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Soulbuild Pty Ltd (In Liquidation)ACN 600 021 127 (the Company)

Liquidator's Statutory Report to Creditors

Friday, 12 October 2018

Cameron CrichtonLiquidatorT (07) 3222 0200F cameroncrichton©au.gt.com

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Introduction

I refer to my initial correspondence to creditors dated 8 August 2018 in which I advised you of myappointment as liquidator and your rights as a creditor in the liquidation.

The purpose of this report is to:

• Provide an estimate of the assets and liabilities of the Company

• Provide you with an update on the progress of the liquidation.

• Brief you on further inquiries that need to be undertaken

• Explain the causes of the Company's failure

• Advise you of likely recovery actions

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

I have relied on information provided from numerous sources to prepare the report, including:

• Discussions with the Director of the Company.

• Discussions with the former manager, Carlos De Almeida.

• Discussions with a key Customer of the Company.

• Discussions with former staff of the Company.

• Discussions with the Company's bookkeeper.

• Discussions with the Company's accountant.

• Information available from public sources, such as, Australian Securities and Investments.Commission (ASIC) and the Personal Property Securities Register (PPSR).

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

Whilst I have no reason to doubt the accuracy of any information, I have not performed an auditand reserve the right to alter my conclusions, should the underlying data prove to be inaccurate orchange materially from the date of appointment.

Update on the progress of the liquidation

Company AffairsThe Company was incorporated on 10 June 2014 and since 10 April 2018 had a registered office atUnit 72, 1 Millennium Circuit, Pelican Waters (QLD). Its previous registered office was at 12 LeslieDrive, Noose Heads (QLD).

The Director of the Company is required to complete and provide to the Liquidator a statementabout the Company's business, property, affairs and financial circumstances, also known as the

Report as to Affairs (RATA"). The RATA is a snapshot in time as at the date of my appointment of

the assets and liabilities of the Company, disclosing book values and the Director's opinion on theestimated realisable value (ERV) for assets.

On 18 July 2018 a written request was issued to the Director to complete the RATA for theCompany. On 13 September 2018 a written request was also issued to Carlos de Almeida

requesting that he complete a RATA. I am yet to receive a completed RATA or any financial

records from either party.

Financial information currently accessible is limited to a MYOB file of the Company for the period

ended June 2016 and bank statements from the National Australia Bank ("NAB").

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As a consequence of the above, my ability to properly investigate the financial history and positionof the Company has been limited.

The Company appears to have operated a concrete formwork business and subcontracted it'sservices to various commercial building and construction projects in South East Queensland.

It appears that the business employed approximately nine staff at the time of my appointment. I amnot aware if the employees were employed on a casual or full time basis. From my discussions todate, it appears the employees have not been paid superannuation or received PAYG paymentsummaries in three years.

From my investigations to date I understand Carlos se Almeida was responsible for the operationalmanagement of the business.

At the time of my appointment the Director was unresponsive to my requests for informationrelating to the Company and this remains the case at the time of this report.

Causes o f the Company's FailureI have issued a Report as to Affairs and Questionnaire to both the Director and Carlos in which Iam yet to receive a response.

From my initial investigations I understand the reasons for the failure of the Company could be thefollowing:

• Failure to keep adequate books and records of the Company;

• Poor liquidity / high cash bum;

• Poor profitability; and

• Mismanagement of business operations;

Further investigations into the causes of the Company's failure will be undertaken if additionalinformation becomes available.

I have commenced my initial investigations into the affairs of the Company prior to my appointmentand any potential recovery actions that may be available to the Liquidator to pursue. These aresummarised on page 4 of this Report.

Assets and liabilities

Cash at BankThe Company operated a bank account with the National Australia Bank ("NAB"). The balance offunds remaining in the account being $65,705 were transferred to a post appointment accountunder my control on 28 September 2018.

I am currently seeking recovery of c.$1 3k in funds withdrawn from the account following myappointment (despite my request on the date of my appointment to block all withdrawals from theaccount).

Trust AccountI am aware of an amount of c.$1,700 held in the trust account of the Company's accountant.

Motor VehicleOn appointment, I conducted a vehicle registration search for the Company which identified a 2011Mitsubishi Triton Ute in the name of the Company.

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This vehicle can also be identified in the MYOB accounts with a value of $16,700 as at 30 June2016. A review of www.redbook.com.au suggests the vehicle could be valued between $11 k −$15k.

Despite numerous requests, neither the Director nor Carlos have returned the vehicle or advisedthe location of this asset. In relation to this asset I have:

Engaged a collection agent to locate and repossess the vehicle; and

Registered a PPSR interest against the vehicle.

