Document. Index. Version 1.0. Revision Date 1 st June, Page No. Page 1 of 5. Section Procedures Document Process Owner

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1 Page No. Page 1 of SCOPE These written instructions set out the policies & procedures for the Collection Process OBJECTIVE The objectives of these instructions are: To ensure that all debts are collected from Customers effectively and efficiently To ensure that all debts are monitored To monitor and hence, minimize the risk of bad debts ABBREVIATIONS The abbreviations for documents referred to in these instructions herein are as follows: Name Abbreviation Exhibit Invoice Part Payment Schedule IPPS Bank-In-Slip BIS Debtor's Ageing Report Debtor's Provision Memo DPM Journal Voucher JV The abbreviations for Job Titles referred to in these instructions herein are as follows:

2 Page No. Page 2 of 5 Abbreviation Title in Full AM Account Manager PS Project Supervisor Accounts Personnel AFM Accounts & Finance Manager GFC Group Financial Controller MC Management Committee PROCESS FLOW Please refer to flowchart POLICIES Only cheque payments are accepted, and the Customers must issue the cheques under the name of Edaran Digital Systems Bhd or its Subsidiary s company The is ultimately responsible for the collection of all cheques for outstanding debts from the Customer All cheques must be banked in daily The GFC is ultimately responsible for monitoring the Debtor s Amounts General Provisions for Bad and Doubtful Debts must be provided for Non-Government Institutions, according to these guidelines: - Overdue <30 days 5% - Overdue 30 to <90 days 15% - Overdue 90 to <180 days 30% - Overdue 180 days or more 50%

3 Page No. Page 3 of Specific Provisions and Bad Debts Written Off must be authorized by the GFC However, the final decision of the provision that is to be made on the overdue debts shall be decided by the ED and MD upon consultation with the GFC Invoicing and Collection For Sales Invoicing, please refer to SOP 8 Customer Billings The shall follow up on collections from the Customer The Customer can pass the cheque to the directly, or pass it to the AM / PS who shall then pass the cheques to the The shall then match the Cheques received against the corresponding Invoices in the Customer s File. The shall then stamp MATCHED on Matched Collections, take them up in the accounts, and file them away in the same Customer s File. The shall route Unmatched Collections to the AFM to be resolved with the Customer. (For Discounted Invoices, please refer to the SOP 11 Invoice Discounting). (For Billings Disputes, please refer to the SOP 10 Billings Dispute). Cheque Cheque, Invoice Customer

4 Page No. Page 4 of In the case of part payments, the shall prepare/update the IPPS in the Customer s File The shall then bank in the cheques daily, file the BIS in the Customer s file, and take up the transaction in the books. (For Supplier Reconciliation Procedures, please refer to SOP 1 Procurement and Payment). IPPS BIS Overdue Debt Management The shall reconcile each Customer s balances with the company and generate a at the end of each month before passing the to the AFM The AFM shall then review the and contact the respective AM / PM to inform them of the outstanding debts After the closing of the books at month end, the AFM shall submit the to the GFC who shall consider provisioning or changing the Customer s credit terms, and communicate the decision to the MC in the Monthly Management Committee Meeting. AFM GFC Provision for Bad and Doubtful Debts The AC shall provide for all Bad and Doubtful Debts according to these guidelines set out in above After analyzing the, the GFC shall decide on the amount of Specific Provisions as well as Bad Debts Written Off to be made for Bad and Doubtful debts. GFC

5 Page No. Page 5 of Once decided, the GFC shall communicate the decision in a DPM to the AFM The AFM shall then prepare a JV according to the details in the DPM before posting it into the accounts. DPM JV GFC AFM PENDICES

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