Senior Executive Finance

Senior Executive Finance Value Creation Through Expert Financial Management

8 – 11 December 2013 • Hyatt Regency Hotel, Dubai, UAE

Top 5 Business Benefits 1. Obtain an appreciation of the concept of shareholder value and its contemporary application to corporate performance 2. Understand the different methods of project appraisal in contemporary use and how they have evolved over recent years 3. Analyse cutting edge techniques for estimating the cost of capital and capital budgeting 4. Develop a sound knowledge of modern methods of valuing companies, how to select appropriate techniques in different situations and the primary value drivers 5. Understand the methods and best practice in raising debt and equity for a range of firms

Organised by:

Strategic Career Partner

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Meet Your Expert Course Leader Nabil W. Zaki Nabil W. Zaki has been in the investment and banking industry for more than 30 years. During that period, he assumed senior positions in both corporate finance and treasury with major Wall Street firms and international financial institutions in New York, Canada and the Middle East. He has held high profile management positions with Chase Manhattan Bank, Merrill Lynch, Prudential Securities The George Washington University School of Business, IIR Middle East’s Academic Partner, is dedicated to excellence: in its teaching and research about management, in the public and private sectors, within the United States and internationally.

The school has a 75 year history of preparing men and women for leadership in both the public and private sectors. Known internationally for its dedication to academic excellence, the school draws students from all parts of the United States and around the world.

and Tradition. Currently, Nabil Zaki is an adjunct Professor of Corporate Finance and Derivatives at New York University. He taught at New York Institute of Finance (currently known as FT Knowledge) from 1995 until 2004. He lectures extensively on portfolio management, risk management, derivatives, and international capital markets for major Wall Street firms and financial institutions . Nabil worked as senior vice presidents at both Chase Manhattan bank as well as Merrill Lynch in a variety of senior posts in credit and treasury.

Also, Nabil is consulting a number of banks and financial institutions in

Beyond first class teaching and scholarship, the school’s faculty offers practical experience in the issues and challenges confronting business and government. Its research centres link faculty and students with US and international business and government organisations. Recent distance learning initiatives have expanded the school’s global reach.

the USA, Asia and Japan in the areas of asset/liability management, credit derivatives and restructuring as well as risk management. Currently, he is a senior adviser for a major hedge fund; Permal Investment Management.

Also, a Group Adviser for the Board of Directors of a major Asian bank; EON Bank. Previously, he served as an independent board professional director at the Board of Directors of Signature Asset Management Company Limited - a Cayman Island incorporated company.

Course Requirements And Certificates Delegates must meet two criteria to be eligible for an IIRME/GW Certificate of Completion for a course: 1. Satisfactory attendance – delegates must attend all sessions of the course. Delegates who miss more than 2 hours of the course sessions will not be eligible to sit the course exam

“Very exciting experience and I was able to learn many concepts in a really short period” Arsalam Bin Jayyab, Majid Al Futtain Group

2. Successful completion of the course assessment Delegates who do not meet these criteria will receive an IIRME Certificate of Attendance. If delegates have not attended all sessions, the Certificate will clearly state the number of hours attended.

Who Should Attend?

• Finance Directors and Managers

“It was very informative and full of knowledge” Firas M.Absa, Jawwal

Would you like to run this course in-house?

• Financial Controllers and Analysts • Vice Presidents and Senior Vice Presidents • Accounting Managers • Chief Accountants • Area and Regional Managers • Heads of Corporate Planning • Heads of Business Development

The in-house training division of IIR Middle East Tel: +971 4 407 2624 • Email: CTS@iirme.com www.iirme.com/cts

T: +971 4 335 2437 F: +971 4 335 2438 E: register@iirme.com W: www.iirme.com/execfinance

Senior Executive Finance

8 – 11 December 2013 Hyatt Regency Hotel, Dubai, UAE

Course Timings: Registration will be at 7:30 on Day One. The course will start promptly at 8:00 and conclude at 14:30. There will be two short breaks at 10:30 and 12:30 and lunch will be served at the end of each day's session.

