1. 1 Financial planning (FP) Financial management of projects

2. 2 TRAINING‘S OBJECTIVE Annexe 1 General objective At the end of the training, the participant will be able to plan his/her expenses and to monitor their realization while respecting the validated budgetary framework and the procedures that are in force at BTC Specific objectives Explain the basic principles of financial planning Elaborate a financial planning Explain BTC’s process of financial planning

3. 3 1 OBJECTIVES CONCEPT Breakdown over time of future expenses according to budget lines Available budget Q1Q2Q3Q4Total yearY+1…… A A_01 A_01_01xxxxSum(Q1..Q4)xx A_01_02 A_01_NNxxxxSum(Q1..Q4)xx ….. Z Z_01 Z_01_01xxxxSum(Q1..Q4)xx …….. Financial planning Budget

4. 4 1 OBJECTIVES RISKS Annexe 2 Exercise What could be possible consequences of bad financial planning?

5. 5 1 OBJECTIVES RISKS (cont’d)

6. 6 1 OBJECTIVES IMPORTANCE OF THE PROCESS Process of planning activities/expenses operational planningBy means of the operational planning (See template distributed in Q4 2009) Annexe 8 Follow-up and respect of budget limits Management of liquid assets Cash call Planning of BTC’s global treasury Reporting

7. 7 1 OBJECTIVES CHARACTERISTICS Annexe 3 Version of the FP to be updated each quarter (4 versions per year) Version 2010 Q1: planning of Q1, Q2, Q3, Q4 and following years Version 2010 Q2: planning of Q2, Q3, Q4 and following years Version 2010 Q3: planning of Q3, Q4 and following years Version 2010 Q4: planning of Q4 2010, Q1 2011, Q2 2011, Q3 2011, Q4 2011 and following years

8. 8 2 FINANCIAL PLANNING Exercise: Beginning of May 2010: A new public contract is about to be launched under state-management (‘Régie’) in the coming 2 or 3 weeks (the technical and legal file) This contract is about a construction and is estimated at 500,000 euros Financial planning has to be completed by 31 May 2010 How would you plan these expenses?

9. 9 2 FINANCIAL PLANNING ELABORATION (cont’d) Study data and evaluation = Model Timing of payments in the field Planning of "Payment by HQ" Comparison of planning and expenses of previous quarters Model of Financial Planning (level of detail higher than budget line, monthly data, exchange rate,…)

10. 10 2 FINANCIAL PLANNING ELABORATION (cont’d) Points of attention Financial planning = expenses (= planning of payment) Importance of understanding the activities, the local reality, the suppliers No conscious overestimation Collection of data: Focus on significant amounts Lessons learned Paymen t Terms of Reference Commitments / contracts Public contracts Activity Invoice

11. 11 2 FINANCIAL PLANNING ELABORATION (end) FAQ Can one exceed budget lines? Yes, if not significant (<10%) Does one have to plan everything? Basically yes, except when you know that not everything will be spent Can one take budget increases into consideration? No Can one take foreseen extensions into account? Yes Which exchange rate? Rate of the day or FIT Can one spend more than planned? Yes, for as long as the global budget restrictions are respected

12. 12 3 PROCEDURE Annexes 4-5-6-7 1Gathering information 2Provisional version of the financial planning 3Analysis of the planning 4Discussion about the planning 5Adaptation of the planning 6Transmission of the planning to HQ

13. 13 3 PROCEDURE (cont’d) Q4 200X-1 Q1 200XQ2 200XQ3 200XQ4 200XQ1 200X+1 Elaboration FP First version FP sent to RR by P <10 Nov<10 Feb<10 May<25 Aug<10 Nov<10 Feb Analysis of FP by RR Discussion and agreement on FP between P and RR Final version FP sent to HQ by RR <30 Nov<28 Feb<31 May<15 Sept<30 Nov<28 Feb

14. 14 4 FOLLOW-UP OF FINANCIAL PLANNING Recommended for each quarter …. TO ACHIEVE RESULTS: Improve the quality of financial planning Analyse the evolution of expenses Control the financial execution of a project during the total duration Take proper decisions on the right moment HOW: 1Collection of information 2Analysis of realized expenses and of planning 3Decision on actions to be taken