17 June 2016

Joint Liquidators’progress report

Manches LLP (inliquidation)

For the period 22 April2015 to 21 April 2016

David Baxendale and ZeIfHussain have been appointed Joint Liquidators ofManches LLP. David Baxendale and ZeifHussain arelicensed in the United Kingdom to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales. TheJoint Liquidators are bound by the Insolvency Code ofEthics which can befotmd at:https://wzvzv.pov.uk/got’ernment/publications/insotvencu-yractiHoner-code-of-ethics

The Joint Liquidators are Data Controllers ofpersonal data as defined by the Data Protection Act iqg8. fricewaterhouseCoopers LLPwill act as Data Processor an their instructions. Personal data will be kept secure and processed onlyfor matters relating to theliquidation

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Definitions used in this report

Definition used

the LLP

the Joint Liquidators/weDavid Baxendale and Zeif Hussain of PricewaterhouseCoopers LLP

‘our

ICAEW Institute of Chartered Accountants in England and Wales

Insolvency Rules 1986

Insolvency Act 1986

Statement of Insolvency Practice (issued by regulatory authorities, setting outprinciples and key compliance standards with which insolvency practitioners arerequired to comply)

Lloyds Banking Group

Generally, creditors with claims for:;. unpaid wages for the whole or any part of the period of four months before 14

October 2013;

2. accrued holiday pay for any period before 14 October 2013; and3. unpaid pension contributions in certain circumstances.

Creditors who are neither secured nor preferential

The amotint set aside for unsecured creditors from floating charge funds inaccordance with section 176A 1A86 and the Insolvency Act 1986 (Prescribed Part)Order 2003

HM Revenue and Customs

Manches Services Limited (in liquidation)

Department of Business Innovation and Skills

Solicitor Regulatory Authority

Conditional Fee Arrangement

Pennington Manches LLP

Joint Liquidators’ progress reportManches LLP (in liquidation)

Term

Manches LIP (in liquidation)

the Rules

the Act / 1A86

SIP

the Secured Lender

Preferential creditors

Unsecured creditors

Prescribed Part

HMRC

MSL

DBIS

SRA

CFA

Purchaser

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Table ofcontents

1. Introduction 4

1.1. Why we’re sending you this report 4

1.2. Appointment of the Administrators 4

1.3. Estimated dividend prospects 4

2. Progress made during the period 5

2.1. Asset realisations 5

2.2. Other matters 5

2.3. Directors’ conduct 6

3. Outcome for creditors 7

3.1. Secured creditors 7

3.2. Preferential creditors 7

3.3. Unsecured creditors 7

4. Joint Liquidators’ fees and other financial information 9

4.1. Our fees 9

4.2. Our disbursements 9

4.3. Creditors’ rights 9

4.4. Receipts and payments account 9

4.5. Statement of expenses 9

Appendix A. - Statutory and other information 10

Appendix B. - Receipts and payments account for the period 22 April 2015 to 21 April 2016 11

Appendix C. - Details of our remuneration and disbursements and other professional costs 12

Appendix D. - Statement of expenses for the period 22 April 2015 to 21 April 2016 21

Appendix E. - Notice of intended dividend 22

Appendix F. - Statement of claim form 23

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1. Introduction

1.1. Why we’re sending you this report

This is the Joint Liquidator’s first progress report to members and creditors.

This report provides a summary of:

• The steps taken during the first year of the liquidation;• Outstanding matters; and• A provisional estimate of the outcome of the liquidation for unsecured creditors.

By law, we have to give you certain statutory information, this is included at Appendix A.

1.2. Appointment ofthe Administrators

On 14 October 2013, David Baxendale, Zelf Hussain and Stuart David Maddison of PricewaterhouseCoopersLLP were appointed Joint Administrators of the LLP. The administration ended on 22 April 2015 when theLLP moved from administration to Creditors’ Voluntary Liquidation. The Joint Liquidators were appointedthat day and Stuart David Maddison obtained his release as Joint Administrator.

1.3. Estimated dividendprospects

Joint Administrators’ FinalProgress report: 12.0%

N/A

*please note this guidance on dividends is only an indication and should not be used as the main basis of anybad debt provision or debt trading.

