In accordance with the Credebt Exchange® Master Agreement, and as defined therein, this is a Credebt Exchange® Document. All Originator and Agent Members of the Exchange are bound by all of the provisions contained in this Document. THIS IS AN IMPORTANT DOCUMENT AND IT SHOULD BE READ CAREFULLY TO ENSURE COMPLETE UNDERSTANDING. If you have any queries in relation to this Document, the online form is the most efficient way to contact us, or you can email us with any queries.

Almost all communications from Credebt Exchange® to its Originators are conducted by email. To avoid any interruption in these communications, it is mandatory that the Originator maintains and keeps current all the contact information on their ‘My Profile‘ page. Failure to maintain the details on the My Profile page may result in communications being sent to unattended email addresses. Similarly, posted surface mail documentation sent to the address on the My Profile page may be delivered to the wrong address. The responsibility for maintaining correct, accurate and up-to-date contact information is the sole responsibility of the Originator. Communications sent to any other email address, or postal address, even if regularly used should not be confused with the requirement to maintain the My Profile data. In accordance with the Credebt Exchange® Master Agreement, any communication sent to the email address on the My Profile page will be deemed to have been received once sent.

The Exchange Trade Centre | Transaction Statement is accessed using the sub menu item ‘Transaction Statement’, under the ‘My Transactions’ main menu item, on the left side of the Originator Dash Board. It is recommended that you download and read the Transaction Manual before proceeding further. The Exchange Trade Centre | Transaction Statement provides an overview of all your Debtors.

Once the Transaction Manual is read and understood, there are two key balance figures, highlighted in bold text, at the bottom of the Exchange Trade Centre | Transaction Statement, namely:

• Overdue Now Balance
• Reserve Balance

The first bold text balance figure at the bottom of each currency account Transaction Statement is the Overdue Now Balance. In a properly managed Originator account, the Overdue Now balance should always be 0.00. If it is not being properly managed, the Overdue Now Balance figure will be displayed in bold red text and this is the total amount of money outstanding on the all of the Debtor accounts that have not been Settled (i.e. paid in full) on, or before the Expected Date. In accordance with the Overdue Policy, payment of the Reserve to an Originator will always be less than the total balance of all Overdue Now balances.

The second and other bold text balance at the bottom of each currency account Transaction Statement is the Reserve Balance. This is the total amount of the Reserve outstanding on the Originator account. Download and read the Transaction Manual to understand how to manage the Reserve balance and understand how it is paid.

The two other balances provided are indicated and explained below, namely:

• Paid Balance
• Total Balance (outstanding)

The first balance figure in normal text at the bottom of the Transaction Statement is the Paid Balance. This Paid Balance figure is the total amount of money that has been paid to the Originator to purchase ETR from all the Debtors in this currency account. This is an historic figure that is useful when conducting a reconciliation between the RSA Details Statement for a specific Debtor and any payment received into the Originator’s bank.

The second and other balance figure in normal text at the bottom of the Transaction Statement is the Total Balance (outstanding). This balance figure is the total amount of money outstanding on all Debtor accounts against ETR that have not yet been Settled (i.e. paid in full).

Exchange Statements are accessed using the sub menu item ‘Transaction Statement’, under the ‘My Transactions’ main menu item, on the left side of the Originator Dash Board. The Transaction Manual is available for download so that it may be printed and used as a reference document when working with the Exchange Statements. As explained in the Transaction Manual, there are two types of statement: the RSA Details Statement for each specific Debtor and the Transaction Statement that provides the summary of all Debtor accounts.

Once the Transaction Manual is read and understood all that remains is to understand the function of the two key balance figures that are highlighted in bold text at the bottom of the RSA Details Statement for each specific Debtor, namely:

• ETR Details Balance
• Fee & Reserve Details Balance

ETR Details Balance

The first bold text balance figure at the bottom of every RSA Details Statement for every Debtor is the ETR Details Balance. This ETR Details Balance figure is the total amount of money outstanding on the specific Debtor account. A zero ETR Details Balance figure means that there is no further money due on the account and the account is Settled/paid in full.

The ETR Details Balance at the bottom of every RSA Details Statement for every Debtor also appears on the Transaction Statement opposite the specific Debtor.

