CAPABILITY STATEMENT

CAPABILITY STATEMENT
Non Executive Management (nem) was founded in 2001 by three former senior corporate executives that saw
an opportunity to assist a wide range of organisations to accelerate the achievement of their businesses
objectives.

Aimed primarily at the private enterprise space, nem developed a non-conventional approach to assisting
businesses. This approach focused on establishing a clear understanding of the fundamental issues facing the
business and identifying the blockages and obstacles that caused them. More critically, ensuring management
and all stakeholders understood what the barriers are is a cornerstone to the client establishing ownership and a
commitment to addressing them.

The nem consulting approach has been extremely successful within the private enterprise space with the
partnership growing to over 40 Principals operating nationally from three offices in Melbourne, Sydney and
Brisbane. nem is now arguably Australiaʼs largest boutique consulting firm, offering non executive management
services to the SME market. In particular, nem focuses on the $5 million to $100 million annual turnover
segment where the majority of our referral networks also have most of their client activity. nem is an active and
trusted advisor to such businesses, with the majority of clients having turnover in the $2 million to $20 million
range.

nem relies on the expertise of the individual Principals to undertake business reviews, identify strategies and to
document agreed implementation programs. They then work with the clientʼs internal resources and existing
external service providers to guide, monitor and assess progress. This contrasts significantly to a conventional
consulting approach that relies on a team of staff, many of whom are commercially inexperienced, working
independently of management.

All Principals are past senior corporate executives or successful business owners in their own right. While they
are commercially remunerated and focused,their primary driver is not to generate wealth for themselves but
rather a desire to assist and impart knowledge in a sector that is poorly serviced by conventional consulting
organisations.

The Principal group hold a wide range of Directorships, not for profit Board positions and community based
positions in addition to their active role as a nem Principal.

The firmʼs genuine approach of only engaging where value added outcomes can be achieved, the modest
recovery rates relative to the major consulting firms and the fact the firm does not operate a leveraged structure
has created widespread interest amongst the partnersʼ wider corporate networks.

As a consequence nem has been increasingly engaged in the major corporate market, offering superior
independent assessment and analysis along agreed frameworks, that work in conjunction with the clientʼs
resources. This has resulted in a number of very successful engagements by a number of large publicly listed
companies that have become sceptical of the benefit of engaging conventional consulting firms to assist them to
achieve key objectives.
nem APPROACH AND PROCESS
Complimentary
Coffee Meeting
(with signed Deed)

Can we add genuine value No Consult and/or

to the business? Referrer Refer on

Yes

Desk Top Comprehensive Specific

Review Review Review
$2 to 3k $5 to 10k $1.5 to $2.5k daily
3 to 4 Hours Contact 3 to 5 Days Contact Days to Weeks

Consult with referrer and seek engagement in process where appropriate.

Scope of works are signed off with agreed terms of engagement with nem.

Review Confirmed Scope of Works Scope of Works

• Conduct review • Conduct review • Fluid process
• Compile report • Provide report • Project orientated
• BPA and timing • BPA and timing • Vary widely
• Assistance agreed • Assistance agreed • Not locked in
• Not open-ended • Not open-ended

Assistance Assistance Assistance

• Workshop • Validation • Guiding & advising
• Agreed Programs • Workshop • Sounding board
• Monitor & Guide • Agreed Programs • Accelerate action
• 3 to 6 months • Monitor Guide • Interim Management
• 6 to 12 months

All assignments are overviewed by the Board of Management. Specific points of reference can be
established with Principals to assess referrals, monitor activity
and provide a central point of contact.
nem CASE STUDIES
CONTRACT PACKER

• Turnover of $6 million, 18 staff, Managing Director plus private equity shareholders.

• Private equity funded the Managing Director into the business 4 years ago. Sales were $2 million
EBIT $300m. Sales last year $6 million. Losses of $200k.

• Investors wanted to know: did the business have a future? If yes, what was the plan to be
implemented to achieve a profitable basis and future for the business.

• Comprehensive Review with the Management Team, MD and his son. The review identified that the
business had great potential with targeted growth of 15% per annum. EBIT was projected to improve
to 10% of sales in the first year and 15% of sales in year two. One day workshop $8,000.

• Restructured sales strategy and direction, with recent months new sales of $1.1 million pa signed at
an average net profit of 22%. The business has become cash flow positive and profitable within one
year.

• Defined the roles and responsibilities of the MD and his son. This has allowed a more focused
approach to the business.

• After 4 months; Factory productivity increased by 20%+; expected to reach 30%. A new trend/batch
production to be put in place by late July allowing production to move from 2 shifts to one 10 hour shift
saving 3 people.

• We are on target to achieve the goals set. Profits for the year 2009/10 are forecast at $600k and
$900k the following year.

• Expected fees for the implementation $60,000 over nine months.

SOFTWARE BUSINESS

• $10 million revenue, 40 staff and 100 dealers.

• Break even profitability with a new product launch planned. Uncertainty about the franchising
approach being pursued via Franchise Connections.

• Comprehensive Review with senior management. One day workshop with 3 Principals. Cost $7,500.

• Recommended charging existing users for upgrade and installation. Engaged to validate and
implement. Cost $37,500.

• Revenue increased immediately and reached 70% over the first 12 months with half flowing to the
bottom line.
nem CASE STUDIES
AGRIPRODUCTS BUSINESS
• Turnover of $100 million, part of a listed entity.

• Management reporting unreliable and untimely. Critical reporting timelines and deadlines missed.

• High level review with General Manager over coffee (complimentary) and comprehensive review
undertaken over 3 days by one Principal. Cost $7500.

• Engaged in interim capacity three days a week to restore capability to reporting function until
permanent staff could be appointed.

• Cost $2,500 a day, three days a week, spanning 4 months.

MEDIA DISTRIBUTION BUSINESS

• $110 million revenue, profitable, 85 staff, single shareholder Managing Director.

• The business had no clear leadership and succession options, lacked strategic focus or even a
business plan and a dysfunctional management structure had evolved over time.

• Comprehensive Review with senior management including half-day workshop clearly articulating
current issues and suggested actions. Cost $7,500.

• Recommended structural changes including appointment of a CEO and changes to the management
team. Agreed a vision and developed the basis for a detailed business plan and appointed an interim
General Manager to develop and implement clear role definitions, Key Performance Indicators and
improved management reporting. Refocused the business on sales and market development.

• When demand dropped, revenue of competitors fell by half whereas this business only had single digit
revenue decline.

• Ongoing strategic advisory role including chairing management meetings at a cost of $4,000 per
month.

PEST CONTROL BUSINESS

• Extremely successful pest control business with 10 vans wanted to franchise to improve operator
capability and quality. Franchise Developments had been engaged at a cost of $70,000.

• A conventional model had been recommended with sale value of $70,000 per franchise and retention
of 12.5% royalty.

• nem appointed for a fee of $30,000. A unique commercial model was developed for 60% income
retention, $200,000 franchise sale price which included a $100,000 income guarantee.

• Over 35 franchises sold and business expanded into other regions.

nem CASE STUDIES
WINDOW CLEANING BUSINESS

• Turnover of $300,000. Father and son business referred by their accountant.

• Father was in his early sixties and the son was in his mid forties. The father wanted to sell the
business and the son was not willing to purchase.

• Desk Top Review undertaken at a cost of $1,250 (several years ago) with the father and son.

• The father worked six days a week and spent at least three days per week quoting. The son worked
five days a week.

• The business advertised extensively in local papers and Yellow Pages. The conversion rates for
quotes were extremely low with no follow-up mechanism.

• Work was divided between domestic and retail with domestic better priced and retail often coming
under competitive threat.

• Recommended a service model for domestic work only where good domestic customers were
registered for recurring service in a four or six month cycle. Projected no advertising cost within
eighteen months, no more than five days a week work, no deterioration in income and a profit increase
of $100,000 p.a.

• Accountant implemented a basic CRM system and projected outcome was achieved within nine
months with only eight man days a week of work. Son purchased business and went on to expand
with sub-contractors.

PLUMBING BUSINESS

• Turnover of $600,000 concentrating on body corporate work. Son had taken over the business from
his father and operated with two apprentices at differing stages of experience. Referred by their
accountant.

• The owner had a serious accident during his apprenticeship breaking his back in several places. As a
consequence, he was very safety conscious and followed all OH&S guidelines to the letter.

• Desk Top Review undertaken at a cost of $1,250 (several years ago) with the owner and the
accountant.

• Quotes had thirty percent conversion rate and a timeline of ten months. Quotes were also inflated by
the OH&S measures. Often compensated by using technology such as cameras to detect blockages
and reduce excavation and labour costs.

• Recommended highlighting OH&S measures on all quotes and stating all competing contractors
should be asked to positively confirm the same to the body corporate. Also recommended a OH&S
consequence site report if items not rectified.

• Conversion rate increased to sixty percent with a timeline of four months. Owner went on to acquire
cameras and computers and is now considering franchising this aspect of the business.