Acquisition and Equity Placing

 

TIDMUFG 
 
RNS Number : 2202U 
Ultimate Finance Group PLC 
12 October 2010 
 

                                                                 12 October 2010 
 
                           Ultimate Finance Group plc 
                          ("Ultimate" or the "Company") 
 
            Proposed acquisition of Ashley Commercial Finance Limited 
             Placing of 22,916,668 Ordinary Shares at 12p per share 
              Admission of Enlarged Share Capital to trading on AIM 
                                      and 
                            Notice of General Meeting 
 
 
Ultimate Finance Group plc (the "Company"), the AIM-quoted factoring, invoice 
discounting and financial solutions provider to the SME sector, announces that 
it has conditionally agreed to acquire the whole of the issued share capital of 
Ashley Commercial Finance Limited for an Initial Consideration of GBP4,750,000, 
which will be satisfied as to GBP3,700,000 in cash and GBP1,050,000 by the issue 
of the Initial Consideration Shares. In addition, a Deferred Consideration of up 
to GBP2,700,000 may become payable. 
 
The Acquisition constitutes a reverse takeover under the AIM Rules and will 
therefore require Shareholder approval. 
 
Highlights 
·     Company to acquire Ashley Commercial Finance Limited for initial GBP4.75m 
(GBP3.7m cash and GBP1.05m in shares) conditional on shareholder approval; 
·     GBP2.75m raised through placing at 12p (GBP1.83m net of expenses) and 
acquisition finance facility entered into, of up to GBP2m; 
·     Acquisition creates independent national force in growing factoring and 
invoice discounting market - the businesses are highly complementary, serving 
clients of different typical size, bringing major potential synergistic 
benefits; 
·     Advantages include access to new clients and introducers, strengthened 
presence in north-west England, opportunities in new markets, (joint marketing 
and cross-selling to respective client bases), client retention through mutual 
referrals and leveraging Ultimate's wider product range; 
·     Ashley 2010 operating profit of GBP0.7m, loan book of GBP4.4m and net 
assets of GBP0.94m; acquisition expected to be earnings-accretive, with savings 
up to GBP0.4 annually from the second year; 
·     Enlarged Group in a good position to provide invoice finance as a viable 
alternative to bank overdraft facilities as conditions improve; 
·     Lloyds to increase funding available to Enlarged Group to GBP34m. 
 
Trading of the Existing Shares on AIM is expected to be restored at 7.30 a.m. 
this morning and a copy of the Admission Document, today being posted to 
Shareholders, will shortly be available on Ultimate's website at 
www.ultimatefinancegroup.co.uk 
 
Clive Garston, Chairman of Ultimate said: 
"Our focus remains the achievement of sustained growth and we see this 
acquisition as an opportunity to build shareholder value while minimising risk 
and extending our service into new markets. 
Among the many opportunities we have seen over the years, Ashley stands out as 
highly complementary. For Ultimate, this is a transformational acquisition 
allowing it to achieve scale and synergistic benefits. 
We believe we will continue to see growth in demand for our services as banks 
restrict the overdraft facilities available to SMEs. This deal also positions 
the Company well for any market upturn. 
We are delighted to have secured the backing of existing and new investors for 
the placing and to see the offer over-subscribed." 
 
                                    - ENDS - 
 
For further information please contact: 
 
Ultimate Finance Group plc: 
+--------------------------------+------------------------------+ 
| Clive Garston, Chairman        |         [phone] | 
+--------------------------------+------------------------------+ 
| Richard Pepler, Chief          |         [phone] | 
| Executive                      |                              | 
| [e-mail]  |                              | 
+--------------------------------+------------------------------+ 
| Shane Horsell, Finance         |         [phone] | 
| Director                       |                              | 
| [e-mail] |                              | 
+--------------------------------+------------------------------+ 
 
Media enquiries: 
Allerton Communications: 
+-----------------------------------+------------------------------+ 
| Peter Curtain                     |         [phone] | 
| [e-mail] |                              | 
+-----------------------------------+------------------------------+ 
 
Nominated Adviser and Joint Broker: 
Arbuthnot Securities Limited 
+------------------------------+------------------------------+ 
| Antonio Bossi                |         [phone] | 
| [e-mail] |                              | 
|                              |                              | 
+------------------------------+------------------------------+ 
| Paul Gillam                  |         [phone] | 
| [e-mail]   |                              | 
+------------------------------+------------------------------+ 
 
Joint Broker: 
WH Ireland 
+---------------------------------+-----------------------------+ 
| John Wakefield                  |       [phone]  | 
| [e-mail] |                             | 
|                                 |                             | 
+---------------------------------+-----------------------------+ 
| Richard Smith                   |        [phone] | 
| [e-mail]  |                             | 
|                                 |                             | 
+---------------------------------+-----------------------------+ 
 
This announcement does not constitute an offer to sell, or the solicitation of 
an offer to subscribe for or buy, Ordinary Shares in any jurisdiction in which 
such offer or solicitation is unlawful or would impose any unfulfilled 
registration, publication or approval requirements on the Company, Arbuthnot 
Securities Limited or WH Ireland Limited and, in particular, is not for 
distribution into the United States, Canada, Australia, Japan, the Republic of 
Ireland or the Republic of South Africa. The Ordinary Shares have not been and 
will not be registered under the applicable securities laws of the United 
States, Canada, Australia, Japan, the Republic of Ireland or the Republic of 
South Africa and the Ordinary Shares may not be offered or sold directly or 
indirectly within the United States, Canada, Australia, Japan, the Republic of 
Ireland or the Republic of South Africa or to, or for the account or benefit of, 
any national, resident or citizen of the United States, Canada, Australia, 
Japan, the Republic of Ireland or the Republic of South Africa. The distribution 
of this announcement in other jurisdictions may be restricted by law and 
therefore persons into whose possession this announcement comes should inform 
themselves about and observe any such restrictions. Any failure to comply with 
these restrictions may constitute a violation of the securities law of any such 
jurisdictions. 
 
Arbuthnot Securities Limited, which is authorised and regulated in the United 
Kingdom by the Financial Services Authority, is acting as nominated adviser and 
joint broker to the Company in relation to the Placing and Admission and will 
not be responsible to any person other than the Company for providing the 
protections afforded to its customers or for advising any other person on the 
contents of this announcement or any matter, transaction or arrangement referred 
to herein. The responsibilities of Arbuthnot Securities Limited as the Company's 
nominated adviser under the AIM Rules for Nominated Advisers are owed solely to 
London Stock Exchange and are not owed to the Company or to any Director, 
Shareholder or any other person. Arbuthnot Securities Limited is not making any 
representation or warranty, express or implied, as to the contents of this 
announcement. Arbuthnot Securities Limited has not authorised or approved the 
contents of, or any part of, this announcement. No liability whatsoever is 
accepted by Arbuthnot Securities Limited for the accuracy of any information or 
opinions contained in this announcement or for the omission of any information 
from this announcement. 
 
WH Ireland Limited, which is authorised and regulated in the United Kingdom by 
the Financial Services Authority, is acting as joint broker to the Company in 
relation to the Placing and Admission and will not be responsible to any person 
other than the Company for providing the protections afforded to its customers 
or for advising any other person on the contents of this announcement or any 
matter, transaction or arrangement referred to herein. 
WH Ireland Limited is not making any representation or warranty, express or 
implied, as to the contents of this announcement. WH Ireland Limited has not 
authorized or approved the contents of, or any part of, this announcement. No 
liability whatsoever is accepted by WH Ireland Limited for the accuracy of any 
information or opinions contained in this announcement or for the omission of 
any information from this announcement. 
 
 
 
 
            Proposed acquisition of Ashley Commercial Finance Limited 
             Placing of 22,916,668 Ordinary Shares at 12p per share 
              Admission of Enlarged Share Capital to trading on AIM 
                                      and 
                            Notice of General Meeting 
1.   Introduction 
 
Further to the announcement released on 22 September 2010 that it was in 
discussions regarding an acquisition, the Company announces that it has 
conditionally agreed to acquire the entire issued share capital of Ashley, a 
company based near Manchester providing invoice finance to UK small and medium 
sized businesses, for an initial consideration of GBP4,750,000, to be satisfied 
as to GBP3,700,000 in cash and GBP1,050,000 by the issue of the Initial 
Consideration Shares. In addition, a Deferred Consideration of up to 
GBP2,700,000 may become payable, dependent on the meeting of certain financial 
targets. 
 
The Acquisition constitutes a reverse takeover under the AIM Rules for Companies 
and as such is conditional on approval by Existing Shareholders which will be 
sought at a general meeting on the Company to be held on 28 October 2010, notice 
of which is set out at the end of the Admission Document. 
 