Should the Director and Carlos de Almeida fail to return the vehicle, I will shortly proceed to reportthe vehicle stolen to Queensland Police and cancel the registration.

Formwork and ScaffoldingMy investigations identified that the Company controlled various items of formwork and scaffoldingstored at the following locations at the time of my appointment:

• Aldi Gympie (Kane Construction)

• Forest Glen storage yard.

The head contractor at Aldi Gympie (Kane Constructions) arranged for the relocation of theformwork and scaffolding supplied by the Company to a yard controlled by Daniels Earthmoving inYandina. Upon becoming aware of this, I immediately advised Daniels Earthmoving of theCompany's claim to the assets and requested they be secured pending collection.

The Company also stored formwork and scaffolding at a storage yard in Forest Glen. I attendedthis site to view the equipment and made arrangements to secure the assets pending collection.

When my collection agent attended the sites, the formwork and scaffolding had been removed fromthe premises. Whilst I was able to secure a semi−trailer loan of equipment (now stored at my agentsGrays Online), I am yet to locate the balance of assets.

My investigations suggest that Carlos de Almeida may have provided instructions to remove theseassets.

I have reported the stolen goods to the Queensland Police and lodged a claim with my insurer.

Employee LiabilitiesI understand from my investigations to date that the Company may have employed nine employeesat the time of my appointment.

I have been provided with information by an employee which suggests that $13,980 is outstandingin wages. I have written to all employees and am currently awaiting responses as to their debt. Ialso understand that superannuation has not been paid in three years nor have employeesreceived PAYG payment summaries.

Further investigations are required to assess the actual position of outstanding employeeentitlements.

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Receipts and Payments to date

The below is a summary of all receipts and payments in the Liquidation to date:

IncomeTransfer from (Pre−Appointrnent Account) 65,705.68Total Income 65,705.68

ExpensesNH

Cash on Hand

nil

65,705.68

Investigations and possible recovery actions

Investigations undertakenI have commenced my initial investigations into the affairs of the Company prior to my appointmentand any potential recovery actions that may be available to the Liquidator to pursue.To date, I have undertaken the following investigations:

• Director's obligation to assist the Liquidator;• Director's obligation to maintain adequate books and records;• Possible breaches of director's duties;• Insolvent trading; and• voidable transactions.

My findings of these investigations are detailed below. Given the limited time that has passed in theliquidation, and the limited information I have been provided to complete my investigations, furtherinvestigations will be undertaken. The below findings are preliminary and may be subject tochange.

Please note that the merits of pursuing a claim against the Director is predicated by the financialposition and ability of the Director to meet such a claim. In this regard, I have conducted a propertysearch against the Director and identified a property registered jointly in the name of the Directorand Carlos de Almeida in Pialba (QId). I have not been able to identify the extent of any equity inthe property.

Directors and Officers to assist the LiquidatorSection 530A of the Corporations Act 2001 (Clth) (the "Act") places a positive obligation on adirector to assist the liquidator or provisional liquidator of a company. For the following reasons Ido not believe that the director, nor the former manager have complied with their obligationpursuant to s530A of the Act. The Director and former manager have:

• not returned a RATA or Questionnaire that details the financial position of the Company;• not provided any books and records of the company; and• not returned company assets despite multiple requests.

I will report any breach of the Act to the ASIC in my report pursuant to s533, as required.

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Director's obligations to maintain adequate books and recordsI have not been provided with any current books and records by the Director nor the formermanager of the Company, Carlos de Almeida. The MYOB file I have received from external partiesdates back to June 2016 and is significantly out of date. Additionally I have been advised theCompany has not provided employees with PAYG payment summaries.

Given the above, the director and former manager may have breached their obligations to maintainadequate books and records of the Company pursuant to s286 of the Act, which I am required toreport to ASIC.

Insolvent tradingI have not been provided with adequate books and records to assess the solvency of the businessat the date of my appointment. The most recent financial information I have been provided is from30 June 2016 and the balance sheet at this date indicates a net asset deficiency.

Further investigations will have to be completed when current financial information is received toassess any potential insolvent trading claim.

Voidable transactionsI have not been provided with adequate books and records to complete my investigations intowhether any voidable transactions were entered into by the Company prior to my appointment.

A review of the bank statements has identified 5 round payments totalling $29,000 with a commondescription within the 12 months of my appointment. The circumstances regarding these paymentsrequire further investigations.

Unreasonable Director related transactionsMy investigations to date have identified director drawings totalling $69,476 in the MYOB as at 31December 2018. This may constitute an unreasonable director related transaction pursuant tos588FDA of the Corporations Act 2001 (Cth). Additional drawings may have accrued after thisdate and further investigations will be undertaken if information becomes available.

