PROPOSALS FOR A SCHEME OF ARRANGEMENT

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1 This document is important and requires your immediate attention. It is being sent to persons who are believed to be Scheme Creditors (as defined herein) of Cape Public Limited Company ( Cape ) or certain of its subsidiaries ( Scheme Companies ). Please read the explanatory statement and the proposed scheme of arrangement which together with the notice convening the meetings of Scheme Creditors comprise this document in its entirety. If you have an ongoing asbestos-related personal injury claim against Cape, any of the other Scheme Companies or any of the Additional Companies (as defined herein), you should consult your solicitor or other appropriate professional adviser without delay. If you require further assistance or advice, we suggest that you contact your solicitor, The Citizens Advice Bureau, an asbestos support group, or your current or former trade union who may be able to assist or put you in touch with specialist assistance. You may also contact our telephone helpline on In an endeavour to ensure that solicitors are in a position to advise their clients, a copy of this document has been sent to those firms of solicitors which have in the recent past acted for clients with asbestosrelated personal injury claims against any of the Scheme Companies or any of the Additional Companies. This document is accompanied by a pink and a blue voting form which enable you to vote on the proposals contained within this document. Each voting form comprises a form of proxy and a claims table for voting purposes. Instructions for the completion of these documents are set out in Appendix VI of Section A of this document. It is important that you read these forms and the instructions carefully. PROPOSALS FOR A SCHEME OF ARRANGEMENT ( the Scheme ) (under Section 425 of the Companies Act 1985) between CAPE PUBLIC LIMITED COMPANY and the other SCHEME COMPANIES (as defined in the Scheme) and their respective SCHEME CREDITORS (as defined in the Scheme) Meetings of each class of Scheme Creditor of each of the Scheme Companies to consider the Scheme (the Scheme Meetings ) will be held on 16 May 2006 commencing at a.m. at the Smeaton Vaults room, The Brewery, Chiswell Street, London EC1Y 4SD. A notice of the Scheme Meetings is set out on pages 221 to 223 of this document. Instructions as to the action you should take are set out on pages 189 to 195. You do not need to attend the Scheme Meetings to vote on the proposals; however whether or not you intend to attend one or more of the Scheme Meetings in person, you are requested to complete, sign and return the relevant form(s) of proxy and accompanying claims table(s) for voting purposes sent to you together with this document in accordance with the instructions as soon as possible. 15 March 2006

2 KEY DATES AND EXPECTED TIMETABLE Record Date Scheme documentation posted by Voting Forms requested to be returned by Scheme Creditors meetings Court hearing to sanction the Scheme Scheme becomes effective The dates concerning the Scheme are subject to change. All times are London times unless otherwise stated March 28 March 5.00 p.m. on 12 May 16 May week commencing 12 June not later than 30 June IMPORTANT NOTICE The Directors of the Scheme Companies accept responsibility for the statements, opinions and information contained in this document upon the basis that, to the best of their knowledge, information and belief, having taken all reasonable care to ensure that such is the case, the statements, opinions and information contained in this document relating to the respective Scheme Companies of which they are directors are correct. Certain statements, opinions and information contained in this document are made in reliance on the records of the Scheme Companies and may relate to events which occurred a considerable period of time ago. There is no certainty that the records of the Scheme Companies are accurate and complete records of such events. The statements and assumptions contained in this document are made as at 15 March 2006, unless another time is specified in relation to them, and service of this document shall not give rise to any implication that there has been no change in the facts set forth (or in the facts underlying the assumptions set forth) in this document since that date. None of the Scheme Companies has authorised any person to make any representation, whether oral, written, express or implied, concerning the Scheme, which is inconsistent with the statements made in this document. Consequently, if any such representation is or has been made, it should not be relied upon. The summary of the principal provisions of the Scheme and related matters set out in this document are qualified in their entirety by reference to the Scheme itself, the full text of which is set out in Section B on pages 200 to 220 of this document. Nothing contained in this document shall constitute an admission of any fact or liability on the part of any Scheme Company or any other person in respect of any asset to which it may be entitled or any claim against it. Without prejudice to the generality of the foregoing, save as expressly set out in the Scheme, nothing in the Scheme or the Explanatory Statement or the distribution thereof evidences to any person or constitutes any admission by any of the Scheme Companies, that a person is or may be a creditor of the Scheme Companies. Further, no estimate of the amount of any claim against a Scheme Company specified in the Voting Forms, or otherwise provided for voting purposes, shall be taken into account in litigating or settling claims; any such estimate shall only be used for voting purposes at the Scheme Meetings of Scheme Creditors to consider the Scheme. The failure to distribute the Explanatory Statement to any Scheme Creditor shall not constitute an assertion by any Scheme Company that such person is not a Scheme Creditor of that Scheme Company or that any liability owed to such person is an Excluded Claim. You should not construe the contents of this document as legal, tax or financial advice. If you have already instructed a solicitor you can ask them for advice. Additionally there are various independent bodies you can speak to if you have any questions or require more information. The Citizens Advice Bureau, an asbestos support group, or your current or former trade union may be able to assist you or put you in touch with specialist assistance. 2

3 CONTENTS Page KEY DATES AND EXPECTED TIMETABLE 2 IMPORTANT NOTICE 2 SECTION A : EXPLANATORY STATEMENT 6 1. LETTER FROM THE CHAIRMAN OF CAPE 6 1. Introduction 6 2. Background to and reasons for the Scheme 6 3. Cape s Scheme proposals 7 4. Conditions to Cape s Scheme proposals 8 5. Why have you been sent this document? 8 6. What is a scheme of arrangement? 9 7. The Scheme 9 8. Who are Scheme Creditors? Recourse Scheme Creditors Separate Scheme Meetings The main advantages of the Scheme The possible disadvantages of the Scheme What are Scheme Creditors required to do? The subsequent application to the Court Documents available for inspection Recommendation BACKGROUND TO THE SCHEME History Asbestos-related claims in the UK The Additional Companies Projected future asbestos-related claims against the Scheme Companies Financial inter-dependence of the Scheme Companies Financial information relating to the Group Scheme Companies: History and Financial and Insurance Information Additional Companies: History and Financial and Insurance Information SUMMARY OF THE PROPOSALS ENVISAGED BY THE SCHEME Introduction Conditions Scheme Claims The proposals envisaged by the Scheme Classes of Scheme Creditors Summary of the Scheme When and how the Scheme becomes effective Effect of the Scheme on claims handling Duration Ancillary Agreements Funding of CCS The Payment Percentage Scheme Shares Scheme Directors Modifications to the Scheme 34 3

4 4. THE ANCILLARY AGREEMENTS AND THE SCHEME SHARES Scheme Guarantee Funding Agreement Reimbursement Agreements Contribution Claims Agreement Services Agreement Scheme Shares and Trust Deed Banking Agreement RECOURSE SCHEME CLAIMS Introduction Scheme Claims that may require recourse Events upon which recourse may be permitted CLAIMS HANDLING AND HOW THE SCHEME WILL BE OPERATED General Claims handling services Claims handling protocol Payment of claims Insolvency of a Scheme Company Insolvency of insurers The FSCS and payments by the FSCS Claims handling protocol: special provisions for Recourse Scheme Claims CLAIMS MAPPING AND VALUATION FOR VOTING PURPOSES Of which Scheme Company will I be admitted as a creditor? How do I know which Scheme Company my claim may lie against? What if I do not know which Scheme Company my claim lies against? What if I was employed by, or otherwise might have a claim against, 56 an Additional Company? 5. How will my claim be valued for voting purposes? Further provisions regarding the valuation of claims for voting purposes To which class of creditor will I be admitted? How do I tell which class of creditor I am? Scheme Creditors with settled Scheme Claims ASBESTOS-RELATED CLAIMS OUTSIDE THE SCHEME Excluded Scheme Companies Included Scheme Companies Group Companies not in the Scheme Reimbursement claims Cape East Limited Shipyard Claims Manufacturing claims Dissolved Group Companies Companies sold by the Group South Africa USA Other overseas claims Future Contribution Claims and Future Financial Dependency Claims 65 4

5 9. THE DIRECTORS, LAW DEBENTURE AND THE SCHEME DIRECTORS Directors of the Scheme Companies Interests of the Directors as directors, employees or creditors 68 of Scheme Companies 3. Interests of the Directors in the shares of Cape The effect of the Scheme on the interests of the Directors Interests of Law Debenture Interests of the Scheme Directors ADDITIONAL DEFINITIONS DOCUMENTS AVAILABLE FOR INSPECTION 74 APPENDICES TO SECTION A 75 I SUMMARY GROUP STRUCTURE CHART SHOWING THE SCHEME COMPANIES 76 II FINANCIAL INFORMATION RELATING TO THE GROUP 77 III SCHEME COMPANIES: HISTORY AND FINANCIAL AND 80 INSURANCE INFORMATION IV ADDITIONAL COMPANIES: HISTORY AND FINANCIAL AND 152 INSURANCE INFORMATION V DISSOLVED GROUP COMPANIES 185 VI GUIDANCE NOTES FOR COMPLETION OF THE VOTING FORMS 189 VII FLOWCHART REGARDING VALUATION OF SCHEME CLAIMS FOR 196 VOTING PURPOSES VIII GENERAL DAMAGES - USUAL RANGE OF AWARDS 198 IX PRO FORMA SOLICITOR S LETTER 199 SECTION B: THE SCHEME OF ARRANGEMENT 200 SECTION C: NOTICE OF MEETINGS 221 5

6 SECTION A: EXPLANATORY STATEMENT PART 1: LETTER FROM THE CHAIRMAN OF CAPE Cape Public Limited Company (Incorporated and registered in England and Wales with registered no ) Directors: Registered office: Martin Keith May (Chairman) Cape House Paul Raymond Ainley (Managing Director) 3 Red Hall Avenue Michael Thomas Reynolds (Finance Director) Paragon Business Village John Arthur Pool (Non-Executive Director) Wakefield David McManus (Non-Executive Director) West Yorkshire WF1 2UL To the Scheme Creditors 15 March 2006 Dear Scheme Creditor, 1. Introduction I am writing to you concerning the scheme of arrangement ( the Scheme ) which each of the Scheme Companies proposes to enter into with its Scheme Creditors. The Scheme is intended to provide for the long term financing of a great majority of all future asbestos-related claims likely to be successfully made against the Group. This letter forms part of the Explanatory Statement, the purpose of which is to help Scheme Creditors reach an informed decision on whether to vote in favour of the Scheme at the forthcoming Scheme Meetings when the Scheme proposals will be formally submitted to Scheme Creditors for their approval. The Explanatory Statement: (a) (b) (c) (d) provides you with background information in relation to the Scheme; explains the advantages and disadvantages of the Scheme; explains the main provisions of the Scheme; and provides guidance on how to complete the Voting Forms. Words and expressions defined in the Scheme shall have the same meanings in this letter and the Explanatory Statement. In addition, words and expressions defined in Part 10 of this Section A shall have the same meanings in this letter and the Explanatory Statement. The Scheme is set out in full in Section B on pages 200 to 220. I would urge you to read the whole of this document very carefully and take appropriate professional advice. 2. Background to and reasons for the Scheme Each of the Scheme Companies is a company in the Group. In the past, the Scheme Companies industrial activities in the UK often involved the use of asbestos. This has meant that a number of people both inside and outside our premises may have been exposed to asbestos and its associated health risks. Whilst the large majority of the Scheme Companies UK employees have not been affected, unfortunately a number of employees, contractors and others who have come into contact with the Scheme Companies asbestos-related activities have been and will be diagnosed with asbestos-related conditions. Such persons may in the future bring a claim for compensation against one or more Scheme Companies. Whilst the Scheme Companies have certain periods of insurance cover, there remains significant financial exposure where there is either no or only partial insurance cover or the insurer is insolvent. Today, Cape is a leading international provider of industrial support services to the energy sector and is recognised for its health and safety procedures and record. Services include the provision of scaffolding, insulation, specialist coatings, fire protection, refractory linings and other associated services including asbestos removal both on and offshore. 6

7 PART 1 Claims against the Scheme Companies will continue for the foreseeable future. It remains very difficult to predict with any certainty what the levels of these claims will be, when they will arise and the financial consequences of these claims on the continued solvency of the Scheme Companies. It is therefore important that the Group remains in a position to generate the resources needed to meet these claims as and when they fall due. A number of other companies faced with the same issues have been forced into insolvency, often leaving claimants, where there is no insurance cover, with little prospect, if any, of receiving compensation. As can be seen from the summary of the profit and loss accounts and balance sheets of the Group for the years ended 31 December 2002, 2003 and 2004 and for the six months ended 30 June 2005, set out on pages 78 and 79 of this document, the Group is at present generating sufficient funds to discharge its liabilities as and when they fall due. The Cape Directors expect this situation to continue. Nevertheless, the uncertainty over asbestos-related claims in the future is having a prejudicial effect on the growth and development of the Group s businesses. As a result of the uncertainty it is likely that the Group has lost a number of business opportunities, and absent the Scheme may continue to do so, as for example the Group has, at times, been unable to obtain funding at commercially acceptable rates. There are also certain significant organisations in the Group s fields of activity which have limited or placed conditions on their dealings with the Group, for example, by demanding guarantees or bonds in circumstances in which they would not do so of the Group s competitors. The Cape Directors believe that such restraints on the Group s ability to expand should be alleviated to a significant extent if the Scheme were in place. The purpose of the Scheme is to provide long term financing of the claims of Scheme Creditors in a manner which on the one hand provides the Group with significant protection from the risk of insolvency and on the other hand, by reason of the enhanced opportunities which this protection provides, makes it more likely that over time the Group will be able to discharge its liabilities to Scheme Creditors in full. The intention is that the Scheme will provide the Group with a stronger and more secure financial base. The Directors believe that from this base the Group should be better able to generate the resources needed to secure the continued payment of compensation to Scheme Creditors. The Directors also believe that the Scheme, if implemented, should remove a significant obstacle to the Group s growth and should assist the Group in increasing its business activities. 3. Cape s Scheme proposals On 16 June 2005, Cape announced its Scheme proposals, including the establishment of an initial 40 million fund, into which Cape will have ongoing top-up funding obligations, to be used in the settlement of Scheme Claims in conjunction with the Scheme. On 11 July 2005, the shareholders of Cape approved the Scheme (subject to any subsequent modifications and amendments) and on 15 July 2005 Cape completed the issue of 29,090,910 new Ordinary Shares to raise approximately 32 million (before expenses), of which 22 million is to part-fund the Scheme. Cape s original proposed Scheme timetable was that the document containing the Scheme (i.e. this document) would be sent to Scheme Creditors in August 2005 and that the meetings of Scheme Creditors to approve the Scheme would be held in October On 21 July 2005, Cape announced that it had received feedback to its Scheme proposals from a number of relevant and interested parties; that some parties had requested that due to the complicated nature of the proposals the timetable should be extended to provide a further opportunity to review and evaluate the proposed Scheme prior to the Scheme Meetings; that as a consequence, Cape would not be seeking the Court s permission to convene the Scheme Meetings on the timetable originally envisaged; and that Cape would continue to consult with interested parties. Cape subsequently announced that the actuarial review of the Scheme Companies future liability for Scheme Claims had not taken full account of all claims that may be made against the Scheme Companies. On 16 November 2005, Cape announced the revised actuarial estimate for future Scheme Claims. Unless expressly stated to the contrary all references in this document to the estimate of the value of Scheme Claims are to such revised figures. The revised estimate is contained in the Tillinghast Reviews and the Tillinghast Review Summaries. If the Scheme is approved by Scheme Creditors and is sanctioned by the Court, Cape will, prior to the Effective Date, pay the 22 million raised from its shareholders in July 2005 to CCS (the new subsidiary of Cape incorporated to hold and administer the Scheme Fund) under the terms of the Funding Agreement (the terms of which are summarised at paragraph 2 of Part 4 of this Section A). 7

8 PART 1 The balance of the initial funding is being provided by a new 15 million loan facility from Barclays and 3 million from the Group s own resources. 4. Conditions to Cape s Scheme proposals Cape s original Scheme timetable was that the Scheme Meetings would be held in October Certain elements of the Scheme proposals included in them a long-stop date of 30 December 2005, by which the Scheme was required to have become effective. In particular a number of the rights attaching to the PLC Scheme Share are expressed to fall away if the Scheme had not become effective by 30 December Further details regarding the PLC Scheme Share are set out at paragraph 7 of this Part 1 below. As the Scheme did not become effective by 30 December 2005, Cape s shareholders are required to approve a renewal of the rights attaching to the PLC Scheme Share. The Resolution to this effect will be proposed at Cape s EGM to be held on or around 12 April If the Resolution is not passed at the EGM the Scheme cannot become effective, even if Scheme Creditors were to vote to approve the Scheme. This is because the Scheme is conditional upon the Resolution being passed. It is a condition of both the Banking Agreement and the rights attaching to the PLC Scheme Share (assuming that the Resolution is passed at the EGM) that the Scheme becomes effective, following its approval by Scheme Creditors and the Court, not later than 30 June If the Scheme does not become so effective the Group will not be entitled to draw down the new facility and the special rights attaching to the PLC Scheme Share will again cease to apply. If the Scheme does not become effective, the Cape Directors will use the balance of the proceeds of the issue of shares in July 2005 to: reduce Group borrowings; provide working capital to the Group; invest in organic growth of the overseas business, particularly in the Middle East and on Sakhalin Island, and other opportunities; and fund suitable acquisition opportunities which expand the range of services or extend existing Group activities. In these circumstances, the payment of asbestos-related claims would, based on the recent history of settlements, continue to be funded from future cashflows generated by the Group s trading operations. However no part of the monies raised by Cape from its shareholders in July 2005 would be specifically allocated for the payment of asbestos-related claims. Scheme Creditors should also be aware that, if the Scheme does not become effective, any investment in the organic growth of the Group s overseas business and any acquisitions that may be made by the Group using any of the balance of the issue proceeds referred to above that are currently allocated to the Scheme are likely to be made by members of the Group that are not Scheme Companies. 5. Why have you been sent this document? In addition to the activities of the Scheme Companies themselves, certain Scheme Companies may be liable for the acts and omissions of certain subsidiaries and former subsidiaries of Cape which are not Scheme Companies (the Additional Companies ) as a consequence of certain intra-group arrangements that were operated between such companies and the Scheme Companies. Further details of the Additional Companies are set out at paragraph 3 of Part 2 of this Section A. You have been sent this document because: you are an employee of a Scheme Company or an Additional Company, you used to be an employee of a Scheme Company or an Additional Company, you have had a commercial relationship with a Scheme Company or an Additional Company, you may have a claim in respect of an asbestos-related condition against a Scheme Company or an Additional Company, you may have a claim in respect of an asbestos-related condition against a Scheme Company or an Additional Company which has been settled on a provisional basis, 8

9 PART 1 you may at some time in the future have a claim in respect of an asbestos-related condition against a Scheme Company or an Additional Company, either on your own behalf or on behalf of a relative (including a relative who may have died), or you registered with the Scheme Companies as a Scheme Creditor. Please note, however, that receipt of this document does not necessarily mean you are a Scheme Creditor. 6. What is a scheme of arrangement? A scheme of arrangement, such as the one proposed, is a legally binding Court approved arrangement or compromise between a company and its creditors (or any class of them), in this case, its current and future claimants in respect of UK asbestos-related claims, pursuant to section 425 of the Companies Act. In order to be approved, each Scheme Company s Scheme requires that a majority in number as represent 75 per cent. or more by value of claims of those claimants in respect of that Scheme Company who attend and vote at the relevant class meeting, either in person or by proxy, vote in favour of the Scheme. Following approval by the requisite majorities of Scheme Creditors, the Court s sanction will then be sought. If sanctioned by the Court, the Scheme will, upon a copy of the Court order being filed with the Registrar of Companies, become effective and bind each Scheme Company and all Scheme Creditors of that Scheme Company regardless of whether they attended the meeting or how they voted. 7. The Scheme A key element of the Scheme is the establishment of long-term funding of Scheme Claims in a manner which is designed to make the Group better able to generate the necessary resources to pay Scheme Claims. The long-term funding will be held and ring fenced in CCS, a newly-formed subsidiary of Cape, and will be under the control of the directors of CCS which will include two independent Scheme Directors. This funding will be invested by CCS in accordance with investment criteria which will be determined by, and may only be altered with the consent of, the independent Scheme Directors. The initial level of funding of 40 million represents not less than the estimate of an independent actuary (Tillinghast) of the amounts payable by the Scheme Companies in respect of Scheme Claims not met by insurance recoveries (including recoveries received from the FSCS) over at least the following eight Financial Years (commencing on 1 January 2006) together with the running costs of CCS for the next three Financial Years. The initial funding of 40 million is being provided as to 22 million from the proceeds of the fundraising in July 2005 from Cape s shareholders, 3 million from the Group s existing resources and 15 million from the new bank facility with Barclays. The level of funding will be independently reviewed every three years, starting in 2008, to determine the funding required to cover expected claims over the following nine Financial Years. If the review reveals that there is a shortfall, Cape will top up the funding over the next three years out of available cash flows. The intention is that following each top-up payment there should be sufficient monies available to CCS to fund the payment of claims against Included Scheme Companies not met by recoveries from an insurer or the FSCS for the following six Financial Years together with three years of CCS s running costs. It should be emphasised that the sum of 40 million has not been calculated by reference to an estimate of the likely amount of Scheme Claims. It simply represents the aggregate of the amounts Cape was able to raise from its shareholders and the level of debt Cape can reasonably maintain for the purposes of the Scheme. Of fundamental importance to the Scheme are the provisions as to the topping up of that sum described above. Should Cape be unable to meet its top-up obligations and the level of funding fall below a specified level, only a percentage of each Scheme Claim will be paid unless and until the funding is restored to that specified level. In the event of no future funds being available, pro-rata payments will be made until the funding is exhausted. In return for the setting up of this initial funding and ongoing top-up obligations, the Scheme Creditors will be bound, except in certain limited circumstances, only to recover payment of their settled or agreed Scheme Claims (including damages and costs) from CCS and not the relevant Included Scheme Company. The Scheme, if approved by Scheme Creditors and sanctioned by the Court, will be binding on both present and future Scheme Creditors. 9

10 PART 1 The obligations of Cape to top up the fund will be limited to 70 per cent. of the consolidated adjusted operational cashflow of the Group. Provided that Cape continues to contribute that percentage to the fund then, subject to the rights of Recourse Scheme Creditors, Cape and the other Included Scheme Companies will be protected from the risk of insolvency so far as Scheme Claims are concerned. The Cape Directors believe that this protection should significantly enhance the ability of the Group to grow its business. At the same time the effect of the continuing top-up obligations is that if at any particular time Cape ceased to be able to make any further contributions, and on a worst case scenario Cape were to enter into insolvency proceedings, there would exist a fund which would be dedicated to the discharge of asbestosrelated claims included in the Scheme. In the absence of the Scheme, this would not be the case, and asbestos-related claims, whether proposed to be within the Scheme or not, would simply rank alongside all other unsecured creditors. In order to protect the interests of Scheme Creditors, a special voting share has been created in each of CCS and Cape. Subject to the passing of the Resolution at the EGM, the rights attaching to these shares are designed to ensure that the Scheme Assets are only used to settle Scheme Claims and ancillary costs and impose restrictions on dividends and other distributions by Cape. Cape may not make any distribution until Thereafter Cape may only make distributions if the amount of funding available to CCS is (and is expected to remain so until the end of the next Financial Year) greater than 110 per cent. of the amount of projected Scheme Claims in the following six Financial Years and three years of CCS s running costs. The special voting shares are to be held by Law Debenture as an independent third party on trust for Scheme Creditors. The board of CCS will include two independent Scheme Directors, to be appointed by Law Debenture, to represent Scheme Creditors interests. The first Scheme Director is Lord Meghnad Desai. It is intended that a further Scheme Director will be appointed by Law Debenture prior to the hearing at which the Court will be asked to sanction the Scheme. Lord Desai Lord Meghnad Jagdishchandra Desai was born in 1940 and was raised to peerage as Baron Desai, of St Clement Danes in the City of Westminster in Lord Desai attended University of Bombay and the University of Pennsylvania. He is a member of the trade union AUT and was the Chair of the Management Committee of City Roads His career accomplishments include serving as an Associate specialist with the Department of Agricultural Economics at the University of California, Berkeley, and successively Lecturer, Reader and Professor of Economics at the London School of Economics where he taught from 1965 to He is now Emeritus Professor of Economics and an Honorary Fellow of the LSE. He was Founder Director of the Centre for the Study of Global Governance and the Development Studies Institute at the LSE. He has written more than 20 books and 200 articles in learned journals. He has served as the Opposition Spokesperson on Health and Treasury and Economic Affairs, and has four honorary doctorates. Lord Desai has special interests in economic policy, education and development, and is also the author of several publications on economics. As the Scheme is being proposed independently by each Scheme Company, it is possible for it to become effective in respect of only some and not all the Scheme Companies, provided always that the Scheme will not become effective unless the Scheme for each of the Key Scheme Companies (being Cape, CISL, Predart Limited and Somewatch Limited) becomes effective. It is for this reason that, depending on the context, in this Explanatory Statement the expressions Scheme Creditor and Scheme Claim include both Scheme Creditors and Scheme Claims for the purpose of the Scheme Meetings and/or those of the Scheme Creditors and Scheme Claims in relation to whom or which the Scheme becomes effective. If the Scheme is sanctioned the rights and restrictions conferred and imposed on Scheme Creditors will be contained in part in the Scheme itself and in part in the Ancillary Agreements and in the articles of association of Cape and CCS. Although the Scheme itself will only be capable of being altered by means of a subsequent scheme of arrangement sanctioned by the Court, the provisions of the Ancillary Agreements and the articles of association of PLC and CCS will be capable of being altered with the consent of the Scheme Shareholder and the Scheme Directors. This is proposed because the Scheme may continue for up to 40 or 50 years, during which time the surrounding circumstances may be subject to significant change, and the Cape Directors consider that it is in the interests of all concerned that there should be an element of flexibility, given that the interests of Scheme Creditors will be protected by the 10

11 PART 1 requirement of consent from the Scheme Shareholder and the Scheme Directors, whose role it is to protect those interests. Detailed explanations of the Scheme, the Ancillary Agreements, claims handling and how the Scheme will be operated are set out in Parts 3, 4, 5 and 6 of this Section A. 8. Who are Scheme Creditors? Scheme Creditor means any person or organisation who has or may, either now or in the future, have a Scheme Claim against any of the Scheme Companies. With the exceptions described below, Scheme Claim means any claim for damages in respect of personal injury arising out of or connected in any way with exposure to asbestos in the UK which is attributable or alleged to be attributable in whole or in part to any act or omission of any Scheme Company. The Scheme will not involve all the possible creditors of the Scheme Companies with such claims. It will be limited to such claims which are governed by the laws of England, Scotland or Northern Ireland. In the case of individuals it will be limited to claims either of individuals resident in the United Kingdom or, if not resident in the UK, of those individuals whose claim against a Scheme Company is based upon exposure to asbestos in the UK during the course of his employment with that Scheme Company. In the case of companies and other organisations it will be limited to claims of companies or other organisations which are incorporated in, or have other connections with (such as a branch in) the UK. These limitations are proposed in order to avoid considerable problems regarding the identification and notification of creditors which would otherwise arise. Of the claims which, despite these limitations, would otherwise be included in the Scheme, it is proposed to exclude the Shipyard Claims. The Cape Directors consider that it is appropriate to exclude the Shipyard Claims from the Scheme as these claims have already been the subject matter of a compromise. It is also proposed to exclude claims from the purchasers of the Group s former manufacturing division (being certain companies within the Promat group). This is because under the terms of the disposal of the former manufacturing division, Cape requires the consent of the purchasers to effect the Scheme. The purchasers have conditionally agreed not to exercise their rights in respect of the Scheme on certain terms, principally that they will not be Scheme Creditors and that any claims they may have will not be Scheme Claims. Scheme Claims also do not include claims brought by a person where it is inherently impossible at the Record Date to identify the person entitled to bring the claim. Such persons include certain claimants under the Fatal Accidents Act 1976 (including similar provisions in Scotland and Northern Ireland) and persons who, after the Record Date, employ a Scheme Creditor and expose him to asbestos. Further details regarding the persons who will not be Scheme Creditors are set out at paragraph 13 of Part 8 of this Section A. The Scheme will also exclude claims which would otherwise be Scheme Claims and are made against Included Scheme Companies by other Included Scheme Companies. The Scheme Companies have each agreed, conditional upon that company becoming an Included Scheme Company, not to make any claims against the other Included Scheme Companies other than as expressly provided by the PLC Reimbursement Agreement (the terms of which are summarised at paragraph 3.2 of Part 4 of this Section A). For the reasons described at paragraph 3 of Part 2 of this Section A below, the Cape Directors are aware that the Financial Services Compensation Scheme (the FSCS ) and certain insurers are likely, since approximately September 2001, to have paid out monies in respect of certain claims in circumstances that may entitle the FSCS and those insurers to seek repayment of certain of these monies from Cape. Such claims from the FSCS and the insurers (which are referred to in the Scheme as Reimbursement Claims ) will not be Scheme Claims. As is described further at paragraph 3 of Part 2 of this Section A below, agreement has not yet been reached between the Scheme Companies and the FSCS and those insurers regarding the timing and quantum of any Reimbursement Claims. Persons who only have asbestos-related claims against other companies in the Group, not being Included Scheme Companies (whether the relevant company was not proposed as a Scheme Company or the Scheme does not become effective in respect of that company), will not be Scheme Creditors and their claims will not be Scheme Claims. However, as a result of the various intra-group arrangements between the Scheme Companies and between the Scheme Companies and the Additional Companies (see paragraph 3 of Part 2 of this Section A), you may have a claim against more than one company in the Group. If your claim is against one company which is an Included Scheme Company and one company which is not an Included Scheme Company, your claim against the Included Scheme Company will be payable by CCS under the Scheme but your claim against the other company will not be payable by CCS. 11

12 PART 1 Dissolved Group Companies (including those which have been re-instated to the Register of Companies for the purposes of claimants taking an assignment of those companies rights against their insurers under the 1930 Act) and companies previously sold by the Group are not Scheme Companies and any claims against those companies are not Scheme Claims and are outside the Scheme. However, if you were employed by, or otherwise exposed to asbestos by, an Additional Company (some of which are Dissolved Group Companies) or by an Excluded Scheme Company you may in certain circumstances have a claim against a Scheme Company. Any claim that you have against a Scheme Company that is not an Excluded Claim and otherwise is a claim to which the Scheme applies will be a Scheme Claim. Any claim that you have against an Additional Company (whether or not it is also a Dissolved Group Company) or against an Excluded Scheme Company will not be a Scheme Claim. Claims which are outside the Scheme will only be settled to the extent that the relevant company has assets and is able to do so and claimants will not be entitled to receive any payment from CCS in respect of claims outside the Scheme. Further particulars of asbestos-related claims to which the Scheme does not apply are contained in Part 8 of this Section A. 9. Recourse Scheme Creditors If a Scheme Creditor has a Scheme Claim which is covered in whole or in part by insurance (his Recourse Scheme Claim ), there are certain circumstances in which he might, if the Included Scheme Company concerned were insolvent and he was not bound by the Scheme, recover greater compensation for that part of his Scheme Claim which is covered by insurance than is available from CCS under the Scheme. This would be the case where, if the Included Scheme Company was insolvent, he could recover compensation either from an insurer which is solvent or from the FSCS. Details of the circumstances in which a Scheme Creditor in this position (a Recourse Scheme Creditor ) might be able to obtain such greater compensation are set out in Part 5 of this Section A. In order to preserve the rights of a Recourse Scheme Creditor in this respect, the Scheme provides that in certain circumstances he will cease to be entitled to all or any further payment from CCS in respect of his Recourse Scheme Claim and will be entitled instead to enforce his Recourse Scheme Claim in whole or in part against the relevant Included Scheme Company or Included Scheme Companies. The circumstances in which this will happen are (i) where the relevant Included Scheme Company has become insolvent, (ii) where there has been a reduction to 50 per cent. or below of the percentage of each Scheme Claim which is being paid or (iii) where there has been a reduction of this percentage below 100 per cent. (but above 50 per cent.) and the Scheme Creditor has not been paid in full within 12 months of his Scheme Claim being established. In the case of (i) this will happen automatically. In the case of (ii) and (iii) it will only happen if the Recourse Scheme Creditor so elects. The broad effect of (ii) and (iii) is therefore that unless the claims of Recourse Scheme Creditors are paid in full within 12 months of being established they may elect to be in a position to force the relevant Included Scheme Company into insolvency so that they can pursue the greater compensation to which they may be entitled in such a circumstance. 10. Separate Scheme Meetings Whether in relation to any scheme of arrangement more than one meeting of the creditors of a company is necessary depends upon an analysis of the relevant legal rights of the creditors against the company before and after the scheme. Creditors can be in the same class for voting purposes if their rights are sufficiently similar for it to be possible for them to consult together with regard to a common interest. Their legal rights do not, therefore, have to be identical. If their rights are sufficiently dissimilar such that it is impossible for them to consult together with regard to a common interest, creditors must be placed in different classes for voting purposes. The Court has directed that there should be two class meetings of Scheme Creditors for each Scheme Company. This is because of the special rights to be conferred under the Scheme on Scheme Creditors whose Scheme Claims are in whole or in part the subject of a contract of insurance as described in paragraph 9 above. For the purposes of the Scheme Meetings, the proposed classes of Scheme Creditor are: (a) Recourse Scheme Creditors whose Scheme Claims may (but not necessarily will) be the subject matter of a contract of insurance; and 12

13 PART 1 (b) General Scheme Creditors whose Scheme Claims may (either in whole or in part) turn out to be payable only by CCS. As a result of the nature and complexity of the Scheme Companies insurance coverage, the length of the periods over which exposure may have taken place, and the uncertainty as to whether an asbestos-related claim will arise, and if so when and in respect of what condition, it is not possible at this stage to determine in relation to the Scheme Claim of a particular Scheme Creditor whether it will be a Recourse Scheme Claim. It should, however, be possible to determine whether it may be a Recourse Scheme Claim. It is therefore proposed that for the purposes of the meetings the class of Recourse Scheme Creditors should be composed of all those who may have Recourse Scheme Claims. As all such Scheme Creditors will know that they may have such claims they will all be in a similar position. However in the event that they do have Recourse Scheme Claims, the rights which they would have to recover compensation, on the insolvency of a Scheme Company, may differ. For example, some may be entitled to payment of up to 100 per cent. compensation from the FSCS, others to compensation from the FSCS up to 90 per cent., and others to compensation from a solvent insurer. However these are differences that exist independently of the Scheme and are not created by the Scheme. Moreover at the date of the Scheme Meetings it will be impossible to tell to which rights (if any) those in the class of Recourse Scheme Creditors will ultimately be entitled. In contrast it is extremely likely that at the date when the Scheme Meetings are held it will be apparent that all Scheme Creditors who vote at the meetings are persons who may bring a claim which is a General Scheme Claim. For example there may be no identifiable contract of insurance which will respond to the claim or by the time that the claim is brought the insurer may no longer be obliged to respond. For this reason it is likely that all Scheme Creditors who vote may be admitted to vote at the meetings of General Scheme Creditors and a large number of Scheme Creditors will also be admitted to vote at the meetings of Recourse Scheme Creditors. If a Scheme Creditor who is admitted to vote solely as a General Scheme Creditor should turn out to have a Scheme Claim which is covered in whole or in part by a contract of insurance, he will be entitled to the rights conferred on Recourse Scheme Creditors under the Scheme and he will be a Recourse Scheme Creditor for the purposes of the Scheme. The only Scheme Creditor who will not be eligible to vote at any of the Scheme Meetings is a Scheme Creditor whose Scheme Claim is, at the date of the Scheme Meetings, settled or determined as to both liability and quantum on a final (rather than provisional) basis. This is because the Scheme provides that persons with established claims against the Included Scheme Companies will have their claims paid in full within 20 business days of the Scheme becoming effective. Scheme Creditors who have agreed their claim on a provisional basis will be permitted to vote at the Scheme Meetings as they may bring future Scheme Claims. 11. The main advantages of the Scheme The Directors consider that the Scheme should be advantageous to their respective Scheme Creditors in the following manners: (a) the Scheme should provide more security to Scheme Creditors of Included Scheme Companies in that an initial fund of 40 million will be ring-fenced for the payment of Scheme Claims not covered by insurance. Based upon an actuarial valuation this funding should be sufficient to pay in full Scheme Claims not met by recoveries from an insurer or the FSCS which fall due during at least the next eight Financial Years (commencing on 1 January 2006); (b) following three-yearly independent actuarial reviews, Cape will be obliged to top-up CCS s funding out of its available operating cashflows in equal instalments over the next three years so that following each top-up there should be sufficient monies to fund the payment of Scheme Claims for the following six Financial Years; (c) it should be emphasised that the sum of 40 million has not been calculated by reference to an estimate of the likely amount of Scheme Claims. It simply represents the aggregate of the amounts Cape was able to raise from its shareholders and the level of debt Cape can reasonably maintain for the purposes of the Scheme. Of fundamental importance to the Scheme are the provisions as to the topping-up of that sum described above; 13

14 PART 1 (d) (e) (f) (g) (h) (i) the obligations of Cape to top up the fund will be limited to 70 per cent. of the available cash resources of the Group. Provided that Cape continues to contribute that percentage to the fund then, subject to the rights of Recourse Scheme Creditors, Cape and the other Included Scheme Companies will be protected from the risk of insolvency so far as Scheme Claims are concerned. The Cape Directors believe that this protection should significantly enhance the ability of the Group to grow its business; by providing Included Scheme Companies with significant protection from insolvency, and in due course permitting limited distributions to Cape s shareholders so long as ongoing funding requirements are met, the Scheme should put the Group on a more secure financial footing; and by reason of the enhanced opportunities for the Group which this should provide should make it more likely that over time the Included Scheme Companies will be able to discharge liabilities to their Scheme Creditors in full; at the same time the effect of the continuing top-up obligations is that if at any particular time Cape ceased to be able to make any further contributions, and on a worst case scenario Cape were to enter into insolvency proceedings, there would exist a fund which would be dedicated to the discharge of asbestos-related claims included in the Scheme, whereas in the absence of the Scheme, this would not be the case, and asbestos-related claims, whether proposed to be within the Scheme or not, would simply rank alongside all other unsecured creditors; the Scheme Shareholder s consent will be required for the sale or disposal of certain of the Group s assets and businesses. The Scheme Shareholder may only give such consents on the recommendation of the Scheme Directors. Such recommendations may only be given if the Scheme Directors consider that such sales or disposals would not be materially prejudicial to the interests of Scheme Creditors (see paragraph 6.3 of Part 4 of this Section A below). The Scheme Shareholder must have regard to the same criteria in giving any consents. If the Scheme is not approved, the Group will not be subject to the same restrictions or limitations on its activities; CCS s obligation to pay those Scheme Claims that are not the subject matter of a contract of insurance is not dependent upon the continued solvency of the relevant Included Scheme Company or Included Scheme Companies. Absent the Scheme, a claimant whose claim against an Included Scheme Company was not the subject matter of a contract of insurance would, if he already had an accrued cause of action, rank as an unsecured creditor in any insolvency of that Scheme Company. The Directors consider that it is likely that any such claimant would receive little or no payment in respect of his claim. As the law now stands a claimant who had not yet suffered an actionable injury, and therefore did not have an accrued cause of action, would not rank as a creditor in the insolvency. However, it is expected that the rules will be changed to remove this restriction. Be that as it may, under the Scheme CCS will be obliged, provided that it has sufficient funds, to make payment of the whole of the claimant s claim, on the terms of the Scheme Guarantee; and with the exception of Cape and CISL (and to a much lesser extent Predart Limited, Cape Calsil Systems Limited and Cape Building Products Limited) the Scheme Companies have few or no assets and rely upon other Group Companies to finance the settlement of asbestos-related claims against them. As a result of various intra-group arrangements and transactions, Scheme Creditors may have claims against more than one Scheme Company. The Scheme is intended to regulate this position and should provide more certainty to the Scheme Creditors of Included Scheme Companies that they will receive compensation in respect of their claim. For the purposes of sub-paragraph (h) above an individual Scheme Creditor will have an accrued cause of action when he has suffered an asbestos-related condition which involves an injury for which the Court will award damages. Following a recent decision of the Court of Appeal (as to which see further page 21 below) pleural plaques do not amount to such a condition even when combined with stress and anxiety which they engender. 14

15 PART The possible disadvantages of the Scheme The Scheme Creditors should be aware of the following possible disadvantages in considering the Scheme: (a) (b) (c) (d) the top-up obligations of Cape are limited to 70 per cent. of the Group s consolidated adjusted operational cashflow (as defined in the Funding Agreement). Should Cape be unable to meet its top-up obligations and the level of funding fall below a specified level, only a percentage of each Scheme Claim will be paid unless and until the funding is restored to that specified level. Unless the Scheme Directors reasonably believe that sufficient future top-up funds will be available to restore funding to that specified level, pro-rata payments will be made to Scheme Creditors on a run-off basis (i.e. on a basis under which payments are only made if there are sufficient reserves to ensure that all claimants receive the same proportion of their claims); at paragraph 8 above it is explained that Reimbursement Claims will not be Scheme Claims. It is also explained that the Scheme Companies have not yet agreed the timing and quantum of any Reimbursement Claims with the FSCS and the relevant insurers. Depending upon the final agreements with such parties as to quantum and timing of repayment, these claims may reduce the available cash flows out of which Cape will be able to top up the Scheme Assets, at least in the short to medium term. This in turn could cause the Payment Percentage to be reduced; whether the funding in CCS is sufficient to settle all Scheme Claims payable by CCS will depend on the continued successful trading of the Group and the accurate projection of Scheme Claims. The Scheme may, in certain circumstances, affect the timing of the payment of compensation to, or the amounts received by, Scheme Creditors. Long-term trading projections, as well as actuarial estimates of potential future claims, are inherently difficult to predict with accuracy and the occurrence of any of the following may result in Cape being unable to provide the further payments to ensure that CCS is fully funded: if there is an extended and material deterioration in the Group s trading performance; if there is either a significant one-off or a continued increase in the number or value of Scheme Claims; if there is a material change in the legal or regulatory environment surrounding asbestos-related conditions resulting in, for example, a significant increase in the amount of damages awarded and the costs associated with defending a claim or the admission of a new class or type of claimant whether in or outside the Scheme; or if investment returns fall below, and the effect of inflation on Scheme Claims rises above, current expectations; and CCS s assets will be available on an equal basis to settle the Scheme Claims of all Included Scheme Companies. In the event of a shortfall, Scheme Creditors of all Included Scheme Companies who have outstanding claims will have their Scheme Claims paid at the then prevailing Payment Percentage (details of how the Payment Percentage will be set are contained in paragraph 12 of Part 3 of this Section A). In the event that the Scheme Companies were to become insolvent absent the Scheme, the Directors consider that it is likely that creditors with Scheme Claims that were not the subject matter of any contract of insurance would receive little or no payment in respect of their claims. It is however possible that, absent the Scheme, creditors of different Scheme Companies may in these circumstances receive differing levels of payment based upon the available assets at the relevant time of the Scheme Company against which they had a claim. Nevertheless, in the absence of unexpected circumstances, the Cape Directors consider that the initial level of funding and ongoing top-up obligations should enable CCS to pay Scheme Claims in full for as long as Scheme Claims continue to be made against the Included Scheme Companies. 13. What are Scheme Creditors required to do? If you are a person in one of the categories described in paragraph 5 above, you may be a Scheme Creditor. You may be a Scheme Creditor whether or not you currently have an asbestos-related condition and whether or not you are currently bringing a claim. 15

16 PART 1 Further guidance as to whether you are a Scheme Creditor, the Scheme Company or Scheme Companies against which you may have a Scheme Claim and which class or classes of Scheme Creditor you fall into for the purposes of the Scheme Meetings is set out in Part 7 of this Section A. If you are a Scheme Creditor of a Scheme Company, you are entitled to attend and vote at the relevant Scheme Meeting or Scheme Meetings of Scheme Creditors of that Scheme Company. It is not necessary that you attend in person in order to vote; you may vote by proxy instead. The procedures for voting by proxy are set out below. The Scheme Meetings have been convened as directed by the Court for the purpose of considering and, if thought fit, approving the Scheme in relation to the relevant Scheme Company. The Scheme Meetings will be held on 16 May 2006 commencing at a.m. (London time) at the Smeaton Vaults room, The Brewery, Chiswell Street, London EC1Y 4SD. Prior to the commencement of the Scheme Meetings there will be a general question and answer session between a.m. and a.m. Representatives from the Cape Board and, it is anticipated, both of the Scheme Directors will be present to take questions from Scheme Creditors, their advisers and representatives and from any other interested persons relating to the Scheme. Notice of the Scheme Meetings is included at Section C of this document. Scheme Creditors may attend any relevant Scheme Meeting in person (or, if a corporation, by a duly authorised representative) or by proxy. Individuals appointed as corporate representatives to attend a Scheme Meeting in person on behalf of a Scheme Creditor which is a corporation are requested to bring with them to the relevant Scheme Meeting a certified copy of the resolution of the board or other governing body appointing them, or a letter certifying the appointment and signed by an authorised signatory. You should have received a pink and a blue Voting Form together with this document. If you wish further Voting Forms to be sent to you please call the telephone helpline on Alternatively, further blank Voting Forms may be downloaded and printed from the website Guidance notes for completion of these forms are at Appendix VI of this Section A and on the Voting Forms. Appointing a proxy will not prevent a Scheme Creditor from attending and voting in person. However a proxy will not be able to vote if the relevant Scheme Creditor attends and votes in person. Whether you do or do not intend to be present in person at any relevant Scheme Meeting, please complete and sign the relevant Form(s) of Proxy and Claims Table(s) in accordance with the instructions and notes printed on it/them and the guidance notes at Appendix VI of this Section A, and return it/them as soon as possible, and in any event so that it is/they are received by 5.00 p.m. (London time) on 12 May 2006, to Freepost RLUH CXLU BAYS, Cape, PO Box 99 Sudbury CO10 6SN or by fax addressed to the Company Secretary on fax number If you intend to attend and vote in person at any relevant Scheme Meeting, please detach the Admittance Card from the Voting Form and bring it with you to the relevant Scheme Meeting(s) for identification purposes. Voting Forms may also be handed in at the registration desk at the relevant meeting prior to its commencement. Please note that faxed Forms of Proxy and Claims Tables will only be accepted if they are faxed to the number specified above and are legible. The Scheme Companies reserve the right to require production of the originals if this is considered to be necessary for the purpose of verification. The Scheme Companies would like as many votes as possible to be cast at each meeting (whether in person or by proxy). Each Scheme Creditor is therefore encouraged to sign and return his/her/its Form(s) of Proxy and Claims Table(s) as soon as possible. The value to be attributed for voting purposes to a Scheme Creditor s claim will be determined by the Chairman of the relevant Scheme Meeting based on the information provided by the Scheme Creditor and the information available to the Scheme Company concerned from its existing records and other sources. The basis of valuation of Scheme Claims is set out in paragraphs 5 and 6 of Part 7 of this Section A. The Chairman of the relevant Scheme Meeting has the power to reject a Scheme Claim, in whole or in part, for voting purposes only if he considers that it does not represent a reasonable assessment of the sum due from the relevant Scheme Company. The decision of the Chairman as to the value to be placed on a Scheme Claim for voting purposes is final and any decision to reject a Scheme Claim in whole or in part will, if possible, be notified to the relevant Scheme Creditor before the relevant meeting and, in any event, 16

17 PART 1 afterwards, save where the decision had no material effect on the outcome of the meeting concerned. All decisions will be reported to the Court. The amount of a Scheme Claim admitted for voting purposes will not constitute an admission of the existence or amount of any claim and will not bind the Scheme Company concerned or the Scheme Creditor. If it is not possible for all of the Scheme Meetings to be completed (other than the counting of polls) before 9.00 p.m. on 16 May 2006, the Court has directed that such of the Scheme Meetings that have not been completed shall be adjourned until a.m. on 17 May 2006 when the holding of the adjourned Scheme Meetings shall take place in the order and at the intervals that such meetings are convened in the notice set out at Section C of this document. Any Scheme Creditor who has any questions concerning a Scheme Company or his or her involvement with a Scheme Company, or which relate to the action Scheme Creditors are required to take, to completion of the Form of Proxy or the Claims Table or the Scheme generally should contact the telephone helpline on or they should submit their question in writing to Freepost RLUH CXLU BAYS, Cape, PO Box 99 Sudbury CO10 6SN or by fax on fax number The Scheme Companies will endeavour to respond to any such questions as soon as reasonably practicable. As the Court has ordered that the Scheme Meetings be held it is not possible to cancel them. However, if the Resolution to amend the PLC Articles is not passed at the EGM the Scheme will not be capable of becoming effective. This is because the Scheme is conditional upon the Resolution being passed. If the Resolution is not passed, a notice to this effect will be published on the website and will also be published in each of the Financial Times, The Daily Telegraph, The Sun, The Scotsman, The Daily Record, The Belfast Telegraph and The Irish Times. In such circumstances Scheme Creditors will be encouraged not to attend the Scheme Meetings as, even if Scheme Creditors were to approve the Scheme, the Scheme will be incapable of becoming effective. 14. The subsequent application to the Court Meetings will be held in relation to each of the Scheme Companies but it is not necessary, in order for the Scheme to become effective, for the resolutions to be passed by the requisite majorities (as to which see paragraph 6 above), or for the Scheme to be sanctioned by the Court, in respect of all of the Scheme Companies. Provided that the requisite majorities have been obtained at the meetings which have been convened in relation to each of the Key Scheme Companies (being Cape, CISL, Predart Limited and Somewatch Limited) application for the sanction of the Scheme by the Court will be made by all the Scheme Companies in relation to which the requisite majorities have been obtained. The petitions to the Court seeking the sanction of the Scheme are expected to be heard during the week commencing 12 June At the hearing of the petitions, the Court will in relation to each Scheme Company have a discretion as to whether or not to sanction the Scheme and Scheme Creditors are entitled to attend in person, or by solicitors or counsel, to support or oppose the Scheme. Provided that the Court is prepared to sanction the Scheme in relation to the Key Scheme Companies, the Court will be asked to sanction the Scheme in respect of each of the Scheme Companies whose Scheme Creditors approved the Scheme. If the Scheme is sanctioned in relation to a Scheme Company, and the order sanctioning the Scheme in relation to that Scheme Company is delivered to the Registrar of Companies for registration, it will bind all the Scheme Creditors of that Scheme Company whether or not they attended one or other of the meetings and whether or not they voted for or against the Scheme. 15. Documents available for inspection The documents listed in Part 11 of this Section A will be available for inspection by Scheme Creditors or their authorised representatives until the close of the Scheme Meetings between the hours of 9.30 a.m. and 5.30 p.m. Monday to Friday at the addresses given in Part 11 of this Section A and on the website 17

18 PART Recommendation The Directors of each Scheme Company consider that the Scheme is in the best interests of both the relevant Scheme Company and the Scheme Creditors of that Scheme Company. All Scheme Creditors who are entitled to vote at any of the Scheme Meetings are encouraged to vote in favour of the Scheme. Yours sincerely, Martin May Chairman 18

19 SECTION A: EXPLANATORY STATEMENT PART 2: BACKGROUND TO THE SCHEME 1. History Cape was incorporated in 1893 to mine and process asbestos and to sell asbestos-related products. From 1913, Cape operated a number of factories processing and manufacturing asbestos products in the UK. Principally through its subsidiaries, Cape operated mines and, latterly, a factory manufacturing asbestos products in South Africa. Cape sold its mining operations in South Africa in 1979 and, since 1989, has had no presence in South Africa. As the health risks associated with asbestos became more widely known, Cape closed a number of its UK factories in the 1960s and 1970s, at the same time developing asbestos-free insulation products. Cape ceased manufacturing asbestos products in the 1980s and, in September 2002, sold all of its manufacturing operations with the exception of two small operations in Dalton-in-Furness and Abu Dhabi which support Cape s contracting business. By 1945, Cape had begun to diversify into the provision of industrial services. Today, Cape is a leading international provider of industrial support services to the energy sector and is recognised for its health and safety procedures and record. Services include the provision of scaffolding, insulation, specialist coatings, fire protection, refractory linings and other associated services including asbestos removal both on and offshore. The Group s historical use of asbestos in its industrial activities has meant that a number of people have been exposed to asbestos and its associated health risks. Whilst the large majority of the Scheme Companies UK employees have not been affected, unfortunately a number of employees, contractors and others who have come into contact with the Scheme Companies asbestos-related activities have been and will be diagnosed with asbestos-related conditions. Whilst the Scheme Companies have during certain periods maintained EL insurance cover, there remains significant financial exposure (in particular in respect of periods prior to it becoming compulsory to maintain such insurance) where there is either no or only partial insurance cover or the insurer is insolvent. Similarly, in relation to PL insurance (which is not compulsory) there are substantial periods where there is either no or only partial insurance, the insurance is subject to exclusions or the insurer is insolvent with the consequence that the Group has, for many years, been paying compensation for these claims. The net charge to the Group s consolidated profit and loss account (excluding the settlements made in respect of the South African claims and the Shipyard Claims referred to below), was in the Financial Years ended 31 December million, million, million, million and million respectively. With the exception of the claims covered by the South African settlement, the overwhelming majority of claims against the Scheme Companies have been made by persons who were exposed to asbestos in the UK. Implications of asbestos-related claims Asbestos-related claims will continue for the foreseeable future. With the number of claims and the costs of settlement (in most cases) rising and the possibility of further types or classes of claims being made, it is extremely difficult to predict with accuracy the long-term financial impact of these claims on the Scheme Companies. It is therefore important that the Group is able to develop a stronger and more secure financial base from which it is able to generate the funds needed to meet the claims. A number of other companies faced with the same issues have been forced into insolvency, often leaving claimants, where there is no insurance cover, with little prospect, if any, of receiving compensation. Indeed, if there was a material deterioration in the Group s trading performance or a significant increase in either the number of asbestos-related claims or the quantum of damages the Group had to settle, it is unlikely that, in the absence of further external funding, the Group would be able to continue to meet claims. In those circumstances it is possible that the Cape Directors would be faced with no alternative other than to realise the Group s principal assets and to commence the breaking up of the Group. 19

