Tag Archives: financial Strategic Planning”

Special Purpose Shared CFO Solutions for CFO Support Services from SuperCFO

In the real business world, Financial Health Management is critical, and CFOs are hands-on professionals who love to roll-up their sleeves and lead the action. They like to get the work done.

Like many small and mid-sized businesses, do you also think of CFOs as know-it-all sages sitting on top of hills … guys who can only “advise” you when you have a financial problem?

Truth is, in the real business world, almost all CFOs are hands-on folks who love to lead the action; in other words they like to get their work done! So, whenever you have a business deal that needs a CFO to be handy, you should get one from SuperCFO! Be it an IPO or a Merger or Acquisition, or a Special Audit or any critical issue that needs an experienced financial brain.

For instance, putting together a detailed Financial Forecast model for raising Private Equity funds is not something which is a routine part of Financial Controller Services. SuperCFO proposes a unique solution which is an integral part of it armor of CFO Support Services; just hire a Shared CFO when you need to – for just the time and work you need. By the way, even if your existing CFO needs an extra hand, SuperCFO is just an arm’s length away!.

Check out Special Purpose CFO Services from SuperCFO, if you believe that a full-time hire isn’t needed! Read More

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Virtual CFO Solution From SuperCFO: The Most Cost Effective Shared CFO Solution For Startups And Growing Companies.

Companies at all stages of their evolution need a strategic financial brain to steer it clear from the stormy waters.  This is more so in the early stage companies. They crave for a sharp analytical mind to help them out in fund-raising, budgeting, financial reporting, cash flow management and ensuring compliance.
It has been observed that more than 40% early-stage businesses shut down due to financial in-discipline. Of course, only less than 20% startup founders believe that they can afford a full-time CFO in their organization. The truth is that the need for a strategic financial “brain” as part of your early-stage team is more imperative than ever. The CFO or Finance Head will ensure that the company keeps running full-steam and thereby help the CEO or the Promoter to focus on strategy to fuel the company to further growth, without being unsure – financially!
If you are a start – up or a small and growing company, hiring a Fulltime CFO would in most cases be cost prohibitive. How do you reconcile to this situation? There is an ever increasing need to make financially challenged companies aware about the growing phenomena of Virtual CFO or Shared CFO services where you can Hire a CFO, at a fraction of the cost that it would take to recruit a Fulltime CFO.
Worry not! SuperCFO has just the right solution for you in the form of a Virtual CFO or a Shared CFO.
Yes – A Virtual CFO. Someone who will never be a liability on your payroll, but always an asset for you and your company. The SuperCFO Virtual CFO’s involvement with your company is calibrated just to the right extent to ensure that there is no bleeding of unnecessary finances for your company. And what more……our Shared CFO brings great experience and skill to your existing Finance and Accounts team at a sharp cost; just when your company needs it the most. So go ahead and Hire a CFO from SuperCFO.

SuperCFO’s Interactive Annual Salary Survey Report 2013

The world economy is still to shake off from the 2008 crisis. Globally, growth has dipped to around 3% in 2012. Industry experts prognosticate that this trend will likely continue for some more quarters before there is the inevitable light at the end of the long dark tunnel. This year, the global salary forecast across most businesses, is a modest growth of about 10% on the average.

To add further, a significant 26% of the respondents indicated no salary growth last year. In other words, their salary remained constant. Average salary growth was between 6-10% which 23% of the respondents felt so. A majority of 32% felt the growth was less than 5%.

Interestingly, many companies are closely evaluating compensation packages for their employees and are trying to work out the best approach to retain talent, but are adequately cautious to not go overboard in increasing costs substantially.   This slowing trend will likely continue. Mature economies are still healing the scars of the 2008-2009 crises. But unlike in 2010 and 2011, emerging markets did not pick up the slack in 2012, and won’t do so in 2013. There is a lot of uncertainty across the major regions of the world. Unlike 2008, this time around India and China too have been caught in the vortex of the global meltdown apart from the slow US recovery and the continuing Eurozone conflagration.

