Eastlake Developments Limited in administration. High Court of Justice, Chancery Division, Birmingham District Registry Case No.

Eastlake Developments Limited in administration High Court of Justice, Chancery Division, Birmingham District Registry Case No. 8226 of 2015 Joint administrators third progress report for the period from 2 June 2016 to 1 December 2016 29 December 2016 PricewaterhouseCoopers LLP Central Square 29 Wellington Street Leeds LS1 4JP Telephone: +44(0)113 289 4000 Fax: +44(0)113 289 4460 www.pwc.co.uk/edl 1

Contents Section Pages 1 Joint administrators third progress report for the period from 2 June 2016 to 1 December 2016 3-5 2 Statutory and other information 6 3 Receipts and payments account 7 4 Analysis of the administrators remuneration and disbursements for the period 8-13 5 Expenses incurred in the period 14 6 Form 2.24B The following abbreviations are used in this report: IR86 Insolvency Rules 1986 the administrators or we Roger Hale and Robert Lewis the administration The administration of Eastlake Developments Limited the Company Eastlake Developments Limited in Administration PBS Principality Building Society Joint administrators progress report for the period 2 June 2016 to 1 December 2016 2

1. Joint administrators third progress report for the period from 2 June 2016 to 1 December 2016 Introduction We write to provide an update on the progress of the administration, covering the period from 2 June 2016 to 1 December 2016. This report should be read in conjunction with our two previous reports covering the period from appointment on 12 June 2015 to 1 June 2016, which are still available at www.pwc.co.uk/edl We are required to provide certain statutory information pursuant to Rule 2.47(1)(a) to (d) IR86, which is included in Section 2. Asset Realisations in this period Regent Court/Randstad Court In the last report, we advised that an offer had been accepted in relation to this property and a sale had been agreed subject to contract. We are pleased to report that the sale of this property, with total consideration of 4.7 million, completed on 8 June 2016 Total rental income of 380,042 was collected in relation to this property. Following the sale, we have been dealing with certain contractual matters, including completion of the pre-sale service charge regime, procuring certified reconciliations and tenant statements for the purchaser and finalising remaining balances on the service charge accounts. This has entailed ongoing liaison with our solicitors, our service charge agent and the purchaser. We are close to finalising the remaining obligations and therefore expect to be in a position to move towards closing the administration shortly. Receipts and payments account An account of the receipts and payments in the administration for the period from 2 June 2016 to 1 December 2016 is set out in Section 3. Expenses statement A statement of the expenses incurred by the administrators in the period 2 June 2016 to 1 December 2016 is included at Section 5. The statement excludes any potential tax liabilities that may be payable as an expense of the administration in due course because amounts due will depend on the position at the end of the tax accounting period. Administrators remuneration The administrators remuneration has been approved on a time costs basis by PBS as the Company s secured creditor. The time costs incurred in the period covered by this report are 202,374. This includes time in relation to both fixed and floating charge matters. This amount does not necessarily reflect the amount that will be drawn as remuneration by the administrators for this period in due course. In accordance with the requirements of Statement of Insolvency Practice 9, a full analysis of the administrators time costs and Category 2 disbursements for the period 2 June 2016 to 1 December 2016 is provided in Section 4. Where applicable, details of work, which would normally be undertaken by the administrators own staff, that has been subcontracted in the period covered by this report are provided in Section 4. During the period to 1 December 2016, the administrators have drawn post-appointment remuneration of 448,539, bringing total post-appointment remuneration to 548,539. Joint administrators progress report for the period 2 June 2016 to 1 December 2016 3

1. Joint administrators third progress report for the period from 2 June 2016 to 1 December 2016 Creditors rights Creditors have the right to ask for more information within 21 days of this report as set out in Rule 2.48A of the Insolvency Rules 1986. Any request must be in writing. Creditors can also challenge fees and expenses within eight weeks of this report as set out in Rule 2.109. This information can also be found in the guide to fees at: www.icaew.com/en/technical/insolvency/creditors-guides Outcome for creditors Secured creditor PBS s lending to the Company as at the date of administration was in the region of 10.7 million and is secured by a debenture dated 30 June 2004. This security gives PBS fixed and floating charges over all the Company s assets. To date, 7.014 million has been distributed to PBS, including distributions totalling 4.395 million following the sale of Randstad Court. However, we don t think the realisations made will be sufficient to repay PBS in full. Preferential creditors (employees) We don t think there will be any claims from preferential creditors based on what we currently know. Unsecured creditors The prescribed part is a fund that has to be made available for unsecured creditors. It s paid out of net property. Net property is floating charge realisations after costs, and after paying - or setting aside enough to pay - preferential creditors in full. But it only has to be made available where the floating charge was created on or after 15 September 2003. The amount of the prescribed part is: 50% of net property up to 10,000; and 20% of net property above 10,000; but Subject to a maximum of 600,000. There is unlikely to be a dividend for the unsecured creditors under the prescribed part or otherwise as we currently estimate that all floating charge realisations will be required to meet floating charge costs. However we cannot confirm the value of net property, at this stage as this is dependent on future realisations. Further details will be provided in due course. Ending the administration Following disposal of all of the assets of the Company, the administrators envisage that the administration will be brought to an end by filing notice under Paragraph 84(1) Schedule B1 of the Insolvency Act 1986 with the Registrar of Companies, following which the Company will be dissolved three months later. Joint administrators progress report for the period 2 June 2016 to 1 December 2016 4

