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Existing Connection : Yes/No New unit : YES/ No If Take over, whether all
If yes, date of last norms complied with :
sanction/renewal: NA (Yes/No) N.A
• Mr. Shiv Nath Prasad Gupta, S/o Sri Ragir Prasad Gupta, resident of Near Bharat Scout
& Guide, Ward No.13, Sikanderpur, is well experienced and have good job knowledge of
the activity.
• He is belonging from business community having genetic characteristics of business.
• He has an experience of more than 12 years.
• He had started his first Mfg unit of PVC pipe in 1999 in the name & style of M/s Krishna
Plastic at Bairiya Chowk, Muzaffarpur. The business is running satisfactorily and the
promoter has earned goodwill. The following table illustrates the working of the firm
during last three years of its existence. The table are:
(Rs. In lac)
Year 2007-08 2008-09 2009-10
Sale
Profit after Tax
Net Profit/ Net Sales (%)
TOL
TNW
TOL/TNW
Current Ratio
• The promoter after improvement in industrial environment of State, particularly, law &
order situation, has decided to shift his unit to Industrial Area, Bela, Muzaffarpur and
hence applied to the authority for allotment of land but new name, “M/s USHA POLY
• The unit, M/s Usha Poly Plast, has ISO 9001:2008 quality certificate no – NS - EN ISO
9001:2008 from Norsk Akkreditering of Norway (An international organization for
quality certification).
• The unit has VAT no-10312771058 /CST NO-10312772149 ; Weight & measurement
license no-505/2010 dt-25.01.10; Challan for Rs4163/- dt-06.03.2010 for labor &
employment license fee.
• The promoter is presently manufacturing HDPEE Roll Pipe, PVC Section Pipe, PVC
Garden Pipe and proposed to manufacture PVC Rigid Pipe. He has assessed the
investment in manufacturing facility for proposed activity, which is large enough. He is
unable to meet by himself and hence requested us to sanction a term loan of
Rs.49.00lac and working capital limit of Rs.40.00lac.
With the burgeoning economic growth, providing adequate infrastructure facilities to a populous
country like India is very important. Pipelines used in transportation of oil, gas and water are
crucial in developing a nation’s infrastructure. Transportation through pipes is cheaper and
faster as compared to traditional modes of transport like road and rail. Pipes also have a long
useful life of approximately 25-30 years for Steel pipes, 25 years for PVC pipes and 70-75 years
for Cement pipes.
The Indian Pipe Industry is among the top three manufacturing hubs after Japan and Europe.
However, the penetration level of pipelines in oil and gas transportation is low at 32% in India as
compared to 59% in USA and 79% globally. The pipeline network of India for oil and gas
transport stood at 13,517 kms in April 2006. Sanitation levels are also lower at 33% in India
compared to 91% in Srilanka and 100% in France. Of 140 mn hectares of cultivable land, only
40% the land is irrigated. The low penetration levels represent the huge scope for growth for the
pipe industry.
The positive trend in the Indian pipe industry is to be continue in the next 3-5 years on the back
of high oil and gas discoveries worldwide, increased efforts by GoI on infrastructure
development for laying pipelines for oil and gas transport, water and sewage transport and
irrigation facilities.
Demand triggers for the growth are:
GoI increased the annual budget allocation under the Rajiv Gandhi Drinking Water Mission from
• Rs. 46 bn to Rs. 58 bn in Union Budget 07-08.
For the XIth five year plan, GoI is aiming to add 11 mn hectares of irrigational facilities, entailing
• an investment of Rs. 1,580 bn.
Growth in the real estate sector due to growing population and affluence will require
investments • in water, drainage and sewage systems.
GoI in its efforts to reduce crude imports has formulated the New Exploration Licensing Policy •
for exploration and production of oil and gas. 165 blocks have been awarded till date and the
number is set to increase to 245 by 2008.
Private players like RIL, Cairn have shown interest in setting up pipe infrastructure for oil & gas •
transport. National gas grid will also be set up requiring an investment of Rs. 210 bn.
