Remedy available to Director who has resigned and the Company is not filing DIR-12 with ROC

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Author – CS Gurminder Dhami (Firm- Gurminder Dhami & Associates from New Delhi, IN).

The nitty-gritty involved while resignation from the post of Director of a Company, precautions to be taken while resigning have been discussed by the author is separate articles link of which have been provided above.

Now, despite of all the precautions taken there are chances that a Company is not filing the e-form DIR-12 with ROC.

This article focuses on remedies available with a resigning Director in case the Company is not filing e-form DIR-12 with ROC.


The remedies given herein below are according to the author, put in a logical sequence and therefore it is advisable to exhaust the first remedy and even if still the issue persists then move on to the next available remedy.

Remedy 1File e-form DIR-11 with ROC & Send correspondence to the Company

In case the Company has not filed with ROC e-form DIR-12 intimating resignation within the stipulated time period of 30 days in Section 168 of Companies Act, 2013, the resigning Director should immediately proceed for filing e-form DIR-11, if not already filed.

Thereafter, the resigning Director may serve the Company and all its Directors with a reminder letter along with the copy of e-form DIR-11 filed with ROC.

(FORMAT of a sample reminder letter is placed at this weblink)

Remedy 2File complaint with ROC in e-form SCP (Serious Complaint Form)

That even after sending of reminder letter to the Company, the Company has not filed e-form DIR-12 with ROC, then the resigning Director should file e-form SCP (Serious Complaint Form) with ROC. The e-form SCP allows a resigning Director to file complaint against the Company who is not filing the resignation of Director.

The practical guide as to information required to be mentioned in the e-form SCP is as follows:-

Particulars of e-form SCP Values


Details of the Complainant Name, Address, Phone & e-mail id.


Details of the Company Enter CIN to pre-fill details.


Nature of Complaint


Select the option “Cessation of director”
Status of Complainant


Select the option “Other”
Particulars of Resigning Director Enter DIN & pre-fill, enter Designation, e-mail id, reasons of cessation and other remarks, if any.


Particulars of Complaint Enter the details of the complaint being made in brief here along with other remarks, if any.


Attachments 1.     ID Proof of Complainant.

2.     Correspondence with Company regarding the resignation.

Here it is advisable to prepare a complaint letter and explain all the facts therein and attach all the relevant documents to substantiate the complaint. In this letter ROC should be requested to initiate appropriate actions against the Company (call information & documents u/s 206, direct to file e-form DIR-12 and also adjudicate penalty for the default u/s 454)

(FORMAT of a sample complain letter to be filed with ROC is placed at this weblink)

Thereafter, it is advisable to submit physical copies of all the above documents with form SCP and challan with ROC office, make representation and follow-up the matter with ROC so that the ROC takes action in this regard.

Situations which may arise while exercising Remedy No. 2 above described in the below picture :-


Remedy 3Send a legal notice to the Company

That while pursuing as per remedy 3 above, it comes to conclusion that the ROC will not take action against the Company (refer chart above) and if the Company has still not filed with ROC e-form DIR-12, then it is advisable that before instituting legal proceedings, a legal notice is sent to the Company and all its Directors.

It is always advisable to send a legal notice first before institution of legal proceedings because litigation is costly and lengthy affair.

Also sending a legal notice reduces the initial time taken at Court / Tribunal proceedings during admission of the case because –

– the respondent(s) are aware of the fact that a case maybe be filed against them, if they do not resolve the issue and thus may not ask for time from the Court / Tribunal to file their reply.

-The Court / Tribunal would also in this case, not be inclined to give the respondents lengthy time to file their reply.


(FORMAT of a sample legal notice to be sent to the Company is placed at the following weblink)

Remedy 4 File Petition with Hon’ble NCLT

Despite all the tedious and rigours efforts if the Company still does not file e-form DIR-12, then the resigning Director should drag the Company to the appropriate legal forum to seek justice. Here the resigning Director should also demand for damages, litigation costs and compensation for harassment and mental agony.

