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CMA N.V.V Chalapathi Rao

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He has over 20 years of diversified experience in Asia -Pacific region, Africa and Middle East across wide spectrum of industries and a proven track record in his career. Chalapathi Rao, Director of Audit for Ghana’s leading retail company, Melcom Group has shown his mettle in the accounting field over the years. In this Interview with The CFO he talks about the evolving role of CFOs and other sundry issues.

How would you describe yourself?

I am someone who is candid and believes in integrity. Every day I work to improve upon myself and my skills. I think positively and prepared to take challenging tasks. Would like to control a situation rather than allow a situation to control me.” I am the type of person who meets challenges head-on rather than sweeping them under the rug and hoping they go away.

How did you climb the success ladder?

At the outset I would like to thank my parents, my teachers and the Almighty without their blessings I would not have reached this position. I am thankful to my wife and my family who have always supported me and stood by me in times of need and grateful to my friends and my team who have always encouraged me.

I qualified CMA (Cost & Management Accountant) from India in June 95. My career began with ALSTOM Limited a French MNC as Branch Accountant and has thereon successfully risen through the ranks by handling multidimensional assignments and heading major functions in different companies in different countries at various points of time. I have worked with MNCs like WILMAR International Limited, CANPACK, and diversified Groups like JAYPEE, Galadari Brothers, Gulf Warehousing Company etc. in different capacities like CFO, Vice- President, Head of Internal Audit and Director etc.

Currently I am on the advisory board of ISMA (Indian Society of Management Accountants). I hold other certifications which helped me in my career like CFE, CMA, and CRMA from USA. I am also a qualified public accountant from Australia.

You were CFO until your recent promotion as Director; what does your new role entail?

My activity involves working closely with the Chairman, Board members and other Department Heads and trying to take the company to the next level. Present job profile is to focus more on Strategy, Risk management, internal controls, audit, operations etc

What are your major Goals as Director of Audit for the Group?

My major goals include implementing ERM – Enterprise Risk Management System, ensuring corporate governance, improve the Process/ Systems/ Internal Controls and implementing modern business tools appropriate for the business

What is your take on Ghana’s 2017 budget?

Government has introduced a number of tax reliefs in the 2017 budget statement and economic policy, the Finance Minister, Mr Ken Ofori-Atta has announced. I am sure these measures taken by the government will put the Ghana economy on sound footing and will propel the growth of the private sector and boost job creation. The free Senior High school policy is laudable. Furthermore, businesses in Ghana are upbeat about prospects for expansion and growth following a 2% reduction in the prime rate of Ghana’s Central Bank. It’s a good move.

What is your typical day like?

To list out the important tasks to be completed during the day. Guide my co-workers in fulfilling their tasks. Attend Internal and External meetings. Review the completed tasks and set out priorities for the following day.

What are some of your remarkable achievements in your career?

As CFO was able to successfully syndicate a loan of 135m USD, as Chief Audit Executive (CAE) I was the Lead Investigator for multimillion dollar frauds. Achievements include successfully revamped & restructured loss making companies and transformed them in to profitable one when I was working in the capacity of Vice- President.

How should the CEO and CFO work together to improve the quality of planning and forecasting?

CFOs are increasingly playing a more critical role in shaping their company’s strategies today, especially in light of the highly uncertain macroeconomic environments, where managing financial volatilities is becoming a centerpiece for many companies’ strategies.

The CFO is now expected to be a key player in stockholder education and communication and is clearly seen as a leader and team builder who sets the financial agenda for the organization, supports the CEO directly and provides timely advice to the board of directors.

The relationship between the chief executive officer and the chief financial officer is one of the most important relationship in any company in general and especially to improve the quality of planning and forecasting. The CEO needs the CFO to share his or her view of the company strategy and then work in concert to implement it. The CFO is responsible for ensuring that the finance team works in alignment with the company’s wider strategy.

The expectation, therefore, is that the finance department will work to support the business units rather than “run its own race,” and where change is needed, it is the CFO who is expected to make it happen.

How did you feel winning the CFO of the year Award for the Retail sector at the 2016 Ghana CFO awards?

It’s a great honor to be recognized in my core field. This award means a lot to me. It brings happiness, confidence and will keep me on my toes to do my best.

What is your advice for new entrants in the industry?

In recent years, the role of the CFO has evolved significantly. Traditionally being viewed as a financial gatekeeper, the role of the CFO has expanded and evolved to a strategic partner and advisor to the CEO. With an increasingly integrated world economy, the new CFOs should be prepared to respond to higher levels of both risk and opportunity. A strong balance sheet is a tremendous asset when managing though periods of volatility.

The primary mandate of the CFO is to be the guardian of shareholder value for the company. Traditionally, this was about managing risk, but today CFOs are expected to balance risk and opportunity. It’s become quite a quite multi-dimensional role.

Chalapathi Rao, Director of Audit, Melcom Group

In making decisions, there are really three important roles that new CFOs should perform.

Firstly, to make the right investment decisions to drive growth. Secondly, ensure that we turn that revenue into strong earnings and cash flow through smart resource utilization and cost management. Finally, we need to optimize our capital structure and make smart, strategic use of the cash that we generate. My best financial advice is to surround you with the right team and ensure continuous communication and interaction with each other. One must not only provide leadership but also have to give the team authority and accountability. It takes the entire team to be successful.”

The modern CFO should be a big-picture thinker, rather than detail-oriented, outspoken rather than reserved, prefer to delegate rather than be hands-on, emphasize what gets done rather than how things are done, and make collaborative rather than unilateral decisions.

What advice would you give a company on surviving cash shortfalls?

Collect Receivables ASAP, encourage Customers to Pay up Faster, boost Sales with Creative Incentives, designate a Cash Flow Monitor, maintain Some Cash Reserves, renegotiate payment terms with Suppliers ,preparing sensitive cash flows where we consider the optimistic and pessimistic situation, monitoring the fluctuation in currency exchange, look out for cost effective funding.

Where do you see you self in the next five years?

Coming 5 years, I would like to see myself to equip with a good knowledge and better skills while taking more responsibility and contributing for growth of the company.

If you had three wishes, what will they be?

I wish was able to spend more time with my parents, create a difference in the lives of others by uplifting the underprivileged people, I have observed that wealth, people, relations, friends, youth are snatched by time in the blink of an eye. So my wish would be giving up this illusory world and attain the supreme.

If you were not an accountant what other would you have chosen?

My initial ambition was to join the Air force as a Fighter Pilot.

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Safaricom post-IPO investor wealth rises to Sh1.3trn peak

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The Safaricom stock hit a historic peak recently, closing at a high of Sh32.80 per share on Friday, thereby swelling investor wealth eightfold since its listing on June 9, 2008, inclusive of dividends.
Shareholder wealth as measured by market capitalisation has now touched Sh1.314 trillion, representing an increase of a whopping Sh1.114 trillion from the time the company listed 40 billion shares at Sh5 a share 11 and a half years ago.
When the company’s cumulative dividend pay-out totalling Sh301.2 billion over the 12-year period is added, Safaricom investors have enjoyed a return of 708 percent on initial investment of Sh200 billion. The dividend alone has been enough to allow investors to recoup their capital at listing and remain with an additional Sh101.2 billion balance.
The gains last week also pushed the company valuation as a share of the entire market to 50.4 percent and underlined its dominance on the stock market. Crossing the 50 percent threshold means Safaricom’s market worth is now more than the combined valuation of all the other 61 listed companies.
Analysts have attributed the rally in the last one year to sustained foreign demand, with the growth in dividends being a key factor in driving its attractiveness to investors who have few other options to make money in the market.
“The feel-good factor surrounding Safaricom has spilled over into the New Year, on bullish sentiments by foreign investors,” said Standard Investment Bank analysts in a note.
Last year, the stock led the market in net foreign inflows at Sh4.6 billion, which backed a share price gain of 42 percent to Sh31.50 between January and December 2019. During the year, foreign investors accounted for 75.4 percent of total traded volumes on the counter.
Since the beginning of this year, the stock has gained 4.1 percent. The company’s ability to continue to generate record profits — combined with a generous dividend policy that sees it pay out 80 percent of net earnings to shareholders — helped maintain demand through a bear run that gripped the NSE between 2015 and mid last year.
Safaricom has managed to make large capital investments in telecommunications infrastructure, introduce new services and pay incremental dividends with minimal debt and without seeking additional funding from shareholders.
The firm has therefore been able to build up cash reserves quickly, culminating in two special dividend pay-outs in the past four years.
In the year ended March 2019, the company declared a final dividend per share of Sh1.25 and an additional special distribution of Sh0.62 per share, bringing the total to Sh74.92 billion.
M-Pesa
It had also paid a special dividend of Sh0.68 per share during the financial year ending March 2017, on top of an ordinary dividend of Sh0.97 a share.
Driven by growth in M-Pesa revenue, the firm’s net profit for the year ending March 2019 rose by 14.7 percent to Sh63.4 billion.
In the six months to September 2019, its profits recorded a similar margin of growth — 14.4 percent to Sh35.65 billion — again on strong M-Pesa and mobile data revenue performance.
Egyptian investment firm EFG Hermes Holding said in their 2020 yearbook markets report that the rise in profitability and market capitalisation of Safaricom and large banks, while the rest of the market lags behind, will see their dominance become more entrenched at the NSE.
These are the stocks most likely to benefit from an expected return to the equities market by local institutional investors, who have in the past three years tended towards the fixed income segment. “Local institutions remained invested in fixed income for most of 2019, but the impact of the rate cap repeal on local rates and monetary easing could force more local institutional money back into equities in 2020,” said EFG Hermes in the report.
Safaricom’s influence on the market has, however, had the effect of skewing the performance trends of the main indices, depending on whether they are weighted on price or market capitalisation.
The market cap weighted NSE All Share Index is currently at a 16-month high of 171.36 points, reflecting the positive effect of the huge weight that Safaricom has on the index due to its valuation.
On the other hand, the price weighted NSE 20 share index, where blue chips with a high nominal price (such as BAT Kenya, Bamburi, EABL and Standard Chartered) carry more weight, has benefitted less from Safaricom’s gain.
It closed at 2,701 points on Friday, which is below its 2020 high of 2,707 points recorded on January 3.

