MEMO TO THE 264th MEETING OF THE EXECUTIVE COMMITTEE

MEMORANDUM nO: t 1- Date:

Sub: Proposal for renewaV review with reduction of total credit facility from Tk.39.50 crore to Tk.34.98 crore
[funded Tk.32.l4 crorel by way of:
i. Renewat of SLC limit of Tk. 20.00 crore at l0o/" margin and 0.400 p.q. commission basis with
subsequent LTR timit of Tk. 18.00 crore at 9.00o/o p.a. rate of interest for 180 days to import raw cotton,
artificial staple fiber etc for factory use.
ii. Renewal of Time Loan limit of Tk. 15.74 crore [within LTRI at 9.000 p.a. rate of interest for 120 days
for local procurement of raw cotton.
iii. Renewal of OD limit of Tk.5.00 crore at 9.00o/o p.a. rate of interest to meet w/c requirement.
iv. Review of OD-2 limit of Tk2.26 crore at 9.00'A p.a. rate of interest (4.50o/o to be subsidized by BB and
4.50oh to be borne by the Client) for I year to meet working capital requirement under GOB stimulus
package as directed by Bangladesh Bank Circular BRPD #8 dated 12 April,2O20.
v. Review of 02 specific BG O/s of Tk.0.2l crore at 10%o margin and 0.500/" p.q. commission basis as

security bond favoring Titas Gas for gas supply.

vi. Cancellation of specific BG limit of Tk.0.30 crore allowed favoring Titas Gas for gas supply sincc not
required.
vii. Cancellation of Term Loan - I limit of Tk.l.06 crore since adjusted.
viii. Review with reduction of specific Term Loan - 2 limit from Tk.4.42 crore to Tk.1.26 crore at 9-o0ol,
p.a. rate of interest allowed to refinance imported machinery for BMRE of the project at cost of
Tk.9.00 crore.
ix. limit of Tk. 6.25 crore at 107o margin and 0.40% p.q.
Review of specific S/ULC/ Acceptance (360 days)
commission basis with subsequent Term Loan - 2 limit of Tk.5.62 crore at 9.000 p.a. rate of interest
for 5% years including% year Grace Period [IDCPwill be capitalized] to import 2 gas generators for
replacing low capacity old generators.

[Branch CM dated 14.01.2021and as per enclosed Facility & Security Schedule];

A/c: Baishakhi Spinning Milts Ltd [BSMLI at Principal Branch.
l. Facilitv Schedule: ICorporate Client] [Tk. in ororel

O/s Margin
# # Facility Exist Propo Purpose Tenor/GP
124.02.21) /Pricins
SLC 20.00 20.00 l0%;0.40% 180 days
I Import / reltnance raw cotton, spare
180 days
LTR (18.00) ( 18.00) 0.45 parts & small m/c 9.00o/, p.a.
106.03.21-26.06.2t1
120 days
EJ
) Time Ln (Ls.74) (ts.74) 12.60 Procure cotton from local market.
26.03.21-15.06.21

3 OD 5.00 s.00 4.84 Meeting w/c requirement. I year

q)
Meet w/c to overcome the pandemic 9.00% p.a.
il
loss by COVID-l9 as directed by
4 oD-2 2.26 2.26 2.26 19.10.2021
BRPD circular No. 8 dated
12.04.2020.

Sub-Total 27.26 27.26 20.15 / Existing / Proposed CM expiry: 28.02.21 I 28.02 ').
5 BG-I 0.21 0.21 0.21 tjY;o; 5 yrs max
Security bond favoring Titas Gas
6 BG-2 0.30 0.50% p.q. 107 .05.23-19.t?-.241
Construction of 4 storied factory
22.07.22
q)
7 Term -l 1.06 Adjusted
building at a cost of Tk. 4.75 crore.
U) To import / refinance 14 sets different 9,00%o p.a

