summer project credit

7/27/2019 Summer Project Credit

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The Bank has a very humble but a very inspiring beginning. On 14th September

1918 , "The Saraswat Co-operative Banking Society" was founded. Mr. J.K.

Parulkar became its first Chairman, Mr. N.B. Thakur, the first Vice-Chairman

faith, vision, optimism and entrepreneurial skills. These dedicated men in charge

of the Society had a commendable sense of service and duty imbibed in them.

Even today, our honorable founders inspire a sense of awe and respect in the

Bank and amongst the shareholders.

The Society was initially set up to help families in distress. Its objective was to

provide temporary accommodation to its members in eventualities such as

weddings of dependent members of the family, repayment of debt and expenses

of medical treatment etc. The Society was converted into a full-fledged Urban

Co-operative Bank in the year 1933.


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The Bank has the unique distinction of being a witness to History. The Bank,

which was originally founded in 1918, i.e. close on the heels of the Russian

Revolution, also witnessed as a Society and as Bank-the First World War, the

Second World War, India's freedom Movement and the glorious chapter of post-

independence India. During this cataclysmic cavalcade of history, the Bank as a

financial institution and its members could not of course remain unaffected by the

economic consequences of the major events. The two wars in particular brought

in their wake, paucities of all kinds and realities and stand by its members in

distress as a solid bulwark of strength. The Founder Members and the later-day

management's of the Bank continued to demonstrate their unwavering faith in the

destiny of the common man and the co-operative movement and they

encouraged the shareholders to save despite all odds.

MISSION STATEMENT

"To emerge as one of the premier and most preferred banks in the country by

adopting highest standards of professionalism and excellence in all the areas of

working !!!"

MILESTONES

Thanks to these sustained and assiduous efforts over 25 years after its inception,

the Bank had gained Strong foundation in terms of its membership, resources,

assets and profits. By 1942, the Bank was fulfilling all the banking needs of its

customers.

During the late fifties, the Bank grew from strength to strength. The Bank had

established five branches within the city of Mumbai and one each at Pune and

Belgaum. In its 50th year, the Bank chose a bee motif to symbolize the Bank's

emblem - fitting and appropriate characteristics of a Bank that believed in hard

work, a search for all that is good, a team spirit to achieve its objectives and a

selfless service to its members and customers. The Bank has grown in stature,

progressed in its social and economic objectives and produced an image of what


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an ideal bank should be. Resultantly, in the year 1977-78, the Bank's gross

income crossed the Rs.3.00 crore mark for the first time.

Last two decades the bank has witnessed a steady growth in the business. The

bank has a network of 153 fully computerized branches covering five states viz.

Maharashtra, Gujrat, Madhya Pradesh, Karnataka and Goa. The Bank is

providing 24- hour service through ATM at 48 locations.

In 1988 the bank was conferred with "Scheduled" status by Reserve Bank of

India. The bank is the first co-operative bank to provide Merchant Banking

services. The bank got a permanent license to deal in foreign exchange in 1978.

Presently the Bank is having correspondent relationship in 45 countries

covering 9 currencies with over 125 banks.

CREDIT POLICY:-

INTRODUTION: -

Business Plan of the Bank includes Credit Policy. The policy is reviewed in such

a way that it is simple to use, informative and user friendly and exhaustive in

nature. The Credit Policy stipulates various norms for exposure, security, ratios

etc. However it is observed that these norms are many times diluted/deviated in

an anxiety to achieve the targets sometimes compromising on quality. Without

affecting the quality of the credit proposal, these norms can be relaxed.

Therefore the success would depend upon its implementation both in letter and

spirit. With this in view, implementation of the various norms stipulated in the

credit policy are to be strictly adhered to. This credit policy addresses three

segments of credit in detail: Commercial credit, Retail Credit and Export credit.


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The objectives of the credit policy are as follows: -

Main focus is on SME segment and therefore bank is trying to Broaden

the base of clientele of Corporate and Non-Corporate segments

throughaggressive credit marketing,

Address the genuine credit needs of the existing clients to ensure

quicker and prompt credit decision.

Augment Credit Portfolio of the Bank consistent with the risk

management strategy of spreading risk for the purpose of minimizing

the same.

Develop the skill set of the officials looking after credit portfolio in

keeping with the changing trends in the economy, through training in

areas like appraisal, monitoring and unit inspection.

Stringent assessment of new credit proposals, maintain & improve

upon the asset quality through effective monitoring the accounts and to

maximize the yield on advances.

Ensure compliance of all the directives/guidelines issued by

Government /RBI and all other regulatory requirements on credit

matters. Evolve proper reporting system to fix the accountability

The Credit Policy will be operative from the date of issue of the circular till it is

reviewed

next and generally it will be reviewed yearly.

The Credit Policy would govern all credit and credit related exposures, fund

based as well as non-fund based and prescribes acceptance criteria for all forms

of credit dispensation. These would include short term, medium term and long

term based facilities, as also letters of credit, guarantees, acceptances, etc.

The functional divisions are expected to comply with the policy guidelines laid

down in the policy. In case of any doubt about the applicability of any aspects of

the policy to any situation, clarification/ approval shall first be sought from Credit

department prior to committing the bank.


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INTRODUCTION TO CREDIT APPRAISAL: -

The process by which a lender appraises the creditworthiness of the prospective

borrower. This normally involves appraising the borrowers payment history and

establishing the quality and sustainability of his income. The lender satisfies

himself of the good intentions of the borrower, usually through an interview.

Credit products are broadly categorized as Retail and Industry/business loans.

The Credit Appraisal should strictly cover all the critical information about the

proposal required for making the decision and the observations /

recommendations at various levels.

The appraisal notes put up before the Board or any authority should haveclarity, preciseness, objective assessment, consistency and proper linkage

between two or more aspects of the appraisal. Repetitions should be

avoided. There should be a checklist to check all the details stated in the

note so as to avoid inconsistencies in figures.


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The proposals should be put up before the appropriate sanctioning

authorities within a maximum period of one month from the date of receipt

of full information.

The credit appraisal note should be in a prescribed format only.

For proposals of Rs. 50.00lacs and above, promoters' background with

their experience and qualification should be given. Each zone should

prepare a history sheet of the borrowers and should incorporate all the

major events of the company, right from the beginning of the activity. Such

history sheet should be properly preserved.

The primary information for a credit decision would included.

a. Details of unit

b. Corporate Governance

c. Organization structure.

d. Financial spreadsheets.

e. Merits/demerits of proposal

f. Deviation from prescribed policy

g. Internal and External Risk factors as also remedial measures to contain

their impact.

h. Specific Recommendations.

To reduce the gap between sanction and disbursement, process of

general documentation and title clearance should be simultaneously

initiated with the processing of credit proposal.