The resigning Director in the petition under Section 168 and Section 170 read with Section 172 should, inter-alia, seek the following relief(s) :-

  • To direct the respondent(s) to file e-form DIR-12 with the office of Registrar of Companies.
  • To direct the respondent(s) to place the fact of petitioner(s) resignation on the website of the Company.
  • To direct the respondent(s) to intimate the fact of petitioner(s) resignation to all the bankers, vendors, dealers, agents and other stakeholders.
  • To take appropriate penal actions against the respondents for non compliance of Section 168 and Section 170 read with Section 172, for not filing the e-form DIR-12 within stipulated time period and for not making entries of particulars of resignation in register of Director.
  • To take appropriate penal actions against the respondents for non compliance of Section 189 for not making entries of particulars provided by the petitioner Director u/s 189(2) in the register of contracts or arrangements in which directors are interested.
  • To take appropriate penal actions against the respondents for non compliance of Section 134 read with Section 168, for not mentioning the fact of resignation of petitioner in the ensuing Board’s Report layed at the AGM.
  • To direct the respondents to revise the Board’s report in compliance with the provisions of the Companies Act, 2013 and also intimate all the shareholders about the fact of resignation of petitioner.
  • To take appropriate penal actions against the respondents for non compliance of Section 92, for not mentioning the fact of resignation of petitioner in the Annual Return (MGT-7) with ROC.
  • To direct the respondents to revise the Annual Return (MGT-7) and file the revised return with ROC.
  • To direct the respondents to pay a sum of Rs. ——————— /- as damages and harassment and Rs. —————————–/- towards the litigation costs.
  • To direct the respondents to keep the petitioner indemnified at all times, against all liabilities including cost of defending any proceedings, which might arise from any proceeding filed by any person against the petitioner, believing the petitioner to be a Director in the Company during the period starting from the date of actual resignation of the petitioner and till the date of filing of e-form DIR-12 by the Company.















Note of thanks to our Author – RiSiko would like to offer word of thanks to CS Gurminder Dhami (Firm- Gurminder Dhami & Associates from New Delhi, IN) for this valuable contributions on this critical topic. You can reach out to him for any Queries/suggestions or Questions at

Disclaimer: The entire contents of this article have been prepared on the basis of relevant provisions, judgements and information existing at the time of preparation. The observations of the author are personal view and the author does not take any responsibility of the same and this cannot be quoted without the written consent of the author.



Whether Resignation of Director is subject to Approval /Acceptance ?

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Author – CS Gurminder Dhami (Firm- Gurminder Dhami & Associates from New Delhi, IN).

Under Companies Act, 1956 there was no provision governing the resignation tendered by a Director. Thus matters in dispute with respect to mandatory acceptance or approval of resignation were taken to Courts of law, wherein various pronouncements clarifying whether resignation by a Director is a unilateral or bilateral act have been made depending upon the facts & circumstances of the case.

Section 168(1) of the Companies Act, 2013

“168 (1)  A director may resign from his office by giving a notice in writing to the company and the Board shall on receipt of such notice take note of the same and the company shall intimate the Registrar in such manner, within such time and in such form as may be prescribed and shall also place the fact of such resignation in the report of directors laid in the immediately following general meeting by the company.

Provided that a director shall (may)[1] also forward a copy of his resignation along with detailed reasons for the resignation to the Registrar within thirty days of resignation in such manner as may be prescribed.

 (2)       The resignation of a director shall take effect from the date on which the notice is received by the company or the date, if any, specified by the director in the notice, whichever is later.

Provided that the director who has resigned shall be liable even after his resignation for the offences which occurred during his tenure.”

Although, reading of Section 168(1) of the Companies Act, 2013 has made it clear that the resignation by a Director will be effective once served to the Company.  But there have been arguments that a Director, who hold posts wherein he is responsible for managing affairs of the Company or assigned with certain roles & responsibilities cannot resign without the approval of the Board.

So, even after enactment of Companies Act, 2013, wherein Section 168(1) expressly provides that resignation by a Director is effective upon service of the same, Can there be situations where the resignation of a Director will be subject to acceptance or approval?

Murari Vs. State of Tamil Nadu (Madras HC) – [1976] 46 COMP. CAS. 613 (MAD.)

“………..If there is any provision in the articles giving right to a director to resign at any time, the resignation will take effect without any need for its acceptance by the board or the company in the general meeting. In the absence of any provision relating to resignation in the articles of association, it is well-settled that a resignation once made takes effect immediately when the intention to resign is made clear.” (Para 13 of the Judgement)

“Even in the absence of any express power to resign, it is submitted that, unless the articles are specially framed, a director may by notice to the company resign his directorship. Directors are merely agents of the company’…., and an agent may determine his agency” (Para 16 of Judgement)

“…………Where a director is elected or has contracted to act for a fixed period, his resignation, before the expiration of the period, may make him liable for damages for breach of his contract, unless the articles permit such resignation.” (Para 18 of the Judgement)

S. Lakshmana Pillai v. Registrar of Companies, Tamil Nadu-  [1977] 47 COMP. CAS, 652 (MAD)

“……….Where a resignation states that it is to take effect on acceptance, or the articles so require, acceptance is necessary to end the tenure of office……..” (Para 16 of the Judgement)

