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ANDHRA BANK

(A GOVERNMENT OF INDIA UNDERTAKING)

APPRAISAL FORMAT FOR


SSI ADVANCES WITH LIMITS OVER Rs.10 LAKHS & BELOW Rs. 50 LAKHS
Powers: CHIEF MANAGER ( ZO) Note No.: Date: 11.03.2010
Branch: BETHAMCHERLA Credit Rating:- Existing: --
Proposed: B
Zone: KURNOOL Asset Classification: New Account
Proposal for : Fresh limits Renewal due since :
Proposal received at Branch ZO : 20.02.2010 HO
Clarifications received on 11.03.2010
Date of disposal

A. PROFILE OF THE BORROWER:


1. Name of the Borrower M/S Sai Pooja Marbles
Prop : V.Ganeswara Gupta
2. Constitution Proprietary
3. Location : Business address S.No.196-C/197/237, Kurnool Road
Bethamcherla (Village & Mandal)
Kurnool Dist., AP
Residential Address H.No.10-32, Beside MRO Office,
Bethamcherla
Telephone No. Factory :9440294895
4. Date of Establishment New Unit
5. Dealings with our Bank since New Account
6. Line of Activity/Business Colour Stone cutting & Polishing
7. SSI Registration No 2802 111 001912
8. Group Not applicable
9. Banking Arrangement Sole

7. Names of Proprietor/Partners/Directors : (Rs. in lacs)


Sl. NAME Worth Basis (IT/WT Educational Experience
No. (Rs. in Lakhs) assessment Qualifications
etc.)
1. V.Ganeswara Gupta 20.00 Property -- 10 Years
S/O V.Padmanabhaiah Statement
8. Change in the constitution, if any, with details : NO

9. Details of existing and proposed limits with our Bank:


Sanction reference (for existing limits):(Rs. in lacs)
Facility Existing Outstanding DP OD Proposed Rate of interest
Limit as on limits Existing Proposed
TL SSI 17.00 12.00
OCC 4.50 12.00
Total -
Fund Based
Non Fund
Based
Grand Total 21.50

1
Exposure:
As per Ceilings as per *Constitution wise ceiling as per **Our Bank's exposure
Projected B/S RBI norms bank policy Existing Proposed
31.03.2010
To the unit 83457 12.18x6=73.08 --- 21.50
To the Group 222554 NA

* Ceiling as applicable to Individuals, Proprietorship / HUF Trusts / Co-operative Societies / Association persons / Pvt.
Ltd. Companies/ Public Ltd. Companies etc.
** Term loans out standings + 100% of fund based working capital limits or out standings whichever is higher + 50% of
non fund based limits or outstanding which ever is higher (with effect from 01.04.2003 100% of non fund based limits or
out standings which ever is higher)

10. Credit facilities with other Financial Institutions/Banks - NIL -

11. Credit facilities enjoyed by sister/Associate concerns with us and others: NIL

12. Names of Co-obligants / Guarantors :


S No Name Net worth Basis
1 G. Aswini Kumar 45.00 Property Statement

13.Details of Collateral Security : :


Name of the owner Details of Security Including the Value Date of valuation
extent & Name of the Owner ( In Lakhs )
V.Ganeswara Gupta House site Plot No.7, 28.80 13.02.2010
R.S.No.380/A1, 380/A3, at
Kallur 288.88 Sq. Yards
House site Plot No.6,
R.S.No.380/A1, 380/A3, at
Kallur 288.88 Sq.Yards

14. For Corporate borrowers only:

A. Share holding pattern :


Promoters/Association/Public/ F.Is. -------- NOT APLICAPBLE. ------
B. Names of 10 major shareholders: -------- NOT APPLICABLE. ------

15. Brief comments about Management:

• M/S Sai Pooja Marbles is a proprietary concern and Mr.V.Ganeswara Gupta is


proprietor of the firm
• The borrower proposed to establish Color Stone cutting and polishing unit at
S.No.S.No.196-C/197/237, Kurnool Road, Bethamcherla
• The promoter is having 10 years experience in slab cutting and polishing activity and is
well experienced in the proposed line of activity.
• The borrower is selected under PMEGP Programme 2009-10

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16. Verification of Caution list, defaulters list:

RBI defaulters list dated__30.09.2009


(Rs. 1 crore & above)

Willful defaulters list date____30.09.2009_ NOT FOUND.


