a Trust 13.2.6

We have not conducted any detailed assessment or sought taxation advice in relation to the proposed arrangements.

We advise creditors to seek their own independent, professional advice in relation to their individual taxation

circumstances.

Other information about the Trust 13.2.7

Having regard to ASIC’s Regulatory Guide 82 – External administration: Deeds of company arrangement involving a

creditors’ trust (“RG 82”), the Administrators further note the following:

Reasons why the JSW-HD1

DOCA involves a creditors’

trust

The DOCA Proponents have proposed the use of a creditors’ trust in the context of

the JSW-HD1 DOCA.

The Administrators understand that one reason for the use of a creditors’ trust is to

enable JSW and HD1 to exit all forms of external administration, and resume normal

operations of their businesses, as soon as possible after the second meeting of

creditors. In particular, this would allow the directors of JSW and HD1 (including any

new directors) to regain full control of the companies and the companies will no

longer be required to use the notification “subject to deed of company arrangement”

on their public documents.

The Administrators consider that returns to creditors, and the timing of payment,

under a DOCA involving creditors’ trust will not be materially different to those under

DOCA which does not involve a creditors’ trust. On the other hand, a DOCA without

a creditors’ trust will be less attractive, and might not be acceptable to, the DOCA

Proponents.

Key events and timing The key events under the JSW-HD1 DOCA proposal and the estimated timing of

those events are as follows:

(a) Execution of the DOCA is likely to occur on the day of the second meeting of

creditors (that is, on 8 December 2016);

(b) Completion of the Reorganisation is likely to occur on the same day as the

DOCA is executed;

(c) Creation of the Trust by execution of the Creditor will, again, occur on the same

day as the DOCA is executed;

(d) Payment by the DOCA Proponents of the Deed Fund (less any relevant

deductions) into the Trust fund will occur one business day after the execution of the

JSW-HD1 DOCA (that is, most likely, on 9 December 2016);

(e) Transfer of shares in JSW and HD1 to the DOCA Proponents will occur on the

day payment of the Deed Fund is made (most likely 9 December 2016).

(f) Releases and extinguishment of all creditors’ claims (other than excluded claims)

against JSW and HD1, and substitution with rights as beneficiaries of the Trust, will

take effect on the day payment of the Deed Fund is made (most likely, 9 December

2016). This addresses some of the key risks to creditors identified in paragraphs

1.8(a)(ii) and 1.8(b) of RG 82.

(g) Effectuation and termination of the DOCA will occur on the same day as the

payment of the Deed Fund and the transfer of shares in JSW and HD1.

(h) Distributions to beneficiaries of the Trust are expected to occur within 2 to 3

months after termination of the DOCA.

D14-161201-S439AReport-HM 44

In other words, there may be a short time gap between the date on which:

the JSW-HD1 DOCA is effectuated (and creditors’ claims against JSW and HD1

extinguished); and

creditors (who will become beneficiaries of the Trust) will receive payments from

the Trust fund.

Return to creditors This is explained in detail in section 14 of this report. In summary, the Administrators

anticipate that:

Claims of employee-creditors of JSW and HD1 (whose claims have crystallised,

for example, by reason of retrenchment) and claims of the ATO against JSW and

HD1 (in respect of unpaid superannuation guarantee charge) will be paid in full

from the Trust fund;

Westpac, being the primary secured creditor of JSW and HD1, will receive the

balance of the Trust fund in partial repayment of the secured debt; and

Silverthorne and unsecured creditors of JSW and HD1 will not receive any

distributions.

Powers of Trustees Powers of the Trustees will be provided for and governed by the terms of the

Creditors’ Trust Deed. It is anticipated that the Creditors’ Trust Deed will provide for

broad powers of the Trustees to administer the Trust and realise Trust assets.

Claims of creditors Creditors’ claims (other than excluded claims) which arose before the date of

appointment of the Administrators (22 September 2016) the will be extinguished and

replaced by an entitlement to claim as a beneficiary of the Trust.

The Trustee will adjudicate and determine those beneficiary claims in a similar

manner as a liquidator would if JSW and HD1 were in liquidation.

Other creditor / beneficiary

differences

The protections and rights that creditors would have under the Corporations Act as

creditors of companies subject to a DOCA might not be identical to the protections

and rights they would enjoy as beneficiaries of the proposed Trust.

For example, beneficiaries of the proposed Trust may not have the same ability to

challenge decisions, actions or omissions of the Trustees, as creditors would as

against a deed administrator. In addition, the Trustees will not have the same

reporting obligations, or accountability to creditors, the Court or ASIC, as a deed

administrator would in relation to a company subject to a DOCA.

In negotiating the terms of the Creditors’ Trust Deed, the Administrators will ensure

that those terms provide for adequate protection of beneficiaries.

Compliance opinion The Administrators are of the opinion that the DOCA Proponents are likely to able to

comply with their obligations under the DOCA proposal (including their obligation to

pay the Deed Fund into the Trust), if the JSW-HD1 DOCA is approved by creditors.

Solvency statement Having regard to the proposed extinguishment of creditors’ claims under the DOCA

and the financial capacity of DOCA Proponents, the Administrators are of the opinion

that JSW and HD1 will be solvent at the date of effectuation of the JSW-HD1 DOCA,

should that DOCA be wholly effectuated on the terms proposed.

In our opinion, the Administrators consider that the Trust is consistent with the objectives of Part 5.3A set out in

section 435A of the Corporations Act. More specifically, the Administrators consider the Trust to be:

In the interests of creditors as a whole;

D14-161201-S439AReport-HM 45

In accordance the purpose and policy of Part 5.3A; and

Consistent with public interest.

HDL DOCA 13.3

The DOCA Proponents also propose a holding DOCA for HDL for the purpose of allowing the Administrators (who will

become the Deed Administrators) to investigate potential claims and to explore a sale of the ASX listed shell of HDL.

The HDL DOCA is intended to be put in place for 6 months and (unless extended by creditors) will terminate

automatically at the end of that period if a recapitalisation of HDL has not been achieved, following which HDL will be

wound up.

The Deed Administrators will also have the power to convene a meeting of creditors to consider the termination of

the HDL DOCA at any time after 90 days following its commencement date, if they form the view that a proposal for

HDL's recapitalisation is unlikely to be received or any proposal is unlikely to be in a form which the Deed

Administrators will be able to recommend to creditors having regard to, amongst other things, the Deed

Administrators’ assessment of potential claims which could be pursued by HDL if it were to be wound up.

Under the HDL DOCA:

no property of HDL will be available for distribution to creditors;

there will be no release of claims by or against HDL during the term of the HDL DOCA;

there will be a moratorium on the enforcement of claims against HDL during the term of the HDL DOCA; and

if a suitable proposal for the recapitalisation of HDL is received during the term of the HDL DOCA, the Deed

Administrators will convene a meeting of creditors to consider a variation to the HDL DOCA to facilitate the

proposed recapitalisation.

The proposed holding DOCA does not give rise to any concerns identified in paragraphs 1.23 to 1.25 of RG 82.

D14-161201-S439AReport-HM 46

Anticipated return to creditors 14

As outlined in section 12, we recommend that:

the creditors of HD1 and JSW vote in favour of the proposed JSW-HD1 DOCA,;

the creditors of HDL vote in favour of the proposed HDL DOCA; and

the creditors of all other entities vote in favour of each being placed into liquidation.

In sections 14.1.1 and 14.1.2, we outline the difference in the estimated outcomes for creditors of HD1 and JSW in

liquidation and under the proposed JSW-HD1 DOCA.

In section 14.1.3, we outline the difference in the estimated outcomes for creditors of HDL in an immediate liquidation and

under the proposed HDL DOCA.

D14-161201-S439AReport-HM 47

HD1 14.1.1

Our current estimate of the return available to creditors of HD1 on a ‘high’ and ‘low’ basis under a liquidation scenario,

and on the proposed DOCA, is set out below.

Key points:

In both the ‘high’ and ‘low’ liquidation scenarios there are insufficient funds available from circulating asset recoveries

to pay priority employee creditor claims in full. We note that under a liquidation scenario, employees would gain

access to the Federal Government’s Fair Entitlement Guarantee Scheme (“FEG”), allowing them to claim reimbursement

Estimated outcome statement - HD1

DOCA

$'000 Notes Low High

Circulating asset recoveries

DOCA fund / cash on hand - - 5,337

Pre-appointment debtors 2,874 2,874 -

Pre-appointment WIP 1,779 1,779 -

Inventory 81 81 -

Other recoveries (including potential Liquidators' recoveries) -

Total estimated circulating recoveries 4,733 4,733 5,337

Professional fees (558) (558) (448)

Trading costs of administration (1,820) (1,502) (1,303)

Other costs (including those for potential Liquidators' recoveries) -

Net funds available to priority creditors 2,356 2,674 3,585

Priority creditors claims

Unpaid superannuation 1 (2,797) (2,797) (2,797)

Priority creditors - entitlements 2 (7,848) (7,848) (788)

Surplus / (shortfall) to priority / secured creditors 3 (8,289) (7,971) 0

Non-circulating asset recoveries

Plant and equipment - remaining 7,026 7,729 -

Plant and equipment - subject to offer - - 11,106

Plant and equipment (net of realisation costs) 5,944 6,952 11,106

Total estimated non-circulating recoveries 5,944 6,952 11,106


Trading costs of administration (1,440) (1,123) (3,695)

Surplus / (shortfall) to secured creditor 3 3,950 5,275 6,963

Estimated return to creditors - HD1

DOCA


HD1

Priority - unpaid super 1 2,356 2,674 2,797

Priority - other employee claims 2 Nil Nil 788

Secured 3 3,950 5,275 6,963

Ordinary unsecured Nil Nil Nil

Total 2,356 2,674 2,797

Notes:

Liquidation

3: The secured creditor return is presented on a standalone basis for each entity. Overall secured creditor return is maximised

under the DOCA.

Liquidation

1: Total unpaid superannuation guarantee charge of $2.8 million for HD1 is paid in full under the DOCA.

There is a shortfall from circulating recoveries in both the low and high case liquidation scenarios.

2: In a DOCA the majority of employees continue their employment with entitlements preserved. Claims for priority creditors

which have crystalised are paid in full via the DOCA.

Unable to be estimated


D14-161201-S439AReport-HM 48

of their outstanding entitlements (subject to FEG approval and excluding unpaid superannuation). In those

circumstances, FEG would have a right of subrogation in relation to any employee claim paid.

Through a DOCA, the majority of employees will continue to work for HD1, with their entitlements continuing against

the recapitalised entity. Any employees of HD1 that do not continue employment will have their outstanding

entitlements paid in full through proceeds of the DOCA Fund.

There is no return forecast under any scenario for unsecured creditors or shareholders.

In the DOCA proposal, a number of the leases are paid out or

The above liquidation analysis does not include any recoveries from voidable transactions or insolvent trading claims.

As outlined in section 11.2.4, the value of the potential insolvent trading claim is uncertain. Similarly, as outlined in

section 11.3 the value of potentially voidable transactions identified in our investigations are low ($300,00 for HD1)

and recovery is uncertain. Even if these amounts were recovered, we consider the net recovery (after costs) would be

fully applied to priority creditor claims and there would be no benefit to unsecured creditors.

An important consideration in the assessment of DOCA v liquidation outcomes is risk. A liquidation would be

complex, involve the termination of contracts (potentially crystallising significant damages claims from contract

customers), terminating employees and the realisation of plant and equipment in fire sale circumstances. As a result,

there will be significant risk associated with liquidation.

By contrast, the DOCA preserves the ongoing business of HD1, while providing certainty and is capable of execution in

a relatively short timeframe.

D14-161201-S439AReport-HM 49

JSW 14.1.2

Our current estimate of the return available to creditors of JSW on a ‘high’ and ‘low’ basis under a liquidation scenario,

and on the proposed DOCA is set out below.

Estimated outcome statement - JSW

DOCA


Circulating asset recoveries

DOCA fund / cash on hand - - 2,697

Pre-appointment debtors 1,459 1,459 -

Pre-appointment WIP 2,814 2,814 -

Inventory 321 321 -

Other recoveries (including potential Liquidators' recoveries) -

Total estimated circulating recoveries 4,595 4,595 2,697


Trading costs of administration (1,106) (886) (769)

Other costs (including those for potential Liquidators' recoveries) -

Net funds available to priority creditors 2,816 3,036 1,364

Priority creditors claims

Unpaid superannuation 1 (1,364) (1,364) (1,364)

Priority creditors - entitlements 2 (2,152) (2,152) -

Surplus / (shortfall) to priority / secured creditors 3 (700) (480) (0)

Non-circulating asset recoveries

Plant and equipment (net of realisation costs) 6,000 6,916 8,420


Trading costs of administration (994) (774) (2,626)

Surplus / (shortfall) to secured creditor 3 4,345 5,481 5,231

Estimated return to creditors - JSW

DOCA


HD1

Priority - unpaid super 1 1,364 1,364 1,364

Priority - other employee claims 2 1,452 1,672 -

Secured 3 4,345 5,481 5,231

Ordinary unsecured Nil Nil Nil

Total 7,161 8,517 6,595

Notes:

3: The secured creditor return is presented on a standalone basis for each entity. Overall secured creditor return is maximised

under the DOCA.

1: Total unpaid superannuation guarantee charge ("SGC") of $1.4m million for JSW is paid in full under the DOCA. There is a

surplus from circulating asset recoveries in both the low and high case liquidation scenarios to pay the SGC liability in full.

2: Under DOCA, the majority of employees continue their employment with entitlements preserved.

Liquidation

Liquidation



D14-161201-S439AReport-HM 50

Key points:

In all scenarios, there are sufficient funds available from circulating asset recoveries to pay the unpaid superannuation

amounts in full.

In both the ‘high’ and ‘low’ liquidation scenarios, after the payment of unpaid superannuation, there are insufficient

funds available from circulating asset recoveries remaining to pay other priority employee creditor claims in full. We

note that under a liquidation scenario, employees would gain access to the federal government’s Fair Entitlement

Guarantee Scheme (“FEG”), allowing them to claim reimbursement of their outstanding entitlements (subject to FEG

approval and excluding unpaid superannuation). However, FEG has a right of subrogation to any employee claim

paid.

Under a DOCA, the majority of employees will continue employment, with their entitlements continuing against the

recapitalised entity.

The return to the secured creditor is better under DOCA than our estimate of the return from a liquidation.

There is no return forecast under any scenario for unsecured creditors or shareholders.

The above analysis does not include any recoveries from voidable transactions or insolvent trading claims. As outlined

in section 11.2.4, the value of the potential insolvent trading claim is uncertain. Similarly, as outlined in section 11.3

the value of potentially voidable transactions identified in our investigations is low ($493,000 for JSW) and recovery

uncertain. Even if these amounts were recovered, we consider the net recovery (after costs) would be fully applied to

priority creditor claims and there would be no benefit to unsecured creditors.

An important consideration in the assessment of DOCA v liquidation outcomes is risk. A liquidation would be

complex, involve the termination of contracts (potentially crystallising significant damages claims from contract

customers), terminating employees and the realisation of plant and equipment in fire sale circumstances. As a result,

there will be significant risk associated with liquidation.

By contrast, the DOCA preserves the ongoing business of JSW, while providing certainty and is capable of execution in

a relatively short timeframe.

HDL 14.1.3

Under the HDL DOCA, as it is a holding DOCA only, there will be no assessment of claims and no distributions to

creditors. Accordingly, at this time there is no comparator in relation to the potential outcome in liquidation.

D14-161201-S439AReport-HM 51

Creditor information on remuneration 15

Annexure E of this Report deals with:

remuneration incurred for the period 22 September 2016 to 18 November 2016;

remuneration forecast to be incurred for the period 19 November 2016 to 8 December 2016; and

remuneration forecast to be incurred for the period 9 December 2016 to 27 January 2017, under each of the

outcomes available to creditors.

Receipts and payments 16

Details of receipts and payments during the Administration are detailed in Annexure E.

Committee of inspection 17

In the event that creditors resolve that the Companies be wound up, the Act provides that a Committee of Inspection

(“COI”) may be formed.

In these circumstances, a COI would provide the Liquidators with a sounding board as to likely creditor views on any

contentious issues, and may approve certain matters (for example compromises of claims and remuneration requests).

At the meeting of creditors convened for 8 December 2016, for those entities being placed in liquidation, creditors will be

invited to consider whether a COI should be formed, and if so, to nominate members.

Second Meetings of Creditors 18

The second meetings of creditors for each company have been convened to be held on Thursday, 8 December 2016 at

1:00pm AEST Cliftons Brisbane, Level 24, 288 Edward Street, Brisbane QLD 4000.

Creditors will also be able to attend via video conference from Cliftons Perth, Level 4, Parmelia House, 191 St Georges

Terrace, Perth WA 6000.

Creditors who intend to vote at the meeting are required to lodge a formal proof of debt with Link Market Services.

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

included at Annexure G.

Creditors may exercise their right to vote by voting at the meeting in person, by appointing a proxy or by postal vote. The

proxy forms lodged by creditors for the first meeting cannot be used for the second meeting. Accordingly, creditors should

ensure that a proxy form, power of attorney or evidence of appointment of a company representative is completed and

lodged with Link Market Services. A blank proxy form is included at Annexure H.

Under the Act, the proxy forms lodged by creditors for the first meeting cannot be used for the second meeting.

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

power of attorney or evidence of appointment of a company representative is completed.

Documents may be lodged with Link Market Services prior to the meeting or may be brought to the meeting. Registration

for the meeting will commence at 12pm AEST on the day of the meeting.

Creditors who are interstate and unable to attend, a copy of the minutes of the meetings will be made available on our

website (www.mcgrathnicol.com) after the meetings.

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Contact 19

ASIC’s “Insolvency information for directors, employees, creditors and shareholders is included at Annexure I.

For all further enquires please refer to:

McGrathNicol Website

http://www.mcgrathnicol.com/assignments/

Link Market Services

Creditor Hotline: 1300 365 798

Email: [email protected]

Dated Thursday, 1 December 2016

Shaun Fraser

Joint and Several Administrator

Jason Preston


http://www.mcgrathnicol.com/assignments/

D14-161201-S439AReport-HM 53

Appendices 20

Annexure A: Administrators’ Statement pursuant to Section 439A(4)(b) of the Corporations Act 2001

Annexure B: Statutory information

Annexure C: Notice of Meeting

Annexure D: Declaration of Independence, Relevant Relationships and Indemnities

Annexure E: Remuneration Reports for each entity

Annexure F: Schedule of Remuneration and Rates

Annexure G: Proof of Debt form

Annexure H: Proxy form

Annexure I: ASIC “Insolvency information for directors, employees, creditors and shareholders”

ANNEXURE A: Administrators’ Statement pursuant to Section 439A(4)(b) of

the Corporations Act 2001

Administrators’ Statement pursuant to Section 439A(4)(b) of the Corporations Act 2001

Hughes Drilling Ltd ACN 12 124 279 750

Australia Gas Drilling Pty Ltd ACN 13 139 242 890

EDMS Metals Pty Ltd ACN 29 146 399 760

Every Day Mine Services Operations Pty Ltd ACN 40 003 949 148

Express Hydraulics (Aust) Pty Ltd ACN 91 155 845 864

G.O.S. Drilling Pty Ltd ACN 57 068 520 794

HD JSW Pty Ltd ACN 83 165 895 072

Hughes Drilling 1 Pty Ltd ACN 31 011 007 702


Hughes Drilling Corporate Pty Ltd ACN 64 146 398 718

Hughes Equipment Hire Pty Ltd ACN 23 146 398 923

Hyd-Elec Australia Pty Ltd ACN 89 151 316 611

JSW Australia Pty Ltd ACN 22 125 989 791

Reichdrill Australia Pty Ltd ACN 69 162 841 287

(Administrators Appointed)

(collectively referred to as “Hughes Drilling Group”)

We, Jason Preston, Shaun Fraser and Jamie Harris, provide the following statement setting out our opinion about each of

the following matters and our reasons for these opinions:

(i) Whether it would be in the creditors’ interests for the Hughes Drilling Group to execute a Deed of Company

Arrangement (“DOCA”)

For the reasons disclosed in Sections 12 to 14 of this Report, we recommended that JSW Australia Pty Ltd, Hughes Drilling

1 Pty Ltd and Hughes Drilling Ltd approve and execute the proposed DOCAs.

(ii) Whether it would be in the creditors’ interests for the Administration to end.

For the reasons disclosed in Section 12.2 of this Report, we do not consider it to be in creditors’ interests for the

Administration to end.

Our reason for this opinion is that, based on the financial position of the Hughes Drilling Group, it would be unable to pay

its debts as and when they fell due. Accordingly, we cannot recommend that the Administration end.

(iii) Whether it would be in the creditors’ interests for the Hughes Drilling Group to be wound up

For the reasons disclosed in Section 12.3 of this Report, our opinion is that it would be in creditors’ best interests that the

entities not included in the proposed DOCAs be wound up.

Dated: 1 December 2016

Shaun Fraser


StatutoryAppendices-SNgc

ANNEXURE B – Statutory Information


B.1 Hughes Drilling Limited

Statutory information

ACN 124 279 750

Registered in New South Wales on 6 March 2007

Registered office: 12 Byte Street Yatala QLD 4207

Principal place of business: 12 Byte Street Yatala QLD 4207

Type/ class: Australian listed public company, limited by shares

Description: Parent entity, non-trading

Directors and officers

Report as to Affairs


Name Role Appointment Date Resignation Date

Andrew John Drake Director 10 February 2012 -

Jeffrey William Branson Director 3 October 2013 -

Douglas Jon Grewar Director 1 July 2016 -

Paul Edward Brenton Secretary 11 August 2010 -

Nicholas John Silvethorn Former director 3 October 2013 6 July 2016

Robert Charles Hughes Former director 10 February 2012 1 July 2016

Barry Frederick O'Connor Former director 5 November 2012 30 June 2016

Gary Walter Belcher Former director 11 August 2014 26 April 2016


HDL - Director's RATA

$'000 Book value Director's net realisable value

Assets

Cash at bank 185 185

Cash on hand 2 2

Sundry debtors 79,577 Did not specify

Other assets (includes $4,840 investment in subsidiaries) 12,353 Did not specify

Total assets 92,117 Undetermined

Liabilities

Partly secured creditors (18,918) Did not specify

Unsecured creditors (22,032) Did not specify

Total liabilities (40,951) -

Net assets 51,167 Undetermined

Source: Director's RATA


Shareholders

Security interests

Creditor profile

Shareholders


1 Learob Pty Ltd (R & L Hughes Family A/C) 71,388,074 34.2%

2 National Nominees Limited 34,264,597 16.4%

3 HSBC Custody Nominees (Australia) Limited 19,171,588 9.2%

4 Bond Street Custodians Limited (Forager Wholesale Value Fd) 6,151,126 3.0%

5 Skye Alba Pty Ltd (The Skye Alba Fund A/C) 5,700,000 2.7%

6 Citicorp Nominees Pty Limited 4,397,611 2.1%

7 Mellett Super Pty Ltd (Mellett A Fund A/C) 3,717,000 1.8%

8 Vanward Investments Limited 3,000,000 1.4%

9 RPM Super Pty Ltd (RPM Super Fund A/C) 2,894,941 1.4%

10 Saabm Pty Ltd (A & M Jacklin Family A/C) 2,434,017 1.2%

Total shares held by top 10 shareholders 153,118,954 73.4%

Total shares held by all other shareholders 55,551,295 26.6%



Security interests



Other lenders All present and after-acquired property Various 39

Motor vehicles Motor vehicles Various 164



Total 494


Creditor profile

Creditor group Number Value ($)

Secured creditor 1 40,421,351

Employees 4 43,305

Landlords - -

Financiers - -

Unsecured creditors 14 237,880

Total 19 40,702,536

Source: Company books and records


Financial information

Key points:

HDL is the holding group entity and has minimal trading operations.

Overheads include director’s fees, legal fees and other administration costs.

Finance costs relate to interest paid on borrowings on Westpac facilities.

Statement of Financial Performance

A$'m FY14 FY15 FY16

Revenue - 0.0 -

COGS - - -

Margin - 0.0 -

Margin % - 100% -


Depreciation expense - - -

Overheads (1.6) (0.8) (1.0)

Operating profit (1.6) 0.1 (1.0)

Impairment costs - - -

Finance (interest) costs 0.7 (0.2) 0.5

Profit before tax (0.9) (0.1) (0.5)

Income tax 0.2 (1.5) (0.6)

NPAT (0.7) (1.6) (1.1)

EBITDA (1.6) 0.1 (1.0)

Source: Management accounts (FY14; FY15 and FY16)


Key points:

HDL reported a net asset position for the entire period examined due to amounts receivable from intercompany loans.

Net intercompany loans receivable is $59.7 million in FY16 and is comprised of loan accounts between AGD, EDMSM,

EDMSO, EHA, GOS, HD JSW, HD1, HDC, HEH, JSW, RD and Reichdrill Inc.

Intercompany debtors were reported at book value and no impairments were taken in the accounts.

Non-current assets includes goodwill on investments in JSW, RD and HEA.