As a result of the announcement issued on 22 September 2010 in relation to the 
Acquisition, trading in the Ordinary Shares on AIM was suspended at 7.30 a.m. 
that morning. Trading of the Existing Shares on AIM is expected to be restored 
at 7.30 a.m. this morning and a copy of the Admission Document, today being 
posted to Shareholders, will shortly be available on Ultimate's website at 
www.ultimatefinancegroup.co.uk 
 
 
As at 31 March 2010, Ashley had a total loan book of just over GBP4.4 million, 
net assets of GBP0.94 million and in the year to 31 March 2010 generated an 
operating profit of GBP0.69 million. Further details of the history, business 
and prospects of Ashley are set out in Part II of the Admission Document. The 
historical financial information on Ashley for the three years ended 31 March 
2010 and the Accountant's report thereon is set out in Part VI of the Admission 
Document. 
 
The Company has also conditionally raised GBP1.83 million (net of expenses) 
through a placing of new Ordinary Shares with new and existing investors at 12 
pence per Ordinary Share and has been granted the Acquisition Finance Facility 
for up to GBP2 million. Application will be made for admission to trading on AIM 
of the Enlarged Share Capital, which, subject to the approval of Resolutions 1 
to 3, is expected to become effective on 29 October 2010. Admission of the 
Enlarged Share Capital is conditional on the allotment of the New Ordinary 
Shares. 
 
2.   Background to and benefits of the Acquisition 
 
The Company was incorporated in 2002 and its Ordinary Shares were admitted to 
trading on AIM in June of that year, when it commenced trading from its Bristol 
office. The Company has grown significantly since it was admitted to AIM - it 
now has offices in Kent and Manchester as well as its original office in Bristol 
and it services clients based throughout the UK. Ultimate's business is the 
provision of invoice factoring, invoice discounting, trade finance and asset 
finance facilities. Its target market is UK SMEs. 
 
The Company is now well established in the UK SME invoice finance market and has 
recently set up trade finance and asset finance businesses. Despite a short 
period of low growth in the financial years 06/07 and 07/08, the Company has 
demonstrated strong growth in the financial years 08/09 and 09/10 and is keen to 
strengthen its position in the market. The Existing Directors consider that the 
Acquisition will represent a major step in achieving this goal. 
 
The Existing Directors are of the opinion that the acquisition of Ashley will be 
significantly earnings accretive (this statement should not be interpreted to 
mean that earnings per share will necessarily be greater than those for the 
financial period ended 30 June 2010) whilst allowing the Existing Group access 
to a new pool of clients and introducers, a different segment of the market and 
strengthening the Existing Group's presence in the north west of England. In 
addition, the Existing Directors believe that there are significant 
opportunities for the Existing Group to attract new business from Ashley's 
target markets and an enlarged introducer base. The Enlarged Group will benefit 
from joint-marketing and cross-selling to respective client bases, particularly 
in the debtor protection, trade finance and asset finance categories. 
 
Ashley's clients are typically smaller than those of the Existing Group, with an 
average loan per client of GBP16,000 compared to in excess of GBP100,000 for the 
Existing Group (as at 30 June 2010). Furthermore, the Existing Directors believe 
that the Acquisition may improve client retention, through the referral of new 
business opportunities between the two companies in the Enlarged Group. 
 
The Existing Directors expect that significant cost savings of up to GBP400,000 
per annum could be achieved, although they anticipate that only a proportion of 
these savings will be achievable in the first twelve months following Admission. 
 
Currently, both companies utilise back-to-back funding facilities provided by 
Lloyds. As announced on 22 September 2010, Lloyds has agreed in principle to 
extend its facility to the Existing Group to GBP30 million. Ashley has to date 
been utilising an existing facility with Lloyds of GBP3.5 million. Post 
Admission, Lloyds has agreed, in principle, to increase the funding available to 
the Enlarged Group by way of two new facilities, to GBP34 million. 
 
3.   Principal terms of the acquisition 
 
The Company has conditionally agreed to acquire the entire issued share capital 
of Ashley from the Vendors for the following consideration: 
 
-     Initial consideration of GBP4,750,000 to be satisfied on completion as to 
GBP3,700,000 in cash and GBP1,050,000 by the issue of the Initial Consideration 
Shares to the Vendors. 
-     Deferred Consideration will be paid in two tranches as set out below, at 
the rate of GBP6 for every GBP1 in excess of: 
a)   GBP850,000 of profit before tax of Ashley in the year from 1 November 2010 
to 31 October 2011, with a maximum First Tranche payment of GBP1,350,000; and 
b)   GBP1,100,000 of profit before tax of Ashley in the year from 1 November 
2011 to 31 October 2012, with a maximum Second Tranche payment of GBP1,350,000. 
 
The Deferred Consideration shall be payable in cash other than up to GBP100,000 
of the First Tranche and up to GBP600,000 of the Second Tranche which shall, at 
the sole discretion of Ultimate, be payable either in cash or Deferred 
Consideration Shares, at a price representing the higher of (i) the average of 
the mid closing price over the period of 5 trading days before the allotment 
date and (ii) the Placing Price. 
 
Completion is conditional upon, inter alia, (i) approval of Resolutions 1 to 3 
at the General Meeting and (ii) Admission. 
 
The Acquisition Agreement contains restrictive covenants from Jonathan Cranston, 
Jayne Merriman, Ian Robins and Jeffrey Burton. The Acquisition Agreement also 
contains certain warranties from Jonathan Cranston, Stephen Hart, Jayne 
Merriman, Ian Robins, Jeffrey Burton and his wife Denise Burton relating to the 
business of Ashley and indemnities in respect of tax. Such warranties and 
indemnities are given on a joint and several basis, are subject to an aggregate 
financial cap on the Warrantors' liability by reference to the value of the 
total consideration paid in cash under the Agreement, and all claims must be 
made before 31 December 2012 other than in relation to tax. 
 
Further details of the Acquisition Agreement are set out in paragraph 11.1 of 
Part VIII of the Admission Document. 
 
4.   The market 
 
The UK factoring market has grown significantly since 2000 (source ABFA) as 
factoring and more generally invoice finance, become increasingly main-stream 
sources of finance. Between 2000 and 2009, total client sales financed 
throughout the industry grew by c.151 per cent. to reach GBP191bn in 2009, while 
the total number of clients using factoring facilities grew by 59 per cent. to 
43,590. During the recent economic uncertainty, the market as a whole has seen a 
small contraction, and total advances to clients fell slightly in 2009. The 
Directors believe that there are significant opportunities in the SME sector and 
that, as a result of the current economic climate, many clients prefer dealing 
with an independent company to a high street bank because of their more hands-on 
personal approach and close relationships with their clients. 
 
The Directors believe invoice finance can benefit companies of all sizes as an 
alternative to bank overdrafts; it can enable faster growth since funding 
normally increases in line with trading activity. Often only the book debts are 
required as security, releasing other assets for additional borrowing and 
contracts are normally open-ended but with a minimum contract term plus a 
termination notice period. Since the start of 2008, the current economic climate 
has led to increased numbers of company liquidations and has impacted on the 
ability of many start-up companies and SMEs to secure the necessary funding for 
their businesses. However, as the UK economy recovers, the Directors believe 
that the Enlarged Group will be in a good position to provide invoice finance as 
a viable alternative to bank overdraft facilities. 
 
The UK market is competitive, with the majority of the large retail banks 
offering invoice finance services. Further competition comes from a number of 
independent factoring businesses. 
 
5.   Directors, senior management and employees 
 
Immediately following Admission, the Board will be comprised of four executive 
and two non-executive directors, brief biographical details of whom are set out 
below. 
 
Board of the Company as enlarged by the Acquisition 
 
Clive Garston - Chairman, Age 65 
Clive is a solicitor and consultant with Davies Arnold Cooper LLP, an 
international law firm with offices in London, Manchester, Madrid and Mexico 
City. He is a non-executive director of Pall Mall Capital Limited and has been a 
non-executive director of many other private and public companies. He is a 
fellow of the Securities & Investment Institute, a fellow of the Institute of 
Directors and a member of the corporate governance committee of the Quoted 
Companies Alliance. 
 
Richard Pepler FICM - Chief Executive Officer, Age 50 
Richard has over 32 years' experience in commercial banking and asset/trade 
finance. He was appointed CEO of Ultimate in March 2008 (although he was Acting 
CEO from October 2007), having been Group Managing Director since founding the 
business in 2002. He was previously National Sales Manager of Bibby Factors 
Limited, co-founder and Sales Director of Bibby Factors (Bristol) Limited and 
Head of Marketing for Bibby Group of Factors Limited. 
 
Shane Horsell CIMA, CIPFA, MBA - Group Finance Director, Age 44 
Shane has over 22 years' experience in various financial roles, latterly as 
Finance Director of Blick UK Limited, a main subsidiary of Blick Plc and Group 
Finance Director of Advent Publishing Systems Limited. Shane joined the Company 
in 2006. 
 
Jeremy Coombes ABFA Dip. - Group Managing Director, Age 45 
Jeremy has over 23 years' experience in operational and underwriting roles. He 
was appointed Group Managing Director in January 2009, having been a founding 
member of the Company in 2002. Jeremy was previously International New Business 
Co-ordinator of Griffin Factors Limited (now known as HSBC Invoice Finance 
Limited) and a Senior Client Manager at NMB-Heller Limited (now known as GE 
Capital Commercial Finance Limited). He was also co-founder and Operations 
Director of Bibby Factors (Bristol) Limited. 
 
Richard Lee - Non-executive Director, Age 65 
Richard is a Corporate Strategy Consultant and a director of WH Ireland Group 
plc. He has experience as a director of a number of public and private companies 
in a variety of industries. He is also a director of Wilmslow Finance Holdings 
Limited. 
 
Jonathan Cranston - Proposed Executive Director, Age 46 
Jonathan has 25 years' experience in the financial services industry, including 
his initial vocation as a stockbroker. He joined Ashley as Managing Director 
shortly after its inception and has been responsible for credit decisions and 
Ashley's relationships with its lending banks. Jonathan also runs a commercial 
mortgage business which is completely separate from the Enlarged Group's client 
base. It is proposed that he will join the board upon Completion. It is expected 
that he will remain with the Enlarged Group for at least the duration of the 
Earn-Out Period. 
 
As at 30 June 2010, the Existing Group had 54 employees, comprising of 35 based 
at the Bristol office, 9 at the Manchester office and 10 at the Tunbridge Wells 
office. 
 
Key senior employees of the Company include: 
 
Paul Atkins - Managing director (Midlands) 
Paul has over 20 years' experience in finance and leading sales teams. He 
recently headed up sales teams at Sage plc, Experian plc and Barclays Bank plc. 
Paul joined the Company in 2007. 
 
Hugh Francis - Managing director, Ultimate Trade Finance Limited 
Hugh is responsible for Ultimate Trade Finance Limited, having previously 
established and run two successful trade finance companies: Bibby Trade Finance 
Limited in 1998 and Liquidity Import Finance Limited in 2005. 
 
Andrew Ribbins - Managing director, Ultimate Asset Finance Limited 
Andrew is responsible for Ultimate Asset Finance Limited. Andrew was previously 
involved in the formation of Voss Finance Limited, becoming its managing 
director in 2007. He has 26 years' experience in the finance industry, 
predominantly in the provision of asset finance to SMEs. 
 
Austin Thorp - Commercial director (North) 
Austin has 14 years' experience in the finance sector, having worked for NatWest 
plc and Davenham Group plc. 
 
As at 31 March 2010, Ashley had 27 employees, with the majority of staff based 
at the Cheadle head office. Brief biographical details of the key individuals 
involved within Ashley are listed below: 
 
Jonathan Cranston - Managing Director, Age 46 
Jonathan Cranston's details are set out above as he will be joining the Board of 
the Company upon Completion. 
 
Ian Robins - Sales Director, Age 54 
Ian has 23 years' financial services and industry experience. Prior to 
co-founding Ashley he held a wide range of client handling and sales roles 
within financial services. He also ran a financial consultancy business, from 
which he provided factoring services to small businesses. He is responsible for 
managing the sales team, and is expected to remain with Ashley for at least the 
duration of the Earn-Out Period. 
 
Jayne Merriman - Operations Director, Age 46 
Jayne has worked for Ashley since 1997 and was promoted to Operations Director 
in 2001. She is responsible for the operations team which manages clients' 
debtor ledgers along with processing initial take-on procedures. She sits on the 
credit committee and is also responsible for Ashley's marketing function. Jayne 
is expected to remain with Ashley for at least the duration of the Earn-Out 
Period. 
 
Jeffrey Burton - Recoveries Manager, Age 60 
Jeffrey has 37 years' experience in the financial services sector and was a 
shareholder in Reedham Factors Limited, which was sold to Cattles plc in 1994. 
He is responsible for the recoveries department and liaising with insolvency 
practitioners and solicitors on all aspects of debt recovery. Jeffrey is 
expected to remain as a consultant to Ashley for 12 months following completion 
of the Acquisition. 
Jeffrey is not an employee of Ashley but receives a fee for his services. 
 
6.   Lock-in arrangements 
 
Each of the Vendors has agreed that for a period of 24 months from Admission 
they will not dispose of any of the Initial Consideration Shares or Deferred 
Consideration Shares to which they are legally or beneficially entitled as a 
result of the Acquisition Agreement, and for a further 12 months any disposals 
of Initial Consideration Shares or Deferred Consideration Shares by these 
individuals are to be made following consultation with, and through, the 
Company's brokers. 
 
The lock-in arrangements outlined above will apply in respect of all of the 
Initial Consideration Shares, representing approximately 13.4 per cent. of the 
Enlarged Share Capital, and any Deferred Consideration Shares that are 
subsequently issued prior to the end of the three year period following 
Admission. 
 
Further details of the lock-in arrangements are set out in paragraph 11.4 of 
Part VIII of the Admission Document. 
 
7.   Details of the Placing and use of proceeds 
 
The Company has conditionally raised GBP1.83 million (net of expenses) through a 
placing of new Ordinary Shares with new and existing investors at 12 pence per 
Ordinary Share. On Admission, the Placing Shares will represent approximately 
46.1 per cent. of the Enlarged Share Capital. Application will be made for 
admission to trading on AIM of the Enlarged Share Capital, which, subject to the 
approval of Resolutions 1 to 3 set out in the notice of General Meeting, is 
expected to become effective on 29 October 2010. The Placing and Admission are 
conditional on the allotment of the New Ordinary Shares. On Admission, at the 
Placing Price, the Enlarged Group will have a market capitalisation of 
approximately GBP5.97 million. 
 
Under the Placing Agreement, Arbuthnot Securities and WH Ireland have severally 
conditionally agreed to use their reasonable endeavours, as agents on behalf of 
the Company, to procure placees for the Placing Shares at the Placing Price. 
The Placing is conditional upon, inter alia, the Acquisition Agreement becoming 
unconditional in accordance with its terms no later than 3 p.m. on 29 October 
2010 (or such later date as the Company, Arbuthnot Securities and WH Ireland 
shall agree, being not later than 12 November 2010). The Placing Agreement 
contains customary market-related provisions entitling Arbuthnot Securities and 
WH Ireland to terminate the Placing Agreement at any time prior to Admission in 
certain circumstances. If this right is exercised, the Placing will lapse. The 
Placing has not been underwritten by Arbuthnot Securities or WH Ireland. 
 
The Placing Shares and the Initial Consideration Shares will, on Admission, rank 
pari passu in all respects with the Existing Ordinary Shares, including the 
right to receive all dividends and other distributions thereafter declared, made 
or paid in respect of the ordinary share capital of the Company. 
However, they will not carry the right to the dividend of 0.3p per Ordinary 
Share already proposed and which will be payable to holders of Existing Ordinary 
Shares on 23 December 2010. 
 
The Company will pay Arbuthnot Securities and WH Ireland a commission of 5 per 
cent. of the aggregate value of the Placing Shares raised by each party at the 
Placing Price and to Arbuthnot Securities a corporate finance success fee of 
GBP175,000. 
 
The cash portion of the Initial Consideration of GBP3,700,000 due in respect of 
the Acquisition shall be satisfied by the funds raised by the Placing and the 
Acquisition Finance Facility. 
Further details of the Placing Agreement are set out in paragraph 11.2 of Part 
VIII of the Admission Document. 
 
8.   Acquisition Finance Facility 
 
The Company has been granted the Acquisition Finance Facility by Lloyds Bank for 
up to GBP2,000,000, further details of which are set out in paragraph 11.5 of 
Part VIII of the Admission Document. 
 
9.   Dividend policy 
 
The Company will maintain a progressive dividend policy going forward and the 
Board has resolved that they intend to distribute to Shareholders by way of 
dividend a significant proportion of retained profits for each financial year, 
subject to trading, profitability and the requirements of the business. 
 
10. Corporate Governance 
 
The Directors recognise and value the importance of high standards of corporate 
governance and intend to continue to observe the requirements of the QCA 
Guidelines to the extent that they consider reasonably practicable in light of 
the Company's size, stage of development and resources. The Board will ensure 
that proper procedures are adhered to with regard to the approval of the 
Company's annual and interim accounts. 
 
Upon Admission, the Board will consist of six directors, two of whom, including 
the Chairman, will be non-executive directors. 
 
The Company will hold regular board meetings. The Directors will be responsible 
for formulating, reviewing and approving the Company's strategy, budget and 
major items of capital expenditure. The Company has in place an audit committee 
and a remuneration committee with formally delegated rules and responsibilities. 
The remuneration committee will meet as and when appropriate and the audit 
committee will meet at least twice each year. 
 
The audit committee comprises Clive Garston and Richard Lee and is chaired by 
Clive Garston. The audit committee determines and examines matters relating to 
the financial affairs of the Company including the terms of engagement of the 
Company's auditors and, in consultation with the auditors, the scope of the 
audit. It receives and reviews reports from management and considers the 
accounting and internal control systems in use throughout the Company. 
 
The remuneration committee comprises Richard Lee and Clive Garston and is 
chaired by Richard Lee. The remuneration committee reviews and makes 
recommendations in respect of the Directors' remuneration and benefits packages, 
including share options and the terms of their appointment. The remuneration 
committee also makes recommendations to the Board concerning the allocation of 
share options to employees. 
 
 
 
11. Share dealing code 
 
The Company has previously adopted a share dealing code appropriate for a 
company admitted to trading on AIM. The Company will take proper steps to ensure 
compliance by the Directors and all applicable employees and consultants. 
 
12. Financial information 
 
Historical Financial Information is presented below in respect of Ashley 
Commercial Finance Limited. This has been derived from statutory financial 
statements for the two years to 31 March 2009 as amended to reflect the adoption 
of IFRS and to reflect the basis of preparation set out in Section B note 1 of 
Part VI of the Admission Document, and from Ashley's unaudited annual report for 
the 12 months to 31 March 2010. 
 
 
Statements of Comprehensive Income 
for the years ending 31 March 2008, 2009 and 2010 
 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |        2008 |        2009 |        2010 | 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |         GBP |         GBP |         GBP | 
+---------------------------------+-------------+-------------+-------------+ 
| Revenue                         |   2,766,277 |   2,898,860 |   3,042,059 | 
+---------------------------------+-------------+-------------+-------------+ 
| Cost of sales                   |   (337,086) |   (351,155) |   (394,274) | 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Gross profit                    |   2,429,191 |   2,547,705 |   2,647,785 | 
+---------------------------------+-------------+-------------+-------------+ 
| Administrative expenses         | (1,608,832) | (1,742,477) | (1,956,470) | 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Operating profit                |     820,359 |     805,228 |     691,315 | 
+---------------------------------+-------------+-------------+-------------+ 
| Finance income                  |       7,606 |      10,782 |      38,527 | 
+---------------------------------+-------------+-------------+-------------+ 
| Finance expense                 |        (60) |     (9,984) |     (3,754) | 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Profit before tax               |     827,905 |     806,026 |     726,088 | 
+---------------------------------+-------------+-------------+-------------+ 
| Tax expense                     |   (227,275) |   (221,226) |   (183,281) | 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Profit for the year being total |     600,630 |     584,800 |     542,807 | 
| comprehensive income            |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
 
 
Statements of Financial Position 
As at 31 March 2008, 2009 and 2010 
 
+---------------------------------+-----------+-----------+-----------+ 
|                                 |      2008 |      2009 |      2010 | 
+---------------------------------+-----------+-----------+-----------+ 
|                                 |       GBP |       GBP |       GBP | 
+---------------------------------+-----------+-----------+-----------+ 
| Assets                          |           |           |           | 
+---------------------------------+-----------+-----------+-----------+ 
| Non current assets              |    94,889 |    73,418 |   104,143 | 
+---------------------------------+-----------+-----------+-----------+ 
| Property, plant and equipment   |         - |    83,750 |    91,945 | 
+---------------------------------+-----------+-----------+-----------+ 
| Intangible assets               |    94,889 |   157,168 |   196,088 | 
+---------------------------------+-----------+-----------+-----------+ 
|                                 |           |           |           | 
+---------------------------------+-----------+-----------+-----------+ 
| Current assets                  |           |           |           | 
+---------------------------------+-----------+-----------+-----------+ 
| Trade and other receivables     | 4,040,411 | 5,063,303 | 4,677,497 | 
+---------------------------------+-----------+-----------+-----------+ 
| Cash and cash equivalents       |   127,750 |   350,987 |   233,567 | 
+---------------------------------+-----------+-----------+-----------+ 
|                                 | 4,168,161 | 5,414,290 | 4,911,064 | 
+---------------------------------+-----------+-----------+-----------+ 
| Total assets                    | 4,263,050 | 5,571,458 | 5,107,152 | 
+---------------------------------+-----------+-----------+-----------+ 
|                                 |           |           |           | 
+---------------------------------+-----------+-----------+-----------+ 
| Equity                          |           |           |           | 
+---------------------------------+-----------+-----------+-----------+ 
| Issued capital and reserves     |           |           |           | 
| attributed to the owners of the |           |           |           | 
| parent                          |           |           |           | 
+---------------------------------+-----------+-----------+-----------+ 
| Issued share capital            |     1,050 |     1,050 |     1,050 | 
+---------------------------------+-----------+-----------+-----------+ 
| Retained earnings               |   826,486 |   934,943 |   941,455 | 
+---------------------------------+-----------+-----------+-----------+ 
|                                 |           |           |           | 
+---------------------------------+-----------+-----------+-----------+ 
| Total Equity                    |   827,536 |   935,993 |   942,505 | 
+---------------------------------+-----------+-----------+-----------+ 
|                                 |           |           |           | 
+---------------------------------+-----------+-----------+-----------+ 
| Non current liabilities         |           |           |           | 
+---------------------------------+-----------+-----------+-----------+ 
| Interest bearing borrowings     |   464,183 |     3,526 |         - | 
+---------------------------------+-----------+-----------+-----------+ 
|                                 |           |           |           | 
+---------------------------------+-----------+-----------+-----------+ 
| Current liabilities             |           |           |           | 
+---------------------------------+-----------+-----------+-----------+ 
| Loans and borrowings            | 1,753,581 | 2,847,725 | 2,777,230 | 
+---------------------------------+-----------+-----------+-----------+ 
| Corporation tax payable         |   262,668 |   276,109 |   351,188 | 
+---------------------------------+-----------+-----------+-----------+ 
| Trade and other payables        |   955,082 | 1,508,105 | 1,036,229 | 
+---------------------------------+-----------+-----------+-----------+ 
|                                 | 2,971,331 | 4,631,939 | 4,164,647 | 
+---------------------------------+-----------+-----------+-----------+ 
| Total equity and liabilities    | 4,263,050 | 5,571,458 | 5,107,152 | 
+---------------------------------+-----------+-----------+-----------+ 
 
 
Statements of cash flows 
for the years ending 31 March 2008, 2009 and 2010 
 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |        2008 |        2009 |        2010 | 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |         GBP |         GBP |         GBP | 
+---------------------------------+-------------+-------------+-------------+ 
| Profit for the year             |     827,905 |     806,026 |     726,088 | 
+---------------------------------+-------------+-------------+-------------+ 
| Adjustments for:                |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Depreciation                    |      46,824 |      88,927 |     115,090 | 
+---------------------------------+-------------+-------------+-------------+ 
| (Profit)/Loss on disposal of    |       (247) |       1,036 |       1,120 | 
| property, plant and equipment   |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Interest income                 |       (172) |        (13) |           - | 
+---------------------------------+-------------+-------------+-------------+ 
| Interest expense                |          60 |       9,984 |       3,754 | 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |     874,370 |     905,960 |     846,052 | 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Decrease/(increase) in trade    |   (337,525) | (1,022,892) |     385,806 | 
| and other receivables           |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Increase/(decrease) in trade    |     232,688 |     553,023 |   (471,875) | 
| and other payables              |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Cash generated from operations  |     769,533 |     436,091 |     759,983 | 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Income taxes paid               |   (234,607) |   (207,785) |   (108,203) | 
+---------------------------------+-------------+-------------+-------------+ 
| Interest paid                   |        (60) |     (9,984) |     (3,754) | 
+---------------------------------+-------------+-------------+-------------+ 
| Net cash flows from operating   |     534,866 |     218,322 |     648,026 | 
| activities                      |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Investing activities            |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Purchases of property, plant    |    (21,288) |   (165,542) |   (157,630) | 
| and equipment                   |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Sale of property, plant and     |       8,500 |      13,300 |       2,500 | 
| equipment                       |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Interest received               |         172 |          13 |           - | 
+---------------------------------+-------------+-------------+-------------+ 
| Net cash used in operating      |    (12,616) |   (152,229) |   (155,130) | 
| activities                      |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Financing activities            |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Issue of ordinary shares        |          50 |           - |           - | 
+---------------------------------+-------------+-------------+-------------+ 
| Dividends paid                  |   (643,889) |   (476,343) |   (536,295) | 
+---------------------------------+-------------+-------------+-------------+ 
| Proceeds from/(repayment of)    |     464,183 |   (464,183) |           - | 
| bank borrowings                 |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Payments to finance lease       |    (27,593) |      10,578 |     (7,187) | 
| creditors                       |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Net cashflows (used in)/from    |   (207,249) |   (929,948) |   (543,482) | 
| financing activities            |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
|                                 |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Net increase (decrease) in cash |     315,001 |   (863,855) |    (50,586) | 
| and cash equivalents            |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Cash and cash equivalents as at | (1,940,832) | (1,625,831) | (2,489,686) | 
| 1 April                         |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
| Cash and cash equivalents as at | (1,625,831) | (2,489,686) | (2,540,272) | 
| 31 March                        |             |             |             | 
+---------------------------------+-------------+-------------+-------------+ 
 
 
Statements of changes in equity 
 
+---------------+--------------+--------------+--------------+ 
|               |        Share |     Retained | Total equity | 
|               |      capital |     earnings |              | 
+---------------+--------------+--------------+--------------+ 
|               |          GBP |          GBP |          GBP | 
+---------------+--------------+--------------+--------------+ 
| 1 April 2007  |        1,000 |      869,745 |      870,745 | 
+---------------+--------------+--------------+--------------+ 
| Issue of      |           50 |            - |           50 | 
| share         |              |              |              | 
| capital       |              |              |              | 
+---------------+--------------+--------------+--------------+ 
| Dividends     |            - |    (643,889) |    (643,889) | 
+---------------+--------------+--------------+--------------+ 
| Total         |            - |      600,630 |      600,630 | 
| comprehensive |              |              |              | 
| income        |              |              |              | 
+---------------+--------------+--------------+--------------+ 
|               |              |              |              | 
+---------------+--------------+--------------+--------------+ 
| 31 March      |        1,050 |      826,486 |      827,536 | 
| 2008          |              |              |              | 
+---------------+--------------+--------------+--------------+ 
| Dividends     |            - |    (476,343) |    (476,343) | 
+---------------+--------------+--------------+--------------+ 
| Total         |            - |      584,800 |      584,800 | 
| comprehensive |              |              |              | 
| income        |              |              |              | 
+---------------+--------------+--------------+--------------+ 
|               |              |              |              | 
+---------------+--------------+--------------+--------------+ 
| 31 March      |        1,050 |      934,943 |      935,993 | 
| 2009          |              |              |              | 
+---------------+--------------+--------------+--------------+ 
| Dividends     |            - |    (536,295) |    (536,295) | 
+---------------+--------------+--------------+--------------+ 
| Total         |            - |      542,807 |      542,807 | 
| comprehensive |              |              |              | 
| income        |              |              |              | 
+---------------+--------------+--------------+--------------+ 
|               |              |              |              | 
+---------------+--------------+--------------+--------------+ 
| 31 March      |        1,050 |      941,455 |      942,505 | 
| 2010          |              |              |              | 
+---------------+--------------+--------------+--------------+ 
 
 
13. General Meeting 
 
Set out at the end of the Admission Document is a notice convening the General 
Meeting to be held at the offices of Davies Arnold Cooper LLP, 6-8 Bouverie 
Street, London, EC4Y 8DD, on 28 October 2010 at 10.00 a.m. The full terms of the 
Resolutions are set out in that notice and are summarised below: 
 
Resolution 1 
Resolution 1, which is an ordinary resolution and is conditional on the passing 
of Resolutions 2 and 3, seeks Existing Shareholders' approval of the 
Acquisition, which constitutes a "reverse takeover" for the purposes of the AIM 
Rules for Companies. A summary of the principal terms of the Acquisition 
Agreement can be found in paragraph 11.1 in Part VIII of the Admission Document. 
 
Resolution 2 
Resolution 2, which is an ordinary resolution and is conditional on the passing 
of Resolutions 1 and 3, seeks Existing Shareholders' approval to grant authority 
to the Directors to allot (i) Ordinary Shares up to an aggregate nominal value 
of GBP333,283.60, (ii) equity securities up to an aggregate value of 
GBP333,283.60 in connection with a rights issue or similar offer to holders of 
Ordinary Shares in proportion to their existing shareholding and (iii) Ordinary 
Shares pursuant to the Acquisition and the Placing, such authorities to expire 
on the conclusion of the Company's next annual general meeting. 
 
Resolution 3 
Resolution 3, which is a special resolution and is conditional on the passing of 
Resolutions 1 and 2 seeks Existing Shareholders' approval to empower the 
Directors pursuant to section 570(1) of the Act to allot equity securities for 
cash as if section 561(1) of the Act did not apply to such allotments. Such 
empowerment is to expire on the conclusion of the Company's next annual general 
meeting. 
 
In accordance with section 571(6) of the Act, the Directors confirm that the 
amount to be paid to the Company in respect of each of the Placing Shares is the 
Placing Price, which the Directors, further to discussions with potential 
investors, consider is appropriate. 
 
Resolution 4 
Resolution 4, which is a special resolution, seeks Existing Shareholder approval 
to amend the Articles to effect the following changes: 
 
-     Under the Act the objects clause and all other provisions which are 
contained in the Company's memorandum are deemed to be contained in the 
Company's articles of association but the Company can remove these provisions by 
special resolution. The Act states that unless the Company's articles of 
association provide otherwise, the Company's objects are unrestricted, thus 
abolishing the need for the Company to have an objects clause. For this reason 
the Company is proposing to remove its objects clause together with all other 
provisions of its memorandum. 
-     Under the Act the Company is no longer required to maintain an authorised 
share capital, so theCompany is proposing to remove this limit. 
-     Under the Act all share transfers must be registered as soon as 
practicable, which is currently inconsistent with the Company's articles which 
permit the directors to suspend the registration of shares. For this reason the 
Company is proposing to remove this power. 
-     Under guidance produced by the Department for Business, Innovation and 
Skills it is suggested that the Company's articles should treat physical illness 
in the same manner as mental illness in respect of directors vacating office. 
For this reason the Company is proposing to amend the provision. 
 
14. Irrevocable undertakings 
 
The Existing Directors have given irrevocable undertakings to the Company to 
vote in favour of the Resolutions (and to procure that such action is taken by 
the relevant registered holders) in respect of their beneficial holdings 
totalling 2,361,010 Existing Ordinary Shares, representing approximately 11.81 
per cent. of the Existing Share Capital. 
 
In addition, WH Ireland Group PLC has given an irrevocable undertaking to the 
Company to vote in favour of the Resolutions (and to procure that such action is 
taken by the relevant registered holders) in respect of its beneficial holding 
totalling 5,183,122 Existing Ordinary Shares, representing approximately 25.92 
per cent. of the Existing Share Capital. 
 
In total, therefore, the Company has received irrevocable undertakings to vote 
in favour of the Resolutions to be proposed at the General Meeting in respect of 
beneficial holdings totalling 7,544,132 Existing Ordinary Shares, representing 
approximately 37.73 per cent. of the Existing Share Capital. 
 
15. Admission and dealings 
 
Application will be made to the London Stock Exchange for the Existing Ordinary 
Shares to be re-admitted, and the Placing Shares and the Initial Consideration 
Shares to be admitted to trading on AIM, conditional upon, inter alia, the 
passing of Resolutions 1 to 3 set out in the notice of General Meeting. 
 
It is expected that Admission will become effective and dealings will commence 
in the Enlarged Share Capital on 29 October 2010. The Directors anticipate that 
no application will be made for the Enlarged Share Capital to be admitted to 
trading or to be listed on any other stock exchange. 
 
The Articles permit the Company to issue Ordinary Shares in uncertificated form 
in accordance with the CREST Regulations. CREST is a paperless settlement system 
enabling title to securities to be evidenced otherwise than by certificate and 
transferred otherwise than by written instrument, in accordance with the CREST 
Regulations. 
Settlement of transactions in the Ordinary Shares following Admission may take 
place within the CREST system if Shareholders so wish. CREST is a voluntary 
system and holders of Ordinary Shares who wish to receive and retain share 
certificates will be able to do so. 
 
For more information concerning CREST, Shareholders should contact their brokers 
or Euroclear UK & Ireland Limited at 33 Cannon Street, London EC4M 5SB. Trading 
in the Company's Shares on AIM will require Shareholders to deal through a 
stockbroker or other intermediary who is a member of the London Stock Exchange. 
 
16. Further information 
 
Existing Shareholders and potential investors should read the whole of the 
Admission Document which provides additional information on the Company, the 
Existing Group, Ashley and the Resolutions, and should not rely on summaries of, 
or individual parts only of the Admission Document. Investors' attention is 
drawn, in particular, to the Risk Factors set out in Part IV of the Admission 
Document and the Additional Information set out in Part VIII of the Admission 
Document. 
 
17. Action to be taken 
 
A form of proxy will be attached to the Admission Document for use by Existing 
Shareholders in connection with the General Meeting. 
 
Whether or not they intend to be present at the General Meeting, Existing 
Shareholders are asked to complete, sign and return the form of proxy to the 
Registrars at Neville House, 18 Laurel Lane, Halesowen, B63 3DA, as soon as 
possible but in any event so as to arrive no later than 10.00 a.m. on 26 October 
2010. The completion and return of a form of proxy will not preclude Existing 
Shareholders from attending the General Meeting and voting in person should they 
wish to do so. 
 
18. Related party transaction 
 
When considered in aggregate, the participation of the Existing Directors in the 
Placing is classified as a transaction with a related party for the purposes of 
the AIM Rules for Companies. The Existing Directors are all participating in the 
Placing and are therefore unable to make the fair and reasonable statement 
required by the AIM Rules. Therefore, Arbuthnot Securities, the Company's 
nominated adviser, considers that the terms of the related party transaction are 
fair and reasonable insofar as the Company's shareholders are concerned. 
 