20 PART 2 Steps taken to date to address the financial implications of asbestos-related claims The Cape Directors have sought to address the financial uncertainty surrounding the payment of future asbestos-related claims. In this regard in 2003, the Group reached two important settlements; the first in connection with certain claims arising in South Africa as a result of mining and manufacturing activities by former Cape subsidiaries and the second in relation to various contribution claims emanating from contracting work undertaken within shipyards in the UK. In March 2003, Cape reached a settlement, without admission of liability, with the representatives of over 7,500 South African claimants, whereby Cape paid 7.5 million for the benefit of these claimants and 2.75 million as a contribution towards their legal costs. In September 2003, Cape agreed with the relevant UK shipyards and their insolvent insurer to make oneoff payments, aggregating some 2.6 million, in settlement of all then outstanding liabilities and to pay agreed proportions of all future settlements in respect of asbestos-related claims; the proportions vary for each shipyard. In the Financial Year ended 31 December 2004, payments for Shipyard Claims totalled approximately 1.3 million. Current and future claims The Cape Directors consider that the Scheme Companies largest exposure to asbestos-related liabilities remains UK-based employee and third party claims. Claims received by the Scheme Companies are made principally by employees who worked in a Group factory and those who worked with asbestos as part of the Group s contracting operations (liability for the latter is usually shared with other contractors). Cape also receives claims from third parties such as family members of Scheme Companies employees and those who lived in the neighbourhood of a former Group factory or other employers whose employees have claimed against them and who in turn are entitled to claim against the Scheme Companies. A substantial proportion of all claims relate to periods of exposure that pre-date compulsory employers liability insurance (which became mandatory in 1972 (1975 in Northern Ireland)) and a significant element are not insured. As referred to below, an independent actuarial review of the Scheme Companies UK asbestos-related claims projects that claims will be received for not less than 46 years with an anticipated peak in the value of claims arising between 2025 and The aggregate projected discounted value of all the Group s unpaid UK asbestos-related claims over the next 46 years, is, on the basis described under Projected future asbestos-related claims against the Scheme Companies in paragraph 4 below, estimated by the independent actuary, Tillinghast, to amount to approximately million. This figure includes the Shipyard Claims which are estimated by Tillinghast (on the same basis) to amount to approximately 10.7 million. Having reached settlements in respect of the South African claims and the Shipyard Claims, the Cape Directors have sought to identify a structure which further improves the long-term financial viability of the Group by reducing the risk of insolvency of Cape and certain of the key trading subsidiaries due to UK asbestos-related claims, whilst preserving the interests of Scheme Creditors (who include current employees, past employees and other potential claimants in the UK). The Scheme does not prejudice any claimant s right to make a claim against a Scheme Company or restrict the amount of compensation that may be awarded, although the Scheme may, in certain circumstances, affect the timing of the payment of compensation to, or the amounts received by, Scheme Creditors. The Cape Directors consider that, save for Excluded Claims, Scheme Claims represent the UK asbestos-related claims likely to be made against the Scheme Companies in the future. Dissolved Group Companies (including those which have been re-instated to the Register of Companies for the purposes of claimants taking an assignment of those companies rights against their insurers under the 1930 Act) are not Scheme Companies and any claims against those companies are not Scheme Claims and are outside the Scheme. However, if you were employed by (or otherwise exposed to asbestos by) an Additional Company (whether or not such company is also a Dissolved Group Company) you may have a claim against a Scheme Company. Any such claim that you have against an Included Scheme Company that is not an Excluded Claim will be a Scheme Claim. Any claim against any Additional Company, any Dissolved Group Company or any Excluded Scheme Company will not be a Scheme Claim. Whilst any claimants whose claims against such companies are covered by insurance maintained by those companies may be entitled to recover from an insurer or, as the case may be, the FSCS, claimants whose claims are not covered by relevant insurance will not be entitled to so recover. 20

21 PART 2 2. Asbestos-related claims in the UK The following is an analysis of the UK asbestos-related claims the Scheme Companies receive. Types of claims (a) By disease There are six diseases or conditions commonly accepted as being attributable to asbestos exposure. They are: (i) (ii) (iii) (iv) (v) (vi) Mesothelioma - a fatal cancer which usually develops in the lining of the lungs (the pleura). There is no cure for the disease and it leads to death, usually within 18 months to two years of the symptoms becoming apparent; Lung cancer - although the connection between exposure to asbestos and the development of lung cancer is well established, there are many other causes of lung cancer, not least smoking. As a consequence of the number of different causes and some uncertainty about the nature of the connection between exposure to asbestos and lung cancer, there are relatively few claims against the Scheme Companies by claimants suffering from lung cancer; Asbestosis - the development of fibrosis in the lungs caused by asbestos dust. Fibrosis reduces the respiratory ability of the sufferer; Pleural thickening - scarring of the lining of the lung as a result of asbestos exposure leading to respiratory disability; Pleural plaques - lesions on the lining of the lungs which harden over time; and Psychiatric injury - any recognised psychiatric illness which has developed as a result of asbestos exposure. The ability of a person who has developed the condition known as pleural plaques (or who alleges psychiatric injury in consequence of such condition) to make a claim and recover damages is currently uncertain. This is because a number of test cases are being brought regarding the issue. The most recent decision of the Court (being the Court of Appeal s decision in Grieves v FT Everard & Sons Ltd and others (2006)) was that pleural plaques are not themselves actionable even when combined with the stress and anxiety which they engender. The Court of Appeal s decision, which was a majority rather than a unanimous decision, may be appealed to the House of Lords. Leave for such an appeal has been granted. (b) Divisible and non-divisible claims Mesothelioma and lung cancer are treated as non-divisible conditions. Since it is considered impossible to identify which asbestos fibre or fibres caused the condition, defendants (for example, successive employers) are treated by the UK courts as being liable on a joint and several basis. Asbestosis, pleural thickening and (if they or any consequent damage is actionable) pleural plaques are treated by the UK courts as divisible conditions meaning that liability as between defendants is several and normally damages are apportioned among co-defendants pro rata to the claimant s exposure to asbestos by each defendant. Apportionment is usually allocated on a time-exposed basis. The distinction between divisible and non-divisible claims is important because in non-divisible cases defendants may be pursued in the UK individually for the full amount of the claim. While co-defendants in the UK generally, following the insurance industry-adopted ABI Guidelines, pay their proportion of non-divisible claims as if they were divisible, if the other co-defendants cannot be found, or they or their insurers are insolvent, the solvent defendants must make up the resulting deficit. (c) By claimant The Scheme Companies receive asbestos-related claims in the UK from a number of sources but they can be classified as personal claims and commercial claims. (i) Employee claims Personal claims Employee claims come from two main sources: ex-factory employees exposed to asbestos in the course of their work - typically, a Scheme Company will be liable for the total cost of factory claims although in some circumstances, 21

22 PART 2 where the employee was exposed to asbestos in more than one employer s workplace, the relevant Scheme Company may only pay a share of the claim; and ex-contracting employees who were exposed to asbestos-containing products in the course of one of the Scheme Companies contracting operations - these employees typically worked for many different employers and may have been exposed to asbestos during several separate periods of employment. Consequently (and consistent with ABI Guidelines where relevant), the relevant Scheme Company usually pays only a proportion of such claims. Other personal claims Scheme Companies also receive claims from family members of employees exposed to asbestos on the employee s clothing, people living in the neighbourhood of the Group s former factories and, in certain cases, the dependents of persons who have died from an asbestos-related condition. Claims can also arise from people exposed to one of the Scheme Companies asbestos-containing products or activities in the course of their employment with a separate employer. (ii) Commercial claims Commercial claims come from two sources: contribution claims have been and will continue to be received from shipyards which have paid claims made by their employees who were exposed to asbestos as a result of working alongside the Group s contracting operations employees. As mentioned above, Cape has agreed with the relevant UK shipyards and their insolvent insurers to pay proportions of these claims and also agreed detailed procedures as to how these claims should be dealt with and these claims are outside the Scheme; and a much smaller number of contribution claims, similar in nature to the Shipyard Claims, are also received from other employers. In addition to these sources of current claims, the Scheme Companies may also in the future receive claims from the purchasers of its manufacturing operations, which it sold to certain companies within the Promat group in Cape retains the majority of the manufacturing division s contingent liabilities for asbestos-related claims. Cape also indemnified the purchasers in respect of any liability they incur as a result of any asbestos exposure that took place before the purchasers acquired the business. Claims against the Scheme Companies from the purchasers are excluded from the Scheme. (d) Insurance coverage and uninsured risks The employers liability ( EL ) and public liability ( PL ) insurance cover available to the Scheme Companies to recover the costs of meeting industrial disease claims is variable. Not all Scheme Companies with liabilities that arise or will arise by virtue of events that occurred prior to January 1972 (December 1975 in Northern Ireland) have insurance cover in respect of such liabilities and, where there is insurance, it often does not provide asbestos cover or incorporates an exclusion so that it does not respond in cases of certain asbestos conditions, for example asbestosis. In addition, there are periods between 1972 and 1981 in respect of which certain Scheme Companies do not have insurance that will respond to claims that arise by virtue of events that occurred between those dates (at least while the relevant Scheme Companies remain solvent, see paragraph 2(b) of Part 5 of this Section A below). The insurance cover available to each Scheme Company is noted in the relevant company s history in Appendix III of this Section A. Prior to January 1972 (December 1975 in Northern Ireland), it was not compulsory for employers such as the Scheme Companies to have EL insurance. Most of the earlier insurance policies of the Scheme Companies have been commuted or discharged and, therefore, no longer respond. For periods in the 1960s and early 1970s, various Scheme Companies are insured by Iron Trades (whose liabilities were subject to a statutory transfer to Chester Street in 1997) and The Builders Accident Insurance Limited. Both Chester Street and The Builders Accident Insurance Limited are now insolvent. For EL cover after December 1971 (after November 1975 in Northern Ireland), the FSCS in accordance with its rules provides compensation where the insurer is now insolvent either to the insured company (if it is solvent) or, if the insured company is insolvent, to the claimant under the 1930 Act. For EL cover taken out prior to it being compulsory for employers to do so, the FSCS will only provide compensation where both the insurer and the insured (i.e. the employer) are insolvent. 22

23 PART 2 Whilst PL insurance is not compulsory, certain of the Scheme Companies that undertook contracting activities held PL insurance policies until October 1984, but these generally excluded cover for asbestos diseases. From October 1984, although asbestos-related diseases were generally excluded, cover was given for claims arising from the companies asbestos stripping activities in the UK. However, the Scheme Companies PL insurance was written on a claims made basis and unless claims were notified to the insurer during the period of cover (which, given the long-term latency period of most asbestosrelated diseases, is unlikely) the policies will not respond. Since 2003, the Scheme Companies asbestosrelated PL insurance has been written on a claims arising basis, but it only responds to claims made in respect of exposure since the inception of the policies in The FSCS does not provide any compensation to the Scheme Companies in respect of PL claims. 3. The Additional Companies The majority of persons with claims against the Scheme Companies are likely to be employees and former employees of the Scheme Companies. However, even if a claimant was employed solely by an Additional Company (or was otherwise exposed to asbestos by such company) the claimant or the Additional Company may still have a claim against a Scheme Company. This would depend on whether there were arrangements, for example agency or indemnity arrangements, between a Scheme Company and the Additional Company concerned. Prior to approximately September 2001, when claims were notified to a Scheme Company, provided that the claimant was able to make out his claim against any current or former subsidiary of Cape (i.e. including the Dissolved Group Companies), Cape paid the claim regardless of which company in the Group was legally liable to pay the claim. This practice was re-considered in 2001 following the insolvency of two of the insurers who had provided significant employers liability cover to the Group, Iron Trades and Builders Accident Insurance Limited. Whilst those insurers were solvent and responding to claims, the relatively low net cost to the Group led Cape to pay claims irrespective of whether on a strict analysis it or any other solvent company in the Group had any legal obligation to pay. Following the insurers insolvency the net cost of claims to the Group potentially increased very significantly. At the same time, Cape was already in a very poor financial condition generally. The Group made a loss of 15.7 million in the year ended 31 December 2000 and a loss of 32.4 million in the year ended 31 December The continuing losses that the Group incurred around this time ultimately led to the sale of Cape s manufacturing division in Therefore from 2001 Cape began to pay particular attention to which subsidiary each claimant had been employed by. From approximately September 2001, where a claimant was employed solely by a Dissolved Group Company, Cape responded to any letter of claim by stating that it did not recognise any liability for the Dissolved Group Company after it went into liquidation. In June 2005 Cape made the application to the Court for directions which resulted in the June version of the Scheme Brochure being sent to persons whom the Directors then believed were or might be Scheme Creditors. After that hearing attention turned to a detailed examination of intra-group arrangements between the Scheme Companies in order to determine the Scheme Company or Scheme Companies against which a particular Scheme Claim lay, and to provide the information which is now provided in Appendix III of this Section A. In the course of that analysis it became apparent that in consequence of intra-group arrangements between Scheme Companies on the one hand and (1) certain of the Dissolved Group Companies and (2) certain solvent Group Companies that were not Scheme Companies (i.e. together the Additional Companies) on the other hand, a creditor of an Additional Company might have a claim against a Scheme Company as well. In addition it became apparent that as a result of such arrangements there might be claims against Scheme Companies by the Additional Companies themselves. A typical example of a transaction which might give an employee of an Additional Company (A) a claim against a Scheme Company (P) is a transaction whereby A transferred its business to P, but subsequently continued to carry on that business in its own name as P s agent, holding the assets comprised in the business as trustee for P. A typical example of a transaction which might give an Additional Company (A) a claim against a Scheme Company (P) is a transaction of the nature described above which was accompanied by an indemnity by P in relation to liabilities of A. Another example is an indemnity given by P in connection with the subsequent liquidation of A. 23

24 PART 2 It had always been the intention that with limited exceptions all persons with UK asbestos-related claims against Scheme Companies should be brought within the Scheme. However the June version of the Scheme Brochure was not sent to former employees of the Additional Companies. Moreover claims by persons who had been employed by, or otherwise exposed to asbestos by, any of the Dissolved Group Companies were not included in the original Tillinghast Review (by reference to which the Scheme had originally been framed). Accordingly Tillinghast were asked to undertake a further review, as described in paragraph 4 of this Part below. When the results of that review were available a further application to the Court was made in November 2005 as a result of which the November version of the Scheme Brochure was sent to certain former employees of the Additional Companies and a short letter which explained what had happened was sent to those persons to whom the June version of the Scheme Brochure had been sent. Set out in Appendix IV of this Section A is a short history and financial information in relation to each of the Additional Companies, indicating in broad terms the nature of the arrangements with a Scheme Company or Scheme Companies as a result of which employees of (or other persons exposed to asbestos by) the Additional Company, or in some cases the Additional Company itself, might have a Scheme Claim. Due to the passage of time and the incomplete nature of the Group s records there may be uncertainty regarding the precise nature of these arrangements. Therefore, in Appendix III and Appendix IV, to describe these arrangements the Scheme Companies have used the general formula During the period set out below, there may have been arrangements between Company A and Company B as a result of which Company A may be liable in relation to a claim made against Company B. Unless and until the nature and effect of such arrangements are determined by the Court, there is no certainty as to their result. However, creditors with claims against Company B will be admitted to vote on the Scheme on the basis that they may also have claims against Company A. If a claimant s claim is only against an Additional Company, he will not be entitled to receive payment from CCS. However if his claim is against an Additional Company which might have an indemnity from an Included Scheme Company his rights against the Additional Company may be affected by the Scheme because any such claim by an Additional Company against an Included Scheme Company would itself be a Scheme Claim. Certain of the Additional Companies are dormant; some are in liquidation; and some have been dissolved (of which some have been reinstated to the Register of Companies). Of the Additional Companies that are in liquidation, due to the passage of time that has elapsed since their liquidation commenced, some of them may not have any director(s) or a liquidator who is alive and in office. Where any such company does not have a director or liquidator, the claimant against the company concerned is likely to need to seek the appointment of a liquidator by the Court, in order for the Additional Company to enforce its rights against the Scheme Company concerned. Even where a liquidator is either currently in office or is subsequently appointed, any recovery that an Additional Company makes from a Scheme Company may not be immediately paid in full to the claimant against the Additional Company. This is because the monies that the Additional Company recovers from the Scheme Company are likely to form part of the Additional Company s general assets for distribution to its creditors in its liquidation. The Scheme Companies intend to seek agreement with any liquidator of an Additional Company (including those subsequently appointed) that such liquidators will forward to the claimant concerned as much of the proceeds recovered, and as quickly as possible, as can be agreed. However, there can be no certainty regarding the timing or terms of such agreements. Cape reserves the right to maintain that neither it nor any other Scheme Company is liable in respect of claims made in consequence of the activities of the Additional Companies. However, for the reasons described above, it is possible that persons employed by, or otherwise exposed to asbestos by, any of the Additional Companies may be able to establish their claim against a Scheme Company. Therefore this document is being sent to former employees of, and other persons that Cape has records of who may have been exposed to asbestos by, the Additional Companies during the operation of any relevant arrangements with a Scheme Company. Such persons will be admitted to the relevant Scheme Meeting of the Scheme Company concerned for voting purposes and any claim that is established against an Included Scheme Company will be payable by CCS on the terms of the Scheme. 24

25 PART 2 Scheme Creditors may include persons who have made a claim since September 2001 in consequence of the activities of an Additional Company. In responding to such claims, Cape did not disclose to claimants or their advisers the existence of arrangements between the Additional Company concerned and any Scheme Company under which the Scheme Company may, potentially, have liability. In responding now to such claims Cape does disclose to claimants and their advisers the existence of these arrangements. However, as stated above, Cape does not accept that any Scheme Company is liable in respect of such claims and it reserves the right to deny liability in respect of all or any claims that are made in the future. It is possible that claimants who have made a claim since September 2001 in consequence of the activities of an Additional Company and whose claim was settled (in whole or in part) or indeed rejected may retain rights against a Scheme Company or an Additional Company. Such persons are recommended to take their own legal advice. Solvent insurers of the Additional Companies and, where such insurers are no longer solvent, the FSCS have been meeting certain claims against the Additional Companies. Since approximately September 2001 such insurers and the FSCS have been meeting claims on the understanding that no Scheme Company was liable in respect of these claims. For the reasons described above, it is possible that the Scheme Companies could be liable for some of these claims. The Cape Directors believe that Cape has grounds on which to resist any claim for reimbursement from insurers. Cape has commenced discussions with the FSCS regarding the payments that the FSCS may have made since approximately September 2001 that would, had such claims been successfully made against a Scheme Company, have been paid by the Scheme Companies. Depending on the final agreements with such parties as to the timing and quantum of any repayment, these claims could have a material adverse effect on the profits of the Group and may reduce the available cash flows out of which Cape will be able to top up the Scheme Assets, at least in the short to medium term. This in turn could cause the Payment Percentage to be reduced. However, based on their assessment of the likely quantum and timing of such claims and on their expectations regarding the financial performance of the Group s business, the Cape Directors are satisfied that the Group would be able to meet any such claims, which are not expected to be material in the context of the potential Scheme Claims as a whole, and that such claims would be unlikely to affect the ability of Cape to top up the Scheme Assets. The Cape Directors believe that it would not be appropriate for any claim for reimbursement from insurers and the FSCS to be settled out of, nor a proper use of, Scheme Assets which are intended to meet claims from Scheme Creditors. Therefore such claims (described as Reimbursement Claims in the Scheme) will not be Scheme Claims. 4. Projected future asbestos-related claims against the Scheme Companies For the purpose of the Scheme and in particular to determine the amount required to be made available to fund payments under the Scheme, Cape first commissioned Tillinghast to review and provide an estimate of all of the Scheme Companies unpaid and uninsured UK asbestos-related claims as at 31 December 2004 (including future claims). This review included all such future claims apart from claims which may be brought by persons whose employment transferred to the Group at the time that Cape acquired the UK Darchem Contracting Business in 1992 in respect of their exposure to asbestos prior to transfer of their employment to the Group. Further details regarding such persons are contained at paragraph 3 of Part 8 of Section A below. Tillinghast is part of Towers Perrin, the global professional services firm, and provides global actuarial and management consulting services to companies advising on risk financing and insurance-related matters. Unpaid claims do not represent an exact calculation, but rather are estimates of the expected future costs of the ultimate settlement of claims. As such, estimates of unpaid asbestos-related claims are inherently uncertain. In providing its estimates Tillinghast has relied, without audit or independent verification, on both historical financial and non-financial data and other quantitative and qualitative information supplied by the Scheme Companies. Tillinghast has also used disease emergence studies conducted in the UK by the Health and Safety Executive (HSE) as well as several academic studies including studies of mesothelioma specific to the UK. Due to the historical nature of the information provided by the Scheme Companies, 25

26 PART 2 there are variances in its completeness. This further increases the inherent uncertainty in Tillinghast s estimates, although this uncertainty should decrease over time as the information is further expanded and updated. In the first review, on the basis set out above, Tillinghast s best estimate of the aggregate projected discounted value, net of insurance, of all unpaid UK asbestos-related claims against the Scheme Companies (and against the Additional Companies that are not Dissolved Group Companies but excluding claims against the Dissolved Group Companies) is 80.9 million. This represents the best estimate within the range of the low and high estimates contained in Tillinghast s review of 49.5 million and million respectively. The discount rate applied is 5 per cent. per annum. As described at paragraph 3 above, following Tillinghast s initial review it became apparent that in consequence of intra-group arrangements between Scheme Companies and certain subsidiaries and former subsidiaries of Cape a creditor of such a company might have a claim against a Scheme Company as well. It also became apparent that as a result of such arrangements there might be claims against Scheme Companies by the Additional Companies. Tillinghast were accordingly asked to conduct a second review. Tillinghast s initial review had included an assessment of the claims that might be made against the Additional Companies that were not Dissolved Group Companies. The second review was to estimate the Scheme Companies potential liability for the activities of the Dissolved Group Companies. Neither review encompassed potential claims against the Darchem Companies (as to which see page 62). For the purpose of their reviews, Tillinghast assumed that the Scheme Companies will be liable in respect of all claims that arise as a consequence of exposure caused by the Additional Companies, whether or not such exposure occurred during the operation of any relevant arrangements with the Scheme Companies. This assumption was made because there is no realistic basis on which Tillinghast could split claims that are likely to arise out of exposure that occurred during the operation of relevant arrangements and claims that are likely to arise as a consequence of exposure outside of the operation of these arrangements. Tillinghast also assumed that the Scheme Companies will be liable even in relation to claims against Dissolved Group Companies in respect of which there were no relevant arrangements and therefore no known basis on which any Scheme Company could be liable. This assumption was made because there is no realistic basis on which Tillinghast could split claims between those Dissolved Group Companies where there were such arrangements (Additional Companies) and those where there were not. The reviews taken together are therefore unrealistically pessimistic, but Scheme Creditors are nonetheless being made aware of the financial effects of these claims, assuming that they could all be successfully made against a Scheme Company. Unless and until, in relation to the Additional Companies, these claims are determined by the Court, the Scheme Companies will not know what proportion of these claims they are liable for, if at all. For the purposes of the estimate of the Scheme Companies potential liability for the activities of the Dissolved Group Companies, Tillinghast also assumed that the solvent insurers of the Dissolved Group Companies, but not the FSCS, will in the future respond to claims against the Dissolved Group Companies. Insofar as the FSCS is concerned this is likely to be an unrealistically pessimistic view. This is because the FSCS may cease to respond to certain claims (i.e. where insurance was provided to the Dissolved Group Companies by a now insolvent insurer during periods where there may have been relevant arrangements with a Scheme Company). However the FSCS is likely to continue to respond to other claims. Tillinghast s best estimate of the aggregate projected discounted value, net of insurance recoveries, of all the Scheme Companies unpaid UK asbestos-related claims (including all claims against the Dissolved Group Companies (other than the Darchem Companies)) is million. This estimate is contained in the second Tillinghast Review and represents the best estimate for all such claims within the range of the low and high estimates of 70.2 million and million respectively. The discount rate applied is 5 per cent. per annum. Tillinghast s best estimate assumed that the level of damages payable to claimants in respect of pleural plaques claims would remain as the current law then stood, being the first instance decision in Grieves and others v FT Everard & Sons and others (2005) ( Grieves ). Since the date of the second Tillinghast Review an appeal of Grieves has been heard by the Court of Appeal. By a majority, the Court of Appeal found that pleural plaques are not themselves actionable even when combined with the stress and anxiety they engender. Leave has been granted for a further appeal to the House of Lords. 26

27 PART 2 One of the assumptions Tillinghast made in their high estimate is that on appeal of the Grieves decision the Court of Appeal would re-instate the higher level of awards of damages that were commonly accepted before the Grieves decision. One of the assumptions Tillinghast made in their low estimate is that the Court of Appeal would decide that awards should be reduced even further. In fact the Court of Appeal expressed the view that if pleural plaques were actionable, the level of damages should be increased above the Grieves level, albeit not to the level generally awarded before Grieves. Given the wide range of the estimates and the significant degree of uncertainty surrounding the estimates, the Cape Directors are unable to conclude that the aggregate projected discounted value, net of insurance recoveries, of all the Scheme Companies unpaid UK asbestos-related claims (including future claims) will amount to million, nor is there any certainty that the total cost of such claims will even fall within the range of estimates. The Tillinghast Review Summaries, which comprise detailed executive summaries of the process and findings of the Tillinghast Reviews, are two of the documents available for inspection as referred to in Part 11 of this Section A. 5. Financial inter-dependence of the Scheme Companies Certain of the Scheme Companies are financially dependent on other Scheme Companies for the payment of their asbestos-related claims. This is partly a result of a number of intra-group transactions or reorganisations that have taken place in the past. The general nature of these transactions and reorganisations, which are described in greater detail in Appendix III of this Section A, was to transfer the business and assets from one Scheme Company to another Scheme Company. In certain instances, the transferee Scheme Company may have agreed to meet claims against the transferor Scheme Company as and when they fell due in the future. Details of which companies have agreed to meet the liabilities of which other companies are also contained in Appendix III of this Section A. These arrangements may mean that if you were employed by or otherwise exposed to asbestos by one Group Company (which may not even be a Scheme Company) you may have a claim against more than one Group Company (which may include one or more Scheme Companies). You may therefore be admitted for voting purposes to the relevant Scheme Meeting of more than one Scheme Company. These arrangements also mean that certain Scheme Companies may be creditors of certain other Scheme Companies in respect of asbestos-related claims. Where such claims arise between two Included Scheme Companies, they have been expressly excluded from the Scheme and will not comprise Scheme Claims. Therefore Included Scheme Companies will not be entitled in respect of such claims to participate in the funds available to CCS. Under the terms of the PLC Reimbursement Agreement (the terms of which are summarised at paragraph 3.2 of Part 4 of this Section A), each Scheme Company has agreed, conditional upon it becoming an Included Scheme Company, not to claim against another Included Scheme Company other than as expressly provided in that agreement. The Directors consider that this restriction is appropriate as one of the intentions of the Scheme is the preservation of the solvency of the Included Scheme Companies. The Scheme Companies are also dependent upon certain Scheme Companies for the payment of their asbestos-related claims in other ways. The funds to meet the majority of claims brought against the Scheme Companies are generated as trading profits of CISL and the overseas activities of the Group. If Cape itself was to become insolvent, the Cape Directors consider it likely that any administrator or liquidator of Cape would seek to realise the trading operations of the Group including the business of CISL. The Cape Directors consider that it is unlikely that the sale of the business of CISL, in such circumstances, would realise sufficient monies to enable all Scheme Claims against CISL to be paid in full nor, in such circumstances, would the sale of all the trading operations of the Group realise sufficient monies to meet all Scheme Claims against the Scheme Companies. In recent years intra-group arrangements (such as agency arrangements) have been disclosed in the relevant Scheme Companies accounts. Historically, however, the position has not always been clear. Where the Directors have the information, a note to this effect has been included in the history section of the relevant Scheme Company in Appendix III of this Section A. In Appendix III, as in Appendix IV, where there may be uncertainty regarding the precise nature of these arrangements, the Scheme Companies have used the general formula During the period set out below, there may have been 27

28 PART 2 arrangements between Company A and Company B as a result of which Company A may be liable in relation to a claim made against Company B. Unless and until the nature and effect of such arrangements are determined by the Court, there is no certainty as to their result. However, creditors with claims against Company B will be admitted to vote on the Scheme on the basis that they may also have claims against Company A. For the reasons given under Current and future claims in paragraph 1 of Part 2 of this Section A, the Cape Directors cannot state with certainty the aggregate amount of asbestos-related claims that may be brought against the Scheme Companies. The Tillinghast Review provides an estimate of the likely range of these amounts. The Cape Directors therefore also cannot state with certainty the amount of claims likely to be brought against any particular Scheme Company. As a consequence of the financial interdependence of certain of the Scheme Companies on each other for the continued payment of their claims, there is even greater uncertainty regarding the likely amount of claims to be brought against any particular Scheme Company than regarding the amount of claims likely to be brought against the Scheme Companies in aggregate. With the exception of the Scheme Companies described below, the Scheme Companies are now all dormant and/or have no or minimal net assets and are therefore reliant on other Group Companies to pay claims against them. Accordingly in Appendix III of this Section A, the Directors of these Scheme Companies have not sought to estimate the amount of Scheme Claims that may lie against the companies concerned. In Appendix III of this Section A, the Directors of the other Scheme Companies (being Cape, CISL, Predart Limited, Cape Building Products Limited and Cape Calsil Systems Limited) state their opinion of the amount of Scheme Claims that may lie against those companies. For the reasons outlined above, an indicative range is given. Whilst these ranges represent the Directors estimate of the amount of such claims, there can be no certainty that the amount of claims against any Scheme Company will fall within the range that is stated. 6. Financial information relating to the Group There is set out in Appendix II of this Section A a summary of the consolidated profit and loss accounts and balances sheets of the Group for the years ended 31 December 2002, 2003 and 2004 and for the six months ended 30 June The full published financial statements for the Group are available for inspection as referred to in Part 11 of this Section A. 7. Scheme Companies: History and Financial and Insurance Information There is set out in Appendix III of this Section A a summary of the corporate history of each of the Scheme Companies together with certain financial and insurance information relating to them The full published financial statements for each of the Scheme Companies are available for inspection as referred to in Part 11 of this Section A. 8. Additional Companies: History and Financial and Insurance Information There is set out in Appendix IV of this Section A a summary of the corporate history of each of the Additional Companies together with certain financial and insurance information relating to them. 28

29 SECTION A: EXPLANATORY STATEMENT PART 3: SUMMARY OF THE PROPOSALS ENVISAGED BY THE SCHEME 1. Introduction The Scheme comprises separate schemes of arrangement under section 425 of the Companies Act between each of the Scheme Companies and its Scheme Creditors (being relevant creditors whether actual or contingent, and whether individual or corporate). If the Scheme is approved by the Scheme Creditors and sanctioned by the Court, both present and future Scheme Creditors will not be permitted, except in certain limited circumstances, to enforce payment of their Scheme Claim by the relevant Scheme Company but instead will be bound to recover only from CCS. CCS will guarantee the payment of Established Scheme Claims under the terms of the Scheme Guarantee. The Scheme will not seek to limit the ability of Scheme Creditors to make or establish a Scheme Claim if necessary by seeking a declaration as to its amount, or seek to limit the amount of any Scheme Claim, but will limit the ability of Scheme Creditors to enforce payment of their Scheme Claims other than through the operation of the Scheme. The Scheme may, in certain circumstances, affect the timing of the payment of compensation to, or amounts received by, Scheme Creditors. 2. Conditions Whilst each Scheme Company s scheme of arrangement is independent, the Scheme in aggregate is conditional upon each of the individual schemes for the Key Scheme Companies being approved and sanctioned. In this regard your attention is drawn to paragraph 5 of Part 2 of this Section A above. In addition to the approval and sanction of the Scheme, the Scheme is conditional upon the Resolution being passed at the EGM, the issue of the PLC Scheme Share to Law Debenture, the appointment of at least one Scheme Director, the Banking Agreement not having been terminated prior to the Court s sanction of the Scheme and Cape having made the initial funding of 40 million to CCS. 3. Scheme Claims The Scheme does not apply to all claims against Scheme Companies in respect of personal injury arising out of or connected with exposure to asbestos or to all claims of that nature against companies in the Group. Particulars of asbestos-related claims to which the Scheme does not apply are contained in Part 8 of this Section A. 4. The proposals envisaged by the Scheme The proposals for which the Scheme provides are embodied in part in the Scheme itself and in part in the provisions of certain documents which have been executed or otherwise put in place (or arranged to be put in place) in anticipation of the Scheme becoming effective. These documents consist of the Ancillary Agreements, the memoranda and articles of association of Cape and CCS and the Trust Deed. The effect of the proposals as a whole can be summarised as follows: (a) (b) (c) while Scheme Creditors will retain their rights against Included Scheme Companies, and may bring proceedings against Included Scheme Companies for declaratory relief to determine whether they have a claim and, if so, of what amount, they will agree (subject as provided in sub-paragraphs (k) and (m) below) that those rights will only be enforceable against CCS under the terms of the Scheme Guarantee; CCS will in the first instance be funded with a sum of 40 million, which represents what is considered to be a sufficient sum to discharge CCS s liabilities to Scheme Creditors which become payable over at least the next eight years (commencing on 1 January 2006); as explained on page 9 above the sum of 40 million has not been calculated by reference to an estimate of the likely amount of Scheme Claims. It simply represents the aggregate of the amount Cape was able to raise from its shareholders and the level of debt Cape can reasonably maintain for the purposes of the Scheme. Of fundamental importance to the Scheme are the provisions as to the topping-up of that sum described below; 29

30 PART 3 (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) commencing in 2008, every three years there will be an assessment of the projected Scheme Claims against Included Scheme Companies payable by CCS over the following nine years by reference to which there will be established the Funding Requirement; in the event that an assessment reveals a shortfall between the Scheme Assets and the Funding Requirement, Cape will top up CCS s funding over the following three years provided that sufficient cash is available, Cape s obligation being limited to 70 per cent. of the Group s consolidated adjusted operational cashflow; should Cape not be able to meet its top-up obligation in any one year, Cape will be required to make good the shortfall in the next year, again subject to sufficient cash being available; alongside the Funding Requirement there is the Scheme Funding Requirement which will be assessed every year by reference to projected Scheme Claims against Included Scheme Companies payable by CCS over the next six years; if at any time the ratio of the Scheme Assets to the Scheme Funding Requirement (the Scheme Funding Percentage) falls below 60 per cent., CCS will have the ability to reduce the percentage (the Payment Percentage) of each established claim which it pays to Scheme Creditors until such time as the Scheme Funding Percentage is restored to 60 per cent.; commencing in 2008, Cape will be permitted to pay dividends provided that at the time of payment certain conditions are met including (i) the Scheme Funding Percentage in relation to the last preceding Financial Year was certified to be not less than 110 per cent., (ii) the directors of Cape having certified that they anticipate that the Scheme Funding Percentage for the current and following Financial Years will be not less than 110 per cent. and (iii) the Payment Percentage having not at any time within the previous 40 days been below 100 per cent. Any distribution which Cape proposes to make to its shareholders may not, without the consent of the Scheme Shareholder, exceed the greater of (i) 50 per cent. of the consolidated operating profits of the Group for the last preceding Financial Year and (ii) the aggregate of any Permitted Dividends made in the preceding Financial Year. This restriction therefore places a cap on the amount of dividends that Cape may pay in any one year; there are to be special voting shares (the Scheme Shares) in CCS and Cape which are to be held by an independent third party (the Scheme Shareholder) on trust for Scheme Creditors. The Scheme Shares are to confer special rights which are designed to enable the Scheme Shareholder to protect the interests of Scheme Creditors; in the case of certain Scheme Creditors (Recourse Scheme Creditors), who are those Scheme Creditors whose claims are in whole or in part the subject of a contract of insurance (Recourse Scheme Claims) their rights to enforce their Recourse Scheme Claims against a relevant Included Scheme Company will revive in certain circumstances. These circumstances are where the relevant Included Scheme Company is insolvent or where there has been a specified reduction in the Payment Percentage and if the Scheme Creditor was able to bring about the insolvency of the relevant Included Scheme Company he would be able to recover greater compensation from the FSCS or, in certain circumstances, from a solvent insurer than is available from CCS at that time under the Scheme. There will be a specified reduction if either (i) the Payment Percentage has been reduced below 100 per cent. but above 50 per cent. and the Scheme Creditor has not been paid in full after 12 months or (ii) the Payment Percentage is reduced to 50 per cent. or below; each Included Scheme Company will agree to hold on trust for any Scheme Creditor concerned the proceeds of any policy of insurance (or any compensation received from the FSCS) referable to that Scheme Claim; the restriction described in sub-paragraph (a) above will not apply to proceedings to enforce the rights conferred under sub-paragraph (l) above; there are provisions contained in the Reimbursement Agreements which preserve certain rights of proof by CCS and Cape respectively in any insolvency of Cape or any of the other Included Scheme Companies; and 30

31 PART 3 (o) provided that the Scheme becomes effective in relation to each of the Key Scheme Companies, the Scheme can be modified to exclude any other Scheme Company or Scheme Companies without affecting its binding nature as to the remainder. 5. Classes of Scheme Creditors In this connection your attention is drawn to paragraph 10 of Part 1 of this Section A. 6. Summary of the Scheme The provisions of the Scheme can be summarised as follows:- (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) subject to clauses 2.3.3, and 2.5, clause restricts the rights of a Scheme Creditor to bring proceedings against an Included Scheme Company in relation to his Scheme Claim to proceedings which are designed simply to establish the existence and/or amount of an Included Scheme Company s liability in respect of that Scheme Claim; clause 2.2 provides for the trust referred to in paragraph 4(l) of this Part 3 above; clause 2.4 provides for the establishment of the amount due in respect of a Scheme Claim; clause 2.5 contains provisions, described in paragraph 4(k) of this Part 3 above, which are designed to enable Recourse Scheme Creditors to bring and enforce Scheme Claims against Included Scheme Companies in circumstances in which they would otherwise be prejudiced by their inability to obtain available compensation from an insurer or the FSCS; clause 2.9 contains provisions relating to the Scheme Guarantee; Part 3 provides for the approval by Scheme Creditors of the Ancillary Agreements and the terms on which the Scheme Shares will be held by the Scheme Shareholder and the undertaking by the Scheme Companies to comply with the terms of those agreements; Part 4 provides for the approval of the Scheme Companies current practice in relation to nondivisible claims where an insurance policy was not in place for the whole of the period of the claimant's exposure to asbestos, as to which see paragraph 2(c) of Part 5 of this Section A below; Part 5 provides for the payment of Scheme Creditors of Included Scheme Companies who on the Effective Date have Established Scheme Claims; Part 6 contains provisions relating to the assignment of Scheme Claims; and Parts 7 and 8 provide for the duration of the Scheme and contain general provisions as to conditions, effective date, modification, notices and other machinery. 7. When and how the Scheme becomes effective The action to be taken by Scheme Creditors in relation to the Scheme Meetings is explained in paragraph 13 of Part 1 above. In paragraph 14 of Part 1 above it is explained that the subsequent hearing of the petitions to the Court seeking the sanction of the Scheme are expected to be heard during the week commencing 5 June 2006; that Scheme Creditors are entitled to attend that hearing in person, or by solicitors or counsel, to support or oppose the Scheme; and that the Scheme may become effective in relation to some Scheme Companies but not others. If at the Court hearing the Scheme is sanctioned in relation to the Key Scheme Companies, the order or orders sanctioning the Scheme in relation to the Key Scheme Companies, and in relation to any other Scheme Companies in respect of which it has been sanctioned, will be delivered to the Registrar of Companies for registration. Upon such delivery the Scheme will become effective in relation to those Scheme Companies, and therefore the date of such delivery will be the Effective Date. After the hearing, Cape will publish details of the outcome of the Scheme Meetings and whether or not and in respect of which Scheme Companies the Scheme has become effective in each of the Financial Times, The Daily Telegraph, The Sun, The Scotsman, The Daily Record, The Belfast Telegraph and The Irish Times. 31

32 PART 3 8. Effect of the Scheme on claims handling Save in relation to claims arising from the activities of the Additional Companies, the claims of Scheme Creditors will be handled in the same manner as is currently the case. It is however hoped that where the Group is responsible for handling claims the settlement procedures and process may be simplified and shortened. During 2005, Cape invested approximately 100,000 in improving its claims handling systems. As regard claims arising from the activities of the Additional Companies, the Scheme Companies reserve the right to deny liability as explained in paragraph 3 of Part 2 of this Section A above. Further details of how Scheme Claims will be handled and how the Scheme will be operated are set out in Part 6 of this Section A. 9. Duration The Scheme will continue until it is terminated in accordance with its terms. The Scheme will terminate upon the third anniversary of the last Scheme Claim to settle or determine, provided that upon such date (i) no new Scheme Claims have been commenced or threatened since the last Scheme Claim was settled or determined and (ii) no amounts remain payable to Scheme Creditors by CCS under the Scheme Guarantee. 10. Ancillary Agreements It will be a term of the Scheme that Cape and certain of its subsidiaries have entered into and perform their obligations under the various Ancillary Agreements described in Part 4 of Section A. These include Cape s ongoing funding obligations and CCS s obligation to settle Scheme Claims. Whilst the Scheme itself will only be capable of alteration by means of a further scheme of arrangement, the Ancillary Agreements are capable of being altered with the consent of the Scheme Directors and the Scheme Shareholder. This is proposed because the Scheme may be on foot for up to 40 or 50 years, during which time the surrounding circumstances may be subject to significant change, and the Cape Directors consider that it is in the interests of all concerned that there should be an element of flexibility, given that the interests of Scheme Creditors will be protected by the requirement of consent from the Scheme Shareholder and the Scheme Directors, whose role it is to protect those interests. 11. Funding of CCS A key element of the Scheme is the establishment of long-term funding of the Scheme Claims. The longterm funding will be held and ring-fenced in CCS, a newly-formed subsidiary of Cape. On the Scheme becoming effective, the Scheme Fund will be held in a CCS bank account, separate from any other Group assets or banking arrangements, and will be under the control of the directors of CCS which will include two independent Scheme Directors. This funding will be invested by CCS in accordance with investment criteria which will be determined by, and may only be altered with the consent of, the Scheme Directors. The initial level of funding of 40 million represents not less than Tillinghast s estimate of the amounts payable by all of the Scheme Companies in respect of Scheme Claims not met by insurance over at least the following eight years (commencing on 1 January 2006) together with the running costs of CCS for the next three years (commencing on 1 January 2006). Thereafter, as mentioned above, commencing in 2008, every three years an independent actuarial review will be undertaken of the projected Scheme Claims against Included Scheme Companies for the following nine Financial Years to the extent not covered by a contract of insurance in respect of which the insurer or the FSCS is expected to respond. To the extent there is any shortfall in the Funding Requirement, Cape will be contractually required to top up the Scheme Assets. The top up payments will be made in three equal annual instalments, the intention being that, following such payments, the Scheme Assets should be sufficient to fund the payment by CCS of Scheme Claims against Included Scheme Companies not met by insurance recoveries for the following six Financial Years and three years of CCS s running costs. No top-up payment will be made before the first actuarial review in Cape s obligation to provide further funding is limited to the lesser of (1) the top up instalment calculated in accordance with the Funding Agreement and (2) an amount equal to 70 per cent. of the Group s Consolidated Adjusted Operational Cashflow (as defined in the Funding Agreement). 32

33 PART 3 The Cape Directors are aware that a funding obligation calculated by reference to a cash-based test may be open to manipulation. Nevertheless, in the opinion of the Cape Directors, the funding arrangements contained in the Funding Agreement are appropriate and balance the interests of the Group and Scheme Creditors. In particular the Cape Directors believe that: (a) (b) (c) (d) a funding obligation calculated by reference to any other criteria (for example Group profits or net assets) may also be manipulated and would not be workable in practice; any manipulation of the Group s cash position would not be effective other than in the short-term; Cape has little incentive to seek to evade its obligations to fund CCS. For example, if the Scheme Funding Percentage falls below 60 per cent., the Scheme Directors may set a Payment Percentage below 100 per cent. If the Payment Percentage remains below 100 per cent. for 12 months or more, certain Recourse Scheme Creditors would become entitled to enforce all or part of their Recourse Scheme Claims against the Scheme Companies concerned; and Cape has a particular incentive to ensure that CCS is not only fully funded but that the Scheme Funding Percentage is not less than 110 per cent. This is because it is only in such circumstances that Cape would be permitted to pay a dividend to its shareholders. 12. The Payment Percentage CCS will pay all Scheme Claims that it has agreed to pay under the Scheme Guarantee in full whilst the Scheme Funding Percentage is 60 per cent. or greater. Should the Scheme Funding Percentage fall below 60 per cent., CCS will pay Scheme Creditors at a rate (the Payment Percentage) determined by the Scheme Directors until it is able to recommence full payments. Where the Scheme Funding Percentage is 60 per cent. or more the Payment Percentage will always be 100 per cent. For the purpose of setting or revising any Payment Percentage, the Scheme Directors shall obtain and consider such financial and/or actuarial and/or legal and/or other information and advice as they may consider appropriate, which may include the financial position of all or any Group Companies and the interests of Scheme Creditors generally. In setting any Payment Percentage below 100 per cent. the Scheme Directors are obliged to have regard to and consider the likely quantum of all unpaid and future Scheme Claims at the date of their determination. Unless the Scheme Directors reasonably believe that further funds will be advanced to CCS by Cape such to restore the Scheme Funding Percentage to at least 60 per cent., any Payment Percentage set by the Scheme Directors is to be determined on a run-off basis such that in the opinion of the Scheme Directors the Scheme Assets should be sufficient to ensure that all unpaid Scheme Creditors (including prospective creditors) receive payment of the same proportion of their Scheme Claims. The Scheme Directors will at any time be entitled to require that a further independent actuarial review of the value of the Scheme Claims is undertaken in order to be able to ascertain the current level of funding and to determine the Payment Percentage. Cape s funding obligation will not be affected by this review. It is possible that CCS may be obliged to pay more than one Scheme Claim arising out of or otherwise connected to the exposure of one person to asbestos. For example, where a Scheme Claim is established that concerns a non-divisible disease, CCS may (under certain circumstances) become obliged to make payment to both the person who has suffered the disease and, by way of contribution, to another defendant liable in respect of the same injury. Where a Payment Percentage of under 100 per cent. has been set under the Scheme Guarantee, CCS will make payment of the appropriate percentage of the claim of the Scheme Creditor who first establishes his Scheme Claim as an Established Scheme Claim. Unless and until the Payment Percentage is increased, CCS will not make any further payment in respect of that injury, because to do so would result in payment of more than the current Payment Percentage which would be unfair to other Scheme Creditors. On any increase of the Payment Percentage, CCS will apportion the further payment between the Scheme Creditors concerned in such manner as the Scheme Directors shall consider to be fair and reasonable. 33

34 PART Scheme Shares In order to protect the interests of Scheme Creditors, and in particular to ensure the Scheme Assets are only used to settle Scheme Claims and permitted ancillary costs and to ensure that if at any time the Scheme Fund is less than a specified amount dividend payments or any other distribution may not be made outside the Group, special voting shares have been created in CCS and Cape. The rights of the PLC Scheme Share, which are described more fully in paragraph 6.1 of Part 4 of this Section A, are to, provide that, inter alia, without the prior written consent of the Scheme Shareholder all significant transactions carried out by the Group (other than intra-group transactions) must be on arm slength terms, no transactions may be undertaken with related parties unless on arm s-length terms and not materially prejudicial to the interests of Scheme Creditors, Cape may not dispose of any shares in CCS and that, if at any time the Scheme Funding Percentage is 110 per cent. or less, no dividends or other distributions may be made to Cape s shareholders. If Cape is permitted to pay dividends, the dividend may not exceed the greater of (i) 50 per cent. of the consolidated operating profits of the Group for the last preceding Financial Year and (ii) the aggregate of any Permitted Dividends made in the preceding Financial Year. In addition, the PLC Scheme Share prohibits the payment of any dividend prior to the first independent actuarial review in The rights of the CCS Scheme Share, which are described more fully in paragraph 6.2 of Part 4 of this Section A, provide that, inter alia, until all Scheme Claims have been settled, without the prior written consent of the Scheme Shareholder, CCS will not carry on any business or activity other than the management of the Scheme Fund and the conduct and payment of Scheme Claims and permitted ancillary costs and its funds and assets may only be used for that purpose. The CCS Scheme Share will entitle the Scheme Shareholder to appoint two directors (the Scheme Directors) who will represent the interests of Scheme Creditors. The Scheme Shares will be held by the Scheme Shareholder under the terms of the Trust Deed which are described more fully in paragraph 6.3 of Part 4 of this Section A, for the benefit of Scheme Creditors. In exercising any voting rights or other discretion arising in relation to the rights attached to the Scheme Shares, the Scheme Shareholder will take such independent advice as it considers appropriate and have regard to the interests of all Scheme Creditors, both current and future, but will not be required to consult with any individual Scheme Creditors nor their advisers. Law Debenture will be the initial Scheme Shareholder. Founded in 1889, Law Debenture is an independent provider of trustee, fiduciary and related services to the international financial and corporate markets and to occupational pension schemes. Law Debenture may only transfer both, and not only one, of the Scheme Shares to a similar provider of trustee services which will hold the Scheme Shares on the terms of the Trust Deed. 14. Scheme Directors The first Scheme Director is Lord Desai. It is intended that a further Scheme Director will be appointed by the independent Scheme Shareholder prior to the application to the Court for an order sanctioning the Scheme. Further details concerning Lord Desai are set out at paragraph 7 of Part 1 of this Section A. The Scheme Directors will be in a minority on the board of CCS, but only the Scheme Directors will be entitled to vote on, and be counted in the quorum in relation to, any resolution of the board of CCS concerning any or all of the investment criteria on which the Scheme Funds are invested and any decision as to whether to enforce, or the manner of enforcement relating to, the rights of CCS under the Ancillary Agreements and any termination or variation of any or all of these agreements. 15. Modifications to the Scheme Cape may, at any hearing to sanction the Scheme, consent on behalf of all those concerned to any modification of the Scheme or any terms or conditions which the Court may think fit to approve or impose. 34

35 SECTION A: EXPLANATORY STATEMENT PART 4: THE ANCILLARY AGREEMENTS AND THE SCHEME SHARES It is a term of the Scheme that certain Scheme Companies have entered into and perform their obligations in the Ancillary Agreements which are described in this Part 4 below. References in this Part 4 to the Scheme becoming effective shall be construed as meaning the Scheme as it applies to each Scheme Company. 1. Scheme Guarantee Pursuant to the guarantee dated 14 March 2006 between (1) CCS and (2) the Scheme Companies, CCS has undertaken, subject to the Scheme becoming effective, to make payment of Scheme Claims to Scheme Creditors of Included Scheme Companies where there has been established (whether by settlement or court order (subject to special provisions regarding interim orders)) an obligation of the Included Scheme Company to pay an ascertained sum (other than judgment interest). This undertaking applies to the extent that (i) the Included Scheme Company is not holding the proceeds of any insurance or any payment from the FSCS on trust for the Scheme Creditor; (ii) the Included Scheme Company s rights against its insurers have not been transferred to the Scheme Creditor pursuant to the 1930 Act; and (iii) the Included Scheme Company s liability in respect of that Scheme Claim has not otherwise been discharged, for example by an insurer or the FSCS making payment direct to the Scheme Creditor. CCS will make payment of such Scheme Claims in full (that is the Payment Percentage will be 100 per cent.) when the Scheme Funding Percentage is 60 per cent. or greater. Where the Scheme Funding Percentage is below 60 per cent., the Scheme Directors may set a Payment Percentage below 100 per cent., for so long as the Scheme Funding Percentage remains below 60 per cent. Where a Payment Percentage below 100 per cent. has been set, interest will accrue on the unpaid portion of Scheme Claims payable by CCS at the annual rate of 0.5 per cent. above Barclays Bank PLC s base rate. For the purpose of setting or revising any Payment Percentage, the Scheme Directors shall obtain and consider such financial and/or actuarial and/or legal and/or other information and advice as they may consider appropriate, which may include the financial position of all or any Group Companies and the interests of Scheme Creditors generally. In setting any Payment Percentage below 100 per cent. the Scheme Directors are obliged to have regard to and consider the likely quantum of all unpaid and future Scheme Claims at the date of their determination. Unless the Scheme Directors reasonably believe that further funds will be advanced to CCS by Cape such to restore the Scheme Funding Percentage to at least 60 per cent., any Payment Percentage set by the Scheme Directors is to be determined on a run-off basis such that in the opinion of the Scheme Directors the Scheme Assets should be sufficient to ensure that all unpaid Scheme Creditors (including prospective creditors) receive payment of the same proportion of their Scheme Claims. The Scheme Directors will at any time be entitled to require that a further independent actuarial review of the value of the Scheme Claims is undertaken in order to be able to ascertain the current level of funding and to determine the Payment Percentage. Cape s funding obligation will not be affected by this review. CCS will make payment of Scheme Claims payable by it within 20 business days of a Scheme Creditor s Scheme Claim becoming established in accordance with the Scheme. Where a Payment Percentage below 100 per cent. was in force at the time that a Scheme Claim became established and such Payment Percentage is subsequently revised upwards, CCS will make payment of the difference between the original Payment Percentage of the Scheme Claim and the revised Payment Percentage of the Scheme Claim (together with accrued interest on such amount) within 20 business days following the increase in the Payment Percentage. In certain circumstances CCS may be obliged to pay more than one Scheme Claim arising out of or otherwise connected to the exposure of one person to asbestos. An example of such a circumstance is described at paragraph 12 of Part 3 of this Section A above. Where CCS is so obliged, and the Payment Percentage is below 100 per cent., CCS will make payment of the appropriate percentage of the claim of the Scheme Creditor who first establishes his Scheme Claim as a Established Scheme Claim. Unless and until the Payment Percentage is increased, CCS will not make any further payment in respect of that 35

36 PART 4 injury, because to do so would result in payment of more than the current Payment Percentage which would be unfair to other Scheme Creditors. On any increase of the Payment Percentage, CCS will apportion the further payment between the Scheme Creditors concerned in such manner as the Scheme Directors shall consider to be fair and reasonable. Where CCS has discharged any Included Scheme Company s liability in respect of a Scheme Claim and the Included Scheme Company subsequently makes recovery from its insurer or the FSCS of any amount referable to the payment CCS has made, the Included Scheme Company will agree to hold such proceeds on trust for CCS. 2. Funding Agreement Pursuant to the Funding Agreement dated 14 March 2006 Cape has agreed, subject to the Scheme becoming effective, to make a loan to CCS of 40 million, being the initial Scheme funding. Starting in 2008, CCS will every three years commission an independent actuarial review of the projected Scheme Claims against the Included Scheme Companies for the next nine Financial Years not covered by insurance. Following the review, Cape is obliged to make further loans (each loan to be paid in three equal annual instalments) to CCS equal to the Funding Requirement less the value of the Scheme Assets. Cape s payment obligation in any Financial Year will be limited to an amount equal to 70 per cent. of the Consolidated Adjusted Operational Cashflow for the Financial Year immediately preceding the Financial Year in which the proposed payment is to be made. Consolidated Adjusted Operational Cashflow in respect of a Financial Year is the net cash inflow before use of liquid resources and financing adjusted by (a) adding back the cash outflow arising from acquisitions, (b) deducting the capital elements of finance lease rentals, (c) adding back CCS net cash outflow/deducting CCS net cash inflow, (d) adding back top up payments paid under the Funding Agreement during that year, (e) adding back capital expenditure exceeding 125 per cent. of depreciation, (f) deducting repayments of loans to fund CCS and (g) adding back the effect of any transaction not at fair market value or in contravention of the provisions of the PLC Scheme Share. Cape will pay an annual claims payment fee to CCS equal to 5 per cent. of the aggregate amount payable by Cape to CCS under the CCS Reimbursement Agreement in the preceding Financial Year. The terms on which all loans under the Funding Agreement will be advanced to CCS are that such loans and any interest thereon will only be repayable upon the Scheme terminating in accordance with its terms. Upon the Scheme terminating, CCS s obligation to repay such loans will be limited to the extent that it then has sufficient assets to make such repayment. The loans under the Funding Agreement will be deemed to be satisfied by CCS to the extent any payments are due and payable by Cape to CCS under the CCS Reimbursement Agreement. 3. Reimbursement Agreements The purposes of these agreements are to create payment obligations which will not be settled in cash but will be reflected in the internal accounting treatment of the settlement of Scheme Claims and, in the event of the insolvency of an Included Scheme Company, to enable CCS or PLC as the case may be, to prove in the insolvency of the relevant Included Scheme Company. 3.1 CCS Reimbursement Agreement Pursuant to the CCS Reimbursement Agreement dated 14 March 2006 Cape has agreed, subject to the Scheme becoming effective, to pay to CCS an amount of each Scheme Claim that settles or is determined and which CCS has undertaken to pay under the Scheme Guarantee in discharge of an Included Scheme Company s liability in respect of that Scheme Claim. Amounts due under the CCS Reimbursement Agreement will be deemed to be set off against and satisfied by reducing the amount of the loan outstanding under the Funding Agreement. Under this agreement CCS agrees not to commence insolvency proceedings against Cape in respect of any amounts due to CCS. In the event of Cape s insolvency it will be obliged to pay to CCS an amount equal to the future value of all Scheme Claims against Included Scheme Companies. 36

37 PART PLC Reimbursement Agreement Pursuant to the PLC Reimbursement Agreement dated 14 March 2006 each Scheme Company (other than Cape) has agreed, subject to the Scheme becoming effective and conditional upon it becoming an Included Scheme Company, to pay to Cape an amount equal to the amount which Cape is obliged to pay to CCS under the CCS Reimbursement Agreement in respect of each Scheme Claim established against that Scheme Company. Under this agreement PLC agrees not to commence insolvency proceedings against any Included Scheme Company in respect of any amounts due to PLC. In addition, each Included Scheme Company (including Cape) agrees, save as expressly provided therein, not to seek the recovery of any amount from any other Included Scheme Company in respect of, or the subject matter of, any claim which (unless excluded from the Scheme) would have been a Scheme Claim. In the event of the insolvency of an Included Scheme Company (other than Cape) that Included Scheme Company will be obliged to pay to Cape an amount equal to the future value of all Scheme Claims against that Included Scheme Company. 4. Contribution Claims Agreement Pursuant to the Contribution Claims Agreement dated 14 March 2006 each Scheme Company has agreed, subject to the Scheme becoming effective and conditional upon it becoming an Included Scheme Company, to allow CCS to bring in its name any claim for contribution which such Scheme Company may have against any third party, not being a Group Company, in respect of a Scheme Claim where CCS has discharged the obligation of such Scheme Company to pay such Scheme Claim (by making payment itself under the Scheme Guarantee). Each Included Scheme Company will permit CCS to have sole conduct of all proceedings and/or negotiations arising in connection with any contribution claim. Each Included Scheme Company undertakes to CCS that it will not make any agreement, settlement or compromise with any third party in relation to a contribution claim without the prior written consent of CCS; it will consult in good faith with CCS as to the ways in which a contribution claim might be prosecuted, settled, compromised or appealed; and it will make available to CCS and its advisers and agents all such information and assistance as they may reasonably require. Each Included Scheme Company will assign to CCS such proportion of the proceeds of any contribution claims it is entitled to bring as equals the proportion of the Scheme Claim in respect of which the contribution claim arises that was paid by CCS. Where any Included Scheme Company recovers any proceeds from a third party, it will hold such proportion of such proceeds on trust for CCS. CCS s rights under the Contribution Claims Agreement are subject to any rights of the Included Scheme Companies insurers or the FSCS in respect of such matters. The Contribution Claims Agreement will not operate to require any Included Scheme Company to do anything, or refrain from doing anything, which would or might prejudice any insurance cover to which it or other members of the Group may be entitled. 5. Services Agreement Pursuant to the Services Agreement dated 14 March 2006 Cape will, subject to the Scheme becoming effective, provide certain services to CCS to enable it to perform its obligations under the Scheme. Such services include claims handling services, accounting and treasury functions and company secretarial services. Cape may charge CCS for the provision of certain of these services (not including claims handling services which include costs of defending proceedings brought to establish the existence and/or amount of a Scheme Claim) at the cost that Cape itself incurs in providing such services. Regardless of the Payment Percentage set from time to time under the Scheme Guarantee, the fees payable by CCS under the Services Agreement will be paid at 100 per cent., consistent with the treatment of external costs. 6. Scheme Shares and Trust Deed In order to protect the interests of Scheme Creditors, and in particular to ensure the Scheme Assets are only used to settle Scheme Claims and permitted ancillary costs and to ensure that if at any time the Scheme Fund is less than a specified amount, dividend payments or any other distribution may not be made outside the Group, the Scheme Shares have been created and will be issued to the Scheme Shareholder under the terms of the Trust Deed. 37

38 PART Rights of the PLC Scheme Share The following is a summary of the rights which are to be attached to the PLC Scheme Share. The restrictions contained in Section B and Section C are dependent on the passing of the Resolution and, subject thereto, will fall away if the Scheme has not become effective by 30 June A Rights to a distribution and return of capital The PLC Scheme Share does not confer on the Scheme Shareholder any right to receive a distribution or any right to participate in any surplus capital of Cape, save that the Scheme Shareholder has the right to require Cape to redeem the PLC Scheme Share at its par value on or at any time after the termination of the Scheme, in accordance with the procedure specified in the PLC Articles. B Matters requiring the consent of the Scheme Shareholder Cape cannot, at any time after the Effective Date and before the termination of the Scheme (save to the extent that its shareholders have approved the same in a general meeting at which the Scheme Shareholder will be entitled to vote - see Voting Rights below) without the prior written consent of the Scheme Shareholder, engage in any of the activities specified in the PLC Articles which include, but are not limited to, the following: (a) (b) (c) (d) making any distribution to its shareholders other than is properly due and payable in respect of the 3.5 per cent. cumulative preference shares of 1 each in the share capital of Cape (the Preference Shares ) unless: (i) the distribution is made after the first independent actuarial review in 2008; (ii) (iii) (iv) (v) at the time of the making of the proposed distribution, the Scheme Funding Percentage for the Relevant Financial Year (i.e. the Financial Year immediately preceding the Financial Year in which Cape proposes to make the distribution) has been certified in accordance with the terms of the Funding Agreement and the Scheme Directors have not requested an interim actuarial review be conducted under the Funding Agreement which has yet to be concluded; the Scheme Funding Percentage for the Relevant Financial Year is greater than 110 per cent.; at the time of the making of the proposed distribution, the Payment Percentage has not at any time in the previous 40 business days been less than 100 per cent; and the directors of Cape have certified that in their reasonable opinion the Scheme Funding Percentage for the two Financial Years following the Relevant Financial Year is anticipated to be not less than 110 per cent., (any distribution which does not require the prior written consent of the Scheme Shareholder by virtue of satisfying the above conditions is a Permitted Dividend ) provided that no distribution may exceed the greater of (aa) 50 per cent. of the consolidated total operating profits of the Group and (bb) the aggregate of any Permitted Dividends made in the Relevant Financial Year; issuing, allotting or granting any option or right to subscribe for, or otherwise disposing of, any share in Cape having attached to it any rights which are not identical in all respects with those attached to the Ordinary Shares; doing anything which would result in CCS ceasing to be a subsidiary of Cape or disposing of any of the shares in CCS; doing any of the following, save for: (i) bona fide transactions with third parties on arm slength terms at fair market value for the benefit of the Group; (ii) those transactions with related parties which are expressly permitted under the PLC Articles (including transactions between Cape and any Group Company which is a wholly-owned subsidiary or subsidiary undertaking of Cape or between two or more Group Companies which are wholly-owned subsidiaries or subsidiary undertakings of Cape); and (iii) transactions entered into with directors which are permitted under the PLC Articles: 38

39 PART 4 (i) entering into, granting, increasing or extending any security interest over, or acquiring or disposing of, any asset of any Group Company the fair market value of which exceeds the greater of 100,000 and 0.25 per cent. of the aggregate value of the Group s net assets; (ii) entering into, or increasing or extending any liability under, any guarantee or indemnity; (iii) issuing, allotting, granting any options or right to subscribe for, or otherwise disposing of, any share capital in Cape; (iv) undertaking any transactions with related parties, save where the Scheme Shareholder has received prior written confirmation from the auditors that, in their opinion, the proposed transaction is a bona fide transaction on arm s-length terms at fair market value for the benefit of the Group and will not materially prejudice the interests of Scheme Creditors; (e) winding up Cape or making any petition or application regarding the appointment of an administrator; (f) changing the accounting conventions, policies and principles, save where the Scheme Shareholder has received prior written confirmation from the auditors that the interests of the Scheme Creditors, taken as a whole, will not materially be prejudiced; or (g) removing the auditors or appointing new auditors. The PLC Articles also provide that Cape must procure that no Group Company shall do any of the matters listed in paragraphs (c) to (g) above. C Voting Rights The PLC Scheme Share carries two votes for each vote which the holders of other classes of shares in issue at the time of the meeting at which the relevant resolution is proposed are entitled to exercise, on any resolution proposing (or any resolution the effect of which if passed would be) at any time after the Scheme becomes effective and before the termination of the Scheme to engage in any of a number of activities specified in the PLC Articles, which include, but are not limited to, the following: (a) to create or issue any class of any share other than Ordinary Shares, to attach to any share any voting rights which are not identical in all respects with those attaching to the Ordinary Shares or to vary the rights of the Ordinary Shares, the deferred shares of one penny each in the share capital of Cape or the Preference Shares; (b) to alter or to delete, or in any way derogate from the effect of, any Article which is relevant to the rights of the PLC Scheme Share; (c) to do any of the following, save to the extent that it is a Permitted Dividend: (i) make, approve, sanction or ratify any distribution, save for a redemption of any new redeemable shares issued in accordance with the PLC Articles; (ii) give Cape authority to purchase its own shares; (iii) approve or authorise any reduction of the issued share capital of Cape, save where the purpose of the reduction of capital is to remove losses of Cape and does not involve a return of value to its shareholders; (d) to wind up Cape or to approve a company voluntary arrangement; (e) to approve any increase in the borrowing levels set out under the PLC Articles; (f) to remove the auditors or appoint new auditors; (g) to take advantage of the voluntary regime offered by Article 11 of Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on Takeover Bids and in any subsequent legislation implementing the Directive in the United Kingdom; or (h) to authorise or grant authority or power to Cape, its directors, any Group Company or any of the directors of a Group Company to do any of the matters set out in, or ratify anything done by Cape, its directors, any Group Company or any of the directors of a Group Company in breach of the matters listed in paragraph B above and this paragraph C. 39

40 PART 4 D Notice of and proceedings at general meetings The Scheme Shareholder is entitled to receive notice of, and to attend (either by representative or by proxy), every general meeting of Cape and every separate general meeting of the holders of the shares of any class in Cape s issued share capital. Cape will procure that each such notice, which the Scheme Shareholder is entitled to receive, is accompanied by: (i) an opinion from the solicitors to Cape stating whether, in their opinion, the Scheme Shareholder is entitled to vote on any of the resolutions and (ii) a certificate signed by two directors of Cape confirming that, since the last general meeting, no act or omission which required the prior written consent of the Scheme Shareholder under the PLC Articles has occurred without such consent. Save as provided in the PLC Articles (including in respect of those matters listed in paragraph C above), the Scheme Shareholder is not entitled to vote at a general meeting. Where the business of a general meeting includes any matters requiring the consent of the Scheme Shareholder (including those set out in paragraph B above) or any resolutions on which the Scheme Shareholder is entitled to vote (including those set out in paragraph C above), a quorum will not exist unless the Scheme Shareholder is present either by representative or by proxy. The Scheme Shareholder, present either by a representative appointed in accordance with the Companies Act or by proxy, has the right to demand a poll. 6.2 Rights of the CCS Scheme Share The following is a summary of the rights attaching to the CCS Scheme Share. A Rights to a distribution and return of capital The CCS Scheme Share does not confer on the Scheme Shareholder any right to receive a distribution or any right to participate in any surplus capital of CCS, save the right to require CCS to redeem the CCS Scheme Share at its par value on or at any time after the termination of the Scheme, in accordance with the procedure set out in the CCS Articles. B Matters requiring the consent of the Scheme Shareholder CCS will not, at any time after the Effective Date and before the termination of the Scheme or 30 June 2006, if by then the Scheme has not become effective, (save to the extent the shareholders of CCS shall have approved the same in a general meeting at which the Scheme Shareholder will be entitled to vote - see Voting Rights below), without the prior written consent of the Scheme Shareholder do any of the activities listed in the CCS Articles, which include but are not limited to the following: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) make, approve, sanction or ratify the payment of any dividend or the making of any other distribution to any shareholders; approve the transfer of any ordinary share in CCS; carry on any business other than the handling and conduct of Scheme Claims in the UK and the holding and investment of funds to meet such claims (the Business ), or make any change to the nature of the Business; acquire any asset other than in the proper performance of the Business; other than in the proper settlement of a Scheme Claim, transfer or relocate any asset of CCS outside the UK; dispose of or transfer any assets of CCS other than in the proper performance of the Business; enter into, grant, increase or extend any security interest over any assets of CCS; form or enter into any partnership, consortium or any other incorporated or unincorporated association; enter into, increase or extend any liability under any guarantee or indemnity (other than in the proper course of the Business); be wound up, or make any petition or application regarding the appointment of an administrator; issue or create any class of share, save for the issue of further ordinary shares to any existing holder of ordinary shares; 40

41 PART 4 (l) (m) change the accounting conventions, policies and principles, save where the Scheme Shareholder has received prior written confirmation from the auditors that the interests of the Scheme Creditors will not be materially prejudiced; or remove the auditors or appoint new auditors or change the actuaries appointed by CCS. C Voting Rights The CCS Scheme Share carries two votes for each vote which the holders of the ordinary shares in CCS in issue at the time of the meeting at which the relevant resolution is proposed are entitled to exercise, on any resolution which, at any time after the Scheme becomes effective and before the termination of the Scheme or 30 June 2006, if by then the Scheme has not become effective, is proposed as a special resolution or proposes any of the matters specified in the CCS Articles which include, but are not limited to, the following: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) D to grant authority to allot relevant securities or to grant any option to subscribe for or acquire shares in CCS or issue any securities convertible into shares in CCS; to alter any of CCS s share capital; to wind up CCS or to approve a company voluntary arrangement; to make, approve, sanction or ratify any distribution to any shareholders; to amend the CCS Articles or the memorandum of association of CCS; to disapply pre-emption rights on an allotment of equity securities; to vary the rights attaching to any shares in CCS; to give CCS authority to purchase its own shares, or to allow CCS to redeem its own shares out of capital; to remove the auditors or to appoint new auditors; or to authorise or grant authority or power to CCS or the directors of CCS to do any of the matters set out in, or ratify anything done by CCS or the directors of CCS in breach of, the matters listed in paragraph B above and this paragraph C. Notice of and proceedings at general meetings The Scheme Shareholder is entitled to receive notice of, and to attend, every general meeting of CCS and every separate general meeting of the holders of the shares of any class in CCS s issued share capital. CCS will procure that each such notice which the Scheme Shareholder is entitled to receive is accompanied by: (i) an opinion from the solicitors to CCS stating whether in their opinion the Scheme Shareholder is entitled to vote on any of the resolutions and (ii) a certificate signed by two directors of CCS confirming that, since the last general meeting, no act or omission which required the prior written consent of the Scheme Shareholder under the CCS Articles has occurred without such consent. Save as provided in the CCS Articles (including in respect of those matters listed in paragraph B above), the Scheme Shareholder will not be entitled to vote at a general meeting. Where the business of a general meeting includes any matters requiring the consent of the Scheme Shareholder (including those set out in paragraph B above) or any resolutions on which the Scheme Shareholder is entitled to vote (including those set out in paragraph C above), a quorum will not exist unless the Scheme Shareholder is present either by representative or by proxy. The Scheme Shareholder, present either by a representative appointed in accordance with the Companies Act or by proxy, has the right to demand a poll. E Scheme Directors The CCS Scheme Share entitles the Scheme Shareholder to appoint two Scheme Directors to represent the interests of the Scheme Creditors and, by written notice, to the board of CCS to remove any Scheme Director from office. In the event that there are fewer than two Scheme Directors at any one time, the board of CCS shall, as soon as is practical, nominate in writing a candidate whom the board considers to be independent of CCS and of any Group Company, and whom the board also considers would be a suitable representative for the Scheme Creditors. The board of CCS will provide the Scheme Shareholder with a written statement setting out the reasons justifying its opinion as to the independence and 41

42 PART 4 suitability of such nominee. The Scheme Shareholder will then, if satisfied as to the independence and suitability of such nominee, approve the nomination and appoint the nominee to the board as a Scheme Director. If the Scheme Shareholder is not satisfied as to the independence and suitability of the nominee, the board of CCS will repeat this process until the Scheme Shareholder is so satisfied. The Scheme Directors will constitute a minority in the number of directors on the board of CCS. It is proposed that a majority of the directors of CCS be directors appointed by the holder of the ordinary shares in CCS (namely Cape Security Services Limited, a wholly-owned subsidiary of Cape) in order to ensure that CCS is a member of the Group for tax purposes. If this were not so, valuable tax treatment might be lost. On any resolution of the board of CCS (i) concerning any matter pertaining to any or all of the Funding Agreement, the Services Agreement, the Scheme Guarantee, the Contribution Claims Agreement, the PLC Reimbursement Agreement and the CCS Reimbursement Agreement, including, without limitation, the decision as to whether to enforce, or the manner or enforcement relating to, the rights of CCS under these agreements; and any termination or variation (including, without limitation, any modification, forgiveness, forbearance, indulgence, delay, failure to enforce, waiver, release, abandonment, compromise or any other variation in or of any payment or other obligation of any Group Company) of any or all of these agreements; (ii) approving the determination, variation or amendment of the Payment Percentage and calling for an independent actuarial review of the value of Scheme Claims for such purpose; (iii) approving the determination, variation or amendment of the investment criteria upon which the assets of CCS are held and invested in order to satisfy its obligations in relation to Scheme Claims under the Scheme Guarantee; or (iv) concerning the amendment, variation or termination of the Trust Deed, only the Scheme Directors will constitute a quorum and be entitled to vote thereon. The CCS Articles also provide that no director of CCS may delegate any of his powers in relation to those matters. 6.3 Trust Deed Pursuant to the Trust Deed dated 14 March 2006 and entered into by Cape, CCS and Law Debenture, Law Debenture has agreed conditional upon the issue of the PLC Scheme Share and the Scheme becoming effective to hold each of the Scheme Shares on trust for Scheme Creditors, subject to and on the terms of the Trust Deed. The Trust Deed provides that Law Debenture is able to exercise its voting and/or consent rights (set out in the summaries of the PLC Articles and the CCS Articles in paragraphs 6.1 and 6.2 above) to any matter in its absolute discretion provided that it complies with the requirements of the PLC Articles, the CCS Articles and the Trust Deed. It must not exercise any discretion as to whether to give consent or vote in any way which it considers to be materially prejudicial to the interests of any of the following categories of Scheme Creditor, each taken as a whole, under the Scheme: (a) (b) (c) (d) Recourse Scheme Creditors; General Scheme Creditors; Earlier Scheme Creditors (being Scheme Creditors whose claims are to fall due in the first nine Financial Years considered in the most recent actuarial review together with any Scheme Creditors whose claims have become established but who have yet to receive full payment from CCS as a result of the Payment Percentage being less than 100 per cent.); and Later Scheme Creditors (being Scheme Creditors other than Earlier Scheme Creditors). Law Debenture will not exercise its voting rights and/or consent rights to approve or consent to any act, omission or matter unless both of the Scheme Directors (or, if there is only one, the Scheme Director) shall first have recommended in writing that Law Debenture do so. However, Law Debenture is not obliged to follow any such recommendation and is in its absolute discretion free not to do so and to vote against or reject such resolution, act, omission or matter. The Trust Deed also provides that Law Debenture shall be entitled to give its consent to any variation to, or termination of, any of the Scheme Guarantee, the Funding Agreement, the PLC Reimbursement Agreement, the CCS Reimbursement Agreement, the Contribution Claims Agreement and the Services Agreement in its absolute discretion provided that it complies with the requirements of the PLC Articles, the CCS Articles and the Trust Deed. Law Debenture shall only give such consent where: 42

43 PART 4 (a) (b) both Scheme Directors (or, if there is only one, the Scheme Director) shall have certified in writing to Law Debenture that they have consented to such variation or termination and are of the opinion that such variation or termination is: (i) (ii) in the interests of the Scheme Creditors taken as a whole; and not materially prejudicial to the interests of each of the above categories of Scheme Creditor (each category taken as a whole); and Law Debenture considers that such variation or termination is: (i) (ii) in the interests of the Scheme Creditors taken as a whole; and not materially prejudicial to the interests of each of the above categories of Scheme Creditor (each category taken as a whole). Law Debenture shall not give any such consent if it is unable to form the view that to give such consent would not be materially prejudicial to the interests of each of the separate categories of Scheme Creditor. For the purposes of determining whether any action to be taken by it (or not to be taken by it) is in the interests of the Scheme Creditors or is not materially prejudicial to the interests of any category of Scheme Creditor, Law Debenture shall be entitled (but not obliged) to rely on any recommendation or certification provided to it by any of the Scheme Directors in relation to such action, without taking any further advice or making any other enquiries. Further, Law Debenture is not required to consult with any of the Scheme Creditors or any representative of the Scheme Creditors. The Scheme Shareholder may only transfer both, and not only one, of the Scheme Shares to another provider of similar independent trustee services which has agreed to hold the Scheme Shares on the terms of the Trust Deed. It may also transfer the Scheme Shares to another company within its group, provided that the prior consents of Cape, CCS and the Scheme Directors have been obtained. Under the terms of the Trust Deed, the Scheme Shareholder is able to rely on communications, including certificates, from the Cape Board, the board of CCS and the Scheme Directors without being liable for so doing and without being required to check the accuracy, validity or authorisation of such communication. Cape is responsible for the Scheme Shareholder s fees and expenses and will indemnify the Scheme Shareholder against all liabilities and expenses properly incurred by the Scheme Shareholder in the proper performance of its duties under the Trust Deed, the PLC Articles and the CCS Articles and against all actions, proceedings, costs, claims, damages, expenses and demands in respect of any matter relating to the Trust Deed, the PLC Articles and/or the CCS Articles. Law Debenture may retire as the Scheme Shareholder by giving three months prior written notice to Cape and CCS provided that it uses all reasonable endeavours to procure that a new Scheme Shareholder, being a Trust Corporation (as defined therein), is appointed and that such new Scheme Shareholder enters into a deed of adherence agreeing to be bound by the terms of the Trust Deed. The Trust Deed contains a confidentiality undertaking given by Law Debenture by which it agrees, subject to limited exceptions, not to divulge any information given to it pursuant to the Trust Deed which is confidential to the Group unless prior written approval is given by Cape or CCS or unless required by applicable law or regulatory authority. The CCS Articles provide that only Scheme Directors are entitled to vote on, and be counted in the quorum in relation to, any resolution concerning any changes to the Trust Deed. Provided that, in exercising the powers, authorities and discretions vested in it under the Trust Deed, the Scheme Shareholder shall have acted honestly and reasonably and with a view to protecting the interests under the Scheme of the Scheme Creditors taken as a whole, the Scheme Shareholder will not be liable for any loss or damage resulting from the exercise or non-exercise thereof. 7. Banking Agreement The Banking Agreement is a secured facility agreement between CISGL as borrower (1), Cape, Cape Calsil Systems Limited, Cape Calsil Group Limited, Cape Overseas Limited, CISL, CISGL, Cape East Limited, Cape East (UK) Limited, Cape Industrial Services Europe Limited and Cape East Pte Ltd as guarantors (2) and Barclays Bank PLC ( Barclays ) as lender (3) dated 27 August 2003 and conditionally 43

44 PART 4 amended and restated on 31 January 2006 pursuant to which Barclays has agreed to make available to CISGL a new term loan facility ( Facility A ) of up to 15 million (repayable by way of 10 half-yearly instalments of 1.5 million with the first such instalment falling due on 31 December 2006), an ongoing multicurrency revolving credit and terminable indemnity facility of up to 15 million, and an ongoing terminable indemnity facility of 12 million. Pursuant to a guarantee contained within the Banking Agreement the guarantors have jointly and severally guaranteed to Barclays the performance of CISGL s obligations under the Banking Agreement and any ancillary facility provided by Barclays and have undertaken to pay any sum on demand to the extent that CISGL fails to satisfy its payment obligations. The obligations of CISGL and the guarantors arising under the Banking Agreement are secured by fixed and floating charges granted by CISGL and each of the above-mentioned guarantors (save for Cape East Pte Ltd) in respect of their assets and undertakings pursuant to a debenture dated 29 August The Banking Agreement provides that Barclays shall have no recourse whatsoever to CCS. In addition CISGL and CISL granted to Barclays a cross guarantee on 27 August 2003 so as to guarantee to the lender the payment of all indebtedness of such guarantors to Barclays from time to time. Drawdown of Facility A to fund CCS must be made by 30 June 2006 and is conditional upon, inter alia, the Scheme having been sanctioned by the Court and there having been no material adverse change in the financial condition, prospects or business of the Group which affects the ability of any of the Group Companies to perform their obligations under the Banking Agreement. 44

45 SECTION A: EXPLANATORY STATEMENT PART 5: RECOURSE SCHEME CLAIMS 1. Introduction There are certain Scheme Creditors whose Scheme Claims may be the subject matter of a contract of insurance in respect of which neither the insurer nor the FSCS responds to the full extent of the insurer s obligations under that contract following the Scheme Claim settling or determining. Certain of these Scheme Creditors may, in the event of the relevant Included Scheme Company s insolvency, be entitled to payment of all or any part of their Scheme Claim by the insurer or, if the insurer is insolvent, the FSCS. This is because a company s rights against its insurer automatically transfer to and vest in the claimant upon certain insolvency events happening to the company. Additionally, where a claimant fails to recover in full from an insurer as a result of the insurer s insolvency, the FSCS will compensate certain claimants for all or a major part of their loss. An intention of the Directors in seeking to implement the Scheme is to reduce the likelihood of any Included Scheme Company becoming insolvent. However, where CCS has set a Payment Percentage below 100 per cent., the Scheme could prejudice those Scheme Creditors who would be entitled to a payment from an insurer or from the FSCS on the insolvency of an Included Scheme Company as such Scheme Creditors will be prevented by the Scheme from forcing that Included Scheme Company to pay their Scheme Claim or become insolvent. The Scheme will therefore permit such Scheme Creditors to be released from their agreement not to enforce payment of their Scheme Claim by the Included Scheme Company where: (a) (b) (c) the Included Scheme Company is insolvent; or the Payment Percentage is 50 per cent. or lower; or the Payment Percentage is less than 100 per cent. but more than 50 per cent. and the Scheme Creditor has not been paid in full after 12 months. The Scheme Creditor will be automatically released from his agreement not to enforce payment by the Included Scheme Company in the event of the Included Scheme Company s insolvency. In the other circumstances, the Scheme Creditor s written election will be required. Where the Scheme Creditor is given recourse to enforce a payment by the Included Scheme Company, CCS s obligation to make payment to him under the Scheme Guarantee will be reduced by an equivalent amount. 2. Scheme Claims that may require recourse The types of Scheme Claim in respect of which Scheme Creditors may have recourse to enforce payments from the relevant Included Scheme Company are: (a) (b) claims covered by non-compulsory EL insurance, where the insurer is now insolvent. The reason such Scheme Creditors may require recourse is because the FSCS will compensate a claimant as to up to 90 per cent. of the amount that he would have received from an insurer, but only where the insurer and the insured (i.e. the Included Scheme Company defendant) are insolvent; claims covered by policies of compulsory EL insurance issued by Iron Trades between 1 January 1972 and 31 December 1974 and by Guardian Royal Exchange Assurance Group Limited ( GRE ) between 1 January 1975 and 30 June 1981 under what are known as fronting arrangements. Chester Street is the successor body to Iron Trades. Chester Street is now administered pursuant to an insolvent scheme of arrangement. GRE is now part of the Axa Group and is currently solvent. Chester Street and GRE are together referred to below as the Relevant Insurers. From 1 January 1972 it was compulsory in the UK, other than Northern Ireland, for an employer such as the Scheme Companies to maintain EL insurance. Where an insurer in respect of such compulsory insurance is or becomes insolvent, the FSCS will compensate the insured (or the claimant where the insured is also insolvent) as to 100 per cent. of the amount that he would have received from the insurer. 45

46 PART 5 (c) The policies of insurance between certain Scheme Companies and the Relevant Insurers were in respect of compulsory EL insurance. However, as part of the policies of insurance, the Scheme Companies agreed to indemnify the Relevant Insurers against certain liabilities that the Relevant Insurers might incur under the policies. These indemnities related to asbestos claims. The Cape Directors believe that the reason that such indemnities were put in place is likely to be because, from 1 January 1972, the relevant Scheme Companies had a legal obligation to maintain comprehensive policies of EL insurance but the Relevant Insurers were unwilling to assume economic liability for asbestos claims for as long as those Scheme Companies remained solvent. Whilst the interpretation of these fronting arrangements has not been determined by a court of competent jurisdiction, the Scheme Companies have received advice that it is likely that a court would find that the FSCS is not responsible for paying compensation to any Scheme Companies, as the Relevant Insurers could set off any compensation payable to an insured Scheme Company against the amount that would then be owed by that Scheme Company under the indemnity. However, the advice that the Scheme Companies have received is that it is likely that the FSCS would be responsible for paying compensation to a claimant where the Scheme Company had become insolvent, as the Relevant Insurers would not be able to exercise any right of set-off against the claimant. Therefore, it is likely that the FSCS will only pay compensation to a claimant whose Scheme Claim is insured under the fronting arrangements where the Relevant Insurer concerned and the Scheme Company are insolvent; claims brought in respect of a non-divisible disease where the Included Scheme Company has insurance cover for part but not all of the period of culpable exposure. A non-divisible disease (being any cancer, including mesothelioma) is one which current medical opinion holds is caused by exposure to one or relatively few asbestos fibres, as opposed to a divisible disease which current medical opinion holds is caused, and the degree of severity of suffering increased, through cumulative exposure over time. Historically there was some uncertainty regarding the extent of the rights that an insured had against its insurer where a claim was brought against the insured in respect of a non-divisible disease. This issue was considered in the case of Phillips v Syndicate 992 Gunner (2003) ( Gunner ). The Court held in Gunner that any insurer that provided insurance cover in all or any of the years when the claimant may have been exposed to the asbestos fibre or fibres that caused his disease is liable to indemnify the insured for the whole claim. The decision in Gunner led to the development of the ABI Guidelines relating to the sharing of awards in respect of such claims between defendants and their insurers and among insurers. The ABI Guidelines seek to apportion awards between defendants and their insurers on the same basis as if the claim was in respect of a divisible disease. Whilst the ABI Guidelines are not binding on the Scheme Companies, the Scheme Companies currently handle claims and deal with their insurers in accordance with market practice in a manner consistent with the ABI Guidelines. The Directors are not aware of any insured company that seeks recovery from its insurers on any other basis. The Directors will continue to review this approach on a regular basis taking into account any changes in market practice, the legal environment and the specifics of the Scheme Companies own insurance programmes, with regard to the interests of the Group and its creditors as a whole. For Scheme Claims in respect of non-divisible diseases, absent any changes in the current basis of apportionment between the Scheme Companies and their insurers, if CCS is paying a Payment Percentage below 100 per cent., this approach could result in certain claimants receiving a payment that is lower than that which they might receive from an insurer (or, in certain cases, the FSCS). 46

47 PART 5 3. Events upon which recourse may be permitted Upon the occurrence of any of the events described in sub-paragraphs (a) to (c) of paragraph 1 above, those Scheme Creditors whose Scheme Claims are described in any of sub-paragraphs (a) to (c) of paragraph 2 above will be permitted to enforce such amount of their Scheme Claim against the Included Scheme Company concerned as equals the Recourse Liability. The Recourse Liability is that amount of the Scheme Claim that a solvent insurer would have paid to the claimant (had the Included Scheme Company been insolvent at the time that the Scheme Claim settled or determined) less an amount to reflect certain payments that the Scheme Creditor has received with respect to his Scheme Claim. The calculation of Recourse Liability is described in more detail at paragraph 8 of Part 6 of this Section A. For the purposes of constituting classes of Scheme Creditor for voting on the Scheme, any person who the Scheme Companies believe may bring a Scheme Claim which is, in whole or in part, the subject matter of a policy of insurance will be included in the class of Recourse Scheme Creditors. However, there is no certainty that even where such a Scheme Creditor brings a Scheme Claim, it will be covered as to any part by a contract of insurance nor that (even where it is) the Scheme Creditor will be permitted recourse in respect of all or any of any Included Scheme Companies liability with regard to such Scheme Claim. 47

48 SECTION A: EXPLANATORY STATEMENT PART 6: CLAIMS HANDLING AND HOW THE SCHEME WILL BE OPERATED 1. General Save in relation to claims arising from the activities of those Additional Companies that are Dissolved Group Companies (in relation to which, since 2001, Cape has maintained that it is not responsible), the claims of Scheme Creditors will be handled in the same manner as is currently the case. As regard claims arising from the activities of the Additional Companies in general, the Scheme Companies reserve the right to deny liability as explained in paragraph 3 of Part 2 of this Section A above. Following the implementation of the Scheme, Scheme Creditors should continue to notify their claims to the appropriate Included Scheme Company(s) in the first instance. Any proceedings commenced against an Included Scheme Company in respect of a Scheme Claim should also be issued against CCS as a co-defendant. The party responsible for handling a Scheme Claim brought after the implementation of the Scheme will be the same party who would have been responsible for handling the claim even if the Scheme had not been put in place. Generally a Scheme Claim will be handled by Cape itself or by an insurer. It is only where the Payment Percentage in force when a Scheme Claim becomes established is below 100 per cent. and the claim in question is not paid in whole by a solvent insurer or by the FSCS that you may receive a lower payment to that which you might have received had the Scheme not been in force. This is because the Scheme Guarantee, which is the agreement whereby CCS has agreed to make payment of Scheme Claims to Scheme Creditors of Included Scheme Companies, permits the Scheme Directors to set a Payment Percentage below 100 per cent. where the Scheme Funding Percentage is less than 60 per cent. and for so long as the Scheme Funding Percentage remains below 60 per cent. It is not possible to say whether in all cases the payment that you may receive under the Scheme will be more or less than the payment that you would have received had the Scheme not been approved. The payment may be less where the defendant Included Scheme Company is solvent but Cape is not able to fund CCS to make payments at 100 per cent. at that time. Alternatively, for example where the defendant Included Scheme Company is insolvent or has no assets, the payment that you receive from CCS may be more than you would have received from the Included Scheme Company. It should be remembered that even where it has set a Payment Percentage below 100 per cent., CCS will remain liable for the entire amount of the Scheme Claims payable by it and it will make further payment in respect of such claims as and when the Payment Percentage is increased. 2. Claims handling services Scheme Claims that are not covered by insurance will, as before the Scheme, be handled on behalf of the defendant Included Scheme Companies by Cape s in-house claims handling team who will deal with these Scheme Claims from notification to the agreement, determination or withdrawal of the Scheme Claim. Subject to claims arising from the activities of the Additional Companies, in relation to which the Scheme Companies reserve the right to deny liability, the focus of the team will be to seek the agreement of valid Scheme Claims without, wherever possible, the need for litigation. Cape will call on the provision of third party services, for example solicitors, as required. CCS will have the provision of certain claims handling and other services made available to it by Cape under the Services Agreement. The principal terms of the Services Agreement are summarised at paragraph 5 of Part 4 of this Section A. The cost of the handling of Scheme Claims will continue to be paid by the Included Scheme Companies together with any legal or other fees incurred by the Included Scheme Company or CCS during the claims agreement process. CCS will not be responsible for meeting these costs. 48

49 PART 6 The Included Scheme Companies will not be responsible for handling all Scheme Claims. However, the circumstances in which the Included Scheme Companies will not be responsible for handling a Scheme Claim will be the same following implementation of the Scheme as before the Scheme. The principal circumstance in which a Scheme Claim may be handled other than by the Included Scheme Companies is where the claim is covered either in whole or as to the larger part by a policy of insurance, where an insurer is likely to handle the claim. 3. Claims handling protocol The Scheme Companies now follow a claims handling protocol for asbestos-related personal injury claims as described below: Notification of a potential claim Once you, or your solicitor, has notified the Included Scheme Company in writing that you may have a claim, the Included Scheme Company will endeavour to provide any records relating to you in the possession of the Included Scheme Companies that you or your solicitor has requested (for example your employment records) within 40 days of the date of the Included Scheme Company s receipt of the request. If you decide not to proceed with your claim you are asked to advise the Included Scheme Company, in writing, of this as soon as possible. If you decide to proceed with your claim you, or your solicitor, should send the Included Scheme Company a letter of claim as soon as sufficient information is available to substantiate a realistic claim. This letter should be in the standard format as suggested in the Pre-Action Protocol for Illness and Disease Claims. Receipt of a letter of claim The Included Scheme Company will endeavour to acknowledge, in writing, your potential claim within 21 days of the date of its receipt of the letter of claim and will identify the Included Scheme Company s insurer, if any, who is expected to deal with the matter (please see below). It will be the responsibility of the Included Scheme Companies to ensure that the claimant and the lead insurer are notified of the identity of all other insurers involved within one month of the date of the letter of claim being provided to the insurer. Insured claims If the Included Scheme Company establishes that your claim is covered in whole or any substantial part by insurance, the matter will be referred to the lead insurer who it is expected will take responsibility for the handling of your claim. This will be carried out in accordance with that insurer s own claims handling protocol. Negotiation and settlement of your claim will be dealt with by the relevant insurer, and they will advise the Included Scheme Company of the outcome only. Where there are multiple defendants, the lead insurer would be expected to seek instructions from the other defendants at key stages. Uninsured claims The Included Scheme Company concerned will review all documentation provided by you, or your solicitor, relating to the claim, and will obtain other documentation as it considers necessary. Within three months of its receipt of your letter of claim, the Included Scheme Company will endeavour to advise you, or your solicitor, whether it considers that the Included Scheme Company is or is not liable for the claim. If the Included Scheme Company considers that is liable, it will endeavour to negotiate a settlement of the claim. If the Included Scheme Company considers that it is not liable, the reasons for this will be clearly set out in the response to you or your solicitor. 49

50 PART 6 Claims in respect of non-divisible diseases and the ABI Guidelines As described above, the Scheme Companies currently apportion liability with their insurers and any codefendants (including their insurers) in respect of claims made against them regarding non-divisible diseases in accordance with market practice in a manner consistent with the apportionment principles contained in the ABI Guidelines. The Scheme includes a provision whereby Scheme Creditors approve and ratify this approach for the time being, but leaves it open for the Included Scheme Companies to adopt a different approach if they consider it to be appropriate to do so. The Included Scheme Companies and CCS may amend the claims handling protocol from time to time to take account of changing legislation and practices within the insurance and legal environments. Claims against the Additional Companies Where the claim is not covered by any contract of insurance, the Additional Company will be responsible for handling the claim against the Additional Company and the relevant Included Scheme Company and CCS will be responsible for handling any claim against an Included Scheme Company and CCS. The ability of an Additional Company to handle uninsured claims against it, and to pay compensation in respect of such claims, is dependent upon the assets available to the Additional Company concerned. Some of the Additional Companies are in liquidation or are dissolved. It may be that such companies are not able to pay any compensation in respect of claims made against them. Where the claim against the Additional Company is covered in any part by an insurer, it is likely that the insurer will handle the claim. Where the claim against the Additional Company is covered in any part by an insolvent insurer, the FSCS may respond to pay compensation in respect of the claim. Under its rules the FSCS may make it a pre-condition of it making payment in respect of the claim that you have exhausted your rights against any other relevant parties or that you assign any such rights that you have to the FSCS. These rights could include your rights (if any) against an Included Scheme Company. If your claim is only against an Additional Company, you will not be entitled to receive payment from CCS. However if your claim is against an Additional Company which might have an indemnity from an Included Scheme Company your rights against the Additional Company may be affected by the Scheme because any such claim by an Additional Company against an Included Scheme Company would itself be a Scheme Claim. Certain of the Additional Companies are dormant; some are in liquidation; and some have been dissolved (of which some have been reinstated to the Register of Companies). Of the Additional Companies that are in liquidation, due to the passage of time that has elapsed since their liquidation commenced, some of them may not have any director(s) or a liquidator who is alive and in office. Where any such company does not have a director or liquidator, you are likely to need to seek the appointment of a liquidator by the Court, in order for the Additional Company to enforce its rights against the Scheme Company concerned. Even where a liquidator is either currently in office or is subsequently appointed, any recovery that an Additional Company makes from a Scheme Company may not be immediately paid in full to you. This is because the monies that the Additional Company recovers from the Scheme Company are likely to form part of the Additional Company s general assets for distribution to its creditors in its liquidation. The Scheme Companies intend to seek agreement with any liquidator of an Additional Company (including those subsequently appointed) that such liquidators will forward to the claimants concerned as much of the proceeds recovered, and as quickly as possible, as can be agreed. However, there can be no certainty regarding the timing or terms of such agreements. 4. Payment of claims CCS will make payment to you of your Scheme Claim in accordance with the terms of the Scheme Guarantee. A summary of the terms of the Scheme Guarantee is contained at paragraph 1 of Part 4 of this Section A. Any claim that has been agreed by an Included Scheme Company or has been determined against an Included Scheme Company (in both events as to liability and quantum) will not be disputed by CCS. 50

51 PART 6 CCS will make payment of a Scheme Claim payable by it within 20 business days of the Scheme Claim becoming established. Where a Payment Percentage below 100 per cent. is in force at the time that a Scheme Claim becomes established and such Payment Percentage is subsequently revised upwards, CCS will make payment of the difference between the original Payment Percentage of the Scheme Claim and the revised Payment Percentage of the Scheme Claim (together with accrued interest on such amount) within 20 business days following the increase in the Payment Percentage. The Payment Percentage under the Scheme Guarantee will be 100 per cent. where the Scheme Funding Percentage is 60 per cent. or greater. Where the Scheme Funding Percentage is below 60 per cent. the Scheme Directors may set a Payment Percentage below 100 per cent. 5. Insolvency of a Scheme Company If the Scheme is not approved, your rights to recover from the Included Scheme Company concerned and your likely prospects of recovery in respect of your claim would in part depend upon whether your claim was covered in whole or as to any part by a contract of insurance. If your claim was not covered as to any part by a contract of insurance then (provided that you already have an accrued cause of action or there has been an appropriate change to the rules (as to which see paragraph 11 of Part 1 of this Section A on page 13 above)) you would rank as an unsecured creditor in the insolvency of the Included Scheme Company and you would be entitled to the dividend (if any) that was paid to such creditors in the company s liquidation. The Directors consider that is likely that you would receive little or no payment in respect of your claim. If the Scheme is approved, the insolvency of any Included Scheme Company will not affect your rights to payment of your claim by CCS. CCS s obligation to pay Scheme Claims which are not the subject matter of a contract of insurance is not dependant upon the continued solvency of the defendant Included Scheme Company. This is the case whether or not you have an accrued cause of action. Any claimant in respect of a claim which is covered in whole or as to any part by a contract of insurance, whether the insurer in respect of that claim is solvent or not, would have the right to make a claim against that insurer transferred to him upon the insolvency of the Scheme Company (whether an Included Scheme Company or an Excluded Scheme Company). The reason for this is that the 1930 Act provides for the automatic transfer of a company s rights against its insurers to claimants against that company upon certain stipulated insolvency events happening to the company. The Scheme provides that CCS s obligation to make payment to a Scheme Creditor of so much of his claim as equals the amount of his claim which is payable by an insurer and in respect of which rights against that insurer have been transferred to him by virtue of the 1930 Act will cease upon those rights being transferred to him. CCS will remain responsible to pay to the Scheme Creditor so much (if any) of his claim which is not so payable by an insurer. The position of a creditor of an Excluded Scheme Company which becomes insolvent is not affected by the Scheme. 6. Insolvency of insurers A number of the Scheme Companies former insurers are now insolvent and insurers which are currently solvent may become insolvent in the future. The impact on the payment of a Scheme Claim of the insolvency of an insurer will depend upon the solvency of the defendant Included Scheme Company and also upon the nature of the claim - namely whether it is in respect of an EL or a PL liability. Where the defendant Included Scheme Company remains solvent, rights against the insurer will not have been transferred to the Scheme Creditor under the 1930 Act. However, any payment that the defendant Included Scheme Company receives either by way of dividend paid to creditors in the insurer s liquidation or from the FSCS will be held by the Included Scheme Company on trust for the Scheme Creditor and will be paid to him within 20 business days of the Included Scheme Company s receipt of such monies. 51

52 PART 6 Where the Included Scheme Company is not solvent, its rights against its insurers will have automatically transferred to and vested in the Scheme Creditor under the 1930 Act. The insolvency of an insurer may, depending upon the nature of the claim, result in the claimant receiving a payment from the FSCS. 7. The FSCS and payments by the FSCS The FSCS is a company limited by guarantee established by the Financial Services Authority in accordance with section 212 of FSMA. The FSCS exercises the functions conferred on it by the Policyholders Protection Act 1975 which were previously carried out by the Policyholders Protection Board and also the functions conferred on it by FSMA to compensate persons in cases where relevant persons (as defined in FSMA) are unable, or are likely to be unable, to satisfy claims against them. Insurance companies are examples of such relevant persons. Where a claim is made against a Scheme Company and that claim is one in respect of which it was compulsory for the Scheme Company to maintain a contract of EL insurance but the insurer with which the Scheme Company had insurance is now insolvent, the Scheme Company is eligible for compensation from the FSCS in respect of its claim. Since 1 January 1972 in England, Wales and Scotland (29 December 1975 in Northern Ireland) it has been compulsory for the Scheme Companies to maintain EL insurance in respect of claims arising by virtue of events that occurred after such dates. The FSCS will pay to the Scheme Company an amount equal to the amount that the insurer would have paid had it been solvent. Where a claim is made against a Scheme Company and that claim is one in respect of which it was not compulsory for the Scheme Company to maintain a contract of insurance but the claim is one which it would have been compulsory for the Scheme Company to have maintained insurance against had the events giving rise to the claim occurred after 1 January 1972 (29 December 1975 in Northern Ireland), the Scheme Company is not eligible for compensation from the FSCS in respect of its claim. However if the Scheme Company is also insolvent and its rights against its insurers have transferred under the 1930 Act to the claimant, the claimant may be eligible for compensation from the FSCS. The FSCS will make payment to the Scheme Creditor of up to 90 per cent. of the amount that the insurer would have paid had it been solvent. Where a claim is made against a Scheme Company and that claim is not one in respect of which it either was or would have been compulsory for the Scheme Company to maintain a contract of insurance at any time, for example PL claims, the FSCS will not make payment to either a Scheme Company or, where the Scheme Company is insolvent, a Scheme Creditor on the insolvency of the insurer. 8. Claims handling protocol: special provisions for Recourse Scheme Claims As stated at paragraph 3 of Part 5 of this Section A above, not all Scheme Claims which are classified as Recourse Scheme Claims for the purposes of the Scheme Meetings will prove to be covered by insurance. Where a Scheme Claim does prove to be covered by insurance (whether or not it was classified as a Recourse Scheme Claim for the purposes of the Scheme Meetings) it will be classified as a Recourse Scheme Claim for the purposes of the Scheme. Where a Scheme Company has a policy of insurance that covers a Scheme Claim, upon agreement of the Scheme Claim, the insurer will usually make payment of any monies that are due (which may cover the Scheme Claim in whole or in part), direct to a Scheme Creditor (or his agent) rather than to the Scheme Company. The Scheme provides that in the event that the insurer or the FSCS makes the payment to an Included Scheme Company, the Included Scheme Company will hold that money on trust for the Scheme Creditor and pay it to the Scheme Creditor within 20 business days of receiving the money, unless that part of the Scheme Creditor s claim to which the money relates has already been discharged. A Scheme Creditor can enforce his claim against an Included Scheme Company to recover any sums held on the Scheme Creditor s behalf in accordance with this trust. For the reasons described in Part 5 of this Section A, there are certain Recourse Scheme Creditors who in certain circumstances will be released (the Release ) from their agreement not to enforce their Recourse Scheme Claim against an Included Scheme Company. 52

53 PART 6 The amount of the Recourse Scheme Claim to which the Release applies is equal to the Recourse Liability. The Recourse Liability is calculated under the Scheme as being the amount of the claim which is Recoverable less an amount equal to the Net Payment. When the Payment Percentage is less than 100 per cent., upon any Recourse Scheme Claim settling or determining, the Included Scheme Companies will notify the Scheme Creditor of the amount of the Scheme Claim which is Recoverable for the purposes of the Scheme. The amount of any Recourse Scheme Claim that is Recoverable is the amount of the claim that an insurer is liable to pay less the amount that it actually paid or was paid on its behalf. Where the Payment Percentage is 100 per cent. the Scheme Claim will be paid in full and therefore there will not be any amount which is Recoverable to which the Scheme Creditor would be entitled. The Net Payment is equal to the gross aggregate payment made by CCS to the Scheme Creditor pursuant to the Scheme Guarantee multiplied by the result of dividing the Recoverable amount by the total liability of CCS to the Scheme Creditor under the Scheme Guarantee. Some worked examples of the calculation of the Recoverable amount, the Net Payment and the Recourse Liability are set out below: Divisible Disease 1. Recourse Scheme Claim settles for 100 Half of the period of culpable exposure was insured with an insurer that is solvent. The insurer therefore pays 50. Regardless of the prevailing Payment Percentage there is no Recoverable amount because the insurer has discharged its liability in full. 2. Recourse Scheme Claim settles for 100 Half of the period of culpable exposure was insured with an insurer that is no longer solvent. However, the element of the claim that is insured is in respect of EL insurance that post-dates The FSCS therefore pays 50. Regardless of the prevailing Payment Percentage there is no Recoverable amount because the insurer's liability has been discharged in full by the FSCS. Examples 3 and 4 assume that the insurance is in respect of EL cover that pre-dates 1972 and that the relevant Included Scheme Company remains solvent. 3. Recourse Scheme Claim settles for 100 Half of the period of culpable exposure was insured with an insurer that is now insolvent. Insurer pays nothing. The prevailing Payment Percentage is 60 per cent. and CCS therefore pays 60 ( 100 x 60 per cent.). The amount which is Recoverable is 50 ( 50-0). The Net Payment is 30 ( 60 x 100). 50 The Recourse Liability is therefore 20 ( 50-30). 4. Recourse Scheme Claim settles for 100 Half of the period of culpable exposure was insured with an insurer that is now insolvent. The insolvent insurer s estate is paying a dividend and it pays 10. The prevailing Payment Percentage is 60 per cent. and CCS therefore pays 54 ( 90 x 60 per cent.). The amount which is Recoverable is 40 ( 50-10). The Net Payment is 24 ( 54 x 40 90). The Recourse Liability is therefore 16 ( 40-24). 53

54 PART 6 Non-divisible Disease 5. Recourse Scheme Claim settles for 100 Half of the period of culpable exposure was insured with an insurer who is solvent. The insurer's legal liability is to pay 100 but on the basis of the ABI Guidelines the insurer pays 50. The prevailing Payment Percentage is 60 per cent. and CCS therefore pays 30. The amount which is Recoverable is 50 ( ). The Net Payment is 30 ( 30 x 50). The Recourse Liability is therefore 20. Under current law, for Recourse Scheme Claims in respect of Non-divisible diseases, the Recourse Liability will always equal so much of the Scheme Claim that remains unpaid. 54

