Orange H Group Limited (In Receivership) (In Liquidation) and relevant subsidiaries Receivers’ second report pursuant to section 24 of the Receivership Act 1993 18 January 2019 Important note and disclaimer The entities to which this report relates, all of which are in receivership and in liquidation, are provided in the table below and are collectively referred to in the report as the “Companies” or “Receivership Entities”. Receivership Entities (all in receivership and in liquidation) Company name Company number  Orange H Group Limited 3691741  H Construction Group Limited 3746315  H Construction Hobsonville Limited 3893218  H Construction North Island Limited 175077  H Construction North Island Group Limited 3873056  H Construction N.I. Limited 3874817  H Construction South Island Limited 3691841  H Infrastructure Holdings Limited 5995672  H Infrastructure (NZ) Limited 5995721  H Plant Limited 3691839  HUC Limited  Orange H Construction Limited 3723877  Orange H Management Limited 3691975 Disclaimer This report has been prepared by us in accordance with Section 24 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 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. 826148 A corporate structure diagram for Orange H Group Limited (In Receivership) (In Liquidation) and its subsidiaries (“Group”) is provided at Appendix 1. 2 Receivers’ second report on the state of affairs of the Receivership Entities Introduction    Andrew John Grenfell and Conor John McElhinney (“Receivers”) were jointly and severally appointed as Receivers and Managers of all the assets, property and undertakings of the Companies on 11 May 2018 by McConnell Limited as Security Agent for the secured lenders, being those entities provided in Appendix 3 (“Secured Lenders”). The Receivers were appointed under the powers contained within a group security agreement dated 4 April 2016 (“GSA”) in favour of the Secured Lenders. Subsequent to our appointment, Andrew Bethell and Andrew McKay (“Liquidators”) of BDO were appointed as liquidators of the Companies (with the exception of H Construction North Island Limited (“HCNI”) where Timothy Downes and Stephanie Jeffreys of Grant Thornton are liquidators). We set out below our report on the state of the affairs of the Companies, including a report on the progress of the receivership for the period 11 May 2018 to 10 November 2018 (“Period”) as required by section 24 of the Receiverships Act 1993.  Amount owing as at the date of the report to creditors of the Companies having preferential claims  The Receivers have paid employees preferential claims in full.  PAYE and related employment taxes had been paid up to date.  At the date of our appointment the Receivership Entities were in a GST refund position. Amounts likely to be available as at the date of the report for payment of unsecured creditors  Receipts and payments  Appendix 2 provides the Receivership Entities’ receipts and payments summaries for the Period. Property disposed of in the Period and proposals for future disposal of property   In March 2017, the Group sold its business and assets to Hawkins 2017 Ltd and Downer New Zealand Ltd (“Purchaser”), both subsidiaries of Downer EDI. The sale of the business included employment contracts, the Hawkins brand and name, plant and equipment and selected construction contracts. Construction projects not included in the sale remained with the Companies for completion (“Retained Projects”). The majority of the Retained Projects had reached practical completion and were in their defects liability period. During the Period, the Receivers have collected a number of payment claims and retentions in relation to the Retained Projects. The Receivers continue to work with principals to seek recovery of amounts due on the Retained Projects. In some cases this may require legal actions against principals. Amounts owing to the Secured Lenders as at the date of the report  The GSA under which the Receivers were appointed secures the inter-company receivables/advances between the Secured Lenders. The secured amounts due by each Receivership Entity are provided in Appendix 2.  During the Period, the beneficiary of a $10.5m bond associated with H Construction Schools 2 PPP Ltd (In Liquidation), called the bond in full. The bond was cash-backed by McConnell Limited, with a guarantee from Orange H Group Limited (In receivership)(In liquidation). As a result, the amount outstanding to McConnell Limited has increased during the Period to $26.0m (net of distributions). In addition to the cash held in secure bank accounts, HSBC and Vero have prior ranking security over the Companies’ assets to secure the contingent liabilities associated with the performance bonds and sureties issued on behalf of the Group. At the date of the report, the value of HSBC’s and Vero’s performance bonds and sureties still on issue was $1.0m. The key driver of potential returns to creditors is the recovery of final payment claims, retentions and collateral in respect of outstanding performance bonds on Retained Projects. At this stage it is uncertain what funds will be available for