Reserve Bank of India has stipulated that while entertaining applications

for assistance from new borrowers, banks should insist on No Objection

Certificate from the existing financing bank. Similarly, before putting up

the preliminary proposal, processing official should verify whether the

applicant firm/company and the proprietor/partners/directors are in the

willful defaulters list and suit filed accounts list. These lists are now

available on the website of Credit Information Bureau of India Ltd. (CIBIL)

(cibil.com). Further , the bank has already subscribed for getting the credit

reports from CIBIL. CIBIL will give us credit report in case of retail


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borrowers as well as corporate customers. The reports can be accessed

and downloaded from any branch. The branches therefore, should make

use of this facility to have quality accounts in the credit portfolio. Further,

an appropriate declaration regarding payment of dues towards provident

fund (employer and employees contribution), dues of Employees State

Insurance and other statutory dues should now be obtained at the time of

grant of new facilities and/or renewal/enhancement of credit facilities every

year. This aspect should be verified by visiting officials and findings

incorporated in their visit report.

EXISTING EXPOSURE LIMITS:-

Existing exposure & revised norms proposed are as under:

Constitution Entry Level Ultimate exposureExisting Proposed

Existing Proposed

Proprietary 50.00 100.00 75.00 250.00Partnership 500.0 750.00 750.00 1500.00

Company (Pvt. Ltd. withPromoters equity) & Closelyheld Public Ltd. Co

1000.00 1000.00 1500.00 2500.00

Company (Pvt. Ltd. withpart Equity from Financecos.)

1000.00 2000.00 1500.00 3500.00

Public Ltd. Co. 1000.00 2500.00 1500.00 4000.00

Group -- -- 2500.00 6500.00

The above proposed exposure norms are applicable for export credit excluding

diamond business.


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Only if at least 4 of the below mentioned 8 conditions are fulfilled the bank may

take up additional exposure, in case of proprietary concerns, partnership firms

and companys, over the above recommended norms, as detailed below:

Rating of the borrower is not below B

Borrower has applied for additional funds for diversifying into new

ventures;

Borrower has finalized plans for introducing private equity whereby

Debt equity ratio would further improve than the existing.

Borrower is arranging for another Bank in consortium and the

arrangement is in the final stage.

In case if the exposure is to the Export oriented unit, borrower has

taken per party ECGC cover to secure against credit default.

Independent collateral cover offered is more than 50% of the advance

applied

Activity of the company is such that the value addition is very high (raw

material consumption to sales is less than 70% as per the actual for

the last three years)

Insurance cover is obtained.

Constitution Max exposure

Proprietary500.00

Partnership2000.00

Company(Pvt. Ltd. withPromoters equity) & Closely held Public Ltd. co. 3000.00

Company (Pvt. Ltd. with part Equity from Finance cos.)4000.00

Public Ltd. Co.5000.00

Bank provide following Retail Loans:

1. Housing Loans


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2. Education Loans

3. Vehicle Loans

4. Multipurpose Loans

5. Doctors Delite

6. E-Stock

7. Professional Advantage

8. Executive Privilege

COMMITTEES: -

For handling the proposals beyond the delegation of various authorities, different

committees are operational. Their purview will be as under:

Committee of Retail Loans - RLC

To note the position of irregular Retail Loan Accounts, up to Rs.25.00lac andtake decisions of calling back the advance, if required.

Note

For the purpose of delegation of retail loan committee, sanctioned limit or

outstanding balance (for each individual account), higher of the two is to be

considered.

Each retail loan account is considered to be irregular on continuous 3 defaults

and needs to be immediately reported to Committee of Retail Loans. It is the

responsibility of the Zonal Head to keep a track of all the irregular accounts under

their control and ensure that they are reported to Committee of Retail Loans in

proper time.


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Central Management Committee- CENMAC

Approval/sanction/renewal/review of all the proposals with individual/ group

exposure beyond Rs.100.00lacs and above, up to Rs.750.00lacs (both funded +

non funded). Noting the position of the account and recalling irregular business

accounts of Rs.1.00lacs and above up to Rs.750.00lacs, shall be placed before

the CENMAC.

Audit/Accounts/NPA Management Committee

Above committee of the Board of Directors will meet once in a month. All

overdues cases with exposure of Rs.1.00 crore and above and all the cases

where remission in interest/principal or cases under OTS shall be referred to this

Committee.

Board of director

Approval/sanction/renewal/review of all the proposals with individual/ group

exposure beyond Rs.750.00lacs (both funded + non funded). Noting the position

of the account and recalling irregular business accounts of above Rs.750.00lacs,

shall be placed before the Board of Directors


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RATIO PRESCRIPTIONS: -

The major criteria /prescribed ratios for assessment of any business proposal are

as under:

1) Current Ratio: -

It continues to be a minimum of1.33 and any ratio below 1.33 should be treated

as deviation. As regards proposals having exposures below Rs.1.00crore and

depending upon type of activities/products, life cycle of production process,

performance under other parameters shall be permissible in deserving cases, but

not below 1.17.Any such proposal having current ratio lower than 1.17 will be

treated as deviation.

2) Debt Equity Ratio: -

For this ratio debt means sanctioned Fund based working capital limits or

outstanding whichever is higher plus outstanding term loans plus Letter of Credit-usance limit or outstanding whichever is higher.


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* Beyond which if proposal is considered, it would amount to deviation.

3) Debt Service Coverage Ratio (D.S.C R.): -

In case of Term loans working out of DSCR for stipulated repayment period /

remaining repayment period is must. While computing the D.S.C R., the following

numerator and denominator shall be used.

Profit after tax + Int. on Term loan & working capital limits + Depreciation

Int. on Term loan & working capital limits + Term loan installment payable

(on existing and proposed loans)

Normally an annual/average DSCR should be minimum of 1.5 however

annual/average DSCR Between 1.4 to 1.50 may be accepted with proper

justification. DSCR below 1.40 will be treated as a deviation. An annual/average

DSCR 1.25 or less deserves outright rejection of the credit proposal. It is

suggested that if the DSCR is low, a condition restricting appropriation of profitfor Dividends / Drawings be stipulated.

4) Interest service coverage ratio (ISCR): -

ISCR has to be calculated where only working capital limits are enjoyed with us.

The interest service coverage ratio is a measurement of the number of times the

company

could make its interest payments with its earnings before interest and depreciation but

after tax. Higher ratio sounds the better financial capacity of the unit to serve the debt

burden of the company.

PAT + Depreciation + Interest


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Total interest payable by unit to Banks, FIs including interest on WC limits and

interest on Unsecured Loans

# This ratio should not be less than 2.5. ISCR below 2.5 will be treated, as adeviation and proposals having ISCR below 2 deserve rejection.


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METHOD OF ASSESSMENT FOR WORKING CAPITAL

REQUIREMENT:

We intend to continue with our present practice i.e. MPBF method or turnover

method. For initial large exposures exceeding the entry-level norm prescribed in

the Policy, we may look upon borrowers having existing consortium

arrangements / insist upon formation of consortium. For borrowers enjoying fund

based working capital limits in excess of Rs.5.00 crores, it should be explored

that 25% of the book debts are financed through bills. The bank is in the process

of arranging Credit insurance on the lines of ECGC from General Insurance Cos

mainly for insuring receivables. The requirement of working capital therefore will

have to be split into limit against receivables and limit against stocks. Marginagainst receivables can be reduced upto 10% and also finance against debtors

beyond 90 days upto 180 days can be given where such insurance cover is

available.

