Balancing Digital Aspirations While Addressing Risk Management Fundamentals: Observations From Citi Treasury Diagnostics

18 TREASURY POLICY: SUBSIDIARY FUNDING Funding/Repatriation Requests Linked with Cash Flow Forecasts Always linked Sometimes linked No 52% 38% 10% Subsidiary Funding Policy Formal policy exists and formal loan agreements executed No policy but formal loan agreements executed No policy or formal loan agreements 84% 16% 76% 8% 84% have either a formal subsidiary funding policy in place or require formal loan agreements executed by policy. However, only 52% always link the funding requests with the financial plan forecast. With half those surveyed permitted by policy to borrow locally, 90% of those require central approval to do so. 91% benchmark cost of funds against either panel of local banks and/or compared to the corporate cost of funds from central treasury. Benchmarking of borrowing costs when borrowing at local level Yes, based on a panel of local bank process Yes, based on the corporate cost of funds No 49% 42% 9% Subsidiary External Financing Subsidiaries Permitted to Borrow Locally Approval Requirement of Subsidiaries to Borrow Yes No 50% 50% Subsidiary require approval to borrow Subsidiary don’t require approval to borrow 10% 90%