Joint Liquidators’ progress reportManches LLP (in liquidation)

For unsecured creditors:*

Recovery

This report: 6.48 %

Forecast Timing

3 months

4

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2. Progress made during the period

2.1. Asset realisations

Transfer of funds from administrationFollowing the move from administration, the balance of funds held totalling £ 1,53 ik were transferred to theliquidation. This amount included funds due to third parties of £i.8k which is shown separately on the receiptsand payments account at Appendix B.

VAT Bad Debt ReliefFollowing the Joint Liquidators’ submission of a VAT bad debt relief claim, in respect of services provided byLLP prior to the administration which remained unpaid, a refund of £160,953 was received.

Rates refundsThe former Joint Administrators had instructed specialist agents to pursue appeals of the rateable valuesapplied to the LLP’s office premises. Recoveries of £3o.gk were received following the move to liquidation. Nofurther recoveries are anticipated.

Book debtsAs reported in the Joint Administrators’ final progress report certain debts were assigned to the Purchaser.During the liquidation period non-assigned debts totaling £2.9k were recovered. No further recoveries areanticipated.

Under terms agreed with the Purchaser o% of these recoveries are to be made available to settle the equitymembers’ personal obligations and personal guarantees, which will result in the net balance of £1.45k beingretained by the liquidation.

CFAThe former Joint Administrators assigned any right, title and interest in the CFAs to the Purchaser, whereby thePurchaser would recover any costs incurred by the LLP up to the date of assignment. From the recoveriesachieved by the Purchaser, a further £17k has been received by the estate shortly following the period of thisreport. As such this does not appear in the receipts and payments account at Appendix B. No furtherrecoveries are anticipated.

As with the book debts, 50% of the recoveries are made available to settle the equity members’ personalobligations and personal guarantees, which will result in the net balance of £8.5k being retained by theliquidation.

2.2. Other matters

RegulatoryJonathan Jefferies of Pinsent Masons LLP acted as a Solicitor Manager during the administration period. MrJefferies has continued with this role during the liquidation. The Solicitor Manager role was a specificrequirement of the SRA to ensure that all LLP client matters and monies were handled according to SRA rules.

The Solicitor Manager is currently in the process of finalising his report with a view to stepping down shortly.

Former Joint Administrators’ remuneration and expensesWith the approval of the Secured Lender, further payments were made in relation to the former JointAdministrators’ remuneration of £176,547 and disbursements of £2,409 in settlement of the outstanding costsincurred by the Joint Administrators. Creditors should refer to the Joint Administrators’ final progress report,should they require additional information regarding the costs incurred by the former Joint Administrators.

Joint Liquidators’ progress report

Manches LLP (in liquidation) 5

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2.3. Directors’ conduct

One of our duties has been to look at the LLP’s partners’ actions before it went into liquidation and duringadministration and consider any points raised by creditors. We have finished our work on this and havecomplied with our obligation to submit a return or report to DBIS.

Joint Liquidators’ progress reportManches LLP (in liquidation) 6

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3. Outcomefor creditors

3.1. Secured creditors

The LLP’s debt to the Secured Lender as at the date of administration was and was secured by adebenture dated 19 January 2005. The security gave the Secured Lender fixed and floating charges over all theLLP’s assets.

During the administration period distributions totaling £1,i$5k were made to the Secured Lender under theterms of its charges. Following the move to liquidation a further distribution of £8ook has been made, bringingtotal distributions to the Secured Lender to £1,985k.

Based on the information currently available, it is anticipated that following the Prescribed Part distributionand settlement of all remaining costs and expenses of the liquidation, a final distribution of c.15ok will bemade to the Secured Lender. Whilst this estimate is subject to the costs and expenses of the liquidation, it isevident that the Secured Lender will suffer a shortfall under its security.

3.2. Preferential creditors

As there were no employees in the LLP, there are no preferential creditors.

3.3. Unsecured creditors

The Prescribed Part is a fund that has to be made available for unsecured creditors where the floating chargewas created on or after i September 2003. It’s paid out of “net property”. Net property is floating chargerealisations after costs, and after paying or setting aside enough to pay preferential creditors in full (as therewere no preferential creditors in the LLP, this does not apply)..

A Prescribed Part applies in this case as the Secured Lenders floating charge was created after i September2003.