“As regards the other contention of the ROC (first respondent) that the Resigning Director (petitioner) should have co-opted another director before he tendered his resignation, I see that there is no obligation under the Companies Act requiring a director, even if he is the only director, to co-opt another in case he intends to resign his office. After going through the provisions of the Act, I find there is nothing to show that such a co-option is a condition precedent for a director validly tendering his resignation. The power of co-option is only an enabling provision to co-opt so as to have the quorum for holding the meeting. There is no specific article in the articles of association of this company that it is imperative; on the part of the outgoing director to co-opt another director before he leaves his office. So this contention also fails.” (Para 28 of the Judgement)

Registrar of Companies, Orissa Vs. Orissa Paper Products Limited (Orissa HC)-  [1988] 63 COMP CAS. 460 (ORI.)

“No doubt, resignation of Director does not require acceptance” (Para 12 of the Judgement)

J.S. Gambhir Vs. Millennium Health Institute & Diagnostics Pvt. Ltd. (Delhi HC)- [2014] 120 CLA 372 (Del.)

“…….A resignation by a director implies a relinquishment of his office. This is a unilateral act which unless the Articles of Association otherwise provide, is not contingent on the acceptance by the company. Directors act as agents of the company and are, thus, also entitled to terminate their agency. The act of resignation or relinquishment of the office would not require the consent of the company and, therefore, would become effective from the time when the intention to relinquish the office as a Director is communicated.” (Para 28 of the Judgement)

Rajan Sangameshwaran Vs. Saralaya Technologies Private Limited (Chennai CLB)- [2015] 127 CLA 216 (CLB)

“…………..On the legal aspect it is seen that there is no provision in the Act or in the Regulations contained in Table A regarding the acceptance of resignation of a director by the company, given in the articles of the company there is no requirement of acceptance of resignation by the company”

“………………The only objection of the company in taking note of the resignation of the petitioner and filing Form 32 with the concerned Registrar is that the company incurred certain liabilities at the behest of the petitioner during October 2010 and April 2012……………………..”

“…………….The resignation will not, however, relieve the petitioner from any liability if any, which he may have incurred while in office as alleged by the respondents. I am of the view that the company and its officers made default by not filing Form 32 intimating the resignation of the petitioner from the post of director……………..”  (Para 5 of the Judgement)

Manav Kumar Agarwal Vs. Discovery Enterprises Private Limited & Ors. 

  • Decided by CLB (Delhi CLB)- No. 51/614/CLB/2016, Dtd. 01/03/2016


“On reading this section, it is no doubt true that the Tribunal is vested with powers to direct the company to make good the default in case the company flouted any of the provisions of the Companies Act, 1956. It is a settled proposition of law, whenever company is to file any return, account or other documents, then it has to necessarily pass a Board Resolution to send such document to the Registrar of Companies. Unless the company has passed any resolution, accepting document or return, it can’t be said that the company has committed default in filing of form before the Registrar. Here, the case of the petitioner is that he has given resignation letter to the company on 18.01.2011 but it is not the case of the petitioner that the company passed a resolution and failed to file such resolution copy approving resignation of the petitioner as director before ROC. For there being no Board Resolution accepting the resignation, his mere giving resignation letter will not amount to resolution by the Board. It is needless to say that unless there is a Board Resolution by the company, it shall be presumed that the petitioner has been continuing as director of the company.” (Para 9 of the Judgement)

  • Set aside by Hon’ble Delhi High Court & Remitted back to NCLT (Delhi HC)- CO.A(SB) 17/2016 & Co. Appl. No.4814/2016; Dtd. 10/02/2017


“……the CLB was of the view that in absence of Board Resolution accepting the appellant’s resignation, his merely giving a letter of resignation would not suffice and in law, it would be presumed that the appellant continued as a director of the company” (Para 3 of the Judgement)

“……a resignation by a director is a unilateral act and unless otherwise specified in the Articles of Association of a company, a resignation would become effective from the date on which it is communicated” (Para 5 of the Judgement)

“The impugned order is consequently set aside. The matter is remitted back to the CLB (now NCLT) for determination of the underlying dispute de novo, in accordance with law, as expeditiously as possible.” (Para 7 of the Judgement)

  • Finally Decided by Hon’ble NCLT (Principal Bench, NCLT, Delhi)-CP-17/2016, Dtd. 18/05/2018


Upon remission of the matter to NCLT for determination of disputes de novo, NCLT Upheld the order passed by the Delhi High Court.

Analysis of the aforesaid Judgements

Upon analysis of the aforesaid judgments if read along with the Section 168, it can be concluded that under the following situations the Resignation by a Director will / will not be subject to approval or acceptance by the Board:-



S. No.




Whether Resignation will be subject to Approval of Board, if AOA  ***



is silent



contains express provision for acceptance of Resignation [2]




Resignation Letter itself states that it is subject to acceptance by Board








Resignation by Director before expiry of fixed tenure for which he was elected or contracted








Resignation by only remaining Director in the Company








Where before the date of resigning by a Director, the Company has incurred many liabilities at the behest of the Director.








Where Company did not pass a resolution to file the e-form 32 / DIR-12 with ROC for intimating the Resignation?






*** According to various judicial pronouncements, the AOA of the Company can make the requirements of the Act more stringent. Therefore, the operation of Section 6 (Act to override MOA/AOA) will not effect the operation of a clause in the AOA that requires acceptance of resignation by a Director, which is contradictory to Section 168 and thus the AOA shall prevail over Section 168.

Note of thanks to our Author – RiSiko would like to offer word of thanks to CS Gurminder Dhami (Firm- Gurminder Dhami & Associates from New Delhi, IN) for this valuable contributions on this critical topic. You can reach out to him for any Queries/suggestions or Questions at

Disclaimer: The entire contents of this article have been prepared on the basis of relevant provisions, judgements and information existing at the time of preparation. The observations of the author are personal view and the author does not take any responsibility of the same and this cannot be quoted without the written consent of the author.

[1] Substituted by the Companies (Amendment) Act, 2017 and effective from 07/05/2018.

[3] This may make the Director liable for damages for breach of contract.

[4] If the AOA provides that single remaining Director shall not resign before co-opting another Director in his place, then the resignation letter by the Single remaining Director will not be treated as valid resignation, unless he has co-opted another Director.


UAE is all set to roll out long-term resident visa scheme

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The UAE has announced the launch of a long-term resident visa scheme, to complement the country’s current visa options.

In a significant move to attract talent and investment, the United Arab Emirates has announced a slew of radical changes, including 10-year visas for specialists working in medicine, science, research and technical fields. The UAE will now allow foreign companies to own 100 per cent of their business and students will be able to secure 5-year visas. ‘Exceptional’ graduates can stay for 10 years.

These are massive changes for the country with potentially far-reaching consequences, at a time when major developed countries like the US are putting up barriers in visas and immigration policy.

If these policies are implemented, Indians and Indian businesses will be key beneficiaries. At 2.8 million individuals, Indians are the largest expatriate community in the UAE. Professionally qualified personnel constitute at least 15 to 20 per cent of the community, followed by 20 per cent white-collar non-professionals (clerical staff, shop assistants, sales men and accountants). The remaining 65 per cent comprises blue-collar workers.

Aimed at attracting and retaining professionals and talented people in sectors deemed vital for the UAE economy, the new resident visa scheme will grant a permanent visa for up to 10 years to specialists in the medical, scientific, research and technical fields, as well as to innovators and entrepreneurs.

A new student visa scheme – 5-year standard, 10-year visa for “exceptional” students – will also be introduced.  Clearing the uncertainty inherent to the current visa system (successive visas issued for max 3 years at a time), this landmark announcement is expected to boost investments in the region and cement the UAE’s position as a primary destination for international investors and top talent from around the world.

The real estate market is also likely to benefit: family members of these categories will receive a visa valid for the same term as the main applicants.

Our RiSiKo Dubai office is closely monitoring the development and will provide further updates as the scheme’s details such as cost , documentation , eligibility etc. are released. For further details you can drop us email at or drop enquiry on our website

Walk the Journey of “Transformation of risk to reward” with RiSiKo Consulting LLP, India

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The International Monetary Fund (IMF) has retained India’s growth projections at 7.5 per cent for 2016-17 and 2017-18 each. India and the rest of emerging Asia are generally projected to continue growing at a robust pace, although with some countries facing strong headwinds from China’s economic re-balancing and global manufacturing weakness.

Over the past several years, the policy and procedures regulating and governing the inflow of foreign investments into India have been progressively liberalized and simplified. The initiatives taken by the Government in India in this regard have resulted in significant inflows of foreign investment in almost all areas of the economy, except a select few, that continue to remain reserved for strategic reasons. Due to this economic liberalization, starting, setting up and doing business in India is no more a hassle. Owing to ongoing computerizations/digitalization at Government level, formation of a company in India has become an easy process. Owing to changing regulatory environment, there are various efficient and cost effective vehicles available for entry and exit strategy.

