Liquidators’ Second Report Cullen Group of Companies (all in Liquidation) (“Cullen Group”) 15 July 2020 kpmg.com/nz Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 1 Appointment details On 17 December 2019 Vivian Judith Fatupaito and Luke Norman, both of KPMG, were appointed as joint and several liquidators (the Liquidators) of Cullen Group Limited (Company Number: 1245040) (CGL) by order of the High Court pursuant to section 241(2)(c) of the Companies Act 1993 (the Act). On 17 December 2019 at 12:20pm the Liquidators were appointed as joint and several liquidators of Bush Inn Properties Limited (Company Number: 965672) (Bush Inn) by way of a special resolution of its shareholder pursuant to section 241(2)(a) of the Act. On 18 December 2019 at 6:15pm the Liquidators were appointed as joint and several liquidators of Cullen Investments Limited (Company Number: 663610) (Cullen Investments) by way of a special resolution of its shareholder pursuant to section 241(2)(a) of the Act. On 19 December 2019 the Liquidators were appointed as joint and several liquidators of the following wholly owned subsidiaries of Cullen Investments by way of a special resolution of the shareholders pursuant to section 241(2)(a) of the Act (collectively referred to as CI Subsidiaries): Time of liquidation Company name Company number 9:15 am Cullen Inc Holdings Limited 967310 9:15 am Cullen Portfolio Limited 1839584 9:15 am E W Leasing Limited 1147251 9:15 am EGB Holdings Limited 1949275 9:15 am Serious Holdings Limited 1054970 9:15 am Topical Investments Limited 2171225 9:15 am Watson Bloodstock Limited 845295 1:56 pm Batty Road Holdings Limited 1284780 On 15 January 2020 the Liquidators were appointed as joint and several liquidators of the following companies (of which CGL is the ultimate holding company) by way of a special resolution of the shareholder(s) pursuant to section 241(2)(a) of the Act (collectively referred to as the Additional CI Subsidiaries): Time of liquidation Company name Company number 11:56am Bendon Group Holdings Limited 1866110 11:56am Cullen Equities Limited 1839585 11:56am Cullen FX Limited 1839586 11:57am Bendon Group Limited 3446578 11:57am Cullen Equities UK Limited 1845373 11:57am IP Holdings No.1 Limited 4959079 11:58am Bendon Investments Limited 967574 Document Classification – KPMG Public 1 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 11:58am IP Holdings No. 2 Limited 1392220 11:59am Epartners Limited 2199359 2:56pm Knockout Boxing Limited 1512971 For the purposes of this report CGL, Bush Inn, Cullen Investments, the CI Subsidiaries and the Additional CI Subsidiaries are collectively referred to as the Cullen Group or the Group. 2 Purpose of this report This report has been prepared pursuant to section 255(2)(d) of the Act and covers the six-month period from the relevant appointment dates for each entity. This report should be read in conjunction with the Liquidators’ first reports dated 24 December 2019 (for CGL, Bush Inn, Cullen Investments and the CI Subsidiaries) and 22 January 2020 (for the Additional CI Subsidiaries). This report is prepared for the sole purpose of reporting on the conduct of the liquidation during the first six months of the liquidations and to detail any proposals in relation to the completion of the liquidations. It is not the intention that this report is available for general circulation nor should it be reproduced in full or in part without the Liquidators written consent. A joint report has been prepared for all of the Cullen Group entities due to the interconnected nature of the companies and the actions of the Liquidators to date. In preparing this report, the Liquidators have relied upon information, documentation and explanations provided to them by various parties. The information, documentation and explanations have not been independently verified or audited as at the date of compiling this report. The Liquidators accept no responsibility for the completeness or accuracy of the information contained in this report, nor do they accept liability for any losses occasioned to any party due to the circulation, publication, reproduction, or use of this report. The Liquidators reserve the right to review and amend this report in light of any additional information and explanations that become available, although they are under no obligation to do so. 3 Report appendices Appendix A Cullen Group Structure Appendix B Liquidators’ receipts and payments Appendix C Detailed fee analysis report 4 