 Hi everyone amongst us we have Mr Rocky Ravindra Bhukta an insolvent plus an advocate and an expert in mediation etc. We have been receiving requests from a lot of participants as to how one could do the business turnaround in few days. We have talked to Mr Rocky before coming live on this webinar to the effect what are the ways around. Since he is an expert in this field he happily agreed to share his knowledge and perspectives on this vital subject especially when we see after the covid etc since the morterium etc has gone off and how we can actually give the turnaround to the business and we flip to that. I would request Mr Rocky to take over the show over to you. Thank you Vikas. Thank you for the introduction and for having me here in the in this video. Good morning to everyone. Let me just share my screen and then we will start off. So this is business turnaround in 100 days. Different sectors would take different timelines but for a general business sector we can safely assure you that you can turn around your business in 100 days. What is the meaning of a turnaround? When a company or a business is in financial or operational distress the way to normalize a company or the way to bring it back to a normal is called business turnaround. In this video we will be talking about when, how and why a business turnaround should be initiated, the causes associated with business stress be it a financial or operational stress, the reasons of a company or a business getting into a stress or a failure and generic strategies for a business turnaround. Now let me tell you that let me let me tell you about the business turnaround philosophy. As you all know that most of the companies because I think your your audio is on so most of the companies getting into insolvencies these days and most of the companies which get into insolvencies majority of them end into liquidation. This affects a big time into our economy. There is a loss of public money because a lot of public sector banks have given out or the other private banks have given public money to these companies which are getting liquidated. So should there be a sort of a mechanism where at the point initially in time when the distress or the stress starts in a company if it can be turned back or brought back to the normal that would be a better option for a company. And we have been seeing in last last three to four years that business turnaround is going to become one of the key laws in India in the coming future. As of now we just have the RBI potential framework in which this can be done. But we need a lot of other regulations and rules within IBC or outside the scope of IBC to help companies do workouts with the creditors to have some sort of arrangement with the creditors so that they can help them in a business turnaround. Now around 15-20 days back there was a article in the newspaper in Atomic Times which said that there is now a 98% chance of global recession and as we speak the global recession has set in in US and the developed economies. As per this report India is not going to be going to be very much affected by that but probably if it is a decrease of one or two percent in the GDP or the growth rate that would affect a lot and a lot of companies and the businesses in India. As you might be aware that India consists of almost 6.6 crores MSMEs here in India and out of those only 30 to 40 lakhs are corporate entities which are affected by the IBC code as of now because the chapter on the individuals and the partnerships has not yet been notified. So the point here is that there is no safe way out for companies almost belong to MSME sector that is 6 crores. So what we are looking at is some and they would be big highly affected when this recession comes to India probably by the middle of 2023 and and this effect is going to be seen by by the end of July August 23. So at that point in time we would be requiring a lot of turnaround professionals insolvency professionals to handle the rush which which might come in and and since as of now the threshold limit of initiating insolvency is almost one crore of rupees and anytime if it is brought down there would be a huge Russian insolvency which is being seen across the world in US, UK, Australia, Canada where the threshold limits for initiating insolvency have been brought down to the pre-COVID levels which has not been the case in India. So when we talk about turnaround management we would be looking at a turnaround situation what a turnaround situation looks like. We'll be talking about the early morning signals at the IBBI conclave last month in November I think. Finance Minister Mrs. Nirmala Sitaraman had actually spoken about to focus more on early warning signals we'll be coming to that what early warning signals then we'll be identifying critical issues that are affecting businesses, how these issues need to be analyzed and how the corrective actions should be taken. So what is a turnaround situation? So I have put up a video for you please see this video. In this video you can see water coming from top and getting out of these small holes in the bucket. Now what does this signify? If you imagine that that the water coming in from the top is the revenue that a company is earning and these are the small holes or the leakages which comprises of probably poor financial management, inefficient supply chain, reduced average credit time then debit timelines, siphoning off by promoters through these small holes where the water comes out, fraud by employees or the stakeholders, high operational losses due to inefficient operational flows probably over staffing. So all these things are leakages in a business which needs to be plugged and the business cannot hold the water, the revenue unless these leakages can be put. This is by way of visual I can explain the turnaround situation where the cash flows are not remaining up to the mark and there's a negative cash flow. By negative cash flow I mean that the incoming is less than the outgoing. That outgoing can be because of these leakages as well, the higher amount of outgoing of cash in a business. So now I will just change my track. So what do you do