ADVANCES DIVISION

PRO CES S NO TE
R ef: KVGB / HO/ ADV/ 2017 Dat e: 29.12.2017

Sub: SSI Loan proposal of Sri. Laxman Talageri Bommanahalli Branch to set up a Rice Processing Unit.
1. B ranch B OMMANAHALLI
2. R egi onal Offi ce HAVERI
3. Nam e & Address of t he Laxm an Tal ageri
P art y S/ O R ayappa Tal ageri
Hanum asagar Vi ll age
Bom m anahal l i P ost
Hangal Tal uk Haveri
4. Const i t ut i on Indi vi dual
5. Act i vi t y Ri ce P rocessi ng Uni t S S I
6. Deal i ngs wi t h us 21/ 10/ 2011
7. P roposal To set up a Rice Processing Unit and Working Capital
8. Am ount appl i ed Rs. 60.00 l akhs Term Loan Rs. 48.00 l akhs + OD R s. 12.00
Lakhs
9. R ecom m endat i on by B ranch R egi onal Offi ce
Rs.60 Lakhs Rs.60 Lakhs
10. C redi t R at i ng CR -04 “ Adequat e S afet y ”
PRO FILE :
Appl i cant i s a perm anent resi dent of Hanum asaga r Vi l l age. He owns a R enuka R i ce Mi l l in
Hanum asagar Vi l l age. The appl i cant i s a reput ed person i n t he vil l age. To set up a R i ce Mil l , He
avai l ed Rs.25.00 l akhs l oan from our branch i n 2012. He has repai d and cl osed t he l oan account
i n 2018. His repaym ent was good. The appl i cant i s a t rust wort hy and credi t wort hy person.
They are our exi sti ng cust om er si nce 2011. The deal i ngs are sat i sfact ory.
Exi sti n g Deal i n gs wi th Us :
Dep osi ts: As on d ate (Am ount i n l akhs)
No A/ c no P roduct Dat e of Openi ng Dat e of Am ount of
Mat uri t y Deposi t / B al ance
1 89006606582 SB 21-10-2011 SB A/ c 2.87
2 89102434307 ND 29-09-2018 29-09-2024 0.96
3 89107036638 ND 31-12-2018 31-12-2024 0.13
Total 3.96

Li ab il i ti es: (Amou n t i n lakh s)

Sl Type/ Account No Dat e of Lim i t O/ S B al OD
No S anct i on 28.12.17
NIL

In come as p er IT R: (Amou n t i n lakh s)

Sl No Nam e 2015- 16 2016-17 2017- 18 Aver age
01 S ri . Laxm an Tal ageri NOT FILED 2.97 4.13 3.55

TO TAL NO T FILE D 2.97 4.13 3.55

CIB IL / CRIF RE PO RT:

Credit report of the applicants are generated the details of the report are as under
No Name Date/ Score Control Number Remarks
1 S ri . Laxm an Tal ageri 25/02/2019 2,81,17,72,409 No adverse remark,
682
PRO JE CT DE TAILS :

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 The appl i cant is our exi sti ng cust om er si nce 2011. He owns a R i ce Mi ll cal l ed R enuka
Ri ce Mil l i n Hanum asagar Vi ll age. He previ ousl y avai l ed Rs 25.00 l akhs loan from our branch to
set up a R enuka Ri ce Mi l l . He repai d ful l l oan wi t hi n t he repaym ent peri od. Even t hough i n
Bom m anahal l i t here are 3 ri ce mi l l s, R enuka R i ce Mi ll is doi ng m ore busi ness and profi t abl e.
Looki ng at t he dem and, appli cant deci ded t o set up a R i ce Processi ng Uni t . In and around
Bom m anahal l i for about 20km s t here are no R i ce P rocessi ng uni t s. Hence dem and wi l l be m ore
and expect i ng good profi t whi ch in t urn hel ps for regul ar repaym ent .

The cost for the above sai d R i ce P rocessi ng Unit R s.64.18 l akhs and appli cant request ed
for fi nanci al assi st ance of Rs.48.00 l akhs and rem ai ni ng am ount of R s.16.18 l akhs proposed t o
be i nvest ed from t hei r own cont ri but i on as m argi n by t he part y. Al so t he appli cant request ed for
a worki ng capi t al of R s.12.00 l akhs OD l oan. Looki ng at the sat i sfact ory past deal i ngs of t he
appl i cant and hi s pot ent i al i t y, B ranch have recom m ended for t he sam e.