Liquidators’ activities to date 4.1 Collection and review of information Upon appointment the Liquidators commenced collecting the books and records of the Cullen Group and speaking with various parties to gain an understanding of: a) The events leading up to the liquidation b) The financial position of the Cullen Group upon liquidation c) The assets of the Cullen Group d) The creditors of the Cullen Group e) Potential claims and actions that may be available to the Liquidators Document Classification – KPMG Public 2 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report The Liquidators attended the Cullen Group registered office to obtain the physical records that remained, together with the Cullen Group server. In addition, requests were made under section 261 of the Act to obtain books and records from various parties including the directors of the Cullen Group (both current and former), former professional advisors, creditors and other associated parties. In addition to the collection of records, the Liquidators have held meetings, both via telephone conference and in person, with various parties, including the directors of the Cullen Group (current and former), employees, creditors and other persons of interest. Given the nature of the Cullen Group and the activities it has historically undertaken, the volume of information obtained from these sources, in both physical and electronic format, has been vast and working through it is complex and time consuming. The Liquidators and their staff are continuing to review the information received to understand the points referenced at 4.1(a) through to (e). Furthermore, additional persons or entities of interest continue to be identified and requests under section 261 of the Act made. 4.2 Activities undertaken specific to entities 4.2.1 CGL Tax Appeal As noted in the Liquidators first report, CGL was involved in a long-standing tax dispute with the Commissioner of Inland Revenue (IRD) in respect of Non-Resident Withholding Tax (NRWT). This culminated in IRD successfully defending its position in the High Court resulting in $51.5m of NRWT plus interest and penalties falling due. Prior to the Liquidators’ appointment CGL lodged an Appeal against the High Court’s ruling and submissions were due a few days after the Liquidators appointment. As such the Liquidators sought and obtained consent from IRD to firstly defer the date CGL was required to file its submissions and secondly the hearing date to allow sufficient time to determine the merits of the continuation of the Appeal. Having obtained legal advice on the probability of success of the tax appeal and considered the costs associated with the Appeal, the Liquidators decided against proceeding with the Appeal and filed formal notice with the Court to this effect. Following the discontinuance of the proceedings IRD filed an updated claim in the liquidation. Security Review There are two General Security Agreements (GSA’s) registered over the business and assets of CGL, one in favour of Braithwell Investments Limited and one in favour of Novatrust Limited as trustee of The Summit Trust. The Liquidators and their legal advisors have conducted a review of this security and have reached an initial view in respect of its validity, which has been communicated to the secured parties. Discussions with the secured parties remain ongoing in this regard and as such the Liquidators are unable to provide any further details in this regard at this time. Other matters In addition to the above, the Liquidators have commenced investigations into a number of other areas of CGL’s business. These investigations remain ongoing and an update will be provided to creditors in our next statutory report. 4.2.2 Cullen Investments Summary Cullen Investments was the main asset holding company within the Cullen Group. It is the shareholder of a number of group entities and has or had interests via loans, advances and shareholdings in numerous other entities. Upon appointment, the Liquidators began gathering information in relation to these interests to understand what assets remained and whether these are realisable. In addition to the asset position, the Liquidators commenced an investigation into the liabilities of Cullen Investments, including amounts owing to it from other entities within the Cullen Group. The investigations into the assets and creditor position remain ongoing and largely cannot be disclosed in any detail to creditors at this stage to avoid prejudicing