Methodology

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The course will consist of a combination of classroom training, case studies and group exercises. You will be expected to bring a calculator.

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Corporate Finance Maximising Shareholder Value: Risk And Return Revisited • Objectives of corporate finance • What is value? Why value shares?

• The implications of maximising shareholder value • Business operations, strategic transactions and other risks faced by organisations • Identifying strategies which create shareholder value: Return on capital vs. cost of capital • Principal agent problem – getting management to act in the best interest of shareholders Risk And Uncertainty • Risk vs. uncertainty vs. exposure vs. return • What risk cannot be eliminated?

• Comparing arithmetic vs. geometric risk premiums • A brief history of risk assessment • Upside vs. downside risk • Risk psychology – which is it? Loss aversion vs. risk aversion Case Study: Dimensions of risk – what are they and how do they affect your bottom line?

Project Appraisal • The capital investment process • Accounting, earnings and market rates of return • Measuring profitability and returns • Present value, profitability indices, Discounted Cash Flows (DCFs) and timing of cashflows • Net Present Value (NPV) and value-creating investment decisions • Internal Rate of Return (IRR) and Modified IRR (MIRR) • Adjusted Present Value (APV) method – assessing the impact of risk on cashflow analysis • Modified NPV – the real (or managerial or strategic) options approach to project appraisal • Mutually exclusive projects vs. independent projects • Capital budgeting/rationing using linear programming and Monte Carlo simulation Exercise: Project appraisal – comparing cashflow analysis rules and real options in investment analysis. You will use an Excel model to choose from three projects based on their payback, discounted payback, IRR, NPV, APV, and MPV. Cost Of Capital And Capital Structure • Components of capital: Short and long term debt, preference shares, ordinary shares, hybrids • Calculating beta for variations in business risk and variations in leverage • Capital Asset Pricing Model (CAPM), Arbitrage Pricing Theory (APT) and multifactor models • Cost of debt: Coupon vs. yield, market value vs. book value, tax problems and default risk

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Cost of equity: Dividend models, CAPM and its competitors – APT, APV and so on Weighted Average Cost of Capital (WACC) Modigliani – Miller (M&M) propositions I and II and subsequent developments Factors affecting the capital structure decision The effect of capital structure on cost of capital Exercise: The capital structure conundrum – how much leverage is too much?

Exercise: Valuing companies based on cash-flow based techniques (spreadsheets will be provided)

Company Valuation Business Valuation Approaches And Methods – Discounted Cash Flow • Value from revenue generating assets and future growth opportunities • Shareholder value and discounted cash flow analysis • Compounding and discount rates • Comparing enterprise value and equity value Exercise: Variations of IRR in Excel – MIRR and XIRR (All Excel spreadsheets used in the programme will be given to you at the end of the course) Economic Value Added (EVA™) • EVA™ – when is value added?

• EVA™ and its relation to DCF model • Calculation of NOPAT and capital • Typical adjustments for EVA™ calculation • MVA as a discounted EVA™ concept Financial Ratio Analysis • Price/earnings multiples • Earnings related multiples: EV to EBIT, EBITDA, cash flow, etc.

• Other multiples: sales, book value, PEG ratio, EEG • Relative multiples • Comparable deal analysis • Traditional measures of liquidity • Non-financial ratio analysis Exercise: Limitations of ratio analysis Case Study: Dupont Valuation Model – the drivers of return on equity Dividend Valuation • •

Dividend Discount Model (DDM) Applications and examples in practice Exercise: Spreadsheet modelling of the DDM

Financing Strategies – Raising Debt And Equity Debt Finance • Nature and obligations of bank debt • Reasons for financing through debt • Funding hierarchies • Bank lending criteria and credit assessment

T: +971 4 335 2437 F: +971 4 335 2438 E: register@iirme.com W: www.iirme.com/execfinance

