CWCT | COMMONWEALTH CAPITAL TRUST in alliance COMMONWEALTH EUROCREDIT www.cwcapitaltrust.com __________________________________________________________________________________________________________________

Tel: +27 11 455 5589 Corporate Park, 2nd Floor Fax: +27 (086) 676 9712 4 & 6 Skeen Boulevard, Bedfordview Email: compliance@cwcapitaltrust.com Johannesburg, South Africa Website: www.cwcapitaltrust.com PO Box, 5707, Meyersdal 1447 TELEX Code: 05 1410221 SBCHZA G Attn: Commonwealth Capital Trust SWIFT Code: SBCHZAJJ CWCT Reg: 2016/448241/07

|COMMONWEALTH CAPITAL TRUST (PTY) LTD is a juristic representative of COMMONWEALTH EUROCREDIT (PTY) LTD| |COMMONWEALTH EUROCREDIT (PTY) LTD is an authorised Financial Service Provider (FSP: 45728)|

ATTENTION IMPORTERS!

Have you Run Out of AVAILABILITY of Funds or Credit for your Imports ?

We will provide you with LETTERS OF CREDIT!!!

WE PROVIDE PROFESSIONAL MANAGEMENT OF THE LETTER OF CREDIT PROCESS

Our company can open letters of credit to fulfill inventory financing needs for large and small purchase orders through our purchase

order financing scheme, and to provide an enhancement to current banking arrangements.

Letusbeyourguide.

• L e t t e r s o f C re d i t • • T r a de F i n an c e •

• C o n s u l t i n g • • S W IF T S e rv i c e s •

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E m a i l : c o m p l i a n c e @ c w c a p i t a l t r u s t . c o m

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Letter of Credit Facilities

AnUnderstandingofHowtoBegin Our services provide an excellent support for importers and import distributors for the following reasons:

• CWCT supplements current facilities. • CWCT does NOT become an additional creditor to your

current lender(s). We will work with your Lender to effect successful import transactions. CWCT | Commonwealth Capital Trust offers cost effective alternatives to your current trade finance availability from your lender All letters of credit comply strictly to UCP 600 (current edition). A "draft" of each Letter of credit is provided to our clients for final approval prior to all Letter of Credit transactions. The staff at CWCT manages the entire Letter of Credit process on behalf of the client. How to start: The easiest transition for a new client, is to open a single Letter of Credit to a current supplier. In so doing, a new client can use the experience to critique the process, and build on it. To enrol please contact one of the CWCT Staff.

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Understanding The Basics

Letters of Credit: The Basics Definition: A documentary credit is a (conditional) bank undertaking of payment. It is a written undertaking by a bank (issuing bank) given to the seller (beneficiary) at the request, and on the instructions of the buyer (applicant) to pay at sight or at a determinable future date up to a stated sum of money, within a prescribed time limit and against stipulated documents or other conditions. The issuing bank is putting out its credit and good name for the sake of the buyer. Buyer: Because the documentary credit is a conditional undertaking, payment is made on behalf of the buyer against documents, which may represent the goods and give the buyer rights to them. Seller: Because the documentary credit is a bank undertaking, the seller can look to the bank for payment, instead of relying upon the ability or willingness of the buyer to pay. However, because the undertaking is conditional, the seller only has the right to demand payment if he meets all the requirements of the credit. It is, therefore, unwise for the seller to proceed with shipment until he is aware of these requirements and is satisfied he can meet them. Summary: Documentary credits therefore:

• Are arrangements by banks for settling international commercial transactions. • Provide a form of security for the parties involved. • Ensure payment, provided that the terms and conditions of the letter of credit have

been fulfilled. • Mean that payment by such means is based on documents only, and not on

merchandise or services involved.

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Types of Letters of Credit Documentary; Merchandise, Commercial, Trade: The majority of LCs issued are in payment for goods in shipment or current services performed. Payment is normally made against documents for goods shipped. (Article 1&2, UCP 600) Standby: Normally, this type of LC functions like a guarantee. This type of credit can be drawn against only upon performance of service or financial obligation default. It is a definite undertaking of the issuing bank. Similar to commercial LCs, standby's are governed by the International Standby Practices 1998 (ISP98) Revocable: A revocable letter of credit may be amended or cancelled by the issuing bank at any moment and without prior notice to the beneficiary (Article 6 & 8, UCP 600) Unconfirmed: Bears only the obligation of the issuing bank. The beneficiary should look to the credit worthiness of only the issuing bank, and not to any intermediary (Article 9, UCP 600) Confirmed: Is a credit in which a second obligation is added to the letter of credit by another bank (Article 9, UCP 600) Sight: Payment is at sight, which means that the drafts and documents are honoured, if in order, by making payment without delay. Time, Usance: The draft honoured by accepting it for payment at a future date. Payment is delayed until the maturity of the draft. Transferable credit: Can be transferred by the original beneficiary to one or more other parties. It is normally used when the first beneficiary does not supply the merchandise himself, but is a middleman and wants to transfer all or part of his rights to the actual supplier (Article 48, UCP 600)

