www.pwc.co.uk/internacionale

Joint administrators’ progress reportfrom 1 July 2017 to 31 December2017

Internacionale UKLimited

(in administration)

High

Court of Justice, Chancery Division, Manchester16 January 2018 District Registry

Case no. 2236 of 2014

pwc

www.pwcco.ukIintemacionaIe

Contents

Abbreviations and definitions 3

Key messages 4

Progress since we last reported 5

Appendix A: Receipts and payments 7

Appendix B: Expenses 9

Appendix C: Remuneration update ro

Appendix D: Pre-administration costs 15

Appendix E: Other information i6

Internacionale UK Limited PwC • Contents

Abbreviations and definitions

The following table shows the abbreviations and insolvency terms that may be used in this report:

Abbreviation or definition Meaning

Company Internacionale UK Limited — in administration

Administrators Lyn Leon Vardy and Toby Scott Underwood

firm PricewaterhouseCoopers LLP

IRi6 Insolvency (England and Wales) Rules 2016

1A86 Insolvency Act 1986

Sch.Bi 1A86 Schedule Bi to the Insolvency Act 1986

HMRC HM Revenue & Customs

prescribed part The amount set aside for unsecured cEeditors from floating chargefunds in accordance with section 176A 1A86 and the Insolvency Act1986 (Prescribed Part) Order 2003

secured creditors Creditors with security in respect of their debt, in accordance withsection 8 IA$6

preferential creditors Claims for unpaid wages earned in the four months before theinsolvency up to £800, holiday pay and unpaid pension contributionsin certain circumstances

unsecured creditors Creditors who are neither secured nor preferential

the Bank Barclays Bank Plc

3

Key messages

Why we’ve sent you this reportI’m writing to update you on the progress of the administration of the Company in the six months since our lastreport dated 17 July 2017.

You can still view our earlier reports on our website at www.pwc.co.uk/internacionale. Please get in touch withAdam Thompson on 0113 289 4983 or at adam.x.thompson@pwc.com, ifyou need any of the passwords toaccess the reports.

How much creditors may receiveThe following table summarises the possible outcome for creditors*, based on what we currently know.

Total amount paid Previous estimate

Class of creditor (p in £) (p in £)

Preferential creditors too 100

Unsecured creditors 0 0

Please note this guidance on dividends is only an indication and should not be used as the main basis ofany bad debt provision or debt

trading.

We do not think the secured creditor will be fully repaid its lending of £15 million out of its security over theCompany’s assets.

Preferential creditors (mainly employees) totalling £82,885 received a dividend of ioop in the £ in June 2016.

There will be insufficient funds to pay a prescribed part dividend to the Company’s unsecured creditors totalling£47,303,644, due to the expected final level of floating charge costs.

What you need to doThis report is for your information and you don’t need to do anything.

4

Progress since we last reported

We detailed in earlier reports what has been done to realise the Company’s assets, please refer to previousreports available on the website for a detailed breakdown. Progress since our last report is set out below.

Bank interestDuring the period we have received bank interest of £236 into the administration.

Outstanding VAT monies duefrom HMRCDuring the period, as part of a detailed review of the VAT position of the Company, we noted that there arehistoric monies due to the Company from HMRC. We are currently liaising with HMRC in relation to receivingthe monies due to the Company.

Administration extensionThe administration is due to automatically expire on 28 February 2018. We remain in office to allow the Bankto conclude certain mailers in relation to the Company’s affairs. We are currently in discussions with the Bankregarding whether they wish for us to apply to extend the administration further.

Investigations and actionsNothing has come to our attention during the period under review to suggest that we need to do any more workin line with our duties under the Company Directors’ Disqualification Act 1986 and Statement of InsolvencyPractice No.2.

Our receipts andpayments accountWe set out in Appendix A an account of our receipts and paymeuts in the administration from i July 2017 to 31December 2017.

Our expensesWe set out in Appendix B a statement of the expenses we’ve incurred to the date covered by this report and anestimate of our future expenses.

The statement excludes any potential tax liabilities that we may need to pay as an administration expense indue course because amounts due will depend on the position at the end of the tax accounting period.

OurfeesWe set out in Appendix C an update on our remuneration which covers our fees, disbursements and otherrelated matters in this case.

&e-administration costsYou can find in Appendix D information about the approval of the unpaid pre-administratfon costs previouslydetailed in our proposals.

Creditors’ rightsCreditors have the right to ask for more information within 21 days of receiving this report as set out in Rule18.9 IRi6. Any request must be in writing. Creditors can also challenge fees and expenses within eight weeks ofreceiving this report as set out in Rule 18.34. This information can also be found in the guide to fees at:

hftp://wwwJcaew.com/-/media/corporate/files/technfcal/insolvency/creditorsguides/2o17/administration-creditor-fee-guide-6-april-2o;7.ashx?Ia=en

S

You can also get a copy free of charge by telephoning Adam Thompson on 0113 289 4983.

What we stilt need to doWe remain in office to await the resolution of the ongoing matters being dealt with by the Bank. Once these

matters are finalised, we will pay the final costs of the administration and make a final distribution to the Bank.

Next stepsWe expect to send our next report to creditors at the end of the administration or in about six months,

whichever is the sooner.

If you’ve got any questions, please get in touch with Adam Thompson, on 0113 289 4983.

Yours faithfullyFor and on behalf of the Company

Toby UnderwoodJoint administrator

Lyn Leon Vardy and Toby Scott Underwood have been appointed asjoint administrators ofthe Company to manage its affairs, business

and property as its agents without personal tiability. Lyn Leon Vardy and Toby Scott Underwood are licensed toact in the United

Kingdom as insolvency practitioners by the Institute ofCharteredAccountants in England and Woks. Thejoint administrators are

bound by the Insotuency Code ofEthics which can befound at: https://www.gou.uk/gouernment/publications/insotuency-practitioner

code-of-ethics

Thejoint administrators are Data Controllers ofpersonal data as defined by the Data Protection Act zgg8. PricewaterhouseCoopers LLP

will act as Data Processor on their instructions. Personal data will be kept secure and processed onlyfor mattersrelating to the

administration.

6

COST OF REALISATJON / PAYMENTSAgents’fees -1? saleLegal fees - property saleInsurance

BALANCE OF FIXED CHARGE FUNDS

FLOATING CHARGE REALISATIONSBook debtsCash in handFixtures and fittingsInterest received grossLegal settlementsOffice equipmentRefundsRental incomeSundry debtsThird party fundsStockSale of software licencesOffice costs, stationary & postageTrading account balance

COST OF REALISATION / PAYMENTSAgents’feesAgents’ disbursementsBank chargesInsuranceDuress paymentsLegal feeaLegal SettlementsLegal disbursementsMail re-directionOffice holders tees (timecosts basis)Office holders’ expensesStatement of affairs costsMeeting room hireStatutory advertisingStorage costaTaxation

BALANCE OF FLOATING CHARGE FUNDS

VAT Account

Distribution to preferential creditors- IOOp?L June 2016BALANCE HELD IN INTEREST BEARING ACCOUNT

AppendixA: Receipts andpayments

Statement 28 February 2014 tO iJuly 2017 tO Totalofaffairs 30June20l7 3lDeCemberCOl7

FIXED CHARGE REALISATIONSFreehold propertyLeasehold propertyIntellectual property

CE) fE) (E) (E)

200,000

100,000

1,083,457

360,521

40,000

200,000.00

203,906.25

11.ooo.oo

518,906.25

200,000.00

203,906.25

115,000.00

518,906.25

(29,750.00) - (29,750.00)

(2,453.00) (2,453.00)

— (5,595.93) - (5,595.93)(37,798.93) (3,g8.93)

48a,loy.32 - 481,107.32

58,698.04 - 58,698.04216,211.31 - 216,211.31

6,705.17 6,705.17

12.280.76 235.94 12,516.70252.00 252.00

100.00 - 100.00

35,592.75 - 35,592.75

22,188.73 - 22,188.73

14.64 - 14.64

238.34 - 238.34123.63 - r23.63

3,500.00 - 3,500.00

9,430.06 - 9,430.061,212,791.59 - 1,212,791.59

1,578,127.02 235.94 1,578,362.96

(12,164.06) - (12.164.06)

(250.00) - (250.00)

(349.94) (56.76) (406.70)(18,092.69) (2,100.00) (20,192.69)

(20.00) - (20.00)

(144,795.85) - (144,795.85)

(56,630.00) - (56,630.00)

(9,708.35) - (9,708.35)(240.00) - (240.00)

(6oo,ooo.oo) (555.000.00) (1,155,000.00)

(23,576.10) - (23,576.10)

(1,000.00) (i,000.oo)

(io.oo) - (150.00)

(151.64) - (151.64)

(904.59) (904.59)

(15,095.22) - (15,095.22)

(883,12844) (557,156.76) (1,440,285.20)

694,744.85 (556,920.82) 137,824.03

(85,395.49) (iii,ooo.oo) (196,395.49)

(82,885.41) (8i,88.4i)

1,007,825.00 339,904.18 339,904.18

7

28February2os4to lJuly2Ol7tO Total

30 June 2017 31 December 2017

(L) () ()TRADING RECEIFTS

Post appointment trading sales 7,433,67 8.52 - 7,433,678.52

Unallocated sales/store floats 55,408.17 - 55,408.17

7,489,086.69 - 7,489,086.69

TRADING PAYMENT SAdvertising (non-statutory) expenSes (400,00) - (400.00)

Agencystaff (10,067.57) - (10,067.57)

Agents fees (43,485.79) - (43,485.79)

Bank charges (44,202.01) - (44,202.01)

Cleaningandsite clearance (8,254.04) - (8,254.04)

Consultancy fees (221.902.61) - (221,902.61)

Duress payments (84,7 88.09) - (84,7 88.09)

Employee expenses (5,079.85) - (5,079.85)

Employee travel & subsistence (7297 .07) - (7,297.07)

Import duty (1,931.19) - (1,931.19)

Insurance (87,296.26) - (87,296.26)

IT costs (298,136.64) - (298,136.64)

Lease/hire charges (22,034.00) - (22,034.00)

Legal fees (5,959.00) - (5,959.00)

Licenses &trade marks (5,083.20) - (5,083.20)

Motor & travel expenses (249.83) - (249.83)

Netwages (1,591,713.08) - (1,591,713.08)

NIC/PAYE/Other wage deductions (310,140.83) - (310,140.83)

Office costs (1,105.15) (1,105.15)

Postage, stationery & printing (19,996.75) - (19,996.75)

Purchases (853,581.63) - (853,581.63)

P.a tes (1,089,968.90) - (1,089,968.90)

Rent (871,809.93) - (871,809.93)

Repairs & maintenance (2,061 .oo) - (2,061.00)

Sales agent’s comtnission (102,244.68) - (102,244.68)

Security costs (22,867.94) - (22,867.94)

Service charges (169,938.61) - (169,938.61)

Storage coSts (2,426.30) - (2,426.30)

Subcontractors (840.30) - (840.30)

Telephone, fax etc (7,583.49) - (7,583.49)

Transport & carriage (122,27 6.80) . - (122,27 6.80)

Utilities (223,973.17) - (223,973.17)

Waterrates (37,599.39) - (37,599.39)

(6,276,295.10) - (6,276,295.10)

NET TRADING RECEIPT S/(PAYM ENT S) 1,212,791.59 - 1,212,791.59

8

Appendix B: Expenses

The following table provides details of our expenses. Expenses are amounts properly payable by us asadministrators from the estate and includes our fees, but excludes distributions to creditors. The table alsoexcludes any potential tax liabilities that we may need to pay as an administration expense because amountsbecoming due will depend on the position at the end of the tax accounting period.

The table should be read in conjunction with the receipts and payments account at Appendix A, which showsexpenses actually paid during the period and the total paid to date.

Brought forward• Incurred in the . Anticipatedfrom preceding • Cumulative Estimated future• period under review totalperlod*

£ E £ £ £

Administrators’timecosts - 1,759,243.70 23,652.45 1.782,896.15 - 16,500.00 1,799,396.15

Administrator&disbursements 3,684.67 1,510.38 5,1 95.05 3,000.00 8,i 95.05

Bankcharges 41.76 56.76 98.52 - 100.00 198.52

Agents fees — 21 190 00 21 190 00 21 19000

Legal fees - - - 14,240.70 - 644.00 14,884.70 1,000.00 - 15,884.70

Legal disbursements - - 6,217.00 - - 6,217.00 - 6,217.00

Insurance 4,125.00 2,100.00 6,225.00 2,100.00 8,325.00

Total 1,808,742.83 27,963.59 1,836,706.42 22,700.00 1,859,406.42

Note that thesefigures take account of amounts paid in the previous period.

iWure costs estimated on the basis of no further extenSion to the administration and are therefore subject to increase in tile event of the

administration being extended

9

Appendix C: Remuneration update

Our fees were approved on a time costs and fixed fee basis by Barclays and the preferential creditors. We’ve

previously drawn fees of £6oo,00o. During the period covered by this report, we have drawn fees of £555,000,

taking our total fees to £1,155,000 in line with the approval given, as shown on the enclosed receipts and

payments account.

Our time costs incurred in the period from i July 2017 to 31 December 2017 are £23,652, bringing our total

time costs for the administration to £2,382,896.

We set out later in this Appendix details of our work, disbursements, subcontracted work and payments to

associates.

Our time charging policy and hourly ratesWe and our team charge our time for the work we need to do in the administration. We delegate tasks to

suitable grades of staff, taking into account their experience and any specialist knowledge that is needed and we

supervise them properly to maximise the cost effectiveness of the work done. Anything complex or important

matters of exceptional responsibility are handled by our senior staff or us.

All of our staff who work on the administration (including our cashiers, support and secretarial staff) charge

time directly to the case and are included in any analysis of time charged. Each grade of staff has an hourly

charge out rate which is reviewed from time to time. Work carried out by our cashiers, support and secretarial

staff is charged for separately and isn’t included in the hourly rates charged by partners or other staff members.

Time is charged in six minute units. The minimum time chargeable is three minutes (i.e. 0.05 units). We don’t

charge general or overhead costs.

We set out below the maximum charge-out rates per hour for the grades of our staff who already or who are

likely to work on the administration. We call on colleagues in our Tax, VAT, Real Estate and Pensions

departments where we need their expert advice. Their specialist charge-out rates vary but the following are the

maximum rates by grade per hour.

Grade Current rates Current Specialist rates

£ £

Partner 310 1,250

Director 310 1,150

Senior manager 310 970

Manager 310 700

Senior associate qualified 310 515

Senior associate — unqualified 310 515

Associate 310 255

Support staff 310 150

In common with many professional firms, our scale rates may rise to cover annual inflationary cost increases.

Payments to associatesWe have not made any payments to associates in the periods covered by this report.

10

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ii

Our work in the periodEarlier in this section we have included an analysis of the time spent by the various grades of staff. Whilst this isnot an exhaustive list, in the following table we provide more detail on the key areas of work.

Area ofwork Work undertakenStrategy & planning • Progress updates with

appointments takers andsenior management

• Liaising with the securedcreditor in relation to theongoing titigation betweenthe Bank andformerdirectors

• Dealing with requestforinformation

• Answering questions inrelation to the ongoinglitigation

• Searching throughCompany records to assistwith ongoing litigation

Accounting & treasury • Accountingfor receipts andpayments

• Bank recondiliations

What, if any, financialbenefit the workprovided to creditorsWhy the work was OR whether it wasnecessary required by statute

• To ensure appointee • Ensures efficientinvolvement and that all management of thevital information is administrationcaptured

• To assist withfinalising • Nofinancial benefitthe administration ofthe Company

Creditors

Statutory &compliance

• Updating creditors

• Manager and appointeereviews

• Drafting and submittingthe previous progressreport

• To keep creditorsabreast ofdevetopments

• To comply withstatutory obligations

• Nofinancial benefit

• Required by statute orregulation

• Case progression meetingsTax& VAT • Working towards

finalising the tax and VATposition

• To comply withstatutory obligations

• Required by statute orregulation

Submitting a VAT reclaim

Employees & Pensions • Responding to employmentverification requestsfromformer employees

• To assistformeremployees

Nofinancial benefit

Secured creditors

Investigations• To assist with the • Nofinancial benefitongoing litigation

• To ensure managementofthe bank account isup to date

• Secure stewardship ofestatefunds

12

Ourfitture workWe still need to do the following work to achieve the purpose of administration. This assumes no extension tothe administration.

Whether or not thework will provide afinancial benefit to

Area ofwork Work we need to do Estimated cost £ creditors

Strategy &planning • Progress updates with • 1,000 • Ensures efficientappointments takers and management ofthesenior management administration

Secured creditor • Provide updates to the secured • i,ooo • Nofinancial benefitcreditor

Investigations • Assisting with ongoing • 2,500 • Nofinanciat benefitlitigation

Accounting & treasury • Accountingfor receipts and • 1,000 • Secure stewardshippayments ofestatefirnds

• Bank reconcitiations

• Dealing with uncashedcheques

Creditors • Updating creditors • 500 • Nofinancial benefit

Statutory & compliance • Preparing & submithngfinal • 8,ooo • Required by statuteprogress report or regulation

• Manager and appointeereviews

• Case progression meetings

Tax/ VAT • Finalise the Tax and VAT • 1,000 • Required by statuteposition. or regulation

• Submit thefinal VAT reclaim

• Liaison with HMRC regardingoutstanding VAT reclaims dueto the Company

Closure • Obtaining clearancefor • 1,500 • Required by statuteclosure or regulation

• Filing statutory noticesforleaving office

13

DisbursementsWe don’t need to get approval to draw expenses or disbursements unless they are for shared or allocatedservices provided by our own firm, including room hire, document storage, photocopying, communicationfacilities. These types of expenses are called “Category 2” disbursements and they must be directly incurred onthe case, subject to a reasonable method of calculation and allocation and approved by the same party whoapproves our fees.

Our expenses policy allows for all properly incurred expenses to be recharged to the administration and hasbeen approved by the Bank where required.

The following disbursements arose in the period of this report.

Costsincurred

Category Policy £

2Photocopying at 5 pence per sheet copied, only charged for circulars tocreditors and other bulk copying.

2Mileage - At a maximum of 71 pence per mile (up to 2,000cc) or 93 pence permile (over 2,000cc)

— 1 Postage 1,510.38

Total 1,510.3$

Our relationshipsWe have no business or personal relationships with the parties who approve our fees or who provide services tothe administration where the relationship could give rise to a conflict of interest.

Details ofsubcontracted workWe have not subcontracted any work in the period i July 2017 to 31 December 2017.

Legal and otherprofessionalfirmsWe’ve instructed the following professionals on this case:

Service provided Name offirm / Reason selected Basis of feesorganisa6on

Legal services • Addteshaw • Industry • Time costsGoddard knowledge

Legal services & property advice • MacRoberts LLP • Industry • Time costsknowledge

Property security • Orbis • To maintain • Time & materiatsproperty security

14

Appendix D: Pre-administration costs

The following costs incurred before our appointment with a view to the Company going into administrationwere approved for payment by secured and preferential creditors.

Nature of costs Amount Paid amount

(E) ()

fees charged by the administrators 132,975 -

Expenses incurred by the administrators 15,739 15,739

Fees charged by other persons qualified to act as an insolvency - -practitioner

Expenses incurred by other persons qualified to act as an insolvency - -practitioner

Total 132,975 15,739

15

Appendix E: Other information

Court details for the administration: High Court of Justice, Chancery Division, Manchester County Court

2236 of 2014

Company’s registered name: Internacionale UK Limited

Trading name: Interuacionale

Registered number: 08580302

Registered address: Central Square5th Floor, 29 Wellington Street

Leeds

ISi 4DL

Date of the joint administrators’ 28 February 2014appointment:

Joint administrators’ names and Lyn Leon Vardy and Toby Scott Underwood of

addresses: PricewaterhouseCoopers LLP, Central Square, 8th Floor, 29Wellington Street, Leeds, LSi 4DL

Contact: Adam Thompson on 0113 289 4983

Extensions to the initial period of Extension granted for the period 28 February 2015 to 28 February

appointment: 2016 and 28 February 2016 to 28 February 2017. Further extensiongranted for 28 february 2017 to 28 February 2018.

i6