when you're not feeling well? You go to a doctor probably and the doctor will tell you to get tests, some tests done to find out what the issue is with you. Then he'll prescribe a medicine to you and then you will probably get well after completing the course told by the doctor. The companies work in a similar fashion. As the human body shows symptoms of illness much prior to the illness, similarly the business which is under stress, it gives out signals and it is advised that the early warning signal, these are called early warning signal, which we're talking about earlier, are noticed and acted upon as soon as possible. Identification of these early warning signals at an early stage would definitely help you turn around your business easily and we'll be seeing this through a chart in the next slide. Now this slide is a very important slide. You can actually check where your business stands through this slide. So on the X axis, sorry, on the X side, we have urgency for action where there's a high urgency of action from below and goes up where you can find on the green, the healthy company and if you can see the curve, you come down and there's an insolvent company and in between there are three tabs called strategy crisis, earning crisis and liquidity crisis. Now how this graph works is that when a healthy company is getting into stress, it shows out early warning signals. So I'll just mark it here. So early warning signals would be shown somewhere here. Now these early warning signals normally are not visible to everyone except professionals. So it is important that the company people also have some knowledge about these early warning signals to identify them and take corrective action. If these early warning signals are not taken care of, we are rushing into a earning crisis because the water which the visual, the video that we saw earlier, the water is still going out of that bucket and nothing is being held as profits within the bucket. And as we go down, we are not taking steps to rectify the issues at this point in time, we are getting into a distress situation where the liquidity becomes an issue, wherein I would not be able to pay my creditors, I will not be able to pay for services, I will not be able to pay anyone because my revenue has gone below target and my outflow of cash or the outflow of money is much more to my vendors, to different people that I have to pay. And ultimately, this would result in defaults, defaults of debts to the operational as well as financial creditors, which would ultimately lead to an insolvency situation. So the understanding of this chart is very important that if we can act upon the early warning signals as soon as possible, it would be better for the company and the company or the business can be turned around easily at this point in time. How can we do that? We will be coming to that later and what would be the benefits of identifying the signals and acting upon them would be coming to the next few slides. Like I told you, timing of essence to catch the signals early is very important and if those signals are caught early and timely action is taken, there is very high probability of success. Early interventions is important because the more you go down that curve, it would get more difficult to get out of that situation. So probability of success goes down as in when we delay this delay and get down the curve. It's an English adage that prevention is always better than cure and this is very true in an insolvency situation. So when a company is into distress, it is better to turn around the company and not let the company get into legal hassles within the scope of IBC or surfacing. Because you are getting catching the early signals faster than any other business in your sector, it would be easy to mitigate the risk associated with those stresses. At that point in time when you are at the point where you are between a healthy company and the strategic crisis, it would probably be a better option to get more finances because your civil would be better. You would not have made any defaults and people would not be in the knowledge of the fact that the company or the business is facing any distress. At this point in time, restructuring is easier and flexible. Restructuring can be done in secrecy. Mind you, when we talk about insolvency, all the world knows about it through publications by the resolution professional. But at this point in time, which we can say that it is a pre-default situation where we are not done in a default. So it can all be done in secrecy. Neither your creditors, probably some of the creditors might know about it, but your employees, your customers, your vendors would not be in the knowledge of fact that something bad is happening with the company and there is some restructuring going on. This would affect, this would actually affect in a positive way on your business. There would be retention of clients, employees and vendors. There would be no stigma which is associated with insolvency. There would be, we could easily restructure the debt regarding your term loans or the working capital requirement and probably a moratorium on principal or interest can be easily negotiated with the creditors. Some sort of action can be taken to plug all those loopholes so that the water in the bucket remains more than it actually was before plugging those loopholes. At this point in time, decision making is faster and there is high motivation because you have actually understood that the early warning signals have shown up and it is the right time to actually make some sort of decisions to rectify the mistake that have been seen in through those early warning signals. Now, most of the people when I was telling them about turnaround and restructuring, they said, sir, how can we actually identify these sort of early warning signals? So this led to me putting up a small tool wherein you can, we asked you 20 questions and you have to just answer in yes or no. Mind you that I am only talking about a person who I have not even met, who I have not seen their financial statements, I have not even looked at their business. Only this is an objective test to understand