(Rs.25 lacs and above)

Caution list dated_________31.12.2009

ECGC Specific Approval List__NA_

17 A. PERFORMANCE OF THE UNIT FOR THE LAST 3 YEARS: (for existing units only)

Not Applicable – New Unit

B. RATIO ANALYSIS: New Unit – Projected Balance sheet and ratio analysis encloed

Comments on Financial Position and Performance : ALL KEY RATIOS ARE SATISFACTORY as per
Projected Balance sheet .

18. Particulars of operations in OCC / KCC / SOD / PC Limits : New Account msod

List of outstanding Bank Guarantees : NIL

Statement of BGs/LCs outstanding shall be furnished as annexure

Income Earned in the account: NEW ACCOUNT.

Comments on operations in the facilities : New Account

Irregularities Pointed out in Inspections : Not Applicable – New Account

Pre sanction Unit Inspection Observations :


Construction works are under progress. Borrower
Conducted By Branch on 10.02.2010 is having work orders on hand

19. Assessment of Limits Annexure Annexure Applicable


Working Capital A (Inventory Method) A&B
B (Turnover Method)
C (Cash Budget Method)
Term Loans D D
Letter of Credit / BG. E Not Applicable
Addl. Details for Export advances F Not Applicable
CRS G G

20. Branch Views & Recommendations :


• M/S Sai Pooja Marbles is a proprietary concern and Mr.Vankadri Ganeswara Gupta is
proprietor of the firm
• The borrower proposed to establish Coloru Stone cutting and polishing unit at S.No.
S.No.196-c/197/237, Bethamcherla Mandal (land owned by the borrower )
• The borrower is engaged in slab cutting and polishing activity and is well experienced
in the proposed line of activity.

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• KVIC Hyderabad vide their Lr.No.DD/KNL/APKVIB/ PMEGP/MMS/Consent/ 2009-
10/SO/KVIC/PMEGP/ Kurnool/927/2009-10 dt.17.10.2009 informed that The Dist.
Task Force Committee (PMEGP) recommended the project for consideration of bank
loan
• The project cost is justifiable for the market conditions for the economic viability and
financial feasibility.
• Borrower offered House site Plot No. 6 & 7, R.S.No.380/A1, 380/A3, at Kallur at
Bethamcherla ( 288.88 Square yards each ) belongs to him worth Rs.28.80 Lakhs as
Collateral security
• The raw material and skilled labor are available locally
• Finished products are having good market in AP and Karnataka States.
• Cost of Machinery reasonably quoted by the suppliers as per prevailing market rates
• Selling price projected by the borrower is acceptable as per prevailing market rates

Branch Recommended for sanction of Composite Term Loan of Rs.21.10 lakhs ( Consisting of Term
Loan Rs.17.00 Lakhs and Working capital limit of Rs.4.50 lakhs )

The proposal conforms to the Loan Policy.

xxxxx xxxxxx
Appraising Officer Branch Manager

21. Zonal Office Recommendations :


• M/S Sai Pooja Marbles is a proprietary concern and Mr.Vankadri Ganeswara Gupta is
proprietor of the firm
• The borrower proposed to establish Colour Stone cutting and polishing unit at S.No.
S.No.196-c/197/237, Bethamcherla Mandal (land owned by the borrower )
• The borrower is engaged in slab cutting and polishing activity and is well experienced
in the proposed line of activity.
• KVIC Hyderabad vide their Lr.No.DD/KNL/APKVIB/ PMEGP/MMS/Consent/ 2009-
10/SO/KVIC/PMEGP/ Kurnool/927/2009-10 dt.17.10.2009 informed that The Dist.
Task Force Committee (PMEGP) recommended the project for consideration of bank
loan
• Branch mentioned that the project cost is justified depending on the market conditions
and the unit is economically viable and financially feasable.
• Borrower offered House site Plot No. 6 & 7, R.S.No.380/A1, 380/A3, at Kallur at
Bethamcherla ( 288.88 Square yards each ) belongs to him worth Rs.28.80 Lakhs as
Collateral security
• Required raw material and skilled labour are available locally
• Finished products are having good market in AP and Karnataka States.
• Branch submitted CIR reports of borrower and Guarantor and there are no adverse
remarks Branch mentioned that the applicant and her husband are having experience
in the line of activity. The Guarantor is existing customer of the branch.

