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When an Organisation is hesitant to commit to a full-time CFO role creation or cannot afford for a full-time CFO, the same can be availed as a service on "need basis" instead of having full-time CFO.
Taking full charge of the company's CFO / Head of Finance function, this Service shall be aligned to report into the CEO, Promoters, Group CFO (in the case of a multinational) or Investors and oversee the company's Finance & Accounts function.
This service can be retro-fitted across industry verticals, types and sizes. It works with companies across ownership patterns including Family Managed businesses, Private Equity/ Venture Capital backed companies, Early-stage companies and Indian subsidiaries of Multinationals.
With deep insights derived from many years of professional experience and gaining from real-life CFO role experiences, we provide strategic advice and offer tailored solutions.
Our service helps Big Corporate and SMEs to avail a high level of professional competency & standards, which lets the Entrepreneur, CEO or the Management team to focus on the development of core business functions.
In essence, this service captures the larger engagement model structured around:
a. Investor relationship (VC, PE & Board level engagement)
b. Internal alignment (CEO, HODs, Finance team)
c. External alignment (Bankers, Auditors, Consultants)
We support management teams to focus on the core functions like Sales & Marketing to create a customer-driven growth-focussed organisation while enabling an effective Finance function.
WHY do a DDR
Investors are always looking for the next great start-up opportunity, start-ups are always hungry for more capital to fuel growth.
Successful investments can bring great rewards to all parties but hidden issues, judgemental assessment and/or errors can quickly turn a successful assumption into failed investment.
Due Diligence Report (DDR) is a term used for number of concepts involving investigations when investing in a business, reviewing through the financial situation of the business, customer records, legal obligation and other records before signing a contract or agreement for investment.
WHAT is the DDR process
DDR process involves, evaluating a prospective investment decision by making sure that all the facts regarding a prospective investee firm are available and are verified for its veracity & for surrounding risks. Its scope will depend on the size and scale of the transaction.
The DDR will often comprise of financial, tax, legal, secretarial and commercial reviews across multi-disciplinary teams. Its execution involves access to industry expert viewpoints both within and outside the target organisation for validation.
While commercial risks inherent in investment transactions include non-financial, as well as financial factors, the spotlight is increasingly upon effective corporate governance, internal control processes (including IT Systems), corporate culture and overall risk management.
The key findings of a DDR should include factors that will impact the pricing of the transaction, possible warranties that should be sought by the buyer/seller and potential post acquisition integration issues.
HOW is a DDR done
DDR process involves an in-depth review of the company’s business planning in the context of the commercial environment and a critical analysis of financial projections and risks.
Process of doing a DDR involves:
a. Creating a thorough checklist of data request.
b. Compiling of all the necessary documentation & company records.
c. Reviewing & analysing documents that may present financial status along with risks and/or impediments to potential investment.
d. Compliance status reviews across Legal & Secretarial.
e. Preparing detailed information report upon which to base investment decisions.
HOW can we assist
Ocellus framework of DDR comprises of:
Gaining an understanding of the performance of the target organisation.
Analysing the key value drivers behind the investment price.
Identifying potential risks across financial & compliance areas and mitigation possibilities.
Our team of employees & associates consists of highly experienced Chartered Accountants, Legal Advisors and Secretarial Professionals who take utmost care to review all financial records as well as business and legal viewpoints.
Given the current dynamic and the competitive environment, there is a high risk of making errors, because of demand for speed in turnaround time and/or limited resources at disposal, to handle the complexities of the buy/sale transaction.
Our highly qualified & experienced team can help by assessing the potential value and risks associated with a transaction, by identifying key drivers to mitigate risks and by challenging assumptions about future performance leading to overall improvement in negotiating position of our clients.
(Sell side) We assist companies placing a business for sale to develop strategies for sale and prepare a business plan.
(Buy side) We assist Investors putting their hard-earned money into buying a slice of or to fully take over companies.
Our DDR process includes areas such as:
- Business & Revenue model
- Technology and intellectual property claims
- Market assessment for future potential
- Sales & Marketing strategy
- Feasibility studies
- Financial modelling
Types of DDR handled by us:
- M&A Due Diligence
- Business Due Diligence
- Market Due Diligence
- Secretarial, Legal & Tax Due Diligence
- Financial and Accounting Due Diligence
Cash flow management & review
Cash flow forecast and monitoring mechanism
Cashflow sensitivity analysis
Receivables Management (terms, discounting, legal etc)
Overdue receivables focus & collections acceleration
Trade payables terms review
Inventory ageing and stock turns assessment
Investing and financing activities overview
Review of banking terms
Help in getting Debt or Equity funding as may be necessary basis detailed evaluation
Business Plans - Budgeting & Forecasting
Financial Reporting & Analysis
Month End Closing process
Forecast & Budgets overview
Operations data analytics to synch with Financial performance
Indentify key performance indicators (KPIs)
Variance analysis - Rate, Volume & Mix
Analyse KPIs to take corrective actions as necessary
Provide management with data to take critical business decisions
Strict compliance with various statutes - GST, Direct Taxes, Secretarial matters, Forex matters Legal counsel help as required
Audit schedule preparation & co-ordination
Compliance dashboards for Management review
Identification of Compliance issues by a detailed review
Suggesting & implementing remedial actions
Focus on process and system implementation
Secretarial & admin help
Accounting Policies & Procedures