whether their business or the company is in financial or operational stress or not. So we'll go through all these 20 questions now. So you can go to the site and check it out. So I'll start off with these questions. Your net current assets are less than your current liabilities. This is a very important question because actually when your current assets are less than your current liabilities, you are into a state of insolvency. That is the definition of insolvency. You're getting constant reminders of the demand for payment from the creditors. Your customers are complaining more than usual. Every time a repayment of debt is increasing, you do not have funds available to pay all of your creditors. Mind you, whatever the questions are coming in, they are actually dealing with your cash flows. The payment that you are making to different people, how they are being affected, your issue checks are bouncing. You do not have money in the bank. So it checks are bouncing. Again, this is about cash, which is available with the company. COVID related financial or operational stress. We have seen a lot of companies getting into this financial or operational crisis during COVID and they had lack of cash flows because the revenue had stopped coming but their rents were being paid. The electricity expenses were supposed to be paid. The water expenses were supposed to be paid. They had to pay their employees. So the outlaw fund was there but the incoming was not there. So this was some sort of a financial operational crisis for them and this has actually carried forward from 2020 to 2021 to 2022. Because of all these crises, many people in spite of the government effects to give funds to MSMEs who are stressed out due to COVID, many people were not able to raise working capital. There are some habits of promoters as well. Most of the cases which I was handling, one of the promoters was only working, worried about his sales and he was a good marketing and sales guy. Only he looked after the sales. He did not look after his financial management. That ended up in employees siphoning up a lot of funds out of their business. So most of the time you are spending your time in preventing problems from escalating rather than focusing, that is also one of the issues that takes care of negative cash flows. If you have received a recovery notice of a section 7 or 9 notice under IBC, that means that people are demanding money from you which you have not been able to pay and there has been a default. Like I said, you have little day-to-day knowledge of your accounts or cash flow reserves. Being a promoter or being as a CFO of a company or as in the board of directors, you need to have a 360 degree view of your company. There is a delay in filing of tax returns, GST returns and other compliances as per law. Your company consistently lacks sufficient cash flow. Your company is functioning at the limit of your forward route. Again, these are all about the outflow of cash. There is no cash in your bank account or the ODA account. You have completely used up your ODA to the 100% of that limit. You are under pressure from creditors to pay up and there is a high staff turnover because you have not been able to pay your employees. They are leaving. They are looking for new jobs. So these are some of the health checklists that I can say that you have to check whether you are being affected by these things or not. Your bank has reduced the credit limit or refused to lend you more funds because you have not been able to pay your EMI in time. You are making losses. That actually would lead to insolvency in a bankruptcy situation. Your business records are not proper as per law and are in a mess and you are using your own personal income to invest in your company to meet the amounts owed to the creditors. So these are the 20 questions that we normally ask. Have an objective view of what the company is going through and the result. If you result, I will just show it again on this chart which we had seen earlier. So if you had said yes to less than three questions, then you would probably be somewhere here. So if you said yes to less than three questions, you would be somewhere here. If you have said yes to almost four to seven questions, you would be somewhere at this point in time, here in this point in the curve. And if you have said yes to seven to 12 questions, then I am sorry but you are in a state of liquidity crisis and you need immediate help because at this point in time, the probability of you getting into insolvency is very, very high. And if you have said yes to more than 12 questions, you are on life support. You need life support and immediate help from the professionals to stop you getting into insolvency. At this point in time, it is very difficult for us to give you some sort of a turnaround strategy. But yes, we have brought out certain companies from this space as well, but it would all depend upon the sector you are working in, how much issues are there with the company, how many holes are there in your bucket. Only that would be able to, and that is very case specific. It's not something which is, I can say, which is generic. It is all case specific at this point in time. So understanding this is very important. So the next slide that I'm going to take is on, why do companies fail? Now let me ask you one simple question. If you have lent someone money at any point in time to your friend, to your relative, and he has stopped giving it back to you, I mean, he's not responding to your phone calls, probably he doesn't have the money. His situation is very bad that he cannot repay you, so he's not taking your phone calls. It happens with everyone. At certain point in time in your life, it might happen with me. I've taken money from someone probably, and I'm not in a position to repay back. So I'll stop at first and from even calling me, I'll probably block his number. And that is the issue which most of the companies face, which is a lack of communication. Very importantly, you should not stop this line of communication. You should tell the other person, your problems, your issues that you're facing with your business, with your company, and why aren't you able to pay back those, those monies or whatever you have taken from the, from your creditor or from your relative or your friend. Get into a communication mode. This would sort out at least 50% of your problem. And we have seen in different cases that most of these problems are sorted out by talking. And talking is a very effective tool when we're dealing with some sort of a situation where the cash flows are there. So this is one of the important, I would like to say is we have seen in practical life that communication between different stakeholders very important. Lack of insight into real financial situation. Most of the promoters, directors of companies, family or businesses, they are mostly working towards making more revenues through more marketing strategies or more sales. They are not very much focused upon their financial management or financial information system within their company. Probably some, some, some, some businesses might have, most of the company or businesses, the promoters are handling the financial management system. And their understanding of those financial management system is very weak. That is the reason that they can't see those early warning signals which are being, which are being coming out of those financial statements. So that is one of the areas that needs to be taken care of. Again, not enough efforts for an informal solution. Most of the people would run to the charter accountant or a lawyer to help them out of stress. But a charter accountant or a lawyer can only deal with lawyer with the law and charter accountant with the financial. Here we are talking about a 360 degree approach for getting a turnaround. As a, as an insolvency professional work says that he has to wear many hats. He has to wear a hat or a lawyer or a financial manager of a management consultant of a lean Six Sigma, probably. And he has to look after all the areas of operations, about finances, about, he has to look after the vendors, he has to look after the look after the customers. Similarly, a turnaround professional has to look after all these things. And the promoters and directors need to be working in the same way that they need to be aware of all these things to better manage their businesses. Initially, most of the times, what happened is that whenever a person comes to us, a CFO comes to us and says, Sir, this is some issues coming up in the business that the financial statement, the financial ratios are not proper as per, as per the given percentages, probably. So they need, they make a stop to the promoters or the directors. And one thing that I have seen in 99% of the cases is that there is complete lack of vision with the promoters. They completely deny the existence of early warning signals. They just say that, okay, we are, we are, we are good to go. We can manage our businesses. We have been doing this business for almost 30 years, 30, 40 years, and nobody knows the business better than us. This is one of the major issues that even when the early warning signals are identified, they are not acted upon by the promoters and the directors. And this is a passive attitude of the management that, that actually takes the company direct to the liquidity crisis. This leads to no turnaround strategy as such. And the turnaround strategy or a turnaround professional or other professionals would come in at the time of the liquidity crisis has started, which is way down the curve that I had showed you. And at that point in time, it would be very difficult for any person to manage such sort of a turnaround unless they are very professional. And most of the people, they try to do only cost cutting instead of some sort of innovation or a model change, or a lot of other things that can be done will be coming to those generic strategies later on in this presentation. So they just effectively do cost cutting, but cost cutting is only the first step. Thereafter, there are many other steps that need to be looked into. So these are some of the causes of the company's fail. Now the businesses failure has a lot of permutation and combination. They could lead, they could be because of the business characteristics, because of the maturity. As you all know, that the maturity, the business goes through a cycle. It matures, goes to the boom, and then goes to the bust. That cycle is always there for all sectors. The size of the company is also important. And the management, the manageable size is there. If a company is very big, probably the management doesn't know what it's left or right arm is doing. So that is an issue sometime. There's a general environment which takes care of the economics. I mean, the economics, the external factor, which we'll be coming to, there is the companies fail to develop on their technology. Politics is a very important factor for a business, for a business to go down, then the legal and social factor, then the strategic management, companies which were there, 30 years ago, like Kodak, which was a leader in cameras, is nowhere to be seen today, because of the lack of vision and strategy, probably lack of marketing and sales as well. Then the industry specific behavior, customer behavior or industry specific competitors, competitor gets new technology and gets a new product, better than your product, probably cheaper, that would affect you. Then if you're not paying your supply as well or the industry life cycle is going through a downturn, that would impact the business. Importantly, the management and the shareholders, they need to have that vision and the strategy. They have to have the motivation to go ahead, create innovation into the product or their supply chains or their production operational issues. They need to understand all this and try and make innovation at every step in their business. And then the financial policies, the management information system have to be robust. The debt structure has to be as per the guidelines of the debt equity ratios. The working capital has to be there. It has to be managed properly. And the decision-making system has to be very fast. It cannot be slow. When we go to a bank, for example, and I've