Birkby s Plastics Limited and Verve Industries Limited (Both in Administration) ( the Companies )

Transcription

1 Birkby s Plastics Limited and Verve Industries Limited (Both in Administration) ( the Companies ) Joint Administrators final report for the period 3 October 2012 to 2 April April 2013

2 Abbreviations The following abbreviations are used in this report: The Act The Insolvency Act 1986 the Bank Birkby s the Companies EY FYXX the Group HBH HBPO Honda JLR KPMG LTSBCF MBO OEM The Pension Scheme Lloyds TSB Bank plc Birkby s Plastics Limited Verve Industries Limited and Birkby s Plastics Limited Ernst & Young LLP Financial year ending 31 March XX Verve Industries Limited, HBH Holdings Limited and Birkby s Plastics Limited HBH Holdings Limited HBPO Gbmh Honda Trading Limited Jaguar Cars Limited and Land Rover KPMG LLP Lloyds TSB Commercial Finance Limited Management Buyout Original equipment manufacturer Birkby s Plastics Limited Pension Scheme The Rules The Insolvency Rules 1986 Supply agreement Toyota Trough-Tec Treves Verve Supply agreement signed by Honda, JLR and Toyota Toyota Motor Europe Ltd Trough-Tec Systems Limited Treves UK Limited Verve Industries Limited Ernst & Young i

3 Contents 1. Summary of the Administrators Proposals Final progress report Purpose of the Administrations Initial Meeting of Creditors Proposed conduct of the Administrations The End of the Administrations Actions taken during the Administration Birkby s Trading Profit Verve trading Birkby s debtors Stock Chattel assets Birkby s other realisations Verve Joint venture shares Verve other realisations Reports on directors conduct Birkby s Employment Tribunal Distributions to creditors Secured Creditors Preferential Creditors Non Preferential Creditors Prescribed Part Receipts and Payments Account Receipts Payments Joint Administrators Remuneration and Disbursements Remuneration Birkby s Remuneration Verve Basis of remuneration Birkby s & Verve Disbursements Appendix A Statutory Information Appendix B Receipts and Payments from 3 April 2012 to 2 April Appendix C Summary of Joint Administrators Time-Costs from 3 April 2012 to 2 April Appendix D Office Holders Charging Policy for Fees and Disbursements Ernst & Young i

4 1. Summary of the Administrators Proposals 1.1 Final progress report In accordance with Rules 2.47 and of the Insolvency Rules 1986 I provide below the final progress report in respect of the Administrations of the Companies. This report covers the period 3 April 2012 to 2 April 2013 and should be read in conjunction with the Administrators proposals dated 24 May 2012 and the Administrators progress report dated 31 October Purpose of the Administrations The purpose of an Administration is to achieve one of three objectives: a) To rescue the company as a going concern b) To achieve a better result for the company s creditors as a whole than would likely if the company were wound up (without first being in administration) c) To realise property in order to make a distribution to one or more secured or preferential creditors The Administrators concluded that it was not reasonably practicable to achieve the rescue of the Companies as a going concern in accordance with paragraph 3(1)(a) of Schedule B1 to the Insolvency Act 1986, as the business had previously been marketed for sale on two occasions, which had not resulted in any firm offers. Instead, the Joint Administrators concluded they were likely to be able to achieve objective b) (a better result for creditors as a whole than would be likely if the Companies were wound up), as the Joint Administrators were able to trade the business in the short term to allow customers to re-source production. Trading also provided the opportunity to enhance asset realisations in relation to book debts, stock, plant and machinery. The only alternative strategy was an immediate closure of the whole business, which would have resulted in significantly lower realisations and would have been detrimental to the body of creditors as a whole. 1.3 Initial Meeting of Creditors Birkby s has insufficient property to enable a distribution to be made to unsecured creditors other than by virtue of the prescribed part. Verve has insufficient property to enable any distribution to unsecured creditors. In accordance with the provisions of paragraph 52(1) of Schedule B1 to the Act, the Joint Administrators did not convene a creditors meeting at the time the proposals were distributed (although creditors were given the opportunity to request a meeting if they wished). No request was received from any creditor to call a creditors meeting, and as a result the Joint Administrators proposals were deemed to be approved on 11 June Conduct of the Administrations It was proposed that the Joint Administrators would manage the affairs, business and property of the Companies in order to achieve the purpose of the Administration. This included, inter alia: Ernst & Young 2

5 Continuing to trade whilst the customers re-sourced their supplies; Realising the remaining assets, principally the book debts, stock and plant and machinery; Conducting investigations into the conduct of the Directors of the Company and reporting to the Department of Business, Innovation and Skills pursuant to the Company Directors Disqualification Act; Distributing the realisations to the secured creditors; Dealing with unsecured creditor enquiries; Dealing with statutory reporting and compliance obligations; and Finalising the Administration including payment of all Administration liabilities. 1.5 The End of the Administrations In the Joint Administrator s proposals it was proposed that at the end of the Administrations: if realisations were sufficient to allow a distribution to unsecured creditors, the Company concerned would move into creditors voluntary liquidation upon the filing with the Registrar of Companies of a notice pursuant to paragraph 83 of Schedule B1 to the Act; and if the Company concerned had no property to permit a distribution to its creditors, the Administration would come to an end upon the filing with the Registrar of Companies of a notice pursuant to paragraph 84 of Schedule B1 to the Act. Birkby s has sufficient property to allow a distribution to unsecured creditors and as a result, the Joint Administrators have filed the relevant notice with the Registrar of Companies. Once this notice has been registered, Birkby s will move into creditors voluntary liquidation. The liquidators will be RH Kelly and CGJ King of Ernst & Young LLP and any act required or authorised under any enactment to be done by the liquidators may be done by either or both of them. Verve has insufficient property to allow a distribution to unsecured creditors and therefore the Joint Administrators have filed the relevant notice with the Registrar of Companies. In accordance with the provisions of paragraph 84(6) of Schedule B1 to the Act Verve will be deemed to be dissolved three months after the registration of this notice. Ernst & Young 3

6 2. Actions Taken During the Administration 2.1 Birkby s Trading Profit On the date of appointment, the Joint Administrators entered into a Supply Agreement with Toyota Motor Europe NV/SA ( Toyota ), Honda of the UK Manufacturing Limited ( Honda ), Jaguar Cars Limited and Land Rover ( JLR ). Under this Supply Agreement, the three customers agreed to: Pay for the assets utilised in trading, being tooling and raw materials, at amounts significantly in excess of that which would have been achieved in a ceasing to trade scenario; Accept a variable price increase to allow a profit to be generated after the costs of trading had been met; and Pay the costs of the Joint Administrators and their staff in dealing with trading activities. As a result of this agreement, the Joint Administrators took the decision to trade Birkby s in Administration to generate additional net realisations for the benefit of the secured creditors and general body of creditors. The trading profit under the Supply Agreement was agreed at 5% of weekly turnover, subject to a maximum of 25,000 per week and a minimum of 10,000 per week. Trading continued for a 13 week period from 3 April to 29 June 2012, with the maximum profit of 325,000 (per the Supply Agreement) being generated for the benefit of creditors. 2.2 Verve trading Verve did not continue to trade following the appointment of the Joint Administrators. However, certain directors employed by Verve were retained on a temporary basis to assist in the trading of Birkby s. Any costs associated with the retention of these Verve employees have been recharged via Birkby s to Toyota, Honda and JLR under the Supply Agreement and therefore there was no impact upon Verve. 2.3 Birkby s debtors Product debtors At the date of appointment, the total product debtor balance was c. 1.29m. After provisions for uncollectable amounts and adjustments for credit balances, the net collectable balance was assessed at c. 1.27m, with collections of 1.26m achieved, as shown below. Balance on appointment (GBP) Provisions for uncollectible amounts Estimated collectible opening Collections balance to date Outstanding Ledger Adjustments Product GBP 1,099 (5) (9) 1,085 1,076 9 Euro Total product debtors 1,289 (5) (9) 1,274 1, Ernst & Young 4

