How an audit can help with fundraising

Client:

Ecosoft is a manufacturer of water filters established in 1991 in Ukraine. They are among the five manufacturers who offer a full array of products: from water filter pitchers to reverse osmosis systems.

Reasons for fundraising:

Ecosoft has its own development strategy, which incorporates both internal investment and external lending.

Ecosoft’s products are in high demand, which requires its industrial capacity and product range to extend intensively. Its business plan reads that completing the investment program will increase the output and sales twofold or more and that the energy-efficient systems will cut costs and increase gains greatly.

Reasons for audit:

The European Bank for Reconstruction and Development stipulates a number of requirements to potential borrowers that evaluate a company’s readiness to work with large investors:

1. Legally compliant business 2. Reliable and professional management. 3. Strategic vision and clear development strategy. 4. Adequate short-term planning and controls. 5. Strong market position and promising product. 6. Transparent financial and managerial accounting. 7. Financially sound footing and positive financial performance.

Deliverables:

✔ Ecosoft obtained an EBRD grant under the EBRD’s Small Business Initiative (2015).
✔ Kreston GCG aided Ecosoft to transition to International Financial Reporting Standards (2015).
✔ Loan Agreement signed on 1 March 2017.
✔ First tranche received on 19 May 2017.
✔ Loan issued for 5 years.
✔ Size of loan: USD 3 million.

Resultant investment program:

– Double the production output and sales.
– Procure additional equipment and build new production workshops.
– Extend the range of water filter pitchers.
– Start production of filtration membrane based on the reverse osmosis technology.
– Extend the range of water filter pitchers.
– Implement systems to manage energy consumption.

This post is also available in: Russian

  • CLIENT Water Filters Manufacturer
  • SERVICE IFRS
  • INDUSTRY Consumer Goods

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