Ministry of Heavy Industries & Public Enterprises
Department of Public Enterprises
Block No. 14, CGO Complex,
Lodi Road, New Delhi - 3.
Dated, the 13th June 2005
Sub: Presentation of the sick PSEs for revival/restructuring before Board for Reconstruction of Public Sector Enterprises (BRPSE)
1. The undersigned is directed to refer to the D.O. letter No. 26(1)/2004-BRPSE dated 21.12.04 from Secretary, Department of Public Enterprises forwarding therewith a copy of the format approved by BRPSE for submission of the proposals for revival/restructuring of sick PSEs for the consideration of BRPSE.
2. BRPSE has, based on its experience in the last 4 months, recommended that the Administrative Ministries/Departments may guide the PSEs under their control so that the turn around plan reflects the initiatives taken by the PSEs on the areas like (i) improved productivity (ii) improved quality (iii) cost reduction (iv) focus on marketing (v) diversification which could be - same product in new market, new product in same market, new products in new market and new technology and new market (vi) available options of merger, de-merger, management contracting route, etc. BRPSE has further desired that the strategy of the turn around-cum-revival proposal should be clear so that the revival proposal submitted to the Board is “Bankable”.
3. BRPSE has also decided that henceforth the revival proposals submitted to it should contain the following information/documents:
- Profit & Loss Account and Balance Sheet for the last 5 years. This must be accompanied by the comments on the changing financial performance along with ratio analysis like Return on Investment (ROI), current ratios, sales/asset ratio, wages/salaries/sales ratio, capacity utilization, etc.
- Projected Profit & Loss Account and Balance Sheet for the next 5 years. This should be accompanied by detailed description of assumptions made, basis of such assumptions and should be compared with the best performance achieved anytime in the past or with other units in the industry.
4. It is, therefore, requested that the abovementioned recommendations of BRPSE may be kept in view while submitting revival proposal of sick PSEs for consideration of the BRPSE.
To Secretaries of the Administrative Ministries/Departments