Compliance with Loan Policy :


As per Projected Balance sheets As per Policy Present Proposal Compliance
(1st Year) Yes or No
Exposure norm applicable to category 48.00 21.50 YES
Current Ratio >1.15 1.76 YES
TOL/TNW <6 1.52 YES
Capital Gearing Ratio 10 N.A. N.A.
Pre sanction Unit Inspection Conducted By Branch on YES

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10.02.2010

Compliance to PMEGP Guidelines:


1.Existing units and also for the 1) Present unit is new one as per Pre sanction unit visit
expansion of units the scheme is not report of the Manager construction works are going on.
eligible.
New units are only eligible.
2. Borrowers contribution should be 2) Borrower’s contribution is 2.40 lacs out of total
minimum 5% Out of total project cost project cost of Rs 23.90 lacs ie., 10%
3.Cost of land should not be included 3) Land Cost not taken in project cost.
in the project cost.
4.Borrowers own contribution shoud 4) In the present proposal borrowers contribution is
not be more than 50% of the unit cost only 10%

We confirm that the proposal conforms to the loan policy. Deviations are mentioned as above.

In view of the above and basing on branch recommendations, we recommend


the following credit facilities to the captioned borrower :

01 Facility Composite Term Loan ( Fresh )


Limit Rs 21.50 Lakhs (Rupees Twenty one Lakhs fifty thousand
only)
[Consisting of Term Loan Rs.17.00 Lakhs & Working capital
component Rs.4.50 Lakhs]
Rate of interest BMPLR+0. 25% TP Presently 12.00+ 0.25 = 12.25% p.a.
Activity Colour Stone Cutting and polishing
Purpose For construction of Factory building, Purchase of Machinery
Margin 25% ( of which, borrower’s stake 5% remaining 20% KVIB
Margin)
Primary Security 1.EMD of Factory site in S.No.196-c/197/237, Kurnool Road
Bethamcherla (Vill) admeasuring 40.00 cents worth Rs.10.00
Lakhs ( RF 216 dt.13.02.2010) belongs to V.Ganeswara Gupta
2.First Charge on Fixed assets like Factory Building,
Hypothecation of Machinery
Rating “B” as per projected balance sheet as on 31.03.2010
Repayment 60 Monthly Installments with an initial gestation period of 3
Months
Interest debited during the holiday period to be paid as and
when it is debited
Interest debited after holiday period to be paid along with
monthly installment

Names of Co-obligants / Guarantors :


S No Name Net worth Basis
1 G.Aswini Kumar 45.00 Property Statement

Collateral Security : :
Name of the owner Details of Security Including Value Date of valuation
the extent & Name of the ( In Lakhs )
Owner
V.Ganeswara Gupta House site Plot No.7, 28.80 13.02.2010
R.S.No.380/A1, 380/A3, at
Kallur 288.88 Sq.yards
House site Plot No.6,
R.S.No.380/A1, 380/A3, at
5
Kallur 288.88 Sq.Yards

Collateral Security Coverage : ( Rs. In Lakhs )


Total value of collateral security available 28.80
Limits ( Composite Term Loan ) 21.50
Collateral security coverage 133.95%

The borrower is expecting Margin Money / Subsidy of Rs.6.00 Lakhs from KVIC to the project as per
KVIB letter dt.17.10.2009. Bank’s exposure net of subsidy will be Rs.15.10 Lakhs only and the same is
also covered by 190% collateral security.

Apart from that, Factory Land worth Rs.10.00 Lakhs (RF 216 dt.13.02.2010) is also available as
Primary security.

Terms and Conditions :

PRE-DISBURSEMENT CONDITIONS:

1. Sanction terms and conditions should be communicated to the


borrower. The limits should be released only after the terms and conditions of the sanction
are accepted/acknowledged by the borrower. Branch to obtain letter from the borrower for
having accepted all terms & conditions in toto
2. Branch to ensure that the guidelines under PMEGP are followed
and ensure that the borrower undertaken necessary EDP training from KVIB before release
of limits
3. Certificate of compliance of sanction terms & conditions should be
submitted to the controlling /sanctioning authority in the approved format
4. Branch shall submit unit inspection report to Zonal Office within 7
days from the date of disbursement of loan.
5. Branch to obtain an undertaking letter relating to Banking
Ombudsman scheme, as per HO circular No 348/11/6 dt 02.11.2005
6. The working capital limits shall be utilized for the purpose
for which it is intended and there shall not be any transfer of funds to and from
among group concerns. Working capital funds shall not be diverted for acquisition
of fixed assets, investments in associated companies/subsidiaries and
investments in capital market.
7. Branch to obtain un conditional legal opinion on collateral securities
offered and satisfy with worth and title of the properties.
8. Copies of RF255,clear & unconditional legal opinion to be sent to
zonal office along with compliance certificate with in 7 days from the date of disbursement
of loan
9. Subsidy is sole responsibility of the borrower. In case the
projected subsidy not received, the borrower has to bring additional margin to
meet the gap. Branch to obtain undertaking letter to this effect.