City gas pipe is currently available in 10 cities and the coverage is expected to grow to 40 cities
in • next 5-7 years.
In addition to above, replacement demand from USA & European countries, having a vast
pipeline • infrastructure, will be huge.
d)
i.
RMD Advisory dated #: 10.06.2010 for qualitative approach & data
dt-31.03.08&11.08.08 for Quantitative approach.
There is no clear cut instruction about Plastic insustry, We have taken the
information about Chemical sector(organic + inorganic).
ii. Qualitative approach : For Chemicals sector - Moderately +ve (1.5)
iii. Quantitative approach: FB exposure as % of Bank’s total FB exposure-within
1.5% (organic + inorganic).
• Total FB level as on 31.03.2010-Rs 4306.97 CRORES i.e. -0.80%
(for organic + inorganic)
iv. Comments: The proposal merits consideration as there is enough gap and the
promoter has strong back up support on professional, managerial, social and
financial levels.
#As per extant instructions contained in the STATE BANK OF INDIA, CRAVC, RMD, MID
CORPORATE REGIONAL OFFICE, LHO, BANGALORE. Dt-10.05.2010 CRMD Out look
is to be incorporated in addition to the RMD advisory details.The status of CRMD outlook
for the proposed proposal is detailed as under:-
comments In the proposed proposal the CRA rating is SB-5 againast the
threshold SB-8 for additional exposure and hence within the
acceptable Band.
ii Sanction of TL of Rs.49.00lacs
.
b. Approval of:
NA
c. Confirmation of
NA
The proposal falls within the powers of Assistant General Manager, SBI RASMECCC
as
FB / NFB / Total indebtedness is Rs.89.00 lacs, Non-Corporate
(ii) Involves policy level deviations: N.A
(iii) _________________ is a director in ________________ Bank. N.A
% rise/fall (-) in net sales 545.41% 111.68% 18.87% 9.14% 8.38% 7.73%
Profit Before tax 0.04 4.52 0.01 8.82 13.20 17.17 20.72
PBT/ Sales (%) 0.17 3.01 0.00 2.33 3.20 3.84 4.30
Profit After Tax 0.04 4.52 0.01 7.39 10.41 13.16 15.62
Comments only on adverse movements in the above: (Not to exceed 5-6 lines)
The promoter has estimated sales turnover for the unit conservatively considering only 8
hours working in a day and 25 days working in months at 100% capacity utilization. The total
sales receipt of the unit is Rs.691.89lac, existing products Rs.488.08lac and Rs.203.81lac of
proposed product.
The sale receipt from proposed product is taken for only six months during first year. The selling
price of each product, like Suction Pipe @Rs.80/-Kg, HDPE Roll @Rs.90/-Kg, Garden Pipe
@Rs.48/-Kg, Rs.65/-Kg, delivery pipe @Rs.90/-Kg and PVC Rigid Pipe @Rs.70/-Kg and
Rs.88/-Kg is par with prevailing with prevailing wholesale market price.
Hence, in view of above, the estimated & projected sale appears reasonable and may be
accepted.
PBT/Net Sales:
The profitability of the unit increases from 0.71% to 3.01% in the year 2010-11 due to
increase in volume of sale but decreases to nil, in the year 2011-12, due to increase in burden
of depreciation & interest. However, thereafter it is improving during the year under
consideration.
TNW:
The increase in TNW during 2010-11 is Rs.15.77 lac .This is due to introduction of
capital of Rs21.50lacs (supported by a CA certificate ) & withdrawal of Rs10.25lacs & plough
back of profit of Rs4.52lacs. Fresh introduction of Rs.9.05lac during 2011-12 is mainly for
margin purpose. Thereafter the increase in TNW is due to plough back of profit.
TOL/TNW:
The highest ratio during the year under consideration is 2.19 in the year 2011-12 when
present proposal is to be implemented. Thereafter the ratio is below 2.
