Olam India enjoys a strong reputation of managing one of the most diversified agri-commodity supply chains in India.
Head Treasury, Olam Agro India Ltd
Key challenges faced by the treasury team at Olam India include:
2. Prone to manual errors while booking in the market
3.Manual computation of MTM Rates 4.Exposure underlying maintenance 5.Validate trades with traders
6. MIS Report preparation used to take more than 1 day
7.Circulating business positions to each business users was done manually
8. Compliance with Central Bank regulations on derivatives
9. Adoption of hedge accounting to run hedge effectiveness test for derivatives
10. Consolidation of positions – As all the processes were manual, this particular activity took hours, sometimes even days to consolidate.
Innovative TreasuryTM 5.1i supports Multi-Company, Multi -Location, Multi-Asset and Multi-Portfolio (or Product) Environment. It aids in managing exposure and offer tools to mitigate operational Risks. It provides real time reports/ dashboards for managing Open Positions vis-a-vis MTMs, Cash-flows and Collaterals. It leverages technology to incorporate the risk management process inherent in the solution to minimize risk by optimizing the risk-reward trade off. While quantifiable risks communicated by the top management are implemented in the form of threshold limits, qualitative risks are handled using intelligent forecasts and other analytical solutions.
Features of the solution:
- A solution that uses cutting edge technologies to efficiently run a front office to trade in forex and to integrate them seamlessly to back office with built-in flexibility to handle complex settlement procedures and maturity mismatches.
- Front office has the capability to handle Hedge Instruments like Forwards, Futures and Options. Instruments include both the Exchange Traded as well as the Over the Counter (OTC) types with provision for settlement, Cancellation, Rollovers – both for full and Partial amounts.
- Integrating with Thomson Reuters FX Trading platform FXALL
- Successfully executed orders placed on FXALL traverses through the IBSFINtech Treasury application by a office but completely integrated to provide straight through processing
- Automatic generation of deal tickets, dealer pads, contract confirmations either through mail or physical printouts with an option to dynamically design confirmation templates.
- Maintenance of dealer wise positions and different types of FX limits vis-à-vis hedges already taken and availability of the same in real time to Top Management.
- Maintenance of all types of contracts currency, maturity and bank wise with particulars of payable / receivable for the back office for each day and provision for cancellation or settlement on due dates.
- Provision to rollover contracts on maturity either in part of completely with automatic calculation of charges.predefined workflow till settlement to appear in company’s ALM books.
- Integration of currency exposure seamlessly with forward contracts to facilitate the company to hedge their exposure and provide mark-to-market at all times and measure risk through VAR approach.
- Facilitate implementation of Company’s hedge policy and provide stop-loss and take-profit levels.
- Capture as much information as possible to provide meaningful and dynamic MIS to assist the trading staff and top management to take fast business decisions.
- Solution designed to provide maximum security, privacy and integrity by adopting time tested security practices.
- Clear segregation of duties & responsibilities through workflow for front office, middle office and back .
- Each Trading deal can be categorized and optionally be associated with the underlying import / export component.
- Provision to maintain inter-company exposure (without the accounting module) for providing data to Top Management.
- All deals including cross currency will have a rupee equivalent for crystallization, converted on a rate that is parameterized.
- Reconciliation of confirmations on receipt from Banks.
- IBSFintechʼs currency module saved Olam’s time, money and energy.
- Initiation of the FX or the initiation of the risk towards linking it with your underlying exposure.
- The module offers real time reports/dashboards for managing open positions.
- Adhere to the groups dynamic hedging strategy.
- Implemented faster and has fulfilled Olam’s requirement efficiently.
- Efficient end to end management: front, mid and back office.
- Multi currency capability (dollar, euro, pound, yen)
- They get access to real time mark-to-market
- After implementation they started doing currency and all related activities like derivatives, valuation, auto valuation.