1. Joint administrators third progress report for the period from 2 June 2016 to 1 December 2016 Next report The administrators anticipate that they will circulate their next report to creditors at the earlier of the conclusion of the administration or in approximately six months. Yours faithfully For and on behalf of the Company Rob Lewis Joint administrator Roger Hale and Robert Lewis have been appointed as joint administrators of Eastlake Developments Limited to manage its affairs, business and property as its agents. Both are licensed in the United Kingdom to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales. The joint administrators are Data Controllers of personal data as defined by the Data Protection Act 1998. PricewaterhouseCoopers LLP will act as Data Processor on their instructions. Personal data will be kept secure and processed only for matters relating to the administration. The joint administrators are bound by the Insolvency Code of Ethics which can be found at: https://www.gov.uk/government/publications/insolvency-practitioner-code-of-ethics. Joint administrators progress report for the period 2 June 2016 to 1 December 2016 5

2. Statutory and other information Court details for the administration: High Court of Justice, Chancery Division, Birmingham District Registry Case 8226 of 2015 Full name: Eastlake Developments Limited Trading name: Eastlake Developments Limited Registered number: 03078869 Registered address: Central Square, 29 Wellington Street, Leeds, LS1 4DL Company directors: Melanie Hall, Bryan Lewis, Marlene Lewis, Guy Lewis Company secretary: Melanie Hall Shareholdings held by the directors and Melanie Hall (23%), Bryan Lewis (27%), Marlene secretary: Lewis (27%), Guy Lewis (23%) Date of the administration 12 June 2015 appointment: Administrators names and addresses: Mr Roger Hale and Mr Robert Lewis, both of PricewaterhouseCoopers LLP, 1 Kingsway, Cardiff, CF10 3PW Details of any extension(s) to the initial On 8 June 2016, the secured creditor extended period of appointment the administration for 12 months to 11 June 2017. Changes in office holder: Not applicable Appointor s / applicant s name and Eastlake Developments Limited, The Lodge, Parc address: Maes Ffynon, Itton, Chepstow, NP16 6BD Objective being pursued by the administrators: Division of the administrators responsibilities: (c) realising the Company s assets to pay a dividend to one or more secured or preferential creditors In relation to paragraph 100(2) Sch.B1 IA86, all of the functions powers and duties of the administrators may be exercised by all or any of the administrators. Proposed end of the administration: Estimated dividend for unsecured creditors: Estimated values of the prescribed part and the company s net property: Whether and why the administrators intend to apply to court under Section 176A(5) IA86: The European Regulation on Insolvency Proceedings (Council Regulation(EC) No. 1346/2000 of 29 May 2000): Dissolution Nil Nil Not applicable The European Regulation on Insolvency Proceedings applies to this administration and the proceedings are main proceedings. Joint administrators progress report for the period 2 June 2016 to 1 December 2016 6