7 The debtor balances were assigned to LTSBCF who were owed 378,000 at the date of appointment. This liability has been settled in full from debtor realisations Tooling debtors At the date of appointment, outstanding tooling debts were c. 0.50m. The tooling debtor book included amounts due to be paid to Birkby s and then paid on to the tooling manufacturers. From a commercial perspective, customers were unwilling to settle these debts, as the tooling manufacturer retained title to the tooling. Therefore, to gain title to the tooling, all customers opted to pay the tooling manufacturer directly. As a result of this, certain amounts within the tooling debtor book were not legally collectible and the net collectable balance was assessed at c. 0.26m, as shown below. In addition, the Joint Administrators have been able to negotiate payment of c. 172,000 in relation to tooling costs incurred by Birkby s which had not been invoiced to the customer prior to appointment Disputed monies Balance on appointment (GBP) Provisions for uncollectible amounts Estimated collectible opening Collections balance to date Outstanding Ledger Adjustments Tooling GBP 251 (15) (63) Euro (168) Total tooling debtors 504 (15) (231) Around the date of our appointment, certain customers made payments to Birkby s in relation to the tooling ledger, as follows: Date rec'd Amount ( ) Tachi-S Co Limited 30/03/ ,225 Toyota 30/03/ ,411 DS Smith 03/04/ ,288 Total disputed monies 473,923 These amounts were paid into Birkby s bank account in the expectation that they would be passed through to tooling manufacturers. However, due to the appointment of the Administrators intervening, these amounts were not paid on as anticipated. Instead, the amounts received from Tachi-S and Toyota have reduced the amounts due to LTSBCF at the date of appointment, and the amount received from DS Smith (included in the tooling ledger debtor collections) has provided realisations for the benefit of creditors. The customers have disputed the application of these funds, and are seeking to assert that these monies should have been held on trust for their benefit, or the benefit of the tooling manufacturer. The Joint Administrators have set aside a proportion of debtor realisations equivalent to the disputed monies pending clarification of legal position with the customers. The level of realisations which ultimately becomes available to the floating charge holder will be dependent upon the resolution of this issue. To date, none of the customers have commenced legal action. Ernst & Young 5

8 2.4 Stock Overview At the date of appointment, Birkby s had stock with a book value of 1.9m, although c. 0.5m of stock was identified as obsolete. The Joint Administrators received retention of title claims from 41 suppliers in respect of c. 0.8m of stock. Of these claims, 358,000 were settled through the return of stock or through payments to suppliers for stock used during trading. Accordingly, the Joint Administrators estimate that there was c. 1.04m of net realisable stock at book value at the date of appointment, as shown below: '000 Finished Goods WIP Raw materials Total Stock at date of appointment ,386 1,922 Retention of title stock (358) (358) Stock owned by Birkbys at DoA ,028 1,564 Obsolete stock (132) (42) (352) (526) Realisable stock at DoA , Stock used during the trading period Any stock owned by Birkby s which was used during the trading period has generated realisations of 100 pence in the, either through a charge to the customers under the Supply Agreement, or through direct sales to departing customers. Total stock realisations from the trading period are 1.1m, of which: c. 0.67m is for sales made to customers under the Supply Agreement; and c. 0.44m is for sales made to departing customers Stock remaining following the cessation of trading Following the cessation of trading, Birkby s systems indicated that there was stock with a book value of c. 486,000 left on site, of which c. 145,000 was subject to potential ROT claims, leaving c. 341,000 available to realise from obsolete stock. This stock principally consisted of items which were not required by any of the customers, and was dealt with as follows: Any items which were not purchased by customers were re-ground into secondary polymer and sold to a local merchant, or sold as scrap plastic without being re-ground; The remaining polymer was marketed to all customers and suppliers, as well as to several polymer traders; and Residual bought out parts were marketed to all suppliers and customers, but garnered no interest and were subsequently scrapped. The realisations from this residual stock were 49,000. Ernst & Young 6

9 2.5 Chattel assets Overview The Joint Administrators appointed GVA Grimley LLP ( GVA ) to dispose of Birkbys chattel assets. GVA s valuation of the chattel assets on site at the date of appointment is shown below: '000 This valuation was before the costs of realisation and as Birkby s was closing, GVA advised that the ex-situ valuation was the appropriate valuation. GVA disposed of the chattel assets via three online auctions held on bidspotter.co.uk. In addition, various assets have been sold by private treaty, including the Presma machine, which was sold for c. 300, Assets secured to Lloyds Two of the machines were subject to asset finance provided by Lloyds TSB Bank Plc ( Lloyds ), who were owed c. 201,000 at appointment. These machines generated realisations of 480,000 in auction one. Given payments made to Lloyds as a result of ongoing trading, the amount due under the financing agreement had reduced to 136,000 at the time the machines were sold. This amount (c. 110,000) has been paid to Lloyds in settlement of their debt and the surplus has been made available to the floating charge holder Realisations to date Market value in situ Total chattel asset realisations to date are 2.19m, c. 0.79m in excess of GVA s ex situ value, as analysed below: Professional costs GVA and Bidspotter Market value ex situ Plant, machinery and fixtures 3,500 1,400 Auctions 1,717,248 Presma 301,390 GVA total 2,018,638 Other private treaty assets 174,787 Total chattel asset realisations 2,193,425 Less: paid to Lloyds (110,067) Net chattel asset realisations 2,083,358 For the online auction processes, both GVA and Bidspotter fees were paid via a buyer s premium, charged at an additional 15% on top of the price paid for the assets. Therefore, no deduction was made from the amount shown above in respect of realisations from the auctions. GVA received 10% of the buyer s premium, with the remaining 5% being shared between Bidspotter s commission and a rebate to the Administration, as follows: Ernst & Young 7

10 Realisations Bidspotter Administration First 100,000 5% 0% Subsequent 150,000 2% 3% Additional realisations ( 250,000 +) 1% 4% As a result, the Administration has benefited from c. 39,500 of additional realisations in respect of the buyer s premium charged on the sale of chattel assets through the online auction process. Where assets were sold by private treaty and not through the online Bidspotter process, GVA s fees were agreed at 5% of the purchase price. This has been deducted from realisations achieved Exit from site The removal of the majority of assets was undertaken through a third party specialist who managed the process of removing the injection moulding machines from site. The exit was completed and the lease was surrendered prior to the beginning of the next rent quarter (Friday 28 September 2012), avoiding an additional rent payment of 180, Birkby s other realisations Cash at date of appointment and interest received Birkby s had c. 43,000 in its bank accounts at the date of appointment. The Administrators have received 45,138 in interest on sums held throughout the Administration Rental and other prepayments Prior to our appointment, Birkby s had prepaid c. 162,000 in respect of the rent at the Headlands Road site for the quarter to 24 June If trading had not continued, it is likely that this prepayment would have been irrecoverable. However, as trading has continued, the Joint Administrators have been able to realise the value of this and other prepayments made by Birkby s by charging them to the customers under the Supply Agreement Tooling removal income Throughout the Administration period, the Joint Administrators and Birkby s staff were obliged to deal with various third party assets, (principally tooling) located on site. Following the completion of trading, any customers who removed tools from site were charged an appropriate tool removal fee to cover the costs involved Tooling storage income Upon appointment, there were a large number of tools (c.500) on site. Of these tools, c.200 were collected by customers during the Administration period. On the basis of legal advice, the Joint Administrators undertook a process to identify and inform the potential owners of the remaining c.300 tools. This involved contacting all known previous customers and advertising in trade press. Ernst & Young 8

11 Very few parties expressed an interest in collecting the tools and following the expiry of the deadline for responses, the Joint Administrators proceeded to scrap the uncollected tools. In line with legal advice, the proceeds from the scrappage of the tools were held by the Joint Administrators on behalf of the potential owners of the tools. However, in accordance with the circular sent to customers, the Joint Administrators were entitled to deduct storage charges for the tools until the date the tools were scrapped. This utilised all of the proceeds from the scrapping process. The tooling storage income received by the Joint Administrators is 82,000. This amount is a combination of the Customers contributions to the removal of their own tools and storage charges for tools stored on site Pension debtor Under an arrangement with the pension scheme, certain pensioners were paid their pension using the Birkby s payroll system, with the pension scheme reimbursing Birkby s on a monthly basis. In the week prior to the appointment of the Joint Administrators, Birkby s had paid c. 40,000 to various pensioners on behalf of the pension scheme. However, the repayment due from the pension scheme was not received until after appointment. Therefore, this amount forms part of the floating charge realisations Kautex income Kautex occupies an adjoining plot of land on Headlands Road and this income reflects an agreed contribution to shared utility services. Therefore this income has been applied to the benefit of the trading period Novation monies Birkby s held various contracts for the manufacture and supply of tooling to customers. As Birkby s was ceasing to trade, the Joint Administrators were asked to novate certain of these contracts to create a direct relationship between the tooling manufacturer and the end customer. Novation fees of 38,600 have been generated as a result of this. 2.7 Verve Joint venture shares Verve held 50% of the share capital in a joint venture, Trough-Tec Systems Limited ( Trough- Tec ). The other 50% was held by Hird Rail Services Limited ( Hird ). Under the joint venture agreement, the insolvency of one of the joint venture partners gave the right for the other joint venture partner to purchase the remaining 50% of the share capital at a value to be determined by Trough-Tec s auditors. Therefore, immediately following appointment, Hird requested a valuation of Trough-Tec, and accordingly, the Joint Administrators have received a payment of 500 for the share capital in line with the auditors value. Given the Joint Venture had not commenced trading the Administrators do not intend to challenge this value. 2.8 Verve other realisations The Joint Administrators do not anticipate any further realisations in Verve. Ernst & Young 9

12 2.9 Reports on directors conduct The Joint Administrators have submitted their reports on the conduct of the directors of Verve and Birkby s to the Department for Business, Innovation and Skills in line with their statutory responsibilities. These reports are confidential Birkby s Employment Tribunal Certain employees, some of whom have been supported by their trade unions, have taken action against Birkby s for failure to consult in respect of the redundancies made in the Administration. A tribunal hearing was held on 19 March 2013, where judgement was given for the claimants. These claims will fall to be dealt with in the creditors voluntary liquidation. Ernst & Young 10

13 3. Distributions to creditors 3.1 Secured Creditors LTSBCF & Lloyds LTSBCF had fixed charge security over the sales ledger, and was owed 378,000 on appointment. Lloyds had fixed charge security over two injection moulding machines and was owed 201,000 on appointment. Both LTSBCF and Lloyds have been fully repaid from realisations Birkby s Plastics Limited Pension scheme ( the Pension Scheme ) The Pension Scheme is the third ranking secured creditor for its s.75 deficit. The Pension Scheme holds a debenture from the Group companies incorporating fixed and floating charges. We are uncertain of the precise amount of the Pension Scheme s claim, however, the Directors estimated it to be 10.3m in their Statement of Affairs. After the payment of the costs of realisation, preferential claims and the Prescribed Part, all floating charge realisations will be made available to the Pension Scheme. However, based on a liability of 10.3m we do not anticipate that the Pension Scheme will be repaid in full. To date payments of 3.3m have been made in respect of this claim. 3.2 Preferential Creditors All preferential creditor claims in both Verve and Birkby s have been settled as a result of the continuation of trading, as all arrears of wages and holiday pay have been paid to employees made redundant during the trading period. The cost of settling these claims has been accounted for as a cost of trading. 3.3 Non Preferential Creditors Non-preferential claims continue to be submitted and will be dealt with in the conduct of the liquidation. The directors Statements of Affairs estimates that the non-preferential claims for Verve and Birkby s will be in the region of 1.1m and 7.0m respectively. Final claims may be higher due to contingent claims and other non-preferential creditor amounts becoming known. We do not expect there will be a distribution to the non-preferential creditors of Verve. It is not anticipated that there will be sufficient realisations to enable a distribution to the non-preferential creditors of Birkby s other than by virtue of the Prescribed Part. 3.4 Prescribed Part The prescribed part is a proportion of floating charge assets set aside for non-preferential creditors pursuant to section 176A of the Insolvency Act The prescribed part applies to floating charges created on or after 15 September Ernst & Young 11

14 3.4.1 Prescribed Part - Birkby s The Joint Administrators of Birkby s currently estimate that the value of the net property will be c. 4.2m, and the value of the Prescribed Part will be 0.6m Prescribed Part - Verve The Joint Administrators of Verve currently estimate that the value of the net property will be nil, and the value of the Prescribed Part will be nil. Ernst & Young 12

15 4. Receipts and Payments Account A receipts and payments account for the Administrations for the period 3 April 2012 to 2 April 2013 is shown at Appendix B. 4.1 Receipts Receipts to date principally relate to trading, stock, debtor and chattel asset realisations. 4.2 Payments Trading costs All relevant trading costs have been met by the customers under the Supply Agreement and therefore the creditors will not suffer the impact of these costs Non trading costs The Joint Administrators have incurred the following costs to date in dealing with the nontrading aspects of the Administrations: Employee costs in relation to the small number of employees who were retained in the period to 28 September 2012 to assist with various closure tasks ; and Utilities, rent, rates and other site related costs for the post-trading period Professional fees The following other professionals were engaged to assist in the Administrations. They were chosen on the basis of their experience in similar assignments: Name of firm Nature of service How contracted to be paid GVA Grimley DWF Walker Morris Valuation and disposal of chattel assets Administrator s appointment documentation Legal advice relating to validity of appointment, trading matters, retention of tile claims, intellectual property and the leasehold property. As set out above Time cost basis Time cost basis Professional fees for GVA and Bidspotter in relation to the online auctions are discussed above. In addition, commission of 14,750 was paid to GVA for the sale of the Presma machine. Walker Morris fees have been fixed on the basis of time costs incurred, and weekly updates on costs have been provided to allow legal costs to be allocated between trading and nontrading issues. To date, 142,539 has been incurred, of which 96,361 relates to trading issues and has been paid by the customers. In addition, 5,307 has been paid to DWF LLP, who assisted the directors with the Joint Administrator s appointment. Ernst & Young 13

16 Joint Administrators Remuneration and Disbursements 5. Joint Administrators Remuneration and Disbursements 5.1 Remuneration Birkby s To date, the Joint Administrators have incurred total time costs of 2,056,914 (being 667,337 of non-trading costs and 1,389,577 of trading costs). Attached at Appendix C is a detailed analysis of time spent and charge out rates, for each grade of staff for the various areas of work carried out to 2 April 2013, as required by the Association of Business Recovery Professionals Statement of Insolvency Practice No. 9. To date, trading costs of 1,352,109 have been drawn under the Supply Agreement. These costs have been met by the Customers and will not be a cost to the creditors. In addition, non-trading costs of 600,000 have been drawn from floating charge realisations with the consent of the secured and preferential creditors 5.2 Remuneration Verve To date, the Joint Administrators have incurred total time costs of 22,378 against which no fees have been drawn. Attached at Appendix C is a detailed analysis of time spent and charge out rates, for each grade of staff for the various areas of work carried out to 2 April 2013, as required by the Association of Business Recovery Professionals Statement of Insolvency Practice No Basis of remuneration Birkby s & Verve The Joint Administrators proposed that their remuneration be fixed on the basis of time properly given by them and their staff in dealing with the matters arsing in the Administrations. As there are insufficient funds available for distribution to the unsecured creditors, other than via the prescribed part, the basis of the Administrators remuneration falls to be agreed with the secured creditors and the preferential creditors in accordance with the provisions of Rule 2.106(5A) of the Insolvency Rules The secured creditors and preferential creditors have agreed this basis. At Appendix D there is a statement of the Administrators policy in relation to charging time and disbursements. In certain circumstances, creditors are entitled to request further information regarding the Administrators remuneration or expenses, or to apply to court on the grounds that the costs are considered to be excessive. (Rules 2.48A and of the Insolvency Rules 1986). Further information is provided in Appendix D. 5.4 Disbursements Both the secured and preferential creditors have approved the Joint Administrators proposal that they be entitled to draw Category 2 disbursements, shown at Appendix D Birkbys The Administrators have incurred disbursements of 33,848 and the full amount has been drawn, with 30,000 being paid by the customers under the Supply Agreement and the remainder being paid from floating charge realisations. Ernst & Young 14

17 5.4.2 Verve The Administrators have incurred disbursements of 434 and it is proposed that this amount will be drawn before the closure of the case. Ernst & Young 15

18 Appendix A: Statutory Information Appendix A Statutory Information Company Information Company Name: Registered Office Address: Verve Industries Limited c/o Ernst & Young LLP 1 Bridgewater Place Water Lane Leeds LS11 5QR Registered Number: Trading Name(s): None Trading Address(es): Headlands Road Liversedge West Yorkshire WF15 6QA Details of the Administrators and of their appointment Administrators: R H Kelly and C G J King Date of Appointment: 3 April 2012 By Whom Appointed: Court Reference: The appointment was made by Lloyds TSB Commercial Finance Ltd High Court of Justice, Chancery Division, Leeds District Registry, 518 of 2012 Any of the functions to be performed or powers exercisable by the Administrators may be carried out/exercised by either of them acting alone or by any or both of them acting severally. Statement concerning the EC regulation The EC Council Regulation on Insolvency Proceedings does apply to this administration and the proceedings are main proceedings. This means that this Administration is conducted according to UK insolvency legislation and is not governed by the insolvency law of any other European Union Member State. Share Capital Class Authorised Issued & Fully paid Number Number Ordinary 100, , , ,000 Ernst & Young 16

19 Directors and secretary and their shareholdings Name Director or Secretary Date Appointed Current Shareholding Ian Parker Director 4 December ,000 Nicola Rose Director/Secretary 4 December ,000 Macartan Flanagan Director 4 December ,000 Thomas Moore Director 4 December ,000 John Child Director 4 December ,000 Company Information Company Name: Birkby s Plastics Limited Registered Office Address: c/o Ernst & Young LLP 1 Bridgewater Place Water Lane Leeds LS11 5QR Registered Number: Trading Name(s): Trading Address(es): None Headlands Road Liversedge West Yorkshire WF15 6QA Details of the Administrators and of their appointment Administrators: R H Kelly and C G J King Date of Appointment: 3 April 2012 By Whom Appointed: Court Reference: The appointment was made by Lloyds TSB Commercial Finance Ltd High Court of Justice, Chancery Division, Leeds District Registry, 517 of 2012 Any of the functions to be performed or powers exercisable by the Administrators may be carried out/exercised by any one of them acting alone or by any or all of them acting severally. Statement concerning the EC regulation The EC Council Regulation on Insolvency Proceedings does apply to this administration and the proceedings are main proceedings. This means that this Administration is conducted according to UK insolvency legislation and is not governed by the insolvency law of any other European Union Member State. Share Capital Class Authorised Issued & Fully paid Number Number Ordinary 8,380,000 8,380,000 8,380,000 8,380,000 Ernst & Young 17

20 Directors and secretary and their shareholdings Name Director or Secretary Date Appointed Ian Parker Director 11 January 2008 Nil Nicola Rose Director/Secretary 11 January 2008 Nil Macartan Flanagan Director 11 January 2008 Nil Thomas Moore Director 11 January 2008 Nil Victor Shelton Director 15 October 2010 Nil John Child Director 11 January 2008 Nil Current Shareholding Ernst & Young 18

21 Appendix E : Receipts and Payments Appendix B Receipts and Payments from 3 April 2012 to 2 April 2013 Birkbys Plastics Limited From 3 April 2012 From 2 October 2012 Total Receipts & payments account to 2 October 2012 to 2 April 2013 Receipts Total receipts Total receipts Total receipts Administration sales 8,084, ,415, ,499,175 Plant and machinery 2,193, ,193,425 Bidspotter premium - 39, ,596 Trading advance/(refund) 1,618, (1,323,827.00) 295,035 Book Debt (charged to LTSBCF) 1,021, , ,047,936 Disputed Book Debt 473, ,923 Debt uninvoiced at date of appointment 171, ,005 Stock 1,144, , ,162,655 Tooling income 237, ,675 Scrappage of tools (storage income) 82, ,048 Cash at date of appointment 42, ,840 Sundry Income 41, , ,540 Bank interest 30, , ,138 Kautex 9, ,051 Third party funds 55, (55,911.82) - Total receipts 15,207, , ,377, Payments Total payments Total payments Total payments Employee costs (2,774,577.24) (6,745.41) (2,781,323) Material purchases (2,245,080.25) (798.92) (2,245,879) Royalties (51,312.34) - (51,312) Insurance (179,364.90) 38, (141,197) Quality control services (49,997.35) - (49,997) ROT settlement (353,010.41) - (353,010) Ransom payments (295,110.85) (295,015) Hire of Equipment (108,125.12) (6,701.12) (114,826) Haulage costs (55,607.95) - (55,608) Property costs (255,113.56) (40,899.78) (296,013) Utilities (218,461.00) (32,858.53) (251,320) Telephone and IT services (15,353.29) (54.76) (15,408) Administrators fees and disbursements - (1,985,957) Professional Fees (136,839.22) (25,758.10) (162,597) Repairs and renewals (38,153.84) (5,200.43) (43,354) Refund of excess profit - (1,779,293) Secured creditor (LTSBCF) (378,533.35) - (378,533) Secured creditor (PPF) - (3,300,000.00) (3,300,000) Secured Creditor (Lloyds) (110,066.90) - (110,067) Sundry expenses (4,891.55) (7,548.16) (12,440) Stationary and printing (2,874.83) (1,504.27) (4,379) Bank charges (5,664.26) (20.35) (5,685) VAT Payable (423,350.30) 118, (304,862) Total payments (7,701,489) (3,271,338) (14,738,076) Balance in hand 7,505,706 (3,098,090) 638,965 Ernst & Young 19