8 Term-2 4.42 1.26 1.26 types of capital m/cs with auxiliary 09.07.23
m/cs at a cost of Tk. 9.00 crore

€tu Page I of10

 # # Facility Exist Propo O/s Margin
Purpose Tenor/GP
j [24.02.2t) /Pricing
SLC/ULC 6.25 6.25 Import / refinance 2 gas generator to l0%:0A0% 180 days
Accept (6.2s) (6.2s) replace low capacity old generators. 0.40% 360 days
9
[Client has already opened LC for Tk.
5% yrsl % yr*
Term - 3 (s.62) (s.62) 2.62 2.84 crore. PI for 2"d unit of 9.00%op.a
generator is not finalized yet.l 1t0.07.202s1
Sub-Total 12.24 7.72 4.09 Relationship history: Since May / 04; this is 16th annual review.
Total 39.50 34.98 24.24 Business solicited by: Rozina Aliya Ahmed, ADMD, CHQ.
Funded 36.36
32.14 RM: Kazi Md. Eleas Kanchon, SAVP, Principal Br.
24.03
*Combined Tenor of Acceptance and Term Loan will be restricted to 5/z years. However,
no g.u.e pe.ioa *itt U" uf to*"a
if acceptance is availed.
/ Existing / Proposed CM expiry: 30.04.2021 I 30.04.2022.
/ Past due/Unpaid EMI: Nil. However, client availed Term Loan extension under BRPD 1712020. Details are as under:

o Continuous/demand loan extended under BRPD 1712020 Nil

o Term loan extended under BRPD 1712020: [Tk. In crorel
O/s I Unpaid Repayment Existing Extended EMI before EMI after
Product Remarks
As on 01.01.20201 [Jan - Decl 20201 maturity maturity extension extension
0.35 Fully adjusted
TL-1 1.05 Julyl2l Iulyl22 0.08 0.07
[4.38 EMr] on 18.02.2021
Jan/21 Jan/22 Tk. 2.59 crore
0.84
TL-2 4.48 0.22 0.18 adjusted on
[3.82 EMr]
Idyl22 Julyl23 16.02.2021.
rotatls.ssl - | t.tq | - | - | o.so lo.zs
Note: Term Loan-3 disbursed onFebl202l lOls:Tk.2.62 crorel.
/ Early Alert: No.
/ CreditRating:ME3donebyBDRAL,RiskWeight:60%o;Yalidity:09.02.2021.[FreshRatingisunderprocessl
r' Breach of Credit Policy / Board or EC condition / Internal Circular:
Credit Policy / Board or EC condition / Internal Circular YeVIrlo Mention the Breach,/I.{on compliance
Credit Policy Is there any breach of OBL Credit Polic/ No N/A
Is there any non compliance of Board/EC
Board/EC No N/A
condition given earlier?
Revaluation of mortgaged property is not
Is there any non-compliance of Internal
Intemal circular No conducted in line with OBL Instruction
circular?
circular # 0212019 dated 21't July, 2019. *
*Branch has requested to conduct the revaluation ofmortgaged properties prior to next annual review

2. Securitv and support:

aSSCtS of BSML.

Control on 01.06.2017. Details is given below:

Area Location Owner MV FSV / It is project land and there are 4 buildings in the project;
(two 3-storied, one 2-storied & other single storied; Total
Char Suzapur, covered area - 40,568 sft).
96.35
Shibpur, BSML 14.96 13.46 /
dec Demarcated by boundary wall in all sides & adjacent to
Narsingdi
Dhaka-Sylhet Highway having all modem facilities.
+ Coveragez 44oh l40oh of proposed funded / total limit [considering FSV of collateral & present FDR valuel.
Q Branch inspection: Branch officials have visited the project/collateral on l8.l1.2020 and found in order.