3. Receipts and payments account 12 June 2015 to 1 June 2016 2 June 2016 to 1 December 2016 12 June 2015 to 1 December 2016 FIXED CHARGE REALISATIONS/RECEIPTS Rental income - Maxet House 27,928.20-27,928.20 Rental income - Regent Court - 252,219.49 252,219.49 Sale of Bolt Street 620,000.00-620,000.00 Sale of Lansdown Industrial Estate 810,000.00-810,000.00 Sale of Maxet House, Luton 1,525,000.00-1,525,000.00 Sale of Regent Court and Regent Court South - 4,700,000.00 4,700,000.00 2,982,928.20 4,952,219.49 7,935,147.69 COST OF REALISATION/PAYMENTS Agents' fees (41,256.50) (105,697.33) (146,953.83) Insurance (16,979.68) 2,403.35 (14,576.33) Lease/hire payments (1,854.00) - (1,854.00) Legal fees & disbursements (27,849.33) (30,507.98) (58,357.31) Office holders post-appointment fees (50,000.00) (236,096.00) (286,096.00) Repairs and maintenance (4,172.00) (200.00) (4,372.00) PAYE, NIC & pensions deductions (18,531.51) - (18,531.51) Wages and salaries (55,798.15) - (55,798.15) (216,441.17) (370,097.96) (586,539.13) Distribution to chargeholder - PBS (2,619,000.00) (4,395,000.00) (7,014,000.00) NET FIXED CHARGE REALISATIONS 147,487.03 187,121.53 334,608.56 FLOATING CHARGE REALISATIONS/RECEIPTS Balance at bank 21,961.10-21,961.10 Bank interest 1,204.64 108.88 1,313.52 Refunds 587.90-587.90 Rental income - Bolt Street 45,289.09-45,289.09 Rental income - Regent Court 247,067.97 (119,245.43) 127,822.54 Sale of Land at Carfin 20,000.00-20,000.00 Service charge funds - 41,487.69 41,487.69 Third Party Funds 260.00-260.00 Working capital funding 100,000.00-100,000.00 436,370.70 (77,648.86) 358,721.84 COST OF REALISATION/PAYMENTS Bank charges (111.60) (330.11) (441.71) Legal fees & disbursements (3,181.17) - (3,181.17) Office costs, stationery and postage (228.00) (108.00) (336.00) Office holders pre-appointment fees (42,537.50) - (42,537.50) Office holders post-appointment fees (50,000.00) (212,443.00) (262,443.00) Office holders expenses (262.87) - (262.87) Rent - Regent Court - car park (50,000.00) (2,994.79) (52,994.79) Rent - head office (3,633.33) - (3,633.33) Statutory advertising (76.72) - (76.72) Storage costs (548.34) - (548.34) Telephone, fax etc (2,413.85) - (2,413.85) Utilities and rates (10.57) - (10.57) Working capital funding (100,000.00) - (100,000.00) (253,003.95) (215,875.90) (468,879.85) NET FLOATING CHARGE REALISATION 183,366.75 (293,524.76) (110,158.01) * VAT control account (31,182.27) (82,203.65) (113,385.92) Balance at Bank (held in current account) 299,671.51 (188,606.88) 111,064.63 *Note that a proportion of VAT is irrecoverable ** Certain balances have been re-allocated between the fixed and floating charges, following legal advice Joint administrators progress report for the period 2 June 2016 to 1 December 2016 7

4. Analysis of the administrators remuneration and disbursements for the period Office holders charging and disbursement policy Time charged to the administration is by reference to the time properly given by the administrators and their staff in attending to matters arising. It is the administrators policy to delegate tasks in the administration to appropriate members of staff considering their level of experience and any requisite specialist knowledge, supervised accordingly, so as to maximise the cost effectiveness of the work performed. Matters of particular complexity or significance requiring more exceptional responsibility are dealt with by senior staff or the administrators themselves. All staff who work on these assignments (including cashiers, support and secretarial staff) charge time directly to the assignment and are included within any analysis of time charged. Each grade of staff is allocated an hourly charge out rate which is reviewed from time to time. Work undertaken by cashiers, support and secretarial staff is charged for separately and is not included in the hourly rates charged by partners or other members of staff. Time is charged by reference to actual work carried out on the assignments in 6 minute units. The minimum time chargeable is 3 minutes (i.e. 0.5 units). Hourly rates Specialist departments within the administrators firm also provided expert advice. These teams included Tax, VAT and Pensions. These rates do vary but the figures below provide an indication of the maximum rate per hour. Set out below are the relevant maximum charge-out rates (before VAT) per hour worked for the grades of the administrators staff actually or likely to be involved on these assignments. Time is charged by reference to actual work carried out on the assignment. There has been no allocation of any general costs or overhead costs. In common with all professional firms, the scale rates used by administrators may periodically rise (for example to cover annual inflationary cost increases) over the period of administrations. Adm inistrators Staff Adm inistrators Staff Specialist departm ents Grade 2 June 2016 to 1 July 2016 to 30 June 2016 1 Decem ber 2016 /hour Partner 825 840 1,250 Director 490 500 1,150 Senior Manager 425 435 880 Manager 340 345 7 00 Senior Associate - qualified 255 260 515 Senior Associate - unqualified 185 190 - Associate 165 17 0 255 Support staff 87 89 150 Joint administrators progress report for the period 2 June 2016 to 1 December 2016 8