the Liquidators’ position. However, there are a few areas that can be disclosed, and these are detailed below: Document Classification – KPMG Public 3 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report Assets Cullen Investments had cash at bank of $30,388 which was transferred to the Liquidators trust account on appointment. In addition, cash of $15 was recovered from Cullen Investments’s registered office. An initial distribution of $50,000 has been made to Cullen Investments in respect of its claim in the liquidation of Watson Bloodstock Limited (WBL). Further details in this regard are included in the WBL section of this report. It appears that a number of assets recorded in Cullen Investments balance sheet are either unrecoverable, have purportedly transferred to another party, written off or are uneconomical to pursue. The Liquidators continue to investigate these assets and an update will be provided in our next 6 monthly statutory report. Potentially the largest asset of Cullen Investments identified to date is a loan of NZ$17.5m provided to a USA incorporated Company, Hart Agriculture Corp. formerly known as Hart Acquisitions LLC (Hart). We understand this entity is owned by Richard Watson, the brother of Eric Watson. Cullen Investments has security over land in respect of this loan. The Liquidators are continuing to review the documentation and security position. 4.2.3 WBL WBL bred, raced and traded thoroughbred race horses. Historically it also owned a racing stud, however this was disposed of some years’ ago. Upon appointment, WBL owned two horses which were in the care of third parties. The Liquidators engaged with several agents to assess the value of the horses, one of which was identified as having a reasonable value. The Liquidators engaged three agents to market the horse for sale and seek best and final offers. This resulted in an offer being accepted for $100,000 and the sale was completed in February 2020. The second horse was still being weaned and could not be immediately sold, it was also of a much lower value. This horse was ultimately listed for sale in a specialist online auction. The price achieved was lower than the costs involved in weaning the horse and as such will not result in a return in the liquidation. In addition to the horses, the records of WBL noted several debtors outstanding at the date of liquidation. The Liquidators are continuing to follow up with the debtors. The most significant creditor of WBL is Cullen Investments. Its claim is 99.7% of total creditor claims. An initial creditor distribution was made to Cullen Investments from the proceeds of the horse sale to assist with the funding of the liquidation. An equalising distribution will be made to other creditors of WBL at the conclusion of the liquidation. 4.2.4 Batty Road Holdings Limited (BRHL) The Liquidators were made aware that BRHL owned a collection of art which was for sale with several art dealers. The Liquidators corresponded with the dealers to establish an appropriate strategy for marketing and selling this artwork. The artwork was listed in several auctions and to date $44,957 has been realised. There remains several unsold items which the Liquidators continue to find a buyer. In addition to the above, $9,353 was received from the former lawyers of BRHL, being funds held in its trust account. 4.2.5 IP Holdings No. 2 Limited (IP No. 2) The Liquidators received a bond refund of $23,877 in respect of a historic property owned by IP No. 2. The Liquidators are not aware of any other assets owned by IP No. 2. 4.2.6 Bendon Investments Limited The Liquidators have commenced assessing the transactions by which Bendon Limited, a former subsidiary of Bendon Investments Limited, was transferred to Naked Brand Group Limited, and the subsequent transfer of shares in Naked Brands Group Limited owned by Cullen Group entities. At this stage it is too early to determine what, if any, action is available to the Liquidators in this regard. Document Classification – KPMG Public 4 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 4.2.7 Other entities From our investigations to date, it appears that a number of the liquidated entities have no assets or creditors. Whilst our investigations continue, it is likely that the Liquidators will look to conclude these liquidations within the next six months. It appears that the only asset of several other related entities in liquidation is a receivable due from Cullen Investments. Whilst no activity is currently being undertaken by the Liquidators in relation to these entities except for statutory reporting, the Liquidations will remain open pending the conclusion of the liquidation of Cullen Investments. 