Page 2 of l0

<I,
 [Tk. in crore]
Item Amt Risks Covered Expiry Insurance Beneficiary
M/c, Bldg & WIP 66.34
Fire, RSD & Lightening 14.06.21 Green Delta OBL
Stock (r/m, finished) 24.30
Total 90.64
3. Branch Earnings:
Tk. in crole
Income Projection 2020 Actual2020 Projection 2021
Gross 3.1I 2.82 2.34
/ COF:5.50%.
/ Projected facility utilizati on'. 90o/o
Net r.39 t.t2 0.95

4. The Group: Group consists of following concems:

# Name Business YOE F/S dt. Tto NP TA TL N/W
I Zenith Spinning Mills Ltd Spinning mill 2015 30.06.l9 147.93 I l.l8 195.84 1s3.05 42.79
2 Baishakhi Spinning Mills Spinning mill 2003 30.06.20 60.1 5 t.20 50.95 36.45 14.50
3 Ruhul Amin & Co. Import & trading 2001 30.06.18 16.99 3.89 13.9',7 2.66 Il.3t
4 N.R. Spinning Mills Ltd. Spinning mill 2018 | Nla I lmplementation going on
5 Zenith Fabrics Ltd. Out of operation
Total 225.07 16.27 260.76 192.t6 68.60
Key Person: Ruhul Amin, Managing Director, is the key person of the company and has been engaged in diversified
business viz. dyeing, finishing & printing of woven fabrics, yam trading and distributorship of Unilever Bangladesh
at Narsingdi area.

with Banks/NBFIs [as on 3 .20201: Tk. in crore

# Name Bank/NBFIS Facilities Limit o/s
AB Bank SLC/LTR//Time/OD/B G/TL 223.11 76.97
I Zenith Spinning Mills
UCBL SLC/LTR//Time/OD 105.00 105.96
ONE Bank S LCILTR//Time/OD/BG/TL 39.19 38.14
2 Baishakhi Spinning
UCBL LClLTR 25.00 17.88
3 Ruhul Amin & Co. NCC Bank SLC/LTR//OD 15.00 8.07
4 N.R. Spinning Mills. UCBL LC1BGlTerm 29.11 17.28
Total 436.41 264.30
Group exposure with OBL: As per facility Schedule

5. The Borrower & the Business:

users: Local shari, lungi, gamsa etc manufacturers. f@ 5.a0 ozlspn/dayl

# Name DoB Position Share PNW Education Experience

I Nusrat Jahan (Wo Mr. Ruhul) 07.11.77 Chairperson 20% 6.81 Graduate 14 yrs
2 Md. RuhulAmin 02.03.7r MD 60% I 1.45 Graduate 24 yrs
3 Shakil Mahmud (brother in law) 24.1r.67 Director 5% 7.21 Graduate 16 yrs
4 Sarder Akil A. Farooque (Friend) 24.10.63 Director 5% 1.68 Graduate 18 yrs

5 Jummatun Nessa (mother in law) 5% H.S.C

Shareholder
6 Selina Begum (Wo Mr. Akil) 5% MBA
Total 1000h 27.15*
*As per ITI0B dated 30.06.2019.

- Office & factory: Char Suzapur, Shibpur, Narsingdi.

- 96.35 decimal own land.
- Existing:4 factory building (two 3-storied, one 2-storied & other single storied; Total area -
40,568 sft).)
Page 3 of l0

4/-
 Machinery Presently factory is running with 30,800 spindles after completion of BMRE [total value of
machinery Tk.24.97 crore approx].
PDB & REB connection. The project has total 1,602 KVA [650+952] gas generators. The Client
was allowed SLCruLC fimit of 6.25 crore to replace existing old 2 generators with 2 new
generator having capacity around 2,000 KVA. Client has installed I unit generator [1500 KVAI
However, PI for second unit of generator is yet to finalize.

Total after BMRE

Item
Debt Equity Total
Land &Building 4.00 t7.7s 21.75
Plant and m/c 10.35 13.42 23.77
Others 5.59 5.59
Total 14.35 36.76 51.11
Debt -Equity 28 :72
Raw cotton. Sourcing: CIS countries, USA, India & local market.
Cotton yarn from 40s to 80s (mainly 50s & 60s).
6.o2}{T/day [Avg. 50s yam 35% (Tk.356/Kg), 60s yarn 65%o (Tk.385/Kg)] - utilization 85%o.
Local shari, lungi factory & traders. The regular buyers are Anondo Yarn Trading, Haque
Traders, Orchi Yarn Trading, Shanta Enterprise, Joni Yam traders, S. K. Traders, etc.

Raw materials Purchs/kg Owhd/kg COGS/kg Finished Goods Sales/kg Gross Profit
Raw cotton Tk. 180.00 Tk. 98.00 Tk. 278.00 50'.' 60'yarn Tk.355.00 Tk.77.00

6. Business Performance [Auditedl: [Tk. rn crole]

Particulars June/2018 June/2019 Junel2020 / Projected Sales for 2020-21is Tk.65.00 crore.
Sales 42.07 51.73 60.1 5 r' During ldl20 -Decl2} sales attained Tk. 28.00 crore.
Gross Profit 8.41 10.34 11.76
/ Stock / AR as on 31.01.2021 was Tk.14.09/ 3.81 crore

Net Profit 0.92 1.06 1.20

r' Ratios:
Fixed Asset 20.23 17.87 18.50
Ratio: 2018 2019 2020
Gross Profit (%) 20.00 20.00 19.55
Total Assets 44.56 39.05 50.95
Net Profit (%) 2.r8 2.05 2.01
Term Liabilities 9.66 7.03 4.64
Current Ratio (times) 0.85 0.96 0.95
Total Liabilities 32.32 25.75 36.45
Inv. Turnover (days) 83 78 8l
Net-worth 12.23 13.29 14.50
Rec. Turnover (days) 20 19 l5
Debt: Equity 72:28 66 :34 72228

7. :
,/ Swing in the OD account was I 8 times against limit of Tk. 5.00 crore. Highest Dr balance: Tk. 5. I 5 crore; Lowest Dr
balance Tk.l.26 crore.
,/ Opened 6 SLCs totaling Tk. 4.00 crore against the revolving limit of Tk. 20.00 crore.
/ Availed 5 LTRs totaling Tk. 1.26 crore against the limit of Tk. 18.00 crore.
/ Availed 44Time Loans totaling Tk.43.04 crore against the limit [inner of LTR] of Tk. 15.74 qore.
/ Internal Audit on the balance of 30.06.1 8 and BB audit on the balance of 3 I . 12. 18 found no anomalies.

,/ Stock and receivable position and liabilities there against [As on 31.01.2021]: Tk. in crore
Stock A/R Total
FI's WC O/s
RM WIP FG In Transit Total [0-30 Daysl Asset
OBL 3.81 0.99 0.54 8.75 14.09 3.81 17.90 t7.28
UCBL 3.63 l.86 0.22 8.26 13.97 1.22 l5 l9 1 3.09

Total 7.44 2.85 0.76 r7.01 28.06 s.03 33.09 30.37

Note: Wc limit with UCBL is Tk.25.00 crore [LC: 25.00 crore and LTR: Tk.5.00 crore [Irurer of LC].
Page 4 of 10

4t,
 ' ,/ Status of Term Loan: Tk. in crore
Due Recovered Unpaid
Facility Disbursed Disburs. Date O/s Expiry
Amt EMI Amt EMI Amt EMI
TL_ I 3.50 24.01.16 3.8s 50 3.85 50 Adjusted 22.07.22
27.09.16
TL-2 8.24 7.12 48-31 7.12 48-31 1.26 09.07.23
10.07.17
TL- 3 2.62 r0.02.2r 2.62 10.07.25
Total 11.74 10.97 10.97 3.88
Note:
l. TL-l outstanding of Tk.0.70 crore was fully adjusted on 18.02.2021 prior to expiry.
2. TL-z consist of 02 contract; of which client has adjusted entire o/s of 0l contract of Tk.2.59 crore prior
to expiry.
3. ClientavaileddefermentunderBRPD 1712020 againstTL-2facility. [Detail inpage#21

