SFP semanaase hl. TO ALL KNOWN CREDITORS AND SHAREHOLDERS Date: 19 December 2008 Contact: Chis Hilbert Direct Disk 020753 2362 OurRef: — MEROOO1/SFP/csh191208.P4 Dear Sirs Meretec Limited {in Administration) (“MER”) I refer to my letter dated 20 November 2008 which was provided to you with, inter aia, a brief explanation of the effect/purpose of the Administration of MER and the next stage. | have previously explained that, pursuant to Schedule 81, Paragraph 49 ofthe Insolvency Act 1986, the ‘Administrator is required, within 8 weeks of thelr appointment to provide creditors with a statement of proposais for achieving the purpose or purposes specified. To this end, | enclose a Report and Statement of Proposals, which provides an update as to general progress of AL's Administration as at 18 December 2008, together with the Joint Administrators’ proposals. Should you have any further queries, please contact the Manager dealing with this matter, Chris Hibert tn cores wth pang 45 of Studd Bt fh elec At 8, not aay gna han, Bons ad papryo rete Linited (n Adnistration) are being managed by inon Franklin Plant and Daniel Panto SFP, acting as Jone Administrators. Pursuant topmiragh Sched of tie cohency Ret 1th Jot adnate pete cnpty an tet persoa ay. SFP | PENSIGNHOUSE | ADMRALSWAY | MARSHWALL | DOCKLANDS 1 LONDON | E149Na 1 T c2075562272 | F 0m 75989922Meretec Limited (In Administration) Report to Creditors and Statement of Proposals Pursuant to Paragraph 49(1) of Schedule Bt of the Insolvency Act 1986 Strictly Private and Confidential Meretec Limited (In Administration) Report to Creditors and Statoment of Proposals Pursuant to Paragraph 49(1) of ‘Schedule Bt to the Insolvency Act 1986 ‘Simon Franklin Plant Daniel Plant MIPA MABRP WIPA MABRP- ‘SFP ‘9 Ensign House Admirals Way. Marsh Wall London E14.9XQ Tel: +44(207) 5382222 Fax: +44 207) 5369922 Email: simonp@sfplant.co.uk danielp@stplant.co.uk ‘This report has been writen and presented forthe sole purpose of complying with the relevant provisions of the Insolvency Act 1986 and the Enterprise Act 2002. It may not be deciosed, disseminated or copiod without our prior wren permission, other than to those ented under statue or otherwise 2s ordered by the Court, and no laity wil be accepted to any other person or party who acts of refrain from acting ons contentsMeretec Limited (In Administration) Report to Creditors and Statement of Proposals Pursuant to Paragraph 49(1) of Schedule B1 ofthe Insolvency Act 1986 Contents 4. Bxeeutve Summary 2 Intoducton 3. The Joint Administrators’ Appointment 4 Company History and Events Leasing othe Adninsration Order 5. The Pupose ofthe Administration 8, Evonts Fotowing the Joint Administrators’ Appointment Leading fo Inia Strategy 1. Gonorl Progress in Retain othe Adminstration 8, The'Staloment of Ass ar the Outcome for Crtors 8, Tho Joint Administrators! Costs 10, Adlon! Points Required tobe Mado Pursuant tothe Rules 11, The Dispensing of te Mootng of Credtors 12, The Joint Adminstrator Proposet 13, Anctay ‘Appendices 1 Statutory Information | Estimated Stalenent of Aes as at 5 November 2008 / Creditors Deals /Dreclors Estimated Statement of Aas Joint Administrators Receipts and Payments Accountto 18 December 2008 IV Breakdown of Adninisrators Fees Breakdown of SFP Forensic Limited Feos Vi_Breckdoun of SFP Datastoo Limited Fees VIL SFP and Assoratd Enltos Charge Out Rates Yl Proof of Dat Form 1K Gullo to Admbistetors and Liquidators Fees x Form2216Moretec Limited (In Administration) Report to Creditors and Stat ont of Proposals Pursuant to Paragraph 49(1) of Schedule Bt of the Insolvency Act 1986, 4. Executive Summary 44. The Company was placed info Administration on 5 November 2008. The purpose of rescuing the Company 2s a going conoem was not zchievable, The primary purpose of the Administration was therefore to achieve @ botir result for the Company's creditors as a whole than would be Bkely if the Company wore wound up (without fist being in Administration). 4.2. The Company traded as @ steel recycling company and developed a niue process fo remove zine from galvanised steel. srgiteed ofce ‘was Grenville Court, Britwell Road, Bumham, Buckinghamshire, SL1 8DF. Iti not occupy a physical eding adress in the UK, bututlised series offices at 23 Berkeley Square, London, 13. The directors approached another firm of insolvency pracitioners in order {to appoint Administrators as a result of the global credit aisis and the share value In CMA Corporaton plummating. At the fime of the ‘Administration, ito longer had sutcient funds of assets to meet its dabis| ‘end was therefore unable to moet is liabilities 2s they fel due. 4144 The primary purpose of the Administration would be achieved by investigating the potential of realising the Company's shareholding in CMA ‘Corporation for sufclent value. The Company had akeady sold its ‘business and asses prior tothe appointment ofthe Joint Administrators, therefore confued trading of the business was not an option, The Joint ‘Administrators envisage implementing a statocic plan in which to ensure ‘maximum value is acquired from the shares in CMA Corporation, 4.5 The purpose of Administrafon is sil in the process of being achieved and there is sila signifcant amount of work to be undertaken, This includes liaising wih sofcitors conceming a strategy to maximise realisations and confinued investigafons into the Company's affars. The Joint ‘Administrators’ consider thet it may be edviseble for the Company to Confnve in Adminstration forthe time being. However, they requie the option of placing it info Crediors’ Voluntary Liquidation for dstibuon purposes inthe unlkely event tht there are sufficient realisations in the ‘Administration for a dividend to unsecured creditors. Alternatively, the oint Administrators vil fle notice of dssoluton of the Company at ‘Companies House should they take the view thatthe Company has no Property which might permit a dstrbution to is creditors, unless they balieve that they should present a winding up petiion at cour, so that a liquidator can be appointed to further invesigate the Companys aff. It isnot proposed to convene a meeting of creditors. 1.6 There has been a limited response to the questionnaire that was sont fo creditors. Responses may assist the Administrators with their general investigation duties. Accordingly, those who have not repied are urged fo dos0. ‘SECTION/APP. REFERENCE Section § Section 4 and Appendlx | Section 4 ‘And Appendic I Section 6 Sections 7,14 and 12 Section 13Moretec Limited (In Administration) Report to Creditors and Statement of Proposals Pursuant to Paragraph 49(1) of Schedule Bt of the Insolvency Act 1986 2. Introduction 24 This Report and Statoment of Proposals (the Report’ is prepared pursuant fo Schedule B1, Paragraph 48 of the Insolvency Act 1986, (the Act) in relation to Meretec Limited (in Administration) (the ‘Company’, the purpose of wich isto provide creiors witha full update as to fhe present poston and seek creditors approval of the next stage of proceedings. 2.2 The Report aio includes information required tb be provided to creditors pursuant to Rule 2.38 of the Insolvency Rules 1986 (‘he Rules’). Al statutory information pertaining to the Company is set out in ‘Appendix 3. The Joint Administrators’ Appointment 31 On 5 November 2008 Notice of Appointment of an Administator by Holder of a Qualifying Floating Charge (Notice of Appointment’) was fled inthe High Court of Justice by the Company's secur trustee pursuant to a secufty rust and intr creitr deed, Zenith Trusts Limited (‘Zenit’). 32 On the same data, the No‘ce of Appointment was endorsed withthe No. 9603 of 2008. Both Simon Franklin Plant and Daniel Piant of SFP, 9 Ensign House, Admirals Way, Marsh Wall, London E14 9XQ were appointed Joint Administrators (the Joint Administrators’). Pursuant to Schedule Bt, Paragraph 100(2) ofthe Ac, the Joint Administrators actin and several. 4. Company History and Events Leading to the Administration Order 4.1 Albeit that statutoy information is contained in Appendix, this report provides brief deta in relaion to ‘he Company’s history. 42 The Company was incorporated on 26 October 1998 in order to buy and develop spectc technology rom ‘a US company known as Metals Investment Trust (‘MIT?. MIT had entered into Chapter 11 insolvency proceedings in the US almost tn years previousy. ls crectr, Craig Siddell (Mr Sel” had developed ‘a unique process in which to remove Zinc ftom galvanized stl. was the frst type of lechnoogy of is kind. 43. Atthe time of incorporation the Company's directors were Mr Siddell, Andrew Barker (‘Mr Barker), Mark Evritt (Mr Evrt?), Gunnar Skoog (‘Mr Skoog’) and Marin Young (‘Mr Young"). The Company secretary was ils bookkeeper, Eacotts Limited. Further details conceming previous directorships and company ‘secretaries can be found at Appendix 44 tis underetood that the Company operated its banking facies at all mes with HSBC and various other international banks. The Company operated verious accounts and detals concerning this have been provided by Mr Young, The Joint Administrators have contacted all the banks involved and the accounts hhave been frazen. A small credit balance of cca £4,000 has subsequently been received. 