B RIE F AB O UT MACH INE RY:-

Ri ce Processi n g Un i t:
1. Machi ne for sort i ng used i n Mi ll i ng Indust ry- Grai ns
2. Si l ky poli sher wi t h 40HP/ 960 R P M mot or
3. Thi ck/ Thni grader wi t h 0.5HP G, Mot or
4. Si ngl e Deck Grade r TC -2 m et er wit h 5.5mm i ndent ed sheet assem bl y & wit h 1.5hp
geared m ot or.
5. Ai r com pressor Model : C PB 25FM @8 BAR
6. P addy separat or m i ni m ax S44
7. Si ft er

The sal es quot at i on for t he above m ent i oned m achi neri es were provi ded by the aut hori zed
deal ers.

LO CAT IO N :
The proposed Ri ce P rocessi ng Unit t o be set up besi de appl i cant ’s Ri ce Mi l l i n
Hanum asagar, B omm anahal l i Vi l l age. Hangal t al uks m aj or crop i s paddy. Hence dem and for Ri ce
P rocessi ng uni t is hi gh. There are no exi st i ng ri ce processi ng unit s nearby t he proposed uni t .

CL IMAT E : The cl i m at e i s good for P addy cult i vat i on. The m aj or crop of t he t al uk i s paddy.

PARK ING S PACE FO R H ARVE S TE R DURING O FF PE RIO D

Am pl e space i s avai l abl e at appl i cant ’s proposed uni t .
S CO PE : -
The proposed proj ect i s set t i ng up i n Hanum asagar, B om m anahal l i Vil l age, Hangal t al uk.
P addy is t he m ai n crop i n Hangal t al uk. Norm al l y paddy i s bei ng processed through hull ers. The
hull ers are usual l y l ow capaci t y mi l l s. In t hese hull ers, bot h shel li ng and poli shi ng operat i ons
are carri ed out si m ult aneousl y. Hence, t here is no cont rol on the poli shi ng of ri ce, wi t h hi gher
breakage of ri ce occurs. To overcom e thi s, the ri ce processi ng unit i s requi red. As paddy i s t he
m ai n crop, abundanc e of raw m at eri al s i s avai l abl e. The scope for ri ce processi ng i s m ore.

ME ANS O F FINANCE
Lakhs
Sl No P art i cul ars Amou n t
1 C ost of t he uni t as above 64.18
2 Less :P rom ot er Fi nance ( S avi ngs, advance from R i ce m i ll , ot her 16.18
sources)
Prop osed term l oan from Bank 48.00
3 Worki ng C apit al Overdr aft 12.00
Tot al Loan 60.00
FINANCE :

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 Term Loan – 84 m ont hs t aken for repaym ent of Term Loan incl udi ng 12 m ont hs gest at i on. R at e
of i nt erest consi dered @ 12.50% p.a.

DE PRE CIAT IO N:
R at e of Depre ci at i on i s t aken as prevai l i ng rat es in Incom e Tax as appl i cabl e t o t he previ ous
year of proj ect i ons.

INCO ME TAX:
B ei ng the agri cul t ural act i vi t y, i ncom e i s current l y exem pt ed from t ax.

(Rs in lakhs)
PROJECTED PROTABILITY STATEMENT
YEAR 1 2 3 4 5 6 7
Income 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Receipts 55.00 57.75 61.22 66.11 69.42 74.35 79.65
Total Sales 55.00 57.75 61.22 66.11 69.42 74.35 79.65
EXPENDITURE
Production Cost
Purchase of Raw Materials 22.00 23.10 24.49 26.44 27.77 29.54 31.25
Salaries and wages(10-12) 5.50 5.78 6.12 6.61 6.94 7.36 7.90
Electricity Expenses 2.75 2.89 3.06 3.31 3.47 3.61 3.80
Freight and Hamali 1.10 1.16 1.22 1.32 1.39 1.45 1.53
Insurance 0.79 0.83 0.87 0.91 0.96 1.02 1.13
Depriciation 7.73 6.67 5.76 4.98 4.31 3.64 3.10
Production Costs 39.87 40.43 41.52 43.57 44.84 46.62 48.71
Administrative Cost
Postage and Telegram 0.12 0.12 0.13 0.15 0.16 0.17 0.18
Staff Welfare & Office
1.44 1.58 2.38 3.56 3.92 4.38 4.98
Maintainance
Travelling Expenses 1.68 1.93 2.22 2.78 2.92 3.32 3.62
Telephone and Internet 0.18 0.20 0.22 0.24 0.26 0.29 0.32
Administrative Cost 3.42 3.83 4.95 6.73 7.26 8.16 9.10
Interest
Term Loan 5.74 5.14 4.45 3.67 2.79 1.79 0.66
Total Interest Cost 5.74 5.14 4.45 3.67 2.79 1.79 0.66
Total Cost 49.03 49.40 50.92 53.97 54.89 56.57 58.47
Net Profit Before Tax 5.97 8.35 10.30 12.14 14.53 17.78 21.18
Less Tax NIL NIL NIL NIL NIL NIL NIL
Profit After Tax 5.97 8.35 10.30 12.14 14.53 17.78 21.18

CAL CUL AT IO N O F DE B T SE RVICE CO VE RAG E

Parti cu l ars 2018- 19 2019- 20 2020- 21 2021- 22 2022- 23 2023- 24 2024- 25
Net Profi t 5.97 8.35 10.30 12.14 14.53 17.78 21.18
ADD: Dep re ci ati on 7.73 6.67 5.76 4.98 4.31 3.64 3.10
In terest 5.74 5.14 4.45 3.67 2.79 1.79 0.66
Ad ju sted Net Profi t A 19.44 20.16 20.51 20.79 21.63 23.21 24.94
Rep aymen ts
Term L oan 10.32 10.32 10.32 10.32 10.32 10.32 10.32
Total Rep aymen ts B 10.32 10.32 10.32 10.32 10.32 10.32 10.32
Deb t S ervi ce Coverage
1.88 1.95 1.98 2.01 2.09 2.24 2.41
Rati o (A/ B )
AVE RAG E DS CR 2.08

PROJECTED FINANCIAL STATEMENT

YEAR 1 2 3 4 5 6 7

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Particulars/Years 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Liabilities
Capital 28.50 28.50 28.50 28.50 28.50 28.50 28.50
Retained Surplus 4.53 6.91 8.86 10.70 13.09 16.34 19.74
Net worth 33.03 35.41 37.36 39.20 41.59 44.84 48.24
Non-Current Liabilities
Bank Loan 48.00 43.01 37.77 31.84 25.12 17.51 8.89
Overdraft Loan 12.00 12.00 12.00 12.00 12.00 12.00 12.00
Total of term liabilities 60.00 55.01 49.77 43.84 37.12 29.51 20.89
GRAND TOTAL 93.03 90.42 87.13 83.04 78.71 74.35 69.13
Fixed Assets
Sugarcane Harvester
45.25 37.52 30.85 25.09 20.11 15.80 12.16
Equipments
Land and Building 115.50 103.95 93.55 84.20 75.78 68.20 61.38
Total Fixed Assets 160.75 141.47 124.40 109.29 95.89 84.00 73.54
GRAND TOTAL 160.75 141.47 124.40 109.29 95.89 84.00 73.54
RATIO ANALYSIS
Debt 60.00 55.01 49.77 43.84 37.12 29.51 20.89
Equity 33.03 35.41 37.36 39.20 41.59 44.84 48.24
Debt/Equity Ratio (times) 1.81 1.55 1.33 1.11 0.89 0.65 0.43

Total liabilities 60.00 55.01 49.77 43.84 37.12 29.51 20.89

Net worth 33.03 35.41 37.36 39.20 41.59 44.84 48.24
TOL/TNW(times) 1.81 1.55 1.33 1.11 0.89 0.65 0.43

Comp li an ce to B asi c fi n an ci al p aramete rs:

S l .No Rati o An al ysi s B en ch Mark Actu al Remark s
1 Debt Equit y R at i o Maxi m um 3 1.81 C om pl i ed
2 TOL t o TNW Maxi m um 5 1.81 C om pl i ed
3 S ecuri t y Coverage Mi ni m um 130% 185% C om pl i ed
4 DS CR Mi nim um 1.50 2.08 C om pl i ed

S en si ti vi ty An al ysi s.
A sensi t i vit y anal ysi s of t he proj ect is done on 4 param et ers. Fi rst 2 param et ers on the reduct i on
of the i ncom e at 5% and 10% & next wi t h increas e in t he cost s by 5% and 10%. The det ai l s are
as under
R educt i on of the
Norm al Incre ase in t he cost s
P art i cul ars / P aram et ers Incom e
fi gures
5% 10% 5% 10%
Incom e 57.75 54.86 51.97 57.75 57.75
Expendi t ure 50.84 50.84 50.84 53.38 55.92
P rofi t B efore Tax 8.35 4.02 1.13 4.37 1.83
P rofi t Aft er Tax 8.35 4.02 1.13 4.37 1.83
Even aft er consi deri ng t he reduct i on i n incom e and i ncreas e i n t he expendi t ure t he proj ect i s
vi abl e except i f sal es pri ce wil l fal l by m ore t han 8.50% of the proj ect ed sal es.

SWO T ANANLYS IS :
S tren gth :
 The proposal m ay earn good i ncom e for t he appl i cant

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  The present proposal m ay assi st farm er t o cul ti vat e paddy.
 Soci o econom i c l i fe of t he farm ers shal l be im proved.
 Mi ssi on of Govt . t o enhance such t ype of act i vit y by provi di ng fi nanci al assi st ance for
SS I shal l be mot i vat ed di rect l y.

Weak n ess :

 Cl i m at e condi t i ons m ay affe ct t he crop product i on.

 Govt . poli ci es & pol i t i cal i ssues m ay affe ct t he repaym ent by t he appl i cant .
 In ti m e avai l abi l i t y of servi ces/ spare part s i n case of any t echni cal probl em or physi cal
dam age t o m achi nery.

Op p ortu ni ti es :
 Area i s havi ng good pot ent i al for P addy product i on.
 Em pl oym ent generat i on shal l be m ade t hrough act i vi t i es.

Th reat :
 There m ay be nat ural cal am i t i es li ke heavy rai ns, cycl ones et c.
 Fl uct uat i ng m arket for the com m odi t y.
 Int ervent i on of al t ernat i ve crop m ay affect busi ness.
 Com pet i t i on by such unit s i n l ocal i t y.

SE CURIT Y:
1. Hypot hecat i on of Machi neri es val ued Rs.125.60 Lakhs.
2. SR M on Non- Agri cul t ural Land R.S No. 4/ 6 & G.P No.1, 1/ 2, 2& 3 m easuri ng 49 Gunt as
i n the nam e of S ri Laxm an R Tal ageri val ued Rs. 111.21 l akhs.(C ol l at eral S ecuri t y)

LE G AL CL E ARANCE

S r. Parti cu l ars of S ecu ri ty L egal Op in i on/ Date

No.
1 R S No. 4/ 6 & G P No. 1, 1/ 2 , 2 & 3 m easuri ng S ri A.M.Gul am al i shanava r, panel
49 Gunt as in t he nam e of S ri Laxm an R Tal ageri Advocat e Opi ni on Dt 08/ 02/ 2019.
of Bom m anahal l i Vi l l age, Hangal Tal uk, Haveri
Di st ri ct .

The P anel Advocat es S ri A.M.Gul am al i shanavar have scrut i ni zed t he records and subm i tt ed t hei r
opi ni on dat ed 08/ 02/ 2019 respect i vel y. The advocat e has opi ned that t he appl i cant s possess
CLE AR, MARK E TAB L E TIT LE over P ropert y offe red as securi t y and al so recom m ended for
SR M.

VAL UAT IO N O F TH E PRO PE RT Y:

(Amou n t in l ak h s)
Val u e of
Parti cu l ars securi t y
R S No. 4/ 6 & G P No. 1, 1/ 2 , 2 & 3 m easuri ng 49 Gunt as i n t he nam e of 90.00
S ri Laxm an R Tal ageri of B om m anahal l i Vi l l age, Hangal Tal uk, Haveri
Di st ri ct . As p er val u ati on gi ven b y G ram Pan ch ayath , B omman ah al l i .
R S No. 4/ 6 & G P No. 1, 1/ 2 , 2 & 3 m easuri ng 49 Gunt as i n t he nam e of 111.21
S ri Laxm an R Tal ageri of B om m anahal l i Vi l l age, Hangal Tal uk, Haveri
Di st ri ct . Val u ati on don e b y ou r Pan el Val u ator Anu bh ava Con stru cti on s.
R S No. 4/ 6 & G P No. 1, 1/ 2 , 2 & 3 m easuri ng 49 Gunt as in t he nam e of 115.50
S ri Laxm an R Tal ageri of B om m anahal l i Vi l l age, Hangal Tal uk, Haveri
Di st ri ct . Val u ati on don e b y ou r Pan el Val u ator Pati l Con stru cti on s.

CO -O BL IG ANT S :
S ri C hannabasappa Mahadevapp a Madli aged 68 years i s our exi st i ng cust om er si nce 2011 and
he is resi dent of Bom m anahal l i Vi l l age, Hangal Tal uk. As per KA- 64 Net wort h is Rs.45.00

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l akhs. The past & present deal i ngs of t he co- obl i gant / guarant or are sati sfact ory and al l hi s
li abi l i ti es wi t h us are regul ar.
Det ai l s of deal i ngs wit h us are as under:

Dep osi ts: As on d ate

Sl Type/ Account No Openi ng Dat e O/ S B al ance(R s.)
No
01 S B - 89038828010 03/ 06/ 2014 2069/ -
Tot al 2069/ -

Li ab il i ti es:
No Type/ Account No S anct i on Dt Lim i t O/S B al R em arks/ OD
27-02-2019
01 VKS CC - 89039739944 20-02-2019 150000/ - 124947/ - NIL
02 VKS CC - 89039641610 13-06-2016 85000/ - 113767/ - C rop l oan wai t i ng
Guarantor(Indirect Liability) for Debt Wai ver
Total 235000/ - 238714/ -

In tern al CRE DIT RAT ING :

The busi ness i s new. Accordi ngl y t he rat i ng secured i s CR 04 – “Adequat e S afet y”. The chart i s
encl osed.

Compliance to extant norms

No P art i cul ars Expl anat i ons
1 Deal i ngs of the part y S at i sfact ory si nce 2011
2 Experi ence of t he part y in
He al ready owns a Ri ce Mi ll si nce 2012.
t he li ne of B usi ness
3 Market The proposed R i ce P rocessi ng uni t is l ocat ed i n
4 Hanum asaga r, B omm anahal l i vil l age, whi ch have hi gh
Busi ness profi t abi l i t y avai l abi l i t y of P addy crop, Hence we expect good
busi ness.
5 Exposure norm s Norm s P roposal
The Net wort h of t he appli cant s as
Exposures shal l
on 11/ 02/ 2019 is R s 111.21 l akhs.
not exceed Fi ve
Eli gi bl e B ank Loan i s Rs 556.05
P er part y Exposure t i m es t he t angi bl e
l akhs. The tot al l i abi li t y wi l l be R s
Net wort h of t he
60.00 l akhs , t herefor e wi t hi n t he
borrower
norm s
Up to 7.5 % of
t he pai d up
B ank’s Exposure Norm s
C api t al +
R eserves
6 S ecuri t y norm s 1. P ri m ary i s Rs.111.21 l akhs form s
185.35% of Loan Am t .
S ecuri t y shal l not
2. Col l at eral i s Rs.96.70 l akhs form s
be l ess than 130%
P ri m ary/ C ol l at eral 102.65% of t he Loan am t .
of the l oan
Tot al – Rs.222.30 l akhs form s 236%
of l oan am ount .

S ANCT IO NING AUT H O RIT Y:

The appl i cant has request ed for t erm l oan of Rs. 60.00 l akhs. Hence t he proposal fal l s under t he
sanct i oni ng power of Assi stan t G en eral Man ager .