Further inquiries to be undertakenI plan to undertake the following further investigations as additional financial information becomesavailable:

• Review trading history to determine the date the Company became insolvent and considerany potential insolvent trading claim;

• Identify potential preference payments;• Ascertain quantum of director and officer drawings and attempt recovery of same; and• Identify any other voidable transactions;

Likelihood of a dividendI expect to be able to pay a dividend to creditors in this liquidation, however, I am currently unableto confirm the quantum of any dividend. I am unable estimate the rate or timing of a dividend for thefollowing reasons:

• The likely realisation value of the Company's assets is not yet known;• The lack of financial information means that I am unable to assess the likely quantum of

recovery for numerous issued identified;• I have not been able to properly quantify the priority creditor claims, primarily

superannuation; and• I have not received adequate information confirm the extent of Creditor claims against the

Company.

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When I am ready to declare a dividend, any creditor whose claim has not yet been admitted will becontacted and asked to submit a proof of debt. This formalises your claim in the liquidation and isused to determine all claims against the Company.

Meetings heldTo date! I have not been required to hold and therefore have not held any meetings of theCompany's creditors.

Cost of the liquidationAs previously advised in my initial information to creditors! I had estimated that my totalremuneration or the external administration would be $10,000 −$20,000 excluding GST andoutlays.

As a consequence of the lack of co−operation by the Director (Anna de Almeida) and formermanager (Carlos de Almeida), I now expect that the total cost will be in the region of $40,000 −$50,000 for the following reasons:

• Investigating the existence and location of various Company assets and seeking tosecure same;

• Not being provided with books and records to allow me to efficiently conduct myinvestigations and ascertain the operations of the business;

• The likely requirement to forensically reconstruct the employee entitlements of theCompany; and

• Engagement with the regulator (ASIC) regarding allegations of Director misconduct.

I am not seeking approval of this remuneration at this time. I will do so via a proposal in the futurewhen I provide an additional update on the progress of the Liquidation.

What happens next in the liquidation?I will proceed with the liquidation, including:

• Locating and realising assets;

• Obtaining books and records;

Complete my investigations into the Company's affairs;

Undertake a distribution to creditors of the Company, should funds permit; and

Completing my reporting to the corporate insolvency regulator, ASIC.

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

I expect to have completed this liquidation within 12 months.

Compliance with best practice

I confirm that this report complies with the requirements in the Insolvency Practice Rules (IPR),specifically IPR 70−40, as well as the statements of best practice issued by the AustralianRestructuring Insolvency and Turnaround Association (ARITA) with regard to content of theStatutory Report by Liquidator.

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Where can you get more information?You can access information which may assist you on the following websites:

• ARITA at .arita.com.au/creditors

• ASIC at www.asic.giv.au (search for "insolvency information sheets").

Should you have any queries with respect to the above, you may also contact Zac Dullard of myoffice on +61 7 3222 0341 or via email on zac.dullardau.gt.com. There is also information aboutthis liquidation on my firm's website: w.prantthornton.com.au.

Dated: Friday, 12 October 2018

SCCameron Crichton

Liquidator

List of attachments

Appendix A − Form 535 (proof of debt form)

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Appendix AForm 535 − Proof of Debt

A C N 600 021 127F O R M 535

Corporations Act (2001)

F O R M A L PROOF O F DEBT O R CLAIM(GENERAL FORM)

To the Liquidator of Soulbuild Pry Ltd (In Liquidation)

Subregulation 5.6.49(2)

I This is to state that the company was on Friday, 13 July 2018 ((late oJ court orderm winding up b) the Cowl. or daleof resolution to wind up, if a vo/untaiy winding up,), and still is, justly and truly indebted to:

(full name and address of the creditor and, if applicable, the creditors partners. If prepared by an employee oragent of the creditor, also insert a description of the occupation of the creditor) for

4 • J am the creditor's agent authorised in writing to make this statement in writing. I know that the debt wasincurred for the consideration stated and that the debt, to the best of my knowledge and belief, remainsunpaid and unsatisfied.

SignatureOccupation:Address:

Dated

Phone:Email:

*1)0 not complete if this proof is made by the creditor personally.

2 To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or receivedany satisfaction or security for the sum or any part of it except for the following: (insert particulars of all.cecwities held. If/he securities are on the ptvperty of the camp any. asse.rs the value of those .recudties I/any bills or a/heriie,gotiahle securities are held, show them in a .cchedule in /hefollowing/hrm).

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