Internal Drafting and Strategy Alignment

• The subsidiary’s management prepares a detailed business plan covering objectives, operations, budgets, and timelines.
  
• The plan must align with the strategic vision and goals set by the parent company.
  
• Inputs are taken from functional heads including finance, marketing, legal, and operations.
  
• Forecasts for revenue, costs, and key milestones are incorporated.
  
• The draft is internally reviewed to ensure feasibility and legal compliance.
  

Board of Directors’ Review

• The draft business plan is presented to the subsidiary’s Board of Directors.
  
• Directors assess the plan’s viability, resource allocation, and projected financial performance.
  
• Risk assessment, legal obligations, and regulatory considerations are discussed.
  
• Changes and refinements are suggested before final approval.
  
• Board approval is documented in the minutes of the board meeting.
  

Parent Company Oversight

• In most cases, the business plan is submitted to the parent company for review and endorsement.
  
• The parent evaluates the plan’s alignment with its global or group-level strategy.
  
• Approval may involve assessment by the parent’s executive committee, finance division, or international planning team.
  
• Cross-border tax implications, transfer pricing, and investment exposure are also reviewed.
  
• Final sanction may be given through a board resolution or management instruction from the parent.
  

Budgetary and Funding Approval

• The approved plan is linked with funding commitments and capital allocations.
  
• Requests for capital infusion, operational funding, or intercompany loans are initiated based on the plan.
  
• The parent company may approve funding in tranches, subject to periodic performance reviews.
  
• Transfer pricing and foreign exchange compliance are factored into funding decisions.
  
• Cash flow projections are validated before release of any funds.
  

Ongoing Monitoring and Modifications

• Once approved, the subsidiary implements the business plan with regular progress tracking.
  
• Variance analysis is conducted against projected results.
  
• Significant deviations from the approved plan require board or parent re-approval.
  
• Updates and realignments are reviewed quarterly or annually depending on the business cycle.
  
• Strategic reviews may trigger mid-year changes in the plan with formal re-endorsement.