1. Dunfermline Athletic Football Club Limited & companies within the
same group – Some Due Diligence Questions (not exhaustive)
How much new money does the club need to survive:
o The next 4 weeks
o Until the end of the season
o For the next 15 months (ie to the end of next season).
1. Why did Gavin Masterton (‘GM’) not file the audited accounts for the year end 31 May 2012
for Dunfermline Athletic Football Club Ltd (‘DAFCL’), The Pars Trust (‘TPT’) – a charity regulated by
OSCR - and Charlestown Holdings Ltd (‘CHL’) with Companies House on or before 28 February 2013,
which was the latest date for filing under Company Law?
2. What might the auditor’s report on the 31 May 2012 East End Park Limited (‘EEPL’) accounts
say about the ‘recoverability of a loan to a fellow group company’ (DAFCL?), which stood at £5.8m at
31 May 2011?
3. Has CHL now realised the 'significant property development' referred to in its 2011 audited
accounts?
4. If so, did the realisation provide a 'meaningful return' to the CHL group as GM expected and
stated in the directors’ report?
5. What was the return which CHL realised on this ‘significant property development’?
6. Will CHL (or First Scottish Group Limited (‘FSGL’) as guarantor), be able to pay the £750,000
plus interest (which stood at £166,685 as at 31 May 2012) which is due to Sir Brian Souter and
Souter Investments Limited in 2014?
7. If not, what are the implications for DAFCL?
8. What specific plans does GM have to repay all the DAFCL long term debt as at the date of
the share issue? What is the total of this debt?
9. Can GM confirm that there is no possibility that the existing rent free arrangements
surrounding East End Park (‘EEP’) will change during the remaining period of the 30 year lease?
10. Since EEP was valued in the 31 May 2011 accounts at Open Market Value (ie possibly
assuming a supermarket development rather than the playing of football?), albeit the directors of
EEPL appear to have no plans to dispose of EEP and thereby trigger repayment of the £12.2m bank
loan from Lloyds Bank, have the CHL and EEPL auditors confirmed the continuing appropriateness of
the valuation treatment adopted by the directors? If not, what are the implications for DAFCL?

2. 11. What conditions did Andrew Reilly Associates attach to its May 2012 valuation of the
stadium (£11.3m)?
12. What experience does Andrew Reilly Associates have in valuing football stadia – they appear
to be a relatively small Edinburgh based firm with net assets of only £22,000.
13. Has the due diligence team reviewed the stadium valuation report? If so, what comments
are in the DD report? If not, why not?
14. Has the stadium been revalued for the May 2012 accounts? If so, at what valuation?
15. What does GM consider the stadium to be worth on the open market today and separately,
as a football stadium today?
16. If EEP was valued as a football stadium and not at Open Market Value, would the revaluation
affect CHL or EEPL banking covenants or CHL solvency in any way?
17. FSGL is now controlled by Sir Brian Souter. Since the £10.8m FSGL revaluation reserve (the
directors’ valuation of FSGL’s investments in subsidiary undertakings) has been eliminated as at 31
May 2012 by the directors of FSGL (per the FSGL audited accounts to 31/5/2012), will CHL directors
mirror this treatment at 31 May 2012 and if so, what effect will this have on CHL banking covenants
and solvency?
18. Why did Sir Brian Souter eliminate this reserve on taking control of FSGL?
19. What does Sir Brian’s decision to eliminate this reserve say about GM’s valuation approach
more generally?
20. The CHL group has over £8m of unsecured redeemable loan stock outstanding, £3.63m of
which is due to Mr John Yorkston. What are GM’s plans for repaying this loan stock and what impact
could the repayment plan have on DAFCL?
21. Has the DD team reviewed all outstanding litigation affecting DAFCL or other members of
the CHL group? If so, what comments are made about the potential impact on DAFCL/CHL group
solvency?
22. Have repayment plan agreements in writing been reached with all DAFCL long term
creditors, other than CHL related entities? If not, what are the implications for DAFCL’s solvency?
23 Does the DD team think that the audited accounts of CHL, EEPL and DAFCL for the year
ended 31 May 2012 will each contain an unqualified audit opinion without any ‘Emphasis of Matter’
references (as were contained in the 2011 audited accounts)?
24. How much is DAFCL due to CHL at present and what are the terms of this debt?
25. If, following the new investment, some of the debt due to CHL is to be repaid via
‘exceptional receipts’ as GM suggested might be the case in his 31 January remarks at the Pars Alive
presentation, is the same proposal applying to similar debts due to entities/individuals unconnected
to CHL? Are these proposals now in writing and agreed between DAFCL and CHL/

3. 26. Why have the existing DAFCL board not resigned yet given that no share issue to the public
is taking place and per their recent public statement to do so? How can the DD team be assured that
the information it is receiving from DAFCL or the Steering Group is complete and accurate and not
affected in any way by actual or potential DAFCL director conflicts of interest.
27. What are the plans to reduce DAFCL’s short term debt to ensure DAFCL remains solvent?
28. What plans exist to pay off HMRC (£134,000) before the impending liquidation and has the
DD team commented on the specific and detailed terms of any injection of new funds which DAFCL
plans to use to pay off HMRC?
29. Who is the ultimate controlling party in CHL?
30. Has the DD team investigated whether (a) party/(ies), other than GM, has/(have) any actual
or prospective economic interest in the CHL shares GM owns? (This is now the case with FSGL and
the interests of Sir Brian Souter and Souter Investments LImited.)
31. Are all the short and long term loans from CHL to DAFCL constituted by written agreement?
If so, what are the terms of these loans (interest, repayment, default etc?
32. If these loans are not in writing why not?
33. Has the DD team reviewed the terms of the £12.2m loan between Lloyds Bank and EEPL? If
so, what implications do the terms have for future security of tenure of DAFCL as a tenant? In
particular, what is the nature of Lloyds Bank’s security in respect of the £12.2m loan to EEPL – what
assets does it cover? What restrictions does it impose on asset transfers in and out of EEPL? What
other restrictions does the loan agreement impose upon CHL, EEPL, and DAFCL?
34. If not, why not?
35. What are the terms of the existing lease between DAFCL and EEPL?
36. Is the lease in writing?
37. When does the lease end?
38. What are the terms of the proposed new commercial lease between EEPL and DAFCL and
what form of independent negotiation has taken place regarding the setting of terms? Has a firm of
specialist property advisers represented either or both of the parties in such negotiations? If so,
which firm?
39. Are all the long term liabilities of DAFCL subject to written agreements with the relevant
creditor?
40. If not why not?
41. Has GM/EEPL recently agreed in writing any variation of the Lloyds Bank loan agreement
with EEPL?
42. If so, what are the variations?

4. 43. What provisions are included in the Lloyds Bank loan agreement regarding early repayment
of the loan?
44. What is the current status of the application which TPT has made to Social Investment
Scotland for funding related to the club’s training ground at Pitreavie. Has the DD team enquired of
the directors of TPT (who include Karen Masterton) what TPT plans to do with such new monies if
and when received? If so, what was the answer?
45. Has the DD team confirmed the amounts of money which DAFCL has paid directly or
indirectly to its directors in the past 12 months? If so, what are the amounts? If not, why not?
46. Has the DD team seen the termination agreements which DAFCL has reached with all
existing directors of DAFCL? If so, what financial provisions are included therein which affect DAFCL?
47. If not, why not?