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Comparison of various methods of payment

MethodGoodsAvailableTo

BuyerUsualTimeOf

PaymentRiskToExporter RiskToImporter

Cash In Advance After Payment Before Shipment Very Low Maximum-Relies on exporter to ship goods as ordered

Letter of Credit *Confirmed *Unconfirmed (Advised)

After Payment When documents are available at shipment

Very Low Assured of quantity and also quality at shipment if inspection report is required

Documentary Collection Sight Draft Documents against Payment

After Payment On presentation or draft to importer

If draft unpaid, goods must be returned or disposed of, usually at loss

Assured of quantity, also quality, if goods are inspected before shipment

Documentary Collection Time Draft Documents against Acceptance

Before payment On maturity of draft

Relies on importer to pay draft

Minimal—Can check shipment for quantity and quality before payment

Consignment Before payment, exporter retains title until goods are sold or used

After use; inventory and warehousing cost to exporter

Substantial risk unless through foreign branch of subsidiary

Very Low

Open Account Before payment As agreed Relies on importer to pay account as agreed—complete risk

Very Low

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Please Note: The following is a visual representation of the process flow for Documentary Letters of Credit. It is one of a number of options we can create for you for a documentary letter of credit

PROCESS

IMPORTER ISSUES A PURCHASE ORDER TO A SUPPLIER.

CWCT AGREES TO OPEN LETTER OF CREDIT TO SUPPLIER FOR 100%COST OF GOODS UNDER TERMS AGREED UPON BY IMPORTER AND SUPPLIER.

SUPPLIER SHIPS TO IMPORTER. UPON SHIPPING OF GOODS TO IMPORTER, SUPPLIER SUBMITS DOCUMENTS TO HIS BANK FOR LC NEGOTIATION

GOODS ARRIVE AT COUNTRY PORT. IMPORTER PAYS LC ISSUING BANK FULL AMOUNT OF LC AS SHOWN ON COMMERCIAL INVOICE. BANK SENDS DOCUMENTS TO IMPORTER TO RELEASE GOODS.

IMPORTER RECEIVES DOCUMENTS INCLUDING ORIGINAL BILL OF LADING FROM BANK AND RELEASES SHIPMENT

IMPORTER RECEIVES GOODS

The process described above is a simple method. Under this scenario, the supplier would simply present its documents to his Bank upon shipping, as is customary. In the event that the importer maintains a loan facility within his home country, CWCT will supplement that facility.

The CWCT staff will advise the client throughout the Letter of Credit process.

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Company Profile: A Summary COMMONWEALTH CAPITAL TRUST is a non-institutional provider of certain types of Letters of Credit. Our organization opens letters of credit on behalf of our client’s businesses to facilitate their trade requirements. CWCT manages the process of the opening of Letters of Credit on behalf of its clientele, and continues the ongoing management of the letter of credit process throughout the period for which a transaction may occur. Our company opens letters of credit to fulfill inventory financing needs for large and small purchase orders through our purchase order financing scheme, and to provide an enhancement to current banking arrangements. COMMONWEALTH CAPITAL TRUST assists with any company's international trade finance needs by providing documentary letters of credit to assist with corporate cash flow requirements. CWCT’s clients import items ranging from commodity goods to apparel and textiles, and electronic components to consumer appliances and specialty products. The Letters of Credit are opened to suppliers in Asia, Africa, South America and other points in the world. Our expert staff can work with clients to arrange their transfer letters of credit, performance guarantee requirements, cash against document requests and other such trade instruments by using our extensive global banking facilities. COMMONWEALTH CAPITAL TRUST maintains a balanced relationship with certain American and European banks, and is a representative for two special purpose banks. Because of the company's firm banking relationships, it is positioned to provide flexible and expedited services to its clientele. Due to the flexibility of the company, COMMONWEALTH CAPITAL TRUST does not necessarily become a creditor to its client companies. CWCT provides an augment to the banking or lending facilities which may be currently provided by other institutions. The services offered by CWCT have helped create excellent relationships between the client companies and their suppliers, thus allowing the growth of certain business segments which companies would otherwise not have the ability to pursue. This past year COMMONWEALTH CAPITAL TRUST has opened hundreds of Letters of Credit on behalf of clients based in North America, Europe, the Middle East and Asia. Through its strong banking relationships in which world banking institutions work in conjunction with CWCT’s expert staff, the company avails itself of the foremost experts in the World of Trade Finance, and the criteria set forth in UCP 600 for documentary LC's and ISP98 for standby Letters of Credit. These alliances help to create opportunities for growth and profitability of the client companies.

