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Asset Classification Sector Credit Rating

Yield (2012-13)

New a/c SME Regulatory Small Enterprises CR-3/MSMEBOB3 based on Projected Balance Sheet as on 31.03.14 New a/c

Note submitted to The Chief Manager SME Loan Factory, Nashik, Aurangabad Region Name of the Account Branch Region Zone
Date of receipt of proposal at Branch 26/08/2013

BALAJI CORPORATION. Nashik Road Aurangabad Maharashtra & Goa


of Date of receipt of full information at SMELF 18/09/2013 Date of putting up to sanctioning Authority 19/09/2013

Date of receipt proposal at SMELF 26/08/2013

SECTION I: DETAILS OF THE PROPOSAL 1.0) Gist of the Proposal:

To consider fresh sanction of the following credit facilities to the Firm for the period of 12 month on the term & condition as detail in Annexure -D (Rs. in Lacs) Facilities Existing Proposed Incr. (+)/ Decr.(-) Fund Based Limits Term Loan Fresh (for purchase of lease -50.00 (+)50.00 hold Factory Land & Building / P&M/ MFA under CGTMSE Scheme) Fund base working capital Limit -100.00 (+)100.00 Cash Credit (Stock & Book Debts) -150.00 (+)150.00 Total Fund Based Limit ---Non-Fund Based Limits -(+)150.00 TOTAL 150.00 1.1) Sanction / Ratification: a. Modifications b. Concessions c. Reference of existing sanction

Nil Nil N.A, New a/c

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2.0) Basic Data: Sector Segment Asset Classification Banks Credit Rating

MSME (Regulatory)- Small Enterprises Manufacturing N.A, New A/c


31.03.2013 Obligor Rating Combined Rating for: Term Loan/s Working Capital N.A N.A N.A 31.03.2014 (Projected) BOB-3 CR-3 CR-3

External Credit Rating Constitution Date of Establishment Location: Registered Office Factory Group Industry and Nature of Activity Exposure to Industry

Not Applicable, as the proposed exposure is below Rs. 5 crores. Partnership 31/01/2013 Krishna Building, Near Bytco point, Nashik Pune Road, Nashik Road-422101 Plot no.52 & 57, STICE, Musalgaon, Sinnar, Dist-Nashik Not a recognise group. Manufacturing of Industrial and Automotive Lubricant Oil & Grease, etc. Petroleum (Lubricants) - ASCROM 31.03.2013 Rs. In Lacs
Particulars
a) b) c) d)

Bank 2840000.00 935147.63 33334.65 28.06

Zone -10811.04 0.00 0.00

Sectoral Cap for Industry Exposure NPA PWO

No. Current Account with our Nashik Road since 29th March 2013 Our Banks Share Working 100% capital as well as term loan Sl. Rate of Interest Collaboration / J.V. if any Dealing with the Bank since
No. a) b) Facility WC Limits TL Limits Applicable Base Rate + 2.25% i.e. @ 12.50 % p.a. with monthly rests. Base Rate + 2.25%+ Tenor Premium @ 0.15% i.e. 12.65 % p.a. with monthly rests.

1. Exclusive 1st charge by way of hypothecation of Plant and machinery of the Firm both Present & Future. 2. Exclusive 1st charge by way of Equitable Mortgage of Lease hold Land & Building admeasuring 4000 sq.mt and Factory building admeasuring 603.05 Sq.mt ================================================================ SME LOAN FACTORY NASHIK: M/s Balaji Corporation. Nasik Road Branch Page 2 of 32 Security Available

located at Plot No. 52 & 57, STICE Musalgaon, Taluka Sinner, Dist: Nashik belonging to firm. 3. Exclusive 1st charge by way of Hypothecation of entire Raw Materials, Stock-in-process, Stores & Spares, Packing Materials, Finished Goods and Book-Debts of the firm both present & future. Note: The TL of Rs. 50 Lac is covered under CGTMSE Scheme. The credit facilities will also secured by the personal guarantee of all the Partners of Firm viz. Mr. Mahesh Prakash Boob; Mr. Umesh Prakash Boob and Mr. Pradeep Kisanlal Boob having aggregate net worth of Rs.780.99 Lacs. Average drawings during the N.A, New A/c Year 2012-13 N.A, New A/C Yield in the account Major Inspection irregularities N.A, New A/C Concurrent Audit N.A, New A/C Internal Audit N.A, New A/C RBI Inspection N.A, New A/C Statutory Audit New Firm Auditors of the Firm Qualification remarks of the auditors Firm has submitted Application for obtaining consent to Pollution Clearance operate from MPCB on 12.08.2013 (Acknowledgement receipt No. 010937 issued by Maharashtra Pollution Control Board is available on record. However the same is still awaited. It has been stipulated that the Firm shall submit Consent to Operate from MPCB before release of the Credit Facilities. Whether statutory dues have N.A., Newly established Firm been paid Whether the names of the Firm / RBI Defaulters List dated 30.09.2012 NIL Associates or partners appear in RBI Wilful Defaulters List dated 30.09.2012 NIL RBI defaulters list and / or CIBIL Report of the Firm / Partners / Group Concerns dated 27.08.13 & 16.09.2013 reveals no adverse remark. caution list Whether the firm/promoters and No, the firm / promoter and their Associates are not on their Associates are on ECGC ECGC caution list dated 19-08-2013. caution list / S.A. List. Compliance of earlier terms and N.A. conditions including creation of charge ================================================================ SME LOAN FACTORY NASHIK: M/s Balaji Corporation. Nasik Road Branch Page 3 of 32

2.01) Banking arrangement: Fund based % Share Amount Exit Prop Exit Prop -100% -100.00 100% 100.00 (Rs. in lacs) Non Fund Based % Share Amount Exit Prop Exit Prop -----

Name of the Bank Bank of Baroda - WC TOTAL

2.02) LOANS FROM FINANCIAL INSTITUTIONS: NA Name of the Institution/ Bank N.A Limit -(Rs. in lacs) Present Excess / Outstanding Over dues ---

2.03) Any Reschedulement agreed (in last -3- years): No 2.04) Particulars of Partners: Name of the partner Mr. Pradeep Kisanlalji Boob Mr. Mahesh Prakash Boob Mr. Umesh Prakash Boob Total 2.05) Particulars of Guarantors: Name of the Partner Mahesh Prakash boob Umesh Prakash Boob Pradeep kisanlal Boob Total 2.06) Business experience of Partners: A) Mr. Pradeep Boob. Pan Number ADYPB0082A AAYPB2014G ABRPB9542Q (Rs in Lac) Net Worth as on 31/07/2013 138.50 130.00 512.49 780.99 Pan Number ABRPB9542Q ADYPB0082A AAYPB2014G Sharing Ratio 50% 25% 25% 100% (Rs in Lac) Net Worth as on 31/07/2013 512.49 138.50 130.00 780.99

Mr. Pradeep Boob (Age 57 years) is Commerce Graduate. After Completion of B.Com, he joined his family business of Petrol Pump in the name of M/s. K. R. Boob, which is engaged in distribution of Petrol & Diesel. The Petrol Pump is situated at Mumbai-Agra Highway in the MIDC area. The firm is authorised dealer & also having C & F Agency of HPCL Nashik and Raigad District.

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He is having vast experience of more than 30 years in the line of distribution of Petroleum products and overall administration and management of existing units. The Boob family is in this business for last 50 years. They have developed good relations with customers of Nashik and having Established network of distribution. B) Mr Mahesh Prakash Boob. Mr Mahesh Boob, aged 36yrs, completed graduation in commerce. After completion of education he joined the family business under the firm M/s Somnath Deokisan Boob, The firm is engaged in trading firm for dealership of HPCL for LDO, Furnace LIL, and Lubricant Oil for Nashik District. His qualification and experience is helpful to the firm in Managing the business of the firm.
C)

Mr Umesh Prakash Boob. Mr Umesh Boob, aged 34 yrs, hails from Business family. He is a commerce graduate. Since completion of Graduation, he is involved in the family business namely M/s Somnath Deokisan Boob, The firm is engaged in trading firm for dealership of HPCL for LDO, Furnace OIL, and Lubricant Oil for Nashik District. Mr Umesh maintains good relationship with the traders/ Industrial Units of surrounding area & gained good experience in this line of activity.