unsecured creditors. Further information  Should you have any queries on the contents of this report please contact Kiran Patel direct dial (09) 926 5118. Dated: 18 January 2019 ____________________________________ Andrew Grenfell Receiver and Manager Address of Receivers: C/- McGrathNicol Level 17, 34 Shortland Street PO Box 106-733, Auckland 1143 3 Appendices Appendix 1 Group structure diagram Appendix 2 Receipts and payments Appendix 3 Secured lenders under the GSA Appendix 1 Group corporate structure McConnell Ltd Orange H Group Ltd H Construction Group Ltd Orange H Management Ltd H Construction North Island Ltd H Construction North Island Group Ltd Hawkins Construction Guam Inc H Construction N.I. Ltd Hawkins Infrastructure Guam Inc (49%) H Construction Hobsonville Ltd HILOR Unincorporated JV (50%) H Construction Schools 2 PPP Ltd H Plant Ltd H Construction South Island Ltd HUC Ltd H Infrastructure Holdings Ltd H Infrastructure Ltd Orange H PNG Ltd Hawkins Infrastructure Ltd, Vanuatu Branch Orange H Construction Ltd H Infrastructure (NZ) Ltd Learning Infrastructure Investment Ltd Hawkins Singapore Pte Ltd Pacific Port Logistics Pte Ltd (10%) Hawkins (Fiji) Ltd Source: Management and Companies Office Pancho Hawkins Philippines Inc (40%) HILOR Unincorporated JV 2013 (50%) Secured entities in receivership and in liquidation In liquidation Overseas entity HIL Representative Office Indonesia Secured entity not in receivership or liquidation Not in receivership or liquidation 5 Appendix 2 2.1 Orange H Group Limited (In Receivership)(In Liquidation) Amounts due to Secured Lenders Orange H Group Limited (In Receivership) (In Liquidation) Receipts and Payments Summary 11 May 2018 to 10 November 2018 Cash at bank - 11 May 2018 Project receipts GST and PAYE refunds Receipts relating to other parties $'000 (GST Incl.) 2,742 - $149.7m Total amount due to Secured Lenders $174.5m 26 108 Total receipts 3,679 Secured creditor distribution (1,395) Receivers' fees and disbursements (170) Legal fees and disbursements (188) - Salaries and wages (98) PAYE (45) Proect costs - Retentions - Other payments (33) Total payments (1,930) Closing cash on hand $24.8m Other Group companies 804 Other receipts GST paid McConnell Limited 1,750 6 Appendix 2 2.2 H Construction Group Limited (In Receivership)(In Liquidation) Amounts due to Secured Lenders H Construction Group Ltd (In Receivership)(In Liquidation) Receipts and Payments Summary 11 May 2018 to 10 November 2018 $'000 (GST Incl.) Cash at bank - 11 May 2018 - Project receipts - GST refunds - Other receipts - Total receipts - Secured creditor distribution - Receivers' fees and disbursements - Legal fees and disbursements - GST paid - Salaries and wages - PAYE - Other payments - Total payments - Closing cash on hand - Other Group companies $4.7m 7 Appendix 2 2.3 H Construction North Island Limited (In Receivership)(In Liquidation) Amounts due to Secured Lenders H Construction North Island Limited (In Receivership) (In Liquidation) Receipts and Payments Summary 11 May 2018 to 10 November 2018 $'000 (GST Incl.) Cash at bank - 11 May 2018 Project receipts GST refunds 434 10 0 Total receipts 445 Receivers' fees and disbursements (33) Legal fees and disbursements (30) GST paid (56) Salaries and wages - PAYE - Project costs (31) Retentions - Other payments (1) Total payments (151) Closing cash on hand $144.3m 1 Other receipts Secured creditor distribution Other Group companies 294 8 Appendix 2 2.4 Orange H Management Limited (In Receivership)(In Liquidation) Amounts due to Secured Lenders Orange H Management Ltd (In Receivership)(In Liquidation) Receipts and Payments Summary 11 May 2018 to 10 November 2018 $'000 (GST Incl.) Cash at bank - 11 May 2018 - Project receipts - GST refunds - Other receipts - Total receipts - Secured creditor distribution - Receivers fees' and disbursements - Legal fees and disbursements - GST paid - Salaries and wages - PAYE - Other payments - Total payments - Closing cash on hand - Other Group companies $11.6m 9 Appendix 2 2.5 H Construction N.I. Limited (In Receivership)(In Liquidation) Amounts due to secured creditors H Construction N.I. Limited (In Receivership) (In Liquidation) Receipts and Payments Summary 11 May 2018 to 10 November 2018 Cash at bank - 11 May 2018 Project receipts GST refunds $'000 (GST Incl.) 936 66 0 Total receipts 1,002 Receivers' fees and disbursements Legal fees and disbursements GST paid (249) (39) (144) Salaries and wages - PAYE - Project costs Retentions (14) - Other payments (14) Total payments (461) Closing cash on hand $80.3m - Other receipts Secured creditor distribution Other Group companies 542 10 Appendix 2 2.6 H Construction Hobsonville Limited (In Receivership)(In Liquidation) H Construction Hobsonville Ltd (In Receivership)(In Liquidation) Receipts and Payments Summary 11 May 2018 to 10 November 2018 Amounts due to secured creditors $'000 (GST Incl.) Cash at bank - 11 May 2018 - Project receipts - GST refunds - Other receipts - Total receipts - Secured creditor distribution - Receivers' fees and disbursements - Legal fees and disbursements - GST paid - Salaries and