/ Impact of Covid-l9:
Particulars Jan-20 Feb-2( Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Total Avg'
Projected Sales 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.50 54.00 ;t0
Actual sales 4.56 4.66 4.09 0.73 3.42 1.84 2.83 6.4s 4.74 4.72 3.72 5.54 47.30 3.94
Sales reflection
with OBL
4.48 3.84 3.75 1.25 1.68 8.92 3.17 2.27 5.28 2.84 3.3 l 4.29 45.08 3.76

8. Present proposal:
This is a renewal / review proposal at same level.

The Client has been banking with OBL for last 16 years with satisfactory account performance. There is no
significant instance of past due during last facility period. Besides, client has adjusted Tk.3.29 crore againsr
Term loan in advance. Last year Client attained sales of Tk.60.15 crore and expected to achieve targeted sales
of Tk.65.00 crore in 2020-21.

To attain the sales target, client has requested for renewal of working capital facilities at existing line i.e.
Tk.25.00 crore for continuation of smooth business operation.

Particulars Tied-up period Amount '/ Projected Sales: Tk.65.00 crore

Inventory 180 days 18.25 / R/m i.e., raw cotton requirement: 60%o of sales
Work in process l0 days 1.00 '/ Wastage - 10-13%

Finished goods 30 days 5.42

'/ No. Spindles: 30,408
'/ Capacity: 6.02MT lday
Spare parts & others Lump sum 0.50
'/ Capacityutilization: 80%, i.e. 5.12MT lday
Factory overhead 30 days 1.10 ,/ Working days: 355 days / year.
Receivables 30 days 5.42
./ Annual Production @85% capacity: l8l5 MT
'/ I Kg finished yarn requires 1.13 kg raw cotton.
Total WC requirement 31.69
/ Requirement of Raw Material: 2050 MT
W/C Limit with OBL 25.26 '/ Average price of raw cotton: Tk.l78i kg
WC Limit \trith UCBL
Funded 5.00 '/ Average Selling price of Yam: Tk. 355/Kg
Note: Total Wc limit with UCBL is Tk.25.00 crore ,/ Salary & wages is Tk. 0.40 crore / month and Utility
[LC: 25.00 crore and LTR: Tk.5.00 crore [Inner of LC] bill around Tk. 0.70 crore/ month.

/ Stock and receivable position and liabilities there against [As on 3f.01.2021]: Tk. in crore
Stock A/R Total
FI's WC O/s
RM WIP FG In Transit Total t0-30 Davsl Asset
OBL 3.81 0.99 0.54 8.75 14.09 3.81 17.90 17.28
UCBL 3.63 1.86 0.22 8.26 13.97 1.22 15.19 1 3.09

iotar I t.++ lz.as I o.zo I rz.or lza.ool s.o: l::.orl ry{

Note: W/c limit with UCBL is Tk.25.00 crore [LC: 25.00 crore and LTR: Tk.5.00 crore [Inner of LC].

4v Page 5 of 10
 The client was allowed two specific Bank Guarantees for Tk.0.l3 crore & Tk.0.08 crore respectively. the
beneficiaries are Titas Gas Transmission & Distribution Company Ltd for issuance of security bond for gas
connection in the factory. Details are as under:

BGNo Issue Date Expiry Date Amount Favoring

001LGor 120010044 20-Dec-04 19-Dec-24 1,300,000.00
00lLGol 120010095 Titas Gas
08-May-O8 07-Mav-23 839.000.00
Total 2,139,000

A specific Bank Guarantee limit of Tk. 0.30 crore was approved by EC in its 220th meeting held on
23.05.2017 vide TM dated 07.05.2017 for 5 years favoring Titas Gas Transmission & Distribution Co. Ltd. to
increase gas supply at factory which is yet to be availed by the client. As such, branch has requested to cancel
the specific Bank Guarantee limit of Tk. 0.30 crore.

