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The Value Proposition of Amstel Treasury Management

Governance & Strategy - Understanding the client’s vision and (financial) strategies, and together with its overall corporate governance framework, translating these into treasury governance, policies, and procedures - Drafting company-specific, sound treasury and (financial) risk policies covering all relevant strategic and practical aspects - Supporting the client in developing and maintaining a solid capital allocation framework - Supporting the client in its (treasury/finance-related) preparations for an IPO, acquisition, merger, or spin-off, including providing due diligence analysis and input for acquisition targets

Bank Relationship Management - Advising the client with its bank (group) relationships and how to improve these both qualitatively and quantitatively: this may include designing or implementing a share of wallet solution - Supporting the client in identifying those financial partners and service providers that provide the best ‘bang for the buck’, i.e., service/cost solution

Cash & Liquidity Risk Management - Analyzing the cost & savings opportunities as well as the pro’s & con’s of existing and new cash management structures (e.g., notional pools, zero-balance or target balance pools, cross-border multi-currency pools, two-way multi-bank sweeps, in-house banking models, etc.), also considering potential tax implications (WHT, etc.) - Supporting the client with developing (more) reliable, consistent cash flow forecasting models, e.g., based on the client’s annual budget/operating plan and forecasts and/or based on shorter term trends and analyses - Identifying the company’s consolidated liquidity risks, e.g., in view of cash repatriation limitations, and how to manage these risks effectively (read: instantly, i.e., as needed in the event of material financial market(s) disruptions) and cost-efficiently - Reviewing the opportunity of implementing a multi-lateral netting solution to streamline inter-company settlement processes, reduce values and volumes of FX conversions (usually at better FX rates), improve the client’s consolidated liquidity and/or cash management positions, and to automate the reconciliation process for accounting purposes - Reviewing the opportunity and identifying the pro’s & con’s of establishing an in-house banking model for the client, which may be linked to, e.g., the (optimal) regional/global cash management model, the ERP system(s) in use at the client, and ‘pay on behalf of’ (POBO) electronic disbursement and/or ‘receive on behalf of’ (ROBO) collection processes (often managed out of SSCs) - Drafting Requests for Proposals for cash management projects and negotiating with the preferred (local/regional/global) partner(s) to agree upon the final plan and contract, as well as leading or supporting the implementation project for such

Capital Structuring - (Typically) In cooperation with the client’s Tax team or tax consultants, analyzing the (debt/equity) capital structures of (mostly) foreign subsidiaries, taking into account local tax rules (e.g., thin cap rules), debt paying capacity, (forecasted) income generation, and growth rates, geo-political risks, currency and interest rate risks (& opportunities), and dividend paying ability of each subsidiary, in order to arrive at the most effective capital structure in the medium and long term, and subsequently, design a plan to implement the preferred mix of capital items (e.g., equity, long/short term debt, third party/inter-company debt, on/off balance sheet debt, permanently invested inter-company loans, use of derivatives (such as interest rate and/or currency swaps) - Developing a framework for the client’s inter-company funding model, including but not limited to applying the relevant (using the OECD guidance) transfer pricing rules to determine appropriate inter-company interest rates (including benchmarking reviews), drafting proper loan documentation, including country-by-country reporting for tax purposes (e.g., related to OECD’s BEPS Action item 13), and advising on the generally accepted accounting treatment

Debt & Capital Markets - Providing input on the client’s financials from a treasury point of view, including, amongst others, balance sheet analyses and asset & liability management reviews - Analyzing the client’s weighted average cost of capital and advising it on how to use this ratio most effectively - Benchmarking the client’s financials from a treasury perspective versus its peers to identify strengths & weaknesses and risks & opportunities, e.g., in terms of its balance sheet and funding strength, or of its debt capacity, or identification of currency risk-related commercial opportunities - Advising the client of the opportunities in diversifying its sources of funding, which includes highlighting the different (fixed versus floating, long versus short, one currency versus another, etc.) hedging options and pointing out the pro’s & con’s of all of these - Supporting or (co-)leading the negotiation process with financial counterparties related to implementing various funding strategies (bond issuances, revolving credit facilities, syndicated or bi-lateral facilities, (rated) commercial paper programs, committed versus uncommitted funding, public versus private markets, (reverse) factoring and securitization programs, etc.), including identifying the appropriate partners to work with for each of these

Currency Exposure Management - Analyzing the client’s financial supply chain in view of its FX risks and advising it of the options to manage or mitigate these risks (more) effectively, including hedging, non-hedging, and commercial solutions - Analyzing the client’s forecasted ('Cash Flow'), transactional, and translational ('Net Investment') or economic currency exposures and advising it of the options on how to manage or mitigate these risks effectively, taking into consideration the various accounting rules under USGAAP (e.g., SFAS52/ASC830 and SFAS133/ASC815) or under IFRS (e.g., IAS21) - Supporting the client in identifying those financial partners, service providers, and solutions that provide the best ‘bang for the buck’, i.e., service/return versus cost solution (e.g., Refinitiv’s FXall or 360T electronic trading platforms)

Working Capital Management - Linking working capital items and ratios to the cost (and return) of the client’s capital employed, and thus how, e.g., extending payment terms to customers or with suppliers may impact the company’s bottom line - Analyzing the cost of working capital, or cash conversion cycle, and identifying the most effective options to fund these - Considering (the pro’s & con’s of) factoring, reverse factoring, securitization, leasing, and similar solutions and supporting the implementation project for such (including identifying the optimal partners, programs, documentation, ERP link, etc.)

Other Areas - Reviewing the need and opportunity for the client of maintaining a Treasury Management System (TMS), which may include performing an extensive cost/benefit analysis, identifying the most appropriate TMS vendors and systems, drafting a request for proposal, reviewing & negotiating the vendors’ proposals and final contract, supporting the preferred solution decision, as well as (co-)leading the TMS implementation project. For larger clients, this may also include reviewing the opportunity for (different forms of) SWIFT Corporate membership - Reviewing the client’s standard practices of various treasury-related processes and identifying improvement opportunities (e.g., in the areas of automation, security/fraud, segregation of duties, transaction fees, …) - Supporting the client with establishing or improving its trade finance and compliance practices, e.g., reviewing the proper trade finance instruments to use, identifying the most appropriate trade finance partner as well as the opportunity to implement a (semi-automated) trade finance platform to work with, or reviewing and advising on the client’s commercial terms and (distributor) agreements in place for specific export destinations (including EU, OFAC, and UN embargoes and sanctions)

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