PROFILE INDEX. Introduction 3. Key Definitions 4. Features & Benefits 5. Standard Operating Procedure 6. Service Process 7. Service Undertaking 8

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1 COMPANY PROFILE

2 PROFILE INDEX Introduction 3 Key Definitions 4 Features & Benefits 5 Standard Operating Procedure 6 Service Process 7 Service Undertaking 8 Contact Details 9 Trade Finance Glossary 10 Page 2

3 INTRODUCTION Turners Shipping is proud to announce an innovative Start-to-End facility, which has been especially designed for the South African Importer. This bespoke service has been developed by combining the Trade Finance element with the Freight Forwarding and Customs Clearing components, to deliver a total logistics supply chain package. Whilst there are a number of financial institutions who provide importers with trade finance facilities, they are generally only concerned about the financial component of the transaction. We believe that there are enormous benefits for the Importer should they utilise a service provider that offers a facility which combines both the trade finance and the international logistics requirements. Turners Shipping has the unique position of being able to offer South African Importers with this collective Start-to-End facility. Essentially, by utilising Turners Shipping s existing freight forwarding and customs clearing strength as the major ingredient and then by adding the trade finance portion as a value added service, Turners Shipping is able to provide Importers with the ultimate package. This Start-to-End facility has been especially constructed to provide discernible logistics excellence at an all-inclusive rate. A major feature of this Start-to-End service is a total reporting system which provides the Importer with absolute visibility, from the time of order placement, right through to final delivery. In addition a detailed costing schedule is available which identifies every cost aspect of the imported product. The overall objective is to allow Importers the time to concentrate on running and growing their own business while Turners Shipping attends to their total logistics supply chain requirements. This at the best possible rates!! Page 3

4 KEY DEFINITIONS Supply Chain A supply chain is a system of Organisations, people, technology, activities, information and resources involved in moving a product or service from Supplier to Customer. Logistics The process of strategically managing the movement of goods from the point of origin to point of consumption. Total Logistics This concept aims to treat the many different elements that come under the broad category of moving products from one point to another under a single integrated system. This would include the following: Financing Purchasing Inventory Management Cargo Tracking Freight Forwarding Customs Clearing Communication / Reporting Invoicing Page 4

5 FEATURES AND BENEFITS 1. Member of the 118 year old Turner Group of Companies 2. Operating in conjunction with Turners Shipping 3. BEE procurement entitlement for Importers of 137.5% 4. Repayments to suit credit terms and trade cycle 5. Single point of contact 6. Complete visibility track & trace and shipment status report 7. Repayments in South African Rands 8. Full costing analysis per shipment 9. Opportunity to negotiate better pricing & settlement discounts 10. Alleviate cash flow 11. Creates additional working capital Page 5

6 STANDARD OPERATING PROCEDURE Importer orders Product and advises Turners Shipping (TS) of the order details and payment terms. TS will then arrange for Foreign exchange requirements and Payment (in terms with the specific requirement) and for the Freight Forwarding. TS will then handle the Overseas landside logistics, sea/air freight forwarding to RSA, local customs clearing, the final delivery and all RSA charges TS will then prepare a Trade Finance Invoice and a Customs Clearing Invoice in accordance with arranged terms. TS will advise Importer of the status of all the progress stages of the shipment from Estimated Time of Departure (ETD) ex the Suppliers address until the final delivery. This information will appear on both the shipment Status report as well as the Purchase Order Management System (POMS) TS will provide the Importer with a full Costing schedule, which will be inclusive of both the Trade Finance Invoice and the Customs Clearing Invoice. Page 6

7 SERVICE PROCESS Procurement of Product Payment terms with Supplier International Customs Clearing & Freight Forwarding South African Customs Clearing Delivery Local Sales / Distribution / Payments Payment to Turners Trade Finance Page 7

8 SERVICE UNDERTAKING Best practice principals Regular operational meetings (Stakeholders/service providers) Approved Key Performance Indicator (KPI) Sanctioned Service Level Agreement (SLA) Agreed Standard Operations Procedure (SOP) Shipment Status Reports Purchase Order Management Systems (POMS) IT connectivity to Importer Most competitive rates practice Page 8

9 CONTACT DETAILS OPERATIONS Durban Neren Dayanand Branch Manager Johannesburg Paul Carter Branch Manager Cape Town Linda Newby Branch Manager ACCOUNTS Durban Ian Losinsky Financial Director Page 9

10 TRADE FINANCE GLOSSARY An introduction to Trade Terms & Definitions Letter of Credit or L/Cs (or more correctly, Documentary Credits) enable international payments typically for foreign sourced goods. LCs entail a formal set of documents to be delivered to the Purchaser s bank which, if all in order, will result in the bank making a payment to the seller s bank. Documents include a commercial invoice, Bill of Lading, packing list, amongst others. LCs have expiry dates, beyond which the delivery of the above documents will result in no payment being made. Revolving Documentary Credit is set up in the normal manner but does not expire or close. As the beneficiary sends cargo and draws payment against the instrument the credit gets topped up by the applicant at the other end each time they receive cargo or for a specific time period. Confirmed Documentary Credit is when an additional bank (not the applicant or beneficiaries bank) is asked to underwrite the payment in order to insure against the insolvency of the applicants bank, collapse of the country or currency. Standby Letter of Credit differs from the normal documentary credit in that, in order to draw down under the standby the beneficiary one would need to provide the bank with evidence of something the applicant did not do, i.e.. Did not pay under open account terms as agreed. Essentially it is a default instrument rather than a payment instrument. A Telegraphic Transfer is an instruction (via SWIFT) on behalf of a buyer to credit the account of a seller. Effectively, an international EFT. Foreign Exchange Contracts (FEC/ Forward Cover) An agreement to exchange one currency for another currency at a fixed rate on a specified date in the future. This agreement fixes the price of foreign currency payments or receipts expected to materialise at a future date and eliminates adverse currency movements beyond the agreed forward rate. Factoring: This is a sophisticated, financial tool which enables credit sales to be converted into working capital by allowing a third party to purchase your outstanding book of debts, against which an amount is advanced and the balance paid to you once it has been collected from your customers. The third party controls and maintains your debtors ledger. Invoice Discounting a method to raise debt from a company s outstanding invoices that does not require the company to relinquish administrative control of the invoices. General Notarial Bond (GNB or NGB): This is registered over movable property in general terms. That is, the movables are not individually specified in the notarial bond, but, instead, are generally identified (for example, as trading stock or furniture). Page 10

11 TRADE FINANCE GLOSSARY Special Notarial Bond. This is registered over specified movable property. The goods are specified through their description in the bond, which must make it readily recognisable and identifiable. Insurance is a contract whereby the insurer undertakes to indemnify the insured in the event of the specified risk arising. It is the intention of the insurance agreement to place the insured in a position they would have been had the insurable event not have occurred. Marine Insurance refers to the insurance of goods being transported in all forms of transport including air, road or rail An Open Marine Policy is normally used when there is a high volume and frequency of goods movement. Quite often these are taken out by Freight Forwarders and Clearing Agents to offer to their clients. Declarations of goods being covered need to be provided to the insurer before the realisation of a claim. Freight Forwarders arranges transport on behalf of a buyer or seller of goods. When contracting with a transport owner (such as a ship owner) can also be known as a Shipper. In SA, Freight Forwarders usually also provide customs clearing services. Customs & Excise: Ad Valorem costs or charges are applied based on the value of goods during movement or customs clearing, i.e. 10% of the invoice value. Customs & excise rates are generally ad valorem but freight rates are generally calculated in a different manner, i.e. per weight. A Shipper books transport services with a transport owner (such as a ship owner) on behalf of buyers and sellers of goods. Carrier: A transporter of goods, such as a ship owner or land transporter. A Bill of Exchange is defined as instructions from one party to a second party to pay a third. A Bill of Lading (B/L) is a receipt issued by a shipping line for cargo, which is a document of title to the cargo and which details the terms of the contract of carriage. A Commercial Invoice is an invoice issued by a seller to a buyer used extensively for the purposes of Customs & Excise procedures, and is typically one of the documents required to accompany an LC. Clearing Agent interfaces with customs and excise to declare goods in the correct manner use the correct forms and procedures as well as the correct formulas and calculations to ensure that goods are properly cleared and customs duties paid. Page 11

12 TRADE FINANCE GLOSSARY Incoterms: To improve consistency and remove uncertainty in international trade, the International Chamber of Commerce (ICC) in Paris developed INCOTERMS (International Commercial TERMS), a set of uniform rules for the interpretation of international commercial terms defining the costs, risks, and obligations of buyers and sellers in international transactions. First published in 1936, these rules have been periodically revised to account for changing modes of transport and document delivery. For a summary of all Incoterms, please click the following link: Some of the more commonly used Incoterms are: Free on Board (FOB) this means that risk and responsibility pass from the seller to the buyer when the goods cross the ship s rail at the port of loading, cleared for export by the seller. Cost Insurance Freight (CIF): Risk passes from the seller to the buyer when the goods cross the ships rail at the seaport of loading; however, the seller is responsible for the payment of freight and procurement of insurance to the destination seaport. Cost and Freight (C&F / C+F / CFR): The seller meets his obligation under the sales contract i.e. Risk passes from seller to buyer when the goods cross the ship s rail at the seaport of loading. The seller is however responsible for the payment of freight to the destination seaport. Ex Works (EXW): Risk and responsibility pass from the seller to the buyer when the goods are made available on the ground at the works i.e. where the goods are produced, such as at the factory, at or on the agreed future date or future time, uncleared through customs and Excise Please note: The above definitions are for basic information purposes only, and do not constitute technical or legal definitions, as such may differ from country to country, and depend upon the context in which the terms are being used. Page 12

13 NOTES Page 13

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