5 Receipts and payments A summary of receipts and payments is attached at Appendix B for the following companies. — Cullen Group Limited — Cullen Investments Limited — Batty Road Limited — Watson Bloodstock Limited — IP Holdings No.2 Limited There has been no receipts or payments in any of the other liquidated entities to date. It is too early to determine what future value will be realised from the remaining assets of the Cullen Group. 6 Creditor overview Based on information received to date, we are aware of the following debts owed in the liquidation of Cullen Group. The Liquidators have not reviewed or formally approved any claims received to date. This process will be undertaken if and when sufficient recoveries have been made to enable a distribution. The one exception to this is the claim of Cullen Investments in the liquidation of WBL where a distribution has been made as mentioned in 4.2.2. We expect that the amounts shown in the below table will change as further claims are received and/or the claims noted below are reviewed by the Liquidators. With the exception of the WBL distribution referenced above, no distributions from any class of creditors from any of the liquidations have been made to date. Company Cullen Group Limited Secured Novatrust Limited: 513,425,698 Preferential Unsecured IRD: 51,506,767.63 Non-Preferential Unsecured IRD: $66,940,353 Trade Creditors: $916,634 Group Entities: $765,837 Bush Inn Properties Limited Group Entities: $5,828,383 Cullen Investments Limited IRD: Notes A formal claim has yet to be received from Braithwell Investments Limited $50 Group Entities: $38,411,594 Other related Entities: $11,937,006 Trade Creditors: $41,136 Document Classification – KPMG Public 5 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report Cullen Inc Holdings Limited Nil Cullen Portfolio Limited Group Entities: $64,321 E W Leasing Limited Group Entities: $5,194 EGB Holdings Limited Group Entities: $15,200 Serious Holdings Limited Nil Topical Investments Limited Nil Watson Bloodstock Limited Group Entities: $7,185,762 Batty Road Holdings Limited Group Entities: $1,047,681 Bendon Group Holdings Limited Group Entities: $167,820 Cullen Equities Limited Group Entities: $13,200 Trade Creditors: $37,408 Trade Creditors: $66 Cullen FX Limited Nil Bendon Group Limited Group Entities: $55,000,000 Cullen Equities UK Limited Group Entities: $9,723 IP Holdings No.1 Limited Group Entities: $110 Bendon Investments Limited Group Entities: $100 IP Holdings No. 2 Limited Group Entities: $927 Epartners Limited Knockout Boxing Limited Nil Group Entities: $26,987 Document Classification – KPMG Public 6 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 7 Fees The Court has approved the hourly rates of the Liquidators and their team members in respect of CGL. The Liquidators are using these rates for all of the Cullen Group liquidations. Position Hourly Rate $ Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager 365-475 Senior Analyst/ Analyst/Graduate Analyst 170-340 Support Staff 120 The Liquidators have incurred total fees of $409,907, representing an average hourly rate of $453 across the relevant reporting period for each entity in the Cullen Group. As at the end of the relevant reporting periods, the Liquidators have invoiced total fees of $119,494. A detailed analysis of fees and disbursements incurred is included in Appendix C. IRD funding: Shortly after the liquidation, IRD provided the Liquidators with $100,000 of funding for the liquidation of CGL. This funding was to cover the initial investigations into the affairs of CGL and has predominantly been used to pay legal fees. From the $100,000 an amount of $16,773 has been used to pay Liquidators fees and disbursements with the balance paid to external legal fees. The funding will be repaid in priority to creditor claims if there are sufficient asset recoveries to do so. No interest or fees are accruing on the funding. Utilisation of the funding received can be found in Appendix B section 1. It will be necessary for the Liquidators’ final fees in CGL to be approved retrospectively by the Court in accordance with current case law. It is our policy to disclose in our six-monthly reports to creditors and shareholders: — the quantum of fees incurred or paid during that period; — the quantum of fees paid during the period from the date of liquidation to the end of the reporting period; — the average charge out rate incurred on the liquidation together with confirmation of hours spent; and — provide an explanation as to why and how those fees have been incurred. We welcome creditor feedback in respect of the fees charged, at any time during the liquidation. 