Related-Party Transactions Policy

1. Purpose

Related-party transactions in a charity, if not properly controlled, are one of the most common sources of loss of ACNC registration, DGR endorsement and public trust. This Policy ensures every related-party transaction is:

1. on arm's-length terms or terms more favourable to the Company;
2. documented in writing before it is entered into;
3. approved by the non-conflicted Directors on the basis of full disclosure;
4. consistent with the Company's charitable purposes and the ACNC Governance Standards;
5. recorded in the Conflicts Register and, where required, disclosed to the ACNC and in the Company's financial statements.

2. Who is a "related party"?

For the purposes of this Policy, a "related party" of the Company includes:

• a Director of the Company;
• a Company Secretary or senior executive;
• a spouse, de facto partner, parent, child, sibling, or other close family member of any of the above;
• an entity controlled by any of the above (including CoSai CFO Services Pty Ltd);
• any other party defined as "related party" under section 228 of the Corporations Act or AASB 124.

Identified related parties at commencement include: Laurence Hugo; Lisa Hugo; Carla Oliver; CoSai CFO Services Pty Ltd; and any other body corporate controlled by any of them.

3. Categories of related-party transaction

4. Executive remuneration, market benchmarks

1. 4.1 Before the Board approves executive remuneration for a Covered Person, the Board must obtain external evidence of comparable market rates. Acceptable sources include:
   1. the AICD Not-for-Profit Governance & Performance Study and NFP Salary Survey;
   2. McCrindle / Australian Charities Report benchmarks;
   3. Justice Connect / Not-for-profit Law published rate cards;
   4. engagement of an independent HR / remuneration consultant.
2. 4.2 The Board records in the minutes: (a) the benchmark data considered; (b) the proposed remuneration; (c) the rationale for its reasonableness; and (d) the vote of non-conflicted Directors.
3. 4.3 The Company complies with the ACNC's Key Management Personnel reporting requirements for large charities where applicable.

5. The CoSai CFO Services engagement, specific arrangements

1. 5.1 In Year 1, CoSai CFO Services provides advisory, governance, financial-model and compliance-uplift support to the Company on an in-kind (unpaid) basis. The arrangement is documented in a written Engagement Letter approved by the Board excluding Carla Oliver.
2. 5.2 In Year 2 and beyond, if the Company wishes to engage CoSai on a paid basis (for example, for outsourced CFO services or ACL-compliance uplift work), the Board must:
   1. obtain competitive quotes from at least two arm's-length providers;
   2. satisfy itself that CoSai's engagement is on terms at, or more favourable to the Company than, the arm's-length quotes;
   3. document the decision and the comparative analysis;
   4. Carla Oliver must not vote or be present during the decision;
   5. the engagement must be time-limited and renewable only on the same conditions;
   6. the engagement and the aggregate amount must be disclosed in the Company's financial statements under AASB 124.
3. 5.3 The Company will not become dependent on CoSai for services that could be delivered by unrelated providers on comparable terms. As the Company grows, in-house capacity (via the Compliance Officer role and, in due course, an in-house CFO or Finance Manager) will replace CoSai's operational contributions.

5A. Schedule A, Credit Mediation Services Pty Ltd (ACL 387398): the principal related-party arrangement

Why this schedule exists. The Company's dominant Year 1 activity, debt negotiation on behalf of beneficiaries, is a regulated credit activity (National Consumer Credit Protection Act 2009 (Cth) s 29). The Company does not hold an Australian Credit Licence and will not apply for one before Year 2 (Registration Roadmap, Stage 5). The work is therefore performed under licence by Credit Mediation Services Pty Ltd ("CMS"), ACL 387398, of which the Company's Executive Director and CEO, Laurence Hugo, is a director and controller. Donated funds will be paid to CMS for that work. This is a related-party transaction under Part 2E of the Corporations Act and ACNC Governance Standard 5, and it is the arrangement a regulator will examine first. Added 2026-09-20 following LEGAL-REVIEW F3.

1. 5A.1 Written agreement first. No payment may be made to CMS, and no beneficiary matter may be referred to CMS on the Company's account, until the LWD to CMS Services Agreement has been approved by the non-conflicted Directors and executed by both parties.
2. 5A.2 Arm's-length terms. Fees must be at or below the market rate for equivalent licensed debt-negotiation or financial-counselling services, evidenced by at least two independent benchmarks (for example published rates of Financial Counselling Australia member agencies and of at least one licensed commercial debt-negotiation firm) recorded in the Board minute approving the agreement. Where CMS offers terms more favourable than market, that is recorded as an in-kind contribution and disclosed.
3. 5A.3 Recusal. Laurence Hugo must not be present for, participate in, or vote on any Board decision concerning the agreement, its fees, its renewal, its termination, or any dispute under it (Constitution clause 22). The Chair records the recusal in the minutes. The quorum for such decisions must include at least one Independent Director (clause 21.2).
4. 5A.4 Tenderable and terminable. The agreement has a fixed term not exceeding 12 months, is renewable only by a fresh decision under 5A.2 and 5A.3, and may be terminated by the Company on 30 days' notice without cause. Nothing in it grants CMS exclusivity. The Company may engage any other licensed provider for any matter.
5. 5A.5 No payment for non-work. CMS is paid only for services actually rendered on identified beneficiary matters, on itemised invoices, against outcomes recorded in the Company's case system. No retainer, no minimum volume, no success fee to the Company's beneficiaries (Constitution clause 4(a)(i): services are free to the beneficiary).
6. 5A.6 Independent review. Before execution the agreement is reviewed by a charity-law solicitor with no engagement from CMS, together with the Constitution. Annually, the Independent Directors review the year's CMS invoices against the benchmarks and against case outcomes and report to the Board.
7. 5A.7 Disclosure. The agreement, the aggregate paid to CMS, and the benchmark analysis are disclosed in the Company's financial statements under AASB 124, in the Annual Information Statement to the ACNC, on the Register of Interests, and in plain words on the public governance page. The Company does not describe CMS's work as donated, volunteered or pro bono unless CMS has invoiced nothing for it.
8. 5A.8 Exit path. The Company's intention, recorded in the Registration Roadmap, is to hold its own ACL from Year 2. From that date the CMS agreement continues only where the Independent Directors are satisfied that CMS remains the best available provider on the 5A.2 test.

6. Disclosure to Members, ACNC and the public

1. 6.1 All material related-party transactions are disclosed:
   1. to Members in the annual report to the AGM;
   2. to the ACNC in the Annual Information Statement;
   3. in the notes to the financial statements as required by AASB 124;
   4. in the public Charity Register entry (through the ACNC filing).

7. Prohibitions

Notwithstanding any other provision of this Policy, the Company must not:

• make a loan to a related party (other than a reimbursement advance in the ordinary course);
• give a guarantee or security for a related party's obligation;
• transfer, gift or lease Company property to a related party otherwise than on arm's-length terms;
• make a direct-relief payment (under the Direct Relief Policy) to a related party or to a beneficiary who is a close family member of a related party;
• use the Company's DGR endorsement to receive tax-deductible donations that will benefit a related party disproportionately.

8. Review

This Policy is reviewed at least annually by the Board and immediately following any material change in the related-party landscape (for example, appointment of a new Director with existing business interests).