The client was allowed Tk.8.24 crore to refinance 14 sets different types of capital m/cs with auxiliary m/cs
procured at a cost of Tk. 9.00 crore. Maturity of the facility was Jan/21-Itlyl22. Till 31 .12.2019, client paid all
EMI. In 2020, client availed deferment of l2 EMI under BPRD 1712020. However, client paid Tk. 0.84 crore
[3.82 EMI] during 2020. In addition, client has adjusted Tk. 2.59 crore on 16.02.2021 against total O/s of
Tk.3.85 crore in advance.

The facility was allowed to replace existing old 2 generators with 2 new generators to increase power capacity
from 1602 KVA to around 2,000 KVA. The client has already procured 1 generator having capacity of around
1500 KVA at the cost Tk.2.84 Crore against which Tk.2.62 crore was disbursed on 10.02.2021. However, PI
for second unit ofgenerator is yet to finalize.
,/ Debt Service Coverage Ratio: Tk. in crore
Particulars 2020-21 2021-22 2022-23 2023-24 2024-2s
Capacitv utilization 85% 8s% 85% 8s% 85%
Revenue 65.00 65.00 65.00 65.00 6s.00
Net Profit 12.00%1 1.30 1.30 1.30 1.30 l.30
Add Depreciation 2.97 2.97 2.97 2.97 2.97
lnterest on Term Loan 0.34 0.34 0.34 0.34 0.34
Cashlnflow 4.61 4.61 4.6r 4.61 4.61
EMI IOBLI L95 1.95 1.95 1.40 1.40
DSCR 2.36 2.36 2.36 3.29 3.29
. Installment of Existing Term Loan with other bank: Nil.
. Installment of Existing Term Loan with OBL is about Tk. 0.10 crore / Month.
. Installment of approved Term Loan yet to disburse with OBL is about Tk. 0.06 crore / Month.

9. Exposure of the client with OBL: (Tk. in crore)

Type Existing Proposed

Funded 36.36 32.14
Non-Funded 26.76 26.46

4t-
Page 6 of l0
I ,0. a*, cIB report is obtained on 02.03.2021 [status- srDl, detail as under:
Tk. in crote
Particulars Group Position Borrower's Position
Limit 63.03 4.87
Term Finance
Outstandins 57.74 4.87
Funded Limit 100. l6 45.00
Funded Outstandins 61.54 18.69
Non-funded Limit 54.29 45.00
Working Capital Non-funded
Outstandinp 11.07 3.28
Total Wc Limit 102.45 45.00
Total Wc Outstandins 72.61 21.97
Limit 165.47 49.87
Grand Total Outstandins 130.35 26.84
Overdue 5.74

11. Client's Core Information:

Business Segmentation Corporate
Business Segmentation Code 9l
Economic Purpose Code 2000,3000,9404
Security Code 50
Sector Code 902112

12. Suppliers' / Buyers' Risk

iers Risk Grade
Particulars Remarks Risk Grade
r) No. of supplier 15- 20 suppliers Low
Good quality raw materials are available round thr
r) Availability and quality of raw material Low
year
;) Reliability of supply chain and availability of
Easy Low
;upplier's source

) Suppliers Agreement, if any Agreement is signed with major suppliers Low

) Risk of forming syndicate among the supplier Moderate Moderate

l) Suppliers ability to control price

Price is usually determine based on Domesti<
Low
Market, purchase preference, capacity etc.
g) Any other relevant factor (s) N/A Low
Supply Risk Grade I High Moderate I Average Low
Buyer Risk
Particulars Remarks Risk Grade
l) Concentration of buyer
Around 10-15 buyers Moderate
o/o
lNumber of buyer and their to total sales)
vlls. Ananda Yarn Trading, M/s. Haque Traders,
) List of5 top buyers VIls. Neloy Yarn, M/s. Rajlaxmi Traders, M/s. Average
labbi Textile
:) Risk of switching to alternate producer/
Average Averagc
;ompetitors
J) Risk of forming syndicate among the buyers No Low

