EUROPE

AMERICAS

AFRICA ASIA

Our Mission

« 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. »

NOT AN OFFICIAL UNCTAD RECORDNOT AN OFFICIAL UNCTAD RECORD

Integrated Risk Integrated Risk Management Solutions Management Solutions

For Oil Downstream For Oil Downstream MarketingMarketing

Integrated Risk Integrated Risk Management Solutions Management Solutions

For Oil Downstream For Oil Downstream MarketingMarketing

ACE Pre-Loan Survey (Due-Diligence)ACE Pre-Loan Survey (Due-Diligence)

- ACE STF Training ServicesACE STF Training Services

- ACE Monitoring Services (Inventory & ACE Monitoring Services (Inventory & Receivables)Receivables)

- ACE Inspection ServicesACE Inspection Services

- ACE Audit ServicesACE Audit Services

- ACE Agricultural Credit Management ServicesACE Agricultural Credit Management Services

- ACE Credit Shield (Insurance) ServicesACE Credit Shield (Insurance) Services

-ACE Collateral Management ServicesACE Collateral Management Services

- & ACE Field Warehousing Services& ACE Field Warehousing Services

ACE - AUDIT CONTROL & EXPERTISE

Our Our servicesservices

MA

RK

ET

PR

OD

UC

T

INSURANCECOMPANY

TRADE HOUSE

CommodityExchange

CommodityExchange

FINANCIALINSTITUTION

IMPORTER / EXPORTER DISTRIBUTOR

Government Parastatal Bodies

Government Parastatal Bodies

PRODUCER

LOGISTIC

Credit Shield

Training Services

Pre-Loan Survey

Monitoring Services

Credit ShieldAgriculture

Credit Mgt.

Training Services

Pre-Loan Survey

Monitoring Services

Credit ShieldAgri. Credit Mgt.

Monitoring Services

Training Services

AuditService

Monitoring Services

Training Services

AuditService

Agriculture Credit Mgt.

Training Services

Pre-Loan Survey

Monitoring Services

Credit Shield

Audit Services

Pre-Loan Survey

Monitoring Services

Training Services

Credit ShieldAgriculture

Credit Mgt.

Monitoring Services

Training Services

ACE Risk Management Services

Storage Agreement

Inspection Services

Stock Audit

Storage Agreement

Inspection Services

Stock Audit

Storage Agreement

Inspection Services

Stock Audit

Storage Agreement

Inspection Services

Stock Audit

Storage Agreement

Inspection Services

Stock Audit

Storage Agreement

Inspection Services

Inspection Services

Stock Audit

ACE Risk Management Services

ADDEDVALUE

 Module Name Work Type Base “Sovereign” Overlap

ACE Inspection Services Data CollectionExporter / Importer / Distributor/ Exchange

ACE Stock Audit Services Data CollectionExporter / Importer / Distributor/ Exchange

ACE Storage Agreement Services Data CollectionExporter / Importer / Distributor / Logistic

ACE Monitoring ServicesIntelligence Data Processing

Exporter / Importer / Distributor / LogisticFinancial Institution / Trade House Exchange / Government Parastatal Bodies

ACE Audit Services & STF Training Services

Data Collection / IntelligenceData ProcessingStructural Integration benefits

Exporter / Importer / DistributorFinancial Institutions /Exchange

ACE Pre-Loan Survey (Due-Diligence) & Credit Shield (Insurance) Services

IntelligenceData Processing / CollectionStructural Integration benefits

Exporter / Importer / Distributor / LogisticFinancial Institution / Trade House Exchange / Government Parastatal Bodies

Structural Integration benefitsKnow-How Cap

Exporter / Importer / DistributorFinancial Institutions

ACE Collateral Management Services

Data CollectionData ProcessingStructural Integration benefits

Exporter / Importer / DistributorFinancial InstitutionsExchange

ACE Field Warehousing Services

Data Emulation / CollectionIntelligenceStructural Integration benefits

Producer / Exporter / Importer / LogisticDistributor / Financial Institution / Trade H.Government Parastatal Bodies / Exchange

LOWADDEDVALUE

HIGHADDED VALUE

HIGHERRISK

ACE STF Arranging & Structuring Services

Cocoa CoffeeCashew and other edible nuts

Tea OUT OF OUT OF AFRICAAFRICA

Tropical FruitsCotton

33 Countries (+3) on a permanent basis36 Countries as Representation OfficesSupported by a network of 97 AgentsACE employs today 1700 people

around the world

RiceSugar

Wheat & other GrainsPalm Oil & Palm Products OUT OF ASIAOUT OF ASIA

Sugar

Soya Bean, Products & Oil

OUT OF SOUTH-OUT OF SOUTH-AMERICAAMERICA

ACE & FINANCIER/TRADE HOUSE

What about Synergies ?What about Synergies ?

ACTORS SUPPLYER LOCAL AGENT PORTEXPORT

EROFF-

TAKER

STEPS Delivery of Raw MaterialWarehousing

Processing

Warehousing

TransitWarehousing

Loading

Export/Shipment

Receivables

TYPE OF FINANCING

Raw Material Financing

Working Capital Financing (Tolling)

Export Product Financing

Receivable

Financing

EXPORT GRADE PRODUCT WARRANTS

COLLATERAL RAW MATERIAL WARRANTSSHIPPING

DOCUMENTS

RISKSSupplier Performance

Quality/Quantity/Weight

Supplier/Processing Performance

Carrier Perform

ance

Terminal Performance

Carrier Performa

nce

PAYMENT

MITIGANTS

ACE SUPERVISON MONITORING

ACE COLLATERAL MANAGEMENT

1st Class Offtaker

or Secured Payment

Instrument

  Plant Management / Technical Assistance

Exporter/Carrier Expertise, Reputation & Technical Support

FINANCIER/TH’S CONVENTIONAL SCOPE

ACE’S SCOPE

The BANKS, The INSURERS & ACE need to The BANKS, The INSURERS & ACE need to

know:know:Oil Specifications Market Environment (if it is a buyer or seller market)Logistics aspectsStorage and Refining CapacityTransportation availabilitySecurityTime CyclePrice MechanismsSelling Mechanism (Firm Offtake or Speculation)

EVALUATION OF THE TRANSACTION EVALUATION OF THE TRANSACTION TO BE FINANCEDTO BE FINANCED

The preparation of the terms of the facility agreement The preparation of the terms of the facility agreement requires full knowledge and in-depth understanding of requires full knowledge and in-depth understanding of

the Risks associated to the transaction.the Risks associated to the transaction.

« TRANSACTIONAL » FINANCING

PARTIES INVOLVED IN THE TRANSACTIONPARTIES INVOLVED IN THE TRANSACTIONThe bank/Insurer & ACE have to know the various The bank/Insurer & ACE have to know the various players involved in the transaction in order to players involved in the transaction in order to secure the collateral and remove the lien of the secure the collateral and remove the lien of the parties :parties : First Stage Buyers, Suppliers, Exporters Traders Credit Support Company Transporters Refineries Tank Farm Operators Forwarders Shipping Agents Insurers BrokersOne objective only : One objective only : Completion of the Completion of the

transaction in facilitating transaction in facilitating repayment of the loanrepayment of the loan

« TRANSACTIONAL » FINANCING

So when talking about commodity performance risk - So when talking about commodity performance risk - similarly to a loan collateral - the Collateral Manager and similarly to a loan collateral - the Collateral Manager and Risk Management Company's legal mechanism should Risk Management Company's legal mechanism should ensure that it does,ensure that it does,

ACE - AUDIT CONTROL & EXPERTISE Group

give the financier clear rights over it, allow to liquidate it and take possession in case of

default, carry out all local registration procedures and

compliance, not give any correlation between the counterparties

credit risk and the collateral value, provide for robust procedures allowing prompt

collateral liquidation if need be, provide for collateral segregation from custodians'

own assets.

The appliedThe appliedsolutionsolution

SOLUTION

Field Tank Farm Receipt & Receivables Field Tank Farm Receipt & Receivables Financing Financing

coupled with, coupled with,

The underlying principle being to: Use in synergy Field Tank Farm receipt & Receivables

financing with

Multilevel biotechnical and chemical cargo marking process - which applies unique DNA codes - allowing for unequivocal identity proof of ownership and source of Oil/Products cargo,

With permanent real time monitoring for Tank Farm storage through the use of an integrated IT graphic solution combining permanent sensor and ultrasonic measurement technologies with Web enabled reporting.

AN ACE RISK MANAGEMENT SOLUTION

1.1. DNA Cargo Tagging,DNA Cargo Tagging,2.2. IT Real Time Tank Storage Monitoring,IT Real Time Tank Storage Monitoring,3.3. near real time fully secured over the web near real time fully secured over the web

reportingreporting

Wide Area Network, via IP: dial up, GSM, wireless, satellite or a combination of all, depending on conditions & existing infrastructureACE On-Site interventions for: -Marking / Tagging -Sampling & Analysis (Country Wide)

AN ACE RISK MANAGEMENT SOLUTION

Oil/Products Tank Storage or Refinery Complex

ACE On-Site Real Time monitoring network & sensors

ACE Central Server

Pre-Operation Phase - ACE will

- Identify Tank Farm / Terminal - Survey Tank Farm / Terminal - Approved Tank Farm / Terminal Sub-Lease from owners Operate Tank Farm/Terminal

Pre-Operation Phase - ACE will

- Survey Refinery Process - Approve Refinery Facility Sub-Lease from owners Obtain Waiver & Consent from owners

Pre-Operation Phase - ACE will

- Identify Field Tank Farm - Survey Field Tank Farm- Approve Field Tank Farm Sub-Lease from owners Operate Field Tank Farm

ACE Integrated Risk Management Solution - Collateral

Management & Monitoring -

Concept

CR

UD

E O

IL

TANK FARMStorage

REFININGPROCESS

TANK FARMStorage

TANK FARMStorage

TANK FARMStorageOPERATION PHASE

ACE will - Monitor Processing - Control Quantity out - Control Weight out - Control Quality out - Attend & Monitor Transport

OPERATION PHASE - ACE will - Control Distributed Quantity - Control Weight Out - Control Distributed Quality

TRANSMIT TO FINANCIER Delivery Documents.

OPERATION PHASE - ACE will - Control Quantity and Weight In - Control Quality In - Approve/Refuse crude oil entry - If approved, DNA Tag oil cargo

TRANSMIT TO FINANCIER Quality/Quantity/Weight Cert. Issued Tank Farm Receipt

OPERATION PHASE ACE will

- Control Quantity out - Control Weight out - Control Quality out - Attend & Monitor Transport

Pre-Operation Phase - ACE will

- Identify Tank Farm / Terminal - Survey Tank Farm / Terminal - Approved Tank Farm / Terminal Sub-Lease from owners Operate Tank Farm

Pre-Operation Phase - ACE will

- Identify Field Tank Farm - Survey Field Tank Farm- Approved Field Tank Farm Sub-Lease from owners Operate Field Tank Farm

ACE Integrated Risk Management Solution - Collateral

Management & Monitoring -

Concept 2

PR

OD

UC

TS

TERMINAL/TANK Storage

TANK FARMDistribution Storage

TANK FARMDistribution Storage

TANK FARMDistribution Storage

OPERATION PHASE - ACE will - Control Distributed Quantity - Control Weight Out - Control Distributed Quality

TRANSMIT TO FINANCIER Delivery Documents.

OPERATION PHASE ACE will

- Control Quantity out - Control Weight out - Control Quality out - Attend & Monitor Transport

OPERATION PHASE - ACE will - Control Quantity and Weight In - Control Quality In - Approve/Refuse crude oil entry - If approved, DNA Tag oil cargo

TRANSMIT TO FINANCIER Quality/Quantity/Weight Cert. Issued Tank Farm Receipt

The LEGAL Nature of ACE Risk Mgt Services

The Depositor relinquishes possession of the property;

This is the legal term describing the relationship when the ownership of personal property resides in one person and possession of it is in another.