seen one of the major causes of the company getting insolvent is when the company gets into a bank for a one-time settlement to take a huge amount of time, because there are layers and layers of decision-making authorities which have to take decision at various levels. And by the time they take a decision in almost four to five companies that I have been helping out, they'll vent into insolvency. So that has to be taken care of as well. Now the causes of decline of a business. Some causes you can control, which are internal causes, some causes which you cannot have any control on. These are external causes. So one of the internal causes is poor management that we spoke about earlier. Inadequate financial control. That could be because of poor management or because the accounting department, the financial department is not up to the mark. Very importantly, poor working capital management. So if you have, for example, to pay two people today and you do not have sufficient amount of funds in the bank, that is a poor working capital management. And that issue reflects on the reputation of the company as well, high costs. So just a day before I was talking to some certain people and the high cost was one of the major factors for downfall of a business. I have seen that most of the companies, most of the promoters, I would say, when they are setting up a business or a manufacturing plant, if you take an example of a manufacturing plant, most of them would be first-time entrepreneurs and they would want the best of the machineries for them. They would be experienced people who would buy the machinery at 50% of the cost. But when they put up these high costs within their manufacturing setup, these high KFX can actually become one of the factors for downfall of a company. So if you're producing something and you're not able to market it, that's going to show on your balance sheet as losses over trading. So this is the opposite of lack of marketing, you're over marketing. But you cannot keep pace with your working capital management. So that is where when you're giving the goods to many people, producing them, but your turnover of revenue incoming is delayed due to some effort, or by the people who are going to pay you up with your customers, that brings a big issue on the working capital management, and thereby the cash flow gets negative. Brick projects take a lot of time to set up. So these big projects mostly do have good management people. But once, even if a bad person into the management can really affect the big projects, big time, because a lot of money is involved in that, acquisitions. Only one example that I can give you is Tata when they are quite chorus. So that went bad because that acquisition was not feasible actually. Financial policies of all organizations should be as per the need and requirement. You cannot just copy paste any policy from any different sector of the same sector, same company, and use it for yourself. It has to be as per your requirement because your requirement of the issue between debt and equity is different from the other person. Organizational inertia and confusion, that is where people are not aware what is happening in the organization in respect of the operations part as well as the financial part. And these are the internal causes which can be rectified by the promoters, by the turnaround professionals by looking into the balance sheets, the financials of the company or the operations of the company. And they can be easily rectified if they are caught in time. When you talk about external causes, you are looking at the policy changes by the government which can affect your outflow of cash. One example that I can give you is that one of the company in the logistics sector, the government came out with a policy of reducing the size of the truck, decreasing the size of the truck by a meter and a half. And the truck owners had to reduce or cut their trucks a bit to get within that policy change, which entailed expenditure of almost 1 to 2 lakhs per truck. The company which having 500 trucks would entail a huge amount of about 10 crores of expenditure on this which was not needed or which was not put into the budgets of the company. When the financials probably started, they would be down by 10 crores. Competition is an important fact. Post-major events like an earthquake or a volcano or some sort of heavy rains which might happen, those are post-major events. And mind you, COVID was not a post-major event. Changes in market demand, you can understand that. If the demand for a product goes down, it affects the company financially in a very big way. Adverse movement in commodity prices. So this is where any sort of a commodity be it a food grain or be it a raw material, if it goes up and down, you would be affected by it in terms that your profit might go up or down and your cash flow would be affected simultaneously. So what does turnaround help or what are the advantages of a turnaround rather than getting into an insolvency scenario? What sort of advantages give turnaround, give to the businesses? Since at this point in time, when you're talking about turnaround, that means that probably there's a default or there's no default, right? And you're not right now within the clutches of the IBC or the surface by the creditors. The flexibility in ease of adaptation is very high. Since if there is no default, the ease of negotiation with your creditors regarding your payments to them can be modified through negotiations. Obviously, the timing issues are very important at the early, the better. Moreover, the confidentiality factor helps not people know about your financial situation because everybody leaves in the sinking ship. So the confidentiality part is there because nobody, not many people know about that you're getting into a crisis situation and managing it through some sort of a negotiation with the creditors. It is less stigma than form an insolvency. And when we compare turnaround with insolvency, like I told you in the earlier, when we started this conversation that most of the companies getting insolvency are ending into liquidation. That means that the company is being finished. It's not keeping as a going concern. So, but when you're talking about turnaround, it helps continue the debtor's business, keeps it as a going concern. Mostly there would be no changes in the management unless the creditors want to come as equity participant. There were thereby there would be no change in the rights of the party. Since we do not have any sort of a formal turnaround rules and regulation, there would be no court involvement, except what we have, what we have is a prepack where if you get into a settlement with your creditor to get a court approval, you can get into a prepack. So that is only one scenario where we can do that through a court involvement. Obviously, there would be lower costs involved and lack of, like I told you, there's a lack of regulatory impact on the turnaround. So how does the turnaround work? So when we were looking at that chart of healthy company and insolvent company, and when the curve starts going down, that means somewhere or the other, there's a liquidity issue with the company. That means cash is not being managed properly. So initially the first thing that a turnaround professional or a promoter or a director needs to is that it needs to take care of its cash flows. Once the cash flows are stabilized and the business stabilizes after that, probably there could be some sort of an arrangement with the creditors to increase the credit timelines and probably reduce the debit timelines. Thereafter, analyze the critical issues and situations. You will need to see what your issues are with the financial aspects and the operational aspects. And on the basis, once you have identified those issues which are in a financial pair and the operational spare, then an emergency response plan to correct those anomalies can be created and implemented. And a restructuring would normally happen and they would return to normal once that restructuring is complete. This would entail probably some sort of intervention by the creditors as well and some sort of negotiations with the vendors as well. There has been a big talk about negotiation and mediation with the creditors. So this can be initiated at a very first early morning signals are seen. And once the creditors understand those issues like the communication with your creditors start and the trust factor is maintained, you can identify the issues and come to some sort of a mutual agreement. Then other than the creditors, they can be other stakeholders as well. And you need to take care that what is the issues with these two stakeholders and then start negotiating or mediating with them. So like I said, the key objects of success will turn around is to take control and manage the immediate crisis. That's the liquidity issues. There could be other issues as well, but normally what we have seen is that first we need to stabilize the business by getting the liquidity issues cleared up because that would entail success with all the stakeholders. Then we need to rebuild stakeholders support, beat a creditor, customer, vendor, employees, fix the business and resolve future funding. Now, most of the times, most of the time when we talk about any promoter comes to us, he is looking at a future funding so that he can keep putting that water into that bucket. But if we give him a funding initially, then all those holes would still be open and the funding which has come in would go down the drain. So first we need to fix up those holes. So if there are 10 holes, then we can fix up eight of them. The outflow of water would be much lesser and then funding would be very much better to get because that would be used up in the business. It would not get out of that part where there were 10 holes and we have fixed eight and only two would be leaking water. That could be taken care of at a later stage as well. So when we talk about generic turnaround strategies, we talk about first is the crisis stabilization that we spoke about that would entail taking control of the business because this crisis has emerged because somewhere down the line, the control was not there on different aspects of the business. Cash management is an issue to generate more cash probably asset reduction by sale of assets. Probably a short term financing if all the issues have been identified and the first step cost reduction into various vectors of that business. We also need to understand about the leadership with the CEO is fine, he understands the issues if not change him, change up other team managerial personnel because they are the person who have got you into this mess. Like I said, communication very important between different stakeholders that should continue because without those communications, no turnaround strategy can work. Then once the initial crisis has been stabilized, then you need to focus on your operational part, redefine your core business, disinvestment and asset production, product market focus. So you need to focus on your product like Tata's. I normally take example of Tata's because they have done all this. Tata's have actually sold off their hide or hide of their companies to have a product market focus downsizing. You must have seen Twitter downsizing as a last two months outsourcing. Now this is a decision that a company has to take whether the outsourcing is cheaper or in-house production or in-house manufacturing is cheaper. So that is a very, very case specific and what sort of investments that can come in to the business to help them churn out that cash flow in a positive way. So thereafter, we have to also look at the organizational aspect, the structural change, the key people change. Again, the communication part is very important. Building commitments and capability in terms of the mental state of all the people who are employed. New terms and conditional employment probably less benefits to ease off the cash flow situations who have less amount of debt on the company. These are the things that need to be done. And the critical operational improvements, the improved sales and marketing to increase your sales, cost reduction in the manufacturing process of the product itself. Probably if cost can't be removed, decreased, probably increase in quality so that it can compete with your competitors in a better way. Improved information and control systems very important because the faster the better the information and control system, the better it would be to take decisions. And lastly, the financial restructuring. So once you have done all this and you go to a predator or a financial institution saying that it being for the issues that we were facing and we have done such and such thing for getting those loopholes in the bucket plugged, we are now in a situation to make more profits. And this is where this is a strategy that we have used for turning around the business. So we need more funds, more revenue, more the tap has to have a bigger mouth to give us more money so that my bucket fills up properly. So at this point in time, most of the companies would get some sort of probably more money or some sort of financial moratorium or interest moratorium, somewhere down the line, which can easily be negotiated with the financial provider. So what does a turnaround professional do? Most of the times you would have seen that promoters have a thing within the box, they cannot think out of the box. So when a turnaround professional or any other person other than the promoter then to the company comes with a fresh eye and a complete objectivity and can look at the business in a very different manner. He would have an auto box thinking and a vision to understand how he can take the company much more forward. He would not be biased. He would not have any baggage to take care of that promoter, for example, has bad relations with a with a creditor or an employee or a customer and he cannot talk to them. That baggage is not with the person who would come to rectify the mistakes of the company. Like I said, he can deal equitably with angry creditors, frightened employees, very customers and a nervous board of directors. So even within the board of directors there might be some ego issues which can be easily taken care of by an external party. He can advise instantly after analysis and do a little business because he is a professional. He understands the issues that might crop up and how to strategize as per the facts of that specific business or a company. And if he strategizes properly and understands the business properly, it can really help the business turn around and grow. If again there is a caveat that if it is done within time. So once all these things are done, we have turned around companies within 100 days. This can be done. If the use of business turn around professionals is taken within time, as per the curve that I showed you, within when we have a strategic crisis or a earning crisis, it's easy to do that. After that, I'm not saying it is not doable, it is doable, but there would be, there is a lot of efforts, more efforts would be involved and the probability of success goes down as we go down the curve. So it might take, initially it might take till the earning crisis, it might take 100 days. Probably after that it might take more time, but it can be done. And it can be a good thing for the Indian economy, for the GDP of India, because this is being done across the world. Turn around profession is working very, very well in developed economies like US, UK, Australia, Canada, South Africa. And there are specific people who are regularly taking webinars and seminars offline and online to teach promoters and directors how to turn around their businesses. And in the future also we have plans to bring the same professional expertise from across the world to India. I think you have understood the session, the way I wanted you to understand. Thank you very much. Yeah, we can do away with the screen. Yes. In fact, it was a, what we say, for a common man also to understand things in a simplified manner. In a different perspective. That the manner in which you have done it. And I think it's said by you that a stitch in time says nine. Yeah, that is a paramount. Yeah. And then you are told as to how mediation and consolation like, I may not say it's a new fact, but even in the commercial act, even under the board of civil procedure, it's a big thing. And how do you break that mental mindset? Because people feel that how will mediation help? There's a total collapse in the business, maybe in the commercial act, maybe the proceedings under the NCLT, insolvency proceedings, securitization proceedings. How do you feel that actually you can change the mindset of a common man for the mediation? It is not the question of changing the mindset of a common man. It is the question. Yeah. It is not the question of changing the mindset of a common man. It is the question of changing the mindset of initially the courts and the judiciary as such. If we look at mediation in a business distress situation, internationally, you must have heard of the Lehman Brothers case. Lehman Brothers went down in 2008 with the financial crisis in US. There were almost 87 proceedings in 16 jurisdictions worldwide and the total estimated legal costs was 7 billion, 7 billion US dollars. It could have been gone over the top to 13 to 14 billion US dollars if it had not been for mediation. Mediation was used in insolvency proceedings. Internationally, this is becoming a fad now to use mediation to decrease the timelines, to decrease the costs. Even in India, we have started using mediation. The courts are mandating forcing the parties to mediate in insolvency situations. The issue is that we do not have any sort of rules and regulations within the IBC, which probably in the coming future we are going to look at it. In terms of workouts and turnarounds, we can see at some sort of convention, the international conventions which Insol International and the World Bank have come out together on workouts. They could be signed by the Indian government and used within the regulations of RBI so that they make it mandatory for the creditors, the financial institutions to have some sort of a negotiation with the debtor before even going for insolvency proceedings. The next question is, a lot of people would like to understand that who is a turn around professional? Do