Comprises of:

 Monitoring and Evaluation of Business

 Preventing sickness and Rehabilitation of
Business units.
 Effective management of small Business.
 Monitoring is the systematic collection and
analysis of information as a project
progresses.
 It is aimed at improving;
 Efficiency
 Effectiveness
 Impact
 Help you identify problems and their causes
 Suggest possible solutions to problems
 Raise questions about assumptions and
strategy
 Push you to reflect on where you are going
and how you are getting there
 Provide you with information and insight
 Encourage you to act on the information and
insight
 Increase the likelihood that you will make a
positive development difference
 Establishing indicators (See Glossary of
Terms) of efficiency, effectiveness and impact
 Setting up systems to collect information
relating to these indicator
 Collecting and recording the information
 Analyzing the information
 Using the information to inform day-to-day
management.
 Self-evaluation
 Participatory evaluation
 Rapid Participatory Appraisal
 External evaluation
 Interactive evaluation
 Familiar
 Comfortable
 Preciseness and acceptance
 Less cost
 Drawing positive conclusions
 No specific training
 Opportunity cost
 An understanding of development issues.
 An understanding of organisational issues.
 Experience in evaluating development projects,
programmes or organisations.
 A good track record with previous clients.
 Research skills.
 A commitment to quality.
 A commitment to deadlines.
 Objectivity, honesty and fairness.
 Logic and the ability to operate systematically.
 Ability to communicate verbally and in writing.
 Fulfilling objectivity
 Expertise
 Chances of getting true information
 Reliable
 Lack of understanding
 Lack of openness
 Costly
 Were the goals achieved? Efficiently?
 What are all the outcomes? What value do
they have?
 Independent determination of needs and
standards to judge project worth.
 Qualitative and quantitative techniques to
uncover any possible results.
 Expert judgement Use of expertise. How does
an outside professional rate this project?
 Critical review based on experience, informal
surveying, and subjective insights
 Which is not healthy
 Healthy denotes reasonable profit,
return on capital employed, maintains
appropriate reserves etc
 “Industrial company(being a company
registered for not less than five years) which
has at the end of any financial year
accumulated loss equal to or exceeding its
entire net worth and which has also suffered
cash losses in such a financial year
immediately preceding such financial year”.
“ A sick unit is that which has incurred a cash loss for
one year and is likely to continue incurring losses for
the current year as well as in the following year and
the unit has an Imbalance in its financial structure”

 BY THE COMPANIES(SECOND AMENDMENT) ACT, 2002

 Which has accumulated losses in any financial year to

50 percent or more of its average net worth during
four years immediately preceding the financial year in
question, or
 Which has failed to repay its debts within any three
consecutive quarters on demand for repayment by its
creditors.
 Continuous decline in gross output compared to
the previous two financial years.

 Delays in repayment of institutional loan, for

more than 12 months.

 Erosion in the net worth to the extent of 50

percent of the net worth during theprevious
accounting year.
 Decline In Capacity Utilization
 Shortage Of Liquid Funds
 Inventories In Excessive Quantities
 Irregularity In Maintaining The Bank
Accounts
 Frequent Break Downs In Plant & Equipments
 Decline In The Quality Of Products
 Frequent Turnover Of Personnel
 Technical Deficiency
 Shortage of cash
 Deteriorating financial ratios
 Continuous decline in prices of shares
 Delay in audit of annual accounts
 Delay and default in the payment of statutory
dues
 morale degradation of employees
 Debt /external fund increase
Internal causes

 Inappropriate Financial Structure

 Poor Utilization Of Assets
 Inefficient Working Capital Management
 Lack Of Proper Costing And Pricing
 Absence Of Financing, Planning & Budgeting
 Improper Utilization Or Diversion Of Funds
 Improper Credit Facilities
 Delay In Advancing Of Funds
 Unfavourable Investment Climate
 Shortage Of Inputs
 Import Restrictions On Essential Inputs
 Change In International Marketing Scene
 Excessive Taxation Policy Of Government
 Market Recession
 Huge financial losses to the banks & financial
institutions
 Loss to employment opportunities
 Emergence of industrial unrest
 Adverse effect on perspective investors and
entrepreneurs
 Wastages of scarce resources
 Loss of revenue to government
 Planning
 Techniques of production
 Training
 Infrastructural facilities
 Supply of raw materials
 Credit arrangements
 Marketing arrangements
Viability study is conducted:

• Technical appraisal
• Managerial appraisal
• Commercial appraisal
• Financial appraisal
 Change management

 Development of a suitable management information system

 A settlement with the creditors for payment of their dues in a phased

manner, taking into account the expected cash generation as per
viability study

 Determination of the sources of additional funds needed to refinance.

 Modernization of plant and equipment or expansion of an existing

programme or even diversification of the products being manufactured.

 Concession or reliefs or assistance to be allowed by the state level

corporation ,financial institutions and central government.
 1. The Industrial Finance Corporation of
India (IFCI) in 1948 - to provide medium &
long-term credits to the public sector limited
companies in order to facilitate post-war
rehabilitation & development.

 2. The State Financial Corporations (SFC)

were established at state level in 1951 to
supplement the work of IFCI by financing
medium and small-scale industrial concerns.
 3. Industrial Reconstruction Corporation of India
or (IRCI) was set up with its head quarters at
Calcutta in 1971
The control measures adopted by IRCI included
 i. transfer of major shares in the name of IRCI
 ii. appointment of IRCI nominees in the Board of
Directors of the sick unit
 iii. appointment of personnel and nominees
in key managerial post and purchase/sales
committees
 iv. frequent plant and factory inspections and so
on.
 4. Industries (Development & Regulation)
Act, 1951 was further amended in 1971 -
empowering the Central Government to take
over industrial undertakings which special
emphasis on sick units.
 5. Foreign Exchange Regulation Act (FERA)
1973 – limited the share of foreign
companies to 40% of the total capital.
 7. The Reserve Bank of India set up Tandon
Committee, in 1975- guideline was laid
down governing the participation of banks in
the management of various sick industries.

Further the government came up with several

industrial policies in order to revive the sick
units
 Introduced in 1976 to provide financial
assistance to five selected industries (jute,
cotton, cement, textile and sugar) on
concessional terms for modernization &
rehabilitation of their old machineries.
 Was Being operated by the IDBI in
collaboration with IFCI & ICICI.
 In 1984 this scheme was modified into soft
loan scheme for modernization –all
categories of industries are eligible for
financial assistance for up gradation of
process/technologies/product, export
orientation/import substitution, energy
saving, anti-pollution measures and
improvement in productivity
 For merger of sick units with the healthy ones
 Healthy was allowed to carry forward and set
off the accumulated losses & unabsorbed
depreciation of the sick unit against its own
tax incidence.
 Sick units to be eligible for merger should
have >100 employees & assets worth >50
lakh.
 Government has from time to time
formulated several committees like the
Standing Committee On Industrial Sickness,
State Level Inter-Institutional Committee,
Guidance Committee & others to examine
the problems of growing industrial Sickness
 Various provisions for the revival of the sick
industries were introduced like The Relief
Undertaking Act, Sec 72(a) Of The Income
Tax Act, IRBI Act Of 1984,SICA 1985, and
others.
 Effective Management Tasks for the Self-
Employed
 Effective Management Tasks for the
Employer. ( For more clarifications refer KV
notes)