These commodity markets have their own peculiar features, including :

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1 ASI A AMERICA S EUROP E AFRICA OUR MISSION CHDALLENGES FACED BY COLLATERAL MANAGERS IN AFRICA «To provide our Customers integrated risk management solutions through superior credit support, inspection, quality assurance, delivered world-wide by a team of professionals applying the best technology.»

2 Who is ACE GLOBAL We are a highly specialized financial services company providing «CREDIT SUPPORT SERVICES», which means that Financial institutions can effectively monitor and control their assets throughout the value chain With this effective degree of Collateral Control. Financial Institutions are now able to extend financing to customers they would previously have shied away from.

3 ACE GLOBAL Services Collateral Control Services ACE Field Warehousing and Storage Services ACE Collateral Management Services Monitoring Services ACE Credit Support Inventory Control ACE Credit Support Account Receivables ACE Secured distribution Inspection Services Quantity, quality, and weight Aids Monitoring Programs, Project Managements, Pre-shipment schemes, Compliance to national or international standards.

4 ACE GLOBAL - Services ACE Credit Shield KYCC (Due Diligence) Services Audit Services Commodity Profile Legal Services Training Services Structured Trade and Commodity Management Services Weighing for tax collection purposes

5 Warehouse Receipt Finance Workshop 30 th These commodity markets have their own peculiar features, including : Seasonal fluctuations in prices, Differentials in prices of different grades and qualities of a given kind of commodity, "Differentials" of the same grade and quality in different marketing centres, and Hazards of deterioration in value during storage. The problem of unpredictable timing of deliveries due to inland transport and port congestion The risk of deterioration in the quality of the commodity to which the contract is related The risk of volatility of the price of the commodity even when the desired quality is unchanged Disparities in the quantity and weight of the commodity Adequacy of insurance to cover the goods whilst in storage and in transit and which can be claimed in convertible currencies off shore The legal risks involving inadequate commercial law legislation and insufficient legal systems to ensure collateral controls Risks arising from logistical problems from transport system failures, poor storage This document contains information that is confidential and is the property of ACE-AUDIT CONTROL & EXPERTISE SA. Copyright ACE-AUDIT CONTROL & EXPERTISE SA. All rights reserved.

6 Warehouse Receipt Finance Workshop 30 th Challenges Limited knowledge by the stakeholders Market Information Operational Procedures Risk Assessment Trading techniques Cost of doing business Cost of Supervision High risk high insurance cost Unfaithful players Collusion between CMC staff with some of the Borrowers

7 Warehouse Receipt Finance Workshop 30 th Infrastructure Challenges faced by CMC Substandard storage facilities Poor security systems Poor Internal Control procedures by the borrower/trader Commodity Standardizations Size of individual farmers Stringent Financing Structutres Advance against goods in the warehouse Advance against foward Sales agreements Release against upfront payment

8 Warehouse Receipt Finance Workshop 30 th Propositions Sensitizations programs through seminars and on job training to create awareness to all the stakeholders Formation of farmer groups or cooperative movement to facilitate easy access to funds Training programs on quality control procedures to all stakeholders Efforts to support and improve available infrastructure or construction of new Class A storage facilities must be encouraged and financed. Efforts to standardize commodities traded in the region must be supported Creation of markets and transparency in the supply chain for all the commodities produced and traded in the region.

9 Refinancin g Agreement LOCAL BANK Account Bank Agency Agreement Assignmen t of Insurance International BANK CMA & CSM ACE - All Risks plus misappropriation. - Professional Indemnity, Fraud & Omission. Insurance Company Sale Consent Acknowledgement of Assignment Purchase agreement/ Purchase order Sale & Purchase Agreement Assignment of Forward Sale Agreement Producer s Transport, Weaver & Consent Processing Weaver & Consent Warehouse Receipt Finance Workshop 30 th INPUTS SUPPLIERS Sale & Purchase, Weaver & Consent Transport, Weaver & Consent Lease/Sub-Lease, Weaver & Consent Cooperatives Approved warehouses Transporter s PROCESSING FACTORY Transporter s Port storage Licensed Exporters PORT FINAL OFFTAKER (MARKET) Smaller Traders Producti on plan -START - "All Risk" plus misappropri ation Coverage - END - (According to sale contract terms FOB, CIF, etc.) Forward Sale Agreement [A] Input Finance [B] Commodity finance at farmers/coope ratives level [C] Raw commodity finance at the entrance of the factory [D] Export commodity finance after processing [E] Export commodity finance FOB [F] Exporters Financing CIF

10 Warehouse Receipt Finance Workshop 30 th THANK YOU (Headquarters) - Rue Richard-Wagner Geneva Switzerland Tel. : Fax : ace.geneva@ace-group.net This document contains information that is confidential and is the property of ACE-AUDIT CONTROL & EXPERTISE SA. Copyright ACE-AUDIT CONTROL & EXPERTISE SA. All rights reserved.