ENABLING CONDITIONS:
10. Bank reserved it’s right to alter/cancel and/or modify the credit
limits/loans sanctioned and/or terms and conditions stipulated without notice and without
assigning any reason thereof.
11. Our bank reserved the right to rearrange the repayment schedule
and to call upon the company to accelerate the payments, if the company’s financial position
so warrants as per the opinion of the bank.
12. The rate of interest and margins stipulated are subject to changes
from time to time at the sole discretion of the bank/as per the guidelines of Reserve Bank of
India/Government of Indian/IBA etc with out any further notice to the borrower.
13. Branch to obtain letter of undertaking from the borrowing concern
as well as cooblignat/guarantor to the effect that “no consideration by way of commission

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Brokerage, fee or any other form would be paid by the borrower or received by the Co-
obligant /guarantor directly or indirectly for standing as a co-obligant /guarantor
14. Party should produce original invoice of machinery to be purchased.
15. Branch to obtain engineers valuation report for
Machinery purchased along with building valuation(After completion)
INSURANCE:
16. Primary securities are to be insured for full value with bank clause.
OTHER CHARGES:
17. Processing charges/Upfront charges to be collected as applicable.

SECURITY C0NDITIONS:
18. Valuation of properties offered as Collateral securities to be carried
out as per guidelines in H.O. Cir.No.66, Ref 26/14 dt.08.06.2009. Collateral securities are to
be revalued once in two years as per guidelines.
19. Inspection of properties offered as collateral securities to be done
before disbursal and certificate to be kept along with documents as per H.O. Cir.No.020, Ref:
26/04, dt.23.04.2009
20. Branch has to register Memorandum of Title Deeds of the property
offered as collateral security with Registrar / Sub registrar of Assurances as per Cir No 360
Ref No 26/60 dt 06.01.2009 and H.O.Cir.No.324, 11/04 dt.01.01.2010
21. Branch has to entrust obtention of certified copies of title deeds,
encumbrace certificate upto date and search reports to the advocate for all the securities
offered and get legal opinion ( as per HO cir. No. 165 Ref No. 11/03 dated 07.08.2003.
22. Equitable Mortgage by deposit of title deeds of the property offered
as collateral security should be created as per guidelines in force. Legal Opinion, valuation
report are to be obtained and branch has to satisfy about the worth of the security.
COMPLIANCE WITH ALL EXISTING GUIDELINES:
23. Other conditions as per Bank’s guidelines and circulars issued from
time to time.
24. All other terms & conditions as specified in our HO booklet on
“Guidelines of the bank on (a) loan policy & Credit Assessment methods. (b) Credit Risk
management & (c) delegation of powers through Cir. No.118 Ref.26/15 dt.29.06.2002, and
modified from time to time.
POST DISBURSEMENT MONITORING:
25. Unit inspection to be conducted as per HO guidelines.
26. Party has to meet the term loan installments from their own
sources in case of projections are not achieved.
GENERAL TERMS & CONDITIONS:
Sole Banking:
27. The borrower should deal with us exclusively and all other bank
accounts should be closed. Branch to ensure closure of other bank accounts of the
institution before release of enhanced limits.
Terms & Conditions applicable to OCC:
28. Branch shall obtain Stock Statement and review the same as per
the Procedure.
29. Our Banks Name Board must be exhibited in the premises as
financiers
TERMS & CONDITIONS APPLICABLE TO TERM LOAN:
30. Pre payment charges of 2% flat are to be collected in case of pre
closure of the loan as per HO Cir.No. 53 , ref 26/05 dated 09.05.2005
31. Certificate from Chartered Accountant is to be obtained for the
amount spent till date of disbursement, while releasing the instalments.
32. The borrower shall give undertaking that they will meet term loan
instalments from their own sources, in case projections are not achieved in any of the year.
33. An undertaking letter from the borrowers shall be obtained,
undertaking to pay the residual amount, if any, in the loan account on payment of stipulated
equated instalments.
34. Loan shall be released in phases depending on the progress of work.

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35. Term loan should be disbursed directly to
suppliers/contractors. Reimbursement should be made as per HO Cir No.247/26/12
dt. dt.6.10.2004 in case, the party has already spent the amount.
36. Advance payments, if any to be made for the supply of furniture/
fixtures /equipment are to be met out of the margin. No portion of term loan is to be released
for advance payments. The amount of advance to be made is also to be paid only by way of
demand draft/pay order directly to suppliers through our bank account, duly ensuring that
necessary margins are bought in.
37. All Statutory approvals such as pollution control board approval,
inspector of factories, AP Transco, food grains licenses etc. should be in force.
38. Branch to disburse directly to the suppliers after obtaining
quotations, invoices etc. within the limit prescribed in the estimated project, duly
collecting the margins stipulated. Branch to ensure that the cost of machinery is
reasonably quoted as per prevailing Market rates.
39. No consideration by way of commission, brokerage, and fee
or in any other form would be paid by the borrower or received by the
coobligant/guarantor directly or indirectly for standing as a coobligant/guarantor.
(HO Cir.No.022 Ref.No.26/3 dt.21.4.2006)
40. Letter authorizing the bank to submit the information of the
applicant and all guarantors to CIBIL is to be signed
39.Branch ensure to obtain renewed Entrepreneur’s Certificate issued by DIC after due date of
the existing certificate.

Submitted for instructions.

Deputy Manager

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ANNEXURE-A-1
WORKING CAPITAL ASSESSMENT
(FOR LIMITS ABOVE Rs.10 LACS AND UPTO RS. 5O LACS)

A. JUSTIFICATION OF TURNOVER PROJECTED:

PROJ 1 PROJ 2 PROJ 3 PROJ 4 PROJ 5


75.00 85.00 94.00 103.00 113.00

 Installed capacity of the firm is 700000 SFT per year as per DIC certificate dt.22.01.2010
 By assuming 71% of installed capacity , the firm projected sales turnover of Rs.75.00
lakhs for the 1st year by assuming the selling price Rs.15.00 per SFT.
 The firm projected an average increase of 10% of sales every year considering the increase in
selling price and operating capacity
 In view of the above, the projected Turnover is reasonable to achieve and justified

B. POSITION OF NET WORKING CAPITAL PRESENT AND PROJECTED:

PROJ 1 PROJ 2 PROJ 3 PROJ 4 PROJ 5


3.72 7.10 10.90 15.13 19.55

Major variation in NWC shall be explained.

ANNEXURE-B

1. ELIGIBILITY UNDER TURNOVER METHOD: (Rs. in lakhs)

M/S Sri Sai Pooja Marbles, 1st Year 2nd Year 3rd Year 4th Year 5th Year
Bethamcherla
Projected Projected Projected Projected Projected
A. Turnover 75.00 85.00 94.00 103.00 113.00
B. 25% of (A) 18.75 21.25 23.50 25.75 28.25
C. 20 % of ( A) 15.00 17.00 18.80 20.60 22.60
D. Margin Required at 5% of 3.75 4.25 4.70 5.15 5.65
(A)
E. Actual Margin / NWC as 3.72 7.10 10.90 15.13 19.95
per previous ABS

F. Surplus (E-D) 0.00 2.85 6.20 9.98 14.30


G .Defecit (D-E) 0.03 0.00 0.00 0.00 0.00
H. Eligible Maximum Bank 15.00 14.15 12.60 10.62 8.30
Finance
I. Actual Bank Borrowings 4.50 4.50 4.50 4.50 4.50
H.Excess Borrowings ( I - H ) 0.00 0.00 0.00 0.00 0.00

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ANNEXURE – A 2
COMPUTATION OF MAXIMUM PERMISSIBLE BANK FINANCE
Inventory Method (Rs. in lakhs)

