Nepal Bank Limited

Sankhu Branch
CFP Memo Date: 2072-12-28

To: Chief Manager SME Credit Department, NBL HO

From: Credit Dept. NBL Sankhu
Client: M/S Subhadin Emporium Contact Person: Mr. Rajkumar Shrestha
(Proprietor)
Telephone No: 9841346694"Cell"
Constitution: Proprietorship Business Proprietor: Mr. Mr. Rajkumar Shrestha
Nature of Business: Retailing of Date of Relation: 2065-09-22
Cloths,wholesaling and Retailing of Furniture items
Client Location: Kageshwori Manahara A/C Strategy: Extension
Municipality 7, Thali, Kathmandu

Group: N/A Stipulated Review Date: New For Business

OD
R. Officer: BO-BM Janardan Sinkhada Next Review Date: Falgun End 2073
Risk Grade (NBL): AvR Loan Classification (NRB): N/A
Purpose of Submission: New business overdraft limit of Rs. 6000K with repayment of Hypo Loan
of Rs. 2800K
1. Credit exposure: '000
Limit Outstanding as on Security Margin Pricing
Facilities 2072-12-28
Existing Proposed Principal Interest Existing Proposed Existing Proposed
Hypo Loan 2800 - 2800 66 - 10.00 % -
- 30% Stock Per Annum
Margin + payable
150.00 %
quarterly
Collateral
Coverage

Auto Loan 770 770 534 0 30% Margin of 30% Margin of 10% Payable 10% Payable
Tender Price Tender Price Yearly Yearly
EMI EMI
Rs.16732 Rs.16732

Business OD - 6000 30% Net - 9.75 % Per

Current Assets Anum
Margin + 200 payable
% Collateral quarterly
Coverage (1% Rebate
is
requested)
Grand Total 3570 6770 3334 -

2. Collateral securities:

1. Collateral Security Details :

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 Remarks on collaterals:
1. Proposed collateral was restrained from theMalpot Office, Sankhu on 2065-11-02 with total value of Rs.
42,00,000 and will be re-mortagage at Value Of Rs.12000K with additional value of Rs. 7800K at Malpot
office Sankhu ..
i. Type of mortgaged land/building: Land with Residential nature.
ii. The existing proposed collateral valuated by ACC Associates Pvt. Ltd Engineer Mr. Chanchal
Nakarmi which is one of the listed engineering firms of NBL on 2065-11-06 at value of Rs. 4471 K and it
was re-valued by Himal Engineering Services Engineer Suman Karmacharya at total value of rs. 14877K
on 2072-12-21.
We also request to support the revaluation of collateral. (Valuation Reports are attached herewith).
And Bank staff S.A Mr. Roshan Tiwari-12309 with support from BM Janardan Sinkhada-11973 valued
the land for Rs. 14612K on date 2072-12-28 (The valuation is attached with this file)
iii. Approximate current market value of the collaterals is about Rs. 14612 thousand as of now as
per the site inspection report of aforementioned bank staffs.
iv. The status of collateral has been satisfactory as per the field visit.

3. Insurance:
(Rs. in '000)
Asset Insurance Risk Coverage Policy Insured Expiry Date Remarks
Co Number Amount

Stock NIC Fire, earthquake, 01011114/15 4001 14/02/2016 Notice was

RSD, MD, Terr, 02088 sent to NIC
for Renewal
Stock NIC Fire, earthquake, TBO 6500
RSD, MD, Terr,

4. Client's background:
Registration/ license details: Office Regd No. Date
a. Firm DoC 82712/065/66 2065-06-05

b. PAN IRO 303017404 2065-06-05

a. Ownership (%): 100% ownership with the proprietor

b. Directors: Mr. Rajkumar Shrestha (Propriter)
c. Successor: Tara Shrestha (Spouse of Borrower) will continue the business.

d. Family tree:

Family of Rajkumar Shrestha

Rajkumar Shrestha (Borrower)

Tara Shrestha (Spouse)

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e. Management: The proprietor holds all the responsibilities for the operation of their business.His spouse
Mrs. Tara Shrestha helps him in time of need. He has long experiences of running such business since
many years back.

f. Business:
i. Objective: Earning profit through the Selling Cloths and furniture and furnishing.
ii. Raw material requirement and availability: The firm mainly product furniture in his factory and also
buy from other manufacturer. They buy carpet from Yeti Carpet and Heritage Carpet. Cloths are
bought from Birgunj, Raksaul and other manufacture from Nepal and India too.
iii. Suppliers: Different Manufacturer of furniture and furnishing, cloths and carpet.
iv. Market availability: As the increasing trend of Construction of individual house, public building the
firm can easily sell their product.
v. Buyers: Personal buyer for House, Co-operatives, School, College, Public contitution
vi. Competitors: Other Firm of same nature around Thali, Sankhu, Jorpati, Chabahil
vii. Others: As the Client Mr. Rajkumar Shrestha is reputed person in Thali area his reputation is plus
point for his business.
g. Relationship with bank and transaction record:
a. Earning: 2046K of this year
b. Remarks on loan servicing and past track record: Dr 10 Times , Cr 3 Times
c. Turnover of facilities: Dr 10 Times , Cr 3 Times
d. Utilization: Full
e. Others:
h. Facilities availed from other financial institutions: N.A.
a. Repayment terms (if available):
b. Collateral security arrangement (if available):
c. Pricing (if available):
d. Transaction records (if available):

i. Net worth as on end of each financial year (Rs.in '000)

Particulars Audited Projected

Ashad Ashad Ashad Ashad 2073

2070 2071 2072

Issued and paid up 500 500 500 500

capital

Add: Retained 6219 7851 9736 8452

earning

Less: Expenses to --- --- --- ---

be w/off

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 Net worth 6719 8351 10236 8952

