Super CFO

Managing Director (and Lead CFO)

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Convert your business data into smart & intelligent analytics, in few quick and easy steps.

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Comprehensive Dashboards For Smart CXO's

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Junking the mail box with mails of little significance or spam is a normal occurrence for all of us nowadays. In relation to the headhunting and search industry, as a CFO or a Finance Controller, when was the last time you put your resume on a head-hunting portal and got your mailbox junked by irrelevant mails? All the time right? Senior and mid career finance and accounts professionals like you deserve to utilize their time in a much more efficient manner.

The truth is there are very few organizations that understand the kind of work a CFO or a Finance Controller or any Senior Finance and Account professional does. Fortunately, SuperCFO is one of them! Our expert CFO Partners and Business Managers work closely with dozens of companies supporting their Finance and Accounts departments. SuperCFO has been a pioneer in the provision of Virtual CFO, Interim CFO and Special Purpose CFO Business solutions in India. SuperCFO has built a successful headhunting solution for CFOs and Finance Controllers on the success of the Virtual CFO business model.

The niche expertise with CFO solutions, a strong database and vibrant and growing online and offline network with the global finance, accounts and management community gives SuperCFO a headway in successful completion of client mandates within expected Turn Around Times and superior quality. As a result, at SuperCFO we are always standing next to your next career opportunity. Once we get to know you, we are able to identify exactly the right kind of companies and job profiles you could be exploring. The team makes sure that you as a prospective candidate are assured of a meeting with the powers that be in the mandated companies. All this, with an emphasis on discussions, and not cliched interviews.

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Full Time CFO – Are You Looking To Hire CFOs And Senior Finance Professionals

Your company must have experienced sheer frustration and helplessness, upon mandating typical Talent Management firms, who are merely resume pushers and certainly exhibit little or no Talent in their Management vetting of Financial and Accounts Talent!! The last time you wanted to hire a CFO, didn’t they flood you with some Finance major resumes with a couple of years of experience? If they did not, just try them and see what happens! Fact of the matter is, no one can help you hire a full-time CFO without knowing your business intimately like SuperCFO endeavors to do.

Can you imagine a CFO or a Financial Controller looking at your data and giving you advice without knowing your business deeply? At SuperCFO, things are done differently and with complete diligence. The Company’s qualified and experienced team of financial experts a.k.a. CFO Partners and Business Managers expertly review candidates to ensure they possess the right skills for your requirement and it is this finance domain expertise that separates us from other headhunters. And we have a constantly growing network of mid to senior, capable Finance and Accounts professionals, who are well leveraged and looking out for the right opportunities to further their career growth.

To work with you to understand the right fit for the role and to get you the most appropriate CFO and Finance Controller candidates is our raison d’etre! This will allow you and your staff, to focus your efforts in the right areas, to facilitate successful achievement of targets with expert financial talent on your roles. Try SuperCFO, and be assured of the right solutions for your growing business.

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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!

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Interim CFO’s – Do You Have A Pressing Need For An Interim CFO? Go For SuperCFO’s Shared CFO services!

Has your fulltime CFO suddenly put in his papers or gone on a longish hiatus due to ill health? Has your Financial Health Management operations faced a sudden roadblock as a result of the CFO’s absence? One must acknowledge that CFOs are human after all and that they will one day be gone or fall terribly sick. The importance of CFO Support Services or Financial Controller Services, whether a fulltime CFO, Shared CFO, Interim CFO, Virtual CFO or Special Purpose CFO, in the overall scheme of things within a company cannot be undermined. If your company can be likened to a ship, then a CFO is its navigator responsible for dexterously maneuvering it through choppy seas, making sure that dangerous and mammoth glaciers are avoided. This can be done by taking some quick and bold decisions.

Basically, for any company, not having a CFO for even a short period of time, can spell disaster for the Financial Health Management of your business. For obvious reasons, hiring a fulltime CFO in a jiffy is a monumental task which is next to impossible. What do companies do to tide over a crisis of this nature?