M/S Sri Sai Pooja Marbles, 2nd 3rd 4th 5th


1st Year
Bethamcherla Year Year Year Year
Projecte Project Project Project Project
d ed ed ed ed
(A)Position of current assets
Raw materials
- Imports 0.00 0.00 0.00 0.00 0.00
- Domestic 8.00 11.00 14.00 18.00 22.00
(Months consumption) #DIV/0! 1.81 2.32 2.67
Consumable stores 0.00 0.00 0.00 0.00
(months consumption) #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Stock in process 0.00 0.00 0.00 0.00 0.00
(Months cost of prod) 0.00 0.00 0.00 0.00 0.00
Finished goods 0.00 0.00 0.00 0.00 0.00
(Months cost of Sales) 0.00 0.00 0.00 0.00 0.00
Receivables –
Export 0.00 0.00 0.00 0.00 0.00
(months sales)
Domestic 0.00 0.00 1.00 1.50 2.00
(months sales) 0.00 0.00 0.13 0.17 0.21
Other Current Assets 0.62 1.10 1.60 1.63 2.15
Total (A)G 8.62 12.10 16.60 21.13 26.15
(B) Position of Current
Liabilities other than Bank
Borrowings
Creditors for purchase of RM, 0.00 0.00 0.00 0.00 0.00
stores/spares
(months purchases) 0.00 0.00 0.00 0.00 0.00
Adv. from Customers 0.00 0.00 0.00 0.00 0.00
Statutory liabilities 0.00 0.00 0.00 0.00 0.00
Other current liabilities 0.40 0.50 1.20 1.50 1.70
Total (B) 0.40 0.50 1.20 1.50 1.70
(C) Working Capital Gap ( A-B) 8.22 11.60 15.40 19.63 24.45
(D) Minimum stipulated NWC @ 13% 1.12 1.57 2.16 2.75 3.40
(E) Actual/Projected NWC 3.72 7.10 10.90 15.13 19.95
(F) Item C Minus Item D 7.10 10.03 13.24 16.88 21.05
(G) Item C Minus Item E 4.50 4.50 4.50 4.50 4.50
(H) Eligible Credit (Item F or G 4.50 4.50 4.50 4.50 4.50
whichever is lower)
(I) Excess Borrowings representing 0.00 0.00 0.00 0.00 0.00
shortfall in NWC (D-E)

The borrower is eligible for working capital limits of Rs.15.00 lakhs as per Turnover method and
Rs.4.50 Lakhs as per Inventory method as per projected Balance sheet 1st and 2nd years. However,
borrower requested for OCC Limit of Rs.4.50 Lakhs (Working capital Component of CTL)

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ANEXURE – D

ASSESSMENT OF TERM LOAN/DPG REQUIREMENTS

I. Brief particulars of the capital investments proposed:

Civil Works, Edge Cutting Machine 1, High performance Heavy duty bridge machine for cutting colour
stones, Edge Cutting Machine, High speed polishing machines 2, Electrical Motors etc.,

II. Technical aspects of the proposal : (enclose feasibility report)

1-1. Name of the product to be manufactured: Polished Colour stone slabs

1-2. Uses of the product: Buildings, Flooring, Cup Boards, Kitchen platforms, Railway platforms

1-3. Manufacturing process: Cutting of Colour stones to different sizes and polishing

1-4. Capacity for each product : Installed Capacity 700000 SFT per year as per DIC certificate
Borrower projected 70% of utilization in 1st year
1-5. Particulars of collaboration, if any : (names of collaborators and details of
collaboration agents): NIL

1-6. Locational advantages : Availability of raw material, labour and ready market is available as the
town is famous for selling of polished black stone/ Colour Stones.
Town is well connected by road and railways

1-7. Infrastructure facilities required and arrangements made for the same:

Land : Borrower acquired 40 cents land at S.No.196-c/197/237, Kurnool Road,


Bethamcherla Village, and proposed to establish the unit
Panchayat approved to establish the unit vide their approval letter dt.15.12.2009
Building : Work sheds and Concrete bed basements for installation of machinery,
Labour quarters 1449 SFT with an estimation of Rs.7.00 Lakhs

Plant & Machinery : Heavy Duty Bridge Cutting Machine (1), High speed Polishing Machines (2)
Cost Rs.9.87 lakhs as per quotations submitted,
Electrical Motors & Other Equipment Rs.2.03 Lakhs

Power & Fuel : 30 HP Power . Feasibility certificate submitted that the same will be provided

Labour : Skilled and un skilled labour are locally available

Water : Available

1-8. Arrangements made for procurement of raw materials: Raw material is available within a distance of
25 KM from the factory

1-9. Arrangements made for marketing of products: There is a good demand for the Black and Colour stone
slabs in AP and neighboring states and all over India
Selling could be done at factory itself