RiSiKo Consulting LLP is a business consulting and advisory firm, specializing in risk management, turnaround strategies and scaling-up family managed businesses. RiSiKo has recently helped several clients for Set up & Entry Level Advisory cum Corporate Services, Strategy & business Plan formulation, Internal Control Check Growth & Performance Improvement.

In a world of competition and rapidly evolving environment, companies must find ways to enhance shareholder value, increase efficiency, improve internal controls, contain costs and manage risk. The rapid changes in the industry demands for unique approach to risk management to successfully achieve “Corporate Governance as well as Corporate Performance.” Based on RiSiKo’s industry experienced professionals and a tailored risk assessment , RiSiKo’s Risk Advisory Services & Strategic Advisory often play a key role in risk management process of a company.

To make your process streamline and to provide support, RiSiKo has tailored made advisory services for large to mid-size clients across business life cycle of business.


RiSiKo India office is based out of Financial District of India in Mumbai. RiSiKo has own office in India, Dubai & USA and company caters to clients across industries and business environments within India, Dubai and USA. RiSiKo believes that it is important that we understand the objectives of our clients and then help them create value for the company. We do this by helping clients understand the key drivers of value chain and then providing Strategic & financial customised advisory services.

From Risk to Reward, RiSiKo lends its expertise to your business, providing an edge over competition and enabling it to exceed its potential. We develop strategic interventions within the professional and managerial frameworks, to support key business activities.

RiSiKo believes in the partnership approach. Excellence in our area of expertise, extensive reach and a culture of unwavering business ethics is what defines us.At RiSiKo, we work very closely with our clients to deliver exceptional, effective and sustainable results.

For any further help & referral visit or you can get in touch with Mr. Vimlesh Chaurasia, Managing Partner (Cell- +91-9833706486, or Mr. Hiren Doshi , Managing Partner (Cell – +91-9867169761, )

RiSiKo is proud to host “ADAM GLOBAL REGIONAL ASIA PACIFIC MEMBERS MEETING (APAC) 2017” in New Delhi , India

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Each year, ADAM Global Regional member firms assemble in a different global metropolis for 2 days to share ideas, identify areas of collaboration and build relationships with fellow member firms. Member firms explore the regional environment in context to ever-changing client’s requirements, and how their roles would add value in setting new benchmarks for growth of the network and its member firms. It’s been witnessed that sharing of passion and ideas with fellow partners have resulted in inspiration to action.

This year RiSiKo Consulting LLP proudly along with Dr. Tahir Akhtar- Chairman of ADAM Global, Mr. Vimlesh Chaurasia- Chairman of Advisory Council and Mr. Ankit Jain- President APAC Region, ADAM Global in cooperation with AJSH & Co. and CEO Clubs Network is hosting & inviting Members firms, to ADAM Global APAC Regional Meeting Conference!

From 24th -25th of March, 2017, International Firms will join our esteemed members in Delhi, India for ADAM Global’s Regional Members Meeting. It is an excellent opportunity for members and potential members to attend and network with like-minded local and international businessmen. Members firms will also have the opportunity bring your families along to experience the serene beauty, historic landmarks, festivals, bustling souks and cultural intricacies of Delhi – one of the oldest cities in the world.

Our agenda is structured to maximize opportunities to build relationships and to promote exciting dialogue about topics. We’re working very hard to ensure the best experience for you. Checkout the link for detailed agenda :-


Methods of Business Valuation

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Your business is probably your biggest asset and hence it’s important to understand an estimate of its value. However, the biggest problem is that company valuation is a very complex and involves several different factors. Business Valuation is a combination of science and expertise.

“Quote too low a figure, and you will undersell your company; aim too high, and you will never sell.”

For one thing, there is no one way to establish what a business is worth. That’s because business value means different things to different people. To the owner, the process of valuation is personal and emotional, and they many times have an unrealistic idea of how much their company is worth. To the buyer, the valuation process is far more objective. Both will look at “fair value” differently. Finding balance can prove to be extremely difficult.

A business valuation takes strategic and in-depth analysis to determine an accurate estimation of a company’s worth. There are numerous factors included in the process of establishing a selling price. It takes more than just a range of numbers to value a company.

Valuing a business on periodic intervals is a good practice, even if you are not planning to sell. Valuation helps you understand your business weaknesses and strengths and continue to improve its real or perceived value. It also helps to motivate the management team, if the team is compensated based on increase in business value. Regular valuation is a good discipline and can help you take the necessary steps and make the necessary adjustments to generate the maximum value in an eventual sale.

There are different ways one can estimate the value of any business. Each method is based on different financial information and presumptions, which might result in a different value.