45 191998, the value of zine was circa US$3,000 per tonne and a signif\cant income could be generated ‘rom removing this element and shipping ito foundries around the world, A sigifcant amount of stee! noeded ‘tobe ‘armed in order to cove the costs involved in the process. 48 The Company acquired the business and asses (Inctuing patents) from MIT circa 10 years ago. At that stage, it was clear thal acidtional funding was required in order to develop the protolypes through to @ ‘workable plant. tis understood thatthe cost of this ran into cia US$25m and was pald over a period of several years.ar 48 49 440 an 442 443 444 445 Meretec Limited (In Administration) Report to Creditors and Statoment of Proposals raph 49(1) of Schedule Bf of the insolvency Act 1986 Por to the purchase of MIT, the crecors of the Company took ache as to how best deal with is aoquisiton. An exising Meretec compeny was already setup in the US caled Meretec Corporation MERC’). The Company is 100% shareholder of MERC. Its understood for reasons that are yet tobe ‘ascertained, thatthe Compeny was set up in order to aoquie the patents end assels rom MIT. Whereas, [MERC was utilised to employ the staff ifended to werk onthe project, who effectively had the know how inorder to operate the procedure. Following the purchase of MIT's business and assets, a formal agreement was entered into between the ‘Company and MERC for the provision of services andthe spi ofthe assets between the two entities. This left a complex sitvaion in terms of how fo apportion any income stream. At ratte, a firm of accountants advised the Company's directors that any income should be split /3 as licence income payable to the Company and 1/3 operating income payable to MERC. {As the technology was developed inthe US, it was decided thet MERC bulld and operate from a plant in ‘Americe. The location desided upon was Chicago. In order to fund the operation and the development of the system, the Company made several considerable inter-company loans to MERC fo the amount of citca US$40m {these are reflected in the Company/s accounts). The loans were provided from loan note holders (accounting for orca USE10m) and a sale of shares in the Company (accountng for circa uss3tm). The strategy docided upon was for the Company and MERC to foense the technology to various oer ‘companies around the world who would build their own recycling pants. The terms ofthe licence fee was {oe calouated upon the amount of tonnes of see! manufactured by each pant. ‘The development process took the best part of seven years and the funds injected via the foan note holders and shareholders was uflsed o perfect the process and testis capabilites. The idea was to sell the technology onto large organisations tha utiised sigifcant quantiles of galvanised ste the primary purchasers being the automobile indus. ‘CMA Corporation (Australia) History and Involvement In 2005, one of Australia's largest recycting companies, Southem Recycing was acquired by CMA Corporation (CMA, it is understood that CMA subsequently approached the Company in order to ‘acquire 2 licence to operate the recycling technology in Australia and buid its owm plant. Negotiations between the Company and CMA commenced in Api! 2005 and completad in July 2005. This provided for CMA to acquire a licence from the Company to operate the technology in Australia at an ‘greed price. in short, OMA would pay the Company US$10 per tonne of steel manufactured. A ‘guaranteed minimum of 100,000 tonnes was to be processed each yeer for a conract term of 10 years ‘extendable to 20 years. Ths effectively meant thatthe Company hed a guaranteed income steam of a ‘minimum of between USS10m wit the potential of generating upto USS20m. Initial Public Offering and Intention to float the Company Following completion ofthe agreement between the Company and CMA, the directors began looking for ‘opportunities to float the Company on the UK Stock Exchange. The directors approached several finenoe houses for an Ital Pubic Ofering (1P0"), The Company wes looking for USS 10m investment to assist With the Companys listing in late 2006 ! early 2007, In order to assist wih the IPO and fo support the Company's application, i sought confirmed interest ftom some ofthe largest car manufacturers in the world to gauge how many offers wouid be forfncoming for the purchase of feences to consiruct plant. Its belaved thatthe Company secured signed letters for mull plant deals from several blue chip car manufacturers.416 4ar 438 419 420 424 423 424 Meretoc Limited (In Administration) Report to Creditors and Statement of Proposals Pursuant to Paragraph 49(1) of Schedule B1 of the Insolvency Act 1986 ‘Tne Company approached solictors in order to comple all he necessary documentation to proceed with the [PO and caried out al the relevant due dligence required. The positon drastcally altered in 2007 with 1 downwerd trend in market condiions and uncertainty inthe steel industry, it was clear by Apri 2007 that the IPO would nat be able to go aheed. ‘The downward trend had a dramatic impact upon the operation in Chicago and the directors of the ‘Company realised that stops needed to be taken to avoid the plant in Chicago from haemorrhaging ‘money. The plant presently had a burn rate of circa US$600,000 per month, being the minimum funds required in order to keep it operational. ‘The Sale of the Company's and MERC’s Business and Assets to CMA Given that the IPO was not vable, the directors looked to maximise the value in the Company and MERC's business and assets, It appeared that the most viable way of achieving this would be to approach CMA to se= if they would be intorested in acquiring it outright. Given that the Company held the patents ‘and MERC employed the staff withthe knowledge fo cary out the recycing procedure, it was necessary {o deal wit both enifes in any sale agreement fo CMA. In January 2008, the Company conducted a sale of the lent in Chicago for USS6.8m to CMA to avoid incuing ongoing overheads in is operaton. The Company then looked to sel licence to CMA to cperato the plant and benef from the technology. An agreement was reached along the similar nes of the previous arrangement with CMA in relafon to its Austrian operation This completed in ly 2008. [At this time, CMA started realising income from the Australian depot. The plant was not operating fo full, ‘capacty as the supply of steel did not reach the required targets. It is bafeved that CMA was generating approximately US$88,000 per month from this plant, At the me CMA was looking to acquire the Company's and MERC's business and assets those ‘companies combined approximate labililes were as follows: ‘+ rca USS412m in bonds; and ‘+ cca USS2m trade creditors (although this wes signicanly made up of professional costs in relation to the attampled IPO and cue cigence) ‘An agreement was subsequently entered into on 25 July 2008 between the partes whereupon CMA purchased the Company's and MERC’s business and asses in return for 37,500,000 of ts shares. At the time, CMA was recorded as @ company with AUSS500m turnover, having a relatively stong share price CCMEA's share price at tis time meant thatthe value atrbuted tothe share holding (which equated to 10% ‘ofCMA’s entre stock) resulted in the Company being soWent on a baance sheet basis. ‘An assot sale agreement was drawn up incorporating the Company and MERC. The direclors' took advice fom their accountants as to the stucture of the agreement given that there may be certain tax implications, [tis understood by the Joint Adminisvators that MERC had large tax losses and advice was taken as tothe best method fo deal with this in respect ofthe sale ‘CMAs substantially larger than the Company and it was Ikely a tat tme that CMA would be taken over by & competior via the acquisition of a majorly shareholding, Its share price at the ime of sale of the ‘Company and MERC to CMA was understood to be circa AUSSO.80.Merotoc Limited (In Administration) Roport to Creditors and Statement of Propos: Pursuant to Paragraph 49(1) of Schedule Bt of the Insolvency Act 1986 4.25 The prospects of CMA's share price holding ifs value or increasing were considered by the Company's 426 428 429 430 43t 432 433 434 directors to be high. It was anticipated that CMA shares would increase to cca AUSS 50 per share ‘making the Company's holding worth an estimated AUSS56,250,000, Folloning the sale ofthe Company's and MERC’s business end assets fo CMA the 37,500,000 shares ‘hat were issued fo the Company and MERC are held in escrow for 12 months. The shares were alloceled between the Company and MERC and the spt ofthese was agreed at relevant board meetings on 7 ‘August 2008, Following the expr ofthe escrow period, the shares ate also subject toa company lock out {ora further 12 months, meaning that they cannot be realised unt! 2010. Inter-company loan between the Company and MERC ‘According to the Company's and MERC’s accounts forthe year ended 31 