Once the assessment of working capital limit including DA L/C limit is done and

approved, the interchangeability between these two limits and interchangeability

between L/C limit and bank guarantee limit if for any reason is required to be

done, it should be done with proper assessment and approval by the respective

sanctioning authority.

a. MPBF Method:

Reserve Bank of India has withdrawn the prescription in regard to the

assessment of working capital needs based on the concept of Maximum

Permissible Bank finance (MPBF). However, our Bank has decided to

continue with the existing practice of MPBF with following prescriptions:

a. As far as possible second method of lending i.e. minimum NWC 25% oftotal current assets shall be applied to all the credit exposure above

Rs.25.00lacs. The same can be relaxed to first method of lending i.e.

minimum NWC 25% of Working capital Gap in deserving cases for credit

limits of Rs.25.00 lacs to Rs.100.00 lacs with proper justification and future


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plan of building up of NWC upto the desired level.

b. As per earlier RBI guidelines following heads are to be excluded from

current assets while calculating MPBF. Margin against L/C, B/G, Fixed

deposits for payment of sales tax deferral, advances to associate

concerns, directors, partners, investment in associates, shares,

debentures, debtors above six months and non moving stock.

c. However, while calculating net worth the above items except following

should be treated as non current assets and should form part of net worth:

Advances to associates/ investments in associates.

Debtors above six months if stuck up and not recoverable.

Non-moving/ old obsolete stock.

These items should be deducted from net worth.

d. Bills negotiated under L/Cs: As working capital requirements for the same

are assessed separately, receivables under L/C need not be included in

the current assets. Similarly, bank borrowings under bills purchased/

negotiated under L/Cs need not be included under current liability. They

should be shown as contingent liability as additional information.

e. Term loan installments/ Deferred Payment Guarantee (DPG) installments

falling due for payment during the next 12 months may be included under

current liabilities.

f. While calculating MPBF under first method of lending or second method of

lending DA L/C will be considered as working capital limits and the credit

enjoyed against D.A. L/C should be reflected in the creditors while

assessing the limit and margins on stocks, debtors and creditors should

be considered accordingly.

b. Turnover Method:

For accounts with annual Turnover upto Rs.100.00 lacs or limits upto

Rs.25.00 lacs the maximum limit based upon the Turnover method (25% of

projected annual turnover for manufacturing unit and 20% for trading

concerns of which 5% should be from the promoters) is applicable. In any


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case, our Working Capital limit should not be more than 20% & 15% of the

projected turnover, for Manufacturing and Trading units, respectively. These

guidelines have been formulated assuming average production/ business

cycle of 3 months. In reality, this cycle could be longer or shorter. The

proponent's working capital requirements may be discussed on the basis of

traditional approach of production/business cycle and limits may be

considered in excess of 20% of the projected annual turnover wherever

warranted due to longer cycle, keeping a minimum margin of one-fifth of the

working capital requirements. On the other hand, in case of shorter

production/ business cycle, working capital limits at 20% of the projected

annual turnover may be sanctioned and actual drawing should be allowed on

the basis of drawing power after excluding unpaid stocks/stocks acquired

under D/A L/C. Since this type of facility is generally allowed for small units

the D:E ratio above the stipulated norms maybe accepted if other parameters

are favourable.

CASH FLOW ANALYSIS: -

1. We need to examine the Cash flow of the borrower to determine, whether the

company generated enough cash from its own operations to cover all its

expenses, including its interest and loan installment payments. This will also

enable detection of any aberrations in the cash flows of the unit.

2. Analysis of cash flow of the borrowers will also be monitoring tool for detection

of diversion/siphoning of funds by the borrower. Such diversion/siphoning of

funds should be construed to occur if any funds borrowed from Banks are utilized

for purposes unrelated to the operations of the borrower to the detriment of thefinancial health of the entity or of the Bank. The decision as to whether a

particular instance amounts to siphoning of funds would have to be a judgment of

the Bank based on objective facts and circumstances of the case.


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The security-wise margin prescriptions are as follows:

Type of Security Margins prescribed

Raw Materials 30 %

Work-in-Progress 40 %Finished Goods 30%

Packing Materials 50%

Tools Dies, Moulds 50%

ReceivablesUp to 90 Days

91 Days to 180 Days

(As far as possible we shoulddiscourage the financing of theseDebtors)

30 % (Debtors from PSU/Listed Cos.)40 % (Otherwise)

50%

(With specific sanction by appropriateauthority and also supported byadditional security or further charge onfixed assets. In such cases the debtorsshould be from Govt. Department orfrom reputed industrial corporates.Each case may be consideredseparately) Alternatively insuring thereceivables with the InsuranceCompany be considered.

Supply Bills against the bills drawnon Multinationals / large Corporate

10 % minimum

Bills Discounting against acceptedHundies

NIL

Plant & Machinery:(1st Hand and/or 2nd Hand)

Imported

Indigenous

Special Purpose Machinery ofMachinery used in ChemicalProcesses / Industry which is subjectto fast deterioration.

25%

30%

40%


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COLLATERAL SECURITY: -

It has been our practice to insist upon collateral security for every credit exposure

funded and non funded. The Bank considers such collateral as additional

cushion in the event of forced liquidation of debt. We may consider obtaining

additional collateral security i.e. over and above the norms specified below,

where the primary security is inadequate or for any other valid reasons like weak

financials, risky ventures, untested projects/products, sunrise industries, etc.

where primary security has limited market. In case of certain categories of

advances such as Diamond Exports, Software, etc., where tangible primary

security is not available/ valuation of which is difficult and advance is granted

more on trust and track record of performance and conduct of the account it is

advisable to obtain additional collateral cover. Whilst considering collateral

security, we should also explore possibility of obtaining 1st/2nd charge on block

of assets to cover working capital limits/all other facilities and cash and cash like

securities like Bank's Term Deposits, government securities, shares, debentures,

commercial real estate, residential real estate, etc. In respect of the credit

exposure to non-corporate enterprises, the owners are also personally liable to

the Bank for the credit facilities, enjoyed by the business unit. In regard to credit

facilities to corporate enterprises, the guarantees of promoters/major

owners/directors should be insisted upon except for widely held companies. The

value of such guarantees is generally more related to ensuring the continued

involvement of the main persons behind the organisation than as a financial

cushion in the event of loss to the Bank. Where beneficial ownership/control lies

with person/s other than the borrower himself guarantee of such beneficial

owner/controller should be obtained.

Collateral cover percentage should be calculated based on 100% of FB limits +NFB limits.

The requirement of collateral is now linked to the rating of the account and our

reference for the related industry.