3.0) ISSUE FOR CONSIDERATION: To consider fresh sanction of the following credit facilities to the Firm for the period of 12 month on the term & condition as detail in Annexure -D (Rs. in lacs) Facilities Existing Proposed Balance o/s as Overdue, if on 19.09.13 any Fund Based Limits Term loan Fresh -50.00 --(For purchase of lease hold Factory Land & Building/P&M /MFA under CGTMSE Scheme) Fund base working capital Limit -100.00 --Cash Credit (Stock & Book Debts) -150.00 --Total Fund Based Limit ----Non-Fund Based Limits -TOTAL 150.00 --3.1) BACKGROUND OF THE FIRM:
Balaji Corporation is a SSI unit (bearing No. 27-020-12-05290) floated as Registered Partnership

firm by Mr. Pradeep Kisanlal Boob, Mr. Umesh Prakash Boob, & Mr Mahesh Prakash Boob on 31st Jan. 2013 with a view to Manufacturing, Trading, C&F Agency Business in Lubricant Oil, Grease & Other Petroleum Products.

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The partners are in the line of retail business of Petrol, Diesel and Auto Lubricants & Kerosene

since last more than 15 yrs. and gradually they have established their name in Nashik Industrial Area with good client base. In view of the opportunities available in the market, they have now decided to do the business i.e. Manufacturing of Industrial & Automotive Lubricant Oil & Grease.
The firm has purchased existing running unit of M/S H.R. Corporation, engaged in Manufacturing

of Industrial & Automotive Lubricant Oil and situated at Plot No. 52 & 57, STICE, Musalgaon, Sinnar in a consideration of Rs. 113.40 Lacs.
Accordingly the Partners of the firm have approached us with a request to sanction credit facilities

aggregating Rs.150.00 Lacs, which comprises of Term Loan of Rs. 50.00 lacs for purchase of the unit on reimbursement basis and Rs.100.00 Lacs towards working capital limit. 4.0) SECURITY COVERAGE: The firm has offered following securities.
Details of assets of the Firm
A. 1

Date of valuation

Amount

Primary Security

Exclusive 1st charge by way of Hypothecation of entire raw Materials, Stock-in-process, Stores & Spares, Packing Materials, Finished Goods and Book-Debts of the firm both present & future. Exclusive 1st charge by way of hypothecation of Plant and Machinery of the Firm both present & Future.

Notional Value 133% of Limit is considered for calculation of Security Coverage

133.00

As per Registered Lease deed dated 23-07-2013price of Rs.113.40 Lacs + Rs.4.53 Lacs stamp duty st Exclusive 1 charge by way of Equitable Mortgage and Registration charges of Lease hold Land & Building admeasuring 4000 Market value of the L&B is sq.mt and Factory building admeasuring 603.05 Rs.141.00 Lacs, as per sq.mt (as per approved plan) located at Plot no.52 Valuation report dtd. 02-08& 57, STICE Musalgaon, Taluka Sinner, Dist- 2013 of Mr. Mudkanna J.C. Nashik in the name of Firm through its Partners our approved valuer. Mr. Pradeep Kishanlal Boob; Mr. Mahesh Prakash Value of P&M is Rs. 21.43 Boob and Mr. Umesh Prakash Boob. Lacs, as per valuation report
dated 24-07-2013 of Mr. Mudkanna J. C. Our approved valuer.

117.93

Total Security Total Exposure Total Security Coverage Ratio (250.93/150.00) Fixed Assets Coverage Ratio (117.93 / 150.00) The TL of Rs. 50 Lac will be covered under CGTMSE Scheme.

250.93 150.00 1.67 0.79

The credit facilities will also secured by the personal guarantee of all the Partners of Firm viz. Mr. Mahesh Prakash Boob; Mr. Umesh Prakash Boob and Mr. Pradeep Kisanlal Boob having aggregate net worth of Rs.780.99 La ================================================================ SME LOAN FACTORY NASHIK: M/s Balaji Corporation. Nasik Road Branch Page 6 of 32

5.0) OTHER INFORMATION: Dealing and conduct of the account

N.A., New A/c. However, group concern of Mr. Pradeep Boob namely M/s K.R. Boob (Petrol Pump) is dealing with our Golf Club Branch since September 2012 and presently availing BTL of Rs. 228 Lacs sanctioned by The Chief Manager, RLF on 31.01.2013. As per Statement of A/c and feedback received from the Branch, the conduct in the account is satisfactory.

M/s Balaji Corporation has also opened current a/c with our Nasik Road Branch in March 2013 and made all payments towards acquisition of the Unit through the account. Documents yet to be executed. However, the Documents to Documentation be vetted by the Empanelled advocate of the Bank before disbursement of credit facility. Whether proposed limits are within Yes Banks prudential single borrower/group exposure norms N.A., New A/c Pro rata non fund business N.A., New A/c Comments on utilisation of limits The Obligor Rating of the Firm is MSMEBOB 3/ CR-3 based Comments on credit rating on Projected Balance Sheet as on 31.03.2014 and within Investment Grade. Whether all clearance / approvals Yes have been obtain The firm has maintained current account with our Nashik KYC Compliance Road Branch with compliance of all KYC documents. Pre-sanction Inspection of the unit was carried out by Mr Pre sanction Inspection Report. Savant , Chief Manager of Nashik Road Branch, Mr Anuj Bhargava, Chief Manager SME Nashik and Mr. Sanjay H. Jajoo, Manager, SME Nashik on 27-07-2013 and commented that: 1) The unit is situated in STICE area at Musalgaon, Sinnar, which is well connected with Road. 2) The Building & Plant & Machinery was in good condition. 3) General maintenance work on P&M was in progress to make the unit operational. 4) The Promoters have informed that the operation in the unit is likely to be commenced in October 2013. 5) No adverse features found during the inspection. Valuation of property. The valuation of the immovable property of the firm as carried out By Mr. Mudkanna J.C. approved valuer. As per the report dt. 02/08/2013 valuation of the same is Rs.141.00 Lacs.

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Details of Associate / Group Concerns/Units and their Banking arrangements: (Rs. in lacs) Name of Unit Name of Bank Term Finance Working Capital M/s Somnath Deokisan HDFC BANK NASIK --30.00 -(Partnership) M/s K.R.Boob Prop. Mr. Pradeep HDFC BANK NASIK --210.00 -Kisanlal Boob (Fuel Division) M/s K.R. Boob Prop. Mr. Pradeep BANK OF BARODA --228.00 -Kisanlal Boob (Petrol Pump) FINANCIAL HIGHLIGHTS OF GROUP CONCERNS: SALES 2010-11 2011-12 -835.82 2259.64 2735.02 (Rs. in lacs) NET PROFIT NETWORTH 2010-11 2011-12 2010-11 2011-12 -14.12 -42.01 52.77 44.48 326.47 133.91

Name of the Group concern M/s Somnath Deokisan M/s K.R.Boob Prop. Mr. Pradeep Kisanlal Boob (Fuel Division) M/s K.R. Boob Prop. Mr. Pradeep Kisanlal Boob (Petrol Pump)

2104.35

2239.06

16.61

16.80

87.26

51.67

Whether listed company - present market quotation - 52 weeks high / low: NA Our Banks investment in the firm: NIL

Our exposure to the captioned firm: C&I Advance --Priority Sector --International Div. --(Rs. in lacs) SME TOTAL --150.00 150.00

Existing Proposed

6.01 SANCTION OF FRESH TERM LOAN OF RS. 50.00 LACS UNDER THE CGTMSE SCHEME. Justification for Term Loan:
Purpose: For Purchase of existing running unit from M/S H.R. Corporation (engaged in

Manufacturing of Industrial & Automotive Lubricant Oil) situated at Plot No. 52 & 57, STICE, Musalgaon, Sinnar. As per Agreement dated 23.07.2013, the Firm has purchased the above in a consideration of Rs. 113.40 Lacs.

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(ii)

Summary of Cost of Project and Means of Finance


(Rs. in lacs)

Cost of Project Factory L&B, Plant & Machinery and Other Fixed Assets situated at Plot No. 52 & 57, STICE, Musalgaon, Sinnar. Cost as per Agreement Rs. 113.40 Lac Add: Stamp Duty - Rs. 4.53 Lac Total Cost - Rs. 117.93 Lac Working Capital Margin TOTAL

Amount Means of Finance 117.93 Promoters Margina) Partners Capital b) Unsecured Loan

Amount 73.00 25.00

30.07 Term Bank 148.00

Loan

from

50.00 148.00

TOTAL

Sources of Promoters Contribution and the time schedule as to when the funds will be brought.