you have a certificate or any course as such? How do you get recognized within this society that he's a turn around? Because normally, any professional Charter Accountant would be like. Like you said, a lawyer would only deal with law. A Charter Accountant would only deal with financial summaries and financial documents. A management consultant would deal with only the management part of it. But a turn around professional has to see it from all sides, from all the angles. It has to wear many hats. So what happened was that we are setting up. Like I told you that there is an organization called Insol International. And similarly, there is an organization called Turn Around Management Association, which is an organization equivalent to Insol International and has almost 10,000 members from across the globe working as turn around professionals. Now this association didn't have an India chapter. And in next quarter or three months or four months, we are bringing the India chapter of Turn Around Management Association to India. And they have accreditation policy, wherein they would accredit professionals after taking some sort of an examination. They would be accrediting that. And that accreditation would be valid across the world. So for example, a person who is accredited by TMA India or TMA International can work as a turn around professional anywhere in the world. So any qualification as such, Simplicita graduation, law, charter, competency, that is, that can be equated with the qualification of an IP, like 10 years practice as a CA or a lawyer or a 15 years experience as a management professional. So I think we can, we still have to understand what would be the qualification like. But yes, it can be equated with people coming as an IP. Because we did the entire session in English, we have viewers from the Hindi heartland. If you could have to summarize this entire turn around process in Hindi, would you just wrap it up in five minutes for those audience who actually want to understand in the Hindi sector? Business and business. Whenever there is a problem, then why is it there? It happens because your cash flow, it is in the room and it is more. So if you have 100 rupees in the pocket and you are paying it 80 rupees, to your vendors or to your financial provider, look, EMI is also going on, then if your cash shortage is reading, then that is a very big issue that you put in a problem. To solve that problem, you have to correct that process. You saw that video in which there was a bucket and there were many fields in it, so if you consider that water as your revenue, that means your, because can you tell me what revenue can be said in Hindi, I don't know. So if your amdhan is going more in the bucket, then there are 10 shed, that is, leakages, you can consider that your employee is fraud, your own siphoning out, money is being invested in some other business, or you can consider anything that has an outflow of cash, then that bucket will have leakage, if the leakage is your business, then when you plug those leakages in, then your bucket will have water in your bucket, water means that your profit will be there, there will be no leakage in it. If we close that leakage, then it is better for us and who can close that leakage, you can do it yourself, if you pay attention to it, think of it with a different mindset, or you can take help from a turn-around professional, which is possible to plug in the leakages. So for you, according to you, you have to plug the loopholes, which means there are weaknesses, like even in the, as a student of mathematics, the topic used to be that there is a bucket and there is a 10-liter capacity and if it is leaking at the rate of, let's assume 10 milliliters, how much time it will take. Basically, the professional would help us to understand how you plug it, you may not use the MCL, but that is the turn-around process where you... So no, we use MCLs to plug those through turn-around strategies. So meaning thereby, you say, that you should revisit it yourself, review it. If you don't understand it yourself, then it is for everything like professionals. So it is advisable to understand it from a professional. So that is the best way to do it and world over, world over, the turn-around professionals are now in huge demand because the turn-around is not only for companies in stress, mind you, it is also to increase your business. Promoters have a specific mindset. They are working in that mindset. If you tell them that your business can increase in some way, that is also a way to increase your business. It's not only to help out businesses in stress, it is also to help out businesses to grow more. Yeah, when we do the case study, etc, a lot of case studies on the Nike, no not on Nike, I stand corrected, on Nokia to state therein that it kept on evolving and revolving upon the same concept, they never realized that the smartphones will become the fact. Exactly, exactly. Nokia was one of the pioneers to bring in a smartphone. I personally had an E90, which was a communicator and that was one of the best phones that I had used. But during those specific years of 2009 and 10, they lost the ground to different other companies in respect of smartphones, even to Blackberry. Now, take the case of Blackberry, Blackberry was a leader in in communication at that point in time. Now, the company is almost shut down their business of manufacturing phones. Yeah, even in these cameras, etc, those who didn't switch over to the... Yeah, the Kodak. The Kodak and mind you that the Mozar beer. Mozar beer is now into liquidation, whereas it was one of the foremost company in CDs. So I'm reminded what we learn that you more have to be like a person having an axe. If you have to cut the trees, you have to cut down, sharpen your axe, rather than just keeping on using the axing, because the axe becomes blood and you will not have the desired results. Yeah. Thank you, Mr. Rocky, for sharing your knowledge and insights. My pleasure. My pleasure. And those who have not subscribed to the Beyond Laws CLC channel, they can do that for more insights. Thank you everyone. Stay safe. Stay blessed. Thank you.