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SICK UNIT
According to Sick Industrial Companies Act, 1985
ãIt was registered for at least 7 year .
ãIt incurred cash from losses for the current and
the preceding year.
According to RBI
ãA sick unit is one which incurs cash losses for
one year and in the judgment of the bank it is
likely to continue to incur cash losses for the
current year as well as for the year .
Internal causes

External causes
Internal causes
Planning
Implementation
Production
Labour management
Marketing management
Financial management
Administrative management
 Market saturation
Extraneous factors
Government price controls
Non-availability of adequate finance
Non availability of irregular supply of critical

raw materials or their inputs.

Market saturation
Extraneous factors
Government price controls
Non-availability of adequate finance
Non availability of irregular supply of critical

raw materials or their inputs.

BJECTIVE F SICA
The SICA had been deal in the public interest to deal
with the
problems of industrial sickness with regard to the
crucial sectors
where public money is locked up.
It contains special provisions for timely detection of
sick and
potentially sick industrial companies, speedy
determination and
enforcement of preventive, remedial and other
measures with
respect to such companies.
GVERNMENT CNCESSINS
The Government of India provided various
concessions and incentives to the Sick sector
for their sustained growth
ŠAssisting new Sick units on soft terms by
lending
institutions,
ŠReservation of Certain Industries for the SSI
sector,
ŠIncentives related to land/shed financing,
machinery
and raw-materials,
ŠProvision of facilities within the Industrial
Estates, and
ŠExcise duty exemption and price preference
CASE STUDY
N
NICC BATTERIES LTD
ABUT NICC CRPRATIN LTD.
Nicco Corporation Limited(NCL) is the flagship
company of the Nicco Group.
For nearly over six decades, NCL has been one
of the
pioneers in cable manufacturing industry. It
produces
a wide range of power, control,
instrumentation and
telecom cables and provides a spectrum of
engineering
services and executes turnkey projects.
Established in
1942, the US$ 67 million NiccoGroup is a
widely
respected Indian industrial powerhouse.
NICC S PRDUCT
Aircraft & Air Field Cables
Fire Retardant Low Smoke Cables
(FRLS)
Automobile Cables
il Rig Cables
Copper Conductors
Cables For Cranes
Elevator Cables (lift Cables)
Furnace & High Temperature Cables
Marine Cables
Power Cables
NICC BATTARIES LTD amalgamated with
NICC Corporation LTD (NCL) with effect
from 1 April 1994 as per the amalgamation
scheme

In the amalgamation scheme the entire

undertaking of NBL shall be transferred to
NCL and the transferee company, that is, the
NCl shall issue and allot the share holder of
the NBL share in the transferor company in
the proportion of 2 share of the face value of
Rs10 each of the transferee company for 13
equity share of the face value Rs.10 each

N IC C 
B A T T A R IE S LT D
N
The rehabilitation ʹCum-amalgamation
scheme envisages settlement of dues of the
bank and the institution, payment to
pressing creditors besides capital
expenditure of Rs 163 lakhs.
A Cost of the scheme:
( Rs in lakhs)
ØCapital expenditure
163.00
ØSettlement of dues of the banks
619.00
ØPayment of unsecured loans from
20.00
ØPayment of pressing creditors
18.00
ØMargin money for working capital
57.00
TTAL
877.00
B Means of finance
(Rs in lakhs)
ͻPromoter s contribution out of internal accruals of NCL
477.00
ͻBenefit under section 72 A of IT Act,1961
400.00
TTAL
877.00
The scheme for amalgamation of NBL ,
with NCL shall be under section 72A of
the IT Act,1961 and shall be effective
from 1 April ,1994 .

The carried forward accumulated loss of

NBL is estimated at Rs 1896 lakhs as on
31 March 1994.
The estimated tax set ʹoff at the current
rates of IT Act , 1961 is restricted to Rs .
400 lakhs
BENEFITS IN MERGER F SICK
Synergistic operating economies
Diversification
Taxation advantages
Growth advantage
Production capacity reduction
Managerial motivate
Acquisition of specific asset
RISKS IN MERGER F SICK UNIT
Dilution of competition in the market
Actual or a potential competitor, may get
eliminated.
Efficient and growing medium or small-sized
undertaking.
May exercise a market power to the
detriment of its customers and suppliers
CNCLUSIN
The rehabilitation of sick unit is an important
aspect for the economic growth of the
country as well as the growth of the country
in the above case of NCL & NBL we can say
that the share exchange ratio is 2 : 13 and
the cost of scheme is Rs 877 lakhs . Which is
large amount for merger though this we can
conclude that the merger of NBL was the
requirement of time and now it contribute
major part of share of NCL.
THANKYU