As against the projected promoters contribution of Rs. 98 Lacs ( capital Rs. 73 lacs and unsecured Loan Rs. 25 lacs), as per the CA Certificate dated 18.09.2013 of M/s Nitin R Sarda & Associates, Chartered Accountants, the Partners have inducted Rs. 108.02 Lacs up-to 18.09.2013.

(iv) Status of tie-up of loans:

The Firm has requested for sanction of entire TL of Rs. 50 Lac to us on reimbursement basis. It has been informed that looking to the best price offered by the sellers of unit and also the schedule of payment as agreed at the time of negotiations, the firm has made full payment of the said unit by raising short term funds by the partners from their own sources along with the final lease deed in July 2013 through its Current Account with Bank of Baroda, Nasik Road, Branch. Accordingly, the Firm has requested to release the TL on reimbursement basis so that the funds may be utilised towards WC Margin as per estimates and repayment of short term loans raised for purchase of above unit.

Branch has recommended for the same. We may accede to the Firms request as recommended by the Branch for disbursement of TL on reimbursement basis, subject to verification of supporting Agreement and Certificates from C A for CAPEX incurred and promoters contribution raised.

(v) Brief explanation for each major individual item of cost of Project with present status along with comments on the reasonableness/ competitiveness

Factory Land and Building: The firm has already acquired lease hold factory land and buildings situated at Plot No.52&57, STICE, MUSALGAON, Sinnar Dist Nasik. The factory is situated in the STICE Industrial area and all required infrastructure is available.
Plant and Machinery:

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The Firm has purchased a running unit, which was engaged in manufacturing of Industrial & Automotive Lubricant Oil. All the requisite P&M and other Infrastructure is already available. As per the Valuation Report of Mr. J C Mudkanna, our approved valuer, the following Machines were available at factory site during his inspection: Sr. No. 1 2 3 4 5 6 7 8 9 10 11 Name of Machine Thermic Fluid Boiler FUELPAC make, Capacity 2 Lac Cal/Hr Blending Reactors-5000 litres capacity Blending Reactors-3000 litres capacity Finished product Tanks 4 Nos.2000 Litres capacity each Electronic Weighing Scale 300 kg. max capacity Air Compressor KAMDAR make with 5 cu.ft. capacity Pit Tanks in M.S 5000Litres Capacity Storage Tanks 50000 Litres Capacity Storage Tanks 25000 Litres Capacity-2 Nos Storage Tanks 14000 Litres Capacity-3 Nos Material conveyance system including Pipings, Motors, valves, fittings, etd. complete Laboratory Equipments Ovens Oil Bath weighing scales etc. Cooling Tower Year of installation 1998 1998 1998 1998 1998 1998 1998 1998 1998 1998 1998 Quantity 1 1 1 4 1 1 1 1 2 3 L.S Market value. 2.75 4.25 2.55 0.80 0.13 0.06 0.20 3.00 3.00 2.52 1.40

12 13

1998 1998

L.S 1

0.65 0.13

The total Market value of Plant Machinery is Rs.21.43 Lacs. During the interaction with the partners we have been informed that present working condition of the machinery is good. Mr. J C Mudkanna, our approved valuer, has also submitted that the residual life of the Machineries is 10 years. The valuer has informed that residual Lime of Thermic Fluid Boiler could not be ascertained as it was not fired at the time of visit. In this regard, the Promoters have informed that it is in working condition. However, in case of any eventuality it will be new Boiler from own sources. The approx. Cost of the new boiler is Rs. 4.50 -5.00 lacs.

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vi) Comments on all major technical aspects like locational advantage, Technology/

manufacturing process, power, man power, utilities, transportation, etc. Locational Advantage: Factory land and building is situated in STICE, MUSALGAON, and Sinnar Dist Nasik. The Industrial Area is well connected with the Road and all necessary infrastructures are available. Electric Installation: The firm has 35 HP Power connections from MSEB CO. Ltd. The Connected Load is sufficient for the unit. Water: No major requirement of water for manufacturing purposes. Water is provided by STICE and Water connection is available at site. Manufacturing Process:

Manpower: Total requirement of Manpower is estimated a sunder: Technical Head : 1 Supervisor : 1 Worker : 3 / per shift Office Staff Marketing Staff : : 2 2

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The Promoters are in the line of business since long and having good knowledge. Further, the Factory is situated in STICE, MUSALGAON, Sinnar where skilled / un-skilled work force is easily available. Transportation: The Unit is situated at Plot No.52 & 57, STICE Musalgaon, there transport is available at feasible rate. Product: The Firm has decided to manufacture following Products: 1) Engine Oil 2) Gear Oil 3) Grease 4) 2 T Oil Marketing Feasibility: Nasik District has seven MIDCS consisting of mainly Capital goods industries. So the overall requirement of various types of Oils & Lubricants in industry in Nasik District is itself very huge. Again the Automobile & construction equipment market is also big, so the requirement of Oils & Lubricants required in automobile sector is also good. So there is huge potential for the unit. The Firm has submitted that it is the only authorized unit in Nasik & surrounding District having requisite license to manufacture Oils & Lubricants. Since the family members and close relatives of the Partners are already in line of manufacturing and Trading of Oil, they have established its goodwill & reputation in the market on the strength quality & commitments. Thus there would not be any difficulty for the firm for marketing the proposed product to be manufactured by the unit.
vii) Summary of profitability and DSCR with comments thereon including assumptions

5) Hydraulic Oil 6) Industrial/Automotive Oil 7) Brake Oil 8) Cutting Oil

underlying profitability projections: Based on the profitability projections, DSCR is calculated by assuming that: ROI @ 12.65% p.a. will be charged to TL A/C. The total repayment period of Term is 84 Months including moratorium period of 6 month from the date of First Disbursement. (Rs. in Lacs)
YEAR 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 Total

PAT INTT ON TL DEPRECIATION TOTAL (A) INTT ON TL INSTALMENT OF TL TOTAL (B) DSCR(A/B) AVERAGE DSCR.

33.99 6.04 8.54 48.51 6.04 7.69 13.73 3.53 6.52

40.38 5.04 7.50 52.92 5.04 7.69 12.73 4.16

47.51 4.04 6.61 58.16 4.04 7.69 11.73 4.96

55.29 3.04 5.84 64.17 3.04 7.69 10.73 5.98

64.22 2.04 5.16 71.42 2.04 7.69 9.73 7.34

74.59 1.04 4.56 80.19 1.04 7.69 8.73 9.18

85.86 0.15 4.03 90.04 0.15 3.84 4.00 22.51

401.84 21.40 42.21 465.44 21.40 50.00 71.40 6.52

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The minimum DSCR is 3.53 times as on 31-03-2014 and maximum DSCR is 22.51 times as on 31-03-2021. The average DSCR works out to 6.52 times indicating that firm will be able to service the proposed loan comfortably in normal circumstances.
viii)

Status of various statutory approvals and clearances: The following approvals / permissions are required to carry out production activity: Approval SSI Registration Manufacturing Licence (Lubricants & Grease) Consent to Operate from MPCB Authority DIC DIC MPCB Present Status Already obtained Already Obtained Firm has submitted application for the same and it is likely to be received by 30.09.2013

ix)

Present physical & financial status of project, if any The Firm has already taken physical possession of the unit and General maintenance work on P&M is in progress to make the unit operational. The Promoters have informed that the operation in the unit is likely to be commenced in October 2013. As per the CA Certificate dated 18.09.2013 of M/s Nitin R Sarda & Associates, Chartered Accountants, the Firm has so far incurred Expenditure of Rs. 118.25 lacs by way of Partners Contribution of Rs. 108.02 Lacs and balance Rs. 10.23 is payable to M/s H.R. Corporation

x)

Implementation schedule: The Firm has already taken possession of the factory and Trial / commercial Production is likely to be commenced from 1st week of October, 2013 Proposed repayment schedule Scheduled date of Completion of Project Commercial Operations Date (COD) Moratorium (in months) No. of installments Starting Date End Date (Last installments) Door to door tenor 30th September 2013 1st week of October, 2013 6 month from date of 1st Disbursement 78 April 2014 September 2020 84 months

xi)

The firm has requested to sanction term Loan of Rs. 50.00 Lacs for a period of 84- months (moratorium of 6 months) comprising of 77 monthly instalments of Rs. 64,000/- each and Last instalment of Rs.72,000/- commencing after 6 months from the date of First Disbursement (i.e. from the end of 7th month) Monthly interest is to be recovered separately as and when applied in the account. ================================================================ SME LOAN FACTORY NASHIK: M/s Balaji Corporation. Nasik Road Branch Page 13 of 32

