Interim CFO Services

Client : The Indian arm of one of the largest reinsurance companies

Service Offered : Interim CFO Services, US GAAP conversion & ERP Implementation

Sector / Industry : Banking and Finance

Client
Objective

The client appointed Nexdigm to take charge of the CFO office and handle all reporting regulations after the reinsurance regulations in India were liberalized which led them to open a branch in the country.

Client
Challenges

While there was a lack of local F&A team, the regulatory landscape also kept evolving. India moved to the GST regime at the same time when Insurance Regulatory and Development Authority (IRDA) evolved the insurance regulations for reinsurance branches. Moreover, the accounting systems were not in place to provide the required reporting as per the Indian regulations and/or Indian GAAP, thereby adding to the complexities.

Client
Solution

Nexdigm deployed an experienced team to handle their complete F&A responsibilities like -

  • Integrating their global accounting system with Indian GAAP
    Our client’s systems and sub-systems were based on either the US-GAAP or Swiss GAAP. We assisted them in identifying the differences between these GAAPs and Indian GAAP and implementing them in the system so as to allow automated Indian GAAP reporting. This resulted in reduction of the reporting TATs by at least 60%.
  • Assisting the implementation of new Indirect tax regime of GST
    While the implementation was done by a different consultant, we provided inputs in terms of reporting and system dependencies since we acquired an in-depth experience of their accounting systems. This allowed the client in identifying the system issues early in the implementation phase.
  • Closing the first-year audit of the branch
    We assisted our client in selection of joint-auditor, preparation of the first year financial statements, liaise with the auditors and finally closing the audit. One of the critical matters in the auditing process was the revenue recognition. Insurance sector in India has always been recognizing revenue which is primarily based on the Bordereaux. Internationally, lot of estimations are built in while recognizing revenue. In our client’s case, since this was only two months of operations, majority of the revenue recognized were based on estimates. We not only anticipated this to be an audit-issue at an early stage, but also created documentation to comfort the auditors.
  • Representing the entity to IRDA and RBI for the evolving re-insurance branch compliances
    Since this was the first time that India opened doors for foreign reinsurance branches, reinsurance regulations were still in process. Our team played a key role in preparation representations to IRDA for modifications in the draft regulations.
  • Designing Finance SOPs
    Our team helped the client in designing SOPs and implementing them in a challenging set up phase. This involved adopting the global practices of the client and modifying them to suit the Indian needs.
  • Representing India office in their Global SAP implementation project
    Our client was implementing SAP S4 HANA at a global level. One of the countries in this project was India. Our team not only provided the business user and local needs but also participated in the global workshop representing the India office.
  • Day-to-day F&A activities & Reporting to the global team/ APAC CFO
    Our team also assisted the client in various day-to-day activities like reporting compliances to IRDA, Income tax department, RBI and other statutory authorities; carrying out day-to-day AP management, etc. Our team directly reported to APAC CFO with a dotted lien reporting to the Global Finance team. This helped our client in conducting business as usual while there was a regulatory uncertainty.
solution
Impact

Nexdigm deployed an experienced team to handle their complete F&A responsibilities. We set up their accounting systems for reporting from US GAAP to Indian GAAP in record time and provided comprehensive support with respect to the F&A function including designing SOPs, reporting to global and APAC teams, etc.

Nexdigm also represented the India office in the global SAP implementation project. Our contribution even extended to representations to the IRDAI in drafting reinsurance regulations.

Our support in the set-up phase ensured that the business ran seamlessly, without any non-compliance risk for the client. We were entrusted with key decisions, implementation of systems and processes, and audits in India.

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