Things do not bode well for India in the near to mid- term. The next year or two will be very challenging for India particularly as it tries to rebuild its rapidly waning investor confidence, which is causing a flight of capital out of the country and depreciating the Indian Rupee to unheard of levels viz the USD.

In an effort to fathom the impact of all the socio – economic trends from the employer and employee perspective, and in some way address the same, SuperCFO has conducted The Salary Appraisal Survey 2013. The response to our latest Survey was more than satisfactory, to say the least. We received an overwhelming response from participants spread across 59 countries in the world. Respondents were divided across small, medium and large business as well. Overall the survey results spell out the economic condition of the world rather accurately and make for an interesting read.

In a radical change from the past, this year’s Salary Appraisal Survey 2013 from SuperCFO, is presented in a novel manner. For the past few months, the staff at SuperCFO has been diligently working on an innovative Business Intelligence (“SuperCFO BI”) platform, which is primarily targeted towards the small and medium business segment. Soon to be launched globally, as an online commercial offering, SuperCFO BI will be a one of a kind offering from a company that has been a leader in the CFO services space.

Please click here to get a unique interactive experience on the SuperCFO Salary Appraisal Survey 2013.

Click here to View Report

SuperChat with SuperCFO – Sandeep Kumar Sarawgi

This week on SuperChat with SuperCFO, we are delighted to present a tete a tete with Sandeep Kumar Sarawgi, who is the Chief Finance and Risk Officer at Antwerp Diamond Bank N V, Mumbai Branch. Winner of the first CFONEXT100 Award for 2012. This is an annual award conducted by the prestigious CFO Institute of India to recognise leaders in the field of finance and accounts.

In this freewheeling SuperChat Sandeep sheds light on his personal facet; his likes and dislikes, his role model, who inspired him to be where he is today and many more such interesting trivia.

For more on the SuperChat with our SuperCFO, Sandeep, please read on……

Education: Fellow Chartered Accountant (FCA); Bachelor of Commerce (B.Com.)

Companies worked with: In his 21 plus years career, Sandeep has been associated in senior leadership roles with various companies including Antwerp Diamond Bank N.V., ICICI Bank Limited, Bombay Stock Exchange Limited, E-City Ventures (Fun Republic), Intelenet Global Services Limited (now called Serco Global), IDBI Bank Limited, ICICI Securities / ICICI Securities Primary Dealership Limited and Arthur Andersen & Co.

SuperCFO: What particular skills or talents are most essential to be effective in your job apart from formal training?

Sandeep Kumar Sarawgi:

Ability to read situations, communication, handling pressure, planning and execution, people management.

SuperCFO: Who is your role model and why?

Sandeep Kumar Sarawgi:

Gautam Buddha – the way he forgave self interest and gave his life for the good of others.

SuperCFO: What has been your biggest achievement professionally?

Sandeep Kumar Sarawgi:

1. Ability to interact with top management through various corporate lifecycles of start ups, expansion, transformation, consolidation and shareholding changes.

2. Have successfully managed various corporate avatars: standalone companies, joint ventures, subsidiaries, associates, Trust structures, SPVs, AOPs, branch of a foreign company etc.

SuperCFO: Who are the 3 Corporate Honchos you admire a lot and why?

Sandeep Kumar Sarawgi:

1. Azim Premji: for his philanthrophy.

2. Ratan Tata: for sticking to retiring himself.

3. Steve Jobs: for being foolish and hungry.

SuperCFO: Which are the 3 companies you admire a lot and why?

Sandeep Kumar Sarawgi:

1. Apple – for reinventing itself.

2. Air Asia – for employee focused leadership.

3. Mercedes – for sustainability of brand through such a large geography in the world.

SuperCFO: Assume that you are indulging in role play. If you were given the position of the Finance Minister of your country, what would your top priority agenda items be?

