Shri Ambica Proposal SBI

DATE CHART PROPOSAL FOR CREDIT FACILITIES NAME OF THE UNIT BRANCH SEGMENT

Nature of Facilities Fund Based Non Fund Based Total

SHRI AMBICA INTERNATIONAL FOOD COMPANY PVT. LTD. TARAORI SSI (` in crores) Existing* Proposed* Others SBI Total Others SBI Total 35.62 32.80 68.42 32.12 49.30 81.42 (1.50) (3.50) (5.00) (1.50) (3.50) (5.00) 35.62 32.80 68.42 32.12 49.30 81.42 *part in consortium & part on stand alone basis

Centralized Processing Cell (CPC) a. Date of receipt of the proposal at the CPC b. Date on which additional information/gaps were advised to the Branch for recasting the proposal/ providing the information. c. Date of receipt of the amended proposal/ Information at CPC d. Date Date of pu putt ttin ing g up up the the prop propos osal al to CRA CRA Val Valid idat atio ion n Com Commi mitt ttee ee e. Date of validation by CRA Validation Committee e. Date of putting up proposal to CCC-I f. Date of query by CCC-I, if any g. Date of resubmission to CCC-I h. Date of sanction by CCC-I CIS Codes: PARTICULARS 1. SEGMENT SSI

CODE

PARTICULARS 5. FACILITY SG 1 CASH CREDIT TERM LOAN 2. ACTIVITY 6. SUB-FACILITY Mfg. Mfg. Of grain grain produc productt AC 153 530 01 a) STOCK TOCKS S & BOOK (rice) DEBTS b) TERM LOAN c) EPC 3. CONSTITUION Pvt. Ltd. Co. OR 32 7. SANCTIONING AUTHORITY 4. SCHEME- Others FS 1000 CCC-I

15.03.11 15.0 15 .03. 3.11 11 15.03.11

CODE FC 1 FC 3 FA 116 FA 300 FA 120

SA 35

Credit Analyst (CPC)

Team

(Pankaj Sood)

(A. K. Raina)

CPC, A.O. HARYANA

29.01.11 31.01.11

Leader

SHRI AMBICA INTL. FOOD CO. PVT. LTD. TARAORI

(CPC)

1

AGENDA ITEM FOR THE CIRCLE CREDIT COMMITTEE-I S FORMAT: Section A EXECUTIVE SUMMARY CIRCLE/SBU: CHANDIGARH BRANCH: TARAORI COMPANY: SHRI AMBICA INTL. FOOD CO. PVT. LTD. Section Contents 1 Borrower profile a. Name, Address, Manufacturing activity/Locations, Date of incorporation, Banking arrangement etc b. Brief Background (Firm/ Group/ Promoters/ Management including shareholding pattern) c. Brief write up on Industry/Sector and Firm’s standing d. RMD Advisory/qualitative approach/Quantitative approach/Comments e. Indebtedness/Exposure & capital charge

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Pages

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Present Proposal a. Proposal: For sanction/approval/confirmation 7 b. Credit limits (existing and proposed) 8 c. Sharing pattern 8 Performance Details a. Performance and Financial indicators 9 b. Industry exposure 9 c. Movement in TNW 11 d. Synopsis of balance sheet 12 Risk assessment: a. Credit Rating b. Rating by External Agencies 13 c. Risk and mitigating factors 13 d. Warning signals/Major irregularities in Inspection Audit/Credit Audit/Other Reports 14 e. Security 14 f. Changes in Security if any, justification 14 Pricing a. Conduct of account 15 b. Income analysis 15 c. Other Bank’s/FIs pricing 15 d. Proposed pricing 16 Loan Policy: Deviations & Compliance: a. Whether names of promoters, directors, firm, group concern figure in defaulters/willful defaulters list 18 b. Deviation in Loan policy c. Deviation in Take over norms and comments 19 d. Directors of Borrowers firm: status of relation with: Board, Sr. officials of the bank etc 21 e. Compliance with Sec 20 of the Banking Reg Act 21 f. Other Issues 21 a. Future plans & Business Potential including cross selling/retail marketing 23 b. Environmental and sustainability implications 23 c. Earlier terms of Sanction: Compliance status 23 d. Statutory dues /Contingent Liabilities 23 a. Justification for the Proposal & b. Recommendations: 24

CPC, A.O. HARYANA

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SECTION 1 Circle/SBU: Chandigarh Branch: Taraori Borrower’s Profile: a. Name, Address, Manufacturing activity/Locations, Date of incorporation, Banking arrangement etc of Company: Shri Ambica International Food Co. Pvt. Ltd. CEO: Sh. Ishwar Chand Goel and Sh. Subhash Chand Goel Regd. Office: Nadana Road, Taraori, Karnal (Haryana) Mfg facility (Locations): 3949-B, Naya Bazar, New Delhi Segment: SSI Constitution: IRAC Status: Pvt. Ltd. Co. Advances: Standard Asset as on 31.12.10 Investments: NA Industry : Food Processing (Rice) Activity: Rice Millers and Exporters Date of incorporation: 15.11.2006 Banking with us since : 23.10.2008 Banking arrangement: part credit facilities in Consortium (with Canara Bank) Existing Connection: Yes. New unit: If Take over: No If yes, date of sanction of existing No Whether all norms complied limits: 29.09.10 by CCC-II. with: NA b) Brief Background (Firm/ Group/ Promoters/ Management including shareholding pattern):

The unit is engaged in the business of rice milling and exports since 1983 and previously operated as M/s Ambica Rice Mills, a proprietorship firm of Sh. Ishwar Chand Goel. On 15.11.2006, Sh. Goel incorporated Ambica Agrico Exports Pvt. Ltd. alongwith his son Sh. Subash Chand Goel, which took over existing running business/ assets /liabilities and client base of the firm M/s Ambica Rice Mills w.e.f. FY09. Subsequently, the company changed its name to Shri Ambica International Food Company Pvt. Ltd. w.e.f. 01.04.10 because of astrological reasons (approval for name change was accorded by CCC-II on 23.06.10). After taking over of the business of the firm M/s Ambica Rice Mills, the company invested in advancement of technology and set up a completely integrated and imported rice milling unit along with sortex machines supplied by reputed suppliers (M/s Satake International). The project was funded by term loans of Rs. 15.00 crores from Canara Bank in 2008 & 2009. After implementation of the project, the company’s milling capacity expanded to 8 MT per hour and sorting/grading capacity to 6 MT per hour. Subsequently, the company envisaged another project involving further expansion of sorting capacity by 12 MT per hour, and the same was funded by a term loan of Rs. 5.00 crores from our Bank (sanctioned in September 2010). The company’s main customer base is in the Middle Eastern countries with over 90% sales to Saudi Arabia and remaining to other Gulf and European countries. The company’s management is owner-driven, traditionally true for all rice milling units, but manages its affairs efficiently. The following directors are on board of the company:

1. 2.

Name Sh. Ishwar Chand Goel Sh. Subhash Chand Goel

CPC, A.O. HARYANA

Age Qualification 69 Matric 45 Matric

Experience Share-holding 40 years 66.25% 20 years 0.42%


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Remaining 33% shares are held in equal share by M/s Parkland Projects & Infrastructure Pvt. Ltd. and M/s ARM Agro Products Pvt. Ltd. which are associate concerns of the company and have extended corporate guarantee to the Bank. Further, the promoters are in talks with one of their overseas buyers to introduce it as an equity partner with 10% share-holding in the company. It is expected that the investment shall be made before 31.03.11. The organizational set up of the company is considered satisfactory and it has appointed qualified & experienced technical persons to meet its day to day requirements. Present Proposal: The present proposal involves enhancement of working capital limits from the existing level of Rs. 40.00 crores to Rs. 55.00 crores, renewal of stand-by limit at existing level of Rs. 5.00 crores under SBI Exporters’ Gold Card, renewal of forward contract limit of Rs. 15.00 crores (notional indebtedness Rs. 0.30 crore). The working capital facilities are proposed to be in consortium whereby our share shall be marginally raised from 69% to 70%, and the respective term loans with the Bank and Canara Bank will be on stand-alone basis. c) Brief write-up on industry/sector and firm’s standing (domestic / international) in the industry including market share, future growth strategies, comments on recent newsreports, etc. (To mention / dovetail Premarketing Committee Presentation, if applicable)

India remains the second largest rice producer in the world after China. In the world trade of the commodity, volume wise, Thailand, USA and Vietnam account for 25%, 18% and 13% share respectively. India’s share is mere 5%. But, India along with Pakistan enjoys the distinction of producing long grain aromatic variety called Basmati and enjoys a premium in the world market because of characteristic aroma. Major destinations of Indian Basmati as also Non-Basmati (Parmal etc.) are Saudi Arabia, UAE, and other Middle East countries, U.K., Brazil etc. Indian rice trade suffers from handicaps of proper infrastructure like transport, material handling, warehousing storage facility, and at times, port congestion. Delay in shipments has, at times, led to cancellation of orders. The market abroad has been spoilt by unscrupulous traders known as fly-by-night operators who book orders at lower rates and not being able to deliver at the committed price, resort to mixing. Indian product is seen with suspicion and is subject to presort checks like in Saudi Arabia. The Government is taking some tangible steps to curb the activities of such unscrupulous operators. Exporter’s own reputation is what generally counts and repeat orders, non-return of bills, absence of quality disputes, growth in sales are some of the parameters to judge the exporters standing. Rice Production India remains the second largest rice producer in the world after China. In India, rice crop is cultivated in the Eastern region comprising of Orissa, Bihar, West Bengal, Assam, eastern UP, parts of MP and also in large parts of AP. However, basmati variety is concentrated in the northern belt in the districts of Karnal, Ambala and Kurukshetra in Haryana, Gurdaspur, Amritsar and Pathankot in Punjab and Dehradun in Uttrakhand, Saharanpur, Muzaffanagar and Nainital in UP. Haryana and Punjab together contribute about 90% of the Basmati Rice production in India. The variety of Basmati produced in India along with Pakistan enjoys the distinction due to its long grain and aroma. It commands a premium in the world market because of this characteristic aroma. Rice Exports Share of Basmati Rice export from India is about 25% of total export of the commodity. The competition in Basmati is mainly from Pakistan and in other CPC, A.O. HARYANA


