Client Background
A mid-sized company in the manufacturing sector.
The Challenge
To determine the fair value of a business division for a slump sale and to conduct annual goodwill impairment testing as required by Ind AS 103.
My Approach & Actions
- Methodology Selection: Chose the Discounted Cash Flow (DCF) method as the primary valuation tool due to its ability to capture future earning potential. Cross-verified the results using Net Asset Value (NAV) and Comparable Companies methods for a robust conclusion.
- Data Collection & Analysis: Rigorously validated management's financial projections by performing sensitivity analysis and comparing them against industry benchmarks. My process for calculating WACC involved determining beta for the non-listed entity and selecting an appropriate risk-free rate.
- Reporting: Consolidated all findings, assumptions, and methodologies into a comprehensive valuation report suitable for both client decision-making and statutory audit purposes.
Client Background
A Public Sector Undertaking (PSU) in the Non-Banking Financial Company (NBFC) sector, specializing in power infrastructure financing.
The Challenge
The engagement required establishing audit procedures from scratch without prior precedent in the firm.
My Approach & Actions
- Preparation: Took the initiative to develop a complete set of audit checklists and working paper templates tailored for an NBFC under Ind AS, focusing on financial instruments and loan portfolios.
- Execution: Identified that the client's interest accrual method was not fully compliant with Ind AS. I meticulously documented the deviation and calculated the financial impact.
- Reporting & Recommendations: Drafted the formal audit qualification related to the non-compliant interest accrual. Further, I prepared a detailed management report recommending stronger internal controls over GST, CRAR ratio calculations, and other key RBI regulations.
Results & Impact: My work ensured a rigorous audit and transparent financial statements. The management report provided a clear roadmap for improving financial controls and ensuring future compliance.
Client Background
A large PSU managing the state-wide public distribution of essential commodities with a turnover of ~₹25,000 Crores.
The Challenge
The audit was severely hampered by a complete reliance on manual inventory records, creating a high risk of misstatement or fraud and making verification difficult.
My Approach & Actions
- Problem Identification: Through audit procedures, I identified and documented the significant financial and operational risks associated with the manual inventory system.
- Recommendation & Justification: I prepared and presented a formal recommendation to senior management. My proposal detailed how a modern, integrated IT system would not only improve auditability but also enhance operational efficiency, reduce the risk of theft, and provide real-time data for decision-making.