2. Highly Confidential
ReferenceNo.(9ptArial)
7/11/2013
Financial Risk
Risk must be Known, Understood, Quantifiable, Controllable, Present and Potential.
5
4
3
2
1
“ Peeling the Onion” - Leading practices for effective risk assessment
1. Company/individual
2. Competitors in specific industry
3. Specific Industry
4. Domestic Industry
5. World/International economies
and Trade
3. Highly Confidential
ReferenceNo.(9ptArial)
7/11/2013
Business and Financial Risk
Business Risk:
1. Every company carries the business risk that it will produce insufficient cash flow in order to
maintain operations.
2. Business risk can come from a variety of sources, some systemic and others unsystemic.
3. Every company has the business risk that the broader economy will perform poorly and
therefore that sales will be poor, and also the risk that the market simply will not like its
products.
4. Business Risk affect outside the industry and it comes whenever any political issue, changes
government Policies, Inflation etc…
5. Certain business risk cannot control or mitigate.
6. If customer cannot control, risk cannot mitigate or control.
7. Corporate and Consumer are categories of Business Risk.
Corporate Business Risk - High
Consumer Business Risk - Low
Financial Risk
4. Highly Confidential
ReferenceNo.(9ptArial)
7/11/2013
Financial Risk:
1. The probability of loss inherent in financing methods which may impair the ability to provide adequate
return.
2. It can include the failure of financial Systems, compliance issues. It can include bad debt, adverse changes
in exchange rates, overdependence on a single supplier, loss of key customer, loss of investments and poor
hedging decision.
3. Financial Risk affect inside the industry whenever changes leverage ratio, interest rate, current ratio, etc...
4. Most financial risk is manageable and mitigate.
5. Financial Risk is easier to hedge and certain degree of control on them.
1
HFR
LBR
2
HFR
HBR
3
LFR
LBR
4
HBR
LFR
1. High Financial Risk, Low Business Risk -
2. High Financial Risk, High Business Risk –
3. Low Financial Risk, Low Business Risk -
4. High Business Risk, Low Financial Risk –
Low High
Financial Risk
LowHigh
BusinessRisk
The appropriate and inappropriate positions regarding business and financial risk in terms
of company’s total risk
Financial Risk
5. Highly Confidential
ReferenceNo.(9ptArial)
7/11/2013
Mobily Financial Risk
Scope:
• Provide management with required analytical reporting to enable monthly monitoring
for actual performance for either standalone or consolidated financial statements.
• Assess Mobily finance operation and reporting activities for general ledger, payable,
Account Receivable , treasury, financing and payroll divisions to define their business
risks ranked by severity; then set relative controls to mitigate identified risks .
• Assess Mobily applied finance policies and procedures in comparison to defined controls
to assess enhancements needed, which will be remediated according to agreed
timeframe based on risk level.
• Assess Mobily applied consumer and corporate policies for various products and prices .
• Assess Mobily applied processes at each business levels.
Financial Risk
6. Highly Confidential
ReferenceNo.(9ptArial)
7/11/2013
Treasury Risk:
Hedging Risk
– Hedging will affect if SIBOR changes below hedging rate.
– Short term hedging periods will affect payment in case of SIBOR high .
Interest Risk
– Market movement will affect interest rate fluctuate and which could impact on cash
flow.
Currency Risk
– Currency fluctuations affect investment returns if transaction dealing in foreign
currency.
– Foreign currency fluctuations affect the payment of roaming and interconnect
invoices.
Market Risk
– Government policy or strategy changes.
– Competition in similar industry and possible to reduce revenue.
– Dealers risk will increase.
Credit Risk
– Credit facilities not used properly and not assessed regularly.
– Cash flow problem result not able to pay debt on time.
Financial Risk
7. Highly Confidential
ReferenceNo.(9ptArial)
7/11/2013
Mobily Product & Services
1) GSM
• Prepaid
Prepaid line activation without document or with forgery document.
Illegally Voucher / Scratch card E-Pin download by internal staff.
Stolen the E-Pin number by fraudsters.
• Postpaid
Line activation without document or with forgery document.
Exceed the Credit Limit .
Subscriber not paying the bill after made high usage.
2) Data
• Prepaid
Prepaid line activation without document or with forgery document.
Access without Subscription.
Free access data after expiry package or credit limit.
• Postpaid
Line activation without document or with forgery document.
Exceed the Credit Limit .
Subscriber not paying the bill after made high usage.
Financial Risk
8. Highly Confidential
ReferenceNo.(9ptArial)
7/11/2013
3) Wholesale
Interconnect Carrier
National Carrier & International Carrier
• Capacity Utilization
• Interconnect Price
Roaming
National Roaming
• Frequently agreement amendment
• Price changes
• Network Issues
• Delay Processing
International Roaming
• Quantitative agreement instead of Qualitative
• Cost price is higher than Revenue
• Network Issues
• Delay Processing
• Link Failure
• Data Clearing charges
• Steering
Financial Risk
