CAVENDISH MANAGEMENT RESOURCES Powerful, innovative resources for businesses

About CMR CMR - established in 1984 CMR - over 3,500 private investors CMR – National Special Associate of NBAN CMR - over 450 senior experienced executives CMR - throughout the UK & Ireland CMR - experts in every industry & market CMR – many innovative resources

CMR’s Resources Equity Funding Self-funding Business Finance International Technology Licensing Corporate Recovery & Restructuring Mergers, Acquisitions & Co. Sales Management Support & Non-exec directors Interim Management & Consultancy

CMR’s operations Ireland Scotland North west North East West Midlands East Midlands Western Chiltern East Anglia Thames Valley London South West Mid-South South East

Self-Funding Business Finance from CAVENDISH MANAGEMENT RESOURCES A unique scheme, providing businesses with finance that makes no demands on cashflow, while substantially increasing profits.

Summary of Scheme Business capital through GE Commercial Finance Linked to CMR’s Procurement Cost Savings Programme Supply chain savings through CMR normally cover all interest & service charges Company receives 50% to 90% of savings depending on size Initial period covers 30 months, thereafter negotiable

Eligibility Companies are eligible … Companies may not be eligible … If they are established, viable businesses in UK or Ireland If they have purchase costs of £1½ million or greater If they can satisfy normal banking requirements (the Scheme can help by creating collateral from the improved profitability) Companies may not be eligible … If they are predominantly a retail business If they spend large amounts on a few specialist commodities If they are too financially weak

Cost Savings Typically, even an efficient company will save 10 -15% of purchase costs. How can we do this? High degree of specialist knowledge & buying power Access to a wider range of suppliers Long experience in negotiating purchases Objectivity of outsiders Dedicated single-mindedly to task, with no distractions … and Company retains full control at all times

Cost Savings – case studies Water industry client – saved over £750K on £3 million Advertising client – saved over £1 million on £5 million Utilities client – saved 30% on IT spend of £1.2 million Financial Services – saved 50% on bank spend of £1.1M Government Dept – saved 35% on £6.3M spend Financial Services – saved 18% on stationery spend of £850K Cost savings pre-agreed with company before Finance Scheme starts

Stages of Scheme Stage 2: Initial period (30 months) Stage 1: Purchase audit Free review of purchasing of materials and overheads Recommendations to company Agreement on annual cost savings level Stage 2: Initial period (30 months) Implementation of cost saving action Sharing of agreed savings (10% to 50% goes to CMR depending on size) CMR’s share pays for the costs of the scheme (recovered over 30 months) Company’s share (50% to 90%) used to pay interest & service charges, with balance going to further increase company profitability Stage 3: Follow-on period At company’s discretion, CMR cost-saving operations can continue CMR’s share of cost savings drops by 75% on Initial Period

Self-funding Finance Standard commercial finance, subject to normal conditions and at a normal interest rate If inadequate security, Scheme may help because of the increased company profitability it brings Interest and service charges normally paid from company’s share of savings over 30 month contract period Company retains legal liability for the loan and interest

Financial Management If appropriate, a third party can be appointed to oversee scheme – usually Company’s accountants Overseers will: Receive and disburse Company’s payment each month After deducting own fee, pay Company’s share and CMR’s share Monitor any audit arrangements CMR receives no up-front fees. All costs & earnings come only from tangible savings

Safeguards What happens if annual savings fall over course of scheme? Company can request a fresh audit at any time CMR share of cost savings drops in line with audit findings Company responsible for interest & charges if savings insufficient What if company wants to change suppliers? Company can change purchasing decisions at anytime

Legal Agreement Agreement Commits Company to pay 1/12th of annual savings into scheme for 30 consecutive months Defines mechanism for calculating cost savings Defines mechanism for amending annual savings Confirms Company’s control over purchasing decisions

Summary Major boost to company profitability Access to important new funding source No upfront costs - all costs from savings achieved All purchasing decisions remain with Company Any purchasing decisions can be reversed Even companies without full security may be eligible Scheme can replace existing borrowings Cost savings can continue ad infinitum

Summary of client benefits Essentially ‘free’ business finance Interest & charges normally paid No up-front costs - all costs are paid from savings Scheme also partially creates collateral base Significant, permanent profitability improvement Many companies will see profits double or more Profit improvement already in Company No sales increase required No new markets to be opened No staff redundancies Often a quality improvement All new suppliers are quality vetted

Summary of benefits for professional intermediaries Helps clients to obtain funding and increase profitability Scheme itself is a significant revenue generator for the firm introducing clients Can be part of the firm’s service package for new and existing clients Keeps the firm at the forefront of innovation in helping clients

CAVENDISH MANAGEMENT RESOURCES Powerful, innovative resources for businesses

Viewpoint: GE Commercial Finance CMR Scheme can be used to give GE a major competitive advantage. Cost savings can be used to offset interest and service charges. Effectively, free capital for clients Increased collateral base can allow higher % loans to be granted? Underlying improvement to customer’s profitability can also help existing clients experiencing trading/ financial problems.

The CMR/GE Scheme Marketing CMR markets Scheme to SMEs throughout its regional operations. GE markets the Scheme through its channels If client only wants funding – this passed to GE If client only wants cost savings – this to CMR

CMR / GE Scheme arrangements – new & existing clients Introduction of customer & initial CMR review Initial GE Finance Review with client CMR agreement signed by client CMR client management team appointed CMR procurement team undertakes audit (FOC) Discussed with client & annual savings/phasing agreed Cost saving actions initiated & scheme starts Scheme monitored throughout contract period

CMR/GE Scheme possible arrangements – troubled clients Scheme starts as standard if client considered survivable Possible referral to CMR Investor Base if further equity capital desired Possible referral to CMR Business Lifeline if survival doubtful Management support from CMR Executives available