Our Views / Comments: The Promoters are having vast experience in the line of activity. Mr. Prakash Somnath Boob Father Shri Mahesh Boob and Shri Umesh Boob, promoters of the firm, is also Landlord of our Nasik Road Branch and the family is having long relationship with our bank. The estimated/projected cash accruals of the firm are sufficient to service the proposed term loan of Rs.50.00 Lacs. In view of the above, the project prima facie appears to be Technically Viable and Economically Feasible under normal circumstances. The Chief Manager, Nasik Road Branch has recommended for sanction of the Fresh Term Loan. Considering the satisfactory security coverage and DSCR, we may accede to firms request for sanction of Fresh TL of Rs. 50 Lacs on the terms and conditions mentioned in Annexure-D. 8.) Justification for Sanction of Fund Based Working Capital Limit of Rs. 100.00 Lacs: As mention earlier, the firm has purchased the Plot No. 52 & 57, STICE, Musalgaon, Tal. Sinnar Dist Nashik admeasuring 4000 sq.mtrs. along with factory Building and Plant and machinery. The partners of the firm decided to manufacturing of Industrial & Automotive Lubricant Oil and grease in newly purchased unit. The Lubricant oil and Grease is required by almost all Industries for smooth running of Plant and Machinery. It is also used in the Automobile & Construction equipment Market. The Demand for the Lubricant oil has been increasing year on year basis due to its superior quality and competitive prices. M/s Balaji corporation assumes growth & prospects in the said business on the basis of vast experience & reputations, business relations of it partners in the field of Lubricants Products . The Commercial production of the Firm is expected to commence from Oct.2013. The Firm has estimated / projected sales turnover of Rs. 250.00 Lacs during the First 6 month of FY 2013-14 and 550.00 during 2014-15 at 60% & 70% capacity utilization respectively and requested for sanction of WC Limit of Rs. 100 Lacs. The firm has decided to established dealership network; create brand & quality products, established big markets to achieve its business goals. The Market for the Oil product is generally is high between Oct. to June. The Raw Material cost has related with the international Market and increased substantially in the last couple of years ================================================================ SME LOAN FACTORY NASHIK: M/s Balaji Corporation. Nasik Road Branch Page 14 of 32

and also the inventories are required to be carried on almost for 60 days for meeting demand from the customers/suppliers. The firm has to extend credit to its customers for minimum 60 to 90 days. The estimated / projected sales turnover appears to be achievable, as there is a good demand for automotive lubricants oil and grease in Industries and Automotive companies. Hence, we may accept the same for our assessment of working capital limits. MPBF is calculated as per the 1st method of lending up as follows: Assessment of Working Capital
Total Current Assets (i) Less: Current Liabilities (other than bank borrowings) (ii) Working Capital Gap (iii) Actual/Projected bank borrowing (iv) Total current liabilities ii + iv (v) Actual / projected NWC i v - (vi) 25% of Working Capital Gap (vii) Item (iii)-(vii)= (viii) Item (iii)-(vi)= (ix)

(Rs. in Lacs) Mar-14 Mar-15


159.05 16.28 142.77 100.00 116.28 42.77 35.69 107.08 100.00 100.00 257.54 79.96 177.58 100.00 179.96 77.58 44.39 133.19 100.00 100.00

MPBF (viii OR ix whichever is lower) = (x) Excess Borrowing, if any


Assessment per Nayak Committee recommendations:

-------

-------

(Rs. in Lacs)

Particulars
Projected sales 25% of Projected sales Margin 5% of projected sales

Projected 31.03.14 (6 months)


250.00 62.50 12.50

Projected 31.03.15
550.00 137.50 27.50

PBF:20% of projected Sales

50.00

110.00

It appears from the above that the Firm is eligible for working capital of limit Rs.100.00 Lacs as per First method of lending based on projected sales turnover of Rs. 250.00 Lacs for 6 months as on 3103-2014 and Rs. 550.00 Lacs as on 31-03-2015 respectively. Whereas the Firm is eligible for Working Capital Limits of Rs. 50.00 Lacs as on 31-03-2014 and Rs. 110.00 as on 31-032015 Lacs as per Turnover Method of Nayak Committee. As per revised SME guidelines in vogue, vide circular no. BCC: BR: 98:301 DT. 28.10.2006, the assessment of Working capital requirement for SME borrowers requiring funded credit facilities up to 5 crores is to be computed under First Method of Lending as propounded by Tandon Committee or minimum of the 20% of the projected turnover ( Turnover method ) as recommended by Nayak Committee, whichever is higher is to be made available.

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As this is SME unit, we have to make available the higher of the Working Capital Limit from the above mentioned methods. Accordingly the Firm is eligible for Cash Credit (Stock and Book Debt limit) of Rs. 100.00 Lacs as per First Method. The Firm has requested to sanction Working Capital Limits of Rs. 100.00 Lacs. The Branch has recommended sanctioning the same. We endorse. The working capital would be made available as per terms and conditions mentioned in Annexure-D. Holding Level in Days: Particulars Inventory Receivables Sundry Creditors Raw Material / Inventory The raw material required for manufacturing is Base oil & Additives, which is procure from local refinery like BPCL / IPCL Mumbai. The Firm expected to start its commercial production from Oct.2013 with capacity utilization 70%. Considering requirement of Raw material & wide fluctuation in its prices and the transportation cost involved, the Firm has estimated/projected stock of raw material/finished goods at 50/72 during in the year 2013-14/14-15 respectively. Looking to the nature of industry, the firm has to maintain stock of raw material for continuous production as well finished products to supply to the Industries. Hence the estimated & projected level of finished goods is reasonable and may be accepted. Receivables: The firm supplied its finished products to various Industries and Traders all over the different part of Maharashtra. Being a New entity, for promotion of sales and as per the market trend it has to extend the credit to its customer and it will take about 60 days for realizing the sale proceeds. Therefore, receivables level estimated /projected at 60/95 days as on 31.03.2014/31-03-2015 onwards is considered reasonable and may be accepted. Creditors: The raw material required for manufacturing is Base oil which will be procured from reputed companies or locally, mainly from IPCL/BPCL. Again cash /credit. The Creditors level is estimated/ Projected at 7/65 days may be accepted. RECOMMENDATIONS: All the partners in the unit are experienced in the line of business activity and carrying out the business successfully for several years. Credit rating based on Projected Balance Sheet of 31-03-2014 works out to MSMEBOB-3and CR-3/which is satisfactory and Term loan is also covered under CGTMSE Estimated 31.03.2014 50 60 7 Projected 31.03.2015 72 94 65

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Requirement of the firm is need based and genuine. Requirement of credit facilities has been assessed as per extant guidelines of the Bank. Enquiries made revealed that all the parties are credit worthy. Total security coverage is 1.67 times, which is satisfactory. The partners are resourceful and dealing with our Nashik Road Branch from last 15yrs. The Chief Manager, Nashik Road Branch has recommended for sanction of credit facilities. In view of what is stated above, we endorse the recommendations of the Chief Manager, Nashik Road Branch for sanction of credit limits as per details given under issues for consideration above, for a period of 12 months on the terms and conditions as per Annexure-D. However Branch to ensure / satisfy upon the following: Branch to release the credit facilities only after compliance of all the terms and conditions of sanction, procedural guidelines, vetting of documents from Empanelled advocate & rectification of discrepancies pointed out, if any and after obtaining disbursement authority from the competent authority. Before disbursement, Branch to obtain all consents/permissions/clearances including Pollution Control Certificate from MPCB. Term loan may be disbursed on reimbursement basis subject to verification of supporting Agreement and Certificates from CA for CAPEX incurred and promoters contribution raised. The unsecured loan should be subordinated to Banks Loan and shall not be repaid without Banks written consent. Branch to closely monitor the advance account of the Firm. Branch to recover Unified Processing and upfront Documentation charges of Rs.95506/(including service Tax i.e.12.36%) (Rs. 85000/- + Service Tax Rs. 10506/-) Branch to recover Rs.4214/- (Rs.3750/-+Service Tax Rs. 464/-) (including service tax i.e.12.36%) as CIBIL charges. DP to be worked out as per extant guidelines of the bank and against paid stocks and receivables. Branch to carry out inspection of securities regularly as per extant guidelines of the Bank and must verify Excise, VAT Returns of the Firm. Branch to explore the possibility to cross-sell various products including third party products like India First Life Insurance, Bancassurance from National Insurance Firm Ltd. (NICL), Baroda Pioneer Mutual Funds, savings account of the employees, etc. ================================================================ SME LOAN FACTORY NASHIK: M/s Balaji Corporation. Nasik Road Branch Page 17 of 32

Branch to ascertain sales performance of the firm periodically and monitor the account effectively. Branch to comply with Government of India guidelines with regard to compulsory registration of mortgage created by way of deposit of title deeds with the Central Registry within 30 days from date of creation of the mortgage (refer BCC circular no. BCC/BR/103/100 dated 27.04.2011) Branch to carry out pre-disbursement inspection / visit to the collateral securities. Further inspection of the securities is to be carried out periodically, as per terms of sanction and extant guidelines of the Bank. Branch to satisfy upon that the properties are Marketable and free from all encumbrances. Bank reserves the right to accelerate repayment of term loan considering cash accruals of the Firm. Branch shall ensure compliance of KYC guidelines of the Bank. Branch to ensure e-filing of our charge on the securities with concern Authority. The Term Loan of Rs. 50.00 Lacs sanctioned above is covered under CGTMSE Scheme for MSE. The firm to pay Guarantee fee for guarantee cover under CGTMSE.

Submitted for consideration

(Yeolakar S.G.) Senior Manager (Credit) SME LF Nashik Date: 21.09.2013 Place: Nashik

Comments of sanctioning authority:

(Anuj Bhargav) Chief Manager SMELF, Nashik. Date: 21.09.2013 Place: Nashik

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BANK OF BARODA SME LOAN FACTORY, NASHIK LEGAL COMPLIANCE CERTIFICATE

Re.: BALAJI CORPORATION - Fresh Advance Proposal for sanction of credit facilities aggregating Rs.150.00 Lacs CERTIFIED THAT while exercising discretionary lending powers for sanction of the above credit facility for the captioned account, all the relevant guidelines, regulations, rules and laws as applicable and required to be kept in view, have been complied with and all the due diligence has been undertaken.

Date :21.09.2013 Place: Nasik

(ANUJ BHARGAVA) CHIEF MANAGER

CERTIFIED THAT while processing the credit proposal for the captioned account, to be considered by The Chief Manager, SME Loan Factory, Nashik all the relevant guidelines, regulations, rules and laws as applicable and required to be kept in view, have been complied with and all the due diligence has been undertaken.

( S.G. YEOLEKAR) SENIOR MANAGER (CREDIT) SME LF NASHIK

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SECTION II- FINANCIAL PARAMETERS AND ASSESSMENT (Rs. in Lacs)


Estimated Projected Projected Particulars 2013-14 2014-15 2015-16 Year A. Balance Sheet Data Share Capital 73.00 73.00 73.00 Accumulated Profit and Loss 12.93 46.92 87.30 Tangible Net worth (TNW) 85.93 119.92 160.30 Net Owned Funds (TNW-FIOB) 85.93 119.92 160.30 Adjusted Net worth 85.93 119.92 160.30 Term Liabilities (of which) 67.31 59.62 51.93 Term Loans (Excl. Instalment 42.31 34.62 26.93 payable within 1 year) Unsecured loan from relatives 25.00 25.00 25.00 Capital Employed 53.24 179.54 212.23 Net Block 110.47 101.96 94.46 Current Assets (of which) 159.05 257.54 311.55 Inventories 69.13 108.78 113.10 Debtors 83.33 141.43 190.14 Cash & Bank Balance 6.59 7.33 8.31 Current Liabilities (of which) 116.28 179.96 193.78 Creditors 8.59 72.27 86.09 Bank Borrowings 100.00 100.00 100.00 TL payable in one year 7.69 7.69 7.69 Net Working Capital 42.77 77.58 117.77 Capital Deployed 153.24 179.54 212.23 Projected 2016-17 Projected 2017-18 Projected 2018-19 Projected 2019-20 Projected 2020-21

73.00 134.81 207.81 207.81 207.81 44.23 19.23 25.00 252.04 87.85 344.70 125.85 209.31 9.54 180.51 72.82 100.00 7.69 164.19 252.04 666.00 666.00 539.42 37.28 6.61 20.54 68.76 21.25 47.51 54.12 10.32% 10.32% 7.13% 22.17% 1.91 1.99 0.09

73.00 190.10 263.10 263.10 263.10 36.54 11.54 25.00 299.64 82.01 378.95 138.25 230.37 10.33 161.32 53.63 100.00 7.69 17.63 299.64 733.00 733.00 592.24 41.21 5.84 19.54 80.01 24.72 55.29 61.13 10.92% 10.92% 7.54% 22.86% 2.35 2.47 0.04

73.00 254.32 327.32 327.32 327.32 28.85 3.85 25.00 356.17 76.85 415.71 152.03 253.31 10.37 136.39 28.70 100.00 7.69 279.32 356.17 806.00 806.00 649.97 44.55 5.16 18.54 92.94 28.72 64.22 69.38 11.53% 11.53% 7.97% 23.68% 3.05 3.23 0.01

73.00 328.91 401.91 401.91 401.91 ---

73.00 414.77 487.77 487.77 487.77 ---

401.91 72.29 482.56 167.34 304.11 11.11 127.94 24.10 100.00 3.84 354.62 426.91 887.00 887.00 714.17 47.35 4.56 17.54 107.94 33.35 74.59 79.15 12.17% 12.17% 8.41% 23.44% 3.77 3.89 0.00

487.77 68.26 585.33 184.13 362.51 38.69 140.82 40.82 100.00 -------444.51 512.77 976.00 976.00 784.85 0.24 4.03 16.65 124.26 38.40 85.86 89.89 12.73% 12.73% 8.80% 22.18% 4.16 4.16 0.00

B. Operational Data Gross Sales Net Sales Cost of goods sold Admn. & Selling Expenses Depreciation Interest Profit Before Tax (PBT) Tax provisions Profit After Tax (PAT) Cash accruals Ratio Analysis: Operating Profit margin PBT/NS (in %) PAT/NS (in %) Return on capital employed (in %) Current Ratio (Cons. TL inst.) Current Ratio (without considering TL inst.)
DE Ratio (TTL/TNW)

250.00 250.00 204.54 13.99 4.53 12.75 18.72 5.79 12.93 17.46 7.49% 7.49% 5.17% 13.33% 1.37 1.46 0.49

550.00 550.00 448.52 29.76 8.51 12.54 49.18 15.19 33.99 42.50 8.94% 8.94% 6.18% 22.32% 1.43 1.49 0.29

605.00 605.00 491.51 33.50 7.50 21.54 58.45 18.07 40.38 47.88 9.66% 9.66% 6.67% 21.55% 1.61 1.67 0.17

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DE Ratio (TOL/TNW) DE Ratio (TTL/TNW) considering UL as quasi equity DE Ratio (TOL/TNW) considering UL as quasi equity Inventory Holding level (days) Receivables holding level (days) Creditors holding level (days)

1.85 0.49 1.85 50 60 7

1.79 0.29 1.79 72 94 65

1.38 0.17 1.38 68 115 70

0.96 0.09 0.96 69 115 54

0.66 0.04 0.66 69 115 36

0.43 0.01 0.43 69 115 18

0.32 ---------0.32 69 125 14

0.29 --------0.29 69 136 21

Whether Fund Flow Statement Submitted: Particulars Long Term Sources Less: Long Term Uses Surplus Short Term Sources Less: Short Term Uses Shortfall
2013-14 157.77 115.00 42.77 116.28 159.05 (42.77) 2014-15 42.50 7.69 34.81 63.68 98.49 (34.81) 2015-16 47.88 7.69 40.19 13.82 54.01 (40.19) 46.42 (46.42) 53.44 (53.44) 61.69 (61.69) 2016-17 54.12 7.70 46.42 2017-18 61.13 7.69 53.44 2018-19 69.38 7.69 61.69

The projected fund flow statement indicates satisfactory financial position considering the projected Balance Sheet during the currency of loan. Comments on performance: Sales /Receipts. Year
Capacity Utilisation Sales

2013-14 Estimated

2014-15 Projected

2015-16 Projected

2016-17 Projected

2017-18 Projected

2018-19 Projected

50% 250.00

70% 550.00

70% 605.00

80% 666.00

80% 733.00

80% 806.00

The partners of the firm have already in the line of trading in Furnace Oil, Light Diesel Oil since long with satisfactory performance. As looking to the current market situation there is a good Market for local manufacturing Lubricant Oil and Grease product in Maharashtra and partners has decided to float new partnership firm. The commercial production is likely to commence from Oct.2013. During the first year operation i.e. the firm has estimated / projected sales turnover of Rs. 250.00 Lacs during 6 months for FY 2013-14 and.550.00 Lacs during 2014-15 based on capacity utilization at 50% / 70% respectively. The estimated/projected turnover appears to be reasonable and achievable Net Profit:
Year 2013-14 Estimated 50% 250.00 12.93 2014-15 Projected 70% 550.00 33.99 2015-16 Projected 70% 605.00 40.38 2016-17 Projected 80% 666.00 47.51 2017-18 Projected 80% 733.00 55.29 2018-19 Projected 80% 806.00 64.22

Capacity Sales Net profit

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The Firm has estimated / projected Net Profit after Tax of Rs. 12.93 Lacs / Rs. 33.99 Lacs based on turnover of Rs. 250.00 / Rs. 550.00 Lacs on 31.03.2014 / 31-03-2015 respectively. In view of this estimated/projected net profit appear to be achievable and hence may be accepted. Movement of Net Worth
Particulars (Rs. in lacs) 2018-19 263.10 64.22 0.00 327.32

Opening TNW Profit/Loss after Tax Increase in Share Capital

2013-14 ------12.93 73.00 85.93

2014-15 85.93 33.99 0.00 119.92

2015-16 119.92 40.38 0.00 160.30

2016-17 160.30 47.51 0.00 207.81

2017-18 207.81 55.29 0.00 263.10

The Partners of the Firm have decided to plough back major share of profit in the business from the first year of its operation itself. As a result estimated as well as projected net worth is showing increasing trend. The same is satisfactory and acceptable to us. Current Ratio: Parameters Current Ratio Current Ratio excluding TL Instalment
Estimate Projected Projected Projected Projected Projected

2013-14
1.37 1.46

2014-15
1.43 1.49

2015-16
1.61 1.67

2016-17
1.91 1.99

2017-18
2.35 2.47

2018-19
3.05 3.23

The Firm is a MSME manufacturing unit and the acceptable benchmark Current Ratio is 1.17. However, the CR is estimated at 1.37 as on 31.03.2014. If we exclude the TL Instalments payable within 1 year from the current liability, the current ratio of the Firm improves from 1.37 to 1.46 as on 31-03-2014. Current Ratio of the Firm is estimated to improve to 1.43 as on 31.03.15. The Current Ratio as estimated / projected is well above the bench mark level of 1.17 for SSI unit and which can be termed as satisfactory. DE Ratio (TOL/TNW):
Estimate Projected 2014-15 0.29 1.79 0.29 1.79 Projected 2015-16 0.17 1.38 0.17 1.38 Projected 2016-17 0.09 0.96 0.09 0.96 Projected 2017-18 0.04 0.66 0.04 0.66 Projected 2018-19 0.01 0.43 0.01 0.43

Parameters
DER (TTL / TNW) DER (TOL / TNW) Quasi DER (TTL / TNW) Quasi DER (TOL / TNW)

2013-14 0.49 1.85 0.49 1.85

The Firm has estimated/projected to plough back of profit and introduction of capital in the business from time to time during the currency of our loan. As a result, DER (TOL/TNW) is estimated /projected at 1.85 & 1.79 as on 31.03.2014 and 31.03.2015 respectively and they are at satisfactory level. The same trend is expected to continue during the currency of loan. Other Information: Comments on funds invested outside business-----NIL ================================================================ SME LOAN FACTORY NASHIK: M/s Balaji Corporation. Nasik Road Branch Page 22 of 32

SECTION III- INDUSTRY PERCEPTION INDUSTRIAL BUSINESS SCENARIO PERCEPTION: PRESENT SCENERIO India is the 6th largest lubricant market in the world, with a consumption of around 1.12 million KL (an effective market size of Rs. 55-60 bn) as against an installed capacity of 1.6 million KL and has grown at a CAGR of around 7.0%.The lubricant industry in India can be broadly classified into two segments-Automotive Lubricants, with automotive lubricants accounting for over 60% of the total lubricant market. The automobile lubricant market has grown at around 4% from 1993-94, with the commercial vehicle segment accounting for about 70% of the total consumption of automotive lubricants. Indias per capita consumption of automotive lubricants is low at around 1 kg per annum on account of the low penetration of automobile in the country. India has the second largest railway network, fifth largest mining industry and is the twelfth most industrialized nation in the world. There has been a shift in the customer preference in buying lubricants. Brand name, price, accessibility and services offered are becoming the deciding factors for choosing between brands. Thus, the strategy in the Indian automotive segment has progressively been shifting from the sales push, commodity type marketing strategy to a brand pull, fast moving consumer good (FMCG) product type of marketing strategy. This is especially in case of the Bazaar trade, which currently accounts for around 40% of the sales of the sales of the automotive lubricants in India. RETAIL LUBE MARKET RETAIL LUBE MARKET is of 0.7 MILLION TONS 95%-AUTOMOTIVE LUBRICANT MARKET VALUE OF RS.4000 CRORE

Recent Trends Increasing Industry Competition: In 1993, the Government liberalised the lubricants sector and announced a number of regulatory changes. These included Entry of foreign companies into the Indian market. Decanalisation of imports of base oil. Decontrol of pricing of base oil. Reduction in customs duty on base oils(progressively reduced from a peak of 85% to the current level of 25 %)

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The deregulation of the lubricant industry has had a severe impact on the structure of the Indian lubricant market. Lubricants have the highest margin among refined petroleum products. Companies earn 20-30 times more from selling lubricants than other petroleum products. Such a lucrative business encouraged foreign majors like Shell, Exxon, Mobil, Caltex, Elf etc., to enter the Indian market. The change in the market share has been predominantly on account of rapid development in technology, marketing and distribution strategies of companies. STRENGTH, WEAKNESS, OPPORTUNITY & THREATS (SWOT):
STRENGTH:

Huge experience in the same field. Having engine oil standards. Using one-solution software to handle stock, accounting and sale. Availability of ADDETIVE from outside of the country. Experienced staff in production. Having equipped labs.

WEAKNESS: Domination Low-profit Wholesales instead of high-profit retail sales. Price fluctuation of Raw Material. Lack of specific system for providing used oil. (Problem in supply chain). Lack of obtaining and receiving regular reports. Weak motivation system. OPPORTUNITY: Possibility of purchasing new machines to eliminate the last production step. Possibility of internal market expansion. Lack of government participation in this industry. Existence of management consulting items. No local manufacturing competition in Nashik District. THREAT:

Lack of commitment from suppliers to supply raw materials.(supply chain problem). Lack of satisfying market demands based on effective product varieties. Lack of a good reputation of products brand in market. Reduction in raw material due to removal of subsidies.

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Terms & Conditions A/c Balaji Corporation, Nashik Road Branch, Aurangabad Region 1) Nature of Facility Limit Purpose Margin Rate of Interest

ANNEXURE-D

Term Loan ( Under CGTMSE SCHEME) Existing Proposed -Rs.50.00 Lacs FOR PURCHASE OF FACTORY LAND AND BUILDINGS/ P&M and OTHER MFA. 57.60% towards Capital Expenditure. Project Margin - 66.22% @2.25% above Base Rate plus 0.15% tenor period i.e.12.65% p. a. at present at monthly rests, for CR-3 rated Small Eenterprises account. The rate of interest is subject to change from time to time as per Banks guidelines, change in Base Rate and credit rating of the account.

Prepayment charges

0.50% p.a. of the amount prepaid for the prepayment period with cap of 2.00%. The loan period out of cash generation from the operations from the operations of the Firm will not be considered as a prepayment. 1.00% + Service Tax(12.36%), to be recovered on acceptance of terms & conditions of the sanction 84 Months including-6- months moratorium, subject to annual review. The Term Loan is to be repaid in 77 monthly instalments of Rs. 64000/each and Last instalment of Rs. 72000/- commencing after 6 months from the date of First Disbursement (i.e. from the end of 7th month) The monthly interest charged in the account, during the moratorium and repayment period, will be serviced separately. Jt. and several D. P. Note to be executed by the firm and its partners (LDOC 4) Letter of Partnership. Letter of instalments with acceleration clause. (LDOC-57) Composite undertaking-cum-Declaration. (LDOC 134, 136 & 136A) Exclusive 1st charge by way of Equitable Mortgage of Lease hold Land & Building admeasuring 4000 sq.mt and Factory building admeasuring 603.05 sq.mt located at Plot no.52 & 57, STICE Musalgaon, Taluka Sinner, Dist- Nashik belonging to in the name of Firm. Exclusive 1st charge by way of Hypothecation of entire Machineries, electrical installations, furniture & fixtures, office equipments and other movable fixed assets of the Firm, situated at the above mentioned Factories, present & future. (LDOC-17-B). General Form of Guarantee signed by all the partners of the firm along with personal guarantee of Mr. Pradeep Boob, Mr.Mahesh Boob and Mr. Umesh Boob.

Unified Processing & upfront documentation charges Period Repayment Schedule

Security / Documents

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Disbursement

The TL will be covered under CGTMSE Scheme. Other securities as per details given under common securities below. 1. The disbursement by way of reimbursement towards capital expenditure already incurred may be allowed, after maintaining stipulated margin, supported by certificate of practicing C.A. in having incurred the capex. 2. The Branch is to obtain Title Clearance Report from Banks approved advocate and to ensure that the title of the above mentioned property is clear, marketable & unencumbered. The report should list the title deeds required to be deposited for creation of mortgage. 3. The Branch is to arrange to obtain permission from the lessor for creation / extension of Equitable Mortgages of all leased hold plots, for the total sanctioned exposure to the Firm. 4. The Branch is to ensure that the entire project is implemented in time as scheduled. In case of time over run or cost over run, the matter is to be appraised to the sanctioning authority in time with remedial measures. Cash Credit (Hypo. Of Stocks / Book Debts) Existing Proposed ---Rs.100.00 Lacs For pre-sale & post sale working capital requirement of the firm 25% for RM, SIP, FG, Stores & Spares and Packing Materials & for Bookdebts up to 90 days. @2.25% above Base Rate i.e.12.50% p. a. at present at monthly rests, for CR-3 rated Small Eenterprise account. The rate of interest is subject to change from time to time as per Banks guidelines, change in Base Rate and credit rating of the account.

2) Nature of Facility Limit Purpose Margin Rate of Interest

-12- months 1. Joint & several D. P. Note executed by the firm & its partners. (LDOC-4) 2. Letter of Partnership. 3. Letter of Continuing Security. (LDOC-7) 4. Exclusive 1st charge by way of Hypothecation of entire raw materials, stock-in-process, stores & spares, packing materials, finished goods and Book-debts of the Firm, both present & future. (LDOC-17-B) 5. Irrevocable Power of Attorney for Book-debts (LDOC-86) duly notarized. 6. Book-Debt Undertaking (LDOC-51). 7. Composite undertaking cum declaration duly stamped. (LDOC 134, 136 & 136A). 8. LDOC-64 for Subordination of Unsecured Loans. 9. General Form of Guarantee signed by all the partners of the firm along ================================================================ SME LOAN FACTORY NASHIK: M/s Balaji Corporation. Nasik Road Branch Page 26 of 32

Unified Processing & upfront documentation charges Period Security / Documents

Processing charges of 0.35% + Service tax(12.36%), to be recovered on acceptance of terms & conditions of the sanction

Provision.

Disbursement

with personal guarantee of Mr. Pradeep Boob, Mr.Mahesh Boob and Mr. Umesh Boob. 10. Other securities as per details given under common securities below. The Firm is to submit monthly Stock & Book-debt statements before 10th of the next month in Banks prescribed format. The Firm is also to submit certified Book debts statement by practicing C.A. or regular Auditor of the Firm, once in every quarter, certifying age & amount of the book-debts, within 15 days of close of each quarter. Although all Stocks and Book Debts are to be hypothecated to Bank, the drawings in the account are to be allowed on the basis of value of paid stocks only (cost or market price, whichever is lower) and Book Debts not older than 90 days and book-debts other than those of its associates. The advance payments received from the customers are also to be shown separately and to be subtracted while calculating the drawing power. The Book-debts for which Bills are purchased / discounted are to be subtracted while calculating the drawing power. C.C. limit is to be released strictly based on: 1. Availability of the Drawing Power. 2. Matching with the estimated/projected sales performance. 3. Matching with the raising of working capital margin by the Firm by way of internal cash accruals and/or capital & unsecured loans.

COMMON SECURITIES: All the credit facilities to be secured by first charge on the Current Assets and Fixed Assets of the firm and personal guarantee as under:
A. Primary Security
1

2 3

4 5

Exclusive 1st charge by way of Hypothecation of entire raw Materials, Stock-in-process, Stores & Spares, Packing Materials, Finished Goods and Book-Debts of the firm both present & future. Exclusive 1st charge by way of hypothecation of Plant and Machinery of the Firm both present & Future. Exclusive 1st charge by way of Equitable Mortgage of Lease hold Land & Building admeasuring 4000 sq.mt and Factory building admeasuring 603.05 sq.mt located at Plot no.52 & 57, STICE Musalgaon, Taluka Sinner, Dist- Nashik in the name of Firm through its Partners Mr. Pradeep Kishanlal Boob; Mr. Mahesh Prakash Boob and Mr. Umesh Prakash Boob. The TL of Rs. 50 Lac will be covered under CGTMSE Scheme. The credit facilities will also secured by the personal guarantee of all the Partners of Firm viz. Mr. Mahesh Prakash Boob; Mr. Umesh Prakash Boob and Mr. Pradeep Kisanlal Boob.

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OTHER TERMS AND CONDITIONS:


1.

The sanctioned / increased credit facilities will be disbursed only after execution of stipulated security documents and compliance of various terms & conditions of the sanction to the Bank's satisfaction. The Firm and its Partners are to undertake that during the currency of our advance, they will: Deal exclusively with us, route all their transactions through their Cash Credit account, will not open any Current Account with other Bank/s without permission of the Bank in writing and close the Current Account/s maintained with other bank/s & furnish account closure certificate/s to the Branch. Increase & maintain Capital at estimated level, to meet with the Term Loan/Working Capital margin, as estimated/ projected. Increase and Maintain Interest Free Unsecured Loans from Partners & Associates, to meet with Term Loan/Working Capital margin, as estimated/projected. Subordinate Unsecured Loans to the Banks borrowings. Bring additional long term funds to meet with the cost over run/time over run, if any. Bring additional long term funds to meet with the repayment obligations of the Bank in time, if there is negative cash profit or positive cash profit is not adequate to service repayment obligations of the Bank. Bring additional long term funds to meet with estimated/projected Net Working Capital, in case estimated/projected net profit is not achieved. Maintain Current Ratio, as estimated/ projected. Maintain Debt Equity Ratio (TOL/TNW), as estimated/projected.

2.

3.

The Firm and its Partners are to undertake that during the currency of our advance, they will not, without the permission of the Bank in writing: Implement any scheme of Expansion / Modernization / Diversification, except which are approved by our Bank. Formulate any scheme of Merger / Acquisition / Amalgamation / Reconstitution. Any Change in the management set-up / capital structure of the Firm. Enter in to borrowing either secured or unsecured with any other Bank / Financial institution / Corporate body. Invest / deposit / lend funds to group firm & companies / directors / family members / other corporate bodies / firms / persons. Create any further charge, lien or encumbrances over the assets charged to the Bank in favour of any other Bank, Financial institution, NBFC, firm, company or person or otherwise dispose off any of the fixed assets. Undertake guarantee obligation on behalf of any other borrower, Group firms / Companies. Pay commission / brokerage / fees etc to Guarantor / or any other person for guaranteeing the facilities sanctioned to the Firm. Declare dividends for any year, except out of the profits related to that year, after paying all due and making provisions as required for that year, provided there is no default in repayment obligation by the Firm.

Allow the level of net working Capital to come down from the estimated / projected level. ================================================================ SME LOAN FACTORY NASHIK: M/s Balaji Corporation. Nasik Road Branch Page 28 of 32

4.