19. Recommendation 
 
The Existing Directors consider the Resolutions to be in the best interests of 
the Company and Shareholders as a whole. Accordingly, the Existing Directors 
recommend that Shareholders vote in favour of the Resolutions, as they have 
irrevocably committed to do in respect of their beneficial holdings amounting, 
in aggregate, to 2,361,010 Existing Ordinary Shares, representing approximately 
11.81 per cent. of the Existing Share Capital. 
 
INFORMATION ON ASHLEY COMMERCIAL FINANCE LIMITED 
 
1.   Introduction 
 
Ashley commenced trading in 1995, providing factoring services to small and 
medium sized businesses in England and Wales. It was established by Ian Robins 
and Jeffrey Burton, both of whom were experienced executives with extensive 
knowledge of the UK factoring market and the funding needs of smaller 
businesses. Jonathan Cranston joined Ashley in 1995, bringing access to greater 
external sources of funding which allowed Ashley to grow rapidly during the 
period 1996 - 2009. Ashley began using an overdraft facility from Barclays Bank 
plc in 1998, initially for GBP300,000, which increased by increments until the 
facility size was GBP2.1 million in 2008. Ashley subsequently moved to a GBP3.0 
million back-to-back facility with Lloyds in 2009, which was increased to GBP3.5 
million in August 2010. 
 
Ashley specialises in the provision of full-recourse factoring services but, 
unlike the Existing Group, does not provide invoice discounting, trade finance, 
asset finance or debtor protection. 
 
Ashley focuses on the smaller end of the SME market and its typical clients are 
approximately a fifth of the size of the Existing Group's, based on average 
factoring facility size and client turnover. Ashley's clients typically have a 
turnover of between GBP150,000 and GBP500,000. 
 
2.   Ashley's business 
 
Under a typical factoring facility agreement, Ashley will advance to its clients 
a pre-determined percentage of the value of an approved invoice the client has 
issued to one of its customers. This allows its clients to release the working 
capital committed to their sales ledger, which can then be reinvested as working 
capital or for expansion. 
 
Typically, Ashley would grant clients a factoring facility of up to an agreed 
monetary limit, based on its credit committee assessment of the risk profile of 
the clients' business and their customers. Ashley normally advances to clients 
up to 85 per cent. of the value of the invoices that it has approved, after 
deducting a factoring fee, typically between 1.5 to 3.0 per cent of the value of 
the invoice, and other applicable charges. Ashley then takes ownership of the 
debt and becomes responsible for the debt collection and sales ledger 
management. When Ashley receives payment from the client's customers, it pays 
the remaining value of the invoice (i.e. the original value less the advance 
made to the client) to the client after deducting the discount charge. The 
discount charge will accrue on a daily basis from the date of advance to the 
date that the invoice is paid by the client's customers. 
 
As at 31 March 2010, Ashley had a total loan book of just over GBP4.4 million. 
At 30 June 2010, it had outstanding advances to, in total, 259 clients with the 
average advance to each client being approximately GBP16,000. At 31 March 2010, 
the amount payable to Lloyds to fund these customer balances through its 
back-to-back loan facility was GBP2.8 million. Ashley's net asset position at 31 
March 2010 was GBP0.94 million. 
 
Historical financial information on Ashley for the three years ended 31 March 
2010 is set out in Part VI of the Admission Document. 
 
Ashley has a very good record in credit control, with one of the market leading 
debt turns of 53 days (as at 31 March 2010), resulting in a low exposure to bad 
debts. 
 
Similarly to the Existing Group, Ashley provides its factoring services on a 
full-recourse basis, meaning that its clients guarantee repayment to Ashley of 
the funds advanced, whether or not their customers pay the factored invoices. 
 
Ashley generates its income in a distinct number of ways: 
 
Factoring fees: 51 per cent. of Ashley's turnover in the year to March 2010 was 
generated through factoring fees, charged for providing the factoring facility. 
 
Discount charge: 14 per cent. of Ashley's turnover in the year to March 2010 was 
generated through discount charges applied to the funds advanced to clients. 
Ashley is able to generate a margin over the cost of borrowing this money from 
Lloyds. 
 
Special fees: 22 per cent. of Ashley's turnover in the year to March 2010 was 
generated by charging special fees. These additional charges, which Ashley is 
able to levy for the flexibility of its service, are key to its business 
strategy and profitability. For example, if a client requires a temporary 
increase in its funding facility, Ashley has a set of standard fees that it will 
charge for arranging the increased facility and also charges for the funds 
advanced. 
 
Other income: the balance of Ashley's turnover in the year to March 2010 was 
generated by a number of other items including re-factoring fees and amounts 
recovered on loan balances that were previously provided against as bad debts. 
In the year ending 31 March 2010, GBP379,000 of other income was generated 
through recoveries. 
 
Ashley's business operations can be split into a number of functions: 
 
Sales and marketing 
In addition to its Head Office in Cheadle, Ashley has a team of four regional 
salesmen based in North London, Bedford, Sheffield and Bristol, who together 
service the whole of England and Wales. The majority of Ashley's business comes 
from referrals from firms of introducers such as finance brokers and accountants 
and through client referrals. Ashley has strong relationships with a number of 
key introducers with whom it has standard fee agreements. Introducers are paid 
referral fees when a client is first taken on and then for the life of the 
client. Ashley maintains relationships with over 500 introducers, and receives 
referrals from around 40 of these on a regular basis. Ashley may follow up on as 
many as 120 leads per month and typically converts one in seven of these leads. 
 
In addition, Ashley operates an enquiry service via its website, and also sends 
direct mail, both electronically and by traditional post, to introducers and 
potential clients. 
 
To increase Ashley's web based marketing, its directors acquired Bizhelp24 in 
January 2009 from ROK Connect Limited for GBP125,000. Bizhelp is a business 
portal website that provides information, news and advice on finance to the SME 
community. The acquisition included a database, brand names, 15 websites and 99 
domain names all relating to either Bizhelp, finance for SMEs or cash flow. 
Ashley appears prominently on these sites and the sites are used to direct web 
traffic to Ashley's main website. The effect of these associated websites 
increases the Google page ranking of Ashley to the degree that a search for 
"Invoice Finance" frequently ranks Ashley as number one in the market (excluding 
sponsored links). In the six months to 30 June 2010, Bizhelp24 alone achieved 
approximately 100,000 visits per month. 88.5 per cent. of these visits were 
directed by search engines and 38.9 per cent. of the subsequent outgoing traffic 
was directed to Ashley's own website. 
 
Credit Committee 
All factoring facilities have to be approved by one or both members of the 
Ashley credit committee, depending on the size of the facility. Following 
completion of the Acquisition, funding lines of GBP75,000 and above will also 
require the sanction of either Richard Pepler or Jeremy Coombes. 
 
The typical checks that Ashley undertakes in respect of a potential new client 
include reviewing land registry records, voter registration, credit-safe and 
Equifax reports, disqualification searches, winding up petitions and bankruptcy 
records, but other sources are used depending on the circumstances of the 
potential client. 
 
Factoring of invoices can only commence after the client has been approved by 
the credit committee. Ashley automatically disapproves any invoices that are 
more than 15 days beyond agreed credit terms. Invoices may also fail to be 
approved due to insufficient customer creditworthiness or a commercial dispute. 
 
Recoveries 
Ashley has a dedicated recoveries team that pursues clients and their customers 
for full payment if necessary. Ashley employs an in-house lawyer which allows it 
to generate the appropriate legal documents to pursue unpaid monies through the 
judicial system without incurring incremental cost. 
On completion of the Acquisition, Ultimate is looking to extend Ashley's 
approach to recoveries to the Enlarged Group. 
 
3.   Operations, premises and systems 
 
Ashley's head office is situated in rented premises in Cheadle, comprising 
2,950sq. ft. of office space. The lease expired on this property in March 2009 
since which time Ashley has been negotiating the terms of a possible extension 
with the landlord, but an agreement has yet to be reached. Ashley's regional 
salesmen operate remotely. 
 
It is intended that Ashley will relocate its business to Ultimate's Manchester 
office within six months of completion of the Acquisition Agreement and will 
vacate the premises in Cheadle. 
 
Ashley operates its business on the Dancerace C3 factoring software system, one 
of the leading products in the industry for independent factoring businesses. 
Post Acquisition, it is intended that Ashley will migrate its operations onto 
the HPD Aquarius system currently used by the Existing Group, thus providing 
some cost savings for the Enlarged Group. 
 
4.   Key clients 
 
Ashley's clients are diversified so there is no dependence on any one particular 
client or sector. Ashley's largest client represented two per cent. of its 
annual revenue in the year to March 2010 and its top ten clients nine per cent. 
As is typical amongst invoice finance companies, there is some bias in Ashley's 
client list towards the haulage, printing and recruitment industries, but none 
of these is especially significant. 
 
5.   Opportunities for growth 
 
The Directors believe that there are a number of opportunities to grow the 
Ashley business, particularly in conjunction with an existing invoice finance 
company such as the Existing Group. The Directors believe that the Enlarged 
Group's improved access to funding means that there is scope for an immediate 
increase in the quantum of advances to new and existing customers of Ashley with 
a consequential impact on the level of fees and charges that can be generated. 
 
As the economy improves, the Directors believe that it is likely that an 
increasing number of small businesses will be established which should benefit 
Ashley, which specifically targets the smaller end of the SME market. 
 
Historically, when Ashley's clients have outgrown its target size, they have 
been referred to alternative lenders. The Directors expect that, going forward, 
it should be possible to retain the majority of these clients within the 
Enlarged Group. Conversely, the Existing Group receives a number of enquiries 
from businesses that are too small for it, but would be suitable for Ashley. 
Furthermore, there are a number of opportunities to offer Ashley's clients and 
its clients' customers and introducer base the trade finance, asset finance and 
debtor protection facilities available from the Existing Group. 
 
The Directors also believe that the Ashley business can be developed through the 
Existing Group's existing sales force, with the potential for new business in 
locations, including Greater London, that have not historically been the focus 
of Ashley's existing regional sales representatives. 
 
6.   Effect of the Acquisition on the Enlarged Group's profits 
 
After the Acquisition, Ashley will be entering into a consultancy contract with 
Jeffrey Burton for GBP20,000 per annum for a period of 12 months from 
Completion. This contract is not currently in place and the profits of Ashley 
will therefore be reduced by a commensurate amount. 
 
 
EXPECTED TIMETABLE OF PRINCIPAL EVENTS 
 
+------------------------------+------------------------------+ 
| Publication of Admission     |              12 October 2010 | 
| Document                     |                              | 
+------------------------------+------------------------------+ 
| Latest time and date for     |     10.00 a.m. on 26 October | 
| lodging forms of proxy for   |                         2010 | 
| the General Meeting          |                              | 
+------------------------------+------------------------------+ 
| General Meeting              |     10.00 a.m. on 28 October | 
|                              |                         2010 | 
+------------------------------+------------------------------+ 
| Completion                   |           by 29 October 2010 | 
+------------------------------+------------------------------+ 
| Expected date of Admission   | 8.00 a.m. on 29 October 2010 | 
| and commencement of dealings |                              | 
| in the Enlarged Share        |                              | 
| Capital on AIM               |                              | 
+------------------------------+------------------------------+ 
 
 
PLACING STATISTICS 
 
+------------------------------+------------------------------+ 
| Placing Price                |                          12p | 
+------------------------------+------------------------------+ 
| Number of Ordinary Shares in |                   19,997,018 | 
| issue at the date of the     |                              | 
| Admission Document           |                              | 
+------------------------------+------------------------------+ 
| Number of Placing Shares     |                   22,916,668 | 
| being placed on behalf of    |                              | 
| the Company                  |                              | 
+------------------------------+------------------------------+ 
| Number of Initial            |                    6,666,666 | 
| Consideration Shares to be   |                              | 
| allotted to the Vendors      |                              | 
+------------------------------+------------------------------+ 
| Number of Ordinary Shares in |                   49,747,019 | 
| issue immediately following  |                              | 
| Admission of the New         |                              | 
| Ordinary Shares1             |                              | 
+------------------------------+------------------------------+ 
| Gross proceeds of the        |              GBP2.75 million | 
| Placing                      |                              | 
+------------------------------+------------------------------+ 
| Estimated net proceeds of    |              GBP1.83 million | 
| the Placing receivable by    |                              | 
| the Company                  |                              | 
+------------------------------+------------------------------+ 
| Percentage of Enlarged Share |               46.1 per cent. | 
| Capital represented by the   |                              | 
| Placing Shares               |                              | 
+------------------------------+------------------------------+ 
| Percentage of Enlarged Share |               13.4 per cent. | 
| Capital represented by the   |                              | 
| Initial Consideration Shares |                              | 
+------------------------------+------------------------------+ 
| Percentage of Enlarged Share |               59.8 per cent. | 
| Capital represented by the   |                              | 
| New Ordinary Shares1         |                              | 
+------------------------------+------------------------------+ 
| Market capitalisation of the |              GBP5.97 million | 
| Company at the Placing Price |                              | 
| following Admission of the   |                              | 
| New Ordinary Shares1         |                              | 
+------------------------------+------------------------------+ 
| AIM symbol                   |                          UFG | 
+------------------------------+------------------------------+ 
| ISIN code                    |                 GB0031685414 | 
+------------------------------+------------------------------+ 
|                              |                              | 
+------------------------------+------------------------------+ 
| 1. Excludes any Deferred     |                              | 
| Consideration Shares         |                              | 
+------------------------------+------------------------------+ 
 
