CURRENT FINANCIAL POSITION
The companies, (with the exception of the smallest subsidiary -Imperial Pheonix Finance Ltd ) appear to be solvent on a going concern balance sheet basis. However, we have serious concerns over the realisabilty of many of the assets and believe the actual asset values are substantially overstated. Under the heading 'Statement of Affairs' is an estimated consolidated balance sheet showing the financial position of the companies which are the subject of this petition and also their offshore related companies.

The director of the companies has been advised that the companies can only avoid insolvent liquidation by entering into some other form of insolvency procedure. The various alternative insolvency procedures have been considered, namely Liquidation, Receivership and Administration. For the reasons outlined later in this report, we consider that the appointment of Joint Administrators to the companies is expedient and represents the most effective method of dealing with the company's financial difficulties.