IDBI Bank Ltd.Memorandum to RCC

Proposal for Renewal of WC/ ST/TL/CL Assistance

Item NoRCC Meeting Date:

Business Vertical Nature of Assistance/Facility Amount SoughtSME Renewal in Fund based and

Non-fund based working capital facility

FB: CC: Rs.1005 lakhNFB: FLC/ILC: Rs.500 lakh LER: Rs.50 lakh

I SUMMARY SHEET

1. Branch Name:SOL ID:

CSC, New Delhi

127

2. Date of Receipt of Completed Application

17/01/2009 3. ARN No. 017100222001

4. Name of the Borrower/ Company

Oriental Trimex Limited

5. Address:Plant:

Registered Office and Corporate Office:

26/25, IInd floor, Bazar Marg, Old Rajindra Nagar, New Delhi –

110060

Processing Units (Marble Processing Units):

1) D-3, Site-V, Surjapur Industrial Area, Greater Noida.

2) B (57) (b), SIPCOT Ind. Complex Gumidipoondi, Thiruvallur,

Tamil Nadu.

Granite Processing Unit:

S-2/6, Industrial Estate, Asanabani, Rairangpur, Dist. Mayurbhanj,

Orissa.

6. Nature of Business/ Products

Engaged in the business of import, export, cutting, polishing and

processing of marbles/granites.

7. Constitution Public Limited company

8. Promoters/ Directors (Names)

1) Shri Rajesh Punia – Managing Director2) Smt. Savita Punia – Whole Time Director3) Shri Sunil Kumar – Director4) Shri Vivek Seth – Director5) Shri Mahesh Chandra Mehta – Director

1

6) Shri Rakesh Takyar – Director

9. Listed Bombay stock Exchange Limited, Mumbai (Code No: OTL 532817)

National Stock Exchange of India Limited, Mumbai (Code No.: OTL 14346)

Stock Price as on 19.03.2009

High Low: Face Value:

NSE 5.50 5.00 10.00

BSE 5.25 4.65 10.00

10. Shareholding as on (Latest - %): Shareholder No. of

Shares%

Promoters 6406299 43.24Institutional Investors 320000 2.16Body Corporate 1628294 10.99NRIs/ OCBs 110478 0.75General Public 6350137 42.86Total 14815208 100.00%

11. Company/ Customer ID 3801715 12. BSR Code 26904

13. PSL / Non PSL Non PSL (Medium Enterprises)

14. Date of last sanction 31st October, 2007

15. Internal Rating (Risk Dept.)

Last Rating ProposedBBB Rating BBB with score of 3.26

(Off the System), assigned by Risk Department

16. External Rating Not Applicable

17. Bank’s RM Case transferred from MCG 

18. Date of last Visit/Call: 12.09.2008 19. Name of the officer visited:

Shri Aditya Gupta, Sr.

Manager (Finance) and Shri

Rajesh Punia.

20. Observations of visit The all round working of the unit was found satisfactory.

21. Proposed Arrangement Consortium

22. Facility: Existing/Proposed:

2

Facility (Value in Rs. in lakh) O/s as on 28.02.2009

Overdue (if any)

Limits Remarks(Pricing, tenure etc.)

Present Proposed (including present)

FB: Cash Credit 1070.94 NIL 1005.00 1005.00 Proposed:BPLR (at present 13.50% p.a.), payable presently. Next renewal in the month of January 2010.

Total FB 1070.94 NIL 1005.00 1005.00NFB: FLC/ILC 223.92 NIL 500.00 500.00 Commission

@1.00% p.a

Interest-BPLR+3.5% +2% on the devolved amount, which would be considered as a separate working capital demand loan.

LER -- NIL 50.00 50.00 As stipulated by bank’s treasury Department.

Total NFB  223.92 NIL 550.00 550.00  

LER

Forex Forward

O/s Not ApplicableMTM

Derivatives

O/s Not ApplicableMTM

CMS Line – Intra-day          23. Total Exposure to

company (TE) - excld CMS Nil Nil 1555.00 1555.00 NA

24. Total Group Exposure (TGE)(company-wise exposure details to be attached)

Nil Nil 1555.00 1555.00 NA25. Compliance with Bank’s

Credit Policy Yes

3

26. Cross Sell (CMS/Salary account/ Tax Collection/ Excise/Dividend distribution/ Forex/LER/ Carbon Credit/Syndication/Corporate Advisory Services etc)

Present Arrangemen

t with

Total Volume (in lakh)

Our Share Income Earned (in

lakh)

Likelihood of Shifting to our

Bank

CMS Line – Intra-day IDBI(Proposed)

50.00* 100% Nil Likely to shift to our bank

SalaryJ&K Bank 118.00 Nil Nil

Likely to shift to our bank

Tax Collection/ Excise Axis Bank 287.13 Nil Nil -------Others NA Nil Nil Nil Nil* Party has applied for Rs.100 lakh CMS Line Limit but we recommend for Rs.50 lakh within the CC limit. Details as per Appendix III.

27. Account Profitability:Account Profitability Avg.

Utiliz.Interest Income

(Rs. lakh)Non-Interest Income

(Rs. lakh)ROC (%)

Existing

FB 95% 43.82 --

57%NFB 95% -- 14.25Others -- -- 15.05Total -- 43.82 29.30

Expected

FB 100% 49.55 --

46% NFB 100% -- 5.00Others -- -- 7.53Total 100% 49.55 12.53

28. Current & Proposed Borrowing Arrangements (Rs. lakh)

Working Capital Banks

Current LimitsOutstanding as On 28.02.2009

Proposed Limits

FB NFB Total FB NFB Total FB NFB Total1. J&K Bank 1185 600 1785 1190.00 316 1506.00 - - -2. IDBI Bank 1005 550 1555 1070.94 223.70 1294.64 1005 550 15553. Axis Bank 710 550 1260 718 20.00 738 - - -4. Standard Chartered Bank

750 750 1500 749 Nil 749 - - -

Total 3650 2450 6100 3727.94 559.70 4287.64 1005 550 1555** Current Limits from J&K Bank, Axis Bank and Standard Charted Bank have already been Renewed 29. Banker’s Report & Comments

thereon (for new relationships) Existing relationship. 30.

Nominee Director’s observations, if anyNone

31. Credit History Satisfactory32. Security

4

Security Existing (Nature, Seniority, value, status of creation)

(Facility-wise)

Proposed (nature, seniority, value, expected time for

creation)(Facility-wise)

Asset Cover

Primary 1) Cash Credit Hypothecation of stocks of

R.M. /W.I.P. /F.G. lying in the factory, godown elsewhere including items in transit and all present and future book debts / receivables on pari-passu basis with other working capital bankers.

Hypothecation of stocks of R.M. /W.I.P. /F.G. lying in the factory, godown elsewhere including items in transit and all present and future book debts / receivables on pari-passu basis with other working capital bankers.

Collateral1) First pari-passu charge over all the fixed assets including plant and machinery situate at D-3, Site-V, Surajpur Industrial Area, Greater Noida (Marble processing unit) having realized value of Rs.1200 lakh (approx).

2) First pari-passu charge over all the fixed assets including plant and machinery situate at Plot No.4, Somnathpur, IDCO Industrial Estate, Balasore, Orrisa (Mining location) having realized value of Rs.40 lakh (approx).

3) First pari-passu charge over all the fixed assets including plant and machinery situate at S-62/2, Industrial Estate, Asanabani, Rairangpur, Dist.Mayurbhanj, Orrisa (Mining Location) having realized value of Rs.12 lakh (approx).

4) First pari passu charge over all the fixed assets including plant and machinery situate at 391-392, Naskarhat, South Khal, Para E.M. Bypass, P.S. Tuhaka, Kolkata.

All existing collateral securities having realized value of Rs.1652 lakh (approx).

AND1) First pari-passu charge over all the fixed assets including plant and machinery situated at I-63, Industrial area, Surajpur-5, Kasna, Greater Noida (Marketing outlet) - Mortgage to be created valued at Rs.682.80 lakh.

2) First pari passu charge over all the fixed assets including plant and machinery situated at B-57b, SIPCOT Industrial Complex, Gummudipoondi, Tamil Nadu (Marble Processing Unit) –Mortgage to be created valued at Rs. 1011.50 lakh.