Source:Business Daily

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Rolls-Royce announces highest annual sales of 5,152 cars in 2019

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Rolls-Royce Motor Cars has achieved the highest annual sales in 2019 with a global performance unequalled in the company’s 116-year history, the luxury car company announced recently.
According to Torsten Müller-Ötvös, Chief Executive Officer, Rolls-Royce Motor Cars, a total of 5,152 cars were delivered last year to customers in over 50 countries, an increase of 25% on the previous high set in 2018.
With these historic results, Rolls-Royce continues to make a meaningful contribution to the overall performance of its shareholder, BMW Group.
Rolls-Royce sells 5,152 cars in 2019, records best-ever sales in 116-year history
“This performance is an altogether different magnitude to any previous year’s sales success. While we celebrate these remarkable results, we are conscious of our key promise to our customers, to keep our brand rare and exclusive.
“We are pleased and proud to have delivered a growth of 25% in 2019. Worldwide demand last year for our Cullinan SUV has driven this success and is expected to stabilise in 2020. It is a ringing testament to the quality and integrity of our products, the faith and passion of our customers and, above all, the skill. The dedication and determination of our exceptional team at the Home of Rolls-Royce at Goodwood and around the world is part of our success,” Müller-Ötvös said.
Meanwhile, the car company disclosed that it recorded growth in sales across all regions during the year, which was driven by strong customer demand for all Rolls Royce models.
However, North America retained top status with one-third of the car maker’s global sales followed by China and Europe.
Rolls-Royce Motor Cars, through a global network of 135 dealerships sold in more than 50 countries, and as part of its long-term commitment to sustainable growth, the company announced two new dealerships Rolls-Royce Motor Cars Brisbane and Rolls-Royce Motor Cars Shanghai Pudong.
Rolls-Royce Motor Cars is expected to launch later in the year a flagship dealership in London, which would double the size of the previous location.

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Hyundai plans to invest $87 billion into producing 44 new electric vehicles

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Hyundai Motor Group is set to invest $87 billion in the production of electric vehicles and autonomous driving. This was announced by the company’s Executive Vice Chairman, Chung Eui-sun.
The $87 billion investment would be put to work over the course of 5 years in future mobility technologies like the planned production of new electric models.
Speaking during the Hyundai new year ceremony held at the company’s head office in Seoul, Eui-sun announced that the company plans to expand its electric line-up to 44 models, including 23 battery EVs and 14 hybrids, and two fuel-cell EVs. He said the first new battery EV would be launched next year.
He further said, “To consolidate our leadership in vehicle electrification, we plan to operate 44 electrified models by 2025, including 11 dedicated battery EV models, by bolstering the development of EV platforms and core components.
“In particular, in our fuel-cell electric vehicle business, where we boast the world’s top technological competitiveness, we will hit our stride by providing fuel-cell systems to customers not only in the automotive industry but also in other sectors”.
Eui-sun further revealed that the company is also big on self-driving commercialisation as it aims to develop an autonomous driving platform by 2022 and to start operating self-driving vehicles in 2023 before commercial production the next year.
As part of its self-driving commercialisation plan, Hyundai invested $2 billion last year into a joint venture with Ireland-based autonomous vehicle startup Aptiv.

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