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CREDIT RATING SYSTEM: -

Appraisal of credit facilities would comprise 2 discrete segments:

Appraising the health of the customer.

Assessment of the customers credit needs.

Both the aspects need to be examined simultaneously at the time of the initial

entry for customer to the Bank as also subsequent periodic renewals. In regard

to customers engaged in business/trade/industry (other than tiny units and

agriculturists) a detailed risk-rating model has been evolved.

Credit rating exercise is to be done annually on the basis of audited balance

sheet.The rate of interest applicable as per credit rating shall be charged to the

account from the due date of the review or actual date of review whichever is

earlier or as stipulated in sanction.

There are various parameters on which the credit rating of the firm/organization

takes place which are as follows: -

FINANCIAL PARAMETERS :-

o Current Ratio

o Debt-Equity Ratio

o PBDIT / Sales: (Last 3 years trend to be considered)

o Sales to Working Capital Exposure

o Sales to Assets

o Interest service coverage ratio

o Debt Service Coverage Ratio

o Trend Analysis (for last 3 years)

Current Ratio

Debt equity Ratio Sales growth rate

Cash Accruals


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UNIT INSPECTION: -It is observed that the area of Unit Inspection still remains a neglected area. This

year it is expected that the inspection of accounts would be carried out before

31st August 07 and the reports will be available for incorporating in the renewal

notes. The zones/branches are expected to go through the inspection reports

and get the compliances on the discrepancies observed and the same to be

reported in the renewal notes. Unit inspection of all other accounts where the

limits are below Rs.100.00lacs or where the unit is enjoying only term loans, shall

be carried out by the branch/zonal office as under:

Status of account Site inspection by Frequency

Standard accounts Branch officials/ Zonal

Office.

Once in half year

Substandard accounts Only by Branch Manager /Zonal

office/ NPA Management Dept.Once in a quarter

The inspection of all the units must be completed as prescribed above, every

year. A report based on inspection findings and operations of the account has to

be placed before G.M. Commercial Credit/ C.G.M. (Business) in respect of

accounts with exposure of Rs.100.00lacs and above and in other cases before

Zonal Manager within a period of one month from the date of Inspection.

Special Mention Accounts (SMA)All the accounts carrying rating D and further should be marked as Special

Mention Accounts (SMAs). Also units, which slip down directly from Prime to

B or from A to C, then such units, must also be marked as SMA. Further any

other units, which Branch/Zone feels that should be marked SMA, may be

marked SMA.

The purpose of Special Mention Accounts (SMAs) mechanism is to identify,

monitor and improve status of the accounts and evolve strategies to avoid further

slippages of identified Special Mention Account to NPA category. The bank

assesses whether the default in an account is due to some inherent weakness or

due to a temporary liquidity or cash flow problem and accordingly calibrates its


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FACILITIES PROVIDED BY THE BANK: - Bank Guarantee

Letter of Credit

Adhoc

Consortium Lending:

Term Loan

Retail Loans

Bank guarantee:

Borrowing and lending of money had become a part and parcel of commercial

transactions. The lender naturally desires to safeguard his own position and

wants to ensure that the money lent was received back without fail. As a meansof such safeguard he seeks from the loanee the guarantee of another person

(who was considered good for the amount in question) for the prompt repayment

of the debt in case the loanee fails to repay.

Applicant A) and Beneficiary B) had a business contract. This was primary

contract. B wants to cover against the risk of any possible non-performance of

contract by A. So B can ask for a monetary deposit as a cover. A was not willing

to block his money (which he can otherwise profitably use) so A approaches his

bank with a request to issue Bank Guarantee in favor of B. Thus, it arises the

need for a Bank Guarantee.

The Bank had been issuing Bank Guarantees of various types for our

constituents since long. These were Performance Bank Guarantee, Bid-Bond

Bank Guarantee, Earnest Money Bank Guarantee, Security Deposit Bank

Guarantee Advance payment guarantee etc.

Period of Bank Guarantee:

As a normal practice, the period of Bank Guarantee not to exceed 3 years.

However issuance of bank Guarantees covering period more than 3 years may

be considered on following lines;

For Customers rated in Prime or A and `B` category, Bank Guarantee may be

issued for a max 10 years.


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However such guarantees to be issued only after proper sanction from

appropriate sanctioning authority.

For Customers rated in B category, Bank Guarantee may be issued for a max. 5

years.

For all other class of customers, the period will be maximum 3 years.

Margins: -

For Customers rated in Prime or A category, a margin i.e. 10% be stipulated.

For Customers rated in B category, a margin in the range of 10% to 15% may

be stipulated.

For Customers rated in C category, margin more than 15% or more was

stipulated. For all other categories of customers higher margin of min. 25% be

stipulated. Margin stipulation be enhanced depending upon the period of

Guarantee.

Letter of Credit: -

The expectation of seller of any goods/services was that he should get the

payment therefore immediately on delivery of goods/services. This may not

materialize if the seller and buyer were at different places (either within the same

country or in different countries). The seller desires to have an assurance for

payment by the purchaser. At the same time, the purchaser desires that he

needs to pay the amount of goods/services only when they were actually

received. Here arises the need for a Letter of Credit. The objective of a Letter of

Credit was to provide a means of payment for goods and services supplied by a

seller to buyer, by ensuring payment to seller and at the same time the delivery

of goods/services to the buyer.

Adhoc/Temporary Overdraft: -

Bank had been generally granting adhoc limits to the accounts with credit ratings

PRIME, A, B and C up to Rs.100.00lacs within the delegated powers of different

category of officials. These delegated powers of sanctioning adhoc limits were


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linked to existing sanctioned working capital limits including D/A L/C limits on

percentage basis. As per the existing guidelines the adhoc limits were not

supposed to be continued for a period exceeding 90 days and should not be for

more than 2 occasions in a financial year. In order to had a proper assessment of

such additional requirement it was proposed to consider sanctioning standby line

of credit to the accounts with PRIME, A, & B rated accounts and in other cases

for any requirement of adhoc limits the request should be entertained only by the

appropriate sanctioning authority.

Consortium Lending:

RBI had done away with the mandate on compulsory formation of consortium

and had allowed lending under Multiple Banking System. It was considered

advisable to prefer forming consortium for lending purpose.

Where our Bank was the leader of the consortium, other participating Banks will

be associated in the process of credit assessment; monitoring and control. Our

share in consortium advance should not exceed 30% of total limits enjoyed by

the unit and 50% in case we were the leaders of consortium subject to exposure

limit as stated earlier. Additional exposure, by way of either Adhoc or regular

limit, should be taken in the accounts in consortium unless approved by the

consortium.

Term Loan: -

Term Loan was one of the most important source of external finance to many

companies. Generally term loan was given for business purpose like building

corporate office or purchase of Plant and Machinery or for factory set up. Term

Loan was given maximum for 7 years according to Banks credit policy.

Sometimes Moratorium period was also given for Term Loan.