Current Ratio:
The current ratio is more than acceptable level 1.33 during the year under consideration.
The lowest current ratio is 1.35 in the year 2011-12, during the year of implementation of
present proposal.
------------------------------NIL----------------------
c) Movement in TNW (projection)
2009-10 2010-11 2011-12
Actual Estimated Projected
Opening TNW 22.63 22.67 38.44
Add PAT 0.04 4.52 0.01
Add. Increase in equity / premium - 21.50 9.05
Add./Subtract change in intangible -- --
assets
Adjust prior year expenses -- --
Deduct Withdrawals -- 10.25
Closing TNW 22.67 38.44 47.50
Comments:-
Actuals Estimates
2009-10 2010-11
Sources of funds
Share Capital 22.66 38.44
Reserves and Surplus --
--
Secured Loans : short term --
: long term --
Unsecured Loans 3.50 16.30
Deferred Tax Liability
Total 26.16 54.74
Application of Funds
Fixed Assets (Gross Block) 19.47 27.98
Less Depreciation 0.82 3.48
Net Block 18.65 24.50
Capital Work in Progress
Investments
Other Non Current Assets
Inventories 14.19 57.50
Sundry debtors
Cash & bank balances 0.30 0.16
Other Current Assets 1.24 5.33
Loans & advances to -- 1.40
subsidiaries and group
companies
Loans & advances to others 4.59 4.75
( Less : Current liabilities ) 12.75 35.00
(Less : Provisions ) 0.05 3.90
Net Current Assets 7.51 30.24
Misc. Expenditure -- --
(To the extent not written off or
adjusted )
Total 26.16 54.74
Comments only on adverse movements in the above: (Not to exceed 5-6 lines)
Comments:
Irregularity in TL
Comment
s:
Utilisation of limits:
FB Limits Average utilisation NA
%
NFB Limits Average utilization NA
%
d. PROPOSED PRICING:
ITEM Existing Rate Card rate Proposed rate
Int. on WC NA 13.75%(SB-5) 13.75%(SB-5)
Int. on TL NA 14.25%(SB-5) 14.25%(SB-5)
Justification for concessions already extended / proposed: (mention about cost benefit):
No concession is proposed.
c. Deviations in Take over norms and comments: Not Applicable (New unit)
e. Compliance with Section 20 of the Banking Regulation Act : Whether any of the Directors of
the Bank is Director of the borrower company or is having any interest in the same: No
a. Future Plans & Business potential(over a 3-5 year horizon) including Cross selling / Retail
Marketing based on Co / Group’s future plans: (to be quantified).
Appraised by Assessed by
Credit Officer Chief Manager (Loan Sanction)
SBI, RASMECCC, Muzaffarpur SBI, RASMECCC, Muzaffarpur
Date: 29.03.2011 Date:
Sanctioned, as recommended, on bank’s usual terms & conditions.
(1)For sanction of :
(iii) Fresh sanction of CC (stock) limit of Rs. 40.00 lacs ..
(iv) Fresh Term Loan limit Rs.49.00 lacs
Under SMECFL Scheme with a coverage under CGTMSE.
3 High Speed heater Cooler Mixer, Model HSM 200R CM - M/s Neoplast 1219500.00
400, with Batch Hopper & AC variable Frequency Drive Engineering Pvt. Ltd.,
Ahmedabad
6 Windsor Make Twin Screw RPVC Pipe Plant, Model KTS M/s Windsor Machines 2255000.00
- 140e/110v Limited
5854725.00
Add: Taxes, packing exp., transportation, Insurance, erection Charge, @12% 702567.00
Total 6557292.00
g) Production factors:
Labour :
Availability of all types of technical, Non-technical, skilled, semi skilled staffs is
abundance in Muzaffarpur. The promoter has long experienced and specialized staffs to
be engaged in unit after completion of new project. Other staffs are already working with
unit.