55 SECTION A: EXPLANATORY STATEMENT PART 7: CLAIMS MAPPING AND VALUATION FOR VOTING PURPOSES All Scheme Creditors have been sent two Voting Forms accompanying this document. The blue Voting Form is for use at meetings of General Scheme Creditors and the pink Voting Form is for use at meetings of Recourse Scheme Creditors. Depending on your circumstances, either Voting Form or both Voting Forms may be relevant to you. If you replied to a response form which accompanied either Scheme Brochure, one or both of the Voting Forms that accompany this document may have certain details completed for you (for example, in Box G, details of the Scheme Company or Scheme Companies of which you are proposed to be admitted as a creditor and into which class or classes it has been determined you fall). You should review the guidance contained in this Part below to confirm that you do not disagree with these matters. If you do disagree, please amend the form(s) providing as much information as possible to support your changes. Please initial any deletions that you make on the form(s). If you wish a new blank Voting Form or Voting Forms to be sent to you please call the telephone helpline on or contact the Scheme Companies in one of the other manners set out in paragraph 8 of Appendix VI of this Section A. Please note that even if any details have been completed on any Voting Form sent to you, you will still need to complete the value of your claim in various places that are required on your relevant Voting Form or Voting Forms and indicate how you wish to vote. If you did not reply to a response form which accompanied either Scheme Brochure or, in any event, if the Voting Forms sent to you together with this document do not have any details completed on them, you should review the guidance below to determine which Scheme Company or Scheme Companies your claim lies against, which class or classes of Scheme Creditor you fall into and the value of your claim for voting purposes. 1. Of which Scheme Company will I be admitted as a creditor? You will be admitted as a creditor of a Scheme Company for voting purposes either if you have a relevant claim against that company or if there is a reasonable possibility that you may bring a relevant claim against that company in the future. The fact that you are admitted as a creditor of a Scheme Company for voting purposes does not mean that you will necessarily develop any illness in the future. It also does not mean that the relevant Scheme Company necessarily admits that any claim you may bring will be successful against that company. You may be admitted to a Scheme Meeting of more than one Scheme Company. For example, if you were employed by or otherwise contracted with more than one Scheme Company, or if the factory where you worked or near which you lived was transferred from the ownership of one Scheme Company to another, you may be admitted as a creditor of each such Scheme Company. An exception to this general position is where you were employed by one Scheme Company and your employment was transferred to another Scheme Company after 1 May 1982 pursuant to a transfer to which the Transfer of Undertakings (Protection of Employment) Regulations 1981 ( TUPE ) applied. TUPE applies to the transfers of businesses on or after 1 May TUPE provides for the automatic transfer of most employee liabilities from the transferor employer to the transferee employer. If you were employed by one Scheme Company and your employment transferred to another Scheme Company pursuant to a transfer to which TUPE applied you are likely to be admitted only as a creditor of the second company. This is because any claim that you may bring is likely to be only against the second and not the former company. You will not be admitted to a Scheme Meeting for voting purposes solely on the basis that you are or were employed by a Scheme Company or an Additional Company. Certain activities of the Scheme Companies and the Additional Companies do not and did not involve the use of asbestos. Details of the factories and other activities of the Scheme Companies and the Additional Companies that may have involved the use of asbestos are set out in Appendices III and IV of this Section A. Not all of the factories and other activities are described in Appendices III and IV. If your employment or other connection with the Scheme Companies or the Additional Companies was solely in relation to a factory or activity not described in detail in Appendix III or Appendix IV, the Directors consider that there is no reasonable prospect that you will have been exposed to asbestos in circumstances that mean you may in 55

56 PART 7 the future have a Scheme Claim. Consequently, you will not be admitted to the Scheme as a Scheme Creditor for voting purposes. The names of factories where asbestos was not used are set out in Part 2 of Table A on page 83 of this document. 2. How do I know which Scheme Company my claim may lie against? If you have a copy of your employment contract or any other contracts you entered into with any Scheme Company, this will be a good starting point for determining which Scheme Company(s) your claim lies against. Also, if you are a former employee, this information should be available from HM Revenue and Customs from your PAYE records. However, you should note that many of the Scheme Companies have changed name over the course of time and therefore the name of the company on your contract may not be the same as the current name of the company. The registered number of the company will not have changed, though. You should also be aware that as a consequence of intra-group arrangements between Scheme Companies you may be admitted for voting purposes to a Scheme Meeting of more than one Scheme Company. Examples for why this might be the case are given at paragraphs 3 and 5 of Part 2 of this Section A. Set out in Appendix III of this Section A are brief summaries of the corporate histories of each of the Scheme Companies. Appendix III of this Section A also contains details of the current and former names (and dates of changes of names) of each of the Scheme Companies together with the registered number of each Scheme Company. Please state the company or companies that you worked for and all relevant dates of employment in the relevant box in Part B of the Claims Table (which comprises part of the Voting Form). 3. What if I do not know which Scheme Company my claim lies against? You should review the Scheme Companies histories that are contained in Appendix III and the Additional Companies histories that are contained in Appendix IV to see whether this assists you. If for example your claim arises because you lived near a Group factory that was involved with asbestos, the ownership details of the factory are contained in Appendix III and/or Appendix IV of this Section A. If you do not know which Scheme Company your claim lies against you should complete both Voting Forms including as much detail regarding yourself and your connection to or association with the Scheme Companies as possible, especially in response to the specific questions asked on the Claims Table which forms part of the Voting Forms. It is particularly important, if you are a former employee, that you provide your dates of employment. If you do not know the exact dates please provide your best estimate (to the nearest month, if possible, and if not to the nearest year). From this information the Scheme Companies will determine which, if any, Scheme Company or Scheme Companies your claim might lie against. The Scheme Companies may be able to do this in circumstances where you are unable to do so. This is because the Scheme Companies are aware of which Scheme Companies were involved in which processes and activities between which dates. If, for example, you complete and return your Claims Table indicating that you were employed in contracting operations between certain dates, where you were employed and the nature of the activities you undertook (for example painting, scaffolding or lagging), the Scheme Companies are likely to know which companies you might have been employed by and you will therefore be admitted as a creditor of each of those companies for voting purposes. Similarly, in the case of commercial claimants, if you contracted with the Group for manufactured products or asbestos installation and/or stripping activities between certain dates the Scheme Companies are likely to be aware of which companies you might have contracted with and you will therefore be admitted as a creditor of each of those companies. 4. What if I was employed by, or otherwise might have a claim against, an Additional Company? The majority of persons with claims against the Scheme Companies are likely to be employees and former employees of the Scheme Companies. However, even if you were employed by (or otherwise exposed to asbestos by) an Additional Company you may still have a claim against a Scheme Company. This would depend on whether there were arrangements, for example agency or indemnity arrangements, between the Additional Company and a Scheme Company. The reasons why these arrangements may be relevant are explained at paragraphs 3 and 5 of Part 2 of this Section A. 56

57 PART 7 If you were employed by (or otherwise exposed to asbestos by) an Additional Company during the operation of these arrangements you will be admitted for voting purposes to the Scheme of the Scheme Company(s) concerned. You should review the Additional Companies histories that are contained in Appendix IV of this Section A to see whether this assists you. If you were employed by (or otherwise exposed to asbestos by) an Additional Company entirely outside of the operation of the relevant arrangements, any claim you may bring will be solely against the Additional Company. Therefore you will not be entitled to receive payment from CCS. However if your claim is against an Additional Company which might have an indemnity from a Scheme Company, your rights against the Additional Company may be affected by the Scheme because any such claim by an Additional Company against a Scheme Company would itself be a Scheme Claim. It may therefore be in your interests to take steps to enable the Additional Company to enforce this claim. Further details regarding the possible consequences of this for you and your claim against the Additional Company are described at paragraph 3 of Part 2 of this Section A above. 5. How will my claim be valued for voting purposes? It is necessary for the Scheme Companies to attribute a value to the claim of each creditor who attends any meeting of Scheme Creditors, either in person or by proxy. The value that is attributed to your claim for the purposes of the meetings is for that purpose only and will not bind either you or the Scheme Company as to the merits or value of your claim in any subsequent litigation or proceedings. In respect of any particular Scheme Company of which you are a Scheme Creditor, you may be eligible to attend either one or both of the meetings of classes of Scheme Creditor of that Scheme Company. If you are eligible to attend both meetings of a Scheme Company you should value your claim in the same amount for both meetings. However, if you are a Scheme Creditor of more than one Scheme Company, your claim may be valued for voting purposes in a different amount for one Scheme Company than another Scheme Company. Further explanation is contained at paragraphs 5 and 6 of Appendix VI of this Section A. The value attributed to your claim will in part depend upon the status of the claim at the time of the meetings of Scheme Creditors. Scheme Creditors who believe that they may have a claim in the future in respect of an asbestos-related condition that they may develop (but who are not currently suffering from any asbestos-related condition (or are unable to provide evidence that they are)), will have their claim valued for voting purposes as described at paragraph 6 below. Scheme Creditors who have developed solely the condition known as pleural plaques will have their claim valued for voting purposes as described at paragraph 6 below. Scheme Creditors who return a Voting Form with evidence that they may have developed an asbestos-related condition, for which a solicitor s letter will be acceptable, but no particular condition is specified, will have their claim valued for voting purposes as described at paragraph 6 below. Scheme Creditors whose claims have settled or determined but have not been paid should refer to paragraph 9 below. All other Scheme Creditors will have their claim valued for voting purposes as described in this paragraph 5 below. Personal injury claims are principally made up of the following elements: general damages; special damages; and costs. General damages are the damages that a court awards for non-pecuniary loss, pain and suffering and loss of amenity or enjoyment of life by reference to the condition from which the claimant suffers. Special damages are awarded to compensate the claimant for any additional (pecuniary) loss that he suffers, for example the cost of care (including medical expenses) or loss of earnings if his condition means that he is unable to work. Where a defendant is found liable to a claimant, it is usual for the defendant to be required to pay an amount to the claimant by way of the costs incurred by the claimant in bringing his claim. If you wish further details regarding the elements that may comprise your claim, we recommend that you should contact a solicitor. The Claims Table contains questions designed to elicit information to enable the Scheme Companies to value the claims of Scheme Creditors for voting purposes. 57

58 PART 7 Where a Voting Form is returned with the requisite evidence of a specific actionable condition, for which a solicitor s letter will be acceptable, the claim will be valued for general damages on the basis of published recent Court awards for that condition. The ranges of general damages within which Scheme Claims should be valued for voting purposes are set out at Appendix VIII of this Section A. Scheme Creditors who wish to value their claims for general damages at more than the published awards must provide further evidence to justify the higher figure. Scheme Creditors who wish to include a claim for special damages must also provide evidence, for which a solicitor s letter may be acceptable, to justify the figure that is claimed. Scheme Creditors with a claim arising out of asbestos exposure but who have not themselves suffered the asbestos condition (for example other employers of persons exposed to asbestos by a Scheme Company) should value the current claim(s) against them in accordance with the criteria set out in this paragraph 5. The Scheme Creditor should also state the proportion of the current claim(s) for which it believes the relevant Scheme Company to be responsible. The Scheme Creditor may be required to provide evidence in support of the amount of the claim(s) in respect of which the Scheme Creditor alleges the Scheme Company to be responsible. If the Scheme Creditor believes that it may in the future have further claims made against it in respect of which it may bring further Scheme Claims, it should set out on its Voting Form(s) its estimate of the amount of such Scheme Claims. The Scheme Creditor may be required to produce evidence in support of the amount of the claims. Scheme Creditors who believe that they may, either now or in the future, have a Scheme Claim that arises in any other circumstances are asked to contact the Scheme Companies in one of the manners detailed at paragraph 8 of Appendix VI of this Section A regarding the valuation of their claim for voting purposes and the evidence that they may be required to produce. 6. Further provisions regarding the valuation of claims for voting purposes If: you have developed the asbestos-related condition known as pleural plaques, or you have developed an asbestos-related condition but are not able to specify which condition, or you have previously settled a claim in respect of an asbestos-related condition against a Scheme Company or (where relevant) an Additional Company on a provisional basis (including in the circumstances described in paragraph 9 below), or you believe that you may have a claim in the future in respect of an asbestos-related condition that you may develop (but you are not currently suffering from any asbestos-related condition (or you are unable to provide evidence that you are)), you will be admitted for voting purposes at the Scheme Meetings as a Scheme Creditor. The value that will be attributed to your claim at the Scheme Meetings is an estimate of the average value of any future claim you may bring (assuming, if you are not currently suffering from an asbestos-related condition, that you develop such a condition) (the Estimated Average Value). There are four different Estimated Average Values. This is because there is likely to be a significant difference in the value of your Scheme Claim depending upon the circumstances in which you were exposed to asbestos. For example, if you are a former employee of a Scheme Company it is relevant whether you were employed in a factory or in some other capacity. Generally, factory-based employees did not work for any other employer who may also have exposed them to asbestos and therefore there is no other party for the Scheme Companies to share liability with. Therefore typically the Scheme Companies are liable for all, or at least the substantial proportion, of claims made against them by former employees that emanate from factory-based exposure. This can be contrasted with the typical claim that emanates from an employee's exposure in a non-factory environment, for example if the employee was involved in contracting activities. This is because nonfactory based employees often worked for other non-scheme Company employers who may also have exposed them to asbestos. Consequently (and consistent with the ABI Guidelines where relevant), the Scheme Companies usually only pay a proportion of such claims. 58

59 PART 7 There is also likely to be a significant difference in the value of your Scheme Claim depending upon whether your exposure to asbestos was in the context of your employment by a Scheme Company or not. This is because there is a difference in the historic disease profiles regarding the particular asbestos conditions suffered by employees and non-employees. This is a difference that Tillinghast anticipate will continue in the future. Therefore the Estimated Average Value will differ depending upon whether you were employed by a Scheme Company (including an Additional Company) and on the context of your exposure, i.e. whether it was factory based. By factory based it is meant that you worked in or lived near a factory building. In the case of former employees, this includes office staff and others who may have worked on a factory site but not necessarily within the factory itself. It also includes persons employed in a relevant factory building after the manufacturing processes involving asbestos ceased. The Scheme Companies have calculated the Estimated Average Values by using the estimates contained in the original Tillinghast Review (dated 8 June 2005) of claims to be made in the calendar year 2005, excluding claims concerning pleural plaques. The original Tillinghast Review contains an estimate of the number of claims that would be made against the Scheme Companies in 2005 in each of these four categories (i.e. factory/non-factory; employee/non-employee); the asbestos-related conditions that each of such claims would be made in respect of; and an estimate of the amounts at which each of such claims would settle or be determined. Using these figures, the Scheme Companies have calculated the average value, at 2005 values, of claims in each of the four categories. These are the Estimated Average Values. The amount at which your claim will be admitted for voting purposes at the Scheme Meetings is as follows: if you are or were employed by a Scheme Company or an Additional Company in a factory context - 97,000; if you are or were employed by a Scheme Company or an Additional Company in a non-factory context - 31,000; if your exposure to asbestos by a Scheme Company or an Additional Company was not in the context of your employment by a Scheme Company or an Additional Company but emanated from a factory (for example you are a family member of a current or former factory-based employee or you lived near a factory) - 86,000; if your exposure to asbestos by a Scheme Company or an Additional Company was not in the context of your employment by a Scheme Company or an Additional Company but emanated other than from a factory (for example you are a family member of a current or former non-factory based employee or you worked in another premises e.g. a power station, where the Scheme Companies may have undertaken contracting activities) - 6,000. The above values are the Estimated Average Values. You may be admitted for voting purposes to the Scheme of more than one Scheme Company. You will be admitted at the relevant Estimated Average Value to each of the Scheme Meetings at which you are eligible to vote. You do not need to apportion the relevant Estimated Average Value between the Scheme Companies concerned. Scheme Creditors who believe that they may, either now or in the future, have a Scheme Claim that arises in any other circumstances should refer to paragraph 5 of this Part 7 above regarding the valuation of their Scheme Claim for voting purposes. 7. To which class of creditor will I be admitted? For the purposes of the provisions of the Scheme itself, General Scheme Creditors are those Scheme Creditors in respect of whom any claim brought by such person is not the subject in any part of any contract of insurance and Recourse Scheme Creditors are those Scheme Creditors in respect of whom any claim brought by such persons is the subject in whole or any part of any contract of insurance. 59

60 PART 7 It will not be possible at the time of convening the meetings of Scheme Creditors to determine with certainty whether any claim that you bring will be the subject in any part of any contract of insurance. The reasons for this include: some of the Group s insurance policies contain limits which may or may not have been exceeded at the time that you bring your claim; some of the policies contain exclusions such that they do not respond to claims in respect of certain diseases but will respond to claims in respect of other diseases; the insurer may succeed in voiding the policy such that is has no liability under the contract; and there are a number of ambiguities in some of the Scheme Companies insurance policies and some of the original policy documents cannot be found. It is extremely likely that at the date when the Scheme Meetings are held it will be apparent that all Scheme Creditors who vote at the meetings are persons who may bring a claim which is a General Scheme Claim. Therefore it may be that all Scheme Creditors who vote will be admitted to vote at the relevant meetings of General Scheme Creditors. In contrast, it is possible at this stage to identify those Scheme Creditors whose Scheme Claims will, in all probability, not be the subject matter of a contract of insurance. It would not be appropriate that such persons be admitted to vote at the meetings of Recourse Scheme Creditors. Such persons will be eligible to vote only at the meetings of General Scheme Creditors of each Scheme Company of which they are a Scheme Creditor. If a Scheme Creditor who is admitted to vote solely as a General Scheme Creditor should turn out to have a Scheme Claim which is covered in whole or in part by a contract of insurance, he will be entitled to the rights conferred on Recourse Scheme Creditors under the Scheme and he will be a Recourse Scheme Creditor for the purposes of the Scheme. 8. How do I tell which class of creditor I am? Current and former employees If you were employed by one or more Scheme Companies you should review the histories section in Appendix III of this Section A which contains summaries of the EL insurance cover available to the Scheme Companies. These summaries are the Directors best estimate of the insurance cover available to the Scheme Companies but, partly for the reasons given above, there is no certainty that the insurance cover actually available to the Scheme Companies in respect of either a specific claim or claims generally will be in accordance with these summaries. If you worked for a particular Scheme Company entirely during a period or periods where the Scheme Company does not believe that it has any EL insurance cover available to it, you will be admitted solely as a General Scheme Creditor. If the dates of your employment are covered in whole or as to any part by dates when the Scheme Company maintained EL insurance, it is likely that you will be admitted as both a Recourse Scheme Creditor and a General Scheme Creditor. As stated above, the fact that you may be admitted to vote as a Recourse Scheme Creditor does not necessarily mean that any claim that you bring will be covered by insurance. If you were employed by more than one Scheme Company but your employment passed from the first Scheme Company to the second by virtue of a transfer to which TUPE applied (please see above) you will, as stated above, only be admitted as a creditor of the second Scheme Company. However, in determining which class or classes of creditor you fall in for voting purposes it will be necessary for you to review the insurance history of the first Scheme Company to see whether your dates of employment coincide with any periods when there are EL insurance policies available to that company. The reason for this is that the second Scheme Company may be able to recover under the first Scheme Company s insurance policies and therefore even if your employment with the second Scheme Company is not covered by insurance, if any part of your employment by the first Scheme Company was covered by insurance, you are likely to be admitted as both a Recourse Scheme Creditor and a General Scheme Creditor of the second Scheme Company. If your dates of employment do not coincide with any periods when there are EL policies available to either company, you will be admitted solely as a General Scheme creditor of the relevant Scheme Company. 60

61 PART 7 If you were employed by an Additional Company during the operation of any relevant arrangements between that company and a Scheme Company you will be admitted for voting purposes as a Scheme Creditor of the Scheme Company concerned. In determining into which class or classes of creditor you fall for voting purposes it will be necessary for you to review the insurance history of the Additional Company and the relevant Scheme Company to see whether your dates of employment coincide with any periods when there are EL insurance policies available to either company. If any part of your employment by an Additional Company was covered by insurance maintained by either the Additional Company or the relevant Scheme Company, you are likely to be admitted as both a Recourse Scheme Creditor and a General Scheme Creditor of the Scheme Company concerned. If your dates of employment do not coincide with any periods when there are EL policies available to either company, you will be admitted solely as a General Scheme Creditor of the relevant Scheme Company. Other claimants Most Scheme Creditors who are not currrent or former employees of a Scheme Company or an Additional Scheme Company will be admitted solely as General Scheme Creditors. In addition a limited number of such persons will also be admitted as Recourse Scheme Creditors. The first category of such creditor is those whom the Scheme Companies have identified as being likely to be able to bring claims to which any EL insurance policy may respond. These are companies who may have employed a former Group employee whose employment with a Scheme Company was covered by insurance. The Scheme Companies have already identified who some of these companies are likely to be and where such companies have replied to the response form that accompanied either Scheme Brochure the Voting Form(s) sent to such companies together with this document have been personalised indicating that they will be admitted for voting purposes to the relevant meetings of both Recourse Scheme Creditors and General Scheme Creditors. All of the Additional Companies fall into this category. Most other companies and all other individuals will be admitted solely as General Scheme Creditors. The reason for this is that there is no reasonable prospect of any EL policy responding to any claim that such persons bring. Additionally, the PL insurance cover available to the Scheme Companies is limited (as is explained in greater detail in paragraph 2(d) of Part 2 of this Section A). Therefore, with the exception of those persons who have contracted with a Scheme Company for asbestos stripping activities in the UK since 2003 who, provided that they replied to the response form that accompanied either Scheme Brochure, have been sent personalised Voting Form(s) together with this document indicating that they will be admitted for voting purposes to the relevant meetings of both Recourse Scheme Creditors and General Scheme Creditors, all other creditors will be admitted solely as General Scheme Creditors. 9. Scheme Creditors with settled Scheme Claims If, at the date of the Scheme Meetings, your Scheme Claim has settled or determined as to both liability and quantum on a final (rather than provisional) basis, you will not be eligible to attend and vote at any of the the Scheme Meetings. This is because the Scheme provides that all such persons with claims against Included Scheme Companies will have their claims paid in full not later than 20 business days after the date on which the Scheme becomes effective and there is no prospect of you bringing further Scheme Claims. Please note, however, that if you are a commercial creditor you will be permitted to vote at the relevant Scheme Meeting or Scheme Meetings if the Chairman determines that there is a reasonable prospect that you may bring further Scheme Claims. If, at the date of the Scheme Meetings, your Scheme Claim has settled or determined as to both liability and quantum on a provisional basis (i.e. on a basis which permits you to bring a new claim in the event that you develop a further asbestos-related disease) your claim, if it is one against an Included Scheme Company, will also be paid in full not later than 20 business days after that date on which the Scheme becomes effective. However, you will be eligible to attend and vote at the relevant Scheme Meetings as you may bring a further Scheme Claim. You should value your claim for voting purposes on the basis set out at paragraph 6 above. 61

62 SECTION A: EXPLANATORY STATEMENT PART 8: ASBESTOS-RELATED CLAIMS OUTSIDE THE SCHEME Potential asbestos-related liabilities not covered by the Scheme include: 1. Excluded Scheme Companies Provided that the Scheme is sanctioned in relation to each of the Key Scheme Companies, the Scheme will become effective. However, whilst the Scheme may obtain sufficient support for the majority of Scheme Companies, the Scheme may not be approved or sanctioned by the Court in respect of certain Scheme Companies. Any such company would not enjoy the protection of the Scheme and would remain liable for asbestos-related claims made against it. In such circumstances the directors of the relevant company may have no alternative other than to commence or accede to insolvency proceedings. 2. Included Scheme Companies The Scheme will exclude claims which would otherwise be Scheme Claims and are made against Included Scheme Companies by other Included Scheme Companies. No Scheme Company will be admitted to vote on the Scheme of any other Scheme Company. 3. Group Companies not in the Scheme The Additional Companies are not included in the Scheme and claims against those companies will not be Scheme Claims. There are a number of other Group Companies which will not be included in the Scheme. These Group Companies include those which are dormant and/or have no or minimal claims-received history or have minimal net assets. Asbestos-related claims may be made against these Group Companies which would not enjoy the protection of the Scheme and such companies would therefore remain liable to settle any such claims made against them. In such circumstances, the directors of the relevant company may have no alternative other than to commence or accede to insolvency proceedings. In 1992 Cape acquired the business known as the UK Darchem Contracting Business. As part of this acquisition Cape also acquired a company then called Darchem Contracting UK Limited (No ), which was formerly called John T Schofield & Sons Limited and is now called Somesystem Limited. Cape also acquired a company then called The Darlington Insulation Company Limited (No ), which is now called Cape Darlington Limited. In 1993 Cape acquired the Middle East Darchem Contracting Business. As part of this acquisition Cape acquired a company then called RB Hilton Limited (No ), which is now called Datadeep Limited (together with Somesystem Limited and Cape Darlington Limited the Darchem Companies ). The June version of the Scheme Brochure indicated that the Darchem Companies would be included in the Scheme. It is now not proposed that the Darchem Companies be Scheme Companies and the Darchem Companies were not described as Scheme Companies in the November version of the Scheme Brochure. Cape Darlington Limited is an Additional Company and was described as such in the November version of the Scheme Brochure. Somesystem Limited is also an Additional Company (although it was erroneously not included as such in the November version of the Scheme Brochure). Datadeep Limited is not an Additional Company. The Cape Directors believe it would not be appropriate for industrial disease liabilities of the Darchem Companies, which can only have arisen to any significant extent by reason of exposure to asbestos prior to Cape s acquisition of the Darchem Companies, to be settled out of, nor a proper use of, Scheme Assets. Accordingly the Darchem Companies are not Scheme Companies. On 6 January 2006 the creditors of Somesystem Limited and Cape Darlington Limited voted in favour of the winding up of those companies. To the extent that claims are made against the Darchem Companies in the future which are not capable of being established against any other party and are not otherwise covered by insurance, claimants are likely to receive only whatever amount the Darchem Company itself can pay. In the case of Cape Darlington Limited and Somesystem Limited this is likely to be limited to the dividend (if any) being paid in the liquidation of the relevant company. 62

63 PART 8 4. Reimbursement claims At the time of Cape s acquisition of the UK Darchem Contracting Business, the employment of approximately 730 employees was transferred from the vendor to Somewatch Limited. The acquisition was a transfer to which the Transfer of Undertakings (Protection of Employment) Regulations 1981 applied. Therefore any claims brought by such persons against Somewatch Limited, or any of the other subsequent Scheme Company purchasers of the business (described in Appendix III of this Section A), will be a Scheme Claim. The Tillinghast Reviews do not include such claims. However, based on the ages and dates of employment of the persons whose employment was transferred to Somewatch Limited and the position that the Cape Directors understand to be the case regarding the insurance maintained by the vendor which may respond to meet claims brought by such persons against the Scheme Companies, the Cape Directors believe that the Scheme Companies uninsured liability for such claims is unlikely to be material in the context of the Scheme. Cape Overseas Limited and Cape Calsil International Limited were also listed in the June version (but not the November version) of the Scheme Brochure as Scheme Companies. The Cape Directors consider that Cape Overseas Limited may possibly have UK asbestos-related liabilities but is likely to have far greater assets than it has liabilities. As regard Cape Calsil International Limited, it is not expected to have UK asbestos-related liabilities and if it did so the Cape Directors consider that it would be well able to meet them. The Cape Directors therefore consider that it may well not be in those companies interests, and indeed not in the interests of claimants against those companies, that they should be included in the Scheme. Cape Ireland Limited, a company registered in the Republic of Ireland, was placed into liquidation on 25 June The Cape Directors are aware of 15 claims that have been brought by third parties in the Republic of Ireland against Cape Ireland Limited since 1999, seven of which the Cape Directors believe are covered in whole by a contract of insurance with a solvent insurer. The Cape Directors believe, and have received legal advice to this effect, that no Scheme Company will be liable to make any payment in respect of claims lodged against Cape Ireland Limited. As is described at paragraph 3 of Part 2 of this Section A, since approximately September 2001 solvent insurers and, where such insurers are no longer solvent, the FSCS have been meeting claims made against those Additional Companies that are Dissolved Group Companies on the understanding that no Scheme Company was liable in respect of those claims. For the reasons described above, it is possible that the Scheme Companies could be liable for some of these claims. The Cape Directors believe that Cape has grounds on which to resist any claim for reimbursement from insurers. Cape has commenced discussions with the FSCS to agree terms to reflect the payments that the FSCS may have made since approximately September 2001 that would, had such claims been successfully made against a Scheme Company, have been paid by the Scheme Companies. Depending on the final agreements with such parties as to the timing and quantum of any repayment, these claims could have a material adverse effect on the profits of the Group and may reduce the available cash flows out of which Cape will be able to top up the Scheme Assets, at least in the short to medium term. This in turn could cause the Payment Percentage to be reduced. However, based on their assessment of the likely quantum and timing of such claims and on their expectations regarding the financial performance of the Group's business, the Cape Directors are satisfied that the Group would be able to meet any such claims, which are not expected to be material in the context of the potential Scheme Claims as a whole, and that such claims would be unlikely to affect the ability of Cape to top up the Scheme Funds. The Cape Directors believe that it would not be appropriate for any claims for reimbursement from insurers and the FSCS to be settled out of, nor a proper use of, Scheme Assets which are intended to meet claims from Scheme Creditors. Therefore such claims (described as Reimbursement Claims in the Scheme) will not be Scheme Claims. 5. Cape East Limited Cape East Limited is an English company which was set up in There may be UK national employees of Cape East Limited who were based or visiting overseas who may have been exposed to asbestos. Potential future claims arising from any such persons will be Scheme Claims, provided that the 63

64 PART 8 claimant is either resident in the UK on the Record Date of the Scheme, or, if not, was exposed to asbestos by the Scheme Companies in the UK in the course of his employment. However, in the event that there are claims from non-uk residents who were not exposed to asbestos by the Scheme Companies in the UK in the course of their employment, these will not be Scheme Claims. 6. Shipyard Claims The Group was previously involved in the supply of insulation contracting services involving the use of asbestos to shipyards. Certain of those shipyards are receiving claims from their own former employees, who are then claiming contribution from the Group. Pursuant to the Chester Street Settlement Agreements, in 2003 the Group agreed with the owners of the relevant UK shipyards at Barrow, Belfast and the Isle of Wight and their insolvent insurer, Chester Street, to make one-off payments aggregating some 2.6 million in settlement of all then outstanding liabilities and to pay agreed proportions of all future settlements made in respect of asbestos-related claims emanating from those shipyards; the proportions vary for each shipyard. Whilst the overall quantum of claims which may be received in respect of the Shipyard Claims is not limited, the amount payable in respect of each individual Shipyard Claim is limited to the agreed proportion. However, were a former shipyard employee to bring his claim direct against the relevant Group Company, rather than against his former employer, the claim would not be subject to the agreements and therefore the proportion of the claim that the relevant Group Company could be liable for would not necessarily be as agreed under the agreements. Any such claim is specifically excluded from the Scheme. Claims in respect of any other shipyards will be Scheme Claims. 7. Manufacturing claims In 2002, Cape Calsil Group Limited ( CALSILG ) sold the Group s manufacturing operations, with the exception of two small operations in Dalton-in-Furness and Abu Dhabi, to certain companies within the Promat group. One of the terms of the disposal was that CALSILG agreed to indemnify ( the asbestos indemnity ) the purchasers against any liability they incurred as a result of the claims from Group employees, transferred as part of the disposal, in respect of asbestos exposure that may have taken place prior to the sale. As part of these arrangements 1.4 million of deferred consideration was paid into a joint escrow account for use in settling relevant asbestos-related claims which fall within the asbestos indemnity. CALSILG also gave an indemnity to the purchasers in respect of certain environmental liabilities ( the environmental indemnity ). To date there have been two claims notified under the asbestos indemnity (neither of which is expected to result in any cost to a Group Company) and no claims made or notified under the environmental indemnity. Cape guaranteed CALSILG s obligations under the asbestos and environmental indemnities and gave certain undertakings ( the undertakings ) not to do anything or undertake any action which might cause Cape to be unable to comply with its guarantee obligations which would include entering into the Scheme. Further, if the Scheme becomes effective, under these arrangements, the purchasers are entitled under the terms of the escrow arrangements to require the 1.4 million escrow monies to be paid to it. CALSILG s indemnification obligations in respect of all relevant asbestos claims, notwithstanding this payment, however, would remain. The purchasers have conditionally agreed to not to exercise their rights under the undertakings in respect of the Scheme on certain terms, principally that they will not be Scheme Creditors and that the liabilities under the asbestos indemnity will not be Scheme Claims. In addition, upon the Scheme becoming effective the purchasers will, in accordance with the contractual terms relating thereto, be entitled to elect that the 1.4 million held in the escrow account be paid to them. The waiver is conditional upon the payment of the escrow monies to the purchasers should they so elect for the escrow monies to be paid to them. The projected amounts of such liabilities, which at the time of the disposal were estimated to be 1.1 million, are included in Tillinghast s estimates referred to in paragraph 4 of Part 2 of this Section A with the appropriate proportion taken into account in the initial funding of 40 million. In the absence of unexpected consequences the Cape Directors do not consider that the ongoing obligation to pay claims under either the asbestos indemnity or the environmental indemnity will have any significant adverse effect on the Group s cashflow or otherwise. However, should the timing and/or quantum of such claims prove to be materially and adversely different from those estimated this would not necessarily remain the case. 64

65 PART 8 8. Dissolved Group Companies The Dissolved Group Companies have been placed in liquidation and/or dissolved of which four have been restored to the Register of Companies by claimants for the purpose of accessing any insurance or compensation which may exist in respect of the asbestos claims they had against the relevant company. The Dissolved Group Companies (which include certain of the Additional Companies) are not included in the Scheme and will not be Scheme Companies. The names of the Dissolved Group Companies are contained in Appendix V of this Section A. 9. Companies sold by the Group Companies which were at some stage owned by the Group but which have been subsequently sold will not be Scheme Companies. 10. South Africa 11. USA It is possible that claims could arise in the future from claimants who were not included in the settlement reached in March 2003 with the representatives of over 7,500 South African claimants, or who claim that they have developed an asbestos-related disease since the date of the settlement as a result of the Group s former mining and manufacturing activities in South Africa. Certain Group Companies continue to be named, along with several asbestos fibre and asbestos product suppliers, in a number of legal actions in the USA. The claimants in such actions are claiming substantial damages as a result of the use of these products. In 1990 the Court of Appeal ruled that 206 plaintiffs who had obtained a judgment against a number of defendants including certain Group Companies, in a class action in Texas, USA, but could not enforce that judgment in the USA because the Group Companies had no assets there, also could not enforce that judgment in the UK. Cape has received legal advice in the UK that default judgments obtained in the USA against Group Companies which are not present or have no place of business in the USA, Canada and Mexico are not enforceable in the UK. If this and other US judgments were enforceable against Group Companies in the UK this would have a materially adverse effect on the financial status of the Group and almost certainly result in insolvency proceedings. 12. Other overseas claims The Scheme only applies to UK asbestos-related claims as described in this document. Historically, other than in respect of the claims from South Africa, USA and the Republic of Ireland, as mentioned above, the Group has received very few claims either governed by the laws of a jurisdiction outside the UK or brought by a person other than an individual resident in or a company incorporated in the UK. It is possible that the Group may in the future receive such non-uk claims and such claims would not be Scheme Claims. 13. Future Contribution Claims and Future Financial Dependency Claims The Court has a wide discretion regarding the compromises or arrangements that it may sanction between a company and its creditors pursuant to section 425 of the Companies Act. For example, the Court has jurisdiction to treat as creditors for the purposes of section 425 persons whose claims against the company concerned are contingent upon some future event. However, the Court does not have unlimited jurisdiction in this regard and there are certain persons who may bring a relevant claim against a Scheme Company in the future but who cannot be Scheme Creditors because the events which give rise to the relationship between the Scheme Company and the claimant have not at the Record Date taken place. In the context of the Scheme these persons are claimants in respect of certain future contribution claims and certain claimants under the Fatal Accidents Act 1976 and similar provisions in Scotland and Northern Ireland. Contribution claims Where, before the Record Date, a Scheme Company and a third party both employed (at different times) a person and both employers exposed that person to asbestos, the person may after the Record Date develop an asbestos-related condition. Where the condition that he develops is a non-divisible disease (for example mesothelioma) he may recover the whole of his damages from either the Scheme Company or the third party. If he does so, the employer who pays the claim may have a claim for contribution from 65

66 PART 8 the other employer. Any claim by either the employee or the third party against the Scheme Company will be a Scheme Claim. Were a third party to employ and expose the employee to asbestos wholly after the Record Date, any claim by the employee against the Scheme Company would, as above, be a Scheme Claim. However, any claim for contribution from the third party is to be excluded from the Scheme. This is because it is inherently impossible at the Record Date to identify the third party and it is inherently impossible for him to be summoned to a meeting to be convened to consider the Scheme. Future Financial Dependency Claims Where a Scheme Creditor who may have a claim against a Scheme Company dies without his claim having been finally determined or settled there are several claims which may thereafter be brought. His estate (or the personal representatives of his estate) may continue any claim that the claimant himself would have had. Such claims will be Scheme Claims. On the Scheme Creditor s death, certain of his family members may be able to make a claim against a Scheme Company under the Fatal Accidents Act 1976 (in England and Wales); the Damages (Scotland) Act 1976 (in Scotland); and The Fatal Accidents (Northern Ireland) Order 1977 (in Northern Ireland). Such claims may or may not be Scheme Claims. Where on the Record Date the person is someone who would be entitled to bring a claim under one of the provisions mentioned above were the Scheme Creditor to die on that day, the claim will be a Scheme Claim. Such a person is a Scheme Creditor and will be admitted to the Scheme for voting purposes. In all other circumstances the claim is to be excluded from the Scheme. This is because it is inherently impossible at the Record Date to identify the person concerned. Once again it is therefore inherently impossible for him to be summoned to a meeting convened to consider the Scheme. 66

67 SECTION A: EXPLANATORY STATEMENT PART 9: THE DIRECTORS, LAW DEBENTURE AND THE SCHEME DIRECTORS 1. Directors of the Scheme Companies Set out below are the names of each of the Scheme Companies and the Directors of each Scheme Company: Scheme Company Cape Public Limited Company Directors Martin Keith May Paul Raymond Ainley Michael Thomas Reynolds John Arthur Pool David McManus Cape Industrial Services Limited Cape East Limited Altitude Scaffolding Limited Capasco Limited Cape Building Products Limited Cape Contracts International Limited Cape Calsil Systems Limited Cape Durasteel Limited Cape Industries Limited Cape Insulation Limited Paul Raymond Ainley Michael Thomas Reynolds Jeremy Peter Gartside Andrew James Gillespie Benjamin Warwick Whitworth Jeremy Peter Gartside Claire Louise Craigie Andrew James Gillespie Andrew James Gillespie Benjamin Warwick Whitworth Andrew James Gillespie Benjamin Warwick Whitworth Claire Louise Craigie Andrew James Gillespie Claire Louise Craigie Andrew James Gillespie Andrew James Gillespie Benjamin Warwick Whitworth Andrew James Gillespie Benjamin Warwick Whitworth Andrew James Gillespie Benjamin Warwick Whitworth Andrew James Gillespie Benjamin Warwick Whitworth 67

68 PART 9 Scheme Company Cape Specialist Coatings Limited Investable Limited Kennedy s Scaffolding Limited Predart Limited Somewatch Limited Somewin Limited Winfield Insulation Services Limited Cape Fire Protection Products Limited Cape Mechnical Insulation Limited Cape Calsil Limited HPC Coatings Limited Cape Painting Contractors Limited Cape Environmental Services Limited TAP Ceilings Limited Directors Claire Louise Craigie Andrew James Gillespie Andrew James Gillespie Benjamin Warwick Whitworth Andrew James Gillespie Benjamin Warwick Whitworth Claire Louise Craigie Andrew James Gillespie Claire Louise Craigie Andrew James Gillespie Andrew James Gillespie Benjamin Warwick Whitworth Andrew James Gillespie Benjamin Warwick Whitworth Andrew James Gillespie Benjamin Warwick Whitworth Andrew James Gillespie Benjamin Warwick Whitworth Andrew James Gillespie Benjamin Warwick Whitworth Claire Louise Craigie Andrew James Gillespie Andrew James Gillespie Benjamin Warwick Whitworth Andrew James Gillespie Benjamin Warwick Whitworth Andrew James Gillespie Benjamin Warwick Whitworth 2. Interests of the Directors as directors, employees or creditors of Scheme Companies (a) Set out below are details of which Scheme Company employs or engages each of the Directors and the Scheme Companies (if any) of which the Directors are a Scheme Creditor. There are no bonuses or other payments which are payable to any Director, either in his capacity as a Director or in his capacity as an employee, in the event that the Scheme becomes effective or which is otherwise dependent on the outcome of the Scheme Meetings or of the petitions to the Court to sanction the Scheme. 68

69 PART 9 Director Employing Scheme Company Scheme Creditor of Martin Keith May Cape Cape Paul Raymond Ainley Cape Somewin Limited, Predart Limited, CISL, Cape Michael Thomas Reynolds Cape Somewin Limited, Predart Limited, CISL, Cape John Arthur Pool Cape Cape David McManus Cape Jeremy Peter Gartside Cape Cape Industries Limited, Cape East Limited, Cape Claire Louise Craigie CISL CISL Andrew James Gillespie CISL Predart Limited, CISL Benjamin Warwick Whitworth Cape (b) The Directors named in the table above as Scheme Creditors consider they are Scheme Creditors by virtue of the possibility of their having been exposed to asbestos in the course of their respective employment with such companies. None of the Directors who are Scheme Creditors have current claims against a Scheme Company and any vote they may have will be admitted at the Scheme Meetings at the relevant Estimated Average Value. 3. Interests of the Directors in the shares of Cape (a) The interests (all of which are beneficial unless otherwise stated) of each Director (including any interest known to that Director or which could with reasonable diligence be ascertained by him of any person connected with a Director within the meaning of section 346 of the Companies Act) in the share capital of Cape at 14 March 2006 (being the latest practicable date prior to the date of publication of this document) are as follows: Number of Ordinary Percentage of issued Director Shares held share capital held Martin Keith May 85, Paul Raymond Ainley 27, Michael Thomas Reynolds 12, John Arthur Pool 30, David McManus 25, Jeremy Peter Gartside 6,400 Claire Louise Craigie Andrew James Gillespie Benjamin Warwick Whitworth (b) (c) At 14 March 2006 (being the latest practicable date prior to the date of publication of this document) the Directors have the following options to subscribe for Ordinary Shares under the Employee Incentive Plan: Number of Date from Director Ordinary Shares Exercise Price which exercisable Expiry Date Martin Keith May 400,000 60p Paul Raymond Ainley 400,000 60p Michael Thomas Reynolds 100,000 60p , p Jeremy Peter Gartside 25,000 60p Andrew James Gillespie 50, p Benjamin Warwick Whitworth 75, p Other than as set out above, no Director has any interest in the share capital of any Scheme Company. 69

70 PART 9 4. The effect of the Scheme on the interests of the Directors The effect of the Scheme on the interests of the Directors, whether as described in paragraphs 2 and 3 of this Part 9 above or otherwise does not differ from its effect on the interests of other persons. 5. Interests of Law Debenture Under the terms of the Trust Deed Cape is responsible for Law Debenture s fees and expenses and will indemnify Law Debenture against all liabilities and expenses properly incurred by it in the proper performance of its duties as Scheme Shareholder under the Trust Deed, the PLC Articles and the CCS Articles. Law Debenture does not, as at 14 March 2006 (being the latest practicable date prior to the date of publication of this document), have any interest in the share capital of any Scheme Company. 6. Interests of the Scheme Directors In order to maintain the independence of the Scheme Directors they will not be entitled to participate in any share option or bonus schemes or to receive any pension from Cape or CCS or to deal in the shares of Cape. 70

71 SECTION A: EXPLANATORY STATEMENT PART 10: ADDITIONAL DEFINITIONS Save as provided below, terms that are defined in the Scheme (such definitions being on pages 201 to 207 of this document) shall bear the same meaning where used in this Section A. Where used in this Section A, the terms Scheme Creditor and Scheme Claim may, depending upon the context, refer to Scheme Creditors and Scheme Claims for the purposes of the Scheme Meetings and/or those Scheme Creditors and Scheme Claims in relation to whom or which the Scheme becomes effective. In addition, the following definitions apply throughout this Section A, unless the context requires otherwise: ABI the Association of British Insurers, being the trade association of the UK s insurance industry ABI Guidelines the guidelines for apportioning and handling employers liability in mesothelioma claims published by the ABI in October 2003 Admittance Card Barclays Board or Directors Cape Cape Directors or the Cape Board CCS Articles the CCS Scheme Share Chester Street CISL claim Claims Table Dissolved Group Companies EGM the detachable admittance card on the Voting Form for the use by Scheme Creditors who wish to attend and vote in person at any of the Scheme Meetings Barclays Bank PLC the directors of the relevant Scheme Company or Scheme Companies whose names are set out in paragraph 1 of Part 9 of Section A of this document and Director shall mean any one of them Cape Public Limited Company the directors of Cape whose names are set out in paragraph 1 of Part 9 of this Section A the articles of association of CCS adopted on 14 March 2006 the special voting share of 1 in the share capital of CCS which has been issued to the Scheme Shareholder and which has the rights described in paragraph 6.2 of Part 4 of this Section A Chester Street Insurance Holdings Limited Cape Industrial Services Limited, a wholly-owned subsidiary of Cape an asbestos-related personal injury claim the claims table for voting purposes accompanying this document for the use of Scheme Creditors in connection with the Scheme Meetings those companies, being former subsidiaries of Cape that have been dissolved (including those which have been re-instated to the Register of Companies for the purposes of the 1930 Act) and current subsidiaries of Cape that are in liquidation, whose names are set out in Appendix V of this Section A the extraordinary general meeting of Cape to be convened for a date on or around 12 April 2006 and any adjournment thereof 71

72 PART 10 EL Employee Incentive Plan Estimated Average Value Excluded Scheme Company Financial Year(s) FSMA Form(s) of Proxy Former Group Companies Funding Requirement Included Scheme Company Iron Trades Law Debenture Ordinary Shares Permitted Dividend PLC Articles the PLC Scheme Share PL Reimbursement Agreements Relevant Balance Sheet Date Relevant Financial Year employers liability Cape s 2004 Employee Incentive Plan the estimated average value at which certain Scheme Claims will be valued for the purposes of the Scheme Meetings, as further described in paragraph 6 of Part 7 of this Section A a Scheme Company in respect of which the Scheme does not become effective (a) financial year(s) of Cape the Financial Services and Markets Act 2000 (as amended) the form(s) of proxy accompanying this document for the use of Scheme Creditors in connection with the Scheme Meetings, which is coloured pink in the case of Recourse Scheme Creditors and coloured blue in the case of General Scheme Creditors Dissolved Group Companies and those companies which have been sold by the Group the amount certified in accordance with the Funding Agreement as being required by CCS to settle the level of Scheme Claims anticipated to be payable by it over the following nine Financial Years plus three years of CCS s running costs a Scheme Company in respect of which the Scheme becomes effective The Iron Traders Employers Insurance Association Limited The Law Debenture Trust Corporation p.l.c. the ordinary shares of 25 pence each in the share capital of Cape a dividend or other distribution which may be made by Cape on the terms of the PLC Articles without requiring the consent of the Scheme Shareholder the articles of association of Cape as proposed to be amended pursuant to the Resolution to be considered at the EGM the special voting share of 1 in the share capital of Cape which, conditional upon the passing of the Resolution, will have the rights described in paragraph 6.1 of Part 4 of this Section A public liability the CCS Reimbursement Agreement and the PLC Reimbursement Agreement the balance sheet date to which the audited accounts for the Relevant Financial Year are prepared the Financial Year immediately preceding the Financial Year in which Cape proposes to make a distribution, including the payment of dividends 72

73 PART 10 Resolution Scheme Assets Scheme Brochure Scheme Directors Scheme Fund Scheme Funding Percentage Scheme Funding Requirement Scheme Meetings Shipyard Claims Tillinghast the special resolution to amend the PLC Articles to be proposed at the EGM the amount of cash or equivalent held by CCS on the Relevant Balance Sheet Date out of which Scheme Claims may be settled, as defined in and certified in accordance with the Funding Agreement the brochure published in November 2005 titled The Cape Asbestos Fund and accompanying documents designed as an introduction for Scheme Creditors to the Scheme (including (where the context requires) the earlier versions of such brochure and documents published in June 2005) the independent directors of CCS appointed by the Scheme Shareholder under the terms of the CCS Scheme Share and the Trust Deed the fund to be established in accordance with the terms and conditions of the Scheme the amount of the Scheme Assets expressed as a percentage of the Scheme Funding Requirement as defined in and certified in accordance with the Funding Agreement the amount as certified in accordance with the Funding Agreement as being required by CCS to settle the level of Scheme Claims anticipated to be payable by it over the following six Financial Years plus three years of CCS s running costs the meetings of General Scheme Creditors and Recourse Scheme Creditors of the Scheme Companies convened by the notice of meetings set out in Section C of this document those asbestos-related claims dealt with under either of the Chester Street Settlement Agreements Tillinghast, a part of Towers Perrin, Forster & Crosby Inc. Tillinghast Reviews the independent actuarial reviews dated 8 June 2005 and 11 November 2005 respectively of asbestosrelated unpaid claims of (1) the Scheme Companies and the Additional Companies which are not Dissolved Group Companies and (2) the Scheme Companies and the Dissolved Group Companies (other than the Darchem Companies) as at 31 December 2004, prepared by Tillinghast Tillinghast Review Summaries United States, USA or US Voting Form the summaries of each of the Tillinghast Reviews, copies of which are available for inspection as described in Part 11 of this Section A the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia the Form of Proxy and the Claims Table 73

74 SECTION A: EXPLANATORY STATEMENT PART 11: DOCUMENTS AVAILABLE FOR INSPECTION A. The following documents will be available for inspection by Scheme Creditors and their representatives at the addresses specified below during normal business hours (that is Monday to Friday 9.30 a.m. to 5.30 p.m. excluding bank holidays) and on the website: from 15 March 2006 until the close of the meetings of Scheme Creditors: 1. the Scheme Guarantee; 2. the Funding Agreement; 3. the PLC Reimbursement Agreement; 4. the CCS Reimbursement Agreement; 5. the Contribution Claims Agreement; 6. the Services Agreement; 7. the PLC Articles; 8. the CCS Articles; 9. the memorandum of association of CCS; 10. the Trust Deed; 11. the Banking Agreement; 12. the audited accounts of the Scheme Companies for each of the financial years ended 31 December 2002, 2003, and 2004; 13. the audited accounts of the Group for each of the financial years ended 31 December 2002, 2003 and 2004; 14. the half yearly report of the Group for the six months ended 30 June 2005; 15. the Tillinghast Review Summaries; and 16. this document. B. Documents available for inspection at: Cape Public Limited Company Travers Smith Cape House 10 Snow Hill 3 Red Hall Avenue London Paragon Business Village EC1A 2AL Wakefield United Kingdom WF1 2UL United Kingdom 74

75 APPENDICES TO SECTION A I. SUMMARY GROUP STRUCTURE CHART SHOWING THE SCHEME COMPANIES II. III. IV. FINANCIAL INFORMATION RELATING TO THE GROUP SCHEME COMPANIES: HISTORY AND FINANCIAL AND INSURANCE INFORMATION ADDITIONAL COMPANIES: HISTORY AND FINANCIAL AND INSURANCE INFORMATION V. DISSOLVED GROUP COMPANIES VI. VII. VIII. IX. GUIDANCE NOTES FOR COMPLETION OF THE VOTING FORMS FLOWCHART REGARDING VALUATION OF SCHEME CLAIMS FOR VOTING PURPOSES GENERAL DAMAGES - USUAL RANGE OF AWARDS PRO FORMA SOLICITOR S LETTER 75

76 APPENDICES TO SECTION A I SUMMARY GROUP STRUCTURE CHART SHOWING THE SCHEME COMPANIES CAPE PUBLIC LIMITED COMPANY (40203) (1) Cape Security Services Limited ( ) Cape Calsil Group Limited ( ) Cape Industrial Services Group Limited ( ) Predart Limited (457763) (3) Cape Calsil Limited ( ) (8) Cape Claims Services Limited ( ) Cape Calsil Systems Limited ( ) (9) Cape Industrial Services Limited ( ) (2) Cape East Limited ( ) (12) Somewatch Limited (269257) (4) Altitude Scaffolding Limited ( ) (5) Cape Contracts International Limited ( ) (10) Cape Durasteel Limited (295561) (11) KEY 1-4 Key Scheme Companies 5-25 Other Scheme Companies Capasco Limited (676215) (6) Cape Building Products Limited (508044) (7) Cape Environmental Services Limited ( ) (13) Cape Fire Protection Products Limited (307653) (14) Cape Industries Limited (585057) (15) Cape Insulation Limited (676216) (16) Cape Mechanical Insulation Limited ( ) (17) Cape Painting Contractors Limited ( ) (18) Cape Specialist Coatings Limited (394232) (19) HPC Coatings Limited (975757) (20) Investable Limited (999661) (21) Kennedy s Scaffolding Limited (629193) (22) Somewin Limited ( ) (23) T.A.P. Ceilings Limited ( ) (24) Winfield Insulation Services Limited (875453) (25) 76

77 APPENDICES TO SECTION A II FINANCIAL INFORMATION RELATING TO THE GROUP The summary financial information set out in this Appendix, comprising profit and loss accounts and balance sheets for the Group for each of the three financial years ended 31 December 2004 and for the six months ended 30 June 2005, has been extracted without amendment or modification from Cape s consolidated audited accounts in the case of the former and, in the case of the latter, from Cape s unaudited financial statements contained in its half-yearly report. The summary financial information does not constitute statutory accounts within the meaning of section 240 of the Companies Act. PricewaterhouseCoopers LLP of Benson House, 33 Wellington Street, Leeds LS1 4JP has given unqualified audit reports within the meaning of section 235 of the Companies Act on the statutory accounts of the Group for each of the financial years ended 31 December 2002, 2003 and None of the audit reports contained any statements under section 237(2) or (3) of the Companies Act. The audit reports for each of these years were modified by reference to fundamental uncertainty in relation to claims for industrial disease. Statutory accounts for the Group for each of the three financial years ended 31 December 2004 have been filed with the Registrar of Companies in accordance with section 242 of the Companies Act. Copies of the audited accounts (including notes thereto) of the Group for the three years ended 31 December 2004 and copies of Cape s half-yearly report for the six months ended 30 June 2005 are available for inspection as set out in Part 11 of this Section A. As stated in the statutory accounts of the Group, there is a history of industrial disease claims being lodged against the Group for a number of years. Where the Group has determined that it is appropriate to do so, settlement has been made. Based on this experience, it is likely that similar claims will continue to be received for the foreseeable future. This is as a result of, inter alia, uncertainties concerning the population that may have been exposed to asbestos and that may develop asbestos-related diseases, the nature and timing of the diseases that may develop, the impact of other factors which might have contributed to the claimant s condition and changes in the legal environment and the typical cost of settlement. These factors affect considerations of liability and the quantum of settlement. Experience to date is that some of these claims will be at least partially covered by insurance policies, but the amount of cover will not be known until the details of the claims are available. As set out on page 26 an independent actuary has assessed that a best estimate of the aggregate projected discounted value, net of insurance recoveries of all the Group s (including the Dissolved Group Companies ) unpaid UK asbestos-related claims is million. This represents the best estimate within the range of the lowest and the highest estimates contained in the actuarial review of 70.2 million and million respectively. Given the wide range of the estimates and the significant degree of uncertainty surrounding the estimates, the Cape Directors are unable to conclude that the aggregate projected discounted value, net of insurance recoveries, of all the Group s (including the Dissolved Group Companies ) unpaid UK asbestos-related claims (including future claims) will amount to million, nor is there any certainty that the total cost of such claims will even fall within the range of estimates. In the light of the foregoing, the Cape Directors continue to believe that such levels of uncertainty remain and that the estimates are insufficiently reliable such that provisions in respect of future claims, including Scheme Claims, cannot be made in the Group s audited accounts other than when claims have been notified. The provisions made in the Group s balance sheets represent, as of the relevant dates, those industrial disease claims which have been lodged but not yet settled. If it were possible to assess reliably the present value of amounts that might be paid in future settlements such that this was to be provided in the balance sheet, there would be a materially adverse effect on the Group s financial position. There is great uncertainty over the net present value of the future claim settlements. These could occur over a period of more than forty years. However, in aggregate they are likely to exceed the amount of the net assets included in the current Group balance sheet. Based on the recent history of settlements, the Cape Directors anticipate that future settlements can be made from the future cash flows generated by the trading operations of the Group. However, should the future pattern as regards the timing and quantum of claims prove to be materially and adversely different from the historic trend, there could be a material adverse effect on the Group s financial position. 77

78 APPENDIX II SUMMARY CONSOLIDATED BALANCE SHEETS AS AT 31 DECEMBER (30 JUNE FOR 2005) UNAUDITED AUDITED at 30 Jun at 31 Dec at 31 Dec at 31 Dec m m m m NET ASSETS Intangible assets Tangible assets Investments Interest in joint ventures Stocks Debtors Cash at bank and in hand Pension Asset Creditors: due within one year (68.4) (55.8) (52.2) (79.4) Creditors: due after one year (12.8) (5.5) (10.2) (0.2) Provisions for liabilities and charges (18.6) (16.1) (16.8) (23.3) SHAREHOLDERS FUNDS Called up share capital Share premium account Revaluation reserve Profit and loss account (6.4) Equity interests Non-equity interests

79 APPENDIX II CONSOLIDATED PROFIT AND LOSS ACCOUNTS TO 31 DECEMBER (HALF YEAR 2005) UNAUDITED AUDITED 6 months to to 30 Jun m m m m Turnover Continuing operations Discontinued operations Total operations Profit before tax Continuing operations Cape Industrial Services Head Office (0.7) (1.5) (2.3) (1.7) Compensation for industrial disease (2.1) (3.7) (3.8) (2.4) Exceptional items (5.7) (1.1) (0.4) 10.5 Total Continuing (3.4) Discontinued Operations (1.6) Total operations (3.4) Net interest payable (0.6) (1.0) (1.4) (1.7) Other finance Income (Loss)/Profit before tax (3.6) Tax credit/(charge) (0.3) (Loss)/Profit for the year (2.7)

80 APPENDICES TO SECTION A III SCHEME COMPANIES - HISTORY AND FINANCIAL AND INSURANCE INFORMATION Introduction This Appendix provides an overview of the history and activities of each Scheme Company in order to assist you in identifying which Scheme Company or Scheme Companies you may be a creditor of either now or in the future. You may be entitled to vote at a meeting to consider the Scheme in relation to more than one Scheme Company. You may also be entitled to vote at more than one meeting of any such Scheme Company. Most of the Group s businesses have been transferred through a number of Group Companies since Cape acquired its first UK subsidiary in As a consequence, whilst this may not have been apparent to you at the time, your employment may have moved through a number of Group Companies. The names of most of the Group Companies have changed over time. Consequently the Scheme Company relevant to you may no longer have a name that you recognise. This does not change the Scheme Company s liabilities or obligations in any way. In addition, as mentioned in paragraphs 3 and 5 of Part 2 of this Section A, you may by reason of various intra- Group arrangements be admitted for voting purposes to the Scheme of more than one Scheme Company. This Appendix also explains whether it is thought that the Scheme Company has EL cover that responds to asbestos claims. If your Scheme Claim is one that may or may not be covered by a contract of insurance you will be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors of that Scheme Company. If your Scheme Claim is one which will in all probability not be the subject matter of a contract of insurance you will be admitted to vote solely at the meeting of General Scheme Creditors of that Scheme Company. If the business that you worked for transferred between Scheme Companies then the insurance cover relevant to your employment may be with a number of Scheme Companies. Where Cape acquired the business that you worked for from outside the Group the insurance relevant to your employment may have been taken out in the name of your former employer. Cape endeavours to mitigate its liability by utilising such cover where it is identified as available. The information set out in this Appendix has been derived from the available historic records of the Group. Whilst every effort has been made to ensure its accuracy and completeness, due to the fact that many of the relevant documents are no longer available it is likely that there will be some omissions or inaccuracies in the information set out in this Appendix. Summary financial information The summary financial information, comprising profit and loss accounts and balance sheets for each Scheme Company for each of the three financial years ended 31 December 2004, has been extracted without amendment or modification from the relevant Scheme Company s audited accounts. The summary financial information does not constitute statutory accounts within the meaning of section 240 of the Companies Act. PricewaterhouseCoopers LLP of Benson House, 33 Wellington Street, Leeds LS1 4JP has given unqualified audit reports within the meaning of section 235 of the Companies Act on the statutory accounts of each of the Scheme Companies for each of the financial years ended 31 December 2002, 2003 and 2004, other than those which were dormant during the relevant period and were not required to obtain an audit of their accounts in accordance with section 249B(s) of the Companies Act. None of the audit reports contained any statements under section 237(2) or (3) of the Companies Act. The audit reports for Cape, CISL, Cape Building Products Limited, Cape Calsil Systems Limited and Predart Limited for each of these years were modified by reference to fundamental uncertainty in relation to claims for industrial disease. Statutory accounts for the Scheme Companies for each of the three financial years ended 31 December 2004 have been filed with the Registrar of Companies in accordance with section 242 of the Companies Act. Copies of the audited accounts (including notes thereto) of each of the Scheme Companies for the three years ended 31 December 2004 are available for inspection as set out in Part 11 of this Section A. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 80

81 APPENDIX III Provision for Industrial Disease Liabilities Due to the significant uncertainties over the number, nature, timing and validity of future industrial disease claims ( Industrial Disease ), the amount of a Scheme Company s obligation in respect thereof cannot be measured with sufficient reliability. Accordingly the provisions made in each Scheme Company s balance sheet represents, as of the relevant dates, those industrial disease claims which have been lodged but not yet settled. Scheme Claims The Directors of Cape, CISL, Predart Limited, Cape Building Products Limited and Cape Calsil Systems Limited have sought to estimate each Scheme Company s proportion of the aggregate liability for asbestosrelated claims contained in the Tillinghast Reviews. For the reasons outlined in paragraph 5 of Part 2 of this Section A, an indicative range is given. The other Scheme Companies are all dormant and/or have no or minimal net assets and are reliant on other Group Companies to pay claims against them. Accordingly the Directors of these Scheme Companies have not sought to estimate each company s proportion of the aggregate liability for asbestos-related claims contained in the Tillinghast Reviews. Scheme Creditors should note that in consequence of intra-group transfers and arrangements, it is possible for more than one Scheme Company to be liable to settle a Scheme Claim. Identifying relevant Scheme Companies The following tables may assist you in identifying which Scheme Companies are relevant to you. Table A: shows factory locations, and Table B: shows contracting activities. Part 1 of Table A shows the factory locations that were operated or owned at any time by a Scheme Company or, at any relevant time, by an Additional Company where asbestos was used. The names of the Additional Companies are shown in italics. These factories may also during certain periods have been operated or owned by a Dissolved Group Company which is not an Additional Company. The names of such companies are not shown on Part 1 of Table A. Part 2 of Table A shows the factory locations where asbestos was not used. Table B shows the Scheme Companies and Additional Companies broken down by way of the nature of the contracting activities they undertook. The names of the Additional Companies are shown in italics. The names of the Dissolved Group Companies which are not Additional Companies are not referred to on Table B. Former Group Companies, which are referred to in the text by, are not Scheme Companies. Such companies may or may not be Additional Companies. Details of the Additional Companies are set out at Appendix IV of Section A of this document. If your employment or other connection with the Scheme Companies was solely in relation to a factory named on Part 2 of Table A or was in relation to an activity not described in this Appendix III or in Appendix IV, the Directors consider that there is no reasonable prospect that you will have been exposed to asbestos in the course of your employment by, or other dealings with, the Scheme Companies. Consequently, you will not be admitted to the Scheme as a Scheme Creditor for voting purposes. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 81

82 APPENDIX III TABLE A: FACTORY LOCATIONS Part 1: where asbestos was used Most companies have changed their names at least once over the last 20 to 30 years and may therefore no longer have the name that you recall. If you do not read the sections for all Scheme Companies you should at least read all sections which may be relevant to you as indicated by the note below. The names of the Additional Companies are shown in italics. Factory Company Approximate Years Page Acre Mill, Hebden Bridge, West Yorkshire Cape 1939 to Cape Insulation Limited 1961 to Barking, Essex Cape 1913 to Cape Insulation Limited 1961 to Bowburn, County Durham Plumefern Limited 1965 to Cape Universal Claddings Limited 1977 to Cape 1985 to Brislington, Bristol Predart Limited 1948 to HPC Coatings Limited 1977 to Chalford, Gloucestershire Plumefern Limited 1964 to Germiston, Glasgow Cape Building Products Limited 1952 to Cape Industrial Products Limited 1985 to Cape Calsil Systems Limited 1998 to Greenford, Middlesex Cape Durasteel Limited 1934 to Harefield (Bellrock Works), Middlesex Plumefern Limited 1964 to Cape Universal Claddings Limited 1977 to Harefield (Blackjacks Lane), Middlesex Cape Fire Protection Products Limited 1945 to Cape Universal Claddings Limited 1977 to mid 1980s 170 Hendham Vale, Manchester Nodit Limited 1960 to Kentmere, Cumbria Cape 1942 to Cape Insulation Limited 1961 to Stirling, Scotland Cape 1954 to Cape Insulation Limited 1961 to SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 82

83 APPENDIX III Factory Company Approximate Years Page Tolpits Lane, Watford Plumefern Limited 1967 to Cape Universal Claddings Limited 1977 to 1984/5 170 Uxbridge, Middlesex Cape Distribution Limited 1946 to Plumefern Limited 1968 to Cape Building Products Limited 1974 to Cape Boards Limited 1985 to Cape Calsil Systems Limited 1998 to Capasco Limited (asbestos laboratory) 1969 to Cape (head office) 1989 to Washington, Tyne & Wear Cape Insulation Limited 1980 to Cape Building Products Limited 1985 to Cape Insulation Products Limited 1985 to Cape Calsil Systems Limited 1998 to Wellingborough, Northamptonshire Cape Durasteel Limited 1972 to Cape 1982 to Cape Building Products Limited 1990 to Cape Calsil Systems Limited 1998 to Part 2: where asbestos was not used If your employment or other connection with the Scheme Companies was solely in relation to a factory named in this Part 2, the Directors consider that there is no reasonable prospect that you will have been exposed to asbestos in the course of your employment by, or other dealings with, the Scheme Companies. Consequently, you will not be admitted to the Scheme as a Scheme Creditor for voting purposes. Bedford, Bedfordshire Biggleswade, Bedfordshire Bishops Waltham, Hampshire Blackburn, Lancashire Coventry, West Midlands Doncaster, South Yorkshire Frome, Somerset Glenrothes, Scotland Hitchin, Hertfordshire Queensferry, Wales Sheffield, South Yorkshire Stafford, Staffordshire Ystrad Mynach, Caerphilly, Wales SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 83

84 APPENDIX III TABLE B: CONTRACTING ACTIVITIES Most companies have changed their names at least once over the last 20 to 30 years and may therefore no longer have the name that you recall. If you do not read the sections for all Scheme Companies you should at least read all sections which may be relevant to you as indicated by the note below. The names of the Additional Companies are shown in italics. Activity Company Approximate Years Page Asbestos removal Cape Environmental Services Limited 1980 onwards 123 Cape Industrial Services Limited 1997 onwards 92 Predart Limited 1993 onwards 95 Somewatch Limited 1932 to Winfield Insulation Services Limited 1966 onwards 150 Brakelinings/friction materials Boltex Limited Cape Friction International Limited 1960 to Cape 1948 to Nodit Limited 1960 to Predart Limited 1948 to Teubfin Limited 1971 to Torpex Limited Cold store insulation Cape Industries Limited 1967 to Cape Insulation Limited 1964 to Cape Universal Claddings Limited 1981 to Somewatch Limited 1973 to Engineering Cape Distribution (Holdings) Limited 1939 to Cape 1964 to General contracting Cape Darlington Limited 1992 onwards 157 Somewatch Limited 1955 to Predart Limited 1993 onwards 95 Cape Offshore Services Limited 1984 onwards 168 Somesystem Limited 1992 onwards 181 Cape Industrial Services (Scotland) Limited 1987 onwards 165 Installation of Durasteel doors Cape Claddings Limited 1987 to Cape Durasteel Limited 1982 to Insulation contracting Cape Pre Cape Industrial Services Limited 1997 onwards 92 Cape Insulation Limited 1960 to Cape Industries Limited 1957 to Cape Mechanical Insulation Limited 1979 to Investable Limited 1971 onwards 141 Marinite Limited 1965 to Predart Limited 1993 onwards 95 Somewatch Limited 1932 to TAP Ceilings Limited 1982 to SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 84

85 APPENDIX III Activity Company Approximate Years Page Overseas contracting Cape Contracts International Limited 1980 to Cape East Limited 1976 onwards 120 Cape Industrial Services Limited 1997 onwards 92 Cape Insulation Limited 1964 to Predart Limited 1993 onwards 95 Somewatch Limited 1932 to Painting Cape Calsil Limited 1971 to Cape Industrial Services Limited 1997 onwards 92 Cape Painting Contractors Limited 1971 to Cape Specialist Coatings Limited 1945 onwards 137 Hunting Painting Contractors (Marine) Limited 1971 to Hunting Painting Contractors (Midlands) Limited 1971 to Hunting Painting Contractors (Northern) Limited 1971 to Hunting Painting Contractors (Wales) Limited 1971 to Predart Limited 1993 onwards 95 Somewatch Limited 1932 to Scaffolding Altitude Scaffolding Limited 1971 to Cape Hire Limited 1989 onwards 163 Cape Industrial Services Limited 1997 onwards 92 Kennedy s Scaffolding Limited 1959 to Predart Limited 1993 onwards 95 Somewatch Limited 1932 to Somewin Limited 1986 onwards 145 SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING WHICH SCHEME COMPANY THEY MAY BE A CREDITOR OF AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 85

86 APPENDIX III 1: Cape PLC Company Registration Number: OVERVIEW 1.1 Former names Date of incorporation or name change The Cape Asbestos Company Limited 28/12/1893 Cape Industries Limited 01/07/1974 Cape Industries PLC 12/11/1981 Cape Public Limited Company 01/08/ UK factories Approximate years Barking, Essex 1913 to 1960 Bowburn, Co. Durham 1985 to 1990 Acre Mill, Hebden Bridge, West Yorkshire 1939 to 1960 Kentmere, Cumbria 1942 to 1960 Stirling, Scotland 1954 to 1960 Wellingborough, Northamptonshire 1982 to UK contracting activities Insulation installation contracting 1930s to Head office locations Windsor, Berkshire Cape House, Watford, Hertfordshire Various locations, London Uxbridge, Middlesex Wakefield, West Yorkshire 1.5 Activities Cape was originally incorporated to mine asbestos in South Africa and to carry out manufacturing operations at a factory it had acquired in Italy. Over time and as technology developed, the business expanded and factories were established by Cape both in the UK and worldwide to make asbestos based products, insulation materials and friction materials. During the 1930s, Cape was asked by customers to undertake both the supply and installation of insulation which led to the development of an industrial contracting business which has grown into what is now a multidiscipline industrial services business. Through acquisition and organic growth, the production of fire protection boards, brake linings and insulation in the UK was increased. Eventually, subsidiary companies were incorporated in the UK to own and operate the businesses. Cape is the holding company of the Group. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 86

87 APPENDIX III 1.6 Intra-Group Arrangements During the periods set out below there may have been arrangements between Cape and the following companies as a result of which Cape may be liable in relation to a claim made against the company concerned. Company Date of arrangements Page Boltex Limited 01/01/85 to 31/12/ Capasco Limited 31/12/63 to 01/01/ Capasco Limited 01/01/79 to 29/06/ Cape Building Products Limited 01/01/71 to 31/03/ Cape Distribution (Holdings) Limited 31/12/63 to 26/04/ Cape Distribution Limited 31/12/63 to 01/07/ Cape Fire Protection Products Limited 31/12/63 to 31/12/ Cape Friction International Limited 01/01/60 to 31/12/ Cape Industries Limited 01/01/72 to 31/12/ Cape Insulation Limited 31/12/63 to 31/12/ Cape Universal Claddings Limited 01/11/77 to 31/12/ Marinite Limited 01/01/65 to 31/12/ Nodit Limited 31/12/63 to 15/03/ Plumefern Limited 01/07/68 to 01/11/ Somewatch Limited 31/12/63 to 31/12/73 99 Teubfin Limited 01/01/79 to 31/12/ Torpex Limited 01/01/84 to 31/12/ CORPORATE HISTORY This section describes Cape s relevant major acquisitions and disposals of either companies or businesses. 2.1 UK factories Cape s first UK factory was built at Barking in 1913 and produced asbestos yarn, fabrics and mattresses, later expanding to also produce insulating products and brake linings. In 1939 Cape bought a second factory, Acre Mill, a disused mill in Hebden Bridge, Yorkshire which was initially used as a factory for gas-mask filters and later for the production of asbestos based products. A third factory was acquired by Cape in Kentmere in Cumbria in The Stirling factory (which manufactured the Rocksil product) was built by Cape in In 1961 the operation of the Barking, Acre Mill, Kentmere and Stirling factories was transferred to Cape Insulation Limited, (formerly called Cape Insulation and Asbestos Products Limited (676216)) (see page 130). From 31 December 1963 until the date of the closure of the relevant factory, there may have been arrangements of the nature described above in relation to these factories between Cape Insulation Limited and Cape. In 1965 the business of Marinite Limited (see page 176) was transferred to Cape. In relation to this business there may have been arrangements of the nature described above between Cape Insulation Limited and Marinite Limited on the one hand and Cape on the other hand. In February 1980 Cape acquired Cape Durasteel Limited (then called Durasteel Limited) (295561) (see page 118) which operated the Wellingborough factory. In January 1982 the Wellingborough factory was transferred to Cape. In early February 1984 the fibrous cement business carried out at the Bowburn factory was transferred to Cape by Cape Universal Claddings Limited. In 1990 the Wellingborough factory was transferred to Cape Building Products Limited (508044) (see page 107). From 1 January 1971 to 31 March 1990, there may have been arrangements of the nature described above between Cape Building Products Limited and Cape in relation to certain factories operated by Cape Building Products Limited. Further details are set out at page 107. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 87

88 APPENDIX III 2.2 Major UK contracting activities Prior to 1955 Cape undertook all the insulation contracting activity of the Group. The first contracting subsidiary, Somewatch Limited (formerly called Andersons Insulation Company Limited and later called Cape Contracts Limited (269257)) (see page 99), was acquired by Cape in On 1 January 1964 Somewatch Limited transferred all its business and assets to Cape Insulation Limited. Thereafter in relation to this business, there may have been arrangements of the nature described above between Cape Insulation Limited and Cape until some time in 1973 when the business was transferred back to Somewatch Limited. 2.3 Major UK subsidiaries There may at certain times have been arrangements of the nature described above between Cape and some of the companies described below. Please see paragraph 1.6 above for further details. The first UK incorporated manufacturing subsidiary was Cape Distribution Limited (then called Uxbridge Flint Brick Company (295321)) (see page 159) which was acquired by Cape in 1946 together with its subsidiary Cape Fire Protection Products Limited (then called Harefield Lime Company Limited) (307653) (see page 125). At the time of their acquisition Cape Distribution Limited owned the Uxbridge factory and Cape Fire Protection Products Limited owned the Harefield (Blackjacks Lane) factory. Cape Building Products Limited (then called Marinite Limited) (508044)) (see page 107) was incorporated in 1952 and from 1952 until 1972 the company was owned 53% by Cape and operated the Germiston factory as a joint venture between Cape and Johns-Manville Corporation of USA. Cape Distribution (Holdings) Limited (then called The Weaver Manufacturing & Engineering Company Limited) (348458) (see page 161) was acquired in This together with Kismet Limited (381429) comprised the engineering and garage equipment business based in Bedford and Sheffield. This business was disposed of in In 1960, Cape acquired Nodit Limited (then called Small & Parkes Limited) (43527) (see page 177) which ran a brake lining business from a factory in Hendham Vale, Manchester. In 1969 Cape acquired Predart Limited (then called Trist Draper Limited) (457763) (see page 95) which together with various of its subsidiaries (see page 95) which included Boltex Limited (see page 153) and Torpex Limited (see page 184) and may have included Teubfin Limited (see page 183) operated a brake lining and friction product business. The business and assets of the automotive business were sold in In March 1967, Cape acquired Plumefern Limited (then called The Universal Asbestos Manufacturing Company Limited) (323993) (see page 179) and Cape Industries Limited (then called Chancery Insulation Limited) (585057) (see page 127). Plumefern Limited operated at Tolpits, Watford; Chalford, Gloucestershire; Bowburn, County Durham and Harefield (Bellrock Works), Middlesex. Part of the business of Plumefern Limited was transferred in 1974 to Cape Building Products Limited and the remainder was transferred in 1977 to Cape Universal Claddings Limited (433147) (see page 170). During the 15 month period ended 31 March 1985 the remaining businesses of Cape Universal Claddings Limited were transferred, on a phased basis, back to Cape. In August 1976 Cape acquired Pattinson Insulations Limited, a loft insulation business, and in April 1977 Cape acquired Cape Insulation Services Limited (then called Thermalon Limited) (758829) which operated a cavity wall insulation business. This company also took on the Pattinson and J Rhodes loft insulation business until January 1982 when the Pattinson and J Rhodes business was sold back to its former owners. In June 1983, Cape acquired 51% of Cape Specialist Coatings Limited (then called Hunting Painting Contractors Limited) (394232) (see page 137). The remaining 49% of the company was acquired by Cape with effect from 1 January In December 1992, Cape acquired the business and assets of the UK Darchem Contracting Business. At the same time Cape acquired Somesystem Limited (then called Darchem Contracting UK Limited) (see page 181) and Cape Darlington Limited (then called The Darlington Insulation Company Limited). This business was immediately transferred to Somewatch Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 88

89 APPENDIX III In October 1993, Cape acquired the Middle East Darchem Contracting Business together with Datadeep Limited (then called RB Hilton Limited (946162)). 2.4 Overseas activities Cape also has overseas activities. Any claims that may arise in respect of Cape s overseas activities will not be Scheme Claims. 3. INSURANCE An overview of the employers liability insurance for Cape is as follows: Date 1 Class of Scheme Creditor Prior to 1966 No Insurance General only 1966 to 1971 Insurance Both 1972 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 to date Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003, in which case you are likely to be admitted to the meetings of both General Scheme Ceditors and Recourse Scheme Creditors. 4. SUMMARY PROFIT AND LOSS ACCOUNTS As permitted by section 230 Companies Act 1985, Cape s own profit and loss account is not included in the financial statements for the Group. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 89

90 APPENDIX III 5. SUMMARY BALANCE SHEETS AS AT 31 DECEMBER m m m NET ASSETS Intangible assets Tangible assets Investments Debtors due after one year Cash at bank and in hand Pension asset Creditors due within one year (2.6) (2.4) (29.9) Creditors due after one year (41.6) (40.5) (8.9) Provisions for liabilities and charges (6.0) (7.5) (8.8) SHAREHOLDERS FUNDS Called up share capital Share premium account Revaluation reserve Profit and loss account (24.1) (20.2) (20.0) m m m Provision for industrial disease liabilities Provision for compensation for industrial disease (included in provision for liabilities and charges above) Provision is made for compensation for industrial disease where it is possible to estimate the liability with sufficient reliability. This is generally only currently possible in respect of claims lodged and outstanding at the year end. Where this is not possible, a contingent liability is noted. Benefit is recognised for insurance and other recoveries for claims provided when they are anticipated with virtual certainty. The provision is therefore gross of any insurance recovery which if appropriate has been recorded within debtors. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 90

91 APPENDIX III 6. SCHEME CLAIMS As stated in the statutory accounts of Cape, there is a history of industrial disease claims being lodged against the Group for a number of years. Where the Group has determined that it is appropriate to do so, settlement has been made. Based on this experience, it is likely that similar claims will continue to be received for the foreseeable future. However, there is significant uncertainty over the number, nature, timing and validity of such future claims. This is as a result of, inter alia, uncertainties concerning the population that may have been exposed to asbestos and that may develop asbestos-related diseases, the nature and timing of the diseases that may develop, the impact of other factors which might have contributed to the claimant s condition and changes in the legal environment and the typical cost of settlement. These factors affect considerations of liability and the quantum of settlement. Experience to date is that some of these claims will be at least partially covered by insurance policies, but the amount of cover will not be known until the details of the claims are available. As set out on page 26, an independent actuary has assessed that a best estimate of the aggregate projected discounted value, net of insurance recoveries of all the Group s (including the Dissolved Group Companies ) unpaid UK asbestos-related claims is million. This represents the best estimate within the range of the lowest and the highest estimates contained in the actuarial review of 70.2 million and million respectively. The Cape Directors have estimated that Cape s share of this liability may be as much as million, ie 100% of the Group s liability. However, each individual case will, when brought, turn on its own facts and this statement does not constitute an admission that any particular claim will be a liability of Cape. Given the wide range of the estimates and the significant degree of uncertainty surrounding the estimates, the Cape Directors are unable to conclude that the aggregate projected discounted value, net of insurance recoveries, of all the Group s (including the Dissolved Group Companies ) unpaid UK asbestos-related claims (including future claims) will amount to million, nor is there any certainty that the total cost of such claims will even fall within the range of estimates. In the light of the foregoing, the Cape Directors continue to believe that such levels of uncertainty remain and that the estimates are insufficiently reliable such that provisions in respect of future claims, including Scheme Claims, cannot be made in Cape s and the Group s audited accounts other than when claims have been notified. If it were possible to assess reliably the present value of amounts that might be paid in future settlements such that this was to be provided in the balance sheet, there would be a materially adverse effect on Cape s and the Group s financial position. There is great uncertainty over the net present value of the future claim settlements. These could occur over a period of more than twenty years. However, in aggregate they are likely to exceed the amount of the net assets included in the current balance sheet for Cape and the Group. Based on the recent history of settlements, the Cape Directors anticipate that future settlements can be made from the future cash flows generated by the trading operations of the Group. However, should the future pattern as regards the timing and quantum of claims prove to be materially and adversely different from the historic trend, there could be a material adverse effect on the Group s and therefore Cape s financial position. Consequently the Cape Directors consider that the proposed Scheme is in the best interest of the current and future creditors of Cape. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 91

92 APPENDIX III 2: Cape Industrial Services Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Chasetrek Limited 20/03/1997 Cape Industrial Services Limited 01/01/ Activities CISL provides multi-skilled industrial contracting services. These include scaffolding, thermal insulation, painting and coatings, asbestos-stripping and refractory lining. CISL also manages the Group s overseas business. 1.3 Locations CISL operates at client sites across the UK, serviced from regional offices. For a list of regional offices see: Somewatch Limited (page 99), Cape Specialist Coatings Limited (page 137), Somewin Limited (page 145) and Cape East Limited (page 120). Additionally an office in Great Yarmouth office was acquired in 1999 with the business and assets of Duffy & McGovern (Great Yarmouth) Limited. 1.4 Intra-Group Arrangements During the periods set out below there may have been arrangements between CISL and the following companies as a result of which CISL may be liable in relation to a claim against the company concerned. Company Date of arrangements Page Predart Limited 31/12/97 to Present 95 Cape Hire Limited 01/01/98 to Present CORPORATE HISTORY Through a series of transactions late in 1997, the business and assets of Predart Limited (457763) (see page 95) were transferred to CISL. Any operations undertaken by Predart Limited since that date may have been pursuant to arrangements of the nature described above. CISL has been trading since 1 January 1998 and is the UK operating company for the Group s industrial services activities in the UK and Republic of Ireland. 3. INSURANCE An overview of the employers liability insurance for CISL is as follows: Date 1 Class of Scheme Creditor 1997 to date Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 92

93 APPENDIX III 4. SUMMARY PROFIT AND LOSS ACCOUNTS TO 31 DECEMBER Turnover 157, , ,347 Operating profit before exceptional items 5,044 5,007 8,577 Operating exceptional items - - 2,337 Operating profit 5,044 5,007 10,914 Amounts written off investments - - (254) Net interest payable (69) (436) 12 Other finance income Profit on ordinary activities before taxation 5,003 4,596 10,688 Tax (charge) / credit on profit on ordinary activities (2,188) 19 (5,470) Profit for the year 2,815 4,615 5, SUMMARY BALANCE SHEETS AS AT 31 DECEMBER NET ASSETS Tangible assets 12,575 11,954 11,697 Investments Stocks 3,448 3,588 2,633 Debtors due after one year 8,341 1,436 - Debtors due within one year 39,555 43,401 41,558 Cash at bank and in hand 783 4,262 1,665 Pension (liability)/asset (8) Creditors due within one year (31,482) (35,527) (25,371) Creditors due after one year (622) (162) (7,761) Provisions for liabilities and charges (7,597) (6,753) (6,760) 25,022 22,362 17,787 SHAREHOLDERS FUNDS Called up share capital 10,000 10,000 10,000 Revaluation reserve Profit and loss account 14,943 12,283 7,708 25,022 22,362 17,787 Provision for industrial disease liabilities Provision for compensation for industrial disease (included in provision for liabilities and charges above) 7,597 6,753 6,760 SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 93

94 APPENDIX III Provision is made for compensation for industrial disease claims where it is possible to estimate the liability with sufficient reliability. This is only currently possible in respect of claims lodged and outstanding at the year end. Where this is not possible, a contingent liability is noted. Benefit is recognised for insurance and other recoveries for claims provided when they are anticipated with virtual certainty. The provision is therefore gross of any insurance recovery which if appropriate has been recorded within debtors. 6. SCHEME CLAIMS There is a history of industrial disease claims being lodged for a number of years in the United Kingdom from a number of sources. On 21 December 1997 CISL entered into an agreement (the Agreement ) with Predart Limited, a fellow subsidiary of Cape, under which CISL agreed to discharge Predart Limited s liability in respect of industrial disease claims. The Agreement can be terminated at CISL s sole discretion, such that it will have no liability (of whatever nature) to Predart Limited. Until the Agreement is terminated, any claims made against Predart Limited represent a potential liability for CISL under the Agreement. Notwithstanding the foregoing, CISL has confirmed that provided it is legally able to do so it intends to discharge such liabilities for the foreseeable future and for so long as it remains solvent. CISL has purchased businesses or won contracts pursuant to which the employees engaged in the business or contract have transferred to it by the operation of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ( TUPE ). Certain of such employees may have been exposed to asbestos in the course of their previous employment. As a result of the operation of TUPE, CISL will be liable for any claim made by such employees in connection with their employment prior to the relevant transfer as if it had been their employer at the time. Following a review of the employment records held by CISL in respect of its current and former employees, it has proven possible to rule out the possibility of asbestos exposure in respect of some, but not all, employees and former employees. Where CISL has determined that it is appropriate to do so, in the past, claims in relation to asbestos exposure have been settled. Based on this experience, CISL believes that it is likely that similar claims will continue to be received for the foreseeable future. These could arise over a period of more than twenty years. However, there is significant uncertainty over the number, nature, timing and validity of such future claims. This is a result of, inter alia, uncertainties concerning the population that may have been exposed to asbestos and that may develop asbestos-related diseases, the nature and timing of the diseases that may develop, the impact of other factors which might have contributed to the claimant s condition and changes in the legal environment and the typical cost of settlement. Experience to date is that some of these claims will be at least partially covered by insurance policies. As a result of these uncertainties, the amount of CISL s obligation cannot be measured with sufficient reliability. Accordingly, CISL provides in its profit and loss account each year for the estimated liability in respect of claims lodged and not settled. As set out on page 26, an independent actuary has assessed that a best estimate of the aggregate projected discounted value, net of insurance recoveries of all of the Group s (including the Dissolved Group Companies ) unpaid UK asbestos-related claims is million. This represents the best estimate within the range of the lowest and highest estimates contained in the actuarial review of 70.2 million and million respectively. For the purpose of the Scheme for CISL, the Directors have estimated that CISL s share of the Group s liability is up to 29.6 million. Given the wide range of the estimates and the significant degree of uncertainty surrounding the estimate, the Directors are unable to conclude with any certainty that the total cost of claims will fall within this range. In light of the foregoing, the Directors continue to believe that such levels of uncertainty remain and that the estimates are insufficiently reliable such that provisions in respect of future claims, including Scheme Claims, cannot be made in the company s audited accounts other than when claims have been notified. Based on the recent history of settlements, the Directors anticipate that future settlements can be made from the future cash flows generated by the trading operations of the Group. However, should the future pattern as regards the timing and quantum of claims prove to be materially and adversely different from the historic trend, there could be a material adverse effect on the Group s, and therefore CISL s, financial position. Consquently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of CISL. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 94

95 APPENDIX III 3: Predart Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Hubert H P Trist & Company Limited 10/08/1948 Trist Draper Limited 13/03/1962 Trist Draper Holdings Limited 23/10/1979 Predart (Holdings) Limited 12/06/1985 Cape Contracts Overseas Limited 02/09/1991 Cape Industrial Services Limited 06/05/1993 Cape Industrial Services Group Limited 10/10/1997 Cape Industrial Services Limited 03/12/1997 Predart Limited 01/01/ Activities Predart Limited originally manufactured friction and hydraulic materials for automotive and industrial use. The company subsequently became the main operating company for Cape s industrial services contracting business. 1.3 UK Factories Approximate years Brislington, Bristol 1948 to Locations From 1993, Predart Limited also operated at client sites across the United Kingdom. For list of regional offices see: Somewatch Limited (page 99), Cape Specialist Coatings Limited (page 137), Somewin Limited (page 145) and Cape East Limited (page 120). 1.5 Intra-Group Arrangements During the periods set out below there may have been arrangements between Predart Limited and the following companies as a result of which Predart Limited may be liable in relation to a claim against the company concerned. Company Date of arrangements Page Cape Darlington Limited 01/04/93 to 31/12/ Cape East Limited 01/01/94 to 31/12/ Cape Hire Limited 28/03/94 to 31/12/ Cape Industrial Services (Scotland) Limited 01/04/93 to Present 165 Cape Offshore Services Limited 01/04/93 to Present 168 Cape Specialist Coatings Limited 01/04/93 to Present 137 Investable Limited 01/04/93 to Present 141 Somesystem Limited 01/04/93 to 31/12/ Somewin Limited 01/04/93 to Present 145 Somewatch Limited 01/04/93 to Present 99 Teubfin Limited 01/01/71 to 31/12/ Winfield Insulation Services Limited 01/04/93 to Present CORPORATE HISTORY Predart Limited was acquired in September 1969 as part of Cape s acquisition of the Trist Draper automotive business, together with several of its subsidiaries including Boltex Limited (287121) (see page 153), Torpex Limited (533902) (see page 184) and possibly Teubfin Limited (927681) (see page 183). SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 95

96 APPENDIX III On 1 June 1977 Predart Limited acquired Minett Fluid Power Limited (550700) and a number of its subsidiaries including HPC Coatings Limited (then called WT Minett (Hydraulics) Limited) (975757) (see page 139) as part of Cape s purchase of the Minett Hydraulics business. This business was subsequently transferred to Predart Limited. Predart Limited disposed of this business in May The friction materials business of Predart Limited and its subsidiaries was sold on 15 April 1985 following which Predart Limited ceased to trade. On 1 April 1993 Predart Limited recommenced trading and the business and assets of all the companies in the Group s industrial services division were transferred to Predart Limited (which at the time was called Cape Industrial Services Limited). Since that date there may have been arrangements of the nature described above between a number of these companies and Predart Limited as shown in the table above. The businesses transferred to Predart Limited included the business and assets of Somewatch Limited (269257) (see page 99); Cape Specialist Coatings Limited (394232) (see page 137); Somewin Limited (previously called Cape Scaffolding Limited) ( ) (see page 145); and Cape Mechanical Insulation Limited ( ) (see page 133). On 6 April 1993 Predart Limited acquired the contracting business and assets of Joseph Nadin Holdings Limited. On 30 September 1993 Predart Limited acquired the refractory business and assets of Cerabrick Refractory Limited. On 1 April 1994 the business and assets of Cape East Limited, except for its investment in the share capital of certain overseas companies, were transferred to Predart Limited. Predart Limited operated the Group s UK industrial services business until December 1997 when, through a series of transactions, the business and assets of Predart Limited were transferred to Cape Industrial Services Limited ( ) (see page 92). Since 31 December 1997 there may have been arrangements of the nature described above between Predart Limited and Cape Industrial Services Limited. 3. INSURANCE An overview of the employers liability insurance for Predart Limited is as follows: Date 1 Class of Scheme Creditor 1948 to 31/01/1970 Insurance Both 01/02/1970 to 30/06/1981 No insurance General only 01/07/1981 to 1997 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 96

97 APPENDIX III 4. SUMMARY PROFIT AND LOSS ACCOUNTS TO 31 DECEMBER Interest receivable Profit on ordinary activities before taxation Tax on profit on ordinary activities (27) (23) (16) Profit for the year SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors due after one year 2,137 2,069 2,007 Creditors due within one year (27) (23) (16) 2,110 2,046 1,991 SHAREHOLDERS FUNDS Called up share capital Share premium account Other reserves Profit and loss account ,110 2,046 1,991 Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Predart Limited. 6. SCHEME CLAIMS There is a history of industrial disease claims being lodged against Predart Limited for a number of years in the United Kingdom. Where Predart Limited has determined that it is appropriate to do so, settlement has been made. Based on this experience, it is likely that similar claims will continue to be received for the foreseeable future. These could occur over a period of more than twenty years. However, there is significant uncertainty over the number, nature, timing and validity of such future claims. This is as a result of, inter alia, uncertainties concerning the population that may have been exposed to asbestos and that may develop asbestos-related diseases, the nature and timing of the diseases that may develop, the impact of other factors which might have contributed to the claimant s condition and changes in the legal environment and the typical cost of settlement. These factors affect considerations of liability and the quantum of settlement. Experience to date is that some of these claims will be at least partially covered by insurance policies, but the amount of the cover will not be known until the details of the claims are available. As a result of these uncertainties, the amount of Predart Limited s obligation cannot be measured with sufficient reliability. On 21 December 1997 Predart Limited entered into an agreement (the Agreement ) with CISL, a fellow subsidiary undertaking of Cape, for CISL to discharge Predart Limited s liabilities in respect of industrial disease claims. Although the Agreement is terminable at CISL s sole discretion, the Directors have received confirmation from CISL that, provided it is legally able to do so, it intends to continue to discharge such liabilities for the foreseeable future and for so long as it remains solvent. Notwithstanding this Agreement, if it were possible to assess reliably the present value of amounts that might be paid in future settlements, this should be provided for in the balance sheet of Predart Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 97

98 APPENDIX III As set out on page 26 an independent actuary has assessed that a best estimate of the aggregate projected discount value, net of insurance recoveries of all of the Group s (including the Dissolved Group Companies ) unpaid UK asbestos-related claims is million. This represents the best estimate within the range of the lowest and highest estimates contained in the actuarial review of 70.2 million and million respectively. For the purpose of the Scheme for Predart Limited, the Directors have estimated that Predart Limited s share of the Group s liability up to 29.6 million. Given the wide range of the estimates and the significant degree of uncertainty surrounding the estimate, the Directors are unable to conclude with any certainty that the total cost of claims will fall within this range. In light of the foregoing, the Directors continue to believe that such levels of uncertainty remain and that the estimates are insufficiently reliable such that provisions in respect of future claims, including Scheme Claims, cannot be made in the company s audited accounts other than when claims have been notified. Based on the recent history of settlements, the Directors anticipate that future settlements can be made from the future cash flows generated by the trading operations of the Group. However, should the future pattern as regards the timing and quantum of claims prove to be materially and adversely different from the historic trend, there could be a material effect on the Group s and therefore Predart Limited s financial position. Predart Limited s financial position could also be materially affected if the Agreement was terminated. Consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Predart Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 98

99 APPENDIX III 4. Somewatch Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Andersons Insulation Company Limited 13/10/1932 Cape Contracts Limited 06/12/1970 Somewatch Limited 01/01/ Activities Somewatch Limited, when called Andersons Insulation Company Limited, specialised in marine insulation contracting. Later, when called Cape Contracts Limited, Somewatch Limited undertook both marine and nonmarine insulation contracting. 1.3 Locations The original Andersons business was based in Liverpool. However Somewatch Limited has over time operated at client sites across the UK. 1.4 Head Office Locations Barking, Essex Liverpool, Merseyside Watford, Hertfordshire Wakefield, West Yorkshire Regional Office Locations included the following Aberdeen, Scotland Chelmsford, Essex Purfleet, Thurrock Alrewas, Staffordshire Darlington, Co Durham Romford, Essex Ashton-under-Lyne, Gtr Manchester Doncaster, South Yorkshire Southampton, Hampshire Askern, South Yorkshire Fareham, Hampshire Stallingborough, Lincolnshire Audenshaw, Gtr Manchester Faverdale, Darlington Sutton Coldfield, West Midlands Belfast, Northern Ireland Glasgow, Scotland Tamworth, Staffordshire Birmingham, West Midlands Greenwich, Gtr London Uxbridge (Laboratory), Middlesex Burnley, Lancashire Liverpool, Merseyside Wallsall, West Midlands Cardiff, Wales Nottingham, Nottinghamshire Warrington, Gtr Manchester Chadwell Heath, Essex Oldham, Gtr Manchester 1.5 Intra-Group Arrangements During the periods set out below there may have been arrangements between Somewatch Limited and the following companies as a result of which Somewatch Limited may be liable in relation to a claim against the company concerned. Company Date of arrangements Page Cape Insulation Limited 01/01/64 to 31/12/ Cape Mechanical Insulation Limited 01/10/87 to 31/03/ TAP Ceilings Limited 01/04/89 to 31/03/ Somesystem Limited 17/12/92 to 31/03/ Cape Darlington Limited 17/12/92 to 31/03/ CORPORATE HISTORY Somewatch Limited was acquired by Cape in 1955 and continued to carry out contracts in its own name (at the time, Andersons Insulation Company Limited) until 1 January 1964 when it transferred all of its business and assets to Cape Insulation Limited. From 1 January 1964 to 31 December 1973, there may have been arrangements of the nature described above between Somewatch Limited and Cape Insulation Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 99

100 APPENDIX III In 1973, all of the business and assets of Cape relating to insulation and other industrial contracting services which were being carried out in the name of Cape Insulation Limited (676216) (see page 130) and Cape Industries Limited (formerly called Chancery Insulations Limited) (585057) (see page 127) were transferred to Somewatch Limited. On 26 January 1975 Somewatch Limited acquired the business and assets of the insulation contracting business of Newalls Insulation Company Limited. In January 1976, Somewatch Limited transferred its fire protection, acoustic, heating and ventilation insulation and cold store insulation businesses to Cape Industries Limited (585057) (see page 127). The fire protection and acoustics businesses of Cape Industries Limited (585057) were transferred back to Somewatch Limited during In 1976 the overseas contracting division was transferred by Somewatch Limited to the newly incorporated Cape East Limited ( ) (see page 120). In 1977 Somewatch Limited transferred its scaffolding division to a newly incorporated company, Somewin Limited ( ) (see page 99). On 1 October 1982 Somewatch Limited acquired Cape Claddings Limited (then called J & R Aitken (Joiners) Limited) (SC63029) which carried on the business of general contracting. The business and assets of this company were transferred to Somewatch Limited on 30 September On 6 December 1982 Somewatch Limited acquired TAP Ceilings Limited (formerly called McEwan Insulators Limited) ( ) (see page 148) together with the business and assets of the vendor s northern contracting operations. The business and assets of TAP Ceilings Limited were transferred to Somewatch Limited on 1 April There may have been arrangements of the nature described above between TAP Ceilings Limited and Somewatch Limited from 1 April 1989 to 31 March On 1 October 1987 Somewatch Limited acquired the business and assets of Cape Mechanical Insulation Limited ( ) (see page 133). There may have been arrangements of the nature described above between Cape Mechanical Insulation Limited and Somewatch Limited from 1 October 1987 to 31 March On 19 December 1988 Somewatch Limited acquired the business and assets of Winfield Insulation Services Limited, a business providing asbestos removal services. As part of the acquisition Cape also acquired the Winfield Insulation Services name. The Winfield Insulation Services business was subsequently transferred from Somewatch Limited to Winfield Insulation Services Limited (then called Clover (Brushes) Supplies Limited) (875453) (see page 150). On 31 March 1993 the business and assets of Winfield Insulation Services Limited (see page 150) were transferred back to Somewatch Limited. On 16 December 1992 the UK Darchem Contracting Business was acquired by Cape. The business and assets were transferred to Somewatch Limited. At the same time Cape acquired Cape Darlington Limited (then called The Darlington Insulation Company Limited) (462823) (see page 157) and Somesystem Limited (then called Darlington Contracting UK Limited) (see page 181). From their acquisition in 1992 until 31 March 1993, there may have been arrangements of the nature described above between each of Cape Darlington Limited and Somesystem Limited on the one hand and Somewatch Limited on the other hand. On 12 February 1992 Somewatch Limited acquired Investable Limited (previously called Maintenance Insulation Limited) (999661) (see page 141). On 31 March 1993 the business and assets of Investable Limited were transferred to Somewatch Limited. On 31 March 1993 all of the business and assets of Somewatch Limited were transferred to Predart Limited (457663) (see page 95) following which there may have been arrangements of the nature described above between Somewatch Limited and Predart Limited for the run-off of existing contracts. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 100

101 APPENDIX III 3. INSURANCE An overview of the employers liability insurance for Somewatch Limited is as follows: Date 1 Class of Scheme Creditor 1945 to 1957 Insurance Both 1958 to 1965 Insurance with asbestos exclusion General only 1966 to 1971 Insurance Both 1972 to 24/07/1977 Insurance (fronting arrangement see page 45) Both 25/07/1977 to 1993 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. SUMMARY PROFIT AND LOSS ACCOUNTS Somewatch Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare profit and loss accounts for those years. 5. SUMMARY BALANCE SHEETS AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 101

102 APPENDIX III Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Somewatch Limited. 6. SCHEME CLAIMS There is a history of industrial disease claims being lodged against the company for a number of years in the United Kingdom. Where the company has determined that it is appropriate to do so, settlement has been made. Based on this experience, it is likely that similar claims will continue to be received for the foreseeable future. However, there is significant uncertainty over the number, nature, timing and validity of such future claims. This is as a result of, inter alia, uncertainties concerning the population that may have been exposed to asbestos and that may develop asbestos-related diseases, the nature and timing of the diseases that may develop, the impact of other factors which might have contributed to the claimant s condition and changes in the legal environment and the typical cost of settlement. These factors affect considerations of liability and the quantum of settlement. Experience to date is that some of these claims will be at least partially covered by insurance policies, but the amount of the cover will not be known until the details of the claims are available. As a result of these uncertainties, the amount of the company s obligation cannot be measured with sufficient reliability. On 19 December 1997, Predart Limited entered into an agreement (the Agreement ) with Somewatch Limited, a fellow subsidiary of Cape, under which Predart Limited agreed to discharge Somewatch Limited s liabilities in respect of industrial disease claims. The Agreement can be terminated at Predart Limited s sole discretion, such that it will have no liability (of whatever nature) to Somewatch Limited. Somewatch Limited has also received confirmation from Cape that, provided it is legally able to do so, it intends to continue to discharge or procure the discharge of such liabilities for the foreseeable future and for so long as it remains solvent. Notwithstanding this Agreement, if it were possible to assess reliably the present value of amounts that might be paid in future settlements this should be provided in the balance sheet. There is great uncertainty over the net present value of the future claim settlements. These could occur over a period of more than twenty years. However, in aggregate, they are likely to exceed the amount of the net assets included in the current balance sheet. Based on the recent history of settlements, the Directors anticipate that future settlements can be made from the future cash flows generated by the trading operations of the Group. However, should the future pattern as regards the timing and quantum of claims prove to be materially and adversely different from the historic trend, there could be a material effect on the Group s, and therefore Somewatch Limited s financial position. Somewatch Limited s financial position could also be materially affected should the confirmation from Cape be withdrawn. Consequently the Directors consider that the proposed Scheme is in the best interests of Somewatch Limited s current and future creditors. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 102

103 APPENDIX III 5: Altitude Scaffolding Limited Company Registration Number: OVERVIEW 1.1 Name Date of incorporation or name change Altitude Scaffolding Limited 26/07/ Activities Altitude Scaffolding Limited operated in the scaffolding business. 1.3 Locations Regional office locations included Kirkby, Merseyside and Eccles, Greater Manchester 2. CORPORATE HISTORY Altitude Scaffolding Limited was acquired by Somewin Limited on 1 April 1981 and traded in its own name until 1 January 1983 when all of its business and assets were transferred to Somewin Limited ( ) (see page 145). From 1 January 1983 until 31 March 1993 there may have been arrangements between Altitude Scaffolding Limited and Somewin Limited as a result of which Somewin Limited may be liable in relation to a claim made against Altitude Scaffolding Limited. On 31 March 1993, the business and assets of Somewin Limited were transferred to Predart Limited (447763) (see page 95). 3. INSURANCE An overview of the employers liability insurance for Altitude Scaffolding Limited is as follows: Date 1 Class of Scheme Creditor 1963 to 1964 No insurance General only 1965 to 1966 Insurance Both 1967 to 1983 No insurance General only 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Altitude Scaffolding Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 103

104 APPENDIX III 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Altitude Scaffolding Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against Altitude Scaffolding Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Altitude Scaffolding Limited, and these not be paid by other Group Companies, Altitude Scaffolding Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Altitude Scaffolding Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 104

105 APPENDIX III 6: Capasco Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Cape Asbestos Fibres Limited 28/11/1960 Slapvale Limited 26/07/1979 Capasco Limited 29/08/ Activities From the 1960s until the Cape mines were sold in 1979, Capasco Limited sold Cape-mined raw asbestos fibre worldwide and imported all fibre required for the UK factories, both Cape mined and from other companies. This company should not be confused with the trading name Capasco that was used for a range of automotive products. The automotive business is unconnected to this company. 1.3 Locations Until August 1969, Capasco Limited operated at Park Street, London and then moved to Uxbridge where Capasco Limited also operated the asbestos research laboratory. 2. CORPORATE HISTORY Capasco Limited was incorporated in 1960 under the name of Cape Asbestos Fibres Limited, to become the operating company of the asbestos fibre sales business with effect from 1 January When called Capasco Limited, the company was used by the Cape Head Office as an in-house leasing company from 1980 to Capasco Limited is now a dormant subsidiary of Cape. Between 31 December 1963 and 1 January 1975 and between 1 January 1979 and 29 June 1979 there may have been arrangements between Capasco Limited and Cape as a result of which Cape may be liable in relation to a claim made against Capasco Limited. 3. INSURANCE An overview of the employers liability insurance for Capasco Limited is as follows: Date 1 Class of Scheme Creditor Prior to 1966 No insurance General only 1966 to 1971 Insurance Both 1972 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 to 1989 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Capasco Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 105

106 APPENDIX III 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS SHAREHOLDERS FUNDS Called up share capital Profit and loss account (130) (130) (130) The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Capasco Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against Capasco Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Capasco Limited, and these not be paid by other Group Companies, Capasco Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Capasco Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 106

107 APPENDIX III 7: Cape Building Products Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Marinite Limited 17/05/1952 Cape Boards & Panels Limited 01/07/1974 Cape Building Products Limited 14/10/ Activities This company originally ran the Germiston factory in Glasgow which manufactured asbestos based products until the late 1970s. Over time Cape Building Products Limited took on the operation of Cape s other manufacturing operations and those that remained were transferred to Cape Calsil Systems Limited in UK Factories Approximate years Germiston, Glasgow 1952 to 1997 Uxbridge, Middlesex 1974 to 1997 Washington, Tyne & Wear 1985 to 1997 Wellingborough, Northamptonshire 1990 to Intra-Group Arrangements During the various periods set out below, there may have been arrangements between Cape Building Products Limited and the following companies as a result of which Cape Building Products Limited may be liable in relation to a claim made against the company concerned. Company Factory Date of arrangements Page Cape Boards Limited Uxbridge 14/10/85 to 01/01/ Cape Durasteel Limited Wellingborough 01/01/82 to 01/01/ Cape Industrial Products Limited Germiston 14/10/85 to 01/01/ Cape Insulation Products Limited Washington 14/08/85 to 01/01/ CORPORATE HISTORY Cape Building Products Limited is a wholly-owned subsidiary that was incorporated in 1952 under the name of Marinite Limited. From 1952 until 1972 the company was owned 53% by Cape. This company operated the Germiston factory as a joint venture between Cape and Johns-Manville Corporation of USA. On 1 January 1974, Cape acquired the remaining 47% of Cape Building Products Limited. In 1974, the Uxbridge board production business was transferred from Plumefern Limited (323993) (see page 179) to Cape Building Products Limited. In 1985 Cape Building Products Limited took over the operation of the Washington factory from Cape Insulation Limited (676216) (see page 130). From 1 January 1971 to 31 March 1990 there may have been arrangements of the nature described above between Cape Building Products Limited and Cape with the result that Cape may be liable in relation to a claim against Cape Building Products Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 107

108 APPENDIX III In 1990 Cape Building Products Limited took over the operation of the Wellingborough factory from Cape. From 1985 until 1998 all Cape s manufacturing activities in the UK were carried out by Cape Building Products Limited. There may have been arrangements of the nature described above between the companies listed in paragraph 1.4 above and Cape Building Products Limited. It is not believed that such arrangements have been formally terminated. With effect from 1 January 1998 Cape Building Products Limited transferred its business and assets to Cape Calsil Systems Limited ( ) (see page 113) and since that date there may have been arrangements of the nature described above between the company and Cape Calsil Systems Limited with the result that Cape Calsil Systems Limited may be liable in relation to a claim against the company. On 1 February 1998 Cape Building Products Limited acquired the Install Performance Doors business from the company s receiver. 3. INSURANCE An overview of the employers liability insurance for Cape Building Products Limited is as follows: Date 1 Class of Scheme Creditor Prior to 1966 No Insurance General only 1966 to 1971 Insurance Both 1972 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 to 1998 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. SUMMARY PROFIT AND LOSS ACCOUNTS TO 31 DECEMBER Administrative expenses (41) (21) - Operating loss (41) (21) - Interest receivable Profit on ordinary activities before taxation Tax on profit on ordinary activities (37) (32) (50) Profit for the year SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 108

109 APPENDIX III 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors due after one year 2,465 2,383 2,457 Debtors due within one year Creditors due within one year (37) (32) (21) Provisions for liabilities and charges (84) (21) (160) 2,377 2,330 2,276 SHAREHOLDERS FUNDS Called up share capital 2,950 2,950 2,950 Profit and loss account (573) (620) (674) 2,377 2,330 2,276 Provision for industrial disease liabilities Provision for compensation for industrial disease (included in provision for liabilities and charges above) Provision is made for compensation for industrial disease claims where it is possible to estimate the liability with sufficient reliability. This is only currently possible in respect of claims lodged and outstanding at the year end. Where this is not possible, a contingent liability is noted. Benefit is recognised for insurance and other recoveries for claims provided when they are anticipated with virtual certainty. The provision is therefore gross of any insurance recovery which if appropriate has been recorded within debtors. 6. SCHEME CLAIMS There is a history of industrial disease claims being lodged for a number of years in the United Kingdom from a number of sources. Where the company has determined that it is appropriate to do so, settlement has been made. Based on this experience, it is likely that similar claims will continue to be received for the foreseeable future. However, there is significant uncertainty over the number, nature, timing and validity of such future claims. This is as a result of, inter alia, uncertainties concerning the population that may have been exposed to asbestos and that may develop asbestos-related diseases, the nature and timing of the diseases that may develop, the impact of other factors which might have contributed to the claimant s condition and changes in the legal environment and the typical cost of settlement. These factors affect considerations of liability and the quantum of settlement. Experience to date is that some of these claims will be at least partially covered by insurance policies, but the amount of the cover will not be known until the details of the claims are available. On 1 April 1990 the company entered into an agreement with Cape, the ultimate parent of the company, under which the company agreed to discharge certain liabilities of Cape in respect of industrial disease claims. The agreement is terminable at the company s sole discretion, such that it will have no liability (of whatever nature) to Cape. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 109

110 APPENDIX III On 1 July 1998 the company entered into an agreement (the Agreement ) with Cape Calsil Systems Limited, a fellow subsidiary undertaking of Cape, whereby Cape Calsil Systems Limited agreed to discharge the majority of the company s liabilities in respect of industrial disease claims. The Agreement is terminable at Cape Calsil Systems Limited s sole discretion, but the Directors are not aware of any intention of Cape Calsil Systems Limited to terminate it. Accordingly, the company provides in the profit and loss account each year for the estimated liability in respect of industrial disease claims lodged and outstanding at the year-end, which are not covered by the Agreement. As set out on page 26 an independent actuary has assessed that a best estimate of the aggregate projected discounted value, net of insurance recoveries of all of the Group s (including the Dissolved Group Companies ) unpaid UK asbestos-related claims is million. This represents the best estimate within the range of the lowest and highest estimate contained in the actuarial review of 70.2 million and million respectively. For the purpose of the Scheme for Cape Building Products Limited, the Directors have estimated that Cape Building Products Limited s share of the Group s liability is in the range of 0 to million. Given the wide range of the estimates and the significant degree of uncertainty surrounding the estimate, the Directors are unable to conclude with any certainty that the total cost of claims will fall within this range. In light of the foregoing, the Directors continue to believe that such levels of uncertainty remain and that the estimates are insufficiently reliable such that provisions in respect of future claims, including Scheme Claims, cannot be made in the company s audited accounts other than when claims have been notified. Based on the recent history of settlements, the Directors anticipate that future settlements can be made from the future cash flows generated by the trading operations of the Group. However, should the future pattern as regards the timing and quantum of claims prove to be materially and adversely different from the historic trend, there could be a material adverse effect on the Group s, and therefore the company s, financial position. Cape Building Products Limited s financial position could also be materially affected if the Agreement with Cape Calsil Systems Limited was terminated. Consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Cape Building Products Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 110

111 APPENDIX III 8: Cape Calsil Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Hunting Painting Contractors (Southern) Limited 12/10/1971 HPC Limited 04/09/1986 Cape Calsil Limited 17/03/ Activities From 12 October 1971 to 1 January 1988, there may have been arrangements between Cape Calsil Limited and Cape Specialist Coatings Limited (394232) (see page 137) as a result of which Cape Specialist Coatings Limited may be liable in relation to a claim made against Cape Calsil Limited. 1.3 Locations Unknown 2. CORPORATE HISTORY Cape Calsil Limited was acquired on 24 June 1983 when Cape acquired 51% of its parent company Cape Specialist Coatings Limited (formerly called Hunting Painting Contractors Limited) (394232) (see page 137). The remaining 49% was acquired by Cape with effect from 1 January Cape Calsil Limited is now a dormant wholly-owned subsidiary of Cape. Since being 100% acquired by Cape, this company has not traded or had employees. Prior to this acquisition, it is understood that all activities carried out in the name of Cape Calsil Limited were performed by its parent company, Cape Specialist Coatings Limited. 3. INSURANCE Cape Calsil Limited has not traded since its 100% acquisition by Cape. The insurance cover is not known. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Calsil Limited was dormant throughout the three years ending 31 December Accordingly it did not prepare a profit and loss account for those years. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 111

112 APPENDIX III 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital: The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Calsil Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against Cape Calsil Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Cape Calsil Limited, and not be paid by other Group Companies, Cape Calsil Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Cape Calsil Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 112

113 APPENDIX III 9: Cape Calsil Systems Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Replyclaim Limited 28/11/1997 Cape Manufacturing Limited 12/05/1998 Cape Calsil Systems Limited 12/06/ Activities Cape Calsil Systems Limited was the operating company for the building material manufacturing interests of Cape in the UK from 1998 to UK Factories Approximate years Germiston, Glasgow 1998 to 2002 Uxbridge, Middlesex 1998 to 2002 Washington, Tyne & Wear 1998 to 2002 Wellingborough, Northamptonshire 1998 to Intra-Group Arrangements During the period set out below there may have been arrangements between Cape Calsil Systems Limited and the following company as a result of which Cape Calsil Systems Limited may be liable in relation to a claim made against the company. Company Date of arrangements Page Cape Building Products Limited 01/01/98 to Present CORPORATE HISTORY With effect from 1 January 1998 Cape Calsil Systems Limited acquired the business and assets of Cape Building Products Limited (508044) (see page 107) which had (possibly through certain intra-group arrangements) carried out all the Group s manufacturing activities in the UK since From 1 January 1998 there may have been such arrangements between Cape Building Products Limited and Cape Calsil Systems Limited. Production ceased in Wellingborough in The Uxbridge factory ceased production in 2002 and its business transferred to companies in the Promat group together with operation of the Germiston factory. The Washington factory also ceased production in 2002 and the factory was sold to the Promat Group in INSURANCE An overview of the employers liability insurance for Cape Calsil Systems Limited is as follows: Date 1 Class of Scheme Creditor 1997 to 2002 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 113

114 APPENDIX III 4. SUMMARY PROFIT AND LOSS ACCOUNTS 31 DECEMBER Turnover - 3,638 28,796 Cost of Sales (60) (3,740) (25,892) Gross profit / (loss) (60) (102) 2,904 Administrative expenses (67) (327) (3,568) Distribution costs - - (2,210) Research and development costs - - (742) Operating exceptional items Operating (loss) / profit (127) 487 (2,859) Profit on sale of fixed assets 155 2,394 - Profit / (loss) on closure of the business (3,571) Loss on sale of business - - (689) Profit / (loss) on ordinary activities before interest 328 3,641 (7,119) Net interest receivable - 2 (152) Profit / (loss) on ordinary activities before taxation 328 3,643 (7,271) Tax credit on profit / (loss) on ordinary activities ,875 Profit / (loss) for the year 355 3,935 (4,396) 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Tangible assets 2,000 2,916 11,271 Stocks - - 3,225 Debtors due after one year 8,219 6,664 - Debtors due after within one year ,355 Cash at bank and in hand Creditors due within one year (247) (643) (5,202) Creditors due after one year - - (4,853) Provisions for liabilities and charges (2,426) (2,528) (7,391) 7,688 7,333 3,423 SHAREHOLDERS FUNDS Called up share capital 37,000 37,000 37,000 Revaluation reserve 2,000 2,083 9,772 Profit and loss account (31,312) (31,750) (43,349) 7,688 7,333 3,423 SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 114

115 APPENDIX III Provision for industrial disease liabilities Provision for compensation for industrial disease (included in provision for liabilities and charges above) 1,529 1,536 5,936 Provision is made for compensation for industrial disease claims where it is possible to estimate the liability with sufficient reliability. This is only currently possible in respect of claims lodged and outstanding at the year end. Where this is not possible, a contingent liability is noted. Benefit is recognised for insurance and other recoveries for claims provided when they are anticipated with virtual certainty. The provision is therefore gross of any insurance recovery which if appropriate has been recorded within debtors. The provision includes an amount of 1.4 million plus interest which is held in a joint escrow account for the purchasers of the Group s UK manufacturing operations disposed of in September 2002 (see page 64). 6. SCHEME CLAIMS There is a history of industrial disease claims being lodged against the company and Cape Building Products Limited for a number of years in the United Kingdom. Where it is determined that it is appropriate to do so, settlement has been made. Based on this experience, it is likely that similar claims will continue to be received for the foreseeable future. However, there is significant uncertainty over the number, nature, timing and validity of such future claims. This is as a result of, inter alia, uncertainties concerning the population that may have been exposed to asbestos and that may develop asbestos-related diseases, the nature and timing of the diseases that may develop, the impact of other factors which might have contributed to the claimant s condition and changes in the legal environment and to the typical cost of settlement. These factors affect considerations of liability and the quantum of settlement. Experience to date is that some of these claims will be at least partially covered by insurance policies, but the amount of the cover will not be known until the details of the claims are available. On 1 July 1998 the company entered into an agreement with Cape Building Products Limited, a fellow subsidiary undertaking of Cape, under which the company agreed to discharge certain liabilities of Cape Building Products Limited in respect of industrial disease claims. This agreement can be terminated at the company s sole discretion, such that it will have no liability (of whatever nature) to Cape Building Products Limited. As set out on page 26 an independent actuary has assessed that a best estimate of the aggregate projected discounted value, net of insurance recoveries of all of the Group s (including the Dissolved Group Companies ) unpaid UK asbestos-related claims is million. This represents the best estimate within the range of the lowest and highest estimate contained in the actuarial review of 70.2 million and million respectively. For the purpose of the Scheme for Cape Calsil Systems Limited, the Directors have estimated that Cape Calsil Systems Limited s share of the Group s liability is in the range of 1.5 million to million. Given the wide range of the estimates and the significant degree of uncertainty surrounding the estimate, the Directors are unable to conclude with any certainty that the total cost of claims will fall within this range. In light of the foregoing, the Directors continue to believe that such levels of uncertainty remain and that the estimates are insufficiently reliable such that provisions in respect of future claims, including Scheme Claims, cannot be made in the company s audited accounts other than when claims have been notified. Based on the recent history of settlements, the Directors anticipate that future settlements can be made from the future cash flows generated by the trading operations of the Group. However, should the future pattern as regards the timing and quantum of claims prove to be materially and adversely different from the historic trend, there could be a material adverse effect on the Group s, and therefore the company s financial position. Consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Cape Calsil Systems Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 115

116 APPENDIX III 10: Cape Contracts International Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Muirest Limited 20/06/1980 Cape Contracts International Limited 05/12/1980 Cape Contracts Overseas Limited 16/04/1985 Cape Contracts International Limited 02/08/ Activities Cape Contracts International Limited was a management company for the industrial services operations undertaken overseas. The overseas business is now managed by CISL ( ) (see page 92). 1.3 Locations Cape Contracts International Limited was based in Watford. 2. CORPORATE HISTORY Cape Contracts International Limited was incorporated in 1980 by Cape. 3. INSURANCE The employers liability insurance for Cape Contracts International Limited is as follows: Date 1 Class of Scheme Creditor 1980 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 to date Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Contracts International Limited was dormant throughout the three years ending 31 December Accordingly it did not prepare a profit and loss account for those years. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 116

117 APPENDIX III 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Contracts International Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against Cape Contracts International Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Cape Contracts International Limited, and not be paid by other Group Companies, Cape Contracts International Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Cape Contracts International Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 117

118 APPENDIX III 11. Cape Durasteel Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Durasteel Roofs Limited 29/12/1934 Durasteel Limited 15/02/1950 Cape Durasteel Limited 15/08/ Activities Cape Durasteel Limited was a manufacturing company that produced steel reinforced cement fire barriers. Until some time in 1978, the Durasteel product included some asbestos. From 1982 the company installed the doors it manufactured. Whilst the doors that were installed should not have contained asbestos, any doors that were being replaced may have contained asbestos. 1.3 UK Factories Approximate years Greenford, Middlesex 1934 to 1972 Wellingborough, Northamptonshire 1972 to Intra-Group Arrangements During the period set out below there may have been arrangements between Cape Durasteel Limited and the following company as a result of which Cape Durasteel Limited may be liable in relation to a claim made against the company. Company Date of arrangements Page Cape Claddings Limited 01/01/87 to 31/12/ CORPORATE HISTORY Cape Durasteel Limited was acquired in February Prior to acquisition, Cape Durasteel Limited had traded under the name of Durasteel Limited at Greenford in Middlesex until 1972 and then at Bradfield Road in Wellingborough. On 1 January 1982 the Durasteel business was transferred to Cape (40203) (see page 86). Thereafter there may have been arrangements of the nature described above between the company and Cape Building Products Limited (see page 107) with the result that Cape Building Products Limited may be liable in relation to a claim made against the company. From 1 January 1987 to 31 December 1990, in supplying Durasteel doors there may have been arrangements of the nature described above between Cape Claddings Limited and Cape Durasteel Limited. On 1 April 1990 the Durasteel business was transferred from Cape to Cape Building Products Limited (508944). 3. INSURANCE An overview of the employers liability insurance for Cape Durasteel Limited is as follows: Date 1 Class of Scheme Creditor Prior to 1954 Not known General only 09/04/1954 to 17/02/1980 Insurance Both 18/02/1980 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 to 1990 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 118

119 APPENDIX III If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Durasteel Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet of Cape Durasteel Limited 6. SCHEME CLAIMS In the event that claims are successfully brought against Cape Durasteel Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Cape Durasteel Limited, and not be paid by other Group Companies, Cape Durasteel Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Cape Durasteel Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 119

120 APPENDIX III 12: Cape East Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Cape Contracts International Limited 24/02/1976 Cape Contracts Overseas Limited 05/12/1980 Cape Contracts International Limited 16/04/1985 Cape East Limited 20/05/ Activities Cape East Limited managed the Group s non-european thermal insulation contracting businesses, including material supplies. Cape East Limited is now a holding company. 1.3 Locations The head office of Cape East Limited was originally at Cape House, Watford and then moved to St Albans. 2. CORPORATE HISTORY In 1976 the business and assets of Somewatch Limited s overseas contracting business were transferred to Cape East Limited which had been incorporated to be a management company for the industrial services operations undertaken overseas. In 1993 the Middle-East Darchem Contracting Business operations that Cape had acquired in that year were transferred from Cape to Cape East Limited. On 1 April 1994, Cape East Limited transferred its UK assets and business to Predart Limited (457763) (see page 95), with the exception of its investment in the share capital of certain overseas companies. Thereafter, until 31 December 1997, there may have been arrangements between Cape East Limited and Predart Limited with the result that Predart Limited may be liable in relation to a claim made against Cape East Limited. 3. INSURANCE An overview of the employers liability insurance for Cape East Limited is as follows: Date 1 Class of Scheme Creditor 1976 to 30/06/1981 Insurance (fronting arrangement see page 45) 2 Both 01/07/1981 to 1994 Insurance 2 Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. 2 Cover will only apply to UK activities. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 120

121 APPENDIX III 4. SUMMARY PROFIT AND LOSS ACCOUNTS TO 31 DECEMBER Increase in provision against the investment in the joint venture - (37) (30) Release of the provision against investment in the subsidiary undertakings Loss on ordinary activities before taxation - (21) (14) Tax credit on loss on ordinary activities Loss for the year - (20) (14) SUMMARY BALANCE SHEETS AS AT 31 DECEMBER NET ASSETS Investments Debtors due after one year Debtors due within one year Creditors due within one year - - (1) Creditors due after one year (111) (7) (7) SHAREHOLDERS FUNDS Called up share capital Investment revaluation reserve Profit and loss account (298) (272) (182) Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape East Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 121

122 APPENDIX III 6. SCHEME CLAIMS There is a history of industrial disease claims being lodged against the members of the Group for a number of years in the United Kingdom. Where it has been determined that it is appropriate to do so, settlement has been made. Based on this experience, it is likely that similar claims will continue to be received by the Group for the foreseeable future. However, there is significant uncertainty over the number, nature, timing and validity of such future claims. This is as a result of, inter alia, uncertainties concerning the population that may have been exposed to asbestos and that may develop asbestos-related diseases, the nature and timing of the diseases that may develop, the impact of other factors which might have contributed to the claimant s condition and changes in the legal environment and the typical cost of settlement. These factors affect considerations of liability and the quantum of settlement. Experience to date is that some of these claims will be at least partially covered by insurance policies, but the amount of cover will not be known until the details of the claims are available. As a result of these uncertainties, the amount of the Group s obligation cannot generally be measured with sufficient reliability. The Directors believe that the likelihood of receiving valid claims is remote. Although the company has not received any valid claims to date, there is no certainty that such claims will not be made against it in the future. The Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Cape East Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 122

123 APPENDIX III 13: Cape Environmental Services Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change The Cape Asbestos Company Limited 01/07/1974 Cape Environmental Services Limited 24/06/ Activities The company has never traded and remains a dormant wholly owned subsidiary of Cape. During the 1980s Cape Environmental Services Limited held an asbestos operating licence but it is thought that this was never used. 2. CORPORATE HISTORY Cape Environmental Services Limited was incorporated in 1974 to provide a dormant company to protect the name The Cape Asbestos Company Limited which was the previous name of its parent company (Cape (40203)). 3. INSURANCE An overview of the employers liability insurance for Cape Environmental Services Limited is as follows: Date 1 Class of Scheme Creditor 1974 to 24/07/1977 Insurance (fronting arrangement see page 45) Both 25/07/1977 to date Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Environmental Services Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 123

124 APPENDIX III 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital: The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Environmental Services Limited. 6. SCHEME CLAIMS There is a history of industrial disease claims being lodged against the members of the Group for a number of years in the United Kingdom. Where it has been determined that it is appropriate to do so, settlement has been made. Based on this experience, it is likely that similar claims will continue to be received by the Group for the foreseeable future. However, there is significant uncertainty over the number, nature, timing and validity of such future claims. This is as a result of, inter alia, uncertainties concerning the population that may have been exposed to asbestos and that may develop asbestos-related diseases, the nature and timing of the diseases that may develop, the impact of other factors which might have contributed to the claimant s condition, changes in the legal environment and to the typical cost of settlement. These factors affect considerations of liability and the quantum of settlement. Experience to date is that some of these claims will be at least partially covered by insurance policies, but the amount of cover will not be known until the details of the claims are available. As a result of these uncertainties, the amount of the Group s obligation cannot generally be measured with sufficient reliability. The Directors believe that the likelihood of receiving valid claims is remote. Although the company has not received any valid claims to date, there is no certainty that such claims will not be made against it in the future. The Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Cape Environment Services Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 124

125 APPENDIX III 14: Cape Fire Protection Products Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Harefield Lime Company Limited 30/11/1935 Stenni (UK) Limited 19/05/1980 Cape External Products Limited 01/11/1989 Cape Fire Protection Products Limited 13/12/ Activities Cape Fire Protection Products Limited quarried lime for use in the brick making process at a factory in Harefield, Middlesex until the late 1970s. The company was then a name protection company until 1980 after which it manufactured the non-asbestos Stenni product at Blackburn. 1.3 UK Factories Approximate years Harefield (Blackjacks Lane), Middlesex 1945 to CORPORATE HISTORY Cape Fire Protection Products Limited was acquired in 1946 together with its parent company Cape Distribution Limited (then called Uxbridge Flint Brick Company Limited) (295321) (see page 159). From 31 December 1963 to 31 December 1980, then called Harefield Lime Company Limited, there may have been arrangements between it and Cape as a result of which Cape may be liable in relation to a claim made against Cape Fire Protection Products Limited. The Harefield factory was then transferred to Cape Universal Claddings Limited. 3. INSURANCE An overview of the employers liability insurance for Cape Fire Protection Products Limited is as follows: Date 1 Class of Scheme Creditor Prior to 1966 No insurance General only 1966 to 1971 Insurance Both 1972 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 to 1996 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 125

126 APPENDIX III 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Fire Protection Products Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital: The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Fire Protection Products Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against Cape Fire Protection Products Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Cape Fire Protection Products Limited, and not be paid by other Group Companies, Cape Fire Protection Products Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Cape Fire Protection Products Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 126

127 APPENDIX III 15: Cape Industries Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Chancery Insulations Limited 04/06/1957 Cape Building Services Limited 18/12/1975 Cape Limited 04/05/1989 Cape Industries Limited 01/08/ Activities When called Chancery Insulations Limited, Cape Industries Limited was a contracting company that sprayed asbestos. When called Cape Building Services Limited, it was a mechanical services contractor. 1.3 Locations Head Office Locations Cape Industries Limited was based at Tolpits Lane, Watford prior to The head office then moved to Cape House, Watford. Regional Office Locations Cape Industries Limited operated at the following sites: Atherstone, Warwickshire Chadwell Heath, Essex Glossop, Derbyshire Grimbsy, Lincolnshire Romford, Essex 2. CORPORATE HISTORY Cape Industries Limited was the insulating contracting division of Plumefern Limited (formerly called The Universal Asbestos Manufacturing Company Limited) (see page 179). Both of these companies were acquired by Cape in Cape Industries Limited continued to trade in its own right until 31 December On 1 January 1972, Cape Industries Limited s assets were transferred to Cape (see page 86) and until 31 December 1973 there may have been arrangements between Cape Industries Limited and Cape as a result of which Cape may be liable in relation to a claim made against Cape Industries Limited. On 31 December 1973 the relevant assets were then transferred from Cape to Somewatch Limited (296257) (see page 99) and the company became dormant. On 1 January 1976, the fire protection, acoustic, heating and ventilation insulation and cold store installation businesses were transferred back to Cape Industries Limited. On 1 January 1979, the fire protection and acoustic contracting businesses were transferred back to Somewatch Limited (296257). On 1 January 1981, the heating and ventilation insulation businesses were transferred to Cape Mechanical Insulation Limited ( ) (see page 133). The cold store business was transferred to Cape Universal Claddings Limited (433147) (see page 170) on 1 January 1982 and Cape Industries Limited again became dormant. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 127

128 APPENDIX III 3. INSURANCE An overview of the employers liability insurance for Cape Industries Limited is as follows: Date 1 Class of Scheme Creditor 1958 to 1971 Insurance Both 1972 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 to 1985 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Industries Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Industries Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 128

129 APPENDIX III 6. SCHEME CLAIMS In the event that claims are successfully brought against Cape Industries Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Cape Industries Limited, and not be paid by other Group Companies, Cape Industries Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Cape Industries Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 129

130 APPENDIX III 16: Cape Insulation Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Cape Insulation & Asbestos Products Limited 28/11/1960 Cape Insulation Limited 01/06/ Activities Cape Insulation Limited took over the operation of the Acre Mill, Barking, Stirling and Kentmere factories from Cape in It operated Acre Mill and Kentmere until these factories closed, the Barking factory was sold in 1966 and the Stirling factory was sold in From 1964 to 1972 Cape Insulation Limited also undertook insulation contracting activities. 1.3 UK Factories Approximate years Acre Mill, Hebden Bridge, West Yorkshire 1961 to 1970 Barking, Essex 1961 to 1966 Kentmere, Cumbria 1961 to 1985 Stirling, Scotland 1961 to 1984 Washington, Tyne & Wear 1980 to 1985 Cape Insulation Limited also operated at client sites. 2. CORPORATE HISTORY Cape Insulation Limited was incorporated in 1960 and on 1 January 1961 Cape transferred the business of the manufacture and installation of insulation products at the Barking, Acre Mill, Kentmere and Stirling sites to Cape Insulation Limited. On 1 January 1964 the contracting business of Somewatch Limited (then called Anderson Insulation Company Limited) (see page 99) was transferred to Cape Insulation Limited and thereafter in relation to the business there may have been arrangements between Cape Insulation Limited and Cape with the result that Cape may be liable in relation to a claim made against Cape Insulation Limited. There may also have been such arrangements between Cape Insulation Limited and Cape regarding the business of Marinite Limited which was transferred to Cape in 1965 and regarding the Belfast insulation business. On 1 January 1973, the specialised insulation contracting business of Cape Insulation Limited was transferred back to Somewatch Limited. In 1980 Cape Insulation Limited acquired a factory at Washington, Tyne & Wear. Prior to Cape Insulation Limited s acquisition of the factory, it had been used to make asbestos-containing products. No asbestoscontaining products were made at the factory whilst it was owned or operated by any Group Company. In December 1984 the Stirling rockwool insulation business was sold. In 1985 the Washington factory was transferred to Cape Building Products Limited (see page 107) and the company s remaining business was closed. The company has been dormant since SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 130

131 APPENDIX III 3. INSURANCE An overview of the employers liability insurance for Cape Insulation Limited is as follows: Date 1 Class of Scheme Creditor Prior to 1966 No Insurance General only 1966 to 1971 Insurance Both 1972 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 to 1985 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Insulation Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings 2,062 2,062 2,062 2,062 2,062 2,062 SHAREHOLDERS FUNDS Called up share capital 2,062 2,062 2,062 2,062 2,062 2,062 The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Insulation Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 131

132 APPENDIX III 6. SCHEME CLAIMS In the event that claims are successfully brought against Cape Insulation Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Cape Insulation Limited, and not be paid by other Group Companies, Cape Insulation Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Cape Insulation Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 132

133 APPENDIX III 17: Cape Mechanical Insulation Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Blondecraft Limited 18/12/1979 Cape Mechanical Insulation Limited 04/02/ Activities Cape Mechanical Insulation Limited traded in the installation of heating and ventilation insulation. 1.3 Locations Cape Mechanical Insulation Limited carried out contracts across a variety of locations around the United Kingdom. 2. CORPORATE HISTORY Cape Mechanical Insulation Limited was incorporated on 18 December 1979 as a wholly-owned subsidiary of Cape (40203) (see page 86). Cape Mechanical Insulation Limited became a subsidiary of Somewatch Limited (269257) (see page 99) on 1 January 1981, when it also commenced trading when the heating and ventilation insulation business was transferred from Cape Industries Limited (585057) (see page 127) to it. From 1 October 1987 until 31 March 1993, when its business and assets were transferred to Predart Limited, there may have been arrangements between Cape Mechanical Insulation Limited and Somewatch Limited as a result of which Somewatch Limited may be liable in relation to a claim made against Cape Mechanical Insulation Limited. 3. INSURANCE An overview of the employers liability insurance for Cape Mechanical Insulation Limited is as follows: Date 1 Class of Scheme Creditor 1981 to 1993 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Mechanical Insulation Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 133

134 APPENDIX III 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET LIABILITIES Creditors: amounts owed to group undertakings (1,632) (1,632) (1,632) (1,632) (1,632) (1,632) SHAREHOLDERS DEFICIT Called up share capital Profit and loss account (1,632) (1,632) (1,632) (1,632) (1,632) (1,632) The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Mechanical Insulation Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against Cape Mechanical Insulation Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Cape Mechanical Insulation Limited, and not be paid by other Group Companies, Cape Mechanical Insulation Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Cape Mechanical Insulation Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 134

135 APPENDIX III 18: Cape Painting Contractors Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Hunting Painting Contractors (Eastern) Limited 12/10/1971 Cape Painting Contractors Limited 04/09/ Activities From 12 October 1971 to 1 January 1988, there may have been arrangements between Cape Painting Contractors Limited and Cape Specialist Coatings Limited (394232) (see page 137), as a result of which Cape Specialist Coatings Limited may be liable in relation to a claim made against Cape Painting Contractors Limited. 1.3 Locations Unknown 2. CORPORATE HISTORY Cape Painting Contractors Limited was acquired on 24 June 1983 when Cape acquired 51% of its parent company Cape Specialist Coatings Limited (formerly called Hunting Painting Contractors Limited) (394232) (see page 137). The remaining 49% was acquired with effect from 1 January Cape Painting Contractors Limited is now a dormant wholly-owned subsidiary of Cape. Since being 100% acquired by Cape, this company has not traded or had employees. Prior to this acquisition, it is understood that all activities carried out in the name of Cape Painting Contractors Limited were performed by its parent company, Cape Specialist Coatings Limited. 3. INSURANCE Cape Painting Contractors Limited has not traded since its acquisition by Cape. The insurance cover prior to acquisition by Cape is not known. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Painting Contractors Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 135

136 APPENDIX III 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital: The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Painting Contractors Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against Cape Painting Contractors Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Cape Painting Contractors Limited, and not be paid by other Group Companies, Cape Painting Contractors Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Cape Painting Contractors Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 136

137 APPENDIX III 19: Cape Specialist Coatings Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change William Latimer & Company Limited 26/03/1945 Hunting Painting Contractors Limited 01/01/1968 HPC Coatings Ltd 14/10/1988 HPC Coatings Limited 25/01/1989 Cape Specialist Coatings Limited 06/04/ Activities Cape Specialist Coatings Limited traded as an industrial painting contractor. 1.3 Locations Head Office Locations East Boldon, Tyne & Wear Cape House, Watford, Hertfordshire Depot Locations include the following East Boldon, Tyne & Wear London Stallingborough, North East Lincolnshire Elsham Wold, Lincolnshire Normanton, West Yorkshire Sutton Coldfield, West Midlands Glasgow, Scotland Port Talbot, Neath, Port Talbot 1.4 Intra-Group Arrangements The following companies were subsidiaries of Cape Specialist Coatings Limited at the time that it was acquired by Cape. During the periods set out below there may have been arrangements between Cape Specialist Coatings Limited and the following companies as a result of which Cape Specialist Coatings Limited may be liable in relation to a claim made against the company concerned. Company Date of arrangements Page Winfield Insulation Services Limited 01/01/70 31/03/ Hunting Painting Contractors (Marine) Limited 12/10/71 26/05/ Hunting Painting Contractors (Midlands) Limited 12/10/71 26/05/ Hunting Painting Contractors (Northern) Limited 12/10/71 26/05/ Hunting Painting Contractors (Wales) Limited 12/10/71 26/05/ Cape Calsil Limited 12/10/71 01/01/ Cape Painting Contractors Limited 12/10/71 01/01/ CORPORATE HISTORY Cape acquired 51% of Cape Specialist Coatings Limited (formerly called Hunting Painting Contractors Limited) and its subsidiary companies, a number of which are now liquidated, on 24 June The remaining 49% of the company was acquired by Cape with effect from 1 January Cape Specialist Coatings Limited continued to trade as an industrial painting contractor until 31 March 1993 when its business and assets were transferred to Predart Limited (457663) (see page 95). Cape Specialist Coatings Limited is understood to have been dormant since 1 April However, with regard to any operations it has undertaken since that date, there may have been arrangements between it and Predart Limited as a result of which Predart Limited may be liable in relation to a claim made against Cape Specialist Coatings Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 137

138 APPENDIX III 3. INSURANCE An overview of the employers liability insurance for Cape Specialist Coatings Limited is as follows: Date 1 Class of Scheme Creditor Prior to 1968 Not known General only 1968 to 1997 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. SUMMARY PROFIT AND LOSS ACCOUNTS TO 31 DECEMBER Cape Specialist Coatings Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare profit and loss accounts for those years. 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Specialist Coatings Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against Cape Specialist Coatings Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Cape Specialist Coatings Limited, and not be paid by other Group Companies, Cape Specialist Coatings Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Cape Specialist Coatings Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 138

139 APPENDIX III 20: HPC Coatings Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change W T Minett (Hydraulics) Limited 26/03/1970 Kestrel Leasing Limited 20/10/1983 HPC Coatings Limited 06/04/ Activities HPC Coatings Limited was one of the companies acquired with the Minett Hydraulics business and part of the automotive division. This company should not be confused with the painting and coatings companies which were subsidiaries of Cape Specialist Coatings Limited (formerly called HPC Coatings Limited) (see page 137) and which were acquired in HPC Coatings Limited is now so called in order to protect the HPC company name. 1.3 Locations Following acquisition, HPC Coatings Limited was originally based at Hitchin, Hertfordshire. Later the registered office moved to Brislington, Bristol. 2. CORPORATE HISTORY HPC Coatings Limited was acquired on 1 June 1977 by Predart Limited (457763) (see page 95) (then called Trist Draper Limited) as part of the acquisition of the Minett Hydraulics business based at Coventry. The registered office was then moved to Brislington where the Trist Draper automotive business was based. By 1982 the company was non-trading and from 1983 the company was used as a leasing company. 3. INSURANCE An overview of the employers liability insurance for HPC Coatings Limited is as follows: Date 1 Class of Scheme Creditor Prior to 1977 Not known General only 1977 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 onwards Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER HPC Coatings Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 139

140 APPENDIX III 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital: The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for HPC Coatings Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against HPC Coatings Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against HPC Coatings Limited, and not be paid by other Group Companies, HPC Coatings Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of HPC Coatings Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 140

141 APPENDIX III 21: Investable Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Maintenance Insulation Limited 14/01/1971 Investable Limited 01/01/ Activities Investable Limited was an industrial heating and ventilation company. 1.3 Locations Investable Limited operated at client sites and had an office in Oldham, Lancashire. 2. CORPORATE HISTORY Investable Limited was acquired on 12 February 1992 by Somewatch Limited (269257) (see page 141). On 31 March 1993 the business and assets of Investable Limited were transferred to Somewatch Limited. The business and assets of Somewatch Limited were then immediately transferred to Predart Limited (457763) (see page 95) which operated the business until Investable Limited is understood to have been dormant since However any operations carried out by Investable Limited since 1 April 1993 may have been performed under arrangements with Predart Limited as a result of which Predart Limited may be liable in relation to a claim made against Investable Limited. 3. INSURANCE An overview of the employers liability insurance for Investable Limited is as follows: Date 1 Class of Scheme Creditor 1971 to 1976 Insurance Both 1977 No Insurance General only 1978 to 1984 Insurance Both 1985 to 30/04/1992 No Insurance General only 01/05/1992 to 1993 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Investable Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 141

142 APPENDIX III 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Investable Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against Investable Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Investable Limited, and not be paid by other Group Companies, Investable Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Investable Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 142

143 APPENDIX III 22: Kennedy s Scaffolding Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Western Scaffolding Company Limited 21/05/1959 Kennedy s Scaffolding Limited 09/04/ Activities This company operated the Western Scaffolding business. It did not trade as Kennedy s Scaffolding and should not be confused with the Kennedy Scaffolding business acquired by Somewin Limited (then called Cape Scaffolding Limited) (see page 145). 1.3 Locations Port Talbot, Wales 2. CORPORATE HISTORY Kennedy s Scaffolding Limited was acquired by Somewin Limited ( ) (see page 145) in On 1 April 1986, its business and assets were transferred to Somewin Limited and from that date until 31 March 1993 there may have been arrangements with Somewin Limited as a result of which Somewin Limited may be liable in relation to a claim made against Kennedy s Scaffolding Limited. 3. INSURANCE An overview of the employers liability insurance for Kennedy s Scaffolding Limited is as follows: Date 1 Class of Scheme Creditor Prior to 1966 Not known General only 1966 to 1986 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Kennedy s Scaffolding Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 143

144 APPENDIX III 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: Amounts owed by group undertakings 4,985 4,985 4,985 4,985 4,985 4,985 SHAREHOLDERS FUNDS Called up share capital 4,985 4,985 4,985 4,985 4,985 4,985 The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Kennedy s Scaffolding Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against Kennedy s Scaffolding Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Kennedy s Scaffolding Limited, and not be paid by other Group Companies, Kennedy s Scaffolding Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Kennedy s Scaffolding Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 144

145 APPENDIX III 23: Somewin Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Jumberliss Limited 30/09/1976 Cape Scaffolding Limited 11/03/1977 Somewin Limited 01/01/ Activities Somewin Limited operated Cape s contract scaffolding and scaffolding hire business. 1.3 Locations Head Office Locations Askern, South Yorkshire Normanton, West Yorkshire Pontefract, West Yorkshire Cape House, Watford, Hertfordshire Regional Office Locations included the following Aberdeen, Aberdeenshire Harrietsham, Kent Port Talbot, Wales Billingham, Stockton-on-Tees Kirkby, Merseyside Pyle, Bridgend, Wales Cardiff, Caerdydd Lancaster, Lancashire Stallingborough, Lincolnshire Eastleigh, Hampshire Linlilthgow, West Lothian Sutton Coldfield, West Midlands Eccles, Gtr Manchester Normanton, West Yorkshire Warrington, Merseyside Elsham, Wold Plymouth, Devon Glasgow, Scotland Poole, Dorset 1.4 Intra-Group Arrangements During the periods set out below there may have been arrangements between Somewin Limited and the following companies as a result of which Somewin Limited may be liable in relation to a claim made against the company concerned. Company Date of arrangements Page Altitude Scaffolding Limited 01/01/83 to 31/03/ Cape Offshore Services Limited 30/03/84 to 31/03/ Kennedy s Scaffolding Limited 01/04/86 to 31/03/ Cape Industrial Services (Scotland) Limited 28/04/87 to 31/03/ Cape Hire Limited 22/09/89 to 27/03/ CORPORATE HISTORY Somewin Limited was set up as a new company by Cape (40203) (see page 86) in During 1977 the business and assets of Somewatch Limited s scaffolding business were transferred to Somewin Limited. On 1 January 1983 Somewin Limited acquired the business and assets of Altitude Scaffolding Limited ( ) (see page 103) one of its subsidiaries. From 1 January 1983 until 31 March 1993 there may have been arrangements of the nature described above between Altitude Scaffolding Limited and Somewin Limited. On 28 January 1983 Somewin Limited acquired Joseph Nadin Scaffolding Limited (then called Grampian Soil Surveys Limited) (S55307). Its scaffolding business and assets were transferred to Somewin Limited and the soil survey business was sold back to the original vendors. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 145

146 APPENDIX III In May 1984 Somewin Limited acquired the Aberdeen operation of Somewatch Limited (269257) (see page 99) and amalgamated them with its own operations in Aberdeen. The amalgamated businesses may have been operated through arrangements of the nature described above between Somewin Limited and each of Cape Offshore Services Limited (87445) (see page 168) and Cape Industrial Services (Scotland) Limited (104361). On 1 April 1984 Somewin Limited acquired the business and assets of one of its subsidiaries, Kennedy s Scaffolding Limited (then called Western Scaffolding Company Limited) (629193) (see page 143). There may have been arrangements of the nature described above between Somewin Limited and Kennedy s Scaffolding Limited from 1 April 1986 until 31 March On 17 February 1990 Somewin Limited acquired the business and assets of Ardon Painting Limited from its receivers. On 12 April 1991 Somewin Limited acquired the business and assets of the southern scaffolding business of Travis Perkins together with the Kennedy Scaffolding name. Subsequently, the company called Western Scaffolding Limited (629193) (above) changed its name to Kennedy s Scaffolding Limited. On 31 March 1993, the business and assets of Somewin Limited were transferred to Predart Limited (447763) (see page 95) and since 1 April 1993 there may have been arrangements of the nature described above with Predart Limited as a result of which Predart Limited may be liable in relation to a claim made against Somewin Limited. 3. INSURANCE An overview of the employers liability insurance for Somewin Limited is as follows: Date 1 Class of Scheme Creditor 1976 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 to 1993 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Somewin Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 146

147 APPENDIX III The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Somewin Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against Somewin Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Somewin Limited, and these not be paid by other Group Companies, Somewin Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Somewin Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 147

148 APPENDIX III 24: TAP Ceilings Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Alnery No 136 Limited 02/03/1982 McEwans Insulators Limited 02/08/1982 Joseph Nadin Contracting Limited 01/07/1993 TAP Ceilings Limited 21/02/ Activities This company carried out the business of insulation contracting. This company should not be confused with the Group company (which is neither a Scheme Company nor an Additional Company) called Cape Roofing Products Limited which was previously called TAP Ceilings Limited. The company now called TAP Ceilings Limited was formerly called McEwans Insulators Limited and is now called TAP Ceilings Limited to protect the TAP Ceilings name. 1.3 Locations Glasgow, Scotland 2. CORPORATE HISTORY TAP Ceilings Limited was acquired by Somewatch Limited (269257) (see page 99) on 6 December 1982 together with the business and assets of the vendor s northern contracting operations. At the time of its acquisition, the company was called McEwans Insulators Limited. The company traded in its own name until its business and assets were transferred to Somewatch Limited (269257) on 1 April From 1 April 1989 until 31 March 1993 there may have been arrangements between TAP Ceilings Limited and Somewatch Limited as a result of which Somewatch Limited may be liable in relation to a claim made against TAP Ceilings Limited. 3. INSURANCE An overview of the employers liability insurance for TAP Ceilings Limited is as follows: Date 1 Class of Scheme Creditor Prior to 1982 Not known General only 1982 to 1989 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 148

149 APPENDIX III 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER TAP Ceilings Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital: The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for TAP Ceilings Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against TAP Ceilings Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against TAP Ceilings Limited, and not be paid by other Group Companies, TAP Ceilings Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of TAP Ceilings Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 149

150 APPENDIX III 25: Winfield Insulation Services Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Clover Painting Contractors Limited 29/03/1966 Clover (Brushes) Supplies Limited 11/02/1969 Winfield Insulation Services Limited 03/02/ Activities This company originally purchased painting equipment and was part of the Hunting Painting Contractors group of companies. On 3 February 1989 it changed its name to Winfield Insulation Services Limited and undertook asbestos removal contracts until 31 March Locations When operating as Winfield Insulation Services Limited, this company operated from the following depots: Tamworth, Staffordshire Walsall, West Midlands 2. CORPORATE HISTORY Winfield Insulation Services Limited was acquired on 24 June 1983, at which time it was called Clover (Brushes) Supplies Limited, when Cape acquired 51% of its parent company Cape Specialist Coatings Limited (formerly called Hunting Painting Contractors Limited) (394232) (see page 137). Cape acquired the remaining 49% of Cape Specialist Coatings Limited with effect from 1 January From 1 January 1970 until 31 March 1988 there may have been arrangements between this company and its then parent Cape Specialist Coatings Limited as a result of which Cape Specialist Coatings Limited may be liable in relation to a claim made against this company. On 19 December 1988 Somewatch Limited (269257) (see page 99) acquired the business and assets of the Winfield Insulation Services business. As part of the acquisition Cape also acquired the Winfield Insulation Services name and shortly after this company changed its name to Winfield Insulation Services Limited. The Winfield Insulation Services business was subsequently transferred to this company. Winfield Insulation Services Limited undertook asbestos removal contracts until 31 March 1993, when it transferred its business and assets to Somewatch Limited (269257) (see page 99). On 31 March 1993 all of the business and assets of Somewatch Limited were transferred to Predart Limited. From 1 April 1993 there may have been arrangements between this company and Predart Limited as a result of which Predart Limited may be liable in relation to a claim made against Winfield Insulation Services Limited. 3. INSURANCE An overview of the employers liability insurance for Winfield Insulation Services Limited is as follows: Date 1 Class of Scheme Creditor Prior to 1988 Not known General only 1988 to 1993 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING WHICH SCHEME COMPANY THEY MAY BE A CREDITOR OF AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 150

151 APPENDIX III If your Scheme Claim is not a claim capable of being covered by employers liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Winfield Insulation Services Limited was dormant throughout the three years ended 31 December Accordingly it did not prepare a profit and loss account for those years. 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET LIABILITIES Creditors: amounts owed to group undertakings (101) (101) (101) (101) (101) (101) SHAREHOLDERS DEFICIT Called up share capital Profit and loss account (101) (101) (101) (101) (101) (101) The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Winfield Insulation Services Limited. 6. SCHEME CLAIMS In the event that claims are successfully brought against Winfield Insulation Services Limited these claims are currently settled by other Scheme Companies. The Directors of those Scheme Companies have therefore included potential claims where relevant in their assessment of the range of the relevant Scheme Company s potential liabilities. Should claims arise against Winfield Insulation Services Limited, and not be paid by other Group Companies, Winfield Insulation Services Limited would have insufficient assets to meet its claims and consequently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of Winfield Insulation Services Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING WHICH SCHEME COMPANY THEY MAY BE A CREDITOR OF AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 151

152 APPENDICES TO SECTION A IV ADDITIONAL COMPANIES - HISTORY AND FINANCIAL AND INSURANCE INFORMATION Introduction This Appendix provides an overview of the history and activities of each Additional Company in order to assist you in identifying which Scheme Company or Scheme Companies you may be a creditor of either now or in the future. You may be entitled to vote at a meeting to consider the Scheme in relation to more than one Scheme Company. You may also be entitled to vote at more than one meeting of any such Scheme Company. The Additional Companies are not Scheme Companies. The Scheme is not being proposed with regard to the Additional Companies. Most of the Group s businesses have been transferred through a number of Group Companies since Cape acquired its first UK subsidiary in As a consequence, whilst this may not have been apparent to you at the time, your employment may have moved through a number of Group Companies. The names of most of the Group Companies have changed over time. Consequently the company relevant to you may no longer have a name that you recognise. This does not change any Additional Company s, nor any relevant Scheme Company s, liabilities or obligations in any way. In addition, as mentioned in paragraphs 3 and 5 of Part 2 of this Section A, you may by reason of various intra- Group arrangements be admitted for voting purposes to the Scheme of more than one Scheme Company. This Appendix also explains whether it is thought that the Additional Company has EL cover that responds to asbestos claims. If your Scheme Claim is one that may or may not be covered by a contract of insurance (maintained by either the Additional Company or the relevant Scheme Company) you will be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors of that Scheme Company. If your Scheme Claim is one which will in all probability not be the subject matter of a contract of insurance you will be admitted to vote solely at the meeting of General Scheme Creditors of that Scheme Company. The information set out in this Appendix has been derived from the available historic records of the Group. Whilst every effort has been made to ensure its accuracy and completeness, due to the fact that many of the relevant documents are no longer available it is likely that there will be some omissions or inaccuracies in the information set out in this Appendix. Summary financial information The Additional Companies are either dormant, are in liquidation or have been dissolved. With regard to dormant companies, the summary financial information, comprising an unaudited balance sheet for each of the three financial years ended 31 December 2004, has been extracted without amendment or modification from the relevant Additional Company s accounts. The summary financial information does not constitute statutory accounts within the meaning of section 240 of the Companies Act. With regard to companies which have been dissolved (even where subsequently restored to the Register of Companies), these companies do not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 152

153 APPENDIX IV 1. Boltex Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Tribestos Brake Linings Limited 16/04/1934 Transport Brakes Limited 16/07/1935 TBL Limited 05/11/1979 Boltex Limited 03/05/1985 (dissolved on 03/07/1989 and subsequently restored to the register 15/03/1999 and dissolved 28/11/2000) 1.2 Activities Since its acquisition by Cape in 1969, there may have been arrangements between Boltex Limited and Nodit Limited (then called Don International Limited) (43527) (see page 177) and subsequently with Cape (40203) (see page 86) in the repairing and fitting of brake linings as a result of which those companies may be liable in relation to a claim made against Boltex Limited. 1.3 Location Boltex Limited was based in Bristol. 2. CORPORATE HISTORY Boltex Limited was acquired in 1969 with the Trist Draper group of companies (see page 95). It is not thought that this company has traded since its acquisition by Cape but from 1 January 1985 to 31 December 1985 there may have been such arrangement betweens Boltex Limited and Cape. The brake lining business was sold in INSURANCE An overview of the employers liability insurance for Boltex Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1969 to 1980 Insurance Both 1981 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 to 03/07/1989 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003, in which case you are likely to be admitted to the meetings of both General Scheme Creditors and Recourse Scheme Creditors. 4. FINANCIAL INFORMATION This company has been dissolved and consequently does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 153

154 APPENDIX IV 2. Cape Boards Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Swift 418 Limited 14/08/1985 Cape Boards Limited 14/10/ CORPORATE HISTORY Cape Boards Limited was incorporated in 1985 to provide a name company for the manufacturing operations at Uxbridge. There may since 14 October 1985 have been arrangements between the company and Cape Building Products Limited with the result that Cape Building Products Limited may be liable in relation to a claim made against Cape Boards Limited. 3. INSURANCE An overview of the employers liability insurance for Cape Boards Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1985 to Present Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Boards Limited was dormant throughout the three years ended 31 December Accordingly, it did not prepare a profit and loss account for those years. 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Boards Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 154

155 APPENDIX IV 3. Cape Claddings Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change J & R Aitken (Joiners) Limited 06/07/1977 Cape Claddings Limited 19/06/ Activities General contracting and installation of Durasteel doors. 1.3 Location Glasgow, Scotland 2. CORPORATE HISTORY Cape Claddings Limited was acquired in 1982 when it was called J & R Aitken (Joiners) Limited. Its business was transferred to Somewatch Limited (see page 99) on 30 September From 1 January 1987 to 31 December 1990 there may have been arrangements between Cape Claddings Limited and Cape Durasteel Limited (see page 118) for the installation of Durasteel doors with the result that Cape Durasteel Limited may be liable in relation to a claim made against Cape Claddings Limited. 3. INSURANCE An overview of the employers liability insurance for Cape Claddings Limited during the period(s) when there may have been any arrangements with any Scheme Company or Scheme Companies is at follows: Date 1 Class of Scheme Creditor 1987 to 1990 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Claddings Limited was dormant throughout the three years ended 31 December Accordingly, it did not prepare a profit and loss account for those years. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 155

156 APPENDIX IV 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Claddings Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 156

157 APPENDIX IV 4. Cape Darlington Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change The Darlington Insulation Company Limited 29/12/1948 Cape Darlington Limited 26/07/1993 (A resolution to wind the company up was passed on 6 January 2006.) 1.2 Activities Since its acquisition by Cape in 1992, there may have been arrangements between Cape Darlington Limited and Somewatch Limited (269257) (see page 99) and subsequently Predart Limited (457763) (see page 95) in the business of providing thermal insulation contracting services, predominantly in the North East of England, with the result that either of those companies may be liable in relation to a claim made against Cape Darlington Limited. 2. CORPORATE HISTORY Cape Darlington Limited was acquired by Cape in 1992 at the same time as Cape acquired the UK Darchem Contracting Business. It is thought that this company had been dormant for some time prior to its acquisition by Cape. When acquired by Cape, the company had the benefit of certain customer contracts which were performed by the company operating the UK Darchem Contracting Business. Between Cape Darlington Limited s acquisition in 1992 and 1 April 1993, the UK Darchem Contracting Business was operated by Somewatch Limited and between 1 April 1993 and 31 December 1997 the business was operated by Predart Limited 3. INSURANCE An overview of the employers liability insurance for Cape Darlington Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1992 to 1997 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Darlington Limited was dormant throughout the three years ended 31 December Accordingly, it did not prepare a profit and loss account for those years. A resolution to wind the company up was passed on 6 January SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 157

158 APPENDIX IV 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. A resolution to wind the company up was passed on 6 January Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Darlington Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 158

159 APPENDIX IV 5. Cape Distribution Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Hunziker (Great Britain) Limited 20/12/1934 Uxbridge Flint Brick Company Limited 06/01/1939 Cape Building Products Limited 02/07/1956 Cape Distribution Limited 28/09/1972 Cape Distribution (Holdings) Limited 01/03/1977 Cape Distribution Limited 11/01/1979 (dissolved on 23/02/1989 and subsequently restored to the register on 05/03/98) 1.2 Activities This company was involved in manufacturing flint bricks and asbestos-based building boards. Scheme Creditors may recognise this company by its former name, Cape Building Products Limited. However this should not be confused with the company now called Cape Building Products Limited (508044) (see page 107). 1.3 UK Factories Approximate dates Uxbridge, Middlesex 1946 to CORPORATE HISTORY Cape Distribution Limited (formerly called the Uxbridge Flint Brick Company Limited, and later Cape Building Products Limited) was acquired by Cape in On 1 January 1964 Cape Distribution Limited agreed to transfer its business and assets to its parent, Cape, on terms that pending completion it would carry on the business as before, in so doing it would be deemed to be the agent of Cape, and would hold its business and assets on trust for Cape. It is not known whether this relationship was reflected in Cape Distribution Limited s accounts. The transfer was never completed. In July 1968, the Uxbridge business was transferred to Plumefern Limited (323993) (see page 179). Until 31 December 1973 there may have been arrangements between the company and Cape concerning Cape s automotive component distribution subsidiaries with the result that Cape may be liable in relation to a claim made against Cape Distribution Limited. It is not known when these arrangements commenced. On 1 January 1974 the company acquired the relevant assets and assumed the relevant liabilities from Cape. 3. INSURANCE An overview of the employers liability insurance for Cape Distribution Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1945 to 1956 No Insurance General only 1957 to 1971 Insurance Both 1972 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 to 23/02/1989 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 159

160 APPENDIX IV Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. FINANCIAL INFORMATION This company was dissolved and consequently (although subsequently restored to the register) does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 160

161 APPENDIX IV 6. Cape Distribution (Holdings) Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Weaver Manufacturing & Engineering Company Limited 14/01/1939 Kismet Limited 02/01/1961 Cape Automotive Limited 06/06/1975 Cape Distribution (Holdings) Limited 11/01/1979 (dissolved 18/07/1989) 1.2 Activities Cape Distribution (Holdings) Limited was engaged in engineering and garage equipment business. 1.3 Locations Bedford and Sheffield 2. CORPORATE HISTORY Cape Distribution (Holdings) Limited was acquired by Cape in It is understood that on 1 January 1964 Cape Distribution (Holdings) Limited agreed to transfer its business and assets to its parent, Cape, on terms that pending completion it would carry on the business as before, in so doing it would be deemed to be the agent of Cape, and would hold its business and assets on trust for Cape. It is not known whether this relationship was reflected in Cape Distribution (Holdings) Limited s accounts. It is believed that the transfer was never completed. Cape sold the business and assets in INSURANCE An overview of the employers liability insurance for Cape Distribution (Holdings) Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1963 to 1975 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. FINANCIAL INFORMATION This company has been dissolved and consequently does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 161

162 APPENDIX IV 7. Cape Friction International Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Capasco Limited 28/11/1960 Cape Friction International Limited 29/08/1980 (dissolved 18/07/1989) 1.2 Activities When called Capasco Limited this company may have traded in brake linings until It was then dormant until 1980 when it traded as a management consultancy under the name of Cape Friction International Limited. 1.3 Location Unknown 2. CORPORATE HISTORY There may from 1 January 1960 to 31 December 1973 have been arrangements between the company and Cape with the result that Cape may be liable in relation to a claim made against Cape Friction International Limited. 3. INSURANCE An overview of the employers liability insurance for Cape Friction International Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1960 to 1973 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. FINANCIAL INFORMATION This company has been dissolved and consequently does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 162

163 APPENDIX IV 8. Cape Hire Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change None 22/09/ CORPORATE HISTORY Cape Hire Limited was incorporated by Cape in 1989 to provide a name protection company for the Cape Hire business. This company has never traded in its own right but it may have entered into arrangements with the following companies during the following periods as a result of which these companies may be liable in relation to a claim made against Cape Hire Limited: Somewin Limited (22/09/89 to 27/03/94) Predart Limited (28/03/94 to 31/12/97) CISL (01/01/98 to present) 3. INSURANCE An overview of the employers liability insurance for Cape Hire Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1989 to present Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Hire Limited was dormant throughout the three years ended 31 December Accordingly, it did not prepare a profit and loss account for those years. 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Hire Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 163

164 APPENDIX IV 9. Cape Industrial Products Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Swift 419 Limited 14/08/1985 Cape Industrial Products Limited 14/10/ CORPORATE HISTORY Cape Industrial Products Limited was incorporated in 1985 to provide a name-protection company for the manufacturing operations at Germiston. There may since 14 October 1985 have been arrangements between this company and Cape Building Products Limited, as a result of which Cape Building Products Limited may be liable in relation to a claim made against Cape Industrial Products Limited. 3. INSURANCE An overview of the employers liability insurance for Cape Industrial Products Limited during the period(s) when it may have acted as agent for any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1985 to Present Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Industrial Products Limited was dormant throughout the three years ended 31 December Accordingly, it did not prepare a profit and loss account for those years. 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Industrial Products Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 164

165 APPENDIX IV 10. Cape Industrial Services (Scotland) Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Blacpark Limited 28/04/1987 Cape Industrial Services (Scotland) Limited 22/07/ CORPORATE HISTORY Cape Industrial Services (Scotland) Limited was incorporated in 1987 to protect the Cape Industrial Services name in Scotland. From incorporation until 31 March 1993, there may have been arrangements between the company and Somewin Limited (then called Cape Scaffolding Limited) (see page 145) and since 1 April 1993 there may have been arrangements between the company and Predart Limited (see page 95) as a result of which either of those companies may be liable in relation to a claim made against Cape Industrial Services (Scotland) Limited. 3. INSURANCE An overview of the employers liability insurance for Cape Industrial Services (Scotland) Limited during the period(s) when there may have been arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1987 to Present Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Industrial Services (Scotland) Limited was dormant throughout the three years ended 31 December Accordingly, it did not prepare a profit and loss account for those years. 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 165

166 APPENDIX IV The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Industrial Services (Scotland) Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 166

167 APPENDIX IV 11. Cape Insulation Products Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Swift 417 Limited 14/08/1985 Cape Metal Products Limited 14/10/1985 Cape Insulation Products Limited 11/07/ CORPORATE HISTORY Cape Insulation Products Limited was incorporated by Cape to provide a name-protection company for the metal products business conducted at Bishops Waltham, Hants. During the period 1985 to 1998 there may have been arrangements with Cape Building Products Limited (see page 107) as a result of which Cape Building Products Limited may be liable in relation to a claim made against Cape Insulation Products Limited. Following the sale of the Group s metal products business the company s name was changed. It then provided a name-protection company for the insulation manufacturing business conducted at Washington. 3. INSURANCE An overview of the employers liability insurance for Cape Insulation Products Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1985 to 1998 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Insulation Products Limited was dormant throughout the three years ended 31 December Accordingly, it did not prepare a profit and loss account for those years. 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Insulation Products Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 167

168 APPENDIX IV 12. Cape Offshore Services Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Gunmart Limited 30/03/1984 Cape Offshore Services Limited 10/08/ Activities Contracting services 1.3 Location Aberdeen, Scotland 2. CORPORATE HISTORY Cape Offshore Services Limited was incorporated in In May 1984 the combined industrial services businesses of Somewatch Limited (then called Cape Contracts Limited) (see page 99) and Somewin Limited (then called Cape Scaffolding Limited) (see page 145) conducted from the depot at Dyce, Aberdeen were transferred to Cape Offshore Services Limited and then immediately to Somewin Limited. From incorporation until 31 March 1993 there may have been arrangements between the company and Somewin Limited (then called Cape Scaffolding Limited) and since 1 April 1993 there may have been arrangements between the company and Predart Limited (see page 95) as a result of which either of those companies may be liable in relation to a claim made against Cape Offshore Services Limited. 3. INSURANCE An overview of the employers liability insurance for Cape Offshore Services Limited during the period(s) when there may have been arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1984 to Present Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Cape Offshore Services Limited was dormant throughout the three years ended 31 December Accordingly, it did not prepare a profit and loss account for those years. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 168

169 APPENDIX IV 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Cape Offshore Services Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 169

170 APPENDIX IV 13. Cape Universal Claddings Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Cookson Sheet Metal Developments Limited 15/04/1947 Cape Universal Claddings Limited 01/11/1977 (dissolved 23/03/92 and subsequently restored to the register on 28/08/2003) 1.2 Activities Cape Universal Claddings Limited acquired the Bowburn, Harefield and Tolpits factories when Plumefern Limited (previously called Cape Universal Claddings Limited) (323993) (see page 179) entered liquidation in Cape Universal Claddings Limited also operated a non-asbestos sheet metal business that was sold in UK Factories Approximate dates Bowburn, Co. Durham 1977 to 1985 Harefied (Bellrock Works), Middlesex 1977 to mid-1980s Harefield (Blackjacks Lane), Middlesex 1980 to 1983 Tolpits Lane, Watford 1977 to 1984/85 2. CORPORATE HISTORY Cape Universal Claddings Limited was acquired in In 1977 this company took on most of the business of the company now called Plumefern Limited (323993) (see page 179). At the time Plumefern Limited was called Cape Universal Claddings Limited. Simultaneously this company changed its name to Cape Universal Claddings Limited. From 1 November 1977 to 31 December 1977 there may have been arrangements between this company and Cape as a result of which Cape may be liable in relation to a claim made against Cape Universal Claddings Limited. In 1981 the cold store insulation business of Cape Insulation Limited (see page 130) was transferred to Cape Universal Claddings Limited and in 1982 the cold store insulation business of Cape Industries Limited (585057) (see page 127) was also transferred to Cape Universal Claddings Limited. In 1983 the cold store insulation business was discontinued. In late 1983 the Harefield (Blackjacks Lane) factory closed and by 1985 the Tolpits factory and Harefield (Bellrock Works) factory had closed. In early February 1984 the fibrous cement business, carried out at the Bowburn factory, was transferred to Cape. During the 15 month period ended 31 March 1985 the remaining businesses of the company were transferred, on a phased basis, to Cape. 3. INSURANCE An overview of the employers liability insurance for Cape Universal Claddings Limited during the period(s) when there may have been such arrrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1977 Insurance (fronting arrangement see page 45) Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 170

171 APPENDIX IV 4. FINANCIAL INFORMATION This company was dissolved and consequently (although subsequently restored to the register) does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 171

172 APPENDIX IV 14. Hunting Painting Contractors (Marine) Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Hunting Painting Contractors (Marine) Limited 12/10/1971 (dissolved 26/05/1987) 1.2 Activities It is not thought that this company has traded since part-owned or owned by Cape. See Cape Specialist Coatings Limited (394232) (page 137). 1.3 Location Unknown 2. CORPORATE HISTORY Hunting Painting Contractors (Marine) Limited was acquired on 24 June 1983 when Cape acquired 51% of its parent company Cape Specialist Coatings Limited (formerly called Hunting Painting Contractors Limited) (394232) (see page 137). The remaining 49% was acquired by Cape with effect from 1 January Prior to its acquisition by Cape, it is understood that all activities carried out in the name of Hunting Painting Contractors (Marine) Limited were performed by its parent company, Cape Specialist Coatings Limited. Following its acquisition by Cape, it is understood that this company did not trade and it did not have any employees. There may, from 12 October 1971 to 26 May 1987, have been arrangements between this company and Cape Specialist Coatings Limited as a result of which Cape Specialist Coatings Limited may be liable in relation to a claim made against Hunting Painting Contractors (Marine) Limited. 3. INSURANCE An overview of the employers liability insurance for Hunting Painting Contractors (Marine) Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1971 to 1987 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. FINANCIAL INFORMATION This company has been dissolved and consequently does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 172

173 APPENDIX IV 15. Hunting Painting Contractors (Midlands) Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Hunting Painting Contractors (Midlands) Limited 12/10/1971 (dissolved 26/05/1987) 1.2 Activities It is not thought that this company has traded since part-owned or owned by Cape. See Cape Specialist Coatings Limited (394232) (page 137). 1.3 UK Factories Unknown 2. CORPORATE HISTORY Hunting Painting Contractors (Midlands) Limited was acquired on 24 June 1983 when Cape acquired 51% of its parent company Cape Specialist Coatings Limited (formerly called Hunting Painting Contractors Limited) (394232) (see page 137). The remaining 49% was acquired by Cape with effect from 1 January Prior to its acquisition by Cape, it is understood that all activities carried out in the name of Hunting Painting Contractors (Midlands) Limited were performed by its parent company, Cape Specialist Coatings Limited. Following its acquisition by Cape, it is understood that this company did not trade and it did not have any employees. There may, from 12 October 1971 to 26 May 1987, have been arrangements between this company and Cape Specialist Coatings Limited as a result of which Cape Specialist Coatings Limited may be liable in relation to a claim made against Hunting Painting Contractors (Midlands) Limited. 3. INSURANCE An overview of the employers liability insurance for Hunting Painting Contractors (Midlands) Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1971 to 1987 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. FINANCIAL INFORMATION This company has been dissolved and consequently does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 173

174 APPENDIX IV 16. Hunting Painting Contractors (Northern) Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Hunting Painting Contractors (Northern) Limited 12/10/1971 (dissolved 26/05/1987) 1.2 Activities It is not thought that this company has traded since part-owned or owned by Cape. See Cape Specialist Coatings Limited (394232) (page 137). 1.3 UK Factories Unknown 2. CORPORATE HISTORY Hunting Painting Contractors (Northern) Limited was acquired on 24 June 1983 when Cape acquired 51% of its parent company Cape Specialist Coatings Limited (formerly called Hunting Painting Contractors Limited) (394232) (see page 137). The remaining 49% was acquired by Cape with effect from 1 January Prior to its acquisition by Cape, it is understood that all activities carried out in the name of Hunting Painting Contractors (Northern) Limited were performed by its parent company, Cape Specialist Coatings Limited. Following its acquisition by Cape, it is understood that this company did not trade and it did not have any employees. There may, from 12 October 1971 to 26 May 1987, have been arrangements between this company and Cape Specialist Coatings Limited as a result of which Cape Specialist Coatings Limited may be liable in relation to a claim made against Hunting Painting Contractors (Northern) Limited. 3. INSURANCE An overview of the employers liability insurance for Hunting Painting Contractors (Northern) Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1971 to 1987 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. FINANCIAL INFORMATION This company has been dissolved and consequently does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 174

175 APPENDIX IV 17. Hunting Painting Contractors (Wales) Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Hunting Painting Contractors (Wales) Limited 12/10/1971 (dissolved 26/05/1987) 1.2 Activities It is not thought that this company has traded since part-owned or owned by Cape. See Cape Specialist Coatings Limited (394232) (page 137). 1.3 UK Factories Approximate dates Unknown 2. CORPORATE HISTORY Hunting Painting Contractors (Wales) Limited was acquired on 24 June 1983 when Cape acquired 51% of its parent company Cape Specialist Coatings Limited (formerly called Hunting Painting Contractors Limited) (394232) (see page 137). The remaining 49% was acquired by Cape with effect from 1 January Since being acquired by Cape, this company has not traded nor had employees. Prior to its acquisition by Cape, it is understood that all activities carried out in the name of Hunting Painting Contractors (Wales) Limited were performed by its parent company, Cape Specialist Coatings Limited. Following its acquisition by Cape, it is understood that this company did not trade and it did not have any employees. There may, from 12 October 1971 to 26 May 1987, have been arrangements between this company and Cape Specialist Coatings Limited as a result of which Cape Specialist Coatings Limited may be liable in relation to a claim made against Hunting Painting Contractors (Wales) Limited. 3. INSURANCE An overview of the employers liability insurance for Hunting Painting Contractors (Wales) Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1971 to 1987 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. FINANCIAL INFORMATION This company has been dissolved and consequently does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 175

176 APPENDIX IV 18. Marinite Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change Nelson Thom Insulation Limited 26/09/1962 Marinite Limited 01/07/1974 (dissolved 18/03/1989) 1.2 Activities Marinite Limited was engaged in insulation contracting when acquired by Cape on 30 July Location North East England 2. CORPORATE HISTORY Marinite Limited was acquired by Cape on 30 July There may, from 30 July 1965 to 18 March 1989, have been arrangements between Marinite Limited and Cape as a result of which Cape may be liable in relation to a claim made against Marinite Limited. 3. INSURANCE An overview of the employers liability insurance for Marinite Limited during the period(s) when there may have been arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor Prior to 1966 No Insurance General only 1966 to 1971 Insurance Both 1972 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 to 18/03/1989 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. FINANCIAL INFORMATION This company has been dissolved and consequently does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 176

177 APPENDIX IV 19. Nodit Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change The Frictionless Engine Packaging Company Limited 11/03/1895 Small & Parkes Limited 29/09/1907 Don International Limited 17/06/1975 Nodit Limited 15/05/1985 (dissolved on 21/04/98 and subsequently restored to the register on 20/05/99) 24/04/ Activities Nodit Limited manufactured friction materials, predominantly brake linings. 1.3 UK Factories Approximate dates Hendham Vale, Manchester 1960 to CORPORATE HISTORY In 1960, Cape acquired Nodit Limited (formerly called Small & Parkes Limited and later called Don International Limited). There may have been arrangements between Nodit Limited and Boltex Limited with the result that Nodit Limited may be liable for a claim made against Boltex Limited. On 1 January 1964 Nodit Limited agreed to transfer its business and assets to its parent, Cape, on terms that pending completion Nodit Limited would carry on the business as before, in doing so would be deemed to be the agent of Cape, and would hold its business and assets on trust for Cape, a relationship which was reflected in Nodit Limited s accounts. The transfer was never completed. In 1985, the business and assets of the business were sold and Nodit Limited entered liquidation on 24 April INSURANCE An overview of the employers liability insurance for Nodit Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1964 to 1971 Insurance Both 1972 to 30/06/1981 Insurance (fronting arrangement see page 45) Both 01/07/1981 to 1985 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 177

178 APPENDIX IV General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. FINANCIAL INFORMATION This company has been dissolved and consequently (although subsequently restored to the register) does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 178

179 APPENDIX IV 20. Plumefern Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change The Universal Asbestos Manufacturing Company Limited 06/02/1937 Cape Universal Building Products Limited 01/07/1968 Cape Universal Claddings Limited 01/07/1974 Plumefern Limited 01/11/1977 (dissolved on 01/05/98 and subsequently restored to the register on 15/05/98) 1.2 Activities Plumefern Limited manufactured asbestos-containing materials, mainly manufacturing cement construction products and pitch fibre pipes. 1.3 UK Factories Approximate dates Bowburn, Co. Durham 1965 to 1977 Chalford, Gloucestershire 1964 to 1970 Harefield (Bellrock Works), Middlesex 1964 to 1977 Tolpits Lane, Watford 1967 to 1977 Uxbridge, Middlesex 1968 to CORPORATE HISTORY In 1967, Cape acquired Plumefern Limited (then called the Universal Asbestos Manufacturing Company Limited) which operated factories in Harefield, Chalford, Tolpits and Bowburn. On 1 July 1968, the Uxbridge factory business of Cape Distribution Limited (then called Cape Building Products Limited) (295321) (see page 159) was transferred to Plumefern Limited. On 1 July 1968 Plumefern Limited agreed to transfer its business and assets to its parent, Cape, on terms that pending completion Plumefern Limited would carry on the business as before, in so doing would be deemed to be the agent of Cape, and would hold its business and assets on trust for Cape, a relationship which was reflected in Plumefern Limited s accounts. The transfer was never completed. In 1974 Plumefern Limited transferred that part of its business carried on at Uxbridge to Cape Building Products Limited (508044) (see page 107) and on 1 November 1977 Plumefern Limited transferred its remaining business to Cape Universal Claddings Limited (433147) (see page 170). At the time that Plumefern Limited entered liquidation (in November 1977) Cape may have agreed to indemnify Plumefern Limited in the terms of a signed undated document prepared in connection with the liquidation. 3. INSURANCE An overview of the employers liability insurance for Plumefern Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1968 to 1971 Insurance Both 1972 to 1977 Insurance (fronting arrangement see page 45) Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 179

180 APPENDIX IV Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. FINANCIAL INFORMATION This company has been dissolved and consequently (although subsequently restored to the register) does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 180

181 APPENDIX IV 21. Somesystem Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change John T. Schofield & Sons Limited 25/07/1951 Darchem Contracting UK Limited 11/12/1990 Darlington Insulation Company Limited 26/07/1993 Somesystem Limited 01/01/1998 (A resolution to wind the company up was passed on 6 January 2006.) 1.2 Activities Since its acquisition by Cape in 1992, there may have been arrangements between the company and Somewatch Limited (269257) (see page 99) and subsequently there may have been arrangements between the company and Predart Limited (457763) (see page 95) concerning the business of providing thermal insulation contracting services, predominantly in the North East of England, as a result of which either of those companies may be liable in relation to a claim made against Somesystem Limited. 2. CORPORATE HISTORY Somesystem Limited was acquired by Cape in 1992 at the same time as Cape acquired the UK Darchem Contracting Business. It is thought that this company had been dormant for some time prior to its acquisition by Cape. When acquired by Cape, the company had the benefit of certain customer contracts which were performed by the company operating the UK Darchem Contracting Business. Between Somesystem Limited s acquisition in 1992 and 1 April 1993, the UK Darchem Contracting Business was operated by Somewatch Limited and between 1 April 1993 and 31 December 1997 the business was operated by Predart Limited. 3. INSURANCE An overview of the employers liability insurance for Somesystem Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1992 to 1997 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. PROFIT AND LOSS ACCOUNT TO 31 DECEMBER Somesystem Limited was dormant throughout the three years ended 31 December Accordingly, it did not prepare a profit and loss account for those years. A resolution to wind the company up was passed on 6 January SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 181

182 APPENDIX IV 5. SUMMARY BALANCE SHEET AS AT 31 DECEMBER NET ASSETS Debtors: amounts owed by group undertakings SHAREHOLDERS FUNDS Called up share capital The company was dormant throughout the three years ended 31 December 2004 and the costs of administration were borne by Cape. A resolution to wind the company up was passed on 6 January Provision for industrial disease liabilities There is no provision for industrial disease liabilities in the balance sheet for Somesystem Limited. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 182

183 APPENDIX IV 22. Teubfin Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change All-o-Matic Limited 22/02/1968 Lubefriction Limited 14/05/1979 Teubfin Limited 15/05/1985 (dissolved on 18/07/1989) 1.2 Activities Teubfin Limited is believed to have been acquired with the Trist Draper group of companies (see Predart Limited - page 95) which ran the business of repairing and fitting brake linings. From 1 January 1971 to 31 December 1978 there may have been arrangements between the company and Predart Limited and from 1 January 1979 until 31 December 1985 there may have been arrangements between the company and Cape (see page 86) as a result of which either of those companies may be liable in relation to a claim made against Teubfin Limited. 1.3 Location Unknown 2. CORPORATE HISTORY It is thought likely that Teubfin Limited was acquired with the Trist Draper group of companies (see Predart Limited - page 95). 3. INSURANCE An overview of the employers liability insurance for Teubfin Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1971 to 1978 Not known General only 1979 to 1985 Insurance Both 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. FINANCIAL INFORMATION This company has been dissolved and consequently does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 183

184 APPENDIX IV 23. Torpex Limited Company Registration Number: OVERVIEW 1.1 Former Names Date of incorporation or name change English Asbestos (Sales) Limited 28/05/1954 TD Export Limited 01/01/1964 Torpex Limited 03/05/1985 (dissolved on 18/07/1989) 1.2 Activities There may have been arrangements between Torpex Limited and Cape (40203) (see page 86) between 1 January 1984 and 31 December 1984 for the sale of friction materials as a result of which Cape may be liable in relation to a claim made against Torpex Limited. It is not thought that Torpex Limited has carried out any other trade since acquisition by Cape in Location Unknown 2. CORPORATE HISTORY Torpex Limited was acquired by Cape in 1969 together with the Trist Draper group of companies (see Predart Limited - page 95). 3. INSURANCE An overview of the employers liability insurance for Torpex Limited during the period(s) when there may have been such arrangements with any Scheme Company or Scheme Companies is as follows: Date 1 Class of Scheme Creditor 1984 Not known General only 1 Cover commences on 1 January and ceases on 31 December unless otherwise indicated. Whether or not there was insurance in place for the period of your employment maintained either by this company or by the relevant Scheme Company will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document. If your Scheme Claim is not a claim capable of being covered by employers liability insurance maintained either by this company or the Scheme Company concerned you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors. 4. FINANCIAL INFORMATION This company has been dissolved and consequently does not prepare financial information. SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL. 184

185 APPENDICES TO SECTION A V DISSOLVED GROUP COMPANIES Dissolved Group Companies, including those which have been reinstated to the Register of Companies for the purposes of claimants taking an assignment of those companies rights against their insurers under the 1930 Act, will not be Scheme Companies and any claims against those companies will not be Scheme Claims. Set out below is a list of the Dissolved Group Companies, and their former names. Certain further details are also set out below regarding those Additional Companies that are Dissolved Group Companies. These companies are shown in italics. Where the company was liquidated, the date of commencement of the liquidation process (for example the date of the passing of the members or creditors winding up resolution) is stated. Certain further information is indicated as follows: 1 members voluntary liquidation 2 creditors voluntary liquidation 3 company struck off under section 652A Companies Act 1985 Company Date of Date of number Company incorporation or commencement Date change of name of liquidation dissolved The Frictionless Engine Packaging Company Limited (restored to Small & Parkes Limited register Don International Limited ) Nodit Limited Baxter Brothers (1920) Limited Tribestos Brake Linings Limited Transport Brakes Limited (restored to TBL Limited register Boltex Limited ) (dissolved ) Hunziker (Great Britain) Limited Uxbridge Flint Brick Company Limited (restored to Cape Building Products Limited register Cape Distribution Limited ) Cape Distribution (Holdings) Limited Cape Distribution Limited The Universal Asbestos Manufacturing Company Limited (restored to Cape Universal Building Products Limited register Cape Universal Claddings Limited ) Plumefern Limited Weaver Manufacturing & Engineering Company Limited Kismet Limited Cape Automotive Limited Cape Distribution (Holdings) Limited Broxbourne Aircraft Equipment Company Limited Frederick B Roberts Limited English Asbestos Company Limited Brakes & Hydraulics (Bexleyheath) Limited Matflow Limited

186 APPENDIX V Company Date of Date of number Company incorporation or commencement Date change of name of liquidation dissolved Kismet Limited Weaver Manufacturing & Engineering Company Limited Cape Automotive Services Limited J.Briggs (Transport) Limited J. Briggs (Engineers) Limited Auto Supply Company (Northern) Limited Auto Electrical Services (Bishop Auckland) Limited Carruthers & Kent Limited UTS Batteries Limited Midland Battery & Brake Company Limited Knighton Transport Supplies Limited Cape Distribution Limited Cape Automotive Limited Cape Distribution (UK) Limited Cookson Sheet Metal Developments Limited Cape Universal Claddings Limited (restored to register ) Steamclean Limited not known Fairway Service Stations Limited Carponents Limited Butlers (Barnsley) Limited Cape Auto Electrics Limited Modern Cushioning, Limited Knighton Transport Supplies Limited Midland Battery & Brake Company Limited The Darlington Insulation Company Limited N/A Cape Darlington Limited John T. Schofield & Sons Limited N/A Darchem Contracting UK Limited Darlington Insulation Company Limited Somesystem Limited J Briggs (Engineers) Limited Roy Uden Cars Limited Northern Insulation Company (Stockton) Limited CDN Insulation Limited English Asbestos (Sales) Limited TD Export Limited Torpex Limited Thermo Acoustic Products Limited TAP Ceilings Limited Cape Ceilings Limited Cape Roofing Products Limited Auto Electrical Services (Bishop Auckland) Limited Auto Supply Company (Northern) Limited

187 APPENDIX V Company Date of Date of number Company incorporation or commencement Date change of name of liquidation dissolved U.A.M. Plastics Limited Motor Factors (Wolverhampton) Limited Merseyside Brakes Supplies Limited Specialised Commercial Services Limited Equipment Maintenance Limited Capasco Limited Cape Friction International Limited Hubert H P Trist & Company Limited Trist Draper Limited Predart Limited Nelson Thom Insulation Limited Marinite Limited Vale Motor Factors (Bridgend) Limited Carlec Auto Electric Limited Finchmore Properties Limited Kent Hose Limited Thermalon Limited Cape Insulation Services Limited Ceecol Motor Factors Limited Butlers (Nottingham) Limited North Central Automotive Limited D B Brakes & Batteries Limited Powerparts Limited Butlers Automotive Limited Spectrum Automotive Limited Butlers Automotive Limited Cape Automotive Limited Specialised Motor Supplies Limited (1) Dissolved (restored to register ) (2) Dissolved Gripp (Motor Factors) Limited Surface Preparation Limited Dispol Limited Severn Valley Factors Limited Commercial Autoparts Limited Andrew Grimsley Limited Wm Latimer & Company Limited Hounslow Brakes & Silencers Limited

188 APPENDIX V Company Date of Date of number Company incorporation or commencement Date change of name of liquidation dissolved All-o-Matic Limited Lubefriction Limited Teubfin Limited Price & Pattison Insulations Limited Pattison Insulations Limited Showbanner Limited OAP Motor Factors Limited Wessex Factors Limited Carponents Group Distributors Limited Gripp (Pneumatics) Limited Andrew Grimsley (Oldham) Limited North Central Automotive Limited Butlers (Nottingham) Limited Tirith Limited Tirith Microplane Limited DHI Services Limited Automotive Supplies (Canterbury) Limited Motor Factors (Wolverhampton) Limited Cape Autofare Limited Specialised Commercial Services Limited Merseyside Brake Supplies Limited Digbeth Motor Company Limited Geest Motor Services Limited Hunting Painting Contractors (Marine) Limited Hunting Painting Contractors (Midlands) Limited Hunting Painting Contractors (Northern) Limited Hunting Painting Contractors (Wales) Limited Automotive Supplies not known (Folkstone) Limited W T Minett (Airdraulics) Limited Plumefern Limited Cookson Sheet Metal Developments Limited Gregano Limited Cape McGill JV Limited Anderson Platt Limited Fibrecrete Limited N/A Cape Universal Building Products Limited Cape Building and Insulation Services Limited Cape Architectural Products Limited

189 APPENDICES TO SECTION A VI GUIDANCE NOTES FOR COMPLETION OF THE VOTING FORMS All defined terms used in these Guidance Notes have the same meanings as set out in the Explanatory Statement at Section A of this document or in the Scheme at Section B of this document, unless the context otherwise requires. 1. Introduction If you are a Scheme Creditor you will be entitled to attend and vote, either in person or by proxy, at such of the Scheme Meetings for which you may be eligible. Enclosed with this document are two Voting Forms for use by Scheme Creditors at the Scheme Meetings convened to consider the Scheme. Each Voting Form comprises a Form of Proxy and a Claims Table. Due to the differing interests of Scheme Creditors, it is necessary to convene two separate class meetings of Scheme Creditors of each Scheme Company. The two classes of Scheme Creditors for voting purposes are: (A) (B) Recourse Scheme Creditors. A Recourse Scheme Creditor is a Scheme Creditor who has been identified by the Scheme Companies as possibly being able to bring a Scheme Claim which is a Recourse Scheme Claim, namely a Scheme Claim in respect of which any Scheme Company or, where relevant, an Additional Company, has in whole or in part any rights of indemnity and insurance coverage under a contract of insurance. The fact that you may be admitted for voting purposes to any Scheme Meeting(s) as a Recourse Scheme Creditor does not mean that any claim you may bring in the future will be covered in whole or in part by insurance. The PINK Form of Proxy is for use at each of the meetings of Recourse Scheme Creditors for which you are eligible to vote. General Scheme Creditors. A General Scheme Creditor is a Scheme Creditor who has been identified by the Scheme Companies as possibly being able to bring a Scheme Claim which is a General Scheme Claim, namely a Scheme Claim which, either wholly or in part, turns out to be payable only by CCS. The fact that you may be admitted for voting purposes to any Scheme Meeting(s) as a General Scheme Creditor is highly likely (but does not necessarily) mean that any claim you may bring in the future will not be covered as to any part by insurance. The BLUE Form of Proxy is for use at each of the meetings of General Scheme Creditors for which you are eligible to vote. If you wish to vote at any of the meetings, you must: - complete the relevant Voting Form and appoint a person as your proxy (who need not be a Scheme Creditor and who may be your solicitor) to attend and vote at the meeting (even if you intend to attend and vote in person); and - specify (for voting purposes) the amount of your claim against the Scheme Company relevant to that particular Scheme Meeting. Set out below are guidance notes for the completion of the Form of Proxy and the Claims Table. Specific instructions for completing the Form of Proxy and Claims Table are printed on each Voting Form itself. Further blank Forms of Proxy and Claims Tables may be downloaded and printed from the website Please note that, although these Guidance Notes are relevant to the majority of circumstances, it is not possible to provide comprehensive guidance on all the circumstances you may encounter and which may be relevant to your claim. If you have any questions regarding the action you are required to take or how to complete the Form of Proxy or Claims Table, please refer to paragraph 8 of this Appendix VI below. 189

190 APPENDIX VI 2. The Scheme Brochure If you replied to the questions on the response form that accompanied either the June or November version of the Scheme Brochure (the Initial Questions ), the Scheme Companies have endeavoured to determine which Scheme Company(s) any claim you may bring may lie against and to which class or classes of Scheme Creditor for each of those Scheme Companies you belong. Where you responded to the Initial Questions providing sufficient details, the Voting Forms that have been sent to you accompanying this document should have been completed with regard to these matters to assist you. Please note that you still need to complete further details on the relevant Voting Form or Voting Forms, for example the value of your Scheme Claim(s). If Box G on any Voting Form sent to you together with this document contains the name of the Scheme Company or Scheme Companies of which it is believed you are, or may be, a Scheme Creditor, you are still required to confirm your agreement with such matters by completing the relevant details in Box H. If you disagree with the details that have been included on your Voting Forms or if since responding to the Initial Questions your details have changed, please amend the form(s) providing as much information as possible to support your changes. If you wish a new blank Voting Form or Voting Forms to be sent to you please call the telephone helpline on or please contact the Scheme Companies in one of the other manners set out at paragraph 8 below. If you did not respond to the Initial Questions, then blank Voting Forms relating to both classes of Scheme Creditor have been sent to you together with this document and you should complete the Form(s) of Proxy you believe to be applicable to you together with the Claims Table(s). In order to work out which Form(s) of Proxy you should complete, please refer to the Explanatory Statement and in particular to Part 7 of and Appendix III (and, if relevant, IV) of Section A of this document. 3. Voting Forms You are strongly recommended to complete and return the relevant Voting Form(s) If you propose to attend in person and vote at a meeting you should still appoint a proxy and return your Voting Form in accordance with the instructions printed thereon. You should detach the Admittance Card from the Form of Proxy before returning the Form of Proxy, and bring the Admittance Card with you to the relevant Scheme Meeting for identification purposes. If you attend and vote at the meeting, the authority given to the appointed proxy on the Form of Proxy will be revoked. If you do not wish to attend the meeting or you wish to attend the meeting but not to vote, you may appoint the Chairman of the meeting, or some other person, as your proxy. If you appoint a person other than the Chairman of the meeting as your proxy, in order to represent you, that person must attend in person at the meeting. Note that corporations, if they attend, must do so by proxy or duly authorised representative. If you appoint the Chairman of the meeting as your proxy the Voting Form provides that, at the Chairman s discretion, any of the Cape Directors or the Company secretary of Cape may act as your proxy. This is necessary because, in order for there to be a valid meeting, at least two persons each of whom is entitled to vote, either in person or as a proxy, must be present. If in relation to a particular meeting all Scheme Creditors who choose to vote do so by proxy, and all such persons appoint the Chairman as their proxy, the Scheme Meeting would not be validly held. In such circumstances, the Chairman will be able to nominate one of the Cape Directors or the Company secretary of Cape to act as proxy for some of the Scheme Creditors and in this way there will be a valid meeting. It is particularly important that you sign the Voting Form indicating by your signature whether the person appointed as your proxy is to vote for or against the Scheme. If, however, you wish to give your proxyholder a discretion to vote for or against the Scheme at the meeting(s) you should sign in the box marked Proxyholder s Discretion. If you intend to sign in the box marked Proxyholder s Discretion you must appoint a person other than Chairman as your proxy, otherwise your proxy will be invalid. Before completing a Voting Form, please read these notes and the instructions which are printed on the Form of Proxy very carefully. The Voting Form is complex and may take some time to complete. You are urged to allow sufficient time before the Scheme Meetings to research the information required to complete the Voting Form. Please ensure that you consider all the parts of the Voting Form. If you consider a particular part and find it is not relevant to you, you may indicate that it is not relevant. 190

191 APPENDIX VI If you are signing the Voting Form as the authorised signatory of a Scheme Creditor or on behalf of a corporation or a partnership or other unincorporated body of persons, you must specify the capacity in which you are signing where indicated. In the case of a corporation, the Voting Form should be signed on behalf of the corporation by a person duly authorised to do so. When complete, the Voting Form(s) should be returned as soon as possible and in any event so that they are received by 5.00 p.m. (London time) on 12 May 2006 to Freepost RLUH-CXLU-BAYS, Cape, PO Box 99, Sudbury CO10 6SN or by fax addressed to the Company Secretary on fax number If you intend to attend and vote in person at the relevant Scheme Meeting(s), please detach the Admittance Card from the Voting Form and bring it with you to the relevant Scheme Meeting(s) for identification purposes. Voting Forms may also be handed in at the registration desk at the relevant meeting prior to its commencement. Please note that faxed Forms of Proxy and Claims Tables will only be accepted if they are faxed to the number specified above and are legible. The Scheme Companies reserve the right to require production of the originals if this is considered to be necessary for the purpose of verification. To be valid your returned Form(s) of Proxy must be accompanied by a completed Claims Table in respect of each of your Scheme Claims. Failure to complete the Claims Table may result in your Scheme Claim being admitted for voting purposes at the Scheme Meeting(s) for less value than might otherwise be the case or your Scheme Claim may not be admitted for voting purposes at all. All persons who may bring a Scheme Claim will be admitted as Scheme Creditors, regardless of whether or not they have a current claim. Scheme Creditors with Scheme Claims which are not yet admitted by a Scheme Company will nevertheless be eligible to attend and vote at the meeting(s) in respect of such claims. However, the admission of a claim for voting purposes at any Scheme Meeting is without prejudice to the right of any Scheme Company(s) to dispute such claim (whether brought now or in the future). Before admitting you to vote at any Scheme Meeting, the Chairman of the Scheme Meeting will be obliged to satisfy himself that there is a reasonable possibility that you may bring a Scheme Claim. If you do not provide all the information requested, the Chairman may not be able to satisfy himself that there is a possibility that you may bring a Scheme Claim and accordingly may not be able to admit you to vote at the Scheme Meeting. 4. Specification of claims for voting purposes In order to specify your claim against the relevant Scheme Company(s), you should complete both the Form of Proxy and a Claims Table in accordance with the instructions printed thereon, whether or not you intend to attend in person at the relevant meeting(s). (A) Table A of the Claims Table This should be completed by a Scheme Creditor who believes that any Scheme Claim he brings will be in respect of a condition he himself may suffer, for example: any current or former employee of a Scheme Company or an Additional Company; any member of family of a current or former employee who believes that he may have a Scheme Claim as a consequence of the family member s employment with a Scheme Company or an Additional Company; any person who lived near a factory of a Scheme Company or an Additional Company; or any person who worked for a company to which a Scheme Company or an Additional Company supplied asbestos-related goods or services. (B) Table B of the Claims Table In general, this should be completed by any Scheme Creditor who does not complete Table A. Such Scheme Creditors are persons who may have a Scheme Claim against a Scheme Company but not in respect of a condition they themselves have or may develop. For example, employers whose employees may have been exposed to asbestos by a Scheme Company and claimants under any indemnity given by a Scheme Company should complete Table B. 191

192 APPENDIX VI 5. Valuation of claims for voting purposes It is assumed that all Scheme Claims will be denominated in pounds sterling. The valuation of your claim(s) will depend partly on the status of the claim(s) at the time at which the Scheme Meetings take place. Scheme Claims will, for voting purposes only, be designated as different types (depending on their status) as there may be different evidence required from you depending upon the type of Scheme Claim (the Type of Scheme Claim) you have. The flow chart at Appendix VII of this Section A (the Flowchart ) sets out the different Types, provides further guidance as to how to value your claim(s) for voting purposes and advises you what documentary evidence you are required to submit. The information which is provided in relation to your Scheme Claim(s) must be accurate as at the date on which the Voting Form(s) is/are returned. If your circumstances change after returning the Voting Form(s) and prior to the Scheme Meeting(s), please notify the Scheme Companies in one of the manners set out at paragraph 8 below as soon as possible in order that your details can be updated. If you have a Type 4 claim please refer to paragraph (F) below. (A) (B) (C) Medical evidence In order for the Scheme Companies to confirm that you have identified correctly the Type of your claim, you may be required to provide some evidence that you have received medical advice regarding this. For example, for a Type 3 claim (being where the particular condition suffered from has been alleged) you may have received a specialist s report. You are not required to send a copy of any medical report that you have received to the Scheme Companies. The medical evidence should be provided to your solicitor who will confirm in his Solicitor s Letter (please see paragraph (E) below) that he has seen it. Elements of your claim Personal injury claims are principally made up of the following elements which are referred to in the Flowchart: general damages, special damages and costs. General damages are the damages that a court awards for non-pecuniary loss, pain and suffering and loss of amenity or enjoyment of life, by reference to the condition that the claimant suffers from. Special damages are awarded to compensate the claimant for any additional (pecuniary) loss that he suffers, for example, medical expenses or loss of earnings if his condition means that he is unable to work. Where a defendant is found liable to a claimant, it is usual for the defendant to be required to pay an amount to the claimant by way of the costs incurred by the claimant in bringing his claim. If you wish further details regarding the elements that may comprise your claim, we recommend that you should contact a solicitor. The Scheme Companies need to value each Scheme Claim for the purposes of voting on the Scheme. Depending on the Type of your Scheme Claim (for which please see the Flowchart) you may be required to value each of the above elements of your claim. General damages Where your Type of claim requires you to provide a value of your claim for general damages (being a Type 2 or Type 3 claim) the Scheme Companies have set out at Appendix VIII of this document the usual range of Court awards for the asbestos-related conditions in respect of which most Scheme Claims are expected to be brought. The ranges contained in Appendix VIII are based on the Judicial Studies Board Guidelines (Seventh Edition) (the JSB Guidelines ). General damages are the damages that a Court awards for non-pecuniary loss, pain and suffering and loss of amenity or enjoyment of life by reference to the condition from which the claimant suffers. The Scheme Companies will accept a valuation of a claim for general damages which is within the relevant range set out in Appendix VIII of this Section A. If you believe that your claim for general damages is worth in excess of the upper end of the range for the relevant condition, you may enter the value which you believe your claim for general damages to have. In these circumstances, the Scheme Companies reserve the right to require you to produce evidence in support of the amount you claim. Please note that due to the slightly different range of awards in each of England and Wales, Scotland and Northern Ireland, if your claim is governed by English or Scots law you should use the first table in Appendix VIII. If your claim is governed by Northern Irish law you should use the second table in Appendix VIII. 192

193 APPENDIX VI If you believe that your Scheme Claim is in respect of a condition that is not listed in Appendix VIII (other than pleural plaques), please contact the Scheme Companies in one of the manners set out at paragraph 8 below for further guidance on how to value your claim. (D) Special damages and costs Scheme Creditors (other than those with a Type 1 claim or a Type 4 claim) are also required to enter the value that they believe their claim has by way of special damages and costs. Special damages are awarded to compensate the claimant for any additional (pecuniary) loss he suffers, for example medical expenses or loss of earnings if his condition means that he is unable to work. The Scheme Companies reserve the right to require you to produce evidence in support of the amount you claim. (E) The Solicitor s Letter It is expected that many Scheme Creditors will wish to speak to a solicitor regarding the value of their Scheme Claim(s) for voting purposes. Scheme Creditors may also wish to appoint a solicitor as their proxy. To assist Scheme Creditors, the Scheme Companies set out the form of letter from a solicitor (the Solicitor s Letter ) which the Scheme Companies will accept by way of (i) confirmation of the medical evidence that has been obtained to justify a claim constituting a Type 3 claim and (ii) the evidence required to justify the value of Type 2 and Type 3 claims (subject to clause (C) above in the case of general damages). Whilst your evidence does not have to constitute a Solicitor s Letter, we believe that this may be the easiest and most convenient form for your evidence to comprise in the case of Type 2 and Type 3 claims. The Solicitor s Letter is expressed to be be given on a without prejudice basis. A Scheme Creditor who has a Type 4 claim, and who has not yet instructed a solicitor, must (as with all Scheme Creditors) complete and return the Voting Form if he is to be admitted to a meeting and to be entitled to vote. (F) Type 4 claims Anyone who has a Type 4 claim (please see the Flowchart) must demonstrate to the reasonable satisfaction of the Chairman that there is a reasonable possibility that he may bring an asbestos-related claim against a Scheme Company in the future, for example that, during the course of his employment by a Scheme Company, he may have been exposed to asbestos by that Scheme Company. All persons with Type 4 claims will be admitted for voting purposes at the Estimated Average Value of their claim. The Estimated Average Value relevant to your claim will depend on the circumstances in which you were exposed to asbestos by a Scheme Company or an Additional Company. You should refer to paragraph 6 of Part 7 of Section A of this document to determine the Estimated Average Value of your claim. (G) Financial Dependency Claims If your claim arises or is likely to arise under the Fatal Accidents Act 1976 (in England and Wales); the Damages (Scotland) Act 1976 (in Scotland); or The Fatal Accidents (Northern Ireland) Order 1977 (in Northern Ireland), you (or your solicitor) should contact the Scheme Companies in one of the manners set out in paragraph 8 below regarding the valuation of your claim for voting purposes and the evidence that the Scheme Companies will require in order to admit you as a Scheme Creditor at the Scheme Meeting. The Scheme Companies will endeavour to agree the value of such claims for voting purposes with the Scheme Creditors concerned in such amount as the Chairman of the Scheme Meeting considers to be reasonable. Failing such agreement, the claim will be admitted at 1. (H) Commercial Creditors Scheme Creditors whose Scheme Claim may arise as a result of more than one claim made against it, for example a corporate Scheme Creditor claiming a contribution from a Scheme Company or under an indemnity, should value each of the claims currently being made against it, so far as possible, in accordance with the requirements of this paragraphs 5(B), (C) and (D) above. The Scheme Creditor should then state the proportion of each of these amounts for which it believes the Scheme Company to be responsible. As well as the evidence that the Scheme Creditor may be required to provide to the Scheme Company concerning the claim(s) currently being made against it, the Scheme Creditor may also be required to provide evidence in support of the amount of these claims in respect of which the Scheme Creditor alleges the Scheme Company is liable. If the Scheme Creditor believes that it may in the future 193

194 APPENDIX VI have further claims made against it in respect of which it may bring further Scheme Claims, it should set out on its Voting Form(s) its estimate of the amount of such Scheme Claims. The Scheme Creditor may be required to produce evidence in support of the amount of the claims. (I) General The value at which Scheme Claims are admitted for voting purposes at the Scheme Meetings will not be taken into account in litigating or settling claims but will be used for voting purposes only. You should consult your own legal adviser as to the consequences for you (if any) of furnishing any particulars required above in the event of any litigation in which you may be, or may become, involved. The Solicitor s Letter is expressed to be given on a without prejudice basis. 6. Attendance at more than one Scheme Meeting and apportionment of Scheme Claims In respect of any particular Scheme Company of which you are a Scheme Creditor, you may be eligible to attend either one or both meetings of that Scheme Company. If you are eligible to attend both meetings of a Scheme Company you should value your claim in the same amount for both meetings. However, if you are a Scheme Creditor of more than one Scheme Company, your claim may be valued for voting purposes in a different amount for one Scheme Company than another Scheme Company. If you are eligible to attend a Scheme Meeting in respect of more than one Scheme Company, you will be admitted to the Scheme Meetings of different Scheme Companies in accordance with the following principles: If your claim relates to a non-divisible disease (being any form of cancer including, without limitation, mesothelioma and lung cancer), then you will be admitted at the full value of your Scheme Claim for each Scheme Meeting at which you are eligible to attend. If (i) your claim relates to a divisible condition (being any condition other than a form of cancer or pleural plaques); and (ii) you were exposed to asbestos by more than one employer (whether or not those employers were Scheme Companies), you will be admitted at the percentage of the value of your Scheme Claim which relates to each Scheme Company at whose Scheme Meeting(s) you are eligible to attend. In order to calculate the relevant percentage (P) for any one Scheme Company you should, if your claim against any Scheme Company relates to your employment by that company, use the following formula: number of years you were employed by that Scheme Company (including where you were employed by an Additional Company during the operation of relevant arrangements with that Scheme Company) P = x 100 the number of years you were employed by any company during which you may have been exposed to asbestos (whether by a Scheme Company, an Additional Company or not) You should then enter the monetary value of your claim which corresponds to such percentage by using the following formula: (total monetary value of claim x P) 100 Where your claim does not relate to your exposure to asbestos by any Scheme Company in the course of your employment by that Scheme Company (including where you were employed by an Additional Company during the operation of relevant arrangements with that Scheme Company), you should endeavour to apportion your claim in accordance with the principles above. If you have any questions concerning how this should be done, please contact the Scheme Companies in one of the manners set out at paragraph 8 below. If you have a Type 4 claim, whether your claim relates to your employment by a Scheme Company or not, you will be admitted to each Scheme Meeting at which you are eligible to attend at the Estimated Average Value of your claim. You do not need to apportion your claim. 194

195 APPENDIX VI Regardless of whether your claim relates to a divisible or non-divisible disease, if you were employed by one Scheme Company and your employment transferred to another Scheme Company pursuant to a transfer to which TUPE applied you will be admitted only as a creditor of the second company. Please see paragraph 1 of Part 7 of Section A of this document for further details. 7. Communication with Scheme Creditors Following receipt of your completed Voting Form(s) the Scheme Companies may have need to contact you prior to the Scheme Meetings. It is not possible to give all the reasons why the Scheme Companies may need to contact you but such reasons may include that the Scheme Companies require additional information from you in order to admit your Scheme Claim for voting purposes or, particularly where you did not respond to the Initial Questions, the Scheme Companies may need to advise you against which Scheme Company(s) your Scheme Claim lies and to which class of Scheme Creditor of each such Scheme Company you are proposed to be admitted. Any communication will be made with you in accordance with the contact details you include on your Form(s) of Proxy. You are asked to indicate on your Form(s) of Proxy your preferred method of communication and the Scheme Companies will endeavour to contact you in this manner. However, the Scheme Companies reserve the right to contact you in a different manner if they are not able or it is not practicable to contact you in your preferred manner. Where you submit both Voting Forms, please ensure that the contact details are identical on each. 8. Further information and the helpline If you have any questions regarding the action you are required to take or how to complete the Form of Proxy and Claims Table, or if you otherwise need to contact the Scheme Companies in connection with the Scheme, you may contact the telephone helpline on Please note that the helpline may be busy, particularly in the periods immediately following your receipt of this document and immediately prior to the Scheme Meetings. Due to the volume of calls and the varying nature of queries, it may not be possible to give you guidance immediately. However, if you leave a detailed message regarding your query, the Scheme Companies will endeavour to return your call as soon as reasonably practicable. Alternatively, you may submit your question or matter in writing to Freepost RLUH-CXLY-BAYS, Cape, PO Box 99, Sudbury CO10 6SN or by fax addressed to the Company Secretary on fax number The Scheme Companies will endeavour to respond to any such questions as soon as practicable. Please read this document and the accompanying documents carefully. If you are in any doubt as to the action you should take, we recommend that you should consult your legal adviser without delay. 195

196 APPENDICES TO SECTION A VII FLOWCHART REGARDING VALUATION OF SCHEME CLAIMS FOR VOTING PURPOSES Has your solicitor or representative notified a Scheme Company of a claim? Yes No Has the claim been paid in full? No Yes Do you believe there is any reasonable possibility that you may have a claim in the future? Do you have the condition called pleural plaques? No further action required Yes No Yes No You have a Type 4 voting claim Has the claim been agreed on a final or provisional basis? Final Provisional You have a Type 1 nonvoting claim Yes You have a Type 4 voting claim Has the claim been agreed in full by the Scheme Company and are you just waiting for payment to be made? Yes No You have a Type 4 voting claim Has the Scheme Company agreed liability for this claim and started to discuss a value with your solicitor or representative? You have a Type 2 voting claim Yes You have a Type 3 voting claim Please turn to the next page No No further action required Does your claim relate to a specific disease as confirmed by a specialist medical report? No You have a Type 4 voting claim 196

197 APPENDIX VII Type 1 non-voting claim Type 2 voting claim Type 3 voting claim Type 4 voting claim No further action required. If your claim is against an Included Scheme Company the Scheme provides that you will be paid in full. You are not eligible to vote at the Scheme Meetings. Complete Voting Form as per guidance notes and instructions Value your claim for general damages in accordance with Appendix VIII plus an estimate of special damages; plus an estimate of costs Complete Voting Form as per guidance notes and instructions Value your claim for general damages in accordance with Appendix VIII plus an estimate of special damages; plus an estimate of costs Complete Voting Form as per guidance notes and instructions Value your claim for voting purposes at the Estimated Average Value relevant for your claim, in accordance with paragraph 6 of Part 7 of Section A Provide the following supporting documentation: A letter from your solicitor stating: the value of those elements of your claim that have been agreed with the Scheme Company, your most recent demand for general damages, your claim for special damages, and an estimate of the costs to be included in your claim Provide the following supporting documentation: A letter from your solicitor stating: your name, date of birth, NI number, Scheme Company or Additional Company employer, dates of employment and their confirmation that you are suffering from the specified disease. This letter must also set out the value of your claim for general damages valued in accordance with Appendix VIII, your claim for special damages, and No further documentation is required from you at this point an estimate of the costs to be included in your claim Note - if your solicitor or representative believes that your claim for general damages should be valued at an amount above the ranges set out in Appendix VIII your solicitor or representative must provide additional documentation to support this. Please remember that the value at which claims are admitted for voting purposes is not binding on any party and will not be taken into account in litigating or settling Scheme Claims. 197

198 APPENDICES TO SECTION A VIII GENERAL DAMAGES - USUAL RANGE OF AWARDS Range of awards to be used for claims governed by English or Scots law Type of condition Valuation guidelines for voting purposes ( ) 1. Pleural thickening 21,000 to 42, Asbestosis 26,500 to 58, Lung cancer 42,500 to 55, Mesothelioma 45,000 to 70,000 Range of awards to be used for claims governed by Northern Irish law Type of condition Valuation guidelines for voting purposes ( ) 1. Pleural thickening 15,000 to 30, Asbestosis 20,000 to 60, Lung cancer 50,000 to 90, Mesothelioma 50,000 to 90,

199 APPENDICES TO SECTION A IX PRO FORMA SOLICITOR S LETTER [To be printed on solicitor s letterhead] Freepost RLUX-CXLY-BAYS Cape PO Box 99 Sudbury CO10 6SN WITHOUT PREJUDICE We are writing in connection with the Scheme at the request of [name of client] in relation to [a] Scheme Claim[s] that our client may be entitled to bring. Our client is a [former] employee of [name of Scheme Company or Additional Company] who was employed between [insert dates of employment]. Our client s date of birth is [insert] and National Insurance number is [insert] [include only for Type 3 claims brought by a current or former employee] We confirm that [name of client] is suffering from [name of condition] as confirmed by the specialist medical report of [name of specialist] dated that we have had sight of. As required by the Scheme and for the purposes of our client voting on the Scheme only and no other purpose we estimate that our client s Scheme Claim is of the following value: (i) (ii) (iii) [insert amount] by way of general damages; [and] [insert amount] by way of special damages broken down between: a) loss of earnings [insert amount] b) care (including medical expenses) [insert amount] c) other [insert amount] 111 Total [insert amount] [and]; [insert amount] by way of costs. We therefore estimate that the aggregate value of our client s Scheme Claim is [insert amount] [NB If there are several Scheme Claims a separate estimate will have to be provided for each claim.] Yours faithfully [Name of firm] Partner responsible: [name of partner] 199

200 SECTION B: THE SCHEME OF ARRANGEMENT SCHEMES OF ARRANGEMENT IN THE HIGH COURT OF JUSTICE NO (AND OTHERS) OF 2005 CHANCERY DIVISION COMPANIES COURT IN THE MATTER OF CAPE PUBLIC LIMITED COMPANY IN THE MATTER OF THE OTHER COMPANIES WHOSE NAMES ARE SET OUT IN PART 1 OF SCHEDULE 1 HERETO - and - IN THE MATTER OF THE COMPANIES ACT 1985 SCHEME OF ARRANGEMENT (UNDER SECTION 425 OF THE COMPANIES ACT 1985) BETWEEN: CAPE PUBLIC LIMITED COMPANY - and - THE COMPANIES WHOSE NAMES ARE SET OUT IN PART 1 OF SCHEDULE 1 HERETO - and - THEIR RESPECTIVE CLASSES OF (1) RECOURSE SCHEME CREDITORS (2) GENERAL SCHEME CREDITORS (EACH AS HEREINAFTER DEFINED) 200

201 PART 1 - PRELIMINARY 1.1 Definitions In the Scheme, unless the context otherwise requires or otherwise expressly provides, the following expressions shall bear the meanings set opposite them: Additional Companies Ancillary Agreements Asbestos Asbestos Contribution Claim Asbestos Personal Injury Claim the companies whose names are set out in Part 4 of Schedule 1 hereto; each of the Funding Agreement, the Banking Agreement, the Scheme Guarantee, the Services Agreement, the Contribution Claims Agreement, the PLC Reimbursement Agreement and the CCS Reimbursement Agreement, the terms of each of which are summarised at Part 4 of the Explanatory Statement; any mixture or product in any form containing any of the following minerals: crocidolite, amosite, chrysotile, fibrous actinolite, fibrous anthrophyllite and fibrous tremolite; any derivative or indirect claim of any kind whatsoever (other than an Excluded Claim), whenever brought, including, without limitation, any claim for contribution, reimbursement, indemnity or subrogation against one or more of the Scheme Companies of which the governing law is the law of any of England and Wales, Scotland or Northern Ireland and which is brought by any person who on the Record Date is: (a) (b) (c) an individual resident in the United Kingdom; or a company incorporated under the laws of any of England and Wales, Scotland or Northern Ireland; or a body corporate incorporated other than under the laws of any of England and Wales, Scotland or Northern Ireland that has a branch in the United Kingdom within the meaning of Part XXIII of the Companies Act; or (d) an oversea company as defined in Section 744 of the Companies Act; or (e) an unincorporated association which has its principal place of business in the United Kingdom, arising out of or connected in any way with any Asbestos Personal Injury Claim or any claim which had it been brought against any Scheme Company (assuming that it could so successfully have been brought) would have been an Asbestos Personal Injury Claim; any claim (not being an Asbestos Contribution Claim or an Excluded Claim) against one or more of the Scheme Companies, whenever brought, of which the governing law is the law of any of England and Wales, Scotland or Northern Ireland brought either; (a) by an individual resident in the United Kingdom on the Record Date; or 201

202 Banking Agreement Business Day (b) by an individual not resident in the United Kingdom on the Record Date but whose claim is attributable or is alleged to be attributable to his exposure to Asbestos in the United Kingdom in the course of his employment by any Scheme Company or any Additional Company, in either case for debt, damages, or other relief in respect of death or personal injury or in respect of a Financial Dependency Claim arising out of or connected in any way with exposure to Asbestos attributable, or alleged to be attributable, wholly or in part to any act or omission on the part of any Scheme Company (or for which any Scheme Company is liable or is alleged to be liable) occurring prior to the Record Date; the secured facility agreement dated 27 August 2003 as conditionally amended and re-stated on 31 January 2006 between certain Scheme Companies and others (1) and Barclays Bank PLC (2); a day not being a Saturday or a Sunday on which banks in the City of London are open for business; CCS Cape Claims Services Limited, a company incorporated in England and Wales under registered number ; CCS Reimbursement Agreement the conditional agreement dated 14 March 2006 between PLC and CCS pursuant to which PLC has agreed to pay to CCS an amount per Established Scheme Claim equal to such amount of the Established Scheme Liability and Scheme Guarantee Interest as CCS has agreed to pay to the Scheme Creditor in respect of that Established Scheme Claim under the Scheme Guarantee; Chester Street Excluded Claim Chester Street Settlement Agreements any claim that is brought against any Scheme Company under any of the Chester Street Settlement Agreements or to which any of the Chester Street Settlement Agreements otherwise apply or any claim which, if it was brought against any party to any of the Chester Street Settlement Agreements (such party not being a Scheme Company), would be a claim to which any of the Chester Street Settlement Agreements would apply; the two deeds of settlement each dated 8 September 2003 made between respectively: (a) (b) 202 Chester Street Insurance Holdings Limited (acting by its joint scheme administrators Dan Yoram Schwarzmann and Mark Charles Batten) (1), Harland & Wolff plc (2) and Somewatch Limited, Cape Insulation Limited and PLC (3); and Chester Street Insurance Holdings Limited (acting by its joint scheme administrators Dan Yoram Schwarzmann and Mark Charles Batten) (1), Vinters-Armstrongs Limited, Vinters Defence Systems Limited, Vinters-Armstrongs (Engineers) Limited and Vinters Engineering plc (2), Gnitrow Limited (3), BAE Systems Marine Limited (4) and Somewatch Limited, Cape Insulation Limited and PLC (5);

203 Companies Act the Companies Act 1985; Contribution Claims Agreement the conditional agreement dated 14 March 2006 between CCS and each of the Scheme Companies relating to certain claims for contribution that may be made by any Scheme Company against any third party (not being a member of the Group) in respect of Scheme Claims; Court Court Order Creditor Costs Divisible Disease Effective Date Established Creditor Costs Established Scheme Claim Established Scheme Liability Excluded Claim Explanatory Statement Final Order Final Settlement the High Court of Justice in England and Wales; the order of the Court sanctioning the Scheme in respect of all or any of the Scheme Companies; the costs incurred by a Scheme Creditor in bringing and establishing his Scheme Claim as an Established Scheme Claim; any disease that is not a Non-divisible Disease, including (without limitation) asbestosis, pneumoconiosis and pleural thickening; the date on which the Scheme becomes effective in accordance with clause 8.3; the Creditor Costs which are payable by the Scheme Company (and/or CCS pursuant to the Scheme Guarantee) as either (i) agreed by the Scheme Creditor (1) and the Scheme Company and CCS (2) or (ii) which are subject to a Final Order (as assessed where not agreed); a Scheme Claim which has become an Established Scheme Claim in accordance with clause 2.4.1; the liability of a Scheme Company in respect of an Established Scheme Claim including Established Creditor Costs; any claim which is: (a) a Chester Street Excluded Claim; (b) a Future Contribution Claim; (c) a Future Financial Dependency Claim; (d) a Reimbursement Claim; (e) a Promat Excluded Claim, or is a claim brought by any company whose name is set out at Part 1 of Schedule 1 hereto in respect of which the Scheme becomes effective; the statement dated 15 March 2006 (and the appendices thereto) explaining the effect of the Scheme to Scheme Creditors as required by section 426 of the Companies Act; an order or award of a court or tribunal of competent jurisdiction which is not subject to any appeal, application for permission to appeal or similar relief, or in relation to which the time to seek a stay, or to appeal or to seek permission to appeal, or similar relief, has expired; a binding agreement, evidenced in writing, which of itself fully and finally determines the obligations of the Scheme Company and, where applicable, CCS with regard to a Scheme Claim (as to both liability and quantum); 203

204 FSCS Financial Dependency Claim Financial Services Compensation Scheme Limited, a company incorporated in England and Wales under registered number , and any statutory successor of it; any claim under the Fatal Accidents Act 1976, the Damages (Scotland) Act 1976 or The Fatal Accidents (Northern Ireland) Order 1977; Funding Agreement the conditional agreement dated 14 March 2006 between PLC as funder and CCS as borrower relating to the funding of CCS for the purpose of meeting its obligations under the Scheme Guarantee, the Services Agreement, the other Ancillary Agreements and the Trust Deed; Future Contribution Claim Future Financial Dependency Claim General Scheme Claim General Scheme Creditor governing law Group any claim by any person ( A ) for a contribution (under the Civil Liability (Contribution) Act 1978, the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940 or otherwise) from a Scheme Company in relation to a claim made against A where, at the Record Date, none of the acts or omissions on which the claim against A is based have taken place; any Financial Dependency Claim by any person ( A ) against a Scheme Company where, at the Record Date, A is not a dependent (as defined in the Fatal Accidents Act 1976 or The Fatal Accidents (Northern Ireland) Order 1977) or a relative (as defined in the Damages (Scotland) Act 1976) of a Scheme Creditor; any claim which is an Asbestos Personal Injury Claim or an Asbestos Contribution Claim which is not a Recourse Scheme Claim or any part of a Recourse Scheme Claim in respect of which, notwithstanding the provisions of clauses 2.4 to 2.7, the Scheme Creditor concerned remains entitled only to payment by CCS; any Scheme Creditor who has a Scheme Claim which is a General Scheme Claim; the law applicable pursuant to English rules of conflict of law, save that in relation to a claim in tort the governing law shall be the law which would be the applicable law for determining the issues arising in the claim if the Private International Law (Miscellaneous Provisions) Act 1995 had been in force when all the acts and omissions on which the claim is based took place; PLC, any parent undertaking of PLC and any subsidiary undertaking of PLC or of any such parent undertaking from time to time (other than CCS); Insurance Compensation Scheme any guarantee or compensation scheme established to protect policyholders who may have been prejudiced in consequence of the inability of authorised insurance companies carrying on business in the UK or elsewhere to meet their liabilities under policies issued by them; 204

205 Insurance Recovery Rights Insurer in relation to a Recourse Scheme Claim, the rights of a Scheme Company against an Insurer which would be transferred to and vest in the Recourse Scheme Creditor in respect of that Recourse Scheme Claim in the event that any of the events set out in section 1(1)(b) of the 1930 Act occurred with respect to the Scheme Company; an insurance company or underwriter which has entered into a Relevant Insurance Policy; Judgment Interest any interest payable by a Scheme Company in respect of or referable to the Scheme Company s liability arising out of or in connection with an Established Scheme Claim and/or Established Creditor Costs pursuant to an order of a court of competent jurisdiction, whether or not such court is a court of England and Wales, Scotland or Northern Ireland and whether such an order is made under the provisions of a statute (including, without limitation, in England and Wales under section 35A of the Supreme Court Act 1981 or section 69 of the County Courts Act 1984; in Scotland under section 1 of the Interest on Damages Act 1958 (as amended by the Interest on Damages (Scotland) Act 1971); and in Northern Ireland under section 33A of the Judicature (Northern Ireland) Act 1978 or article 45A of the County Court (Northern Ireland) Order 1980) or otherwise; Net Payment shall bear the meaning set out in clause 2.7; Non-divisible Disease any cancer, including (without limitation) lung cancer and mesothelioma; Payment Percentage the payment percentage set by CCS from time to time under the Scheme Guarantee, being the percentage of CCS s liability to Scheme Creditors under the Scheme Guarantee (other than with regard to Scheme Guarantee Interest) which CCS is then settling; PLC Cape Public Limited Company, a company incorporated in England and Wales under registered number 40203; PLC Reimbursement Agreement the conditional agreement dated 14 March 2006 between PLC and each Scheme Company pursuant to which each Scheme Company (other than PLC) has agreed to pay to PLC an amount per Established Scheme Claim against that Scheme Company equal to such amount of the Established Scheme Liability and Scheme Guarantee Interest as CCS has agreed to pay to the Scheme Creditor of that Scheme Company in respect of that Established Scheme Claim under the Scheme Guarantee; Prohibited Proceedings 205 any step or proceeding against any Scheme Company or CCS in any jurisdiction to seek or obtain a judgment or order for payment of any Scheme Claim (including any judgment or order which attracts Judgment Interest) or by way of execution or enforcement of a judgment, arbitration award or other determination of any court or tribunal of competent jurisdiction or otherwise to recover payment of any amount due or claimed in respect of or referable to any Scheme Claim;

206 Promat Excluded Claim any Asbestos Contribution Claim that is made or brought against a Scheme Company by Promat Glasgow Limited (a company incorporated in England and Wales under registered number ) or any of the following from time to time: (a) Promat Glasgow Limited s holding company or parent undertaking; or (b) any subsidiary or subsidiary undertaking of Promat Glasgow Limited or of its holding company or parent undertaking; Property all forms of property including money, goods, things in action, land and every description of property wherever situated together with obligations and every description of interest, whether present or future or vested or contingent, arising out of, or incidental to, property; Record Date 1 March 2006; Recourse Scheme Claim Recourse Scheme Creditor any claim which is an Asbestos Personal Injury Claim or an Asbestos Contribution Claim in respect of which any Scheme Company has any rights of indemnity and insurance coverage under a Relevant Insurance Policy; any Scheme Creditor who has a Scheme Claim which is a Recourse Scheme Claim; Recourse Liability the amount of any Recourse Scheme Claim that is Recoverable less the Net Payment in respect of that Recourse Scheme Claim; Recoverable shall bear the meaning set out in clause 2.6; Reimbursement Claim any claim made against a Scheme Company by or on behalf of any person who issued a contract of insurance to an Additional Company (whether such claim is brought under rights of subrogation in the name of the Additional Company, is a claim which has been assigned to the person who issued the contract of insurance or otherwise), in connection with any claim (the original claim ) that at the Record Date has been settled or determined but, had the original claim not been so settled or determined and had the original claim been brought against the Scheme Company concerned after the Record Date, would have been a Scheme Claim; Release shall bear the meaning set out in clause 2.5.1; Relevant Insurance Policy resident Scheme any contract of insurance insuring a Scheme Company in respect of a Scheme Liability, which as at the Record Date is valid and enforceable; an individual shall be considered resident in the United Kingdom if, disregarding dates of arrival and departure, he has spent not less than 183 days of the 365 days immediately preceding the Record Date in the United Kingdom; this Scheme subject to any modification, term or condition which the Court may think fit to approve or impose in accordance with clause 8.4; 206

207 Scheme Claim Scheme Companies subject to clause 6, any claim which is an Asbestos Personal Injury Claim or an Asbestos Contribution Claim; PLC and the companies whose names are set out in Part 1 of Schedule 1 hereto or, as the case may be if the Scheme becomes effective, those of such companies in respect of which the Scheme has become effective in accordance with clause 8.4; Scheme Creditor in relation to a particular Scheme Company, a person (including, subject to clause 6, any assignee of such person) who is or who claims to be a creditor of that Scheme Company in respect of a Scheme Claim; Scheme Guarantee the conditional guarantee dated 14 March 2006 between CCS and each of the Scheme Companies whereby CCS has undertaken and guaranteed to each Scheme Company on behalf of its Scheme Creditors to make payment to such Scheme Creditors, subject to and on the terms of the Scheme Guarantee, of: (a) all Established Scheme Liabilities of any Scheme Company save to the extent that (i) monies are paid to the Scheme Company and held on trust for the Scheme Creditor pursuant to clause and/or (ii) such Established Scheme Liabilities are otherwise paid or discharged, and in any event less the amount of any claim that the Scheme Creditor has against any person who issued to the Scheme Company a Relevant Insurance Policy that has transferred to and vested in the Scheme Creditor by virtue of the 1930 Act; and (b) Scheme Guarantee Interest; Scheme Guarantee Interest Scheme Liability Scheme Shareholder any interest payable by CCS to Scheme Creditors pursuant to clause 7 of the Scheme Guarantee; the liability of a Scheme Company in respect of a Scheme Claim, including Creditor Costs and Judgment Interest; the holder for the time being of the Scheme Shares in CCS and PLC; Scheme Shares the special voting share of 1 in the share capital of each of CCS and PLC; Services Agreement the conditional agreement dated 14 March 2006 between PLC and CCS relating to the provision of certain services to CCS; Trust Deed the trust deed dated 14 March 2006 entered into by PLC, CCS and The Law Debenture Trust Corporation plc relating to the terms on which the Scheme Shares shall be held by the Scheme Shareholder, the terms of which are summarised at Part 4 of Section A of the Explanatory Statement; United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland; 1930 Act the Third Parties (Rights Against Insurers) Act 1930 or, where relevant, the Third Parties (Rights Against Insurers) Act (Northern Ireland)

208 1.1.2 In the Scheme, unless otherwise stated or provided for, any reference to: (a) (b) a person includes an individual, a body corporate, a corporation, a firm, association, partnership, joint venture, organisation, institute, trust or agency, whether or not having a separate legal personality; and holding company, subsidiary, parent undertaking and subsidiary undertaking shall have the meanings given thereto in the Companies Act The headings in the Scheme are for convenience only and shall not affect its interpretation References in the Scheme to numbered clauses or parts or schedules are to clauses of or parts of or schedules to the Scheme respectively Any reference in the Scheme to any statute or statutory provision shall, unless the context otherwise requires, be construed as a reference to such statute or statutory provision (including all orders, instruments or regulations made thereunder or deriving validity therefrom) as in force at the date of the Scheme and as subsequently re-enacted or consolidated References to (or to any specified provision of) the Scheme shall be construed as references to the Scheme (or that provision) as in force for the time being and as modified in accordance with the terms of the Scheme In construing the Scheme general words introduced by the word other shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things and general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words Words importing one gender shall (where appropriate) include any other gender and words importing the singular shall (where appropriate) include the plural and vice versa. 1.2 General The share capital of PLC is 30,990, divided into 250,000 Second Preference Shares of 1 each, 105,683,762 Ordinary Shares of 25p each, 431,906,031 Deferred Shares of 1p and 1 Scheme Share of 1 of which all the Second Preference Shares and Deferred Shares and 83,523,010 of the Ordinary Shares have been issued and are fully paid and the remaining Ordinary Shares and the Scheme Share are unissued Under the terms of the articles of association of PLC certain of the special rights attached to the PLC Scheme Share lapsed on 30 December 2005 and an extraordinary general meeting of PLC is to be convened to consider a resolution to revive those rights PLC is the parent undertaking of each of the other Scheme Companies, each of which is a company incorporated under the laws of England and Wales The Scheme Companies have in the past been involved in asbestos-related activities as a result of which they have long term liabilities in relation to Scheme Claims, the amount of which is uncertain The group of companies of which PLC is the parent undertaking is a leading international provider of industrial support services to the energy sector The uncertainty over asbestos-related claims against the Group in the future is having a prejudicial effect on the growth and development of the Group The purpose of the Scheme is to provide long term financing of the liabilities of Scheme Companies in relation to Scheme Claims in a manner which on the one hand provides the Group with substantial protection from the risk of insolvency and on the other hand, by reason of the enhanced opportunities which this protection provides, makes it more likely that Scheme Companies will be able to discharge their liabilities to Scheme Creditors in full. 208

209 1.2.8 This purpose is to be achieved:- (a) (b) (c) (d) (e) (f) by restricting the rights of Scheme Creditors to enforce Scheme Claims against Scheme Companies; by providing that Established Scheme Claims (or such amount thereof as is irrecoverable from third parties) will instead be paid, as and when they become established, by CCS, which is a subsidiary of PLC established for the purpose; by providing substantial initial sums of money to CCS and making provision for further funding of CCS; by providing safeguards for Scheme Creditors in the form of the Scheme Shares in PLC and CCS which are to be held by the Scheme Shareholder on trust for Scheme Creditors; by providing that if necessary CCS is to have the ability to reduce the percentage of each Established Scheme Claim of which payment is made to Scheme Creditors, but on terms that by reason of the rights attached to the Scheme Shares no distribution may be made to shareholders in PLC without the consent of the Scheme Shareholder unless and until the funds available to CCS are sufficient to enable payments once again to be made in full; and by providing safeguards to protect the interests of Recourse Scheme Creditors, i.e. Scheme Creditors whose Scheme Claims are in whole or in part the subject matter of a contract of insurance, if they would otherwise be deprived of a better right of recovery than that available at that time under the Scheme With a view to the achievement of this purpose by the implementation of the Scheme, the Scheme Companies (or some of them, where appropriate) have entered into the Ancillary Agreements and the Trust Deed (the terms of which are summarised at Part 4 of the Explanatory Statement) which are conditional upon the Scheme becoming effective as follows:- (a) (b) (c) (d) (e) (f) the Funding Agreement and the Banking Agreement which provide for the funding of CCS to meet liabilities in respect of Scheme Claims as and when they become Established Scheme Claims; the Scheme Guarantee which provides for the payment of Established Scheme Liabilities to Scheme Creditors and contains provisions which enables CCS to reduce the Payment Percentage below 100 per cent.; the PLC Reimbursement Agreement and the CCS Reimbursement Agreement which provide for the reimbursement of PLC and CCS respectively, in respect of payments agreed to be made by CCS in discharge of Established Scheme Claims, by the Scheme Companies which were liable in respect of those Scheme Claims; the Contribution Claims Agreement which contains provisions relating to claims for contribution against third parties which Scheme Companies may be entitled to bring where CCS has agreed to discharge their liabilities in respect of Established Scheme Claims; the Services Agreement pursuant to which services are to be provided by PLC to CCS to enable CCS to meet its obligations under the Scheme, the Scheme Guarantee and the other Ancillary Agreements; and the Trust Deed which provides for the terms on which the Scheme Shares in PLC and CCS are to be held by the Scheme Shareholder on trust for Scheme Creditors The share capital of CCS consists of 1,000 divided into 999 Ordinary Shares of 1 each and 1 Scheme Share of 1 of which 999 of the Ordinary Shares have been issued and are fully paid. All the issued Ordinary Shares are held by Cape Security Services Limited, a wholly owned subsidiary of PLC. 209

210 Subject to the passing of the resolution referred to in clause above, the Scheme Shares in CCS and PLC will confer upon the holder special rights to enable the holder to protect the interests of Scheme Creditors The Law Debenture Trust Corporation plc has agreed to be the first holder of the Scheme Shares in CCS and PLC and to hold such shares on the terms of the Trust Deed CCS has agreed to appear by counsel on the hearing of the petition to sanction the Scheme and to undertake to be bound thereby and to execute all such documents and do all such things as may be necessary or desirable to give effect thereto. PART 2 - THE SCHEME 2.1 Application of the Scheme The Scheme shall apply to all debts and liabilities due from Scheme Companies in respect of Scheme Claims. 2.2 Declaration of trust As from the Effective Date each Scheme Company shall in respect of each and every Recourse Scheme Claim against that Scheme Company but subject to clause hold on trust for the Recourse Scheme Creditor concerned all proceeds of Insurance Recovery Rights and all proceeds of any Insurance Compensation Scheme which the Scheme Company receives in relation to that Recourse Scheme Claim On receipt of any proceeds of either Insurance Recovery Rights or any Insurance Compensation Scheme a Scheme Company shall, subject to clause 2.2.3, pay such monies to the Scheme Creditor or to such person as the Scheme Company and the Scheme Creditor may agree (including, without limitation, the Scheme Creditor s legal adviser) within 20 Business Days of the Scheme Company s receipt of such monies Clauses and shall not apply to the extent that the Scheme Company s liability in relation to the Recourse Scheme Claim to which the monies referred to in clauses and are attributable has been satisfied or discharged prior to the time that the Scheme Company would otherwise be obliged to pay such monies to the Scheme Creditor in accordance with clause Prohibition of enforcement of Scheme Claims Subject to clauses 2.3.3, and 2.5, no Scheme Creditor shall: (a) (b) institute or continue any step or proceeding or other judicial, quasi-judicial, administrative or regulatory process against any Scheme Company other than for the sole purpose of establishing the existence and/or amount of the Scheme Company s Scheme Liability in respect of a Scheme Claim as an Established Scheme Liability; or take any Prohibited Proceedings against any Scheme Company or its Property If any Scheme Creditor takes any such action as is prohibited by clause he shall be treated as having received, on account of his Scheme Claim, an advance payment equal to the amount or gross value of any money, Property, benefit or advantage obtained by him as the result of such action. For this purpose, the gross value of any such money, Property, benefit or advantage shall be such amount as is determined by the Scheme Company in its reasonable opinion and, without limitation, may include such amount as the Scheme Company may reasonably consider to be appropriate by way of interest or costs, charges or expenses incurred by the Scheme Company as a consequence thereof Clause shall not restrict or prevent any Scheme Creditor from taking any Prohibited Proceedings against any Scheme Company or its Property to the extent that such Prohibited Proceedings are brought to recover any monies held on trust by the Scheme Company for the Scheme Creditor on the terms of clause

211 2.3.4 The provisions of this clause shall not prevent a Scheme Creditor from taking proceedings against a Scheme Company for the purposes of enforcing the provisions of this Scheme. 2.4 Established Scheme Claims A Scheme Claim shall be an Established Scheme Claim when there has been established in relation thereto (whether (a) by Final Settlement or (b) by Final Order) a liability of the Scheme Company and, where applicable, CCS to pay an ascertained sum of money. For the avoidance of doubt such liability shall not include any liability for Judgment Interest which may have been awarded as a result of a Scheme Creditor taking action which is prohibited by clause If it is agreed between the Scheme Company and a Scheme Creditor or ordered by a court or tribunal of competent jurisdiction that an interim payment shall be made in respect of a Scheme Claim, the agreement or order of the interim payment shall be treated as establishing an Established Scheme Claim, save that for the purposes of clause 2.5.2(b)(ii) and clause 7 the date on which the Scheme Claim is deemed to become an Established Scheme Claim shall be the date of the Final Settlement or Final Order, as appropriate, relating to the Scheme Claim in respect of which such interim payment was agreed or ordered and not the date of agreement or order of the interim payment Where, on the day being 20 Business Days after the day on which a Scheme Claim becomes an Established Scheme Claim, the Creditor Costs incurred by the Scheme Creditor in respect of such claim have not become Established Creditor Costs, the Scheme Company and the Scheme Creditor shall for the purposes of the Scheme treat (1) the Scheme Claim excluding any claim for Creditor Costs and (2) the Scheme Claim in respect of Creditor Costs as separate Scheme Claims, save that: (a) for the purposes of clause 2.5.2(b)(ii) provided that the Scheme Claim for Creditor Costs (being a Recourse Scheme Claim) has become an Established Scheme Claim prior to the Release in respect of such Scheme Claim becoming effective pursuant to that clause; and (b) for the purposes of clause 7, the date on which each of the Scheme Claim excluding any claim for Creditor Costs and the Scheme Claim in respect of Creditor Costs is deemed to have become an Established Scheme Claim shall be the date on which the Scheme Claim excluding any claim for Creditor Costs became an Established Scheme Claim. Where the Scheme Claim for Creditor Costs has not become an Established Scheme Claim prior to the Release becoming effective pursuant to clause 2.5.2(b)(ii), the Scheme Company and the Scheme Creditor shall for the purposes of any Release pursuant to clause 2.5.2(b)(ii) treat the Scheme Claim excluding any claim for Creditor Costs and the Scheme Claim in respect of Creditor Costs as separate Scheme Claims. Thereafter, where at the time that the Scheme Claim for Creditor Costs becomes an Established Scheme Claim the Release in respect of the Scheme Claim excluding any claim for Creditor Costs has become effective pursuant to clause 2.5.2(b)(ii), the Release shall be deemed to have occurred with regard to the Scheme Claim for Creditor Costs upon the claim for Creditor Costs becoming an Established Scheme Claim As soon as reasonably practicable following the date upon which a Recourse Scheme Creditor s Recourse Scheme Claim becomes an Established Scheme Claim, the Scheme Company shall notify each of the Recourse Scheme Creditor and CCS in writing of the amount of the Established Scheme Liability which is Recoverable (where more than nil). 2.5 Release from the prohibition of enforcement of Scheme Claims Any Recourse Scheme Creditor who has a Recourse Scheme Claim shall, in the circumstances referred to at clause 2.5.2, be released from the prohibition in clause in relation to that Recourse Scheme Claim and as regards any Scheme Company which is liable in respect of that Recourse Scheme Claim. Such release of a Recourse Scheme Creditor from the prohibition in clause is hereinafter referred to as the Release Release shall be effective: (a) immediately, in the event that any of the events set out in section 1(1)(b) of the 1930 Act occur with respect to the Scheme Company; or 211

212 (b) upon receipt by the Scheme Company and CCS of a written notice from the Recourse Scheme Creditor concerned to such effect substantially in the form of notice set out at Schedule 2 hereto, where either: (i) the Payment Percentage set by CCS under the Scheme Guarantee is (and remains at the time of service of the written notice) 50 per cent. or lower; or (ii) a period of twelve months or more has expired following the date on which the Recourse Scheme Claim became an Established Scheme Claim, and the Scheme Creditor has not received at the time of service of the written notice full payment in respect of his Recourse Scheme Claim The amount of the Recourse Scheme Claim in relation to which the Release shall be effective is an amount equal to the Recourse Liability, representing: (i) (ii) the amount of the Scheme Company s Insurance Recovery Rights in relation to the Recourse Scheme Claim that have not been paid or discharged by or on behalf of any person who is liable to pay or discharge the same, calculated in accordance with clause 2.6; less the same proportion of the amount of the payment made to the Recourse Scheme Creditor by CCS under the Scheme Guarantee as the amount of the Insurance Recovery Rights that have not been paid or discharged referred to in clause 2.5.3(i) represents as a proportion of CCS s total liability under the Scheme Guarantee to the Recourse Scheme Creditor in respect of his Recourse Scheme Claim, calculated in accordance with clause 2.7. The Recourse Liability shall not exceed the amount of the Established Scheme Liability that remains undischarged and where it would otherwise exceed such amount, the Recourse Liability shall be such amount as equals the amount of the Established Scheme Liability that remains undischarged As soon as reasonably practicable (and in any event not later than 20 Business Days) following an event described in clause 2.5.2(a) or the Scheme Company s receipt of a written notice described in clause 2.5.2(b), as the case may be, the Scheme Company shall notify each of the Recourse Scheme Creditor and CCS in writing (in respect of each Recourse Scheme Claim to which the event described in clause 2.5.2(a) or 2.5.2(b) has occurred) of the amount of the Recourse Liability (where more than nil) in relation to which the Release has become effective. Any notice served by any Recourse Scheme Creditor pursuant to clause 2.5.2(b) shall for the purposes of the Scheme and the Scheme Guarantee be irrevocable unless the Scheme Company and CCS otherwise consent in writing. 2.6 The amount of an Established Scheme Liability which is Recoverable The amount which is Recoverable with regard to a Recourse Scheme Claim is: where the Recourse Scheme Claim relates to a Divisible Disease, equal to the Insurance Recovery Rights of the Scheme Company in relation to such Recourse Scheme Claim (and where at the time that any Scheme Claim which is a Recourse Scheme Claim becomes an Established Scheme Claim the amount of the Scheme Company s Insurance Recovery Rights is not a liquidated amount, the Scheme Company shall endeavour to agree or determine the Insurance Recovery Rights as soon as reasonably practicable and in such amount as the directors of the Scheme Company believe is reasonable); or where the Recourse Scheme Claim relates to a Non-divisible Disease, equal to the Scheme Company s Established Scheme Liability in respect of such Recourse Scheme Claim, until such time (if any) that the Scheme Company receives written advice from such barrister of at least 15 years calling that the Scheme Company and the holder for the time being of the Scheme Shares may agree (and, failing such agreement, as may be nominated by the Chair for the time being of the Civil Litigation Committee of the Law Society) that this approach to apportioning liability in respect of Scheme Claims relating to Non-divisible Diseases is not consistent with current law, following which the Scheme Companies shall operate this clause to reflect the approach to apportioning liability in respect of such claims which such barrister may advise is consistent with current law, 212

213 2.7 Net Payment less, in either case, an amount equal to the Insurance Recovery Rights of the Scheme Company in relation to such Recourse Scheme Claim that have been satisfied or discharged (whether by or on behalf of any person who is liable to pay or discharge the same or by any Insurance Compensation Scheme) Where the Recourse Scheme Claim relates to a Divisible Disease, the Net Payment is equal to A where: A = B x C D and B = the payment made by CCS to the Recourse Scheme Creditor under the Scheme Guarantee in respect of the Recourse Scheme Claim; C = the amount which is Recoverable; and D = the total liability of CCS under the Scheme Guarantee in respect of the Established Scheme Liability whether or not satisfied at that time Where the Recourse Scheme Claim relates to a Non-divisible Disease, the Net Payment is equal to the amount of the Established Scheme Liability that has been paid or discharged by any person (including CCS pursuant to the Scheme Guarantee), until such time (if any) that the Scheme Company receives written advice from a barrister of at least 15 years calling who is selected with the agreement of the Scheme Company and the holder for the time being of the Scheme Shares (and, failing such agreement, who is nominated by the Chair for the time being of the Civil Litigation Committee of the Law Society) that this approach to apportioning liability in respect of Scheme Claims relating to Non-divisible Diseases is not consistent with current law, following which the Scheme Companies shall operate this clause to reflect the approach to apportioning liability in respect of such claims which such barrister may advise is consistent with current law. 2.8 Scheme Guarantee Interest No Scheme Guarantee Interest shall be payable under any circumstances by any Scheme Company and no Scheme Creditor shall take any Prohibited Proceedings against any Scheme Company or its Property for the purpose of enforcing payment of any Scheme Guarantee Interest Clause shall apply, mutatis mutandis, to all claims regarding Scheme Guarantee Interest. 2.9 CCS and the Scheme Guarantee CCS shall, in each case subject to and on the terms of the Scheme Guarantee, make payment of: (a) all Established Scheme Liabilities of a Scheme Company save to the extent that (i) monies are paid to the Scheme Company and held on trust for the Scheme Creditor pursuant to clause and/or (ii) such Established Scheme Liabilities are otherwise paid or discharged, and in any event less the amount of any claim that the Scheme Creditor has against any person who issued to the Scheme Company a Relevant Insurance Policy that has transferred to and vested in the Scheme Creditor by virtue of the 1930 Act; and (b) Scheme Guarantee Interest No Scheme Creditor shall take any Prohibited Proceedings against CCS or its Property for the purpose of enforcing payment of any liability in respect of or referable to a Scheme Claim, save to the extent that such liability is a debt then due and payable on the terms of the Scheme Guarantee and then only to the extent of the then current Payment Percentage If any Scheme Creditor takes any such action as is prohibited by clause he shall be treated as having received, on account of his Scheme Claim, an advance payment equal to the amount or gross value of any money, Property, benefit or advantage obtained by him as the result of such action. For this purpose, the gross value of any such money, Property, benefit or advantage shall be such amount as is determined by CCS in its reasonable opinion and, without limitation, may include such amount as CCS may reasonably consider to be appropriate by way of interest or costs, charges or expenses incurred by CCS as a consequence thereof. 213

214 PART 3 - ANCILLARY AGREEMENTS AND TRUST DEED 3.1 The Scheme Creditors hereby ratify and approve the entry into and execution by each Scheme Company of each of the Ancillary Agreements (or each of the Ancillary Agreements to which the Scheme Company is a party, as appropriate) and performance by each Scheme Company of its obligations under such Ancillary Agreements, including under such Ancillary Agreements as they may be varied or amended, in accordance with their terms, from time to time. 3.2 Each of the Scheme Companies shall perform its obligations under the Ancillary Agreements to which it is a party, as such agreements may be varied or amended, from time to time, in accordance with their terms. 3.3 The Scheme Creditors hereby ratify and approve entry into and execution by each of PLC and CCS of the Trust Deed and performance by each of PLC and CCS of their respective obligations under the Trust Deed, including under the Trust Deed as it may be varied or amended, in accordance with its terms, from time to time. 3.4 Each of PLC and CCS shall perform its obligations under the Trust Deed as it may be varied or amended from time to time, in accordance with its terms. PART 4 - SCHEME CLAIMS IN RESPECT OF NON-DIVISIBLE DISEASES The Scheme Creditors hereby ratify and approve the policy of each Scheme Company to apportion its Established Scheme Liabilities in respect of Scheme Claims relating to Non-divisible Diseases with any person or persons who issued to it a Relevant Insurance Policy in a manner consistent with the approach set out in the document published by the Association of British Insurers in October 2003 titled Guidelines for Apportioning and Handling Employers Liability Mesothelioma Claims, until such time (if any) that any such Scheme Company determines to apportion such Established Scheme Liabilities in any other manner. PART 5 - PAYMENT OF CERTAIN SCHEME CLAIMS CCS shall, not later than the day being 20 Business Days after the day on which this Scheme becomes effective in relation to each of the Scheme Companies in accordance with clause 8.3 below, make payment of the Established Scheme Liabilities which were on the Effective Date Established Scheme Claims. PART 6 - ASSIGNMENT OF SCHEME CLAIMS 6.1 Subject to clause 6.2 and the next-following sentence of this clause 6.1, neither CCS nor any Scheme Company shall be obliged to recognise any assignment or transfer of a Scheme Claim after the Record Date for the purposes of determining entitlements under the Scheme. Where CCS and the relevant Scheme Company or Scheme Companies have received from the relevant parties notice in writing of such assignment or transfer, they shall, subject only to the production of such other evidence as they may reasonably require and to any other terms and conditions which they may reasonably consider necessary or desirable, agree to recognise such assignment or transfer for the purposes of determining entitlements under the Scheme (such agreement not to be unreasonably delayed). Any assignee or transferee of a Scheme Claim so recognised shall be bound by the terms of this Scheme and for the purposes of this Scheme shall be a Scheme Creditor. 6.2 If a Scheme Claim shall be or be deemed to be assigned or transferred by a Scheme Creditor to the FSCS, the Scheme Claim (or so much of the Scheme Claim that has been or has been deemed to have been assigned or transferred to the FSCS) shall cease for all purposes to be subject to this Scheme. 214

215 PART 7 - DURATION OF THE SCHEME 7.1 If no Scheme Claim has become an Established Scheme Claim for a period of three years then the Scheme shall, subject to clauses 7.2 to 7.6, terminate. 7.2 The Scheme shall terminate in accordance with clause 7.1 provided that upon such date: no proceedings in respect of any Scheme Claim have been commenced against a Scheme Company and no Scheme Claim has been otherwise threatened in writing against or notified in writing to a Scheme Company since the date upon which the last Scheme Claim to become an Established Scheme Claim became an Established Scheme Claim, save for any Scheme Claim which has been withdrawn; and no amounts are payable, whether then due for payment or not, by CCS under the Scheme Guarantee. 7.3 Where this Scheme would have terminated in accordance with clause 7.1 but for the operation of clause 7.2.1, the Scheme shall terminate upon the last of the Scheme Claims in respect of which proceedings had been commenced or threatened in writing against or notified in writing to a Scheme Company being withdrawn (or, if any such Scheme Claim becomes an Established Scheme Claim, in accordance with clause 7.1), provided that upon such date (i) at least three years have expired since the date upon which the last Scheme Claim to become an Established Scheme Claim became an Established Scheme Claim and (ii) neither of clauses or apply. 7.4 Where this Scheme would have terminated in accordance with clause 7.1 but for the operation of clause 7.2.2, the Scheme shall terminate upon the date that no amounts remain payable, whether then due for payment or not, by CCS under the Scheme Guarantee provided that upon such date (i) at least three years have expired since the date upon which the last Scheme Claim to become an Established Scheme Claim became an Established Scheme Claim and (ii) clause does not apply. 7.5 For the purposes of this Part 7, a Scheme Claim shall be deemed to be withdrawn where a period of 12 months or more has expired since the Scheme Company or CCS received any notice or other written communication from or on behalf of the Scheme Creditor concerning the Scheme Claim and either: following the expiry of such period, the Scheme Company has sent a written notice to the Scheme Creditor notifying the Scheme Creditor of the Scheme Company s intention to deem such Scheme Claim to be withdrawn for the purposes of this clause 7 and either: (a) (b) the Scheme Creditor (or his legal adviser on his behalf) has confirmed to the Scheme Company in writing that the Scheme Claim has been withdrawn; or by the date which is 3 months after the date that such written notice was sent by the Scheme Company no written response to the Scheme Company s notice has been received from either the Scheme Creditor (or his legal adviser on his behalf); or the Scheme Company has received advice from a barrister of at least 15 years calling who is selected with the agreement of the Scheme Company and the holder for the time being of the Scheme Shares (and, failing such agreement, who is nominated by the Chair for the time being of the Civil Litigation Committee of the Law Society) that it is reasonable for the directors of the Scheme Company to consider that the Scheme Creditor is time-barred from bringing or prosecuting his Scheme Claim. 7.6 It is a condition of this Scheme that it shall not terminate unless and until it terminates in relation to each Scheme Company which is for the time being bound by this Scheme. 7.7 For the avoidance of doubt this Scheme shall not terminate upon all or any of the Scheme Companies being placed into a voluntary arrangement, administration, receivership or liquidation (or any analogous procedure that may be introduced in the future). 215

216 PART 8 - GENERAL SCHEME PROVISIONS 8.1 Notices Any notice to be given to a Scheme Company or CCS under or in relation to this Scheme shall be given in writing and shall be deemed to have been duly given if it is delivered by hand or sent by pre-paid first class post, and by air mail where it is addressed to a different country from that in which it is posted, to the Scheme Company or CCS at its registered address for the time being. The registered address of each Scheme Company and CCS on the Record Date is Cape House, 3 Red Hall Avenue, Paragon Business Village, Wakefield, West Yorkshire WF1 2UL Any notice to be given to a Scheme Creditor under or in relation to the Scheme shall: (a) in the case of a Scheme Creditor who has commenced proceedings in respect of a Scheme Claim (or who has otherwise notified in writing a Scheme Claim to or threatened in writing a Scheme Claim against any Scheme Company) be given in writing and shall be deemed to have been duly given if it is delivered by hand or sent by pre-paid first class post, and by air mail where it is addressed to a different country from that in which it is posted, to the Scheme Creditor at the last known address of such Scheme Creditor (which may, at the absolute discretion of the Scheme Company, be deemed to be the last known address of any person who the Scheme Creditor advised the Scheme Company was his legal adviser); and (b) in the case of a Scheme Creditor other than a Scheme Creditor to whom clause 8.1.2(a) applies, be given by way of an advertisement to appear in not less than two national newspapers with circulation in each of England and Wales, Scotland and Northern Ireland Any notice posted in accordance with clause or 8.1.2(a) shall be deemed to be given on the day on which it is delivered (or at the start of the next Business Day if such day is not a Business Day) (if by hand), at the start of the second Business Day following the date on which it is posted (if by first class mail) and at the start of the seventh Business Day following the date on which it is posted (if by airmail). Any notice published in accordance with clause 8.1.2(b) shall be deemed to be given on the day on which it is published. 8.2 Governing law and jurisdiction The Scheme shall be governed by, and construed in accordance with, English law and the Scheme Companies, CCS and the Scheme Creditors hereby agree that the Court shall have exclusive jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute which may arise out of the Explanatory Statement or any provisions of the Scheme, or out of any action taken or omitted to be taken under the Scheme or in connection with the administration of the Scheme, and, for such purposes, the Scheme Companies, CCS and the Scheme Creditors irrevocably submit to the jurisdiction of the Court. 8.3 Effective Date Subject to clause 8.5 below, this Scheme shall become effective as soon as office copies of the Court Orders sanctioning this Scheme in relation to each of the Scheme Companies so as to be binding on each of the Scheme Companies and on each class of its Scheme Creditors shall have been delivered to the Registrar of Companies for registration. 8.4 Modification In the event that either:- (a) (b) at either meeting of the Scheme Creditors of any Scheme Company whose name is referred to in Part 3 of Schedule 1 hereto the resolution of the creditors to approve the Scheme shall not be passed by the statutory majority prescribed by section 425 of the Companies Act; or in relation to any such Scheme Company the Court does not sanction the Scheme so as to be binding on that Scheme Company and each class of its Scheme Creditors, 216

217 the Scheme may at the option of PLC and subject to the approval of the Court be modified so as to exclude that Scheme Company from the Scheme and from the requirements of clause 8.3 of the Scheme in relation to that Scheme Company PLC may, subject to clause 8.4.3, consent on behalf of all concerned to any modification of or addition to the Scheme or to any condition which the Court may think fit to approve or impose and, without prejudice to the generality of the foregoing, the Scheme may become operative in a modified form notwithstanding that it may not be binding in relation to any one or more of the Scheme Companies whose names are referred to in Part 3 of Schedule 1 hereto PLC may not consent to any modification of the Scheme that would exclude from the Scheme any Scheme Company whose name is set out in Part 2 of Schedule 1 hereto. 8.5 Time Limit Unless this Scheme shall have become effective on or before 30 June 2006, or such later date, if any, as the Court may allow, this Scheme shall never become effective. Dated 15 March

218 SCHEDULE 1 PART 1 Name Claim Form No. (2005) Cape Public Limited Company 3803 Cape Industrial Services Limited 4838 Cape East Limited 4781 Altitude Scaffolding Limited 4823 Capasco Limited 4771 Cape Building Products Limited 4836 Cape Contracts International Limited 4784 Cape Calsil Systems Limited 4839 Cape Durasteel Limited 4804 Cape Industries Limited 4831 Cape Insulation Limited 4835 Cape Specialist Coatings Limited 4782 Investable Limited 4832 Kennedy s Scaffolding Limited 4803 Predart Limited 4780 Somewatch Limited 4779 Somewin Limited 4820 Winfield Insulation Services Limited 4826 Cape Fire Protection Products Limited 4773 HPC Coatings Limited 4785 Cape Painting Contractors Limited 4775 Cape Environmental Services Limited 4776 TAP Ceilings Limited 4777 Cape Mechanical Insulation Limited 4801 Cape Calsil Limited 4774 PART 2 Cape Public Limited Company Cape Industrial Services Limited Somewatch Limited Predart Limited PART 3 Each of the Scheme Companies whose name is set out at Part 1 of this Schedule 1 save for those Scheme Companies whose name is set out at Part 2 of this Schedule 1. PART 4 Boltex Limited Cape Boards Limited Cape Claddings Limited Cape Darlington Limited Cape Distribution Limited Cape Distribution (Holdings) Limited Cape Friction International Limited Cape Hire Limited 218

219 Cape Industrial Products Limited Cape Insulation Products Limited Cape Industrial Services (Scotland) Limited Cape Offshore Services Limited Cape Universal Claddings Limited Hunting Painting Contractors (Marine) Limited Hunting Painting Contractors (Midlands) Limited Hunting Painting Contractors (Northern) Limited Hunting Painting Contractors (Wales) Limited Marinite Limited Nodit Limited Plumefern Limited Somesystem Limited Teubfin Limited Torpex Limited 219

220 SCHEDULE 2 FORM OF RELEASE NOTICE The Company Secretary [Name of Scheme Company] Cape House 3 Red Hall Avenue Paragon Business Village Wakefield WF1 2UL The Company Secretary Cape Claims Services Limited Cape House 3 Red Hall Avenue Paragon Business Village Wakefield WF1 2UL [Date] Dear Sirs Scheme of Arrangement dated 15 March 2006 (the Scheme ) I write with regard to the Scheme. Capitalised terms used in this letter shall bear their meanings as defined in the Scheme. I also write with regard to my Scheme Claim which became an Established Scheme Claim on [date]. [Insert details regarding the Scheme Claim to enable the Scheme Company and CCS to identify the claim e.g. name of claimant, claim number, claimant s solicitors, nature of asbestos condition, amount at which claim established etc.] [Either] The Payment Percentage set by CCS under the Scheme Guarantee is at the date of this letter [insert percentage, being 50 per cent. or lower] per cent. [or] A period of 12 months or more has expired following the date on which my Scheme Claim became an Established Scheme Claim and at the date of this notice I have not received full payment of my Scheme Claim. I hereby serve you with notice pursuant to clause 2.5.2(b) [(i)/(ii)] of the Scheme of my Release. Please confirm as soon as reasonably practicable (and in any event within 20 Business Days), in accordance with clause of the Scheme, the amount of the Recourse Liability that this Release has become effective with regard to. Yours faithfully... [Name of Scheme Creditor] 220

221 SECTION C: NOTICE OF MEETINGS NOTICE OF MEETINGS OF SCHEME CREDITORS IN THE HIGH COURT OF JUSTICE No (and others) of 2005 CHANCERY DIVISION COMPANIES COURT IN THE MATTER OF THOSE COMPANIES LISTED IN THE SCHEDULE TO THIS NOTICE ( the Scheme Companies ) and IN THE MATTER OF THE COMPANIES ACT 1985 NOTICE IS HEREBY GIVEN that, by an order dated 8 March 2006 made in the High Court of Justice in the matter of the Scheme Companies, separate meetings were ordered to be summoned of Scheme Creditors (as defined in the scheme of arrangement hereinafter mentioned) of each of the Scheme Companies for the purpose of considering and, if thought fit approving (with or without modification) schemes of arrangement proposed to be made between each of the Scheme Companies and the respective Scheme Creditors of each of the Scheme Companies pursuant to section 425 of the Companies Act 1985 ( the Scheme ), namely: i. Scheme Creditors who are or may be Recourse Scheme Creditors (as defined in the Scheme); and ii. Scheme Creditors who are or may be General Scheme Creditors (as defined in the Scheme). The meetings will be held on 16 May 2006 at the Smeaton Vaults room, The Brewery, Chiswell Street, London EC1Y 4SD at the times set out in the schedule to this notice next to the names of each of the Scheme Companies or if later five minutes after such time as the immediately preceding session or meeting shall have finished or been adjourned. Prior to the commencement of the meetings, between a.m. and a.m. there will be a meeting to which all Scheme Creditors are invited at which there will be a general question and answer session in relation to the Scheme. If this session extends beyond a.m. the first meeting will not take place until 15 minutes after the session has ended. Voting forms for use at the meetings are enclosed with this document. Scheme Creditors may attend and vote at such of the meetings for which they are eligible, either in person or by proxy and Scheme Creditors are, whether or not they intend to be present in person, requested to appoint a proxy and to complete the appropriate voting form(s) and return it/them to the Scheme Companies, as soon as possible, and in any event so that the voting forms are received by 5.00 p.m. (London time) on 12 May 2006, to Freepost RLUH-CXLY-BAYS, Cape, PO Box 99, Sudbury CO10 6SN or by fax addressed to the Company Secretary on fax number although if not so returned, voting forms may be handed in on the day of the meetings at the place fixed for them prior to the relevant meeting s commencement. Completion of a voting form in which a person is appointed as a Scheme Creditor s proxy will not prevent a Scheme Creditor from attending and voting at the meeting, or at any adjournment thereof, in person. Each Scheme Creditor or his proxy will be required to register his attendance at such meetings as he is entitled to attend prior to its or their commencement. The Scheme is proposed between each of the Scheme Companies and their respective Scheme Creditors (being creditors in respect of any Scheme Claim (as defined in the Scheme)). A copy of the scheme of arrangement and a copy of the statement required pursuant to section 426 of the Companies Act 1985 are incorporated in the document of which this notice forms a part. By the order, the High Court of Justice has appointed Martin Keith May or failing him, John Arthur Pool or failing him, Benjamin Warwick Whitworth to act as chairmen of the meetings and has directed the chairman of each meeting to report the results of the meetings to the Court. The schemes of arrangement for each of the Scheme Companies will be subject to the subsequent sanction of the High Court of Justice. Dated 15 March 2006 Travers Smith 10 Snow Hill London EC1A 2AL Solicitors to the Scheme Companies 221

222 SCHEDULE THE SCHEME COMPANIES Claim Registered Form No. Class of Time of Company Name No. (2005) Scheme Creditors Meeting Cape Public Limited Company Recourse Scheme Creditors a.m. General Scheme Creditors a.m. Cape Industrial Services Recourse Scheme Creditors a.m. Limited General Scheme Creditors a.m. Predart Limited Recourse Scheme Creditors a.m. General Scheme Creditors a.m. Somewatch Limited Recourse Scheme Creditors p.m. General Scheme Creditors p.m. Cape East Limited Recourse Scheme Creditors p.m. General Scheme Creditors p.m. Altitude Scaffolding Limited Recourse Scheme Creditors p.m. General Scheme Creditors p.m. Capasco Limited Recourse Scheme Creditors p.m. General Scheme Creditors p.m. Cape Building Products Limited Recourse Scheme Creditors p.m. General Scheme Creditors p.m. Cape Calsil Systems Limited Recourse Scheme Creditors p.m. General Scheme Creditors p.m. Cape Contracts International Recourse Scheme Creditors 1.00 p.m. Limited General Scheme Creditors 1.05 p.m. Cape Durasteel Limited Recourse Scheme Creditors 1.10 p.m. General Scheme Creditors 1.15 p.m. Cape Industries Limited Recourse Scheme Creditors 1.20 p.m. General Scheme Creditors 1.25 p.m. Cape Insulation Limited Recourse Scheme Creditors 1.30 p.m. General Scheme Creditors 1.35 p.m. Cape Mechanical Insulation Recourse Scheme Creditors 1.40 p.m. Limited General Scheme Creditors 1.45 p.m. Cape Specialist Coatings Recourse Scheme Creditors 1.50 p.m. Limited General Scheme Creditors 1.55 p.m. Investable Limited Recourse Scheme Creditors 2.00 p.m. General Scheme Creditors 2.05 p.m. Kennedy s Scaffolding Limited Recourse Scheme Creditors 2.10 p.m. General Scheme Creditors 2.15 p.m. Somewin Limited Recourse Scheme Creditors 2.20 p.m. General Scheme Creditors 2.25 p.m. Winfield Insulation Services Recourse Scheme Creditors 2.30 p.m. Limited General Scheme Creditors 2.35 p.m. Cape Fire Protection Products Recourse Scheme Creditors 2.40 p.m. Limited General Scheme Creditors 2.45 p.m. 222

223 Claim Registered Form No. Class of Time of Company Name No. (2005) Scheme Creditors Meeting HPC Coatings Limited Recourse Scheme Creditors 2.50 p.m. General Scheme Creditors 2.55 p.m. TAP Ceilings Limited Recourse Scheme Creditors 3.00 p.m. General Scheme Creditors 3.05 p.m. Cape Painting Contractors Recourse Scheme Creditors 3.10 p.m. Limited General Scheme Creditors 3.15 p.m. Cape Calsil Limited Recourse Scheme Creditors 3.20 p.m. General Scheme Creditors 3.25 p.m. Cape Environmental Services Recourse Scheme Creditors 3.30 p.m. Limited General Scheme Creditors 3.35 p.m. 223

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