:) Borrower's capability on controlling/determining Low

Low
rrice

) Nomination from/Agreement with Borrower, if any No Low

) Any other relevant factor (s) N/A Low

Buyers Risk Grade I High

Moderate I Average Average

4i- Page 7 of l0
' 13. Credit Risk Ratine:

Summary of ICRRS:
Indicators Scale Score obtained Risk Rating Remarks
Quantitative Assessment 60 28.00 46.70% Unacceptable F Assessment has been made on the basis of
Qualitative Assessment 40 32.s0 8130% Excellent Audited financials as on 30.06.2020.
Aggregate Score 100 60.50 60.50% Unacceptable
) Risk Rating during last renewal was Marginal based on audited financials dated 30.06.2019.
D As per ICRRS guideline "Bank can make renewal and enhancement of existing loans for maximum 2 (two) times if the
borrower's ICRR is "IJnacceptable".

Details of ICRRS:
Score
Particulars Scale ICRR
Obtained
Risk and Mitigates
Quantitative 60 28 Marginal
Assessments
A Leverage l0 5 Unacceptable The company is highly leveraged in terms of its Short
Term Loan. Being highly leveraged, financial cost is
B Liquidity l0 8
Excellent high which eventually turn the Profitability, Coverage
& Earnings Quality Unacceptable. However, BSML
C Profitability 10 4 Unacceptable has large number of inventory that can make good
amounr or earrungs ro superseoe tne Ilnanclal oeDt oI
D overage l5 4
Unacceptable the company.

E Cperational Efficiency 10 10 Excellent

Operating cash flow is much lower compared to Sales
due to maintenance of large amount of stock. However,
this inventory is expected to create cash inflow
F Earnings Quality 5 0 Unacceptable
followed by good number of sales. Thus, the cash flow
from operating activities will improve as well as
earning quality.
Qualitative Assessments 40 32.s0 Excellent
G Performance behavior l0 l0 Excellent
H Business & Industrl 7 7
Excellent
Risk
I Vlanagement Risk 7 6 Excellent
J Security Risk ll 4.5
Unacceptable
Eligible collateral is less than 50%. But client provided
PG of all directors having PNW Tk. 27.15 Crore.
K Relationship Risk 3 5 Excellent
L 3ompliance Risk 2 2 Excellent
Aggregate 100 60.50 Marginal

14. Environmental & Social Due Dilieence [ESDDI:

OverallE&SCategory DoE Categorv: ESRR
Orange B Oranqe B Medium Risk
The Sum of E&S Due
Regulatory compliance Partially Complaint.
Key E&S issues r Dust - from small particles of fabric (fly) can be a cause of respiratory and dermal
health risk - ventilation system.
/ The Client has adequate ventilation system.
I Noise - from machinery, particularly in yarn making and processing and woven
fabric production.
/ They have noise reducing precautions on the machineries area.
f Labour standards for the company's own employees as well as to all contractors'
workers.
/ They are maintaining some standards for the labours & for the
contractors.
I Fire safety measures (proofed doors, exit stairs, hre extinguishing system).
/ The client have proper fire extinguishing system.
Required actions Conducting a visit to the factory for re-checking the issues.

PageEorro

€ F
I
' 15. Risk & Mitieates:
a Risk Mitigates
Supply risk is minimum though price hiked sometimes. Raw cottons are imported f.o.n CtS
Supply countries & local market etc on contract basis ensuring timely requirement. Sometimes supply
hampers due to embargo raised by India but Indian cotton posses only 8%o of cotton market.

Market Spinned cotton yarn 60'count has good demand for woven industry & local sharee, lungi &
cloth industry.
Ruhul is the key person of BSML having 23 years of experience in this line. His .pou."-
Management nephew are also engaged in the business. So there is a mere chance of failure due to
management risk.
The company is highly leveraged in terms of its Short Term Loan. However, such loans are
Financial
backed by current asset. Client's cash ratio is also excellent.

16. Credit Committee Recommendation:

The proposal was placed in the 180th meeting of the Credit Risk Management Committee dated 1 1.03.21. Afier
review and discussion, the Committee has recommended the proposal for approval as per terms and conditions
contained in the CRM Note and Branch CM.

