PAC Webinar - Kinross Strikes Gold

KINROSS STRIKES GOLD WITH

ADVANCED REPORTING

Presenters:

Justin McNeely - Account Executive, Performance Analytics CorporationSharon Chadwick - Manager, Kinross Advanced Reporting SystemSusan Harris, Director of Consolidations & Kinross Advanced Reporting System

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� Canadian consulting firm focused exclusively on SAP Enterprise Performance

Management solutions

� Implementing SAP BusinessObjects Planning and Consolidation (BPC) since

2003

� Currently support the majority of Canadian customers using BPC

� Consultants located across Canada

� Consultants have Finance background: CA, CGA, CMA, CPA

� Services include: Evaluation, Design, Implementation, Project Management,

Training, and Support

Sample of Canadian SAP BPC

Customers

Common Issues

■ Silos of information

■ Data integrity and validation issues

■ Multiple currencies

■ Manual security

■ Excel hell

■ Version comparison and variance analysis difficult

■ What-if analysis difficult

■ Structural changes (account, org) are painful

■ Lack of controls, approvals, and audit trail

■ Compliance with SOX/C198 difficult

■ IFRS

■ XBRL

■ Manual process – time consuming –80/20 rule

Process Issues Environmental Issues

Lengthy Cycles

Introducing SAP BusinessObjects

Planning & Consolidation (BPC)

MS SQL Server

SAPNetWeaver

What the Industry Analysts are

saying…

� Gartner SAP is a Market Leader and has the strongest vision

� IDC SAP #1 in Performance Management Tools

� Forrester SAP has the strongest offering in the Business

Performance Solutions market

� Microsoft – SAP press release November 2009

Microsoft Corporation supports the SAP® BusinessObjects™ Planning and

Consolidation application, version for the Microsoft platform, as a preferred

solution for customers running their business applications on the Microsoft

platform.

Kinross Gold Corporation

■ Canadian based gold mining company with mines & projects in the USA, Brazil, Chile, Ecuador, Ghana, Mauritania & Russia

■ Employees: Approximately 7,000 worldwide

■ Strategic focus is to maximize net asset value & cash flow per share

■ Production: 2.3 million gold equivalent ounces

■ Revenue: USD 3 billion

■ Acquired Red Back Mining

■ Increased revenue, cash flow & earnings

■ Advanced growth projects

■ Expanded gold reserves & resources

Corporate profile

2010 performance & highlights

Kinross Advanced Reporting System

■ External auditors, KPMG, assisted with selection process:

■ Enterprise wide solution to meet both financial and operational requirements

■ Single, reliable and centralized source of information that everyone in the

company could access

■ Highly intuitive and provide familiar interfaces, including Microsoft Office

■ Scalable to support the company’s growth

■ Implementation partner: Performance Analytics Corporation

■ Two phases

■ External financial reporting

■ Internal operational reporting

KARS Implementation


■ Project team

■ Project managers - 1 x PAC, 2 x Kinross - Finance & IT

■ Consultants - 2 x PAC

■ KARS team - 4 x Kinross Finance, including system administrator

■ Key business users across company

■ Consulting

■ Application design

■ Fully calculated cash flow

■ Elimination of investments

■ Gold equivalent ratio by month, quarter & YTD

■ Imperial to metric conversion for USA sites

■ Reports, input schedules & custom journal report

■ Interfaces

KARS Project Team & Consulting


KARS Project Plan

JUN 1 JUL 1 AUG 1 SEP 1 OCT 1 NOV 1 DEC 1 JAN 1 FEB 1 MAR 1

Overview

Scrub Data

Project Coordination

Consolidation

Adjustments

19-Jun-08

Parallel sub-consolidations

KARS sub-consolidations

APR 1

31-Mar-09


� DailyRate: Daily currency rates, metal & oil prices.

� Rate: End of month & monthly average for Fx rates & prices.

� Finance: Consolidation of financial & operational data.

� Ownership: Entity ownership data.

� Operations: Operational/production data.

BPC Applications


� Dimensions (18)

� Shared e.g. Category

� Unique e.g. Account

� Alternate hierarchies e.g. Entity

� Legal, Management, Geographic and Segment.

BPC Applications – continued …

FinanceDailyRate Ownership OperationsRate


■ Developed

■ 1½ day training course

■ User guides for Operations & Finance

■ ½ day report writing course post ‘go-live’

■ On-site training

■ Operating mine sites

■ Regional offices

KARS Training & Documentation


■ Monthly reporting implemented April 2009

■ “Go live” for external reporting – Q2 2009

■ Financial statement preparation for Q2, Q3 & Q4 based on KARS data

■ Legacy/Excel consolidation run in parallel for Q2, Q3 & Q4 to verify KARS data – discontinued Q1 2010

KARS Milestones

KARS


■ First collected at a regional level

■ Highly summarized financial data

■ Submitted to headquarters 10 days after financial reporting cut-off date

■ Headquarters took a week to generate consolidated P&L & balance sheet

■ Another week to issue consolidated cash flow report

■ Request for more detail placed additional burden on regions and/or local business units

“Then” quarterly consolidation process


■ WD3

■ AP & AR closed 8am

■ Ounces produced input & transferred to Finance

■ WD6

■ Source GL (JD Edwards) closed 8am & data loaded into BPC

■ Operations data transferred to Finance at 3pm

■ WD8

■ Balance sheet continuities completed – cash flow completed

■ Supplementary input schedules completed

■ All entities submitted by COB

■ WD9

■ Operations results issued to SLT

■ Regional signoff – KARS locked for the period

■ WD10

■ Consolidated results issued to Executive Team

“Now” monthly consolidation process


■ Rapid external financial reporting

■ First time in company’s history that audited quarterly financial statements were released at the same time as publicly announced quarterly financial results

■ Reduced reporting cycle timeline

■ 50% faster for completing consolidated balance sheet, profit & loss and cash flow statements

■ Business users can focus more time on analytics & operational improvements

■ Consolidated ‘monthly’ internal reporting

■ Delivered on budget & on time

Results


KARS Report stacks

■ Profit & loss

■ Balance sheet

■ Cash flow

■ Intercompany matching

■ Note disclosures

■ MD&A

■ G&A

■ Production & costs

■ Production & sales summary

■ Site statistics

■ Production

■ Costs by element

■ Fuel costs

■ Corporate responsibility reporting e.g. consumption of carbon-emitting substances

■ Monthly commentary

■ Quarterly site financial reporting packs

Financial statements Operational metrics

Business Benefits

� Reduced cycle times and associated costs

� Improve accuracy and alignment with strategic goals

� Increase governance, control and accountability

� Spend more time analyzing and modeling the business and less time gathering data

© SAP 2009 / Page 21

Thank you!

Justin McNeelyAccount Executive

Performance Analytics Corporation

T (905) 599-7001

E [email protected]

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PAC Webinar - Kinross Strikes Gold