Laxman Talageri.doc

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 89102434307 ND 29-09-2018 29-09-2024 3 89107036638 ND 31-12-2018 31-12-2024 Total Li ab il i ti es: Sl Type/ Account No No

Dat e of S anct i on NIL

In come as p er IT R: Sl No Nam e 01 S ri . Laxm an Tal ageri TO TAL

Lim i t

2015- 16 NOT FILED

2016-17 2.97

NO T FILE D

2.97

(Amou n t i n lakh s) O/ S B al OD 28.12.17

(Amou n t i n lakh s) 2017- 18 4.13

Aver age 3.55

4.13

CIB IL / CRIF RE PO RT:

Credit report of the applicants are generated the details of the report are as under No 1

Name

Date/ Score

Control Number

S ri . Laxm an Tal ageri

25/02/2019 682

2,81,17,72,409

PRO JE CT DE TAILS :

1

2.87 0.96 0.13 3.96

Remarks No adverse remark,

3.55

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 Sl No 1 2

P art i cul ars C ost of t he uni t as above Less :P rom ot er Fi nance ( S avi ngs, advance from R i ce m i ll , ot her sources) Prop osed term l oan from Bank 3 Worki ng C apit al Overdr aft Tot al Loan FINANCE :

2

Lakhs Amou n t 64.18 16.18 48.00 12.00 60.00

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) YEAR Income Receipts Total Sales EXPENDITURE

PROJECTED PROTABILITY STATEMENT 1 2 3 4 2018-19 2019-20 2020-21 2021-22 55.00 57.75 61.22 66.11 55.00 57.75 61.22 66.11

5 2022-23 69.42 69.42

6 2023-24 74.35 74.35

7 2024-25 79.65 79.65

Production Cost Purchase of Raw Materials Salaries and wages(10-12) Electricity Expenses Freight and Hamali Insurance

22.00 5.50 2.75 1.10 0.79

23.10 5.78 2.89 1.16 0.83

24.49 6.12 3.06 1.22 0.87

26.44 6.61 3.31 1.32 0.91

27.77 6.94 3.47 1.39 0.96

29.54 7.36 3.61 1.45 1.02

31.25 7.90 3.80 1.53 1.13

Depriciation Production Costs

7.73 39.87

6.67 40.43

5.76 41.52

4.98 43.57

4.31 44.84

3.64 46.62

3.10 48.71

0.12

0.12

0.13

0.15

0.16

0.17

0.18

1.44

1.58

2.38

3.56

3.92

4.38

4.98

1.68 0.18 3.42

1.93 0.20 3.83

2.22 0.22 4.95

2.78 0.24 6.73

2.92 0.26 7.26

3.32 0.29 8.16

3.62 0.32 9.10

5.74 5.74 49.03 5.97 NIL 5.97

5.14 5.14 49.40 8.35 NIL 8.35

4.45 4.45 50.92 10.30 NIL 10.30

3.67 3.67 53.97 12.14 NIL 12.14

2.79 2.79 54.89 14.53 NIL 14.53

1.79 1.79 56.57 17.78 NIL 17.78

0.66 0.66 58.47 21.18 NIL 21.18

2022- 23 14.53 4.31 2.79 21.63

2023- 24 17.78 3.64 1.79 23.21

2024- 25 21.18 3.10 0.66 24.94

10.32 10.32

10.32 10.32

10.32 10.32

2.09

2.24

2.41

5

6

7

Administrative Cost Postage and Telegram Staff Welfare & Office Maintainance Travelling Expenses Telephone and Internet Administrative Cost Interest Term Loan Total Interest Cost Total Cost Net Profit Before Tax Less Tax Profit After Tax

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 Net Profi t 5.97 8.35 10.30 12.14 ADD: Dep re ci ati on 7.73 6.67 5.76 4.98 In terest 5.74 5.14 4.45 3.67 Ad ju sted Net Profi t A 19.44 20.16 20.51 20.79 Rep aymen ts Term L oan 10.32 10.32 10.32 10.32 Total Rep aymen ts B 10.32 10.32 10.32 10.32 Deb t S ervi ce Coverage 1.88 1.95 1.98 2.01 Rati o (A/ B ) AVE RAG E DS CR 2.08

YEAR

1

3

PROJECTED FINANCIAL STATEMENT 2 3 4

Particulars/Years Liabilities Capital Retained Surplus Net worth Non-Current Liabilities Bank Loan Overdraft Loan Total of term liabilities GRAND TOTAL Fixed Assets Sugarcane Harvester Equipments Land and Building Total Fixed Assets GRAND TOTAL Debt Equity

2018-19

Total liabilities Net worth TOL/TNW(times)

2020-21

2021-22

2022-23

2023-24

2024-25

28.50 4.53 33.03

28.50 6.91 35.41

28.50 8.86 37.36

28.50 10.70 39.20

28.50 13.09 41.59

28.50 16.34 44.84

28.50 19.74 48.24

48.00 12.00 60.00 93.03

43.01 12.00 55.01 90.42

37.77 12.00 49.77 87.13

31.84 12.00 43.84 83.04

25.12 12.00 37.12 78.71

17.51 12.00 29.51 74.35

8.89 12.00 20.89 69.13

45.25

37.52

30.85

25.09

20.11

15.80

12.16

84.20 109.29 109.29

75.78 95.89 95.89

68.20 84.00 84.00

61.38 73.54 73.54

43.84 39.20

37.12 41.59

29.51 44.84

20.89 48.24

115.50 160.75 160.75 60.00 33.03

Debt/Equity Ratio (times)

2019-20

103.95 93.55 141.47 124.40 141.47 124.40 RATIO ANALYSIS 55.01 49.77 35.41 37.36

1.81

1.55

1.33

1.11

0.89

0.65

0.43

60.00 33.03 1.81

55.01 35.41 1.55

49.77 37.36 1.33

43.84 39.20 1.11

37.12 41.59 0.89

29.51 44.84 0.65

20.89 48.24 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 1 Debt Equit y R at i o Maxi m um 3 2 TOL t o TNW Maxi m um 5 3 S ecuri t y Coverage Mi ni m um 130% 4 DS CR Mi nim um 1.50

Actu al 1.81 1.81 185% 2.08

Remark s C om pl i ed C om pl i ed C om pl i ed 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 Incre ase in t he cost s Norm al 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. No. 1

Parti cu l ars of S ecu ri ty

L egal Op in i on/ Date

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 S ri Laxm an R Tal ageri of Bom m anahal l i Vi l l age, Hangal Tal uk, Haveri Di st ri ct .

S ri A.M.Gul am al i shanava r, panel Advocat e Opi ni on Dt 08/ 02/ 2019.

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

5

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 No 01 S B - 89038828010 Li ab il i ti es: No Type/ Account No 01 02

VKS CC - 89039739944 VKS CC - 89039641610 Guarantor(Indirect Liability)

Openi ng Dat e

O/ S B al ance(R s.)

03/ 06/ 2014 Tot al S anct i on Dt

Lim i t

20-02-2019 13-06-2016

150000/ 85000/ -

O/S B al 27-02-2019 124947/ 113767/ -

Total

235000/ -

238714/ -

2069/ 2069/ R em arks/ OD NIL C rop l oan wai t i ng for Debt Wai ver

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 1 2

P art i cul ars Deal i ngs of the part y Experi ence of t he part y in t he li ne of B usi ness Market

3 4

Busi ness profi t abi l i t y 5

Exposure norm s

P er part y Exposure

B ank’s Exposure Norm s 6

S ecuri t y norm s P ri m ary/ C ol l at eral

Expl anat i ons S at i sfact ory si nce 2011 He al ready owns a Ri ce Mi ll si nce 2012. The proposed R i ce P rocessi ng uni t is l ocat ed i n Hanum asaga r, B omm anahal l i vil l age, whi ch have hi gh avai l abi l i t y of P addy crop, Hence we expect good busi ness. 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 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 C api t al + R eserves 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% 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 .

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