DSIJ Interview with,Kailash B Gupta CFO, INOX Leisure Ltd
Kailash B Gupta
CFO, INOX Leisure Ltd
"Today's CFO is a financial strategist and business adviser to the CEO"
As a CFO, can you please elaborate on your top three key priorities during next three years?
With the introduction of a wide array of alternative content, the exhibition business is all set for a major disruption. The aim is to strike a balance between the growth levers of the business and the core of the existing business. In the evolving regulatory landscape, it becomes imperative to measure the political impact and its effects on the industry as a whole. Accordingly, it is important that we have the overall controls in place, so that the company is compliant with all the laws and regulations. Further, as an industry representative, it also becomes necessary to put forward the industry-wide issues by liaising with various government departments in a timely manner. As a CFO of a company with such a high growth rate, it becomes important to manage the debt of the company. The challenge is to strike a balance between the high growth and also the level of debt the company can accommodate. The strategy would be to device an appropriate finance structure which is most optimal to the organisation.
Can you highlight the strategic initiatives that paid off well for your company during your tenure as a CFO with the present company?How did these help the company and investors who have parked their money in your company's stocks?
The following key initiatives were undertaken: 1. We entered into a fresh deal with a few ticket aggregators which in turn led to an additional revenue of approx. Rs.100 crore over a period of three years. 2. We formed centralised procurement cell to take advantage of bulk buying, better rates and to maintain integrity issues 3. We introduced multiple banking arrangement in the company and optimised the loan mix from Indian and foreign banks, leading to substantial savings in the form of lower interest rates
As a CFO what are the key challenges faced by you in achieving the company's objectives? How did you really overcome these challenges?
Businesses are constantly facing changes due to the technological progress and unstable economic and political situations. The role of today´s CFO is fundamentally changing. Their work does not end with passive control of numbers, revenues and expenditures as CEOs/board of directors and other stakeholders have a lot more expectations from their performance. As a CFO the key challenges are:
Supporting growth while managing risk In the current scenario, growth is the main objective of the company. The company has already signed 700-plus new screens which are to be operational in the next few years. The company is also looking at the growth by the way of acquisitions. The company relies on the CFO to help it drive the growth strategy from mergers and acquisitions to geographic expansion and organic growth. I, as a CFO, interact closely with the business team and design various strategies for the growth of the business, while managing the risk profile of the company.
Regulatory compliance: The critical need is to keep abreast of potential new laws that will have an effect on the firm's financial bottom line as it remains a key challenge for any CFO. As a CFO, I see the same as an opportunity wherein the new strategies can be put in place and the same can be used for the competitive advantage for the firm.
Technology and innovation: With the advancement of new technologies, the CFOs are expected to look for new ways of working that could involve overhauling business models and operations in order to harness the opportunities that emerging technologies offer. As a CFO, I closely co-ordinate with the business team in general, and the chief information officer, in particular, to be able to adapt the latest technologies available. We see the new technological advancement as enabler and aim to be the next technological disruptor in the sector.
Retaining and nurturing talent: Finding and retaining the talent needed to drive finance teams is one of the most important challenges for the organisation. Identifying the right person for the job is one of the most critical aspect of people management. As a CFO, I have to ensure that the team has right tools, skills and capabilities to arm the management with cutting-edge insights and analysis which can be used for taking informed business decisions.
Cost control: Controlling the costs will always be a priority for chief financial officers.
We keep hearing about CEOs more through media and other such modes of communication. CFOs apparently live behind the curtain but play a very crucial role when it comes to wealth creation of the individual investors. Do you feel deprived of limelight at times? How about CFOs being faces of the companies in India in future?
As a professional, the only 'limelight', according to me, is being recognised by stakeholders and delivering immense value to the organisation through my expertise and skills. For me, this is the best publicity and I am absolutely satisfied with it.
CFOs are now recognised as business partners and are carrying the business, regulatory and investor relations. They are carrying greater responsibilities when it comes to creating value for the shareholders. They will be seen as caretaker of the wealth of the shareholders in good and bad times.
Numbers are the primary things that you play with at work. People in the outside world have a feeling that CFOs are the set of people who only understand numbers and they are kind of far away from other aspects of life. How much is this true? What further needs to be done to ensure CFOs in India get their dues?
I believe that the above statement was true a few years back. With the ever evolving business landscape, the role of the CFO has also undergone a drastic change. Today's CFO can be seen as a financial strategist and business adviser to the CEO. It is no longer enough for CFOs to be reporting numbers and managing financial function. In the current scenario, I see the CFO as a business person who also has a finance background.
I believe that the CFO in India must adapt to the changing environment. While it is vital for the head of finance to have a deep understanding of the numbers, the CFO now has a much more central role in deciding strategy and communicating with internal teams and external stakeholders. This is the age of business partnering. By adoption of the new role, I believe CFOs will get their dues.