Seminar on Business Environment

Topic: Industrial sickness

Submitted To:Prof Ratnesh pal Singh

Assistance professor.
Management department.
Mata Gujri college
Shri fatehgarh sahib

Submitted By:Satnam Singh

Roll No:197562
Class:BBA 2nd year.
 Definition of Industrial
sickness.
Industrial sickness is defined all over the world as
“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 is such financial year and the
financial year immediately preceding such
financial year”.
 Causes of sickness.
1.Lack of experience of the promoters, wrong
selection of the project,faculty project planning,etc.
may give birth to sick units.
2.Paucity of funds and faulty financial management
may also cause the birth of sick units.
3.Sickness may arise from locational problems
also .It has been observed that 'high' technology
based units are established in areas without skilled
labor or supporting infrastructure.
4.Technological factors like selection of obsolete of
 Remedial Measures.
●
Steps taken by commercial banks:
●
1.Provide working capital assistance
●
2.Recovery of interest at reduced rates.
●
3.Suitable moratorium on payment of interest.
●
4.Freezing a portion of outstanding in the
account.
●
5.No. Of organizations or agencies were setup:
●
- sick industrial undertaking cell.
●
- state level inter- institutional committees.
 Consequences of Industrial
sickness.
●
Set- back to employment.
●
Fear to industrial unrest.
●
Wastage of resources.
●
Adverse impact on related units.
●
Adverse effect on investors & entrepreneurs.
●
Losses to banks and financial institutions.
●
Loss of revenue to government.
 Sick industrial companies (special
provisions)Act,1985(SI CA)
A unit is defined as sick industrial company where:
●
A company is registered for not less than 5
year.
●
Its incurred cash losses for the current &
preceding financial year.
●
Its net worth was eroded.
●
Even 50% o more of the net worth of the past 5
financial year is eroded because of
accumulated losses.
 Conclusion
To conclude, the sick unit may be attempt to be
turned around through efficient management,
change of the top level executive, executing a turn
around strategy.