1-10.Arrangements for effluent disposal/statutory permission on environmental


aspects: Not applicable

1-11.Position regarding other statutory approvals: SSI Registration, Power obtained

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1-12.Time Schedule for implementation:

Activity Scheduled date of completion


Civil Works 28.02.2010
Erection of Machinery 28.02.2010
Trial Runs & Commercial production One month from the date of installation of machinery, ie.,
within 3 Months, the unit will be ready for commercial
production

III. Financial Aspects


3-1.Cost of the project: (Rs.in lacs)
S.No. Item No Name of the Supplier Cost
1 1 MT Heavy 1 M/S Latheefa General 8,75,000.00
Duty Bridge Engineering work,
Machine and Bethamcherla
Piller & Trolies
of 3 Nos.
2 High Speed 2 1,12,000.00
Polising
Machines
3 25 HP Electric Sahara Electricals, 2,03,000.00
Motor (1), 1.5 Bethamcherla
HP Electric
Motor (1) and
other Electric
Equipment
3 Civil Works As per Approved 7,00,000.00
Engineer’s Estimation
4 Working Capital As per Assessment 5,00,000.00
TOTAL
23,90,000.00

3-2.Means of Finance: (Rs.in lacs)


Sources Amount
PROPRIETOR CAPITAL CONTRIBUTION 2,40,000.00
PRAPOSED COMPOISITE TERM LOAN FROM ANDHRA BANK 21,50,000.00
Total 23,90,000.00

Term Loan Eligibility :

S.No. Item No Name of the Supplier Cost


1 1 MT Heavy 1 M/S Latheefa General 8,75,000.00
Duty Bridge Engineering work,
Machine and Bethamcherla
Piller & Trolies
of 3 Nos.
2 High Speed 2 1,12,000.00
Polising
Machines
3 25 HP Electric Sahara Electricals, 2,03,000.00
Motor (1), 1.5 Bethamcherla
HP Electric
Motor (1) and
other Electric
Equipment
3 Civil Works As per Approved 7,00,000.00
Engineer’s Estimation
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4 Working Capital As per Assessment 5,00,000.00
TOTAL
23,90,000.00
Borrower’s Margin ( @ 10% ) 2,40,000.00
Bank Composite Term Loan 21,50,000.00
3-3. Comment on each item of cost and reasonability of projections:
(confirm with reference to quotations etc.)

Land : The borrower aquired 40 cents of land at


S.No.196-C/197/237 Kurnool Road, Bethamcherla
and proposed to Establish the unit
Building : As per approved Engineer’s estimation
Plant & Machinery : Reasonable
Preliminary & Preoperative : Nil
expenses
Others : Nil

3-4. Comment on each item of sources of Finance:

Capital : Borrower meet his margin from own sources like Cash / Deposits

4.Profitability Projections : Projected Operating statement for 5 years enclosed

4-0.Profitability: Projections showing increasing trend

4-1. Comments on:

i) Capacity Utilisation projected: 71% in First year


ii) Achievability of projected Sales: Reasonable to achieve
iii) Reasonability of raw material consumption projected: Reasonable
iv) Reasonability of other items of expenditure projected: Reasonable

a) Stores and spares : --


b) Power and fuel : Reasonable
c) Direct labour : Reasonable
d) Repairs & Maintenance : Reasonable
e) Depreciation : As per norms
f) Administrative and
Selling expenses : Reasonable
g) Interest : As per norms
h) Net profit before tax : Showing positive net profit
i) Taxation : Provided for
j) Net profit after tax : Showing positive net profit after tax

Projected Balance Sheet & Cash Flow Statement : Enclosed

DSCR Calculations: (till the end of the year by which Term loan is proposed to be repaid) (Rs. In lakhs)

Year 1 2 3 4 5 Total
Cover
Profit after Tax 3.78 4.37 5.15 5.89 6.74 25.93
Depreciation 2.84 2.41 2.05 1.74 1.48 10.52
Prel. Expenses written 0 0 0 0 0 0
Interest on Term Loan 2.1 1.7 1.3 0.9 0.5 6.5
0
Total (A) 8.72 8.48 8.5 8.53 8.72 42.95

Service
Term loan Instalment 4.3 4.3 4.3 4.3 4.3 21.5
Interest on TL 2.1 1.7 1.3 0.9 0.5 6.5
0

13
Total (B) 6.4 6 5.6 5.2 4.8 28
DSCR (A-B) 1.36 1.41 1.52 1.64 1.82
Average DSCR 1.53

DSCR is above the minimum accepted level of 1.50

Debt/equity: 1.12

Sensitivity Analysis: Not Applicable

Security Coverage: Rs.28.80 Lakhs collateral security and KVIC Margin Money of Rs.6.00 lakhs

Term Loan Recommended: Rs.21.50 Lacs.

(Composite Term Loan consisting of Term Loan Rs.17.00 lakhs and Working capital Component Rs.4.50 Lakhs)

Credit Rating
Rate of Interest proposed: B , BMPLR + TP presently 12.00 + 0.25 = 12.25%

Proposed repayment: 60 Monthly Installments with initial holyday period of 3 Months

Security: Hypothecation of Plant and Machinery

Guarantors: G.Aswini Kumar Worth Rs.45.00 Lakhs

Terms and Conditions : As mentioned in the process note

14
ANNEXURE - IV

CREDIT RATING MODEL FOR NEW UNITS WITHOUT AUDITED BALANCE SHEET

APPLICABLE FOR Rs.5.00 LACS AND LESS THAN Rs.50.00 LACS

M/S Jaya Slabs, Bethamcherla Ref : Projected Balance sheet as on 31.03.2010

I MANAGEMENT & INDUSTRY RISKS


Column A Tick Column B Tick Column C Tick Column D Tick

Group Reputation Most Reputed x No negative Unsatisfactory


reputed reputation reputation

Managerial Competence Very Good Good x Satisfactory Not good

Personal Guarantee of
Directors/3rd party Available ----- x ---- Not available
guarantee in case of
partnership/proprietary
concern

Integrity Very Good Good x Satisfactory Not


satisfactory

Total Crosses 4 3
5 4 3 0
Multiplying factor
16 9
Marks obtained 5 12 0

Maximum Marks 20 16 12 0

II. COLLATERAL SECURITY COVERAGE Marks Tick

60% & above 5 X


40 to <60% 4
25 to < 40% 3
10 to < 25% 2
5 to <10% 2
<5% 1

15
III FINANCIAL RISK FACTORS
Marks Tick
A. GROUP RISK Allotted

All group units are standard assets, profit making with no adverse 5 X
financial features.
All group units are standard assets with no adverse financial features and most of
them are making profits except those units, which have commenced commercial 4
operations recently.
All group units are standard assets with no adverse financial features. Though one
or more of them have made losses for latest financial year, due to temporary 3
reasons, their long term viability is not in doubt.

All group units are standard assets but one or more them have made losses for
latest financial year resulting in adverse financial position for which the promoters 1
are taking sufficient steps to improve.

All group units are standard assets but one or more of them are making losses for 0
more than one year with/without adverse financial position.

B. TERM LOAN REPAYMENT RISK Marks Allotted Tick


(FOR TERM LOAN RISK ONLY)
< 36 months 5
>=36 & <48 months 4
>=48 & < 60 months 3
>= 60 & <84 months 2 X
>=84 & <120 months 1
>= 120 months 0

C. PROJECTED DSCR Marks Allotted Tick


(FOR TERM LOANS ONLY)
>=1.75 5
>=1.50 <1.75 4 X
>=1.40 <1.50 3
>=1.30 <1.40 2
>=1.20 <1.30 1
<1.20 0

D. PROJECTED DEBT EQUITY RATIO Marks Allotted Tick


< 1.75 5 X
<2 to >=1.75 4
<2.25 to >=2.00 3
<2.50 to >=2.25 2
<3.00 to >=2.50 1
>3.00 0

IV OTHER RISKS
Marks Tick
CONSTITUTION RISK
Allotted
Widely held Company/PSU 5

16
Public Limited Company 4
Private Sector Company 3
Partnership firm 2
Proprietary 1 X

TABULATION OF SCORES
Risk Factor Marks Allotted Marks Scored
I. Management/Industry Risk Factors 20 16
II. Collateral Security 05 5
III. Financial Risk Factors 20 16
IV. Others 05 1
Total 50 38

(F) APPLICABLE RATING


Marks Secured CRA rating Tick Spread(PLR+)
95% & Above (to be decided by HO) A+++ Prime
95% & Above (to be decided by HO) A++ Excellent
90% & above A+ Very Good
80 to 89% A Good
70 to 79% B Satisfactory
less than 70%. C Average

Date : 11.03.2010 Date :

Officer : Recommending Authority :

17