WHAT IS THE BEST WAY TO MANAGE LOCAL COMPLIANCE?

SIMON WATSON | BDO GUIDO OUDEJANS| TOMTOM RALPH GEERTSEMA | BT Shared Services & Outsourcing Week, Amsterdam

May 2012

Copyright © May 12 BDO LLP All rights reserved

Panel discussion

AGENDA

Introductions

Context

Panel discussion

Questions

BDO INTERNATIONAL

5th BDO International is one of the world’s five largest accountancy networks

48,000 Over 48,000 partners and staff world wide

1,100 More than 1,100 offices

135 Present in more than 135 countries

$5.7bn Total combined fee income of US$5 7bn (2011)

Flexible characteristics of local firms, supported by world-wide network and strength of a global player

THE LEADING ALTERNATIVE TO ‘BIG-4’

BDO outsourcing services International compliance VAT returns Local statutory accounts Statutory audits Corporate tax returns Corporate housekeeping Payroll

Local accounting Management accounting Advice on trading entities Company registration Acting as local directors Setting up and operating

bank accounts

CLIENTS FROM ACROSS THE GLOBE

Global outsourcing services for BT Global Services

90 countries worldwide

Payroll and supporting services including treasury for a FTSE 100 pharmaceutical firm

38 countries across all regions

Statutory accounts, VAT, CIT service and Global service co-ordination

50 countries worldwide

Full scope (including payroll, back office, CoSec, bank signatory etc.) 25 EMEA countries

Stat accounts, direct & indirect tax

120 countries in North America, EMEA and Asia Pacific regions

Statutory accounts, tax, company secretarial and payroll for US technology business 20+ countries worldwide

BDO COMPLIANCE SURVEY 2011 Which factors are most important to you when considering local compliance?

0

10

20

30

40

50

60

70

80

Avoiding localpenalties

Improvingvisibility and

control

Reducing costof compliance

Reducing risk Affects thebusiness case

for SSC

Access to localknowledge

Local presencefor tax audits

Reducingmanagement

time inresolving local

issues.

Other other comm

bel

BDO COMPLIANCE SURVEY 2011 Which model does your company most use for local, in-country compliance?

0

10

20

30

40

50

60

Mainly use in-housestaff in each

country

Different providersin each country

Our SSC does localcompliance from a

central location

Our BPO providerdoes local

compliance from acentral location

Single, globalprovider withoffices in each

country and centralcoordination

Not sure

BDO COMPLIANCE SURVEY 2011 Which challenges have you experienced with local staff involved with compliance?

0%5%

10%15%20%25%30%35%40%45%

Career structurefor remaininglocal finance

staff

Cover for in-country staffinvolved withcompliance

Retention of keystaff

Recruitment ofstaff with the

right skills

Part-rolesconnected with

complianceaffect the

business case forSSC

None

BDO COMPLIANCE SURVEY 2011 Which other challenges have you experienced with local compliance?

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Lack ofvisibility overlocal filings

Difficultycoordinating

multiplelocal

suppliers

High cost oflocal

compliance(eg. fees or

internal)

Penalties forlate or

incorrectfiling

Lack ofpractical

advice overchanges in

localregulation

Fines or legalproceedings

for localdirectors

Distractionfor central

managementresolving

localcomplianceor serviceproviderissues

None

TomTom FSSC May 2012

SSOW Event Amsterdam

Personal Profile

10

Professional Experience

Current:

VP Finance at TomTom (July 2010 – Present)

Previous:

Interim Manager at Guido Oudejans Interim Management & Consultancy B.V. ( 2008 – 2009)

Director at Deloitte (July 2002 – December 2003)

Director at Andersen (August 1987 – June 2002)

›

›

›

›

›

Director at PricewaterhouseCoopers Global Compliance Services (January 2004 – November 2007)

12

WORLD LEADER IN LOCATION AND

NAVIGATION PRODUCTS

AND SERVICES

OVER 3,500 EMPLOYEES WORLDWIDE

BASED IN AMSTERDAM

12

TomTom app for iPhone/iPad

8

TomTom IQ Routes

Spoken street names

Map share technology

Latest map guarantee

Advanced lane guidance

Celebrity voices

TomTom speed cameras

TomTom HD Traffic

16

Tracks run data (time, distance, heart rate etc.)