DEFINITIONS 
 
+------------------------------+------------------------------+ 
| "ABFA"                       | Asset Based Finance          | 
|                              | Association                  | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Act"                        | the Companies Act 2006 (as   | 
|                              | amended)                     | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Acquisition"                | the proposed acquisition by  | 
|                              | the Company of the entire    | 
|                              | issued share capital of      | 
|                              | Ashley                       | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Acquisition Agreement"      | the agreement relating to    | 
|                              | the Acquisition, made        | 
|                              | between, inter alia, the     | 
|                              | Company and the Vendors, a   | 
|                              | summary of which is set out  | 
|                              | in paragraph 11.1 of Part    | 
|                              | VIII of the Admission        | 
|                              | Document                     | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Acquisition Finance         | a finance facility provided  | 
| Facility"                    | by Lloyds Bank for the       | 
|                              | purposes of the Acquisition  | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Admission"                  | the admission of the         | 
|                              | Enlarged Share Capital to    | 
|                              | trading on AIM becoming      | 
|                              | effective in accordance with | 
|                              | the AIM Rules for Companies  | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Admission Document"         | the admission document to be | 
|                              | posted to Shareholders       | 
|                              | shortly                      | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "AIM"                        | the market of that name      | 
|                              | operated by London Stock     | 
|                              | Exchange                     | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "AIM Rules"                  | the AIM Rules for Companies  | 
|                              | and the AIM Rules for        | 
|                              | Nominated Advisers           | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "AIM Rules for Companies"    | the AIM Rules for Companies  | 
|                              | published by the London      | 
|                              | Stock Exchange, as amended   | 
|                              | from time to time            | 
+------------------------------+------------------------------+ 
| "AIM Rules for Nominated     | the AIM Rules for Nominated  | 
| Advisers"                    | Advisers published by the    | 
|                              | London Stock Exchange, as    | 
|                              | amended from time to time    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Arbuthnot Securities"       | Arbuthnot Securities         | 
|                              | Limited, the Company's       | 
|                              | nominated adviser and joint  | 
|                              | broker                       | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Ashley"                     | Ashley Commercial Finance    | 
|                              | Limited                      | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Articles"                   | the articles of association  | 
|                              | of the Company adopted by    | 
|                              | special resolution on 12     | 
|                              | November 2008                | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "BDO LLP"                    | BDO LLP, the auditors of and | 
|                              | reporting accountants to the | 
|                              | Company                      | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Bizhelp24"                  | Bizhelp24 Limited            | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Board" or "Directors"       | the directors of the Company | 
|                              | immediately following        | 
|                              | Admission including the      | 
|                              | Proposed Director, whose     | 
|                              | names are set out on page 1  | 
|                              | of the Admission Document    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Company" or "Ultimate"      | Ultimate Finance Group plc   | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Completion"                 | completion of the proposed   | 
|                              | acquisition by the Company   | 
|                              | of the entire issued, and to | 
|                              | be issued, share capital of  | 
|                              | Ashley, pursuant to the      | 
|                              | Acquisition Agreement        | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "CREST"                      | the computerised settlement  | 
|                              | system (as defined in the    | 
|                              | CREST Regulations) operated  | 
|                              | by Euroclear which           | 
|                              | facilitates the transfer of  | 
|                              | title to shares in           | 
|                              | uncertificated form          | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "CREST Regulations"          | the Uncertificated           | 
|                              | Securities Regulations 2001, | 
|                              | including (i) any enactment  | 
|                              | or subordinate legislation   | 
|                              | which amends or supersedes   | 
|                              | those regulations; and (ii)  | 
|                              | any applicable rules made    | 
|                              | under those regulations or   | 
|                              | any such enactment or        | 
|                              | subordinate legislation for  | 
|                              | the time being in force      | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "CSOP"                       | the Inland Revenue approved  | 
|                              | company share ownership plan | 
|                              | of the Company               | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Deferred Consideration"     | the deferred consideration   | 
|                              | payable under the            | 
|                              | Acquisition Agreement, as    | 
|                              | set out in paragraphs 3 of   | 
|                              | Part I and 11.1 of Part VIII | 
|                              | of the Admission Document    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Deferred Consideration      | the up to 5,833,333 Ordinary | 
| Shares"                      | Shares to be issued to the   | 
|                              | Vendors, subject to certain  | 
|                              | performance conditions as    | 
|                              | defined in the Acquisition   | 
|                              | Agreement                    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Earn-Out Period"            | the earn-out period to       | 
|                              | determine the Deferred       | 
|                              | Consideration payable, which | 
|                              | covers the period from       | 
|                              | completion of the            | 
|                              | Acquisition until 31 October | 
|                              | 2012                         | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Enlarged Group"             | the enlarged group following | 
|                              | the acquisition of Ashley by | 
|                              | the Company, comprising the  | 
|                              | Existing Group and Ashley    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Enlarged Share Capital"     | the 49,747,019 Ordinary      | 
|                              | Shares in issue immediately  | 
|                              | following Admission          | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Euroclear"                  | Euroclear UK & Ireland       | 
|                              | Limited, a company           | 
|                              | incorporated under the laws  | 
|                              | of England and Wales, the    | 
|                              | operator of CREST            | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Existing Directors"         | the directors of the Company | 
|                              | as at today excluding the    | 
|                              | Proposed Director, whose     | 
|                              | names are set out on page 1  | 
|                              | of the Admission Document    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Existing Group"             | Ultimate Finance Group plc   | 
|                              | and its Subsidiaries as at   | 
|                              | the date of the Admission    | 
|                              | Document                     | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Existing Ordinary Shares"   | the Ordinary Shares in issue | 
|                              | at the date of the Admission | 
|                              | Document                     | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Existing Share Capital"     | the issued ordinary share    | 
|                              | capital of the Company at    | 
|                              | the date of the Admission    | 
|                              | Document                     | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Existing Shareholders"      | holders of Existing Ordinary | 
|                              | Shares                       | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "First Tranche"              | the first tranche of the     | 
|                              | Deferred Consideration as    | 
|                              | described in paragraph 3(a)  | 
|                              | of Part I of the Admission   | 
|                              | Document                     | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "FSA"                        | the Financial Services       | 
|                              | Authority                    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "FSMA"                       | the Financial Services and   | 
|                              | Markets Act 2000 (as         | 
|                              | amended)                     | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "General Meeting"            | the general meeting of the   | 
|                              | Company convened for 10.00   | 
|                              | a.m. on 28 October 2010 (or  | 
|                              | any adjournment thereof),    | 
|                              | notice of which is set out   | 
|                              | at the end of the Admission  | 
|                              | Document;                    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Google"                     | an internet search engine    | 
|                              | that can be accessed at      | 
|                              | http://www.google.co.uk      | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "IFRS"                       | International Financial      | 
|                              | Reporting Standards          | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Initial Consideration"      | the initial consideration    | 
|                              | payable under the            | 
|                              | Acquisition Agreement, as    | 
|                              | set out in paragraphs 3 of   | 
|                              | Part I and 11.1 of Part VIII | 
|                              | of the Admission Document    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Initial Consideration       | 6,666,666 New Ordinary       | 
| Shares"                      | Shares to be issued on       | 
|                              | Admission to the Vendors     | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "LIBOR"                      | the London Interbank Offered | 
|                              | Rate, a daily reference rate | 
|                              | based on the interest rates  | 
|                              | at which banks borrow        | 
|                              | unsecured funds from other   | 
|                              | banks in the London          | 
|                              | wholesale money  market      | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Lock-In Agreement"          | the agreement dated 12       | 
|                              | October 2010, between the    | 
|                              | Company, Arbuthnot           | 
|                              | Securities, WH Ireland and   | 
|                              | the Vendors, details of      | 
|                              | which is set out in          | 
|                              | paragraph 11.4 of Part  III  | 
|                              | of the Admission Document    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "London Stock Exchange"      | London Stock Exchange plc    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Lloyds"                     | Lloyds TSB Commercial        | 
|                              | Finance Limited              | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Lloyds Bank"                | Lloyds TSB Bank plc          | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "New Ordinary Shares"        | the new Ordinary Shares to   | 
|                              | be subscribed for by the     | 
|                              | Placees under the Placing or | 
|                              | to be issued to the Vendors  | 
|                              | under the Acquisition        | 
|                              | Agreement, and the 166,667   | 
|                              | new Ordinary Shares to be    | 
|                              | issued to and paid for, on   | 
|                              | admission, by an adviser to  | 
|                              | the Company at the Placing   | 
|                              | Price, as the case may be    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Official List"              | the Official List of the UK  | 
|                              | Listing Authority, a         | 
|                              | division of the FSA, acting  | 
|                              | as competent authority for   | 
|                              | the purposes of Part VI of   | 
|                              | FSMA                         | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Ordinary Shares"            | the ordinary shares of 5p    | 
|                              | each in the capital of the   | 
|                              | Company and "Ordinary Share" | 
|                              | shall be construed           | 
|                              | accordingly                  | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Placees"                    | the subscribers or           | 
|                              | purchasers of Placing Shares | 
|                              | pursuant to the Placing      | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Placing"                    | the conditional placing by   | 
|                              | Arbuthnot Securities and WH  | 
|                              | Ireland on behalf of the     | 
|                              | Company of the Placing       | 
|                              | Shares pursuant to the       | 
|                              | Placing Agreement            | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Placing Agreement"          | the conditional agreement    | 
|                              | dated 12 October 2010        | 
|                              | between the Company, the     | 
|                              | Directors, Arbuthnot         | 
|                              | Securities and WH Ireland    | 
|                              | relating to the Placing,     | 
|                              | details of which are set out | 
|                              | in paragraph 11.2 of Part    | 
|                              | VIII of the Admission        | 
|                              | Document                     | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Placing Price"              | 12p per Placing Share        | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Placing Shares"             | the New Ordinary Shares      | 
|                              | which are the subject of the | 
|                              | Placing                      | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Proposed Director"          | Jonathan Cranston, further   | 
|                              | details of whom are set out  | 
|                              | in paragraph 5 of Part 1 of  | 
|                              | the Admission Document       | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Prospectus Directive"       | Directive 2003/71/EC of the  | 
|                              | European Parliament and of   | 
|                              | the Council of 4 November    | 
|                              | 2003 on the prospectus to be | 
|                              | published when securities    | 
|                              | are offered to the public or | 
|                              | admitted to trading and      | 
|                              | amending Directive           | 
|                              | 2001/34/EC and any relevant  | 
|                              | implementing measure in each | 
|                              | member state of the European | 
|                              | Economic Area which has      | 
|                              | implemented the Prospectus   | 
|                              | Directive                    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Prospectus Rules"           | the prospectus rules of the  | 
|                              | UK Listing Authority,        | 
|                              | pursuant to the FSMA         | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "QCA Guidelines"             | The Quoted Companies         | 
|                              | Alliance guidelines for AIM  | 
|                              | companies                    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Registrars"                 | Neville Registrars Limited,  | 
|                              | the Company's registrars     | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Resolutions"                | the resolutions to be        | 
|                              | proposed at the General      | 
|                              | Meeting, the full text of    | 
|                              | which is set out in the      | 
|                              | notice of General Meeting    | 
|                              | set out at the end of the    | 
|                              | Admission Document           | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Scheme"                     | the CSOP                     | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Second Tranche"             | the second tranche of the    | 
|                              | Deferred Consideration as    | 
|                              | described in paragraph 3(b)  | 
|                              | of Part I of the Admission   | 
|                              | Document "Shareholders"      | 
|                              | holders of Ordinary Shares   | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "SME"                        | small and medium size        | 
|                              | enterprise                   | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Substantial Shareholder"    | any person who holds any     | 
|                              | legal or beneficial interest | 
|                              | directly or indirectly in 10 | 
|                              | per cent. or more of any     | 
|                              | class of AIM security, as    | 
|                              | defined in the AIM Rules for | 
|                              | Companies                    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Taxes Act"                  | the Income & Corporation     | 
|                              | Taxes Act 1988 (as amended)  | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "United Kingdom" or "UK"     | the United Kingdom of Great  | 
|                              | Britain and Northern Ireland | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Vendors"                    | the current shareholders of  | 
|                              | Ashley, being Jonathan       | 
|                              | Cranston, Stephen Hart,      | 
|                              | Jayne Merriman, Ian Robins   | 
|                              | and the trustees of the      | 
|                              | Oriel Trust, who will be     | 
|                              | selling their shares in      | 
|                              | Ashley to the Company        | 
|                              | pursuant to the Acquisition  | 
|                              | Agreement                    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "Warrantors"                 | each of Jonathan Cranston,   | 
|                              | Stephen Hart, Jayne          | 
|                              | Merriman, Ian Robins,        | 
|                              | Jeffrey Burton and Denise    | 
|                              | Burton, who have provided    | 
|                              | warranties pursuant to the   | 
|                              | Acquisition Agreement        | 
|                              |                              | 
+------------------------------+------------------------------+ 
| "WH Ireland"                 | WH Ireland Limited, the      | 
|                              | Company's joint broker       | 
+------------------------------+------------------------------+ 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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