Whichever method is used to value the company, one should always prepare a statement of income and profit/loss since most buyers request this document to estimate the cost of goods sold and operating expenses.The three most common methods used for Business Valuation are explained below:


From the buyer’s perspective, this is the most accurate way to value a company because it forces the business owner to give more attention to details like trends in sales and profits and the capitalized value of the company. This method of valuation reflects the amount of money the investor estimates to come into the business in the next few years.

The Discounted Cash Flow method is a subset of the income-based approach, and is often used in M&A transactions. This method, which is based on estimating the current value of future cash flow, is appropriate for businesses which have forecasted steady cash flow over several years.

Discounted Cash Flow method determines the business value by considering these inputs:

  • A stream of expected economic benefits, such as the net cash flows.
  • A discount rate which establishes the required rate of return on investment.
  • An expected gain from the disposition of the business at the conclusion of the ownership period, or the long-term (terminal) value.





There are three critical questions one needs to answer to capitalize future earning:

  • Value: How much is the business worth today, based on what it will earn in the future?
  • The Rate of Return: What is the investor’s expected rate of return?
  • Equity Share: How much equity will the investor get for their investment?


  • Theoretically the most sound method if one is very confident in the projections and assumptions, because DCF values the individual cash streams (the actual source of the company’s value) directly.
  • DCF method is not heavily influenced by temporary market conditions or non-economic factors.


  • Valuation obtained is very sensitive to modelling assumptions—particularly growth rate, profit margin, and discount rate assumptions—and thus, different DCF analyses can lead to wildly different valuations.
  • DCF requires the forecasting of future performance, which is very subjective, and most of the value of the company is usually derived from the “terminal value,” which is the set of cash flows that occurs after the detailed projection period (and is therefore usually projected in a very simple way).

This approach is best suited for solid cash-generating businesses (i.e. businesses that are not asset intensive)


An asset-based approach is a type of business valuation that focuses on a company’s net asset value (NAV), or the fair-market value of its total assets minus its total liabilities, to determine what it would cost to recreate the business.

The real value of assets in an asset-based approach for valuing a business may be much greater than simply adding up the recorded assets. But, depending on the nature of the business, the asset-based approach may result in a lower valuation, as it may not adequately take into consideration the intangible, going concern value of the business.

Adjusted Net Asset Method

The asset-based approach is best used when a business is nonoperating or has been generating losses, and the company’s focus is holding investments or real estate. The adjusted net asset method is commonly used for estimating the value of the business. The difference between the fair market value of the company’s total assets and the fair market value of its total liabilities determines the fair market value of the business.

Asset-based business valuations can be done on a going concern or on a liquidation basis.

  • A going concern asset-based approach lists the business’s net balance sheet value of its assets and subtracts the value of its liabilities.
  • A liquidation asset-based approach determines the net cash that would be received if all assets were sold and liabilities paid off.



Using the asset-based approach to value a sole proprietorship is more difficult. In a corporation, all assets are owned by the company and would normally be included in a sale of the business. Assets in a sole proprietorship exist in the name of the owner and separating assets from business and personal use can be difficult.

This approach is typically used where a business is not a going concern, or where a business is a going concern, but its value is tied directly to the liquidation value of its underlying tangible assets and investments.


Market value approaches to business valuation attempt to establish the value of your business by comparing your business to similar businesses that have recently sold. The market comparable approach values your business using the average of similarly situated businesses in the same or similar industries.  The market approach offers the view of business market value that is both easy to grasp and straightforward to apply. The idea is to compare your business to similar businesses that have sold.

A market approach is a method of determining the appraisal value of an asset based on the selling price of similar items. Additionally, the market approach can be used to determine the value of a business ownership interest, security, or intangible asset.

There are two approached to market comparable method that are primarily used when valuing a business, the Guideline Transaction Method, and the Guideline Public Company Method. These methods are used to value a company based on the pricing multiples observed for similar companies that were sold or are publicly-traded.

Market multiples are revenue, EBITDA, EBIT, net profit multiple, the price-earnings ratio (PER or P/E ratio) or the Market-to-book ratio, where the multiples are always a multiple of the listed figures. With unlisted companies a comparison is made with prices paid on the stock market, however, proven to be relatively difficult.

Limitation of Market Comparable Approach

  • Market data may not be available or only be available for a limited number of goods and services and may not reflect the correct value.
  • The true economic value of goods or services may not be fully reflected in market transactions, due to market imperfections (organised/ unorganised) and/or policy failures.
  • Seasonal variations and other effects on price must be considered.
  • The market price method does not deduct the market value of other resources used to bring products to market, and thus may overstate benefits.