Run history and reminders

Connects with world’s largest running club

Easy to use

SportWatch by Nike and TomTom

18

Line-fitted and aftermarket

20

Business Solutions = More than navigation

Be in touch with drivers and cars Know what’s going on in your fleet Help people to work more efficiently Improve your business performance

Navigation

Communication

Fleet management

Leveraging the TomTom assets and brand for business

22

Product portfolio TomTom Licensing

Portable and wireless

Government, Internet, logistics and transportation

Retail and insurance Financial services

24

(in € millions)

Revenue Net results

0

400

800

1,200

1,600

2,000

2005 2006 2007 2008 2009 2010 2011

720

1,364 1,737 1,674

1,480 1,521 1,273

0

100

200

300

400

2005 2006 2007 2008 2009 2010 2011

143 222

317

175*

87 108 68

Key financials profit & loss metrics

26

Concord

Redwood City Southfield

Mexico City

Sydney

Taipei Shanghai

Tokyo

Pune

Kuala Lumpur

Jakarta

Lebanon

Irene

Singapore

Bangkok

Employees

50 – 200

5 – 50

> 200

Eindhoven

Madrid

Paris

Edinburgh

Istanbul

Ghent

Copenhagen

Calne

Milan

Munich Zurich Budapest

Berlin

Leipzig Prague London

Amsterdam

Lodz Warsaw

Moscow

Harsum

Stockholm Helsinki

Amersfoort

Vienna

Lisbon Seoul

Nagoya

Our offices

Sao Paulo

27

Our Finance Organisation In TomTom financial shared services we have the functions AP, AR, GL, Procurement, and Payroll. Geographically, we have organised the finance support functions as follows:

EMEA: Amsterdam SSC. 60 Heads

• Asia: Decentralised model. Coordination team in Singapore. 20 Heads

• Americas: Decentralised model. 10 Heads

At Corporate level we have the functions Group Tax, Group Treasury, Group Accounting & Control

Our accounting runs on SAP and reporting is under IFRS

› ›

›

28

Compliance model - Current The TomTom Group compliance landscape – SFS and CIT filings - looks as follows:

EMEA: 40 filings

APAC: 26 filings

Americas: 8 filings

On top of this, we have indirect tax, payroll and statistics filings.

The filings are organised as follows:

Dutch filings

Foreign filings Outsourced to

multiple service providers

In-house / Outsourced

›

› ›

29

Why Outsourcing

› Core service by provider (TomTom is in navigation business)

Knowledge management (IFRS <-> Local GAAP) ›

› Risk appetite (focus)

Global reach service provider (uniform approach/support to local audits)

Coordination & reporting services (one team/one contract)

›

›

We started working together with BDO in 2010. BDO provides TomTom with SFS and CIT services in a number of countries. Local delivery, coordinated through their Amstelveen office. Dashboard provides filing status and acts as central repository.

30

Challenges

Transition path: Requires proper support and scoping. Ie who remains responsible for pending, potentially overdue filings. The current or new provider

Global reach: Presence in all of the countries? How strong is a partner provider or a network office in a country. Is compliance core business to a local partner or office. Differences in quality exists

Tier 1 vs Tier 2: Choice of audit firms in Tier 1. Choice may become more limited if compliance is performed by Tier 1 firm. Tax advisory vs Tax compliance

Ultimately, the corporate is responsible for its filings

›

›

›

Next steps

31

› Bundle - Concentration of compliance filings with selected number of providers

› Standardise - Uniform input data provisioning (One Pack)

› Optimise - Fit of compliance dashboard to TomTom reporting model

› Control - Align checks & balances TomTom with service providers

Shared Services and Outsourcing Week, 2012

Ralph Geertsema, BT

Placing compliance environment in a standard outsourcing grid

Complex H

igh

Ris

k

Easy Lo

w R

isk

Statutory

Reporting

Preparing Stat

Reports

Checking / validating

Transactions

Local

VAT/Tax

filing

BT Compliance environment considering the Long Tail…

CENTRALIZED LOCAL

Statutory Reporting Small

Country Operation

MEA & APAC

US Major Hub

Large European

Entity model

.....

OUTSOURCED

IN HOUSE

Local Co-Source In house

Local Outsourcing to E&Y / BDO

Legacy situation

Possible areas to develop

CENTRALIZED LOCAL

Statutory Reporting

OUTSOURCED

IN HOUSE

1

2

AGENDA

Introductions

Context

Panel discussion

Questions