BPIF Strategic Plan 2011 – 2014 - British Printing Industries ...

Contents1 Executive Summary2 Strategic initiatives2.1 Seal of business excellence2.2 A strong voice for print2.3 Growth by organic and partnership means2.4 Leading post-recession review of employment terms & conditions2.5 Adapting to a cross-media world2.6 Changing the basis of the membership fee structure3 Financial Projections3.1 Income3.2 Departmental Profit Contribution3.3 Balance Sheet3.4 Cash FlowAppendices(I)(II)(III)Industry TrendsOperational Plans(A)(B)(C)(D)(E)MembershipCommercialTrainingBOSSPropertyOrganisational StructurePage 2 of 40

1. Executive SummaryThe BPIF‟s Front Line First Strategy – in operation for the three-year period 2008 to 2011, has servedthe BPIF well. By concentrating on those services that are directly geared to helping membersimprove the performance of their businesses, the BPIF has been able to maintain high quality servicedelivery despite making significant, but necessary, reductions in headcount during this period. Theorganisation has also stayed focused on its core task of improving the efficiency and profitability of itsmembers, and has helped them weather the storm of the 2009 recession.However as we emerge from recession into a period of recovery, the BPIF must adopt a new strategy.One that builds on Front Line First but still retains its essential focus on reducing costs and improvingefficiency. This also adds a new dimension, which concentrates on helping shape the future of ourmember companies and of the industry itself. The challenge is to help member companies transformtheir businesses so that they can meet fast changing customer needs and expectations in a digitalage, and to help them add real value to their customers through new services and operations.Four-fifths of UK printing companies are not members of the BPIF. While this presents an importantopportunity for the BPIF to expand membership, despite being in a contracting marketplace, it alsoraises fundamental questions about the appeal of BPIF membership to so many print businesses.The BPIF membership offer therefore needs to be reviewed and revised, to ensure that it offersservices that add real value to members‟ businesses and to ensure that it addresses the full range ofchallenges that printing companies are facing. The BPIF must become the business supportorganisation of choice for any company wishing to achieve, and demonstrate, the highest standardsof business excellence.Our new strategy must therefore include a programme of action geared to securing a greaterproportion of a declining market, so that membership numbers grow in real terms. Achieving successwith this will depend as much on having in place a membership offer that is appealing to potentialmembers, competitively-priced and well marketed, as it will on necessarily ensuring that the servicesdelivered through membership continue to be relevant to companies‟ needs and of the highest quality.However organic growth in itself will be insufficient to maintain the viability of the BPIF in the longerterm. We will also need to pursue strategic alliances with other trade bodies. With the proposed EEFpartnership now set aside for the time being at least, we are able to devote time and resources toengaging with other trade bodies. Through this two-pronged approach to the future development ofour business, we shall seek to ensure an independent and secure future for our organisation.Strategic initiativesThis paper sets out a number of actions that are designed to bring this strategy into effect:Making BPIF membership valued: BPIF healthchecks will made available to all members in a widerange of operational areas (e.g. health and safety, HR, environment and customer service) and takeupwill be actively encouraged. Members scoring above a given level will be awarded a certificate ofexcellence in that area, with companies achieving high scores in four or more health-checks beingawarded a BPIF Seal of Business Excellence. This Seal would need to be reviewed and renewedannually. This will be a membership service provided within the cost of subscription and be exclusiveto BPIF members.Making the membership offer more attractive and relevant: The BPIF membership offer will bereviewed to ensure that the services offered match the needs of an evolving industry. The range ofsubscription packages will be reviewed to ensure that membership is affordable by the very smallestof companies. We will examine the scope for grouping services to allow members to purchasespecialist service packages on a modular basis, with a view to ensuring that they do not have to payfor services they do not use. The basis for subscription calculation will also be reviewed, with a shift toa new formula based on sales turnover rather than headcount expected to be recommended in orderthat the financial success of the BPIF itself becomes directly linked with that of its members. We willreview all aspects of the delivery of membership services, with a view to reducing the cost of deliveryand containing subscription charges.Page 3 of 40

Association with excellence: The BPIF will re-launch its annual Excellence Awards, to provide anopportunity for printing companies to showcase their achievement of the highest standards ofbusiness excellence to the industry as a whole.A strong voice for print: The BPIF will actively lobby Government and other organisations whosedecisions and actions impact on our members to ensure that we are able to influence initiatives andplans by external bodies to the benefit of the industry.Building alliances with other trade organisations: As trade associations right acrossmanufacturing come under increasing financial pressure and face shrinkage in their respectivemarkets, the need for closer collaboration becomes more and more important. There is scope fortrade associations to share resources, gain economies of scale, increase product range and value,harness best practice between organisations, deliver improved services, and achieve greater impactwith target audiences such as Government. There are clear benefits in building alliances that wouldallow the BPIF and other trade associations to sustain their respective businesses in the longer term.We will therefore continue to develop opportunities to collaborate with organisations in other sectorswithin the print media supply chain and elsewhere in the manufacturing industry.Helping printers serve cross-media clients: We have already launched dotgain.org to help theprinting industry transform itself into the essential delivery vehicle for the entire spectrum ofcommunications solutions demanded by its clients. Print is a major part of the modern, digitally-basedcommunications landscape but is just one of a number of channels that clients are seeking to use toengage with their markets in the multi-media world. Its clients are seeking to work in partnership withsuppliers who can deliver integrated marketing and communications solutions that add value to theirbusinesses. Increasingly the client is looking for cost-effective campaigns rather than commodity print,and we will assist members to adapt to this evolution in our marketplace. The next five years will seedramatic changes and opportunities in cross-media. The BPIF needs to also change and supportmembers in the changing cross media markets. We will look at the future development of dotgain.organd integrate it fully into core membership.Reviewing industry employment terms and conditions of employment: Although Partnership atWork has enabled the industry's National Agreement to be modernised and to adapt to changingtechnologies and working practices, the industry's ability to support existing levels of pay andconditions is far more constrained than in the past. We will provide guidance to members that willassist them to optimise the productivity of their workforce, respond effectively to customerrequirements, and ensure that their employment conditions are affordable. Should we be given amandate by members to return to national bargaining in 2011, we will seek a commitment from Uniteto revisit the terms of the current Agreement.Financial projectionsWhilst the Printing Industry is diverse only 3% of companies have a turnover greater than £5m.However, these companies account for 45% of employees and 50% of turnover. The majority ofcompanies within the industry can be classified as small to medium enterprises operating withoutsignificant internal corporate support.The BPIF has made significant progress over the last five years adapting its range of services toprovide a customer focused and cost effective portfolio of services tailored to the specific sectorneeds.Almost without exception member companies have recently been impacted by: The adverse economic climate Changes in technology particularly the impact of multi media and the internet which presentsboth opportunities and threats A volatile materials supply chain A hostile financing climate A changing employee relations landscape which has seen a move from Centralised union bargaining to a platform of ever increasing employment legislation A widening compliance obligation around environmental and other corporate socialresponsibilities. A change of Government inheriting a massive national debtPage 4 of 40

The BPIF is responding to these changes in the nature and scope of the services it delivers.In 2007 the executive directors prepared a strategic plan called "FRONT LINE First" which stated thatthe BPIF needed to generate £400k per year operating profit whilst maintaining front line services. Wereduced from 6 sites down to 3 and reduced headcount from 102 people down to 68 over the threeyears.In year 1 of the plan we achieved our strategic objectives:1. Operating profit of £460k2. Generated £1 million cash from sale of Investments at market rate prior to the September financialmeltdown3. Sold the Bristol property for £400k at asking price4. Paid off the £1 million overdraft and have lived without an overdraft facility since.However in Year 2 the financial crisis severely impacted on our income. We were down 14% onmembership, down 40% on ViP, down 60% on BPIF Business and down £1.7 million overall in BPIF(-22%).In year 2 of the plan (2009/2010) income was under £6 million and the net loss after exceptional andfinal salary pension costs was minus £253kIn preparing a new Strategic Plan for the next three years the Directors have reviewed the incomestructure, the current run rate for membership (down 7.5% this year, down 14% last year) and thecurrent run rate for ViP and BPIF Business. They have also made allowances for a double dip in theeconomy with less optimistic projections for growth in discretionary spend. The new Plan forecasts aprofit at the Operating line but also reflects the need to improve the Balance Sheet and the Cash flowof the BPIF in order to build up reserves for the future, while still meeting the requirement to maintainfront line services. The new Plan is conservative in income growth but addresses the requirement forimproved profit, improved balance sheet and sustainable cash flow. This requires that significant costbe taken out of the operation in 2010 to improve profitability, Balance Sheet and Cash flow insubsequent years. A reduction in headcount from 68 to 62 will therefore be implemented during2010 -11 - see Appendix III.Membership income reflects the current run rate since the financial crash in September 2008. Wehave assumed that there will be no recovery in 2010/11 and a flat line in the next two years, withlosses being offset by income gains. In the last two years we have seen a 20% reduction inmembership income. Prior to the September 2008 crash we lost approx 7% membership per year andreplaced it with a similar amount.BPIF Business and ViP income reflects continuing concerns over the impact of governmentspending cuts on the economy, the possibility of a double dip recession, further banking crisis and theimpact on members' discretionary spend.Balance SheetThe Plan is positive within 2 years. FRS17 valuations have been ignored for this purpose.Cash FlowThe Plan shows more cash outlay in 2010/11 but an improvement in each of the following years. Thiswill create headroom should more cash be required for further change. By year 3 the Plan assumes a£700k surplus. As these are year-end figures, the Plan will require some close cash management inthe months of January/February each year.The Plan addresses the Profit, Balance Sheet and Cash flow requirements needed to create asustainable BPIF.The Banks and the Skills Funding Agency have both stated that we need to improve our profitabilityand our balance sheet before they will consider giving us improved funding or new contracts forTraining.Page 5 of 40

2. Strategic InitiativesThe BPIF are announcing a number of strategic initiatives in this plan:To recognise the quality of our members through a Seal of Business ExcellenceTo raise the BPIF lobbying profile as the Voice of PrintTo grow the BPIF through organic and partnership agreementsTo support members in post recession Terms and ConditionsTo enable members to adapt to a Cross Media WorldTo change the membership fee structure to a turnover based feeEach of these strategic initiatives will be championed by a named Executive Director, supportedoperationally by a specialist in the area concerned.2.1 Seal of Business ExcellenceWe intend to create a Seal of Business Excellence that will be recognised by all BPIF members andwill attract non-members to join. Standards will be set, the process will be audited and we will supportour members to achieve this prestigious new accreditation.Core Topics will initially include H&S HR EnvironmentWe intend to include PAS 75 Customer Relations at an early stage.A minimum standard pass rate of 70% will be set on all three initial healthchecks and the processreviewed and measured every two years to ensure ongoing compliance.The healthchecks will be free to Platinum members and available to the rest of membership for acompetitive fee.Only members can get this Seal of Approval in Business Excellence and we will use the platform ofthe revived BPIF Excellence awards to feature these awards.2.2 A Strong Voice for PrintLobbying for members interests is the top priority of the BPIF. Building on our recent publicationPriorities for Print we will continue to call for action by Government, EU, CBI, Integraf, Trade Unions,Suppliers, other Trade Associations and the media to support and protect our members‟ interests. Wewill promote our industry, building on our recently published flyer UK Printing - the Facts and Figures.We will seek to build confidence in the sector and to strengthen the print community.This will be achieved by:Engaging members, particularly larger companies, in developing lobbying priorities andpositions.Ensuring members are briefed on current lobbying issues so that they can help articulatekey concerns to external audiencesEnsuring that members are fully aware of the importance of our work in this area as wellas the benefit this brings to the industryAdopting a proactive lobbying agenda to respond quickly and effectively to proposalsmade and actions taken by Government and other external decision makersSecuring funding opportunities for BPIF and make members aware of theseAssist member companies to bid for public sector contactsActions to be taken include: Publishing lobby briefs and position papers on key issuesPage 6 of 40

Ensuring improved communications between the central team and staff in the field onlobbying issuesHolding meetings of larger group companies twice a yearKeeping the All Party Parliamentary Print Group appraised of lobbying positions,representations made, and current concernsProviding an online platform for print suppliers to interface with OGCBS (and otherpurchasing agencies) using a technology solution that will enable more SMEs to bid forpublic sector contractsTopics currently proposed are: VAT Pre-packs Payment terms Raw material prices Access to finance Promoting print Public services Postal services Energy and environmental issues Pensions SkillsWe have also identified the following specific priorities that the larger companies wish to see the BPIFfocus upon going forward: Assisting companies to lobby their local employees, especially where jobs in the constituencywere at risk Promoting print, with active support given by BPIF to the PrintPower campaign in the UK (seewww.printpower.uk) Funding of apprenticeships and incentives to train (specific reference was made to an EEFproposal under which the Government would fully fund apprenticeships throughout theirtraining, with employers paying the cost when they took them on) Enhanced grants for investment and R&D, particularly where the company is undergoingbusiness transformation e.g. adding new services Building links with centres of excellence in academia in relation to knowledge transfer,innovation, and technology research projects impacting on print, so that more UK companiescan be engaged with these Building a strong brand reputation for print as a modern and effective communicationsmedium, an attractive career option for talented young people, and a sector worth investing in Improving the industry‟s image/perception, with the public at large and with younger people(e.g. through schools/industry links and curriculum/teaching support) Opposing taxation changes that would impact adversely on print companies, particularly new„green‟ taxes Improving access to finance and enabling new sources of lending to become establishedThe BPIF will seek to work in partnership with other organisations wherever possible, to make„common cause‟ with others and increase the strength of the industry‟s voice with target audiences.Different lobby „groupings‟ will be needed according to the nature of the issue on whichrepresentations are being made. These could include creative sectors (PPA, PA etc), paper-basedproducts (CPI, NAPM etc), manufacturing (EEF, SMMT etc) and cross-sectoral (CBI, FSB. IoD etc).2.3 Growth by Organic and Partnership MeansThe BPIF has implemented a successful Association Management Contract with the BOSSFederation which has benefitted both Federations. In the current economic climate all federations andtrade associations are finding it very difficult to provide a range of core services at competitive cost.There are also a large number of commercial operations targeting our core markets in HR, H&S andenvironmental and our commercial products and services.We will target other like-minded associations and explore mutual growth and developmentopportunities.Page 7 of 40

In membership we are planning a fresh membership campaign targeted at companies in the 25-100employee range. We will supplement this with telesales targeting and face to face visits by RegionalDirectors and by Executive Board Directors.2.4 Leading Post-Recession Review of Employment Terms and ConditionsOur members have suffered financially as a result of the economic recession and we have supportedthem through restructures, rationalisation, redundancies and revised terms and conditions to helpthem through these difficult times. With the Government spending review about to be implementedmore support will be required for certain sections of the print industry.The price of labour is falling and we will need to support our members in a number of ways:We need to revisit the Partnership At Work Agreement and Code of Practice with a viewto agreeing a new National Agreement that reflects the changing needs of the industryand current levels of affordabilityThe new agreement needs to support the negotiation of structural changes at companylevelWe will gather and share information from member companies on current terms andconditions in operation at company level so that they are well-informed when conductingin-house negotiationsWe will provide guidance to members that will assist them to optimise the productivity oftheir workforce, respond effectively to customer requirements, and ensure that theiremployment conditions are affordable.2.5 Serving Cross-Media ClientsThe printing industry is changing and members now need to think about cross media, socialnetworking, Twitter, linked in, Facebook, X and Y generation buyers and sellers, Web to Print and awhole host of other opportunities and threats to our industry.The next five years will see dramatic changes and opportunities in cross-media. The BPIF needs toalso change and support members in the changing cross media markets. We will look at the futuredevelopment of dotgain.org and integrate it fully into core membership.By forming a knowledge network that will move print into the centre of tomorrow‟s media industry, theBPIF will provide access to a wide range of membership benefits, in customer-focused, solutionsorientedsales processes and applications, and development of best practice case study database,disseminated through an annual conference, training events and extensive online resources. To help identify members positioning in the market place and provide solutions to deliver theirbusiness objectives To be the principal UK portal to move the print industry from product focussed to client focussed To be the knowledge network encompassing the entire cross media supply chain, helpingmembers migrate their business to value added services To bring together the leaders in this arena to educate, train, network and share best practise inorder to encourage others to follow.The products and services will be part of the membership offering. The initial healthcheck will becarried out free of charge for Platinum members, other grades can pay additional.Regional seminars, workshops and forums will also be available free of charge.Free website and links to case studies.Telephone advice will be delivered by knowledgeable associate specialists.A Business Diagnostic will be available through BPIF business which will based on a daily rate.Further support that has been identified during the diagnostic will be available through BPIF Business.Page 8 of 40

Visit to BPIF MemberCarry out a pre-qualification questionnaireqquestionnaireCarry out Business HealthcheckIdentify Solutions and develop planRe- assess Cross Media strategy planA business diagnostic will be developed to automate the existing questionnaire that is being usedwhich is labour intensive and time consuming. This will enable feedback to be given on site, face toface to establish solutions and who and how they will be delivered.A Cross Media Group will also be set up to identify member‟s needs and allow for specialistpresentations and demonstrations.The delivery of these services will be delivered by internal staff, associates and vendors. The initialhealthcheck will be carried out by regional directors to establish the member‟s current position andaspirations. Associate consultants will deliver specialism‟s such as; web to print, variable data, crossmedia marketing, data management and will be a paid for service through BPIF business.An „off payroll‟ associate will be responsible for the co-ordination, development and innovation of theCross Media services, employed for four days per month. The cost of this in year one will be £24,000which will be paid for out of membership subscriptions and partly offset by the subscriptions from thegroup. Additional subscription to the Cross Media Group will be based on turnover and will cost £100per million £ turnover per annum for each member. Podi membership will be optional and the cost willbe additional to the Cross Media subscription at a reduced member rate.2.6 Changing the Basis of the Membership Fee StructureThe BPIF has been very supportive of members in restructuring, downsizing, merging and acquiringcompanies. We have helped them to survive the economic recession and become more profitablecompared to non members. The size of the industry in the last 10 years by both number of companiesand employees has reduced by a third. The current membership income is based on numbersemployed, so the more successful that the BPIF have been in supporting the bottom lines of ourmember companies, the less income we have created to continue to develop our core products andservices. We are reviewing our membership fees structure and will explore a turnover-basedcalculation. During this process we will explore the membership offering ensuring that membersreceive the services they need when they need it and receive value for money. One option could be a„bundle‟ of services that could be adopted on top of the core service depending on the companystrategy at that time. A working group including members will be set up early in the New Year toexplore what the membership offering should look like going forward.A fully-costed proposal and service delivery will be presented to members before the 2012 renewalswith a view to making the changes in April 2012.Page 9 of 40

3 Financial Projections3.1 IncomeBPIFTurnover Trend AnalysisY/E Y/E Forecast%changeForecast%changeForecast%change31/03/2010 31/03/2011 31/03/2011 YOY 31/03/2012 YOY 31/03/2013 YOYActual Budget Forecast£'000 £'000 £'000BPIF Membership 2,702 2,813 2,565 -5% 2550 -1% 2550 0%BOSS 315 320 330 5% *220 -33% 240 9%Training 760 750 700 -8% 800 14% 900 13%Vision in Print 600 536 446 -26% 467 5% 492 5%BPIF Business 427 560 440 3% 460 5% 486 6%Commercial Products 671 748 729 -3% 746 2% 746 0%BPIF Mc Innes Corporate 54 40 15 -72% 40 167% 40 0%Dotgain.org 1 174 48 -44% 0 -100% 0 0%Ecoprint London 40 142 138 245% 165 20% 0 -100%Print Yorkshire 118 120 118 0% 0 -100% 0 0%Legal plus 147 150 155 5% 165 6% 175 6%Other 133 189 133 0% *253 90% 253 0%5,968 6,542 5,817 -3% 5,866 1% 5,882 0%* In 2011/12 the BOSS Industry Awards income will be moved to the new events department under „Other‟ together with other events that will now bemanaged centrally.Page 10 of 40

3.2 Departmental Profit ContributionActual Budget Forecast Forecast Forecast2009/10 2010/11 2010/11 2011/12 2012/13£ £ £ £MembershipBPIF Regions 1,694,383 2,086,118 1,886,000 1,886,000 1,886,000BOSS 92,211 96,264 105,000 95,000 100,000Health, Safety and Environment -165,594 -167,480 -152,000 -135,000 -135,000HR Commercial -173,646 -512,407 -476,000 -444,000 -444,000Technical -24,664 -20,500 -20,000 -20,000 -20,000National Negotiations -4,482 -5,000 -5,000 -5,000 -5,000EC – PROSPEC 0 0 12,000 18,000 18,000Dotgain.org Ltd -80,868 16,984 -76,000 -25,000 -25,000Membership Division 1,337,340 1,493,979 1,274,000 1,370,000 1,375,000CommercialViP 41,165 68,334 33,000 40,000 59,000BPIF Business 27,237 81,980 59,000 92,000 91,000BPIF Training 49,229 60,015 77,000 100,000 120,000BPIF Products 631,592 658,150 639,000 671,000 671,000BPIF McInnis Corporate -26,140 9,900 -15,000 40,000 40,000Eco Print London 18,250 0 25,000 20,000 0Commercial division 741,333 878,379 818,000 963,000 981,000CommunicationsPublic Affairs 88,091 111,447 105,000 0 0Marketing 259,116 322,826 300,000 395,000 395,000Communications Division 347,207 434,273 405,000 395,000 395,000

Support departmentsChief executive's office 728,858 724,809 688,000 464,000 408,000Finance 247,329 237,917 200,000 200,000 200,000Legal 51,634 47,912 35,000 40,000 30,000IT 290,063 282,900 272,000 262,000 252,000Farringdon Point 371,324 369,662 365,000 365,000 365,000Villiers Court 77,122 82,050 82,000 82,000 82,000Wakefield/Brighouse Property 25,569 22,742 20,000 20,000 20,000Corporation Street -2,571 -26,000 -26,000 -26,000 -26,000Non operating -19,327 2,000 2,000 2,000 2,000Support Division 1,770,001 1,743,992 1,638,000 1,409,000 1,333,000Total surplus/(deficit) from trading -38,535 194,093 49,000 529,000 628,000Final salary pension costs -46,325 -34,000 -40,000 -34,000 -34,000Net surplus/(deficit) after full pensioncosts -84,860 160,093 9,000 495,000 594,000Exceptional items -168,982 -45,000 -50,000 -40,000 -40,000Cost of Restructure/Redundancy 0 0 -169,000 0 0Total Exceptional -168,982 -45,000 -219,000 -40,000 -40,000Net surplus/(deficit)after exceptionals -253,842 115,093 -210,000 455,000 554,000Page 12 of 40

3.3 Balance SheetConsolidated Balance SheetMar-09 Mar-10 Mar-11 Mar-12 Mar-13Consolidated Consolidated Consolidated Consolidated ConsolidatedActual Actual Forecast Forecast ForecastIntangible assets 0 0 0 0 0Tangible assets 784 697 633 559 509Investments 0 0 0 0 0Fixed Assets 784 694 633 559 509Current assetsDebtors 1,613 1,376 1,594 1,647 1,574Cash 668 623 -45 216 701Current Assets 2,281 1,999 1,549 1,863 2,275Creditors < 1 year -2,220 -2,205 -2,120 -1,925 -1,801Net current liabilities 61 -206 -571 -62 474Total assets less currentliabilities 845 491 62 497 1,031Creditors > 1 year -195 -175 -156 -136 -116Pension liability -1,134 -1,094 -894 -894 -894Net liabilities -484 -778 -988 -533 21Represented by Members FundsMembers funds b/f -492 -484 -778 -988 -533Profit/Loss Year 8 -294 -210 455 554Total funds -484 -778 -988 -533 21Page 13 of 40

3.4 Cash Flow Forecast to 31 March 2012Page 14 of 40

APPENDICES(I)Industry Trends(II)Operational Plans(A)(B)(C)(D)(E)MembershipCommercialTrainingBOSSProperty(III)Organisational StructureProvisional – to be reviewed after the appointment of the new Chief Executive

(I)Industry Trends“It is generally agreed that the printing industry will not make up the ground that it lost during therecession. How much further it will contract is debatable. One report has suggested that it will lose aquarter of its market by 2020, but this scenario is regarded as too extreme. The challenge for theprinting industry is twofold. One is to find a way of accommodating itself to the internet, whichessentially means offering products and services that embrace the internet rather than exclude it. Theother is for the industry to reinvent itself as a provider of various services, including printing. There isfrankly no other way. Sceptics have argued that the best thing a printer can do is stick with what itknows, but in a diminishing market that is no solution at all”Source: Key Note Market Report 2010 – PrintingThe printing industry, as measured by numbers of companies and employees, has contracted steadilythroughout the past decade. With high levels of over-capacity still remaining, the industry is expectedto continue to do so during the current decade also.Since 2000, the number of companies had fallen from an estimated 13,300 to around 10,900 in 2007and is projected to fall to around 8,700 by 2014. Employee numbers dropped from 194,000 in 2000 to144,000 by 2007 and are expected to fall to around 120,000 by 2014 (central path forecast). Giventhat the BPIF's subscriptions are currently calculated using a formula based on employee numbers,this has already impacted on the BPIF‟s finances, as a result of both companies lost frommembership through closures and mergers and also falling headcount. This attrition will clearlycontinue to erode the BPIF‟s subscription income going forward.Sales turnover, on the other hand, has held up reasonably well, a consequence of improvingproductivity generated by technological advancement, process improvements, and better workingpractices. Turnover dropped from £15.6bn in 2000 to £15.3bn in 2007. BPIF Research, havingmapped fluctuations and trends from previous years, estimates this will fall to around £13.8 bn in2010. Key Note Ltd expects some degree of recovery in sales from 2012 onwards however, followingsuccessive yearly declines in 2009, 2010 and 2011. Their figures exclude printed packaging. Theytake a lower turnover figure of £14.5 in 2007, predicting that this will fall to a low of £11.9bn in 2011and rise to £12.3bn in 2014. In either scenario the argument for moving to a subscription systembased on turnover seems compelling. It also provides an opportunity to put in place a fairer and moreequitable system, which does not penalise more labour intensive businesses. It also enables asystem to be developed that links the BPIF‟s income to the turnover of its member companies, givingthe BPIF a real stake in helping them to grow it.It is estimated that around 30% of UK printing industry‟s turnover is already derived from added-valueservices, as printers evolve from being specialists in ink on paper to broad-based integratedmarketing solutions providers offering a comprehensive range of multi-channel communicationssolutions. These include design, product innovation, facilities management, e-commerce,personalization, cross-media, digital asset management, website hosting, and mailing and fulfillmentsolutions. This is likely to grow substantially, as customers demand publications, communicationsand promotional materials that can be distributed simultaneously in both printed and electronic media,and also look for campaign that integrate print and web channels to optimise impact in themarketplace. It is crucial to the industry‟s future that printers take control of this evolving space byresponding to changing customer needs and expectations in a digital age, and it is crucial that theBPIF is able to assist them to doing so. We will therefore need to ensure we have the services inplace that will allow us to actively assist members to move from a client model that is mainly pricefactor-driven and product-focused to one that is essentially customer-centric, using initiatives such asdotgain.org, to help printers move up the print value chain.Page 16 of 40

(II)(A)Operational PlansMembership1. StrategyThe last three years of the Front Line First strategy has ensured that members have adopted highstandards, best practice and compliance in legislative requirements. The membership department hasprovided first class services in HR, HSEQ and Technical areas and also ensured that we maintain ourunique selling points that are print and packaging specific in areas such as the partnership at work,national negotiations, and industrial relations with the unions at national level, and „re-cycling‟ bestpractice in the industry. The feedback from members of our „always in‟ policy has been excellent, andwe will continue to provide members with the support they require to remain profitable, and furtherdevelop their businesses with our support.This plan outlines the arrangements the membership department will now put in place to supportmembers in developing their business to help reduce costs, be more efficient and expand into newmarkets increasing capacity. The aim is also to support members in improving the gross value addedfrom their employees. These support services will enable the membership department attract newmembers in the six regions, and most importantly ensure that BPIF members are at the cutting edgeof technology and generating new income from alternative media channels.The membership department will also continue to:Support Local and National lobbying issuesProvide workshops and seminars compliance and innovation areasIdentify funding to support members in their businessEncourage people to come into the industry at all agesProvide leads for all the BPIF commercial departmentsGenerate additional income through consultancy servicesCarry out the successful Key Account Management Program.The overall objective of this plan is to ensure that our BPIF Membership department financialobligations are met, and as a department continue to improve our financial position for this period.2. Departmental StructureOperations and Resources (People)The Membership Department will comprise of:1 x Membership Director6 x Regional Directors6 x Human Resource Field Advisers2 x Human Resource Desk Advisers3 x Health and Safety Field Advisers3 x Regional Administrators1 x Membership Co-ordinator1 x BPIF Personnel AdministratorTotal: 23 - a reduction of 3 employees compared to 2010-11Services covered by „off payroll‟ support will include;1. Technical Adviser2. Environmental Adviser3. Cross Media Manager4. BPIF CartonsBy using external associates in this way, we can offer higher quality support to member companies ona flexible basis, as and when it is needed.Page 17 of 40

Membership DirectorWill continue to manage all membership services in the six regions including Print Yorkshire, topicareas covering Human Resources, Health and Safety, Environment, Technical, Dotgain, SpecialInterest Groups including YMP.RegionsThe six regions will be managed by six Regional Directors and supported by Regional Boards madeup from a cross section of members from the region. During this plan the regions will be tasked toensure that there is good healthy debate at meetings, and will encourage younger members to themeetings and promote the YMP wherever possible.Six regions will operate out of three buildings North, Central and South with two regional departmentsworking out of one building.Each region will have the following objectives: Continue to develop and sustain a robust and effective Key Account Management SystemContinue to revitalise Industry ForumsSustain the speed and effectiveness of service in line with our „always in‟ policyContinually improve communication with members and staff through all mediaContinue to explore value from local “government agency” relationshipsContinue to maintain and retain members, demonstrating value for moneyUtilise staff resources matching them to the future needs of the organization,development and implement succession planningGenerate additional commercial income both self delivered and for BPIFBusiness and other BPIF Service OfferingsAchieve the 2011/12 budget and subscription incomeHealth, Safety and Environment DepartmentThe HSE department will continue to run with three H&S Advisers one of which will be the Head ofdepartment and will continue to carry out a dual role as an adviser in the Southern regions.The department will continue to provide regional support, generate leads for BPIF business and carryout consultancy services.The HSE department will continue to promote their unique selling points, which are;BPIF is in a joint partnership with the HSE in a holistic approach to improving the workingenvironment for the industry through the PIAC.BPIF has a partnership agreement with Unite the Union and strong connections and jointviews on safety improvements.BPIF is a member of the CBI Health and Safety Committee, ability to voice concerns overproposed new legislation that may have a negative affect upon the industry.The BPIF is a committee member on the BSI MCE Committee, which reviews machinerystandards and develops and advises changes to machinery build standards. (ISO and ENstandards).The HSE team are all experienced safety practitioners, with many years of experience withinthe Industry and other sectors, making them classed as 'competent' advisers.Ability to advise/introduce practicable control measures to ensure workplace hazards arecontrolled adequately.Ability to support the employer during regulatory issues (either HSE, Fire Authority,Environment Agency, Local Authorities etc) and act as the buffer between both parties.All advisers are committed to members and their query requests and offer advice on issues attimes outside of 'normal' working hours, a service not provided as standard, by other wellknown service providers.Page 18 of 40

Human Resource DepartmentThe HR department will continue to run with six regional advisers, two desk based advisers, onepersonnel administrator.The HR department will provide regional support through visits, telephone guidance, workshops andseminars.The HR department will continue to promote their unique selling points, which are;A joint agreement in place to work in partnership to negotiate on industry wages andconditions.A joint partnership at work agreement that sets out the commitment made by both parties.Specific and in depth knowledge of all industry salaries, benefits and conditionsSkilled in negotiating at national and local levels with unions.An understanding on how all employment matters that can be applied pragmatically to meetmember requirements.SensitivityThe loss of advisers to the open market, which has always been a possibility but has been managedwell over the years, using the opportunity to bring in new skills and disciplines. Holidays and sicknesspeak periods could cause a resource issue but good holiday and absence management will controlthis.TechnicalThis will continue to be managed „off payroll‟ and has worked well over the last twelve monthsproviding on-site visits, telephone advice, technical support and dispute resolutions.The Technology Warehouse will be managed by „printspeak‟.dotgainThe dotgain.org department has been running for over 12 months and has struggled to make animpact in the industry it deserves. There are a number of reasons for this; membership discretionaryspend, associate member sponsorship commitment, and an offering that has not appealed tomembers.Dotgain.org is an integral part of the membership offering ensuring that members are at the cuttingedge of technology, market place intelligence and customer centric.Dotgain.org will provide a membership offering under the Platinum level to provide:Brand holders and clients applications that achieve effective customer communications andhelp them source services and solutionsDigital, marketing and data agencies and print service providers in offering integrated, multichannelcommunication solutionsPrint service providers move from a product-led approach to a client-focusedmodel, offer more digital services and add valueA meeting place for vendors to show applications and network with customers.The Membership Director will be responsible for delivery of dotgain services through a combination ofinternal and associate consultant support as outlined in 2.5SensitivityThe first six months has seen a slow start for dotgain.org this was mainly down to the offering for bothmembers and vendors. The postponement of the conference in May 2010 didn‟t help the situation asthis would have been the launch pad that was needed to explain to members the need to furtherdevelop their business in a customer centric way. The conference will be held in November which willencourage potential members to the event which will in turn create the need for vendors to be there.However, conference, workshops, and seminar attendance have been poor generally this yearbecause of time commitments.Page 19 of 40

Growth by organic and partnership meansMembership RecruitmentThis will be carried out by the six regional directors and Exec directors with the support of themarketing department. A detailed recruitment campaign is in place for the period of this plan targetingprinting and packaging companies with employee numbers between 25 and 75. Initial contact will bemade by a telesales organisation who will make appointments for the regional director. Associatemembership recruitment will be carried out by an off payroll consultant working in partnership with themarketing department. The traditional associate membership offering has been amended toaccommodate the member requirements which is to demonstrate a return on investment, theassociate membership package now includes sponsorship opportunities.White Label options for other membership organisationsGraphic Enterprise Scotland (GES)A service level agreement similar to that is in place with BOSS will be offered to similar industryorganisations such as GES. A Gold level type of membership will be offered which is telephone andonline advice with the option of upgrading at extra cost.3. Financial Income and ContributionThe membership department financial income and contribution will come from a number of sources;1. Existing Corporate and Associate members2. New and upgraded Corporate and Associate members3. Additional Income through internally delivered consultancy4. Project funding.Existing Corporate and Associate membersThis is collected through direct debit over 10 months, one off payments by cheque or bacs transfer.Out of the £2.7 million subscription approximately £2.1 million is due at the beginning of the financialyear in April. To improve the successful renewal process during 2010 an automatic renewal processwill be implemented. Members will receive a membership renewal notice advising them that there willbe no need to do anything unless they wish to cancel their membership. Members will receive theircertificate and VAT receipt as soon as the first payment is received.Turnover – 2010–2013The table below details the turnover for the membership department for the next three years, showinga forecast loss of £113,000 this year and a flat plan for the following two years. It anticipates a 2.5%increase in subscriptions on 1 st April 2011, and doesn‟t account for reductions or increases in turnoverfor the same period.Page 20 of 40

The turnover for the topic areas will remain the same for the next three years as we have found thatthe balance between membership services and consultancy is right and no change is necessary. Thisassumes no change in the charge rates for BPIFB consultancy services.Turnover Trend AnalysisTopic/Dept2010-11Forecast2010-11Budget2011-12Forecast2012-13ForecastBPIF Regions -Subscriptions 2,700,000 2,813,000 2,754,000 2,754,000Topic/Dept2010-11Forecast2010-11Budget2011-12Forecast2012-13ForecastHR Commercial 48,000 48,000 48,000 48,000HSE Commercial 32,000 32,000 32,000 32,000EC - PROSPEC 12,000 0 20,000 20,000Technical -20,000 -20,000 -20,000 -20,000Dotgain -76,000 17,000 0 0National Negotiations 0 -5,000 -5,000 -5,000SensitivityIf there is a reduction in discretionary spend by members then this will impact on the leads generatedand therefore the consultancy work carried out.ContributionThe following table details the contribution for the membership department considering all income andall expenditure. The forecast for 2010-11 for the topic areas will be ahead of target and membershipsubscriptions down by £100k this forecast is assuming a „second wave‟ of company closures in period3. The overall impact of the department will be -£35k.The plan also assumes that the Print Yorkshire project and funding will cease in March 2011 and theircontribution of £20k will also cease. However, the contribution will be replaced by a EuropeanCommission funded project paying for a Project Administrator and Project Director.DepartmentalContributionAnalysis2010-11Forecast2010-11Budget2011-12Forecast2012-13ForecastTopic/DeptBPIF Regions -Subscriptions 2,026,000 2,086,000 2,006,000 2,006,000Topic/Dept2010-11Forecast2010-11Budget2011-12Forecast2012-13ForecastHSE Commercial -162,000 -167,480 -162,000 -162,000HR Commercial -512,000 -492,000 -492,000 -492,000EC - PROSPEC 12,000 0 18,000 18,000Technical -20,000 -20,500 -20,000 -20,000Dotgain -76,000 17,000 -25,000 -25,000National Negotiations 0 -5,000 -5,000 -5,000Page 21 of 40

SensitivityThe plan assumes the same as the turnover detail no further reductions in membership subscriptionsand consultancy.Headline targets and KPI`sEach department will be subject to targets and key performance indicators, covering visits, additionalincome, new member income and member upgrades. The key account management protocol willcontinue for the duration of this period.Regional Targets - FinancialThe Regional Directors are responsible for these targets.SensitivityRecruitment and upgrading members maybe difficult if the recession continues as it will have animpact on company expenditure.Human Resource – Target FinancialConsultancy days charged at £595 - £400 charged to the departmentActivity Plan 2011/ 13National North Central SouthHR Adviser Team NE NW MI SW SE EA TotalConsultancy days 20 20 20 20 20 20 120Total Consultancy income £48,000SensitivityThe main sensitivity for these KPI‟s are dicretionary spend from members, and sickness of theadvisers. This will be easily managed by associate members carrying out the consultancy.Health and Safety– Target FinancialThe Head of HSE is responsible for these targets:Consultancy days charged at £595 - £400 charged to the departmentNational North Central SouthH&S Advisers 45 45 15 105Total Consultancy income £32,000SensitivityStaff sickness could have an impact on the income which has been an issue during 2010, it is fairlyeasy to get Environmental Generalists but to get someone who is a specialist in carbon managementand energy efficiency is more difficult.4. Overall SensitivityThe membership department‟s main sensitivity is the perceived value of membership. In this currentclimate every pound has to have a return on the investment made. Although the membership offeringis not in question sometimes it is not affordable and members have to resign purely for that reason.Over the last two years we have also seen a number of company closures which has had aPage 22 of 40

significant impact on income, there is a belief that there will a „second wave‟ of printers closing in thethird quarter which again could have an impact.5. New Product and Service OpportunitiesSeal of Business ExcellenceA simple scheme at no extra cost to members will be introduced to give recognition for Platinummembers who achieve high standards this will be developed around the HR. H&S & Environmentalhealthcheck service. A customer service healthcheck will be developed as a fourth topic. Companieswho score over 70% and achieve 100% in mandatory areas will be awarded a „Seal of BusinessExcellence‟ by the BPIF. A certificate will be awarded to the company which identifies the companyhealthcheck score, and ongoing commitment to continually improve their management in these areas.There will be no formal accreditation as this will incur cost to members and further confusion in theindustry. However, an external body will carry out random checks 1 in a 100 to ensure that thescheme is being run fairly. If members score above 70% they will automatically be entered into theBPIF Excellence Awards in the H&S, HR Environmental and customer service categories in the BPIFExcellence awards, and if 70% is scored in all four areas then automatic entry into the company of theyear award.Existing ServicesThe core products will continue to be provided through our field and desk based advisers providingguidance on legislative and best practise requirements through healthchecks, website, electronicupdates, and telephone advice. Additional modules will be added to the healthchecks so that an auditof member‟s policies and procedures are inspected in depth. This will ensure that members have thepeace of mind that they are doing the right thing, and is good preparation for achieving ISOstandards.GoldThis would include the existing Gold level offering with a free business healthcheck done online. Abasic healthcheck covering HR and HSE legislative issues will be put online so members can ensurethat they are compliant with the law protecting their business. Members will be able to upgrade via thewebsite to take advantage of the Platinum service which is the full healthcheck which goes into moredetail and requires a visit by one the Advisers.PlatinumA new Platinum offering will include ViPP lean services, waste diagnostic and dotgain.org services aspart of membership; the cost of these will be significantly reduced if taken as part of membership.Page 23 of 40

(B)Commercial1. General CommentaryCommercial£0002009-10ActualJulyF’cast2010-11 %var2011-12Plan%var2012-13Plan%varTotal Income 1,792 1,768 -1% 1878 6% 1764 -6%Total Profit 690 741 7% 863 16% 861 0%The Plan is deliberately downbeat in forecasting just a 6% growth in income in 2011-12 and anactual decline in come in 2012-13 [caused by the end of Ecoprint London]. This is not what weintend to deliver but we want to start beating budgets not struggling to meet them. Neverthelesswe see a surge in net profit next year as we take out overheads in line with a more conservativeincome.Assuming the UK can avoid a double-dip recession; we can expect a slow and bumpy recovery indemand and must take a positive view towards generating higher levels of income andcontribution. If we are to beat this conservative budget [and we are determined to do so] we mustset challenging targets and think outside the box. There are six key actions needed:1. New Product DevelopmentWe have already launched eight new/updated products this year Heidelberg Lean Champion EcoPrint London Sun Chemical 12647 Gap Analysis Sales & Marketing Healthcheck HSPG Snapshot Plus BTG Red Flag BOSS Insurance w. RKH BPIFB Occupational HealthWe have a further possible three in active development for this year Telecoms RAC Carbon Smart Awards in non-London regionsWe are already planning for a further ten next year Sales Training Academy Lean Foundation Programme Lean Transformation MIS Diagnostic PrePress Workflow Diagnostic Online Business Healthcheck (with Membership) Customer Service Healthcheck (with membership) Trade credit insurance Financial healthcheck Parcels ServiceWe need to continue to develop and launch products recognising the heavy demands onthat developing, piloting and marketing place on limited resources.2. New Market DevelopmentWe have made modest progress in adapting and promoting BPIF products to BOSSmember needs, and more needs to be done.Page 24 of 40

In addition we should „follow‟ a wider membership offering as per the MembershipDivision‟s proposal for Gold membership and promote our products by that means to awider audience to members of partner organisations e.g.: Graphic Enterprise Scotland CPIThis also applies to audiences not conventionally targeted by BPIF Commercial e.g.: Furniture and Paper sectors for ViP services following accreditation by Proskills A wider definition of Dotgain.org service providers i.e. incl. those not „printers‟ Associate members – an additional membership benefit never actively considered3. Focussed MarketingTopic Promotion Period ProductBPIF B June-July 12647August-Sept.Oct-NovDec-FebMar-MayH&S Mgt SchemeS&M HchkHRSales TrainingViP May – July Snapshot PlusAug-NovDec-FebWaste ConferenceLean TransformationFinancial Alliance May – July Red FlagCommercialProductsAug.- Oct.Nov-DecJuly – SeptSept-OctNov-JanFeb-AprTaxInvoice DiscountingBOSS InsuranceHealth InsuranceRACTelecomsBTG CorporateSept.-Oct„Re-launch‟FinanceReg. Campaign May – July EcoPrintAug-Sept Beyond 2010Jan-MarCSmart – NW & SEViP Events July- Aug TLTJuly - NovChamp PassportRecognising both thelimited capacity of ourteam to manageeffective marketingcampaigns and ourmembers to absorbthem, marketing ismore focussed with halfa dozen products beingpromoted at any timeand another half dozenbeing developed.Regarding sponsorship, since the recession this has changed in characteristic, with lessgeneral sponsorship and more ROI specific activities e.g. „marketing related‟ researchprojects and events. The Commercial Director is responsible for c. £100,000 p.a. ofcommercial „sponsorship‟ requiring close relations with suppliers, time and an activecommercial approach.4. Active Lead Targeting and ManagementThere is far closer co-ordination between the Membership and Commercial divisions thanbefore, with agreed target levels and an adjusted account mgt. programme to give themembership staff better opportunity to generate commercial leads. Recent sales trainingfor the membership team should have helped. Nevertheless whilst the trend isencouraging with leads up month on month this year they are not much above lead levelsPage 25 of 40

of last year and sharply down on prerecession levels. It remains a challenge not fullyresolved as to how to get the best level of commercial leads from the membership teamand as well as the recent sales training two specific actions are proposed: Better product training on a quarterly basis – at regional membership teammeetings Development of OM.net so as to give personalised feedback on leads generatedon a regular „automatic‟ basis5. Fresh FundingGiven the Autumn Gov. Spending review, it is good news that BPIF Commercial is notheavily dependent on government funding. Nevertheless where we can we must exploitthe opportunities. The arrival next year of Local Enterprise Partnerships will create freshchallenges and opportunities for the regional directors that the Commercial Division canhelp deliver e.g. EEDA „Beyond 2010. Current funding: EcoPrint London EEDA Beyond 2010Profit by ‘Dept.’£000 Profit2009-10ActualJuly Forecast2010-11Budget2010-112011-12Plan2012-12PlanCommercialProducts incl.Financial All. 632,000 639,000 658,000 671,000 671,000McInnes (26,000) (15,000) 9,900 40,000 40,000BPIF Business 28,000 59,000 82,000 92,000 91,000ViP 38,000 33,000 68,000 40,000 59,000EcoPrintLondon 18,000 25,000 0 20,000 0Total 690,000 741,000 817,900 863,000 861,000In summary whilst a £50,000 improvement on last year, profit is forecast for 10-11 £76,900 [9%]down against budget, due to an overall £258,000 income shortfall [13%]. Of this latter figure,£120,000 is BPIF Business, where the original budget figure was always going to be unrealistic,once it became clear in the last 6 months of last year there would no speedy recovery.2. Commercial Products2.1. Revised Forecast£000 JulyForecast2010-11Budget2010-11Plan2011-12Plan2012-13IncomeInsurance 120,000 120,000 120000 120000CCL 525,500 515,000 525000 525000Pensions 25,000 25,000 25000 25000Health Insurance 27,000 23,000 27000 27000RAC 1,500 10,000 4000 4000Financial Alliance 30,000 40,000 30000 30000New Products 0 15,000 15000 15000Total 729,000 748,000 746000 746000Overheads 90,000 90,000 75000 75000Net Profit 639,000 658,000 671000 6710002.2. Actions & Longer Term PlanIn the main these are product specific:Page 26 of 40

2.3. InsuranceThe current commission guarantee has been extended. New business is coming in a c. £1.5mpa with a retention rate of c.85% [industry standard]. This will result in the above net incomegrowth but is dependent on winning larger accounts and close liaison between the RKH teamand membership teams is essential. The BOSS scheme is forecast to generate c.£200,000 inits first year but forecasts thereafter are uncertain.2.4. CCLThere are currently 235 companies on the scheme, which is closed to new entrants until April2011. It is envisaged that a new scheme will take its place which will monitor companiesannually from January 2012. The current 80% discount will be reduced to 65%, also fromApril 2011, which will leave 20 companies with marginal saving and therefore vulnerable toresignation [£20,000]. The scheme will also be subject to company closures. On the otherhand we can assume some new entrants in some cases assisted by companies keen to avoidthe CRC scheme. Looking beyond 2014, the future of the CCL scheme is uncertain, though asector based scheme is likely.2.5. PensionsIt is likely that the 2012 changes in Pension legislation will provide a boost for the scheme asthey move to auto enrolment. Current thinking is that the government may use the existingstakeholder structure i.e. member companies should see the PIPS scheme as the obviousscheme to use.2.6. Health InsuranceMaintain efforts to counter both market conditions and new entrants.2.7. RACWe are negotiating better rates and developing a marketing campaign for the New Year.2.8. Financial AllianceA source of continuing frustration, whilst the budget is 75% protected by a minimumcommission guarantee, actual commission is minimal. Nevertheless close working withBegbies Traynor, our principal partner, should result in better results by 2011-12: Redesign core products to be relevant – Red Flag, Tax, Asset Finance, CorporateFinance, Credit Insurance and possibly RestructuringIncrease number of leads from staff by better communication and sustained marketingImprove lead conversion and reporting – new „back office‟ much overdue but bettermanagement from BTG also needed2.9. New Products - Telecoms and ParcelsWe have just started a tender exercise for Telecoms and will restart negotiations with Parcelssuppliers shortly. We plan to launch the Telecoms service after Christmas and expect incomein the new F/Y.3. BTG Corporate Finance (was BPIF McInnes)3.1. Revised Forecast£‟000 July Forecast2010-11Budget2010-11Plan2011-12Plan2012-13Income 15,100 40,000 40000 40000Costs 30,100 30,100 0 0Profit (15,000) 9,900 40000 40000We are just completing a protracted transfer of management of BTG Corporate Finance (wasBPIF McInnes) to their Manchester office. In doing so Marcus is stepping back from day-todayactivity and we are looking to their team to give the lead. The few live projects there arehave been handed over to them and we rebooted the marketing in September to get afresh flow of leads.Page 27 of 40

5. ViP9. Continue to work with the HR advisors to structure commercial support forcompanies. Encouraging HR lead and service generation to enable them to reachtargets first then supplying leads for associates when budgets have been reached.10. Improve conversion rates for proposals sent to proposals accepted to 2 in 3 (currently1 in 2) and maintain conversion of leads to proposal stage at a minimum of 3 in 4(currently 4 in 5).5.1. Revised Forecast£‟000 July Forecast2010-11Budget2010-11Plan2011-12Plan2012-13Income 446 536 467 492Direct Costs 351 386 366 372Overheads 62 82 61 61Net Profit 33 68 40 59Key points for 2010-11 July forecast : £21,000 income shortfall Q1 Engineer income reduced by £14,000 reflecting no large contracts in short term £10,000 income shortfall TLT in rest of year £35,000 income shortfall [less use of associates] offset by £23,000 labour saving £5,000 income shortfall conference Raft of overhead and direct cost savings totalling £26,000For 2011-12, prospects are mixed but a conservative 5% growth per annum is assumed:Positive: Larger companies are seeking more bigger programmes MAS's will survive the Spending Review but funding may reduce allowing a morebalance market that should benefit us [though this will also disadvantage a few of oursmaller clients who may not proceed without funding]Negative: Sponsorship is much harder and at risk is 2 yrs Snapshot funding at £50,000 pa [nowlikely £35,000] and Strategic funding at £45,000pa. Whilst we would keep the engineer team at five and use Associates for growth, werisk possible loss of engineers and cost of recruiting and training a minimum staffing.5.2. Actions & Longer Term PlanThe key variable for 2010-11 is converting a couple of major programmes. Beyond that weneed:1. To secure Snapshot Funding for the next two years2. To secure Strategic Funding of £45,000 pa for the next two years3. To work closely with BPIF colleagues to gain an improved pipeline of leads4. To win more longer term contracts from larger members5. To win contracts outside print using our Proskills accreditation e.g. Furniture6. To refresh our Team Leader Training Product6. EcoPrint London6.1. Revised Forecast£‟000 JulyForecast2010-11Budget2010-112011-12 2012-13Grant receivable 138,000 142,000 165,000 -Direct Costs 65,000 71,000 82,500 -Costs 48,000 71,000 62,500 -Profit 25,000 0 20,000 -Page 29 of 40

6.2. Actions & Longer Term PlanContract performance is going well. All KPIs are well ahead of target. The recent risk tofinancial benefit to BPIF due to ERDF rules on claiming overheads has been overcome andwe expect to be on ERDF budget for 2010 both in terms of deliverables and financials. Wewill beat BPIF budget as the detailed net benefit was not clear at budget time and we did notassign any margin. [No contribution was assumed in any other department either].In 2011 we can roll out the CarbonSmart award across other regions [with or without funding]but this will be budgeted in BPIF Business.Page 30 of 40

(C) TRAINING1. Introduction and OverviewBPIF Training Ltd was established as a wholly owned separate company in May 2009. At the time theboard saw considerable opportunity around harnessing Train to Gain funding, but also considerablerisk in the anticipated changes to funding management.In April 2009 they invited Kathy Woodward to become Executive Chair and Kay Smith to becomeDevelopment Director. The remit was to review, develop and deliver BPIF Training to a position ofsecurity, in terms of its profitability, its reputation and its portfolio of products.The board were aware that prior to the resignation of the Head of Training the department‟sprocesses had drifted and that the rigor of training standards for both Ofsted and LSC(SFA) wouldrequire significant improvement in achievement levels to maintain recognition.Alongside the resignation of the Head of Training and the appointment of the new Executive Team anaudit of current registered learners was undertaken to establish the current economic viability of thedepartment and a number of cost reductions were implemented. Administration was reduced by 2heads and Training Consultants were reduced by 3 heads. During 2010 a further reduction has beenmade in TCs and a new structure has been introduced. These reductions have been made alongsidecontinued improvements in completion rates.During the year BPIF Training Limited has been subject to a number of Financial and PerformanceAudits including Ofsted. The Ofsted report achieved a satisfactory grading acknowledging theperformance improvement in the year, though financial stability remains an issue with the SFA andprevious completion rates resulting in loss of several regional contracts. The change of Governmenthas heralded significant changes in the funding regime with the predicted demise of Train to Gain anda revised focus on Apprenticeships.Through the work carried out in 2009, and the relationships forged at that time, 2010 started with thedelivery of the first whole organisational training programs. It is expected that this will continue during2010, along with other across organisational developments.The Board authorised the exploration of alternative models which are ongoing.2. Departmental DescriptionBPIF Training Ltd has 10 staff, 1 Executive Chair, 1 Development Director, 1 Administrator and 7 TC‟sand has entered into an innovative arrangement with Management and Personnel Services Limitedto implement an exchange of resources which has the benefit of diluting the cost of the managementand administrative overhead whilst gaining Customer Service NVQ support.The Chair is responsible for the ongoing strategy, the Development Director is responsible forBusiness delivery, the administration is responsible for monitoring, quality, compliance and fieldsupport and the TCs are responsible for the timely delivery of quality qualifications. Though all staffare expected to contribute to revenue generating delivery.3. Headline Targetsa. FinancialApps income £703kT2G income £54kTLT income 90kOther income £18kTotal income £885kProfit £42.5kPage 31 of 40

10% Mileage reduction from 196454 in 2009 to 176810 in 2010b. KPIsTo improve completion rates from 54% to 60%(FSA may set a higher minimum level).To improve Apprenticeship timeliness rates.To reduce unfunded learner to below 10.To sign up a minimum of 100 new learners.Develop a BPIF badged management qualificationTo target cluster learners to increase delivery profitabilityTo address Ofsted identified areas for improvementc. Key Account ManagementTCs provide support to different regions. They are responsible for the learners within thoseregions.The Chair supports internal and external strategic relationships.The Development Director supports Key accounts and institutional relationships.4. Deliveryd. MethodologyChair presents strategy.Strategy is agreed by team.Programs are devised to deliver the strategy.Champions support the strategy.e. Operations and Resources (People)Chair – 18 days a yearDevelopment Director – 2 days a weekFully time support from 7 x TCsFully time support from 1 x Administration*both the Chair and Development Director work significantly beyond contract days.f. Monitoring and measurementMonthly management reviewsQuarterly strategic reviewsWeekly operational reviewsStatistical pack and measurement monthlyTeam KPI‟s5. Sensitivity/Risk AnalysisThe overall economic climate continues to affect the number of Apprentices that will be employedwithin our industry however we expect this to be a gradual improvement. T2G money is expected tobe removed by the new government.With the introduction of the new SFA funding has been secured but continues to be monitored.TLT numbers, and therefore the viability of the courses, are at risk.Due to the uncertain funding new TCs will be appointed as associates who, unless carefullymanaged, can risk delivery quality.6. New Product/Service DevelopmentWe will continue to develop our „whole organisational‟ training portfolio.We will investigate the opportunity to introduce a new TLT NVQ.We will introduce a modular management qualification.Page 32 of 40

We will look to convert the current whole organisation training programme into a saleableorganisational diagnostic instrument.7. Marketing Plan1. Campaign to increase Apprenticeship numbers2. Promote a unitised management qualification in January3. National Apprenticeship Campaign throughout the year4. Team Leader Training promotion5. A brochure that demonstrates our commitment to E & D6. Develop a diagnostic driven customer service product7. Review our training brand including our bit on the website8. Act as a mother ship for really competent Associate Trainers9. Get some free news publicity!Page 33 of 40

(D)BOSS1. StrategyIn July 2007 the BOSS Federation and the BPIF agreed a 5 year Association Management Contractwhereby all the staff of BOSS were transferred across to the BPIF under TUPE. BPIF would take allthe income from membership and the BOSS Awards Dinner and provide all services to BOSSMembers.BOSS had limited cash resource at the time and the BPIF agreed to pay the redundancy costs for theCEO and the Administrator, which would be repaid by BOSS to BPIF from either the rental income ofthe BOSS property in High Wycombe or the sale proceeds from the property.Boss retained title and ownership of their property in High Wycombe and five sevenths of any rentalincome was paid to BPIF. The remaining two sevenths was to be used by BOSS to pay off the intercompany loan arising on the transfer. This loan as at transfer date was £120k.Prior to the BOSS contract, BOSS income was declining year on year and BOSS was seen as a niceto have networking and social function, providing limited technical support and BOSS standards forthe industry (pacs and pers).Under a new Chief Executive (Michael Gardner) the attrition in members income was reversed with a20% growth in 2009/10 during the severest financial crisis since the 1930ties.The strategy is to increase membership in the following areas:RetailEducationWholesalersDealer GroupsContract StationersIndependent DealersManufacturersRetail (Ryman's, Tesco, Sainsbury's, WH Smith etc)This is the weakest part of the BOSS offering as the major retailers in the UK do not require theproducts and services offered by the BPIF/BOSS agreement. We have invited a number of retailers tothe BOSS CEO Conference on 9 September, to enable them to meet the main CEOs of thewholesaler/dealer groups and manufacturers, and to explore opportunities to encourage them intomembership. We are also launching a new high level market tracking initiative which will enable themto clearly identify the market trends in product development in Office Products.Education (YPO, ESPO, County Councils, Education Authorities etc.)Buying groups for stationary are common in the UK. We have targeted this group as they can utiliseBOSS to gain access to prospective suppliers and end users.Wholesalers (VOW and Spicers)The Office Products Industry is still highly structured with manufacturers, wholesalers, dealers (anddealer groups) and resellers (retailers). The wholesalers play a very important part in the Industry andwithin BOSS both centrally and regionally. Both Vow and Spicers are on the BOSS Board and supportmany of the BOSS regional fund raising events. They also support the dealer groups.Dealer Groups (Nemo, Office Friendly, XPD, Simply Office etc)In order to compete with the large contract stationers in the UK, dealer groups have been set upduring the last 15 years. These consist of a number of dealers who have a shared catalogue,marketing and purchasing support function. Some dealer groups are run as commercial limitedcompanies and some as co-operatives supporting their members. Dealers will often negotiatepurchasing contracts with major wholesalers and manufacturers and also produce catalogues whichcan be "badged " by members with their logo.Page 34 of 40

Contract Stationers (Lyreco, Office2Office and Office Depot etc.)Contract stationers have evolved over the last 20 years, as larger independent dealers have beenbought up to gain critical mass and offer a UK wide distribution network to larger government,retailers, banks and financial institutions, as well as regional support for smaller companies. Thesemay have turnovers in excess of £250million pa. These are now mainly owned by American andEuropean parents.Independent DealersThe growth of the internet, online ordering and pack and wrap facilities offered by major wholesalers,has resulted in a large number of Mamma and Pappa dealers emerging as there is a low cost of entryinto the market. With little or no stock required and discounts offered by the wholesalers andmanufacturers, the independent dealer can be a small two man internet ordering operation up to a£50million warehousing and distribution centre.ManufacturersAll manufactures who service the Office Products Industry are potential BOSS members from thelargest computer equipment suppliers to local stamp manufacturers.ForumsBOSS currently operates two forums, the Manufacturers Forum and the Resellers and DistributorsForum where members can meet, network, socialise and discuss the industry issues.BOSS also has special interest groups called WIA (Writing Instrument Association) and RSMG(Rubber Stamps Manufacturers Guild). These provide networking, social activities, legislative supportand industry support for these special areas of technology.MarketingBOSS has its own directory of Products and Services based on the BPIF offering and tailored toBOSS requirements.BOSS also has its own magazine BOSS Today which is sponsored and profitable.BOSS also has a very popular and profitable annual awards dinner which is seen as the socialhighlight of the year for many members and non members.BOSS Benevolent FundBOSS has a benevolent fund run separate to BOSS but with appointed Trustees agreed with theBOSS Board. They have approx £600k in investments and raise money through a variety offundraising events supported by the BOSS regional Committees.2. Departmental StructureBoss has a part time Chief Executive Officer, Michael Gardner, who is also Finance Director of theBPIF.BOSS employs one full time General Manager Philippa Morrell.Marketing, IT and Finance are provided by the BPIF central functions.BOSS is run regionally through the BPIF Regional Director and Regional Administration structure.BOSS has regional 7 committees across the UK broadly split in the same regions as the BPIF andpopulated by unpaid regional committee members.Page 35 of 40

3 Headline Targets and KPI`sa. Financial Income and Contribution £`000`s2009/10 2010/11 2011/12 2012/13Actual Forecast Forecast ForecastIncome Membership 209 230 240 260Income BOSS Awards 106 100 100 100Total Income 315 330 340 360ContributionBOSS 92 105 110 115Corporation St 3 26 26 26Total Contribution 95 131 136 141b. KPIs1. Achievement of Top Line Income2. Exceed Budget Contribution for Boss Membership and Corporation Street3. Upgrade Gold and Silver membership Platinum and Gold (5% pa growth)4. Increase membership by 5% year on year5. Roll out BPIF Products and Services to BOSS Members (e.g. Legal Plus, Insurance,Begbies) measured by increase in BOSS Commercial incomec. Key Account Management1. Target Retail and Education2. Target Dealer groups not in membership3. Target Manufacturers not in membership4. CEO/RD`s to visit/contact all paying members in financial year5. Attend all dealer/Wholesale conferences and promote BOSS/BPIFd. Markets and Opportunities1. Government/Retail/Education are target markets2. Sell BPIF Business opportunities e.g. Legal plus/Insurance/ Begbies Traynor into allBOSS memberse. Operations and Resources (People)1. General Manager role to become business development role2. Regional Directors to be responsible for BOSS new business development3. All Marketing resource to be controlled centrally through BPIF Marketing4. Sensitivity/Risk Analysis1. In 2012 the 5 year contract comes to an end. We will need to revisit the structure,content and service offering and agree a new contract or full merger between BPIFand BOSS.2. The market place is shrinking with closures, takeovers and mergers. Income may beat risk by 5%.3. The Awards brings in income and profit but sponsorship opportunities are limited.Risk approx £20k.4. The Corporation Street premises covenant on the lessees is poor. Risk £26k pa5. The sale/remortgage of Corporation Street is required to repay the BOSSintercompany loan. Loan of £120k may not be repaid by end of contract.Page 36 of 40

5. New Product and Service Opportunities1. We will continue to promote the full range of BPIF products and services to BOSSmembers.2. Through WIA and RSMG we will look for new product opportunities and membershipdevelopment.3. Through the Manufacturers Forum and Resellers and Distributors Forum we willcontinue to promote BPIF products and services and look for additional added valueopportunities for the BPIF.Page 37 of 40

(E)PropertyThe BPIF currently operates out of 3 sites servicing all of the UK. An increasing number of staff areclassified as homeworkers and over the course of the plan it may be possible to Homework a numberof functions currently requiring office space e.g. IT. We have reduced by 50% the number of sitessince 2007 and reduced the cost base significantly. Current sites are:North - Brighouse off the M62 between Leeds and Manchester and servicing the North East andNorth West RegionCentral - Meriden between Coventry and Birmingham and servicing the Midlands and South WestRegionsSouth - London at Farringdon Point servicing the South East and Eastern RegionsThe strategic plan includes the 3 site option but requires a full review of how these sites should beutilised and costs reduced.Farringdon Villiers Court BrighouseRent & Service Charges £249,200.00 £5,018.20 £13,950.00Rates £59,062.80 £16,197.35 £4,015.80Electricity £3,903.00 £3,263.00 £nilWater £465.16 £200.00 £nil£312,630.96 £24,678.55 £17,965.80BrighouseA short leasehold for an initial 12 month period with an option to renew in July 2011. Houses theadmin staff for North East and North West, plus Print Yorkshire and hot desking for RegionalDirectors, and all other BPIF Central staff. There is a board room/training room available for meetings,training sessions and for use by member companies for meetings.Central - MeridenThis property is owned by the BPIF and valued at circa £600k with a loan on the property of £180k.Currently Finance, Training, HR, Commercial Products and the Regional Administrator for Centraland South West, together with the two telephone HR advisors for the UK are based here. There isalso a board room and meeting facilities. With the potential sale of Training this may release space orcreate an income stream in Meriden if the new owners wish to rent out the space occupied bytraining. There is still capacity to put more people into Meriden.South - Farringdon Point London.Currently CEO, Corporate Affairs, IT, Marketing, ViP, BPIF Business, BOSS and Admin for the SouthEast and Eastern regions are housed here. There is spare capacity as BPIF numbers have reducedby 33% over the last two years.The property is leasehold on a 15 year tenants repairing lease signed in 2000 and expiring on 15August 2015. There is no break clause in the lease and the property has recently been sold to newowners who have stated that they have no plans to redevelop the site and are holding the BPIF to theterms of the original lease. The Lease is with the Trustees of the BPIF General Fund at the time RoyBaillie, John Patrick Howitt, Peter Yates and their respective companies.Page 38 of 40

Options:(a) Rent out all or part of Farringdon PointWith the landlords consent we have the option to rent out all or part of Farringdon Point. Wehave to make up any shortfall in rent and if the sub tenants default we are responsible for anyshortfall.We can ascertain current market rent, put the property on the market and try to assign theremainder of the lease (5 years).Alternatively we can split the floor into two areas and rent out part of the property.(b)Service ChargesAppoint a professional agent to renegotiate the service charges (currently at £40k pa). Wehave done this for the rates.Recommendation:we will continue to put pressure on the Landlords to reduce the service charges and to work with us toan achieve acceptable break in the contract.Page 39 of 40

(III)Organisational structureProvisional – to be reviewed after the appointment of the new Chief ExecutiveThe BPIF Board is now taking the opportunity to review its higher level organizational structure in partcrystallised by the impending change of President, the planned retirement of the Chief ExecutiveOfficer and the voluntary retirement of a long serving board executive with over 30 years of loyalservice.A new organizational structure will be implemented, which involves de-payrolling a number of costareas, including lobbying, cross-media, and business development. This will allow tighter control ofcosts and will enable the introduction of lean management.The overall objectives of the organisation are considered to be clear: To continually develop an innovative and credible membership proposition that demonstratesongoing value to its diverse members which includes industry specific compliance and best fitpractice and support. To effectively market the proposition, to both maintain and gain membership to secure thelong-term sustainability of our „front line‟ services. To establish and reinvigorate our profile that ensures credibility as an effectivelobbying/dialogue channel to Government and other relevant bodies. To develop a robust and cost effective organisational infrastructure that is capable ofproviding not only the strategic and operational excellence to support the BPIF'scurrent and future needs but is capable of delivering a suite of services to other tradeorganisations.A number of developments are now being considered to further enhance the organisation‟s ability todeliver on these primary objectives. The aim of the review is to focus the organisation, to harness theskills set of the current team, to implement an executive cost base that is affordable and sustainable,to maintain the current development momentum and to remove barriers that prevent further progress.Headcount Reductions are planned to minimise any impact on Front Line Services, involving areduction of 6 headsThe Plan assumes a full time Awards and Events Manager in Marketing from April 2011. Thiswill be paid for by bringing in house the BOSS Awards event management saving £29k pa. We willalso resurrect the BPIF Excellence Awards - target profit £10K.Page 40 of 40