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Trade Receivables Discounting System - M1 Exchange

M1’s Trade Receivables Discounting System “TReDS” is an online exchange being set up under the approval of RBI to facilitate discounting of invoices and Bills of exchange on a PAN India basis. For more information visit: www.m1xchange.com

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Trade Receivables Discounting System - M1 Exchange

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  1. www.m1xchange.com MYND SOLUTIONS PVT LTD

  2. Presentation Agenda Key pointers covered in this deck • 1 Introduction • 2 About TReDS • Participants & Benefits • Support of Strong Regulator - RBI • Onboarding: Time & Process • TReDS: Factoring & Reverse Factoring • 7 M1 Advantage • 8 Third Party Integration • 9 Our Management Team • 10 Vision & Mission

  3. Trade Receivables DiscountingSystem MYND Online National Exchange (For Receivables) • Trade Receivables Discounting System “TReDS” is an online exchange being set up under the approval of Reserve Bank of India (RBI) to facilitate discounting of invoices and Bills of exchange on a PAN India basis. • RBI granted approval to Mynd Solutions in Dec 2015, to set-up and operate TReDS under the Payment and Settlement System (PSS) Act 2007. Mynd solutions is one of the very few entities approved to set up the exchange. The Exchange is named M1 (Mynd Online National Exchange) • Key participants to be Micro, Small & Medium Enterprises “MSME” (“The Seller”), large corporates including PSUs and Govt. Departments (“The Buyer”) and Banks/NBFCs (“the Financier”) • To provide MSMEs working capital at competitive rates through an open bid process through multiple financiers. • Financing to be “Without Recourse” to MSME supplier. • Client on-boarding started. First transaction in the month of January-17.

  4. Key Participants & Benefits MYND Online National Exchange (For Receivables) 2 3 1 SUPPLIERS BUYERS FINANCIERS • Easy, fast working capital finance at cheaper interest rates • Without recourse/non-collateral based finance • Off balance sheet finance – sale of receivables • One time documentation, no need to engage with multiple banks • Receipt of funds within two days from acceptance of bid • Saving on procurement cost through improved negotiation of financing terms for suppliers • Saving on finance costs by extending credit period • Off balance sheet transactions • Digital Platform - Lower administration cost for vendor financing, payments and settlements • Opportunity to build quality PSL asset portfolio in MSME space • Reduced operational cost along with improved reach to build clientele • Ease of operation with minimum documentation • Facility to make better decision making through key information availability

  5. Strong Regulator - RBI MYND Online National Exchange (For Receivables) Enhances Credibility Increases credibility of exchange in the market and minimises risk of defaults Stability RBI as a regulator will ensure long term stability of the exchange Scalability RBI defined processes and procedures built for scalability Improved Bank Participation Many benefits such as PSL are not available to non-regulated entities, hence there will be increased participation from banks on this regulated platform Security Ensures necessary security and controls through technology Key Benefit End to end discounting solution (including the settlement process) which is not permissible to the non regulated entities Better Security Control Fosters confidence in participants towards the security, control and transparency as exchange becomes regulated and complies with stricter guidelines

  6. Time & Steps for Onboarding Collection of KYC & on boarding documentation from vendors KYC and document Verification Verification of buyer docs and KYC Sharing of vendor details& execution of MSA, Debit Mandate, BR Uploading of the Buyer on the platform and issuing the log in id and passwords to buyers. MYND Online National Exchange (For Receivables) Uploading of vendor details on the platform Day 2 Day 5 Day 0 Day 10 Day 14 Day 12 Day 15 Day 15 Welcome kit with log in id and password creation process on line

  7. TREDS - Factoring Step 1: Supplier delivers the goods/services (Outside TReDS) MYND Online National Exchange (For Receivables) Step 1 Step 2:Supplier Logs in & upload the Invoice (Rs100) Buyer Supplier Step 3: Validate invoice, convert to Factoring Unit & publish for acceptance Step 9 Step 11 Step 4: Buyer Logs in & accepts the Invoice (Rs100) Step 3 Step 5: Publish the factoring Unit for bidding Step 4 Step 2 Step 5 Step 6: Financiers bid against the factor Step 8 Step 7 M1 Exchange Step 10 Step 7: Accepts the Bids (% interest as best bid) Step 8: Exchange generates the settlement File to debit Financier and pay Supplier Step 6 Financier Step 9: Exchange debits Financier’s bank account for Rs90 and credit the supplier’s bank account Step 9 Step 11 Step 10: On due date, final settlement file is generated Step 11: Exchange debits Buyer’s bank account for Rs100 & credits the financier’s bank account *Alerts and Notifications will be sent at every stage