4. Analysis of the administrators remuneration and disbursements for the period Disbursements policy Our firm s expenses policy allows for all properly incurred expenses to be recharged to the case. Disbursements are charged to the assignment as follows: Category Policy 1 All disbursements not falling under Category 2 are recharged at cost 9.36 2 Photocopying - At 5 pence per sheet copied, only charged for circulars to creditors and other bulk copying. 8.57 Total for the period 2 June 2016 to 1 December 2016 17.93 Brought forward amount 299.24 Total 317.17 Summary of legal and other professional firms The administrators have instructed the following professionals: - Service provided Name of firm / organisation Reason selected Basis of fees Amount paid in the period ( ) Legal advice Eversheds LLP Expertise Time costs 30,507.98 Valuation of business and assets Valuation of business and assets Jessop & Co Jones Lang Lasalle Expertise Expertise % of realisations, plus disbursements % of realisations, plus disbursements 48,464.00 48,500.00 All third party professionals who are remunerated on a time cost basis are required to submit time cost analyses and/or narrative in support of invoices rendered, in order for the administrators to consider whether they are reasonable in the circumstances of the case. Payments to associates No payments have been made to associates during the period. Details of subcontracted work In the period, no work has been done by subcontractors which would normally be done by our staff. Our relationships We have no business or personal relationships with the parties who approve our fees or who provide services to the administration where the relationship could give rise to a conflict of interest. Joint administrators progress report for the period 2 June 2016 to 1 December 2016 9

4. Analysis of the administrators remuneration and disbursements for the period Analysis of time costs for the period from 2 Jun 2016 to 1 Dec 2016 Aspect of assignment Partner Director Senior Manager Manager Senior Associate Associate Secretarial Total hours Time cost Average hourly rate Cumulative time cost 1 Strategy & Planning - - 5.00 31.1 0 9.50 0.60-46.20 15,658.25 338.92 36,657.7 5 2 Secured creditors - 37.50 1 4.55 37.1 0 1.30 - - 90.45 39,897.00 441.09 60,681.25 3 Trading - 2.00-0.25 39.05 1.1 0-42.40 8,611.00 203.09 35,801.50 4 Assets 4.00 4.50 28.60 93.95 30.55 0.30-161.90 60,577.50 37 4.1 7 27 1,665.7 5 5 Inv estigations - - - - 0.20 - - 0.20 52.00 260.00 8,500.7 5 6 Creditors - - - 0.30 0.95 1.7 0-2.95 585.75 1 98.56 3,530.50 7 Accounting and treasury - - - 2.1 0 9.00 9.00 0.25 20.35 4,213.72 207.06 1 9,255.22 8 Statutory and compliance - 6.00 0.1 0 5.55 1 7.7 0 3.85 0.50 33.70 9,642.50 286.1 3 60,892.50 9 Tax & VAT 0.50 0.7 0 7.80 43.90 56.60 90.55 5.00 205.05 62,522.01 304.91 1 82,7 80.01 1 0 Employ ees & pensions - - - - - - - - - - 25,962.25 1 1 Closure procedures - - - 0.20 2.1 0 - - 2.30 615.00 267.39 7 25.00 Total for the period 4.50 50.70 56.05 214.45 166.95 107.10 5.75 605.50 202,374.73 334.23 706,452.48 Brought forward as at 1 June 2016 (restated) 1,549.33 504,077.75 Total 2,154.83 706,452.48 *please note the brought forward has been restated as due to an adjustment in the time reported in the previous period Joint administrators progress report for the period 2 June 2016 to 1 December 2016 10

4. Analysis of the administrators remuneration and disbursements for the period The following table explains the key elements of our work, as summarised in the table of time costs, by grade of staff and area of work Area of Work Work undertaken Why the work was necessary Strategy & planning Cost monitoring Holding update meetings with the case team and appointees To ensure case progression and monitoring costs What, if any, financial benefit the work provided to creditors OR whether it was required by statute Ensures orderly progression of case Secured creditors Liaising with secured creditor regarding asset sales Reporting to secured creditor Calculating and paying distributions to the secured creditor Responding to queries from secured creditor and provision of further work detail in relation to each property disposal Regular updating of estimated outcome statement for the secured creditor s internal reporting requirements Securing of formal fee approval from the secured creditor as required To keep the secured creditor informed, to seek the necessary fee approval and to return funds to the secured creditor. Return of funds to creditor. Fee approval is required by statute. Trading Rental income coding and reporting Responding to tenant queries Liaising with utility agents Liaising with managing agents Supplier queries in relation to ongoing supplies To ensure returns to creditors are maximised Achieving the highest realisations possible for the benefit of creditors Assets Dealing with tenant matters, including providing a new short term lease, dealing with tenant vacation and car parking lease matters Completing sales process for Randstad Court, including extensive liaison with lawyers and agents Legal advice in relation to realisations and to deal with car park lease Finalisation of detailed apportionment exercise and liaison with service charge agent regarding the property sale To ensure returns to creditors are maximised Achieving the highest realisations possible for the benefit of creditors Joint administrators progress report for the period 2 June 2016 to 1 December 2016 11

