Chief Financial Officer / India
Where the first financial account needed another question
- Company retail estate
- 38 shops
- Fictional books, stationery and art-supplies business
- Company revenue
- ₹362 crore
- FY ending March 2026; not the CFO's expenditure authority
- Finance function
- 43 colleagues
- Five managers and ₹6.9 crore annual function expense
Decisions & consequences
01Removing supplier-owned books from a preliminary borrowing account
In FY2023 our preliminary lender pack included a ₹42 crore physical-stock schedule. It combined books, stationery and art supplies across shops and storage locations. The count had been reconciled, and I had reviewed the arithmetic. A legal review of the underlying supplier arrangements then identified ₹11.8 crore of books held on consignment that remained supplier-owned. The pack had not made that distinction clear enough for the financing purpose it was being asked to serve.
The proposed facility request was ₹18 crore. Operating colleagues wanted the funding discussion to proceed quickly because seasonal purchases were approaching. One view was that the lender could apply its usual adjustments later and we should avoid delaying the whole process. I disagreed. The company needed to state the basis of the schedule correctly before asking another party to rely on it. I also accepted that the omission was partly mine: I had treated a reconciled quantity-and-value account as though it was already a usable financing account.
We spent ₹29 lakh on stock and legal review, tracing ownership arrangements and revising the pack. Subtracting the ₹11.8 crore consigned balance left ₹30.2 crore of company-owned stock, but that amount was not automatically eligible collateral. The lender still had to assess its terms, exclusions, valuations and other conditions. We revised the requested facility to ₹11 crore after reviewing the wider funding plan; that request was not produced by a simple fixed percentage of the corrected inventory figure.
The process took five additional weeks, and the lender ultimately approved ₹10.5 crore subject to its own terms. The operating plan had to accommodate less funding than originally proposed. We did not describe the correction as cash saved or suggest that every owned item had been accepted as security. The useful outcome was a financing account that distinguished the goods in our possession from the rights the company could actually offer. I would now ask for that distinction at the first review, before a correct stock total begins carrying a different meaning in a borrowing discussion.
Keeping the continuing management and occupancy costs in an acquisition
In 2024 we considered buying three franchised outlets whose owners wanted to leave daily management. The asking price was ₹8.4 crore, supported by a seller-adjusted EBITDA figure of ₹1.6 crore. The adjustments included ₹42 lakh of management cost and ₹28 lakh of occupancy cost that the seller treated as removable. The outlets had a useful local customer base, and our commercial team wanted to secure the opportunity before another buyer emerged.
I asked the operating team to describe how the shops would run after acquisition. We would need managers to replace work the owners performed, and the proposed premises arrangements still involved continuing occupancy cost. On the buyer's planning basis, retaining those ₹70 lakh of costs reduced the earnings view to ₹90 lakh. That did not mean the seller's account was dishonest or that the business was worth a mechanical multiple of our revised number. It meant the acquisition proposal needed to carry the operating model we actually intended to fund.
We spent ₹37 lakh on due diligence and professional review, separately reported from the purchase consideration. The CEO supported further negotiation rather than immediate withdrawal. The seller argued that our wider organisation should absorb some management work and that the outlets deserved a premium for their locations. We tested the feasible support model with operations and retained the costs we expected to incur. The board approved a negotiated ₹6.1 crore purchase price for the three outlets, completed in September 2024. The difference from the asking price was not recorded as a realised saving.
In the twelve months to September 2025, the acquired outlets recorded ₹12.4 crore sales and ₹78 lakh direct operating contribution before central costs, financing, depreciation, tax and separately tracked integration costs. That measure was not group profit or a return calculation on the purchase price. Trading and integration still needed management attention, and the result did not establish that every acquisition assumption had been correct. My lesson was to bring the replacement operating model into the earnings discussion before the seller's adjusted figure became the number around which everyone negotiated.
Accepting less forecast interest so maturities matched the cash plan
At the start of 2025 a treasury proposal would have placed an ₹18 crore balance in a twelve-month term deposit. The quoted interest looked attractive relative to leaving the balance immediately accessible. Our cash plan, however, showed ₹11 crore of expected needs during the next quarter. The proposal relied on the broader business generating enough cash on time or on accessing funds early if required. I wanted those assumptions examined before the interest quote became the main basis for approval.
The treasury team had a reasonable objection: leaving too much cash accessible reduced expected income, and not every forecast payment would necessarily occur on its first planned date. I agreed that liquidity should not be treated as free. We compared the proposed commitment with a structure that kept ₹9 crore in demand cash and placed ₹9 crore into three ₹3 crore maturities scheduled through January, February and March. The authorised treasury policy, counterparties and actual access terms remained subject to the proper review; this was not a general recommendation for another company's investments.
On the comparison assumptions, the selected structure implied ₹9.6 lakh less forecast interest than committing the full amount for twelve months. I put that opportunity cost in the recommendation. The CEO approved the structure within the company's delegated process. We did not call the forecast difference an actual realised loss or assume that early access to a longer deposit would have been costless. The choice paid for a closer match between expected obligations and available cash while preserving a separately managed demand balance.
By the March review, ₹7.4 crore of the ₹9 crore that had matured had been applied to planned obligations and ₹1.6 crore remained available. Movements in the separate demand balance were reported in their own cash account. These figures did not establish that the original twelve-month proposal would certainly have caused a shortfall, because other trading cash flows could have developed differently. They showed how the selected maturities were actually used. I would now ask for the payment calendar beside the first investment quote, so colleagues can discuss income and access as parts of the same decision.
Disclosing my own dividend interest while recommending a smaller payout
In July 2026 shareholders were considering a ₹4.8 crore distribution following the completed financial year. Working-manager shareholders own 74% of Lunqeri and other employees 26%, so the proposed payment mattered to people whose daily work supported the business. I own 0.6% within the manager holding. On that percentage, the proposal implied ₹2.88 lakh gross for me before any personal tax treatment. I disclosed the figure when presenting the financial recommendation, rather than describing the shareholder interest as something held only by other people.
The cash review identified a ₹3 crore requirement to retain liquidity for the planned seasonal commitments. Some shareholders argued that the business should fund those needs through borrowing and preserve the larger distribution. Their preference was understandable: ownership should have a tangible return, and employees had already committed substantial effort to the company. I asked the board to consider a ₹1.8 crore payout with ₹3 crore retained, while keeping the relevant profit, legal and approval questions separate from the cash forecast.
The board supported the smaller distribution through the appropriate process after the necessary review. I presented the analysis as an executive, without a director's vote. At ₹1.8 crore, my gross entitlement was ₹1.08 lakh, which I also disclosed. The lower personal amount did not make me disinterested; I remained a shareholder and an employee with an interest in the company's future. The decision was not justified solely by having money in the bank, nor did retaining funds establish that every future obligation was covered.
The ₹1.8 crore distribution was made, with the ₹3 crore retained amount kept in the funding plan. Its later use and the seasonal cash outcome remained for review in November 2026, beyond this profile's October review date. We did not promise that the retained figure would remain untouched or portray it as a permanent addition to profit. I learned to explain the practical cost to employee shareholders directly, while showing the funding choice and my own stake in it. A candid recommendation should give directors the interests as well as the arithmetic.