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Global Transaction Services

Further Enhancing Visibility and Control

Edwin HartogCitigroup, Global Transaction ServicesDACT Treasury beurs, November 2nd 2006

Cash Management Trade Services and Finance Securities and Fund Services

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(Einstein)

Where have we gone wrong ?

Things should be made as simple as possible , but not too simple!

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■ Achieving visibility into cash and underlying risk from a corporate operations points off view

■ Need for integrated information on a 24/7 global base

■ Sarbanes-Oxley

OR:

a) Visibility of the cash cycle

b) Control the expenditures cycle

c) Maximise return and minimise volatility in the revenue cycle

Today’s Challenge

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Today’s Reality

■ 60% of respondents in a study by technology research organisation defined improving the accuracy of cash flow forecasting was their number one risk management goal

■ However most of the 160 companies admitted they lacked integrating processed for managing their cash

■ Most of the companies only have a partial or regional view of their cash but no global holistic view of their treasury landscape

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Today’s Solutions

■ ERP Solutions

– Stable corporate structure

– Common data standards

– Sufficient resources

– Investments

■ TMS Solution

– Sufficient solution for many Corporates, although challenged by:

• Resources

• Integrated global roll out

• Global data integration

■ Electronic Banking

– Electronic (multi) banking information

Too Complex

Too Simple

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Side-Step (Technology) …

Service Oriented Architecture

U

U

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SOA is About (1)

■ Flexible organisation

■ Intra and inter company efficiency

■ Transparent organisations

■ Web Service

– Modular application

– Self contained

– Self-describing

– Located

– Invocable

■ Web Services Definition Language (WDSL)

– The contract between the service provider and the service requestor• What the services can do

• Where it resides

• How to invoke it

• What information to supply

• Which results to be expected

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Essentially a collection of services who communicate with each other:

a) Simple data passing

b) Two ore more servers coordinating some activity

Key in this service is the loosely coupled nature

i.e. the service interface is independent of the implementation

= remote call for services / data / application modules

Service Response

Service Request

Service Provider Service Consumer

SOA is About (2)

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Popularity of SOA

■ Gartner

– By 2008, SOA will be a prevailing software engineering practice, ending the 40-year domination of monolithic software architecture

■ Meta Group

– By 2006, recognition that SOA and enterprise architecture are fundamentally synonymous will have reached a mainstream status. By 2008, SOA will be embedded in 30% of early adaptor Global 200 business models, altering them and leveraging network economics

■ Forrester

– Whether or not you have a strategy for service oriented architecture, SOA is inevitable

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Brueghel “the Harvesters”

…Back to “Our World”…

Today’s Treasury Landscape

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■ Liquidity – majority of overlay structures focus on Western Europe but trend to include Central Eastern Europe

■ Full use of internally generated cash for funding and investment

■ Efficiency – continued implementation of SSCs

■ Trend to work with single bank but in reality still need to maintain local banking relationships (petty cash, payroll, specific collection accounts)

■ Risk management and control across the enterprise

■ Implementation of group wide ERP and TMS enabling a single interface to bank systems

■ Expectation that the interface to bank systems should provide real time information

■ Standardised group wide technology reduces implementation and maintenance costs

■ Reduce costs and free up resources to focus on treasury management instead of repetitive manual work

■ Automation supports centralisation of cash flows minimising headcount

■ Aggregation of cash flow data for more accurate cash forecasting

■ Automated investment execution to eliminate need to manually invest operational balances

■ Demand standardisation transaction info from banks to enable auto reconciliation across region

■ Supply Chain automation will start to become a focus

■ Standardise treasury processes and functions so that they can be performed centrally

■ Minimised maintenance costs due to standard technology across group

■ Customers becoming aware of open standards (such as SWIFTNet) which allows easy switch over between banks and interaction with multiple banks

Centralise Automate

Integrate Standardise

Best Practices

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Business Case

■ The Challenge

– Multinational company

– > 100 countries

– > 1000 bank relations

– Approx. USD 500 mm collections a day

■ The team

– 70 programmers

– 22 global treasury managers

– 6 treasury centres

– 15 months

■ The Results

– TreasuryVision launched on December 15th 2005

“The Quest for a Perfect Platform”

Awarded under the Category“Risk Management”

ForTreasuryVision

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TreasuryVision – Overview

TreasuryVision is Citigroup's treasury information web portal product that empowers the treasurers of global corporations to effectively manage their financial resources.

TreasuryVision provides a comprehensive set of tools for analysing and managing the company cash, debt, investment and forecasting data across business units, legal entities and regions, where all the corporate information is collected and aggregated from various institutions providing a single view into their liquidity position.

Visibility of treasury related financial information to support enterprise liquidity and risk management activities.

Control over liquidity and risk management related workflows. Ability to monitor the compliance with treasury policies throughout the enterprise.

Appropriate use of traditional banking products for collecting liquidity, hedging exposures, investing surpluses and funding to meet short, medium and long-term needs.

Prime Beneficiaries:

■ Clients with…

– Multiple banking relationships

– Multiple subsidiaries

– Multiple countries of operation

■ To obtain ‘Visibility’ and ‘Control’

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TreasuryVision – Modules

TreasuryVision Service Modules

■ Cash Analytics

■ Investments Analytics

Cash, investment, debt account data aggregation, monitoring, alerting, analytics, exception reporting, account opening workflow

■Debt Analytics

■Cash Flow Forecasting

■FX Risk & Dealing

Workflow, analytics, reporting, leverage aggregated data

■Guarantee Management

■Market Data

Delayed pricing, news / quotes, ratings to support benchmarking and risk management

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Comparing TreasuryVision to a Treasury Management System

Treasury Process TreasuryVision TMS

Polling & Parsing

EOD Statement Aggregation

Reconciliation

Cash Positioning

Calculate EOD Forecast & Forecast vs. Actual Varies by provider

Funds Transfer

Global Cash & FX Position Analysis

Other

Account Management Varies by provider

SOX Compliance Varies by provider

GL Interface

Netting & Foreign Exchange

Risk & Hedge Accounting

Excellent Fair Unaddressed

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Comparing TreasuryVision to a Treasury Management System

■ Polling & Parsing

– Taps into bank SWIFT Channels

– TAPS into customers internal stored information

■ Cash Positioning

– Single secure source for enterprise wide forecasting

– Forecast versus realisation

■ Other Processes

– Account Management workflow tools

■ Internet Based

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Critical Success Factors

■ Speed to Benefits

■ Multi-bank

■ Non-invasive to existing technology

■ Global scalability

■ Reliable long-term supplier

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TreasuryVision – How It Works

1. Aggregate and monitor multi-bank data feeds on behalf of our clients

2. Convert the data into Information through state-of-the-art portal

3. Treasury related workflow tools (e.g. client side bank account opening request / approval tool)

An Active Service

Data Aggregation

Analytics

InformationDistribution

Solution Design

Citibank Other Banks

Information Warehouse

Cash Analytics

Investment Analytics

Risk Analytics

B r o w s e r A p p l i c a t i o n

Metrics Analytics

Workflow

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Data Aggregation & Normalisation

■ Identify, collect and classify data from Citigroup and other third party banks on behalf of our clients

■ Access global and local data sources including payment and information systems – like SWIFT or other third party sources

■ Proactively manage timeliness of data on behalf of clients – resolve missing information flows or inaccurate inflowing data issues

■ Normalise and standardise data into a uniform, useable format

Information Warehouse

Data Aggregation and Normalisation

Bank 2 Bank 3 User 1System 1Citibank

■ Stores data in a single, secure, industrial strength central repository

■ Tested and proven asset currently housing financial data for existing electronic banking platforms

Multi-bank cash, investment and other financial information

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Citigroup Branches

Domestic Cash Bank(s)

MT940MT950MT942

Citigroup Branches

‘CITIGB2LIFP’

TreasuryVision

CitiDirect

Client TMS/ERP

Cash Account Reporting

■ TreasuryVision Data Aggregation provides information on all your accounts around the world via Citigroup’s electronic banking platforms and interfaces to TMS / ERP systems

■ Transaction information reported into Citigroup from third party banks via SWIFT MT940 or MT950 message. Balance and transaction information is presented in a standard format

■ Where SWIFT messaging not available, we have a choice of third-party data aggregators

Obtaining Balance Information from Third Party Banks

Information Warehouse

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Investment Deal Confirmation

■ TreasuryVision Data Aggregation provides

– Confirmation messages for Time Deposit deals

– Transaction details (MT535 – Statement of Transactions) and balances (MT536 – Statement of Holdings) for Money Market Funds

– Transaction details (MT535 – Statement of Transactions) and investment balances (MT536 – Statement of Holdings) for Commercial Paper, Bonds and Medium Term Notes

■ Where SWIFT is not available, we obtain the data using a third-party aggregator

Citigroup Branches

Investment Counterparties

MT320MT535MT536EVARE

Citigroup Branches

‘CITIGB2LIFP’

TreasuryVision

Information Warehouse

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Debt Data Aggregation

■ Commercial Paper, Bonds and Notes issuance information from Issuing and Paying Agents (IPA) using a third-party data aggregator

■ Loans data from the counterparty banks, using a third-party data aggregator

■ Overdrafts information using the cash account statements

Citigroup Branches

IPA/Counterparties

Third-PartyAggregators

Information Warehouse

Citigroup Branches

TreasuryVision

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TreasuryVision – Cash Forecasting

■ Legal Entity Forecast

■ Enterprise-wide forecasting structure and terminology

■ Administered either globally or regionally

■ Aggregated to a customisable, global view

TreasuryVision Cash Flow Forecasting

Treasury

NA RTC EMEA RTC Asia RTC

Legal Entity A

Legal Entity B

Legal Entity C

Legal Entity D

Legal Entity E

Legal Entity F

Legal Entity G

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TreasuryVision – Cash Forecasting

■ CFF Administration

– Global or regional set up of the forecasting system using customisable tables and rows

■ CFF LE

– Enables Legal Entities to enter and manage their Short and Long-term cash forecasts.

■ CFF Analytics Grid

– Enables entitled users to view and analyse Legal entity forecasts in aggregate

■ CFF Analytics Chart

– Enables entitled users to view and analyse Legal entity forecasts in aggregate

■ CFF Accuracy Analytics

– Enables entitled users to view and analyse forecasted data verses actual data

Cash Flow Forecasting Web Parts

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TreasuryVision – Business Benefits

■ Better business decision-making

– Resulting from the integration of diverse financial data resources on a single operational platform

■ Improved operating efficiencies

– Through streamlined processing of treasury financials

■ Heightened risk management

– Through improved cash control and forecasting

■ Greater awareness

– Of rapidly-changing business conditions through the use of customisable event alerts

■ More effective working capital management

– Through use of cross-affiliate and cross-regional data views

■ Optimised cash allocation and credit usage

– Resulting from a consolidated information perspective

■ Streamlined report generation tools

– Meeting regulatory requirements, including Sarbanes-Oxley

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TreasuryVision – Services

■ Financial Data Acquisition

– Cash Balances, Investments, Debt Transactions, Market Date etc.