Fee & Reserve Details Balance

The second and other bold text balance figure at the bottom of every RSA Details Statement for every Debtor is the Fee & Reserve Details Balance. This Fee & Reserve Details Balance figure is the total amount of the Reserve outstanding on the specific Debtor account. A zero Fee & Reserve Details Balance figure means that no further Reserve money is due to the Originator on the specific Debtor account. A negative Fee & Reserve Details Balance figure means that there is no Reserve money due to the Originator on the specific Debtor account and this negative Fee & Reserve Details Balance figure must be subtracted from any other Reserve payments due to the Originator from any other unpaid Reserves. By reading the Transaction Manual, the concepts of an A-Trade and an R-Trade should be clearly understood and will assist in understanding the importance of reconciliations and R-Trades.

The Fee & Reserve Details Balance at the bottom of every RSA Details Statement for every Debtor also appears on the Transaction Statement opposite the specific Debtor.

Other Balance Details

The two other balances provided are indicated and explained below, namely:

• Fee/Trade Balance
• Reserve (per ETR)

Fee/Trade Balance

The first balance figure in normal text at the bottom of every RSA Details Statement for every Debtor is the Fee/Trade Balance. This Fee/Trade Balance figure is the total amount of money that has been paid to the Originator to purchase the ETR listed above it, minus any fees that have been deducted from the specific Debtor account. This is an historic figure that is useful when conducting a reconciliation between the RSA Details Statement for a specific Debtor and a payment received into the Originator’s bank.

Reserve (per ETR)

The second and other balance figure in normal text at the bottom of every RSA Details Statement for every Debtor is the Reserve Balance. This balance figure will always be equal to the Fee & Reserve Details Balance outstanding on the specific Debtor account. It is shown purely to demonstrate that the Fee & Reserve Details Balance is correct and that there are not discrepancies on the Fee & Reserve Details Balance for the specific Debtor.

Originators that trade in multiple currencies will note that on the right side of the Exchange Trade Centre | Transaction Statement there is a drop down dialog that will display a different Transaction Statement for each currency that the Originator is authorised to trade in. Use this drop down menu to switch between different currency accounts. All currency accounts are subject to the Reserve Policy and the Fx Policy.

Transaction Manual

The Transaction Manual is specifically designed to assist collections personnel, bookkeepers, account managers, accountants and business owners. It is an important document and should be read carefully to gain a full understanding of how Exchange transactions work and how they are recorded

As explained in the Transaction Manual, the Reserve on any Debtor is only paid on R-Trades (i.e. reconciled Trades). To reconcile an RSA Details Statement for a specific Debtor, Originators can copy and paste the RSA Details Statement for the specific Debtor into Excel®, or any other spread sheet program, and then match specific payments to specific ETR. Originators will periodically upload spread sheets using the Transaction Update interface to convert A-Trades to R-Trades (for more information, see the Transaction Manual) when seeking payment of any outstanding Reserve.

Multiple RSA Details Statements for multiple Debtors can be created in the same Excel® workbook to create a complete Exchange reconciliation. Once prepared, a Summary sheet can be added to the same workbook and this Summary can then be compared to the Transaction Statement to complete an overall and accurate Exchange reconciliation.

Reconciliation Commission

As explained in the Transaction Manual, the Reserve on any Debtor is only paid on R-Trades (i.e. reconciled Trades). The Originator has the option of providing reconciled accounts for each Debtor as described in Exchange Reconciliations, or in accordance with the Reconciliations Policy can request Credebt Exchange® to reconcile any Debtor account. Prior to paying any Reserve to the Originator, each Debtor account must be reconciled to ensure all R-Trades are identified. R-Trade reconciliations will adhere to the Cash Balance Policy (and if conducted by Credebt Exchange® the Reconciliations Policy) when completing reconciliations and, on condition that any ETR marked as an R-Trade matches Debtor payments within an accuracy of +/-1.00, the Originator will accept such reconciliation without dispute. For each Debtor reconciliation conducted by Credebt Exchange®, the Originator agrees to the trade commission for each Debtor, each time a reconciliation is requested. Said charge will be automatically deducted on each Reserve payment event.