h) Marketing:
The unit already catch the market of North Bihar, and the finished good is supplied to
samastipur, Sitamadhi, East Champaran, Muzaffarpur, Rosera & Begusarai. In view of
promoter background and long experience we can safely say that the unit has no
problem in marketing of proposed and existing products.
i) Commercial viability:
SBI,RASMECCC/MUZAFFARPUR , M/S USHA POLY PLAST 18
Year 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 TOTAL
Receipt 318.33 378.39 412.99 447.58 482.17 516.78 551.37 3107.61
Net Profit after tax 0.01 7.39 10.43 13.16 15.62 17.80 19.71 84.12
Depreciation 12.29 10.48 8.95 7.64 6.52 5.57 4.76 56.20
Cash Accrual 12.30 17.88 19.38 20.80 22.14 23.37 24.46 140.32
Term Loan
Interest@14.25% and
90% with calculating
On reducing balance 6.60 5.70 4.75 3.79 2.84 1.89 0.93 26.49
Cash for Repayment 18.90 23.58 24.13 24.59 24.98 25.26 25.39 166.83
Term Loan Interest 6.60 5.70 4.75 3.79 2.84 1.89 0.93 26.49
Term Loan Intalment 3.78 7.56 7.56 7.56 7.56 7.56 7.42 49.00
Repayment Obligation 10.38 13.26 12.31 11.35 10.40 9.45 8.35 75.49
Gross DSCR 1.82 1.78 1.96 2.17 2.40 2.67 3.04 2.21
Average Gross DSCR 166.83/75.49 = 2.21
Net DSCR 3.25 2.36 2.56 2.75 2.93 3.09 3.30 2.86
Comments on DSCR (in brief): Average gross DSCR is well above 1.75 in all the years of
repayment period, which is well above acceptable range; It indicates that the cash
accruals are sufficient to service the interest as and when applied and to repay the term
loan installments timely.
j.Security Margin :
2012- 2014- 2015- 2017- TOTA
Particulars 2011-12 13 2013-14 15 16 2016-17 18 L
WDV 80.39 69.91 60.97 53.33 46.81 41.24 36.48 389.14
T/L Outstanding 45.22 37.66 30.10 22.54 14.98 7.42 0.00 157.92
231.2
Margin 35.17 32.25 30.87 30.79 31.83 33.82 36.48 2
Security Margin 100.0
% 43.75 46.13 50.63 57.73 68.00 82.01 0 59.42
Sensitivity analysis:
As on 31/03 2013 When Sale price When variable Cost When both occurs
nd
2 Year Reduces by 5% Increases by 5%
Situation No. I II III IV
Receipt 378.39 359.47 378.39 359.47
Variable Cost Excl. 41.47 41.47 43.54 43.54
Raw Materials Cost
Profit before tax 8.82 -10.01 6.75 -12.17
Cash for repayment 23.58 13.48 22.14 4.01
Repayment 13.26 13.26 13.26 13.26
Obligation
l) CRA & Pricing : The CRA of the unit is based on estimated financial as on 31.03.2011
is SB-5.
m) Pricing by other major banks / FIs and justification of the proposed pricing :
----------- Not applicable -------------
Operating Cost to sales (%) 99.83 96.99 100.00 97.67 96.80 96.16
Bank Finance/ Ct. Assets
0.00 0.00 60.97 53.53 46.88 41.08
(%)
Inventory+ Receivables to
183 115 57 55 57 60
net Sales
ROCE(%) (PBDIT/TTA) 2.21 7.67 16.19 20.41 21.44 21.92
Comments:
Fund Flow analysis shows satisfactory situation except in the year 2011-12 this due to
facts during the year 2011-12 the promoter will use short term fund as margin for proposed
proposal.
B. ECGC COVER:N.A
C.
D. MARGINS : (FOR EACH FACILITY AS APPLICABLE)
Justification for deviation from existing margins, if any to be provided in the proposal. NO
Primary Security: Assets created out of the Hypo of stock & equipments
credit (existing as well as new to be
facility so extended. purchased by bank finance.)