4

varieties from Vietnam and Thailand. With the signing of the WTO, the prospects of exports of Indian agriculture products have improved. The Govt. has also identified Basmati Rice export as a thrust area for promotion and has abolished minimum export price on export of Basmati Rice, thereby providing flexibility to Rice exporters in pricing. The industry is presently passing through a phase when dependence on Govt Policy is being reduced. Export prospects are good. The unit is manufacturing Par Boiled rice, which has good export market in Gulf countries. During the Year ended 31.03.09 due to increasing price of food items, government has imposed ban on export of non basmati rice, levied export duty of $180/MT and fixed minimum export price ranging from $1000 to $1200/- to improve availability of rice in Indian market. Later with easing out of the food position and rice exporters pressing demand to relax export of rice, ban on PUSA 1121 was lifted and export duty was waived. All these steps improved the rice export market and export of rice picked up during the previous year. India’s Basmati exports this year (FY10) are likely to hit a record 3 million tonnes despite subsidy withdrawal from Saudi Arabia, setbacks to exports in Iran and the Dubai financial crisis. Exports up to December 2009 stood at 2.3 million tonnes and could easily go up substantially, industry sources said, although the price of the top quality rice may have dropped in the export markets compared to last year. (Source: The Economic Times, 26th January 2010) Basmati rice exports from Indian have been rising steadily in the last few years, largely after government classified PUSA 1121 variety into the basmati category. The demand has come largely from Middle East countries, with Iran contributing almost 50% to the demand. The Agricultural and Processed Food Products Export Development Authority (Apeda) analysis has pegged total basmati exports at 2.3 million tonne in 2009-10. According to the latest data compiled by Apeda, exports of the premium aromatic rice has increased by an impressive 44% to 2.3 million tonne in comparison to 1.6 million tonne reported during 2008-09. In value terms, export of basmati rice has crossed Rs 12,000 crores last fiscal against Rs 9,476 crore achieved during 2008-09. (Source: The Financial Express, 22th June 2010)

CPC, A.O. HARYANA


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SECTION 2 PRESENT PROPOSAL: A) Sanction for i) Renewal of FBWC limits with enhancement from Rs. 22.50 crores to Rs. 38.50 crores ii) Renewal of Stand-by Limit with enhancement from Rs. 5.00 crores to Rs. 5.50 crores, under SBI Exporters’ Gold Card iii) Forward Contract Limit of Rs. 0.30 crore (being the conversion factor of 2% of forward contract limit of Rs. 15.00 crores) Approval i) Interchangeability to the extent of 50% or Rs. 5.25 crores from CC Hyp for to EPC. ii) Interchangeability between Demand Loan against Warehouse Receipts and CC (Hyp.) limit. iii) Continuation of waiver of ECGC cover on pre-shipment (IPCG) and post-shipment (IPSG) limits (only for medium-risk and above countries, and buyers with satisfactory D&B reports) (Post-shipment waiver not approved). iv) Continuation of waiver of insurance cover for stocks against risk of theft and burglary, and for stocks lying outside of 150 ft. of mill area against risk of fire v) Swing of FBWC limits into FCNB-DL (12 months tenor) at Card rate as per borrower’s rating of SB-8 (applicable pricing L+6.50%), subject to funds angle clearance vi) Waiver of hedging requirements on FCNB loans vii) Continuation of competitive pricing of CC limit at 4.75% above Base Rate (BR), present effective rate 13.00% p.a. with monthly rests against applicable pricing to a unit rated SB-8 i.e. 6.75% above BR viii) 25% concession in Processing Charges, i.e. recovery of Rs. 0.133 crore against applicable charges of Rs. 0.1772 crore ix) 25% concession in charges on issuance of FLC/Letter of Comfort for Buyer’s Credit, i.e. recovery of Rs. 0.075 crore against applicable charges on Rs. 0.10 crore

(` in crores)

b) Credit Limits (Existing and proposed): LIMITS Fund based C.C. (Hyp) C.C. (BD) EPC FBP (Non LC) Stand-by limit DL WHR$ Total FBWC Term Loan-I Term Loan-II Term Loan-III For. Contract# TOTAL FBL Non Fund FLC (one-time) FLC (one time) TOTAL NFB Total FB+NFB DL-WHR@

SBI

EXISTING % CB* CONS

9.10 91 0.90 10.00 (3.50) 88 (0.50) (4.00) 13.40 54 11.60 25.00 (6.50) 65 (3.50) (10.00) 5.00 100 -5.00 ----27.50 69 12.50 40.00 --7.68 ---5.44 -5.00 100 --0.30 100 --32.80 100 25.62 40.00 -----100 (1.50) -(3.50) 100 --(3.50) --(1.50) 32.80 25.62 40.00 IDBI --10.00 --

CPC, A.O. HARYANA

SBI

PROPOSED % CB* CONS

10.50 70 4.50 (3.50) 70 (1.50) 28.00 70 12.00 (10.50) 70 (4.50) 5.50 70 2.50 (10.50) 70 (4.50) 44.00 70 19.00 --7.68 --5.44 5.00 100 -0.30 100 -49.30 100 32.12 -----(1.50) (3.50) 100 -(3.50) -(1.50) 49.30 32.12 --

--

--

15.00 (5.00) 40.00 (15.00) 8.00 (15.00) 63.00 ----63.00 ----63.00 --

CHANGE SBI CONS

+1.40 -+14.60 (+4.00) +0.50 (+10.50) +16.50 ----+16.50 ----+16.50 IDBI -10.00


+5.00 (+1.00) +15.00 (+5.00) +3.00 (+15.00) +23.00 ----+23.00 ----+23.00 --

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*CB: Canara Bank CC (BD) limit is within CC Hyp. FBP limit is within EPC limit. Besides, FBP (Non-LC) limit as above, Canara Bank has also sanctioned an FBP (LC) limit of Rs. 4.50 crores. #Forward Contract indebtedness of Rs. 0.30 crore being the conversion factor of 2% on the Forward Contract Limit of Rs. 15.00 crores. $Interchangeability between CC Hyp. and DL-WHR is proposed. @The company has availed a demand loan against warehouse receipts of Rs. 10.00 crores in December 2010 from IDBI Bank Ltd. The same shall be liquidated upon availment of the enhanced facilities proposed in the present proposal. c) SHARING PATTERN Financial Arrangement: Consortium FB SBI 49.30 Ass.Bks. -SBI Group 49.30 Other Banks 32.12 Total 81.42

CPC, A.O. HARYANA

` in crores

NFB (3.50) -(3.50) (1.50) (5.00)

Total 49.30 -49.30 32.12 81.42


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SECTION 3 PERFORMANCE DETAILS a. PERFORMANCE AND FINANCIAL INDICATORS: ` in crores

31STMARCHMARCHMARCHMARCHMARCH 2008 2009 2010 2011 2012 FINANCIAL RATIOS AUD. AUD. AUD. ESTI. PROJ. Domestic sales 10.41 11.66 51.62 95.00 80.00 (23.12) (60.00) Export sales 20.00 61.47 60.70 65.00 120.00 (92.00)(100.00) Oth. Income/Export Incentive -0.07 0.10 --1Net sales 30.41 73.20 112.42 160.00 200.00 (115.12) (160.00) 2Operating profit 0.16 1.07 2.38 4.91 6.51 (1.69) (4.81) 3Profit before tax 0.16 1.12 2.48 5.16 6.76 (1.69) (5.06) 4PBT/Net sales 0.53% 1.53% 2.21% 3.23% 3.38% (1.47%) (3.16%) 5Profit after tax 0.11 0.81 2.07 4.23 5.48 (1.18) (4.13) 6Cash accruals 0.11 0.88 2.57 5.23 6.48 (2.18) (5.13) 7PBDIT 1.00 3.22 6.38 11.86 13.48 (6.87) (11.76) 8Paid up capital 0.16 0.24 0.29 1.80 1.80 (0.29) (1.00) 9Tangible net worth 4.31 10.14 17.22 28.45 33.93 (16.07) (26.15) 10Adjusted TNW 4.31 10.14 17.22 28.45 33.93 (16.07) (26.15) 11TOL/TNW 4.03 2.95 2.71 2.63 2.53 (2.82) (2.27) 12TOL/Adjusted TNW 4.03 2.95 2.71 2.63 2.53 (2.82) (2.27) 13Current ratio 1.07 1.18 1.15 1.33 1.38 (1.14) (1.29) 14NWC 1.16 4.29 5.50 18.63 25.47 (4.86) (12.93) The figures as on March 31, 2008 pertain to the erstwhile firm M/s Ambica Rice Mills. The figures as on March 31, 2009 & 2010 pertain to the company Ambica Agrico Exports Pvt. Ltd. (renamed Shri Ambica Intl. Food Co. Pvt. Ltd. in April 2010). The figures in parenthesis in March 2010 column represent estimates taken by Canara Bank at previous sanction in August 2009. The figures in parenthesis in March 2011 column represent estimates taken by us at last sanction in September 2010. b. Industry Exposure as on 30.06.10 (` in crores) FBL 15,428.71 QTRLY results as on 31.12.09 31.12.10 NFBL 1,653.96 Sales (combined) 57.27 96.08 Total 17,082.67 (Exports) (53.21) (35.97) Exposure of the Company as per PAT NA NA prudential CPC, A.O. HARYANA SHRI AMBICA INTL. FOODexposure CO. PVT.norms LTD. TARAORI 8 To Industry exposure 0.31% To total advances (Domestic) 0.009% ` in crores

c) Movement in TNW: As on 31/03

Opening TNW Add PAT Increase in capital Share Application Money Share Premium Deferred Tax Liabilities Add / subtract change in intangible assets Adjust prior year expenses Less Dividend/withdrawal Closing TNW

2008 Aud 0.16 0.10 -1.19 2.85 0.03 ---4.33

2009 Aud 4.33 0.77 0.08 -1.00 5.92 0.04 ---10.14

Previous Year 2009

Rs. in crores Last Year 2010

0.24 9.83 18.97 7.11 0.34 0.07 -36.56

0.29 15.50 32.96 11.75 0.33 1.43 -62.26

4.22 0.45 3.77 8.62 0.09 14.60 11.19 1.15

20.81 0.95 19.86

-0.64 (3.29) (0.21) 24.17

-0.56 (1.53) (0.17) 42.40

-36.56

-62.26

d) Synopsis of Balance Sheet: Particulars Source of Funds Share capital Reserves & surplus Secured loans : Short term : Long term Unsecured loans Deferred tax liability Other liabilities Total Uses of Funds Fixed assets (Gross Block) Less depreciation Net block Capital work in progress Other Non-Current Assets Inventories Sundry debtors Cash & Bank balances Loans & advances to subsidiaries & group companies Loans & advances to others (Less current liabilities) (Less provisions) Net current assets Misc. expenditure (to the extent not written off or adjusted Total

CPC, A.O. HARYANA

2010 Aud 10.14 0.71 0.05 0.01 4.95 1.36 ---17.22

Rs. in crores 2011 2012 Esti Proj 17.22 28.45 3.76 4.62 0.21 --0.20 -6.99 -0.47 0.86 ------28.45 33.93

1.10 25.78 15.07 1.59


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SECTION 5 PRICING a) CONDUCT OF ACCOUNT: No. of Average period for regularization occasions Irregularity 5 i) 02.03.10 to 27.03.10: 26 days in WC: ii) 14.04.10 to 31.05.10: 47 days

iii) 03.06.10 to 30.06.10: 27 days iv) 01.12.10 to 02.02.11: 62 days

Comments: --

v) 03.02.11 till date Overdrawings were permitted by the branch/Circle management to enable execution of fresh export orders on account of delayed realization of export receivables. NA --

Irregularity Nil in TL: Comments: --Utilization of limits: FB Limits Average 100% utilization % NFB Average NA Limits utilization %

--

(Rs. in crores)

b) INCOME ANALYSIS:

From WC Int.

Total

(FY11) Irregularity report last submitted on i) Irregularity since confirmed. ii) Irregularity since confirmed. iii) Irregularity since confirmed. iv) Irregularity report yet to be submitted.

Estimated (FY10) 0.60 ----0.04 0.20 0.84

Actual (FY10) 0.26 ----0.02 0.11 0.39

Interest & Other Charges as per Balance Sheet dated 31.03.10 Interest: Rs. 2.98 crores Charges: Rs. 0.41 crore

SBI Estimates (FY11) 1.60 0.10 ---0.10 0.18 1.80

Projections (FY12) 3.95 0.40 ---0.12 0.18 4.65

SBI Share Amount Percentage Rs. 0.37 crore Rs. 0.04 crore

12.42% 10%

c. Other Bank’s/FIs pricing: The unit’s existing CC credit limits with Canara Bank is priced at 13.50% p.a. (Base Rate + 4%, Base Rate being 9.50%).

CPC, A.O. HARYANA


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d) PROPOSED PRICING: Existing (31.03.2010)* CRA PRICING CRA Cash SB-8 (62) 2.75% above BR, minimum SB-8 (62) Credit FR-9 (39) floor rate being 10.25% p.a., FR-9 (40) present effective rate being 11.00% (for a period of one year) Term SB-8 (62) 3.25% above BR, minimum SB-8 (62) Loan FR-9 (40) floor rate being 10.75% p.a., FR-9 (42) III present effective rate being 11.50% (for a period of one year) *based on audited financials. For export finance as per Bank’s/RBI’s extant instructions.

CPC, A.O. HARYANA

Proposed (31.03.2010)* PRICING 4.75% above Base Rate (BR), present effective rate being 13.00% p.a.

No Change. (Existing pricing to continue for 1 one year from approval and shall be reset thereafter).


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SECTION C

CIRCLE BRANCH COMPANY

CHANDIGARH TARAORI SHRI AMBICA INTL. FOOD CO. PVT. LTD.

Assessment of WC facilities: a.

Inventory & receivable levels: (Months/Days)

1 R.M. (a) Imported ----- Amount Months' consumption (b) Indigenous-- Amount Months' consumption 2 Finished goods Amount Months' cost of sales 3 Receivables (a) Domestic Amount Months' domestic sales (b) Export Amount Months' export sales 5 Creditors Amount Months' purchase

31.03.0 8 (Actual)

31.03.09 (Actual)

31.03.10 (Actual)

--3.02 (8.09)

--5.29 (1.02)

--16.43 (2.00)

7.71 (13.59)

9.31 (1.82)

0.66 (4.21) 5.80 (12.17) 1.35 (3.62)

31.03.11 (Estimated at last sanction) ---

31.03.11 31.03.12 (Estimated) (Estimated)

23.70 (2.00)

--34.00 (2.75)

--41.30 (2.75)

9.35 (1.11)

12.00 (1.00)

18.00 (1.50)

22.65 (1.50)

2.26 (2.33) 8.93 (1.74)

7.54 (1.75) 7.53 (1.49)

7.48 (1.50) 12.50 (1.50)

7.50 (1.50) 12.50 (1.50)

10.00 (1.50) 15.00 (1.50)

2.09 (0.39)

0.23 (0.03)

6.30 (0.50)

6.90 (0.50)

7.90 (0.50)

b) Assessed Bank Finance (ABF): 31ST MARCH MARCH MARCH MARCH MARCH 2008 2009 2010 2011 2012 ASSESSED BANK FINANCE AUD. AUD. AUD. ESTI. PROJ. 1 Total current assets 18.01 27.58 43.00 75.57 93.11 2 Other current liabilities 2.36 4.32 4.54 11.94 12.64 3 Working capital gap 15.65 23.26 38.46 63.63 80.47 4 Net working capital(actual/proj.) 1.06 4.29 5.50 18.63 25.47 5 Assessed Bank Finance 14.59 18.97 32.96 45.00 55.00 6 NWC to Total current assets 5.89% 15.55% 12.79% 24.65% 27.35% 7 Bank Finance to Total C.A. 81.01% 68.78% 76.65% 59.55% 59.07% 8 Sundry creditors to Total C.A. 7.50% 7.58% 0.53% 9.13% 8.48% 9 Other CL to Total C.A. 5.60% 8.08% 10.03% 6.67% 5.10% 1 0 Inventories to Net sales(Days) 511 73 84 119 117 1 1 Receiv. to Gross sales(Days) 310 56 49 46 46 1 2 S.Creditors to Purchases(Days) 170 12 1 15 15 c) 1. 2. 3.

Assessment as per Nayak Committee (for illustrative purposes): Estimated turnover of the firm (FY12) Rs. 200.00 crores Working Capital Requirement@ 25% of estimated turnover Rs. 50.00 crores Borrower’s contribution to working capital@ 20% of Rs. 10.00 crores working capital requirement 4. Estimated NWC as on 31.03.11 Rs. 18.63 crores 5. Assessed Bank Finance (lower of 2-3 and 2-4) Rs. 31.37 crores

CPC, A.O. HARYANA


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d) Assessment of Individual Limits (FY12):

1 2 3 4 5 6

Assessment of Cash Credit (hyp.) Limit Tot. Value Raw material – Imp. -Raw material – Indig. 41.30 Stocks-in-process -Finished Goods 22.65 Consumable spares -- Imp. -Consumable spares -- Ind. -SUB-TOTAL 63.95

Margin % -25.00% 25.00% 25.00% ---

Amount in Crores Margin amt. Net value --10.33 30.97 --5.66 16.99 ----15.99 47.96

Assessment of Cash Credit (book debts) Limit Tot. Value Margin % 1 Receivables -- Domestic 10.00 40.00% SUB-TOTAL 10.00

Margin amt. Net value 4.00 6.00 4.00 6.00

Assessment of Export Bills Purchase Limit Tot. Value Margin % 1 Receivables -- Export 15.00 -SUB-TOTAL 15.00

Amount ---

TOTAL

88.95

Net value 15.00 15.00

19.99

68.96

Against Permissible Bank finance of Rs. 68.96 crores, the following individual limits have been proposed in consortium subject to availability of Drawing Power: Rs. in crores Sr. No. Nature of limit Total i) Cash Credit (Hyp.) 15.00 ii) Cash Credit (BD) within CC Hyp. (5.00) iii) EPC 40.00 iv) FBP (Non LC) within EPC (15.00) v) DL-WHR within CC Hyp. (15.00) TOTAL 55.00 EPC limits under Exporter Gold Card Scheme (Rs. 40.00 crores): Standby limit under Exporters’ Gold Card Scheme: Rs. 8.00 crores: FBP (Non-LC) limit of Rs. 15.00 crores (within EPC limit):

CPC, A.O. HARYANA


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SECTION D CIRCLE BRANCH FIRM

CHANDIGARH TARAORI SHRI AMBICA INTL. FOOD CO. PVT. LTD.

TERMS & CONDITIONS Security:

(i) PRIMARY Working Capital

Nature 1st pari-passu charge (with other banks of the consortium) by way of hypothecation of entire current assets of the company including raw material, stocks-in-process and finished goods lying at the premises of the company and lying anywhere else represented by documents of title to goods or by any other means and finished goods in transit represented by documents of title to goods or by any other means and book debts/receivables etc. Term Loan i) 1st exclusive charge on fixed assets purchased out of the proposed term loan-III (to the extent of amount of the term loan as on 31.03.11 i.e. `5.00 crores), and ii) 1st pari-passu charge (with other banks of the consortium) by way of equitable mortgage of factory land and building with estimated WDV of `7.42 crores as on 31.03.11) with the following details: Factory land and building measuring 53 Kanals 14 marlas, comprising three title deeds: i) 18 K-17 M comprised in khewat no. 12/9 min., khatouni no. 17 min. rect. no. 13, kh. no. 1 (8-0), rect. no. 14, kh. no. 5 (2-18), 17 (10), 14 (6-19), ii) 10 K-04 M comprised in khewat no. 9 min., kahtouni no. 14 min., rect. no. 9, kh. no. 9 min. (2-4), 10 (8-0), and iii) 24 K-13 M comprised in khewat no. 9 min., khatouni no. 14 min., rect. no. 13, kh. no. 11 (7-18), 20/2 (0-14), 14/6 (6-14), 15 (8-0), 16/1 (1-7) situated at Rakba village Sekhanpura, Nadana Road, Taraori (Not SARFAESI compliant) The above property is held in name of M/s Ambica Rice Mills (erstwhile firm of the promoters)^ and has realizable value of `12.60 crores vide valuation report dated 18.07.10. ^Formalities regarding change of title in favour of the company are under-way and are likely to be completed by 31.03.11. (ii) COLLATERAL : 1 pari-passu charge (with other banks of the consortium) on the following properties: ` in crores Description Title holder Real. Date of Value valuation Property mortgaged with Canara Bank: 1. Equitable mortgage of commercial shop M/s Ishwar Chand 0.41 20.07.10 on plot area 149.33 sq. yards (14’ by 96’) Goel & Co., prop. (0.41) (18.07.10) covered area 1344 sq. ft. located at Grain Sh. Ishwar Chand Market, Taraori, Teh. Nilokheri (vide Regd. Goel S/o Sh. Sita Sale Deed no. 189/1 dated 24.05.82. Ram 2. Equitable mortgage of commercial shop Smt. Darshana 0.54 20.07.10 no. 40 (single storey) measuring 189 sq. Devi W/o Sh. (0.90) (15.07.10) yards (20’ by 85’) covered area 1344 sq. ft. Ishwar Chand located at New Grain Market, Taraori, Teh. Goel Nilokheri (vide Conv. Sale Deed no. 640/1 st

CPC, A.O. HARYANA


14

dated 06.08.07). 3. Equitable mortgage of agricultural land Sh. Ishwar Chand measuring 4K-16M comprised in khewat Goel S/o Sh. Sita no. 16 min. khatouni no. 21, rect. no. 13, kh. Ram no. 9/1 (4-16), situated at village Sekhanpur, Teh. Nilokheri (Not SARFAESI compliant) 4. Equitable mortgage of residential-cum- Smt. Darshana commercial plot of land measuring 14 marla Devi W/o Sh. (423.44 sq. yards) comprising 2 title deeds: Ishwar Chand i) 6 marla (181.44 sq. yards or 1633 sq. ft.) Goel situated at ward no. 9, kasba Taraori, Teh. Nilokheri, vide regd. sale deed no. 657/1 dated 10.07.90 ii) 8 marla (242 sq. yards) comprised in khewat no. 16, khatouni no. 27, rect. no. 90, kh. no. 21/1/1 & 2/2 situated at Taraori, The. Nilokheri, vide regd. gift deed no. 1283/1 dated 24.11.06 (While title deed (i) is already mortgaged with Canara Bank, title deed (ii) has been offered as additional collateral security. Since the land is contiguous, valuation has been carried out as one). SUB-TOTAL Collateral Security mortgaged with the Bank: 5. Equitable mortgage of residential plot of Smt. Darshana land measuring 5 marla comprised in Devi W/o Sh. khewat no. 109 min., khatouni no. 123 min., Ishwar Chand rect. no. 89. kh. no. 25/2/1 min (0-5) Goel situated at Taraori, Teh. Nilokheri 6. Equitable mortgage of commercial shop Sh. Parveen on plot area 1 marla (or 30 sq. yards) as Kumar S/o Sh. 1/37th share of 1K-17M comprised in Ishwar Chand khewat no. 321, khatouni no. 504 min., rect. Goel no. 126, kh. no. 3 min. (1-17), situated in village Padhana, Teh.. Nilokheri. (on Nilokheri – Karnal G.T. Road near Hafed Godowns). 7. Equitable mortgage of residential plot of Sh. Ishwar Chand land measuring 15 marla comprised in Goel S/o Sh. Sita khewat no. 152, khatouni no. 172, rect. no. Ram 89, kh. no. 25/2/1/2/2 (0-15) situated at Taraori, Teh. Nilokheri SUB-TOTAL Additional Collateral Security 8. Equitable mortgage of residential house Sh. Ishwar Chand built on plots with following details: Goel S/o Sh. Sita i) measuring 6 marla comprised in khewat Ram no. 8 min., khasra no. 21//2/1 min, Sonkara Road, Taraori, Teh. Nilokheri ii) measuring 4 kanal – 14 marla comprised in khewat no. 2 min. & 61, khatouni no. 2 min. & 77 min., khasra no. 90-89//21/1 (218), 25/2 (1-16), Sonkara Road, Taraori. Teh. Nilokheri CPC, A.O. HARYANA

0.46 (0.46)

20.07.10 (18.07.10)

0.90 (1.81)

20.07.10 (18.07.10)

2.31

0.26 (0.26)

20.07.10 (18.07.10)

0.15 (0.15)

20.07.10 (18.07.10)

0.77 (0.77)

20.07.10 (18.07.10)

1.18

1.90

20.12.10


15

GRAND TOTAL COLLATERAL COVERAGE 1st pari-passu charge (with other banks of the consortium) by way extension of charge on factory land and building 2nd charge on fixed assets (present and future) created out of other bank’s term loans, excluding value of land & building TOTAL SECURITY TOTAL SECURITY COVERAGE

5.39 8.55% 12.60

4.21*

120.07.10 (18.07.10) WDV esti. as on 31.03.11

22.20 27%

*Est. WDV as on 31.03.11 of FA (excluding land and building): `19.63 crores Less 1st charge on value of assets created by term loan-III: ` 5.00 crores st Less value of assets on which Canara Bank has 1 charge (assets created out of it’s term loans): `10.42 crores Residual value of fixed assets: ` 4.21 crores nd (Although 2 charge will be created on entire fixed assets created out of other bank’s term loans, only residual value has been reckoned for the purpose of arriving at security coverage.) FBP (LC) limit of Rs. 4.50 crores sanctioned by Canara Bank on stand alone basis not reckoned in indebtedness for the purpose of arriving at security coverage. Valuation reports have been obtained from Er. Ved Parkash Gupta, Ambala City, approved valuer on Bank’s panel. Realizable values have been reckoned at the level considered reasonable by the branch vide certificate dated 20.07.10, while value in parentheses mentioned below the same are those arrived at by the valuer. Lower of the two are being reckoned by us for the purpose of arriving at collateral coverage. TIRs dated 15.07.10 in respect of all above properties have been obtained from Sh. S. K. Malhotra, Distt. Courts, Karnal, Advocate on Bank’s panel. The branch has confirmed that the properties are SARFAESI compliant (except in case on properties mentioned at Sr. No. 1 & 4), have been physically verified by branch officials and valuations thereof have also been verified from independent sources and found to be in order. Properties mentioned at Sr. nos. 1 to 4 continue to be mortgaged with Canara Bank, although our Bank has stepped-in as Leader of the consortium. Although the Branch is following up with Canara Bank for early release of the property, till such time the same is mortgaged with us, the Branch shall be advised to obtain a Letter of Comfort from Canara Bank. C) Directors’ Personal/Third Party Guarantees: (` in crores) S.No. Name of the guarantors Net means as on 18.01.11 1. Ishwar Chand Goel 0.20 2. Subhash Chand Goel 0.15 3. Parveen Kumar Goel 0.24 4. Smt. Darshana Devi 0.25 Total 0.84 As per opinion reports dated 05.03.11 compiled by Credit Analyst. Net Means does not include value of properties owned by the directors/guarantors and mortgaged to the Bank, and value of the directors’ investments in associate/family concerns, if any. CPC, A.O. HARYANA


16

i)

ii)

Corporate Guarantees of associate concerns: Parkland Projects & Infrastructure Pvt. Ltd. as on

ARM Agro Products Pvt. Ltd.

TNW `3.87 crore

31.03.10 TNW ` 3.42 crore as on 31.03.10

D) ECGC COVER: (Post-shipment waiver not approved) The company already enjoys waiver of ECGC cover on pre and post shipment limits being availed from Canara Bank as well as from our Bank. It has requested for continuation of the same.

It is proposed that waiver of ECGC cover on pre-shipment and post shipment limits be approved, subject to: i) Satisfactory credit report on overseas buyers to be obtained from Dun & Bradstreet, which should be updated every 12 months, and The country of shipment/repatriation should not be a listed country ii) according to ECGC and should enjoy Medium Risk and above status assigned by the Bank (FD, Kolkata). E) MARGINS: (FOR EACH FACILITY AS APPLICABLE) Existing Proposed Cash Credit limit: RM 25% 25% SIP --FG 25% 25% Receivables domestic (cover period – 90 days) 40% 40% Receivables - Export Nil Nil Term Loan-III 37.50% -F) RATE OF INTEREST: Existing (31.03.2010)* CRA PRICING CRA Cash SB-8 (62) 2.75% above BR, minimum SB-8 (62) Credit FR-9 (39) floor rate being 10.25% p.a., FR-9 (40) present effective rate being 11.00% (for a period of one year) Term SB-8 (62) 3.25% above BR, minimum SB-8 (62) Loan FR-9 (40) floor rate being 10.75% p.a., FR-9 (42) III present effective rate being 11.50% (for a period of one year) *based on audited financials. For export finance as per Bank’s/RBI’s extant instructions. G. 1. 2. . 3.

Proposed (31.03.2010)* PRICING 4.75% above Base Rate (BR), present effective rate being 13.00% p.a.

No Change. (Existing pricing to continue for 1 one year from approval).

OTHER TERMS & CONDITIONS: Documents As per documents applicable to SSI advances Period of sanction WC: 12 months from the date of sanction. Validity of sanction

CPC, A.O. HARYANA

WC : 3 months from the date of sanction TL : 1 year from the date of sanction (in view of company’s request to arrange Buyer’s Credit) Improvement in pricing and concession in service


17

4. 3. 5. 4. 6. 6.

Basis of valuation Cover period for book debts Repayment

charges: 1 month from the date of sanction Cost price, controlled price, invoice price or market price whichever is lower. 90 days.

WC: Repayable on demand. TL-III: As per original repayment schedule (repayable in 19 quarterly instalments (first 11 quarterly intstalments of Rs. 0.20 crore each and next 8 quarterly instalments of Rs. 0.35 crore each) commencing from 30th September 2011. Last instalment payable on 31st March 2016). Interest will be recoverable as and when applied. 7. Inspections Once in a month at irregular intervals by field 8. officer of Taraori branch and once in a quarter by CM/BM. 8. Insurance Current/fixed assets including Building, Machinery, Miscellaneous fixed assets, other movable assets etc. will be insured against the risks of flood, fire, theft, earthquake, SRCC, other natural calamities and transit risk etc. jointly in the name of the bank and the company at the latter’s cost and policy to be retained by the bank except for waiver of insurance as stipulated in the proposal. Insurance to be got done as per Bank’s tie up arrangement, through New India Assurance Co. using the Corporate Agency Code No 900042. 9. Service, Processing To be recovered as per the Bank’s extant 10 Charges/ Commission/ instructions or as proposed in the present proposal, Other Charges subject to approval by the competent authority. 10 Prepayment charges 2% of pre-paid amount of Term Loan facilities, and . as per Bank’s instructions from time to time.

CPC, A.O. HARYANA


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Shri Ambica Proposal SBI

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