22 Verve Industries Limited The only receipts in Verve have been 500 for the Shares in Trough Tec and 2.24 bank interest. All payments made in relation to Verve have been via Birkby s, other than a Corporation Tax payment of Ernst & Young 20

23 Appendix K: Summary of Joint Administrators Time-Costs Appendix C Summary of Joint Administrators Time-Costs from 3 April 2012 to 2 April 2013 Birkby s Plastics Limited Non - trading Hours Partner Executive Director Assistant Director Staff Grade Senior Executive Executive Analyst Support Intern Total Accounting and Administration Bank & Statutory Reporting Creditors Debtors Employee Matters General Immediate Tasks Investigation/CDDA Job Acceptance & Strategy Other Assets Other Matters Property Retention of Title Statutory Duties VAT & Taxation Total Hours ,627.3 Time Costs ( ) 50,608 31, , , ,339 58,067 36,929 5, ,337 Average Hourly Rate ( ) Trading Hours Partner Executive Director Assistant Director Senior Executive Executive Analyst Support Intern Total Trading - cash & accounting ,862.3 Trading - customers Trading - Employee matters Trading - HBPO exit Trading - Honda Trading - JLR Trading - suppliers ,308.1 Trading - Toyota exit Trading - Treves exit Trading Total Hours , , ,108.9 Time Costs ( ) 42,238 71, , , , ,943 81,308 18,660 1,389,577 Average Hourly Rate ( ) Verve Industries Limited Hours Partner Executive Director Assistant Director Senior Executive Executive Analyst Support Intern Total Accounting and Administration Bank & Statutory Reporting Employee Matters General Immediate Tasks Other Assets Other Matters Property Retention of Title Statutory Duties VAT & Taxation Total Hours Time Costs ( ) 740-9,298 6,323 1,431 4, ,378 Average Hourly Rate ( ) Ernst & Young 21

24 Appendix L: Office Holders Charging Policy for Fees and Disbursements Appendix D Office Holders Charging Policy for Fees and Disbursements Fees The Insolvency Rules 1986 provide that the Administrators remuneration may be fixed on the basis of time properly spent by the Administrators and their staff in attending to matters arising in the Administration. The Administrators have engaged a manager and other staff to work on the case. The work required is delegated to the most appropriate level of staff taking account of the nature of the work and the individual s experience. Additional assistance is provided by cashiers dealing with the Company s bank accounts and statutory compliance diaries, secretaries providing typing and other support services and filing clerks. Work carried out by all staff is subject to the overall supervision of the Administrators. All time spent by staff working directly on case-related matters is charged to a separate time code established specifically for the case. Each member of staff has a specific hourly rate, which is subject to change over time. The average hourly rate for each category of staff over the period is shown in Appendix C. The current hourly rates may be higher than the average rates as hourly rates have increased over the period covered by this report. Summarised below are our current hourly rates: Current hourly rate Previous hourly rate Previous hourly rate Previous hourly rate Effective from 1 July July July July 2008 Partner Director Assistant Director Senior Executive Executive Analyst - Level Level Level Accounting & Treasury Executive Disbursements Statement of Insolvency Practice No. 9 ( SIP 9 ) published by R3 (The Association of Business Recovery Professionals) divides disbursements into two categories. Category 1 disbursements comprise payments made by the office holders firm, which comprise specific expenditure relating to the administration of the insolvent s affairs and referable to payment to an independent third party. These disbursements can be paid from the insolvent s assets without approval from the Secured Creditor. In line with SIP 9, it is our policy to disclose such disbursements drawn but not to seek approval for their payment. Category 2 disbursements comprise payments made by the office holders firm which include elements of shared or overhead costs. Such disbursements are subject to approval from the Secured Creditor as if they were remuneration. It is our policy, in line with SIP 9, to seek approval for this category of disbursement before they are drawn. Ernst & Young 22

25 Appendix L: Office Holders Charging Policy for Fees and Disbursements Summarised below are the Joint Administrators disbursements to date: Birk by 's Verv e Category 1 expenses 22, Category 2 expenses 11, , Ernst & Young 23