1. Dilemmas of a Financially Distressed Entity [ Opportunities for Accountancy Professionals ]

2. Entity under Distress v/s. Promoters under Distress Distressed EntityDistressed Promoters

3. Intention Re - Start Internal Sources Promoters Funds Friends and Relatives Disposal of Assets (Company / Personal ) External Sources Dilute Stake OR Keep Ownership Intact Wind up No protection under SICA No protection under the Provisions of ‘Revival and Rehabilitation of Sick Companies’ of the Companies Act, 2013 Winding up by Order of Tribunal or Voluntary Winding up

4. Re - Start (External Sources) Dilute Stake Shares Debt Foreign Funds Keep Ownership intact Debt Foreign Funds

5. Due Diligence Legal Financial and Accounting Technical Environment Human Resource Product Market

6. Dilemmas Portions of Current Assets are ir-recoverable. (Stock, Debtors, Loans and Advances) Ir-Recoverable Investments Gaps between Booked Liabilities v/s. Amounts Demanded Cases under OTS / PF / Excise / Customs / Income Tax / TDS / DGFT / Service Tax / VAT / CST / Professional Tax / Gratuity / 138 NA Act / Winding Up Petitions / Civil Recovery / 420 IPC / Guarantor Invocation

7. Comparative Co. Act, 2013 Chapter XIX – Revival and Rehabilitation of Sick Companies (Section 253 to 269) Reference to Company Tribunal Provisions has not been made applicable till date. Co. Act, 1956 & SICA, 1985 Chapter VIA – Revival and Rehabilitation of Sick Industrial Companies (Section 424A to Section 424L and Section 441C) Pre 2002 Amendment, the Provisions were covered under SICA. (SICA repealed in 2003).

8. Revival and Rehabilitation of Sick Companies All Companies covered. (Previously, only Industrial Undertakings were covered). Minimum Existence Clause done away with. (Previously, 7 years). Minimum Investment Clause done away with. (Previously, minimum investment in Plant and Machinery was a pre-requisite).

9. Revival and Rehabilitation of Sick Companies Secured Creditors representation more than 50% or more of its outstanding debt is eligible to file an application to the Tribunal. If the Company fails to Pay debt OR Secure the Debt within a period of 30 days of the Service of the Notice demand. Application for determination that the Company be declared sick.

10. Revival and Rehabilitation of Sick Companies Expeditious decision by the Tribunal (within 60 days of the reference). Highlight point of consideration – Whether the Company would be able to pay its debt within reasonable time. Application of Stay of any proceeding for Winding up of the Company or for execution, distress against any property. No suit for recovery of any money or for enforcement of any security against the Company shall lie or be proceeded with.

11. Revival and Rehabilitation of Sick Companies Central Government / State Government / Public Financial Institution / State Level Institution / Scheduled Bank also have a right to prefer any application to the Tribunal. No property or assets of the Company can be disposed off during the period of pendency of an application before the Tribunal. Once declared Sick, time for repayment of the debt may be fixed by the Tribunal.

12. Revival and Rehabilitation of Sick Companies Application for Revival and Rehabilitation Appointment of Interim Administrator Committee of Creditors Appointment of Administrator (Section 259) Scheme of Revival and Rehabilitation Sanction of Scheme Rehabilitation and Insolvency Fund