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PPB Pty Ltd trading as PPB Advisory ABN 67 972 164 718 Liability limited by a scheme approved under Professional Standards Legislation PPB Pty Ltd has associated but independent entities and partnerships

Level 46, MLC Centre 19 Martin Place Sydney NSW 2000 GPO Box 5151 Sydney NSW 2001 t: +61 2 8116 3000 f: +61 2 8116 3111 www.ppbadvisory.com

24 October 2013 The Manager Company Announcements ASX Limited Level 8, Exchange Plaza 2 The Esplanade PERTH WA 6000 Dear Sir/Madam CMA Corporation Limited and its related entities (Administrators Appointed) ACN 113 329 016 ASX Code CMV The Administrators herein provide their Section 439A report for CMA Corporation Limited and its related entities. The report is prepared in accordance with Section 439A of the Corporations Act 2001. The Second Meeting of Creditors for CMA Corporation Limited and its related entities has been convened for:

Date: Friday, 1 November 2013 Registration: 9.30 am AEDT Meeting time: 10.00 am AEDT Location: Wesley Conference Centre, The Lyceum Room, 220 Pitt Street,

Sydney, New South Wales The Administrators will host a teleconference dial-in to the Sydney meeting from our PPB Advisory office in Melbourne, located at Level 21, 181 William Street, Melbourne, Victoria. A Proxy and Proof of Debt form for the Second Meeting of Creditors are enclosed within the report. Yours faithfully

P.P. Carter, M.W. Ayres & N.J. Martin Joint & Several Administrators

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CMA Corporation Limited and related entities

Report by Administrators

Pursuant to Section 439A of the Corporations Act 2001

23 October 2013

Administrators:

Philip Carter

Marcus Ayres

Nicholas Martin

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Report by Joint and Several Administrators pursuant to Section 439A of the Corporations Act 2001

Page 2

Table of Contents

Glossary 3

1. Executive summary 4

2. Second Meeting 8

3. Administrators’ recommendation as to the Group’s future 10

4. Appointment background 12

5. Assets and trading 15

6. Investigations 21

7. Financial background 30

8. Progress of administration 33

9. Remuneration 35

10. Summary of receipts and payments 37

11. Disclaimer 38

Appendix Listing

A Statement of Administrators’ opinion

B Scholz LoFS and Stemcor letter of comfort

C Form 529 – Notice of Meeting of Creditors

D Form 532 – Appointment of Proxy

E Informal Proof of Debt Form for the Purpose of Voting

F Declaration of Independence, Relevant Relationships and Indemnities

G Statutory information

H PPSR searches

I Security interests

J Group operations

K Intercompany balances

L IPAA Publication – “Creditor Information Sheet: Offences, Recoverable Transactions and Insolvent

Trading”

M Insolvent trading and directors defences

N Offences by company representatives

O ASIC Publication – “Insolvency information for directors , employees, creditors and shareholders”

P Administrators’ remuneration report

Q ASIC Publication – “Approving Fees: A Guide for Creditors” For

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Glossary

Abbreviations Full Name

ACN Australian Company Number

Act Corporations Act 2001 (Cth)

Administrators Philip Carter, Marcus Ayres and Nicholas Martin of PPB Advisory as Joint and Several Administrators

AEDT Australian Eastern Daylight Time

ASIC Australian Securities and Investments Commission

BNZ Bank of New Zealand

CBA Commonwealth Bank of Australia

CMA Assets CMA Assets Pty Limited (administrators appointed)

CMA Corporation CMA Corporation Limited (administrators appointed)

CMA Malaysia Purate Keuntungan Sdn bhd

CMA NZ CMA Recycling Limited (administrators appointed)

CMA Recycling CMA Recycling Pty Limited (administrators appointed)

CMA Singapore CMA Peakmore Pte Limited

CMARV CMA Recycling Victoria Pty Ltd (administrators appointed)

COC Committee of Creditors

COI Committee of Inspection

DIRRI Declaration of Independence, Relevant Relationships and Indemnities

DOCA Deed of Company Arrangement

FEG The Federal Government’s Fair Entitlements Guarantee

First Meeting Meeting pursuant to Section 436E of the Act, held on 14 August 2013 at 11.00 am AEST

FY10, FY11, FY12 Financial years ending 30 June 2010, 2011, 2012

GE GE Commercial Pty Limited and GE Commercial Corporation Australia Pty Ltd

Group/CMA/CMA Group

CMA Corporation Limited, CMA Assets Pty Ltd, CMA Recycling Victoria Pty Ltd, CMA Recycling Pty Ltd, CMA Recycling Australia Pty Ltd, Asia Pacific Metals Pty Ltd, Advanced Recycling Australasia Pty Ltd, ACN 147 849 545 Pty Ltd and T & T Metal & Asbestos Services Pty Ltd (all in administration)

H1 FY13 Half year ending 31 December 2012

Informal POD Informal Proof of Debt Form for Voting Purposes

IP Intellectual property

IPAA Insolvency Practitioners Association of Australia

Management The Group’s directors, officers and senior employees

PPSR The Personal Property Securities Register

RATA Report As To Affairs

Report This report by the Administrators in accordance with Section 439A of the Corporations Act 2001 (Cth)

Scholz Scholz AG (a German-based company) and its subsidiaries Scholz Recycling AG & Co KG, Scholz Hong Kong Limited and Scholz Singapore Pte Ltd

Scholz LoFS Scholz Letter of Financial Support dated 26 February 2013 (included at Appendix B

Second Meeting Meeting pursuant to Section 439A of the Act, at which creditors determine the future of the companies within the Group, scheduled for 1 November 2013 at 10.00 am AEDT

Secured creditor GE and Stemcor

Stemcor Stemcor Trade Finance Limited and Stemcor Australia Pty Ltd

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Report by Joint and Several Administratorspursuant to Section 439A of the Corporations Act 2001

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1. Executive summary

1.1 Second meeting of creditors

The Second Meeting of each Group company will be held on Friday, 1 November 2013 at 10.00 am AEDT at the Wesley Conference Centre, The Lyceum Room, 220 Pitt Street, Sydney, New South Wales. In addition, our Melbourne office at Level 21, 181 William Street, Melbourne, Victoria, will host a teleconference dial-in to the Sydney meeting.

1.2 Administrators’ recommendation to creditors regarding the future of the companies in the Group Pursuant to Section 439A of the Act the Administrators are required to provide a statement setting out their opinion as to which course of action is in the best interest of creditors and to provide a statement dealing with the reasons behind the Administrators’ opinion. This statement is attached at Appendix A. Creditors will decide the Group’s future by resolving whether to accept one of the following options in the case of each Group company:

that the administration end and control of the company revert to its directors; or that the company execute a DOCA, if one is proposed; or that the company placed into liquidation be wound up (i.e. liquidation).

At the date of this Report a DOCA proposal has not been received, and the companies are not solvent. As a consequence, the only option available to creditors is to wind up the companies in the Group. However, we have been advised that a DOCA proposal may be forthcoming from Scholz before the Second Meeting. If a formal proposal is received before the Second Meeting we recommend adjourning the meeting to allow us sufficient time to properly consider the proposal and to provide creditors with a supplementary report with our opinion on whether to accept the DOCA proposal or liquidate the Group. The Administrators’ recommendation is for creditors to vote to wind up the following companies: CMA Corporation Limited CMA Assets Pty Ltd CMA Recycling Victoria Pty Ltd CMA Recycling Pty Ltd CMA Recycling Australia Pty Ltd Asia Pacific Metals Pty Ltd Advanced Recycling Australasia Pty Ltd ACN 147 849 545 Pty Ltd T & T Metal & Asbestos Services Pty Ltd.

1.3 Appointment background

Philip Carter, Marcus Ayres and Nicholas Martin were appointed Joint and Several Administrators of the Group on 2 August 2013. The purpose of this Report is to provide creditors with sufficient information to make an informed decision as to each Group company’s future. Our Report includes:

the options available to creditors, our opinion on each of these options and our recommendation to creditors

commentary on the Group’s key assets the results of our investigations to date

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background information about the Group.

1.4 Estimated return to creditors The returns to each class of creditor of each Group company in the event of a liquidation (winding up) will depend upon the level of asset realisations for each entity, as further detailed in Section 0. At this stage we estimate that: employees' priority claims of c $2.1m will be paid in full GE will be repaid in full on its principal indebtedness of $11.8m (before termination and default

interest fees) Stemcor will receive a return of between $22m and $44m but will suffer a shortfall on its lending

to the Group of between $22m and $43m unsecured creditors are unlikely to receive a return from asset proceeds or the Scholz LoFS.

Any potential return in a liquidation is dependent on recoveries from voidable transactions and insolvent trading.

1.5 Funding by secured creditors and Scholz

The CMA Group operations were funded by financing arrangements between the CMA Group and various secured financiers as follows: GE Stemcor BNZ CBA

The secured financing arrangements are otherwise geographically segregated, with: GE and Stemcor holding security over the assets of the Australian-based companies. The

respective priorities of GE and Stemcor in relation to those assets are regulated pursuant to the terms of an inter-creditor deed between GE and Stemcor

Stemcor holding security over the assets of the CMA Corporation’s subsidiaries in Singapore and Malaysia

BNZ holds security over the assets of the CMA Corporation’s subsidiary in New Zealand CBA provided bank guarantees for the Group’s lease commitments, which were cash backed

In addition to the financial accommodation referred to above, in February 2013 Stemcor and Scholz provided letters of financial support to the Group pursuant to which Stemcor and Scholz agreed to make available to CMA Corporation sufficient funds to pay Group debts up until 31 March 2014. Both Stemcor and Scholz were major customers of the Group and made substantial prepayments for stock to assist the Group’s working capital requirements. On 28 May 2013, Stemcor advised CMA Corporation that it had withdrawn its financial support of the Group. On 31 July 2013, Scholz withdrew its financial support of the Group. The withdrawal of that support precipitated our appointment as Administrators to the Group.

1.6 Investigations

1.6.1 Reasons for the Group’s failure

Our investigations indicate the purported withdrawal of financial support by Scholz and a failure by Scholz to honour the Scholz LoFS on 31 July 2013 led the directors to conclude that the Group was insolvent and, as a result, to appoint administrators. As a result, the Group was unable to pay an interest payment to Stemcor of approximately $2m which was due for payment on 31 July 2013.

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However, it is evident that the Group was experiencing financial difficulties prior to the purported withdrawal of financial support by Scholz and these circumstances ultimately led to the failure of the Group. These difficulties were: net trading losses (before tax) in the last three financial years prior to administration, including

an estimated net loss of $72.6m for FY13 negative EBITDA in each of the last 12 months and an estimated EBITDA loss of $44.3m for

FY13 working capital constraints resulting from trading losses which substantially impacted the

Group’s ability to adequately maintain positive cash flow from ordinary operations. On 2 August 2013, the directors resolved that the Group was insolvent, or was likely to become insolvent at some future time, and also resolved that administrators should be appointed to the Group. Accordingly, on the same date, the Administrators were appointed over each CMA Group company. 1.6.2 Potential offences, voidable transactions and insolvent trading Based on our preliminary investigations we have identified the following transactions that may be further investigated by a liquidator: insolvent trading – we consider that the Group may have been trading insolvently since July

2012 unfair preferences – any recoveries will be dependent on the date of insolvency but we consider

that the Group’s disposal of its investment in the US to Scholz shortly before administration for no cash consideration, may constitute an unfair preference

breaches by the Group’s directors/officers of the Corporations Act 2001 (Cth) (the Act) A liquidator has greater investigative powers than an Administrator. A liquidator would also need to consider the commerciality of pursuing any voidable transactions. Further details of the potential findings and investigations performed to date are discussed in Section 6.

1.7 Progress of administration

The major work undertaken by the Administrators since our appointment is summarised as follows:

development and execution of an initial trade-on plan that preserved the goodwill in the business to enable a going concern sales process to be undertaken

application to the Federal Court to extend the convening period to 29 October 2013 to facilitate an orderly sale process

day-to-day operational management of 12 sites located in New South Wales, Victoria, South Australia, Western Australia, Northern Territory, Queensland and Tasmania

management of the Group’s interest in New Zealand, Singapore and Malaysia organising the placement of adequate insurance supervision and administration of finance and budgeting functions evaluation of retention of title (ROT)/Personal Property Securities Act (PPSA) claims including

negotiating commercial settlements weekly reporting to the Secured Creditor regarding the progress of the administration liaised with key stakeholders including employees, the secured creditors, trade creditors,

Australian Securities and Investments Commission (ASIC) and Australian Stock Exchange (ASX)

running a comprehensive sale process for the Group’s business that resulted in a successful going concern sale of the Port Hedland and Berrimah businesses, employment of 20 pre-existing staff and adoption of their entitlements in full

subsequent management of the sale completion process, including site exit and handover to the successful purchasers

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managing the wind-down of remaining Group sites, including liaison with auctioneers and selling agents for realisation of assets

preparing creditor reports and organising and holding creditor meetings attending to numerous employee and creditor enquiries investigating the Groups’ affairs including liaising with legal advisors regarding legal

proceedings commenced prior to administration assessment of all Group priority creditor (employee) entitlements preparing for the Second Meeting of creditors and preparation of this report liaising with the Committee of Creditors (COC) by providing regular updates and holding

meetings to discuss the progress of the administration.

Further details of the work performed in the administration to date are discussed in Section9.

1.8 Enquiries All questions should be directed to the CMA Group’s hotline number 1300 657 159 or by emailing a request to [email protected]. Dated 23 October 2013

Philip Carter, Marcus Ayres and Nicholas Martin Joint & Several Administrators

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2. Second Meeting

The Second Meeting of the Group companies has been convened for: Date: Friday, 1 November 2013 Registration: 9.30 am AEDT Meeting time: 10.00 am AEDT Location: Wesley Conference Centre, The Lyceum Room, 220 Pitt Street, Sydney,

New South Wales We will host a teleconference dial-in to the Sydney meeting from our PPB Advisory office in Melbourne, located at Level 21, 181 William Street, Melbourne, Victoria. We ask those creditors planning to attend the Melbourne teleconference to register their interest in advance by contacting the CMA Group hotline on 1300 657 159 or by emailing a request to [email protected] To enable orderly registration for the meeting please attend 30 minutes prior to the meeting time.

2.1 Extension of convening period On 27 August 2013, the Federal Court made orders granting the Administrators an extension of the statutory period to convene the Second Meeting of creditors in the administrations of the Group for a period of up to 60 days, to 29 October 2013. The decision to seek an extension of the convening period was made on the basis that it would: allow the Administrators more time to properly investigate the financial affairs of the Group maximise the possibility of the sale of all or part of the Group's businesses as a going concern allow the Administrators more time to determine whether a deed of company arrangement

(DOCA) proposal, if formulated, should be recommended to creditors allow the Administrators more time to conduct investigations into whether the Group traded

whilst insolvent or whether the directors acted in breach of their directors duties. Prior to making the application to extend the convening period, we advised the COC of our intention to make the application and obtained their unanimous consent.

2.2 Purpose of Second Meeting The purpose of the Second Meeting is for creditors to decide the future of each company in the Group by resolving whether it should:

end it’s administration (in which case control of the company would revert to its directors); or execute a DOCA; or be wound up (i.e. be placed into liquidation).

For each company, creditors may also resolve to replace the existing Administrators with a new liquidator or deed administrator (as applicable). Otherwise, the incumbent Administrators automatically become the liquidators or deed administrators (as the case may be). For any company placed into liquidation, creditors may also resolve to establish a Committee of Inspection (COI) to liaise with the liquidator during the liquidation period.

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2.3 Meeting registration For the purpose of the Second Meeting the following forms are attached: Form 529 – Notice of Meeting of Creditors at Appendix C Form 532 – Appointment of Proxy at Appendix D Informal Proof of Debt Form for the Purpose of Voting (Informal POD) at Appendix E

Please ensure that your Informal POD and any relevant Appointment of Proxy form is completed and emailed to [email protected] by no later than 12.00 pm AEDT on 30 October 2013 to enable timely registration. All corporate creditors are required to submit a proxy form should they wish to be represented at the meeting in accordance with the Act. Creditors who are unable to attend the meeting and wish to be represented should ensure the attached proxy form, power of attorney or evidence of the appointment of a company representative is completed. Proxy forms lodged by creditors for the First Meeting of creditors cannot be used for the Second Meeting. Informal PODs submitted previously will be recognised and considered for the Second Meeting. To receive any future reports and/or notices via email or facsimile, rather than by regular post, please provide your contact details on the Informal POD.

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3. Administrators’ recommendation to creditors regarding the future of the companies in the Group

3.1 Recommendation

As no DOCA has yet been proposed and the companies in the Group are not solvent, the Administrators recommend that the creditors resolve to wind up the following companies: CMA Corporation Limited CMA Assets Pty Ltd CMA Recycling Victoria Pty Ltd CMA Recycling Pty Ltd CMA Recycling Australia Pty Ltd Asia Pacific Metals Pty Ltd Advanced Recycling Australasia Pty Ltd ACN 147 849 545 Pty Ltd T & T Metal & Asbestos Services Pty Ltd

(all in Administration) Further information on these recommendations is provided below.

3.2 Administrations to end

The option to end the administration and return control of a company to its directed can only be selected if the company is solvent. Each company in the CMA Group is insolvent and, its assets have largely been realised. It is inappropriate for the companies to return to the control of its directors. There is no evidence to suggest that any of the companies would benefit from a return of control to the directors. As a consequence we do not recommend that the administrations end.

3.3 DOCA

As at the date of this Report, the Administrators have not received a formal DOCA proposal. We are, however, aware that Scholz is considering putting forward a proposal. If a formal proposal is received between the date of this Report and the Second Meeting, neither the Administrators nor the creditors will have had adequate time to consider it. If this eventuality were to occur, we will be able to discuss the proposal at the second meeting, but creditors will not be able to vote on it, as they will not have had adequate notice of it. In that case, it may be necessary to adjourn the Second Meeting to allow time for proper consideration of a DOCA proposal, if such a proposal is received. If the Second Meeting is adjourned to allow adequate time for consideration of the DOCA, the Administrators will need to prepare a supplementary report to creditors. Any supplementary report may include a revised recommendation, pursuant to section 439A(4)(b) of the Act, if there are grounds for the Administrators to alter their recommendation in light of considering such a proposal. Given there is no DOCA proposal at the date of this Report, we do not (and cannot) recommend it.

3.4 The companies be wound up

In a liquidation scenario, the potential return to creditors depends substantially on: recovery from the realisation of each company’s assets the extent of any priority or secured creditors

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recovery of voidable transactions, insolvent trading or offences, the outcome of which is dependent upon ongoing investigations and commercial considerations

whether compensation can be recovered from the relevant parties. For this reason, it is not possible for the Administrators to give precise estimates of the returns available to all creditors in liquidation. On the basis of current information, we anticipate a range of potential outcomes as noted below: priority employee claims of $2.1m will be paid in full GE, owed $11.8m at 2 August 2013 before termination and interest charges, will be repaid in

full Stemcor, owed $67m at 2 August 2013, will receive a return of between $22m and $44m but will

suffer a shortfall on its lending to the Group of between $44m and $22m. Significantly, any proceeds from a successful call on the Scholz LoFS would be subject to the security in favour of Stemcor

unsecured creditors are unlikely to receive a return from the sale of the Group’s assets or the Scholz LoFS due to the shortfall to Stemcor. However, all remaining creditors in the liquidation rank pari passu for recoveries on certain actions by a liquidator. In the case of CMA, the Administrators have identified the following transactions that a liquidator would seek to further investigate: - Insolvent trading - Unfair preference - Misleading and deceptive conduct - Breach of directors duties

The variances in the return to Stemcor are primarily due to the unknown outcome of a major piece of litigation, and is also affected by PPSA claims and some residual uncertainty regarding the realisable value of a small number of remaining assets and costs such as: plant and equipment the collection of outstanding debtors the recovery of bonds/ guarantees associated time costs to complete various tasks

Returns from the recovery of voidable transactions and insolvent trading (if any) are uncertain but may enhance the return to creditors. A liquidator would only pursue a potential claim if they assessed the claim would likely result in an enhanced return to creditors. Further detail about the potential claims available in liquidation and our opinion is provided at Section 6.4. Liquidation allows for investigations to be conducted by the liquidators who have greater investigative powers than the administrators. In turn, this may allow for potential recoveries from successful voidable transactions or insolvent trading claims.