December 2005, MERC owes it 224,759,018 by way of an intercompany loan. It's understood that a supplemental agreement was ‘entered into between the paras (agread by the board of directors on 7 August 2008) providing that the ‘Company held MERC's entitlement to a proportion ofthe CMA shares as nominee. Itis understood that it was subsequently agreed at a futher board meeting that in setlement ofthe inter- ‘company loan, MERC allotted its share eniitement tothe Company. This requires futher investigation by the Joint Administrators, ‘The Onset of Insolvency Procedures Following the sale o CMA, the creciors were required to look at methods in which fo dea wth he airs ‘ofthe Company given thatthe bonds issued were due to expire on 31 October 2008. Accordingly, the CCompary approached finance brokers inorder to put together arenancing re-structuring deal inorder {omeetits commitments. In August 2006, heads of terms were drawn up for a refinancing deal. The idea was forthe Company to raise funds off he back of the value ofthe shares in CMA to settle the Companys unsecured credtors Some creditors advised the Company that thy would be wing fo accept a debt for equily swep, However, in September 2008 it is understood thatthe value of CMA's shares fel to below AUSSO.34 hich effactvaly made a resnancing package untenable. As a result, the directors of the Company sought insolvency advice and approached another firm of insolvency practitioners to look to place the company into Administration, Inorder to place the Company into Administration, the dirctors were required to serve Note of intention ‘to Appoint an Administrator, Zenith, Upon receipt of his, Zenith approached insolvency practitoners SFP toreview the position. The decision was taken to appoint the partners of SFP as Joint Administrators. ‘On & November 2008 a Notice of Appointment of Administrators was fled atthe High Court of Justice and ‘endorsed with number 9603 of 2008, appointing both Simon Frankin Plant and Daniel Pant 2s Joint Administrators, At Appendix Il is an Esimated Statement of Alfars as at the data that the Company was placed into Administration ("he Statement of Afar). The Statement of Aas indicates that the Company was insolvent ona balance sheet basis with a deficiency to creditors of £12,023,636, 5, The Purpose of the Administration 5A. ‘The purposes of an Adminstration are set out in Schedule B1, Paragraph 3(1) of the Act. In short, this provides that an Administrator ofa company must perform his functions with the objective of:52 53 Meretec Limited (In Administration) Report to Creditors and Statement of Proposals Pursuant to Paragraph 49(1) of Schedule B4 ofthe Insolvency Act 1966 54.1 rescuing the company 2s a going concern, or 5.2 achieving a better result for the creditors as a whole than would be likely to be achioved f the ‘company were wound up (without frst being in Administration), or 5.4.3 realising propery in order to make a distribution to one or more secured or preferential creditors. ‘The purposes are therefore a hierecchy of objectives. The rescue of a company isthe priority. Nextis to instead achiove a better return tothe creditors as a whole. in the event that this cannot be achieved then the Administrator is permited to realise assets forthe benefit ofthe preferential or seoured creditors, In the light of the insolvency ofthe Company, the ital purpose relating to is rescue could only be achieved through a company voluntary arrangement. This was not considered tobe achievable, although ‘appeared thatthe second purpose was a viable opfon. Full details concering progress in respect of this purpose are set outin Section 7 Events Following the Joint Administrators’ Appointment Leading to Ital Strategy co 62 63 64 65 66 ‘Asa roseue of the Company was not possible, the primary purpose of the Administration was fo obtain a better result forthe creditors as a whole than woud be achieved if the Company was simply wound up {without frst being in Administration). This would potentally be achieved with the assistance of sfalutory moratorium which protects @ company when i is placed into Administration, The moratorium eflectively prevents all creditors’ actions being taken or progressed without leave of the Coutt or the ‘Adminstratr’s consent, thereby proving @ company wih a breathing space in which a strategy can be invoked to maximise realisations. On the day of appointment, the Joint Administrators attempted to contact the Company's rectors in ‘order to advise them that Simon Franklin Plant and Daniel Pient of SFP had been appointed os Joint Adrninistrators. ‘The Joint Administrators attempted to call Mr Young and Mr Evrit, the two UK based directors. it was understood that the other direciors were spread between the US and United Arab Emirates. Mr Evritt relumed the Joint Administrators call on the evening of § November 2008 and i was explained to him the ‘events of the day and the present postion concerning the Administration, Mr Evrtt was advised that it was imperative thatthe Joint Admiistraters meet with him and Mr Young in ‘order to ciscuss the ramifications ofthe appointment together with obtaining @ detailed history conceming the events leading to the sale of the Company's business and assets. Mr Evritt advised that he would ‘contact Mr Young and revert back to the Joint Administrators with some proposed times. It was subsequently understood that Mr Young was not in the UK and the earliest time he would be avalable for a meeting would be Monday, 17 November 2008. The Joint Administrators explained that this would cause potential issues given thatthe Joint Administrators have to discharge certain dutes ihn a very stict imetfame and information would be needed before this time in order to carry these ou. {twas agreed that Mr Young would provide details to the Joint Administrators via ema ofa bret history of the Company, its banking detals, profesional acvisors and any other relevant information to assist ‘Additionally, a meeting was arranged for Mr Evrt and Mr Young to attend SFP's offices on Monday, 17 November 2008 at {1am in order raise eny adktonal queries and to give the Joint Administrators forensic department, SFP Forensic Limited (‘SFP Forensic’) an opportuni to obtain some initial information. Further detalsconcering the outcome of tre meeting can be found at Section 7Meretec Limited (In Administration) Report to Creditors and Statement of Proposals Pursuant to Paragraph 49(1) of Schedule Bt of the insolvency Act 1986 7. General Progress In Relation to the Administration TA 72 73 14 18 76 a 78 79 140 ‘The Meeting with Mr Young and bir Evritt On 17 November 2008, Mr Young and Mr Evrit attended the Joint Administrators offoes. A ful history of the Company and MERC was oblained. Further Mr Young advised thatthe Company's accountants were holding books and records al relevant to the Company and that these could be collected at any time, Mr Young further confirmed that there were two potential assets that could be realised in the next 7 to 10, days, One was a VAT refund from HM Revenue and Customs of citca £162,000, The other was @ «dividend declared by CMA to its shereholders, of which the Company was due to receive circa £80,000, ‘At the meeting Mr Young and Mr Evit were also provided with te standard pack issued to decors ‘sling out ther duies and the ramifications of the appointment. Mr Young advised that given the other directors were not based in the UK, he would contact them to explain the importance of reviewing these and suggested that in the meantime they be sent fo them in te post. ‘The Company's Shareholding in MERC Mr Young advised thatthe Company is 100% shareholder in MERC. Andrew Barker, wha is one ofthe Company's drectors, is also the Chief Executve Offcer of MERC and is based in the US. Further, Mr ‘Young advised that MERC has no assots as these had al been sold to CMA. However, tha it curently has labilies of circa US$150 000. ‘The Joint Administrators shall be taking advice in respect oftheir duties in relation fo MERC from a US based fim of solicitors. Pre-Appointment VAT refund ‘The VAT refund of £162,231.75 has now been received into the Joint Administrators estate aocount ‘There are no furherrealisaons to be made ftom this source. (CMA Dividend ‘Me Young has confirmed that te application for the payment ofthe CMA dividend was mede prior to the ‘Joint Administrators appointment and that it was expected imminenty. Mr Young however, advised that there may be a set off claim. Given that the dividend payments yet to be received, itis uncertain as to whether or not payment ofthis has been withheld pending resolution of this, ‘The Joint Administrators have consulted wih the solicitors instucted in this matier, Nabarto LLP ((Nabarre?) to determine whether or not CMA is entitled to set off payment of the dividend to the ‘Company. decision as fo how best to proceed wil be made dependant upon Nabarro's advice Realisation of the Company's shareholding in CMA At this present time, the only oer known significant esset in the Company's Administration is the 37,500,000 shares held in CMA,Meretec Limited (In Administration) Report to Creditors and Statement of Proposals Pursuant to Paragraph 49(1) of Schedule B1 of the Insolvency Act 1986 7.41. The Joint Administrators are present investigating the sale agreement and te agreed lock cu period in order to formulate a strategy conceming the realisation of these shares forthe benefit of the Company's creditors, 7.42 The Joint Adrinistators shall fxmulale a strategy in which fo ascertain the best course of action, This wil _uncoubtedy involve the instuction of Australian soiciors to advise upon the best method of realising the shares. ‘The Company's Trading Premises 713 The Company cid not occupy a trading premises. in order to deal with any UK operations it ulised a serviced office address at 23 Berkeley Square, London, There is no agreement in place in relation to this and they were ceased fo be used some me prior fo the Joint Administrators appointment. There is, ‘therefore no property fo deal with. Investigation into the Company's Affairs Prior to the Administration 7.44 Investigations into the Company's affairs prior tit being placed into Adinistation ave being undertaken by SFP Forensic and are presenty ongoing, 7.45 SFP Forensic has ideniifed various areas of concer in relafon to the Company's trading actives prior to it being placed into Administration, These are currenty being investigated. However, the Joint ‘Administrators do not wish to divulge any futher information in relaton to this at this stage since it may hamper enquires future recoveries. ‘Additional Issues and Realisations 7.48 The Company's books and records have been recovered from the Company's accountants by an ently associated wit the Joint Administrators fm, SFP Datastore Limited (‘SFP Datastore’). An inventory has ‘been prepared and the books and records wil continue fo be stored by them. ‘The Statement of Affairs and the Outcome for Creditors / Joint Administrators Receipts and Payments 8.41 Based upon current information, it is presently unclear whether or not there wil be dividend to Unsecured crediors. At Appendix Il is an Estimated Statement of Afars as at the date that the Company was piaced into Administration, completed by the Joint Administatos, Further, attached is an Estimated Outoome Statement provided by the directors of the Company. 82 In addon to this isa st of creditors whose details have been obtained from the Company/s records and ‘whose claims have been lodged. Piease note that the £0.00 balances denote claims that are yet to be lodged onto the Joint Administrators system and does not mean that the claim has been rejected or agreed. 83 Attached et Appendix Ill is tho Joint Administrators Receipts and Payments Account for the period § November 2008 to 18 December 2006. The Joint Administrators’ Costs 9.4 Given itis presently uncertain as to whether or not thee will be a surplus avaiable to the unsecured creditors, itlooks to be the case that he thid purpose only ofthe Adminstration (at paragraph 5.1.3) wil be achieved. From the outset the Jcint Administrators arrenged for members of ther team to be present atthe Company's trading premises in order to react to any immediate issues.Merotoc Limited (In Administration) Report to Creditors and Statement of Proposals ursuant to Paragraph 49(1) of Schedule Bt of the Insolvency Act 1986 92. Todate, the Joint Administrators have undertaken, inter ea, the folowing actions: 924 ial review ofthe positon and ascertaining the trading posiion of the Company; 9.2.2 _lissing withthe directors in order to deal with immediate issues; 923 lieising with the drectors concerning the sale of the Company's assets prior to the Joint Administrators appointment; 924 attending meetings with Mr Young end Mr Et conceming the Company's affairs; 92.5 dealing with shareholders queries concerning ther investments in the Company; 19.26 reviewing the Company/s books and records for creditor information and any employee detalls; 9.27 liaising with SFP Datastore concerning rebieval ofthe Company's books and records; 9.28 _lcising wth SFP Forensics regarding invesigatin into the affats ofthe Company; 9.29 escottaining the postion of MERC and the Joint Administrators obigations concerning tis, 92.10 fzising with solicitors concerning various aspects of the Administration and the Company's affiars; and 9.211 undertaking all statutory measures including updating creditors, advertising end fling requisite sdecuments and forms at Companies House. 193 At Appendix IV isa breakdown of the ime that hes been incurred by SFP to date. At Appondix IX is @ Guide to Administrators and Liquidators Fees, being Statement of Insobvency Practice 9. 94 AtAppendix Vis2 breakdown of the time that has been Incurred by SFP Forensic to date, 97 AtAppendix Vis a breakdown of the fe that has been incurred by SFP Datastore to date. 98 At Appendl Vilis.a guide fo SFP and its associated entities charge out rates and disbursement rates. 189 Section 12 sats out the Joint Administrators proposals. The Joint Administrators are presenty uncertain 28 to whother or not there will be a distrbution fo unsecured creditors, alhough it fS noted that this is dependent upon the value of the shares in CMA. On this basis, the Rules provide that the secured creditors (and preferential creditors f they receive a dividend) are to agroe the Joint Administrators fees. ‘Albeit unikely that tere wil be a distibuion to unsecured creditors, for the sake of good order, the Joint ‘Administrators are seeking authorisation from them oftheir remuneraion on a time cost basis, being the time properly given by the Joint Administrators and their staff in attending to matters arising in the ‘Administration under rue 2.106(2) of the Ruies. 98.10 Disbursements and specific expenditure relaing to the administration ofan insolvent estate and payable to an independent third party are recoverable without creditor approval. Such expenciture is made, if funds are avaiable from the insolvent estate. If funds are not avaiable the payment is made fom this fim’ offce account and this frm is rembursed from the insolent estate if and when funds become availabe. 9.41 Payments made out of a fims office account and recharged to an insolvent estate are defined as ‘Galogory 1 Disbursements. This disbursement is explained further under the expenses and942 913 944 Meretec Limited {In Administration) Report to Creditors and Statement of Proposals. Pursuant to Paragraph 49(1) of Schedule Bt of the Insolvency Act 1986 Disbursements heading in the Guide to Administrators and Liquidators fees at Appendix IX The following Category 1 disbursements have been incurred to date: Bordereau 2 12500 Malrediecton £ — 49.80 Expenditure incidental tothe adminisraion ofthe insolvent case, which by its nature includes an element of shared oF allocated costs are recoverable with creditor approval. These payments are defined as ‘Category 2 Disbursements’ and, once again, this disbursement is explained futher in the Guide to ‘Administrators and Liquidators fees at Appendix IX. There have been the folowing Category 2 disbursements incurred to date: Postage £ 68A5 ‘The fees incurred by Nebarro and SFP Forensic are on a time cost basis. SFP Datastore’s fees are calculated on a fixed fee basis for storage end retrieval of Books and records and an hourly rate for any further work carried out ‘SFP Forensic and SFP Datastoe are ents which are associated with the Joint Administrators frm, SFP. Cine Associated Entties"). Pursuant to SIP 9 payments made to outside parties in which the office holder or his fim or any associate has an inferest should be treated 2s a Category 2 Disbursement In ‘accordance with SIP 9 the folowing information is provided conceming the Associated Enites: 94a the Associated Entities have been established by SFP to perform functions to which either the office holder or outside agencies could undertake. It is considered that by Vue oftheir specialist nature and close proximity to SFP they wil achieve better resus than the office holder, his team or any outside agencies would be able to accomplish. 9462 the Associated Entiies remuneration is on an hourly time cost basis, divided into 6 ‘minute units and calculated as follows: Entity Basis of Remuneration ‘Siaff Charge Out Rates ‘SFP Forensic, Tine Cost £75 - 2450" [SFP Datasiore Fixed Fee and Time Cost £25875" ‘The charge out rates detal the bands that wil be applied dependent upon the grading of staff requited to deal with any one spectc assignment. Please note that these may fuctuatfater during the course ofthe Administration or the placing ofthe Company into a subsequent insoWency regime. 9443 the proposals to creditors seek the approval of the payment of SIP 9 Category 2 Disbursements. Approval wil enile the offce holder to settle these as and when deemed necessary wihout the need for any futher authorisation. 410, Additional Points Required to Be Made Pursuant to the Rules 404 102 For creditors’ general information, the EC Regulations on insolvency proceedings do apply in tis case, and these proceedings are the main proceedings. Pursuant to Schedule B1, Paragraph 47(1) ofthe Ac, he Joint Adinistators may request one or more relevant persons to provide a Statement of Afar of te Company. Cerzn ofthe Doctors have provided a completed statement of affairs. Acopy can be found at Appendix I1. 103 Moretec Limited (In Administration) Report to Creditors and Statement of Proposals Pursuant to Paragraph 49(1) of Schedule 61 of the Insolvency Act 1985 “The Joint Administrators donot consider thatthe prescribed pat defned under secon 176A ofthe Act wil be payable and therefoe donot intend to make an appcation to Court pusuant to section 176A(6) of the Act ‘The Dispensing Of A Meeting of Creditors 11d 12 113 114 15 Pursuant to Schedule B1, Paragraph 61(1) a copy ofthe Administrato’s statement of proposals must be ‘accompanied by an invitation to a creditors meeting, However, his requirement may be dispensed with in circumstances where there i likely to be noting of substance thatthe creditors meeting could decide ‘These circumstances are set out in Paragragh 52(1) which provides thatthe need to convene a meeting shall not apply where the statement of proposals slates thatthe Administrator thinks that: 41.24 the company hes sufcient property to enable each creditor ofthe company to be paid in full 11.22 the company has insufficient property to enable a distribution to be made to unsecured creditors ‘other than by virtue of payment through the prescribed element of floating charge realisations, or 4.23 the only objective of the Administration which the Administrator thinks is capable of achievement is realising property in order to make a distibuion to one or more secured or preferential creditors. In this instance the Joint Administrators are of that the view that 11.2.3 wil apply in relaton to the Company. Notwithstanding ti, the Joint Administrators shall be required to summon a meoing of creditors if iis requested by the Companys creditors whose debts amount fo at least 10% of te total debis of the ‘Company, by way of service of a Form 2.21B, within 12 days from the date on which the proposals are sent out Hf such meeting is requested it must be held within 28 days of the request being received by the Joint ‘Administrators. Security must be given forthe expenses of summoning and holding the meeting. At ‘Appendix X isa copy ofthe Form 2.21B should any ceditor wish fo request a meetrg, Ifo meeting is requested the proposals wil be deemed fo be accepted pursuant to Rule 2.346) of he Rules. ‘The Joint Administrators’ Proposal A 122 123 24 ‘The Administration has enabled the Company to have a breathing space In which to asoertain the present postion concering the sale ofits business and assets fo CMA and the circumstances leading tits insolvency. Whilst investigations are ongoing, the protection of the Adminisvation is sill in order to finalise all cutstending matters. The presccibed timo mit for an Administration is 12 months, In the event that an ‘Administration lasts in excess of 12 months, the Joint Administrators have to obtain creditors approval or ‘make an application to Court to extend its length, It is a requirement, notwithstanding the fact that a company is ffl in Adminisaion for the Joint ‘Administetors to investigate the company's atfars and submit the appropriate D form to the Deperment of Business Enterprise and Regulatory Reform concerning the directors conduct In the event that there are or may be further realisations that result in a dividend to unsecured creditors the Joint Administrators shall seek fo place the Company into Creditors Voluntary Liquidation in order to effect125 126 Merotec Limited (In Administration) Report to Croditors and Statement of Proposals Pursuant to Paragraph 49(1) of Schedule Bt of the Insolvency Act 1986 fa distibuton. In such circumstances they will be looking to take the appointment as Liquidators. in ‘accordance with Schedule B1, Paragraph 83(7} ofthe Act and Rule 2.117(3), cediors are able to nominate 2 diferent person or persons as proposed Liquidtor or Liquidators, provided tha the nomination is made afer the receipt ofthe proposas and before they are approved. AAs an alternative, and should there be no Ikoly funds to distibule to unsecured credilors, thatthe Joint Administrators may seek to place the Company info Compulsory Liquidation In oder to bring proceedings that only Liquidator may commence ‘or the benefitof the estate Iti proposed thatthe Creitors’ Voluntary Liquidation would commence from the date of acknoweedgement by the Regstrar of Companies that the relevant notice has been filed at Companies House. This procedure, wnich is permited by the Act would crcurnvent the need for an addtional creditors meeting and oop costs to a minimum. Inlightof the above, and in accordance with Schedule B1, Paragraph 49(1) ofthe Act it's proposed by the saint Administrators that: 4261 the Administration of the Company continue in order to further investigate the circumstances: Teading to the Company’s falure and finalise any addtional matters which requir the assistance ‘of the moratorium; 12.6.2 the Joint Administrators’ remuneration be fixed by the time properly spent by them and their staff in attending to matters arising out of the Adiinistaion in accordance with Stalement of Insolvency Practce @ and thatthe Joint Administrators be authorised to draw remuneration 2s ‘and when funds become availabe; 4263 the Joint Administrators be authorised to recover all disbursements including category 2 cisbursements as dened by the Statement of Insolvency Practice &; 42.84 in the event hat the Joint Administrators think that the Company hes no property which might permit a distribution to is creditors, they shall be authorised fo file @ noice of dissolution of the ‘Company pursuant to paragraph 84 of Schedule BI tothe Act, 4285 in the event of a potential distribution being avalable to unsecured crecitors, the Jolt ‘Administrators be eppcinted Joint Liquidators of the Company pursuant to paragraph 83 of ‘Schedule B1 to the Act without further recourse to the creditors with the purpose of making a distribution to unsecured creditors and to continue investigation into the Company's afairs; 1266 es an alternative to paragraphs 12.64 and 12.65 the Joint Adminsrators be able lo seek to place the Company info Compulsory Liquidation in order to pursue such actions and bring proceedings that ony aLiguidatoris permite to bring pursuant fo the Act 42.87 upon the placing of the Company into Liquidation under paragraph 126.5 or 12.8.6 or the necessary form being fled for the Company to be dissolved, the Joint Administrators be discharged from liabliy in respect of any action undertaken by them pursuant to Schedule B1, paragraph 98 of the Act; and 12.8.8 upon the placing ofthe Company into Liquidation, the Joint Liquidators’ by authorsad to ac in & Joint and several capacityMeretec Limited (In Administration) Report to Creditors and Statement of Proposals Pursuant to Paragraph 49(1) of Schedule B1 of the Insolvency Act 1988 43, Ancillary Croditors Questionnaires 434 The response that has been forlncoming from the questionnaire provided to creditors has proved to be helpful in relation to the events that Wanspired up to the date that the Company was piaced into Administration. 132 As previously stated in the first circular to the Company's creditors, responses that are received may prove integral to assist with investigatons into the Company's affas. Accordingly, if you have not previously provided a completed questionnaire, please do so, at your earliest onvenience. Directors Conduct 433. Pursuent to the Company Directors Disqualification Act 1986, itis the Joint Administrators and eny subsequently appointed Liquidators duty to submit a requisite reportform to the Department of Business Enterprise and Regulaory Reform concerning the directors’ conduct. 41346 The reportform must address all person holding the positon as director during the three years upto the date ofthe onset of insolvency. Please note tha this isa standerd requirement, Responses to creditors’ ‘questionnaires may prove extremely helpful concering this. If any creditor has any queries in relation to the above, please do not hesitate to contact ether the Joint ‘Administrators or the Manager dealing wth this matter, Chris Hirt on 020 7538 2222. 