8 Reporting of conduct The Liquidators are obligated to evaluate the actions of management, review antecedent transactions and if necessary, report any adverse findings to the appropriate authorities and/or institute proceedings for recovery of funds dissipated. Should you have any information that you believe would benefit our enquiries then please set out details in writing, attaching copies of all documentary evidence, and send it to the Liquidators. Please note that the Liquidators can only act on written information as undocumented information is deemed to be hearsay only and is inadmissible in Court. 9 Future reporting and completion of the liquidation Reports on the conduct of the liquidation and on proposals for completion of the liquidation will be prepared and distributed six-monthly in accordance with section 255 of the Act. A final report will also be prepared and distributed in accordance with section 257 of the Act at the completion of the liquidation. At this stage, it is not possible to provide an estimated date for the completion of the liquidation. Document Classification – KPMG Public 7 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 10 Contact details Postal Address C/- KPMG Auckland, 18 Viaduct Harbour Avenue, Auckland 1010 E-mail insolvency@kpmg.co.nz ____________________ ____________________ Vivian Judith Fatupaito Luke Norman Joint and Several Liquidator Joint and Several Liquidator Dated: 15 July 2020 Dated: 15 July 2020 Document Classification – KPMG Public 8 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report Appendix A Cullen Group Structure Document Classification – KPMG Public 9 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report Appendix B 1. Liquidators’ receipts and payments Cullen Group Limited (in Liquidation) From 17/12/2019 to 16/06/2020 (NZD) INCOME IRD Funding 100,000.00 100,000.00 EXPENDITURE Liquidator Fees 15,974.41 Legal Fees 83,226.86 Liquidators Expenses 798.73 100,000.00 BALANCE - Document Classification – KPMG Public 10 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 2. Cullen Investments Limited (in Liquidation) From 18/12/2019 to 17/06/2020 (NZD) INCOME Cash on Hand 15.40 Cash at Bank 30,388.28 Interest received 31.22 Distribution from related entity 50,000.00 80,434.90 EXPENDITURE Storage Costs 840.00 Liquidators Remuneration 65,000.00 Liquidators Expenses 4,334.97 Withholding Tax 8.74 70,183.71 BALANCE 10,251.19 MADE UP AS FOLLOWS GST Receivable 18.00 KPMG - ASB Trust Account 10,197.19 GST Clearing Account 36.00 10,251.19 Document Classification – KPMG Public 11 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 3. Batty Road Holdings Limited (in Liquidation) From 19/12/2019 to 18/06/2020 (NZD) INCOME Funds held in Solicitors Trust Account Other Assets 9,352.88 44,956.52 Interest received 14.22 54,323.62 EXPENDITURE Agents & Valuers Fees 7,378.00 Liquidators Remuneration 17,500.00 Liquidators Expenses 988.86 Withholding Tax 3.98 25,870.84 BALANCE 28,452.78 MADE UP AS FOLLOWS KPMG - ASB Trust Account 28,803.07 GST Clearing Account (350.19) 28,452.88 Document Classification – KPMG Public 12 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 4. Watson Bloodstock Limited (in Liquidation) From 19/12/2019 to 18/06/2020 (NZD) INCOME Cash at Bank 1,229.11 Other Assets 100,000.00 Interest received 46.76 101,275.87 EXPENDITURE Bank Charges 15.00 Agents & Valuers Fees 5,000.00 Horse - Speller Agistment and Training 11,179.08 Liquidators Remuneration 18,000.00 Liquidators Expenses 1,013.86 Sundry Horse Expenses 28.17 Withholding Tax 13.09 Non-Preferential Creditors 50,000.00 85,249.20 BALANCE 16,026.67 MADE UP AS FOLLOWS KPMG - ASB Trust Account 15,707.44 GST Clearing Account 319.23 16,026.67 Document Classification – KPMG Public 13 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 5. IP Holdings No.2 Limited (in Liquidation) From 15/01/2020 to 14/07/2020 (NZD) INCOME Interest received 16.08 Refund of Property Association Bond 23,877.00 23,893.08 EXPENDITURE Liquidators Remuneration 3,000.00 Liquidators Expenses 231.00 Withholding Tax 4.50 3,235.50 BALANCE 20,657.58 MADE UP AS FOLLOWS KPMG - ASB Trust Account 20,657.61 GST Clearing Account (0.03) 20,657.58 Notes The Liquidators expenses includes an administration charge equal to 5% of the Liquidators remuneration which covers, amongst other things, travel within a staff members home city to deal with the liquidation, printing, photocopying, stationery and storage of Company records. Document Classification – KPMG Public 14 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report Appendix C 1. Detailed fee and disbursement analysis Cullen Group Limited Analysis of fees incurred Hours per Activity Level Hourly rate Administration, planning and reporting Partner/Liquidator 600-640 42.7 Director/Associate Director 525-575 11.3 Senior Manager/Manager/Assistant Manager 365-475 59.6 Senior Analyst/ Analyst/Graduate Analyst 170-340 17.4 120 8.5 Support Staff Receivables and Inventory Secured assets and creditors Other asset realisations 24.8 Unsecured creditors 0.5 Investigations and recovery action 2.5 Tax Appeal 62.5 1.5 5.8 Total hours Total fees Average fee per hour 41.3 174.3 108,740.00 623.87 7.0 25.6 14,691.25 575.00 67.4 27,881.25 413.98 53.2 15,122.00 284.52 8.5 1,020.00 120.00 167,454.50 509.21 5.5 2.3 Total 139.4 2.1 2.1 0.8 24.8 1.3 0.4 32.6 4.4 106.4 50.6 328.9 Analysis of disbursements incurred Disbursement category 5% admin fee Legal Fees Travel Advertising Total Amount incurred 8,372.73 10,473.31 ` 2,862.68 545.57 22,254.29 15 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 2. Bush Inn Properties Limited (in Liquidation) Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations Unsecured creditors Investigations and recovery action 2.0 0.3 Total hours 2.3 Total fees Average fee per hour 1,420.00 617.39 0.0 365-475 2.6 2.6 1,079.00 415.00 170-340 1.2 1.2 336.00 280.00 5.0 600.00 120.00 11.1 3,435.00 309.46 120 Total 5.0 10.8 0.0 0.0 0.0 0.0 0.3 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 171.75 Advertising 537.00 Total 708.75 16 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 3. Cullen Investments Limited (in Liquidation) Analysis of fees incurred Hours per Activity Level Hourly rate Administration, planning and reporting Receivables Secured assets and Inventory and creditors 0.5 Other asset realisations Unsecured creditors Partner/Liquidator 600-640 25.3 20.8 3.0 Director/Associate Director 525-575 21.8 0.2 0.3 365-475 37.5 5.2 170-340 49.1 120 6.0 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Total 139.7 Investigations and recovery action 29.6 29.6 0.5 26.2 3.3 112.2 Total hours Total fees Average fee per hour 64.7 114.3 70,400.00 615.92 18.15 40.4 23,201.25 575.00 27.8 70.5 28,901.00 409.94 1.5 80.2 22,696.00 282.99 6.0 720.00 120.00 145,918.25 468.66 311.4 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 7,295.91 Travel 841.00 Other 2,661.07 Advertising Total 138.00 10,935.98 17 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 4. Cullen Inc Holdings Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors 1.0 1.0 Unsecured creditors Investigations and recovery action Total fees Average fee per hour 1,200.00 600.00 1.1 456.50 415.00 6.1 1,708.00 280.00 3.5 420.00 120.00 12.7 3,784.50 297.99 Total hours 2.0 0.0 365-475 1.1 170-340 5.5 120 3.5 Total Other asset realisations 11.1 0.6 0.6 1.0 0.0 0.0 0.0 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 189.23 Advertising 138.00 Total 327.23 18 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 5. Cullen Portfolio Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations Unsecured creditors Investigations and recovery action 2.0 Total hours 2.0 Total fees Average fee per hour 1,240.00 620.00 0.0 365-475 1.1 1.1 456.50 415.00 170-340 2.9 2.9 812.00 280.00 120 3.5 3.5 420.00 120.00 9.5 2,928.50 308.26 Total 9.5 0.0 0.0 0.0 0.0 0.0 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 146.43 Advertising 138.00 Total 284.43 19 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 6. E W Leasing Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations Unsecured creditors Investigations and recovery action 2.0 Total hours 2.0 Total fees Average fee per hour 1,240.00 620.00 0.0 365-475 1.1 1.1 456.50 415.00 170-340 4.5 4.5 1,260.00 280.00 120 2.5 2.5 300.00 120.00 10.1 3,256.50 322.43 Total 10.1 0.0 0.0 0.0 0.0 0.0 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 162.83 Advertising 138.00 Total 300.83 20 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 7. EGB Holdings Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations Unsecured creditors Investigations and