The Firm is to obtain Pollution Control Certificate from Maharashtra Pollution Control Board (MPCB) and submit copy of the same to the Branch before release of the Credit Facilities. The Branch is to recover Unified processing and upfront documentation charges and inspection charges at the sanctioned rate or rates prescribed by the Bank from time to time. The proper books of accounts, stock register and records of machineries are to be maintained as per the Banks requirements and to be made available to the Bank officials / representative during inspection. The securities charged to the Bank are to be inspected on bi-monthly / quarterly / half yearly intervals, as per Banks guidelines. Inspection charges for periodical verification of stocks / Machinery / securities are to be borne by the Firm. The Bank will have the right to examine the books of accounts and carry out inspection or valuation of assets of the Firm, which are charged to the Bank, from time to time by Banks official / technical experts / external agencies / C.A. firms / management consultants and / or valuers. The inspection / valuation charges so incurred will be borne by the Firm. Banks nameplate for lien will be displayed prominently at the place of each unit, office, on hypothecated Machineries and also at the place of storage of hypothecated goods. All money advanced or to be advanced by the Bank will be utilized exclusively for the purpose set forth in application / project report submitted to the Bank. In case the advance is utilized or attempted to be utilized for any other purpose or if the Bank apprehends or has reasons to believe that the said loan is being utilized for any other purpose, the Bank shall have the right to recall the entire or any part of the loan / advance forthwith without assigning any reason thereof. The Firm is to obtain comprehensive insurance policy covering insurance of various factory buildings, Plant & Machineries, electric installations, furniture & fixtures, vehicles, computers, equipments, stock of raw materials, work-in-progress, finished goods, residential bungalow, etc charged to the to Bank incorporating Bank clause. Insurance policy should cover stocks lying at different places and should cover all risks including earthquake. The Firm is to cover the same as far as possible under BANCASSURANCE Scheme. The insurance policy to be submitted to the Bank. Valuation Reports in respect of the Factory Land & Building, other immovables charged to the Bank and Machineries should be obtained from the Banks approved Architect Engineer / Valuer once in every -3- years as per Banks norms, the fees for which are to be borne by the Firm. The Firm is to submit list of Machineries and other movable fixed assets once in a year to the Branch. The Firm is to submit Statements under the Quarterly Monitoring Report System (QMR) / Quarterly Information System (QIS) within the time stipulated by Bank as follows: QIS-I : before commencement of the quarter QIS-II : within 6 weeks from the end of the quarter QIS-III: within 8 weeks from the end of the half year (March & Sept)

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The Firm is to obtain and continue to obtain / renew various licenses / permissions / sanctions etc from various Government Department from time to time and copy of the same should be given to the Bank.

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15.

The facilities are sanctioned for a period of -12- months. The renewal of facilities will be subject to satisfactory conduct and performance for which the renewal papers i.e. latest audited / provisional financials, CMA, income-tax returns, etc. should be submitted before -3- months of the due-date of the review or -6- months from the date of close of financial year of the Firm, whichever is earlier, failing which penal interest will be charged as per Bank's guidelines. The Branch is to obtain audited financials of the Firm at the earliest (irrespective of due date of reviewal of facilities), peruse the performance & financials compared to estimate / projection furnished by the Firm while sanctioning / reviewing the credit facilities and place their views on key financial parameters before the sanctioning authority along with required remedial measures, if any. In case of any default in the repayment of the loan or interest, the Bank and / or RBI will have an unqualified right to disclose or publish the name of the Firm / Partners / guarantors as defaulter in such manner and in such medium as the Bank or the RBI in their absolute discretion may think fit. The Firm and its Partners / Guarantors will submit a declaration that none of them is related to any director of our Bank / any other Banking Company or to any staff of our Bank. The Firm would keep the Bank informed of the happening of the event that is likely to have substantial effect on the profit / business or circumstance adversely affecting its financial position. The Firm will use our e-banking facilities for its entire financial requirements. Penal interest will be charged, @ 1.00% - 2.00% p.a., as per Banks norms, for the following irregularities: Non / Delayed payment of instalment and / or interest and / or excess over the limit. Non / Delayed submission of monthly stock & book-debt statement and / or quarterly certified Book-Debt statement. Non / Delayed submission of provisional / audited financials, CMA, I. T. returns, etc for reviewal of the facilities. Non / Delayed submission of QIS statement. Non / Delayed payment of invoked guarantee / devolved L/C. In the event of any breach / non-compliance of any major terms and condition of the sanction (at the discretion of the Bank) Non compliance of any financial convent undertaken by the Firm.

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The Branch is to ensure that all the terms and conditions of the sanction are complied with in letter & spirit and the observations made by the higher authorities during processing of the proposal and conveyed to the Branch vide separate letter and / or as mentioned in the appraisal note are taken care of during documentation / disbursement / post disbursement supervision and follow up at monitoring stages. The advance made available under the above mentioned facilities are repayable on demand and the terms & conditions of these facilities granted, at the discretion of the Bank, are subject to change from time to time without any prior notice. The Bank reserves the right to withdraw, modify or amend the terms & conditions of advance and Bank would not bound to disburse full amount of advance in the event of any failure on the part of the Firm in satisfying any of the stipulated terms & conditions.

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The Bank reserves the right to discontinue the credit facilities / advance / loans and/or to withhold / stop any disbursement/s without assigning any reasons / giving any notice, in case of noncompliance / breach of any of the terms & conditions stipulated therein and from time to time as also in the relevant document or any information / particulars furnished to us found to have incorrect or in case of any development or situations wherein, in the opinion of the Bank, its interest will be/is likely to be prejudicially affected by such continuation or disbursement. The rate of interest, margin and other charges will be subject to change as per RBIs directive / Banks Policy from time to time. The stipulated rate of interest is subject to Internal Credit Rating (CRISIL RAM Module at present) prepared by the Branch and to be vetted by the sanctioning authority. The rate of interest is subject to change from time to time based on audited financials as on 31st March of each year, which is to be submitted before 31st October of each year for carrying out credit rating and deciding rate of interest to be charged in the account for the next year effective from 1st October for the respective year (irrespective of due date of reviewal of facilities). In case of any delay in submission of audited financials, Bank reserves the right to charge rate of interest with maximum spread along with penal interest for delay in submission of B/s. The Branch is to endeavour to cross sell Third Party Products to the Partner of the Firm, its Associates, their employees and canvass salary accounts of the employees of the Firm. The sanction is valid for 6 months from the date of sanction.

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Additional Stipulations:

Firm to pay Unified Processing and upfront Documentation charges of Rs. 95506/- (For Cash Credit Rs. 35000/- + TL Rs. 50000/- =Rs. 85000/- + Service Tax Rs. 10506/-) and CIBIL charges of Rs. 4214/- (Rs. 3750/-+ Service Tax 464/-) DP will be worked out as per extant guidelines of the bank and against paid stocks and receivables. Bank reserves the right to accelerate repayment of term loan considering cash accruals of the Firm. The Term Loan of Rs. 50.00 Lacs sanctioned above is covered under CGTMSE Scheme for MSE. The firm to pay Guarantee fee for guarantee cover under CGTMSE. Firm shall submit Consent to Operate from MPCB before release of the Credit Facilities.

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Enclosure to Circular no BCC: BR: 101:24 dated 23.01.2009 ASCROM DATA INPUT SHEET (For Critical Fields Only) Maharashtra & Goa Aurangabad Pimpalgaon Bahula Balaji Corporation

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Zone Name Region Name Branch Borrower Name Borrower ASCROM Id (To be filled in after opening of account) Name of Field ASCROM Code Constitution 38 Occupation 705 Religion Special Category Sector 15 Scheme 999 Activity 7499 Sanctioning Authority 92 Turnover Amt in Rs (Projected ************* Turnover for assessing Credit Limit) Business Segment (As per our 160 Bank's internal segmentation) Last Three Year Sales (Amt in ************* Lacs) Investment in Plant and Machinery /Equipment (In case of Manufacturing / Service units) Credit Rating /Credit Score External Credit Rating Repayment mode Security

Description PARTNERSHIP CONCERN ( MALE) Manufacturer NA NA SSI (ME) Bank other scheme OTHER PETROLEUM PRODUCTS. SME Head 2013-14- Rs. 250.00 Lakhs (For 6 months)

Small Enterprises-(SME Regulatory) 2010-11 2011-12 2012-13

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N.A N.A N.A Rs.21.43 Lacs (As per Sale Deed dt.23.07.2013)

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************* ************* 1 1 2 3

MSMEBOB-3 and CR-3 based on Projected B/S as on 31.03.2014 Not Applicable, as the proposed exposure is below Rs. 5 crores. Monthly HYPO. OF STOCK AND BOOK DEBTS Rs.133.00 Lacs as on 31.03.2013 HYPO. OF PLANT & MACHINERY Rs. 21.43 Lacs EQUITABLE MORTGAGE OF LEASE HOLD LAND & BUILDING Rs.117.30

Recommending Officer Place: NASIK Date: 21.09.2013

Sanctioning Authority

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