The amount of the Prescribed Part is:— 5o% of net property up to £io,000;— 20% of net property above £10,000; and— Subject to a maximum of £6oo,ooo.

Based on the information available we currently anticipate that the value of the Prescribed Part will be £539k.However, the final amount will be subject to the remaining costs and expenses of the liquidation.

Whilst the precise level of the dividend is uncertain, based on claims received to date of c.8,o21k (being claimsreceived of £3,26;k plus potential further claims of c.L4,76ok), it is estimated that the dividend will beapproximately 6.4$ pence in the £.

The estimated dividend is lower than the estimate of 12 pence in the £ mentioned in the Joint Administratorsfinal progress report, we now expect total claims against the LLP to be significantly higher than the claims valueof £4,212k indicated in the members’ Statement of Affairs.

Please note, the estimated dividend is subject to finalising both the unsecured claims and the costs andexpenses of the liquidation. As such it should not be used as the main basis of any bad debt provision or debttrading.

Other than by virtue of the Prescribed Part, as detailed above, there will be no further dividends for unsecuredcreditors based on what we know currently.

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Manches LLP (in liquidation) 7

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Formal notice of the Joint Liquidators’ intention to declare the dividend is attached at Appendix E.

In the event you have not already submitted a formal claim in the liquidation, a statement of claimform can be found at Appendix F.

Should you wish to submit a claim, the last date for proving claims is 29 July 2016. Any creditor who has notproved his debt by the last date for proving will be excluded from the dividend.

Please note, if you have already proved your debt, there is no need to resubmit this to us unless requested to doso. Please also note that the notice of intended dividend is for the LLP only. A separate notice of intendeddividend will be issued to the creditors of MSL.

Joint Liquidators’ progress reportManches LLP (in liquidation) $

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4. Joint Liquidators’fees and otherfinancial information

4.1. Ourfees

During the administration, the Secured Lender passed a resolution fixing the Joint Administrators’ fees byreference to time properly given by the Joint Administrators and their staff in dealing with the administration.

The fee basis agreed in the administration will continue to apply in the liquidation. This means that our fees asJoint Liquidators will be calculated by reference to the time properly given by the Joint Liquidators and theirstaff.

from 22 April 2015 to 21 April 2016 we have incurred time costs of £192,486 for 580 hours work, which worksout at an average hourly rate of £332.

We include details of the time costs incurred from the date of our appointment as Joint Liquidators on 22 April2015 to 21 April 2016, by work type, at Appendix C.

Of the approved fees in the liquidation we have drawn £40,000 as detailed on the receipts and paymentsaccount at Appendix B. Based on the information available there will be insufficient funds to pay our costs infull.

further details of our fees are included at Appendix C

4.2. Our disbursements

We’ve incurred disbursements of £133 during the period 22 April 2015 to 21 April 2016, which have been drawnin full. further details are provided at Appendix C.

4.3. Creditors’ rights

Creditors have the right to ask for more information within 21 days of receiving this report as set out in Rule4.49E of the Rules. Any request must be in writing. Creditors can also challenge the Liquidators’ fees andexpenses within eight weeks of receiving this report as set out in Rule 4.131 of the Rules. This information canalso be found in the guide to fees at:

http://www.icaew.com/ /media/corporate/files/technical/insolvency/creditors%20guides/creditors% 2oguide%2oLiquidators%2ofees%2oflnal.ashx

You can ask for a copy free of charge by calling Carly Barrington on +44 (0)207 213 3387.

4.4. Receipts and payments account

A receipts and payments account for the period 22 April 2015 to 21 April 2016 is provided at Appendix B.

4.5. Statement ofexpenses

A statement of expenses for the period 22 April 2015 to 21 April 2016 is provided at Appendix D.

This statement doesn’t include any tax liabilities that may be payable for the period of this report as this willdepend on the position at the end of the accounting period.