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CWCT | COMMONWEALTH CAPITAL TRUST (PTY) LTD., South Africa, offers INTERNATIONAL LETTERS OF CREDIT AND TRADE FINANCE SERVICES

Our services provide an excellent support for importers and import distributors for the following reasons:

• Ability to order larger quantities for seasonal build-up, rapid growth, expansion, turnaround, or diversification.

• No need to reserve equiy for the purchase.

• CWCT supplements current facilities.

• CWCT does NOT become an additional creditor to your current lender(s). We will work with your Lender to effect successful import transactions.

• CWCT offers cost effective alternatives.

• All letters of credit comply strictly to UCP 600 (current).

• The staff at CWCT manages the entire Letter of Credit process on behalf of the client.

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INCOTERMS

INTERNATIONAL RULES OF COMMON CONTRACT TERMS IN IMPORT TRANSACTIONS.

EXW Carriage of goods > > Carriage to be arranged by the buyer. Ex Works (named place) Risks > > Risk transfer from the seller to the buyer when the goods are at the disposal of the buyer.

Costs > > Cost transfer from the seller to the buyer when the goods are at the disposal of the buyer.

Main Carriage Not Paid By Seller

FCA Carriage of goods > > Carriage to be arranged by the buyer or by the

Free CArrier seller on the buyer’s behalf (named place) Risks > > Risk transfer from the seller to the buyer when the goodshavebeendeliveredtothecarrierat thenamedplace.

Costs > > Cost transfer from the seller to the buyer when the goods have been delivered to the carrier at the named place.

FAS Carriage of goods > > Carriage to be arranged by the buyer. Free Alongside Ship (named port of shipment) Risks > > Risk transfer from the seller to the buyer when the goods have been placed alongside the ship

Costs > > Cost transfer from the seller to the buyer when the goods have been placed alongside the ship.

FOB Carriage of goods > > Carriage to be arranged by the buyer Free on Board (named port of shipment) Risks > > Risk transfer from the seller to the buyer when the goods pass the ship’s rail.

Costs > > Cost transfer from the seller to the buyer when the goods pass the ship’s rail.

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Main Carriage Paid By Seller

CFR Carriage of goods > > Carriage to be arranged by the seller. Cost and Freight (named port of destination) Risks > > Risk transfer from the seller to the buyer when the goods pass the ship’s rail.

Costs > > Cost transfer at port of destination, buyer paying such costs as are not for the seller’s account under the contract of carriage.

CIF Carriage of goods > > Carriage and insurance to be arranged by the

Cost,Insurance & Freight seller. (named port of destination) Risks > > Risk transfer from the seller to the buyer when the goods pass the ship’s rail.

Costs > > Cost transfer at place of destination, buyer paying such costs as are not for the seller’s account under the contract of carriage.

CPT Carriage of goods > > Carriage to be arranged by the seller. Carriage Paid To (named place of destination) Risks > > Risk transfer from the seller to the buyer when the goods have been delivered to the carrier.

Costs > > Cost transfer at place of destination, the buyer paying such costs as are not for the seller’s account under the contract of carriage.

CIP Carriage of goods > > Carriage and insurance to be arranged by the

Carriage and Insurance Paid seller. To (named place) Risks > > Risk transfer from the seller to the buyer when the goods have been delivered to the carrier.

Costs > > Cost transfer at place of destination, the buyer paying such costs as are not for the seller’s account under the contract of carriage.

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DAF Carriage of goods > > Carriage to be arranged by the seller Delivered At Frontier (named place) Risks > > Risk transfer from the seller to the buyer when the goods have been delivered at the frontier.

Costs > > Cost transfer from the seller to the buyer when the goods have been delivered at the frontier

DES Carriage of goods > > Carriage to be arranged by the seller Delivered Ex Ship (named port of destination) Risks > > Risk transfer from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship.

Costs > > Cost transfer from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship.

DEQ Carriage of goods > > Carriage to be arranged by the seller. Delivered Ex Quay (named port of destination) Risks > > Risk transfer from the seller to the buyer when the goods are placed at the disposal of the buyer on the quay.

Costs > > Cost transfer from the seller to the buyer when the goods are placed at the disposal of the buyer on the quay.

DDU Carriage of goods > > Carriage to be arranged by the seller Delivered Duty Unpaid

Risks > > Risk transfer from the seller to the buyer when the goods are placed at the disposal of the buyer.

DDP

Delivered Duty Paid Costs > > Cost transfer from the seller to the buyer when (named place of destination) the goods are placed at the disposal of the buyer.