ACE assumes « exclusive, continuous and notorious possession of the property ».

Two conditions are necessary for « Bailment » to exist,

BAILMENT CONCEPTBAILMENT CONCEPT

The depositor of the goods is known as the « Bailor »

The person engaged in storing the goods of others for compensation (I.e. the Collateral Manager) is known as the « Bailee »

Oil/Products Import Structure – Legal Agreements

- “All Risks” plus misappropriation.- Professional Indemnity, Fraud & Omission.- Political Risk (confiscation, expropriation, nationalization & Depossession).

CMA & CSS Agreements

Assignment of

Insurance

Sale & Purchase AgreementAssignment of Farm Tank Receipt & Proceeds

Procurement/Purchase Contract

ACEACE

Insurance Company

Distribution Network

Financing Bank (SPV)

Transporters

TANK FARM

Storage

REFINERY Process & Storage

Small Importers

TANK FARM

Storage

Transporters

SUPPLIER

Lease/Sub-Lease,

Waiver & Consent

Agreements

Transport, Waiver & Consent

Agreements

Refining/Storage or

Tolling Agreement

Transport, Waiver & Consent

Agreements

Lease/Sub-Lease,

Waiver & Consent

Agreements

Purchase,Waiver & Consent

Agreements

Oil/Products Import Structure – Product Vs Cash

Product Grade ACE Tank Farm Receipt

ACE crude Oil Tank Farm Receipt

Classification

ACETank Farm Receipt

CMA & CSM Fees

Transporters

Distribution Network

TANK FARM

Storage

REFINERY Process & Storage

Small Importers

TANK FARM

Storage

Transporters

SUPPLIER

Revenue Authority

ACEACETax & Duties

Transport Fees

Processing/Storage Fees

Storage Fees

Cash for Procureme

nt

Transport Fees

Storage Fees

Financing Bank (SPV)

Financing Bank (SPV)

Proceeds from Sales

Field Tank Farm Receipt Financing

Benefits of implementation for StakeholdersBenefits of implementation for Stakeholders1. To Tank Farm Operators/Refinery

Reduced number of small counterparts or interfaces. Prevent bypassing of existing infrastructure. Constant monitoring of storage conditions and stored quantities.

2. To Small Importers Reduced transactional obstacles (economies of scale). Reduced transactional cost (economies of scale). Access to Farm Tank financing (Field Farm Tank Warrant).

4. To Financing Institutions Securitized warrant based financing. Access to unratable and previously non-financed borrowers.

3. To Tax Authorities and Consumers Prevention of tax evasion and increased cargo traceability capacity. No more Fuel alteration. Improved Quality & Safety Standards country wide.

ANALYSE RISKS

1

SECURETRANSACTION

3

CREATEVALUE

4

CATALYSEBUSINESS

5

SHARE RISK& REWARDS

6

ACE

ACE RISK MANAGEMENT SERVICES

STRUCTUREFLOWS

2

As a Risk Management Company, do we share only risks ?As a Risk Management Company, do we share only risks ?

We shareWe shareKNOWLEDGEKNOWLEDGE

» Of the producers/exporters» Of the commodity dynamics & its trade» Of the countries» Of the laws» Of practical mitigants» Track-record / experience / expertise

We shareWe shareRELATIONSHIPSRELATIONSHIPS

Borrowers Insurers Transporters Clearing forwarders, Shipping Lines Participating Banks & Exchanges Law Firms

ACE RISK MANAGEMENT SERVICES

(Headquarters) - Rue Richard-Wagner 11202 Geneva – Switzerland

Tel. : +41 22 919 91 11 Fax : +41 22 919 91 19

Email : ace.geneva@ace-group.net

www.ace-group.net