Other non-current assets are comprised of the deferred tax asset account, stated at $7.3 million in FY16.

Borrowings include hire purchase facilities on drill rigs through Westpac, and have been reclassified from non-current

to current from FY15 to FY16.

Statement of financial position

$'m Jun-14 Jun-15 Jun-16

Current assets

Cash and cash equivalents 0.0 0.0 0.0

Trade receivables 0.1 0.1 0.1

Inventories - - -

Other current assets - - -

Intercompany loans receivable 42.7 56.7 59.7

Total current assets 42.8 56.8 59.9

Non-current assets

Plant and equipment 0.0 - 0.0

Intangible assets - 0.0 -

Investment 4.6 4.8 4.8

Other non-current assets 8.7 8.0 7.3

Total non-current assets 13.4 12.8 12.1

Total assets 56.2 69.6 72.0

Current liabilities

Trade and other payables (0.6) (0.9) (0.9)

Borrowings - (2.8) (15.9)

Bank overdraft - (2.4) (3.1)

Intercompany loans payable - - -

Related party loans (0.6) (0.6) -

Taxation - - 0.1

Other current liabilities - - -

Total current liabilities (1.2) (6.8) (19.7)

Non-current liabilities

Non-current borrowings - (9.5) -

Other non-current liabilities - (0.0) (0.0)

Total non-current liabilities - (9.5) (0.0)

Total liabilities (1.2) (16.3) (19.7)

Net assets/(liabilities) 55.0 53.3 52.2



B.2 Australian Gas Drilling Pty Ltd


ACN 139 242 890

Registered in New South Wales on 3 September 2009



Type/ class: Subsidiary of Australian listed public company, limited by shares

Description: Dormant entity



Shareholders



Paul Edward Brenton Director 31 August 2011 -

Paul Edward Brenton Secretary 22 March 2011 -


Summarised Report as to Affairs - as at 22 September 2016

$'000 Notes Book value Director's net realisable value

Assets

Cash at bank 0 0


Other assets 0 0


Liabilities



Net assets (7,855) Undetermined


Shareholders


1 Hughes Drilling Limited 10 100.0%

Total shares on issue 10 100.0%



Security interests

Creditor profile


As this entity does not hold any assets or liabilities and has minimal historical financial trading information, we have not

presented financial information for this entity.

Security interests



Other lenders All present and after-acquired property GE 1



Total 9


Creditor profile



Employees - -

Landlords - -

Financiers - -

Unsecured creditors - -

Total 1 40,421,351



B.3 JSW Australia Pty Ltd


ACN 125 989 791

Registered in Western Australia on 15 June 2007

Registered office: 5 Corokia Way Bibra Lake WA 6163

Principal place of business: 5 Corokia Way Bibra Lake WA 6163


Description: Subsidiary trading in drilling, blasting and water services



Shareholders



Paul Edward Brenton Director 1 July 2016 -

Paul Edward Brenton Secretary 3 October 2013 -

Robert Charles Hughes Former Directory 3 October 2013 1 July 2016




Assets

Cash at bank 0 0

Cash on hand 0 0


Stock 9,760 Did not specify

Plant and equipment 11,957 Did not specify

Other assets 1,326 Did not specify

Assets subject to specific charges (net amount owing) 11,786 Did not specify


Liabilities

Employee entitlements (7,434) Did not specify






Shareholders


1 HD JSW Pty Ltd 1,000 96.0%

2 Jeffrey William Branson 42 4.0%

Total shares on issue 1,042 100.0%



Security interests

Creditor profile


JSW has reported net profits for each year during the period examined.

Revenue declined by 35% in FY16 from a decrease in lower margin water services work.

EBITDA reduced $3.3 million to $10.7 million in FY16.

COGS includes wages and consumable costs associated with operation of key client contracts.

Overheads relate to general sales, administration, rent and employee expenses.

Security interests



Other lenders All present and after-acquired property The Silverthorne Trust 1




Total 154


Creditor profile



Employees 181 2,117,694

Landlords 3 Unknown

Financiers 3 Unknown

Unsecured creditors 181 3,693,706

Total 369 46,232,751


JSW - Statement of Financial Performance

A$'m FY14 FY15 FY16

Revenue 33.2 50.7 32.9

COGS (23.1) (33.6) (20.6)

Margin 10.1 17.1 12.3

Margin % 31% 34% 37%



Overheads (3.3) (3.3) (1.9)





Income tax (0.8) (2.4) 0.7

NPAT 1.7 5.2 3.9

EBITDA 7.0 14.0 10.7



Key points:

JSW reported a net asset position during each year of the period examined.

JSW’s net assets increased during the period examined due to increases in inventory and plant and equipment

balances (purchases of additional rigs and spares). Our analysis to follow indicates that June 2016 book values may be

overstated (on a realisable value basis) and this is set out further in section [ ] of this report.

A decrease in trade receivables for FY16 reflects both a decrease in sales and efficient management of debtors.

The net intercompany loan payable of $9.7 million in FY16 is comprised of loan accounts between HDL, HD1, HD2 and

EHA and relates mainly to purchases of drill rigs and components.

Borrowings (both current and non-current) decrease over the period examined as JSW continues to repay amounts

owing on Westpac financed equipment. Borrowings also include amounts owing to Atlas Copco and John Silverthorne.

Other non-current liabilities increased to $3.4 million due as a result of a $3.2 million deferred tax liability.



Current assets



Inventories 4.7 8.5 11.4


Intercompany loans receivable - - -


Non-current assets

Plant and equipment 22.3 23.8 30.1

Intangible assets - - 0.0

Investment - - -




Current liabilities


Borrowings (8.5) (6.6) (3.6)

Bank overdraft (1.5) (2.6) (1.7)

Intercompany loans payable (5.5) (8.2) (9.7)

Related party loans - - (3.1)

Taxation (0.0) (1.6) -

Other current liabilities (0.8) (1.1) (1.1)



Non-current borrowings (5.9) (3.0) (0.2)

Other non-current liabilities (0.3) (0.2) (3.4)

Total non-current liabilities (6.2) (3.2) (3.5)





B.4 EDMS Metals Pty Ltd


ACN 146 399 760








Shareholders

Security interests




Paul Edward Brenton Secretary 17 September 2010 -




Assets

Cash at bank 0 0

Sundry debtors 732 Did not specify

Other assets 0 Did not specify

Total assets 732 Undetermined

Liabilities

Unsecured creditors (238) Did not specify

Total liabilities (238) -

Net assets 494 Undetermined


Shareholders





Security interests



Total 2



Creditor profile




Creditor profile



Employees - -

Landlords - -

Financiers - -


Total 1 40,421,351



B.5 Every Day Mine Services Operations Pty Ltd


ACN 003 949 148








Shareholders








Assets

Cash at bank 1 Did not specify



Liabilities





Shareholders


1 Hughes Drilling Limited 2,000 100.0%




Security interests

Creditor profile




Security interests


Banks All present and after-acquired property Westpac and CBA 18



Total 32


Creditor profile



Employees - -

Landlords - -

Financiers - -


Total 2 40,451,883



B.6 Express Hydraulics (Aust) Pty Ltd


ACN 155 845 864

Registered in Queensland on 22 February 2012




Description: Involved in the internal purchasing for the Group and the reselling of parts and services to external

customers.



Shareholders




Paul Edward Brenton Secretary 20 November 2012 -

Robert Charles Hughes Former Director 22 May 2012 1 July 2016




Assets

Cash at bank 9 9



Work In Progress inventory 226 Did not specify

Plant and equipment 236 Did not specify



Liabilities

Employee entitlements (898) Did not specify

Partly secured creditors (307) Did not specify





Shareholders


1 Hughes Drilling 1 Pty Ltd 99,998 100.0%




Security interests

Creditor profile


Key points:

Revenue increased significantly in FY16 resulting in an EBITDA of $0.9 million for the same period. The increase in

revenue for the period is driven by the group purchase of Reichdrill Inc during FY15.

Revenue is comprised mainly of inter group sales of drill rigs and spare parts.

Overheads have increased to $0.5 million in FY16 as a result of an increase general, selling and administration costs

associated with an increase in trading activity.

Security interests



Motor vehicles Motor vehicles Hastings Deering (Australia) 2


Total 18


Creditor profile



Employees 39 870,652

Landlords 1 Unknown

Financiers - -


Total 175 43,096,441



A$'m FY14 FY15 FY16

Revenue 1.5 6.7 15.1

COGS (1.3) (5.9) (13.6)

Margin 0.3 0.8 1.6

Margin % 17% 13% 10%

Other income 0.0 0.0 (0.2)


Overheads (0.1) (0.2) (0.5)



Finance (interest) costs 0.0 0.0 0.0


Income tax - 0.1 (0.0)

NPAT 0.1 0.7 0.8

EBITDA 0.2 0.6 0.9



Key points:

EHA reported a net asset position each year during the period examined, showing net assets of $1.9 million at

30 June 2016.

Total assets are comprised of inventory and plant and equipment which include drill rigs and other components to

service the Group. Our analysis to follow indicates that June 2016 book values may be overstated (on a realisable

value basis) and this is set out further in section [ ] of this report.

Other non-current assets decreased from $2.1 million in FY 15 to $0.1 million in FY 16. This was a result of the sale of

a capitalised drill rig to HD1 during FY16.

Trade payables of $7.5 million in FY16 is comprised of stock purchases from trade creditors.

Net intercompany loans receivable of $2.0 million in FY16 is comprised of loan accounts between RD, HDL, HD1, HD2,

HEH, JSW, HDC and Reichdrill Inc and relates mainly to inter group sales of drill rigs and spare parts.




Current assets

Cash and cash equivalents - 0.2 0.0






Non-current assets


Intangible assets - - -

Investment - - -




Current liabilities


Borrowings - - -


Intercompany loans payable (0.7) (4.2) 2.0

Related party loans - - -

Taxation - - -




Non-current borrowings - - -







B.7 G.O.S. Drilling Pty Ltd


ACN 068 520 794








Shareholders








Assets

Cash at bank 0 Did not specify




Liabilities





Shareholders






Security interests

Creditor profile




Security interests





Total 26


Creditor profile



Employees - -

Landlords - -

Financiers - -


Total 1 40,421,351



B.8 HD JSW Pty Ltd


ACN 165 895 072

Registered in Queensland on 19 September 2013




Description: Holding entity for JSW Australia Pty Ltd.



Shareholders

Security interests





Robert Charles Hughes Former Director 19 September 2013 1 July 2016




Assets



Liabilities





Shareholders





Security interests



Total 1



Creditor profile




Creditor profile



Employees - -

Landlords - -

Financiers - -


Total 1 40,421,351



B.9 Hughes Drilling 1 Pty Ltd


ACN 011 007 702

Registered in Queensland on 3 January 1990




Description: Production and delineation drilling specialist



Shareholders




Paul Edward Brenton Secretary 20 November 2012 -

Robert Charles Hughes Former Director 20 March 1990 1 July 2016




Assets

Cash at bank 2 9







Liabilities

Employee entitlements (8,967) Did not specify

Partly secured creditors (997) Did not specify





Shareholders






Security interests

Creditor profile


Key points:

The accounts indicate that HD1 was generating a net profit in each of the periods examined.

Despite increased revenue from new contracts, EBTIDA in FY16 decreased $4.7 million due to decreasing margins.

COGS includes wages and consumable costs associated with operation of key client contracts.

Overheads relate to general sales, administration, rent and employee expenses.

Security interests


Banks All present and after-acquired property Westpac and ANZ 95

Other lenders All present and after-acquired property GE Automotive Financial Services 15



Total 154


Creditor profile



Employees 278 10,279,494

Landlords 5 Unknown



Total 378 53,987,490



A$'m FY14 FY15 FY16

Revenue 42.6 40.6 43.3

COGS (23.8) (22.5) (28.9)

Margin 18.9 18.1 14.4

Margin % 44% 45% 33%



Overheads (0.6) (0.8) (2.0)


Impairment costs - (0.1) -



Income tax - 0.1 (0.3)

NPAT 12.1 10.4 3.2

EBITDA 18.3 17.2 12.5



Key points:

Net assets have increased substantially since FY14 due to increases in inventory and plant and equipment balances

(purchases of additional rigs and spares). Our analysis to follow indicates that June 2016 book values may be

overstated (on a realisable value basis) and this is set out further in section [ ] of this report.

Other non-current assets include movements in deferred tax asset balances, and a capitalised WIP drill rig which was

reallocated to plant and equipment in FY16.

Trade payables are $10.9 million at 30 June 2016, up $7.5 million from 30 June 2015. This is comprised of an increase

in trade creditors, payroll accruals and statutory amounts payable to the ATO for unpaid GST/PAYG lodgements.

Borrowings include hire purchase facilities on drill rigs through Westpac, and have been reclassified from non-current

to current from FY15 to FY16.

Other current liabilities include leave and payroll related provisions.


Current assets

Cash and cash equivalents 0.1 (0.7) -






Non-current assets



Investment - - -

Other non-current assets 2.2 (0.3) 1.6



Current liabilities


Borrowings (10.2) (9.0) (15.1)

Bank overdraft - - (0.5)



Taxation - - -




Non-current borrowings (10.8) (7.6) -








B.10 Hughes Drilling 2 Pty Ltd


ACN 146 399 902






customers.



Shareholders








Assets

Cash at bank 1 1

Interest in land 320 Did not specify




Assets held for sale 1,416 Did not specify



Liabilities





Shareholders






Security interests

Creditor profile


Key points:

HD2 was acquired in 2012 via a reverse acquisition.

EBITDA was ($0.2 million) in FY16 as there was limited trading out of this entity.

Security interests



Motor vehicles Motor vehicles Coates 1


Total 6


Creditor profile



Employees - -

Landlords 1 Unknown



Total 9 40,424,287



A$'m FY14 FY15 FY16

Revenue 0.3 0.0 0.1

COGS - - (0.1)

Margin 0.3 0.0 (0.1)

Margin % 100% 100% (141%)

Other income 0.0 0.1 (0.1)


Overheads (1.4) (0.6) (0.0)

Operating profit (2.9) (1.5) (0.6)

Impairment costs (1.6) (0.6) -

Finance (interest) costs (0.0) (0.0) 0.1


Income tax - 0.9 0.1

NPAT (4.4) (1.2) (0.4)

EBITDA (2.7) (1.1) (0.2)



Key points:

HD2 reported a net asset deficiency of $1.3 million in FY16 driven mainly by the net intercompany loan payable

position.

Inventories of $1.9 million in FY16 include spare parts and consumables.

Other non-current assets for FY16 include a deferred tax asset and a number of drill rigs being held for sale in the

amount of $2.7 million.

Net intercompany loans payable is comprised of loan accounts between AGD, EDMSO, EHA, GOS, HD1, HDC, HDL,

HEH, HEA and JSW and relates to the sale and purchase of drill rigs and components.




Current assets



Inventories - 2.0 1.9




Non-current assets



Investment - - -

Other non-current assets - 2.8 2.7



Current liabilities


Borrowings - - -

Bank overdraft - - -



Taxation - - -

Other current liabilities (0.0) - -







Net assets/(liabilities) 0.4 (1.0) (1.3)



B.11 Hughes Drilling Corporate Pty Ltd


ACN 146 398 718





Description: Corporate entity



Shareholders








Assets

Cash at bank 7 7




Assets subject to specific charges (net amount owing) (13) Did not specify


Liabilities






Shareholders






Security interests

Creditor profile


Key points:

HDC is largely an entity incurring overhead expenses for the Group including general, administration and staff

expenses, including wages and fees for management staff.

Security interests



Suppliers Other goods, intangibles and specific claims Fuji Xerox Finance 1

Total 3


Creditor profile




Landlords - -



Total 34 41,091,322



A$'m FY14 FY15 FY16

Revenue - - -

COGS - - -

Margin - - -

Margin % - - -

Other income 0.0 0.0 -


Overheads (1.8) (1.7) (2.5)





Income tax - (0.0) (0.8)

NPAT (1.9) (2.0) (3.7)

EBITDA (1.8) (1.7) (2.5)



Key points:

HDC reported a net asset deficiency for the period examined.

Plant and equipment is comprised of office related hardware, software and other assets.

Net intercompany loans payable of $10.3 million in FY16 is comprised of loan accounts between AGD, EDMSM,

EDMSO, EHA, GOS, HD1, HD2, HDL, HEH, HEA and RD. A significant portion of intercompany loans to HDC relate to

wages and salaries paid to management staff employed by HDC.

Intercompany debtor amounts were reported at book value and no impairments were taken in the accounts.

Trade and other payables of $1.4 million in FY16 are comprised of payroll accruals and statutory amounts payable to

the ATO for unpaid GST/PAYG lodgements.



Current assets

Cash and cash equivalents 0.0 (0.0) 0.0

Trade receivables 0.0 - 0.0

Inventories - - -



Total current assets 0.0 (0.0) 0.0

Non-current assets


Intangible assets 0.1 0.1 -

Investment - - -

Other non-current assets 0.1 0.1 (1.2)

Total non-current assets 0.6 0.6 (0.7)

Total assets 0.6 0.6 (0.7)

Current liabilities


Borrowings (0.1) (0.2) (0.1)




Taxation - - 0.4








Net assets/(liabilities) (6.6) (8.6) (12.4)



B.12 Hughes Equipment Hire Pty Ltd


ACN 146 398 923






customers.



Shareholders



Paul Edward Brenton Director 4 October 2011 -





Assets

Cash at bank 1 5


Stock 29 Did not specify





Liabilities






Shareholders






Security interests

Creditor profile


Key points:

HEH was established in 1H15, meaning FY16 is the first full year of operations.

HEH reported an EBITDA of $1.1 million in FY16

Security interests


Banks All present and after-acquired property Westpac and CBA 6



Total 49


Creditor profile



Employees 1 28,063

Landlords 1 Unknown

Financiers - -


Total 11 40,494,113



A$'m FY14 FY15 FY16

Revenue - 0.8 1.8

COGS - (0.0) (0.4)

Margin - 0.8 1.4

Margin % - 99% 76%

Other income 0.1 0.0 -

Depreciation expense - (0.2) (0.6)

Overheads (0.0) (0.4) (0.2)




Profit before tax (0.0) 0.0 0.3

Income tax - 0.0 0.1

NPAT (0.0) 0.0 0.4

EBITDA 0.0 0.4 1.1



Key points:

HEH reported a net asset position for both FY15 and FY16 periods.

Net intercompany loans receivable of $4.1 million in FY16 are comprised of loan accounts between AGD, EDMSO, EHA,

GOS, HD1, HD2, HDC, HDL, HEA, EDMSM and RD.

Intercompany debtor amounts were reported at book value and no impairments were taken in the accounts.

Plant and equipment increased to $3.8 million FY16 and includes a number of compressors used as the principle

revenue generating assets for HEA.

Non-current borrowings of $3.8 million in FY15 represent the hire purchase loans on the compressors financed by

Westpac. These were refinanced and are now reported as current borrowings as $2.7 million in FY16 statements.



Current assets

Cash and cash equivalents - 0.0 0.0

Trade receivables - 0.4 0.7

Inventories - 0.0 0.0


Intercompany loans receivable - 6.3 4.1

Total current assets - 6.6 4.8

Non-current assets

Plant and equipment - 2.4 3.8


Investment - - -

Other non-current assets - 0.0 0.0

Total non-current assets - 2.4 3.8

Total assets - 9.0 8.6

Current liabilities

Trade and other payables - (0.1) (0.5)

Borrowings - - (2.7)




Taxation - - (0.1)

Other current liabilities - (0.0) (0.0)

Total current liabilities - (0.1) (3.3)


Non-current borrowings - (3.8) -

Other non-current liabilities - (0.0) (0.0)

Total non-current liabilities - (3.8) (0.0)

Total liabilities - (3.9) (3.3)

Net assets/(liabilities) - 5.1 5.3



B.13 Hyd-Elec Australia Pty Ltd


ACN 151 316 611

Registered in New South Wales on 6 June 2011





customers.



Shareholders



Paul Edward Brenton Director 2 May 2012 -

Paul Edward Brenton Secretary 6 June 2011 -




Assets

Cash at bank 5 5

Sundry debtors 444 Did not specify

Stock 259 Did not specify


Goodwill 181 Did not specify



Liabilities




Net assets (269) Undetermined


Shareholders






Security interests

Creditor profile


Key points:

There is limited financial data to compare current FY16 results however, they are consistent with Managements comments

of the business as a broadly ‘break-even’ run business

Security interests



Other lenders All present and after-acquired property Southcott 1

Total 3


Creditor profile




Landlords 1 Unknown



Total 53 40,920,924



A$'m FY14 FY15 FY16

Revenue - - 0.4

COGS - - (0.5)

Margin - - (0.1)

Margin % - - (35%)

Other income - - -

Depreciation expense - - (0.0)

Overheads (0.0) (0.0) (0.0)



Finance (interest) costs - - (0.0)


Income tax - - (0.0)

NPAT (0.0) (0.0) (0.2)

EBITDA (0.0) (0.0) (0.2)



Key points:

HEA reported a net asset deficiency over the entire period examined.

Plant and equipment for FY16 is reported at $0.3 million and is made up of assets, vehicles, machinery and

components purchased during the acquisition of the business.

Trade and other payables of $0.5 million for FY15 includes the amount payable to the prior owners of the business as

part of the acquisition price.

The intercompany loan payable to HDL relates to the purchase of HEA from the previous owners.



Current assets


Trade receivables 0.0 - 0.2

Inventories - - 0.2




Non-current assets

Plant and equipment - - 0.3

Intangible assets - - 0.2

Investment - - -

Other non-current assets - - -

Total non-current assets - - 0.5


Current liabilities

Trade and other payables - - (0.5)

Borrowings - - -




Taxation - - 0.0

Other current liabilities - - (0.0)




Other non-current liabilities - - -

Total non-current liabilities - - -


Net assets/(liabilities) (0.0) (0.0) (0.2)



B.14 Reichdrill Australia Pty Ltd


ACN 162 841 287

Registered in Queensland on 14 March 2013




Description: Rig manufacture and sales.



Shareholders



Robert Charles Hughes Director 14 March 2013 -


Robert Charles Hughes Secretary 14 March 2013 -

Paul Edward Brenton Secretary 1 July 2016 -




Assets

Cash at bank 1 1




Liabilities


Unsecured creditors (606) Did not specify




Shareholders


1 Hughes Drilling Limited 4,838,508 96.0%

2 Patrick Garrity 201,605 4.0%




Security interests

Creditor profile


Key points:

RD Australia is the head holding company of Hughes Drilling Group’s shares in the USA based Reichdrill Inc.

Accordingly, there are limited accounts for this entity.

Security interests



Total 1


Creditor profile



Employees - -

Landlords - -

Financiers - -


Total 1 40,421,351



A$'m FY14 FY15 FY16

Revenue - - -

COGS - - -

Margin - - -

Margin % - - -

Other income - - -

Depreciation expense - - -

Overheads (0.1) (0.0) (0.1)





Income tax 0.0 0.0 0.0

NPAT (0.1) (0.0) (0.1)

EBITDA (0.1) (0.0) (0.1)



Key points:

RD reported a net asset position of $4.8 million for FY16.

The net intercompany loan receivable is comprised of loan accounts between EHA, HDC, HD1, HDL, HEH and

Reichdrill Inc.

Investment of $5.1 million relates to the investment in Reichdrill Inc.

Liabilities for FY16 include a bank overdraft facility to fund purchase and building of new rigs.



Current assets


Trade receivables - - -

Inventories - - -




Non-current assets

Plant and equipment - - -


Investment 5.1 5.1 5.1




Current liabilities

Trade and other payables (0.0) - -

Borrowings (5.2) - -




Taxation - - -

Other current liabilities - - -




Other non-current liabilities - - -

Total non-current liabilities - - -




ANNEXURE C: Notice of Meeting

FORM 529A

Corporations Act 2001

Subregulation 5.6.12(1)

NOTICE OF SECOND MEETING OF

CREDITORS OF COMPANY UNDER ADMINISTRATION

Hughes Drilling Ltd ACN 12 124 279 750

Australia Gas Drilling Pty Ltd ACN 13 139 242 890

EDMS Metals Pty Ltd ACN 29 146 399 760

Every Day Mine Services Operations Pty Ltd ACN 40 003 949 148

Express Hydraulics (Aust) Pty Ltd ACN 91 155 845 864

G.O.S. Drilling Pty Ltd ACN 57 068 520 794

HD JSW Pty Ltd ACN 83 165 895 072



Hughes Drilling Corporate Pty Ltd ACN 64 146 398 718

Hughes Equipment Hire Pty Ltd ACN 23 146 398 923

Hyd-Elec Australia Pty Ltd ACN 89 151 316 611

JSW Australia Pty Ltd ACN 22 125 989 791

Reichdrill Australia Pty Ltd ACN 69 162 841 287

(Administrators Appointed)

(collectively referred to as “Hughes Drilling Group”)

On 22 September 2016 Hughes Drilling Group, under Section 436A of the Corporations Act 2001, 1

appointed Jason Preston, Shaun Fraser and Jamie Harris of McGrathNicol as Joint & Several Voluntary

Administrators.

Notice is now given that the second meeting of the creditors of Hughes Drilling Group will be held 2

concurrently on Thursday, 8 December 2016 at Cliftons Brisbane, Level 24, 288 Edward Street, Brisbane QLD

4000 (1pm AEST time) with video conference facilities available at Cliftons Perth, Level 4, Parmelia House,

191 St Georges Terrace, Perth WA 6000 (11am AWST).

The agenda of the meeting is set out below. 3

To consider the Administrators' report pursuant to Section 439A of the Corporations Act 2001, in

relation to Hughes Drilling Group and any other matters raised relating to Hughes Drilling Group’s

future, and then to resolve either that:

Some or all of the entities of Hughes Drilling Group execute a Deed of Company

Arrangement; or

the administrations should end; or

Some or all of the entities of Hughes Drilling Group be wound up.

To consider, and if thought fit, approve the Administrators' remuneration.

In the event that Hughes Drilling Group is wound up:

to consider, and if thought fit, approve the Liquidator’s remuneration;

to consider the appointment of a Committee of Inspection;

to consider authorising the Liquidators to compromise debts of the Company under

Section 477(2A) of the Corporations Act; and

to consider authorising the Liquidators to enter into agreements that may take longer

than three months to complete under Section 477(2B) of the Corporations Act.

To discuss any other relevant business which may arise. 4


Shaun Fraser

Joint & Several Administrator

D14-161201-S439AReport-HM 54

ANNEXURE D: Declaration of Independence, Relevant Relationships and

Indemnities

The Hughes Drilling Group of Companies (“HDX”)

(Comprising the companies listed in Schedule A attached)

The Corporations Act 2001 and professional standards require the Practitioners appointed to an insolvent entity to

make a declaration as to:

their independence generally; A.

relationships, including B.

the circumstances of the appointment; (i)

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

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

that there are no other relationships to declare; and (iv)

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

This declaration is made in respect of ourselves, our partners and the firm McGrathNicol, which for the purpose of

this declaration includes the McGrathNicol Partnership, the McGrathNicol Advisory Partnership, and McGrathNicol

Services Pty Limited.

Independence B.

We, Jason Preston, Shaun Robert Fraser and William James Harris of the firm McGrathNicol (“the Administrators”)

have undertaken a proper assessment of the risks to our independence prior to accepting the appointment as

administrators of HDX in accordance with the law and applicable professional standards. This assessment identified

no real or potential risks to our independence. We are not aware of any reasons that would prevent us from

accepting this appointment.

Declaration of Relationships C.

Circumstances of appointment (i)

On 29 April 2016 McGrathNicol Advisory was engaged by Westpac Banking Corporation (“WBC”) to conduct an

Independent Accountant’s Review of HDX.

We had a number of meetings with the Directors and key management personnel of HDX during the period from

29 April 2016 to 7 July 2016 for the purposes of obtaining the relevant information to undertake our review, the

scope of which included:

Reviewing the forecasts for the year to 30 June 2016, taking account of actual results to and including

March 2016;

Reviewing the financial model and forecasts for FY17; and,

Understanding the extent of free cash flow arising during the period to 30 June 2017.

We provided our first report to WBC in accordance with our engagement letter and above scope on 7 July 2016.

We were then engaged by WBC on 29 July 2016 to conduct a further review of HDX’s cash flow forecast and

profitability. The scope of this engagement was:

Understanding the Group’s immediate cash requirements, its short-term cash flow forecast and its current

and forecast working capital position; and,

Understanding the Group’s ability to operate within its existing banking facilities and estimated funding

requirements.

Declaration of Independence,

Relevant Relationships and Indemnities

2

We held further meetings with the Directors and key management personnel of HDX during the period from 29 July

2016 to 30 August 2016 for the purposes of obtaining and discussing the relevant information to undertake this

review.

We issued our second report to WBC in accordance with our engagement letter and above scope on 30 August

2016.

Total fees incurred in the completion of the Independent Accountant Review for WBC totalled $208,541.

Whilst we were engaged by WBC, fees for our services were invoiced to HDX pursuant to the terms of our first

engagement letter dated 29 April 2016. We have never received any payment from HDX. Prior to accepting this

engagement we have credited the invoices and confirmed that there are no amounts owing to McGrathNicol by

HDX. As such we are not in the position of potentially having received any form of voidable transaction from HDX,

including an unfair preference. Additionally, McGrathNicol is not a creditor of HDX.

On Tuesday, 6 September 2016, representatives of McGrathNicol met with the Board of HDX to discuss the options

available to them. This meeting included fielding queries regarding the voluntary administration process and how an

appointment would impact HDX.

No remuneration was received for participating in these discussions and meetings.

On 20 September 2016, we were contacted by Michael Fingland of Vantage Performance (advisor to HDX) who

indicated that the Board was considering appointing Voluntary Administrators. On 21 September 2016, partners of

McGrathNicol met with the Board of HDX to further discuss and plan for a voluntary administration appointment.

In our opinion, the communications held with the Board of HDX during our engagement as Investigative

Accountants (engaged by WBC) and the preparation meetings for the voluntary administration do not affect our

independence as:

they were of limited scope with a clear information gathering focus and would not be subject to review and

challenge during the course of the administration;

given our scope and objectives (to understand the HDX’s current and forecast financial position) these

communications would not influence our ability to be able to fully comply with the statutory and fiduciary

obligations associated with the administration in an objective and impartial manner; and

it is recognised by the Australian Restructuring, Insolvency and Turnaround Associations (ARITA) Code of

Professional Practice that pre-appointment discussions regarding insolvency options and obtaining

background information are necessary and do not amount to an impediment to accepting an appointment.

We have provided no other information or advice to HDX or their Directors prior to our appointments beyond that

outlined in this DIRRI.

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

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

Name Nature of relationship Reasons

Westpac Banking Corporation (“WBC”)

WBC holds a charge on the whole or substantially the whole of the property of the Companies. McGrathNicol undertakes corporate recovery and advisory work from time to time on instructions from WBC. As detailed in the section C (i) above, McGrathNicol has undertaken an Independent

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

Each professional engagement undertaken for WBC in relation to a particular entity or group of entities is conducted on an entirely separate basis which has no connection with these appointments. These engagements are only commenced after full regard is given to potential conflicts of interest in relation to all interested stakeholders.

Our work for WBC involved limited contact with

3

Accountant’s Review of HDX on behalf of WBC.

senior management and HDX directors, being confined to obtaining and discussing the financial and operational information to assist with the tasks outlined above in our engagement scopes.

No payment was received from HDX and McGrathNicol is not a creditor of HDX and therefore there are no potentially voidable transactions that would require investigation.

The Independent Accountant’s Report provided is not of a nature that would be subject to a review in any subsequent insolvency appointment because it provided a factual summary of the current and forecast financial position. In addition, the work undertaken by McGrathNicol did not include reviewing the validity of the security held over the assets of HDX by WBC.

The nature and scope of this engagement (being

with WBC and not with HDX) will not influence our ability to fully comply with the statutory and fiduciary obligations associated with the voluntary administrations of the HDX companies in an objective and impartial manner.

An Investigating Accountant engagement is recognised by the ARITA Code of Professional Practice as a relationship which does not preclude appointment as voluntary administrator

Given these factors, our independence in acting as Voluntary Administrators of HDX has not been compromised.

4

Prior professional services to the Insolvent (iii)

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

No other relevant relationships to disclose (iv)

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

the previous 24 months with HDX, an associate of HDX, a former insolvency practitioner appointed to HDX or any

person or entity that currently has security over the whole or substantially the whole of HDX’s property and should

be disclosed.

Relationship with Former Secured Creditors (v)

There are no relationships with any former secured creditors.

Indemnities and Up-front Payments D.

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

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

Following our appointment, we entered into discussions with the Current Secured Creditors regarding a funding

arrangement (‘Facility”) to enable the businesses operated by members of HDX to continue to trade. Orders are

being sought in the Federal Court of Australia (NSW) on 26 September 2016 pursuant to s 447D of the Act, that

despite s443A of the Act the Administrators will not be personally liable for funds drawn under the Facility.

Appointments to Members of a Corporate Group E.

As listed on Schedule A of this Declaration, the Administrators have been appointed as voluntary administrators to

14 entities within the HDX group of companies.

The Administrators are of the view that the appointment to the group of companies will have significant benefits to

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

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

Administrators are aware that there are inter-company transactions within the group but at this time are not aware

of any potential conflicts of interest arising from the appointments over the various group members. However, to

the extent it becomes apparent that pre-appointment dealings between companies in the group may give rise to a

conflict which may impact the outcome for creditors of either company; the Administrators undertake to disclose

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

potential conflict.

Dated: this 26th day of September 2016

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

Jason Preston Shaun Robert Fraser

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

William James Harris

5

Note:

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

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

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

Declaration at the next meeting of the insolvent’s creditors/committee of creditors.

2 Any relationships, indemnities or up-front payments disclosed in the DIRRI must not be such that the

Practitioner is no longer independent. The purpose of components B and C of the DIRRI is to disclose

relationships that, while they do not result in the Practitioner having a conflict of interest or duty, ensure

that creditors are aware of those relationships and understand why the Practitioner nevertheless remains

independent.

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

ARITA.

6

Schedule A: Hughes Drilling Group of Companies – entities over which the Administrators are appointed

Company name ACN

Hughes Drilling Ltd 124 279 750

Australian Gas Drilling Pty Ltd 139 242 890

EDMS Metals Pty Ltd 146 399 760

Every Day Mine Services Operations Pty Ltd 003 949 148

Express Hydraulics (Aust) Pty Ltd 155 845 864

G.O.S. Drilling Pty Ltd 068 520 794

HD JSW Pty Ltd 165 895 072

Hughes Drilling 1 Pty Ltd 011 007 702

Hughes Drilling 2 Pty Ltd 146 399 902

Hughes Drilling Corporate Pty Ltd 146 398 718

Hughes Equipment Hire Pty Ltd 146 398 923

Hyd-Elec Australia Pty Ltd 151 316 611

JSW Australia Pty Ltd 125 989 791

Reichdrill Australia Pty Ltd 162 841 287

Annexure E: Remuneration Reports for each entity


Section 449E

REMUNERATION REQUEST APPROVAL REPORT

Hughes Drilling Ltd ACN 124 279 750 (“HDL”) (Administrators Appointed)

(“the Company”)

Declaration 1

We, Jason Preston, Shaun Fraser and Jamie Harris of McGrathNicol have undertaken a proper assessment of this

remuneration claim for our appointment as Administrators of the Company in accordance with the law and applicable

professional standards. We are satisfied that the remuneration claimed is in respect of necessary work, properly performed

in the conduct of the Administration.

To date no remuneration has been approved, or drawn, for the Company. Further, we have not received any funding from

external sources.

Summary 2

Description of work performed 3

Remuneration incurred 22 September 2016 to 18 November 2016 3.1

Description of work 3.1.1

Task area General description

Asset realisations

71.7 hours

$37,281 (ex GST)

Strategy and process Assess assets and sites and consider risks and requirements to

protect assets.

Prepared sale material including information for the data room.

Initiated a sale program including documentation of process,

procedures and confidentiality requirements.

Interested parties Identified and liaised with interested parties, including

responding to queries.

Arranged and attended site visits with interested parties.

Prepared an Information Memorandum for interested parties.

Received, reviewed and assessed expressions of interest from

interested parties.

Summary of Remuneration Request Approval Report

Company

Appointees

Administration type

Resolution one 22 September 2016 to 18 November 2016 51,596 VA period actual

Resolution two 19 November 2016 to 8 December 2016 13,457 VA period forecast

Resolution three 9 December 2016 to 27 January 2017 25,638 DOCA/Liquidation period forecast

Resolution four 9 December 2016 to 27 January 2017 25,638 Liquidation period forecast

Total fee resolutions proposed (DOCA/Liquidation) 90,691

Total fee resolutions proposed (Liquidation) 90,691

Voluntary Administration

Hughes Drilling Ltd Pty Ltd (Administrators Appointed)

Jason Preston, Shaun Fraser, Jamie Harris of McGrathNicol

Issued process letters to shortlisted parties.

Managed data room and interested party due diligence.

Received and assessed non-binding offers.

Discussed non-binding offers with parties.

Various meetings with interested parties, management

presentations, site visits, Q&A activity and negotiations with

bidders.

Cash Assessed the pre-appointment cash position.

Wrote to major Australian banks to identify bank accounts held

by the Company.

Day to day management of banking, account reconciliations

and processing receipts and payments.

Developed trading forecasts, negotiated funding with secured

creditor, applied to federal court for approval of VA funding

agreement.

Creditors and

shareholders

9.8 hours

$4,644 (ex GST)

Secured creditors Liaised with secured creditors regarding the appointment, it’s

security, funding and strategy.

Prepared written updates to the secured creditors.

Liaised with secured creditor in relation to DOCA proposal and

alternative strategies including Liquidation.

First Meeting of

Creditors

Prepared meeting notices, proxies and advertisements.

Distributed the notice of meeting to all known creditors.

Prepared presentation slides and Chairperson notes.

Prepared meeting logistics.

Liaised with Link Market Services to review various documents

for the first meeting.

Reviewed and maintaining the proxy register.

Prepared the meeting file, including the agenda, certificate of

postage, attendance register, lists of creditors, report to

creditors and the advertisement of meeting.

Developing a media management plan and protocols for

attendance at the first meeting.

Attendance at and chairing meetings.

Liaised with media regarding the first creditor meeting.

Prepared and lodging the minutes of the first meeting with

ASIC.

Application for

extension of the

convening period of

the Second Meeting

of Creditors

Prepared an application to the Federal Court of Australia to

request an extension of the convening period for the second

meeting of creditors.

Prepared the affidavit (and supporting documentation) to

support the application.

Liaised with solicitors regarding the application and affidavit.

Prepared notifications to creditors and shareholders and a press

release regarding the successful application to extend the

convening period.

Shareholders and the

Australian Securities

Exchange (“ASX)

Lodged updates on the ASX website.

Corresponded with Australian Securities and Investment

Commission (“ASIC”) in respect of reporting relief.

Corresponded with shareholders and responding to shareholder

queries.

Reviewed shareholder register.

439A report

preparation

(including

investigations)

12.4 hours

$5,393 (ex GST)

439A preparation Inspected company books and records and back up electronic

data.

Conducted and summarised various statutory searches and

financial reports.

Undertook financial analysis to understand the financial position

of the company in the months leading up to the appointment

of Administrators.

Reviewed the Reports as to Affairs provided by the directors

and commenting on same.

Determined the content and key findings for inclusion in the

439A Report.

Drafted the 439A report.

Prepared remuneration schedules to include in the 439A report.

DOCA Collated information and attended explanatory meetings with

interested parties.

Meetings with preferred bidder to discuss the structure and

inclusions for the proposed DOCA.

Liaised with legal advisors regarding terms and structure of the

proposed DOCA.

Modelled outcome analysis to compare the impact of the

proposed DOCA versus a Liquidation on all classes of creditors.

Conducting

investigation

Reviewed and analysed management accounts, annual reports,

and prospectus information, for inclusion in the 439A Report.

Interviews with management, staff and auditors on investigation

matters.

Prepared preliminary findings on potential recoveries available

to a liquidator.

Statutory and

Administration

9.0 hours

Strategy and project

management

Prepared and maintained task lists and checklists.

Team meetings regarding the allocation and status of tasks.

Ongoing file management.

$4,278 (ex GST)

Insurance Identified potential issues requiring attention from insurance

specialists.

Corresponding with our insurance broker to ensure adequate

insurance cover is maintained.

Reviewed pre-appointment insurance policies and corresponded

with the Company’s previous brokers.

Declaration of

Independence,

Relevant Relationships

and Indemnities

Prepared Declaration of Independence, Relevant Relationships

and Indemnities (“DIRRI”).

McGrathNicol website Organised McGrathNicol website to display details of the

appointment.

Maintained updated information on the website for the benefit

of stakeholders.

Statutory notices Prepared and lodged all statutory notices with ASIC including

the Form 505 on appointment.

Advised other statutory authorities (e.g. the Australian Taxation

Office and the Office of State Revenue) of our appointment.


(“RATA”)

Issued a letter to the directors requesting they complete a

RATA.

Liaised with the directors regarding the logistics of RATA

lodgements, including granting an extension for its provision.

Reviewed the RATAs once received.

Books and records Identifies location of relevant Company records.

Issued information request to management as required..

Records storage matters.

Taxation Prepared letters to the Australian Taxation Office for documents

in relation to accessing freedom of information.

Summary of remuneration incurred for the period 22 September 2016 to 18 November 2016 3.1.2

Hughes Drilling Ltd

Remuneration for the period 22 September 2016 to 18 November 2016

Rate

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

Jamie Harris Partner 585 0.6 351 0.0 17 - - - - - - - - 0.6 368

Jason Ireland Partner 650 1.9 1,235 - - - - - - - - - - 1.9 1,235

Jason Preston Partner 650 1.4 923 0.4 228 - - - - - - 1.8 1,170 3.6 2,321

Shaun Fraser Partner 650 4.2 2,737 - - 0.1 52 - - - - - - 4.3 2,789

Anne-Maree Keane Partner 585 8.8 5,154 - - - - - - - - - - 8.8 5,154

Darren Hopkins Director 1 536 - - - - - - - - - - 1.6 881 1.6 881

Hugh Monaghan Director 550 22.2 12,183 - - - - - - - - - - 22.2 12,183

Anthony Cocco Senior Manager 500 2.7 1,330 0.6 289 1.8 904 - - - - 0.6 279 5.6 2,801

Christopher Johnson Senior Manager 500 5.9 2,950 - - 1.0 505 - - - - - - 6.9 3,455

Heather Matheson Senior Manager 500 0.9 450 6.6 3,321 2.9 1,468 - - - - 0.1 71 10.6 5,311

Brendan Payne Manager 1 428 - - - - - - - - - - 1.1 474 1.1 474

Guy Gunasekera Manager 1 475 0.3 152 - - - - - - - - - - 0.3 152

Jessie Maguire Manager 475 - - 0.0 20 - - - - - - - - 0.0 20

Kate Versey Manager 475 - - - - - - - - - - 0.6 285 0.6 285

Carlo Lucci Assistant Manager 430 22.8 9,817 - - 0.3 125 - - - - - - 23.1 9,942

Elin Gunstveit Assistant Manager 387 - - - - 0.2 77 - - - - 1.4 556 1.6 633

Grace Chessman Senior Accountant 375 - - 1.2 445 1.8 666 - - - - 1.3 493 4.3 1,604

Johnathon Tawil Senior Accountant 375 - - - - 0.2 67 - - - - - - 0.2 67

Timothy Duncan Senior Accountant 375 - - 0.7 271 4.1 1,529 - - - - - - 4.8 1,799

Aleksandra Pejoska Accountant 275 - - 0.1 29 - - - - - - - - 0.1 29

Joshua Crick Accountant 275 - - 0.0 11 - - - - - - 0.1 20 0.1 31

Graciela Nolan Client Admin/Prac Serv-Level 4 160 - - - - - - - - - - 0.3 46 0.3 46

Rosemary Winser Client Admin/Prac Serv-Level 1 136 - - 0.1 13 - - - - - - 0.0 5 0.1 17

Total (excluding GST) 71.7 37,281 9.8 4,644 12.4 5,393 - - - - 9.0 4,278 102.8 51,596

GST 3,728 464 539 - - 428 5,160

Total (including GST) 41,009 5,108 5,932 - - 4,706 56,755

Average hourly rate 572 522 480 N/A N/A 523 552

Trade on (including

leases and PPSR)

Statutory and

administration TotalAsset realisations

Creditors and

shareholders

439A report

preparation (including

investigations) Employees

Estimated Administrators’ remuneration from 19 November 2016 to the second meeting of 3.2

creditors (8 December 2016)



Asset realisations

$10,120 (ex GST)

Interested parties Continuing the sale process.



bidders.

Negotiations around the form and structure of a DOCA

proposal with the preferred bidder.

Cash Day to day management of banking, account reconciliations


Creditors and

shareholders

$1,009 (ex GST)

Secured creditors Preparing written updates to the secured creditors.

Liaising with secured creditors in relation to DOCA proposal

and alternative strategies including Liquidation.

Second Meeting of

Creditors

Preparing meeting notices, proxies and advertisements.

Distributing the notice of meeting to all known creditors.

Preparing presentation slides and Chairperson notes.

Preparing meeting logistics.

Liaising with Link Market Services to review various documents

for the second meeting.

Reviewing and maintaining the proxy register.

Preparing the meeting file, including the agenda, certificate of






Liaising with media regarding the second creditor meeting.

439A report

preparation

(including

investigations)

$1,400 (ex GST)

439A preparation Inspecting company books and records and back up electronic

data.

Conducting and summarising various statutory searches and

financial reports.

Undertaking financial analysis to understand the financial

position of the company in the months leading up to the

appointment of Administrators.

Reviewing the Reports as to Affairs provided by the directors


Determining the content and key findings for inclusion in the

439A Report.

Drafting the 439A report.

Preparing remuneration schedules to include in the 439A

report.

DOCA Liaising with legal advisors regarding terms and structure of the

proposed DOCA.

Modelling outcome analysis to compare the impact of the


Daily meetings and provision of information to ensure the

DOCA was agreed and in place, in time for the second creditors

meeting.

Conducting

investigation

Reviewing and analysing management accounts, annual reports,



matters.

Preparing preliminary findings on potential recoveries available

to a liquidator.

Statutory and

Administration

$929 (ex GST)


management

Preparing and maintaining task lists and checklists.

Team meetings regarding the allocation and status of statutory

and operational tasks.


Insurance Liaising with insurance broker as incidents occurred during the

Administration.

Books and records Cataloguing records to put in storage.

Cash management Reviewing cash balances and funding needs on a daily basis.

Summary of estimated Administrators’ remuneration for the period 19 November 2016 to the second creditors meeting (8 December 2016) 3.2.2

Hughes Drilling Ltd

Remuneration for the period 19 November 2016 to the second creditors meeting

Rate

Position $/hr hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST)

Partner 650 0.8 506 0.1 50 0.1 70 - - - - 0.1 46 1.0 673

Senior Manager 500 5.1 2,530 0.5 252 0.7 350 - - - - 0.5 232 6.7 3,364

Manager 475 4.3 2,024 0.4 202 0.6 280 - - - - 0.4 186 5.7 2,691

Senior Accountant 375 8.1 3,036 0.8 303 1.1 420 - - - - 0.7 279 10.8 4,037

Accountant 275 5.5 1,518 0.6 151 0.8 210 - - - - 0.5 139 7.3 2,019

Admin Staff 160 3.2 506 0.3 50 0.4 70 - - - - 0.3 46 4.2 673

Total (excluding GST) 26.9 10,120 2.7 1,009 3.7 1,400 - - - - 2.5 929 35.7 13,457

GST 1,346

Total (including GST) 14,803

Average hourly rate 377 377 377 - - 377 377

Statutory &

Administration TotalAsset recoveries Creditors

439A report/

investigations Employees Trade on

Forecast remuneration for the DOCA period from 9 December 2016 to 27 January 2016 3.3



Asset realisations

$5,128 (ex GST)

Sale Initiating a sale process for the sale of the Company shell.



Creditors and

shareholders

$6,410 (ex GST)

Dealing with creditors and their claims Liaising with creditors in relation to their claims and the

Liquidation generally.

Receiving and following up creditor enquiries generally.

Reviewing and preparing correspondence to creditors and their

representatives via facsimile, email and post.

Secured creditors Liaising with secured creditors regarding strategic issues.

Preparing written updates to the secured creditors.

Investigations

$7,962 (ex GST)

Conducting

investigations

Inspected company books and records and back up electronic

data.

Undertook financial analysis to understand the financial

position of the company.

Statutory and

Administration

$6,410 (ex GST)

Document

maintenance/file

review/checklist

Undertaking Liquidation process.

Filing of documents.

Conducting file reviews.

Updating checklists.

Dealing with Directors

and their advisers

General liaison in relation to the liquidation including requests

for assistance/confirmation of background issues etc.

ATO & other

statutory reporting

Notifying of appointment.

Preparing Business Activity Statements.

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

liquidation.

Books and records /

storage

Cataloguing records to put in storage.

Summary of forecast remuneration for the DOCA period from 9 December 2016 to 27 January 2016

Hughes Drilling Ltd

Remuneration for the period 9 December 2016 to 27 January 2017

Rate


Partner 650 0.4 256 0.5 320 0.6 385 - - - - 0.5 320 2.0 1,282

Senior Manager 500 2.6 1,282 3.2 1,602 3.8 1,923 - - - - 3.2 1,602 12.8 6,410

Manager 475 2.2 1,026 2.7 1,282 3.2 1,538 - - - - 2.7 1,282 10.8 5,128

Senior Accountant 375 4.1 1,538 5.1 1,923 6.2 2,307 - - - - 5.1 1,923 20.5 7,692

Accountant 275 2.8 769 3.5 961 4.2 1,154 - - - - 3.5 961 14.0 3,846

Admin Staff 160 1.6 256 2.0 320 2.4 385 - - - - 2.0 320 8.0 1,282


GST 2,564



TotalAsset recoveries Creditors

439A report/


Statutory &

Administration

Summary of forecast remuneration for the Liquidation period from 9 December 2016 to 27 January 2016 3.3.2

Forecast remuneration for the Liquidation period from 9 December 2016 to 27 January 2016

Description of work


Asset realisations

$5,128 (ex GST)

Demobilisation Managing the demobilisation of the group to ensure it is

completed safely, efficiently and cleanly.



Creditors and

shareholders

$6,410 (ex GST)

Dealing with creditors and their claims Liaising with creditors in relation to their claims and the







Investigations

$7,962 (ex GST)

Conducting

investigations

Conducting further investigations in relation to any potential

voidable transactions including seeking legal advice and liaising

with (potential) defendants and their advisers.

Preparing and lodging report pursuant to Section 533 of the

Act with ASIC.

Litigation / recoveries

(where relevant)

Preparing briefs to solicitors.

Liaising with solicitors regarding recovery action.

Attending to negotiations and settlement matters.

Statutory and

Administration

$6,410 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms

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

other ASIC forms.

Corresponding with ASIC regarding statutory forms.


and their advisers



ATO & other

statutory reporting





liquidation.

Books and records /

storage


Summary of forecast remuneration for the Liquidation period from 9 December 2016 to 27 January 2016

Hughes Drilling Ltd


Rate


Partner 650 0.4 256 0.5 320 0.6 385 - - - - 0.5 320 2.0 1,282

Senior Manager 500 2.6 1,282 3.2 1,602 3.8 1,923 - - - - 3.2 1,602 12.8 6,410

Manager 475 2.2 1,026 2.7 1,282 3.2 1,538 - - - - 2.7 1,282 10.8 5,128

Senior Accountant 375 4.1 1,538 5.1 1,923 6.2 2,307 - - - - 5.1 1,923 20.5 7,692

Accountant 275 2.8 769 3.5 961 4.2 1,154 - - - - 3.5 961 14.0 3,846

Admin Staff 160 1.6 256 2.0 320 2.4 385 - - - - 2.0 320 8.0 1,282


GST 2,564




439A report/


Statutory &

Administration

Statement of Claim 4

The following resolutions are proposed for the Company:

Fee

Resolution Resolution

1 “That the remuneration of the Administrators of Hughes Drilling Ltd (Administrators Appointed) ACN

124 279 750 for the period from 22 September 2016 to 18 November 2016 calculated on hours spent

at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to

creditors, in the amount of $51,596 (excluding GST), plus disbursements, is hereby approved for

payment.”

2 “That the remuneration of the Administrators of Hughes Drilling Ltd (Administrators Appointed) ACN

124 279 750 for the period from 19 November 2016 to 8 December 2016, calculated on hours spent


creditors, to a capped amount of $13,457 (exclusive of GST), plus disbursements, is hereby approved

and can be drawn as required.”

3 In the event that the proposed Deed of Company Arrangement is approved by the creditors, and the

current Administrators are appointed as the Deed Administrators/ Trustees of the Creditors Trust::

“That the remuneration of the Deed Administrators of Hughes Drilling Ltd (Administrators Appointed)

ACN 124 279 750 / Trustees of the Creditors Trust for the period from 9 December 2016 to 27 January

2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and

Hourly Rates provided to creditors, to a capped amount of $25,638 (exclusive of GST), plus

disbursements, is hereby approved and can be drawn as required.”

4 In the event that Hughes Drilling Ltd (Administrators Appointed) ACN 124 279 750 is placed into

liquidation, and the current Administrators are appointed as the Liquidators:

“That the remuneration of the Liquidators of Hughes Drilling Ltd (In Liquidation) ACN 124 279 750 for

the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed

in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped

amount of $25,638 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as

required.”

Disbursements 5

There have been no disbursements incurred during the period 22 September 2016 to 18 November 2016, for which

McGrathNicol will be reimbursed.

Receipts and Payments 6

A summary if the receipts and payments for the period 22 September 2016 to 18 November 2016 are presented below.

Further details are available on request.

Information Sheet 7

For further information concerning the calculation and/or approval of the Administrators remuneration, creditors can

access the following:

Information sheet 85: Approving fees – a guide for creditors at ASIC’s website www.asic.gov.au/insolvencyinfosheets

Creditor information sheet on approving Administrator’s remuneration at ARITA’s website www.arita.com.au and

Our “Remuneration Methods and Hourly Rates” detailing the method used to calculate our fees and disbursements is

attached to this report at Annexure F.

If you have any queries in relation to the above, please contact Grace Chessman on (02) 9248 9953.


Hughes Drilling Ltd (Administrators Appointed)

Shaun Fraser


Hughes Drilling Ltd

Receipts and payments for the period 22 September 2016 to 18 November 2016

Account Value ($)

Receipts

Cash at bank on appointment 1,290

Pre-appointment debtors -

Post-appointment debtors -

Advance from HDL -

Other receipts 4,609

Total receipts 5,899

Payments

Suppliers (132,239)

Employees -

Intergroup Loans (707,701)

Other payments (162,475)

Total payments (1,002,415)

Net receipts/payments (996,516)

Source: Company’s pre-appointment and Administrators’ bank accounts

http://www.asic.gov.au/insolvencyinfosheets



Section 449E


Australia Gas Drilling Pty Ltd ACN 139 242 890 (“AGD”) (Administrators Appointed)

(“the Company”)

Declaration 1






external sources.

Summary 2





Creditors and

shareholders

6.0 hours

$2,744 (ex GST)






First Meeting of

Creditors









Company

Appointees

Administration type




Total fee resolutions proposed 10,762

Australia Gas Drilling Pty Ltd (Administrators Appointed)











ASIC.

439A report

preparation

(including

investigations)

3.1 hours

$1,304 (ex GST)


data.


financial reports.



of Administrators.




439A Report.



Statutory and

Administration

7.5 hours

$2,796 (ex GST)


management



Insurance Corresponding with our insurance broker to ensure adequate




Declaration of

Independence,


and Indemnities




appointment.


of stakeholders.






(“RATA”)


RATA.




Australian Gas Drilling Pty Ltd


Rate


Jamie Harris Partner 585 - - 0.0 17 - - - - - - - - 0.0 17

Jason Preston Partner 650 - - 0.4 228 - - - - - - - - 0.4 228


Anthony Cocco Senior Manager 500 - - 0.3 139 0.9 429 - - - - 0.6 279 1.7 846

Heather Matheson Senior Manager 500 - - 3.1 1,571 0.3 143 - - - - 0.1 71 3.6 1,786



Elin Gunstveit Assistant Manager 387 - - - - - - - - - - 1.4 556 1.4 556

Mitchell Soden Assistant Manager 387 - - - - - - - - - - 0.1 39 0.1 39

Grace Chessman Senior Accountant 375 - - 1.2 445 0.2 78 - - - - 0.4 155 1.8 678


Timothy Duncan Senior Accountant 375 - - 0.7 271 1.1 400 - - - - - - 1.8 671



Dira Benavides Client Admin/Prac Serv-Level 4 160 - - - - - - - - - - 1.7 272 1.7 272



Total (excluding GST) - - 6.0 2,744 3.1 1,304 - - - - 7.5 2,796 16.6 6,844

GST - 274 130 - - 280 684

Total (including GST) - 3,018 1,434 - - 3,076 7,528

Average hourly rate N/A 504 463 N/A N/A 411 454

Statutory and

administration Total

Creditors and

shareholders

439A report


investigations) EmployeesAsset realisations

Trade on (including

leases and PPSR)





Creditors and

shareholders

$716 (ex GST)

Secured creditors Liaising with secured creditors in relation to Liquidation.

Second Meeting of

Creditors















439A report

preparation

(including

investigations)

$339 (ex GST)

439A preparation Finalising the 439A report.


report.

Statutory and

Administration

$730 (ex GST)


management

Preparing and maintaining task lists and checklists..




Australia Gas Drilling Pty Ltd


Rate


Partner 650 - - 0.1 36 0.0 17 - - - - 0.1 37 0.1 89

Senior Manager 500 - - 0.4 179 0.2 85 - - - - 0.4 183 0.9 446

Manager 475 - - 0.3 143 0.1 68 - - - - 0.3 146 0.8 357

Senior Accountant 375 - - 0.6 215 0.3 102 - - - - 0.6 219 1.4 536

Accountant 275 - - 0.4 107 0.2 51 - - - - 0.4 110 1.0 268

Admin Staff 160 - - 0.2 36 0.1 17 - - - - 0.2 37 0.6 89

Total (excluding GST) - - 1.9 716 0.9 339 - - - - 1.9 730 4.7 1,785

GST 179


Average hourly rate - 377 377 - - 377 377


439A report/


Statutory &

Administration

Forecast remuneration for the Liquidation period from 9 December 2016 to 27 January 2016 3.3



Statutory and

Administration

$2,133 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms


other ASIC forms.



and their advisers



ATO & other

statutory reporting




liquidation.

Books and records /

storage





Rate


Partner 650 - - - - - - - - - - 0.2 107 0.2 107

Senior Manager 500 - - - - - - - - - - 1.1 533 1.1 533

Manager 475 - - - - - - - - - - 0.9 427 0.9 427

Senior Accountant 375 - - - - - - - - - - 1.7 640 1.7 640

Accountant 275 - - - - - - - - - - 1.2 320 1.2 320

Admin Staff 160 - - - - - - - - - - 0.7 107 0.7 107

Total (excluding GST) - - - - - - - - - - 5.7 2,133 5.7 2,133

GST 213


Average hourly rate - - - - - 377 377


439A report/


Statutory &

Administration



Fee


1 “That the remuneration of the Administrators of Australia Gas Drilling Pty Ltd (Administrators

Appointed) ACN 139 242 890 for the period from 22 September 2016 to 18 November 2016

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

Rates provided to creditors, in the amount of $6,844 (excluding GST), plus disbursements, is hereby

approved for payment.”

2 “That the remuneration of the Administrators of Australia Gas Drilling Pty Ltd (Administrators

Appointed) ACN 139 242 890 for the period from 19 November 2016 to 8 December 2016, calculated

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

provided to creditors, to a capped amount of $1,785 (exclusive of GST), plus disbursements, is hereby

approved and can be drawn as required.”

3 In the event that Australia Gas Drilling Pty Ltd (Administrators Appointed) ACN 139 242 890 is placed

into liquidation, and the current Administrators are appointed as the Liquidators:

“That the remuneration of the Liquidators of Australia Gas Drilling Pty Ltd (In Liquidation)

ACN 139 242 890 for the period from 9 December 2016 to 27 January 2017, calculated on hours spent




Disbursements 5








Account Value ($)

Receipts

Cash at bank on appointment 180



Advance from HDL 330

Other receipts -

Total receipts 510

Payments

Suppliers -

Employees -

Other payments (350)

Total payments (350)

Net receipts/payments 160


Information Sheet 7









Australia Gas Drilling Pty Ltd (Administrators Appointed)

Shaun Fraser





Section 449E


EDMS Metals Pty Ltd ACN 146 399 760 (“EDMS”) (Administrators Appointed)

(“the Company”)

Declaration 1






external sources.

Summary 2





Creditors and

shareholders

6.0 hours

$2,744 (ex GST)






First Meeting of

Creditors









Company

Appointees

Administration type






EDMS Metals Pty Ltd (Administrators Appointed)










ASIC.

439A report

preparation

(including

investigations)

3.1 hours

$1,304 (ex GST)


data.


financial reports.



of Administrators.




439A Report.



Statutory and

Administration

7.5 hours

$2,774 (ex GST)


management







Declaration of

Independence,


and Indemnities




appointment.


of stakeholders.






(“RATA”)


RATA.




EDMS Metals Pty Ltd


Rate



















GST - 274 130 - - 277 682



Trade on (including

leases and PPSR)

Statutory and


Creditors and

shareholders

439A report







Creditors and

shareholders

$715 (ex GST)


Second Meeting of

Creditors















439A report

preparation

(including

investigations)

$340 (ex GST)



report.

Statutory and

Administration

$724 (ex GST)


management







EDMS Metals Pty Ltd


Rate


Partner 650 - - 0.1 36 0.0 17 - - - - 0.1 36 0.1 89

Senior Manager 500 - - 0.4 179 0.2 85 - - - - 0.4 181 0.9 445

Manager 475 - - 0.3 143 0.1 68 - - - - 0.3 145 0.7 356


Accountant 275 - - 0.4 107 0.2 51 - - - - 0.4 109 1.0 267

Admin Staff 160 - - 0.2 36 0.1 17 - - - - 0.2 36 0.6 89


GST 178




439A report/


Statutory &

Administration




Statutory and

Administration

$2,131 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms


other ASIC forms.



and their advisers



ATO & other

statutory reporting



Books and records /

storage



EDMS Metals Pty Ltd


Rate


Partner 650 - - - - - - - - - - 0.2 107 0.2 107

Senior Manager 500 - - - - - - - - - - 1.1 533 1.1 533

Manager 475 - - - - - - - - - - 0.9 426 0.9 426


Accountant 275 - - - - - - - - - - 1.2 320 1.2 320

Admin Staff 160 - - - - - - - - - - 0.7 107 0.7 107


GST 213




439A report/


Statutory &

Administration



Fee


1 “That the remuneration of the Administrators of EDMS Metals Pty Ltd (Administrators Appointed) ACN




payment.”

2 “That the remuneration of the Administrators of EDMS Metals Pty Ltd Ltd (Administrators Appointed)

ACN 146 399 760 for the period from 19 November 2016 to 8 December 2016, calculated on hours

spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to

creditors, to a capped amount of $1,779(exclusive of GST), plus disbursements, is hereby approved and

can be drawn as required.”

3 In the event that EDMS Metals Pty Ltd (Administrators Appointed) ACN 146 399 760 is placed into


“That the remuneration of the Liquidators of EDMS Metals Pty Ltd (In Liquidation) ACN 146 399 760

for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates

detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a

capped amount of $2,131 (exclusive of GST), plus disbursements, is hereby approved and can be

drawn as required.”

Disbursements 5






EDMS Metals Pty Ltd


Account Value ($)

Receipts





Other receipts -

Total receipts 359

Payments

Suppliers -

Employees -





Information Sheet 7









EDMS Metals Pty Ltd (Administrators Appointed)

Shaun Fraser





Section 449E


Every Day Mine Services Operations Pty Ltd ACN 003 949 148 (“EDMSO”) (Administrators Appointed)

(“the Company”)

Declaration 1






external sources.

Summary 2





Creditors and

shareholders

6.0 hours

$2,744 (ex GST)






First Meeting of

Creditors









Company

Appointees

Administration type







Every Day Mine Services Operations Pty Ltd (Administrators Appointed)









ASIC.

439A report

preparation

(including

investigations)

3.1 hours

$1,304 (ex GST)


data.


financial reports.



of Administrators.




439A Report.



Statutory and

Administration

7.2 hours

$2,726 (ex GST)


management







Declaration of

Independence,


and Indemnities




appointment.


of stakeholders.






(“RATA”)


RATA.




Every Day Mine Services Operations Pty Ltd


Rate



















GST - 274 130 - - 273 677



Trade on (including

leases and PPSR)

Statutory and


Creditors and

shareholders

439A report







Creditors and

shareholders

$715 (ex GST)


Second Meeting of

Creditors















439A report

preparation

(including

investigations)

$341 (ex GST)



report.

Statutory and

Administration

$710 (ex GST)


management





Every Day Mining Services Operantions Pty Ltd


Rate


Partner 650 - - 0.1 36 0.0 17 - - - - 0.1 36 0.1 88

Senior Manager 500 - - 0.4 179 0.2 85 - - - - 0.4 178 0.9 442

Manager 475 - - 0.3 143 0.1 68 - - - - 0.3 142 0.7 353


Accountant 275 - - 0.4 107 0.2 51 - - - - 0.4 107 1.0 265

Admin Staff 160 - - 0.2 36 0.1 17 - - - - 0.2 36 0.6 88


GST 177



Statutory &


439A report/





Statutory and

Administration

$2,127 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms


other ASIC forms.



and their advisers



ATO & other

statutory reporting



Books and records /

storage



Every Day Mining Services Operantions Pty Ltd


Rate


Partner 650 - - - - - - - - - - 0.2 106 0.2 106

Senior Manager 500 - - - - - - - - - - 1.1 532 1.1 532

Manager 475 - - - - - - - - - - 0.9 425 0.9 425


Accountant 275 - - - - - - - - - - 1.2 319 1.2 319

Admin Staff 160 - - - - - - - - - - 0.7 106 0.7 106


GST 213




439A report/


Statutory &

Administration



Fee


1 “That the remuneration of the Administrators of Every Day Mine Services Operations Pty Ltd

(Administrators Appointed) ACN 003 949 148 for the period from 22 September 2016 to 18 November

2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and

Hourly Rates provided to creditors, in the amount of $6,773 (excluding GST), plus disbursements, is

hereby approved for payment.”

2 “That the remuneration of the Administrators of Every Day Mine Services Operations Pty Ltd

(Administrators Appointed) ACN 003 949 148 for the period from 19 November 2016 to 8 December




3 In the event that Every Day Mine Services Operations Pty Ltd (Administrators Appointed) ACN 003 949

148 is placed into liquidation, and the current Administrators are appointed as the Liquidators:

“That the remuneration of the Liquidators of Every Day Mine Services Operations Pty Ltd (In

Liquidation) ACN 146 399 760 for the period from 9 December 2016 to 27 January 2017, calculated on

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



Disbursements 5






EDMS Metals Pty Ltd


Account Value ($)

Receipts





Other receipts -

Total receipts 359

Payments

Suppliers -

Employees -





Information Sheet 7









Every Day Mine Services Operations Pty Ltd (Administrators Appointed)

Shaun Fraser





Section 449E


Express Hydraulics (Aust) Pty Ltd ACN 155 845 864 (“EHA”) (Administrators Appointed)

(“the Company”)

Declaration 1






external sources.

Summary 2





Asset realisations

28.3 hours

$14,226 (ex GST)


protect assets.

Prepare sale material including information for the data room.








interested parties.



Company

Appointees

Administration type






Express Hydraulics (Aust) Pty Ltd (Administrators Appointed)







bidders.

Plant and equipment Identified and secured plant and equipment on appointment.

Liaised with and instructed valuers and auctioneers.

Reviewed asset listings and valuations.



by the Company.





agreement.

Debtors Liaised with management and customers regarding outstanding

debtors and worked to resolve invoice disputes.

Reviewed work in progress and liaised with management

regarding invoicing.

Oversight of invoicing for pre-appointment work in progress.

Accounted for debtor collections.

Inventory Conducted stock takes with the assistance of valuation agents

and management.

Liaised with valuers.

Reviewed stock listing and values.

Reviewed and assessed of stock management systems.

Investigated stock valuation issues.

Creditors and

shareholders

18.8 hours

$9,431 (ex GST)

Unsecured creditors

Obtained a listing of unsecured trade creditors with addresses

and contact details.

Issued the Circular to Creditors on appointment, containing the

notice of the first meeting of creditors.

Engaged Link Market Services and set up a creditor/

stakeholder hotline to collate and respond to queries.

Prepared responses to frequently asked questions for use by

Link Market Services in addressing creditor queries.

Responded to creditor enquiries via telephone and email.

Responded to creditor enquiries which had escalated from Link

Market Services.

Liaised with Link Market Services to monitor the number and

nature of creditor enquires.

Finalised month-end accounts and calculated creditor claims as

at the date of appointment.

Maintained creditor enquiry register.

Reviewed and Prepared correspondence to creditors and their

representatives via email and post.

Negotiated with creditors to continue ongoing supply.






First Meeting of

Creditors
















ASIC.

Application for

extension of the

convening period of

the Second Meeting

of Creditors









convening period.

Committee of

Creditors

Prepared schedule of Committee of Creditors members.

Reviewed and issue appointment documents to Committee of

Creditors members.

Ongoing communication with Committee of Creditors

members.

439A report


data.

preparation

(including

investigations)

11.8 hours

$5,313 (ex GST)


financial reports.



of Administrators.




439A Report.



Conducting

investigation




matters.


to a liquidator.

Employees

27.2 hours

$11,058 (ex GST)

Employee enquiries Addressed employees on appointment in person and via

telephone.

Received and responded to employee enquiries via telephone,

email and in person.

Prepared regular updates to employees.

Entitlements Complied employee location and contact details.

Reviewed employee files and the books and records.

Drafted and issued a circular to employees on appointment.

Worked with management to calculate entitlements.

Analysed and investigated employee entitlements, liaised with

statutory bodies and assessed DOCA impact on employees.

Reconciled superannuation accounts.

Liaised with solicitors regarding entitlements.

Preparation of letters to employees advising of their

entitlements.

Fair Entitlements

Guarantee scheme

(“FEG”)

Liaised with the Department of Employment regarding potential

claims being made under FEG.

Payment and funding

of payroll

Paid wages, annual leave and other payroll expenses.

Prepared Group Certificates.

Other employee

issues

Liaised with the Child Support Agency.

Liaised with Centrelink.

Liaised with human resources and payroll staff to resolve

employee related issues.

Dealt with employee resignations, and the termination of

employees where required.

Engaged temporary employee contractors to fill key positions.

Reviewed contracts of employment for new starter employees.

Trade on

(including leases

and PPSR)

426.8 hours

$178,675 (ex GST)

Appointment matters Prepared and sent circulars to creditors and suppliers regarding

the Administrators’ appointment.

Liaised with utility providers to ensure continuation of services.

Liaised with the insurance broker to establish appropriate

insurance coverage for the Administration.

Investigated pre-appointment insurance policies.

Attended site, meet and address the staff members.

Retention of title

claims and Personal

Property Securities

Register (“PPSR”)

Conducted PPSR searches.

Notified PPSR registered creditors of appointment.

Received initial notification of creditor’s intention to claim.

Adjudicated on retention of title (‘ROT) and PPSR claims.

Correspondence with creditors regarding rejected ROT and

PPSR claims.

Worked with registered but satisfied claimants to have

registrations and security interests discharged.

Landlords Obtained a listing of landlords with addresses and contact

details and notifying landlords of the Administrators’

appointment.

Notified landlords of the Administrators’ intention not to

exercise property rights.

Leasing Reviewed lease documents.

Liaised with owners/lessors regarding asset location and site

visits.

Maintained a summary of leased assets and continued to

update.

Banking Liaised with Westpac regarding the identification and

management of pre-appointment bank accounts.

Management of post-appointment Administration trading bank

account.

Facilitated bank sweeps from pre-appointment bank accounts

to post-appointment bank account.

Administrated company staff with bank reconciliation work to

assist with debtor collections and cash flow maintenance.

Prepared payment requisition forms and receipt vouchers to

reflect the Company’s transactions in the Administrators’

accounting software.

Cash flow and trading Developed a trading cash flow model.

Reviewed and updated the cash flow to assess the trading

position of the Company.

Worked with Company staff to understand debtor position and

collections.

Obtained details regarding location and supply of stock.

Prepared and circulated trading / accounting protocol

documentation to all employees.

Employees Prepared circular to employees notifying of the Administrators’

appointment.

Reviewed employee wage calculations for the Administration

period.

Completed weekly wage runs and reimbursed employees for

any work related expenses.

Approved recruitment advertisements.

Reviewed individual employee leave requests.

Responded to employee enquiries in relation to wages,

superannuation, annual leave and general working conditions.

Facilitated conference calls to the Company’s employees to

provide regular updates in respect of the Administration.

Informed employees of the how rights in the Administration

impacts their accrued entitlements.

Customers Prepared a circular and notice to customers advising them of

the appointment of the Administrators and provided

information in regards to specific contract issues.

Regular meetings with customers.

Suppliers Notified suppliers of appointment and liaised with suppliers to

set up Administration accounts.

Managed key suppliers through the Administration process and

dealt with any specific supplier enquiries.

Provided Company staff with guidelines and parameters to

enable them to continue to manage the business operations.

Created and maintained a purchase order register to monitor

the Administrators’ liabilities.

Reviewed and authorised purchase orders submitted by

Company staff.

Weekly payments to third party suppliers for approved orders.

Ensured the continuance of a number of key utility services in

the Administration.

Processed receipts

and payments

Processed receipts and payments into the Administrators’

accounting system and generating management reports.

Statutory and

Administration

26.2 hours

$9,617 (ex GST)


management





specialists.





Declaration of

Independence,


and Indemnities




appointment.


of stakeholders.






(“RATA”)


RATA.







Cash management Established daily cash management processes and protocols

and implemented cash management practices.

Established daily cash management variance analysis and re-

forecasting practices.

Reviewed cash balances and funding needs on a daily basis.




Express Hydraulics (Aust) Pty Ltd


Rate


Jamie Harris Partner 585 0.2 105 0.0 17 - - - - 0.1 29 0.1 35 0.3 186

Jason Ireland Partner 650 0.6 371 1.8 1,157 - - - - 8.2 5,311 - - 10.5 6,838

Jason Preston Partner 650 0.4 277 1.9 1,242 - - 0.8 542 3.9 2,506 0.7 468 7.7 5,034

Shaun Fraser Partner 650 1.3 821 0.4 234 0.0 16 0.1 87 1.5 995 0.1 65 3.4 2,217



Hugh Monaghan Director 550 6.6 3,655 - - - - - - 2.0 1,100 - - 8.6 4,755

Susan Fiedler Director 550 - - - - - - - - 5.5 3,025 - - 5.5 3,025

Anthony Cocco Senior Manager 500 1.6 798 1.7 859 1.1 571 0.7 350 25.5 12,764 2.6 1,314 33.3 16,656

Cameron Gray Senior Manager 500 - - - - - - - - 0.4 200 - - 0.4 200

Christopher Johnson Senior Manager 500 5.7 2,835 1.9 970 1.9 952 - - 28.6 14,275 - - 38.1 19,032

Heather Matheson Senior Manager 500 0.3 135 6.7 3,326 1.1 540 0.8 417 8.8 4,420 4.8 2,421 22.5 11,260


Guy Gunasekera Manager 1 475 0.1 46 - - 3.7 1,739 7.0 3,325 77.5 36,797 - - 88.2 41,906


Carlo Lucci Assistant Manager 430 6.8 2,945 - - 0.1 37 - - 7.6 3,268 - - 14.5 6,250

Elin Gunstveit Assistant Manager 387 - - - - 0.1 23 - - 0.8 310 1.8 701 2.7 1,034

Mitchell Soden Assistant Manager 387 - - - - - - 1.2 464 131.2 50,786 0.1 46 132.6 51,297

Grace Chessman Senior Accountant 375 0.1 38 1.8 670 0.7 254 - - 15.8 5,927 2.0 759 20.4 7,647

Johnathon Tawil Senior Accountant 375 - - - - 1.2 442 13.4 5,025 7.5 2,813 2.3 881 24.4 9,160

Timothy Duncan Senior Accountant 375 1.0 375 2.3 863 2.0 739 0.5 188 77.7 29,144 0.4 143 83.9 31,451

Aleksandra Pejoska Accountant 275 - - 0.1 29 - - 0.4 101 7.3 2,000 0.2 44 7.9 2,174

Joshua Crick Accountant 275 1.0 281 0.0 11 - - 1.9 513 3.1 843 0.6 163 6.6 1,811

Andrea Palmer Client Admin/Prac Serv-Level 4 144 - - - - - - - - 0.5 70 - - 0.5 70

Dira Benavides Client Admin/Prac Serv-Level 4 160 - - - - - - - - 3.1 492 4.8 774 7.9 1,266

Graciela Nolan Client Admin/Prac Serv-Level 4 160 - - - - - - - - 5.6 893 2.4 382 8.0 1,275

Trent Williams Client Admin/Prac Serv-Level 3 144 - - - - - - - - 2.1 307 0.2 35 2.4 341

Clare Lethlean Client Admin/Prac Serv-Level 2 160 - - - - - - 0.2 27 1.5 240 - - 1.7 267

Rosemary Winser Client Admin/Prac Serv-Level 1 136 - - 0.1 13 - - 0.2 20 1.2 163 0.2 32 1.7 228

Total (excluding GST) 28.3 14,226 18.8 9,431 11.8 5,313 27.2 11,058 426.8 178,675 26.2 9,617 539.1 228,319

GST 1,423 943 531 1,106 17,867 962 22,832

Total (including GST) 15,649 10,374 5,844 12,164 196,542 10,579 251,151

Average hourly rate 552 552 496 448 460 403 466

Trade on (including

leases and PPSR)

Statutory and


Creditors and

shareholders

439A report







Asset realisations

$11,791 (ex GST)




bidders.



Plant and equipment Maintaining the plant and equipment.



Debtors Reviewing work in progress and liaising with management



Accounting for debtor collections.

Creditors and

shareholders

$1,965 (ex GST)

Unsecured creditors

Responding to creditor enquiries via telephone and email.

Responding to creditor enquiries which had escalated from Link

Market Services.

Liaising with Link Market Services to monitor the number and


Maintaining creditor enquiry register.






Second Meeting of

Creditors















439A report

preparation

(including

investigations)

$2,203 (ex GST)


data.


financial reports.







439A Report.

Finalising the 439A report.


report.

Conducting

investigation




matters.


to a liquidator.

Employees

$2,620 (ex GST)

Employee enquiries Receiving and responding to employee enquiries via telephone,


Preparing regular updates to employees.

Entitlements Analysing and investigating employee entitlements, liaising with

statutory bodies and assessing the DOCA impact on employees.

Liaising with solicitors regarding the status of employee

entitlements.

Fair Entitlements

Guarantee scheme

(“FEG”)

Liaising with the Department of Employment regarding

potential claims being made under Fair Entitlements Guarantee

scheme.

Payment and funding

of payroll

Paying wages, annual leave and other payroll expenses.

Other employee

issues

Liaising with the Child Support Agency.

Liaising with Centrelink.

Liaising with human resources and payroll staff to resolve


Trade on

(including leases

and PPSR)

$38,946 (ex GST)

Retention of title

claims (“ROT”) and

Personal Property

Securities Register

(“PPSR”)

Adjudicating on ROT and PPSR claims.

Corresponding with creditors and their representatives

regarding rejected ROT and PPSR claims.

Working with registered but satisfied claimants to have


Leasing Maintaining a summary of leased assets.

Banking Management of pre-appointment Company bank accounts.

Management of post-appointment Company trading bank

account.

Facilitating bank sweeps from pre-appointment bank accounts


Administrating company staff with bank reconciliation work to


Preparing payment requisition forms and receipt vouchers to



Cash flow and trading Maintaining a trading cash flow model.

Reviewing and updated the cash flow to assess the trading

position of the Companies.

Working with Companies staff to understand debtor position

and collections.

Employees Completing weekly wage runs and reimbursing employees for


Approving recruitment advertisements.

Reviewing individual employee leave requests.

Responding to employee enquiries in relation to wages,


Facilitating conference calls to the Companies’ employees to


Informing employees of the how rights in the Administration


Customers Regular meetings with customers.

Suppliers Managing key suppliers through the Administration process

and dealt with any specific supplier enquiries.

Maintaining a purchase order register to monitor the

Administrators’ liabilities.

Reviewing and authorising purchase orders.

Weekly payments to suppliers for approved orders.

Processed receipts

and payments

Processing receipts and payments into the Administrators’


Statutory and

Administration

$2,025 (ex GST)


management






Administration.




Express Hydraulics Australia Pty Ltd


Rate


Partner 650 0.9 590 0.2 98 0.2 110 0.2 131 3.0 1,947 0.2 101 4.6 2,978

Senior Manager 500 5.9 2,948 1.0 491 1.1 551 1.3 655 19.5 9,737 1.0 506 29.8 14,888

Manager 475 5.0 2,358 0.8 393 0.9 441 1.1 524 16.4 7,789 0.9 405 25.1 11,910

Senior Accountant 375 9.4 3,537 1.6 590 1.8 661 2.1 786 31.2 11,684 1.6 607 47.6 17,865

Accountant 275 6.4 1,769 1.1 295 1.2 331 1.4 393 21.2 5,842 1.1 304 32.5 8,933

Admin Staff 160 3.7 590 0.6 98 0.7 110 0.8 131 12.2 1,947 0.6 101 18.6 2,978


GST 5,955



Statutory &


439A report/





Asset realisations

$10,000 (ex GST)

Plant and equipment Liaising with and instructing valuers and auctioneers.

Reviewing asset listings and valuations.

Arranging onsite or other auctions for plant & equipment.

Pursuing any other sale options for remaining assets of the

group.

Demobilisation Safely decommissioning and removing equipment from each of

the customer sites

Managing a small number of staff members to ensure

demobilisation is completed safely, efficiently and cleanly.



Debtors Continue to collect outstanding debtors.

Creditors and

shareholders

$5,000 (ex GST)

Dealing with creditors

and their claims

Liaising with creditors in relation to their claims and the







Investigations

$10,000 (ex GST)

Conducting

investigations





Act with ASIC.


(where relevant)




Employees

$7,500 (ex GST)

Employees Terminating employment contracts as the demobilisation is

completed.

Liaising with former employees in relation to claims and

entitlements.

Finalising employee entitlement calculations.

Making distribution to preferential employee creditors.

Preparing Group Certificates.

Fair Entitlements

Guarantee scheme

(“FEG”)


potential claims being made under FEG.

Trade On

$5,000 (ex GST)

Creditors Preparing correspondence to potential creditors inviting

lodgement of PODs.

Receiving and adjudicating on PODs.

Requesting further information from creditors regarding PODs.

Considering legal advice regarding PODs (if needed).

Liaising with and satisfying all creditors from the Voluntary

Administration and demobilisation period.

Statutory and

Administration

$12,500 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms


other ASIC forms.



and their advisers



ATO & other statutory

reporting




liquidation.

Books and records /

storage



Express Hydraulics Australia Pty Ltd


Rate


Partner 650 0.8 500 0.4 250 0.8 500 0.6 375 0.4 250 1.0 625 3.8 2,500

Senior Manager 500 5.0 2,500 2.5 1,250 5.0 2,500 3.8 1,875 2.5 1,250 6.3 3,125 25.0 12,500

Manager 475 4.2 2,000 2.1 1,000 4.2 2,000 3.2 1,500 2.1 1,000 5.3 2,500 21.1 10,000

Senior Accountant 375 8.0 3,000 4.0 1,500 8.0 3,000 6.0 2,250 4.0 1,500 10.0 3,750 40.0 15,000

Accountant 275 5.5 1,500 2.7 750 5.5 1,500 4.1 1,125 2.7 750 6.8 1,875 27.3 7,500

Admin Staff 160 3.1 500 1.6 250 3.1 500 2.3 375 1.6 250 3.9 625 15.6 2,500


GST 5,000




439A report/


Statutory &

Administration



Fee


1 “That the remuneration of the Administrators of Express Hydraulics (Aust) Pty Ltd (Administrators





2 “That the remuneration of the Administrators of Express Hydraulics (Aust) Pty Ltd (Administrators





3 In the event that Express Hydraulics (Aust) Pty Ltd (Administrators Appointed) ACN 155 845 864 is

placed into liquidation, and the current Administrators are appointed as the Liquidators:

“That the remuneration of the Liquidators of Express Hydraulics (Aust) Pty Ltd (In Liquidation) ACN 155

845 864 for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the

rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a



Disbursements 5

We confirm that disbursements of $15,698 have been incurred during the period 22 September 2016 to 18 November

2016, for which McGrathNicol will be reimbursed. These are as follows:


Disbursements for the period 22 September 2016 to 18 November 2016

Category Value exc GST ($)

Per diems 1,613

Airfares 5,989

Accomodation 3,248

Taxis and other travel 4,643

Other 205

Total 15,698




Information Sheet 7









Express Hydraulics (Aust) Pty Ltd (Administrators Appointed)

Shaun Fraser




Account Value ($)

Receipts


Pre-appointment debtors 342,433

Post-appointment debtors 85,723

Advance from HDL 215,771

Other receipts 50


Payments

Suppliers (198,331)

Employees (212,023)


Total payments (426,297)

Net receipts/payments 218,177





Section 449E


G.O.S. Drilling Pty Ltd ACN 068 520 794 (“GOS”) (Administrators Appointed)

(“the Company”)

Declaration 1






external sources.

Summary 2





Creditors and

shareholders

6.0 hours

$2,744 (ex GST)






First Meeting of

Creditors









Company

Appointees

Administration type





G.O.S. Drilling Pty Ltd (Administrators Appointed)











ASIC.



Exchange (“ASX)





queries.


439A report

preparation

(including

investigations)

3.1 hours

$1,304 (ex GST)


data.


financial reports.



of Administrators.




439A Report.



Statutory and

Administration

6.5 hours

$2,614 (ex GST)


management







Declaration of

Independence,


and Indemnities




appointment.


of stakeholders.






(“RATA”)


RATA.










G.O.S. Drilling Pty Ltd


Rate



















GST - 274 130 - - 261 666



Trade on (including

leases and PPSR)

Statutory and


Creditors and

shareholders

439A report







Creditors and

shareholders

$716 (ex GST)


Second Meeting of

Creditors















439A report

preparation

(including

investigations)

$341 (ex GST)



report.

Statutory and

Administration

$681 (ex GST)


management






Administration.




G.O.S. Pty Ltd


Rate


Partner 650 - - 0.1 36 0.0 17 - - - - 0.1 34 0.1 87

Senior Manager 500 - - 0.4 179 0.2 85 - - - - 0.3 170 0.9 434

Manager 475 - - 0.3 143 0.1 68 - - - - 0.3 136 0.7 347


Accountant 275 - - 0.4 107 0.2 51 - - - - 0.4 102 0.9 261

Admin Staff 160 - - 0.2 36 0.1 17 - - - - 0.2 34 0.5 87


GST 174



Statutory &


439A report/





Statutory and

Administration

$2,118 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms


other ASIC forms.



and their advisers



ATO & other

statutory reporting



Books and records /

storage



G.O.S. Pty Ltd


Rate


Partner 650 - - - - - - - - - - 0.2 106 0.2 106

Senior Manager 500 - - - - - - - - - - 1.1 529 1.1 529

Manager 475 - - - - - - - - - - 0.9 424 0.9 424


Accountant 275 - - - - - - - - - - 1.2 318 1.2 318

Admin Staff 160 - - - - - - - - - - 0.7 106 0.7 106


GST 212




439A report/


Statutory &

Administration



Fee


1 “That the remuneration of the Administrators of G.O.S. Drilling Pty Ltd (Administrators Appointed) ACN




payment.”

2 “That the remuneration of the Administrators of G.O.S. Drilling Pty Ltd (Administrators Appointed) ACN





3 In the event that G.O.S. Drilling Pty Ltd (Administrators Appointed) ACN 068 520 794 is placed into


“That the remuneration of the Liquidators of G.O.S. Drilling Pty Ltd (In Liquidation) ACN 068 520 794





Disbursements 5






G.O.S. Pty Ltd


Account Value ($)

Receipts

Cash at bank on appointment -




Other receipts -

Total receipts 330

Payments

Suppliers -

Employees -



Net receipts/payments -


Information Sheet 7









G.O.S. Drilling Pty Ltd (Administrators Appointed)

Shaun Fraser





Section 449E


Hughes Drilling 1 Pty Ltd ACN 011 007 702 (“HD1”) (Administrators Appointed)

(“the Company”)

Declaration 1






external sources.

Summary 2





Asset

realisations

240.0 hours

$125,635 (ex

GST)

Strategy and process Assess assets and sites and consider risks and requirements to protect

assets.




Interested parties Identified and liaised with interested parties, including responding to

queries.





Company

Appointees

Administration type






Total fee resolutions proposed (Liquidation) 1,010,642


Hughes Drilling 1 Pty Ltd (Administrators Appointed)


interested parties.





Various meetings with interested parties, management presentations,

site visits, Q&A activity and negotiations with bidders.





Wrote to major Australian banks to identify bank accounts held by the

Company.

Day to day management of banking, account reconciliations and

processing receipts and payments.

Developed trading forecasts, negotiated funding with secured creditor,

applied to federal court for approval of VA funding agreement.



Reviewed work in progress and liaised with management regarding

invoicing.



Inventory Conducted stock takes with the assistance of valuation agents and

management.





Creditors and

shareholders

37.4 hours

$19,642 (ex GST)

Unsecured creditors

Obtained a listing of unsecured trade creditors with addresses and

contact details.

Issued the Circular to Creditors on appointment, containing the notice

of the first meeting of creditors.

Engaged Link Market Services and set up a creditor/ stakeholder

hotline to collate and respond to queries.

Prepared responses to frequently asked questions for use by Link

Market Services in addressing creditor queries.


Responded to creditor enquiries which had escalated from Link Market

Services.

Liaised with Link Market Services to monitor the number and nature of

creditor enquires.

Finalised month-end accounts and calculated creditor claims as at the

date of appointment.





Secured creditors Liaised with secured creditors regarding the appointment, it’s security,

funding and strategy.




First Meeting of

Creditors





Liaised with Link Market Services to review various documents for the

first meeting.


Prepared the meeting file, including the agenda, certificate of postage,

attendance register, lists of creditors, report to creditors and the

advertisement of meeting.

Developing a media management plan and protocols for attendance at

the first meeting.

Attendance at and chaired meetings.


Prepared and lodging the minutes of the first meeting with ASIC.

Application for

extension of the

convening period of

the Second Meeting

of Creditors

Prepared an application to the Federal Court of Australia to request an

extension of the convening period for the second meeting of creditors.

Prepared the affidavit (and supporting documentation) to support the

application.



release regarding the successful application to extend the convening

period.

Committee of

Creditors



Creditors members.

Ongoing communication with Committee of Creditors members.

439A report

preparation

(including

investigations)

439A preparation Inspected company books and records and back up electronic data.

Conducted and summarised various statutory searches and financial

reports.

Undertook financial analysis to understand the financial position of the

44.1 hours

$19,576 (ex GST)

company in the months leading up to the appointment of

Administrators.

Reviewed the Reports as to Affairs provided by the directors and

commenting on same.

Determined the content and key findings for inclusion in the 439A

Report.




interested parties.

Meetings with preferred bidder to discuss the structure and inclusions

for the proposed DOCA.


proposed DOCA.

Modelled outcome analysis to compare the impact of the proposed

DOCA versus a Liquidation on all classes of creditors.

Conducting

investigation

Reviewed and analysed management accounts, annual reports, and

prospectus information, for inclusion in the 439A Report.


matters.

Prepared preliminary findings on potential recoveries available to a

liquidator.

Employees

70.0 hours

$25,102 (ex GST)

Employee enquiries Addressed employees on appointment in person and via telephone.

Received and responded to employee enquiries via telephone, email

and in person.






Analysed and investigated employee entitlements, liaised with statutory

bodies and assessed DOCA impact on employees.



Preparation of letters to employees advising of their entitlements.

Fair Entitlements

Guarantee scheme

(“FEG”)

Liaised with the Department of Employment regarding potential claims

being made under FEG.

Payment and funding

of payroll



Other employee

issues



Liaised with human resources and payroll staff to resolve employee

related issues.

Trade on

(including leases

and PPSR)

988.6 hours

$453,423 (ex

GST)

Appointment matters Prepared and sent circulars to creditors and suppliers regarding the

Administrators’ appointment.


Liaised with the insurance broker to establish appropriate insurance

coverage for the Administration.



Retention of title

claims and Personal

Property Securities






Correspondence with creditors regarding rejected ROT and PPSR

claims.

Worked with registered but satisfied claimants to have registrations

and security interests discharged.

Landlords Obtained a listing of landlords with addresses and contact details and

notifying landlords of the Administrators’ appointment.

Notified landlords of the Administrators’ intention not to exercise

property rights.


Liaised with owners/lessors regarding asset location and site visits.

Maintained a summary of leased assets and continued to update.

Banking Liaised with Westpac regarding the identification and management of

pre-appointment bank accounts.


account.

Facilitated bank sweeps from pre-appointment bank accounts to post-

appointment bank account.

Administrated company staff with bank reconciliation work to assist

with debtor collections and cash flow maintenance.

Prepared payment requisition forms and receipt vouchers to reflect the

Company’s transactions in the Administrators’ accounting software.


Reviewed and updated the cash flow to assess the trading position of

the Company.


collections.


Prepared and circulated trading / accounting protocol documentation

to all employees.


appointment.

Reviewed employee wage calculations for the Administration period.

Completed weekly wage runs and reimbursed employees for any work

related expenses.





Facilitated conference calls to the Company’s employees to provide

regular updates in respect of the Administration.

Informed employees of the how rights in the Administration impacts

their accrued entitlements.

Customers Prepared a circular and notice to customers advising them of the

appointment of the Administrators and provided information in

regards to specific contract issues.


Suppliers Notified suppliers of appointment and liaised with suppliers to set up

Administration accounts.

Managed key suppliers through the Administration process and dealt

with any specific supplier enquiries.

Provided Company staff with guidelines and parameters to enable

them to continue to manage the business operations.

Created and maintained a purchase order register to monitor the


Reviewed and authorised purchase orders submitted by Company staff.


Ensured the continuance of a number of key utility services in the

Administration.

Processed receipts

and payments

Processed receipts and payments into the Administrators’ accounting

system and generating management reports.

Statutory and

Administration

43.6 hours

$15,433 (ex GST)


management





specialists.



Reviewed pre-appointment insurance policies and corresponded with

the Company’s previous brokers.

Liaised with insurance broker as incidents occurred during the

Administration.

Declaration of Prepared Declaration of Independence, Relevant Relationships and

Independence,


and Indemnities

Indemnities (“DIRRI”).

McGrathNicol website Organised McGrathNicol website to display details of the appointment.

Maintained updated information on the website for the benefit of

stakeholders.

Statutory notices Prepared and lodged all statutory notices with ASIC including the Form

505 on appointment.

Advised other statutory authorities (e.g. the Australian Taxation Office

and the Office of State Revenue) of our appointment.


(“RATA”)

Issued a letter to the directors requesting they complete a RATA.

Liaised with the directors regarding the logistics of RATA lodgements,

including granting an extension for its provision.





Cash management Established daily cash management processes and protocols and

implemented cash management practices.




Taxation Prepared letters to the Australian Taxation Office for documents in

relation to accessing freedom of information.




Rate


Jamie Harris Partner 585 1.8 1,053 0.0 17 - - - - 11.7 6,850 0.1 61 13.6 7,981

Jason Ireland Partner 650 18.3 11,895 9.1 5,925 - - - - 93.6 60,853 - - 121.0 78,673

Jason Preston Partner 650 4.3 2,769 3.1 2,002 - - 0.8 542 7.2 4,703 1.3 819 16.7 10,834

Shaun Fraser Partner 650 12.6 8,210 0.6 410 0.2 156 0.1 87 3.7 2,392 0.2 114 17.5 11,367



Hugh Monaghan Director 550 66.5 36,548 - - - - - - 4.0 2,200 - - 70.5 38,748


Anthony Cocco Senior Manager 500 9.3 4,674 4.2 2,099 3.7 1,854 4.2 2,100 160.2 80,116 4.5 2,237 186.2 93,079


Christopher Johnson Senior Manager 500 25.6 12,800 3.5 1,773 6.3 3,165 - - 141.1 70,565 - - 176.6 88,303

Heather Matheson Senior Manager 500 2.7 1,350 9.3 4,639 8.2 4,118 0.8 417 15.7 7,833 8.4 4,184 45.1 22,540


Guy Gunasekera Manager 1 475 1.0 456 - - 6.4 3,042 7.0 3,325 148.1 70,360 - - 162.5 77,184

Jessie Maguire Manager 475 - - 0.1 54 - - - - 0.1 48 - - 0.2 101


Elin Gunstveit Assistant Manager 387 - - - - 0.6 232 - - 1.6 619 2.2 846 4.4 1,697

Mitchell Soden Assistant Manager 387 - - - - - - - - 138.6 53,640 0.1 52 138.7 53,692

Grace Chessman Senior Accountant 375 0.2 66 3.4 1,288 4.9 1,844 - - 26.8 10,039 3.2 1,198 38.5 14,435

Johnathon Tawil Senior Accountant 375 - - - - 2.7 1,004 41.0 15,375 17.6 6,600 4.4 1,650 65.7 24,629

Timothy Duncan Senior Accountant 375 1.1 413 3.7 1,382 10.1 3,786 2.1 788 147.0 55,143 0.7 249 164.7 61,761


Joshua Crick Accountant 275 1.8 491 0.0 11 - - 1.9 513 5.3 1,453 1.0 270 10.0 2,739


Dira Benavides Client Admin/Prac Serv-Level 4 160 - - - - - - - - 6.2 986 10.4 1,659 16.5 2,645

Graciela Nolan Client Admin/Prac Serv-Level 4 160 - - - - - - 0.3 48 13.1 2,098 3.4 550 16.8 2,696


Clare Lethlean Client Admin/Prac Serv-Level 2 160 - - - - - - 11.2 1,787 5.1 820 - - 16.3 2,607


Total (excluding GST) 240.0 125,635 37.4 19,642 44.1 19,576 70.0 25,102 988.6 453,423 43.6 15,433 1,423.6 658,810

GST 12,564 1,964 1,958 2,510 45,342 1,543 65,881



Trade on (including

leases and PPSR)

Statutory and


Creditors and

shareholders

439A report







Asset realisations

$21,651 (ex GST)




bidders.










Creditors and

shareholders

$4,983 (ex GST)

Unsecured creditors



Market Services.









Second Meeting of

Creditors















439A report

preparation

(including

investigations)

$3,780 (ex GST)


data.


financial reports.







439A Report.



report.


proposed DOCA.





meeting.

Conducting

investigation




matters.


to a liquidator.

Employees

$9,107 (ex GST)







entitlements.

Fair Entitlements

Guarantee scheme

(“FEG”)



scheme.

Payment and funding

of payroll


Other employee

issues





Trade on

(including leases

and PPSR)

$128,874 (ex GST)

Retention of title


Personal Property

Securities Register

(“PPSR”)









account.












and collections.


















Processed receipts

and payments



Statutory and

Administration

$3,437 (ex GST)


management






Administration.






Rate


Partner 650 1.7 1,083 0.4 249 0.3 189 0.7 455 9.9 6,444 0.3 172 13.2 8,592

Senior Manager 500 10.8 5,413 2.5 1,246 1.9 945 4.6 2,277 64.4 32,219 1.7 859 85.9 42,958

Manager 475 9.1 4,330 2.1 997 1.6 756 3.8 1,821 54.3 25,775 1.4 687 72.4 34,366


Accountant 275 11.8 3,248 2.7 747 2.1 567 5.0 1,366 70.3 19,331 1.9 515 93.7 25,775

Admin Staff 160 6.8 1,083 1.6 249 1.2 189 2.8 455 40.3 6,444 1.1 172 53.7 8,592


GST 12,887 17,183

Total (including GST) 141,762 189,015

Average hourly rate 377 377

Asset recoveries Creditors

439A report/


Statutory &

Administration Total




Asset realisations

$10,350 (ex GST)



Creditors and

shareholders

$10,350 (ex GST)

Dealing with creditors and their claims Liaising with creditors in relation to their claims and ensuring

the Deed fund is distributed in accordance with the Creditor’s

Trust Deed.






Statutory and

Administration

$5,175 (ex GST)

Document maintenance/file review/checklist

Undertaking first month administration reviews.




ATO & other statutory reporting Notifying of appointment and completion of the DOCA.

Complying with all tax requirements of the proposed Creditor’s

Trust.


DOCA.

Books and records / storage Cataloguing records to put in storage.

Summary of forecast remuneration for the DOCA period from 9 December 2016 to 27 January 2016 3.3.2



Rate


Partner 650 0.8 518 0.8 518 - - - - - - 0.4 259 2.0 1,294

Senior Manager 500 5.2 2,588 5.2 2,588 - - - - - - 2.6 1,294 12.9 6,469

Manager 475 4.4 2,070 4.4 2,070 - - - - - - 2.2 1,035 10.9 5,175

Senior Accountant 375 8.3 3,105 8.3 3,105 - - - - - - 4.1 1,553 20.7 7,763

Accountant 275 5.6 1,553 5.6 1,553 - - - - - - 2.8 776 14.1 3,881

Admin Staff 160 3.2 518 3.2 518 - - - - - - 1.6 259 8.1 1,294

Total (excluding GST) 27.5 10,350 27.5 10,350 - - - - - - 13.7 5,175 68.7 25,875

GST - 2,588

Total (including GST) - 28,463

Average hourly rate - 377


439A report/


Statutory &

Administration




Asset realisations

$36,000 (ex GST)





group.


the customer sites






Creditors and

shareholders

$18,000 (ex GST)


and their claims








Investigations

$36,000 (ex GST)

Conducting

investigations





Act with ASIC.


(where relevant)




Employees

$27,000 (ex GST)


completed.


entitlements.




Fair Entitlements

Guarantee scheme

(“FEG”)



Trade On

$18,000 (ex GST)

Processing proofs of

debt (“POD”)

Preparing correspondence to potential creditors inviting

lodgement of PODs.




Dividend procedures Preparing correspondence to creditors advising of intention to

declare dividend.

Obtaining clearance from ATO to allow distribution of

company’s assets.

Preparing dividend calculations.

Preparing payment vouchers to pay dividend.

Preparing correspondence to creditors enclosing payment of

dividend.

Statutory and

Administration

$45,000 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms


other ASIC forms.



and their advisers




reporting




liquidation.

Books and records /

storage





Rate


Partner 650 2.8 1,800 1.4 900 2.8 1,800 2.1 1,350 1.4 900 3.5 2,250 13.8 9,000

Senior Manager 500 18.0 9,000 9.0 4,500 18.0 9,000 13.5 6,750 9.0 4,500 22.5 11,250 90.0 45,000

Manager 475 15.2 7,200 7.6 3,600 15.2 7,200 11.4 5,400 7.6 3,600 18.9 9,000 75.8 36,000


Accountant 275 19.6 5,400 9.8 2,700 19.6 5,400 14.7 4,050 9.8 2,700 24.5 6,750 98.2 27,000

Admin Staff 160 11.3 1,800 5.6 900 11.3 1,800 8.4 1,350 5.6 900 14.1 2,250 56.3 9,000


GST 1,800 18,000

Total (including GST) 19,800 198,000

Average hourly rate 377 377

Statutory &


439A report/




Fee


1 “That the remuneration of the Administrators of Hughes Drilling 1 Pty Ltd (Administrators Appointed)

ACN 011 007 702 for the period from 22 September 2016 to 18 November 2016 calculated on hours



payment.”








“That the remuneration of the Deed Administrators of Hughes Drilling 1 Pty Ltd (In Liquidation)

ACN 011 007 702 / Trustees of the Creditors Trust for the period from 9 December 2016 to 27 January




4 In the event that Hughes Drilling 1 Pty Ltd (Administrators Appointed) ACN 011 007 702 is placed into


“That the remuneration of the Liquidators of Hughes Drilling 1 Pty Ltd (In Liquidation) ACN 011 007

702 for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates




Disbursements 5






Per diems 1,613

Airfares 5,989

Accomodation 3,248


Other 205

Total 15,698




Information Sheet 7










Shaun Fraser




Account Value ($)

Receipts


Pre-appointment debtors 4,253,645

Post-appointment debtors 1,251,433

Advance from HDL (900)

Other receipts 957

Total receipts 5,505,136

Payments

Suppliers (895,373)

Employees (2,081,777)



Net receipts/payments 2,359,193





Section 449E


Hughes Drilling 2 Pty Ltd ACN 146 399 902 (“HD2”) (Administrators Appointed)

(“the Company”)

Declaration 1






external sources.

Summary 2





Asset realisations

37.9 hours

$18,960 (ex GST)


protect assets.









interested parties.



Company

Appointees

Administration type













bidders.






by the Company.


and management.





Creditors and

shareholders

6.2 hours

$2,799 (ex GST)

Unsecured creditors











Market Services.














First Meeting of

Creditors
















ASIC.

439A report

preparation

(including

investigations)

8.5 hours

$3,629 (ex GST)


data.


financial reports.



of Administrators.




439A Report.



Conducting

investigation




matters.


to a liquidator.

Trade on

(including leases

and PPSR)

0.3 hours

$116 (ex GST)

Appointment matters Prepared and sent circulars to creditors regarding the





Retention of title

claims and Personal

Property Securities







PPSR claims.





visits.


update.




account.






Processed receipts

and payments



Statutory and

Administration

8.9 hours

$2,998 (ex GST)


management





specialists.





Declaration of

Independence,


and Indemnities




appointment.


of stakeholders.






(“RATA”)


RATA.




Rate



Jason Ireland Partner 650 1.0 618 - - - - - - - - - - 1.0 618

Jason Preston Partner 650 0.7 462 0.4 228 - - - - - - - - 1.1 689





Anthony Cocco Senior Manager 500 1.3 665 0.3 139 1.3 666 - - - - 0.6 279 3.5 1,749


Heather Matheson Senior Manager 500 0.5 225 3.1 1,571 1.6 805 - - - - 0.1 71 5.3 2,673






Mitchell Soden Assistant Manager 387 - - - - - - - - 0.3 116 - - 0.3 116



Timothy Duncan Senior Accountant 375 - - 0.7 271 2.6 964 - - - - - - 3.3 1,235





Clare Lethlean Client Admin/Prac Serv-Level 2 160 2.0 320 - - - - - - - - - - 2.0 320


Total (excluding GST) 37.9 18,960 6.2 2,799 8.5 3,629 - - 0.3 116 8.9 2,998 61.7 28,502

GST 1,896 280 363 - 12 300 2,850

Total (including GST) 20,856 3,079 3,992 - 128 3,297 31,353

Average hourly rate 551 497 471 N/A 426 371 508

Trade on (including

leases and PPSR)

Statutory and


Creditors and

shareholders

439A report







Asset realisations

$5,843 (ex GST)




bidders.










Creditors and

shareholders

$349 (ex GST)

Unsecured creditors



Market Services.









Second Meeting of

Creditors















439A report

preparation

(including

investigations)

$855 (ex GST)


data.


financial reports.







439A Report.



report.

Conducting

investigation




matters.


to a liquidator.

Trade on

(including leases

and PPSR)

$15 (ex GST)

Retention of title


Personal Property

Securities Register

(“PPSR”)









account.












and collections.








Processed receipts

and payments



Statutory and

Administration

$372 (ex GST)


management






Administration.






Rate


Partner 650 0.4 292 0.0 17 0.1 43 - - 0.0 1 0.0 19 0.6 372

Senior Manager 500 2.9 1,461 0.2 87 0.4 214 - - 0.0 4 0.2 93 3.7 1,859

Manager 475 2.5 1,169 0.1 70 0.4 171 - - 0.0 3 0.2 74 3.1 1,487

Senior Accountant 375 4.7 1,753 0.3 105 0.7 256 - - 0.0 4 0.3 112 5.9 2,230

Accountant 275 3.2 876 0.2 52 0.5 128 - - 0.0 2 0.2 56 4.1 1,115

Admin Staff 160 1.8 292 0.1 17 0.3 43 - - 0.0 1 0.1 19 2.3 372

Total (excluding GST) 15.5 5,843 0.9 349 2.3 855 - - 0.0 15 1.0 372 19.7 7,434

GST 743


Average hourly rate 377 377 377 - 377 377 377


439A report/


Statutory &

Administration




Asset realisations

$6,787 (ex GST)





group.


the customer sites





Statutory and

Administration

$2,262 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms


other ASIC forms.



and their advisers




reporting




liquidation.

Books and records /

storage





Rate


Partner 650 0.5 339 - - - - - - - - 0.2 113 0.7 452

Senior Manager 500 3.4 1,697 - - - - - - - - 1.1 566 4.5 2,262

Manager 475 2.9 1,357 - - - - - - - - 1.0 452 3.8 1,810

Senior Accountant 375 5.4 2,036 - - - - - - - - 1.8 679 7.2 2,715

Accountant 275 3.7 1,018 - - - - - - - - 1.2 339 4.9 1,357

Admin Staff 160 2.1 339 - - - - - - - - 0.7 113 2.8 452

Total (excluding GST) 18.0 6,787 - - - - - - - - 6.0 2,262 24.0 9,050

GST 905


Average hourly rate 377 - - - - 377 377

Statutory &


439A report/




Fee






payment.”






3 In the event that Hughes Drilling 2 Pty Ltd (Administrators Appointed) ACN 146 399 902is placed into


“That the remuneration of the Liquidators of Hughes Drilling 2 Pty Ltd (In Liquidation) ACN 146 399





Disbursements 5








Account Value ($)

Receipts





Other receipts 3


Payments

Suppliers (2,250)

Employees -





Information Sheet 7










Shaun Fraser





Section 449E


Hughes Drilling Corporate Pty Ltd ACN 146 398 718 (“HDC”) (Administrators Appointed)

(“the Company”)

Declaration 1






external sources.

Summary 2





Asset realisations

14.6 hours

$7,536 (ex GST)

Strategy and process Prepare sale material including information for the data room.








interested parties.





Company

Appointees

Administration type





Hughes Drilling Corporate Pty Ltd (Administrators Appointed)






bidders.



by the Company.





agreement.

Creditors and

shareholders

9.1 hours

$4,364 (ex GST)

Unsecured creditors











Market Services.














First Meeting of

Creditors
















ASIC.

Application for

extension of the

convening period of

the Second Meeting

of Creditors









convening period.

439A report

preparation

(including

investigations)

6.5 hours

$2,781 (ex GST)


data.


financial reports.



of Administrators.




439A Report.



Conducting

investigation




matters.


to a liquidator.

Employees

19.7 hours

$8,144 (ex GST)


telephone.













entitlements.

Fair Entitlements

Guarantee scheme

(“FEG”)



Payment and funding

of payroll



Other employee

issues





Trade on

(including leases

and PPSR)

54.9 hours

$23,040 (ex GST)








Retention of title

claims and Personal

Property Securities








visits.


update.




account.










appointment.


period.











Processed receipts

and payments



Statutory and

Administration

10.7 hours

$4,233 (ex GST)


management





specialists.





Declaration of

Independence,


and Indemnities




appointment.


of stakeholders.






(“RATA”)


RATA.




Hughes Drilling Corporate Pty Ltd


Rate


Jamie Harris Partner 585 0.1 70 0.0 17 - - - - - - 0.0 9 0.2 96

Jason Ireland Partner 650 0.4 247 0.4 289 - - - - 0.3 195 - - 1.1 731

Jason Preston Partner 650 0.3 185 0.7 481 - - 0.8 542 0.8 510 0.2 117 2.8 1,835

Shaun Fraser Partner 650 0.8 547 0.1 59 0.0 10 0.1 87 0.3 176 0.0 16 1.4 895



Hugh Monaghan Director 550 4.4 2,437 - - - - - - 0.4 220 - - 4.8 2,657

Susan Fiedler Director 550 - - - - - - - - 1.4 756 - - 1.4 756

Anthony Cocco Senior Manager 500 0.5 266 0.6 319 1.0 524 - - 3.4 1,675 1.0 509 6.6 3,292


Christopher Johnson Senior Manager 500 1.2 590 0.4 218 0.2 101 - - 2.2 1,080 - - 4.0 1,989

Heather Matheson Senior Manager 500 0.2 90 4.0 1,984 0.8 408 0.8 417 0.9 438 1.3 659 8.0 3,995


Guy Gunasekera Manager 1 475 0.1 30 - - 0.9 435 7.0 3,325 19.3 9,163 - - 27.3 12,953


Carlo Lucci Assistant Manager 430 4.6 1,963 - - 0.1 25 - - 1.5 654 - - 6.1 2,642

Elin Gunstveit Assistant Manager 387 - - - - 0.0 15 - - 0.2 62 1.5 585 1.7 662


Grace Chessman Senior Accountant 375 0.0 9 1.3 501 0.5 195 - - 1.0 386 0.9 320 3.8 1,412

Johnathon Tawil Senior Accountant 375 - - - - 1.2 442 8.3 3,113 5.5 2,048 0.5 190 15.4 5,792

Timothy Duncan Senior Accountant 375 - - 1.1 419 1.7 626 - - 7.3 2,754 0.1 36 10.2 3,834

Aleksandra Pejoska Accountant 275 - - 0.1 29 - - 0.4 101 0.8 214 0.0 11 1.3 355

Joshua Crick Accountant 275 0.3 70 0.0 11 - - 1.9 513 0.2 59 0.2 55 2.6 709

Dira Benavides Client Admin/Prac Serv-Level 4 160 - - - - - - - - 1.4 219 1.2 194 2.6 413

Graciela Nolan Client Admin/Prac Serv-Level 4 160 - - - - - - - - 2.4 382 0.7 118 3.1 500





GST 754 436 278 814 2,304 423 5,010



Trade on (including

leases and PPSR)

Statutory and


Creditors and

shareholders

439A report







Asset realisations

$4,168 (ex GST)




bidders.





Creditors and

shareholders

$719 (ex GST)

Unsecured creditors



Market Services.









Second Meeting of

Creditors
















data.


financial reports.

439A report

preparation

(including

investigations)

$732 (ex GST)







439A Report.



report.

Conducting

investigation




matters.


to a liquidator.

Employees

$745 (ex GST)







entitlements.

Fair Entitlements

Guarantee scheme

(“FEG”)



scheme.

Payment and funding

of payroll


Other employee

issues





Trade on

(including leases

and PPSR)

$6,011 (ex GST)




account.




assist cash flow maintenance.















Processed receipts

and payments



Statutory and

Administration

$693 (ex GST)


management










Rate


Partner 650 0.3 208 0.1 36 0.1 37 0.1 37 0.5 301 0.1 35 1.0 653

Senior Manager 500 2.1 1,042 0.4 180 0.4 183 0.4 186 3.0 1,503 0.3 173 6.5 3,267

Manager 475 1.8 834 0.3 144 0.3 146 0.3 149 2.5 1,202 0.3 139 5.5 2,613


Accountant 275 2.3 625 0.4 108 0.4 110 0.4 112 3.3 902 0.4 104 7.1 1,960

Admin Staff 160 1.3 208 0.2 36 0.2 37 0.2 37 1.9 301 0.2 35 4.1 653

Total (excluding GST) 11.1 4,168 1.9 719 1.9 732 2.0 745 16.0 6,011 1.8 693 34.7 13,067

GST 1,307



Statutory &


439A report/





Asset realisations

$2,017 (ex GST)





group.


the customer sites






Creditors and

shareholders

$3,026 (ex GST)


and their claims








Investigations

$3,026 (ex GST)

Conducting

investigations





Act with ASIC.


(where relevant)




Employees

$5,044 (ex GST)


completed.


entitlements.




Fair Entitlements

Guarantee scheme

(“FEG”)



Trade On

$2,017 (ex GST)


lodgement of PODs.






Statutory and

Administration

$5,044 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms


other ASIC forms.



and their advisers




reporting




liquidation.

Books and records /

storage





Rate


Partner 650 0.2 101 0.2 151 0.2 151 0.4 252 0.2 101 0.4 252 1.6 1,009

Senior Manager 500 1.0 504 1.5 757 1.5 757 2.5 1,261 1.0 504 2.5 1,261 10.1 5,044

Manager 475 0.8 403 1.3 605 1.3 605 2.1 1,009 0.8 403 2.1 1,009 8.5 4,035

Senior Accountant 375 1.6 605 2.4 908 2.4 908 4.0 1,513 1.6 605 4.0 1,513 16.1 6,052

Accountant 275 1.1 303 1.7 454 1.7 454 2.8 757 1.1 303 2.8 757 11.0 3,026

Admin Staff 160 0.6 101 0.9 151 0.9 151 1.6 252 0.6 101 1.6 252 6.3 1,009


GST 2,017




439A report/


Statutory &

Administration



Fee


1 “That the remuneration of the Administrators of Hughes Drilling Corporate Pty Ltd (Administrators





2 “That the remuneration of the Administrators of Hughes Drilling Corporate Pty Ltd (Administrators





3 In the event that Hughes Drilling Corporate Pty Ltd (Administrators Appointed) ACN 146 398 718 is


“That the remuneration of the Liquidators of Hughes Drilling Corporate Pty Ltd (In Liquidation)

ACN 146 398 718 for the period from 9 December 2016 to 27 January 2017, calculated on hours spent




Disbursements 5

We confirm that disbursements of $XX have been incurred during the period 22 September 2016 to 18 November 2016,

for which McGrathNicol will be reimbursed. These are as follows:




Per diems 1,613

Airfares 5,989

Accomodation 3,248


Other 205

Total 15,698




Information Sheet 8









Hughes Drilling Corporate Pty Ltd (Administrators Appointed)

Shaun Fraser




Account Value ($)

Receipts





Other receipts 1,347


Payments

Suppliers (92,439)

Employees (179,048)








Section 449E


HD JSW Pty Ltd ACN 165 895 072 (“HDJSW”) (Administrators Appointed)

(“the Company”)

Declaration 1






external sources.

Summary 2





Creditors and

shareholders

6.0 hours

$2,733 (ex GST)






First Meeting of

Creditors









Company

Appointees

Administration type





HD JSW Pty Ltd (Administrators Appointed)











ASIC.



Exchange (“ASX)





queries.


439A report

preparation

(including

investigations)

2.0 hours

$904 (ex GST)


data.


financial reports.



of Administrators.




439A Report.



Statutory and

Administration

6.9 hours

$2,678 (ex GST)


management







Declaration of

Independence,


and Indemnities




appointment.


of stakeholders.






(“RATA”)


RATA.










HD JSW Pty Ltd


Rate












Timothy Duncan Senior Accountant 375 - - 0.7 271 - - - - - - - - 0.7 271


Joshua Crick Accountant 275 - - - - - - - - - - 0.1 20 0.1 20




Total (excluding GST) - - 6.0 2,733 2.0 904 - - - - 6.9 2,678 14.9 6,314

GST - 273 90 - - 268 631

Total (including GST) - 3,006 994 - - 2,945 6,945


Trade on (including

leases and PPSR)

Statutory and


Creditors and

shareholders

439A report







Creditors and

shareholders

$713 (ex GST)


Second Meeting of

Creditors















439A report

preparation

(including

investigations)

$235 (ex GST)



report.

Statutory and

Administration

$698 (ex GST)


management





HD JSW Pty Ltd


Rate


Partner 650 - - 0.1 36 0.0 12 - - - - 0.1 35 0.1 82

Senior Manager 500 - - 0.4 178 0.1 59 - - - - 0.3 175 0.8 412

Manager 475 - - 0.3 143 0.1 47 - - - - 0.3 140 0.7 329


Accountant 275 - - 0.4 107 0.1 35 - - - - 0.4 105 0.9 247

Admin Staff 160 - - 0.2 36 0.1 12 - - - - 0.2 35 0.5 82


GST 165



Statutory &


439A report/





Statutory and

Administration

$2,088 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms


other ASIC forms.



and their advisers



ATO & other

statutory reporting



Books and records /

storage



HD JSW Pty Ltd


Rate


Partner 650 - - - - - - - - - - 0.2 104 0.2 104

Senior Manager 500 - - - - - - - - - - 1.0 522 1.0 522

Manager 475 - - - - - - - - - - 0.9 418 0.9 418


Accountant 275 - - - - - - - - - - 1.1 313 1.1 313

Admin Staff 160 - - - - - - - - - - 0.7 104 0.7 104


GST 209




439A report/


Statutory &

Administration



Fee


1 “That the remuneration of the Administrators of HD JSW Pty Ltd (Administrators Appointed) ACN 165

895 072 for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at

the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors,

in the amount of $6,314 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of HD JSW Pty Ltd (Administrators Appointed) ACN 165

895 072 for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the




3 In the event that HD JSW Pty Ltd (Administrators Appointed) ACN 165 895 072 is placed into


“That the remuneration of the Liquidators of HD JSW Pty Ltd (In Liquidation) ACN 165 895 072 for the

period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in

the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount

of $2,088 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

Disbursements 5


McGrathNicol will be reimbursed




HD JSW Pty Ltd


Account Value ($)

Receipts





Other receipts -

Total receipts 330

Payments

Suppliers -

Employees -



Net receipts/payments -


Information Sheet 7









HD JSW Pty Ltd (Administrators Appointed)

Shaun Fraser





Section 449E


Hyd-Elec Australia Pty Ltd ACN 151 316 611 (“HEA”) (Administrators Appointed)

(“the Company”)

Declaration 1






external sources.

Summary 2





Asset realisations

25.0 hours

$12,753 (ex GST)


protect assets.









interested parties.



Company

Appointees

Administration type





Hyd-Elec Australia Pty Ltd (Administrators Appointed)








bidders.






by the Company.





agreement.








and management.





Creditors and

shareholders

10.3 hours

$4,819 (ex GST)

Unsecured creditors











Market Services.














First Meeting of

Creditors
















ASIC.

Application for

extension of the

convening period of

the Second Meeting

of Creditors









convening period.

439A report

preparation

(including

investigations)

8.7 hours

$3,859 (ex GST)


data.


financial reports.



of Administrators.




439A Report.



Conducting

investigation




matters.


to a liquidator.

Employees

11.9 hours

$5,219 (ex GST)


telephone.













entitlements.

Fair Entitlements

Guarantee scheme

(“FEG”)



Payment and funding

of payroll



Other employee

issues





Dealt with employee resignations, and the termination of

employees where required.

Engaged temporary employee contractors to fill key positions.

Reviewed contracts of employment for new starter employees.

Trade on

(including leases Appointment matters Prepared and sent circulars to creditors and suppliers regarding


and PPSR)

160.0 hours

$65,845 (ex GST)






Retention of title

claims and Personal

Property Securities








appointment.





visits.


update.




account.












collections.





appointment.


period.
























Company staff.



the Administration.

Processed receipts

and payments



Statutory and

Administration

12.2 hours

$4,773 (ex GST)


management





specialists.





Declaration of

Independence,


and Indemnities




appointment.


of stakeholders.






(“RATA”)


RATA.

















Rate



Jason Ireland Partner 650 0.6 371 0.4 289 - - - - 2.5 1,638 - - 3.5 2,298


Shaun Fraser Partner 650 1.3 821 0.1 59 0.0 16 0.1 87 0.6 390 0.0 16 2.1 1,388





Anthony Cocco Senior Manager 500 1.0 513 0.6 319 1.1 571 - - 6.3 3,161 1.1 542 10.2 5,106



Heather Matheson Senior Manager 500 0.3 135 4.0 2,014 1.1 540 0.8 417 2.6 1,308 1.3 659 10.1 5,072








Johnathon Tawil Senior Accountant 375 - - 1.0 375 1.2 442 0.5 188 8.5 3,195 0.7 262 11.9 4,461

Timothy Duncan Senior Accountant 375 1.0 375 1.1 419 2.0 739 - - 62.4 23,414 1.2 448 67.7 25,395










GST 1,275 482 386 522 6,584 477 9,727



Trade on (including

leases and PPSR)

Statutory and


Creditors and

shareholders

439A report







Asset realisations

$6,469 (ex GST)




bidders.










Creditors and

shareholders

$1,142 (ex GST)

Unsecured creditors



Market Services.









Second Meeting of

Creditors















439A report

preparation

(including

investigations)

$1,192 (ex GST)


data.


financial reports.







439A Report.



report.

Conducting

investigation




matters.


to a liquidator.

Employees

$710 (ex GST)







entitlements.

Fair Entitlements

Guarantee scheme

(“FEG”)



scheme.

Payment and funding

of payroll


Other employee

issues





Trade on

(including leases

and PPSR)

$14,714 (ex GST)

Retention of title


Personal Property

Securities Register

(“PPSR”)

Working with a registered claimant to assess its registration and

security interest.




account.












and collections.


















Processed receipts

and payments



Statutory and

Administration

$1,142 (ex GST)


management






Administration.




Hyd-Elec (Aust) Pty Ltd


Rate


Partner 650 0.5 323 0.1 57 0.1 60 0.1 36 1.1 736 0.1 57 2.0 1,268

Senior Manager 500 3.2 1,617 0.6 285 0.6 298 0.4 178 7.4 3,679 0.6 285 12.7 6,342

Manager 475 2.7 1,294 0.5 228 0.5 238 0.3 142 6.2 2,943 0.5 228 10.7 5,074


Accountant 275 3.5 970 0.6 171 0.7 179 0.4 107 8.0 2,207 0.6 171 13.8 3,805

Admin Staff 160 2.0 323 0.4 57 0.4 60 0.2 36 4.6 736 0.4 57 7.9 1,268

Total (excluding GST) 17.2 6,469 3.0 1,142 3.2 1,192 1.9 710 39.1 14,714 3.0 1,142 67.4 25,369

GST = 2,537



Statutory &


439A report/





Asset realisations

$5,559 (ex GST)





group.


the customer sites






Creditors and

shareholders

$2,780 (ex GST)


and their claims








Investigations

$5,559 (ex GST)

Conducting

investigations





Act with ASIC.


(where relevant)




Employees

$4,169 (ex GST)


completed.


entitlements.




Fair Entitlements

Guarantee scheme

(“FEG”)



Trade On

$2,780 (ex GST)


lodgement of PODs.






Statutory and

Administration

$6,949 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms


other ASIC forms.



and their advisers




reporting




liquidation.

Books and records /

storage



Hyd-Elec (Aust) Pty Ltd


Rate


Partner 650 0.4 278 0.2 139 0.4 278 0.3 208 0.2 139 0.5 347 2.1 1,390

Senior Manager 500 2.8 1,390 1.4 695 2.8 1,390 2.1 1,042 1.4 695 3.5 1,737 13.9 6,949

Manager 475 2.3 1,112 1.2 556 2.3 1,112 1.8 834 1.2 556 2.9 1,390 11.7 5,559

Senior Accountant 375 4.4 1,668 2.2 834 4.4 1,668 3.3 1,251 2.2 834 5.6 2,085 22.2 8,339

Accountant 275 3.0 834 1.5 417 3.0 834 2.3 625 1.5 417 3.8 1,042 15.2 4,169

Admin Staff 160 1.7 278 0.9 139 1.7 278 1.3 208 0.9 139 2.2 347 8.7 1,390


GST 2,780




439A report/


Statutory &

Administration



Fee


1 “That the remuneration of the Administrators of Hyd-Elec Australia Pty Ltd (Administrators Appointed)




payment.”

2 “That the remuneration of the Administrators of Hyd-Elec Australia Pty Ltd (Administrators Appointed)





3 In the event that Hyd-Elec Australia Pty Ltd (Administrators Appointed) ACN 151 316 611 is placed


“That the remuneration of the Liquidators of Hyd-Elec Australia Pty Ltd (In Liquidation) ACN 151 316





Disbursements 5






Per diems 1,613

Airfares 5,989

Accomodation 3,248


Other 205

Total 15,698




Information Sheet 7









Hyd-Elec Australia Pty Ltd (Administrators Appointed)

Shaun Fraser




Account Value ($)

Receipts





Other receipts -


Payments

Suppliers (31,349)

Employees (107,617)








Section 449E


Hughes Equipment Hire Pty Ltd ACN 146 398 923 (“HEH”) (Administrators Appointed)

(“the Company”)

Declaration 1






external sources.

Summary 2





Asset realisations

53.4 hours

$27,515 (ex GST)


protect assets.

Determined the optimal sale method and process.


Initiated a sale process including documentation of process,







interested parties.


Company

Appointees

Administration type





Hughes Equipment Hire Pty Ltd (Administrators Appointed)









bidders.






by the Company.





agreement.








and management.





Creditors and

shareholders

9.2 hours

$4,394 (ex GST)

Unsecured creditors











Market Services.














First Meeting of

Creditors
















ASIC.

Application for

extension of the

convening period of

the Second Meeting

of Creditors









convening period.

Committee of

Creditors



Creditors members.


members.

439A report 439A preparation Inspected company books and records and back up electronic

preparation

(including

investigations)

10.8 hours

$4,732 (ex GST)

data.


financial reports.



of Administrators.




439A Report.



Conducting

investigation




matters.


to a liquidator.

Employees

15.9 hours

$6,719 (ex GST)


telephone.













entitlements.

Fair Entitlements

Guarantee scheme

(“FEG”)



Payment and funding

of payroll



Other employee

issues





Trade on Appointment matters Prepared and sent circulars to creditors and suppliers regarding

(including leases

and PPSR)

110.0 hours

$46,409 (ex GST)







Retention of title

claims and Personal

Property Securities








appointment.





visits.


update.




account.












collections.





appointment.


period.
























Company staff.



the Administration.

Processed receipts

and payments



Statutory and

Administration

11.5 hours

$4,447 (ex GST)


management





specialists.





Declaration of

Independence,


and Indemnities




appointment.


of stakeholders.






(“RATA”)


RATA.















Hughes Equipment Hire Pty Ltd


Rate



Jason Ireland Partner 650 1.3 865 0.4 289 - - - - 1.5 988 - - 3.3 2,142


Shaun Fraser Partner 650 2.9 1,916 0.1 59 0.1 36 0.1 87 0.6 390 0.0 16 3.9 2,503





Anthony Cocco Senior Manager 500 2.1 1,045 0.6 319 1.5 761 - - 6.1 3,061 1.1 542 11.5 5,728



Heather Matheson Senior Manager 500 0.6 315 4.0 2,014 2.1 1,070 0.8 417 2.6 1,308 1.3 659 11.6 5,782








Johnathon Tawil Senior Accountant 375 - - - - 0.7 254 4.5 1,688 1.3 495 0.7 262 7.2 2,699

Timothy Duncan Senior Accountant 375 1.0 375 1.1 419 3.2 1,190 - - 24.1 9,052 0.1 36 29.5 11,071










GST 2,752 439 473 672 4,641 445 9,422



Trade on (including

leases and PPSR)

Statutory and


Creditors and

shareholders

439A report







Asset realisations

$6,954 (ex GST)




bidders.










Creditors and

shareholders

$1,180 (ex GST)

Unsecured creditors



Market Services.









Second Meeting of

Creditors















439A report

preparation

(including

investigations)

$1,155 (ex GST)


data.


financial reports.







439A Report.



report.

Conducting

investigation




matters.


to a liquidator.

Employees

$983 (ex GST)







entitlements.

Fair Entitlements

Guarantee scheme

(“FEG”)



scheme.

Payment and funding

of payroll


Other employee

issues





Trade on

(including leases

and PPSR)

$13,122 (ex GST)

Retention of title


Personal Property

Securities Register

(“PPSR”)

Working with a registered claimant to assess its registration and

security interest..




account.












and collections.


















Processed receipts

and payments



Statutory and

Administration

$1,180 (ex GST)


management






Administration.






Rate


Partner 650 0.5 348 0.1 59 0.1 58 0.1 49 1.0 656 0.1 59 1.9 1,229

Senior Manager 500 3.5 1,739 0.6 295 0.6 289 0.5 246 6.6 3,281 0.6 295 12.3 6,143

Manager 475 2.9 1,391 0.5 236 0.5 231 0.4 197 5.5 2,624 0.5 236 10.3 4,915


Accountant 275 3.8 1,043 0.6 177 0.6 173 0.5 147 7.2 1,968 0.6 177 13.4 3,686

Admin Staff 160 2.2 348 0.4 59 0.4 58 0.3 49 4.1 656 0.4 59 7.7 1,229

Total (excluding GST) 18.5 6,954 3.1 1,180 3.1 1,155 2.6 983 34.9 13,122 3.1 1,180 65.3 24,574

GST 2,457



Statutory &


439A report/





Asset realisations

$5,224 (ex GST)





group.


the customer sites






Creditors and

shareholders

$2,612 (ex GST)


and their claims








Investigations

$5,224 (ex GST)

Conducting

investigations





Act with ASIC.


(where relevant)




Employees

$3,918 (ex GST)


completed.


entitlements.




Fair Entitlements

Guarantee scheme

(“FEG”)



Trade On

$2,612 (ex GST)


lodgement of PODs.






Statutory and

Administration

$6,530 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms


other ASIC forms.



and their advisers




reporting




liquidation.

Books and records /

storage





Rate


Partner 650 0.4 261 0.2 131 0.4 261 0.3 196 0.2 131 0.5 326 2.0 1,306

Senior Manager 500 2.6 1,306 1.3 653 2.6 1,306 2.0 979 1.3 653 3.3 1,632 13.1 6,530

Manager 475 2.2 1,045 1.1 522 2.2 1,045 1.6 784 1.1 522 2.7 1,306 11.0 5,224

Senior Accountant 375 4.2 1,567 2.1 784 4.2 1,567 3.1 1,175 2.1 784 5.2 1,959 20.9 7,836

Accountant 275 2.8 784 1.4 392 2.8 784 2.1 588 1.4 392 3.6 979 14.2 3,918

Admin Staff 160 1.6 261 0.8 131 1.6 261 1.2 196 0.8 131 2.0 326 8.2 1,306


GST 2,612




439A report/


Statutory &

Administration



Fee


1 “That the remuneration of the Administrators of Hughes Equipment Hire Pty Ltd (Administrators





2 “That the remuneration of the Administrators of Hughes Equipment Hire Pty Ltd (Administrators





3 In the event that Hughes Equipment Hire Pty Ltd (Administrators Appointed) ACN 146 398 923 is


“That the remuneration of the Liquidators of Hughes Equipment Hire Pty Ltd (In Liquidation) ACN 146

398 923 for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the




Disbursements 5






Per diems 1,613

Airfares 5,989

Accomodation 3,248


Other 205

Total 15,698




Information Sheet 7









Hughes Equipment Hire Pty Ltd (Administrators Appointed)

Shaun Fraser




Account Value ($)

Receipts





Other receipts 89


Payments

Suppliers (44,654)

Employees (16,306)








Section 449E


JSW Australia Pty Ltd ACN 125 989 791 (“JSW”) (Administrators Appointed)

(“the Company”)

Declaration 1






external sources.

Summary 2





Asset realisations

317.7 hours

$169,297 (ex GST)


protect assets.

Prepared sale material including information for the data room.









Company

Appointees

Administration type






Total fee resolutions proposed (Liquidation) 1,109,809

JSW Australia Pty Ltd (Administrators Appointed)



interested parties.







bidders.






by the Company.





agreement.








and management.





Creditors and

shareholders

55.3 hours

$25,969 (ex GST)

Unsecured creditors











Market Services.














First Meeting of

Creditors













Attendance at and chaired meetings.



ASIC.

Application for

extension of the

convening period of

the Second Meeting

of Creditors









convening period.

Committee of

Creditors



Creditors members.


members.

439A report

preparation

(including

investigations)

74.7 hours

$32,278 (ex GST)


data.


financial reports.



of Administrators.




439A Report.




interested parties.

Meetings with preferred bidder to discuss the structure and

inclusions for the proposed DOCA.


proposed DOCA.

Modelled outcome analysis to compare the impact of the


Conducting

investigation




matters.


to a liquidator.

Employees

71.9 hours

$28,385 (ex GST)


telephone.













entitlements.

Fair Entitlements Liaised with the Department of Employment regarding potential

Guarantee scheme

(“FEG”)


Payment and funding

of payroll



Other employee

issues





Trade on

(including leases

and PPSR)

1069.8 hours

$465,000 (ex GST)








Retention of title

claims and Personal

Property Securities







PPSR claims.





appointment.





visits.


update.




account.












collections.





appointment.


period.
























Company staff.



the Administration.

Processed receipts

and payments




management



Statutory and

Administration

44.1 hours

$16,533 (ex GST)



specialists.





Liaised with insurance broker as incidents occurred during the

Administration.

Declaration of

Independence,


and Indemnities




appointment.


of stakeholders.






(“RATA”)


RATA.
















Rate


Jamie Harris Partner 585 1.8 1,053 0.0 17 - - - - - - 0.1 53 1.9 1,122

Jason Ireland Partner 650 5.7 3,705 2.7 1,736 - - - - 4.0 2,581 - - 12.3 8,021

Jason Preston Partner 650 7.8 5,044 2.7 1,749 - - 0.8 542 2.8 1,804 1.1 702 15.1 9,840

Shaun Fraser Partner 650 22.4 14,580 5.1 3,341 0.2 156 5.2 3,402 84.6 55,003 0.2 98 117.8 76,579



Graham Cope Director 1 595 68.5 40,758 2.4 1,428 - - 2.0 1,190 111.3 66,224 - - 184.2 109,599



Matthew Wall Director 550 1.0 550 - - - - - - 0.5 275 - - 1.5 825

Anthony Cocco Senior Manager 500 9.2 4,579 2.4 1,219 3.7 1,854 - - 27.2 13,624 3.7 1,829 46.2 23,104


Christopher Johnson Senior Manager 500 17.7 8,850 2.6 1,305 3.0 1,515 - - - - - - 23.3 11,670

Heather Matheson Senior Manager 500 2.7 1,350 8.4 4,201 8.2 4,118 0.8 417 10.9 5,445 7.2 3,596 38.3 19,127


Guy Gunasekera Manager 1 475 1.0 456 - - 5.5 2,608 - - 18.4 8,722 - - 24.8 11,786

Jessie Maguire Manager 475 - - 2.9 1,379 3.4 1,615 - - 35.9 17,053 - - 42.2 20,046

Kate Versey Manager 475 2.2 1,045 6.5 3,088 20.9 9,928 8.3 3,943 269.9 128,203 1.0 475 308.8 146,680

Alexandra Toohey Assistant Manager 366 13.5 4,941 - - - - 31.1 11,383 272.0 99,552 3.8 1,391 320.4 117,266



Mitchell Soden Assistant Manager 387 - - - - - - - - 2.2 840 0.0 12 2.2 851

Grace Chessman Senior Accountant 375 1.4 506 2.8 1,045 4.9 1,844 0.5 188 39.2 14,706 2.8 1,052 51.6 19,340

Johnathon Tawil Senior Accountant 375 - - - - 1.7 629 7.4 2,775 - - 4.4 1,668 13.5 5,073

Timothy Duncan Senior Accountant 375 - - 3.1 1,159 9.0 3,386 - - 25.7 9,642 0.6 214 38.4 14,402

Steven Nudo Senior Accountant 319 - - 13.1 4,179 12.6 4,019 11.5 3,669 59.3 18,917 6.3 2,010 102.8 32,793


Joshua Crick Accountant 275 1.5 421 - - - - 1.9 513 5.3 1,470 0.9 234 9.6 2,638


Dira Benavides Client Admin/Prac Serv-Level 4 160 - - - - - - - - 4.2 677 4.1 650 8.3 1,327

Graciela Nolan Client Admin/Prac Serv-Level 4 160 - - - - - - - - 13.1 2,097 3.0 478 16.1 2,574

Kathryn White Client Admin/Prac Serv-Level 4 136 - - - - - - 0.7 95 - - - - 0.7 95


Clare Lethlean Client Admin/Prac Serv-Level 2 160 - - - - - - 0.2 27 52.4 8,376 - - 52.5 8,403


Total (excluding GST) 317.7 169,297 55.3 25,969 74.7 32,278 71.9 28,385 1,069.8 465,000 44.1 16,533 1,633.4 737,462

GST 16,930 2,597 3,228 2,838 46,500 1,653 73,746



Trade on (including

leases and PPSR)

Statutory and


Creditors and

shareholders

439A report








Asset realisations

$31,545 (ex GST)




bidders.










Creditors and

shareholders

$6,540 (ex GST)

Unsecured creditors



Market Services.









Second Meeting of

Creditors















439A report

preparation

(including

investigations)

$7,117 (ex GST)


data.


financial reports.







439A Report.



report.


proposed DOCA.





meeting.

Conducting

investigation




matters.


to a liquidator.

Employees

$8,656 (ex GST)







entitlements.

Fair Entitlements

Guarantee scheme

(“FEG”)



scheme.

Payment and funding

of payroll


Other employee

issues





Trade on

(including leases

and PPSR)

$134,835 (ex GST)

Retention of title


Personal Property

Securities Register

(“PPSR”)









account.












and collections.


















Processed receipts

and payments



Statutory and

Administration

$3,655 (ex GST)


management






Administration.






Rate


Partner 650 2.4 1,577 0.5 327 0.5 356 0.7 433 10.4 6,742 0.3 183 14.8 9,617

Senior Manager 500 15.8 7,886 3.3 1,635 3.6 1,779 4.3 2,164 67.4 33,709 1.8 914 96.2 48,087

Manager 475 13.3 6,309 2.8 1,308 3.0 1,423 3.6 1,731 56.8 26,967 1.5 731 81.0 38,469


Accountant 275 17.2 4,732 3.6 981 3.9 1,068 4.7 1,298 73.5 20,225 2.0 548 104.9 28,852

Admin Staff 160 9.9 1,577 2.0 327 2.2 356 2.7 433 42.1 6,742 1.1 183 60.1 9,617


GST 19,235



Statutory &


439A report/





Asset realisations

$10,350 (ex GST)



Creditors and

shareholders

$10,350 (ex GST)

Dealing with creditors and their claims Liaising with creditors in relation to their claims and ensuring

the Deed fund is distributed in accordance with the Creditor’s

Trust Deed.






Statutory and

Administration

$5,175 (ex GST)

Document maintenance/file review/checklist

Undertaking first month administration reviews.




ATO & other statutory reporting Notifying of appointment and completion of the DOCA.

Complying with all tax requirements of the proposed Creditor’s

Trust.


DOCA.

Books and records / storage Cataloguing records to put in storage.

Summary of forecast remuneration for the DOCA period from 9 December 2016 to 27 January 2016 3.3.2



Rate


Partner 650 0.8 518 0.8 518 - - - - - - 0.4 259 2.0 1,294

Senior Manager 500 5.2 2,588 5.2 2,588 - - - - - - 2.6 1,294 12.9 6,469

Manager 475 4.4 2,070 4.4 2,070 - - - - - - 2.2 1,035 10.9 5,175

Senior Accountant 375 8.3 3,105 8.3 3,105 - - - - - - 4.1 1,553 20.7 7,763

Accountant 275 5.6 1,553 5.6 1,553 - - - - - - 2.8 776 14.1 3,881

Admin Staff 160 3.2 518 3.2 518 - - - - - - 1.6 259 8.1 1,294

Total (excluding GST) 27.5 10,350 27.5 10,350 - - - - - - 13.7 5,175 68.7 25,875

GST 2,588


Average hourly rate 377 377 - - - 377 377


439A report/


Statutory &

Administration




Asset realisations

$36,000 (ex GST)





group.


the customer sites






Creditors and

shareholders

$18,000 (ex GST)


and their claims








Investigations

$36,000 (ex GST)

Conducting

investigations





Act with ASIC.


(where relevant)




Employees

$27,000 (ex GST)


completed.


entitlements.




Fair Entitlements

Guarantee scheme

(“FEG”)



Trade On

$18,000 (ex GST)


lodgement of PODs.






Statutory and

Administration

$45,000 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms


other ASIC forms.



and their advisers




reporting




liquidation.

Books and records /

storage





Rate


Partner 650 2.8 1,800 1.4 900 2.8 1,800 2.1 1,350 1.4 900 3.5 2,250 13.8 9,000

Senior Manager 500 18.0 9,000 9.0 4,500 18.0 9,000 13.5 6,750 9.0 4,500 22.5 11,250 90.0 45,000

Manager 475 15.2 7,200 7.6 3,600 15.2 7,200 11.4 5,400 7.6 3,600 18.9 9,000 75.8 36,000


Accountant 275 19.6 5,400 9.8 2,700 19.6 5,400 14.7 4,050 9.8 2,700 24.5 6,750 98.2 27,000

Admin Staff 160 11.3 1,800 5.6 900 11.3 1,800 8.4 1,350 5.6 900 14.1 2,250 56.3 9,000


GST 18,000



Asset recoveries Creditors

439A report/


Statutory &

Administration Total



Fee


1 “That the remuneration of the Administrators of JSW Australia Pty Ltd (Administrators Appointed) ACN




payment.”

2 “That the remuneration of the Administrators of JSW Australia Pty Ltd (Administrators Appointed) ACN







“That the remuneration of the Deed Administrators of JSW Australia Pty Ltd (In Liquidation) ACN 125

989 791/ Trustees of the Creditors Trust for the period from 9 December 2016 to 27 January 2017,


Rates provided to creditors, to a capped amount of $25,875 (exclusive of GST), plus disbursements, is

hereby approved and can be drawn as required.”

4 In the event that JSW Australia Pty Ltd (Administrators Appointed) ACN 125 989 791 is placed into


“That the remuneration of the Liquidators of JSW Australia Pty Ltd (In Liquidation) ACN 125 989 791





Disbursements 5



JSW Pty Ltd



Per diems 6,959

Airfares 19,797

Accomodation 13,477


Other 218

Total 47,150




Information Sheet 7









JSW Australia Pty Ltd (Administrators Appointed)

Shaun Fraser




Account Value ($)

Receipts


Pre-appointment debtors 1,793,942


Advance from HDL -

Other receipts 1,499,640

Total receipts 3,671,732

Payments

Suppliers (554,318)

Employees (1,481,200)



Net receipts/payments 1,633,345




Section 449E


Reichdrill Australia Pty Ltd ACN 162 841 287 (“RD”) (Administrators Appointed)

(“the Company”)

Declaration 1






external sources.

Summary 2





Asset realisations

78.0 hours

$40,343 (ex GST)


protect assets.









interested parties.



Company

Appointees

Administration type





Reichdrill Australia Pty Ltd (Administrators Appointed)








bidders.

Creditors and

shareholders

6.0 hours

$2,744 (ex GST)






First Meeting of

Creditors
















ASIC.

439A report

preparation

(including

investigations)

12.9 hours

$5,580 (ex GST)

439A preparation Inspected company books and records and backed up

electronic data.


financial reports.



of Administrators.




439A Report.



Trade on

(including leases

and PPSR)

Appointment matters Prepared and sent circulars to creditors regarding the



1.5 hours

$975 (ex GST)



Retention of title

claims and Personal

Property Securities







account.



Statutory and

Administration

7.1 hours

$2,710 (ex GST)


management







Declaration of

Independence,


and Indemnities




appointment.


of stakeholders.






(“RATA”)


RATA.










Reichdrill Australia Pty Ltd


Rate



Jason Ireland Partner 650 1.9 1,235 - - - - - - - - - - 1.9 1,235

Jason Preston Partner 650 1.4 923 0.4 228 - - - - 1.5 975 - - 3.3 2,126





Anthony Cocco Senior Manager 500 5.9 2,930 0.3 139 1.8 904 - - - - 0.6 279 8.5 4,251


Heather Matheson Senior Manager 500 0.9 450 3.1 1,571 2.9 1,468 - - - - 0.1 71 7.1 3,561






Grace Chessman Senior Accountant 375 0.7 263 1.2 445 1.8 666 - - - - 0.4 155 4.1 1,529


Timothy Duncan Senior Accountant 375 - - 0.7 271 4.1 1,529 - - - - - - 4.8 1,799






Total (excluding GST) 78.0 40,343 6.0 2,744 12.9 5,580 - - 1.5 975 7.1 2,710 105.4 52,352

GST 4,034 274 558 - 98 271 5,235

Total (including GST) 44,378 3,018 6,138 - 1,073 2,981 57,587

Average hourly rate 569 504 477 N/A 715 420 546

Trade on (including

leases and PPSR)

Statutory and


Creditors and

shareholders

439A report







Asset realisations

$4,096 (ex GST)




bidders.



Creditors and

shareholders

$4,096 (ex GST)

Unsecured creditors Responding to creditor enquiries via telephone and email.




Second Meeting of

Creditors













439A report

preparation

(including

investigations)

$2,408 (ex GST)



report.

Statutory and

Administration

$3,414 (ex GST)


management





Reichdrill Pty Ltd


Rate


Partner 650 0.3 205 0.3 205 0.2 102 - - - - 0.3 171 1.1 683

Senior Manager 500 2.0 1,024 2.0 1,024 1.0 512 - - - - 1.7 853 6.8 3,414

Manager 475 1.7 819 1.7 819 0.9 410 - - - - 1.4 683 5.7 2,731

Senior Accountant 375 3.3 1,229 3.3 1,229 1.6 614 - - - - 2.7 1,024 10.9 4,096

Accountant 275 2.2 614 2.2 614 1.1 307 - - - - 1.9 512 7.4 2,048

Admin Staff 160 1.3 205 1.3 205 0.6 102 - - - - 1.1 171 4.3 683


GST 1,365



Statutory &


439A report/





Asset realisations

$25,988 (ex GST)

Plant and equipment Pursuing any other sale options for remaining assets, including

engaging with interested parties from the initial VA sale

process.

Negotiating a sale of shares in Reichdrill Inc.

Statutory and

Administration

$2,888 (ex GST)

Document

maintenance/file

review/checklist





ASIC Form 524 and

other forms


other ASIC forms.



and their advisers



ATO & other

statutory reporting




liquidation.

Books and records /

storage



Reichdrill Pty Ltd


Rate


Partner 650 2.0 1,299 - - - - - - - - 0.2 144 2.2 1,444

Senior Manager 500 13.0 6,497 - - - - - - - - 1.4 722 14.4 7,219

Manager 475 10.9 5,198 - - - - - - - - 1.2 578 12.2 5,775

Senior Accountant 375 20.8 7,796 - - - - - - - - 2.3 866 23.1 8,663

Accountant 275 14.2 3,898 - - - - - - - - 1.6 433 15.8 4,331

Admin Staff 160 8.1 1,299 - - - - - - - - 0.9 144 9.0 1,444

Total (excluding GST) 69.0 25,988 - - - - - - - - 7.7 2,888 76.7 28,875

GST 2,888


Average hourly rate 377 - - - - 377 377


439A report/


Statutory &

Administration



Fee


1 “That the remuneration of the Administrators of Reichdrill Australia Pty Ltd (Administrators Appointed)




payment.”

2 “That the remuneration of the Administrators of Reichdrill Australia Pty Ltd (Administrators Appointed)





3 In the event that Reichdrill Australia Pty Ltd (Administrators Appointed) ACN 162 841 287 is placed


“That the remuneration of the Liquidators of Reichdrill Australia Pty Ltd (In Liquidation) ACN 162 841





Disbursements 5






Reichdrill Australia Pty Ltd


Account Value ($)

Receipts





Other receipts -

Total receipts 330

Payments

Suppliers -

Employees -



Net receipts/payments (50)


Information Sheet 7









Reichdrill Australia Pty Ltd (Administrators Appointed)

Shaun Fraser




D14-161201-S439AReport-HM 55

ANNEXURE F: Schedule of Remuneration and Rates

1

Schedule of Remuneration Methods and Hourly Rates

Basis of remuneration 1

Remuneration methods 1.1

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

practitioner. They are:

Time based/hourly rates

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

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

tasks performed.

Fixed Fee

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

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

Percentage

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

realisations.

Contingency

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

Method Proposed 1.2

We propose that our remuneration will be calculated on a time basis. Details of the hourly rates for

different levels of staff are included below. The complexity and demands of the administration will

determine the staff to be utilised for this appointment.

We have chosen the time based method because:

This method is considered to be most suitable for this appointment as it ensures creditors are only charged

for work that is performed in the external administration, which can be difficult to accurately estimate at

the date of appointment.

Explanation of Hourly rates 2

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

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

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

and should not be compared to an hourly wage.

2

Title Guide to qualifications and role Hourly rate

(excl GST)

Appointee/

Partner

Registered liquidator, Chartered Accountant or equivalent and generally degree

qualified with more than twelve years of experience. Leads assignments with full

accountability for strategy and execution.

$650

Director 1 Generally, Chartered Accountant or comparable qualification and degree qualified

with more than ten years of experience, including four years of Director or

equivalent experience. Autonomously leads assignments reporting to

Appointee/Partner.

$595

Director Generally, Chartered Accountant or comparable relevant qualification and degree

qualified with more than nine years of experience. Autonomously leads

assignments reporting to Appointee/Partner.

$550

Senior Manager Generally, Chartered Accountant or comparable relevant qualification and degree

qualified with more than seven years of experience. Self-sufficiently conducts

small to medium assignments and leads major workstreams in larger matters.

$500

Manager Generally, Chartered Accountant or comparable relevant qualification and degree

qualified with more than five years of experience. Self-sufficiently conducts

smaller assignments and takes a supervisory role on workstreams in larger

matters.

$475

Assistant

Manager

Generally, Chartered Accountant or comparable relevant qualification and degree

qualified with more than three years of experience. Autonomously manages

workstream activity within assignments.

$430

Senior

Accountant 1

Generally, degree qualified and undertaking Chartered Accountant’s qualification

or comparable relevant qualification with more than two years of experience,

including one year of Senior Accountant or equivalent experience. Completes

multiple tasks within workstreams and assignments.

$395

Senior

Accountant

Generally, degree qualified and undertaking Chartered Accountant’s qualification

or comparable relevant qualification with more than 16 months of experience.

Completes tasks within workstreams and assignments under supervision.

$375

Accountant 1 Generally, degree qualified and undertaking Chartered Accountant’s qualification

or comparable relevant qualification with at least one year of Accountant or

equivalent experience. Assists with tasks within workstreams and assignments

under supervision.

$325

Accountant Generally, degree qualified and undertaking or about to undertake Chartered

Accountant’s qualification or comparable relevant qualification with less than one

year of experience. Assists with tasks within workstreams and assignments under

supervision.

$275

Undergraduate/

Cadet

Undertaking relevant degree. Assists with tasks within workstreams and

assignments under supervision. $190

Client

Administration

and Treasury

Appropriately experienced and undertakes support activities, including but not

limited to Client administration, Treasury and document management functions. $160

3

McGrathNicol reviews its hourly rates six monthly. The hourly rates quoted above remain in force until 31 December

2016 and McGrathNicol may increase fees for work continuing past that date. Creditors will be advised of any

change to the hourly rates for this administration.

Disbursements 3

There are three categories of disbursements which may be charged:

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

externally provided professional service disbursement is legal fees.

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

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

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

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

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

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

power and maintenance).

Basis of Disbursement Claim 3.1

Internal Disbursements Rate (Excl GST)

Advertising At cost

Courier At cost

Printing- black and white $0.09 per page

Printing- Colour $0.28 per page

Postage At cost

Stationery and other incidental disbursements At cost

Staff per diem travel allowance* $89.00 per day

Staff vehicle use $0.63 per km

Telephony – mobile, fixed line and conference calls At cost

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

residence overnight.

D14-161201-S439AReport-HM 56

ANNEXURE G: Proof of Debt form

PROOF OF DEBT (POD) OR CLAIM FORM 535 CORPORATIONS ACT (SUB REGULATION 5.6.49(2))

A$ , , , .

I hereby authorise Link to send all communications electronically including notices, reports and any statements.

I am an employee of the indebted company I am a creditor

HD

XI POD

001

INDEBTED COMPANY DETAILS – REFER ATTACHED SCHEDULE OF COMPANIESA

Please insert the company number you have a claim against in this box (refer to attached schedule):

If you are a creditor of more than one Indebted Company, you must copy and provide a POD form for each company. The indebted amount must be completed.

Total indebted amount (this must be completed):

All forms returned to:Link Market Services Limited

PO Box 3184Rhodes NSW 2138

Facsimile: +61 2 9287 0309Client Code: HDXI

Email: [email protected] Queries: +61 1300 365 798

Pursuant to Regulation 5.6.11A of the Corporations Regulations 2001, creditors may elect to receive notices and documents prescribed by the Corporations Act 2001 by electronic means.

Creditor 1 (Individual)/Agent 1 Creditor 2 (Individual)/Agent 2 Date

SIGN HERE (All Creditor(s) must sign)B

/ /

I am in the employment of the creditors and duly authorised in writing by the creditor to make this statement and it is within my knowledge that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, still remains unpaid and unsatisfied.

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

All material copyright © 2016 Link Market Services Limited

Email Address

Note: Supporting documentation for the above debt(s) must be included with this submission.

Note 1: If returning the forms by post, please always consider using the appropriate postage stamp on your reply/return envelope to ensure that the forms are received by Link in a timely manner.

Note 2: For further details about Link Group’s personal information handling practices, visit our website at www.linkmarketservices.com.au for a copy of the Link Group condensed privacy statement.

Creditors who have already lodged a proof of debt do not need to complete a new proof of debt unless an amendment is required.

CREDITOR DETAILS

Contact Telephone Number

HRN (if known)

Email Address

Full Name of Company or Individual

Registered Address

LINK INSOLVENCY SOLUTIONS – PROOF OF DEBT (POD) OR CLAIM FORM

SCHEDULE OF COMPANIES

COMPANY NUMBER COMPANY NAME & ACN

1 Hughes Drilling Limited ACN 124 279 750

2 Australian Gas Drilling Pty Ltd ACN 139 242 890

3 EDMS Metals Pty Ltd ACN 146 399 760

4 Every Day Mine Services Operations Pty Ltd ACN 003 949 148

5 Express Hydraulics (Aust) Pty Ltd ACN 155 845 864

6 G.O.S. Drilling Pty Ltd ACN 068 520 794

7 HD JSW Pty Ltd ACN 165 895 072

8 Hughes Drilling 1 Pty Ltd ACN 011 007 702

9 Hughes Drilling 2 Pty Ltd ACN 146 399 902

10 Hughes Drilling Corporate Pty Ltd ACN 146 398 718

11 Hughes Equipment Hire Pty Ltd ACN 146 398 923

12 Hyd-Elec Australia Pty Ltd ACN 151 316 611

13 Reichdrill Australia Pty Ltd ACN 162 841 287

14 JSW Australia Pty Ltd ACN 125 989 791

D14-161201-S439AReport-HM 57

ANNEXURE H: Proxy form

LINK INSOLVENCY SOLUTIONS – APPOINTMENT OF PROXY


CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of Hughes Drilling Ltd (Administrators Appointed) ACN 124 279 750 for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $51,596 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of Hughes Drilling Ltd (Administrators Appointed) ACN 124 279 750 for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $13,457 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that the proposed Deed of Company Arrangement is approved by the creditors, and the current Administrators are appointed as the Deed Administrators/ Trustees of the Creditors Trust: “That the remuneration of the Deed Administrators of Hughes Drilling Ltd (Administrators Appointed) ACN 124 279 750 / Trustees of the Creditors Trust for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $25,638 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

4 In the event that Hughes Drilling Ltd (Administrators Appointed) ACN 124 279 750 is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of Hughes Drilling Ltd (In Liquidation) ACN 124 279 750 for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $25,638 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

Section 1:

Section 2 - Resolutions where creditors must give a special proxy (Refer to Votes on Items of Business – Proxy Appointment overleaf)

For Against Abstain

“If a creditor has nominated a proxy, it is taken that this is a general proxy for any resolutions proposed at the meeting, other than the ones detailed in section two, for which creditors must give specific voting instructions.”

Proxies will only be valid and accepted by the Company if they are signed and received no later than 2:00pm (AEDT) on Wednesday, 7 December 2016. Please read the voting instructions overleaf before marking any boxes with an X .

FORM 532 (CORPORATIONS ACT 2001) APPOINTMENT OF PROXY (REGULATION 5.6.29)

to vote on your behalf at the Meetings of Creditors of the Company to be held at 1:00pm (AEST) on Thursday, 8 December 2016 at Cliftons Brisbane, Level 24, 288 Edward Street, Brisbane QLD 4000 and at any adjournment or postponement of the meeting.

APPOINT A PROXYSTEP 1

This form should be signed by the creditor. If signed by the creditor’s attorney, the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed in accordance with the company’s constitution and the Corporations Act 2001 (Cth).

SIGNATURE OF CREDITORS – THIS MUST BE COMPLETED

Creditor 1 (Individual)/Agent 1 Creditor 2 (Individual)/Agent 2 Creditor 3 (Individual)/Agent 3

HDXI PRX1603N

VOTING DIRECTIONSSTEP 2

STEP 3

the Chairman of the Meeting (mark box)

OR if you are NOT appointing the Chairman of the Meeting as your proxy, please write the name of the person or body corporate (excluding the registered creditor) you are appointing as your general/special proxy

All forms returned to: Link Market Services Limited

PO Box 3184 Rhodes NSW 2138

Facsimile: +61 2 9287 0309 Client Code: HDXI

Email: [email protected] Creditor Queries: +61 1300 365 798

I/We being a creditor(s) of Hughes Drilling Limited (ACN 124 279 750) and entitled to attend and vote hereby appoint:

*HDXI PRX1603N*

HOW TO COMPLETE THIS PROXY FORM

Appointment of a ProxyIf you wish to appoint the Chairman of the Meeting as your proxy, mark the box in Step 1. If the person you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the name of that person in Step 1. A proxy need not be a creditor of the company. A proxy may be an individual or a body corporate.

Note: The proxy nomination will be deemed invalid if you do not complete this step.

Votes on Items of Business – Proxy AppointmentDirected VotesYou may direct your proxy how to vote by placing a mark in one of the boxes opposite each item of business. All your entitlements will be voted in accordance with such a direction. If you mark more than one box on an item your vote on that item will be invalid.

General (open) VotesIf you do not mark any of the boxes on an item of business, your proxy may note as he or she chooses.

Note: For Section 2, if you do not mark any of the boxes on an item of business, your proxy vote will be considered as abstain.

Signing Instructions

You must sign this form as follows in the spaces provided:

Individual: where the holding is in one name, the holder must sign.

Joint Holding: where the holding is in more than one name, either creditor may sign.

Power of Attorney: to sign under Power of Attorney, you must lodge the Power of Attorney with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

Lodgement of a Proxy FormThis Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below by 2:00pm (AEDT) on Wednesday, 7 December 2016. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxy Forms may be lodged:

by mail:Att: Hughes Drilling Limited and Australian Subsidiaries (Administrators Appointed) C/- Link Market Services LimitedPO Box 3184Rhodes NSW 2138Australia

by email:

scan and email to [email protected]

by fax:

+61 2 9287 0309

by hand*:delivering it to Link Market Services Limited, 1A Homebush Bay Drive, Rhodes NSW 2138.Att: Hughes Drilling Limited and Australian Subsidiaries (Administrators Appointed)

* During business hours (Monday to Friday, 9:00am–5:00pm)

If you would like to attend and vote at the Meeting of Creditors, please bring this form with you. This will assist in registering your attendance.

Notes1. If the creditor is a sole trader, sign in accordance with the following example: “A.B., proprietor”.2. If the creditor is a partnership, sign in accordance with the following example: “A.B., a partner of the said firm”.3. If the creditor is a company, then the form of proxy must be under its Common Seal or under the hand of some officer duly

authorised in that capacity, and the fact that the officer is so authorised must be stated in accordance with the followingexample: “for the company, A.B.” (duly authorised under the Seal of the Company).



CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of Australian Gas Drilling Pty Ltd (ACN 139 242 890) for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $6,844 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of Australian Gas Drilling Pty Ltd (ACN 139 242 890) for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $1,785 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that Australian Gas Drilling Pty Ltd (ACN 139 242 890) is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of Australian Gas Drilling Pty Ltd (ACN 139 242 890) for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $2,133 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

For Against Abstain








HDXI PRX1604N

STEP 3







I/We being a creditor(s) of Australian Gas Drilling Pty Ltd (ACN 139 242 890) and entitled to attend and vote hereby appoint:

*HDXI PRX1604N*

Section 1:



















by email:


by fax:

+61 2 9287 0309





authorised in that capacity, and the fact that the officer is so authorised must be stated in accordance with the following example: “for the company, A.B.” (duly authorised under the Seal of the Company).



CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of EDMS Metals Pty Ltd (ACN 146 399 760) for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $6,821 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of EDMS Metals Pty Ltd (ACN 146 399 760) for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $1,779 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that EDMS Metals Pty Ltd (ACN 146 399 760) is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of EDMS Metals Pty Ltd (ACN 146 399 760) for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $2,131 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”








HDXI PRX1605N

STEP 3







I/We being a creditor(s) of EDMS Metals Pty Ltd (ACN 146 399 760) and entitled to attend and vote hereby appoint:

*HDXI PRX1605N*

For Against Abstain

Section 1:



















by email:


by fax:

+61 2 9287 0309








CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of Every Day Mine Services Operations Pty Ltd (ACN 003 949 148) for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $6,773 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of Every Day Mine Services Operations Pty Ltd (ACN 003 949 148) for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $1,767 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that Every Day Mine Services Operations Pty Ltd (ACN 003 949 148) is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of Every Day Mine Services Operations Pty Ltd (ACN 003 949 148) for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $2,127 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”








HDXI PRX1606N

STEP 3







I/We being a creditor(s) of Every Day Mine Services Operations Pty Ltd (ACN 003 949 148) and entitled to attend and vote hereby appoint:

*HDXI PRX1606N*

For Against Abstain

Section 1:



















by email:


by fax:

+61 2 9287 0309








CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of Express Hydraulics (Aust) Pty Ltd (ACN 155 845 864) for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $228,319 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of Express Hydraulics (Aust) Pty Ltd (ACN 155 845 864) for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $59,551 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that Express Hydraulics (Aust) Pty Ltd (ACN 155 845 864) is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of Express Hydraulics (Aust) Pty Ltd (ACN 155 845 864) for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $50,000 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”








HDXI PRX1607N

STEP 3







I/We being a creditor(s) of Express Hydraulics (Aust) Pty Ltd (ACN 155 845 864) and entitled to attend and vote hereby appoint:

*HDXI PRX1607N*

For Against Abstain

Section 1:



















by email:


by fax:

+61 2 9287 0309








CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of G.O.S. Drilling Pty Ltd (ACN 068 520 794) for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $6,661 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of G.O.S. Drilling Pty Ltd (ACN 068 520 794) for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $1,737 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that G.O.S. Drilling Pty Ltd (ACN 068 520 794) is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of G.O.S. Drilling Pty Ltd (ACN 068 520 794) for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $2,118 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”








HDXI PRX1608N

STEP 3







I/We being a creditor(s) of G.O.S. Drilling Pty Ltd (ACN 068 520 794) and entitled to attend and vote hereby appoint:

*HDXI PRX1608N*

For Against Abstain

Section 1:



















by email:


by fax:

+61 2 9287 0309








CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of Hughes Drilling 1 Pty Ltd (Administrators Appointed) ACN 011 007 702 for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $658,810 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of Hughes Drilling 1 Pty Ltd (Administrators Appointed) ACN 011 007 702 for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $171,832 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that the proposed Deed of Company Arrangement is approved by the creditors, and the current Administrators are appointed as the Deed Administrators/ Trustees of the Creditors Trust: “That the remuneration of the Deed Administrators of Hughes Drilling 1 Pty Ltd (In Liquidation) ACN 011 007 702 / Trustees of the Creditors Trust for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $25,875 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

4 In the event that Hughes Drilling 1 Pty Ltd (Administrators Appointed) ACN 011 007 702 is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of Hughes Drilling 1 Pty Ltd (In Liquidation) ACN 011 007 702 for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $180,000 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

Section 1:


For Against Abstain









HDXI PRX1610N


STEP 3







I/We being a creditor(s) of Hughes Drilling 1 Pty Ltd (ACN 011 007 702) and entitled to attend and vote hereby appoint:

*HDXI PRX1610N*
















by email:


by fax:

+61 2 9287 0309








CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of Hughes Drilling 2 Pty Ltd (ACN 146 399 902) for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $28,502 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of Hughes Drilling 2 Pty Ltd (ACN 146 399 902) for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $7,434 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that Hughes Drilling 2 Pty Ltd (ACN 146 399 902) is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of Hughes Drilling 2 Pty Ltd (ACN 146 399 902) for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $9,050 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”








HDXI PRX1611N

STEP 3







I/We being a creditor(s) of Hughes Drilling 2 Pty Ltd (ACN 146 399 902) and entitled to attend and vote hereby appoint:

*HDXI PRX1611N*

For Against Abstain

Section 1:



















by email:


by fax:

+61 2 9287 0309








CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of Hughes Drilling Corporate Pty Ltd (ACN 146 398 718) for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $50,098 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of Hughes Drilling Corporate Pty Ltd (ACN 146 398 718) for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $13,067 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that Hughes Drilling Corporate Pty Ltd (ACN 146 398 718) is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of Hughes Drilling Corporate Pty Ltd (ACN 146 398 718) for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $20,174 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”








HDXI PRX1612N

STEP 3







I/We being a creditor(s) of Hughes Drilling Corporate Pty Ltd (ACN 146 398 718) and entitled to attend and vote hereby appoint:

*HDXI PRX1612N*

For Against Abstain

Section 1:



















by email:


by fax:

+61 2 9287 0309








CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of HD JSW Pty Ltd (ACN 165 895 072) for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $6,314 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of HD JSW Pty Ltd (ACN 165 895 072) for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $1,647 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that HD JSW Pty Ltd (ACN 165 895 072) is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of HD JSW Pty Ltd (ACN 165 895 072) for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $2,088 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”








HDXI PRX1609N

STEP 3







I/We being a creditor(s) of HD JSW Pty Ltd (ACN 165 895 072) and entitled to attend and vote hereby appoint:

*HDXI PRX1609N*

For Against Abstain

Section 1:



















by email:


by fax:

+61 2 9287 0309








CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of Hyd-Elec Australia Pty Ltd (ACN 151 316 611) for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $97,267 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of Hyd-Elec Australia Pty Ltd (ACN 151 316 611) for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $25,369 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that Hyd-Elec Australia Pty Ltd (ACN 151 316 611) is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of Hyd-Elec Australia Pty Ltd (ACN 151 316 611) for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $27,796 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”








HDXI PRX1614N

STEP 3







I/We being a creditor(s) of Hyd-Elec Australia Pty Ltd (ACN 151 316 611) and entitled to attend and vote hereby appoint:

*HDXI PRX1614N*

For Against Abstain

Section 1:



















by email:


by fax:

+61 2 9287 0309








CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of Hughes Equipment Hire Pty Ltd (ACN 146 398 923) for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $94,216 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of Hughes Equipment Hire Pty Ltd (ACN 146 398 923) for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $24,574 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that Hughes Equipment Hire Pty Ltd (ACN 146 398 923) is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of Hughes Equipment Hire Pty Ltd (ACN 146 398 923) for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $26,119 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”








HDXI PRX1613N

STEP 3







I/We being a creditor(s) of Hughes Equipment Hire Pty Ltd (ACN 146 398 923) and entitled to attend and vote hereby appoint:

*HDXI PRX1613N*

For Against Abstain

Section 1:



















by email:


by fax:

+61 2 9287 0309








CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of JSW Australia Pty Ltd (Administrators Appointed) ACN 125 989 791 for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $737,462 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of JSW Australia Pty Ltd (Administrators Appointed) ACN 125 989 791 for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $192,347 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that the proposed Deed of Company Arrangement is approved by the creditors, and the current Administrators are appointed as the Deed Administrators/ Trustees of the Creditors Trust: “That the remuneration of the Deed Administrators of JSW Australia Pty Ltd (In Liquidation) ACN 125 989 791/ Trustees of the Creditors Trust for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $25,875 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

4 In the event that JSW Australia Pty Ltd (Administrators Appointed) ACN 125 989 791 is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of JSW Australia Pty Ltd (In Liquidation) ACN 125 989 791 for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $180,000 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

Section 1:


For Against Abstain




to vote on your behalf at the Meetings of Creditors of the Company to be held at 11:00am (AWST) on Thursday 8 December 2016 at Cliftons Perth, Level 4, Parmelia House, 191 St Georges Terrace, Perth WA 6000 and at any adjournment or postponement of the meeting.





HDXI PRX1616N


STEP 3







I/We being a creditor(s) of JSW Australia Pty Ltd (ACN 125 989 791) and entitled to attend and vote hereby appoint:

*HDXI PRX1616N*
















by email:


by fax:

+61 2 9287 0309








CREDITOR DETAILS


HRN (if known)

Email Address


Registered Address

1 “That the remuneration of the Administrators of Reichdrill Australia Pty Ltd (ACN 162 841 287) for the period from 22 September 2016 to 18 November 2016 calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $52,352 (excluding GST), plus disbursements, is hereby approved for payment.”

2 “That the remuneration of the Administrators of Reichdrill Australia Pty Ltd (ACN 162 841 287) for the period from 19 November 2016 to 8 December 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $13,655 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”

3 In the event that Reichdrill Australia Pty Ltd (ACN 162 841 287) is placed into liquidation, and the current Administrators are appointed as the Liquidators: “That the remuneration of the Liquidators of Reichdrill Australia Pty Ltd (ACN 162 841 287) for the period from 9 December 2016 to 27 January 2017, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, to a capped amount of $28,875 (exclusive of GST), plus disbursements, is hereby approved and can be drawn as required.”








HDXI PRX1615N

STEP 3







I/We being a creditor(s) of Reichdrill Australia Pty Ltd (ACN 162 841 287) and entitled to attend and vote hereby appoint:

*HDXI PRX1615N*

For Against Abstain

Section 1:



















by email:


by fax:

+61 2 9287 0309






D14-161201-S439AReport-HM 58

ANNEXURE I: ASIC “Insolvency information for directors, employees,

creditors and shareholders”

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

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

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

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

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

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

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

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

Hughes Drilling Ltd - McGrathNicol

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