1. DACT Treasury Fair, 14 November 2014
How to fill the gaps of a TMS in areas of reporting and hedge accounting
DACT Treasury Fair, 14 November 2014
Ramón Tolk
Director Treasury Operations & Control - VimpelCom
Kees-Jan de Vries
Director Capital Markets and Accounting Advisory Services - PwC

2. External and internal factors require Treasury’s to look beyond its current TMS landscape
Journal entries are prepared manually
System vendors do not really invest in flexible and tailor made reporting solutions
Hedge accounting is a rather manual process
Demand for a straight through EMIR reporting solution
FINCAD does not provide IFRS 13 compliant valuations

3. A well diversified leading international mobile operator

4. Treasury at VimpelCom Treasury teams HQ Amsterdam: 13
Regional treasury teams in Moscow (approx. 20), Rome (approx. 20), Kiev (5)
Local teams in each OpCo
Some info on size (USD bn 30-Sep-14)
Gross Debt
27.7
Cash & Cash Equivalents /Deposits
6.0
Derivatives
7.8
Developments
2010 March 2012 Oct 2013 Nov 2013
HQ to Amsterdam TMS: Bellin Treasury Analytics Chatham Financial

5. Old and new IT landscape
Today
Treasury Analytics

6. Changes since implementation Bellin as TMS
Does this mean that we have selected the wrong system back in March 2012?
No!
We are still a satisfied Bellin client!
In March 2012, the decision to select Bellin was mainly driven by implementation speed and user friendliness
We knew back then that the strength of Bellin was not in the reporting and derivative valuation/hedge accounting areas …
…, but Bellin partnerships fill these gaps
We believe that there is no TMS available in the market that could meet our requirements and could compete with our current IT landscape, both from a functionality and cost perspective

7. Treasury Analytics

8. Treasury Analytics What? Business Intelligence reporting layer
Developed by PWC in cooperation with Bellin
Takes data directly from Bellin database
Why?
Reduce reporting time (8 BDs  2 BDs) and time spend (-5 man days)  focus on value added work
Move away from Excel (error prone)

9. Treasury Analytics project at VimpelCom
Started in October 2013
Consideration at start: majority of design and construction to be finalized before mid December  Ambitious timeline:
Project team: VimpelCom HQ + PWC consultants (NL+DE)

10. Treasury Analytics – Content & Structure

11. Treasury Analytics / QlikView – example 1

12. Treasury Analytics / QlikView – example 2
Selection possibility periods
Filter possibilities group

13. Treasury Analytics / QlikView – example 3

14. Treasury Analytics – our next steps
We can now modify / set-up reports by ourselves (no need to hire PWC for this)
Roll-out to Business Units / OpCos

15. Chatham Financial

16. Chatham Financial What? Why?
System with functionality on IFRS compliant valuation / hedge accounting (given our size of derivative portfolio, no possibilities for short cuts / backside sigarbox calculations)
Selected after RFP process with FinCad, Kyriba, Reval and SuperDerivatives
PWC engaged as consultant; EY as external auditor also consulted during process
Why?
Ability to meet reporting deadlines, despite large portfolio of derivatives (60-70)
Valuation takes into account CVA/DVA (IFRS 13) based on Total Expected Exposure methodology, not Current Exposure
Hedge effectiveness testing (regression / dollar offset): CVA/DVA included in derivative, not in hypothetical derivative

17. Chatham Financial - valuation
Deal input in system
Valuations will be run daily; exportable to Excel

18. Chatham Financial – effectiveness testing
System supports both regression and dollar-offset as effectiveness testing methodology
VimpelCom preferred regression:
Change hedge accounting as per 30-Sep-13
CVA/DVA  100% effectiveness impossible
Deals with small numbers

19. Chatham Financial – hedge documentation and JEs
Hedge designation in system causes creation of hedge documentation
System also prepares monthly/quarterly JEs

20. Questions?