Louis Group (IOM) Limited (in liquidation) Report by Michael Simpson and Gordon Wilson Joint Liquidators 13 June 2013

Louis Group (IOM) Limited (in liquidation) Report by Michael Simpson and Gordon Wilson Joint Liquidators 13 June 2013

Contents Page FINANCIAL POSITION 3-4 FIDUCIARY SERVICES 5 2

A. LGIOM FINANCIAL POSITION Below is a summary of the financial situation of LGIOM as at 21 January 2013 (date of liquidation) and 31 May 2013: Assets 21 January 2013 m Assessment at 31 May 2013 m Comment Fixed assets Nil Nil Note 1 Trade debtors Gross 2.4 2.2 Trade debtors (Provision) (1.1) (2.1) Trade debtors (Net) 1.3 0.1 Note 2 Other debtors 0.1 Nil Note 3 Cash at bank 0.3 0.3 LGIOM Services 1.0 Nil Note 4 Other assets 0.1 Nil Note 5 Total Assets 2.8 0.4 Liabilities Subordinated loan from LGSPI 0.5 0.5 Note 6 VAT due on debtors when received 0.3 0.0 Managers/Liquidators fees and 0.4 0.2 associated legal expenses Trade creditors 0.1 0.1 Prepaid income 0.1 Nil Total Liabilities 1.4 0.8 Net Assets/(liabilities) 1.4 (0.4) Contingent liabilities - 19.8 Note 7 Note 1 Fixed Assets There will not be any meaningful recovery of value from the fixed assets owned by LGIOM. Note 2 Trade Debtors Trade debtors comprise amounts due to LGIOM from clients, mainly property syndicate companies. Due to the adverse financial circumstances in the majority of the property companies LGIOM is unlikely to recover much more than around 0.1m of the 2.2m due re outstanding fees for services it has provided to these companies in the past. Since our appointment LGIOM has ceased to provide services to these property syndicate companies which do not have resources to pay for services. We now anticipate that we will be able to recover around 0.1m of the remaining debtor balances, this is approximately 6% of the total gross amount receivable. 3

Also included in the gross trade debtor balance are the following amounts due from other Louis Group entities, recoverability of which is unlikely: Fees owed by Louis Group non property entities Entity 000 LGIE 22 LGSPI 76 BL Holdings Ltd 36 LGE 41 LGSC 323 SLN 42 540 Note 3 Other debtors Other debtors consist of an amount of 76k which is, we understand from documents that we have reviewed, deferred consideration for a property transaction. Our enquiries are ongoing, however, we do not expect to recover a material amount in relation to this asset. Note 4 LGIOM Services Louis Group (IOM) Services Limited (In liquidation) ( LG Services ) was placed into liquidation by resolution of its members on 2 April 2013. Gordon Wilson and Michael Simpson are the appointed liquidators. LGIOM is LG Services main creditor. The majority of LG Services assets relate to debtor balances with entities that are unable to settle their debts. Whilst some recovery is expected, we do not expect any significant recovery from this asset. Note 5 Other assets Other assets are prepayments and unlikely to be realisable for cash. Note 6 Subordinated loan The loan of 0.5m is due to LGSPI which is in liquidation. We have confirmed that LGSPI shows that 0.5m is owed to it by LGIOM and for the purpose of this report we consider it appropriate to attribute face value to this obligation. Note 7 Contingent liabilities The contingent liabilities relate to proof of debts we have received as part of the liquidation process. Please note that these claims are still being reviewed and have not yet been admitted. Claim Group m Property Syndicate Shareholders 5.08 SLN loan note holders 0.81 Staff 0.13 Breach of Fiduciary Duty 10.52 Misrepresentation 2.01 Misselling 1.20 19.75 4

B. LGIOM FIDUCIARY SERVICES Additional staff have been hired to review and commence the transfer process of client structures. Focus is on those third party entities not owned by the Six Companies and not part of the property holding structures. This third party client base comprises 50 entities (some of which have financial exposure to property holding business and/or the Six Companies) as follows: o seven will trusts have been terminated. o one further trust is to be closed and the assets distributed to beneficiaries. o three client companies are going into liquidation for failure to meet payments on their mortgage and no-payments of fees with meetings called in June 2013. o fourteen structures have agreed to be transferred to other licenceholders and we expect these to be completed by the end of June. We have written or are in the process of writing to all other fiduciary clients informing them that they will need to make alternative arrangements due to LGIOM being in liquidation. It is our intention to have LGIOM cease regulated activities as soon as possible. LGIOM provides registered agent services to a number of companies where Alan Louis is a director. In every case fees are in arrears for these companies. Despite demands made, Alan Louis has hitherto refused to deliver this information. LGIOM has recently given eight weeks notice of its intention to resign as registered agent. There are a number of property holding companies affected by this action, the list of which is below: LG Properties Aster Limited LG Properties Persian Limited LG Properties Protea Limited LG Investments Privet Limited Zircon Properties Limited Mayworth Properties Limited Sun Stone Limited LG Properties Ginger Limited LG Properties Lotus Limited LG Properties Chelone Limited LG Properties Alpinia Limited LG Properties Eucharis Limited Emerald Properties Limited 5