HOW TO SURVIVE AN ECONOMIC DOWNTURN Presented by Simon Glyn

1. HOW TO SURVIVE AN ECONOMIC DOWNTURN Presented by Simon Glyn 20 January 2009

2. About Vantis • Vantis plc is the AIM listed UK top 13 accountancy, business & tax advisory group • Our objective is to be the provider of choice for ambitious organisations (from owner-managed businesses to listed companies and not for profit organisations), high worth individuals and other professionals • Vantis have specialist industry groups as well as individual experts across the organisations

3. Locations Vantis operates from offices based in 19 locations: - Hartlepool - Middlesbrough - Darlington - Manchester - Leicester & Birmingham - Beaconsfield - Marlow - Sidcup - Epsom - St Albans - Hornchurch - Tonbridge - London - Wokingham - Loughton - Worthing - Jersey

4. HLB International • 100 Countries • 450 Offices • 1,800 Partners • 11,600 Personnel • International Billing US$1.3billion • International Ranking – 12th Vantis plc is a member of HLB International

5. Accounting, Tax & Consultancy BusinessSupport Services Business Growth & Succession • Bespoke tax planning • International tax planning • Personal tax including IHT planning • Tax investigations & enquiries • VAT advice & planning • Customs duty recovery & advisory services • Outsourced accounting solutions • Payroll & HR solutions • Year end & management accounts • Business coaching • Commercial asset finance & leasing solutions • Company secretarial services • Executive recruitment, training & development • HR compliance advice • Internal audit & risk management • Interim management placement services • Stocktaking, internal audit & investigation services • Training • Buying & selling businesses • Commercial advice, strategy & business planning • Due diligence • Exit planning • Flotations • Management buy-ins & buy-outs • Management consultancy • Raising finance • Sports consultancy Recovery / Restructuring Independent Financial Advice Forensic Accounting & Dispute Resolution • Business recovery • Business reviews • Corporate insolvency • Personal insolvency • Pre-lending reviews • Refinancing • Restructuring • Turnaround management • Employee benefit schemes & consultancy • Financial advice for businesses & private individuals • Investment advice • Life assurance for business & family protection • Mortgages & remortgages • Pension planning • Retirement counselling • Alternative dispute resolution • Breach of contract disputes • Business interruption • Fraud & corporate investigations • Personal injury & clinical negligence • Professional negligence • Share valuations Services we provide to private & corporate clients

6. Presentation Content • What are the Early Warning Signs? • Fundamentals of Bank Lending • Main issues facing the “real economy” • Bank behaviour in this environment • Practical tips to survive the economic downturn

7. Death Divorce Disaster Disease Dinosaur Dispute Early Warning Signs

8. Bank Lending Principles Banks lend money to SME’s on 3 bases: • Ability of Management to have a strategy/run a business plan/stay close to their forecasts • Security given by the business and/or owners’ guarantees (which will impact the pricing of risk) • Ability to repay interest (serviceability)

9. Consumer reduction in disposable income Debtor days increasing (The ruthless “Multiple”) Availability of credit (particularly new money requests) SME lack of confidence to proceed with plans Accuracy of forecasting-wider sensitivities No hiding place for poor management! What factors are affecting the “real economy”?

10. 10-15% of all Bank Customers are in their Early Watch/Business Support Department Circa 3% (increased from <1%) anticipated to fail in the recession IF: Banks remain generally “supportive” of their customers (particularly in a declining property market) In order to be “supportive”, the Bank will want to: 1. Prove Viability 2. Ensure ongoing serviceability of Bank debt (even interest only) 3. Be comfortable that Management is willing to change/make difficult and timely decisions How are the Bank’s reacting?

11. Financial Manage the business for cash (even at the expense of margin or profit) Prepare rolling 13 week cash flow forecasts Think ahead by stress testing the business model to understand the pressure points (realistic sensitivities!) Explore all ways to release cash and value from the business (e.g. robust credit control function) Practical tips

12. Strategic Fully understand your market and customer- the importance of perceived value Anticipate stakeholder behaviour (eg. Credit insurers pulling out) Seek professional advice early/don’t leave it all to the last minute! Ensure you have robust “contingency plans” in place to deal with that unexpected, possibly terminal event Management must make decisive and timely decisions however difficult or emotional they may be Remember to understand what “Success” is during the recession Practical tips (cont)

13. Simon Glyn Client Partner – Business Recovery Services P O Box 2653 66 Wigmore Street London W1A 3RT DDI: 0207 467 4262 Mobile: 07768 467042  Email: simon.glyn@vantisplc.com Beverley Marsh Client Partner - Business Recovery Services 104-106 Colmore Row Birmingham B3 3AG DDI: 0121 710 1682 Mobile: 07801 901772 Email: beverley.marsh@vantisplc.com Jonathan Perrin Client Partner – Head of Hospitality and Leisure Sector 66 Wigmore Street London W1U 2SB DDI: 0207 467 4169 Mobile: 07867 978089  Email: jonathan.perrin@vantisplc.com www.vantisplc.com Contact details