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Section 3: Key credentials in Treasury Advisory

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Treasury transformation for a leadin major in t!e re ion


Project Summary & Objectives

automotive

The Company, one of the largest automotive trading companies in the region and a large family business conglomerate, engaged EY to assist in defining the target operating model for their group and in setting up a Group Treasury function

Our Role
EY conducted a detailed current state assessment study of the existing treasury functions. We evaluated the treasury against the EY Treasury aturity atrix! to understand the current state of treasury sophistication and the desired target state EY carried out a detailed benchmar"ing study vis#$#vis large global treasuries to identify best practices that can be applied to the client %ased on the current state assessment and the benchmar"ing, EY defined the target operating model for the Group Treasury &etailed 'or"#shops 'ere conducted 'ith different sta"eholders to finali(e the target operating model. %ased on the finali(ed operating model, 'e defined a detailed implementation roadmap &etailed policies and procedures 'ere prepared covering cash and li)uidity management, ris" management, investment management, debt management and ban" relationship management EY also prepared functional re)uirements for a treasury management system that can be used across the group

Value Delivered to client


This engagement enabled the group to evaluate the sophistication of their treasury operations against international practices and prepare a vision for the future The engagement enabled identification of several areas of inefficiencies and address them effectively The target operating model helped the Group Treasury to evolve into a strategic unit focus on "ey issues that can add value to the group

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"nternal control frame#or$ for treasury functions for a leadin Real %state &om'any in (atar
Project Summary & Objectives
The Company 'anted to establish a consistent, firm 'ide finance operating model supported by the right structure, policies, procedures, internal controls and technology This 'as envisioned as an essential step to efficiently run and control Company*s finance functions including treasury and +,

Our Role
The team helped the treasury in creating a recipe for the creation of the various limits that 'ere to be used for ris" monitoring purposes &eveloped treasury organi(ation structure and treasury ris" policy that included the guidelines for the management of ris"s Conducted training for the treasury department in the various transactions -approved products. underta"en by the treasury

Value Delivered to client


/n operating model most suited to the Company*s re)uirements 'as established for the departments 0 Treasury, +inancial ,is" anagement -+, ., 1nvestment 2ortfolio 3ptimi(ation and 1nvestor ,elations &eveloped policies, processes and procedures for corporate treasury, financial ris" management, investment optimi(ation, and investor relations Trained the staff on the operational and internal control frame'or" established at the Company

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Advisory Services on &or'orate Treasury for a )ar e *etal & &ommodities &om'any in +A%
Project Summary & Objectives
The client has implemented 4/2 E,2 solution suite that includes treasury module. The treasury function has exposures in plain vanilla derivative transactions primarily used for hedging commodity ris", +5 ris", interest rate ris" etc. The treasury function feels the need for implementing a dedicated treasury anagement 4ystem that can address their "ey re)uirements i.e. cash and debt management, hedge accounting, ris" management, etc. 1n this respect, high level functional re)uirements for the Treasury anagement 4ystem -T 4. have been identified by the Client. The client engaged EY to assist them in the preparation of detailed functional re)uirements document and ,e)uest for 2roposal -,+2. for selection of T 4. 1n addition to the agreed scope the client has re)uested us to develop vendor evaluation scorecard template for the vendor selection

Our Role
EY Team revie'ed and revised the existing functional re)uirements document for the treasury system in line 'ith leading industry practices The Team also conducted a 'or"shop to present the detailed functional re)uirements for the T 4 /ssisted in the preparation of ,e)uest for 2roposal -,+2. for T 4 &eveloped a detailed vendor evaluation scorecard for vendor selection

Value Delivered to client


This engagement helped the Client in identifying industry leading Treasury anagement 4ystem 6endors that that can address their "ey re)uirements, i.e. cash and debt management, ris" management, hedge accounting, etc 1t streamlined their vendor selection process and helped in communicating the re)uired functionality to the vendors 'ithin the ,+2 The vendor evaluation scorecard provided them 'ith a tool to perform ob7ective assessment of each vendor and T 4 offering

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&or'orate Treasury Services for a leadin Automotive Tradin &om'any in KSA


Project Summary & Objectives
The Client*s Group Treasury +unction operates under a hybrid model. The Treasury assumes the role of the Group*s ban" and caters for around 89: of their re)uirements. The Client needed to run its international treasury operations in line 'ith international best practices. The functions, roles and responsibilities of each sta"eholder in the treasury system needs to be articulated clearly documenting functions and the segregation of responsibilities bet'een the functions. The Client also re)uires a complete detailed process and procedures manual for its international treasury operations and detailed treasury ris" policy documenting guidelines The Client contracted EY to assist in the development of the Treasury organi(ation structure, treasury policies and procedures and drafting of the functional re)uirements and ,+2 for T 4 to implement the treasury policies and procedures

Our Role
EY has revie'ed the current roles and responsibilities across front, middle and bac" offices The team performed assessment and identification of "ey ris"s in the treasury operations and conducted a 'or"shop on the current treasury processes of the group in comparison 'ith similar organi(ations* leading practices &eveloped the treasury policies and procedures in line 'ith the leading practices /ssisted in the selection of a soft'are vendor to implement the treasury procedures through the development of draft system ,+2 and evaluation criteria

Value Delivered to client


This engagement assisted the Client in the selection of appropriate treasury management system for addressing all functional re)uirements and implementing the Treasury policies and procedures for the company.