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4. Appointment background

4.1 Appointment background Philip Carter, Marcus Ayres and Nicholas Martin were appointed as Joint and Several Administrators of all nine companies in the Group on 2 August 2013 by each company’s respective Board.

4.2 Declaration of independence, relevant relationships and indemnities (DIRRI) Our DIRRI is attached at Appendix F. These declarations disclose information regarding our independence, any prior personal or professional relationships the Administrators or PPB Advisory had with the Group or related parties and any indemnities received in relation to this appointment. There have been no changes to the DIRRI since it was provided in the first creditors report on 5 August 2013.

4.3 Directors and officers At the date of administration the four directors of CMA Corporation were: John Pedersen Parag-Johannes Bhatt Mike Volker Greulich Oliver Scholz.

John Pedersen was the sole director for each of the other eight CMA Group companies. A full list of all former directors and secretaries is included at Appendix G. Messrs Bhatt, Greulich and Scholz are all employees of Scholz AG Group, which owns 47% of the shares in CMA Corporation.

4.4 Corporate offices and place of business CMA Corporation’s registered office and principal place of business was Level 5, 160 Sussex Street, Sydney, New South Wales, at the time of our appointment as voluntary administrators. A full list of the registered offices and principal places of business for each CMA Group entity is included at Appendix G.

4.5 Charges A search of the PPSR revealed various registered security interests over the Group’s assets. We have attached a listing of PPSR searches in Appendix H summarising those entities that have registered security interests.

4.6 Creditors’ claims

The following table summarises approximate claims for each class of creditor for each Group company. This data has been prepared on the basis of Informal PODs received for the First Meeting and the Group’s books and records .

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Company Secured Priority (Employees) Unsecured (based on First Meeting)

Number Amount ($)

1

Number Amount ($)

2

Number Amount ($)

2

CMA Corporation Ltd

2 79,509,2821

46 1,233,409 29 48,480,629

CMA Assets Pty Ltd

- - - -

CMA Recycling Victoria Pty Ltd

- - 13 320,027

CMA Recycling Pty Ltd

63 912,727 1,684 11,867,040

CMA Recycling Australia Pty Ltd

- - 29 310,184

Asia Pacific Metals Pty Ltd

- - - -

Advanced Recycling Australasia Pty Ltd

- - - -

ACN 147 849 545 Pty Ltd

- - - -

T & T Metal & Asbestos Services Pty Ltd

- - - -

Totals 2 79,509,282 109 2,146,136 1,755 60,977,880

1GE ($11.8m,) Stemcor ($67.6m), together ($79.5m)

2These claims are subject to change following the receipt and adjudication of formal proofs of debt.

These amounts have been derived from the: Group’s books and records receipt of Informal PODs received from creditors Administrators’ calculations (e.g. employee entitlements).

4.6.1 Security interest Appendix I sets out a detailed summary of security interests registered against the Group’ assets.

4.6.2 Employees

The Administrators have assessed all of the Group’s priority entitlements for all outstanding annual leave, long service leave, payment in lieu of notice and redundancy entitlements. The Administrators expect all employees’ priority claims will be paid in full. In addition, under the sale of the Port Hedland and Berrimah businesses, 20 of the employees were offered employment with the purchaser (Sell & Parker). As part of this process, all transitioning employees have had their entitlements preserved in full and transferred to the purchaser.

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4.6.3 Unsecured creditors A list of the top ten unsecured creditors current at the time of the appointment of Administrators is included at Appendix G.

4.7 Shareholders

A list of the top ten shareholders current at the time of the appointment of Administrators is included at Appendix G.

4.8 Outstanding or previous winding up applications We are not aware of any outstanding or previous applications to wind up the Group.

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5. Assets and trading

5.1 Summary of assets on hand at appointment, actual/forecast realisations to date and estimated return to creditors CMA Recycling is the key asset-holding entity within the Group. As the trading entity, CMA Recycling holds the majority of the leases over the Group's operating sites and is the primary owner of the Group's plant and equipment located at the various sites across Australia. There are some leases held by CMARV. CMA Corporation is the owner of the real property owned by the Group in Australia, is 100% shareholder of CMA Singapore, CMA Malaysia and CMA New Zealand, and is also a guarantor of certain leases across Australia. CMA Assets holds a contingent asset being a claim against John Holland, which is currently being assessed as part of our investigation of the Group. We comment further on this claim at Section 6. The remaining CMA Group entities are largely dormant. A detailed summary of Group operations is included at Appendix J. The majority of Group assets have now been realised following a period of trading under the control of the Administrators which culminated in: going concern sales of the Port Hedland and Berrimah businesses (including the Port Hedland

property) the sale of bins in Victoria, South Australia and New South Wales various auctions held through our selling agents to dispose of remaining equipment the sale of inventory

The remaining assets (comprising plant and minor residual debtors) will be realised in the coming months. Further detailed information on the trading period, sale of business and residual assets is also provided below.

5.2 Initial review of the Group’s position and decision to recommence trading Immediately following appointment, the Administrators undertook an urgent assessment of the Group’s business and assets to determine if it was possible to continue the business in order to maximise the value of the assets and returns to creditors.

Funding:

there was limited cash at bank and funding available to meet ongoing financial obligations

Stock/inventory: the Group had c $3m of stock on hand at appointment

Debtors: the Group was owed $2.7m from debtors, of which $2m appeared to be collectable

Secured Creditors:

the Secured Creditors were unwilling to extend further funding to the Group and had little appetite to support continued trading

Employees: the existing employees were willing to support the continued trading whilst a buyer was found

Customers: the existing customers continued to purchase stock from the Group and did so at market prices with seven day payment terms

Suppliers: given the nature of the business, suppliers continued to use the Group’s recycling centres and in most circumstances supported a move away from cash terms to three day payment terms

Occupational, health & safety:

the Ecocycle business posed a significant environmental risk if operations were to continue due to the level of mercury waste at the processing sites

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5.3 Administrators’ strategy As Administrators, our objective is to maximise the return to creditors. In order to achieve this, a going concern sale of the business as a whole or in part would usually maximise the realisations from the Group’s assets. However, due to the limited funds available, it was not possible to continue to trade the operations in their entirety and we were aware that any sale of the business would have to be concluded quickly to preserve value. The Administrators formulated the following strategies for the various sites: Port Hedland (Western Australia) and Berrimah (Northern Territory) Due to the key location of these sites servicing the mines and being close to its key customers in Asia it was evident that these two sites would likely generate the most interest. The Administrators continued to trade as normal as possible whilst an accelerated sales and marketing campaign was conducted. Tamworth and Tomago (New South Wales) It was unlikely that any buyer would be interested in the sites as going concerns so the sites were closed down and stock was sold. The Tamworth property is owned by the Group and will be sold in due course. Grays were instructed to conduct a public auction to sell the plant and equipment. Queensland The Group was in the process of subletting its leasehold premises and a going concern buyer, other than the subtenant, was unlikely to be found. As such the operations were closed down. Grays were instructed to conduct a public auction to sell the plant and equipment. Tasmania The Group had previously closed operations in Rocherlea and Burnie. As a result the Administrators engaged Grays to hold a public auction to sell the plant and equipment. The Burnie property is owned by the Group and is on the market for sale. Victoria The Ringwood site was the Group’s Australian operational head office and largest site. However, it was unlikely that a buyer would be interested in the site as a going concern due to its location, noise restrictions and onerous leases. Limited trading would allow the sale of the existing stock and the orderly sale of the plant and equipment. The Bayswater and Pakenham sites were used as feeder yards for Ringwood and so preserving the value of the sites did not require continued trading whilst the sites were marketed for sale. Ecocycle business It was evident that the Ecocycle business (a recycler of mercury and silver) was highly specialised, but the risks associated with continuing to collect and process the mercury waste posed a significant risk to the Administrators. The business was closed down while a buyer for the operations was sought.

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5.4 Outcome of the administration

5.4.1 Sales and marketing campaign The sale process comprised separate sale campaigns and processes to reflect the varied nature and location of the Group’s assets in each of Australia, New Zealand and Singapore. We detail below the asset realisation strategies and outcomes for the Group’s operations. Subsequent to our appointment, we undertook a range of preparatory steps ahead of commencing a comprehensive sale campaign, which included obtaining a detailed independent valuation of the assets across the various Australian sites. The CMA business was advertised for sale as a going concern as a whole or in part in the Australian Financial Review on 7 August 2013 seeking expressions of interest by 16 August 2013. Forty-two parties expressed interest for various parts of the Group. However, no offer for the business as a whole was received. There was particular interest in the following assets:

the business, assets and land at Port Hedland in Western Australia the business and assets at Berrimah in the Northern Territory the Ecocycle business the bins at customer sites across Victoria and South Australia.

Across the remaining Australian sites, the level of interest was poor, and in many cases the indicative offers received were below the liquidation value of assets, as independently assessed by our valuers Grays. Accordingly, our strategy for these sites was a staged onsite auction and managed wind-down process.

5.4.2 Sale of Port Hedland and Berrimah on a going concern basis Both the Port Hedland and Berrimah sites attracted reasonable interest from the outset of the process, attracting interest from six parties. The Administrators subsequently engaged with and facilitated detailed due diligence with parties that had lodged acceptable indicative proposals. Following detailed negotiations with those parties that submitted acceptable proposals and with the consent of the Secured Creditors, we accepted an offer from Sell & Parker for both sites on a going concern basis. The sale comprised the businesses, all fixed assets including the owned land at Port Hedland, bins and stock. The sale also included the transfer of 20 employees and their priority entitlement claims of $162k to the purchaser.

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5.4.3 Plant and equipment Grays were engaged to conduct public auctions for the non specialised plant and an international tender process for the larger specialised plant. The results to date are illustrated below:

Site Auction

Result Tender Result

Rocherlea $1,060,283 $60,000

Burnie $951,380 $13,953

Wingfield $1,610,658 $285,000

Ringwood $2,008,695 $215,000

Pakenham $1,091,957 N/A

Bayswater $34,210 $60,000

Tomago $1,894,404 $270,000

Tamworth $851,172 $241,933

Wangara $32,477 N/A

Campbellfield $449,625 N/A

Eagle Farm - -

Total $9,984,861 $1,145,886

$11,130,747

The Eagle Farm auction and a general clearing auction of remaining plant are being conducted this week and will be finalised by the time of the Second Meeting. In addition to the above Grays has been engaged to sell the Meretec de-zincing machine and the American Pulveriser. Due to the size and specialist nature of these assets a separate marketing campaign is being conducted to run alongside the international tender process to stimulate interest.

5.4.4 Bins Victoria After detailed negotiations with a range of parties, and with the consent of the Secured Creditors, we accepted a proposal from OneSteel for a combined value of $1.2m for all 633 of the Victorian bins at customer sites and four trucks. South Australia South Australia attracted much less interest from parties despite our efforts to encourage unsuccessful parties from the Victorian bin sale process to bid for these assets. With the consent of the Secured Creditors, we accepted a proposal from Sims Metals for a combined value of $469k for 355 bins at customer sites. Other The Group’s other bins have been realised either by private treaty or through various public auctions.

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5.4.5 Ecocycle business The Ecocycle business attracted reasonable initial interest from a variety of parties. However only two parties submitted acceptable offers for the entire business. Following detailed negotiations with both parties we are in the final stages of negotiating the sale with one of these parties. The sale process has been interrupted by an injunction obtained by the landlord of the Campbellfield site. We are currently working towards removing this injunction in order to finalise the sale. The next court hearing in this regard is 25 October 2013.

5.4.6 Trading outcome The Administrators continued to trade the Group’s operations for approximately six weeks, which enabled the conversion of stock of $3.0m plus purchasers of $0.4m into post appointment sales of $4.4m (excluding GST). Ultimately, by trading on the business for this period, the Administrators were able to facilitate going concern sales of the Port Hedland and Berrimah businesses with an appropriate level of competitive tension. In our view this maximised the value of assets realised compared to the alternative scenario of an immediate shut-down and liquidation of assets.

5.4.7 Debtors Intercompany debtors The intercompany balance position at 31 July 2013 is summarised at Appendix K. CMA Corporation is owed c $180m from entities with the CMA Group, of which CMA Recycling owes $150m. The majority of this balance relates to legacy asset transfers and on-charges for financing and operations which came through CMA Corporation to CMA Recycling for operations. With the exception of balances owing from New Zealand, where CMA Corporation may get a return if an unsecured dividend is payable, balances owed from Singapore, Malaysia, and PNG are not recoverable due to the financial position of each of those entities. Trade debtors Below is a summary of CMA Recycling’s current debtor position. CMA Recycling is the only entity of the Group that has books and records disclosing trade debtors:

Entity Amount

($’000)

Receivables (2 August 2013) 2,811

Less: Debtor collections (to 11 October 2013)

(1,624)

Receivables balance (as at 11 October 2013)

1,187

A bad debt provision of $491k has been made against debts owed by Scholz and Stemcor, who are also substantial creditors. A doubtful debt provision of $400k has been raised against the remaining debts due to disputes. The Administrators continue to pursue the remaining outstanding accounts. Further action, including engaging debt collectors will be undertaken if payment is not forthcoming.

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Shares in overseas subsidiaries CMA NZ CMA NZ is a wholly-owned subsidiary of CMA Corporation, and as Administrators, we have oversight over its dealings. Consequently, following our appointment as Administrators to CMA Corporation, we worked closely with the directors to market the New Zealand business for sale. The intention was for CMA Corporation to sell its 100% shareholding in CMA NZ if possible. The sale process formally commenced on 15 August 2013. A summary of the sale process is outlined below:

a total of 19 parties undertook due diligence indicative offers were received from six parties, however, no party was prepared to purchase

the shares held by CMA Corporation Limited parties expressed interest in the business and various assets at Auckland, Tauranga and

Hamilton On review of the offers the directors of CMA NZ concluded that the company was unable to solvently accept any of the offers and was likely to become insolvent. On 4 October 2013, David Webb and Philip Carter of PPB Advisory were appointed Administrators to CMA NZ by its board of directors. As a consequence, the Administrators are seeking to complete the sale of the New Zealand business as soon as possible. A sale of the CMA NZ business may provide a small return to CMA Corporation via its unsecured intercompany creditor claim in CMA NZ. CMA Singapore/CMA Malaysia CMA Singapore and CMA Malaysia are both wholly-owned subsidiaries of CMA Corporation and as the Administrators we have oversight over these companies. In both cases, we have worked in conjunction with Stemcor, the secured creditor of both CMA Singapore and CMA Malaysia, in order to oversee the realisation of the assets over which it is secured. As with New Zealand, the initial intent was to sell the CMA Corporation 100% shareholding and it was advertised for sale on 30 and 31 August 2013 in the Straits Times and Lianhe Zaobao. We were contacted by a total of 24 parties, of which three parties undertook due diligence, including site visits. However, all of the indicative proposals were significantly below the independently assessed forced sale valuations for the assets. On that basis, we abandoned the sale process and are now progressing towards a managed wind down of the site and sale of the assets. CMA Corporation will not get a return on its investment in Singapore and Malaysia as any return (estimated to be between USD6.5m and USD9.5m) will be subject to Stemcor’s security.

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6. Investigations

6.1 Purpose of investigations As Administrators, we have undertaken preliminary investigations in order to identify matters that a liquidator, if appointed, may seek to pursue. Actions which a liquidator could pursue include:

undertaking more detailed investigations actions against Scholz under the Scholz LoFS recovering voidable transactions making a claim for insolvent trading seeking compensation for breaches/contraventions by the directors/officers and/or other parties.

Funds recovered by a liquidator would be available for distribution to creditors of the relevant company subject to the Act’s priority provisions. Certain recoveries, e.g. from voidable transactions, are claims that can only be pursued by a liquidator. Potential recoveries available to a liquidator would not be available to a deed administrator should creditors vote to accept any DOCA proposal. As at the date of this Report, we have not received a DOCA proposal. However, should a DOCA be proposed prior to the Second Meeting of creditors, the Administrators would require further time to investigate the Group’s affairs so that an informed view can be articulated to creditors to consider whether to accept the DOCA proposal or appoint a liquidator to pursue the claims identified below. As Administrators, we have conducted investigations to the extent possible in the available time and will continue to review all the issues identified, should creditors vote to wind up the Group and the Administrators become the liquidators. As noted above, a liquidator has greater powers to pursue recoveries than an administrator or deed administrator. In undertaking our investigations we conducted: a review of the Group’s books and records including:

- management financial accounts and work papers - electronic financial systems/records - search of file servers - bank records - creditor correspondence and discussions - legal documents - pre-appointment sale documentation - board papers and minutes - Management and Director correspondence - contracts

a review of publicly filed financial accounts discussions with Management and their advisors discussions with former staff discussions with contract counterparties

6.2 Events leading up to the appointment of Administrators

The key events leading up to the appointment of the Administrators are as follows: February 2012: Unqualified FY12 half yearly review issued subject to Stemcor and Scholz committing to prepayment facilities of $10m each. Whilst the audit was unqualified, the auditor’s report did state there was material uncertainty as to the Group’s ability to continue as a going concern. April 2012 / May 2012: To reduce the Group’s liabilities and improve the net asset position, a share purchase deed was entered into with Scholz for 25 million shares at $0.40 each, totalling $10m. The issue discharged $9m of Scholz debt and the balance ($1m) was paid in cash.

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August 2012: FY12 audit report issued with an Emphasis of Matter paragraph noting CMA’s possible inability to refinance debt due for repayment at an appropriate cost and compliance with loan covenants. The emphasis of matter again referred to the material uncertainty around the Group’s ability to continue as a going concern. 30 August 2012: Stemcor waiver letter issued, the letter stated that the prepayment facility would be increased from $10m to $20m. 31 August 2012: Scholz’s first letter of financial support capped at $10m, issued to the Group. 23 October 2012: Scholz provided a corporate guarantee in favour of GE to a maximum aggregate of $21.5m in favour of GE, which in turn provided waivers on covenant defaults. 30 October 2012: Scholz provided a corporate guarantee in favour of BNZ to a maximum of NZD2m. In return, BNZ provided waivers in respect of covenant defaults. 25 February 2013: Draft half-year audit report issued, noting net current asset deficiency of $96.3m, a loss of $50m for H1 FY13, significant uncertainty re going concern given dependency on continued financial support from shareholders and financiers and challenges facing ongoing trading. Report included emphasis of matter again referring to material uncertainty about ability to continue as going concern. 26 February 2013: Scholz LoFS issued (attached as Appendix B). Letter included provision of funding of operations for 12 months, extends settlement / maturity date of facilities, intention of shareholders to participate in rights issue of at least $100m. 27 February 2013: Stemcor letter of comfort issued. Letter included provision of funding of operations for 12 months, extends settlement / maturity date of facilities, intention of shareholders to participate in rights issue of at least $100m. 28 May 2013: Stemcor advised CMA that while the facilities and agreements with CMA are to continue, Stemcor is no longer able to support CMA under the letter of comfort previously provided on 27 February 2013. 15 July 2013: CMA NZ starts process to put Scholz on notice for NZ$2m for payment to BNZ. CMA NZ meets with BNZ to negotiate however BNZ demands funds and engages a financial advisor to review daily cash flows for BNZ. 30 July 2013: Special meeting of Board is held to formally call upon the Scholz LoFS. 31 July 2013: Formal demand put on Scholz to fund $2m interest payment to Stemcor under the Scholz LoFS. In response, Scholz purported to unilaterally withdraw its financial support to CMA. The purported withdrawal of that support precipitated the appointment of Administrators to the Group. 2 August 2013: Voluntary Administrators appointed to the nine companies in the CMA Group.