0.59

5

(Mining Location) having realized value of Rs.400 lakh (approx).

Guarantees Personal guarantees of Shri Rajesh Punia and Smt. Savita Punia.

Personal guarantees of Shri Rajesh Punia having networth of Rs.300.21 lakh and Smt. Savita Punia having networth of Rs.182.76 lakh as on 31.12.08.

33.Insurance (Coverage, validity & adequacy

All Charged assets of the company with Bank clause. Additional insurance coverage shall be obtained by the company based on the additional stock. All the security charged to the bank will be comprehensively insured against theft, fire, earthquake, riots & other natural and non-natural calamities with agreed bank’s clause. The cost of insurance will be borne by the concern. 

34. Inspection (Last inspection date & observations)

Date of last visit: 12th September 2008. Visit report was satisfactory

35. Check List of enclosures Yes/No (1) Analysis of Latest Audited Financial Statements Yes (2) YTD performance Yes (3) Credmin sheet Yes (4) LER Deals sheet NA (5) Profitability & cash flow projections Yes (6) Rating Report along with clarifications Yes (7) Others, if any

6

II COMPANY & BUSINESS PROFILE

BACKGROUND:

Oriental Trimex Limited was incorporated in 1996 and has been engaged in the business of

trading of building material, marble and granite since its incorporation. Initially company was

started by Shri Rajesh Punia and Smt. Savita Punia as private limited and in FY06-07 the

company had come out with IPO. The directors of the company are Shri Rajesh Punia, Smt

Savita punia, Shri Sunil Kumar, Shri Vivek Seth, Shri Mahesh Chandra Mehta and Shri Rakesh

Takyar. In 2001, the company commissioned marble processing unit at Greater Noida with a

licensed and installed capacity of 12,600 MT p.a. whereby the company initiated the process of

imported as well as indigenous rough marble blocks into slabs/tiles. The company further

acquired small granite processing unit at Rairangpur, Orissa with a capacity of 650 MT and

another at Balasore, Orissa with capacity of 100 MT. Presently, the company is sourcing its raw

material requirements through imports and indigenous sources. The company is importing

rough marble blocks for meeting its raw material requirement from Middle East, South East

Asian Countries, Greece, Egypt, Spain, Turkey and Italy and sells its after processing in the

domestic market to institutional as well as retail customers either directly or through

wholesalers. The company also imports semi processed marble slabs for raw material

requirement from these countries including Sri Lanka apart from sourcing market slabs and

blocks indigenously. The company imports decorative marble blocks, which are used in

residential/commercial buildings, hotels, hospitals, restaurants etc.

Milestones achieved by the company:

Year Milestones1996 Incorporated as Private Limited Company for trading in building materials mainly

marble, granite and tiles2001 Change of status by conversion into Public Limited Company2001 Commissioning of marble processing unit at Greater Noida with installed capacity

of 12,600 MT2001 Opening of showroom / retail outlet at Chennai2001 Awarded as "Shreshtha Vyapari" for the year 2000-2001 by the Sales Tax

Authorities, Delhi2001 Awarded KSA 9001-ISO 9001 QMS Certification from KMAQ-Korea for quality

management system.2003 Acquisition of 7 acres of land at Balasore, Orissa2004 Grant of mining lease at Village Jangia-Badadalmia, Tehsil-Bahalda, Rairangpura,

7

District Baripada, Orissa over 6.90 acres under Orissa Minor Minerals Concession Rules 2004 for a period of 10 years

2005 Acquisition of a small granite processing unit at Rairangpur, Orissa with an annual installed capacity of 650 MT. Acquisition of a small granite processing unit at Rairangpur, Orissa with an annual installed capacity of 650 MT.

2005 Opening of showroom / retail outlet at Kolkatta2005 ISO 9001:2000 Certification from Kvalitet Veritas Quality Assurance for import,

stocking, processing and supplying rough / finish marble, granite and other natural stones.

2006 Grant of mining lease at Village Palli, Chikiti Tehsil, Ganjam District, Orissa over 38.14 acres under Orissa Minor Minerals Concession Rules 2004 for a period of 20 years.

The finished decorative marbles are used by Hotels, Restaurants, Residential & Commercial

Projects, farm Houses and in all kind of good constructions with quality flooring. This list

includes some Corporate Houses like Sahara India, Unitech, Eros Group, International Home

Déco Park, Bhushan Ltd and also renowned, Architects, Interiors and Contractors.

Oriental has trained personnel for procurement of raw materials, clearing the imported materials

from various Customs Ports in India and marketing of these products available throughout

India. Apart from imported marble business, the company is also engaged in mining of

indigenous granite stones and has started exports/domestic supply.

Achievements/ Recognitions:

1) KSA9001-ISO9001 QMS Certification from KMAQA-Korea in the year 2001.

2) ISO 9001/NS-EN 9001:2000 Certification from NORSK AKKREDITERING QUAL007-

Norway in the year 2002 for Import, Stocking, Processing & Supplying Rough/ Finish

Marble, Granite and other natural stones.

Raw Material Arrangement:

The principal raw materials used are rectangular size rough blocks, extracted from the quarries.

In the quarries these blocks are split from the main deposit / block, brought down by the use of

excavators and dressed in to proper rectangle size. These blocks then are transported to factory

by using trucks / trailers.

Raw materials for Marble processing units would be imported in the form of rough marble

blocks.

8

Manufacturing Process: -

The manufacturing process of polished marble/ granite slabs comprises of loading of the

rectangular shaped rough blocks in to the block saw transfer trolleys. The blocks are then

reinforced on the trolley by cement and wooden planks to withstand the sawing pressures. The

loaded trolley is then put inside the gang saw machine. Multi bladed frames fitted in the

machine cut the block vertically at high pressure and friction. Here small steel particles (grifts)

act as the cutting agent and slices the block at desired thickness. The surfaces of these slices

(sawn slabs) are further polished in the polishing machines and if are required, cut in the edge

cutting machine as per the requirement of the customer. The gaps left in the tiles are then filled

out to smoothen the surface. Earlier the sun-drying method was used to dry these tiles. TO make

the process more sophisticated the company has procured Polish line machine from Champ Will

on Keda Technology with capability of polishing multiple slabs at a time against single slab by

traditional machines & having 16 heads, edge over traditional polish machine with only 7 heads

with highest quality polishing. These machines are fully automatic with robotic supports for

handling. These polished slabs so obtained are inspected and packed before dispatch.

Management:

The Board of Director guides the company on various matters and experienced professionals

look after day-to-day affairs of the company under the guidance of Shri Rajesh Punia –

Managing Director of the company. Details of Management and Organizational setup are given

below:

Name/ Age Position Qualification/Experience Other Directorships

1) Shri Rajesh Punia

ManagingDirector

Law Graduate. Experience in Material Resourcing, DGFT, EXIM & Legal Matters.

1) Oriental (Buildmat) Exports Pvt. Ltd. 2) Oriental tiles Ltd.3) Colombo stone Industries Pvt. Ltd.4) Deepali Granites Pvt. Ltd.

2) Smt. Savita Punia

Whole-Time Director

Arts Graduate,Experience in Human

1) Oriental (Buildmat)

9

Resource and Administration.

Exports Pvt. Ltd.,2) Oriental tiles Ltd.3) Colombo stone Industries Pvt. Ltd.4) Deepali Granites Pvt. Ltd.

3) Shri Sunil Kumar

Director B.Com (Hons), MBA, Experience in industry and customs clearance.

1) Oriental tiles Ltd.2) Suntru artwork Pvt. Ltd.3) Deepali Granites Pvt. Ltd.

4) Shri Vivek Seth

Director Engineer Grad. From IIT, Chennai, Post Graduation in International Trade, Experience in Export Industry

NIL

5) Shri Mahesh Chandra Mehta

Director Science Grad. and member of CA & CS Institute. Experience as a CA in corporate/project finance, financial management and forex matters

NIL

6) Shri Rakesh Takyar

Director B.Com, FCA NIL

Details of management and Organizational setup are given below:Name Position Department Qualifications /

ExperienceExperience

Mr. Hari Singh Bisht

General Manager (Corporate Affairs & CS)

Corporate MBA (Fin), C.S., LLB, M.Com.

20

Mr. Yankush K. Govil

FinancialController

Corporate MFC, C.S., B.Com (Hons).

8

Mr. Dinesh Kumar

Manager EXIM Corporate B.Com (Hons). 13

Mr. Satish Shamra

VP Marketing Marketing MBA (Marketing) 25

Mr. S.C. Anand

DGM (operations) G. Noida Factory

BE (Electrical) 30

Mr. Naim Khan

Personnel Officer G. Noida Factory

B.Com, Dip. In PM & IR

5

10

Mr. A. K Banerjee

GM Orissa Operations

Orrisa BE (Mechanical) 30

Mr. P.K. Nayak

Astt. Manager - Mines

Rairangpur, Orrisa

MBA, Dip. in Comp. Sc.

12

Mr. S.K. Pradhan

Astt. Manager-F & A

Balasore, Orrisa

MBA (Finance) 15

Mr. Moloy Mukherjee

Head Eastern-Region

Kolkata MBA (Marketing) 12

Mr. G.J. Naidu

Head – Southern Region

Chennai MBA (Marketing) 10

Mr. Pradeep Chaudhary

Head- Delhi Depot New Delhi M. Com 20

Initial Public Offer (IPO) and IPO Fund Utilization Details:

In the FY06-07, the company had come out with an IPO, wherein company had issued 93,

11,875 equity shares of Rs.10 each through 100% book building route to investors and raised a

sum of Rs.4469.70 lakh. The utilization of the IPO proceeds as on 30th Sept, 2008 is as follows:

Utilization (Rs. in lakh)

Issue Expenses 416.16

General Corporate Purposes 545.49

Purchase of Land 848.08

Construction of Building 432.53

Purchase of Plant & Machinery 538.94

Electric Installation 30.43

Long Term working Capital 490.00

Total 3301.63

Balance of Rs.1168.07 lakh have been temporarily invested in Bank fixed deposits/IPO Escrow

Account with the J&K Bank Ltd as certified by the company’s Chartered Accountant.

Group Companies: -

1) Oriental Tiles Ltd.: - Incorporated on 23rd Oct. 1998 as Oriental Pvt. Ltd. later

converted into public limited company on 16th Jan, 2001. The company is engaged in

trading of marble and granites. Shri Rajesh Punia, Smt. Savita Punia and Shri Sunil

11

Kumar are the directors of the company.

2) Oriental (Buildmat) Exports Pvt. Ltd.: - Incorporated on 9th Dec. 1998 as Oriental

(Buildmat) Exports Pvt. Ltd., the company is engaged in trading of marble and granites.

The directors of the company are Shri Rajesh Punia and Smt. Savita Punia.

3) Colombo Stones Industries (Pvt.) Ltd.: - It is a 100% wholly owned subsidiary of

Oriental (Buildmat) Exports Pvt. Ltd. Incorporated on 18 th Jan, 1999 under the

Companies Act 1982 of Sri Lanka. The company is engaged in the business of cutting,

polishing, processing, exporting and dealing in marble, granite slate and stones,

quartzite and similar stones. The company has its own manufacturing facilities and since

it’s located outside India, it has its own customers in Sri-Lanka, India and others

countries. The directors of the company include Shri Rajesh Punia, and Smt. Savita

Punia.

4) Deepali Granites Pvt. Ltd.: - Incorporated on 7th April 2006 as Deepali Granites Pvt.

Ltd., the company is engaged in trading of marble and granite. Directors include Shri

Rajesh Punia, Smt. Savita Punia and Shri Sunil Kumar.

Industry Outlook:

Future Growth strategy

The industrial sector in India registered a strong growth during the last 2-3 years. Disposable

incomes of middle class have gone up considerably and consequently the demand for housing

has also gone up drastically. Lot of new commercial complexes, shopping malls, restaurants and

residential complexes are being constructed in metro cities and the same are also being planned

in the state capitals and smaller cities. Accordingly, the consumption of all building materials

like cement, steel, flooring materials like tiles, marble, granite etc. has gone up substantially

during last 2-3 years and the trend is expected to continue for another atleast 10-15 years as

India has to still go a long way as far as its infrastructure is concerned.

Over the years, India has become a major destination for foreign tourist as well as business

travellers. The occupancy rates in 5 star hotels as well as budget hotels has reached almost to

100% and therefore lot of new hotels are either being constructed or are being planned.

Demand Drivers

The Marble & Granite products are extensively used in the household sector and also for

12

industrial applications. The marble and granite stone industry, whose fortunes depend on the

construction industry, has been seeing a lot of activity recently. A consolidation of sorts is

under way with the established players gearing up for a crest in the construction cycle. The

segment is growing and the main reason is replacing of mosaic tiles as well as offering various

options better than any other similar product.

Construction and Housing Boom

The real estate and construction boom has played key role in bolstering demand for marbles &

granites. Apart from the retail segment, comprising primarily of residential housing, the demand

has picked up from the institutional segment as well. The increased activity in retailing business

along with the economic growth has propelled the institutional segment. The continued boom in

the construction sector, housing industry in particular, will spur the demand for these stones in

future. Further industry is also having the option to enhance its earning through export.

Sustained Housing Growth

The housing sector currently accounts for more than 70% of the Marble & Granite consumption

and demand for housing is expected to sustain, going forward due to the following reasons: -

1) Increasing Affordability

In the last ten years, there has been a significant change in the income patterns of urban housing

consumers consequently there has been sharp increase in real as well as disposable income.

This has led to the increasing affordability of property.

2) Continued Tax Sops To Housing

The extension of tax sops for housing loans, reduction in interest rates on housing loans, and

rise in real income levels has increased the affordability of houses for the rising urban Indian

middle-class population. Also, property costs have increased at 5.8 % CAGR (Compound

annual Growth Rate) in the last five years, while the average annual income has increased by a

sharp 11.7%. Therefore, the affordability (property cost/ annual income) has improved.

3) ITES, Retail Boom To Bolster Demand

The growing middle-class and an increase in real incomes has led to a strong growth in

organized retailing – leading to a boom in the construction of malls and multiplexes. As per

13

Images Retail, there are 180 malls under construction that will be ready in the next two years.

Currently, over 30 malls are operational in India while approx. 300 malls are in various stages

of planning and execution. The strong growth in ITES exports has also necessitated the

construction of commercial complexes and office space.

It is estimated that around 100,000 seats are added every year in the ITES space and as per IT

industry estimates, Rs.25 bn. Worth of investments are expected in the IT/ITES space in the

next 5 years. Allowing foreign direct investment in retail and real estate development is also

slated to attract huge investments in these sectors- resulting in increased demand for Marble &

Granite products for flooring purposes.

4) Incremental Demand from Industrial Projects

India is in an up cycle of industrial investments with huge capex plans lined up by core sector

industries. The operating rates in most industries too have peaked – implying the need for

investments in expansion projects. According to Government of India estimates, annual average

investments in industrial projects are expected to increase from Rs.220 bn (during 1998-99 –

2004-05) to Rs.580 bn (during 2005-06 – 2009-10). This would also contribute to the sustained

increase in demand for construction material in general.

5) Sustained Lower Rates on Housing Finances

The domestic interest rates have remained easy for better part of the last 3 years at around 8%.

This makes home finance more attractive. Also, there is another added advantage of easily

available housing finance. This is also led to investment in housing sector by high net worth

individuals and high-income group.

Marketing and Selling Arrangement :

OTL has marketing outlets/offices at New Delhi, Greater Noida, Chennai and Kolkata and has a

very extensive network of distributors throughout the country. The Company has, over the

years, created a niche market for its products i.e. imported marble used in premium quality of

flooring. The Company is well placed to take advantage of the upswing in the demand for

building materials in the country. OTL has a team of dedicated and experienced marketing

professionals. Its products are well established in the market.

14

Institutional Sales

Company’s customers include names like Sahara Group, Unitech, APJ group, ATS Green,

EROS Group, Shapoorji Pallanji, Money Group, Suncity Group, Prestige Group and many

other builders. OTL would adopt a concerted and systematic marketing strategy using various

channels namely:

Systematic brand promotion of company’s products.

A massive advertisement campaign in Electronic & Print Media.

Advertisement through attractive Signboards at strategic locations.

Tenders participation.

Promotion through own website and through advertisement on other Websites.

Retail Sales through its own marketing outlets.

OTL also regularly participates in International / National trade fairs, conferences and

congregations for Natural stones and has already received a number of trade enquiries.

15

III PERFORMANCE/FINANCIAL ANALYSIS

Performance/Financial Indicators (Rs. lakh)

Year ended 2006 (Aud.)

2007 (Aud.)

2008 (Aud.)

2009 (Est.)

2010 (Proj.)

2011 (Proj.)

Net Sales 5073.71 7837.24 10470.90 14969.72 19957.62 24944.53

Other Income 18.87 56.71 63.18 25.00 25.00 25.00

PBDIT 528.08 655.80 843.27 1536.17 1828.83 2982.64

PAT 271.30 293.63 275.39 676.49 843.09 1554.07

Cash Profit 291.5 315.76 306.98 752.52 919.88 1933.69

Paid Up Capital 433.33 1481.52 1481.52 1481.52 1481.52 1481.52

Tangible Net Worth 675.58 5081.81 5272.40 5537.45 5879.44 6250.57

Net Working Capital 198.65 4357.09 3052.01 1785.48 2062.03 2466.05

Net Cash From Opns.

-- -1022.25 -713.41 -996.91 -31.79 811.52

PBDIT as a % of Sales

10.41 8.37 8.05 10.26 9.16 11.96

NP as a % of Sales 5.35 3.75 2.63 4.52 4.22 6.23

TOL/TNW 2.91 0.52 0.86 1.22 1.37 1.51

(TOL+ Conti. Liability)/TNW

2.91 0.52 0.86 1.22 1.37 1.51

Current Ratio 1.12 2.82 1.71 1.31 1.31 1.28Interest Coverage 4.49 3.46 2.71 2.92 3.32 4.82

Observations /Comments

Sales: Sales of the company is showing increasing trend. It increased from Rs 78537.24

lakh in FY 2007 to Rs 10470.90 lakh in FY 2008 showing increase of 33.60 %. The

company has forecast good sales for the coming years in view of good rapport and long

standing relationship in the market. It has projected sales of Rs 14969.72 lakh in FY 2009

and Rs 19957.62 lakh in FY 2010.

Net Profit: The firm has posted profit after tax of Rs 275.39 lakh with net margin of

2.63% for the period ended March 31, 2008. For FY 09, the firm expects an increase of

16

42.96% in its net profit. The company has already achieved net profit of Rs.178.39 lakh

as on 31st Dec 08. The firm has projected its profits to grow to Rs 676.49 lakh in FY 09,

Rs 843.09 lakh in FY 10. The firm sees excellent opportunity for growth of its business

in the coming years, notwithstanding the global downtrend.

GP Margin: GP Margin of the company in FY 2007 is 8.09 % and further decrease to

7.75% in FY 2008 because of decrease in the sales. GP Margin of the company projected

to improve further to 7.78% in FY 2009.

NP Margin: NP Margin of the company has decreased from 3.75% in FY 2007 to 2.63%

in FY 2008. Company has projected NP margin at 2.54 % in FY 2009 and 2.73 % in FY

2010.

Capital: Capital of the Company remains same in FY07 to FY 09 by Rs 1481.52 lakh.

TOL/TNW: TOL/TNW of the company in FY 2008 is 0.86 i.e. which is within our

benchmark 3.5:1. The TOL/TNW for FY 2009 and 2010 is 1.22 and 1.37 respectively.

Current Ratio: The Current ratio of the company is at comfortable level of 1.71 in FY

2008. The estimated current ratio for FY09 is 1.31 and 1.28 for FY10. The liquidity

position of the firm would be satisfactory.

Cash From Operations: The Company has put Rs.4477.4 lakh in fixed assets which will

be financed by IPO proceeds, presently with J&K Bank. This will improve the liquidity

position of the company.

Interest Coverage Ratio: Interest coverage ratio of the company for FY08 at 2.71 and

projected for FY09 at 2.92.

Auditors Qualifications, if any (and clarifications)No adverse comments

17

YTD Performance

YTD Performance (Rs. in lakh)

9 Months Ended Details 31-12-07 31-12-08Sales 7526.85 8018.88Other Income 23.89 17.00PBDIT 713.17 664.92Interest Costs 219.36 418.29Depreciation 20.21 37.22PAT 245.97 178.39Cash Accruals 266.18 215.61

Observations /Comments

The sales for 9 months ended for 31.12.08 is Rs.8018.88 lakh, which is higher than that

of the same period previous year. In 31.12.07 the sales figure was Rs. 7526.58 lakh.

However, PAT has decreased from Rs. 245.97 lakh to Rs.178.39. This is due to

slowdown in the global economy.

Peer Comparison (Rs. lakh)

As on 31.03.07Oriental Trimex

Limited Nitco TilesNet Sales 7837.24 41311.00PBDIT 655.80 7300.10PAT 293.63 3802.00PBDIT (%) 8.37% 17.67%PAT (%) 3.75% 9.20%Total Net Worth (TNW) 5081.81 29701.40Current Ratio 2.82 2.15

Observations /CommentsOriental Trimex Limited has achieved sales of Rs.7837.24 lakh, which is less than the

Nitco Tiles. This is because Oriental Trimex Limited only specializes in marbles and

granites whereas Nitco tiles is into various products i.e. ceramic tiles, vertified tiles,

18

mosaico, marble, cement and terrazzo tiles. Oriental Trimex limited has a satisfactory

performance even in the period of economic slowdown.

Group Financials (As on 31.03.2008)

(Rs. lakh)Particulars Sales PAT TNW TOL/TNWOriental (Buildmat) Exports Private Limited

0.06 (1.70) 96.10 1.73

Oriental Tiles Ltd. 109.81 2.72 43.43 6.91Colombo Stones Industries (Private) Limited

1023.53 116.67 344.21 2.98

Deepali Granites Pvt. Ltd.

--- (0.06) 0.79 5.37

Observations /Comments

The above group companies except Oriental Tiles Limited are still in existence but the

production of these companies is negligible. Oriental Tiles Limited is engaged in

marketing marble blocks & slabs and having its business activities confined mainly in

Kolkata.

EOD Status

Particulars Status As on March 31, 2008 EOD Triggered? (Y/N)

Current Ratio < 1.25 1.71 NoTOL/TNW>3.5 0.86 NoCompany incurring Cash loss

No cash loss No

Negative variation of more than 10% between provisional & audited results (in the stipulated parameters)

Sales increased by 33.60% in FY 08. No

Cross Default No default NoDefaults with any other bank/FI/MF/lending

No No

19

institution Any change in circumstances including but not limited to a material change in ownership/shareholding pattern/management of the company

1) Shri Dharamvir Gupta, one of the directors of the company expired on 25th February 2008. In place of him new director has appointed named Shri Rakesh Takyar.2) Funds received through IPO were Rs.4469.70. The utilization of these fund as on 30.06.07 and 30.06.08 are given below:@

No

@Funds received through IPO proceeds 30.06.07

(Rs. in lakh)30.06.08

(Rs. in lakh)1) Issue Expenses 414.19 416.162) Advance for Mining Machinery 33.13 --3) Quarry Development Expenses 40.00 --4) General corporate Purposes 547.52 545.495) Purchase of Land -- 848.086) Purchase of Plant & Machinery -- 538.947) Electric Installation -- 30.438) Construction of Building -- 432.539) Long term working capital -- 490.0010) Bank fixed deposits/IPO Escrow account with the J&K Bank Ltd.

3434.86 1168.07

Total 4469.70 4469.70

Observations /Comments

EOD has not triggered. Current ratio is above 1.25 at 1.71 and TOL/TNW is below 3.5 at 0.86 and they continue to do so in the projections for the next two years.

20

V. ASSESSMENT OF CURRENT PROPOSAL

Oriental Trimex Limited has approached us for renewal in fund based (Rs 1005 lakh) and

non-fund based (Rs 550 lakh) working capital facility, aggregating to Rs 1555 lakh under

consortium finance with J&K Bank as Lead institution, IDBI Bank and Axis Bank as

member. The other bank namely Standard Chartered Bank has opted to enter the

consortium. Of the proposed renewal, the position of facilities extended to the company

is summarized as under:

Working Capital Limits (Rs. in lakh)Nature of facility

J&K Bank IDBI Bank

Axis Bank

Standard Chartered Bank

Total

Cash Credit 1185 1005 710 750 3650Bill/Cheque Purchase

-- -- -- 250 250

FLC/ILC 500 500 300 -- 1300BG 100 -- 250 -- 350LER -- 50 -- -- 50Total Limit 1785 1555 1260 1000 5600

As the company is on the growth path, it needs large amount of capital assistance to

expand and meet the requirements of customers. Therefore, an additional term loan

facility has taken from ICICI bank of Rs.1100 lakh for financing imported machineries

for their new units at Greater Noida, Chennai and Kolkata. The total cost of the project is

Rs. 58.23 crore. The proposed Capex being undertaken by the company is as follows:

Particulars Amount (Rs. In crore)CostPlant and Machinery (Incurred Rs.6.45 Cr)Land (Incurred Rs.9.35 Cr)BuildingElectricalsPre-operative & corporate         Long Term Working Capital 

  18.4110.008.750.85

10.0210.20

Total 58.23Means of FinanceIPO ProceedsTL from ICICIInternal Accruals

  47.0011.000.23

21

Total 58.23

Progress on Expansion Projects of the Company:

Units* Already Utilized Capacity in 2008

Annual Utilization in 2009

1) Greater Noida 12600MT 25200MT

2) Chennai 12600MT 37800MT

3) Kolkata -- 22600MT

* 1) Greater Noida expansion plan: Gangsaw machine has already been installed and has

started commercial production in June 2008. With commissioning of commercial

production of Gangsaw the annual capacity utilization will be doubled to 25200MT.

2) Chennai Project: Land has been already acquired and registered in the name of the

company. The construction work has been completed. Commercial production has started

in December 2008.

3) Kolkata Project: The commercial production of Kolkata project will start by August

2009 with Marble Processing capacity of 12600MT and Granite Processing capacity of

10000MT.

1. Assessment of WC/STL Requirement

 Particulars 2006 2007 2008 2009 20101. Total Current Assets 1875.03 6749.12 7361.44 7571.84 9497.322. Other Current Liabilities 822.11 852.88 1603.36 2121.05 3152.503. Working Capital Gap 1052.92 5896.24 5758.08 5450.79 6344.824. Min. Stipulated NWC 468.76 1687.28 1840.36 1892.96 2374.335. Actual / Projected NWC 273.06 4431.50 3092.79 1800.79 2344.826. Item 3 Minus Item 4 584.16 4208.96 3917.72 3557.83 3970.497. Item 3 Minus Item 5 779.86 1464.74 2665.29 3650.00 4000.008. MPBF (lower of 6 or 7) 584.16 1464.74 2665.29 3557.83 3970.499. Excess borrowings representing Shortfall in NWC 195.70 NIL NIL 92.17 29.51

The total current asset in 2009 is projected at Rs.7571.84 lakh and the working capital

22

gap is estimated at Rs.2121.05 lakh. The MPBF for the period is assessed at Rs.3557.83

lakh in FY 09 and Rs.3970.49 lakh in 2010.

Build up of Current Assets & Current Liabilities   (Rs. in lakh)

Particulars 2006 2007 2008 2009 2010Stock in process – Amt 293.78 606.55 2372.46 3058.65 4158.36Month’s Cost of Production 0.79 0.91 3.19 2.72 2.75Month’s cost of sales 1.48 2.66 1.49 1.11 1.00Domestic Receivables – Amt 787.29 728.60 579.10 1780.45 2017.85Month’s Domestic Sales 1.88 1.11 0.66 1.42 1.21Creditors for Purchases – Amt 423.58 353.29 656.92 845.46 1149.83Month’s Purchases 1.39 0.53 0.77 0.77 0.77

   Stock-in-Process:

As per Balance sheet closing inventory stands at Rs 2372.46 lakh for the FY 2007-08,

which is higher as compared to Rs 606.55 lakh in the FY 2006-07.

Debtors level:

Debtors level had decreased from 1.11 months in FY 2007 to 0.66 months (i.e. about 19

days) in FY 2008 due to better management of the receivables. Company has expanded

its business and has roped in new customers during current year, which has resulted in

increase in debtors level. Also, it is estimated to increase to 1.42 months in FY 2009.

Creditors level:

Creditor’s level was 0.53 month (i.e. about 15 days) & 0.77 months (i.e. about 23 days) in

FY 2007 & FY 2008 respectively.

2. Assessment of TL Requirement----NA---

3. Assessment of CL Requirement----NA----

23

VI. COMPLIANCE WITH EXPOSURE NORMS/ CREDIT POLICY

1. Cap in absolute terms

(Rs. crore) Particulars Existing Proposed Pre-defined limitsCompany 15.55 15.55 1500.00Group NIL NIL 3000.00

2. As a percentage of IDBI's capital funds as on 31.03.08 Rs 9059.76

Crore

Existing Exposure (Rs. crore) Proposed Exposure (Rs. crore)

Pre-defined limit

Total exposure

Company15.55

Group

% of IDBI’s capital funds

0.172

Nil

Total exposure

15.55

Nil

% of IDBI’s capital funds

0.172%

Nil

15%(20% in case of infrastructure)

40%(50% in case of infrastructure)

3. As a percentage of the Company'/Group's Net worth

Existing Exposure (Rs. lakh)

Proposed Exposure (Rs. lakh)

Pre-defined limit

Total exposure

Company1555.00

Group

Net worth (as on

31.03.08)

5852.08

Nil

% of Networth of Company

26.57%

Nil

Total exposure

1555.00

Nil

% of Networth ofCompany

26.57 %

Nil

100% in case rating is 'A' and above and 75% in case of rating below 'A'

--

24

Compliance with Exposure Norms/Other relevant norms:

S.No. PARAMETERS Norms Status Remarks1 Performance Growing trend

for 3 previous years in respect of Sales, Net Profit & TNW

Sales and TNW for the past three years have been growing. But the PAT for FY08 is not in a growing trend.

Not Complied with.In FY08 the profit of the company is Rs.275.39 lakh and in FY07 it was Rs.293.63 lakh.

2 Credit Rating BBB ‘A’ as per New SME Modal.

Rating BBB with score of 3.26 assigned by Risk Department.

3 Interest Coverage Min 2 Interest coverage is above 2 during the previous three years.

Complied with

4 Leverage 3.5:1 Max In FY 2006, 2007 and 2008, TOL/TNW was at the level of 2.89, 0.52 and 0.86 respectively. As per the projections, it is projected at 1.22 and 1.37 for FY 2009 and 2010 respectively.

Complied with.

5 Current Ratio Min 1.25 The current ratio as on 31.03.08 was at 1.71, i.e. above the benchmark. In the FY 2009 it is 1.31 and in 2010 it is 1.28 i.e. above the norm.

Complied with.

6 Margin on Security

Minimum 25% Margin on primary security: stock 25%, book debts 90 days: 25%. Collateral on company's fixed assets is also stipulated.

Complied with

7 Credit History No known wilful defaults.

No defaults Complied with

25

VII KEY RISKS/ MITIGANTS/RATING

1. Business & Industry Risks

1) Strengtha) Promoters are well experienced in Marble & Granite trade and industry.b) Professional management.c) Established track record in marble trade & industry.d) Trained and experienced personnel.e) Wide distributors/dealers network through out the country.f) Existing marketing offices in Delhi, Kolkata & Chennai.g) Oriental has own Quarry of granite/decorative stones thereby the cost of raw materials for granite processing unit will be very low in comparison with other processors who does not own quarry.h) Some of the existing overseas suppliers of imported marble are prospective buyers for granite blocks and slabs.i) As per Import License policy of the government, no further license is to be given for import the tiles. Because of this entry barrier there is no further significant increase in the competition.2) Weaknessa) Company’s existing sales are mainly to domestic customers.b) Company is dependent on overseas supplies for its raw material requirement for Marble processing units.3) Opportunities a) Growth potential for construction industry in the coming years in India is an opportunity for the company.b) Growing demand for Granite in overseas countries.c) Increasing usage of Green marble/granite for decoration purposes is an exciting opportunity for the company.4) ThreatsChange in Government rules and regulations like Exim policy, Import duties etc. can affect company’s business operations.

2. Financial Risks No risk is perceived, except volatility in exchange rates.3. Management Risks The company has professionals as specialists in various fields who

take care of the day-to-day operations.4. ECGC Cover Nil

5. Country Risk (if relevant)

Nil

6. Internal Rating concerns

Risk concern raised by RISK DEPARTMENT H.O

The proposal was sent for rating to risk department under New SME modal along with DAN and other relevant papers in original on 20 th

January 09. We have received rating (BBB), Score (3.26) with risk concerns on 5th March 09, by Risk Department. Concerns raised by rating department and our comments are as follows:

26

Risk / Concerns Comments1) There is substantial increase in receivables level from 0.66 months FY 08 to 1.42 months in FY 09. NWC is projected to reduce from Rs.31 crore in FY 08 to Rs.18 crore in FY 09, meanwhile bank borrowings have also increased in CFY and projected to increase further. The YTD achievement is low for the 9 months ended Dec.'08 and estimates appear optimistic. Accordingly, WC requirement to be reassessed & monitored within ABF/DP. There appears need to infuse long-term funds.

The increase in receivable level is due to targeting big corporate houses (to increase sales) on high credit terms as a result of changed market condition. NWC has decreased due to high levels of creditor and advances.YTD is low due to global financial meltdown. Actual availment of working capital would be linked to Drawing power.

2) The company is also in an expansionary mode hence; the company has raised Rs.47 crore through IPO and has proposed TL of Rs.11 crore from ICICI Bank to fund the capex of Rs.58 crore. Prima facie the project cost appears optimistic & needs to be compared / evaluated with other peer concerns. Despite Rs.10 crore of LTWC envisaged under the proposed capex, excess bank borrowings has been projected for next 2 years. Hence, it necessitates infusion of additional long-term funds.

Peer comparison has been done with Nitco Tiles. Oriental Trimex Limited specializes only in marbles and granites whereas Nitco tiles is into various products i.e. ceramic tiles, vertified tiles, mosaico, marble, cement and terrazzo tiles. Oriental Trimex limited has a satisfactory performance even in the period of economic slowdown.J&K bank is custodian & appointed monitoring agency for IPO funds & periodic reports are submitted & ICICI bank has granted Term Loan on the basis of Projected expansion planLTWC is only one time infusement for kick-start of operations in upcoming projects.

3) The company is operating in the decorative marble/granite segment, a niche segment of

The Company has confirmed orders & is also expecting bigger orders from government agencies. The advances paid for raw

27

construction industry. With the downturn in the construction business the performance of the company is likely to be impacted in the short to medium term. Given this background constant rise in advance to suppliers may be examined closely.

materials were Rs.44 lakh, Rs.140 lakh and Rs.614 lakh for the FY ending 2006, 2007 and 2008 respectively. It was clarified by the company officials that the company had to remit advance payments to raw material suppliers located abroad as a part payment for the purpose of import of raw materials. In view of the recession in the West and the tight prevailing market conditions in 2008, the requirement of advance payments by the exporters for supply of raw materials increased. 

Other Concerns Comments4) Unsecured loans may be subordinated to bank loan.

In the fresh documentation subordination agreement will be obtained from the company.

5) Given the size of the company, corporate governance issues need to be addressed.

The company fully adheres to the standards set out by the Securities and Exchange Board of India’s Corporate Governance practices and has implemented all its stipulations.

6) As per the Credmin review, submission of quarterly results & MIS is irregular and insurance is pending.

The company has already submitted the quarterly results and agreed to give MIS.Insurance for stock of raw material, Finished, Semi Finished Goods has already been obtained for Rs.35 crore till 30th May 2009.

VII. RECOMMENDATIONS

1. Certification(In case of non-compliance, give details / reasons & justification for recommending the limit despite non-compliance)

2. There are no un-rectified irregularities in the account, except for: No unrectified irregularities in the account.

28

b.         All formalities regarding documentation and security creation for existing facilities have been completed (Except Property at Rajender Nagar securities of all other properties has been created)

c.          All other terms, including EODs, for existing exposures are in compliance.Complied With.

d.         The company / directors / group companies / guarantors do not figure in RBI’s/CIBIL defaulter list (the company/promoters name does not appear in the caution list. There are no litigations pending against borrowers, other than those in the normal course of business.

RBI’s defaulter list, RBI’s defaulter list (Non suit file accounts of Rs 25.00 lakh and Rs 1 Crore and above) checked on intranet on 22.09.2008 no records found. CIBIL report on proprietor and guarantor mentions that “file not found”. CIBIL report is attached.

3. Neither directors of the Bank nor their relatives are interested in the proposal nor do they hold substantial interest in the borrowing entity. Further, none of the directors of other banking company and their relatives are interested in the proposal.

Suitable Certificate will be obtained from the borrower.

f. The borrowing entity complies with the relevant environmental norms.

The concern is a trading firm and no environmental norms are foreseen.g.          There are no deviations from the credit policy (including policy on Bill Finance), RBI policy, FEMA and other related regulatory provisions, except for: No deviation except those mentioned in takeover chart above.

h.         There are no cases pending against the borrower / guarantor in any court in respect of any dues to banks/ financial institutions.An affidavit regarding the same will be taken before disbursement.

2. Terms of Sanction for Working Capital

Limit Rs 1005 lakh (Rupees one thousand and five lakh only)Purpose Working Capital (Interchangeability of Rs. 200 lakh

between Cash Credit, Packing Credit/PCFC, Foreign Bill

29

Purchase and CMS of Rs.50 lakh.Pricing BPLR i.e. 13.50% presently.Tenor Tenor: 1 year, next renewal date will be in the month of

Dec 2009Repayment / Due date On due date / On demandProcessing charges 0.50 % of loan amount plus applicable service tax.

Margins 25% on stock and 40% on book debts.

3. Terms of Sanction for Foreign Letter of Credit

Limit Rs 500 lakh (Rupees five hundred lakh only)Purpose Procurement of Raw material-Imported or indigenous

Commission 1% p.a.Tenor Max 120 daysRepayment / Due date On due date / On demandMarginsIndigenous-90 daysImport-180 days

15%

Liquidated Damages BPLR + 3.5% + 2% on the devolved amount which would be considered as a separate WCDL.

4. Terms of Sanction for Export Packing Credit

Limit Maximum of Rs 200 lakh (Rupees two hundred lakh only). It is a Sub-limit of CC. It will be interchangeable to this extent between CC, Packing credit and Foreign Bill Purchase.

Purpose Normal working capital requirement of the company.

Interest BPLR-2.5% payable monthly.Tenor Same as CC.Repayment / Due date On due date / On demandProcessing Fees 150 bps p.a on the amount disbursed to be payable

upfront.

Other condition Facility to be covered under the WTPCG and WTPSG cover of ECGC and the relative premium to be borne by the company.

Covenants General Disbursement of PCFC is subject to availability of foreigncurrency resources with IDBI and at the sole discretion of

30

IDBI. ECGC cover to be taken on pre shipment and post shipment limits & premium to be borne by the company.

5. Terms of Sanction for Foreign Bill Purchase

Limit Maximum of Rs 200 lakh (Rupees two hundred lakh only). It is a Sub-limit of CC. It will be interchangeable to this extent between CC, Packing credit and Foreign Bill Purchase.

Purpose Normal working capital requirement of the company.

Interest BPLR-2.5% payable monthly upto 180 days.Tenor Tenor of individual bill not to exceed 180 days.Repayment Realization of export bills discounted.Other condition Facility to be covered under the WTPCG and WTPSG

cover of ECGC and the relative premium to be borne by the company.

Covenants General Disbursement of FBP/PCFC is subject to availability of foreign currency resources with IDBI and at the sole discretion of IDBI.ECGC cover to be taken on pre shipment and post shipment limits & premium to be borne by the company.

4. Terms of Sanction for Loan Equivalent Risk

Limit Rs 50 lakh (Rupees fifty lakh only)Purpose For enabling hedging of forex exposure due to trade.Forward booking charges As per applicable rateTenor 1 year, to be reviewed after 1 year.Period Less than 6 months

Margins 10% of the outstanding amount. Margins may be obtained in the form of FD.

Security Unsecured

Currency All currencies

Details as per Terms & Condition attached as Appendix II.

5. RecommendationConsidering the foregoing, we recommend:

1) The proposal for renewal of Working Capital facilities of Rs.1555 lakh, which

31

includes CC-Rs.1005 lakh (Includes interchangeability of Rs. 200 lakh between Cash Credit, Packing Credit/PCFC and Foreign Bill Purchase), FLC/ILC-Rs.500 lakh and LER limit-Rs.50 lakh).

2) The proposal conforms to the exposure norms except relating to growing profit for three years.

3) A limit of Rs.50 lakh for CMS is within the overall CC limit being sanctioned to the company.

4) RCC is requested to approve only one deviation as mentioned above and may approve renewal of CC limit of Rs.1005 lakh (Includes interchangeability of Rs. 200 lakh between Cash Credit, Packing Credit/PCFC and Foreign Bill Purchase), FLC/ILC of Rs.500 lakh and LER limit of Rs.50 lakh to Oriental Trimex Limited. The above sanction will be on the terms and condition as mentioned in Appendix II for CC limit, FLC/ILC and LER and other normal terms and conditions applicable for grant of such assistance.

Signature Signature Signature Signature

Priya Sumanpreet Kaur Arun Kumar Goyal K.Subramanian

RO CO DGM Regional Head

Appendix – IFACILITIES ASSESSMENT

(For Working Capital)

32

Assessment of Fund Based facility

Calculation of Maximum Permissible Bank Finance

 Particulars 2006 2007 2008 2009 20101. Total Current Assets 1875.03 6749.12 7361.44 7571.84 9497.322. Other Current Liabilities 822.11 852.88 1603.36 2121.05 3152.503. Working Capital Gap 1052.92 5896.24 5758.08 5450.79 6344.824. Min. Stipulated NWC 468.76 1687.28 1840.36 1892.96 2374.335. Actual / Projected NWC 273.06 4431.50 3092.79 1800.79 2344.826. Item 3 Minus Item 4 584.16 4208.96 3917.72 3557.83 3970.497. Item 3 Minus Item 5 779.86 1464.74 2665.29 3650.00 4000.008. MPBF (lower of 6 or 7) 584.16 1464.74 2665.29 3557.83 3970.499. Excess borrowings representing Shortfall in NWC 195.70 NIL NIL 92.17 29.51

The total current asset in 2009 is projected at Rs.7571.84 lakh and the working capital

gap is estimated at Rs.2121.05 lakh. The MPBF for the period is assessed at Rs.3557.83

lakh in FY 09 and Rs.3970.49 lakh in 2010.

Build up of Current Assets & Current Liabilities

Particulars 2006 2007 2008 2009 2010Stock in process – Amt 293.78 606.55 2372.46 3058.65 4158.36Month’s Cost of Production 0.79 0.91 3.19 2.72 2.75Month’s cost of sales 1.48 2.66 1.49 1.11 1.00Domestic Receivables – Amt 787.29 728.60 579.10 1780.45 2017.85Month’s Domestic Sales 1.88 1.11 0.66 1.42 1.21Creditors for Purchases – Amt 423.58 353.29 656.92 845.46 1149.83Month’s Purchases 1.39 0.53 0.77 0.77 0.77

Comments:

Stock-in-Process:

33

As per Balance sheet closing inventory stands at Rs.2372.46 lakh for the FY 2007-08,

which is higher as compared to Rs.606.55 lakh in the FY 2006-07.

Debtors Level:

Debtors level had decreased from 1.11 months in FY 2007 to 0.66 months (i.e. about 19

days) in FY 2008 due to better management of the receivables. Company has expanded

its business and has roped in new customers during current year, which has resulted in

increase in debtors level. Also, it is estimated to increase to 1.42 months in FY 2009.

Creditors level:

Creditor’s level was 0.53 month (i.e. about 15 days) & 0.77 months (i.e. about 23 days) in

FY 2007 & FY 2008 respectively.

Assessment of Non - Fund Based facility

LC Facility

Particulars Current Year(Amt in Rs crore)

Estimated Total Purchases 45.00Purchases under LC 30.00Usance Period 0 to 120 daysBank’s exposure 5.00 on 30.11.08

Comments:

The company presently has a sanctioned limit of Rs 500 lakh for both Inland/Overseas

purchases for raw materials, and others as required by the Company. In view of the

increasing business and fund requirements by suppliers all of them are now insisting on

supplying material preferably against L/C only and hence the increased requirements. 

The company has also requested for convertibility amongst both these non-fund based

limits as sometimes the requirement of one exceeds the other and convertibility allows

the company to utilize the complete limits without delay.

Assessment for LER Limits

34

Company has been sanctioned LER limit of Rs.50 lakh. The limit is for booking of forward cover/derivative deals. It is proposed to renew the same.

Appendix - II TERM SHEET FOR WORKING CAPITAL

Facility I II III IV V

35

Limit

Under Consortium:

Cash CreditRs.1005.00

lakh

LC

Rs.500.00 lakh

EPC

Rs.200.00 lakh (Interchangeability between CC, PC and FBP)

FBP

Rs.200.00 lakh (Interchangeability between CC, PC and FBP)

LER

Rs.50.00 lakh

Purpose To meet Working Capital

requirement

LC for procuring raw material.

Normal working capital requirement of the company.

Normal working capital requirement of the company.

For enabling hedging of forex exposure due to trade

Pricing BPLR i.e. 13.50%

Commission @ 1%

BPLR-2.5% BPLR-2.5% As per applicable

rateTenor 1 year Max 120

daysSame as CC Bill not to

exceed 180 days.

1 year

Repayment / Due date

On due date/On demand

On demand

On due date/On demand

Realization of export bills discounted.

Less than 6 months

Margins 25% on stock and

40% on book debts

15% Same as CC Same as CC 10% of the outstanding amount. Margins may be obtained in the form of FD.

Security Primary Hypothecation of Stocks and Book Debts.Collateral Existing:

1) First pari-passu charge over all the fixed assets including plant and machinery situate at D-3, Site-V, Surajpur Industrial Area, Greater Noida (Marble processing unit) having realized value of Rs.1200 lakh (approx).2) First pari-passu charge over all the fixed assets including plant and machinery situate at Plot No.4, Somnathpur, IDCO Industrial Estate, Balasore, Orrisa (Mining location) having realized value of Rs.40 lakh (approx).3) First pari-passu charge over all the fixed assets including plant and machinery situate at S-62/2, Industrial Estate, Asanabani, Rairangpur, Dist.Mayurbhanj, Orrisa (Mining Location) having realized value of Rs.12 lakh (approx).4) First pari passu charge over all the fixed assets including plant and machinery situate at 391-392, Naskarhat, South Khal, Para E.M. Bypass, P.S. Tuhaka, Kolkata. (Mining Location) having realized value of Rs.400 lakh

36

(approx).

Proposed:1) First pari-passu charge over all the fixed assets including plant and machinery situated at I-63, Industrial area, Surajpur-5, Kasna, Greater Noida (Marketing outlet) - Mortgage to be created valued at Rs.682.80 lakh.2) First pari passu charge over all the fixed assets including plant and machinery situated at B-57b, SIPCOT Industrial Complex, Gummudipoondi, Tamil Nadu (Marble Processing Unit) –Mortgage to be created valued at Rs. 1011.50 lakh

Third Party Guarantees

Personal guarantees of Shri Rajesh Punia having networth of Rs.300.21 lakh

and Smt. Savita Punia having networth of Rs.182.76 lakh as on 31.12.08.

Events of Default

Covenants constituting an event of default: In the event of any one of the

following occurring it will trigger a review of the account. On such review the

bank will have the right to alter the terms and conditions of this sanction

including inter -alia (but not limited to) recall of facility.

Financials - No Negative variation of more than 10% between provisional & audited results

- Current ratio not to fall below 1

- TOL/TNW not to go above 3.5 after 31-03-2009.

- Company does not incur cash loss.

- No default/cross default.

Others - There is cross default- Significant management/marketing change- Default with any other bank/FI/MF/lending institution.

Processing charges

0.50% of the sanctioned amount.

Other Conditions

1) The borrower shall maintain adequate books of account, which should

correctly reflect its financial position and scale of operation and should

not radically change its accounting system without notice to the bank.

2) The company shall route sales proceeds through IDBI on Pro-rata

basis.

3) The company shall create charge on fixed assets within 3 months from

the date of issue of LOI failing which a penal interest of 1% will be

charged on the outstanding amount.

4) The company shall furnish an undertaking that during the tenure of the

facility it shall not declare dividend on its share capital if it fails to

37

meet its obligations to pay the amounts due to IDBI, so long as the

default continues.

5) The company will keep IDBI informed about any change in the capital

structure and management setup during the currency of IDBI’s loan

facilities.

6) IDBI may assign or otherwise transfer the facilities (or the portion

thereof) to any third party and pursuant to which IDBI shall be entitled

to assign the security created herein with all or any rights under this

agreement without the prior consent of the borrower.

7) The borrower shall obtain adequate comprehensive insurance of the

securities mortgage with agreed banks clause,

8) It will submit to the Bank all financial statements, and returns

submitted to the Sales Tax and Income Tax authorities within three

months from the date of closure of the accounting year or as may be

required by the Bank from time to time.

9) Inspection: to be conducted quarterly. The company shall permit IDBI

to carry out technical, financial and legal inspections of the company’s

properties and to visit any facilities of the company and to examine

any plants, installations, sites, works, buildings, properties, equipment,

records and documents relevant to the performance of the obligations

of the company. The cost of inspection will be borne by the company.

10) Enhanced rate of interest at 2% will be charged on the excess drawings

in case any irregularity/breach is continuously less than 60 days, and if

it exceeds beyond 60 days, on the entire outstanding from the date of

irregularity/breach. Enhanced interest will be compounded monthly.

11) Penal interest of 1% will be charged on-

i. The entire outstanding for non-submission of renewal data

for the period of delay. The renewal data are requires to be

submitted to the bank by the company about 3 months from

the expiry of validity period (which is 12 months from due

of sanction) of sanction of working capital limits.

38

ii. For non submission of stocks/book debts statements for the

month for which the statement is either not submitted or

submitted with delay, on the entire outstanding.

12) It shall not induct into its firm a person whose name appears in the

willful defaulter of the RBI/ CIBIL.

13) It will keep the bank informed of the happening of any event likely to

have substantial effect on their profit or business, if, for instance sales

are substantially less than what have been indicated to the bank, the

company will inform the Bank accordingly with explanations and

remedial steps proposed to be taken.

14) It will bear the expenses / charges of valuation of securities at the

discretion of the Bank.

15) The company shall deal with the consortium members exclusively and

will not open any account with any other Bank without prior

permission.

16) The firm will make no investments in any subsidiary/ associate

concerns by way of loans and advances or investments in shares

without prior consent of bank in writing.

17) The Bank will have the right to examine at all times the firm’s books

of accounts and to have the firm’s premises inspected from time to

time by officers of the Bank/ qualified auditors/ or technical experts/

or management consultants of the Banks choice. Cost of such

inspections shall be borne by the company.

18) The Bank reserves the right to withdraw the facility in event of any

change in circumstances including but not limited to a material change

in ownership / shareholding pattern / management of the company.

19) The Bank shall have right to securitize the secured assets and in the

event of such securitization the bank is not bound to send an

individual intimation as regard to the said securitization to the

borrower and/ or guarantors.

20) If company defaults with any other Banks / FII / MF/Lending

39

institutions it will be considered a default and IDBI will have a right to

recall the facility to the Company.

21) The Bank will have the first charge on the profits of the company after

provisions for taxation or other repayment obligations if any, due from

the firm to the Bank.

22) In case of any default in repayment of the Loan/ Advances or in the

payment of interest thereon on the due dates by the borrower the Bank

and / or RBI will have an unqualified right to disclose or publish the

borrowers name / directors name the name of the company/ unit as

defaulter in such manner and through such medium as the bank or RBI

in their absolute discretion may think fit.

23) Pre-payment charges will be levied as per Banks guidelines from time

to time.

24) EM Charges / Allocation charges / Commitment Charges/ Inspection

charges / Documentation Charges etc to be recovered as per Banks

extant guidelines subject to change from time to time.

25) This sanction does not vest in anyone of the right to claim any damage

against the bank for any reason whatsoever.

26) In case the bank increase / decrease the rate of interest pursuant to

circular directives of RBI and/or as linked with BPLR of the Bank

issued / notified from time to time, the same shall be binding on the

borrower and the guarantors.

27) The Bank’s name board(s) should be displayed prominently in the

premises/godowns where stocks hypothecated to the bank are laying.

28) The company will submit to IDBI quarterly financials within 45 days

of the quarter ending and audited financials for the financial year

within 90 days of the financial year ending.

29) IDBI Bank’s exposure to be guaranteed by Shri Rajesh Punia and

Smt. Savita Punia.

40

Due Date of next renewal/ review

 After One year.

Waivers if any proposed

 NA

Documents: (i) For Consortium Limit: As per Consortium(ii) Outside Consortium: As per Bank’s Norm/Guideline

InsuranceAssets to be Insured Risks to be covered Remarks

Primary and collateral security to be insured for full value with agreed

bank clause.

Goods to be fully and comprehensively insured against risk of fire, SRCC, etc. with bank clause. Place of storage to be mentioned in the insurance policy

 The company has so far not insured its fixed assets with the Bank Clause. The fixed assets to be insured urgently.

Inspection Frequency

41

Location of Unit/s Proposed Frequency Reasons for relaxation, if any, proposed.

Registered and Corporate Office: 26/25, IInd floor, Bazar Marg, Old Rajindra Nagar, New Delhi – 110060

Processing Units (Marble Processing Units):1) D-3, Site-V, Surjapur Industrial Area, Greater Noida (Marble Processing Unit).2) B(57)(b), SIPCOT Ind. Complex Gumidipoondi, Thiruvallur, Tamil Nadu

Granite Processing Unit:S-2/6, Industrial Estate, Asanabani, Rairangpur, Dist. Mayurbhanj, Orissa

Monthly No relaxation in inspection frequency is proposed.

42

Appendix – III

Income to be generate from CMS

For Day 0  

Product Offered:  

Product ArrangementPricing(Per ‘000)

Min. per inst.(Rs)

Return Chgs.

EXPHV Day 0 Rs. 0.17 NIL Rs. 25

Express (RBI/ NRBI – D-1 Locs)

Day 0 Rs. 0.17 NIL Rs. 25

Express (NRBI – D-2 Locs)

NA NA NA NA

Swift NA NA NA NA

IRR NA NA NA NA

IMR NA NA NA NA

IMRQCC NA NA NA NA

IMRNQCC NA NA NA NA

IREM NA NA NA NA

CCASH NA NA NA NA

NCASH NA NA NA NA

Return Interest  BPLR                                                     Drawee Bank charges -NA Courier Pick up charges (Local products):   NIL                      Debit Due to Expiry: NACourier Charges (Outstation products):  NA                            Int. on IREM (fm paid date to liq.date): Cash pick up charges:                                  NA                      >From Day

6  Total Expected CMS Net Income  Rs  21995

7 Expected Current AccountFloat  Rs NIL

8 Expected Current AccountFloat Income(calculated @ 6.5% p.a.) Rs NIL

9 Estimated Income (6+8) Rs  21995

10 Other Income, if any (pls. Specify) Rs NA

11 Total Estimated Income Rs  21995

 

43

For Day 1  

Product ArrangementPricing (Per ‘000)

Min. per inst. (Rs)

Return Chgs.

EXPHV Day 1 NIL NIL Rs. 25

Express (RBI/ NRBI – D-1 Locs)

Day 1 Rs. 0.07 NIL Rs. 25

Express (NRBI – D-2 Locs)

NA NA NA NA

Swift NA NA NA NA

IRR NA NA NA NA

IMR NA NA NA NA

IMRQCC NA NA NA NA

IMRNQCC NA NA NA NA

IREM NA NA NA NA

CCASH NA NA NA NA

NCASH NA NA NA NA

6  Total Expected CMS Net Income  Rs53852 

7 Expected Current AccountFloat  Rs NIL

8 Expected Current AccountFloat Income (calculated @ 6.5% p.a.) Rs NIL

9 Estimated Income (6+8) Rs 53852

10 Other Income, if any (pls. Specify) Rs NA

11 Total Estimated Income Rs 53852

44