But of course! Look to SuperCFO and their Interim CFO Services solution. With our tremendous domain expertise in CFO Support Services and Financial Controller Services, widespread network of Senior Finance Professionals CFOs, Finance Controllers et al) at our beck and call, and a super quick turn around on mandates, we have a vantage point position from where to serve your Interim CFO and requirements efficiently.

We bring you just the right kind of knowledge and experience your CFO should have and your company requires. All this without the hefty pay – packs or the standard 3 month waiting period for a fulltime hire.

So, while your search for a full-time CFO continues, don’t miss out on the value that a CFO adds to your company and hire an Interim CFO from SuperCFO now!

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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.

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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

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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?

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.

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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?

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?

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?           

click here To read complete Interview.

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?

[supercfo-blog]

Evaluating Board Effectiveness

The Board should undertake a formal and rigorous annual evaluation of its own performance and that of its committees and individual directors. The Board should state in the Annual Report how performance evaluation of the Board, its committees and its individual directors has been conducted. The following is an illustrative list of few questions one may consider to evaluate the effectiveness of the Board. The evaluation process should be strictly used constructively, as a mechanism to improve board effectiveness, maximize strengths and tackle weaknesses. Evaluate Board Effectiveness     How well has the board performed against any performance objectives that have been set?     What has been the board’s contribution to the testing and development of strategy?     What has been the board’s contribution to ensuring robust and effective risk management?     Is the composition of the board and its committees appropriate, with the right mix of knowledge and skills to maximize performance in the light of future strategy?    Are inside and outside the board relationships working effectively?     How has the board responded to any problems or crises that have emerged and could or should these have been foreseen?     Are the matters specifically reserved for the board the right ones?     How well does the board communicate with the management team, company employees and others?   How effectively does it use mechanisms such as the AGM and the annual report?     Is the board as a whole up to date with latest developments in the regulatory environment and the market?     How effective are the board’s committees? [Specific questions on the performance of each committee should be included such as, for example, their role, their composition and their interaction with the board.

To Know more.

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Board Committees – Important step towards Good Governance

 An important step towards Good Governance is to have well appointed Board Committees. While various regulations have extensive references and guidelines, here is a quick snapshot of the must-haves.

Note that a well governed Board functions efficiently with well appointed Committees. Key Board Committees are:

Nomination Committee

Audit Committee

Remuneration (Compensation) Committee

Nomination Committee

i. Companies may have a Nomination Committee comprising of majority of Independent Directors, including its Chairman. This Committee should consider:

Proposals  for  searching,  evaluating,  and  recommending appropriate Independent Directors and Non-Executive Directors [NEDs], based on an objective and transparent set of guidelines which should be disclosed and should, inter-alia, include the criteria for determining qualifications, positive attributes, independence of a director and availability of time with him or her to devote to the job;

Determining processes for evaluating the skill, knowledge, experience and effectiveness of individual directors as well as the Board as a whole.

ii. The Nomination Committee should also evaluate and recommend the appointment of Executive Directors.

iii. With a view to enable the Board to take proper and reasoned decisions, Nomination Committee should ensure that the Board comprises of a balanced combination of Executive Directors and Non-Executive Directors.

iv. A separate section in the Annual Report should outline the guidelines being followed by the Nomination Committee and the role and work done by it during the year under consideration.

Audit Committee

The Audit Committee should have at least three-members, with majority being Independent Directors & the Chairman of the Committee should be an Independent Director. All the members of the audit committee should have knowledge of financial management, audit and accounts.

The Audit Committee should have the power to -

have independent back office support and other resources from the company;

have access to information contained in the records of the company; and

obtain professional advice from external sources.

The Audit Committee should also have the facility of having separate discussions with both internal and external auditors as well as the management.

The Audit Committee should have the responsibility to -

monitor the integrity of the financial statements of the company;

review the company’s internal financial controls, internal audit function and risk management systems;

make recommendations in relation to the appointment, reappointment and removal of the external auditor and to approve the remuneration and terms of engagement of the external auditor;

review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit process

The Audit Committee should also monitor and approve all Related Party Transactions including any modification/amendment in any such transaction.

Remuneration (Compensation) Committee

The Remuneration Committee should comprise of at least three members, majority of which should be Non Executive Directors & at least one Independent Director.

The Committee should have the responsibility of determining remuneration for all executive directors and the executive chairman.

The Committee should also determine principles, criteria and the basis of remuneration policy of the company which should be disclosed to the shareholders, with their comments, if any.

The Committee should also recommend and monitor the level and structure of pay for senior management

The Committee should make available its terms of reference, its role, the authority delegated to it by the Board, and what it has done for the year under review to the shareholders in the Annual Report.

[supercfo-blog]

Tips for cost efficiency

Plug those leakages to achieve cost efficiency and savings.

Cost Savings is very important for enhancing Profitability and could be achieved by plugging various leakages in your cost structure while delivering significant results to your bottom-line, without having to implement any cost reduction measures. Ask yourself below questions to know if you are monitoring your costs well:

1.   Rentals: Did you measure the office you took on rent?

Did you know that: You could have negotiated good rate per sq. feet, but what if the landlord is charging you for more area than what the actual office space is?

2.  Manpower Cost: Do you evaluate various activities performed by your staff to check if there is any scope for improving efficiency, or eliminating unwanted tasks or automating mechanical processes?

Did you know that: By undertaking Time & Motion study, by evaluating in detail what each one does the whole day, by implementing certain productivity tools and/or by realigning job responsibilities, you could improve employee productivity multi-folds, thereby eliminating the need to hire more and containing manpower costs? Such measures also help in improving accuracy levels.

3. Cafeteria Services: Have you ever compared your guest/employee attendance vs. the plate count provided by your cafeteria services provider?

Did you know that: While you may have negotiated best per plate rate with your cafeteria services provider, you may be charged for unwanted extra plates?

4.   Internet Cost: Are you paying for internet for allowing free movie downloads to your employees during office hours?

Did you know that: With smart internet usage policy, where you could permit personal use of internet after office hours, you could free up a lot of internet traffic, thereby reducing internet bandwidth requirement and corresponding cost.

5.    Car Hire / Conveyance Cost: A lot of employee friendly companies provide door-to-door transportation services to their employees. Are you checking if the car hire company is taking the best route from “distance travelled” perspective OR is he charging you based on the longest route?

Did you know that: There have also been instances of employees producing fake/manipulated bills for car fuel / conveyance cost. Thorough cross checking, strong expense approval process and strict disciplinary action reduces this substantially.

6.   Business Development Costs: How do you know that the Restaurant/Entertainment bills that Business Head just produced are not for his family outing?

Did you know that: There could be leakages in costs and sometimes unwanted costs are incurred if Sales & Business Development teams are not monitored closely and vouchers not checked thoroughly? Companies have implemented simple control measures like asking for the restaurant bill and not just the credit card statement to check the number of guests entertained AND checking if those expenses were incurred on a working day or a holiday.

7.   Telephone Costs: Do you monitor long distance calls made by employees through the company phone number? Do you monitor roaming call costs?

Did you know that: By giving a Calling Card and by monitoring key long distance phone numbers, you could reduce your telephone cost substantially? This also reduces personal calls being charged to company account.

8.  Lawyers Bill: Do you ask for cost estimate from your lawyer, before asking him to work on any matter?

Did you know that: Most lawyers work on time & effort basis? They would charge you even for the telephone call you had with them explaining the matter on hand, as well as for correcting the mistakes made in the first draft document prepared by them. You may have negotiated hourly rates, but always ask them to stick within a budget and minutely review their time sheets to check what you are being billed for.

9.  Banking: Do you have a separate working capital (overdraft) account and a separate current account? Are you efficiently moving money across your various non-interest bearing current bank accounts to your interest bearing Working Capital (OD) account?

Did you know that: By setting-up auto sweep or other manual methods, and ensuring that funds from your current account are moved to your Overdraft (OD) account on daily basis, you could save a lot of interest cost in your OD account?

10. Interest Cost: Are you monitoring the interest rate charged by your bank on the loan you took from them some time back OR do you just pay whatever the bank charges you as interest?

Did you know that: You could miss out on interest cost savings just because your bank did not reduce the interest rate on your loan, while lending rates would have reduced?

Did you know that: If you have been servicing your loan well, and if you feel you are being charged higher interest rate, as compared to what another bank is offering, you could go back and renegotiate your interest rates with your bank? Remember, banks too need good clients.

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Other Forms of Restructuring

There are other kinds of restructuring which are self explanatory:

Changes in top management

This means the changes in the top and the operating management in the company. This begins with the change in the CEO and Managing Director level changes to bring in the change driver commensurate with the need of the hour. The “person of the moment” is seen as a key driver of policy changes and mover and shaker by the promoter management and by the market. The team to work under the top person is many times left to his or her discretion. By and large the person brings along a tested team which perhaps has seen a good turnaround elsewhere which does not mean success is guaranteed, but that which could be tried out in the new place. This includes at the Board/operating level and may include heads of profit centers, HR, Marketing and other critical positions. Finance is usually a closely guarded level and the top management may like to bring in someone from within the loyal group of professionals.

Retention of key management team

There are also instances when some people are considered indispensable and their retention in the company is absolutely required. Such persons are retained in the company by paying the stay on bonus in cash or in the form of stock options. This will give significant motivation to persons for continuing in the organization and be a part of the changing environment.

Moving of operations such as manufacturing to lower-cost locations

In late 80’s and early 90’s the set up in various companies used to be “fractured infrastructure”. The Corporate Office set up will have Marketing, Procurement, Finance, HR apart from the usual corner office paraphernalia. The plant correspondingly would have the functions such as Sales, Purchase and stores, Accounts, Industrial relations, etc performing some parallel or even overlapping functions. Leaving a small set up for the Corporate office, MD and associated functions, it was found to be productivity and cost effective by combining functions in one location for cost saving, better plant management and effective customer and plant relations. Moving plant locations have also been done in the past to improve proximity to the raw-material and customer market, better availability of power etc.

Conclusion:

Restructuring is a process and involves careful planning and application. The company can phase the restructuring process say over a period spanning 6 months to one year giving time for observing the impact of the restructure across the entire business. The costs and productivity being important, it is also necessary to keep the interest levels of customers and motivation of employees alive. Many restructuring has resulted in panic among these sections resulting in the flight of customers and key employees. The new of restructuring will therefore need to be timed out and suitably explained as it happens.

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Equity Restructuring

Here is an interesting restructuring process. Equity restructuring in its broadest sense may mean any transaction between the Company and its shareholders, such as issue of rights and bonus shares, issue of preference shares, IPOs, PE/VC funds, dividend on shares, stock split, spin-off, that affects any class of share holder or the share price. The issue of rights and bonus shares involves change in the capital structure either for cash or through capitalization of reserves in case of rights and bonus shares respectively. The right to equity dividend may get altered with the preference capital coming in where the preference shareholders will get priority over the equity shareholders with reference to payment of dividend and repayment of capital. Similarly share splits and spin offs radically restructure the capital base of the company and also may provide opportunity for holding shares in other companies.

One of the kinds of capital restructuring is capital reduction schemes made by certain companies in the past under section 100 of the Companies Act 1956. This interalia includes among other things setting off the carry forward losses that the companies may be carrying in the balance sheet against any share /stock premium or unused specific reserves in the balance sheet in order to present a correct picture of the net worth of the company. While the bankers may in any case be adopting this practice, it is for the shareholders to get a correct feel of the real financials companies in the past have resorted to this practice. Several companies have done this in the past. It is however a very involved process which includes certain court procedures.

Companies that have smaller debt compared to their net-worth are underleveraged or have a low gearing ratio. Such companies are either cash rich and have limited or no external debt needs for their operations. Such companies may also not have any major growth plans for which they will need the money. These are conservative corporates who are shy of borrowing for various fears of parting with their assets as security, or providing a berth on the Board for directorship for an external person or predominantly family run concerns. Such companies may adopt a strategy of buy back of shares. This means there will be fewer stockholders to satisfy and pay dividends to. Converse to the situation is where the company has profitable projects in the near future. There is thus an opportunity for raising debts by leveraging equity. There are certain debts like institutional debt with convertibility clause and issue of convertible debentures/preference shares that will affect the equity base of the companies.

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Restructuring Operations

Simple as it may sound, the challenge is in implementing or executing the plan. The restructure may involve optimization of production, improvement in processes with uncompromised quality and productivity measures, cutting frills in the cost, improved turnaround time through better time and motion methodologies (even requiring relocation of production facilities in a factory or different locations), rationalization of workforce etc. Apart from the improvement in productivity taking on competition, price re-adjustment, customer retention and improvement in market share etc. also forms an integral part in any operations restructure. Any successful turnaround will have to address all or most of the above operational concerns.

Optimization of production will involve a diligent production planning process based on schedules provided by customers in a manufacturing company or the final sale order received. The planning process may involve certain out of the schedule manufacture also but one needs to take care to see that the inventory does not go beyond the prescribed norms. Defining the stocking and reordering norms taking into account the lead time in supplies, together with resorting to just in time supplies for high cost but low lead time materials etc can help in better inventory management, thereby reducing the carrying costs and improve working capital management. Disposal of slow/non moving stocks and stores also can release the mush needed cash for working capital.

Planning capex for volume increase for attaining economy of scale, or for adopting a contemporary state of the art technology or forward or backward integrations for cost savings can also restructure the desired operations. Similarly the process improvements other than the technology purely from the point of view of better utilization of resources and time management can also improve operations, reduce costs and make the company compete better.

Strict quality adherence, coupled with “on-time” delivery whether in manufacturing or service industry will enable company to improve its market image. Whenever the company is in a position to save costs, it can pass on part of the cost savings to the customers through price readjustments thereby retaining the customers or increasing the market share.

Operational restructuring, may also involve downsizing, eliminating staff to reduce costs. Changes to corporate workforce bring in rationalization of human resources. The elimination of non essential activities from the company by outsourcing the requirements and introduction of automation in various spheres of the company’s activities may result in surplus workforce who can be redeployed for other activities or provided exit options through a golden hand shake scheme. A manufacturing company near Mumbai had a total work force of 2500 , for a manufacturing activity which was almost more than 100% of its requirement on a recently semi automated plant. On a close scrutiny it was found that the company had on its rolls tailors for stitching the plant uniforms for workers, cobblers for making and mending the workers’ shoes, repairs and maintenance staff and the canteen workers. There were also more people in the plant than what was necessary for a semi automated plant. The management realized that while most of the frill activities could be saved by outsourcing the facilities, a little more capital expenditure can make the plant more efficient and less people dependent. The company adopted this new thinking and was able to reduce the total work force to about 1300 and was able to show higher productivity and profitability, through lower costs and improved market share.

Many times there is a mismatch between what the customer actually wants and what the company perceives is their need. Surveys do help to fill the void. Many companies with the help of professionals have devised methods which have been adopted with reasonable success. The weight ages assigned for various customer satisfaction parameters results in a score which is compared with the standards to determine the index of satisfaction. Improvements based on the results of such surveys are helping the companies improving the servicing to the customers. Similar employee surveys have proved to be eye openers to the HR for knowing exactly the pulse of the employee satisfaction that can trigger productivity.

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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.