© VimpelCom Ltd. 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
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External and internal factors require Treasury’s to look
beyond its current TMS landscape
© VimpelCom Ltd. 2014
System vendors do not
really invest in flexible
and tailor made
reporting solutions
Journal entries
are prepared
manually
Treasury
Moscow
Treasury
Treasury
Kiev
Moscow
Treasury
Amsterdam
FINCAD does not
provide IFRS 13
compliant
valuations
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Treasury
Treasury
Rome
Cairo
Hedge accounting is a
rather manual process
Demand for a
straight through
EMIR reporting
solution
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A well diversified leading international mobile operator
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Treasury at VimpelCom
Treasury teams
Some info on size (USD bn 30-Sep-14)
HQ Amsterdam: 13
Gross Debt
Regional treasury teams in Moscow (approx. 20),
Rome (approx. 20), Kiev (5)
Cash & Cash Equivalents /Deposits
6.0
Derivatives
7.8
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Local teams in each OpCo
27.7
Developments
2010
HQ to Amsterdam
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March 2012
TMS: Bellin
Oct 2013
Treasury Analytics
Nov 2013
Chatham Financial
Old and new IT landscape
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2010-2011
2012-2013
Today
Treasury
Analytics
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Changes since implementation Bellin as TMS
Does this mean that we have selected the wrong system back in March 2012?
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No!
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•
•
We are still a satisfied Bellin client!
•
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
In March 2012, the decision to select Bellin was mainly driven by
implementation speed and user friendliness
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
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Treasury Analytics
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Treasury Analytics
What?
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•
•
•
Business Intelligence reporting layer
Developed by PWC in cooperation with Bellin
Takes data directly from Bellin database
Why?
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•
Reduce reporting time (8 BDs  2 BDs) and
time spend (-5 man days)
 focus on value added work
•
Move away from Excel (error prone)
Treasury Analytics project at VimpelCom
Started in October 2013
•
Project team: VimpelCom HQ + PWC consultants (NL+DE)
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•
•
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Consideration at start: majority of design and construction to be finalized
before mid December 2013
 Ambitious timeline:
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Treasury Analytics – Content & Structure
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Treasury Analytics / QlikView – example 1
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Treasury Analytics / QlikView – example 2
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Selection
possibility
periods
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Filter possibilities
group
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Treasury Analytics / QlikView – example 3
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Treasury Analytics – our next steps
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•
We can now modify / set-up reports by ourselves
(no need to hire PWC for this)
•
Roll-out to Business Units / OpCos
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Chatham Financial
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Chatham Financial
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What?
•
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?
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•
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
Chatham Financial - valuation
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Deal input in
system
Valuations will be
run daily;
exportable to Excel
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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
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Chatham Financial – hedge documentation and JEs
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• Hedge designation in system
causes creation of hedge
documentation
• System also prepares
monthly/quarterly JEs
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© VimpelCom Ltd. 2014
Questions?
www.vimpelcom.com
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