Exercise: Calculating available bank debt for a range of enterprises Fixed Income Markets, Factors And Risks • Money market and bond instruments • Government, municipal and corporate bonds • Repurchase agreements (REPOs) • Credit and credit ratings • Sources of returns from bonds • Bond and other fixed interest instrument pricing methods • Spot rates and zero-coupon bonds • Term structure of interest rates and yield spreads • Clean and dirty bond pricing • Fixed income risk and return measures – yield, duration, Present Value of a Basis Point (PV01) and convexity • Mark-to-market vs. accrual assessment of bond trading positions • Interest rate risks and sensitivities Exercise: Pricing zero-coupon and coupon-paying bonds in Excel for floating and fixed-rate scenarios Fixed Income Investment Management • Characteristics of fixed income investment • Advantages and disadvantages of fixed income investment • Risks associated with fixed income markets • Duration, PV01, convexity and other fixed income risk factors Exercise: Calculating key ratios and pricing for bonds • • •

Government bond markets Syndicating and pricing new issues Stability of bond ratings and bond ratings migration matrices Case Study: The bond floatation process

Foreign Exchange (FOREX) • Foreign exchange rates – markets, conventions and regimes • Implications of FOREX trading around the world and around the clock • Inflation and currency stability using indexing • FOREX parity relationships in international markets • The art and science of country risk analysis • FOREX risks – translation and transaction exposures Exercise: Do foreign exchange policies matter? The implications, benefits and consequences of foreign exchange rate policies and regimes Case Study: Managing systemic risk and the anatomy of some recent international financial crises Exercise: Applying country risk analysis in the Middle East Initial Public Offerings (IPOs) • Primary equity markets - Middle Eastern markets - Comparison with US and European markets • Rationale for an IPO • Domestic vs. international issues • ADRs, GDRs and EDRs • Underwriting vs. best efforts • Fixed price offers, tender offers and book buildin • The IPO process • Preparing for an IPO Case Study: IPOs, going public and recent global trends in IPO listings Alternative Procedures For Rasing Public Equity Capital • Rights issues • Seasoned equity offerings • Private placements

Case Study: Recent developments in private equity

Investments And Portfolio Analysis Portfolio/Fund Management – An Introduction To Asset Management • Major players in the market • Portfolio/fund management process • Examining different investment strategies – value, growth, technical, contrarian • Active vs. passive investment strategies Exercise: Trading anomalies and inefficient markets

Investment Performance Monitoring And Analysis Investment Performance Evaluation • Monitoring investment performance • Measuring investment returns • Risk-adjusted performance measures • Performance measurement of portfolios containing derivatives Case Study: Best practice in fund management performance

Advanced Financial Techniques Structuring Securitisation And Asset Backed Securities (ABS) • Structuring and securitisation concepts • Motivation for securitising assets/cash flows • Types of ABSs • Commodity, currency, debt and equity structured products • Securitisation in developing markets Exercise: Using MBS to meet investment objectives Case Study: Development in securitisation in the Middle East Analysing Corporate Mergers And Acquisitions • Categories of corporate mergers • Analysing rationales for potential mergers • Roles of investment bankers, lawyers, underwriters and brokers • Selecting a target – synergies • Leverage buyouts • M&A due diligence Case Study: Analysing potential acquisition targets in the Middle East Private Equity In The 21st Century • Nature of private equity in the Middle East • Comparison with USA, Europe and Asia • Which and what deals would attract private equity • Private equity returns – empirical analysis • Corporate takeovers and restructurings from a venture capitalist’s viewpoint Exercise: Evaluating investments and exits

Risk Management: Derivatives And Value Maximisation An Introduction To Risk Management • Risk management framework • Different types of risk management procedures • Financial market’s regulation and the Basel accords • Corporate governance, institutions of information, screening and monitoring • Financial risk management and its importance on financial control • Comparing crisis management and risk management

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Exercise: Basel II – What is it? How good is it? How will it affect a business?

Exercise: Should organisations use derivatives to manage risks? How they should do it

Exercise: Enterprise risk management – What is it? Does it add value?

