Agenda Purpose of meeting Initial discussion on processes & controls for Tokyo Brief update on Toyo Commercial: Power, Metals, FX, Weather, Oil, EBS New office Staffing Outsourcing to Sydney See next slides Other
Why Sydney? Costs (25% of Tokyo costs) Mature office, 2 years of operation, main controls in place Enron FO/MO/BO segregation model in operation Language (Easy to recruit bilingual staff) Time zone (1 hour ahead of Tokyo)
Reporting Lines and Responsibilities All reporting signed off in Tokyo Daily DPR & P/L from Tokyo to Houston Weekly cash flow report from Tokyo to Houston Monthly packs from Tokyo to Houston Consolidated BS, P/L and notes Bank reconciliation (Sydney) CT, salary and other reconciliations Curve validation EMS report Reconciliations in Sydney, approved by Tokyo Signatures Tokyo & Sydney can sign wire transfer requests individually Tokyo approves G&A’s Tokyo approves trade settlements (Validations) Tokyo signs trade confirmations
Timeline BACK OFFICE MID. OFFICE Now August 25 Initial trades General accounting functions in Houston August 25 Move general accounting functions to Sydney Invoice collection, reviewing and approval in Tokyo MID. OFFICE Initial trades Legal in Tokyo involved in Documentation process Books in spreadsheets Manual settlement process In general manual processes, everyone involved in details Trade accounting in Sydney Critical Deal Mass in place Documentation, Settlement and Trade Accounting Automate processes and move to Sydney Logistics Part of the Commercial team, in Tokyo, dotted line to Commercial Support Risk Management In Tokyo System decisions, design and calibration
Enron Japan Commercial Support Logistics TOKYO Communication & Systems Documentation SYDNEY Contract Details Physical Transportation Trades Risk Management TOKYO Physical Volumes Financial DPR & P/L Financial Commercial TOKYO Price & Vol Curves Settlement & Cash Flow SYDNEY TOKYO Corporate Reporting & Local Statutory Reporting & Tax/VAT Reporting Treasury HOUSTON Accounting & Management Reporting SYDNEY