  • Market efficiency ensures that trading values for comparable companies serve as a reasonably good indicator of value for the company being evaluated, if the comparable are chosen wisely. These comparable should reflect industry trends, business risk, market growth, etc.
  • Values obtained tend to be most reliable as an indicator of value of the company whenever a non-controlling (minority) investment scenario is being considered.


  • No two companies are perfectly alike, and as such, their valuations generally should not be identical either. Thus, comparable valuation ratios are often an inexact match. Also, for some companies, finding a decent sample of comparables (or any at all!) can be very challenging. Thus, in Comparable Companies analysis are always running the risk of “comparing apples to oranges,” never being able to find a true comparable, or simply having an insufficient set of comparable valuations from which to draw.
  • Illiquid comparable stocks that are thinly traded or have a relatively small percentage of floated stock might have a price that does not reflect the fundamental value of that company.

The approach is best used when a minority (small, or non-controlling) stake in a company is being acquired or a new issuance of equity is being considered (this also does not cause a change in control). In these cases, there is no control premium, i.e., there is no value accrued by a change in control, wherein a new entity ends up owning all (or at least the majority) of the voting interests in the business, which allows the owner to control the company cleanly.

Annual Partners Meeting – 6th to 8th of August, 2016, in Lisbon, Portugal

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RiSiKo Consulting LLP is proud to be part of ADAM Global’s Annual Partners Meeting – from 6th to 8th of August, 2016, in Lisbon, Portugal where Leaders & Partners from 65 Countries would be joining to identify areas of collaboration and build relationships with fellow member firms.

Partner firms explore the global environment in context to ever-changing client’s requirements, and how their roles would add value in setting new benchmarks for growth of the network and its member firms.

RiSiKo Consulting LLP is proud gift partner of 5th Annual Global Pharma Regulatory Summit 2016

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The Indian pharmaceutical market size is expected to grow to US$ 100 billion by 2025, driven by increasing consumer spending, rapid urbanisation, and raising healthcare insurance among others.

India exports drugs to over 200 countries due to which pharmaceutical exports clocked a CAGR of 10.3 per cent to US$ 15.5 billion during 2014–15

Failure in international regulatory inspections is continuously tarnishing India’s reputation as a producer of high quality, low cost medicines. Also over the past couple of years the Indian Pharma companies have faced increased scrutiny from the regulators bringing a total of 11 warning letters being issued by the US regulator in 2015.

CPhI is glad to announce its 5th Annual Global Pharma Regulatory Summit which aims at bringing expert regulators across the globe who will share their knowledge on how to comply with regulatory guidelines for manufacturing and export quality drugs.

RiSiKo Consulting LLP has been actively involved in Pharma & Nutra Industry through various Strategic & Turnaround Advisory, RiSk management, Compliance Management, Transaction Structuring Advisory and has experience of working in various Pharma Business Environment existing in India,Dubai,USA,CIS, Europe, GCC,China, Mexico, Africa,SEA Region.

For further details on the events , please click below link :-

5th Annual Global Pharma Regulatory Summit 2016

RiSiKo believes in continuous Compliance,Process & Performance Improvement in Pharma & Nutra industry and has been part of similar events.

Arab Health Summit 2016

CPhI PAT Workshop 2016


PAT Event 2016

To know further about RiSiKo Consulting LLP & its services across globe , please visit out website :-

Adam Global has appointed RiSiKo Consulting LLP as Strategic Partner for India

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Adam Global has appointed RiSiKo Consulting LLP as Strategic Partner for India region. ADAM Global is a leading Corporate Services firm, delivering International Business Solutions and a wide range of comprehensive corporate services assisting companies and entrepreneurs establish and expand their businesses seamlessly across international borders. With operations around the world delivering comprehensive business solutions, Adam Global are the global experts who understand the local needs.

With over a 100 partner and integrated offices across the Americas, Asia Pacific, Europe, Africa and the Middle East, team of expert Advisors, Accountants, Lawyer, and Financial Analysts enable clients across the globe to enhance their enterprise value and operate their business structures, finance vehicles and investment in various geographical locations with a peace of mind.

Risiko is a business consulting and advisory firm, specializing in risk management, turnaround strategies and scaling-up family managed businesses. The company caters to clients across industries and business environments within India, Dubai and USA.

This Strategic Partnership would help to create unique synergy between Lawyers, Accountants, business strategic & financial advisors and would help the clients to increase overall enterprise value and performance.

Adam Global and RiSiKo Consulting LLP are extremely confident in the future of this new venture.

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Major Reform in #Insolvency & Bankruptcy Law in India

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Indian Legal System has made multiple legal avenues (thorough various acts & legal provisions) to handle events of failure of businesses or insolvency or voluntary winding up, which directly & indirectly impacts employees, shareholders, lenders, small & large creditors and the broader economy.