Exercise: Managing risk using option’s greeks Case Study: Procter & Gamble and Gibson’s misuse of derivatives financing – lessons for senior management Forward And Future Contracts Forward Contract Design And Structure • Understanding the structure of forward and future contracts • The difference between forwards and futures • Different types of forward and futures contracts including currency, interest rates, bonds and commodities Case Study: Designing a futures contract – designing a contract combining user requirements with feasibility from the exchange standpoint Mechanics And Uses Of Forward Contracts • Trading speculation, hedging and financial engineering • Measuring market risk • Measuring credit risk Case Study: Managing risk using forward contracts. You will use futures contracts to manage a range of different financial risks facing corporates Interest Rate Forward Contracts • Rates implicit in spot quotations • Arbitrage pricing methods • Importance of margining • Clearing and netting Swaps Types Of Swaps • Interest rate swaps • Cross currency swaps • Equity swaps • Asset swaps Options Options And Their Use In Corporate Finance • Understanding option jargon • Using options in practice • Trading and hedging • Arbitrage with convertible bonds

Credit Risk Introduction To Credit Risk • Definition of credit risk • Three approaches to measuring credit exposure – individual transaction approach, market factor approach and portfolio approach • Extension from credit exposure to credit risk – credit risk management, economic capital and regulatory capital Credit Derivatives • Understanding the major uses of these products • Benefits and pitfalls for the user • Credit default options • Total return swaps • Credit spread transactions Case Study: Developments in credit derivatives in the Middle East Risk Assessment Techniques • Risk assessment from factor sensitivity to Value at Risk (VaR) to conditional VaR • Three approaches to measuring VaR: Variance/covariance, historical simulation, Monte Carlo methods • VaR at the transaction, portfolio and organisational levels • Marginal VaR contribution measures and conditional VaR • Cashflow at Risk (CfaR), Earnings at Risk (EaR), and Capital at Risk (CaR) approaches • Credit Value at Risk (CVaR) and Operational Value at Risk (OPVaR) Exercise: VaR across the organisation and its business units including the decomposing of risk across an organisation using component VaR Risk And Capital Allocation Techniques • Risk and capital allocation using Value at Risk (VaR) measures • Capital-based risk-adjusted return and performance measures • Comparing economic risk capital and regulatory capital • Relationship of RAROC capital to credit, market and operational risks Exercise: Calculating RAROC for a financial institution

Case Study: An option theoretic view of the organisation Option Pricing For Corporate Finance • Black-scholes and binomial options pricing methods • Adoption of black-scholes method • Other option pricing models • Model risk – do the complex mathematical models associated with derivatives valuation have a place in the Middle East?

Exercise: You will be provided with black-scholes and binomial option pricing models and instructed on their use Financial Control And Option’s Greeks • Delta • Gamma • Vega • Theta • Rho

T: +971 4 335 2437 F: +971 4 335 2438 E: register@iirme.com W: www.iirme.com/execfinance

Senior Executive Finance

8 – 11 December 2013 • Hyatt Regency Hotel, Dubai, UAE

FIVE WAYS TO REGISTER IIR Holdings Ltd. P.O Box 21743 Dubai, UAE

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DISCOUNTS AVAILABLE FOR 2 OR MORE PEOPLE CALL – +971 4 335 2483 E-MAIL – a.watts@iirme.com WEB BC4792 Event

Course Fee Before 22 September 2013

Course Fee Before 13 October 2013

Final Fee

US$ 3,895

US$ 4,395

US$ 4,695

Senior Executive Finance

8 – 11 December 2013 (BC4792)

WOULD YOU LIKE TO RUN THIS COURSE INͳHOUSE?

Course fees include documentation, luncheon and refreshments. Delegates who attend all sessions and successfully complete the course assessment will receive an IIRME/GW Certificate of Completion.

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Event Venue: Hyatt Regency Hotel, Dubai, UAE Tel: +971 4 209 1234 Accommodation Details We highly recommend you secure your room reservation at the earliest to avoid last minute inconvenience. You can contact the IIR Hospitality Desk for assistance on: Tel: +971 4 407 2693 Fax: +971 4 407 2517 Email: hospitality@iirme.com

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