17. Recommendation:
We have examined the proposal.

BSML is a small spinning mill established in 2002. It has been making cotton yarn, mainly 60' counts, for
local market and it has earned good reputation for their quality products. The spiruring mill is equipped with
brand new top quality machinery of China / Germany I Japan origin. Ruhul Amin, MD and key person of
BSML, has 23 years of experience in this sector. Client has been banking with OBL for last 16 years with
satisfactory account conduct with good repayment record so far. Financials of the company shows positive
growth. The project land has been mortgaged as collateral having FSV of Tk. 13.46 crore.

In view of the above and considering satisfactory past performance and good repayment record and genuine
need of the Client, the proposal is recommended for approval.

AMD & HoB vide mail dated 07.02.2021has also recommended the proposal for approval.

18. Conditions:
i. Renewal to be effective subject to authorization from CLAD regarding documentation.

ii. Branch to follow Bangladesh Bank's Guide Lines for Foreign Exchange Transactions, UCPDC 600, latest IPO
and other related BB & GOB Circulars issued from time to time.

iii. Prior opening cotton LC, Branch to verify cotton price from market competitors.

iv. Branch to ensure there is no mismatched / outstanding Bill-of-Entry.

v. Branch to follow Credit Instruction Letter # 05109, dated 06.06.09 for instances of past dues.

vi. Branch to ensure Valuation of Securities before next annual review as per OBL Instruction Circular # 0212019
dated 2l't July,20l9.

{v
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I il-, the proposal is placed before the EC for consideration and if approved request to adopt the following
resolution:

Resolved:

"that the Management's proposal for renewaU review with reduction of total credit facility from Tk39.50
crore to Tk34.98 crore [funded Tk32.14 crore] by way oft
i. Renewal of SLC limit of Tk. 20.00 crore at lLoh margin and 0.400 p.q. commission basis with
subsequent LTR limit of Tk 18.00 crore at 9.00oh p.a. rate of interest for 180 days to import raw
cotton, artificial staple fiber etc for factory use.

ii. Renewal of Time Loan limit of Tk. 15.74 crore [within LTRI at 9.000 p.a. rate of interest for 120
days for local procurement of raw cotton.
iii. Renewal of OD limit of Tk.5.00 crore at 9.00oh p.a. rate of interest to meet w/c requirement.
iv. Review of OD-2 limit of Tk2.26 crore at 9.00yo p.a. rate of interest (4.50% to be subsidized by BB
and 4.50oh to be borne by the Client) for 1 year to meet working capital requirement under GOB
stimulus package as directed by Bangladesh Bank Circular BRPD #8 dated 12 April,2020.
v. Review of 02 specific BG O/s of Tk.0.21 crore at l07o margin and 0.500 p.q. commission basis as

security bond favoring Titas Gas for gas supply.

vi. Cancellation of specific BG limit of Tk.0.30 crore allowed favoring Titas Gas for gas supply since not
required.
vii. Cancellation of Term Loan - I limit of Tk.1.06 crore since adjusted.
viii. Review with reduction of specific Term Loan - 2 limit from Tk.4.42 crore to Tk.1.26 crore at 9.00,h
p.a. rate of interest allowed to refinance imported machinery for BMRE of the project at cost of
Tk.9.00 crore.
ix. Review of specific S/ULC/ Acceptance (360 days) limit of Tk. 6.25 crore at 10%o margin and 0.40"h
p.q. commission basis with subsequent Term Loan - 2 limit of Tk.5.62 crore at 9.00o/o p.a. rate of
interest for 5% years including % year Grace Period UDCP will be capitalizedl to import 2 gas

generators for replacing low capacity old generators

A/c: Baishakhi Spinning MiIIs Ltd [BSML] at Principal Branch is hereby approved as per terms and
conditions contained in the Memo and Branch CM dated 14.01.2021."

,f,m
Md. Manirul Islam
SEVP & HOCRM Managing Director

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