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Assistance in develo'in Treasury Transformation for a lar e and leadin ban$ treasury in t!e +A%
Project Summary & Objectives
The %an" 'as in the process of implementing a system for its treasury operations -4T2.. /s part of this implementation, the %an" 'as attempting to align the treasury operating model, policies, processes and controls 'ith the industry leading practices.

Our Role
The Team assisted the %an" in the development of their treasury operating model in line 'ith the industry leading practices. We identified the existing organi(ational structure of treasury and support functions and then defined the functional organi(ation clearly articulating 'hat role is expected to be performed by each functional unit EY developed the %an"*s treasury front office policy document clearly defining the treasury governance structure, roles and responsibilities, dealer code of ethics, dealing room policies and individual des"#'ise policies. The document highlighted the policies for interactions and fee sharing bet'een various des"s -li"e the sales des" and money mar"et des". EY developed the %an"*s end#to#end treasury procedures and process maps. 1n this phase, the team conducted meetings 'ith the process o'ners 'ith the Treasury functions including the +ront, iddle and %ac" offices to understand the present Treasury activities EY also developed ris" controls matrix for all treasury processes including trade lifecycle, mar"et ris", middle office, collateral management, traded credit ris" management, ne' product development etc.

Value Delivered to client


/n operating model most suited to the %an"*s re)uirements 'as established for the Treasury +unction 'hich covered 0 front office, middle office, operations, mar"et ris", traded credit ris" etc. &eveloped ris" controls matrix for all treasury processes &eveloped detailed policies and end#to#end processes and procedures for treasury and mar"et ris".

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Treasury O'erations advisory for a lar e commercial ban$ in t!e +A%


Project Summary & Objectives
The %an" 'as see"ing to upgrade its Treasury operations for iddle and %ac" 3ffices to industry leading practices. 1n pursuing this initiative, the %an" has engaged EY to provide assistance in conducting a thorough revie' of its existing practices and recommend best practices.

Our Role
EY assisted the %an" in; <. 2erforming a revie' on the Treasury iddle and %ac" office 3perating odel, roles and responsibilities =. Conducting a detailed revie' of existing internal control environment in Treasury iddle and %ac" offices, highlight the gaps in controls vis#$#vis leading practices and provide implementable recommendations to address the identified gaps >. ,evie'ing the current ?edge /ccounting 2rocess, revie'ing existing hedge documentation and the existing hedge effectiveness measurement process @. 1dentifying and defining the roles and responsibilities of various units 9. 2reparation of accounting and valuation documentation manual

Value Delivered to client


This pro7ect assisted the %an" in benchmar"ing its treasury middle and bac" offices in line 'ith leading practices in terms of internal controls, roles and responsibilities 1t also provided the ban" 'ith an appropriate hedge effectiveness testing documentation frame'or" in line 'ith 1+,4 re)uirements This pro7ect provided the accounting manual for all approved product types that 'ill help the %an" in implementing the same in the ne' front#to#bac" treasury system that is being implemented by the %an".

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Ot!er notable treasury & ris$ mana ement credentials , #it!in -&&
Ot!er notable credentials in t!e re ion include:
&lient
)ar e islamic ban$ in +A%

.or$ done

Ernst A Young carried out revie' of the existing policies and reporting templates of the %an". We then developed a comprehensive revised policy covering dealing room policies, des" policies, investment policies and corporate finance advisory policies Ernst A Young also developed the limit management templates and reporting templates for the %an" This engagement consisted in a revie' of their derivatives processes, policies and procedures for trading sophisticated financial products The process covered the assessment of the ris"s and internal control environment related to the end#to#end derivatives activities of the ban"s The end#to#end process included; front#office, middle office, bac" office, finance, ris" management, compliance, legal department, audit department Ernst A Young performed detailed revie' of the financial derivative transactions carried out by the %an"s The scope of the revie' included the assessment of the internal controls related to the derivative activity and independent valuation of the derivative positions held by the ban"s Ernst A Young conducted an assessment of the existing ris" control environment, ris" management governance structure as per leading practices The team also revie'ed the completeness of ris" related policies namely credit, mar"et and operational ris"s and /B policies of the %an"

T!ree lar e ban$s in Ku#ait

)eadin

/an$s in Ku#ait0 Oman and +A%

)ar e /an$s in t!e Saudi Arabia

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