FIRST REPORT ON THE STATE OF AFFAIRS OF SHIVRAM LIMITED (IN RECEIVERSHIP) "the Company" Company Number: 1763113 Introduction I was appointed, together with William Black, jointly and severally as Receiver and Manager of all the assets, property and undertakings of the Company on 29 November 2013 by Heartland Bank Limited. We were appointed under the powers contained within a General Security Agreement dated 18 December 2012 in favour of Heartland Building Society (now Heartland Bank Limited) ("the Bank"). We set out below our first report on the state of the affairs of the Company as at the date of receivership as required by section 23 of the Receiverships Act 1993. Disclaimer This report has been prepared by us in accordance with Section 23 of the Receiverships Act 1993. It is prepared for the sole purpose of reporting on the state of affairs with respect to the property in receivership and the conduct of the receivership pursuant to Sections 26 and 27 of the Receiverships Act 1993. In compiling this report we have relied on the accuracy of all relevant information obtained from the Company together with information supplied by the directors, and/or management. We have not independently verified the accuracy of information provided to us, nor have we conducted an audit in respect of the Company. We express no opinion on the reliability, accuracy, or completeness of information provided to us and upon which we have relied. The Receivers do not accept responsibility or liability for any losses occasioned to any party as a result of the circulation, publication, reproduction, or use of this report. Events leading up to our appointment The Company had defaulted in meeting royalty payments due to the master franchisor and it was issued with Breach Notices under the Nando's New Zealand Master Franchise Agreement. The Company was also in default under its bank facilities and a demand issued by the Bank was not satisfied. Consequently the Bank appointed Receivers on 29 November 2013. Trading on The Receivers have continued to trade the business under the provisions of the Master Franchise Agreement with a view to marketing and selling the business operations. Following appointment, the Receivers have marketed the business widely in both New Zealand and Australia. A number of offers to acquire the business have been received and the Receivers are currently working to conclude the sales process. Property disposed of to date The Receivers have not disposed of any property to date. Proposals for disposal of receivership property On completion of the sale process, the business and operations of the Company will be transferred the successful purchaser. There are no other material assets to be disposed of. Accoumawts .1 Amounts owing to the General Security Holder At the date of our appointment the amount due to our appointer was $l,5 80,722.90. Interest continues to accrue on this amount. Other security interests From our search of the Personal Property Securities Register we advise that two parties apart from our appointer had registered a financing statement against the Company. Details of these parties and their interests in the Company are as follows: Date created Secured party Collateral type 30 April 2012 Tegel Foods Limited All present and after acquired personal property. 11 June 2012 Stratton Consulting Limited Goods other. The debt owing to Tegel had been repaid prior to receivership and we have requested the PPSR registration be removed. Preferential creditors The Receivers are working to finalise the IRD position of the Company at the date of the Receivership and to quantify both the employees and IRD preferential claims at the date of receivership. Unsecured creditors The Receivers are working to ascertain the quantum of unsecured creditors' claims at the date of Receivership. Until the conclusion of the sale process the Receivers are not in a position to determine what funds if any may be available to meet unsecured creditor claims. Particulars of assets and liabilities A current Statement of Assets and Liabilities of the Company was not available at the date of Receivership. The Receivers are working to finalise the financial position of the Company. Details relating to the Company assets have not been disclosed in this report as these are considered to be commercially sensitive information in relation to the sale of the business. Information provided by the Company The director has cooperated with the Receivers however Company information provided to date has been inco ete. Kare ohnstone Receiver and Manager 1 1 February 2014