Indian business environment which is always full of conservative old school strategy, backed up by Social & Creditors pressure, on top of that “Overprotective & Overthinking” approach which mostly leads to miscalculation in understanding the business assumption & ground reality, and ultimately results into failure in taking timely business decisions. Thereafter business house which is already not able to perform or sustain, need to go through Social & Creditors pressure under which Promoters Group drag & delay reorganization or debt restructuring or any changes of management, or new business unit or sale of investment etc. which goes on and on for long time with lenders.

Till the time when Insolvency is actually established either it’s too late or matter is stuck into the layers of Indian legal provisions such as Securitisation and Enforcement of Security or SARFAESI Act, Corporate Debt Restructuring, Sick Industrial Companies Act or SICA , Debt Recovery Tribunal or DRT. Due to involvement of multiple level of regulatory authorities at State & Central Level it becomes difficult to get any timely decision from the legal court systems to revive or to support or to actual recover and protect the interest of the parties involved. So it is important in all such cases that there is speedy closure which will help the cases which can be either restructured or sold off with less pain for all involved.

To simplify all the above difficult & tricky situation, Indian Government has decided to form a modern law which can bring speedy efficiency & clarity into the insolvency matter and same will be inspired from International Experiences like USA , UK , Germany and similar countries with efficient legal system to handle insolvency cases.

The US has a Bankruptcy Code that provides for fairly quick liquidation or re-organisation of business with what is popularly known as Chapter 7, with cases being filed in bankruptcy courts; Chapter 11, which deals with reorganisation of businesses; and Chapter 15, on cross-border insolvencies. Individual bankruptcies are dealt with separately. In the UK, once cases are filed for bankruptcies, after 12 months, there is either discharge with part of the assets being used to pay off debts, or, in situations where companies can be turned around, court-appointed administrators handle cases. The German insolvency law is applicable to both individuals and firms, with independent court-appointed insolvency practitioners helping in realising assets or re-organising the business.

RiSiKo has participated in Bankruptcy case filed under Chapter 11 with USA Delaware Bankruptcy Court as Strategic & Financial Advisor and our experiences has been amazing to see the way court proceedings are formulated in timely manners to protect the interest of Unsecured Creditors Committee (UCC), to protect the value of the assets , to reduce or to limit the pain of the person filing bankruptcy.

In India, The Bankruptcy Law Reform Committee (“BLRC” or the “Committee”) was set up by the Department of Economic Affairs, Ministry of Finance, by an office order dated August 22, 2014 to study the “corporate bankruptcy legal framework in India” and submitted a report to the Government for reforming the system. During the course of its deliberations, the Committee decided to divide the project into two parts:

  • to examine the present legal framework for corporate insolvency and suggest immediate reforms, and
  • to develop an ‘Insolvency Code’ for India covering all aspects of personal and business insolvency.



BLRC committee has recently submitted its draft of “The Insolvency & Bankruptcy Bill 2015” (submitted on Feb 2015) along with its recommendation report (submitted on Nov 2015).This new bill has suggested numerous changes into the legal system such as



  • Changes in the Power of Secured & Unsecured Creditors providing incentives for creditors to join the collective insolvency resolution process rather than initiate individual actions
  • Provision of a timeline of 180 days — extendable by 90 days — to deal with applications for resolving cases of insolvency or bankruptcy.
  • During this period, the management of the distressed firm or debtor could be placed in the hands of a resolution professional — a new class of professionals equipped to deal with such cases, who would be supervised by a proposed new regulator.
  • The proposal also envisages them getting into talks to revive firms, and work out a repayment plan.
  • Decisions such as the economic viability of the debtor, will be determined through negotiations between the debtor and creditors – an exercise that will be facilitated by insolvency professionals.
  • Draft Bill also abolishes the institution of the official liquidator, which by all accounts has been a failure in non-viable businesses.
  • A Debt Recovery Tribunal will be the adjudicating authority over both individuals and unlimited liability partnership firms.
  • The National Company Law Tribunal will be the adjudicating authority with jurisdiction over companies with limited liability.
  • The Financial Sector Legislative Reforms Commission (FSLRC) has recommended the creation of a resolution corporation to monitor financial firms, and intervene before they go bust. The aim is to either close firms that can’t be revived, or change their management to protect investors or depositors. 















The law will still need to be approved by Parliament. This is only a starting point for easing exits for debtors in distress, preserving value and providing creditors with greater certainty in outcomes.

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#risikollp , #insolvency