18th December 2008 7 ant (dministratorMoretec Limited (in Administration) Report to Creditors & Statement of Proposals APPENDIX | ‘© Statutory InformationMeretec Limited ~ in Administration Statutory Information As Reflected At Companies House Company Number: 03659285 Date of Incorporation: 26/10/1998 Previous Names: Metal Investment Trust Limited Nature of Business: 2710 - Manufacture of basic Iron and steel including ferro alloys Issued Share Capital: 127,278,578 Ordinary A shares have been issued according to ‘the last filed annual retum as at 26 October 2007. An accurate ‘share register is not yet available and the Joint Administrators shall compile this information as soon as it is readily available, Name ‘Appointed Resigned Director(s): Mark Evi 19/03/2008 : Andrew Willam Barker 2201112007 7 Craig Steven Sidell 08/02/2006 i Martin Edward Young 271022001 - Gunnar Skoog 26/10/1998 - Robert Bolier 1022007 47/10/2007 Robert Coxon 20/04/2006 01/09/2007 David John Downes o1mtoro08 17/10/2007 Andrew Henry Simon 2004/2006 17/10/2007 Timothy Peach 7/0/2002 28/02/2005 Dr Milton Sanders 28/02/2005 31/42/2005 Wiliam A Morgan 4721999 15/11/2000 Martin Edward Young 2eroriges 23/06/1969 Company Secretary: Eacotts Limited 27/2007 7 Julian David Hillman 17101/2003 04/1/2005 Mark Gerald Paine zejoeriges 17/04/2003 Thames Valley Services ow/t1v20008 02/07/2007 Martin Edward Young 2610/1998 9/04/1999 Current Registered Office: 9 Ensign House Admirals Way Marsh Wall Docklands London E14 9X Previous Registered Office: Grenville Court Britwell Road Burnham Bucks ‘SL18DFServiced Office Address: 23 Berkeley Square London wi Accountants: Eacotts Grenville Court Britwell Road Bumham Bucks ‘SL18DF Schedule of Outstanding Mortgages or Charges: Please see attached800z/60!90 9002/60!90 8002/60/90 8002/60!90 8002/60!90 8002/60!90 8002/60!90 pousnes ‘Guy eanpay pue juewealBy Aunoeg ‘ebeByoyy waweeiBy Aunoag ‘S8u80"] pue Stuajed UL se1e}U| AuNoNS Jo WELD pue ueweaLby weuUBISSY fea qunogde yueq Jeno aBiey9 jueweeiby uowusissy quawiseiBy eBpeig SenUnoes J2K0 abe }0y4 Sapuoag JaN0 abeB Loy ‘emueqeg adh, snowe, snowe, snoye, aywr seqysni, yyuez oy] seaysn1y yuOZ oyun] seaysnay wuz, oye] soaysnay yUOZ boyy] saeisnuy yyUEZ Paywiry sosysnay yqusz ‘owen ih) PoC Ty ddsMeretec Limited (in Administration) Report to Creditors & Statement of Proposals ‘APPENDIX ‘© Estimated Statement of Affairs as at § November 2008 / Creditors DetailsMERETEC LIMITED (N ADMINISTRATION) ESTIMATED STATEMENT OF AFFAIRS AS AT'S NOVEMBER 2008 Notes Book Value Estimated torvalso ‘ rn Assos (specifically plodged) CMA snares 4 uncertain uncertain Less; Lean Note Holders 119,000,000, 10,000,000 ‘Supuus donc ett 900,000 10,000,000, -Assote (nat specifically pledged) ‘VAT Refine 2 so2282 6282 (sth et Bank 3 “4.000 4216 Estimated deft to Floating Charge Creditor agar 768 08.448 LiasiLies Floating Charge Creditor Loan Note Heer 40,000,000, ‘UNSECURED CREDITORS ‘Trade & expense 4 32003698, Estimated deficiency as regards creditors es ‘Siete cons and openes oe Aainraton ‘The Estate Sater feta dev ot rlod amount ated sharhcdet Saad pte rotons es unto ew be any eo shel.Meretec Limited (in Administration) (“the Company") Notes To Estimated Statement of Affairs as at 5 November 2008 ‘The value in the CMA shares is presently uncertain given thatthe share price continues to fluctuate ‘and any realisation of the shares is subject to the hares being held in escrow for 12 months followed by an additional 12 month company lock out agreement. This effectively means the Joint ‘Administrators are unable to place a value on the value ofthe shares. ‘The Company had submitted its pre-appointment VAT retum prior to the appointment of the Joint Administrators. The retum indicated a refund of circa £162,000. The Joint Administrators have since received the VAT refund in the amount of £162,232. ‘The Company banked with HSBC Bank plc in the UK. At the date of the Joint Administrators appointment the business current had a small credit balance of circa £4,000. The balance of funds ‘on the account has now been received and the Joint Administrators estate account has been credited with the amount of £4,216. This figure is reflected by the level of claims received to date by the Joint Administrators.5. 18a Wms eo pe aS 2a eae, Horn eon oN am anes ‘INS WOH ARO WIEN Fras 10 0 wes 20 99 Ue EA 0 ae wu et yyy bs fg ong ‘vee vo tsa eng rg BB Fg wou 7 abe el on mena ening UHI SEH GOMFON ZAIN HUES Loe ny oH foayoa9 Sez ng 4 ono nF emp UREaLeG SEs ‘esa tag We pny fave‘ RED 0 )75'seng wen Foy oe Pg AD “Wee0H ump sseeu toms ons YE ED NE SIN HOLE es OIG RO wa pT eg PON EO fer neces en HEAT} NOL HEN ODE sosrenize voc m0 os Os od ssp furéwe (oommneunupy upon, asForm2.143, Rule 229 Statement of affairs ‘Name of Company ‘Company number MERETEC LIMITED (IN ADMINISTRATION) 03659285 inthe ‘Court ease number HIGH COURT OF JUSTICE 9603 ne Loos mewdaduessof Statement as tothe altars of (8) MERETEC LIMITED of Greenville Court, Britwell Road, mpry Burnham, Buckinghamshire, SL1 8DF on the (b) 5 November 2008, the date that the company entered administration, een ce Statement of Truth (ser date 1 believe thatthe facts stated inthis statement of affairs are a fll, true and complete statement oft affairs ofthe above named company a3 at (0) the date thatthe compeny ent administration. Full name a: ‘Signed Dated Wop Noasubee. 008‘Statement of Affairs for Meretoc Limited (In Administration) Prepared by Martin Young, Director of Meretoc Limited for the board of Directors of Motetec Limited (In administration) Company Number 03659285, WITHOUT PREDUJICE, Please accept this Statement of Affairs for Meretec Limited (In Administration) as a full, true and complete statement of the above named company as at the 5" of November 2008 Full Name: Meytin Egward Young Signed .cssaMt Dated: 16th of INFORMATION O1 Background On the 12" of August the company sod the business of Meretec Corp and Meretec Limited inctusing tho name, intellectual property rights and employees "The Business" to CMA Corp en Ausiraan ‘Company in return for 37-5 milion shares in CMA Corp which were subject to an irevocable Escrow ‘Agreement until August 2009 and @ company Look Up agreement unt August 2070. At the time that ths transaction completed the company was solvent withthe shares in CMA werth substantially more than the outstanding bonds and unseevred creditor positions Ih September and October 2008 the share price of CMA Corp moved down substantial in tne wth Global markets effected by he cred ers, addtonally the Australian Dolr in which the company Feld assets moved dovn substantial ageinst the USD in which the company held secured and Uncecured debt Although the company had tentatively agroed re-fnancing in Australia in August and Sopiember it was unable to complate this financing due tothe decrease in the value ofthe avaiable colateral inthe CMA shares. z ‘When it became clear that the share values in CMA and the currency movements which the company had experienced were not returning swifly back to their previous positions the company took specialized insolvency advice from Davenport Lyons and Smith Wiliemson which led on to today’s position. ‘The company is currently siting on less than $10,000 in cash. The company's only assets are ‘37,500,000 shares in CMA Corp which are held in Escrow plus accounts receivable of about ‘$500,000 in dividends and VAT returns from HMRC. We believe that since writing the above ‘statement the Company has received in approximately £160,000 from HMRC in respect to the VAT ‘claim but that the dividend payment from CMA Corporation has been requested but is stil outstanding. ‘CORPORATE 1.1 The Company was incorporated under the Companies Act 1985 (the Aci") on 26 October 41998 e9 a private company imitod by shares with the name of Metals investment, Trust Limited end registered in England and Wales with number 3659285. On 6 March 2008 the ‘Company changed its name to Meretec Limited. 12 The Directors of the Company are Martin Young, Gunnar Skoog and Craig Sidell, Mark Everitt and Andrew Barker 1.3 The registered office of the Company is at Grenville Court, Britwell Road, Burnham, Buckinghamshire SL1 eDF.14 15 16 “The eccounting reference date of the Company is 31 December. The accounts for the year aided 31 December 2006 are overdue for filing et Companies House although they have been completed by Grant Thornton but not signed off ‘Shareholders ‘The largest shareholder of the Company is Meyado Private Wealth Management (MPWM), @ Company incorporated in England and Weles. MPWNM is a subsiciary of Meyado Group Holdings (MGH), a company incorporated in the Bahame. Meretec arranged a series of private placements for the Company via MPWN and MPWNM Mote shares both for is parent MGH and on behalf of various other persons (both natural and fogal), including MGH. This {s reflected in the latest financial statements for the Company URe2). disclose that MPWM interest is a nominee hoiding and that the shares are held for the penefit of a number of private investors. Private Placement risk factors wore signed by all private Investors in Mereteo Limited which were provided tc all placees. “The Ditectors of the company believe that the company has approximately 197,773.87) Millon shares outstanding but requires work with the company secretary in the coming days qaieolablsh the currant up to date number. The board can repor that the company has mace Te econ significant issuance of shares and that the last transaction was Just prior to the sale Of the company to CMA Corporation in August ofthis year. Please see the attached: Meretec Shares on Issue [though Moyedo Private Wealth Management has previously acted as nominee for many of fhe private investors ft is understood that they are unuiling to continue this @ ts paren! ‘ompany is 2 significant shareholder, unsecured creditor and loan note holder and iis May aaraee conficts of interest, MWVPM wil provide a lis ofall neminees to the Administrator within arnumber of days. ‘The Company has the folowing subsidiary undertakings: Name: Meretec Corporation, a"C" company incorporated in tho State of Delaware Issued Share Capital: US$1000 [divided nto 1000 ordinary shares of USSt each} Certificate of incorporation: ‘Tho Company was incorporated on May 9, 2000. Directors: Gunnar Skoog, Company Treasurer: Mark Everitt Accounting Reference Date: December 31 Shareholders: Meretec LimitedMeretec Shares on Issue Meyado Group Holdings 109,994,506 ¥MRTI 14,105,630 ‘Alan Polivnick 93,750 ‘Atkoxander Grant 62,475 ‘Alonso 62,500 Anthony Pralte 493,260 ‘Antonio Harrison 93,750 B Morgan 287,500 Butter Smith 12,500 Charles Pinnell 374,969 Chitine 62,481 Contro! Masters Ine 375,000 David Fuller 187,465 David Wall 74,950 Gonzalez De Diego Miter 62,448 Gouge & Schitter 31,250 H Watson 87,456 lan Barber 27,998 Maw 62,454 Michael Curry 93,750 Milleran Marketing 200,013 NWay 62,466 Neil Dickson 61,260 P Coubrough 93,750 P Henshaw 156,225 P Radford 424,975 Peter Leuner 31,250 Pralte!| 902,315 Shaun Cerroll 100,000 Sikich Coperation 5,580,000 Tedjini "328,154 V Lopes Rocha 156,250 William Fiint Smith 125,000 MYoung 3,206,241 total shares in issue: TRS TOBanking Relationships & Balances as of November 6° 2008 Meretec Limited Bank: HSBC, NY ‘ABA: 021007088 ‘Addross: Park Avenue Office 250 Park Avenue New York, NY10 Fel: 1 212 983 8859 Relationship Manager Margret Harvey: margrat harvey@us.hsbe.com ‘Aceount No.: 006045359 Balance: $6,154.04 Bank: HSBC, Slough 4128 High Street, Slough, Borks, SL1 1UF Tet: 08457 606060 Sort Code: 404208. ‘Acoourt No. 61866070 Relationship Managar Randeep Budyat: randeep badyel@hsbe.com Balance: £225.97 ‘Bank: HSBC, UK Sort Code: 400515 ‘Account No.: 68191682 Balance: $292.10 Meretec Corporation Bank: HSBC, NY ‘ABA: 021001088 ‘Account No.006053106 Balance: $406.95 Bank: Harris NA ABA: 071025661 ‘Account No. 4339120481 Belanco: $478 BANKING ARRANGEMENTS: Neither the Limited nor Corp has any banking facilites.DIRECTORS, SECRETARY AND ADVISERS Directors ‘Martin Young (Chairman) Mark Evertt (Non-Executive) ‘Gunnar Skoog (Non-Executis Craig Siddell (Non-Executive Andrew Barker (Managing Di ‘Company secretary ‘Thames Valley Business Ser Registered office Grenville Court Britwell Road Burnham Buckinghamshire SL180F Company Bookkeepers UK ‘Company Bockkeapers USA Eacots ‘Sikich Corporation LLC Grenville Court ‘298 Corporate Blvd, Britwell Road Aurora, Burnham IL 60502-9102 Bucks United States ‘SL1 80F FTAO Montha Bunthon and Martin Gatehouse FTAO of George Melina ‘Tel: 01628 665432 Legal advisers to as to English law Legal advisers to the Compa Davenport Lyons ‘Akerman, Senterfit & Eidson 30 Burlington Street Las Olas Centre Il London 360 East Las Olas Boulevarc Wis 3NL. Ft Lauderdale FL33301-2229 USA ‘Auditors and reporting accountants Grant Thorton UK LLP Grant Thomton House Molton Street London NW1 2EP United Kingdom FTA Segio CardosaCreditors The company entered into a lo ‘Absolute Capital and Meyada Group Holdings as well as some private Clients of Meyedo; Galapagos Trust, Lind Domecq, John Pinnell and Antonio Hertison in August 2006 in preparation for IPO funding [The funding wafer $10 milion repayable by December 2007 and an acmission was antipated fore this tine. {n Spring 2007 the company was forced to abandon the planed IPO because of market conditions and docidod to sell the physical plant in East Chicago to CMA Corporation as wall as sell an additional license to CMA, this strategy was successful and the sale of the plant and land to CMA cooperation ‘completed in January 2008. One of the Loan Note holders agreed to increase is lone note Instrument by $1.5 million at this time. In February 08 tne company was epproached by CMA Corporation to buy “the business” of Meretec hich consisted of primarily the two income producing licenses and the intellectual property rights to the Meretec process for @ sum of $30 milan. The board of Directors consulted and agreed the sale; during the negotiations and drafting of the contracts the agreed sum modified to 37.5 milion shares of ‘CMA Corporation, the loan note holders of Mereiec approved the deal and changed the security to the CMA shares from the IPR and the deal closed on August the 12" 2008. As part of the completion of the deal all of the note holders received early repayment on some of their oan-notes plus a 10% penalty for changing the security, this reduced the amount of capital owed by the company but re- iterated a maturity date of October 31* 2008. ‘The instrument is subject toa equitable charge. ‘The Amounts sti owing to the note holder may require some further calculations due to interest but the following table was produced by Eacotts for the board in Eerly August breaking down the amounts ‘owing and to which parties: Please See the Note holders Schedule Attached‘Meretec — Additional Creditors ‘Breakdown in original currency MGH uss cept Loan due to MGH - balance Carried Forward $136,595.00 ‘Add: Payments made by Meyado on behalf of Merete ‘th Aug Loan to Meretec $60,000 ‘$60,000.00 22th Aug Loan to Meretec $9,980°2 $19,960.00 ‘Gunnar Skoog salary £20,693 wk36 £20,693.00 Gurrer August salary £20,693 plus expenses claim £1,656 tote £22,049 n weok 37, £22,360 00 Davenport Lyons Payment £25,000 wi40 ££25,000.00 Evolution Securities payment £10,000 wk 42 £10,000.00 Pay down part of Chris Payandee loan Euro40,000 w42 Davenport Lyons payment £25,000 wka2 +£25,000.00 Davenport Lyons payment £25,000 wha ££25,000.00 Davenport Lyons payment £40,000 wk44 '240,000.00 tion Securities payment £10,000 and Eacotts £20,000 wk4+ +£30,000.00 Palladia payment £124.23 wk45 81,224.23 CMA Overpayment of License fee in August 2008 $120,000.00 Meyado Private Wealth Management invoice “August invoice £104,635 88 (24,961.93 plus £100,274.5 Davenpor Jul & Aug bls) £420 33 Sept invoice £1252.56 81,262.56 (Oct invoice £1889.68 £1,889.68 Davenport Lyons bils charge Meyado paid on behatf of Meretec £100,274.50 Less: Davenport £2,757.59 Balance of week 42 payment £25k £2,751.59 Davenport £25k week43 -£25,000.00 Davenport £40k weekts -£40,000.00 ‘Loan from Chris Payandee due August 2007 e Loan Interest Unpaid Salaries ‘Gunnar Skoog from 2007 241,386.00 ‘Andy Baker June and July 2007 18,745.06 Unpaid Exponses Ct Martin Young expenses claim - Invoice 77 £31,051.66 ‘Andrew Barker Expenses Claim £23,759.96 Other Creditors Akerman Senterfitt $135,037.06 Evolution ££30,000.00 Grant Thornton $2,477.51 Henry Davis York $15,426.44 Jones Day 244,549.12 North Bridge $400,000.00 Sikich LLP $2,039.38 Zenith Trust 27,446.52 Inland revenue (PAYE & NI) (epproxnate calciaton no errands received) ££265,594.74 UKIR (Withhold tax) £924.00 ‘Meretec Corp. ‘Advanced Waste Service $17,038.40 Burke Costanza & Cuppy LLP 316,840.91 Lake County Treasurer $10,841.32 Meade Electric Company $14,218.25Praxalr-95023241 $9,726.09 Sikich LLP $146,176.01 Superior Engineering $12,079.17 ‘Treasurer Lake County - Property tax $10,051.57 Grand total {$4,429,207.11 £699,743.77 € 271,672.32 ‘Addross Uist of Creditors, Supplier Address Meretec Limited ‘Akerman Senierfitt Post Office Box 4906 Orlando, FL32802 ‘Andrew Barker Evolution Securities Limited 9th Floor, 100 Wood Street, London EC2V 7AN Grant Thorton LLP. 4175 West Jackeon Blvd., Chicago. IL 60604 Henry Davis York 144 Martin Place Sydney NSW 2000 Australia Inlend revenue (PAVE & NI) Cumbernauld Glasgow G67 1¥2. Jones Day 21 Tudor Street London EC4T ODJ X67 London’ Chancery Martin Young Martin Young's Private Office, PO Box 43659, Union House, Sth Floor, Port Sayeed Roar North Bridge Capital Partners Limited +14 Buckingham Gate, London SW1E 6LB ‘Sikich LLP ‘998 Corporate Bivd, Aurora, Il 60502-9102 UKIR (withhold tax) ‘Tex on CP loan interest 0802 oath Trust Company Limited PO Box 460, Waterloo House, Don Stroat, St Heller Jersey JE4 SRS Meretec Corp. Advanced Waste Service 1126 South 70th Street Suite N408B West Allis WI 53214 Burke Costanza & Cuppy LLP 9191 Broadway Merrillvile, IN 46410 Lake Counly Government Genter 2293 North Main Street Grown Point, Lake County Treasurer Indiana 46307-1696, Meade Electric Company Praxair Distribution Ine Dept CH 10660 Palatine IL 60055-0660 ‘Sikich Corp LLP 998 Corporate BWvd. Aurora, IL 60502-9102 ‘Superior Engineering Other Loan Meyado Group Holdings '50 Shirley Street, PO Box N-624, Nassau, Bahamas Meyado Private Weaith Management ‘clo Meyade Group Holdings Limited as above cma, Melbourne, Australia Chris Payandee Madrid, SpainCapital Structure ‘The company currently has epproximatoly 140 million shares on issue and Meyado Private Wealth ‘Management Limited is currently the largest shareholdor with epproximatsly 90% of the shares being held in its nominee. I can confirm that Meyaco Private Wealth Management Limited is only a nominee ‘and has no beneficial interest in the company whatsoaver. Meyado Private Wealth Management is required to resign as nominee for the beneficial shareholders due to administration, ‘There are approximately 380 nominee shareholders within the company with the largest nominee being Meyado Group Holdings with the majority of rest ofthe investors private investors who are resident in Europe, America and the Far East Other details ‘The company has no Insurances, Pension schemes or landlords. The company has no other employees other than the Directors all of whom are unpaid. Andrew Barker was the Managing Director of Meretec Limited until the Asset Sale on August the 12th where he was also sold with the ‘company and he wes issued a new contract with CMA. He was never removed as a Director of Meretec prior to this edministration order hence the aberration. ‘Summary ‘The Directors are aware that the assets in Meretec which are shares in CMA Corporation are potentially undervalued on a temporary basis and that the realization of these shares now or in the near future could be prejudicial to the intorests of all of the creditors equally. Furthermore the Directors are aware that the company CMA corporation has within the last two wooks received an all share offer for the company which was rejected as well as receiving a Substantial new strategic shareholder all of which point to there being substantiated interest within the primary assets that Meretec hold a strategic stake in CMA Corporation. The Directors are concerned that if realization of the assets is forced now that it would be prejudicial to the interests of the unsecured creditors and the company which could result in Unfair economic advantage being g attributed to the secured creditors for sums far in excess, of the sums owing to them under contract. This concerns the Directors and they wish to officially bring this to the attention of the Administrators and the court.Meretec Limited (in Administration) Reportto Creditors & Statement of Proposals. ‘APPENDIX tl © Joint Administrators Reooipts and Payments Account to 18 December 2008Meretec Limited (In Administration) JOINT ADMINISTRATORS' INCOME AND EXPENDITURE ACCOUNT Statement From 05/11/2008 From 05/11/2008 of affairs To 18/12/2008, To 18/12/2008 7 £ £ RECEIPTS CMA Shares Uncertain 0.00 0.09 VAT Refund 163,000.00 162,231.75 162,231.75 Bank Interest Gross 218.88 218.88 Cash at Bank 2,000.00 421597 421597 168,666.60 168,666.60 PAYMENTS: ‘Statutory Advertising 169.92 Vat Receivable 25.49 195.41 195.61 BALANCE - 18 Decomber 2008 166,471.19Merotec Limited (in Administration) Reportto Crouitors & Statement of Proposals ‘APPENDIX IV ‘¢ Breakdown of Administrators Fees / Activity Codes‘seis po aBreyo ty u s92L0Ueh J} NEE POM YoY pese—.U! BNE sje HDR. OY AK HAUT Sa JO oRNOD a NINO aN {98 J0) eae no Bul Awning 20) xpUedEy 205 — 1unos0e uo user uopeieunogs LER ORO oveadT — ooare —ag0SE GORE —aTORFET ‘39800 OL, wee 008 vam cos UNUSED OR nou sod 3 os oBeiony oor; orthoses cove ‘mou won, oree ge ovst oo ‘sowwa9 009 Supe os ot oro. ose ‘siosse o vonesntoy oz oz ‘vonesiisenuy ori =o hae oss ‘Surwueig pue uoneasiujUpY sountea We, wunssy —oeRSIMUpY —_smERSMMUPY OWES ss6e009 sobeuny 210s souea Sugeuen NOWLONn >R0M JO NOUYOIISEYTO ‘00 4313030 9} OL 8002 ABEWAAON 9 GoRzd 3HL YOd S3LVA LNO OUVHO GNY BNL 4O ANVMINS (ouvensiaway ND cauMroaLHaN‘SIP 9 STANDARD ACTIVITY SUMMARIES: Standard Activity Examples of Work ‘Administration and Planning Case Planning Administrative set up Appointment and noffication Maintenance of records Statutory reporting Estate accounting Schedule company books and records Investigation SiP2 CDDA report Investigating antecedent transactions Realisation of assets, Identifying, securing, insuring assets Retention of title Debt collection - pre and post appointment Property, business and asset sales Communication and negotiations with secured creditors Trading Planning Management of operation Communication/negotition with suppliers Communication/negotiation with landlord Communicatton/negotiation wit third parties Monitor goods outward/inwards Stock take On-going employee issues Travel Creditors Communication with creditors Creditor claims (including employees and other preferential creditorsMeretec Limited (in Administration) Report to Creditors & Statement of Proposals APPENDIX V ‘© Breakdown of SFP Forensic Limited Fees“sete po eetp ou) secuauen.0} yun pom rN pesBe!oU aNDY See! Gojoe sg 209K BUN Sua Jo Ws aN BANG ‘EN {Weis 10} seu INO aBsaYD Aiming 40} mpueddy 995 ‘une22e wo uneyp uopesounIeS CSTE wort seI809 ea, vem ost voor oo'00z ove coos nou 20d 3592 Bes0ny oe hae ont : oe. oe sunou reo. oreo es os oe. oe. uopeBneeny soweng MeL wesssy —soensupy —_seyeastuMPY OWS, 26eu0N, seBeuew ones —— Sulbouey, NOWONn OM 40 NOLLYOHISSYTO ‘8002 HaENaOO 91 O1 9907 WABNAAON s GORA ZH Yo S21VE.LNO BORVHO ONY BW 40 ANVANNS Lh (iowmunsiniway ND aaLWn Sau SISNEHO coke dasMeretec Limited (in Administration) Report to Creditors & Statement of Proposals ‘APPENDIX VI ‘© Breakdown of SFP Datastore Limited Feeswee swowssingsig mo. onuad F139 ‘soma 5216 eunou suowesingsa ase ur=.0; 0984 I oBue4 faewuns 20} ypueUty 20g wnop0e Uo une vontiountiey ¥ seso0 0 cose sno a goes a6 e0y ee i ‘nou 90 ve sple2eu jo Bnepoqueaiy wong dh Beno, sropums — siso0unS Suysuewenny syse1 seg NoWoNna ION Jo WOMLYOIAIESY.O ‘02 waaneto3a 9} 01 soee EAANAAON 8 GONSd BH Nod SLY AND AORN GAY aM. 4O ALYHNS (vouvanseunay wi oaumn oaizuaN suoswiva Th HH esMorotec Limited {in Administration) Report to Creditors & Statement of Proposals ‘APPENDIX Vil ‘+ Charge out Rates for SFP main practice and associated entities(sysop ay sed 0913 S021 0} oe) coses sow Aveda ohne se i809 EIS (sus 040 dr maa fog Ns (su94 01 «16 Aanpa fac ewes euomppy pur Bursuowonyy ys wo ee swe sue, sz 800 JIS w (won201109 80mg x08 ue leneiney) syse1 eBei01g EE ERS TRE aes POUT SOE das se se ou oor 06 oo ost ou ost 02 cel oz. sz ost see osz Su ose. su oz, zuebouen | | siz oe sz Lssbeveyy owes | | ooe see ose. Zsa6evey souues | | seo osy. soeeia Buyseuen | | suz soanq Buibeuen | | Osh sopeg Bubevey) TTS oes | | may pe RTS, Spe OVP] SOSROTSY dS amar Ruedaag das eva] SISUBIe SIS Bu TOEMeretec Limited {in Administration) Report to Creditors & Statement of Proposals APPENDIX Vill ‘© Proof of Debt formPROOF OF DEBT - GENERAL FORM In the matter of Meretec Limited (in Administration) and in the matter of the Insolvency Act 1986 Name of Creditor ‘Address of Creditor Total amount of claim, including any Value Added Tax and outstanding uncapitalised interest as at the date the company went into administration Details of any document by reference to which the debt can be substantiated. [Note the administrator may call for any document or evidence to substantiate the claim at his discretion] TF the total amount shown above includes Value Added Tax, please show:- (a) amount of Value Added Tax (b) amount of claim NET of Value Added Tax if total amount above includes outstanding uncapitalised interest please state amount if you have filed in both box 3 and box 5, please state whether you are claiming the amount shown in box 3 or the amount shown in box 5(b) Give details of whether the whole or any part of the debt falls within any (and if so which) of the categories of preferential debts under section 386 of, and schedule 6 to, the Insolvency Act 1986 (es read with schedule 3. to the Social Security Pensions Act 1975) Category ‘Amount(s) claimed as preferential £ Particulars of how and when debt incurred. 10. Particulars of any security held, the value of the security, and the date it was given 1 ‘Signature of creditor or person authorised to act on his behalf Name in BLOCK LETTERS Position with or relation to creditor‘Meretec Limited {in Administration) Report to Creditors & Statement of Proposals APPENDIX IX '* Guide to Administrators and Liquidators Feesre ernedordplimeiOor Ate Mpa 2 SESSA SSS cnt tsi tet eye I SS iesaty seperate teat Sihisereeeeeeerenens ema + teeeernanissutaionrqmamelenieete ohne setgnetbenmene tne ERS Sree eeonars cable egpeetnecmneenmaupipacet rag nese Ipiteatsteenirentoers + sean emanate ipDeena eae‘Wieser ehipetictae meet Sonor aes eaetcare EES hee 2 ig 1 iene ttaenpcnanter pa =o Sooo ‘ SSS eemmen peeriiascereeresaee: gether ald Sinaia nl opera EEE amperes sanrsac Sg eine nt ‘nema bp obi SS ASG SM a pee at ieee + femtestonaprt inmate SSRIS a inoue pcan ier Seaoea ganar aneeewaccorenen unittest?1 tea ere nny pit ‘apps ah ont oe agit Ranma enaMoretec Limited (in Administration) Reportto Creditors & Statement of Proposals ‘APPENDIX © Form 2.218Rule 237 (@) Insert fll mame and address ofthe ercdtor making the request () inset full name and sees of registered office of, the company (6 Insert amount of aim (@) Incr fll name) and address(es) of eres concurring with the request it any) and thee claims inthe ‘wlminstrton ifthe requesting creditor’ elim is ‘below the required 10% (Insert details ofthe purpose ofthe meeting Form 2.21B Creditor’s request for a meeting ‘Name of Company ‘Company number MERETEC LIMITED (IN ADMINISTRATION) 03659285 In the HIGH COURT OF JUSTICE Court case number ‘CHANCERY DIVISION 19603 of 2008 COMPANIES COURT 1@), request a meeting of the creditors of (b) ‘My claim in the administration is (c) SR Se concur with the above request, and I attach copies of their written confirmation of concurrence, ‘The purpose of the meeting is (e) Signed Dated