Remarks: The data presented above has been derived from the client's financial documents.
j. Credit Information: To be obtained from CIC.
k. Others

5. Working capital Assessment: (Rs. in '000)

i) Borrowing cause:
Working capital need due to the investment requirement in stocks and trade receivables.
The client is in need of more funds for building up its inventory and liquidity to the firm.
The customer has to capitalize to the potential market opportunity by maintaining the sufficient
amount of stock and catering the same to the locality which would result the customer in earning
higher profit in the days to come.
ii) Disbursement criteria:
This loan is disbursed only within 70% of net current assets (Stock + Receivables - Payables) for which
the stock statement, receivables and payables would be verified prior to the disbursal.

iii) Repayment terms:

The borrower may borrow, repay and re-borrow. This facility will be available until cancellation and
subject to periodic review. Interest is payable in quarterly basis.

6. Site visit remarks:

Business of borrower was visited by BM Janardan Sinkhada (11937), SA. Roshan Tiwari-12309 on 2072-
12-22. There was not any noticeable deviation on above mentioned information and was satisfactorily
doing business. The Collateral and business can be easily observed by the Bank. The location of firm is 7
Km away west from NBL Sankhu Branch.
Term loan Assessment: Not applicable
7. Non-Funded Requirement: Not Applicable

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 8. Financial Indicators '000

C
omments:
Sales are increasing every year. Sales were Rs. 15045K in FY 2069/70, 16050K in 2070/71, Rs. 17456K
in 2071/72 and the firm has projected to increase by 15.00% in the FY 2072/73up to 20074 K.
The figures of gross profit and the net profit are satisfactory. It is in increasing trend.
The current ratio and quick ratio trend have been obtained higher than the standard but acceptable. And
the firm has projected to maintain the CR and QR being 2.32 times and 1.24 times for the FY 2072/73.
Being the debt equity ratio less than 1 for all the presented period along with the projected year, it
signifies that the firm will be to service the debt.
Interest Coverage ratio are not available for previous years as the client is new for the branch. It has
projected to maintain the ratio by 4.82 for the FY 2072/73 which shows that the firm has sufficient EBIT
to pay the Bank interest.
9. SWOT analysis:
i. Strength:
Experienced management
Growth oriented sales
ii. Weakness:
The credit sales in the future may increase.
Poor store keping.
iii. Opportunity:
Standard of the business in the future may increase.
Due to the increase in the scope of business, the business may capture high market share in the
future.
iv. Threat:

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 Due to the entry of additional competitors, the sales may decrease.
The proprietor may experience difficulties in collecting receivables.
10. Key credit risk analysis:
i. The firm has some number of competitors in the locality of the firm however this
risk is also mitigated by the market reputation, credibility and goodwill of the firm.
11. Other important information:

12. Customer's Request: The customer has requested to approve the Business OD limit of NRS 6000K
with Auto Loan Limit of Rs. 770K and he will repay Hypo Loan Limit of Rs. 2800K after approval of
Business OD Limit. As the client is very loyal and also in relationship with our branch since 2065 B.S, he
also requested for Rebate of 1% in Published interest Rate. (i.e The client wants to enjoy Business OD in
8.75 % Per annum)
13. Branch recommendation:
The client M/S Subhadin Emporium (Pro. Rajkumar Shrestha) is Enjoying Hypo Loan Facility of Rs. 2800K
and Auto Loan of Rs. 770K from NBL Sankhu Branch. Interest and EMI is regular during the period.
He is our loan client from initial stage of modernization of NBL Sankhu Branch. He is not only a client but
also assets of Sankhu Branch.
Previously he used to sell cloths items. Now he has increased his firm and started business of furniture and
furnishing. So he needs more working capital for Stock and to maintain receivables.
He has rented his house to Kumari Bank but he is doing his Loan transaction with us due to our good
relationship and image of Nepal Bank.
We recommend you to approve the total overdraft limit of Rs. 6000K with Auto Loan Limit of Rs. 770.
He will repay his Hypo Loan Limit of Rs. 2800K after approval of Business OD Limit.
As the customer is experienced, dedicated towards his business. The stocks, receivables and the proposed
collateral (Plot of land) is sufficient in maintaining the security for total OD limit of 6000K.
The client is interested to take loan from NBL Sankhu due to our marketing and public relation. So we also
request 1% Interest rebate in Published Interest Rate.
We also request to support the Re-valuation of Collateral
14. HO recommendation

15.Waver, if any: Waiver is requested for 1% rebate Interest Rate. (i.e Interest Rate of 9% is
requested)
We also request to support the Re-valuation of Collateral.
16.Special covenants:
- Existing covenants & compliances:
- Additional Proposed:
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 17. Compliance notes for branch:

18. Attachments:
a. Spread Sheet prepared by branch.
b. Risk grading Matrix.
c. YTD Sales.
d. Stock statement
e. Field Visit report
f. Financial statements of FY 2070/71, 2071/72, 2072/73 & projected 2073/74
g. Firm registration certificate
h. Application of client.
i. Engineer's valuation report of fixed properties of already mortgage land.
j. Latest Land revenue payment receipt
k. KYC report.

BRANCH OFFICE:

Presented By; Supported By: Recommended By

. . .
Name: Roshan Tiwari-12309 Name: Kamala Khatiwada Name: Janardan Simkhada - 11973
Gajurel-12366
Design: S.A. Design: S.A./ ABM Design: BM
Date: 2072-12-28 Date: 2072-12-28 Date: 2072-12-28

Head office
Presented By; Recommended By Approved By

. ..

Name: Name: Name:

Design: Design: Design:

Date: Date: Date: