1. Receivable’ Finance Programs’ characteristics and benefits Tycjan Bielecki Distributors’ Finance Unit Head

2. 2 What is a Distributor’s Finance Program? Distributors’ Finance Program is addressed to the selected distribution channels of the Sponsor It is a settlement tool, aimed at offering additional attractive financing for Sponsor’s commercial partners, optionally with an element of distribution channel risk-sharing between Sponsor and the Bank. 4- Goods 6- Credit Repayment to the Bank 5- Payment for goods 2- Goods, Invoice 1- Order Distributor Retailer/ End-user Sponsor 3- Payment for transaction with Distributor. Means obtained from the loan extended to Distributor by the Bank

3. 3 Program value added Strenghtening Sponsor’s market position Achiveing Distributor’s loyality Enhancing financial and purchasing strength of Distributors:  Closing Distributor financing gap between terms of payment against Sponsor and end-Buyers  Extending loans to Distributors with financial standing often below general Banking standards  Financing with minimum formalities usually required upon lending  No requirement for collateral  Attractive pricing given clean lending and scope of due diligence on Distributors

4. 4 Program value added cont. Strenghtening Sponsor’s financial position Sponsor does not need to extend terms of payment in order to expand sales to Distributors Part of the risk may be shifted to the Bank (Sponsor limits the risk in case of potential significant industry problems) Sponsor enhances its liquidity- invoices are paid by the Bank on the due date Sponsor achieves enhanced Distributor’s payment discipline (obligations against Banks are treated by commercial entities on priority level) Limiting Sponsor’s administrative and handling costs Sponsor is freed up from large portion of administrative burden (evalutaion of Distributor financial standing, payment monitoring and control, soft and hard collection is performed by the Bank) In case of hard collection, costs borne by Sponsor within the process are limited solely to external tariff costs set by the Polish law Comprehensive MIS on settlements is avaialble to Sponsor Program administrative handling is limited only to exporting data to the Bank’s electronic system for invoices selected for financing

5. 5 Bank Handlowy w Warszawie SA Trade Finance Department 16 Senatorska str. 00-923 Warsaw Distributors’ Finance Unit HeadTycjan Bielecki tycjan.bielecki@citigroup.com Phone (desk): +48 (22) 657 71 94 Mobile: +48 605 788 066 fax: +48 (22) 692 21 32 Key contacts

6. Trade Receivables Financing under KUKE insurance policy

7. 7 = invoice discounting program with recourse limited to exclusions from insurance cover – mainly commercial disputes program secured under KUKE insurance policy, in which the Bank is the beneficiary = program secured under KUKE insurance policy, in which the Bank is the beneficiary The insurance policy covers The insurance policy covers domestic foreign domestic foreign receivables receivables receivables receivables advance rate – 85% advance rate – 95% What is a KUKE Program?

8. 8 Program’s scheme

9. 9 Program’s Benefits Financing, which is an attractive alternative for traditional credit Taking over of non-payment risk of the Buyer High advance rates - 95% (foreign), 85% (domestic) of receivable value Possibility to offer competitive payment terms to the contracting parties BHW as the factor disciplines the Debtor

10. 10 Bank Handlowy w Warszawie SA Trade Finance Department 16 Senatorska str. 00-923 Warsaw Trade Finance (Team Leader) Magdalena Laskowska magdalena.laskowska@citigroup.com Phone (desk): +48 (22) 69 290 31 Mobile: +48 605 980 397 fax: +48 (22) 692 21 32 Key contacts