Foundations Program plc - in liquidation
FPA Limited - in liquidation

Update July 2013

GLOSSARY

Foundations Program plc - in liquidation ("FPP")
FPA Limited - in liquidation ("FPA")
Joint Liquidators and Joint Official Receivers ("JL&JORs")

CONSULATATION RESULTS

The JL&JORs have now concluded that there will be no material additions to the Foundations Consultation web site. Forty percent of the Participants have given their opinions and the JL&JORs thank them for their contributions.

The results are as follows:

Do you support a strategy of achieving complete accuracy in the revaluation of policy portfolios?

Eighty two per cent of respondents were not in favour of this proposition. However, of those who did agree with the proposal, seventy five percent were not willing to accept the associated cost of achieving complete accuracy. The JL&JORs have concluded that the substantial majority view is that complete accuracy is an inappropriate objective.

Would you support the proposal to value the policies quarterly and accept the allocation of participation points on the basis of these valuations?

Overwhelmingly, ninety four percent of respondents support this proposal. The JL&JORs have concluded that this is the valuation approach that should be adopted and they will proceed accordingly.

When the liquidators resolve to commence surrenders of the policies, which would be your preferred option? (provide cash alternative or surrender policies)

The responses to this question are far from clear. Sixty per cent indicated that they would wish to allow the policies to be redeemed and forty per cent wish to consider a cash alternative. However, the comments associated with these responses make it clear that the Participants would only be prepared to provide sufficient funds to cover their share of losses and not the full value of the policies. It must be noted that this is not a viable proposition and the various updates explain why. However, It is clear that a significant number of Participants still wish to retain their policies if possible, even if it is a smaller policy.

Next steps

The JL&JORs wish to remind the Participants that notwithstanding the responses that you have given during the consultation, they will be obliged to offer every Participant the opportunity of making a cash payment. This is a formal requirement of the Program.

The steps necessary to revalue the portfolio have commenced. The JL&JORs appreciate that this is an important step in enabling them to give a clearer indication of the range of losses that the Participants face and they will keep you informed of the progress on this task via this site.

July 2013