6.3 Reasons for the group’s failure

The Group’s directors advised the Group failed because it was unable to negotiate a deferral of a $2m interest payment to Stemcor which was due on 31 July 2013. The directors also advised that the Group had made substantial losses and was unable to raise sufficient working capital to fund its operations. The Administrators consider the following to be the main factors contributing to the directors’ conclusion that the Group was, or was about to become, insolvent on 2 August 2013: Scholz failed to honour a formal call on the Scholz LoFS on 31 July 2013 Scholz purported to withdraw its financial support on 31 July 2013

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the Group had insufficient cash to meet its ongoing liabilities there was no reasonable prospect of finding alternative sources of funding in the short term the Group had made EBITDA losses in the 13 months prior to the appointment date and had

endured a negative net asset position on its balance sheet since July 2012, both of which are key indicators of financial stress

6.4 Insolvent trading and voidable transactions – findings to date

Whilst our investigations into the Group’s failure are ongoing, we summarise our initial findings below: Insolvent trading Our investigations have identified factors which suggest that the Group may have traded whilst

insolvent since July 2012. Examples of such indicators are: - a deficit net asset position - poor liquidity ratio performance suggesting that the Group was experiencing significant

liquidity issues - the last three audit reports each raised concerns around the Group’s ability to continue as

a going concern - the Group was reliant on funding and support from its major shareholder, Scholz, to

continue trading - in the lead up to our appointment, some suppliers had placed the Group on cash-on-

delivery terms and a large number of redundancies had been made across the Group. We note however that the Group was considering a rights issue to raise capital for the business

and that this may have had an impact on the directors’ view as to whether or not the Group was insolvent.

The Group’s books and records appear adequate and therefore we do not believe there is a presumption of insolvency pursuant to section 286 of the Act. We do note however that the minutes of all board meetings held in 2012 were only signed by a director in January 2013, which calls into question the accuracy of minute taking.

Voidable transactions

We have not finalised our investigations into voidable transactions, as these investigations require a determination of whether, and if so when, the Group was insolvent.

We have also identified an unfair preference payment which the liquidators may be able to have put aside if it can be proved that the Group was insolvent at the time the transaction was entered into. This transaction is discussed further in Section 6.4.2 below.

A liquidator may identify voidable transactions that warrant further investigation and has the power to pursue those claims (refer Section 6.4.2). We note however that the commerciality of pursuing these claims would need to be carefully considered.

Generally any potential claims that might arise out of our investigations are recoverable only if the relevant company is in liquidation. Administrators may also identify breaches that may be committed under other legislation including: Taxation Acts Trade Practices Act Fair Trading Act

Although our investigations are ongoing, we have not presently identified any specific matters that may be referable to the relevant authorities relating to the Acts noted above and the Administrators are not aware of any reason to render a report to ASIC under S438D of the Act.

For general information about what offences may be identified by the administrator, please refer to the IPAA information sheet entitled “Creditor Information Sheet: Offences, Recoverable transactions and Insolvent Trading” attached at Appendix L.

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6.4.1 Insolvent trading Background Solvency is defined in section 95A of the Act as when a company is able to pay all its debts as and when they become due and payable. A company that is not solvent is insolvent. Whether a company is able to meet its debts as they become due is essentially a “cash flow” test rather than a “balance sheet” test (although its balance sheet is relevant). We have considered both tests as part of our investigations however we note that the Group did not prepare a cash flow forecast and accordingly our cash flow tests have been limited. Consideration of the entire financial position of a company at any single point in time is required to establish if it is insolvent. This includes factors such as the nature of the assets and liabilities and the extent to which cash is expected to be generated from future trading activities or available from alternative sources. The table below shows the Group’s net asset and EBITDA position for the 12 months from July 2012 to June 2013.

Net assets

($'000) EBITDA

($'000)

Jul-12 (1,750) (1,828)

Aug-12 (4,700) (1,788)

Sep-12 (8,700) (3,284)

Oct-12 (13,638) (3,442)

Nov-12 (19,476) (4,223)

Dec-12 (49,114) (18,386)

Jan-13 (51,671) (1,059)

Feb-13 (53,531) (586)

Mar-13 (55,982) (606)

Apr-13 (59,260) (1,982)

May-13 (61,566) (1,405)

Jun-13 (68,717) (5,631)

The negative net asset position and EBITDA losses over the period suggest underlying issues with the business model and industry. In addition, the Group was not able to generate sufficient profits to meet its ongoing financial commitments. As noted above, the Group’s auditor, Deloitte, had flagged material concerns about the Group’s ability to continue as a going concern in their FY11, FY12 and H1 FY13 audit reviews. Directors’ obligations Company directors have a positive duty to prevent insolvent trading by not incurring debt when there are reasonable grounds for suspecting that the company will be unable to pay its debts as and when they fall due (section 588G of the Act). Appendix M details general information for creditors on recovery of insolvent trading claims and directors’ defences.

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Presumption of insolvency – inadequate books and records Pursuant to Section 286 of the Act, a company must keep written financial records that correctly record and explain its transactions, financial position and performance, and enable true and fair financial statements to be prepared and audited. Financial records must be kept for seven years after the transactions covered by the records are completed. Failure to maintain books and records may give rise to a presumption of insolvency pursuant to Section 588E of the Act. This presumption may be relied upon by the liquidator in an application for compensation for insolvent trading and other actions for recoveries pursuant to Part 5.7B of the Act. We have been provided with access to the books and records of the Group by the directors and Management. The directors have also submitted their RATA’s. After a review of the books and records, the Administrators have formed the view that books and records of the Group have been adequately maintained in accordance with Section 286 of the Act but investigations will continue in this regard. Preliminary view on liability for insolvent trading The Group has been loss-making at an EBITDA level in every month since January 2012 with the exception of May 2012. Whilst the directors had various strategies to improve the Group’s position, including a mooted rights issue, none of them eventuated and on review it is unclear as to whether these strategies were realistic given the Group’s poor financial position. In addition, the Group’s last two audit reports dated 31 August 2011 and 31 August 2012 both noted material uncertainty about the Group’s ability to continue as a going concern. In light of the above, it is our view that the Group may have been insolvent since July 2012 although insolvency will need to be proved. A liquidator, should one be appointed, will have the power to investigate the solvency (or otherwise) of each company within the Group in more detail and recommend to creditors whether there is a benefit in pursuing the directors for insolvent trading. The value of any estimated claim should be tempered by the fact that it may be difficult to prove insolvency. We expect that if a case was to be pursued, the directors would rely on a number of defences. A liquidator would have to consider these potential defences, and the likelihood of overcoming them in proving insolvency. There are therefore risks and financial costs associated with making such a claim, which would potentially require substantial funding.

6.4.2 Voidable transactions Summary These investigations centre on transactions entered into by a company that a liquidator may seek to avoid or challenge where a company is wound up. Investigations of this nature allow an Administrator to inform creditors of what funds may become available in the event that a company is wound up. For general information explaining voidable transactions refer to Appendix M. An administrator’s obligation with respect to investigations of this type is not to the same level as a liquidator. A liquidator could take some time to investigate these matters before reaching a conclusion as to any potential claims that may be recoverable. These transactions generally fall into the following categories: unfair preference payments uncommercial transactions unfair loans unreasonable director-related transactions, and related entity benefits.

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The information provided in this section is based on our investigations to date. More detailed investigations would be required before any final view could be reached. The identification of certain voidable transactions is also dependent on establishing whether companies within the Group were insolvent and, if so, when they became insolvent. Our investigations into whether the Group traded whilst insolvent are ongoing and we refer to our previous comments in Section 0. Based on our preliminary investigations we have identified transactions that may be voidable by a liquidator for: unfair preferences uncommercial transactions

A liquidator will be able to conduct more thorough investigations to identify any voidable transactions. A liquidator would also need to consider the commerciality of pursuing any voidable transactions. We have not currently identified any other transactions that may be voidable by a liquidator: Unfair preferences A transaction is an unfair preference if at the time of the payment the following existed: the payment was made to either:

- a non-related creditor six months or less prior to the commencement of the administration; or

- a related creditor four years or less prior to the commencement of the administration the company was insolvent the creditor received a greater benefit by receiving the payment than it would have received had

the transaction been set aside and the creditor proved in a winding up the creditor could have reasonably been aware that the company was insolvent at the time of

the transaction. We consider that the sale of CMA Group’s US operations to Scholz in July 2013 may be an unfair preference. In July 2013, sale documents were executed for the sale of shares in the two wholly owned subsidiaries of CMA US, being CMA Recycling Corporation Ltd and CMA Property Corporation Ltd. These entities are believed to be the owners of the buildings, land, plant and machinery, for the (non-operating) US business based in Chicago. The transaction raises concerns for the following reasons:

there was no cash consideration for the sale, rather a $12m reduction of the Group’s unsecured debt owed to Scholz in exchange for the assets of CMA US

independent valuations for the assets of CMA US prepared in March 2013 ranged between $1.3m and $4m, well below the value of the debt written off

there are inconsistencies between how the actual transaction was carried out and the information presented to shareholders regarding the transaction prior to it occurring

Further advice would need to be sought to determine the commerciality of pursuing this matter with particular reference to pursuing the matter in an overseas jurisdiction and the likelihood of recovering the physical assets or the proceeds of sale. We have reviewed the Group’s bank statements, creditor balances and correspondence for the 13 month period prior to 2 August 2013 and consider the value of transactions that may constitute unfair preferences to trade creditors to be minimal.

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Uncommercial transactions A transaction is an uncommercial transaction if at the time of the transaction the following existed:

a reasonable person would not have entered into the transaction after taking into account the

detriment and benefits to the company the company was insolvent it must have been entered into with either:

- a non-related entity two years or less prior to the commencement of the administration; or - a related entity four years prior to the commencement of the administration

the entity: - could have reasonably been aware that the company was insolvent at the time of the

transaction - did not provide valuable consideration

Based on investigations to date, we have not identified any transactions that would appear to be uncommercial. Unfair loans Section 588FD of the Act sets out the definition of what constitutes an unfair loan. On the basis of our investigations to date, we have not identified any amounts which may be recoverable as unfair loans. However, if the companies in the Group proceed into liquidation, more detailed investigations into these matters could be conducted. Unreasonable director-related transactions Section 588FDA of the Act sets out the definition of what constitutes an unreasonable director-related transaction. Based on our investigations to date, we have not identified any amounts which may be recoverable as unreasonable director-related transactions. However, if the companies in the Group were liquidated, more detailed investigations into these matters could be conducted. Related entity benefit resulting from insolvent transaction Section 588FH of the Act provides that insolvent transactions which have the effect of discharging a liability of a related entity may be recovered by a Liquidator. We have not identified any amounts that may be recoverable in this regard. However, if the companies in the Group were liquidated, more detailed investigations into these matters could be conducted.

6.4.3 Offences Company directors have an obligation to act: with due care and diligence in good faith properly with respect to their position and information.

Further information on offences is contained in Appendix N. At present we have not yet identified any matters which appear to definitively demonstrate a breach of director duties or constitute an offence other than those mentioned above. However, our investigations into these matters are ongoing, and in the event the Group companies were liquidated, these investigations would be continued by a liquidator.

6.5 Litigation on foot prior to administration

At the date of our appointment the Group was involved in a number of legal proceedings. We summarise below these proceedings.

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CMA Assets Pty Ltd vs John Holland Pty Ltd Proceedings against John Holland Pty Ltd commenced in March 2008, culminating in a final hearing throughout April/May 2013. We are currently awaiting judgement to be handed down and given the complexity of the matter, expect the judgement to be delivered in 2014. CMA Assets Pty Limited’s best outcome would be c$28.4m, which is subject to Stemcor’s security. CMARV vs Doubt Free Investments Pty Ltd This dispute was heard in court in 2011 and, following judgement against CMARV, was appealed with judgement subsequently overturned in favour of CMARV in August 2012. The Court recently handed down its judgement on costs in favour of the CMARV in the sum of $698k and ordered the return of the security for costs of $223k. A formal demand for the payment of the costs has been sent to Doubt Free but no response has been received.

Claim by Ambergate Limited (NZ Company no. 963855) (Ambergate) In May 2013, Ambergate, a shareholder of CMA Corporation, filed proceedings in the Federal Court against CMA Corporation seeking damages of approximately $800k for breach of Section 52 of the Trade Practices Act. An amended statement of claim was filed by Ambergate on 31 July 2013; however the proceedings were stayed following the Administrators' appointment. On 27 September 2013, Ambergate filed an application seeking leave to join Mr Doug Rowe and Mr Trevor Schmitt (two former directors of CMA) to the proceedings. That application is before the Court for directions on 22 November 2013. The Administrators are continuing to correspond with Ambergate's lawyers in relation to the proceedings. Claim by Trevor Schmitt against CMA Corporation In March 2013 Mr Schmitt, a former director of CMA Corporation commenced proceedings against CMA Corporation in the Federal Court claiming wrongful termination of his employment with CMA Corporation in December 2012. CMA subsequently filed a defence to this claim. Our legal representatives have subsequently written to the court on our behalf to notify the court of the Administrators’ appointment. The court has subsequently confirmed that the proceedings have been stayed and that no further listings will occur without the Administrators’ consent or leave of the court. Mount Isa Mines Limited (MIM) v CMA Assets Pty Ltd This proceeding was commenced by MIM in the Supreme Court of Queensland as a result of a fire incident which occurred on 27 September 2007 at a mine owned by MIM and situated in Mount Isa in Queensland. MIM has alleged that CMA is liable to MIM for damages and loss suffered by MIM as a result of employees of CMA Assets having caused the fire. The proceedings are currently stayed and no further listings will occur without the Administrators' consent or leave of the Court.

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6.6 Scholz LoFS and Stemcor letter of comfort Attached as Appendix B is a copy of the Scholz LoFS dated 26 February 2013 and a copy of the Stemcor letter of comfort dated 27 February 2013. The Scholz LoFS was issued to CMA Corporation and its subsidiaries and provides financial support to the Group to meet its ongoing financial commitments from the date of issue until 31 March 2014. The Scholz LoFS was issued as a result of the draft half-year audit report issued on 25 February 2013 that noted a net current asset deficiency of $96.3m, a loss of $50m for H1 FY13, and significant uncertainty as to the going concern viability of the Group given dependency on continued financial support from shareholders and financiers. The report included an emphasis of matter again referring to material uncertainty about ability to continue as going concern. Legal advice received in regards to the letter suggests that the letter is a binding contract to make available sufficient monies for the Group to meet its ongoing financial obligations. Scholz purported to withdraw the letter shortly before administration however, this constitutes a breach of contract and the Group would be entitled to damages for the breach. Any proceeds from a successful call on the letter of financial support or for a breach of contract would fall under Stemcor’s security and would not be available to the unsecured creditors unless and until Stemcor’s secured debt was paid in full. The Stemcor letter of comfort provided to CMA Corporation was not a guarantee but an intention to make available sufficient funds to enable the Group to pay its debts until 31 March 2013. We do not consider that this letter is promissory in nature and as such do not consider this a binding contract that could be called on by CMA Corporation.

6.7 Liquidation of PNG operations On 26 September 2012, the directors resolved to place the PNG operations into liquidation as they believed it had become unprofitable over the past six months and both a drain on cash reserves and management time. In addition, they noted that the PNG market had been unique and following the removal of the former directors, Paul Mann and Daniel Blignaut, it was determined that CMA could not operate without skilled local management. On 27 September 2012, David Guinn of GuinnPKF was appointed Liquidator of the company. A review of the Liquidation report indicates that CMA believed that the actions and practices of the former directors and certain management may not have been in the best interests of the company. On appointment of the Liquidator, the company had all but ceased trading. Records for the company were minimal or non-existent. Whilst the Liquidator has been able to realise some assets and stock, there will be insufficient funds for any return to CMA Corporation.

6.8 Funding to pursue recovery actions Should creditors resolve the Group companies be wound up and placed into liquidation, it may be without sufficient funds to meet costs in pursuing recoveries. As such, if recovery actions are identified we may seek funding from: creditors litigation funders

Litigation funding may only be available if potential recovery actions are determined to be sufficiently strong and in the interests of creditors. Litigation funders generally retain a percentage of the recovered proceeds.

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7. Financial background

In the section below we have summarised pertinent Group consolidated financial information that describes the Group’s performance prior to our appointment. We have conducted the analysis below utilising the Group’s available books and records. Overall, the Group had a significant net asset deficiency from July 2012 onwards, made massive losses in the last 3 years and was unable to generate sufficient cash from operations to meet its financial commitments.

7.1 Historical financial performance Audited accounts The following table summarises the Group’s consolidated financial performance for the period from FY10 to FY12 and H1 FY13, based on audited accounts.

Monthly management accounts We provide below a summary based on consolidated management accounts for the Group’s profit and loss in the circa six month period prior to our appointment.

$'000H1 FY13

Audited

FY12

Audited

FY11

Audited

FY10

Audited

Continuing operations

Revenue from continuing operations 98,817 238,141 337,917 348,663

Other income (35,996) (269,666) (411,395) (390,476)

Depreciation and amortisation expense (11,535) (11,669) (14,954) (18,490)

Finance costs (4,118) (13,744) (15,557) (12,888)

Loss before income tax (46,182) (56,938) (103,989) (73,191)

Income tax expense (3,850) (14,360) (19,171) 5,927

Loss for the period from continuing operations (50,032) (71,298) (123,160) (67,264)

Discontinued operation

Loss for the year from discontinued operation (2,799) (4,288) (433) (5,127)

Loss for the year (52,831) (75,586) (123,593) (72,391)

Other comprehensive loss

Exchange differences arising on translation of foreign operations 833 (1,369) (4,255) (892)

Total Comprehensive loss (51,998) (76,955) (127,848) (73,283)

$'000 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 FY13 YTD

Income 15,546 17,538 14,803 12,532 14,432 6,010 179,928

COGS (12,126) (13,435) (10,862) (9,761) (11,195) (2,708) (138,924)

Gross profit 3,420 4,103 3,941 2,772 3,237 3,302 41,004

GM % 22% 23% 27% 22% 22% 55% 23%

Operating expenses (4,482) (4,813) (4,621) (5,276) (4,672) (4,587) (66,037)

Other expenses (127) 124 (24) 29 18 (4,578) (20,721)

Other income 130 (1) 98 494 12 232 1,443

EBITDA (1,059) (586) (606) (1,982) (1,405) (5,631) (44,311)

Less: depreciation and amortisation (999) (956) (911) (1,002) (1,100) (1,085) (17,868)

EBIT (2,058) (1,542) (1,517) (2,984) (2,505) (6,716) (62,179)

Related parties foreign exchange (122) 661 (11) (45) 371 (144) 249

Less: interest & finance charges (598) (524) (503) (542) (519) (425) (6,773)

Profit/ (loss) before taxation (2,778) (1,406) (2,031) (3,571) (2,652) (7,285) (68,702)

Less: income tax - - - - - - (3,850)

Profit/ (loss) after taxation (2,778) (1,406) (2,031) (3,571) (2,652) (7,285) (72,552)

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We make the following comments on the Group profit and loss:

the majority of the Group’s income is derived from the sale of scrap metal. Income declined by c 30% between FY11 and FY12 which Management attribute to the general decline in the industry. At H1 FY13 this trend continued as the Group experienced even further decline in revenue.

COGS are closely correlated to income with the key components being the purchase of scrap, quantity/ quality claims in relation to purchases, inventory adjustments for stock takes, import and export freight relating to the purchase/sale of scrap.

the Group’s operating expenses increased in June 2013 due to year-end adjustments including an impairment loss of $6.5m and the release of a $2.1m provision for market rentals.

the Group suffered total comprehensive losses every year since FY10. It continued to incur trading losses at an EBITDA level in each of the six months prior to our appointment which is reflective of the directors’ reasons for failure being lack of profitability and insufficient working capital.

7.2 Historical financial position

The following statement of consolidated balance sheet summarises the Group’s financial position for FY10, FY11, FY12 and H1 FY13.

We make the following comments on the Group’s balance sheet: a decrease in the Group’s current assets over the period can be attributed to a decline in trade

and other receivables by 60% between FY12 and FY13. In addition, the inventory balance reduced 62% from FY10 to FY12.

the Group’s decrease in non-current assets over the period is largely due to: - decrease in the value of property, plant and equipment – 34% decrease from FY10 to

FY12 - write off of deferred tax assets – 86% decrease from FY10 to FY12 - write down of intangible assets from FY12.

Current and non-current liabilities remained consistent over the period between January 2013 and June 2013, the balance is made up largely by prepayments from Scholz and Stemcor.

The Group had a deficiency of assets to liabilities in H1 FY13 of $49.1m and a deficiency of $68.7m in FY13.

Consolidated Balance Sheet

$'000FY13

Draft

H1 FY13

Audited

FY12

Audited

FY11

Audited

FY10

Audited

Assets

Current assets 30,339 35,933 43,855 50,135 87,426

Non-current assets 74,083 86,775 110,043 157,300 247,923

Total assets 104,422 122,708 153,898 207,435 335,349

Liabilities

Current liabilities 139,756 132,265 114,748 182,594 87,238

Non-current liabilities 33,383 39,557 36,266 20,671 116,093

Total liabilities 173,139 171,822 151,014 203,265 203,331

Net assets (68,717) (49,114) 2,884 4,170 132,018

Equity

Issued capital 326,983 326,987 326,987 251,318 251,318

Accumulated losses (392,597) (372,871) (320,040) (244,454) (120,861)

Other reserves (3,102) (3,230) (4,063) (2,694) 1,561

Total equity (68,717) (49,114) 2,884 4,170 132,018

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7.3 Directors’ Report As To Affairs The RATA sets out the directors’ view of the Group’s assets and liabilities at 2 August 2013, together with the estimated realisable value of the assets. A RATA has been received from each director for each company within the CMA Group. A summary of the consolidated CMA Corporation assets and liabilities provided by the directors in their RATA is provided below. The book values presented by the directors differed in some instances from those identified by the Administrators; however we have presented the book values provided by the directors in the table below.

There are significant differences in the directors’ opinions as to the financial affairs of the Group predominately due to the differing levels of information that the directors have access to post appointment. The summary above is provided as information only and creditors should refer to all information in this section that sets out the financial position of the Group as per the Company’s books and records.

the directors estimated recovery of assets range between $5.6m and $94.1m largely due differences in the estimated recovery of Group debtors and property, plant and equipment.

there are variances between the directors for the value of Secured Creditor claims against the Group, which range between zero and $102.8m

the directors estimated deficiency of assets to liabilities range between $69.9m and $177.2m

CMA Corporation Limited

$'000 Notes

Interests in land

Debtors

Cash at bank

Stock

Property, plant and equipment

Other assets - Deposits (bonds)

Total assets

Amounts owing to secured creditor

Amount owing for employee entitlements

Preferrential Creditors

Partly secured creditors

Creditors

Contingent liabilities

Total liability

Estimated deficiency

Notes Mr Bhatt Mr Greulich Mr Pedersen Mr Scholz Mr Bhatt Mr Greulich Mr Pedersen Mr Scholz

1,750 2,279 2,279 2,550 1,750 1,800 1,500 2,100

30,400 180,315 180,313 196,320 28,800 3,185 314 320

3,860 2,554 2,554 2,500 3,860 2,554 2,554 2,500

9,549 n/a n/a n/a 8,500 - - -

54,000 n/a n/a n/a 50,000 - - -

1,235 111,788 296,950 112,234 1,235 1,235 1,235 1,234

100,794 296,936 482,096 313,604 94,145 8,774 5,603 6,154

(2,306) (2,306) - (102,800) (1,800) (1,903) -

(500) (218) (217) (140) (500) (218) (217) (140)

(2,000) n/a (13,719) (2,000) (2,000) - (2,000) (2,000)

(80,645) (68,526) (104,000) (80,645) (13,680) (77,000)

(57,687) (57,687) (62,000) (57,687) (57,687) (56,900)

- - - - - - -

(2,500) (140,856) (142,455) (2,140) (271,300) (140,350) (75,487) (136,040)

98,294 156,080 339,641 311,464 (177,155) (131,576) (69,884) (129,886)

Directors' Estimated Realisable ValueBook Value

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8. Progress of administration

8.1 First Meeting The First Meeting for each Group company was held on 14 August 2013. Creditors at that meeting elected to form a COC for each of CMA Corporation and CMA Recycling and ratified the appointment of the administrators. A copy of the minutes of the First Meeting is available on the PPB Advisory website, and may also be obtained from the ASIC website.

8.2 Committee of creditors The members of each committee are as follows: CMA Corporation

Grant Whatley representing Scholz Recycling AG Stephen Baker representing Stemcor Australia Pty Ltd and Stemcor Trade Finance Limited Andrew Bursic representing GE Commercial Corporation (Australia) Pty Ltd Walter Aldridge representing the employees of CMA Corporation

CMA Recycling

Grant Whatley representing Scholz Hong Kong Limited and Scholz (Singapore) Pte Ltd Stephen Baker representing Stemcor Australia Pty Ltd and Stemcor Trade Finance Limited Andrew Bursic GE Commercial Corporation (Australia) Pty Ltd David Georgiou representing a Joint Venture between Bill Russo Nominees Pty Ltd, David

Georgiou and Judith Georgiou, the Wingfield landlord Walter Aldridge representing the employees of CMA Recycling

To date the COC have met on two occasions to discuss the status of the Administration. Details of the issues discussed are as follows:

Date of meeting Issues discussed

22 August 2013 Application for the extension of the convening period

Sale process update

18 October 2013 Administrators’ investigations Upcoming second meeting Approval of Administrators remuneration for

the period 2 August to 30 September 2013

8.3 Proceedings brought against the Group since administration

THC Holdings THC has made a claim of ownership of c1,300mt of scrap at the Port Hedland site. The Administrators rejected this claim on the basis that THC had not perfected its security interest in the scrap and instead had a claim for breach of contract, which we consider is an unsecured claim against CMA Recycling. The Scrap was sold to Sell & Parker as part of the sale of business and assets at this site. In compliance with the most recent orders of the Court, the Administrators have undertaken not to dispose of or deal with the sum of $371,824 from the proceeds of sale pending the hearing of the dispute which has been listed for hearing on 16 December 2013.

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Doubt Free Investments, WMR Investments and Waswaste Investments The landlords of Rocherlea, Ringwood and Campbellfield (which are all entities controlled by former CEO, Mr Doug Rowe) obtained an interim injunction to prevent the Administrators removing certain assets at each of these sites. The basis for the injunction was a dispute about the nature of the make good provisions at the sites following the removal of plant and equipment and clean-up of hazardous waste provisions. It appears the landlords’ basis for the injunction has now changed to one of challenging the Administrators’ decision to sell the assets to a third party rather than Mr Rowe. The Court granted an injunction pending a full hearing scheduled for 25 October and ordered both sides to attend mediation before 11 October. The Administrators attended the mediation on 11 October, at which a settlement in respect of Rocherlea and Ringwood was agreed, the contents of which are confidential. The result is that only the injunction in relation to Campbellfield and the Ecocycle assets remains on foot and will be heard on 25 October 2013 unless both sides can agree a settlement prior to this date. The Administrators have been progressing a sale of the Ecocycle assets to a third party and should a settlement with the landlord not be agreed, we will look to execute this sale as it represents a better return to creditors than Mr Rowe’s proposal.

8.4 Further information on the insolvency process To assist creditors, employees, and shareholders in understanding the Administration process better, ASIC has released a package of insolvency information sheets. These have the endorsement of the IPAA. Enclosed at Appendix O is the ASIC publication ‘Insolvency information for directors, employees, creditors and shareholders’, which provides an index of all the information sheets that are available. You can download these information sheets as PDF files from www.ipaa.com.au or www.asic.gov.au.

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9. Remuneration

9.1 Summary of remuneration We attach at Appendix P the Administrators remuneration report which sets out the following:

summary of Administrators’ time spent from 2 August 2013 to 11 October 2013 summary of Administrators’ time estimated to be spent from 12 October 2013 to

1 November 2013 summary of Liquidators’ time estimated to be spent from 1 November 2013 to completion.

Creditors are directed to Appendix P which has a schedule detailing the hourly rate of each level of staff at PPB Advisory and Appendix Q, an ASIC information sheet entitled “Approving Fees: A Guide for Creditors” to further assist creditors in evaluating the work undertaken. Below is a breakdown of the time costs incurred to date:

Entity 2 Aug - 31 Aug

($) 1 Sept - 30 Sept

($) 1 Oct - 1 Nov (estimate) ($)

Total ($)

CMA Corporation Limited

222,756.00 212,927.00 194,776.60 630,459.60

CMA Recycling Pty Ltd 1,652,452.25 831,482.00 563,100.43 3,047,034.68

CMA Assets Pty Ltd 2,642.50 1,148.00 5,909.00 9,699.50


3,244.00 7,084.00 1,000.00 8,378.50


7,378.50 0.00 1,000.00 11,328.00


2,433.00 0.00 1,000.00 3,433.00


2,614.50 0.00 1,000.00 3,614.50

ACN 147 849 545 Pty Ltd

2,363.00 0.00 1,000.00 3,363.00


2,606.50 0.00 1,000.00 3,606.50

Total 1,898,490.25 1,052,641 769,786.03 3,720,917.28

It is difficult to provide an estimate for the future cost of the liquidation or a DOCA (should a proposal be forthcoming) at this stage due to the uncertainty surrounding the potential litigation and antecedent transaction recoveries. However, for the purposes of providing creditors with an estimate we anticipate costs to be between $0.5m to $1m. Should a Committee of Inspection be formed at the Second Meeting then it would be for the committee to approve the liquidators’ fees. Methods of remuneration Four basic methods 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

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Percentage: the total fee charged is based on a percentage of a particular variable, such as the gross proceeds of assets realisations

Contingency: the practitioner’s fee is structured to be contingent on a particular outcome being achieved.

Method chosen Given the nature of this administration, we propose that our remuneration for each Group company be calculated on time based / hourly rates. This is because:

it ensures that creditors of each Group company are only charged for work that is performed. Our time is recorded and charged in six minute units

we are required to perform a number of tasks which do not relate to the realisation of assets, for example: - responding to creditor enquiries - reporting to ASIC - distributing funds in accordance with the provisions of the Act.

9.2 Administrators’ remuneration

At the Second Meeting, we will be seeking creditors’ approval for payment for the work conducted by the Administrators, since our appointment on 2 August 2013 up to the holding of the Second Meeting on 1 November 2013. As mentioned above we have sought and obtained the approval from the COC for payment of our fees for the period 2 August to 30 September 2013 for CMA Corporation ($435,683) and CMA Recycling ($2,483,934) (both excluding GST).

9.3 Administrators’ disbursements

The remuneration report includes a summary of our actual and/or estimated disbursements. Disbursements are divided into three types: A, B1, B2:

A - disbursements are all externally provided professional services and are recovered at cost. An example of an A type disbursement is legal fees

B1 - disbursements are externally provided non-professional costs such as travel accommodation and search fees. B1 type disbursements are recovered at cost

B2 - disbursements are internally provided non-professional costs such as photocopying and document storage. B2 type disbursements are charged at cost except for photocopying, printing and telephone calls which are charged at a rate which is intended to recoup both variable and fixed costs.

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10. Summary of receipts and payments

Below is a consolidated summary of the Group’s receipts and payments for the period from 2 August 2013 to 11 October 2013.

$'000 Amount excl

GST

Receipts

Sale of plant and equipment 9,222

Post-appointment debtor receipts 3,895

Cash at bank at appointment 1,690

Sale of stock 1,803

Pre-appointment debtor receipts 1,300

Sale of land 1,000

Refunds 266

Petty cash receipts 90

Deposit interest 4

Total receipts 19,270

Payments

Secured creditor distributions (8,624)

Operational costs (942)

Salaries and wages (782)

Rental costs (514)

Statutory costs (381)

Asset realisation costs (112)

GST (74)

Total payments (11,429)

Net receipts in period 7,841

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11. Disclaimer

In reviewing this Report, creditors should note the following: This Report is based upon our preliminary investigations to date. Any additional material issues which

are identified subsequent to this Report may be the subject of a further written Report and / or tabled at the forthcoming meeting of creditors.

The statements and opinions given in this Report are given in good faith and in the belief that such statements and opinions are not false or misleading. Except where otherwise stated, we reserve the right to alter any conclusions reached on the basis of any changed or additional information which may be provided to us between the date of this Report and the date of the Second Meeting.

Neither the Administrators, PPB Advisory nor any member or employee thereof is responsible in any way whatsoever to any person in respect of any errors in this Report arising from incorrect information provided to us.

In considering the options available to creditors and formulating their recommendation, the Administrators have necessarily made forecasts of asset realisations and total creditors. These forecasts and estimates may change as asset realisations progress and claims are received from creditors. Whilst the forecasts and estimates are the result of the Administrators’ best assessment in the circumstances, creditors should note that the outcome for creditors may differ from the information provided in this Report.

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Appendix A

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CMA CORPORATION LTD - ACN 113 329 016

CMA ASSETS PTY LTD - ACN 112 821 735 CMA RECYCLING VICTORIA PTY LTD - ACN 005 667 103

CMA RECYCLING PTY LTD - ACN 107 209 503 CMA RECYCLING AUSTRALIA PTY LTD - ACN 003 047 210

ASIA PACIFIC METALS PTY LTD - ACN 109 950 861 ADVANCED RECYCLING AUSTRALASIA PTY LTD - ACN 083 514 863

ACN 147 849 545 PTY LTD - ACN 147 849 545 T & T METAL & ASBESTOS SERVICES PTY LTD - ACN 061 970 572

(ALL ADMINISTRATORS APPOINTED) (THE COMPANIES OR THE GROUP)

STATEMENT OF ADMINISTRATORS’ OPINION

PURSUANT TO SECTION 439A(4)(b) OF THE CORPORATIONS ACT 2001 This statement sets out our opinions in relation to the alternatives which the creditors of the Companies will consider at the Second Meeting of creditors to be held at the Wesley Conference Centre, The Lyceum Room, 220 Pitt Street, Sydney, New South Wales on Friday, 1 November 2013 at 10.00 am AEDT. The following options are available to creditors to decide at the Second Meeting pursuant to section 439C of the Corporations Act 2001, being that: a) any or all of the Companies should execute a DOCA; or b) the administration of any or all the Companies should end; or c) any or all of the Companies be wound up.

The Act requires that the Administrators express an opinion on each option and make a recommendation. Our opinion on each option and the reasons for our opinion are set out below:

a) The Companies execute a DOCA At this stage no DOCA proposal has been submitted to the Administrators although we understand that Scholz is considering putting forward a proposal. At present, this option is unavailable to creditors. b) The administration should end

In our opinion, this option is NOT in the creditors’ interests. Our reason for this opinion is that the Companies are insolvent and there is no likelihood of them returning to solvency in their circumstances.

c) The Companies should be wound up In our opinion, this option is presently the only option available to creditors and therefore the Administrators’ recommend the Companies be wound up.

Dated this 23rd

day of October 2013

Philip Carter, Marcus Ayres and Nicholas Martin Joint & Several Administrators PPB Advisory Level 46, MLC Centre, 19 Martin Place, Sydney, NSW, 2000

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Appendix B

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Appendix C

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FORM 529

Corporations Act 2001 Sub regulation 5.6.12(2)

NOTICE OF SECOND MEETING OF CREDITORS OF

CMA CORPORATION LTD - ACN 113 329 016

CMA ASSETS PTY LTD - ACN 112 821 735 CMA RECYCLING VICTORIA PTY LTD - ACN 005 667 103

CMA RECYCLING PTY LTD - ACN 107 209 503 CMA RECYCLING AUSTRALIA PTY LTD - ACN 003 047 210

ASIA PACIFIC METALS PTY LTD - ACN 109 950 861 ADVANCED RECYCLING AUSTRALASIA PTY LTD - ACN 083 514 863

ACN 147 849 545 PTY LTD - ACN 147 849 545 T & T METAL & ASBESTOS SERVICES PTY LTD - ACN 061 970 572

(ALL ADMINISTRATORS APPOINTED) (THE GROUP)

NOTICE is given that a concurrent meeting of the Group’s creditors will be held at the Wesley Conference Centre, The Lyceum Room, 220 Pitt Street, Sydney, New South Wales on Friday, 1 November 2013 at 10.00 am AEDT. AGENDA 1. To review the Voluntary Administrators report of the Group’s business, property, affairs and

financial circumstances pursuant to Section 439A of the Corporations Act 2001.

2. For creditors to consider the options available and to resolve for each Group company either that:

a. it execute a Deed of Company Arrangement; or

b. its administration should end; or

c. the company be wound up.

3. To approve the Voluntary Administrators’ remuneration for the period 2 August 2013 to 11 October 2013.

4. To approve the Voluntary Administrators’ remuneration for the period 12 October 2013 to 1 November 2013.

5. To approve the destruction of the books and records of each of the companies in the Group three months after ASIC has confirmed deregistration.

6. If the Group is wound up, to consider the appointment of a Committee of Inspection to each of the companies in the Group.

Dated this 23

rd day of October 2013

Philip Carter, Marcus Ayres and Nicholas Martin Joint & Several Administrators PPB Advisory Level 46, MLC Centre, 19 Martin Place, Sydney, NSW, 2000

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Appendix D

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b. The Administration should end; or

c. The company be wound up.

Resolutions1 For creditors to consider the options available and to resolve for each Group company either that:

a. Execute a Deed of Company Arrangement; or

LINK INSOLVENCY SERVICES – APPOINTMENT OF PROXY

All material copyright © 2013 Link Market Services Limited

INDEBTED COMPANY (PLEASE TICK ONE BOX FOR THE COMPANY YOU ARE A CREDITOR OF)STEP 2

If you are a creditor of more than one Indebted Company, you must provide a Proxy Form for each Company.

Please tick one box ONLY.

1. CMA CORPORATION LIMITED ACN 113 329 016

4. CMA Recycling Australia Pty Limited ACN 003 047 210

7. CMA RECYCLING VICTORIA PTY LTD ACN 005 667 103

2. CMA Assets Pty Ltd ACN 112 821 735

5. T&T Metal & Asbestos Services Pty Limited ACN 061 970 572

8. Advanced Recycling Australasia Pty Ltd ACN 083 514 863

!"#$%&'#(')&*)#+,-'.%#(-/#0-1 ACN 109 950 861

6. CMA RECYCLING PTY LIMITED ACN 107 209 503

9. ACN 147 849 545 Pty Ltd ACN 147 849 545

2 To approve the Voluntary Administrators’ remuneration for the period 2 August 2013 to 11 October 2013.

3 To approve the Voluntary Administrators’ remuneration for the period 12 October 2013 to 1 November 2013.

4 To approve the destruction of the books and records of each of the companies in the Group three months after ASIC 2'%#)34*56,1#1,5,7&%-5'-&34"

5 If the Group is wound up, to consider the appointment of a Committee of Inspection to each of the companies in the Group.

For Against Abstain

(Please only select ‘for’ for one of the options in Resolution 1)

Proxies will only be valid and accepted by the Company if they are signed and received no later than 12:00pm (AEDT) on Wednesday, 30 October 2013.

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)

or failing the person/body corporate named, or if no person/body corporate is named, the Chairman of the Meeting, as my/our proxy and to vote for me/us on my/our behalf at a concurrent meeting of the Group’s creditors to be held at 10:00am (AEDT) on Friday, 1 November 2013 at the Wesley Conference Centre, The Lyceum Room, 220 Pitt Street, Sydney, New South Wales and at any adjournment or postponement of the meeting(s).

APPOINT A PROXYSTEP 3

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 5,7&%-5/#35#'#),5-&*,1#)38/#'--')2,1#-3#-2&%#9356"#:9#,;,)<-,1#=/#'#)368'4/>#-2,#9356#6<%-#=,#,;,)<-,1#&4#'))351'4),#?&-2#-2,#)368'4/@%#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

!"#$%&'()**+!

CMVI PRX116

VOTING DIRECTIONSSTEP 4

STEP 5

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 proxy

All communications to:Link Market Services Limited

Locked Bag A14 Sydney South NSW 1235Telephone: 1300 657 159 Facsimile: (02) 9287 0303

Client Code: CMVIEmail: [email protected]

Website: www.linkmarketservices.com.au

Contact Telephone Number

Email Address

Full Name of Company or Individual

Registered Address

CREDITOR DETAILSSTEP 1

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HOW TO COMPLETE THIS PROXY FORM

Lodgement of a Proxy Form

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below by 12:00pm

(AEDT) on Wednesday, 30 October 2013. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxy Forms may be lodged:

!by mail:

Link Market Services Limited

Locked Bag A14

Sydney South NSW 1235

Australia

"by email:

scan and email to [email protected]

!by fax:

02 9287 0303

! by hand:

delivering it to Link Market Services Limited, 1A Homebush Bay Drive, Rhodes NSW 2138.

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.

Notes

1. If the creditor is a sole trader, sign in accordance with the following example: “A.B., proprietor”.

2.#:9#-2,#)5,1&-35#&%#'#8'5-4,5%2&8>#%&74#&4#'))351'4),#?&-2#-2,#93..3?&47#,;'68.,A#B$"C">#'#8'5-4,5#39#-2,#%'&1#*56D"

3.#:9#-2,#)5,1&-35#&%#'#)368'4/>#-2,4#-2,#9356#39#853;/#6<%-#=,#<41,5#&-%#E36634#F,'.#35#<41,5#-2,#2'41#39#%36,#39*),5#1<./#

'<-235&%,1#&4#-2'-#)'8')&-/>#'41#-2,#9')-#-2'-#-2,#39*),5#&%#%3#'<-235&%,1#6<%-#=,#%-'-,1#&4#'))351'4),#?&-2#-2,#93..3?&47#

example: “for the company, A.B.” (duly authorised under the Seal of the Company).

Appointment of a Proxy

If you wish to appoint the Chairman of the Meeting as your

proxy, mark the box in Step 3. 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 3. If you

leave this section blank, or your named proxy does not attend

the meeting, in the case of a poll the Chairman of the Meeting

will be your proxy. A proxy need not be a creditor of the

company. A proxy may be an individual or a body corporate.

Corporate Representatives

If a representative of the corporation is to attend the

6,,-&47# -2,# '885385&'-,# BE,5-&*)'-,# 39# $883&4-6,4-# 39#

Corporate Representative” should be produced prior to

admission in accordance with the Notice of Meeting. A form

39# -2,# ),5-&*)'-,#6'/# =,# 3=-'&4,1# 9536# -2,# )368'4/@%#

registry.

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

),5-&*,1#823-3)38/#39#-2,#(3?,5#39#$--354,/#-3#-2&%#9356#?2,4#

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

E368'4/#F,)5,-'5/"#(.,'%,#&41&)'-,#-2,#39*),#2,.1#=/#%&74&47#

in the appropriate place.

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Appendix E

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All communications to:Link Market Services Limited

Locked Bag A14 Sydney South NSW 1235Telephone: 1300 657 159 Facsimile: (02) 9287 0303

Client Code: CMVIEmail: [email protected]

Website: www.linkmarketservices.com.au

INSOLVENCY SERVICES INFORMAL PROOF OF DEBT FORM FOR THE PURPOSES OF VOTING

INDEBTED COMPANY (Please tick one box for the company you are a creditor of)

CREDITOR DETAILS (Please use CAPITAL LETTERS)

A

B

I am an employee of the indebted company I am a creditor I am a secured creditor

CMVI POD001

Full name of Company, Corporation or Trust (if applicable)

Title Given Name(s) Last Name

I am acting as an agent on behalf of the above company, corporation or trust.

1. COMPANY

OR

2. INDIVIDUAL

ABN

Agent Name

LINK INSOLVENCY SERVICES – PROOF OF DEBT (POD) OR CLAIM FORM

All material copyright © 2013 Link Market Services Limited

Please tick one box ONLY.If you are a creditor of more than one Indebted Company, you must provide a Proof of Debt Form for each Company.

Contact Telephone Number

Email Address

Full Name of Company or Individual

Registered Address

1. CMA CORPORATION LIMITED ACN 113 329 016

4. CMA Recycling Australia Pty Limited ACN 003 047 210

7. CMA RECYCLING VICTORIA PTY LTD ACN 005 667 103

2. CMA Assets Pty Ltd ACN 112 821 735

5. T&T Metal & Asbestos Services Pty Limited ACN 061 970 572

8. Advanced Recycling Australasia Pty Ltd ACN 083 514 863

!"# $%&'#(')&*)#+,-'.%#(-/#0-1 ACN 109 950 861

6. CMA RECYCLING PTY LIMITED ACN 107 209 503

9. ACN 147 849 545 Pty Ltd ACN 147 849 545

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Creditor 1 (Individual)/Agent 1 Creditor 2 (Individual)/Agent 2 Date

SIGN HERE (All Creditor(s) must sign)

DOCUMENTATION

F

E

/ /

I have attached the following documentation to substantiate the consideration claim (tick as many as appropriate). If you are in employment of the creditor or an agent, you must provide proof of your authority from the creditors so that this POD is not rejected.

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 -2,#)34%&1,5'-&34#%-'-,1#'41#-2'-#-2,#1,6-7#-3#-2,#6,%-#38#9/#:43;.,1<,#'41#6,.&,87#%-&..#5,9'&4%#=4>'&1#'41#=4%'-&%*,1"

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 %-'-,1#'41#-2'-#1,6-7#-3#-2,#6,%-#38#9/#:43;.,1<,#'41#6,.&,87#%-&..#5,9'&4%#=4>'&1#'41#=4%'-&%*,1"

I have attached the following documents (tick as many as appropriate):

Invoices

Judgement from Court

Orders from company

Guarantee from company

Other documents

Monthly Statements

Letters of Demand

Statutory Demand

Credit Application

Creditor’s authority letter

SECURED CREDITORS ONLYD

Please detail what security you hold and attach all relevant documentation.

Please state the value:

$ , , .

NOTESG

NOTE 1 A creditor may not vote on any contingent debt, and unliquidated claim or a debt the value of which is not ascertained unless a just estimate or its value has been made.

NOTE 2 A secured creditor who votes in favour of a Deed of Company Arrangement may affect its right to act under that security. Legal advice should be sought if you are unsure in this regard.

NOTE 3 This Proof should be signed by a creditor or a person in the employ of the creditor duly authorised by that creditor to sign. If a creditor is a company, it should be signed by a person authorised under the Seal of the Company, to make a Proof of Debt on its behalf. The Chairman of the Meeting may admit or reject a Proof of Debt for the purpose of voting at the meeting.

Post CodeSuburb/Town State

Unit Number/Level Street Number Street Name

Country (if not Australia) Telephone Number

Email Address Indebted in the amount of:

$ , , .

I would like to receive all communications electronically, including notices, reports and statements (if applicable). I have provided my email address above.

PO Box/RMB/Locked Bag/Care of (c/-)/Property name/Building name (if applicable)

Date Debt Incurred

/ /

CREDITOR DETAILS (Continued)CF

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Appendix F

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Appendix G

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Statutory information

Registered office and principal place of business

A search of the ASIC database reveals the following:

Company Date of Incorporation Registered Office / Principal Place of Business

CMA Corporation Ltd 10 March 2005 Level 5, 160 Sussex Street

Sydney NSW 2000

CMA Assets Pty Ltd 7 February 2005 Level 5, 160 Sussex Street

Sydney NSW 2000

CMA Recycling Victoria Pty Ltd 30 May 1980

Level 5, 160 Sussex Street

Sydney NSW 2000 /

Unit 3, 81-85 Heatherdale Road Ringwood VIC 3134

CMA Recycling Pty Ltd 28 November 2003

Level 5, 160 Sussex Street,

Sydney NSW 2000 /

1359 Kingsford Smith Drive

Pinkenba QLD 4008

CMA Recycling Australia Pty Ltd 15 January 1986 Level 5, 160 Sussex Street

Sydney NSW 2000

Asia Pacific Metals Pty Ltd 8 July 2004 Level 5, 160 Sussex Street

Sydney NSW 2000


22 July 1998

Level 5, 160 Sussex Street,

Sydney NSW 2000 /

5-11 Reo Crescent

Campbellfield VIC 3061

ACN 147 849 545 Pty Ltd 14 December 2010 Level 5, 160 Sussex Street

Sydney NSW 2000


6 October 1993 Level 5, 160 Sussex Street

Sydney NSW 2000

Current and past directors

A search of the ASIC database reveals the following:

Director Company Date Appointed

John Pedersen CMA Corporation Ltd 16 January 2012

CMA Assets Pty Ltd 20 December 2012


20 December 2012

CMA Recycling Pty Ltd 20 December 2012


24 July 2012

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20 December 2012


20 December 2012

ACN 147 849 545 Pty Ltd 20 December 2012


20 December 2012

Director Company Date Appointed Parag-Johannes Bhatt CMA Corporation Ltd 4 February 2010

Director Company Date Appointed Mike Volker Greulich CMA Corporation Ltd 23 November 2009

Director Company Date Appointed Oliver Scholz CMA Corporation Ltd 4 February 2010

Previous Directors (past 12 months)

Company Date Appointed Date Ceased

Paul Shaw Whitehead CMA Corporation Ltd 6 September 2011 7 June 2013

Trevor Richard Schmitt CMA Corporation Ltd 10 August 2010 20 December 2012

ACN 147 849 545 Pty Ltd 17 December 2010 20 December 2012

CMA Recycling Pty Ltd 12 May 2008 20 December 2012


12 May 2008 20 December 2012


12 May 2008 20 December 2012


12 May 2008 20 December 2012


12 May 2008 20 December 2012

CMA Assets Pty Ltd 12 May 2008 20 December 2012


12 May 2008 20 December 2012

Peter Andrew Lancken CMA Corporation Ltd 24 May 2010 18 October 2012

ACN 147 849 545 Pty Ltd 17 December 2010 18 October 2012

CMA Recycling Pty Ltd 17 December 2010 18 October 2012


7 March 2011 18 October 2012






17 December 2010 18 October 2012

CMA Assets Pty Ltd 7 March 2011 18 October 2012



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Unsecured creditors

Below are the top ten unsecured creditors (where applicable) in value for the Group:

CMA Group

Creditor name Entity Books and records Amount ($)

Amount claimed ($)

Scholz CMA Corporation & CMA Recycling

48,650,941 47,846,902

B Russo Nominees Pty Ltd CMA Recycling 61,408 9,247,791

Minter Ellison Lawyers CMA Corporation 539,258 611,162

Grain Terminals Pty Ltd CMA Recycling - 500,000

THC Holding Pty Ltd CMA Recycling - 371,824

Caterpillar Financial CMA Recycling - 327,418

Commo’s Metals Pty Ltd CMA Recycling - 122,156

Metal SA Australia Pty Ltd CMA Recycling 120,605 120,605

Electrolux Home Products Pty Ltd CMA Recycling 120,089 120,089

Deloitte Touche Tohmatsu CMA Corporation 119,961 119,961

Total of top ten 49,612,261 59,387,909

Total unsecured creditors 59,040,621 60,977,881

% of total unsecured 84% 97%

1 Claims have not been adjudicated. The books and records amount was taken from the Group’s records at the date of

appointment. The Amount Claimed is the amount submitted by the creditor as per an Informal POD for the First Meeting.

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Shareholders

On 1 August 2013, the ASX suspended trading in CMA’s shares following the Group’s announcement that it was unable to pay an interest payment to Stemcor of approximately $2m which was due for payment on 31 July 2013. Our review of the members’ register at the date of appointment indicates the Group had a market capitalisation of $1.3m at 2 August 2013. The Group’s records indicate these shares were held by 2,327 parties. The top ten shareholders and their respective holdings are set out below:

Shareholder name Ordinary shares

held %

Scholz Invest Gmbh 114,528,513 47%

Stemcor Australia Pty Ltd 32,650,000 14%

Washington H Soul Pattison 21,334,453 9%

Brispot Nominees Pty Ltd 13,418,125 6%

UBS Nominees Pty Ltd 10,516,490 4%

Washington H Soul Patterson & 8,437,500 3%

Mr Joseph Tong Hong Chung 5,778,126 2%

JP Morgan Nominees Australia 4,267,357 2%

Southern Steel Investments Pty 2,361,000 1%

Vipan Kumar Garg 1,619,551 1%

Total of top ten 214,911,115

Total shareholders 241,236,168

% of total shares issued 89%

Source: Members register

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Appendix H

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Schedule of Personal Property Security Registraion charges

Row Labels Count of PPSR #

A.C.N. 147 849 545 Pty Ltd 14

GE Commercial Finance NZ 3

GE COMMERCIAL PTY LTD 4

Stemcor Trade Finance Limited (1947996) 7

Advanced Recycling Australasia Pty Ltd 15




Asia Pacific Metals Pty Ltd 15




CMA Assets Pty Ltd 35

BULLIVANTS PTY LIMITED 1

CAPITAL FINANCE AUSTRALIA LIMITED 2

COATES HIRE OPERATIONS PTY LIMITED 2

COREGAS PTY LTD 1

FREO GROUP LIMITED 1



HASTINGS DEERING (AUSTRALIA) LIMITED 4

J. BLACKWOOD & SON PTY LTD 1

LAWVALE PTY. LTD. 1

LIEBHERR-AUSTRALIA PTY. LTD. 1

MEREDITH DISTRIBUTION PTY LTD 1

ONSITE RENTAL GROUP OPERATIONS PTY LTD 1

PROTECTOR ALSAFE PTY LTD 1

RICOH AUSTRALIA PTY LTD 1


TRU BLU HIRE AUSTRALIA PTY LTD 2

CMA Corporation Limited 27

BOQ FINANCE (AUST) LIMITED 2


CNH CAPITAL AUSTRALIA PTY LIMITED 6

FLEET PARTNERS PTY LIMITED 1

GE COMMERCIAL CORPORATION (AUSTRALIA) PTY LTD 1



MACQUARIE LEASING PTY LTD 1


CMA Recycling Australia Pty Limited 33

A.P. EAGERS LIMITED 1

CMC COIL STEELS PTY LTD 1

COATES HIRE OPERATIONS PTY LIMITED 2

ENERGY POWER SYSTEMS AUSTRALIA PTY. LIMITED. 2




LIEBHERR-AUSTRALIA PTY. LTD. 1

MACQUARIE LEASING PTY LTD 1

RICOH AUSTRALIA PTY LTD 1


TRU BLU HIRE AUSTRALIA PTY LTD 2

WACO KWIKFORM LIMITED 1

WESTPAC BANKING CORPORATION 2

CMA Recycling Pty Limited 59

AGGREKO GENERATOR RENTALS PTY. LIMITED 1

ALUMINIUM SPECIALTIES GROUP PTY. LTD. 1

APEX STEEL SUPPLIES PTY LTD 1

BOQ FINANCE (AUST) LIMITED 1


CATERPILLAR FINANCIAL AUSTRALIA LIMITED 3

CEVOL INDUSTRIES PTY. LIMITED 2

CMC COIL STEELS PTY LTD 1

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Schedule of Personal Property Security Registraion charges



GOODYEAR & DUNLOP TYRES (AUST) PTY LTD 1

MOTORS GROUP TASMANIA PTY LTD 1

MTU DETROIT DIESEL AUSTRALIA PTY LIMITED 1

NATIONAL AUSTRALIA BANK LIMITED 1

ONSITE RENTAL GROUP OPERATIONS PTY LTD 4

PACIFIC BRANDS HOLDINGS PTY LTD 1

PETROGAS PTY. LIMITED 1

ROBERT BOSCH (AUSTRALIA) PROPRIETARY LIMITED 1

ROYAL WOLF TRADING AUSTRALIA PTY LIMITED 1

STEMCOR AUSTRALIA PTY LTD 1


THC HOLDING PTY LTD 1

TOYOTA FINANCE AUSTRALIA LTD 15

TOYOTA TSUSHO (AUSTRALASIA) PTY. LIMITED 2


CMA Recycling Victoria Pty Limited 61

A.P. EAGERS LIMITED 1

AIR LIQUIDE AUSTRALIA LIMITED 1

AUSTRALIAN ROLLFORMING MANUFACTURERS PTY LIMITED 2

BRICE METALS AUSTRALIA PTY LIMITED 2


CMV TRUCK CENTRE PTY LTD 1

FERROCUT AUSTRALIA PTY LIMITED 3

G.A.M. STEEL PTY. LTD. 1




KADOR ENGINEERING (AUSTRALIA) PTY. LIMITED 2

KENNARDS HIRE PTY LIMITED 1

METAL MANUFACTURES LIMITED 1

ORICA AUSTRALIA PTY LTD 1

PACIFIC MATERIALS HANDLING PTY. LTD. 2

RJE PTY LIMITED 3

ROLLPRESS PROPLATE GROUP PTY LIMITED 2

SCHOLZ INDUSTRIES PTY LTD 1

SOUTHERN QUEENSLAND STEEL PTY LIMITED 2

SOUTHERN SHEET & COIL PTY LTD 2

SOUTHERN STEEL (WA) PTY LIMITED 3

SOUTHERN STEEL CASH & CARRY PTY. LIMITED 2

SOUTHERN STEEL GROUP PTY. LIMITED 2

SOUTHERN STEEL SUPPLIES PTY LTD 2

STEELPIPES PTY LIMITED 2


SURDEX STEEL PTY. LIMITED 2

T & T Metal & Asbestos Services Pty Limited 16





Grand Total 275

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Appendix I

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Security interest

CMA Corporation has secured financing arrangements which are geographically segregated, with:

• GE Commercial Pty Limited (GE) (as security trustee) , Stemcor Trade Finance Limited (Stemcor) and (pursuant to the Security Deed Amendment Agreement) Stemcor Australia Pty Limited (Stemcor Australia) holding "all asset" security against assets in Australia granted by CMA and each of its Australian subsidiaries

• Stemcor and (pursuant to the Security Deed Amendment Agreement) Stemcor Australia holding security in Singapore and Malaysia granted by CMA's Singaporean (CMA Peakmore Pte Ltd) (Singapore Security) and Malaysian (Purata Keuntungan Sdn Bhd)(Malaysian Security) subsidiaries respectively

• Bank of New Zealand Limited (BNZ) holding security in respect of the assets of CMA's New Zealand subsidiary, CMA Recycling (which has recently merged with Scrap Metal Recyclers (Waikato) Limited, with CMAR being the successor entity).

GE and Stemcor have agreed to regulate the priority in respect of the Australian Obligor asset pool which is the subject of the common GE and Stemcor Securities under the Intercreditor Deed, with GE having a priority claim to the proceeds of all assets the subject of its Security other than the 'Stemcor Property'.

Under the Intercreditor Deed, the 'Stemcor Property' comprises:

• the ANZ Collection Account maintained in accordance with the Working Capital Facility

• any trade receivables, other than those relating to disposal of plant and equipment or insurances in respect of such equipment

• all ferrous and non-ferrous scrap and related receivables from disposal of such product

• cash and insurances proceeds in respect of the above

• all settlement proceeds in connection with the Supreme Court of WA proceedings involving CMA Assets Pty Ltd v John Holland Pty Ltd (CIV 1297 of 2008) or related proceedings (John Holland Claim). Stemcor has been financing some of the legal and other costs associated with the John Holland Claim hearing in the WA Supreme Court (CMA is currently awaiting judgment)

• all assets relating to the Meretec De-Zincing line business (these assets are directly owned by CMA).

The residual equity of CMA in respect of its shareholdings in its NZ, US, Malaysian, Singaporean and PNG subsidiaries will fall into the Australian asset pool and be subject to the priority rules as between GE and Stemcor. Each of Stemcor and GE have a second ranking claim in respect of the other's priority property to the extent that the property to which they have priority is insufficient to satisfy their debts. Under the Intercreditor Deed (clause 4.1(c)), GE's enforcement actions as First Creditor in respect of the non-Stemcor Property prevail over any enforcement actions taken by Stemcor in respect of such property (and Stemcor's enforcement actions prevail in respect of the Stemcor Property).

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The table below set out an overview of collateral arrangements regarding CMA Corporation:

Secured parties

Party Loan or other debt documents

Collateral Approximate amount owing (as at July 2013)

GE 2011 Facilities Agreement (A$26.2m)

All assets and undertakings of CMA Australian entities (and for Stemcor only, Malaysian and Singapore entities). See Intercreditor Deed between GE and Stemcor which regulates priority in respect of security over Australian assets (which would include residual equity in OS subsidiaries).

$13,000,000

Stemcor Trade Finance Ltd (Stemcor)

2011 Term Loan Facility Agreement (A$25m) (Note amounts advanced by Scholz AG under back to back arrangements below) (see Note 3 below)

$25,000,000

Stemcor

2011 Working Capital Borrowing Base Credit Facility Agreement (US$30m) (see Note 3 below)

$20,000,000

Stemcor Australia Pty Limited (Stemcor Australia)

Consolidated Purchase Contracts (Prepayment Contracts)($20.08m) (assigned to Stemcor by Stemcor Australia in February 2013 – although evidence not sighted)

$20,080,000

BNZ 2008 Facility Agreement (NZ$25.94m)

CMA's NZ assets – security held over NZ subsidiary, CMA Recycling Ltd

$10,000,000

Total $88,080,000

Notes:

1. CMA/GE/Stemcor Intercreditor Deed allocation of secured property (excluding NZ assets) Stemcor Property

• Collection Accounts

• trade receivables (other than from disposal of plant or equipment or insurance proceeds in respect of such plant or equipment)

• ferrous and non-ferrous scrap, and receivables from disposal of ferrous and non-ferrous scrap

• cash receipts and other proceeds (including insurance) received in respect of the above

• John Holland proceeds

• plant equipment, goodwill, IP rights and other assets and undertakings associated with the Meretec De-Zincing line business

Stemcor also has a second ranking security (behind GE) in all the property of CMA and its Australian subsidiaries that is not Stemcor Property. • Stemcor also has specific all asset security over CMA's Singaporean and Malaysian subsidiaries.

• GE Property

• all property of CMA and its Australian subsidiaries, other than the Stemcor Property. (Note: Would include any

• residual equity in NZ, US, Singaporean, Malaysian and PNG business flowing back to CMA)

• BNZ Property

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• all NZ assets

2. By the Security Deed Amendment Deed dated 3 April 2013, Stemcor Australia became a

Secured Party/Beneficiary under the Stemcor Securities.

3. Excludes effect of other registered security interests over specific assets of CMA (eg motor vehicles, photocopiers) by BOSI, Capital Finance, Fuji Xerox, Fleet Partners, Macquarie Leasing and CNH Capital.

4. Stemcor/Scholz back to back loan and credit support: • 2011 Limited Recourse Term Loan Facility Agreement (A$10m) – back to back arrangement in

support of Stemcor term loan

• Scholz AG Guarantee (US$10m) in support of the obligations of Stemcor under the Stemcor Working Capital Borrowing Base Credit Facility

• Stemcor would hold part of its security above for the benefit of Scholz in accordance with agreed risk proportions.

5. Stemcor/Scholz back to back loan and credit support: • 2011 Limited Recourse Term Loan Facility Agreement (A$10m) – back to back arrangement in

support of Stemcor term loan

• Scholz AG Guarantee (US$10m) in support of the obligations of Stemcor under the Stemcor Working Capital Borrowing Base Credit Facility

• Stemcor would hold part of its security above for the benefit of Scholz in accordance with agreed risk proportions.

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Appendix J

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Group operations

Operating structure

The CMA Group comprises the following entities:

Entity ACN

CMA Corporation Limited 113 329 016

CMA Assets Pty Ltd 112 821 735

CMA Recycling Victoria Pty Ltd 005 667 103

CMA Recycling Pty Ltd 107 209 503

CMA Recycling Australia Pty Ltd 003 047 210

Asia Pacific Metals Pty Ltd 109 950 861

Advanced Recycling Australasia Pty Ltd 083 514 863

ACN 147 849 545 Pty Ltd 147 849 545

T & T Metal & Asbestos Services Pty Ltd 061 970 572

The organisational structure of the Group (including its overseas operations) is depicted in a flow chart diagram below. Australian entities

Each of the Group companies, including the Australian-based companies, are wholly-owned subsidiaries of CMA Corporation. CMA Corporation was listed on the Australian Securities Exchange (ASX Code: CMV). Its shares were suspended on 1 August 2013.

Business activities

The major activities of the Group comprise the trading, processing and recycling of ferrous and non-ferrous metal products.

The primary operations of the Group are within Australia, however the Group also undertook activities from sites in New Zealand, Singapore and Malaysia. The CMA Group previously undertook operations in Papua New Guinea (PNG) and the United States of America (US), however the PNG

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subsidiary is now in liquidation and the US business was sold in or about July 2013 (prior to the Administrators' appointments).

Australian operations

The main trading entity in Australia is CMA Recycling which operated from leased premises located at 71-85 Heatherdale Road, Ringwood, Victoria. The Ringwood premises were the regional head office of the Group's Australian operations. All operational reporting for the Group was centralised at Ringwood.

Key business support services for the Group, including accounts receivable and payable, information technology services and sales and marketing were also conducted from the Ringwood premises.

CMA Corporation is the head company and responsible for the preparation of the Group's consolidated financial statements and also any interaction with Group’s various stakeholders including secured creditors, regulators and shareholders. It operated from leased premises located at 160-166 Sussex Street, Sydney, New South Wales.

In addition to the primary office locations at Ringwood and Sussex Street, the Group had sizable trading operations in Tamworth and Tomago in New South Wales, Berrimah in the Northern Territory, Wingfield in South Australia, Campbellfield in Victoria and Port Hedland in Western Australia.

Overseas operations

The Group undertook activities from sites in New Zealand, Singapore and Malaysia and previously in PNG and the USA. Whilst the overseas entities do not fall under the current administration we have control through the 100% shareholding held by CMA Corporation. Immediately upon our appointment representatives of PPBA were investigating the affairs of the overseas operations with the view of preserving value for CMA Corporation.

Overseas entities

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Appendix K

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��

��

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Appendix L

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!

Insolvency Practitioners Association of Australia ABN 28 002 472 362

33 Erskine Street, GPO Box 3921, Sydney NSW 2001 P+61 2 9290 5700 F +61 2 9290 2820 www.ipaa.com.au

Creditor Information Sheet

Offences, Recoverable transactions and Insolvent Trading

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

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

the discharge of his duties.

181 Failure to act in good faith.

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

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

184 Reckless or intentional dishonesty in failing to exercise duties in good faith for proper purpose. Use of

position or information dishonestly to gain advantage or cause detriment.

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

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

206A, B Acting as a director or promoter or taking part in the management of a company within five years after

conviction or imprisonment for various offences.

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

254T Paying dividends except out of profits.

286 Failure to keep proper accounting records.

312 Obstruction of auditor.

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

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

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

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

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

590 Failure to disclose property, concealed or removed property, concealed a debt due to the company,

altered books of the company, fraudulently obtained credit on behalf of the company, material omission

from Report as to Affairs or false representation to creditors.

Voidable Transactions Preferences A preference is a transaction such as a payment between the company and one or more of its creditors, in which the creditor receiving the payment is preferred over the general body of creditors. The relevant time

period is six months before the commencement of the liquidation. The company must have been insolvent at the time of the transaction, or become insolvent as a result of the transaction.

Where a creditor receives a preferred payment, the payment is voidable as against a liquidator and is liable to

be paid back to the liquidator subject to the creditor being able to successfully maintain any of the defences available to the creditor under either the Corporations Act.

Uncommercial Transaction An uncommercial transaction is one that it may be expected that a reasonable person in the company's circumstances would not have entered into having regard to:

! the benefit or detriment to the company;

! the respective benefits to other parties; and,

! any other relevant matter.

To be voidable, an uncommercial transaction must have occurred during the two years before the liquidation.

However, if a related entity is a party to the transaction, the time period is four years and if the intention of the transaction is to defeat creditors, the time period is ten years.

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

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

transaction.

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

Arrangements to avoid employee entitlements If an employee suffers loss because a person (including a director) enters into an arrangement or transaction to avoid the payment of employee entitlements, the liquidator or the employee may seek to recover

compensation from that person. It will only be necessary to satisfy the court that there was a breach on the balance of probabilities. There is no time limit on when the transaction occurred.

Unreasonable payments to directors Liquidators have the power to reclaim "unreasonable payments" made to directors by companies prior to liquidation. The provision relates to transactions made to, on behalf of, or for the benefit of, a director or

close associate of a director. To fall within the scope of the section, the transaction must have been unreasonable, and have been entered into during the 4 years leading up to a company's liquidation, regardless of its solvency at the time the transaction occurred.

Voidable charges Certain charges are voidable by a liquidator:

! Floating charge created with six months of the liquidation unless it secures a subsequent advance;

! Unregistered charges; and

! Charges in favour of related parties who attempt to enforce the charge within 6 months of its creation.

Insolvent Trading In the following circumstances, directors may be personally liable for insolvent trading by the company:

! a person is a director at the time a company incurs a debt;

! the company is insolvent at the time of incurring the debt or becomes insolvent because of incurring the

debt;

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

! the director was aware such grounds for suspicion existed; and

! a reasonable person in a like position would have been so aware.

The law provides that the liquidator, and in certain circumstances the creditor who suffered the loss, may

recover from the director, an amount equal to the loss or damage suffered. Similar provisions exist to pursue holding companies for debts incurred by their subsidiaries.

A defence is available under the law where the director can establish:

! there were reasonable grounds to expect that the company was solvent and they actually did so

expect;

! they did not take part in management for illness or some other good reason; or,

! they took all reasonable steps to prevent the company incurring the debt.

The proceeds of any recovery for insolvent trading by a liquidator are available for distribution to the unsecured creditors before the secured creditors.

Important note: This information sheet contains a summary of basic information on the topic. It is not a substitute for legal advice. Some provisions of the law referred to may have important exceptions or qualifications. This document may not contain all of the information about

the law or the exceptions and qualifications that are relevant to your circumstances.

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Appendix M

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Insolvent Trading and Directors Defences

Section 588M of the Act provides a liquidator is able to recover ‘damages’ from the director(s) of an insolvent company, in an amount equal to the loss or damage suffered by the Company as a result of a breach of the director’s duty. Pursuing a company officer for an alleged breach of duty to prevent insolvent trading is rarely a straight forward matter and:

• it is up to the Court, not a liquidator or creditors, to determine the date of insolvency

• it invariably involves litigation that is expensive with an uncertain outcome. Funding from creditors and/or litigation funder may be necessary to pursue a claim

• any action for insolvent trading would, in our experience, be defended by the directors and possibly former directors which necessarily involves the administration incurring significant costs and potentially long delays of 2 years or longer

• there is a risk that a Court may dismiss any claim with a costs order against the Company thus reducing the funds available to creditors

• any return to ordinary unsecured creditors would be contingent upon not only a successful action, but also there being property against which to recover

• insolvent trading claims are expensive to run, legal costs are generally high and it may be necessary to obtain expert reports in pursuit of a claim. Typically, not all costs, for running such an action, would be recovered.

Directors’ Defences

The question of a potential defence to insolvent trading will ultimately turn upon the directors’ reasonable belief that the Company was solvent, which includes the ability to realise assets at a sufficient value or otherwise fund debts due from some other source and ability to raise additional capital. A director has several defences available to an insolvent trading claim and these are as follows:

• the director had reasonable grounds to expect and did expect that the company was solvent and would remain so (section 588H(2) of the Act)

• the director had reasonable grounds to believe and did believe that a competent and reliable person was providing adequate information to the director and based on that information the director expected the company to be solvent and to remain so (section 588H(3) of the Act)

• the director did not take part in the management of the company at the time due to illness or other good reason (section 588H(4) of the Act)

• the director took reasonable steps to prevent the company from incurring the debt (section 588H(5) of the Act).

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Offences by Company Representatives

Directors’ personal financial position

In order for a claim to be considered commercially viable to pursue it would be necessary for directors to have assets of value to satisfy any such claim. In the event that creditors resolve to place the Company into liquidation, the liquidators shall continue investigations into any personal liability that the directors may have. Examination of company officers and others

The provisions of Div 1 of Part 5.9 of the Act provide a means by which an ‘eligible applicant’ such as a liquidator can examine officers of a company about its examinable affairs and any other person who may be able to provide information relating to such affairs. ‘Examinable affairs’ is a defined term of wide ranging application and includes:

• the promotion, formation, management, administration or winding up of the corporation

• other affairs of the corporation

• the business affairs of a connected entity of the corporation in so far as they appear to be relevant to the corporation or its affairs.

If the Court is satisfied that a summons for examination should be issued, the examinee is usually required to produce at (or prior to) the examination specified books that are in the person’s possession and relate to the corporation. It is an offence if the person to be examined fails to attend the court, fails to answer a question, makes a false or misleading statement or fails to produce books stipulated in the summons.

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Appendix N

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Offences by Company Representatives

Directors’ personal financial position

In order for a claim to be considered commercially viable to pursue it would be necessary for directors to have assets of value to satisfy any such claim. In the event that creditors resolve to place the Company into liquidation, the liquidators shall continue investigations into any personal liability that the directors may have. Examination of company officers and others

The provisions of Div 1 of Part 5.9 of the Act provide a means by which an ‘eligible applicant’ such as a liquidator can examine officers of a company about its examinable affairs and any other person who may be able to provide information relating to such affairs. ‘Examinable affairs’ is a defined term of wide ranging application and includes:

• the promotion, formation, management, administration or winding up of the corporation

• other affairs of the corporation

• the business affairs of a connected entity of the corporation in so far as they appear to be relevant to the corporation or its affairs.

If the Court is satisfied that a summons for examination should be issued, the examinee is usually required to produce at (or prior to) the examination specified books that are in the person’s possession and relate to the corporation. It is an offence if the person to be examined fails to attend the court, fails to answer a question, makes a false or misleading statement or fails to produce books stipulated in the summons.

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Appendix O

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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

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Appendix P

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Report to creditors

23 October 2013

CMA Corporation Limited and related entities

(All Administrators’ Appointed) (‘the Group’)

Remuneration report PART A: Remuneration & disbursement statement PART B: Schedule of Hourly Rates PART C: Remuneration & disbursements declaration PART D: Calculation of remuneration PART E: Description of work schedule & disbursements PART F: Administrators’ expected summary of time

PPB Pty Ltd trading as PPB Advisory ABN 67 972 164 718

Liability limited by a scheme approved under Professional Standards Legislation

PPB Pty Limited has associated but independent entities and partnerships

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Remuneration Report

Part A: Remuneration & disbursements statement

Remuneration Method There are four basic methods that can be used to calculate the remuneration charged by an insolvency Practitioner. They are:

1. 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.

2. 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.

3. Percentage The total fee charged is based on a percentage of a particular variable, such as the gross proceeds of assets realisations.

4. Contingency The practitioner’s fee is structured to be contingent on a particular outcome being achieved.

Method chosen

Given the nature of this administration we propose that our remuneration as Administrators be calculated on hourly rates. This is because:

• It ensures that creditors are only charged for work that is performed; • As Administrators we are required to perform a number tasks which do not necessarily relate

to realisations of assets for example responding to creditor enquires, reporting to ASIC and conducting investigations; and

• We are unable to estimate with certainty the total amount of fees necessary to complete all tasks required in the administration.

Explanation of hourly rates

The hourly rates charged by PPB Advisory effective from 1 July 2013 for remuneration are set out within this remuneration report together with a general guide showing the qualifications and experience of staff engaged in the Administration.

The hourly rates charged encompass the total cost of providing professional services and should not be compared to an hourly wage.

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Remuneration Report

Disbursements

Disbursements are divided into three types: A, B1, B2.

A disbursements are all externally provided professional services and are recovered at cost. An example of an A disbursement is legal fees.

B1 disbursements are externally provided non-professional costs such as travel, accommodation and search fees. B1 disbursements are recovered at cost.

B2 disbursements are internally provided non-professional costs such as photocopying and document storage. B2 disbursements are generally charged at cost; though some expenses such as telephone calls, photocopying and printing are charged at a rate which is intended to recoup both variable and fixed costs as follows:

Disbursement Rate (Excl GST)

Advertising At Cost

Binding At Cost

Couriers At Cost

Fax Local $1.00 first page

$0.50 subsequent pages

Fax Interstate $2.00 first page

$1.00 subsequent pages

Filing Index Not Charged

Folders Not Charged

P/copy B&W $0.45 per page

P/copy Colour $1.50 per page

Postage At Cost

Scanning $0.05 per page

Storage of Client Files At Cost

To date we have not recovered any disbursements incurred.

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Remuneration Report

Part B: Schedule of Hourly Rates

Insolvency Practitioners, in common with many professions, have traditionally charged for work done on the basis of hourly rates.

A schedule detailing our rates to apply to funded administrations for the period commencing 1 July 2013 is as follows:

Title

NSW

$ Hourly Rate

(excl GST)

VIC

$ Hourly Rate

(excl GST)

QLD

$ Hourly Rate

(excl GST)

WA

$ Hourly Rate

(excl GST)

Corporate Advisory

$ Hourly Rate

(excl GST)

Forensics

$ Hourly Rate

(excl GST)

Partner 620 620 555 555 620 595

Director/Principal 560 560 490 490 560 515

Senior Manager 490 490 460 460 490 450

Manager 445 445 390 390 445 400

Supervisor 410 410 320 320 410 290

Senior Analyst 1 370 370 265 265 370 250

Senior Analyst 2 360 360 245 245 360 225

Analyst 1 305 305 225 225 305 205

Analyst 2 240 240 195 195 240 195

Graduate 210 210 190 190 210 175

Undergraduate 190 190 150 150 190 175

Senior Bookkeeper 190 190 150 150 190 175

Bookkeeper 180 180 140 140 180 175

PA 150 150 140 140 150 145

Administration 120 120 100 100 120 115

Note that GST is a tax on services which is borne by the end consumer. It is not remuneration and will always be separately stated on invoices.

Information regarding the general guide to the level of insolvency experience and qualifications for each staff category can be obtained from: http://www.ppbadvisory.com/insolvency-services/company-insolvency.

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Remuneration Report

Part C: Remuneration & Disbursements Declaration

We, Philip Carter, Marcus Ayres and Nicholas Martin of PPB Advisory, have undertaken a proper assessment of this remuneration and disbursements claim for our appointment as Joint & Several Administrators of the Companies 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.

Dated this 23rd

day of October 2013

Philip Carter, Marcus Ayres and Nicholas Martin

Joint & Several Administrators

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alc

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n

Administration $ Hrs Assets $ Hrs Creditors $ Hrs Dividend $ Hrs Employees $ Hrs Investigation $ Hrs Trade On $ Hrs

1 CARTER, PHILLIP Partner 620.00 620.00 3.00 1,860.00 1,860.00 3.0 - - - - - - - - - - - -

2 ROBINSON, MARK Partner 620.00 620.00 5.70 3,534.00 2,418.00 3.9 - - 124.00 0.2 - - - - - - 992.00 1.6

3 WALKER, ALAN Director / Principal 560.00 560.00 7.00 3,920.00 - - - - - - - - - - 3,920.00 7.0 - -

4 CAMPBELL, BENJAMIN Director / Principal 560.00 560.00 39.00 21,840.00 - - - - - - - - - - - - 21,840.00 39.0

5 YOUNG, SYLVIA Manager 445.00 445.00 3.00 1,335.00 1,112.50 2.5 - - - - - - - - - - 222.50 0.5

6 PLOHL, MATTHEW Manager 445.00 445.00 6.30 2,803.50 534.00 1.2 311.50 0.7 - - - - - - 1,780.00 4.0 178.00 0.4

7 CAGNEY, GARY MICHAEL Supervisor 410.00 410.00 3.50 1,435.00 102.50 0.3 615.00 1.5 717.50 1.8 - - - - - - - -

8 CHEN, ZHENG (SALLY) Supervisor 410.00 410.00 40.40 16,564.00 1,353.00 3.3 10,906.00 26.6 - - - - 1,189.00 2.9 574.00 1.4 2,542.00 6.2

9 UNDERWOOD, SUZY Graduate 210.00 210.00 1.30 273.00 189.00 0.9 - - - - - - - - - - 84.00 0.4

10 LE, JOSEPH Bookkeeper 180.00 180.00 0.80 144.00 144.00 0.8 - - - - - - - - - - - -

11 GLEW, AMY Personal Assistant 150.00 150.00 4.90 735.00 630.00 4.2 - - 105.00 0.7 - - - - - - - -

12 RUIZ, SUSAN Administration 120.00 120.00 0.40 48.00 48.00 0.4 - - - - - - - - - - - -

115.30 54,491.50 8,391.00 20.45 11,832.50 28.80 946.50 2.65 - - 1,189.00 2.90 6,274.00 12.40 25,858.50 48.10

5,449.15

59,940.65

472.61 410.32 410.85 357.17 - 410.00 505.97 537.60

Average Rate (Ex GST)* reflects the average charge rate incurred during the period of the remuneration calculation.

Total

$

Task AreaAverage Rate

(Ex GST)*

ACN 113 329 016

CMA Corporation Ltd

CALCULATION OF REMUNERATION

For the Period 1 October to 11 October 2013

Employee Position Current

Rate

(Ex GST)

Hrs

TOTAL

GST

TOTAL (including GST)

Average hourly rate (excluding GST)

A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at: http://www.ipaa.com.au/user/docs/Creditor_Information_Sheet.pdf

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Administration $ Hrs Assets $ Hrs Creditors $ Hrs Dividend $ Hrs Employees $ Hrs Investigation $ Hrs Trade On

$

Hrs

1 AYRES, MARCUS Partner 585.00 620.00 1.40 868.00 124.00 0.2 - - - - - - - - 744.00 1.2 - -

2 ROBINSON, MARK Partner 585.00 535.45 2.20 1,178.00 1,054.00 2.0 - - - - - - - - - - 124.00 0.2

3 WALKER, ALAN Director / Principal 485.00 448.00 2.50 1,120.00 - - - - - - - - - - 1,120.00 2.5 - -

4 YEOMANS, ANDREW Senior Manager 455.00 490.00 0.60 294.00 245.00 0.5 - - 49.00 0.1 - - - - - - - -

5 BRETMAISSER, MONIKA Senior Manager 455.00 396.03 7.30 2,891.00 882.00 2.0 - - - - - - - - 1,470.00 4.0 539.00 1.3

6 PAN, LUYANG Supervisor 410.00 410.00 1.70 697.00 - - 697.00 1.7 - - - - - - - - - -

7 BORG, RYAN Manager 370.00 445.00 0.10 44.50 44.50 0.1 - - - - - - - - - - - -

8 THOMPSON, ERICA Manager 370.00 445.00 0.50 222.50 222.50 0.5 - - - - - - - - - - - -

9 PLOHL, MATTHEW Manager 370.00 445.00 1.10 489.50 89.00 0.2 - - 400.50 0.9 - - - - - - - -

10 KANG, JESSICA Senior Analyst 1 270.00 370.00 0.80 296.00 74.00 0.2 - - 222.00 0.6 - - - - - - - -

11 ORTADO, KELLY Analyst 1 / Intermediate 1 210.00 305.00 0.20 61.00 61.00 0.2 - - - - - - - - - - - -

12 EVANS, TIMOTHY Analyst 1 / Intermediate 1 210.00 305.00 0.80 244.00 152.50 0.5 - - - - - - - - - - 91.50 0.3

13 JOHNSTONE, STUART Graduate 180.00 210.00 1.10 231.00 - - 231.00 1.1 - - - - - - - - - -

14 GLEW, AMY Personal Assistant 160.00 150.00 0.10 15.00 15.00 0.1 - - - - - - - - - - - -

15 SAN, JOSE JESSICA Administration 110.00 120.00 0.40 48.00 48.00 0.4 - - - - - - - - - - - -

20.80 8,699.50 3,011.50 6.9 928.00 2.8 671.50 1.6 - - - - 3,334.00 7.7 754.50 1.8

869.95

9,569.45

418.25 436.45 331.43 419.69 - - - 419.17


Average

Rate

(Ex GST)*

CMA Assets Pty LtdACN 112 821 735

TOTAL

GST





For the Period 2 August to 11 October 2013


Rate

(Ex GST)

Hrs Total

$

Task Area

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$

Hrs

1 VERNEY, BEN Director / Principal 560.00 560.00 3.20 1,792.00 - - 1,792.00 3.2 - - - - - - - - - -




5 NGUYEN, LINH Supervisor 410.00 410.00 0.30 123.00 - - 123.00 0.3 - - - - - - - - - -


7 CLEAVER, CLAUDINE Manager 390.00 390.00 0.70 273.00 - - - - - - - - - - - - 273.00 0.7


9 MONNEKULAME, MAHES Senior Analyst 1 370.00 370.00 2.50 925.00 - - 925.00 2.5 - - - - - - - - - -

10 TAYLOR, RYAN Senior Analyst 1 370.00 370.00 3.50 1,295.00 - - 1,295.00 3.5 - - - - - - - - - -






18.20 7,378.50 1,054.50 2.9 5,021.00 12.1 938.50 2.2 - - - - - - 364.50 1.0

737.85

8,116.35

405.41 363.62 414.96 426.59 364.50


CMA Recycling Victoria Pty LtdACN 005 667 103




Rate

(Ex GST)

Hrs Total

$

Task AreaAverage

Rate

(Ex GST)*

TOTAL

GST




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Administration $ Hrs Assets $ Hrs Creditors $ Hrs Dividend $ Hrs Employees $ Hrs Investigation $ Hrs Trade On $ Hrs

1 AYRES, MARCUS Partner 620.00 620.00 0.20 124.00 - - 124.00 0.2 - - - - - - - - - -

2 DITRICH, ROBERT Partner 620.00 620.00 0.20 124.00 - - - - - - - - - - - - 124.00 0.2

3 ROBINSON, MARK Partner 620.00 620.00 0.20 124.00 124.00 0.2 - - - - - - - - - - - -

4 MCKEMMISH, RODNEY Partner 620.00 595.00 1.00 595.00 - - - - - - - - - - - - 595.00 1.0

5 EGAN, COLIN Partner 620.00 620.00 0.50 310.00 - - 310.00 0.5 - - - - - - - - - -

6 CROSBIE, CRAIG Partner 620.00 620.00 0.40 248.00 - - - - - - - - - - - - 248.00 0.4

7 MARTIN, NICHOLAS Partner 620.00 620.00 3.00 1,860.00 1,860.00 3.0 - - - - - - - - - - - -

8 CARTER, PHILLIP Partner 620.00 620.00 6.00 3,720.00 3,720.00 6.0 - - - - - - - - - - - -

9 VERNEY, BEN Director / Principal 560.00 560.00 2.70 1,512.00 728.00 1.3 616.00 1.1 - - - - - - - - 168.00 0.3

10 LORD, STEVE Director / Principal 560.00 490.00 3.20 1,568.00 - - - - - - - - - - - - 1,568.00 3.2

11 RAJAMANI, GAUTAM Director / Principal 560.00 560.00 20.00 11,200.00 1,260.00 2.3 9,940.00 17.8 - - - - - - - - - -

12 WALKER, ALAN Director / Principal 560.00 560.00 23.50 13,160.00 - - 3,584.00 6.4 2,408.00 4.3 - - 56.00 0.1 7,056.00 12.6 56.00 0.1

13 FOSTER, BARRY Director / Principal 560.00 515.00 27.20 14,008.00 14,008.00 27.2 - - - - - - - - - - - -

14 TYLOR, PETER JOHN Senior Manager 490.00 305.00 3.50 1,067.50 - - - - - - - - - - - - 1,067.50 3.5

15 CLEAVER, CLAUDINE Manager 455.00 390.00 0.50 195.00 195.00 0.5 - - - - - - - - - - - -

16 HARPER, ALEX Manager 455.00 390.00 4.90 1,911.00 - - 1,755.00 4.5 - - - - - - - - 156.00 0.4

17 BORG, RYAN Manager 445.00 445.00 10.90 4,850.50 - - 3,827.00 8.6 - - - - 845.50 1.9 - - 178.00 0.4

18 YOUNG, SYLVIA Manager 445.00 445.00 17.40 7,743.00 2,581.00 5.8 - - - - - - - - - - 5,162.00 11.6

19 PLOHL, MATTHEW Manager 445.00 445.00 32.20 14,329.00 222.50 0.5 - - 12,415.50 27.9 - - 356.00 0.8 400.50 0.9 934.50 2.1

20 WANG, LUDA Manager 445.00 445.00 45.90 20,425.50 712.00 1.6 4,450.00 10.0 - - - - 222.50 0.5 - - 15,041.00 33.8

21 CHEN, ZHENG (SALLY) Supervisor 410.00 410.00 0.80 328.00 - - - - - - - - - - - - 328.00 0.8

22 MARTIN, JULIAN Supervisor 410.00 410.00 1.20 492.00 - - - - - - - - - - - - 492.00 1.2

23 MANNS, LAURA Supervisor 410.00 410.00 22.30 9,143.00 - - - - 779.00 1.9 - - - - 8,364.00 20.4 - -

24 CAGNEY, GARY MICHAEL Supervisor 410.00 410.00 27.50 11,275.00 307.50 0.8 4,100.00 10.0 2,562.50 6.3 - - - - - - 4,305.00 10.5

25 NGUYEN, LINH Supervisor 410.00 410.00 33.50 13,735.00 902.00 2.2 10,291.00 25.1 1,025.00 2.5 - - 123.00 0.3 410.00 1.0 984.00 2.4

26 PAN, LUYANG Supervisor 410.00 410.00 36.40 14,924.00 - - 13,653.00 33.3 - - - - 451.00 1.1 - - 820.00 2.0

27 KANG, JESSICA Senior Analyst 1 370.00 370.00 0.60 222.00 - - - - 222.00 0.6 - - - - - - - -

28 LEE, SAMUEL Senior Analyst 1 370.00 370.00 12.10 4,477.00 - - - - - - - - - - - - 4,477.00 12.1

29 RICHARDS, REBECCA Senior Analyst 1 370.00 370.00 29.20 10,804.00 74.00 0.2 37.00 0.1 - - - - 6,438.00 17.4 74.00 0.2 4,181.00 11.3

30 PLAIL, LORRAINE Senior Analyst 1 370.00 370.00 29.70 10,989.00 1,258.00 3.4 4,773.00 12.9 1,073.00 2.9 - - 592.00 1.6 - - 3,293.00 8.9

31 CHIRISA, WADZANAI Senior Analyst 2 365.00 245.00 2.00 490.00 - - 490.00 2.0 - - - - - - - - - -

32 O'CONNOR, MATTHEW Senior Analyst 2 365.00 245.00 5.90 1,445.50 73.50 0.3 24.50 0.1 269.50 1.1 - - - - - - 1,078.00 4.4

33 TAYLOR-GRACE, HARRY Senior Analyst 2 360.00 360.00 5.10 1,836.00 72.00 0.2 - - 1,764.00 4.9 - - - - - - - -

34 DASH, CAMPBELL Analyst 1 / Intermediate 1 305.00 305.00 0.40 122.00 - - 122.00 0.4 - - - - - - - - - -

35 McKAY, Alice Analyst 1 / Intermediate 1 305.00 305.00 1.30 396.50 - - - - 396.50 1.3 - - - - - - - -

36 LEVEY, JASON Analyst 1 / Intermediate 1 305.00 305.00 12.00 3,660.00 549.00 1.8 3,111.00 10.2 - - - - - - - - - -

37 LOI, DAVID Analyst 1 / Intermediate 1 305.00 305.00 26.00 7,930.00 - - 7,930.00 26.0 - - - - - - - - - -

38 SAJBEN, ANNA Analyst 1 / Intermediate 1 305.00 305.00 33.30 10,156.50 5,795.00 19.0 1,677.50 5.5 - - - - - - - - 2,684.00 8.8

39 ORTADO, KELLY Analyst 1 / Intermediate 1 305.00 305.00 45.60 13,908.00 5,124.00 16.8 610.00 2.0 366.00 1.2 - - 5,734.00 18.8 - - 2,074.00 6.8

40 NOVAK, KYLIE Analyst 2 / Intermediate 2 240.00 240.00 2.60 624.00 - - 624.00 2.6 - - - - - - - - - -

41 POTTER, NIK Analyst 2 / Intermediate 2 240.00 240.00 4.70 1,128.00 - - 1,128.00 4.7 - - - - - - - - - -

42 CLEEVE, JAMES Graduate 210.00 210.00 0.20 42.00 - - 42.00 0.2 - - - - - - - - - -

43 JOHNSTONE, STUART Graduate 210.00 210.00 5.20 1,092.00 - - 483.00 2.3 63.00 0.3 - - - - - - 546.00 2.6

44 BROWN, DURHAM Graduate 210.00 210.00 7.20 1,512.00 1,512.00 7.2 - - - - - - - - - - - -

45 UNDERWOOD, SUZY Graduate 210.00 210.00 59.20 12,432.00 3,738.00 17.8 462.00 2.2 42.00 0.2 - - - - - - 8,190.00 39.0

46 MAKRIS, FONDA Undergraduate 190.00 190.00 3.90 741.00 741.00 3.9 - - - - - - - - - - - -

47 RIVERS, MARGO Bookkeeper 180.00 140.00 0.10 14.00 14.00 0.1 - - - - - - - - - - - -

48 CONTI, JOSIE Bookkeeper 180.00 180.00 0.40 72.00 - - - - - - - - - - - - 72.00 0.4

49 LE, JOSEPH Bookkeeper 180.00 180.00 0.90 162.00 162.00 0.9 - - - - - - - - - - - -


51 MOORE, SAMANTHA Administration 120.00 100.00 0.40 40.00 40.00 0.4 - - - - - - - - - - - -

52 RUIZ, SUSAN Administration 120.00 120.00 0.80 96.00 96.00 0.8 - - - - - - - - - - - -

615.10 233,543.00 46,048.50 125.30 74,164.00 188.65 23,386.00 55.35 - - 14,818.00 42.50 16,304.50 35.10 58,822.00 168.20

23,354.30

256,897.30

379.68 367.51 393.13 422.51 - 348.66 464.52 349.71


TOTAL

GST




CMA Recycling Pty Ltd ACN 107 209 503


For the Period 1 October to 11 October 2013


Rate

(Ex GST)

Hrs Total

$

Task AreaAverage

Rate

(Ex GST)*

For

per

sona

l use

onl

y

10

Rem

un

era

tion

Re

po

rt


$

Hrs




4 WANG, LUDA Manager 445.00 445.00 1.60 712.00 712.00 1.6 - - - - - - - - - - - -

5 YOUNG, SYLVIA Manager 445.00 445.00 12.20 5,429.00 - - - - - - - - - - - - 5,429.00 12.2


7 NGUYEN, LINH Supervisor 410.00 410.00 3.30 1,353.00 410.00 1.0 943.00 2.3 - - - - - - - - - -








24.80 10,328.00 2,050.50 5.2 1,829.00 4.9 716.00 1.7 - - - - - - 5,732.50 13.0

1,032.80

11,360.80

416.45 394.33 373.27 421.18 440.96


Task AreaAverage

Rate

(Ex GST)*

CMA Recycling Australia Pty LtdACN 003 047 210

TOTAL

GST







Rate

(Ex GST)

Hrs Total

$

For

per

sona

l use

onl

y

11

Rem

un

era

tion

Re

po

rt


$

Hrs













6.80 2,433.00 921.00 2.6 476.00 1.6 671.50 1.6 - - - - - - 364.50 1.0

243.30

2,676.30

357.79 354.23 297.50 419.69 0.00 0.00 0.00 364.50


Asia Pacific Metals Pty LtdACN 109 950 861

TOTAL

GST







Rate

(Ex GST)

Hrs Total

$

Task AreaAverage

Rate

(Ex GST)*

For

per

sona

l use

onl

y

12

Rem

un

era

tion

Re

po

rt


$

Hrs












7.20 2,614.50 965.50 2.7 886.00 2.6 671.50 1.6 - - - - - - 91.50 0.3

261.45

2,875.95

363.13 357.59 340.77 419.69 305.00


Average

Rate

(Ex GST)*

TOTAL

GST




Advanced Recycling Australasia Pty LtdACN 083 514 863




Rate

(Ex GST)

Hrs Total

$

Task Area

For

per

sona

l use

onl

y

13

Rem

un

era

tion

Re

po

rt


$

Hrs

1 YEOMANS, ANDREW Senior Manager 490.00 490.00 0.50 245.00 245.00 0.5 - - - - - - - - - - - -



4 PLOHL, MATTHEW Manager 445.00 445.00 0.20 89.00 89.00 0.2 - - - - - - - - - - - -









6.70 2,363.00 890.50 2.5 886.00 2.6 222.00 0.6 - - - - - - 364.50 1.0

236.30

2,599.30

352.69 356.20 340.77 370.00 364.50



Rate

(Ex GST)

Hrs Total

$

Task AreaAverage

Rate

(Ex GST)*

ACN 147 849 545 Pty LtdACN 147 849 545

TOTAL

GST






For

per

sona

l use

onl

y

14

Rem

un

era

tion

Re

po

rt


$

Hrs












7.30 2,606.50 684.50 2.1 886.00 2.6 671.50 1.6 - - - - - - 364.50 1.0

260.65

2,867.15

357.05 325.95 340.77 419.69 364.50


TOTAL

GST




T & T Metal & Asbestos Services Pty Ltd ACN 061 970 572




Rate

(Ex GST)

Hrs Total

$

Task AreaAverage

Rate

(Ex GST)*

For

per

sona

l use

onl

y

15

Remuneration Report

Part E – Description of work schedule & disbursements

A summary of the time spent by the Administrators and their staff and a summary of disbursements incurred in the conduct of the Administration for this period is outlined in the table below for the period from 2 August up to 11 October 2013. CMA Corporation Ltd – 1 October 2013 to 11 October 2013

Task Area General Description Includes

Assets

28.80 hours

$11,832.50

Sale of Business as a Going Concern

Liaising with lawyers regarding sale

Complete sale of business

Plant and Equipment Liaising with valuers, auctioneers and interested parties for sale

Reviewing asset listings and company records

Leasing / Assets specifically charged

Assessing equity position

Reviewing lease agreements

Liaising with owners/lessors regarding retention of titles and return of leased items

Tasks associated with disclaiming leases

Creditors

2.65 hours

$964.50

Creditor Enquiries Receive and follow up creditor enquiries via telephone, email and post.

Maintaining creditor enquiry records

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

Correspondence with committee of creditors

Secured creditor

Preparing reports/correspondence to secured creditor

Responding to secured creditor’s queries

Employees

2.90 hours

$1,189.00

Employees enquiry

Receive and follow up employee enquiries via telephone, email, post and etc.

Review and prepare correspondence to employees and their representatives via telephone, email, post and etc.

Preparation of letters to employees advising of their entitlements and options availableReceive and prepare correspondence in response to employees objections to entitlements/calculations

Calculation of entitlements Calculating employee entitlements

Reviewing employee files and company’s books and records

Reconciling superannuation accounts

Reviewing awards, employee contracts and agreements

Liaising with solicitors regarding entitlements

Other employee issues Correspondence with Child Support

Correspondence with Centrelink

Trade On

48.10 hours

$25,858.50

Trade On Management Liaising with management and staff regarding cease of future operations

Attendance on site and discuss with management

Maintaining purchase order register

Review and authorisation of employee wages on a weekly / fortnightly / monthly basis

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Liaising with superannuation funds regarding contributions, termination of employees employment

Liaising with OSR regarding payroll tax issues

Processing receipts and payments

Entering receipts and payments into accounting system.

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16

Remuneration Report


Budgeting & financial reporting Reviewing budgets / cash flow forecast for the administration

Preparing weekly financial reports

Preparing trading profit or loss

Meetings to discuss trading position

Investigation

12.40 hours

$6,274.00

Conducting investigation Reviewing company’s books and records

Conducting and reviewing statutory searches

Review pre-appointment financial position and performance of company

Investigate reasons for company’s financial difficulties

Identify potential offences by director(s)/officer(s)

Identify possible voidable transactions and insolvent trading claim

Review of specific transactions and liaising with directors regarding certain transactions

Preparing and maintaining investigation files

Ongoing review of specific transactions and liaising with directors regarding certain transactions

Litigation / Recoveries Meetings to discuss status of litigation

Preparing brief to solicitors

Liaising with solicitors regarding recovery actions

Administration

20.45 hours

$8,391.00

Document maintenance/file review/checklist

Updating checklists

Filing of documents

Insurance Correspondence with Willis regarding ongoing insurance requirements and cancellation

Identification of potential issues requiring attention of insurance specialists

Bank account administration Bank account reconciliations

Correspondence with bank regarding specific transfers

ATO & other statutory reporting Preparing BAS’

Planning / Review Discussions regarding status of administration

Books and records / storage Dealing with records in storage

Preparing books and records listings

Disbursements – 2 August to 11 October 2013

Category Amount

A $0.00

B1 $73,799.39

B2 $13,519.53

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17

Remuneration Report

CMA Assets Pty Ltd – 2 August 2013 to 11 October 2013


Assets

2.80 hours

$928.00






Creditors

1.60 hours

$671.50




Secured creditor Preparing reports/correspondence to secured creditor


Meeting of Creditors Holding First Meeting of Creditors

Respond to stakeholder queries and questions following the first meeting of creditors

Shareholder enquires Responding to any shareholder enquiries

Trade On

1.80 hours

$754.50





Administration

6.90 hours

$3,011.50


Updating checklists

Filing of documents



ASIC forms Preparing and lodging ASIC forms including 505

Correspondence with ASIC regarding statutory forms

ATO & other statutory reporting Notification of appointment

Liaising with solicitors in relation to the Federal Court application to extend convening period




For

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18

Remuneration Report

CMA Recycling Victoria Pty Ltd – 2 August 2013 to 11 October 2013


Assets

12.1 hours

$5,021.00






Creditors

2.2 hours

$938.50





Hold meeting with committee of creditors

Prepare minutes of the meeting of the committee

Retention of Title / PMSI Claims Receive creditor’s ROT/PMSI claims

Conduct PMSI search(es) and review results

Receive notification of creditor’s intention to claim

Preparation of retention of title / PMSI claim form to creditor

Review completed retention of title claim form(s)

Maintain retention of title / PMSI file and register of claims

Meeting claimants on site to identify goods

Receive advice for lawyers on claims as needed

Adjudicate retention of title / PMSI claims

Forward correspondence to claimants notifying outcome of adjudication





Trade On

1.0 hour

$364.50





Administration

2.9 hours

$1,054.50


Updating checklists

Filing of documents










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19

Remuneration Report

CMA Recycling Pty Ltd – 1 October 2013 to 11 October 2013


Assets

188.65 hours

$74,164.00

Sale of Business as a Going Concern

Preparing an information memorandum, sale advertisements

Placement of advertisements

Dealing with sale agents

Liaising with lawyers regarding sale

Liaising with interested purchasers

Preparation of sale contact

Complete sale of business

Internal meetings to discuss/review offers received



Debtors Regular correspondence with debtors regarding payment of their debts

Reviewing and assessing debtors ledgers

Stock Sale of stock

Liaising with sale agent, valuers and auctioneers






Creditors

55.35 hours

$23,386.00






















Employees

42.50 hours

$14,818.00

Employees enquiry


Liaising with unions regarding the progress of the administration and effects on employees


For

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20

Remuneration Report


Preparation of letters to employees advising of their entitlements and options available

Receive and prepare correspondence in response to employees objections to entitlements/calculations








Trade On

168.20 hours

$58,822.00

Trade On Management Liaising with suppliers

Liaising with management and staff regarding cease of future operations














Investigation

35.10 hours

$16,304.50









Investigate director’s personal financial position



Liaising with directors regarding certain transactions

Preparation and lodgement of report per s533 of the Act with ASIC




Attending to negotiations to settle claim

Attending to settlement matters

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per

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Remuneration Report


Administration

125.30 hours

$46,048.50


Updating checklists

Filing of documents



Bank account administration Opening bank account(s) for the VA

Requesting bank statements

Bank account reconciliations









Disbursements – 2 August to 11 October 2013

Category Amount

A $0.00

B1 $106,805.39

B2 $17,734.26

For

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22

Remuneration Report

CMA Recycling Australia Pty Ltd – 2 August 2013 to 11 October 2013


Assets

4.90 hours

$1,829.00








Creditors

1.7 hours

$716.00


















Trade On

13.00 hours

$5,732.50





Administration

5.20 hours

$2,050.50


Updating checklists

Filing of documents










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23

Remuneration Report

Asia Pacific Metals Pty Ltd – 2 August 2013 to 11 October 2013


Assets

1.6 hours

$476.00






Creditors

1.6 hours

$671.50








Trade On

1.0 hour

$364.50





Administration

2.6 hours

$921.00


Updating checklists

Filing of documents










For

per

sona

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y

24

Remuneration Report

Advanced Recycling Australasia Pty Ltd – 2 August 2013 to 11 October 2013


Assets

2.6 hours

$886.00



Stock Sale of stock






Creditors

1.6 hours

$671.50









Trade On

0.3 hours

$91.50





Administration

2.7 hours

$965.50


Updating checklists

Filing of documents










For

per

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25

Remuneration Report

ACN 147 849 545 Pty Ltd – 2 August 2013 to 11 October 2013


Assets

2.6 hours

$886.00








Creditors

0.6 hours

$222.00








Trade On

1.0 hour

$364.50





Administration

2.5 hours

$890.50


Updating checklists

Filing of documents










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26

Remuneration Report

T & T Metal & Asbestos Services Pty Ltd – 2 August 2013 to 11 October 2013


Assets

2.6 hours

$886.00








Creditors

1.6 hours

$671.50








Trade On

1.0 hour

$364.50





Administration

2.1 hours

$684.50


Updating checklists

Filing of documents










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27

Remuneration Report

Part F – Administrators’ expected summary of time

A summary of the time spent by the Administrators and their staff in the conduct of the Administration for this period is outlined in the table below for the period 12 October to 1 November 2013.

CMA Corporation Ltd – 12 October 2013 to 1 November 2013


Assets

60.00 hours

$45,000.00








Creditors

40.00 hours

$30,000.00









Meeting of Creditors

Holding Second Meeting of Creditors

Respond to stakeholder queries and questions following the second meeting of creditors

Employees

10.00 hours

$7,500.00

Employees enquiry



Preparation of letters to employees advising of their entitlements and options availableReceive and prepare correspondence in response to employees objections to entitlements/calculations








Trade On

20.00 hours

$150,000.00








Liaising with superannuation funds regarding

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Remuneration Report


contributions, termination of employees employment








Investigation

30.00 hours

$22,500.00













Administration

40.00 hours

$30,000.00


Updating checklists

Filing of documents





ASIC forms Correspondence with ASIC regarding statutory forms





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Remuneration Report

CMA Recycling Pty Ltd – 12 October to 1 November 2013


Assets

60.00 hours

$45,000.00



Debtors Regular correspondence with debtors regarding payment of their debts

Reviewing and assessing debtors ledgers

Stock Sale of stock







Creditors

40.00 hours

$30,000.00



















Meeting of Creditors Holding Second Meeting of Creditors

Respond to stakeholder queries and questions following the second meeting of creditors


Employees

10.00 hours

$7,500.00

Employees enquiry


Liaising with unions regarding the progress of the administration and effects on employees


Preparation of letters to employees advising of their entitlements and options available

Receive and prepare correspondence in response to employees objections to entitlements/calculations





For

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30

Remuneration Report





Trade On

20.00 hours

$150,000.00
















Investigation

30.00 hours

$22,500.00









Investigate director’s personal financial position



Liaising with directors regarding certain transactions

Preparation and lodgement of report per s533 of the Act with ASIC




Administration

40.00 hours

$30,000.00


Updating checklists

Filing of documents





ASIC forms Correspondence with ASIC regarding statutory forms





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Appendix Q

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Important note: This information sheet contains a summary of basic information on the topic. It is not

INFORMATION SHEET 85

Approving fees: a guide for creditorsIf a company is in financial difficulty, it can be put under the control of an independent external

administrator.

This information sheet gives general information for creditors on the approval of an external

administrator’s fees in a liquidation of an insolvent company, voluntary administration or deed of

company arrangement (other forms of external administration are not discussed in this information

sheet). It outlines the rights that creditors have in the approval process.

Entitlement to fees and costs A liquidator, voluntary administrator or deed administrator (i.e. an ‘external administrator’) is entitled

to be:

!" paid reasonable fees, or remuneration, for the work they perform, once these fees have been

approved by a creditors’ committee, creditors or a court, and

!" reimbursed for out-of-pocket costs incurred in performing their role (these costs do not need

creditors’ committee, creditor or court approval).

External administrators are only entitled to an amount of fees that is reasonable for the work that they

and their staff properly perform in the external administration. What is reasonable will depend on the

type of external administration and the issues that need to be resolved. Some are straightforward,

while others are more complex.

External administrators must undertake some tasks that may not directly benefit creditors. These

include reporting potential breaches of the law and lodging a detailed listing of receipts and payments

with ASIC every six months. The external administrator is entitled to be paid for completing these

statutory tasks.

For more on the tasks involved, see ASIC’s information sheets INFO 45 Liquidation: a guide for creditors and INFO 74 Voluntary administration: a guide for creditors.

Out-of-pocket costs that are commonly reimbursed include:

a substitute for legal advice. Some provisions of the law referred to may have important exceptions or qualifications. This document may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances. 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 5

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APPROVING FEES: A GUIDE FOR CREDITORS

!" legal fees

!" valuer’s, real estate agent’s and auctioneer’s fees

!" stationery, photocopying, telephone and postage costs

!" retrieval costs for recovering the company’s computer records, and

!" storage costs for the company’s books and records.

Creditors have a direct interest in the level of fees and costs, as the external administrator will,

generally, be paid from the company’s available assets before any payments to creditors. If there are

not enough assets, the external administrator may have arranged for a third party to pay any shortfall.

As a creditor, you should receive details of such an arrangement. If there are not enough assets to pay

the fees and costs, and there is no third party payment arrangement, any shortfall is not paid.

Who may approve fees Who may approve fees depends on the type of external administration: see Table 1. The external

administrator must provide sufficient information to enable the relevant decision-making body to

assess whether the fees are reasonable.

Table 1: Who may approve fees

Creditors’committee

Creditors Court

Administrator in a

voluntary administration

!1 ! !

Administrator of a deed of

company arrangement

!1 ! !

Creditors’ voluntary

liquidator

!1

!5

!3

Court-appointed liquidator !1

!4, 5

!2

1 If there is one. 2 If there is no approval by the committee or the creditors. 3 Unless an application is made for a fee review. 4 If there is no creditors’ committee or the committee fails to approve the fees.5 If insufficient creditors turn up to the meeting called by the liquidator to approve fees, the liquidator is entitled to be paid

up to a maximum of $5000, or more if specified in the Corporations Regulations 2001.

Creditors’ committee approval

If there is a creditors’ committee, members are chosen by a vote of creditors as a whole. In approving

the fees, the members represent the interests of all the creditors, not just their own individual interests.

There is not a creditors’ committee in every external administration. A creditors’ committee makes its

decision by a majority in number of its members present at a meeting, but it can only act if a majority

of its members attend.

To find out more about creditors’ committees and how they are formed, see ASIC’s information sheets

INFO 45 Liquidation: a guide for creditors, INFO 74 Voluntary administration: a guide for creditorsand INFO 41 Insolvency: a glossary of terms.Creditors’ approval

Creditors approve fees by passing a resolution at a creditors’ meeting. Unless creditors call for a poll,

the resolution is passed if a simple majority of creditors present and voting, in person or by proxy,

© Australian Securities & Investments Commission, December 2008 Visit our website: www.asic.gov.au

Page 2 of 5

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indicate that they agree to the resolution. Unlike where acting as committee members, creditors may

vote according to their individual interests.

If a poll is taken, rather than a vote being decided on the voices or by a show of hands, a majority in

number and value of creditors present and voting must agree. A poll requires the votes of each creditor

to be recorded.

A separate resolution of creditors is required for approving fees for an administrator in a voluntary

administration and an administrator of a deed of company arrangement, even if the administrator is the

same person in both administrations.

A proxy is where a creditor appoints someone else to represent them at a creditors’ meeting and to

vote on their behalf. A proxy can be either a general proxy or a special proxy. A general proxy allows

the person holding the proxy to vote as they wish on a resolution, while a special proxy directs the

proxy holder to vote in a particular way.

A creditor will sometimes appoint the external administrator as a proxy to vote on the creditor’s

behalf. An external administrator, their partners or staff must not use a general proxy to vote on

approval of their fees; they must hold a special proxy in order to do this. They must vote all special

proxies as directed, even those against approval of their fees.

Calculation of fees Fees may be calculated using one of a number of different methods, such as:

!" on the basis of time spent by the external administrator and their staff

!" a quoted fixed fee, based on an upfront estimate, or

!" a percentage of asset realisations.

Charging on a time basis is the most common method. External administrators have a scale of hourly

rates, with different rates for each category of staff working on the external administration, including

the external administrator.

If the external administrator intends to charge on a time basis, you should receive a copy of these

hourly rates soon after their appointment and before you are asked to approve the fees.

The external administrator and their staff will record the time taken for the various tasks involved, and

a record will be kept of the nature of the work performed.

It is important to note that the hourly rates do not represent an hourly wage for the external

administrator and their staff. The external administrator is running a business—an insolvency

practice—and the hourly rates will be based on the cost of running the business, including overheads

such as rent for business premises, utilities, wages and superannuation for staff who are not charged

out at an hourly rate (such as personal assistants), information technology support, office equipment

and supplies, insurances, taxes, and a profit.

External administrators are professionals who are required to have qualifications and experience, be

independent and maintain up-to-date skills. Many of the costs of running an insolvency practice are

fixed costs that must be paid, even if there are insufficient assets available to pay the external

administrator for their services. External administrators compete for work and their rates should reflect

this.

These are all matters that committee members or creditors should be aware of when considering the

fees presented. However, regardless of these matters, creditors have a right to question the external

administrator about the fees and whether the rates are negotiable.

It is up to the external administrator to justify why the method chosen for calculating fees is an

appropriate method for the particular external administration. As a creditor, you also have a right to

question the external administrator about the calculation method used and how the calculation was

made.


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Report on proposed fees When seeking approval of fees, the external administrator must send committee members/creditors a

report with the notice of meeting setting out:

!" information that will enable the committee members/creditors to make an informed assessment of

whether the proposed fees are reasonable

!" a summary description of the major tasks performed, or to be performed, and

!" the costs associated with each of these tasks.

Committee members/creditors may be asked to approve fees for work already performed or based on

an estimate of work yet to be carried out.

If the work is yet to be carried out, it is advisable to set a maximum limit (‘cap’) on the amount that

the external administrator may receive. For example, future fees calculated according to time spent

may be approved on the basis of the number of hours worked at the rates charged (as set out in the

provided rate scale) up to a cap of $X. If the work involved then exceeds this figure, the external

administrator will have to ask the creditors’ committee/creditors to approve a further amount of fees,

after accounting for the fees already incurred.

Deciding if fees are reasonable If asked to approve an amount of fees either as a committee member or by resolution at a creditors’

meeting, your task is to decide if that amount of fees is reasonable, given the work carried out in the

external administration and the results of that work.

You may find the following information from the external administrator useful in deciding if the fees

claimed are reasonable:

!" the method used to calculate fees

!" the major tasks that have been performed, or are likely to be performed, for the fees

!" the fees/estimated fees (as applicable) for each of the major tasks

!" the size and complexity (or otherwise) of the external administration

!" the amount of fees (if any) that have previously been approved

!" if the fees are calculated, in whole or in part, on a time basis:

o the period over which the work was, or is likely to be performed

o if the fees are for work that has already been carried out, the time spent by each level of staff

on each of the major tasks

o if the fees are for work that is yet to be carried out, whether the fees are capped.

If you need more information about fees than is provided in the external administrator’s report, you

should let them know before the meeting at which fees will be voted on.

What can you do if you think the fees are not reasonable?

If you do not think the fees being claimed are reasonable, you should raise your concerns with the

external administrator. It is your decision whether to vote in favour of, or against, a resolution to

approve fees.

Generally, if fees are approved by a creditors’ committee/creditors and you wish to challenge this

decision, you may apply to the court and ask the court to review the fees. Special rules apply to court

liquidations.

You may wish to seek your own legal advice if you are considering applying for a court review of the

fees.


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Page 5 of 5

Reimbursement of out-of-pocket costs An external administrator should be very careful incurring costs that must be paid from the external

administration—as careful as if they were dealing with their own money. Their report on fees should

also include information on the out-of-pocket costs of the external administration.

If you have questions about any of these costs, you should ask the external administrator and, if

necessary, bring it up at a creditors’ committee/creditors’ meeting. If you are still concerned, you have

the right to ask the court to review the costs.

Queries and complaints You should first raise any queries or complaints with the external administrator. If this fails to resolve

your concerns, including any concerns about their conduct, you can lodge a complaint with ASIC at

www.asic.gov.au/complain, or write to:

ASIC Complaints

PO Box 9149

TRARALGON VIC 3844

ASIC will usually not become involved in matters of commercial judgement by an external

administrator. Complaints against companies and their officers can also be made to ASIC. For other

enquiries, email ASIC through [email protected], or call ASIC’s Infoline on 1300 300 630 for the

cost of a local call.

To find out more For an explanation of terms used in this information sheet, see ASIC’s information sheet INFO 41

Insolvency: a glossary of terms. For more on external administration, see ASIC’s related information

sheets at www.asic.gov.au/insolvencyinfosheets:

!" 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 These are also available from the Insolvency Practitioners Association (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.

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