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Industrial Sickness and BIFR Overview

The document discusses sick industrial units in India. It defines a sick unit as one that is making losses and is on the brink of closure. An industrial company is considered sick if it has accumulated losses exceeding its net worth or has suffered cash losses for a financial year. Causes of sickness include lack of finance, bad production policies, ineffective management, and personnel and marketing issues. Being sick contributes to high costs and hurts competitiveness, banks, budgets, consumers, and other viable industries. The Board for Industrial and Financial Reconstruction (BIFR) was established in 1987 as a quasi-judicial body to revive and rehabilitate potentially sick units or close/liquidate non-viable sick companies.

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Aaryan Singh
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8 views13 pages

Industrial Sickness and BIFR Overview

The document discusses sick industrial units in India. It defines a sick unit as one that is making losses and is on the brink of closure. An industrial company is considered sick if it has accumulated losses exceeding its net worth or has suffered cash losses for a financial year. Causes of sickness include lack of finance, bad production policies, ineffective management, and personnel and marketing issues. Being sick contributes to high costs and hurts competitiveness, banks, budgets, consumers, and other viable industries. The Board for Industrial and Financial Reconstruction (BIFR) was established in 1987 as a quasi-judicial body to revive and rehabilitate potentially sick units or close/liquidate non-viable sick companies.

Uploaded by

Aaryan Singh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

VIVEK RANJAN NEHA VIVEK DEEPANSHU GUPTA RAHUL CHANDELA

A SICK UNIT IS ONE WHICH IS NOT HEALTHY .


IT IS A UNIT WHICH MAKING LOSSES AND TOTTERING ON THE BRINK OF CLOSURE ---- An Industrialist

An industrial company which has, at the end of any financial year, accumulated losses equal to, or exceeding, its entire net worth and has also suffered cash losses in such financial year.

LACK OF FINANCE
BAD PRODUCTION POLICIES

MARKETING AND SICKNESS


INAPPROPRIATE PERSONNEL MANAGEMENT

INEFFECTIVE CORPORATE MANAGEMENT

PERSONNEL CONSTRAINT. MARKETING CONSTRAINTS. PRODUCTION CONSTRAINTS. FINANCE CONSTRAINTS.

SICKNESS CONTRIBUTE TO HIGH COST ECONOMY. EFFECTS COMPETITIVENESS OF ECONOMY. BURDEN ON BANKS AND BUDGET CONSUMERS HAVE TO PAY HIGH COST RESTRICT EMPLOYMENT OPPORTUNITIES. EFFECTS THE AVAILABILITY OF RESOURCES TO OTHER VIABLE UNITS.

Prevention Measures: role of government. Role of financial institutions. Role of industry association.

Capacity utilization Autonomy to managerial and technical works.

INTRODUCTION OF BIFR

The board of expert name the board for industrial &financial reconstruction(BIFR).

It was establish January 1987&functional with Affect from 15 May 1987.

It had been established as quasi-judicial body In the department of economic affairs, ministry of finance for revival &rehabilitation of potentially sick undertaking &for closure or liquidation of non viable & sick industrial companies.

SICA (sick industrial companies) applies to companies both public7private sector owning industrial undertaking. Pertaining to industries specified in the first schedule to the industries (development & regulation )Act,1951,(IDR Act) except the industries relating to ship& other vessels drawn By power and. Not being small scale industrial undertaking Or ancillary industrial undertaking as defined in section 3(j) of the IDR Act.

FUNCTION OF BIFR
Criteria determine sickness in industrial company It Should have factory license. Company Should have completed five years after incorporation under the companies act 1956. It should have 50 or more workers any day of 12 months preceding end of financial year with reference to which sickness is claimed.

Lack of profits Loss of interest Future prospects Dissolved partnership Growth prospects Other opportunities Personal reasons Favorable economic condition

Focus Large customer base Diversified customer base Regulatory compliances Land documents Contracts Management

Valuation Update books Supporting documents Take tax advice Get a team in place Continue business as usual First impressions

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