While approving the term loan, following parameters should be verified/

ascertained:

a. Cost of project, value of land and building - whether reasonable considering

the location, type of construction. Statements expressing verification,


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ascertaining these costs- certifying the genuineness of the project cost, should

be made.

b. Machinery whether the proposed set-up was adequate for the activity

proposed to be carried out and the projected turnover was possible.

c. Installed capacity- installed capacity of the machinery and the plant should be

stated in the note and be ascertained.

d. Reference to the set up of similar units banking with us should be made and

commented upon. For this, the processing officer should collect information on

the units banking with us and their details as regards sales/ profitability,

breakeven analysis, sensitivity analysis etc. should be compared/done.

e. Means of finance- sources of own funds should be clearly stated. Sources

should be verified. If the source was cash accruals, whether the cash accruals

were possible with reference to earlier years position and actual sales in current

year should be commented upon.

f. Installed capacity of the plant should be stated.

g. Projections should be independently ascertained. The facts submitted by the

clients should be verified/ascertained.

h. The executive summary should have projections minimum for the years during

which the proposed repayment falls due.

Retail Loans: -

1. Guidelines for assessment of a retail borrower, eligibility norms, purpose wise

upper limits etc. for retail loan are issued under Multi purpose loan scheme and

other schemes, which are already circulated.

2. Any deviations from the prescribed norms under retail products should be

avoided. However, deviations from norms of Retail Loans MPLS,

Vastusiddhi & Car Loans & Executive Finance / Privileged Finance can be made

in exceptional cases by the Zonal In charge as per the guidelines issued in this

respect thro Revised Delegation of Authority depending on the merits. The

deviations approved by the Zonal In charge should be reported positively in the

prescribed format (ChapterFORMATS) to G.M. RBD on quarterly basis.


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34

3. Group loans, tie up with dealers should be explored on an on going basis.

The deviations in-group loans, from the existing standard norms should be

clearly brought out. A format is already circulated. Exposure above Rs.3.00crores

to the employees of a single company should be approved by the

CENMAC/Board.


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CASE STUDY

ON

M/S A AGENCIES.


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Address Office:

31- N Laxmi Indl. Estate, New Link Road, Andheri (W) Mumbai

Factory:

Plot No.2514/2515, Phase IV, GIDC, Vapi.

PROPOSAL: Review/Renewal of following existing limits:

Type of Facility Sancd. Limit Ruling Limit O/s Bal.

27.06.08

Overdues

Cash Credit 500.00 500.00 179.080.00

Total Funded 500.00 500.00 179.08 0.00

Others 0.00 0.00 0.00 0.00

Total N-Funded 0.00 0.00 0.00 0.00

Total FB + NFB 500.00 500.00 179.08 0.00

WHETHER SOLE/CONSORTIUM/MULTIPLE

BANKING:

Sole

IF CONSORTIUM/MULTIPLE BANKING - % age OF

OUR BANKS SHARE

N.A

Associate Concern

Name of Unit Activity Promoters Constitutio

n

Facilities Bankers

U ChemicalsPvt. Ltd

Strategicinvestment of

the entire group

Mr. U.A.SMr. J.R.N

Mr. H.A.

Pvt. Ltd.Net Worth:

lakh

NIL BOI

DETAILS OF FACILITIES WITH OTHER BANK/s, F. Is.: N.A


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PERFORMANCE & FINANCIAL POSITION (In Brief):

Particulars Audited Audited Projected Provisional.

2005-06 2006-07 2007-08 2007-08Export Sales 0.00 0.00 0.00 0.00Local Sales 3108.15 4850.80 7500.00 6387.43

63

Total Gross Sales 3211.73 4942.33 7590.00 6387.43Net Sales 3211.73 4942.33 7590.00 6387.43

(Avg. P.M.) 267.64 411.86 632.50 532.29P.B.D.I.T 465.67 592.98 777.30 1027.22

(%age to Sales) 14.50% 12.00% 10.24% 16.08%Operating Profit 253.37 401.30 618.50 626.29

(% age to Sales) 7.89% 8.12% 8.15% 9.81%Net Profit (Aft Tax) 257.53 344.11 460.50 624.58

Depreciation 11.95 11.80 11.80 21.50

Cash Accruals 219.40 208.78 372.30 450.96(% age to Sales) 6.83% 4.22% 4.91% 7.06%Fixed Assets 57.02 63.91 52.11 114.21Term Liabilities 6.85 2.58 0.00 0.00

Current Assets 1381.87 1998.52 2885.00 2406.10

Current Liab. Exc Bank

Finance

697.64 1135.99 1172.76 900.18

Bank Finance 40.41 9.95 500.00 249.78Net Worth 693.99 913.91 1264.35 1370.35

Sales Growth Rate ----- 53.88% 53.57% -15.84%

Own Funds %age 55.75% 62.89% 73.11% 73.23%

Current Ratio 1.87 1.74 1.72 2.09

Debt/Eq. Ratio 0.12 0.08 0.40 0.36

Sales F.A. Ratio 56.33 77.33 145.65 55.93

D. S. C. R. 21.49 18.47 20.59 9.03

Avg. D. S. C. R -- -- -- --

ISCR 5.80 8.14 9.29 12.51


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Comments on variances Actuals vis-a-vis Projections:

The firm is currently enjoying a Cash Credit limit of Rs.500.00lakh, which is

assessed for the sales of Rs.4473.11, which is 11.18% of the total sales i.e.

within the norms of 15% as per the credit policy. The firm maintains finished

goods stock of 1.5 to 2 months, which is in same trend as the earlier years.

The receipt of payments as per existing trend is 2.5 to 3 months while the

creditors level as on 31.03.07 was 3.24 which reduced to 1.93 in F.Y 2007-08

because of the change in the suppliers policy of the company and that is the

reason why they had availed additional Cash Credit facilities from us.

Sales:

The applicant company has achieved sales of Rs.6387.43lacs for the

F.Y.2007-08 i.e. there was an increase in the sales by 31.67% in comparison

with the P.F. 2006-07. The applicant had projected sales of Rs.7590lacs for

the F.Y. 2007-08 but achieved sales of 6387.43lacs only which is due to the

High Seas sales opted by some of the companies customers where in the

duty of the Import is directly paid by the companies customers and the value

to that extent does not reflect in the companies sales figure. Inspite of the

reduction in value of sales, the company has been able to achieve higher

Profits in the same period than Projected.

Sales Performance

2953 3212

4942

6387

8340

2004- 05 2005- 06 2006- 07 2007- 08 2008- 09

Rs.

in

lacs


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Net worth:

Net worth for the F.Y 2007-08 is Rs.2060.22lacs which is higher as compared to

the P.Y.2006-07 i.e. Rs.913.91lacs due to the increase in profitability from

344.11lacs to 624.58lacs in F.Y. 2007-08 and retention of profits in the firm.

net - worth

476694

914

1973

2004-05 2005-06 2006-07 2007-08 2008-09

Key Ratios:

Current Ratio: -

Current Ratio has increased form 1.74 to 2.09 in the F.Y 2007-08 which is well

above the minimum level of 1.33 (norms). This shows the healthy short term

liquidity of the firm.

Current ratio

1.681.87 1.74

2.092.36

2004-05 2005-06 2006-07 2007-08 2008-09

ISCR-Ratio:

ISCR-Ratio is 12.51 in the F.Y 2007-08, which shows the better financial

capacity of the unit to serve the debt burden of the applicant company.


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45

Debt/equity ratio: -

Debt/equity ratio has increased from 0.01 to 0.18 in FY 2007-08 which is well

within the norms of 2:1 which is acceptable by the bank.

Debt equity ratio

0.03

0.07

0.01

0.18

0.15

2004-05 2005-06 2006-07 2007-08 2008-09

Own Funds: -

Own Funds for the F.Y. 2007-08 is 73.23% which is well above our norm of

50%

% of Own Funds

82.77%73.23%

62.89%55.75%48.62%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

2004-05 2005-06 2006-07 2007-08 2008-09


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Visit / Inspection of Unit: Visit was paid by Mrs. M.T, Chief Manager, Goregoan

(W) Branch in November 07 & the overall observations were satisfactory.

Particulars Observation/s

Verification of Security Record.

(whether verified and found correct)

Maintained

Verification of Books of Account Maintained Upto date

Physical verification of Security

Stocks/Machineries hypothecated to

us or otherwise.

-------

Adequacy of Security and insuranceof the same

(whether security is adequate and fully covered

under insurance)

Adequate

Whether Unit Inspection Report in

prescribed format is brought on

records?

No, will be bought on record after

factory visit

Position of payment of Statutory

Dues

Paid up to date

Documentation: N.A

Pending Compliances: N.A


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CASE STUDY ON

M/S S SCIENTIFIC

PRODUCT

LTD.


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KEY PERSON/s: Mr.H.A.

ADDRESS/es:

Office: Factory & Office : Plot No.94, Sector 1,V

Taluka Co-op.Ind. Estate, V (E) .

Ownership

Factory: SAME AS ABOVE Ownership

MAJOR CLIENTELE:

Name of the Party Sales

(For FY 2007-08)

%age to

Total Sales

A Pharma Ltd 45.23 10.14

B Plastic Products 15.30 3.43

E Pharma Ltd 31.30 7.02

G Pharma Ltd 27.19 6.10

P Ltd 30.44 6.82

S-S India Ltd 18.06 4.05

The H Drug Co 136.48 30.60

W Ltd 115.86 25.97

Others 26.9 5.87

T O T A L 446.05 100.00 %

REQUEST/s:

Sr. No. Details of Request/s

1. To reduce the rate of interest from14% to 12%-11%.


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REASONS FOR REQUEST/s:

Sr. No. Details of Reasons

1. As per our credit policy, Company is presently charged 14% interest

to their OD no.1513 since applicant company is B rated.

But due to progressive financials the credit rating has upgraded to

A so the proposed interest is PLR+0.50%. The client company has

requested to reduce the interest by 3%-2%.

PROPOSAL: 1. Applies for Additional Limit/s as given below:

2. Renewal/Review of Existing Limits.

Type of

Facility

Sancd.

Limit

Ruling

Limit

Addl./

New

Applie

d

Addl./

New

Recomd.

Total O/s

Bal.

20.06.0

8

Over-

dues

(1) (2) (3) (4) (5) (6) (7) (8)

Cash Credit 35.00 35.00 20.00 20.00 55.00 13.34 -

Bills Discg. - - 30.00 30.00 30.00 - -

Total Funded 35.00 35.00 50.00 50.00 85.00 13.34 -

*Letter ofcredit

- - 30.00 30.00 30.00 - -

Total N-

Funded

- - 30.00 30.00 30.00 - -

Total FB +

NFB

35.00 35.00 80.00 80.00 115.0

0

13.34 -

*The applicant company was enjoying Sub limit LC of Rs.15lacs, but has now

applied for separate limit for LC of Rs.30lacs.

Since the LC limit was by way of sub limit of Cash credit, L/C was not utilized.

Hence no L/C is outstanding.

Details of Borrowing in the individual names of Partners/Directors: NIL


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WHETHER SOLE/CONSORTIUM/MULTIPLE BANKING: SOLE

IF CONSORTIUM/MULTIPLE BANKING - % age OF

OUR BANKS SHARE

-

DETAILS OF FACILITIES WITH OTHER BANK/s, F. Is.: NIL

OUR GROUP EXPOSURE (Present & Proposed):

(Rs. In Lacs)

Name of the unit Facilities enjoyed Sales (Net) Net Worth

Funded N-

Funded

06-07 07-08 06-07 07-08

M/S B PlasticProducts

CC-40.00(LC15.00)

- 359.61 386.49 79.41 92.18

M/s S Scientifc

Product Pvt. Ltd

Existing

CC 35.00

(LC 15.00)

Proposed:

CC- 55.00

BD- 30.00

LC

30.00

249.96 410.34 92.45 75.73

M/S B Plastics Products is engaged in activity of only trading and import of gift

articles. It is enjoying cash credit facility of Rs.40Lakhs with sub limit for LC

Rs.15lakh. The collateral security for this facility is legal mortgage of office unit of

M/S B Plastics Products, situated at 147/5-B, M Industrial Estate, M.

TERM LOAN: N.A.


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LETTER OF CREDIT(60days D/P Basis):

The company is engaged in activity of trading and manufacturing gift items. Till

now there was purchasing raw material locally but now they are planning to

import certain raw material, which will be approximately Rs.190.00lacs from

China, Guanzou & Senzena Imports will be covered under OGL/Specific license.

Lead period of 60 days is considered on the following basis:

1. 20 days from establishment of credit to shipment

2. 30 days transit period

3. 10 days for local transit

The calculation of L.C limit is as follows:

D.P L/C = Purchases x lead time =

360

= 190 x 60 = 31.67lacs

360

The need come out of Rs.31.67lacs i.e. Rs.30.00 so the office recommends LC.

On 60 D.P. basis of Rs.30lacs

BACKGROUND: -

1) M/S S Scientific Products Pvt. Ltd. established in the year May 1981. Thecompany has engaged (over the last 21 years) in the manufacturing, tradingand import of corporate gifts. The corporate clients are mainly pharmaceuticalcompanies. Mr. H.A the managing director is the key person of the company.Since 1993 he has taken over the company and has given a vision anddirection to the company. The company is banking with us since 1993.

2) The company manufactures various plastic moulded gift items for

pharmaceutical Companies like M/S L Lab. M/S R Lab Ltd. M/S C PharmaPvt.Ltd. It is also trading in plastic novelties and gift items.

3) The company is having its associate concern, M/S B Plastic Product apartnership firm engaged in activity of trading of gift items. The Partners areMr.N.A and Mrs. R.A Mr. N.A is brother of Mr. who is also director for M/SS.M.S scientific Product. Pvt. Ltd. They are enjoying cash credit facility ofRs40.00lacs with sub limit for LC limit of Rs.15.00lacs.


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PERFORMANCE & FINANCIAL POSITION (In brief): -

Particulars Audited

2005-06

Audited

2006-07

Prov.

2007-08

Projected

2008-09

Export Sales

Local Sales165.57 251.29 412.47 550.80

Total Gross Sales

Net Sales156.92 249.96 410.35 526.05

(Avg. P.M.)13.08 20.83 34.20 43.84

P.B.D.I.T10.49 10.30 28.49 30.84

(%age to Sales) 6.68% 4.12% 6.94% 5.86%Operating Profit

5.12 5.50 14.68 18.86(% age to Sales)

3.26% 2.20% 3.58% 3.59%Net Profit (Aft Tax)

5.11 3.56 14.93 13.47Depreciation

3.63 3.23 1.39 3.13Cash Accruals

8.74 6.64 16.32 16.60(% age to Sales)

5.57% 2.66% 2.46% 3.06%

Current year Sales last 2 months) Rs. 79.48lacs

Previous Period Sales for the similar period Rs. 108.77lacs

Particulars Audited

2005-06

Audited

2006-07

Provisional.

2007-08

Projected

2008-09

Fixed Assets21.63 19.10 22.34 19.21

Term Liabilities 0.00 0.00 0.00 0.00Current Assets

103.80 120.93 120.75 187.09Current Liability.

19.88 28.18 26.24 38.88Bank Finance

18.75 19.40 41.12 85.00Net Worth

86.80 92.45 75.73 82.42


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Operating profit %

3%

2%

4% 4%

5%

2005-06 2006-07 2007-08 2008-09 2009-10

Net worth: -

Net worth has decreased from Rs.92.45lacs to Rs.75.73lacs in the F.Y 2007-08

The applicant company has paid off Rs.33.40lacs of its unsecured loan which

has lead to a fall in the net worth of the company.

net - worth87

92

75

95

2005-06 2006-07 2007-08 2008-09 2009-10


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Own Funds: -

Own Funds for the F.Y. 2007-08 is 50.40% which is above our norm of 50%

% of Own Funds

56.98%

50.40%

36.84%

12.31%9.18%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

2005-06 2006-07 2007-08 2008-09 2009-10

Key Ratios:

Current Ratio:

Current Ratio is 1.79, which is above the minimum level of 1.33 (norms) which

show higher liquidity of the company and the current ratio is projected to improve

over the years.

Current ratio2.69 2.54

1.791.51 1.55

2005-06 2006-07 2007-08 2008-09 2009-10


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Key Ratios:

Current Ratio: -

Current ratio is projected to be 1.51 in the F.Y.2008-09, which shows that the firm

has good short-term liquidity position and within our norms of 1.33.

Debt-Equity Ratio: -

The Debt Equity ratio of the firm is estimated to be 1.03 in the F.Y.2008-09

which is well within our norms of

ISCR Ratio: -

The ISCR ratio of the firm is estimated to be 3.02 in the F.Y.2008-09.

UTILISATION:

(Rs. In Lacs)

Period Debits Credits Max. Bal. Min. Bal. Sales

01.04.07 to 31.03.08 479.06 477.07 55.00 36.96 446.05

01.04.08 to update 65.27 68.23 17.62 34.51 79.48

*100% sales are routed through the account.

PARAMETERS:

Exposure Proposed:

Particulars Norms(As perCredit Policy)

Actuals

Individual Exposure 2500 115Group Exposure 6500 160


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Credit Rating:

Particulars Norms for Min.Marks

Marks Out of Marks Scored

Marks in Financials 32.50 65.00 60.00Marks in Non-Financials 17.50 35.00 39.00

T O T A L 50.00 100.00 89.00

05-06 06-07 07-08 REASONS (if downgraded)

A B A -

Collateral Security:

Particulars (Give brief Details) Norms (%age)

Actuals (%age)

Equi. Mortgage of factory bldg. At plot.No.94,Sector 1, V Taluka Ind Estate.Ltd, V(E) Dist.Thane 401208. Area 836 sq.mtrs., M.VRs.59.48lacs valuation done by P.D on 20.05.06.KDR of Rs.1 lacsL.I.C Policies of Rs.3.80lacsTotal Rs.64.28lacs for Proposed exposure ofRs.115lacs

25% 55.90%

Key Ratios:

Ratios Norms Actuals2006-07 2007-08

Current Ratio 1.33 2.54 1.79D / E Ratio 2.00 0.21 0.54I.S.C.R. 2.50 5.22 2.34%age of Own Funds 50 % 12.31 36.84

Deviation/s made/proposed, reasons for such deviations from the norms andjustification for the same:The % of own funds to net worth is 36.84% which is below our norms i.e. 50% but sincenet worth consists of unsecured loans from family members. The condition of

subordination can be stipulated.


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UNIT SPECIFIC PROSPECTS OF THE INDUSTRY (In brief):

Gift, novelty and souvenir shops have been assigned the Standard Industrialclassification (SIC) Industry Number 5947. The market for gifts and homeaccessories is now active. Many gift shops are showing a profit, and industry

sales volume continues to rise. Increasing affordability, acceptance of corporategifts as a utility product rather than a luxury item and the low penetration ofcorporate gifts in India, is expected to a sales growth of 30-40% in corporateindustry in 2008-09.

STRENGTHS:1. The company is banking with us since 1993.2. Adequate collateral security.3. Established client base. Clientele consists of reputed pharmaceuticalcompanies4. Experienced Directors.

REMARKS & RECOMMENDATIONS:

In view of the above, the office recommends,

A) Additional CC limit of Rs.20.00lacs, Making total CC limit of Rs.55.00lacs &additional Bill Discounting of Rs.30lacs and separate LC limit Rs.15lacs subjectto terms and conditions as per schedule 2 attached.

B) Renewal of the existing Credit facilities be recorded on the basis of ProvisionalAccounts for the year ended on 31st March 2008.Audited accounts to besubmitted before 30.09.08.If variation between audited and provisional accounts+-5%, the same would be reported to C.G.M., Business.

C) Next Renewal on or before 30.09.09 on the basis of Audited accounts for theyear ended 31.3.09.


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Annexure

M/s A Agencies SCHEDULE 5OPERATING

STATEMENT AUD AUD PROJ PROV PROJ PROJ

2005-06 2006-07 2007-082007-

082008-

092009

10Local Sales(Mfg.) 3108.15 4850.80 7500.00 6387.43 8250.00 9075.0Local Trading/Jobwork 103.58 91.53 90.00 0.00 90.00 90.0conversion & servicechg 0.00 0.00 0.00 0.00 0.00 0.0Export sales (Trading) 0.00 0.00 0.00 0.00 0.00 0.0

Total Gross Sales 3211.73 4942.33 7590.00 6387.43 8340.00 9165.0

Less: Excise Duty/Returns 0.00 0.00 0.00 0.00 0.00 0.0

NET SALES 3211.73 4942.33 7590.00 6387.43 8340.00 9165.0MATERIALCONSUMED

Imported 0.00 0.00 0.00 0.00 0.00 0.0

Indigenous 2413.77 3922.49 6135.88 4903.28 6739.80 7402.

Materialconsumption tosales ratio 75.15 79.37 80.84 76.76 80.81 80.7

Packaging material 0.00 0.00 0.00 0.00 0.00 0.0Spares, stores &consumables 0.00 3.83 0.00 0.00 0.00 0.0

Power, fuel, water 0.00 0.00 0.00 6.76 0.00 0.0

Direct labour 0.00 0.00 0.00 0.00 0.00 0.0Other Mfg.Expenses. 0.00 11.45 4.80 0.00 5.10 5.4

Depreciation 11.95 11.80 11.80 21.50 11.80 11.8

Sub Total 2425.72 3949.57 6152.48 4931.54 6756.70 7419.3

Add :Opening W.I.P. 0.00 0.00 0.00 0.00 0.00 0.0

Less: Closing W.I.P. 0.00 0.00 0.00 0.00 0.00 0.0

Cost of Production 2425.72 3949.57 6152.48 4931.54 6756.70 7419.3


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M/s A Agencies SCHEDULE NO 6COMPARATIVE FINANCIALPOSITION AUD PROJ PROV PROJ PROJ

2005-062006-

07 2007-08 2007-08 2008-092009-

10

Land 0.00 0.00 0.00 0.00 0.00 0.00Building 13.68 12.99 12.29 12.34 11.59 10.89Capital W.I.P. 0.00 0.00 0.00 0.00 0.00 0.00Plant & Machinery 7.97 12.72 11.55 48.27 6.15 0.75Vehicles 0.00 0.00 0.00 36.47 0.00 0.00Other Fixed Assets 35.37 38.20 28.27 17.13 22.57 16.87TOTAL 57.02 63.91 52.11 114.21 40.31 28.51Less: RevaluationReserve 0.00 0.00 0.00 0.00 0.00 0.00TOTAL FIXEDASSETS 57.02 63.91 52.11 114.21 40.31 28.51TL from Institutions.(excl. 1 year) 0.00 0.00 0.00 0.00 0.00 0.00Bank Term Loan(excl. 1 year) 0.00 0.00 0.00 0.00 0.00 0.00Other term loans 6.85 2.58 0.00 0.00 0.00 0.00TOTAL TERMLIABILITIES 6.85 2.58 0.00 0.00 0.00 0.00NET FIXED ASSETS 50.17 61.33 52.11 114.21 40.31 28.51Raw MaterialIndigenous 0.00 0.00 0.00 0.00 0.00 0.00

------"---------- Imported 0.00 0.00 0.00 0.00 0.00 0.00W.I.P. 0.00 0.00 0.00 0.00 0.00 0.00Finished Goods 381.39 555.88 720.00 806.15 825.00 920.00Stores & Spares 103.92 180.42 0.00 0.00 0.00 0.00

Adv. To suppliers 6.44 0.00 40.00 6.36 40.00 40.00Trade Drs.-Local(within6 mths) 763.12 1138.05 1875.00 1516.99 2060.00 2265.00TradeDrs. -Exports(within 6 mths) 0.00 0.00 0.00 0.00 0.00 0.00Trade Drs-Local(above 6 mths but

recoverable 0.00 0.00 0.00 0.00 0.00 0.00Trade Drs-Exports(above 6 mths butrecoverable) 0.00 0.00 0.00 0.00 0.00 0.00Loans & advances 19.95 0.00 0.00 0.00 0.00 0.00Cash & Bank Balance 35.27 61.98 50.00 16.75 50.00 50.00Other Current assets 71.78 62.19 200.00 59.85 200.00 200.00


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TOTAL CURRENTASSETS 1381.87 1998.52 2885.00 2406.10 3175.00 3475.00Cash Credit 40.41 9.95 500.00 249.78 500.00 500.00Bill Purchase 0.00 0.00 0.00 0.00 0.00 0.00Term Loan Insta. In a

year 0.00 0.00 0.00 0.00 0.00 0.00Creditors for goodsLocal 650.74 1060.59 1091.76 790.33 0.00 0.00'---------"---------Import 0.00 0.00 0.00 0.00 963.96 794.16Creditors forexpenses 3.77 4.77 21.00 4.40 24.00 27.00Deposits accepted 0.00 0.00 0.00 0.00 0.00 0.00

Advances received 1.41 2.43 5.00 1.96 5.00 5.00Tax Provisions 0.00 15.01 0.00 0.00 0.00 0.00Other provisions 0.00 0.00 0.00 0.00 0.00 0.00

Others 41.72 53.19 55.00 103.49 55.00 55.00TOTAL CURRENTLIABILITIES 738.05 1145.94 1672.76 1149.96 1547.96 1381.16

NET CURRENTASSETS 643.82 852.58 1212.24 1256.14 1627.04 2093.84

Other Current Assets 0.00 0.00 0.00 0.00 0.00 0.00Less Other CurentLiabilities 0.00 0.00 0.00 0.00 0.00 0.00

Net Other CurrentAssets 0.00 0.00 0.00 0.00 0.00 0.00

TANGIBLE NETWORTH 693.99 913.91 1264.35 1370.35 1667.35 2122.35Represented By:

Opening Balance ofCapital 771.09 1079.31 1276.29 1276.29 1636.79 2039.79+Profit/Loss in theyear 257.53 344.11 460.50 624.58 503.00 555.00+Capital introduced 100.77 0.00 0.00 0.00 0.00 0.00

+Reserves ( Excl Rev.Reserve) 0.00 0.00 0.00 0.00 0.00 0.00+UnsecuredLoan/quasi equity 307.11 339.15 340.00 366.90 340.00 340.00- Drawings/Dividend 50.08 147.13 100.00 195.12 100.00 100.00NET WORTH (A) 1386.42 1615.44 1976.79 2072.65 2379.79 2834.79Dr.s above 6 mths(non-recovarable 0.00 0.00 0.00 0.00 0.00 0.00


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+Investmentsincluding ICDs 680.00 689.10 700.00 702.30 700.00 700.00=Total non currentassets 680.00 689.10 700.00 702.30 700.00 700.00-Non current liabilities 0.00 0.00 0.00 0.00 0.00 0.00

=NET NON CURR.ASSETS(B) 680.00 689.10 700.00 702.30 700.00 700.00Intangible Assets (C) 12.43 12.43 12.44 0.00 12.44 12.44

TANGIBLE NETWORTH (A-B-C)

693.99 913.91 1264.35 1370.35 1667.35 2122.35

Difference: 0.00 0.00 0.00 0.00 0.00 0.00

summer project credit

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