Sandeep Kumar Sarawgi:

Increase the direct income tax base, which is pathetically low: there can’t be only 42,000 assesses with over Rs.1 crore of income. As head of the tax administration, to have a fair tax system, is a primary responsibility. Also, tackling black money economy.

SuperCFO: What would you advise aspiring CFOs on dos and don’ts to become a successful CFO?

Sandeep Kumar Sarawgi:

Do’s: Always have a long term and a macro outlook. Focus only on short term goals may lead to compromising situations.
Dont’s: CFOs should be principles and value based and should be able to challenge – people rely on them for the monetary results – don’t let them down.

SuperCFO: What are your 3 “Must Ask” questions in an interview?

Sandeep Kumar Sarawgi:

1. What is your career outlook?

2. How would you handle a particular situation?

3. Why are you looking for a change and why do you think that this is a good match for both?

SuperCFO: Which is one accounting software that has impressed you and why?

Sandeep Kumar Sarawgi:

SAP – it constantly upgrades itself to handle ERP data and information challenges.

SuperCFO: How do you manage talent within your team?

Sandeep Kumar Sarawgi:

By being honest, transparent and straight forward. I hate politics and dislike who cut others throats to move forward.

SuperCFO: Are you a gizmo freak? What is your favorite gadget?

Sandeep Kumar Sarawgi:

Not much – am a practical, need based person. I don’t make the gadgets into status carriers.

SuperCFO: What is your favorite piece of literature?

Sandeep Kumar Sarawgi:

Ghazals – I like the depth of thought expressed in few verses.

SuperCFO: Any sport that you are passionate about?

Sandeep Kumar Sarawgi:

Cricket – but due to the commercial aspects spoiling the game, I have become a diluted diehard fan.

SuperCFO: Describe some of the activities that you undertake to de stress yourself?

Sandeep Kumar Sarawgi:

Watching movies, listening to music and to top it all, spending quality time with my young daughter.

SuperCFO: What has been your favorite vacation destination and why?

Sandeep Kumar Sarawgi:

Switzerland – it is post card, picture perfect.

Debt Restructuring: Part II

A debt restructuring is preferable to the option of applying for bankruptcy and involves either reduction of debt and/ an extension of payment terms, reduction in interest costs and or interest holiday or moratorium. For instance in the US small business bankruptcy filing cost at least $50 to 60,000 in legal and court fees. In India like in other countries, the corporate debt restructuring undertaken by the banks have resulted in not only reviving companies but also aiding in warding off potential NPAs for the banks.

Corporate Debt Restructuring (CDR) is more than a mere fad for Indian Corporates. Several analysts have fastidiously evaluated the impact of debt restructuring processes on the overall well being of the economy and have concluded this as a very effective way of revival of the corporate sector.The CDR Mechanism is a voluntary non-statutory system based on Debtor-Creditor Agreement and Inter-Creditor Agreement and the principle of approvals by majority of creditors. The CDR Mechanism covers outstanding aggregate exposure of Rs.100 million and above from the Indian banking system. It covers all categories of assets in the books of member-creditors classified in terms of RBI’s prudential asset classification standards. Even cases filed in Debt Recovery Tribunals/Bureau of Industrial and Financial Reconstruction/and other suit-filed cases are eligible for restructuring under CDR.

Companies’ suomoto also carry out the process of Debt restructuring. It can also be for altering the mix of short and long term debt. The short term debt of less than six months maturity pose a threat to the liquidity of the company as the company will need to be ready always with cash to honor the commitments either internal cash generation or fresh borrowings. Under such circumstances it will be worthwhile to convert a significant portion of the short term debt into long term borrowings if there is room.

The quasi equity structure which permits raising funds through Preference Capital has a twin advantage of helping the companies with a favorable capital gearing and also aids retention resources in the company for a longer time. The flip side is however the funding cost could be higher as the compensation for this capital comes out of the post tax profits.

In a swap between debt and equity, a company’s bankers or the other creditors agree to cancel some or all of the debt in exchange for equity in the company. This kind of swap is very common in several rehabilitation proposals approved by Board for Industrial & Financial Reconstruction (BIFR) where the company’s large and back breaking debt burden forces conversion of portion of debt to equity, with a buy back option and a right to recompense. An extension of this arrangement is the convertible debentures option which is a hibrid instrument that can be used as debt till converted into equity and this instrument is leveraged effectively in the corporate world for some time.

Corporate Restructuring: Part I

Restructuring is typically a “Management” term for the act of reorganizing the proprietary, operational, or other structures of a Company for the purpose of making it better organized and ultimately Improving the top and bottom lines. Corporate restructuring is the process of rebuilding or reorganizing a portion of the company. This process may be implemented owing to a number of reasons, such as marketing position vis-à-vis competition, meet and sustain in an adverse economic climate, or change gears into an entirely new direction. Most businesses go through a phase of restructuring at some point, though not necessarily to address shortfalls. In some cases, the process of restructuring takes place for allocating resources for a new product campaign or the launch into a new market, to mention a few. In such an event, the restructure is a sign that the company is financially stable and has set goals for future growth and expansion.

Restructuring a corporate entity is often necessitated by the company having grown whereby the original structure can no longer be effective to manage the company efficiently. For instance some of the departments might have grown very fast and may call for spinning them off into subsidiaries and there may still be others which may be operating marginally with huge costs that can set the management think whether it will be better to outsource such work of such departments. In some cases taking up some activities by which the costs can be saved could be a good idea. The restructuring is seen as a positive sign of growth of the company and is often welcome by those who wish to see the company gain and grow.

Corporate restructuring may also be designed to manage the debts, improve profitability and efficiency. Negotiations with banks/term lending institutions, creditors are commonly used to reduce the burden of debt carried by a company. Large debt burden can greatly hinder company growth calling for modification of some or all debts. This may involve securing new loans at more favorable terms or negotiations with creditors. In some cases, equity infusion through IPO/Private equity may be used to restructure debts. In other cases, bankruptcy can be used as a tool for corporate restructuring. If a business is burdened by unsustainable levels of debt, the companies can go through a process of restructuring the debt that allows a company to renegotiate some of its financial obligations and often involves giving equity stake to some creditors in a restructured firm.

Along with any other restructuring, a company may need to restructure its operations to help eliminate wastes. For example, two divisions or departments of a company may perform related functions and in some cases duplicate efforts. Rather than continue to use financial and other resources to fund the operation of both departments, their efforts are combined. This helps reduce costs without impairing the ability of the company to achieve the same ends in a timely manner. Operational restructuring, may also involve downsizing, eliminating staff to reduce costs. Changes to the structure of a corporate workforce bringing in rationalization of human resources or to the processes can improve profitability.

In some cases, restructuring must take place in order for the company to continue operations where the company progressively witnesses sales decline and it no longer generates sustainable profits. The process of operational restructuring includes a review of the costs associated with each sector of the business and an analysis of ways to cut costs and increase the net profit. The process may also do away even in a phased manner with the out dated facilities used in production that are not doing well.

Another kind involves Equity restructuring. Here the Companies that have little debt compared to their equity are underleveraged or have a low gearing ratio .Such companies may adopt buy back of shares. This will have fewer stockholders to satisfy and pay dividends to. Converse to the situation is where the company has profitable projects on the anvil. Here is the opportunity to go for higher debts for projects leveraging the equity. The surplus or deficit of cash can also be used to determine whether high debt is required or whether the assets are required to be sold as the case may be.

Mergers and takeovers also provide inorganic growth and provides basis for restructuring. Companies find it advantageous to pursue joint operations with other Companies whose economic ventures are likely to work better together than apart in terms of the scale of operations, bargaining power with creditors etc. The business activities of both Companies involved in a merger are typically reorganized. In other cases, one firm may simply acquire another outright. Such acquisitions also lead to corporate restructuring.