  8. TREDS - Reverse Factoring Step 1: Supplier delivers the goods/services (Outside TReDS) MYND Online National Exchange (For Receivables) Step 1 Step 2: Buyer Logs in & upload the Invoice (Rs100) Buyer Supplier Step 3: Validate invoice, convert to Factoring Unit & publish for acceptance Step 9 Step 11 Step 4: Buyer Logs in & accepts the Invoice (Rs100) Step 3 Step 5: Publish the factoring Unit for bidding Step 2 Step 4 Step 5 Step 6: Financiers bid against the factor Step 8 Step 7 M1 Exchange Step 7: Accepts the Bids (% interest as best bid) Step 10 Step 8: Exchange generates the settlement File to debit Financier and pay Supplier Step 6 Step 9: Exchange debits Financier’s bank account for Rs90 and credit the supplier’s bank account Financier Step 9 Step 11 Step 10: On due date, final settlement file is generated Step 11: Exchange debits Buyer’s bank account for Rs100 & credits the financier’s bank account *Alerts and Notifications will be sent at every stage

  9. M1 Advantage MYND Online National Exchange (For Receivables) • Bank Agnostic • Large Expertise in Vendor Lifecycle Management. • Solution based approach– Innovation, Agility in solution & quick decision making. • End to End process automation with connectivity to ERP & Tally. • Vision & Potential for expansion in other trade products & international markets. • Extensibility, Usability & Scalability of Product.

  10. Digital Supply Chain Process – Enhanced Offering MYND Online National Exchange (For Receivables) Vendor Onboarding Vendor Portal Business Process Management M1 Xchange Accounting & Recon • Online Vendor Registration • Vendor classification & Profiling • Vendor KYC • Credit spreading • Master data Management & Updation • Centralized depository • Self Service Menu • PO approvals/ vendor self • service • PO extraction and validation • Pre-shipment documentation • Invoice submission • Document submissions • Self Invoice • DN / CN Status View • Invoice status inquiry • Mobile application • Payment advices • Invoice Help desk • Business Process Rule Engine • Scanning solution • Primary Verification • Document archival • Key field entry through Optical recognition (OCR) • Invoice approval work flow management • Query resolution monitoring • DN / CN generation • Integration with ERP • RBI regulated first of its kind online exchange for receivable financing • Large corporate buyers, their suppliers and multiple banks/NBFC factors on the same platform • Invoice Discounting to be done through open bid process • Auto data flow to ERP • Automated Vendor Reconciliation Workflow Single Platform with Seamless Funding & Settlement

  11. Third Party Integration MYND Online National Exchange (For Receivables) Infrastructure SMS GATEWAY CLIENT BUREAU Multi-level infrastructure seamlessly integrates with third party software, giving you an end-to-end solution PAYMENT SETTLEMENT SYSTEM EMAIL SERVER Communication Servers Dedicated Email Servers and SMS gateways to ensure on-time communication, every time. BANKS PARTY ERP CENTRAL REGISTRY

  12. The Management Team MYND Online National Exchange (For Receivables) + SUNDEEP MOHINDRU FOUNDER & CHIEF EXECUTIVE OFFICER + JACOB RAPHAEL CHIEF OPERATIONS OFFICER + DEVIKA GARG NATIONAL SALES HEAD + RAMESH BISHT CHIEF FINANCE OFFICER + SUNIL KUMAR CHIEF TECHNOLOGY OFFICER

  13. Mission & Vision MYND Online National Exchange (For Receivables) VISION To channelize MYND’s leading practices to offer best-in-class Trade receivables exchange for MSMEs, Corporates & Financiers; ensuring seamless liquidity flow between all stakeholders, contributing to the country’s growth. MISSION To provide solution-based approach adept with innovation & flexibility towards financing solutions for stakeholders.

  14. MYND SOLUTIONS PVT. LTD 296, UdyogVihar, Phase-IV, Gurgaon - 122001 Haryana, India Phone: +91-124-4646000 Fax: +91-124-4100395 E-mail: sales@m1xchange.com

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