4. Analysis of the administrators remuneration and disbursements for the period Creditors Accounting and treasury Updating insurance cover and liaising with insurers Finalising rent recovery work Liaison with the service charge agent and solicitors to comply with post completion requirements of the sale and purchase agreement Finalisation of outstanding service charge period accounting, procuring final accounts and tenant statements from the service charge agent for onward transmission to the purchaser Scrutiny of service charge accounts and liaison with service charge agent concerning the status of some post completion liabilities incurred Liaison with solicitors regarding the transfer of service charge surpluses to the purchaser Responding to creditor queries Bank reconciliations Accounting for receipts and payments into the administration accounts To keep the unsecured creditors informed To manage the bank account Required by statute/regulation Ensures proper management of funds held Statutory and compliance Reviewing appointees bonding Updating case records Appointee & manager reviews Responding to enquiries Filing documents at Companies House To comply with statutory obligations Required by statute/regulation Joint administrators progress report for the period 2 June 2016 to 1 December 2016 12

4. Analysis of the administrators remuneration and disbursements for the period Future work We still need to do the following work to achieve the purpose of administration. Area of Work Work we need to do Estimated cost Strategy and Planning Reviewing progress or administration strategy and amend as appropriate 1,000 Whether or not the work will provide a financial benefit to creditors Incidental to proper management of the administration Secured creditors Liaising with secured creditor Reporting to secured creditor Distributing to secured creditor 1,000 Ensuring orderly return of funds to secured creditor Assets Completing sales process for Regent Court including service charge reconciliation 3,000 Achieving the highest realisations possible for the benefit of creditors Creditors Responding to creditor queries received by post and telephone 500 No financial benefit Accounting and treasury Bank reconciliations Accounting for receipts and payments into the administration accounts 2,000 No financial benefit, ensures proper management of funds held Statutory and compliance Reporting to creditors Appointee & manager reviews Complying with statutory filing requirements 4,000 Required by statute Tax & VAT Completing VAT and Tax returns 2,000 Required by statute and ensures the maximum recovery of input VAT, for the benefit of creditors Closure Obtaining clearances Closure procedures 3,000 Required by statute, ensures all administration matters have been dealt with Joint administrators progress report for the period 2 June 2016 to 1 December 2016 13

5. Expenses incurred in the period Expenses statement The following table provides details of our expenses. Expenses are amounts properly payable by us as administrators from the estate and includes our fees, but excludes distributions to creditors. The table also excludes any potential tax liabilities that we may need to pay as an administration expense because amounts becoming due will depend on the position at the end of the tax accounting period. The table should be read in conjunction with the receipts and payments account which shows expenses actually paid during the period and the total paid to date. Expenses Brought forward from preceding period Incurred in the period under review Cumulative Estimated future Administrators' time costs 479,021.75 202,374.73 681,396.48 16,500.00 Administrators' disbursements 299.24 17.93 317.17 500.00 Agents' fees 38,166.50 105,697.33 143,863.83 - Insurance 16,979.68 (2,403.35) 14,576.33 - Legal fees and disbursements 35,862.00 30,507.98 66,369.98 5,000.00 Office costs, stationery and postage 86.40 108.00 194.40 - Rent 12,500.00 2,994.79 15,494.79 - Repairs and maintenance 2,008.00 200.00 2,208.00 - Storage costs 548.34-548.34 1,000.00 Telephones, fax etc 1,991.35-1,991.35 - Wages and salaries 20,055.91-20,055.91-607,519.17 339,497.41 947,016.58 23,000.00 Joint administrators progress report for the period 2 June 2016 to 1 December 2016 14

Rule 2.47 Form 2.24B The Insolvency Act 1986 Administrator s progress report 2.24B Name of Company Eastlake Developments Limited Company Number 03078869 In the High Court of Justice, Chancery Division, Birmingham District Registry Court case number 8226 of 2015 We Roger Hale and Robert Lewis, both of PricewaterhouseCoopers LLP, 1 Kingsway, Cardiff, CF10 3PW Joint administrators of the above company attach a progress report for the period from to 2 June 2016 1 December 2016 Signed Joint Administrator Dated 29 December 2016