wages - PAYE - Other payments - Total payments - Closing cash on hand - Other Group companies $6.5m 11 Appendix 2 2.7 H Construction North Island Group Limited (In Receivership)(In Liquidation) H Construction North Island Group Ltd (In Receivership)(In Liquidation) Receipts and Payments Summary 11 May 2018 to 10 November 2018 Amounts due to secured creditors $'000 (GST Incl.) Cash at bank - 11 May 2018 - Project receipts - GST refunds - Other receipts - Total receipts - Secured creditor distribution - Receivers' fees and disbursements - Legal fees and disbursements - GST paid - Salaries and wages - PAYE - Other payments - Total payments - Closing cash on hand - Other Group companies $1.6m 12 Appendix 2 2.8 H Construction South Island Limited (In Receivership)(In Liquidation) Amounts due to secured creditors H Construction South Island Limited (In Receivership) (In Liquidation) Receipts and Payments Summary 11 May 2018 to 10 November 2018 $'000 (GST Incl.) Cash at bank - 11 May 2018 Project receipts GST refunds 1,667 304 1 Total receipts 1,972 - Receivers' fees and disbursements (257) Legal fees and disbursements (114) GST paid (64) Salaries and wages - PAYE - Project costs (7) Retentions - Other payments (55) Total payments (498) Closing cash on hand $49.4m 0 Other receipts Secured creditor distribution Other Group companies 1,474 13 Appendix 2 2.9 H Infrastructure (NZ) Limited (In Receivership)(In Liquidation) H Infrastructure (NZ) Ltd (In Receivership)(In Liquidation) Receipts and Payments Summary 11 May 2018 to 10 November 2018 Amounts due to secured creditors $'000 (GST Incl.) Cash at bank - 11 May 2018 - Project receipts - GST refunds - Other receipts - Total receipts - Secured creditor distribution - Receivers' fees and disbursements - Legal fees and disbursements - GST paid - Salaries and wages - PAYE - Other payments - Total payments - Closing cash on hand - Other Group companies $0.5m 14 Appendix 2 2.10 H Infrastructure Holdings Ltd (In Receivership)(In Liquidation) H Infrastructure Holdings Ltd (In Receivership)(In Liquidation) Receipts and Payments Summary 11 May 2018 to 10 November 2018 $'000 (GST Incl.) Cash at bank - 11 May 2018 - Project receipts - GST refunds - Other receipts - Total receipts - Secured creditor distribution - Receivers' fees and disbursements - Legal fees and disbursements - GST paid - Salaries and wages - PAYE - Other payments - Total payments - Closing cash on hand - 15 Appendix 2 2.11 H Plant Ltd (In Receivership)(In Liquidation) H Plant Ltd (In Receivership)(In Liquidation) Receipts and Payments Summary 11 May 2018 to 10 November 2018 Amounts due to secured creditors $'000 (GST Incl.) Cash at bank - 11 May 2018 - Project receipts - GST refunds - Other receipts - Total receipts - Secured creditor distribution - Receivers' fees and disbursements - Legal fees and disbursements - GST paid - Salaries and wages - PAYE - Other payments - Total payments - Closing cash on hand - Other Group companies $7.2m 16 Appendix 2 2.12 HUC Ltd (In Receivership)(In Liquidation) Amounts due to secured creditors HUC Limited (In Receivership) (In Liquidation) Receipts and Payments Summary 11 May 2018 to 10 November 2018 $'000 (GST Incl.) McConnell Limited $1.2m Cash at bank - 11 May 2018 53 Other Group companies $6.3m Project receipts - Total amount due to secured creditors $7.5m GST refunds 8 Other receipts - Total receipts 61 Secured creditor distribution - Receivers fees and disbursements - Legal fees and disbursements - GST paid - Salaries and wages - PAYE - Other payments - Total payments - Closing cash on hand 61 17 Appendix 2 2.13 Orange H Construction Ltd (In Receivership)(In Liquidation) Orange H Construction Ltd (In Receivership)(In Liquidation) Receipts and Payments Summary 11 May 2018 to 10 November 2018 $'000 (GST Incl.) Cash at bank - 11 May 2018 - Project receipts - GST refunds - Other receipts - Total receipts - Secured creditor distribution - Receivers' fees and disbursements - Legal fees and disbursements - GST paid - Salaries and wages - PAYE - Other payments - Total payments - Closing cash on hand - 18 Appendix 3 Secured lenders under the GSA Secured lenders Company name  McConnell Limited  Orange H Group Limited (In Receivership)(In Liquidation)  H Construction Group Limited (In Receivership)(In Liquidation)  H Construction Hobsonville Limited (In Receivership)(In Liquidation)  H Construction North Island Limited (In Receivership)(In Liquidation)  H Construction North Island Group Limited (In Receivership)(In Liquidation)  H Construction N.I. Limited (In Receivership)(In Liquidation)  H Construction South Island Limited (In Receivership)(In Liquidation)  H Infrastructure Holdings Limited (In Receivership)(In Liquidation)  H Infrastructure (NZ) Limited (In Receivership)(In Liquidation)  H Plant Limited (In Receivership)(In Liquidation)  HUC Limited (In Receivership)(In Liquidation)  Orange H Construction Limited (In Receivership)(In Liquidation)  Orange H Management Limited (In Receivership)(In Liquidation)  H Infrastructure Limited (1) Note: 1) McConnell Limited is the Security Agent on behalf of all the Secured Lenders 19