■ Analytical Services

– Periodic Trend Analysis

– Corporate Hierarchical Analysis using Business Measures

– Multi-dimensional Aggregation Capability

■ Workflow Management

– Facilitates enforcement of Corporate Policies

■ Cash Flow Forecasting

– Subsidiary and Corporate level Forecasting Optimised cash allocation and credit usage

■ Dealing and Risk Reporting

– Foreign Exchange Dealing and Money Market Loans / Deposits

– Reporting and Analysis of Foreign Exchange Risks & Guarantee Management

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TreasuryVision – Across The Organisation

■ Chief Financial Officer

– Intelligent Information – Actionable Advice

– Global Liquidity Dashboard

– Aggregated view across several hierarchies

– Visual and Graphical Analytical Tool

■ Regional Treasurer

– Geographically aggregated Currency and Cash

– View trend across Days / Months / Quarters & Years

– Information on various Business Units and hierarchies

– Separation of relevant data based on permissions

■ Subsidiary Treasury Users

– Manual and Workflow based Entry (Maker Checker)

– Control on information based on permissions

– Quick information availability

– Freedom from multiple spreadsheet maintenances

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Information Warehouse

Web Dashboards

Bank 2Bank 2 Bank 3Bank 3 User 1User 1System 1System 1CitibankBank 1

Electronic bankingExcelTMSERP

CFOGlobal TreasurerRegional TreasurerCash ManagerController….

How to Position Within Your Organisation?

Cash Analytics Investment Analytics Risk Analytics

Metrics ReportsMetrics ReportsMetrics ReportsAnalyticsAnalyticsAnalytics

WorkflowWorkflowWorkflow

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Please visit our stand for a live demo!

Questions?

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Anti-Tying Disclosure

Citigroup Corporate and Investment Banking ("CIB") maintains a policy of strict compliance to the anti-tying provisions of the Bank Holding Company Act of 1956, as amended, and the regulations issued by the Federal Reserve Board implementing the anti-tying rules (collectively, the "Anti-tying Rules"). Moreover, our credit policies provide that credit must be underwritten in a safe and sound manner and be consistent with federal law. Consistent with these requirements, and the CIB's Anti-tying Policy:

You will not be required to accept any particular product or service offered by Citibank or any Citigroup affiliate as a condition to the extension of commercial loans or other products or services to you by Citibank or any of its subsidiaries, unless such a condition is permitted under an exception to the Anti-tying Rules.

CIB will not vary the price or other terms of any Citibank product or service based on the condition that you purchase any particular product or service from Citibank or any Citigroup affiliate, unless we are authorised to do so under an exception to the Anti-tying Rules.

CIB will not require you to provide property or services to Citibank or any affiliate of Citibank as a condition to the extension of a commercial loan to you by Citibank or any Citibank subsidiary, unless such a requirement is reasonably required to protect the safety and soundness of the loan.

CIB will not require you to refrain from doing business with a competitor of Citigroup or any of its affiliates as a condition to receiving a commercial loan from Citibank or any of its subsidiaries, unless the requirement is reasonably designed to ensure the soundness of the loan.

Confidentiality Statement

The information contained in this proposal (and any additional information provided subsequently in connection with this proposal) is confidential and is intended solely for the use of COMPANY X and its employees. This information may not be disclosed outside of COMPANY X, other than to professional advisers engaged specifically by COMPANY X to evaluate the proposal, and shall not be duplicated, used or disclosed in whole or in part for any purpose other than to evaluate this proposal. If COMPANY X discloses any information to such professional advisers it shall ensure that such persons maintain the confidential nature of this proposal.

Subject to Contract/Disclaimer

This proposal is provided for informational purposes only and is neither a contract nor an offer to contract. However, if this response meets the requirements of COMPANY X, Citigroup will enter into negotiations for a contract(s) with COMPANY X that has terms and conditions acceptable to both parties.

The information contained in this proposal is believed to be accurate, but Citigroup makes no representation with regard to the accuracy or completeness of any information contained herein.

Citigroup is not acting in any advisory role in relation to legal, tax or accounting issues relating to this proposal or otherwise. You should obtain your own legal, tax or accounting advice in relation to your evaluation of this proposal.

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