Kathmandu, January 29:

At a time when economy is not performing well due to discouraging business activities and, closure of over 300 enterprises, financial experts from Nepal and India have come out with an idea of ‘financial restructuring’ to revive sick enterprises.

At a one-day long seminar organised by Institute of Chartered Accountants of Nepal (ICAN) and Indian Institute of Chartered Accountants (ICAI) on the eve of ICAN’s ninth annual day here today, experts discussed on system audit and corporate reporting in a changed economic and financial environment.

Jayant Gokhale, FCA, council member of ICAI India, presenting a paper on ‘Financial Restructuring and Corporate Re-engineering’ said that financial restructuring is the process of analysing an organisation’s current fiscal structure, and determining best capital structure that involves restructuring the assets and liabilities of corporations, including its debt-to-equity structures. “It is needed in line with the cash-flow needs to promote efficiency, support growth, and maximize the value to shareholders, creditors and other stakeholders,” he said.

According to Gokhale, financial restructuring may mean refinancing at every level of capital structure that includes securing asset-based loans, securing subordinated debt financing, securing institutional private placements of equipments, achieving strategic partnering and identifying potential merger candidates.

“However, the goal of restructuring should be on registering profits, improving returns on company assets, lowering

the company’s break-even point, reducing financial and operational risks and increasing shareholder values,” Gokhale added.

Narayan Bajaj, president of ICAN said, the role of chartered accountants in financial restructuring is very much crucial for which we need to move ahead keeping increasing importance of technology in the financial industry globally. “As we are all set to see the enforcement of Insolvency Act soon, chartered accountants could play a crucial role for proving financial restructuring fruitful,” he said. “As the 21st century is being driven by knowledge eco-nomy, the chartered accountants should be ready to perform the role of business advisors and investments advisors.”

K K Singh, past president of ICAN talking about the objectives of financial reporting in a company said that it is needed to evaluate operating results and financial position, assess of efficiency and effective of performance, foresee business risks, ensure compliance with legislation and directives of supervisory regulatory authorities, and safeguard corporate interest and of the stakeholders.

Ms Supriya Munshi, FCA

of ICAN presented a paper on ‘Auditing in computerised environments’. Narendra Bhattarai, FCA and former president of Nepal Bankers Association (NBA), Prabhu Ram Bhandary, FCA, former president of ICAN, Atma Ram Ghimire, member secretary of High Level Information Technology Commission of the government and many others also took part in the seminar. where there were total 98 participants.