Once the Exchange reconciliation is completed it can be compared and reconciled to the Originator bank statement. There are two possible payments on every ETR, as follows:

• Purchase Payment
• Reserve Payment

Purchase Payment

The Purchase Payment always occurs and is clearly identified by looking for the Purchase Payment discount percentage indicated at the top of the Transaction Statement. The Purchase Price is the percentage of the Face Value that is paid to the Originator as the first payment in every ETR Trade.

Reserve Payment

The Reserve Payment is the second possible payment made to the Originator once the ETR is Settled (i.e. paid in full). This payment does not necessarily always occur and its payment entirely depends on the Cash Balance, Reserve and Credit Note policies. As explained in the Transaction Manual and the Reserve Policy, the Reserve is only paid on R-Trades. In accordance with the Cash Balance Policy, the Reserve is calculated as follows:

Reserve = Face Value – (Face Value x RSA x DSO)/30 – Purchase Price*

R-Trades fix the Reserve to a specific value that does not change. A-Trades continue to use the above Reserve formula until such time as they are reconciled and become R-Trades (for more information, see the Transaction Manual). In accordance with the Cash Balance, Reserve and Credit Note Policies, the Reserve on any Debtor is only paid to the Originator on R-Trades (i.e. reconciled Trades).

Random Audit Verification [RAV]

Regularly the Exchange system will randomly issue emails to Originators’ debtors/customers seeking confirmation of the outstanding balance of d-ETR/invoices on the Originators account with that debtor. These are infrequent in nature and should not interrupt the relationship between the Originator and debtor in any way. This is a mandatory practice that is carefully monitored and controlled by the Exchange Treasury Department to ensure matching balances between the Exchange Statement and that of the debtor

Originator Audit Requirements

In the absence of using an approved online accounting system like Xero and at the sole discretion of Credebt Exchange® the following information may be required within 10 calendar days after each month end. If Credebt Exchange® does not request this information at any time and for any reason, this does not mean that it may not request it at a later date. For the avoidance of doubt, Xero users are not required to provide this information:

Monthly Off-Site Audit Requirements

• Monthly Reconciliation of Aged Debtors to include:
• Opening Aged Debtor balance per the Originator’s accounting system
• Plus invoices traded in the period
• Less Credit Notes uploaded in the period
• Less payments received by Debtor Exchange or received by the Originator and passed to Credebt Exchange® in the period

The sum total of this reconciliation must be equal to the Transaction Overview Total as it appears on the Transaction Statement. Monthly reconciliation must be emailed to treasury@credebtexchange.com by the 10th day of the following month & accompanied by the following information taken directly from your accounting package:

• Detailed Aged Debtor Analysis
• Detailed Aged Creditor Analysis
• Originator Bank Statements

Also, in the absence of using an approved online accounting system like Xero it is expected that the on-site audit will require an entire day but if the majority of the information listed below is available from 9.00am on the day of the audit, interruption to your Finance Staff will be kept to a minimum. For the avoidance of doubt, Xero users do not required an on-site audit and for all other Originators, the following is a list of records that should be available during the on-site visit:

Quarterly/Bi-Annual/Annual On-Site Audit Requirements

• Month end aged debtor reports (summary version)
• Monthly sales ledger daybooks (Invoices, Credit Notes, Debtor Receipts, Discounts and any adjustments) – since commencement of trading
• Copy invoices and proof of delivery/satisfaction notes/signed timesheets/paper trail etc
• Copy credit notes and back up information
• Cash allocation reports and remittance advices
• Latest Management Accounts (profit and loss, balance sheet and nominal ledger trial balance)
• Latest Credebt Exchange® Monthly Reconciliation of Aged Debtors
• Monthly aged creditor reports (summary of last 3 months)
• Bank statements for all accounts in the company name – from commencement of trading
• Cashbook (if applicable)
• PAYE, VAT and other tax records, as applicable
• Copies of Contracts or Agreements (whether customer or supplier), if applicable
• Credit insurance (as required and if applicable)

Credebt Exchange® is not a credit management or debt collections service provider and, in the unlikely event that it must perform, manage, or outsource this role to support an Originator with Debtor payment difficulties, the following charges will be applied on an hourly basis, chargeable at every 7.5 minute interval, or part thereof:

• Collections Administrator     EUR 147.50
• Collections Manager     EUR 287.50