recovery action 1.0 Total hours 1.0 Total fees Average fee per hour 600.00 600.00 0.0 365-475 1.1 1.1 456.50 415.00 170-340 5.8 5.8 1,624.00 280.00 3.0 360.00 120.00 10.9 3,040.50 278.94 120 Total 3.0 10.9 0.0 0.0 0.0 0.0 0.0 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 152.03 Advertising 114.00 Total 266.03 21 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 8. Serious Holdings Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations Unsecured creditors Investigations and recovery action 2.0 Total hours 2.0 Total fees Average fee per hour 1,240.00 620.00 0.0 365-475 1.1 1.1 456.50 415.00 170-340 4.7 4.7 1,316.00 280.00 120 2.5 2.5 300.00 120.00 10.3 3,312.50 321.60 Total 10.3 0.0 0.0 0.0 0.0 0.0 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 165.63 Advertising 138.00 Total 303.63 22 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 9. Topical Investments Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations Unsecured creditors Investigations and recovery action 2.0 Total hours 2.0 Total fees Average fee per hour 1,240.00 620.00 0.0 365-475 1.1 1.1 456.50 415.00 170-340 4.1 4.1 1,148.00 280.00 120 2.5 2.5 300.00 120.00 9.7 3,144.50 324.18 Total 9.7 0.0 0.0 0.0 0.0 0.0 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 157.23 Advertising 138.00 Total 295.23 23 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 10. Watson Bloodstock Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Other asset realisations 2.3 Unsecured creditors 11.3 Investigations and recovery action 1.1 1.0 Total fees Average fee per hour 9,620.00 612.74 15.6 6,221.00 398.78 17.6 4,914.00 280.00 3.5 420.00 120.00 52.4 21,175.00 404.49 Total hours 15.7 0.0 365-475 4.9 170-340 12.4 120 3.5 Total Receivables Secured assets and Inventory and creditors 23.1 10.7 2.8 2.8 0.8 0.0 22.8 0.3 1.4 1.3 2.3 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 1,058.75 Advertising Total 114.00 1,172.75 24 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 11. Batty Road Holdings Limited (in Liquidation) Analysis of fees incurred Hours per Activity Level Hourly rate Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations Unsecured creditors Investigations and recovery action Total fees Average fee per hour 14.2 8,720.00 614.08 9.3 5,318.75 575.00 Total hours Partner/Liquidator 600-640 2.8 4.7 Director/Associate Director 525-575 0.3 9.0 365-475 4.2 0.1 1.5 5.8 2,223.00 383.28 170-340 8.0 2.7 2.3 14.4 4,032.00 280.00 120 4.0 4.0 480.00 120.00 47.7 20,773.75 435.97 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Total 19.3 1.5 1.5 0.0 16.5 0.5 0.5 6.2 10.0 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 1,038.69 Advertising Total 114.00 1,152.69 25 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 12. Bendon Group Holdings Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Other asset realisations Unsecured creditors Investigations and recovery action 3.5 2.5 Total fees Average fee per hour 3,720.00 620.00 4.8 1,971.25 415.00 10.4 2,898.00 280.00 2.0 240.00 120.00 23.1 8,829.25 382.22 Total hours 6.0 0.0 365-475 4.4 170-340 3.3 120 2.0 Total Receivables Secured assets and Inventory and creditors 13.2 0.4 0.3 0.3 6.8 6.8 0.4 0.0 2.5 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 441.46 Advertising 105.00 Total 546.46 26 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 13. Cullen Equities Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations Unsecured creditors Investigations and recovery action 1.0 0.3 Total hours 1.3 Total fees Average fee per hour 792.50 609.62 0.0 365-475 2.3 2.3 933.75 415.00 170-340 2.1 2.1 588.00 280.00 2.0 240.00 120.00 7.7 2,554.25 333.89 120 2.0 Total 7.4 0.0 0.0 0.0 0.0 0.3 Analysis of disbursements incurred Disbursement category 5% admin fee Advertising Total Amount incurred 127.71 26.00 153.71 27 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 14. Cullen FX Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations Unsecured creditors Investigations and recovery action 0.5 0.3 Average fee per hour 492.50 615.63 2.1 850.75 415.00 2.7 916.00 339.26 2.0 240.00 120.00 7.6 2,499.25 331.03 0.8 0.0 365-475 2.1 170-340 2.5 120 0.2 2.0 Total Total fees Total hours 7.1 0.2 0.0 0.0 0.0 0.3 Analysis of disbursements incurred Disbursement category 5% admin fee Advertising Total Amount incurred 124.96 26.00 150.96 28 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 15. Bendon Group Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Other asset realisations Unsecured creditors Investigations