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Mauches LLP (in liquidation) 9

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Appendix A. - Statutory and otherinformation

Name of the LLP: Manches LLP

Registered number: OC3o5895

Registered office: 7 More London Riverside, London, SE1 2RT

Former company names: N/A

Trading names: Manches

Names of Joint Liquidators and their David Baxendale and Zeif Hussain of PricewaterhouseCoopers LLP,addresses: 7 More London Riverside, London, SE; 2RT

Date of Joint Liquidators’ 22 April 2015

appointment:

Details of change in Joint N/ALiquidators’:

Details of prior administration: 14 October 2013

Estimated dividend for unsecured Based on current information the dividend to unsecured creditors iscreditors: likely to be 6.48 pence in the £.

Estimated values of the LLP’s net Net Property and Prescribed Part currently estimated to be £2,684kproperty and prescribed part: and £539k respectively.

Whether and why the Liquidators Not applicable.intend to apply to court under Section176A(5) 1A86:

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Manches LLP (in liquidation) 10

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Appendix B. - Receipts andpaymentsaccountfor the period 22 April 2015 to21 April 2016

Asset subject to a floating charge

Receipts £Transfer from administration 1,529,729

Transfer from administration - Third party funds 1,768

VAT Refunds - administration period 45,796Third party funds 4,297

Rates refunds 30,912

VAT bad debt relief claim 160,953

Book debts 2,933

Sundry debts and refunds 3,856Bank interest 2,903

VAT Refunds - liquidation period 45,482

Total 1,828,629

PaymentsJoint Admistrators’ fees 176,547

Joint Administrators’ disbursements 2,409

Joint Liquidators’ fees 40,000

Joint Liquidators’ disbursements 133

Legal fees and expenses 6,230

Solicitor Managers’ fees and expenses 1,935

Debt collection fee 93Professional disbursements 198

Statutory advertising 77Third party funds 4,489

VAT 45,475Total 277,586

DistributionsSecured Lender - Lloyds Banking Group 800,ooo

Total 8oo,000

Balance in hand 751,043

Notesi) No comparison with the Statement ofAffairs (SofA) figures is shown, as the SofA was produced by thementhers of the LLP at commencement of the administration and the figures are no longer comparable withthe receipts and payments of the liquidation period.

2) To facilitate the request to HMRC for tax clearance, the balance of funds held are now in non-interestbearing accounts.

Joint Liquidators’ progress reportManches LLP (in liquidation) 11

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Appendix C. - Details ofourremuneration and disbursements andother professional costs

Background

This section sets out the process that was established for setting and monitoring the Joint Liquidators’remuneration.

The basis of our fees and certain disbursements was agreed in the prior administration by resolution of theSecured Lender and has transferred across to the liquidation in accordance with the Rules.

The fee basis agreed in the administration will continue to apply in the liquidation. This means that our fees asJoint Liquidators will be calculated by reference to the time properly given by the Joint Liquidators and theirstaff in dealing with the liquidation.

The basis of our fees is by reference to time properly given. Details of the amount we have drawn can be foundin Section 4.

Joint Liquidators’ charging policy

The time charged to the liquidation is by reference to the time properly given by our staff and us in attending tomatters arising.

It is our policy to delegate tasks in the liquidation to appropriate members of staff, considering their level ofexperience and any requisite specialist knowledge needed and they are supervised accordingly to maximise thecost effectiveness of the work performed.

Our junior people have carried-out the routine work in the liquidation to keep the costs down. We and oursenior staff have supervised them and have dealt with any complex or significant matters ourselves.

Matters of particular complexity or significance requiring more exceptional responsibility are undertaken bysenior staff or the Joint Liquidators themselves.

Joint Liquidators’ progress reportManches LLP (in liquidation) 12

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Hourly rates

In common with all professional firms, scale rates increase from time to time over the period of theadministration of each insolvency case. PricewaterhouseCoopers LLP, or any successor firm, reserves the rightto change the rates and grade structures. During the period covered by this report, the charge out rates wereincreased on 1 July 2015.

Set out below are the relevant maximum charge-out rates per hour worked for the grades of staff actuallyinvolved on this assignment. All staff who work on this assignment (including cashiers, support and secretarialstaffj charge time directly to the assignment and are included within any analysis of time charged. Time ischarged by reference to actual work carried out on the assignment in six minute units. The minimum timecharged is three minutes (i.e. 0.05 units). There was no allocation of any general costs or overhead costs.

Specialist departments with our firm, such tax, VAT, property and pensions were also used where expert advicewas required. Such specialist rates do vary but the figures below provide an indication of the maximum rate perhour:

Specialist SpecialistMaximum rate Maximum rate maximum rate maximum rateper hour per hourper hour per hour

Grade(1 July 2014 - (r July 2015 - (r July 2014 - (1 July 2015 -

30 June 2015) present) 30 June 2015) present)

(it) () (1) (1)

Partner 795 825 1,130 1,190

Director 695 725 1,040 1,115

Senior Manager 540 550 875 1,110

Manager 460 470 630 665

Senior Associate 380 390 465 490

Associate 240 245 225 240

Support staff 120 123 130 140

Our relationships

We have had no business or personal relationships with the parties who approve our fees or who provideservices to the liquidation where the relationship could give rise to a conflict of interest.

Payments to associates

We have not made any payments to associates in the period covered by this report.

Disbursements for services provided by our firm (Category 2 disbursements)

Expenses are defined in SIP9 as amounts properly payable by us as Joint Liquidators from the estate andincludes our fees, but excludes distributions to creditors. These include disbursements, which are expenses metby and reimbursed to an office holder in connection with an insolvency appointment. They fall into twocategories: Category 1 and Category 2.

Joint Liquidators’ progress reportManches LLP (in liquidation) 18

pwc

Disbursement SIP9 definition

Payments to independent third parties where there is specific expenditure directly referableCategory 1 to the appointment in question.

Costs that are directly referable to the appointment in question but not a payment to anindependent third party. They may include shared or allocated costs that may be incurredby the office holder or their firm, and that can be allocated to the appointment on a proper

Category 2 and reasonable basis.

Our Firm’s disbursement policy allows for all properly incurred expenses to be recharged to the case. We don’tneed approval from creditors to draw Category 1 disbursements as these have all been provided by third parties,but we do need approval to draw Category 2 disbursements as these are for services provided by our Firm. Thepolicies for payment of Category 2 disbursements have been approved as follows:

Photocopying At 12 pence per sheet copied, only charged for circulars to creditors and other bulk copying.

MileaAt a maximum of 71 pence per mile (engine size up to 2,000cc) or 93 pence per mile (engine

ge size over 2,000cc)

Our disbursements in the period 22 April 2015 to 21 April 2016

We have incurred the following disbursements (excluding VAT) in the period 22 April 2015 to 21 April 2016.

Category r: £

Archiving Costs 36

Car Parking Charges 6

Courier 26

Postage 11

Train 54

Total: 133

The statement of expenses at Appendix D show what we have drawn in total in relation to our disbursements.

Other professional advisors we’ve used

A summary of legal firms instructed in the period 22 April 2015 to 21 April 2016 is below:

Name of firm Service provided Reason Basis of fees Amount/organisation selected paid in

period (i)

CMS Cameron Legal advice in respect Industry Time costs and 6,230McKenna LLP of filing the knowledge disbursements

administrationdischarge application

Joint Liquidators’ progress reportManches LLP (in liquidation) 19

pwc

Advising on other

legal mailers as

appropriate

Pinsent Masons LLP Acting as Solicitor Requirement by the Time costs and £1,935

Manager SRA and for disbursements

industry expertise

Our choice were based on the advisers’ experience, the complexity and type of work and the basis of the fee

arrangement. We’re satisfied that the fees charged are reasonable.

Analysis of our time costs by work area from 22 April 2015 to 21 April 2016

Averagehourly

. rateforfees estimate Average Hours Time costs time

hourly incurred incurred 1021 costsCategory ofwork Hours rate to 21 April April 2016 incurred

/hour) 2016 (tIç) 1021April

(Ck) 2016(i/hour)

Accounting and treasury 108 30,332 281 8g 23,665 266

Asset Recovery 97 33,348 344 84 28,701 342

Closure 25 9,569 383 i6 6,289 393

Creditors 171 60,947 356 108 38,886 360

Investigations 40 11,122 278 40 11,122 278

Property (Management) 12 3,212 268 12 3,212 268

Statutory and compliance 205 73,203 357 141 49,467 351

Strategy and planning 47 18,195 387 22 8,588 390

Tax/VAT 88 30,557 347 68 22,556 332

Total hours and fees estimate 793 270,485 341 580 192,486 332

Joint Liquidators’ progress report

Manches LLP (in liquidation) 20

pwc

Appendix D. - Statement ofexpensesfor the period 22 April 2015 to 21 April2016The Rules requires this progress report to include a statement of expenses incurred by the Joint Liquidatorsduring the period of the report, irrespective of whether payment has been made or not. This relates to all costsincurred, and not just the Joint Liquidators’ disbursements. Such a summary of expenses is found below:

Paid in the• Incurredperiod . Estimated Anticipated£ but not Cumulativeunder . future total• paidreview

Joint Administrators’ fees 176,547 - 176,547 - 176,547

Joint Administrators’• 2409 - 2,409 - 2409disbursements

Joint Liquidators’ fees 40,000 152,486 192,486 77,999 270,485

Joint Liquidators’• 133 - 133 200 333disbursements

Legal fees and expenses 6,323 - 6,323 - 6,323

Solicitor Managers’ fees andexpenses

1,935 2,996 4,931 1,505 6,436

Debt collection fee 93 - 93 - 93

Professional disbursements 198 - 198 - 198

Statutory advertising 77 - 77 200 277

Members reserve - - - 10,328 10,328

Total 227,622 155,482 383,104 90,232 473,336

Note — The above amounts are shown net of VAT, which the Joint Liquidators expect to recover in full

The Joint Liquidators incurred and estimated future costs represent our actual and projected timecosts, andmight not represent fees that the Joint Liquidators ultimately decide to charge.

The estimate excludes any potential tax liabilities that may be payable as an expense of the administration indue course because amounts due will depend on the position at the end of the tax accounting period.

Joint Liquidators’ progress report

Manches LLP (in liquidation) 21

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Appendix F. - Notice ofintendeddividend

Manches LLP (in liquidation) (“the LLP”)

To all creditors who have not yet proved their debt

Notice is hereby given pursuant to Rule 11.2 of the Insolvency Rules 1986 that the Joint Liquidators intend todeclare a first and final dividend (by way of the Prescribed Part) to the unsecured creditors of the LLP.

Proofs of debt may be lodge at any point up to (and including) 29 July 2016, the last date for proving claims,however, creditors are requested to lodge their proof of debt at the earliest possible opportunity.

Persons so proving are required, if so requested, to provide such further details or produce such documentationor other evidence as may appear to the Joint Liquidators to be necessary.

The Joint Liquidators will not be obliged to deal with proofs lodged after the last date for proving but they maydo so if they think fit.

The Joint Liquidators intend to make such distribution within the period of two months from the last date forproving claims.

Proofs of debt should be sent to the Joint Liquidators at PricewaterhouseCoopers LLP, 7 More London Riverside,London SE; 2RT marked for the attention of Carly Barrington. Alternatively, you can email a completed proof ofdebt form to carly.barrington@uk.ywc.com

A creditor who has not proved his debt by the last date for proving will be excluded from the dividend.

1LDavid BaxendaleJoint Liquidator

17 June 2016

Joint Liquidators’ progress report

Manches LLP (in liquidation) 22

pwc

Appendix F. - Statement ofclaimform

Manches LLP — In liquidation

Statement of claim form

Name of creditor

2 Address for further correspondence

3 Limited Company Registration Number

or

Proprietors name & home address(to be used only for correspondence should items bereturned by the Royal Mail for the above address)

4 Total amount ofyour claim, including any Value £Added Tax, as at the commencement of theliquidation.

5 Please provide details of any documents thatsubstantiate your claim, including, whereapplicable, details of any resen-ation of title inrespect of goods to which the debt relates.

Please also provide details of the goods andservices provided and, if relevant, attach astatement of account.

6 Give details of whether the whole or any part of Categorythe claim falls within any (and if so which) of thecategories of preferential claims under section386 of, and schedule 6 to, the Insolvency Act1986. Amount (s) claimed as preferential £

7 If you have security for your debt, please providedetails of the type and value of the security andthe date it was given. Please also provide detailsof how you have valued your security.

8 Signature of creditor or person authorised to acton behalf of the creditor

Name in block capitals

Date

Position with or relation to the creditor (e.g.director,_company secretary,_solicitor)

Joint Liquidators’ progress reportManches LLP (in liquidation) 23