and recovery action 0.5 Total fees Average fee per hour 300.00 600.00 2.1 850.75 415.00 2.4 672.00 280.00 2.0 240.00 120.00 7.0 2,062.75 296.80 Total hours 0.5 0.0 365-475 2.1 170-340 2.1 120 2.0 Total Receivables Secured assets and Inventory and creditors 6.7 0.3 0.3 0.0 0.0 0.0 0.0 Analysis of disbursements incurred Disbursement category 5% admin fee Advertising Total Amount incurred 103.14 26.00 129.14 29 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 16. Cullen Equities UK Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations Unsecured creditors Investigations and recovery action 1.0 0.3 Average fee per hour 792.50 609.62 2.1 850.75 415.00 3.7 1,036.00 280.00 2.0 240.00 120.00 9.1 2,919.25 322.57 1.3 0.0 365-475 2.1 170-340 3.4 120 0.3 2.0 Total Total fees Total hours 8.5 0.3 0.0 0.0 0.0 0.3 Analysis of disbursements incurred Disbursement category 5% admin fee Advertising Total Amount incurred 145.96 26.00 171.96 30 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 17. IP Holdings No.1 Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations 1.0 Unsecured creditors Investigations and recovery action 0.3 Total hours 1.3 Total fees Average fee per hour 792.50 609.62 0.0 365-475 2.1 2.1 850.75 415.00 170-340 1.4 1.4 392.00 280.00 1.0 120.00 120.00 5.8 2,155.25 374.83 120 1.0 Total 5.5 0.0 0.0 0.3 0.0 0.0 Analysis of disbursements incurred Disbursement category 5% admin fee Advertising Total Amount incurred 107.76 26.00 133.76 31 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 18. Bendon Investments Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations Unsecured creditors Investigations and recovery action 1.0 Total hours 1.0 Total fees Average fee per hour 620.00 620.00 0.0 365-475 2.1 2.1 850.75 415.00 170-340 2.2 2.2 616.00 280.00 120 1.5 1.5 180.00 120.00 6.8 2,266.75 335.81 Total 6.8 0.0 0.0 0.0 0.0 0.0 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 113.34 Total 113.34 32 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 19. IP Holdings No.2 Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Other asset realisations 1.0 Unsecured creditors Investigations and recovery action 1.2 Total fees Average fee per hour 1,342.50 610.23 3.1 1,185.25 388.61 2.6 734.00 282.31 1.0 120.00 120.00 8.9 3,381.75 382.12 Total hours 2.2 0.0 365-475 2.8 170-340 1.9 120 Total Receivables Secured assets and Inventory and creditors 0.3 0.7 1.0 6.7 0.3 0.0 1.9 0.0 0.0 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 169.09 Total 169.09 33 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 20. Epartners Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations Unsecured creditors Investigations and recovery action 1.0 Total hours 1.0 Total fees Average fee per hour 620.00 620.00 0.0 365-475 2.1 2.1 850.75 415.00 170-340 1.1 1.1 308.00 280.00 1.5 180.00 120.00 5.7 1,958.75 346.68 120 1.5 Total 5.7 0.0 0.0 0.0 0.0 0.0 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 97.94 Total 97.94 34 Cullen Group Limited (in Liquidation) (“the Company”) Liquidators’ Second Report 21. Knockout Boxing Limited Analysis of fees incurred Hours per Activity Level Hourly rate Partner/Liquidator 600-640 Director/Associate Director 525-575 Senior Manager/Manager/Assistant Manager Senior Analyst/ Analyst/Graduate Analyst Support Staff Administration, planning and reporting Receivables Secured assets and Inventory and creditors Other asset realisations Unsecured creditors Investigations and recovery action 1.0 Total hours 1.0 Total fees Average fee per hour 620.00 620.00 0.0 365-475 2.1 2.1 850.75 415.00 170-340 5.5 5.5 1,526.00 280.00 120 0.5 0.5 60.00 120.00 9.0 3,056.75 339.64 Total 9.0 0.0 0.0 0.0 0.0 0.0 Analysis of disbursements incurred Disbursement category Amount incurred 5% admin fee 152.84 Total 152.84 Notes The above is a reflection of fees charged during the course of the liquidation up to the end of the relevant reporting periods. It is not a reflection of fees paid, this amount is included in the body of this report. The Liquidators instruct staff at the appropriate level to undertake the required tasks during the course of the liquidation. All fees and disbursements have been incurred for a purpose that was necessary and proper in order for the Liquidators to discharge their obligations Should any creditor or shareholder have additional queries in relation to the Liquidators’ fees, please contact us using the details in the body of this report. 35 kpmg.com/nz © 2020 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity.