BUSINESS BANKING LOAN

NEW RELATIONSHIP – PROPOSAL FOR APPROVAL OF CREDIT FACILITIES

Basic Information Sheet 

Name M/s Anoop Oswal Hosiery

Constitution Proprietorship Firm
Name of the
Mr. Anoop Jain
Directors/Partners/prop.
Line of Activity Manufacturing of hosiery goods and knitted fabrics
Industry Manufacturing
External Rating Not Done
Internal Rating/Scoring BB5/Category 2/56
Group Not related to any recognised group
Segment Business Banking
Priority Sector Non Priority
Relationship Manager Inderjeet Singh Sohal
Analyst Dinesh Goyal/Saurabh Khanna
Referred By Channel Partner-
Location Ludhiana
Relationship New

Due Date for Review April, 2017

Nature of Banking
Sole Banking
Arrangement
Point of Sanction ZCC

Request & Rationale 

The client is enjoying CC limit of Rs. 180.00 Lacs, Term Loan of Rs.27.40 lacs from State Bank
of Patiala and has approached us for takeover of working capital with enhancement of Rs190.00
Lakhs in CC limits. Term loan takeover at enhancement of Rs 140 lacs. Also fresh WCTL of Rs
25.00 lacs. At present limits enjoyed by the client from State Bank of Patiala and proposed
limits from IndusInd Bank are as under –
INR in Lacs
Facility Existing IndusInd Bank Proposed Proposed Pricing
with State Total
Takeover Additional
Bank of
Patiala
Fund Based
Cash credit 180.00* 180.00 40.00 220.00 As Approved by HBB
WCDL (As sub limit of cash
- - (150.00) (150.00) As Approved by HBB
credit)
Term Loan 30.54 30.54 100.00 130.54 As Approved by HBB
Non fund based
Bank Guarantee (5.00)
Total 210.54 210.54 140.00 350.54

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*At present two MTL running with present outstanding of Rs.30.56 lacs and Rs.7.90 lacs. We
are taking over TL for TL-1 Rs.23.04lacs (outstanding as per repayment schedule) and TL-2
Rs.7.50 lacs

*In bank statement and letter submitted by SBOP, limit of the client is appearing
Rs.176.80lacs. As per client balance limit is utilised as BG and on take over same will be
converted in to 100% cash backed.

Nature of the facility: Uncommitted and Payable on Demand.

Purpose: Cash credit limit for working capital requirements.

Drawing Power: Will be calculated monthly on the basis of stock and book debt statements.

Rationale: The Company is a manufacturing unit involved in manufacturing of hosiery goods

and knitted fabrics located at 1536, Mohalla Bandian, Ludhiana, Punjab. The case is takeover of
CC limit with enhancement and TL at existing levels from State Bank of Patiala.

Reasons for shift from existing Bank/NBFC (In case of balance transfer)
Our marketing team had been after the customer for quite some time and now has been able to
convince the customer for takeover of the account with enhancement by ensuring better service
and competitive rate.

Eligibility

ELIGIBILITY CRITERIA:
The firm meets all bank policy guidelines as per latest audited financials 31st March, 2015.
2014-15
Particulars Eligibility Status

Gearing 1.27 <= 4 ( for traders 5) Complied

Leverage 2.48 <= 6 ( for traders 7) Complied
Current ratio 1.23 >=1 Complied
ICOR 1.89 >= 1.25 Complied

Rating for the client:

Rating – BB5/Cat2/56 Score based on audited financial statements for 31-03-2015. The rating sheet is
attached as annexure.

Group Concerns :

Amount in lacs
Name of Line of Business Sales EBITDA PAT TNW Total TD/EBIT
group 2014-15 debt DA
company (TD)
R.S.A. Knit Manufacturing of 206.42 9.75 5.26 27.21 46.26 4.74
(India) Knitted Fabrics

Brief details of Group Concerns:

M/s R.S.A Knit (India) is a proprietorship concern of Mr Akshay Jain s/o Sh. Anoop Jain. Firm was started
in 2011 as prop concern. Firm is engaged in manufacturing of all hosiery goods and knitted fabrics. Firm is
operating from 1709, Mohalla Bandian, Ludhiana. Mr Akshay Jain joined family business in 2011 after

2
completing graduation and opened new firm in name of M/s R.S.A Knit (India). Firm is availing CC limit of
Rs 30 lacs from State Bank of Patiala. Takeover of limit under this firm is also proposed at enhanced level
of Rs.50.00lacs.

Group Exposure :

Rs. In lacs

Name of the Entity Facility Sanctioned Outstanding Facility availed

Limit from us since
AnoopOswal Hosiery CC-220 lacs - - -
TL –
130.54lacs

R.S.A. Knit India CC-50.00 lacs - - -

Total Rs400.54lacs

Security Template:

DETAILS OF SECURITIES OFFERED

Primary Security:
First and exclusive charge on entire current assets and movable Fixed assets of INR
the firm/company both present and future.
Collateral Security:

Equitable Mortgage of following properties :

Address Type Owne Area Usage Market

r Value
Name (In
lacs)
1133/1A/B Commercial/Industrial Mrs 150.00
, Shivpuri, Neha 199 Manufacturing
Taraf Jain sq. unit
Sekhewal, yards
Jodhewal,
Ludhiana 480.00
B-25-G- Commercial/Industrial Mr 373 Manufacturing 330.00
4/87 & B- Anoop sq. unit
25G-4/88, Jain & yards
Street no Mrs
10, New Neha
Shivpuri, Jain
Ludhiana

1. Sale deed bearing vashika no.5425 dated 10/07/09 measuring 263 sq yards on
name of Sh Anoop Jain.
2. Sale deed bearing vashika no.5427 dated 10/07/09 measuring 110sq yards on
name of Sh Anoop Jain and Mrs Neha Jain.
2.50 lacs
Cash Margin 5% as per SBB program:

3
 Total Value of collateral INR 480 Lacs

Personal Guarantees of all the directors /shareholder and property

owners which necessarily include personal guarantee of :

1. Mr Anoop Jain
2. Mr Akshay Jain
3. Mrs Neha Jain

As per State Bank of Patiala sanction, above properties are collateral for CC and TL.
Valuation Details:

* Fresh valuation will be done after sanction of the credit facilities.

Valuation Valuation Average Lower
Details of Properties (Commercial)
1 2 Value Value
1133/1A/B, Shivpuri, Taraf Sekhewal,
Jodhewal, Ludhiana
B-25-G-4/87 & B-25G-4/88, Street no 10, New
Shivpuri, Ludhiana

Computation of Unsecured Exposure:

(Rs. In lacs)
Sr.
No Collateral Offered Gross Value Haircut DSV
1 Industrial Property Rs 480.00 lacs 40% 288.00
2 FDR Rs.2.50lacs 2.50
  Total(B) Rs 480.00 lacs 290.50
Total Limit 400.54
DSV of Security 290.50
% of limit covered 72.53%
Net Asset At Risk ( Total Limit less DSV of
security) 110.04

BANKING AND CREDIT HISTORY

Existing Banking arrangement: The firm is availing following Working capital facilities from
State Bank of Patiala:-
(Rs in lacs)
Name of Facility Limit (%) Balance Overdue, if any ROI/
Bank 29.02.1 Commission
6

State Bank of Cash 180.00 100 172.18 Nil 11.40%

Patiala (CC ) Credit %

State Bank of Bank (5.00) 100 0.00 Nil

Patiala (BG) Guarante %
e

4
Existing Security with Existing Bank:

Address Type Owner Area Usage Remarks

Name

1133/1A/B, Commercial/Industrial Mrs Neha -

Shivpuri, Taraf Jain 199 sq. Manufacturing
Sekhewal, yards unit
Jodhewal,
Ludhiana
B-25-G-4/87 & B- Commercial/Industrial Mr Anoop 373 sq. Manufacturing -
25G-4/88, Street Jain & Mrs yards unit
no 10, New Neha Jain
Shivpuri,
Ludhiana
Resi cum Resi cum commercial Anoop jain 82 Sq - Client is
commercial yards not
building having
measuring 82 sq registry
yards Mc no. B- for this
IV-1709 mohala property.
Bandian, We will
Ludhiana. not be
able to
create
equitable
mortgage
on this
property.

Bank statement analysis:

We have assessed last 6 months bank statements of cash credit limit with State Bank of Patiala
Below mentioned is the summary of accounts:

State Bank of Patiala CC: 8860

Month Summation Cheque Return Month AVG

DR
Outward Inward
  DR CR
No Amt No Amt
  CC
45.65
Sep'2015 42.64 2 0.78 0 0 174.00
Oct'2015 64.18 57.07 5 1.75 1 0.32 170.09
Nov'2015 62.27 56.95 2 0.81 0 0 171.96
Dec'2015 126.54 123.92 0 0 0 0 169.64
Jan'2016 75.48 71.35 8 4.79 0 0 165.88
Feb'16 124.25 153.64 6 2.45 0 0 174.32
170.98
Total 498.37 505.57 23 10.58 1 0 (Avg)

Comments:

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  Total credit summation as per the last 6 month is Rs 505.57 lacs and the same is more
than 100.00 % of the turnover for the same period.
 Avg utilisation is 170.98 lacs which is 94.98% of total sanctioned limit-180 lacs with
present banker.
 There are 23 outward returns and 1 inward return in last 6 months bank statements.
Outward cheque returns are due to various reasons – drawer signature differs,
insufficient funds and other various reasons. As per client these payments has been
realised in due course.
 Overall account conduct is satisfactory and there are no incidences of non-service of interest
seen.

Term Loan details: The company is availing Term Loans from State Bank of Patiala:
Rs. In lacs
Princi Last
pal EMI
O/S month
Type Sanction/ as on
Name of Loan of Disbursed Tenor(M 29.02.
Financer Amount Loan on EMI onths) 16
State Bank MTL
of Patiala 36.00 May, 2013 48000 75 31.02*
State Bank MTL
of Patiala 34.00 - 45990 60 7.90
*As per repayment schedule outstanding amount should be Rs.23.04lacs against actual
outstanding of Rs.30.50lacs as on March 31, 2016. As per client existing banker is recovering
the amount from CC account and there is no delayed from there end. Client has also submitted
the letter from existing banker for satisfactory conduct of account. We are taking over the term
loan amount as per repayment schedule and client to deposit the balance amount from own
funds.

CIBIL Check /ECGC /RBI List of defaulters

Enquires
Type of CIBIL Check Match Found Remarks
reported
Consumer      
All other loans are running regular and CIBIL
Score is 635. Amount of Rs 3298 is
appearing as overdue in Commercial vehicle
Mr. Anoop Jain Yes 50 loan Rs. 1.55 lacs running with Indusind
Bank Ltd. Client has cleared the overdue
amount and loan is running regular.

All other loans are running regular and CIBIL

Mrs. Neha Jain Yes 68 Score is 727.

All other loans are running regular and CIBIL

Score is 677. Amount of Rs 3298 is
appearing as overdue in Commercial vehicle
loan Rs. 1.55 lacs running with Indusind
Mr. Akshay Jain Yes 46
Bank Ltd. Client has cleared the overdue
amount and loan is running regular.

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Commercial :
M/s R.S.A. Knit India Yes - All loans are running regular.
M/s Anoop Oswal
Yes - All loans are running regular.
Hosiery

Whether company /any directors appears on the latest RBI defaulters list  
or SAL of ECGC
Whether company/any of its directors face litigation from Banks/FI No
Whether the directors /partners /senior executives of the company or their
No
relatives are connected with the bank or directors in any other bank
Whether commission has been paid to guarantors for extending their
No
guarantee for the advance
Whether the company/firm/directors /guarantors appearing in watch out
No
investors.com

Auditor’s qualification / comments : NA

(Supporting documents attached along with the note)

Reference Check  

The reference check of the client has been done by the RM from below mentioned parties and
received a positive reference about the client.

Suppliers Name: Sharma Yarn

Contacting person: Mr. Rajinder Kumar (9814222390)
.

Suppliers Name: Mohit Traders

Contacting person: Mr. Mohit Kumar (9872222613)

Customer Name: Hira Garments

Contacting person: Mr Naveen (0802253275)

Customer Name: Himmat Hosiery

Contacting person: Mr. Raju Kumar (08041245772)

Inderjeet Sohal (RM) has checked the ref from following existing customers and received a positive
feedback about market standing of the client

1. V P Oswal Hosiery Factory- Mr Vijender Jain Partner-9356057041

2. Rajan Knitfab Pvt Ltd- Mr Jatinder Kalra Director- 98159-31311

Background of Company & Promoters

The Group & Company:

M/s Anoop Oswal Hosiery is a proprietorship firm of Mr Anoop Jain. Firm was started in year
2004-05 by Mr Anoop Jain as prop. Firm is engaged in to manufacturing of knitted fabric and
hosiery goods from more than 12 years. The firm is having its manufacturing unit at
1133/1A/B, Shivpuri, Taraf Sekhewal, Jodhewal, Ludhiana (Unit I) and at B-25-G-4/87 & B-
25G-4/88, Ludhiana (Unit II). Total combined area of both units is 572 sq.yards.

7
The Firm has total staff strength of 50 persons in both group firms deployed under
manufacturing process and dispatching process.

The Promoters/management:

Mr Anoop Jain is prop of the Anoop Oswal Hosiery. He is 46 years of age & is graduate. He has
rich experience of around 16 years in the same line of activity. He is looking after overall
business of firm.

Product Line of the firm

Products:Firm is engaged in Manufacturing of Knitted fabrics and hosiery goods .

Business Model- An Overview

Business Model:

1. M/s Anoop Oswal Hosiery is a proprietorship concern owned by Mr. Anoop Oswal.
2. Firm is engaged in to Manufacturing of knitted fabrics and hosiery goods.
3. Firm purchases major raw material i.e. yarns from various yarn mills located in Ludhiana,
majorly through agents.
4. Client is procuring material direct from domestic traders also as per business requirement.
5. Firm has staff strength of around 50 employees, who are engaged in to manufacturing,
finishing and dispatching process.
6. Firm is having average manufacturing capacity of around 5 tonnes per day.
7. Firm is offering credit period of around 3-4 months to buyers.
8. Client has to carry good stock of raw material (yarn) of different colours for smooth
functioning, which is indispensable as per nature of business.
9. Client is dealing in to vide variety of designs under knitted yarn as per orders of the buyers
thus has to carry higher stock to meet immediate requirement of the buyers.
10. Client is supplying finished goods majorly to manufacturers of hosiery goods in the south
market. Client has good business vintage thus having long relationship with these buyers and
regular orders.
11. Major USP of the client are timely supply of material and maintaining good acceptable quality
to the buyers.
12. Customer to manufacture fabric for all seasons.
13. Client has installed the following infrastructure
1.) 14 Circular Knitting machines having capcacity of around 5 tonnes used to manufacture
fabrics of different colours and quality to meet the market demand.
2.) 10 sewing machines to stitch fabric as per requirement in to hosiery good.
3.) 2 Gensets to cop up with power cuts.

Product Line: Manufacturing of Hosiery goods, Night wears and knitted fabrics

Key Customers:
Relationship
Name of Customers vintage % of Total Sales
S.K Oswal Hosiery 10 8.00%
R.P. Hosiery 10 7.00%
Unimax Apparels 5 5.00%

Key Suppliers:

8
 Relationship
Name of Suppliers vintage % of Total Sales
Sarthak Knitwears 7 5%
Priya knitwears 6 5%
Vaishanvi Knitwears 6 5%

Unit Visit:
The unit was visited along with Relationship Manager Inderjeet Sohal, Sudhir Rana (RSM), Dinesh
Goyal( Credit Analyst ) and Saurabh Khanna (Credit Analyst) and found satisfactory set up (Details)

Eligibility: TLPDD

ELIGIBILITY CRITERIA:

Non-Financial
Complia
nce with
Particulars Eligibility Status
norms(Y
es/No)
Type of borrowers  Self Employed Professionals  Proprietorship YES
 Self Employed Non Professional concerns
 Proprietorship concerns
 Partnership Firms
(controlling/majority stake
holders are co- borrowers)
 Private Limited Company
( minimum 51% stake holders
are co-borrowers)
 Public Limited Company -
unlisted, closely held (minimum
51% are co borrowers
Negative list of  HUF, Partnership firm in which NO YES
borrowers HUF is one of a partner, NRI,
PIO, Religious/Educational/
Charitable Society or Trust
Caution Categories  Exporters (given the present NO YES
global market scenario)
 Contractors (excluding Class 1 &
2 Govt Contractors) including
labour contractors
 Builders/ Civil Contractors/
Developers/ Building Material
Suppliers
 Manufacturers having
manufacturing facilities in
residential premises/ areas or
non- confirming areas
 Commission Agents & Brokers
 Tour & Travel agents/ Taxi

9
 operators / Transporters
 Recruitment agencies/
consultants
 Stock Brokers
 Lawyers
Caution profile cases to be
appraised based on:
 Actual Profits being reflected in
books
 Must have clean repayment
track of 12 months of
secured/unsecured loan,
wherein applicant/co-applicant
must have served either car
loan of 5 lacs, unsecured loan of
10 lacs or secured loan (HL/LAP)
of 20 lacs.
 LTV & DSR get reduced by 10%
each
Co-applicant  All Yes Yes
promoters/partners/shareholder
s to be co-applicants
 In case of NA Yes
partnership/companies 51% of
the shareholders (with minimum
of two) should be co-applicants
 Property owners to be co- Yes Yes
applicants(Only in exceptional
circumstances they can be taken
as guarantors instead of co-
applicant)
 Age of co-applicant to be Yes Yes
minimum 25 years and
maximum 70 years at the
maturity of the loan
 At least one of the Co-applicant Yes Yes
must be less than 50 years old
at the maturity of the loan
 Availability of 1 PDC(Undated) Yes Yes
from the personal account of the
key promoter of the borrower
entity
Purpose of loan  Purchase of plant and Take Over of YES
machinery, existing Term Loan
 Purchase of property, sanctioned by
SBOP and fresh
 Construction of
machinery term
factory/building,
loan as per
 Business expansion business
 Working capital term loan requirement.
Business Vintage 5 years for standalone business and The firm was YES
3 years in case of a group entity started in 2014.

10
 (must have overall 5 years business
vintage within group companies)
Client Business Minimum : Rs 40 lacs (audited Turnover during FY YES
Turnover financials) 14-15 was Rs
579.89lacs
Maximum: Rs 15000 lacs
Loan Amount Minimum: Rs 25 lacs YES
Maximum: Rs 1000 lacs TL-1 Rs.30.54lacs
Fresh MTL-100.00
(Maximum Group Exposure
restricted to Rs 2500 lacs)
Loan Tenor Purpose Maximu
m Tenor
Purchase of Plant & 5 years Take over from No
Machinery existing banker for
balance tenor.
Business expansion and 7 years Fresh machinery
Construction of term loan
factory/building
Purchase of property 10 years
Working Capital Term 3 years
Loan
WCTL with the 5 years
approval of Country
Head and Risk Head,
in exceptional cases
Additional capping on Particulars Norms
loan tenor Age of the key partner/ Mr. Anoop Jain- YES
director/stakeholder 46 years

Property age on loan <45 <45Years YES

maturity years
Minimum residual age of 30 years More than 30 YES
property after the loan Years
maturity date
Bank Parameter Norms
Statements/Appraisal Bank statement of all Past 6 From Sept 15 to YES
norms major accounts reflected months Feb 16
in the latest balance
sheet to be obtained
and reviewed
Max. No. of inward 10 YES
returns excluding bounce
due to non-financial
reasons/presented and
cleared within thresh
hold period of 7 days
Max. No. outward 12 YES
returns
Annualised CT in the 70% 100% YES
account(Excluding contra
entries for cheque
returns)
11
 Max. No. of times 1 NIL YES
account irregular/interest
not serviced(30 DPD)
Processing fee at Cheque/DD for Will be obtained No
Login stage Rs.5000/- as non- post sanction
refundable basic
processing fee(Other
than the normal
processing fee on
sanction of the loan)
received and realised.

Eligibility as per financial norms

The company/firm meets all bank policy guidelines as per latest audited financial 2015.

2014-15
Particulars Eligibility Status
EBDITA(Actual) 48.27
EBDITA(Imputed)
Gearing 1.27 <= 4 ( for traders 5) YES
Leverage 2.48 <= 6 ( for traders 7) YES
Current ratio 1.25 >=1 YES
ICOR 1.89 >= 1.25 YES
Debt Service Ratio 75% YES
DSCR 0.89 YES

Collateral security
Compliance
Particulars Norms Status with
norms(Yes/No)
Nature of Residential/Commercial/Industrial Industrial YES
immovable property (self occupied & owned by property
property self or partner/proprietor in his
individual capacity)/
Agricultural properties not
acceptable.
Co-applicant Owner of the property to be co- Yes YES
applicant for the loan
Age of owner of If age is beyond 70 yrs at maturity, Anoop Jain- 46 NA
the property a notarized (Preferably registered) years
will should be taken. All legal heirs Neha Jain-46
to be co-applicants or NOC and years
undertaking to be taken from all
legal heirs

Anoop Oswal Hosiery

          Rs. In lacs
Parameter 2013 2014 2015 2016 2017
  Audited Audited Audited Estimated Projections
No. of months 12 12 12 12 12
Profitability Analysis          
Net Sales 248.28 464.70 579.28 625.00 950.00
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Other Operating income - - - - -
Total Operating Income 248.28 464.70 579.28 625.00 950.00
Top line Growth Rate (%) - 87.17 24.66 7.89 52.00
CAGR of net sales (%) - - 32.63 10.38 17.93
Gross Profit 48.97 71.67 65.48 78.20 121.00
Gross Profit/TOI ( %) 19.72% 15.42% 11.30% 12.51% 12.74%
EBIDTA 41.36 61.92 48.27 58.20 88.00
EBIDTA / TOI (%) 16.66 13.32 8.33 9.31 9.26
Depreciation/ Amortisation 10.70 15.39 15.41 13.20 30.00
Interest 24.23 38.36 25.60 33.00 40.00
Operating profit before tax 6.43 8.17 7.26 12.00 18.00
Non Operating income 0.37 0.64 2.02 1.00 -
Non Operating expenses - - - - -
Prior period adjustment/
extraordinary items - - - - -
PBT 6.80 8.81 9.28 13.00 18.00
Tax 0.51 0.98 1.23 2.00 3.00
Minority Interest - - - - -
PAT 6.29 7.83 8.05 11.00 15.00
PAT / TOI (%) 2.53 1.68 1.39 1.76 1.58
Net Cash Accruals(NCA) 16.99 23.22 23.46 24.20 45.00
ROCE% 14.82 12.28 7.16 8.67 9.04
           
Balance Sheet Analysis          
Gross Fixed Assets (net of revaln
reserves) 71.87 128.19 129.52 129.52 264.52
Net Fixed Assets 61.17 102.10 88.01 74.81 179.81
Capital WIP - - - - -
Tangible Networth(TNW) 101.73 174.64 202.46 230.00 245.00
Subordinated loans 7.30 12.03 12.40 32.00 60.00
Interest bearing - - - - -
Non Interest bearing 7.30 12.03 12.40 32.00 60.00
Minority Interest - - - - -
Adjusted ATNW (including
subordinated loans)
109.03 186.67 214.86 262.00 305.00
Long Term Debt( LTD) -Interest
bearing (other than subordinated
loans) 25.91 96.61 37.75 96.25 147.25
Other Long Term Debt 0.00 - (0.00) - -
Deferred Tax liability - - - - -
Short Term Debt(STD) - Interest
bearing 21.12 29.68 60.37 12.50 29.00
Working Capital Bank Finance 58.09 77.86 158.34 180.00 220.00
Total Debt (int. bearing debt) 105.12 204.15 256.46 288.75 396.25
Total Current Assets 165.04 366.44 563.99 559.93 657.43
Total Current Liabilities 95.19 235.15 451.11 276.50 385.00
Net Working Capital 69.85 131.29 112.88 283.43 272.43

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Other Long term assets/ non
current assets 3.92 49.89 51.72 0.01 0.01
           
Leverage Ratios          
Total Debt / TNW ( Gearing ) 1.03 1.17 1.27 1.26 1.62
LTD(including subordinated)/ TNW 0.25 0.55 0.19 0.42 0.60
TOL / TNW ( Leaverage) 1.26 1.97 2.48 1.76 2.42
           
Total Debt / ATNW ( Gearing ) 0.96 1.09 1.19 1.10 1.30
LTD / ATNW 0.24 0.52 0.18 0.37 0.48
ATOL / ATNW ( Leavergage) 1.11 1.78 2.28 1.42 1.75
           
Coverage Ratios          
Total Debt / EBIDTA 2.54 3.30 5.31 4.96 4.50
Total Debt / NCA 6.19 8.79 10.93 11.93 8.81
LTD / NCA 1.53 4.16 1.61 3.98 3.27
           
Repayment Capacity Ratios          
Current Ratio 1.73 1.56 1.25 2.03 1.71
Interest Coverage Ratio 1.71 1.61 1.89 1.76 2.20
DSCR 1.70 1.04 0.89 0.61 1.62
           
Activity Ratio          
Debtors Amount 59.78 229.82 327.23 281.00 340.00
Debtors (months) 2.89 3.74 5.77 5.84 3.92
Raw Materials 90.56 136.84 244.19 250.00 285.00
RM holding in months 5.42 3.89 4.88 5.96 4.26
WIP - - - - -
WIP holding in months - - - - -
Finished goods - - - - -
FG holding in months - - - - -
Creditors 10.02 120.83 220.22 75.00 125.00
Creditors months 0.61 1.98 3.55 3.52 1.52
Net Working Capital Cycle (in
months) 7.70 5.65 7.10 8.28 6.66
Working Capital finance to turnover 4.27 5.97 3.66 3.47 4.32

YTD Performance: (Rs. in lacs)

Particulars YTD Corresponding YTD Net change
(FY 2015-16) (FY 2014-15)
Apr-Feb Apr-Feb
Net Sales 565.92 546.74 +3.50%
EBITDA NA NA NA
Net profit NA NA NA

Comments on the Financial Indicators

14
Comments:
Turnover Turnover is reflecting growth trend from last 3 years. Client has
Growth registered turnover of Rs 579.28 lacs in FY2015 compared to Rs.464.70
lacs in FY2014 thereby registering good growth of around 24.66%. In
current year there is growth of around 8% also. Client has already
registered turnover of Rs.565.92 lacs and projecting to close current year
with turnover of Rs.625 lacs. Client is majorly doing manufacturing of
Fabrics for both winter and summer season. Client is selling fabrics all
over India to garments/Hosiery goods manufacturers. Client is also
manufacturing hosiery goods majorly night wears selling in domestic
market only.

2015-16 (Up to
Particular 2014-15
Dec, 2015)

Sales of Fabrics
159.65 99.03
Out of Punjab

Sales of Fabrics
272.37 205.76
with in Punjab

Hosiery goods
147.05 153.83
sale

Total Sales 579.07 458.62

Details of quarter wise sales are as follows:

Particular FY2014-15 FY2015-16
Q1 47.80 81.95
Q2 133.78 217.66
Q3 325.16 159.01
Q4 72.32
Promoter’s Equity Promoter’s long term funds are reflecting at good level in the financial.
TNW has increased to Rs.202.46 lacs in FY2015 as per audited financial.
Promoters are retaining profits year on year basis.
Gearing & Both Gearing and leverage stand at 1.27 and 2.48 respectively for
Leverage FY2015. Company is having unsecured loans from directors and relatives
which will be retained in the business to the tune of Rs.12.40 lacs thus
adjusted Gearing and leverage stand at 1.19 and 2.28 respectively in
FY2015 which are well within norms.
Profitability The profits margins of the company stand at satisfactory levels. The
Margin company is expanding year on year basis. The group is expanding now
with increase in machinery set-up. Thus, the profit in the coming years
will increase. All the profitability ratios are positive. EBIDTA margin is
8.33 and PAT margin is 1.39.
Debtor’s The sales are realised normally in 3-4 months and the same level has
Turnover Days been taken into consideration.
Creditor’s The purchases are made on credit period of avg. 60-90 days. Client is
Turnover Days making advance/early payments to avail discounts.
Stock Turnover As per business model of the firm it has to carry higher stock to the level
days of around 4 months to meet the varied demands of the buyers. Client is
supplying fabric of different sizes and qualities depending on the need of
buyers. Client needs to carry higher stock as required different colours
yarn for manufacturing fabric. Client is dealing with large number of
15
 buyers thus meeting timeline of supply schedule is utmost important for
continuing orders. Thus high stock levels are maintained as per business
model of the client.

Assessment 

Assessment of Cash Credit Facility:

MPBF method INR in Lakhs
Financial Years 2013 2014 2015 2016 2017
Particulars Audited Audited Audited Projected Projected
Total Current Assets (A) 165.04 366.44 563.99 559.93 657.43
Total Current Liabilities
(B) 15.98 127.61 232.40 84.00 136.00
(other than bank
borrowings)          
Working Capital Gap (C =
A-B) 149.06 238.83 331.59 475.93 521.43
25% Margin on TCA 41.26 91.61 141.00 139.98 164.36
Actual/Projected net
working capital (E) 90.97 160.97 173.25 295.93 301.43
Maximum Permissible
Bank Finance 58.09 77.86 158.34 220.00 220.00
Excess borrowing
representing 0.00 0.00 0.00 0.00 0.00
Our Proposed/
Recommended FB
Limit       180.00 220.00

Rationale The sales of the company are normally realised in around 4 months basis major
clients are in southern states and Client is having longer working capital cycle in manufacturing
process. The client has to keep stock which is equivalent to around 4 to 5 months sales. The
purchases are made on an average credit payment basis of 60-90 days. Hence the working
capital cycle spans to 5 months. CC limit of Rs 220.00 Lacs is justified on the basis of WC cycle
of 5 months based on projected turnover of Rs.950 Lacs and MPBF 2nd method.

Assessment –TL

Takeover Cases:
Details of Purpose, Cost and funding pattern: The client has taken term loans from State bank
of Patiala which is proposed for takeover. The details of these are as follows:-

TL Availed- Rs. In lacs

Princi Last
pal EMI
O/S month
Type Sanction/ as on
Name of Loan of Disbursed Tenor(M 29.02.
Financer Amount Loan on EMI onths) 16
State Bank MTL
of Patiala 36.00 May, 2013 - 31.02
State Bank MTL
of Patiala 34.00 - 45990 60 7.90
16
Fresh Term loan:
The client is proposing to install fully automatic Circular Knitting Machines as per expansion plan which
cost Rs.135.00 lacs and for which the new term loan is proposed for Rs.100 lacs. There is ample demand
of the product thus as per growth business strategy client is adding knitting capacity, which will effect
both Top line and bottom line positively. Projected turnover in coming year is Rs.950.00 lacs approx. The
configurations of the machineries are as follows:
Details of plant and machinery to be procured:

Name of Supplier Machinery Details No of Machines Amount

in lacs
Nirmal Sales India Fully Automatic 6 set of machines including 135 lacs
computerised Circular accessories approx.
Knitting Machine

1. Funding pattern is as follows:

Sources of funds Amount Application of funds Amount
Bank Finance 100.00lacs Plant & Machinery 135.00lacs
Promoter contribution 35.00lacs
Total 135.00 lacs 135.00lacs

TERM LOAN DETAILS

Particulars
Purpose of Term Loan Purchase of Plant and Machinery (under TUFS)
Proposed Term of Sanction Total Cost Rs 135.00 lacs
Proposed finance Rs 100.00 lacs
Period 60 months
ROI Base Rate plus 1.50%
Repayment 60 Equal Monthly Instalments of
Principal and interest monthly
Details Regarding TUF Specific Segment Weaving / Knitting
Purpose Expansion
Type of Subsidy Capital and interest Subsidy both
Details of Machinery Eligible Under TUFS (Textile
Machinery)- Fully automatic Circular
Knitting machines
Specific Registration N.A.
TUFS and Non TUFS TUFS: Rs.100.00 lacs
portion of loan

Calculation of DSCR

FY16 FY17 FY18 FY19 FY20 FY21

Particulars
11.00 15.00
Net profit after tax 19.00 25.00 32.00 40.00
13.20 30.00 26.00 23.00 20.00 17.00
Add: Depreciation
           

Add: Other non cash items

17
 13.00 18.00 20.00 17.00 14.00 11.00
Add: Interest on term liabilities
37.20 63.00 65.00 65.00 66.00 68.00
Aggregate inflow (1)
           
 
60.37 12.50 29.00 26.50 26.50 26.75

Principal Repayments
13.00 18.00 20.00 17.00 14.00 11.00
Interest on term liabilities
Aggregate outflow (2) 73.37 30.50 49.00 43.50 40.50 37.75
Gross DSCR [1/2] 0.51 2.07 1.33 1.49 1.63 1.80
Average Gross DSCR 1.66

Repayment is regular in all loans as on date. Client has repaid Intec capital loans of Rs.31.88 lacs and
Rs.15.45 lacs by way of takeover by Hero Fincorp in FY2015-16. Actual repayment is 13.04 excluding
takeover of loans in FY2015-16. Thus actual DSCR is above 1 all the time.

Details of running loans in the group are as follows:

Financer Sanctione Outstanding EMI Balance tenor Remark

Name d amount Amount Amount
29/02/2016
SBOP-MTL 36.00 31.02 48000 48 (March, 2020) Anoop Oswal Hosiery-
Taking over for
balance amount

SBOP -MTL 34.00 7.90 45900 23 (Feb 2018) Anoop Oswal Hosiery
-Taking over for
balance amount

ICICI Bank 25.00 16.43 1,22,707 14 (May, 2017) Individual name-

Ltd-PL Akshay Jain and
Anoop Jain

Bajaj Finserv 7.14 5.20 26,354 23 (March , 2018) RSA Knit-

Intec Capital 39.59 38.18 91,101 56 (Dec, 2020) RSA Knit
Ltd-MTL
DHFL-MTL 75.55 70.40 1,83,738 53 (Sept, 2020) RSA Knit

Indusind Bank 1.55 1.04 6300 16 (July, 2017) Individual name-

Ltd Akshay Jain and
Anoop Jain
ICICI Bank 10.00 8.16 35157 26 (June, 2018) Individual name-
Ltd Akshay Jain and
Anoop Jain
Hero 353.33 321.56 5,01,122 134 Anoop Jain and
Motocorp Akshay Jain
Proposed 100.00 100.00 166667 60 Anoop Oswal Hosiery
Machinery
Term loan
Total 11,81,146

18
Repayment is regular in all loans as on date.

Details in case of takeover of loan sanctioned under TUFS:

Details of machinery procured under TL-1 are as follows

Details Number Amount in lacs Suppliers

Circular knitting Machine 3 50 lacs -
with standard
accessories

Client has availed term loan of Rs.34 lacs against this machinery from State Bank of Patiala

 The Unique identification number(UIN) allotted by the MoT /Eligibility Number (EN): -----
 subsidy already claimed and received: -----

Details of machinery procured under TL-2 are as follows

Details Number Amount in lacs Suppliers

Circular knitting Machine 3 50 lacs -
with standard
accessories

Client has availed term loan of Rs.36 lacs against this machinery from State Bank of Patiala

 The Unique identification number(UIN) allotted by the MoT /Eligibility Number (EN): -----
 subsidy already claimed and received: -----

TERM LOAN

Purpose of Term Loan: Term loan takeover at existing level availed for purchase of plant & Machinery
and construction of building and fresh term loan to the tune of Rs.100 lacs for purchase of machinery as
per business requirement.

Business Banking Secured EMI Loan Calculator

Anoop
Borrowe Oswal
r Name : Hosiery  
Select Norms
Complied (At
Last Select least 2 norms Imputed Audite Mar
Ratios Audited Category met) Factor d Year Sales EBDITA gin  
G<3, L<4, 4647000 13.3
Gearing 1.27 Category 2 D/NCA<5 2.25 2014 0 6192000 2  
5792800
Leverage 2.48     2015 0 4827000 8.33  
Averag 10.8
Debt/NCA 10.93     e   5509500 3  
Imputed 24.3
              Margin 6  
75% of
SECURED EMI ELIGIBILITY - Imputed I.
Financial Norm EBDITA EBDITA Banking Check  
75% Com
Imputed plie
EMI 330611       Credits CF d  

(In Month 4,264,00 779,182.

Tenor 60 months) 1 0.00 11 Yes  

19
Rate of (insert Rate 12,396,375.0 9,297,28 Month 5,707,00 1,042,86
Interest 11.00 in figures) 0 1.25 2 0.00 8.74 Yes  
Loan
Eligibilit Month 5,695,00 1,040,67
y 15205823   3 0.00 5.92 Yes  
Loan
Propose Month 12,392,0 2,264,45
d 13775000 4 00.00 2.33 Yes  
EMI of
Propose Month 7,135,00 1,303,81
d 299502 5 0.00 4.35 Yes  

Month 15,364,0 2,807,54

  6 00.00 0.81 Yes  

Consoli 5055700 9238534.

          dated 0.00 271 Yes  

Declaration:

1. The proposal is recommended under WCPDD and TLPDD.

2. We have gone through the DOP and WCPDD and TLPDD as currently in force and having
done so, confirm that the approval of the above proposal falls within the authority of ZCC.

Submitted for approval

MEMORANDUM BY FOR SANCTION / APPROVAL OF FACILITIES BY ZCCI:

Managem Medium  M/s Anoop Oswal Hosiery is a proprietorship firm of Mr Anoop Jain. Firm was
ent Risk started in year 2004-05 by Mr Anoop Jain as prop. Firm is engaged in to
manufacturing of knitted fabric and hosiery goods from more than 12 years.
 Mr Anoop Jain is proprietor of the Anoop Oswal Hosiery. He is 46
years of age & is graduate. He has rich experience of around 16
years in the same line of activity. He is looking after overall business
of firm.
 We are also taking over the personal guarantee of two sons and wife
of proprietor.
Business Medium  Firm is engaged in to Manufacturing of knitted fabrics and hosiery goods.
& However majority of the top line of the firm remained of fabrics.
Industry
Risk
2015-16 (Up to
Particular 2014-15
Dec, 2015)

Sales of Fabrics Out of Punjab 159.65 99.03

Sales of Fabrics with in Punjab 272.37 205.76

20
 Hosiery goods sale 147.05 153.83

Total Sales 579.07 458.62

 Firm purchases major raw material i.e. yarns from various yarn mills located
in Ludhiana, majorly through agents.
 Client is procuring material direct from domestic traders also as per business
requirement.
 Firm has staff strength of around 50 employees, who are engaged in to
manufacturing, finishing and dispatching process.
 Firm is having average manufacturing capacity of around 5 tonnes per day.
 Firm is offering credit period of around 3-4 months to buyers.
 Client has to carry good stock of raw material (yarn) of different colours for
smooth functioning, which is indispensable as per nature of business.
Financial Medium  Top line of the firm is on increasing trend since last three years. Top line of
Risk the firm has increased from Rs.464.70lacs in FY2014 to Rs.579.28lacs in
FY2015. In FY2016, top line of the firm is estimated at Rs.625.00lacs.
 In current year till Feb 2016, there is marginal growth in top line and firm
has achieved a top line of Rs.565.92lacs against top line of Rs.546.74lacs
achieved by firm during last year for same period. Hence till Feb. there is
marginal growth of 3.50% in top line. In current year firm is projecting a top
line of Rs.635.00lacs.
 There is wide fluctuation in the EBIDTA margin of the firm and same has
declined from 16.22% in FY2013 to 8.33% in FY2015. In FY2016, EBIDTA
margin is projected at 9.31%.As per client they are offering competitive
pricing to support increasing volumes thus there is fluctuation in EBIDTA
margins year on year.  
 PAT margin of the firm remained at 1.68% in FY2014 and 1.39% in FY2015.
In FY2016 EBIDTA margin is estimated at 1.76%.
 Gearing and leverage of the firm remained at satisfactory level at 1.27 and
2.48 respectively in FY2015. However proprietor has also borrowed around
Rs.346.00lacs of debt in personal name and same are not counted in above
debt and if we include the same then revised gearing and leverage would be
2.99 and 4.19lacs respectively in FY2015.
 Current ratio of the firm also remained above 1 in all the previous years and
same remained at 1.25 in FY2015.
 Interest coverage ratio of the firm also remained at satisfactory level at 1.89
in FY2015.
 Net operating cycle: Net operating cycle of the firm remained at
7.10months in FY2015 and in FY2016 same is projected at 7.98months.
Further debtors turnover ratio of the firm remained at 5.77months in
FY2015.
Structure Medium  At present firm is enjoying CC limit of Rs.180.00lacs and tem loan of
Risk Rs.30.54lacs and conduct of account is satisfactory except following
comments on term loan
Term loan of Rs.36.00lacs: As per repayment schedule there is
delayed in repayment of instalments. As per repayment schedule of
term loan of Rs.36.00lacs, there should be outstanding of
Rs.23.05lacs in account as on March 2016 as against outstanding of
Rs.30.86.00lacs. As per client existing banker is recovering the
amount from CC account and as such there is no overdue in loan
account and client has also submitted the letter from existing banker
for satisfactory conduct of account. Further we are taking over the
loan amount as per repayment schedule and balance amount to be
deposited by client before takeover of term loan.
 Now enhancement in CC limit is proposed from Rs.180.00lacs to
Rs.220.00lacs, take-over of TL of Rs.30.54lacs and additional term loan of
Rs.100.00lacs for purchase of machinery.
 Proposed collateral will be secured by two industrial properties (land and
21
 building) having value of Rs.500.00lacs and with overall DSV cover of
72%.along with group exposure of Rs.50.00lacs in R S A Knit
 Approval from Head-CB has been taken for collateral cover below 80% as
per program.

Other Issue:

High group borrowing: Total group borrowing (include proposed working capital exposure/LAP/BL/PL
etc.) stood around Rs.869.89lacs and annual repayment obligation of the firm against term
loans/LAP/BL/PL is estimated at Rs.141.00lacs against group NCA of Rs.70.00lacs. Hence there is
mismatch of Rs.71.00lacs in short obligation and available accruals, in future client face problem in
repayment of these term loans. In past client has history to take additional/new loans for closing the
existing loan from banks. However repayment track of existing loan is satisfactory and as per client they
will infuse the money in business to support the fund mismatch.

Loan appearing in personal name of proprietor are not considered in EMI calculator:
Proprietor has also borrowed some LAP/BL/PL in personal name. However, monthly obligations
of these loans are not considered in EMI calculator. If we considered these loans than revised
loan eligibility of term loan will be NIL against proposed loan of Rs.130.00lacs include additional
term loan of Rs.100.00lacs.

LAP repayment: Client has borrowed LAP loan of Rs.350.00lacs from Hero Fin-corp having
monthly EMI of Rs.5.00lacs and same is getting paid from CC account. However in EMI
calculator we have considered only Rs.1.00lacs EMI (loan part that will reflect in books). As per
client only some part of loan will appear in books and balance paid EMI will be reflected through
Capital account of proprietor. Further during sanction Hero Fincop has taken over most of the
loan appearing in personal name of proprietor.

High cash deposit: During last 6 months, there is high cash deposit appearing in banking of
the firm and same is around 36% of last 6 months credit summation. Further against high cash
deposit bulk entries are getting cleared from account on same date. Hence these entries may
pertain to inflate credit summation in account against inflated sales.

Month Deposit by Cash By Chq/NEFT/RTGS

Sep'2015 37.00 5.64

OCT'2015 30.00 27.07

NOV'2015 43.05 13.90

DEC'2015 30.9 93.02

JAN'2016 14.00 57.35

FEB'2016 25.00 128.64

179.90 322.62

36% 64%

Rationale/ Justification & Recommendations for proposal: 

In view of the above, we recommend sanction of following limits to M/s Anoop Oswal
Hosiery on the terms and conditions mentioned in Annexure-I:

22
 Facility Existing IndusInd Bank Proposed Proposed Pricing
with State Total
Takeover Additional
Bank of
Patiala
Fund Based
Cash credit 180.00* 180.00 40.00 220.00 As Approved by HBB
WCDL (As sub limit of cash
- - (150.00) (150.00) As Approved by HBB
credit)
Term Loan 30.54 30.54 100.00 130.54 As Approved by HBB
Non fund based
Bank Guarantee (5.00)
Total 210.54 210.54 140.00 350.54

Deviations Matrix:
The case is presented with the following deviations in the present sanction:
Standard Norms/ Terms & Conditions:

S. Item Standard/ Proposed Term Justification

No Existing
. Term
1 Financial Minimum Score 17 Financials score are low due
Risk >=20 declining EBIDTA trend/high debt
Scorecard NCA ratio and high working capital
cycle ratio. Conduct of account is
satisfactory.
2. Collateral 80% 72% Approval from Head-CB has been
cover taken for lower collateral cover
3. CIBIL No Match Akshay Jain and Anoop As per client same was insurance
found/Overdue Jain: CIBIL overdue of amount debited in commercial
Rs.3298.00lacs in IBL vehicle loan account and same is
commercial vehicle loan cleared now. All loans are running
account regular

Resolution:
The Zonal Credit committed may consider and, if deemed fit, pass the following Resolution:
"The Committee considered and after discussions sanctioned cash credit limit of Rs.220.00lacs,
WCDL as sub limit of CC of Rs.150.00lacs and Term loan of Rs.130.54 on the terms and
conditions detailed in the Memorandum dated ".

Name of borrower Anoop Oswal Hosiery

Account no ( if existing ) -
New ( in case of fresh ) New
 PDD type WC/TL/SME SME
Approved under deviation Y
Deviation Type CIBIL

Annexure I
M/s Anoop Oswal Hosiery
23

Type of Facility
Amount Proposed
Purpose
Rate of interest
Period of Sanction
Margin
Stocks
Book Debts Margin
(Cover period for book debts)
Primary Security
Collateral Security
Terms & Conditions
Cash Credit 
Rs.220.00 Lacs
To meet working capital requirements 
Minimum: 1Year MCLR + 2.00% presently 12.15% p.a. at monthly
rest. Presently applicable Bank’s 1Year MCLR is 10.15%. (floating)      
The Bank has the right to substitute/change MCLR with any alternate
rate or to change the spread over MCLR or such rate, as per policy of
the Bank or as may be required by RBI/ statutory directive.
(Disbursement shall be as per approval of HBB)
Repayable on demand, subject to review at annual intervals or as may
be decided by the Bank. 
Minimum
25 %
40 %
90 (days). Drawing Power will be computed by applying the above
margins to declared value of stocks after excluding Advance payment
guarantees, Sundry Creditors and stocks acquired under Usance LCs,
Buyer’s Credits (whether guaranteed or not by us) and procured on
credit under Stand by LCs
Hypothecation of the entire current assets of the company comprising ,
inter alia, of stocks of raw material, work in progress, finished goods,
receivables, book debts and other current assets
As per Common Security

Type of Facility Working Capital Demand Loan (as a sub-limit of CC limit )

Amount Proposed 150.00
Purpose To meet working capital requirements 
Rate of interest At a rate computed at a spread above Bank’s Base rate. The spread will
be as agreed for each tranche/ renewal/ rollover
Period of Sanction Co-terminus with the Cash Credit facility
Min. -30 days Maximum-180days
Tenor Not more than three WCDLs will ordinarily be permitted to be
outstanding at any time
Drawdown Minimum tranche of Rs.50.00 Lacs
Security Same as Cash Credit
Bullet Repayment on maturity. Monthly interest to be paid as and when
Repayment
debited.
Other conditions Working Capital Demand Loans(WCDL) will be disbursed subject to the
following terms :
a. Disbursement/ rollover of WCDL will be strictly within available DP,
and within validity of sanction.
b. WCDL can be rolled over after cooling period of one day.
c. Notwithstanding a specified term, the WCDL will become
immediately due and payable on occurrence of an event of default

24
 or on expiry of the period of sanction or if the Bank, in its absolute
discretion has asked for the loan to be so repaid.
d. Rate of interest is liable to change in case of any RBI / statutory
directive, or in case of major volatility in money markets.
Type of Facility Medium Term Loan
TL-1 Machinery term loan Eligible under TUFS -Rs.7.50lacs (takeover)
TL-2 Machinery Term Loan Eligible under TUFS –
Rs.23.04lacs(takeover)
Amount Proposed TL-3 Fresh Machinery term loan eligible under TUFS- Rs.100 lacs

(Disbursement shall not exceed principal amount that should be o/s as per
existing banker’s outstanding statement in case of takeover as on date of
disbursement)
Purpose TL-1 Takeover of existing outstanding from State Bank of Patiala
TL-2 Takeover of existing outstanding from State Bank of Patiala
TL-3 Fresh Machinery Term Loan- Purchase of Machinery
TL-1 principal to be paid in Monthly instalment so as last instalment to be not
later than March, 2018.
Tenor (including
moratorium) TL-2 TL-1 principal to be paid in Monthly instalment so as last instalment to be
not later than March, 2021.
TL-3 Principal to be paid in 60 Equal Monthly Principal Instalments
The loan will be disbursed as under:
TL-1 The loan will be disbursed in favour of State Bank of Patiala for takeover
of existing term loan.
TL-2 The loan will be disbursed in favour of State Bank of Patiala for takeover
of existing term loan.
TL-3 The minimum disbursement will be Rs.100.00lacs. The loan will be
disbursed in the following manner:
Disbursement 1. Disbursement will be normally made direct to suppliers and the borrower
should submit appropriate evidence of the same, as required by the Bank.
2. However, on the specific request of the company and subject to the
approval of Credit, disbursement up to 30 % of the new TL can be allowed
as reimbursement if justified with supporting documents /CA certificate of
having used own funds to acquire assets.
Disbursement shall be subject to client inducting his margin in form of equity
capital/ subordinated unsecured loans from promoters.
Moratorium Nil
TL-1 principal to be paid in Monthly instalment so as last instalment to be not
later than March, 2018.
TL-2 TL-1 principal to be paid in Monthly instalment so as last instalment to be
Repayment Schedule not later than March, 2021.
TL-3 Principal to be paid in 60 Equal Monthly Principal Instalments
Interest to be serviced separately on monthly basis in addition to monthly
principal instalment as above.
Margin 25%
Minimum: 1Year MCLR + 2.00% presently 12.15% p.a. at monthly rest.
Presently applicable Bank’s 1Year MCLR is 10.15%. (floating)      
 
Rate of Interest The Bank has the right to substitute/change MCLR with any alternate rate or
to change the spread over MCLR or such rate, as per policy of the Bank or as
may be required by RBI/ statutory directive.
(Disbursement shall be as per approval of HBB)

25
 Interest Reset Quarterly reset of basis and spread.
First charge by way of Hypothecation on assets proposed to be purchased
Primary Security
from disbursement of term loan.
As per Common Security
Collateral Security

Guarantee As per Common Security

1. Branch to obtain standing instruction (SI)/ECS mandate / PDC from
borrower for recovery of principal and interest from cash credit account
of borrower.
Mode of Repayment 2. One repayment cheque for entire loan amount (in favour of IndusInd
Bank) to be obtained.
3. The cheque should be in favor of "IndusInd Bank Ltd" only and should
be accompanied by declaration on form SD 22.
Inspection Quarterly during project implementation & Yearly thereafter or often at
Bank’s discretion; cost to be borne by the company.
Non Utilization Nil
Charge
Progress reports NA

Delay/ Time Cost NA

overruns
Other Covenants NA

Events of Default The following will constitute an event of default under the facility:
.
1. Non-payment of 1 EMIs
2. Non-servicing of interest by 15th of following month
3. Overdues beyond 30days in any other account of borrower
4. The Borrower is in default to the Bank in this or any other facility, or
is in default  to any other bank or financial institution
5. The Borrower has not complied with any loan covenant applicable
for this facility or for any other facility.
6. The Borrower ceases to carry on operations/ prolonged strike/ lock
outs
7. Any material adverse change, which in the opinion of the Bank, 
impairs the ability of the borrower to make timely repayments

Financial covenants During the continuation of afore stated facilities, the company will adhere to
for term loan: the following financial covenants, which will be tested annually on the basis
of the audited financial statements: 
1. DSCR not below 1.25
2. Fixed Asset Coverage not below times 1.5

General Covenants Applicable To All Facilities

Common collateral security:

Fixed assets: First and exclusive charge on movable fixed assets of the company both present and
future except other assets exclusively financed by other banks.
Property: Equitable Mortgage of following properties:
Particulars Property 1 150.00
Address 1133/1A/B, Shivpuri, Taraf Sekhewal, Jodhewal,
Ludhiana
Type Commercial property/Industrial Property

26
Common collateral security:
Owner Neha Jain
Area 199 sq. yards
Usage Office Premises of M/s R.S.A. Knit India and M/s
AnoopOswal Hosiery
Remarks -

Particulars Property 2 330.00

Address B-25-G-4/87 & B-25-G-4/88 St no 10, New
Shivpuri, Ludhiana
Type Commercial property
Owner Anoop Jain and Neha Jain
Area 373 sq. yards
Usage Office Premises of M/s R.S.A. Knit India and M/s
AnoopOswal Hosiery
Remarks -
Any Other
FDR of Rs.2.50.00las
Security

Personal Guarantees of all the directors /shareholder and property owners which
necessarily include personal guarantee of :

Name of Guarantor S/o W/o R/o NW (in Lacs)

Mr Anoop Jain Mr Pal Jain House No. B-II- To be Submitted
2017, Near Nahar
Karyana Store,
Krishna Street,
Shivpuri, Ludhiana
Mr Akshay Jain S/o Mr Anoop Jain House No. B-II- To be Submitted
2017, Near Nahar
Karyana Store,
Krishna Street,
Shivpuri, Ludhiana
Mrs Neha Jain W/o Mr Anoop Jain House No. B-II- To be Submitted
2017, Near Nahar
Karyana Store,
Krishna Street,
Shivpuri, Ludhiana
Total To be Submitted

27
Others Terms and Conditions
Upfront Processing Upfront Processing fee of 0.50% on total exposure plus applicable service
Charges
tax and other charges, on the total facilities payable on the acceptance of
the sanction letter.
Please note that processing fees will be non-refundable post acceptance of
the sanction letter and in the event of applicant unable to comply with the
sanction conditions or refusing to take disbursal, the amount paid as
processing fees shall be forfeited.
Validity of Sanction Three months
Review / Renewal All the on demand facility would be subject to annual renewal at the discretion
of the bank. The bank may at its discretion renew the facility without
waiting for any request by borrower and/or submission of financial and
other data provided.

All other facilities would be subject to subject to review at annual intervals

or at such interval as may be decided by the Bank. 

Penal interest rate (a) Penal interest for non compliance – 18.75% p.a. or 2% above present
applicable rate whichever is higher.
(b) Penal interest for irregularity/overdue – 18.75% p.a. or 2% above present
applicable rate whichever is higher.
Documentation As per Bank’s internal policies/ guidelines.
Inspection To be carried out at quarterly intervals or as per specific terms or as per
calendar decided by the bank. The cost of inspection shall be recovered as per
bank’s guidelines.
Insurance All assets charged / financed by the Bank to be fully insured for 110% of the
value in the name of the borrower with the Bank Clause.
In the event of non compliance of the same, the Bank reserves the right to debit
the CC a/c for the insurance premium and get the policies assigned in favour of
the bank.
Valuation Two valuations shall be done of collaterals independently by the Bank’s
approved valuers, and Title Clearance report from Bank approved advocates/
solicitors. The cost of these will be on Borrower’s account.
Both the valuations to be done prior to disbursement of limits. The average of
two valuations shall not be less than value as stated in sanction terms. In case
there is more than 10% variation between two valuations, the lower value to be
considered and it shall not be less than value as stated in sanction terms.
Prepayment Charges The facility shall attract prepayment charge on the facility limits granted to the
borrower in the event of:
 Repayment by the borrower to the bank of any amount ahead of
previously agreed repayment schedule or tenor or terms of dates of
repayment or renewal as contained in the sanction letter; or
 The borrower’s is not availing of the facility or any part thereof within 60
(sixty) days from the date of its grant.

The prepayment charges would be 2% plus applicable service tax on the facility
limit granted in case of payment through own resources and 4% plus applicable
service tax on the facility limit granted in case of takeover of facility limit by any
other bank/financial institution.
Registration Charges In case of advances granted to Public/Private Ltd Companies,
charge/modification of charge in favour of the Bank to be got registered with
ROC within 30 days of creation/modification of charge and copy of charge
registration certificate to be kept on record.

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Others Terms and Conditions
Statement(s) Stock & B/D Stock Statement and Book debts Statement on monthly
Submission basis within 10 days from the end of current month.
Audited B/L Within -15- days of completion of Audit
& P/L
Renewal At least one month before the due date of renewal.
Papers

Specific Conditions 1. Undertaking from the borrower that unsecured loans from partners, family
applicable members, associates and friends shall be retained in the business at a
minimum level of Rs.32.00lacs (increased to Rs.60.00lacs by March 2017)
during the currency of bank limits and shall be subordinate to bank’s dues.
Interest payment on unsecured loans shall be subservient to the interest
payment to IndusInd Bank Ltd.
2. The firm shall undertake to maintain capital at minimum level of Rs
230.00lacs (Rs.245.00lacs from 31.03.2017 onwards) during the currency
of bank limits.
3. Undertaking from client to be obtained that funds shall not be diverted to
sister concern- or any non-working capital assets. Default in same will
attract penal charges as per bank’s norms.
4. Firm to route all the sales transaction with Indusind Bank CC account and
any non-compliance will attract penal charges.
5. Prior to disbursement, bank shall obtain pre-facility credit report from an
independent agency /chartered accountant firm empanelled by bank.
Disbursement shall be subject to satisfactory report. Cost of report shall be
borne by the borrower.
6. Prior to take over of limits, client to bring down the balance in term loan
(Rs.36.00lacs) to Rs.23.04lacs
7. Exposure sanction to M/s Anoop Oswal Hosiery and RSA Knit India shall be
cross defaulted and cross guaranteed.
8. Client to inform Hero FinCorp that stock and machinery lying at business
premises situated at KhasraNo.307/3,Khata No 475/490 Abadi New
Shiveuri Taraf Sekhewal Hadbast No.78 Ludhiana- 141003(currently
mortgaged with Hero FinCorp) are hypothecated to Indusind Bank and
bank have right to inspect the business premises at any time during the
currency of loan.
Internal Compliance 1. Prior to release pre-facility credit report shall be submitted to Credit Analyst
only and Zonal Credit Analyst approval to be obtained for disbursement. (If not
submitted pre-sanction)
2. Prior to release, ZH/RRM to visit the properties offered as collateral (for cases
over 1 Crore) and submit their visit report to CAD/ZCA before disbursal
confirming his satisfaction with valuation and nature of property as mentioned
in note.
3. Client application form/request letter for proposed facility from IBL to be held
on record prior to disbursal/renewal/enchantment of limit.
4.Other terms and conditions as per applicable on case to case bases.
Takeover Terms  Before disbursement, satisfactory credit opinion report to be obtained
from existing banker.
 Branch to obtain copy of all title deeds deposited with existing bankers
and obtain legal opinion from empanelled advocate about clear title of
the owners of the property.
 Letter of authority in pre-defined format, addressed to existing banker,
should be obtained from borrower/owner of property authorizing  to
deliver all original title deeds of the property to our bank on receipt of
pay order.
 The branch should issue covering letter in pre-defined format to
existing banker giving the purpose of issuing pay Order and advising to
hand over title deeds to our bank directly, as per the list attached on
realization of Pay Order, without exercising any right of lien or set off.
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Others Terms and Conditions
o The pay order should be handed over to the existing
banker after taking acceptance in writing from the
existing banker on the terms & conditions of our covering
letter.
 Branch to issue Pay order/Counter Bank Guarantee favoring existing
banker for closure of existing facilities to the extent of the amount
outstanding. No due certificate is to be obtained within 15 days of
disbursement.
 Branch to ensure takeover of fund based and non fund based facility to
be done simultaneously.
 Branch should ensure delivery and deposit of original title deeds to our
bank as soon as PO issued by our bank is realized by existing banker.
 The borrower to close all current a/c’s with other Banks and route
transactions exclusively through its a/c with our Bank. Account closure
certificate to be obtained within 45 days of disbursement
 Till creation of all securities to be taken over from existing banker,
disbursement shall be limited to maximum of limits enjoyed

Information
Exchange under NA
Banking Arrangement

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Other General Covenants

The borrowing arrangements would be subject to the following terms and conditions:

1. The Firm shall avail working capital facilities with us under sole banking arrangement. Without
written permission of the bank the firm shall not avail any working capital facility with any other bank. All
other current accounts with other banks to be closed and certificate to that extent be kept in record by the
branch.
2. The Bank will have the right to examine the books of accounts of the borrower and to have their
factories inspected from time to time by officers of the Bank and/or outside consultants and the expenses
incurred by the Bank in this regard will be borne by the borrower.

3. The Bank may at its sole discretion disclose such information to such institution(s) in connection
with the credit facilities granted to the borrower.

4. During the currency of the Bank’s credit facilities, the borrower shall not without the prior approval
of the Bank in writing: -

1. i) Effect any change in their capital structure.

2. Shall not pledge the shares held by the promoters, group beyond 10% of holdings, for
raising any loan or for securitizing any loans or advances availed/to be availed by them from any bank/FI/
lender.

3. Formulate any scheme of amalgamation/reconstitution.

iv) Undertake any new project/scheme without obtaining the Bank’s prior consent unless the
expenditure on such expansion etc., is covered by the borrower’s net cash accruals after providing for
dividends, investments, etc., or from long term funds received for financing such new projects or
expansion.

v) Invest by way of share capital in or lend or advance funds to or place deposits with any other
concern. Normal trade credit or security deposits in the usual course of business or advances to
employees, etc., are, however, not covered by this covenant.

vi) Enter into borrowing arrangements either secured or unsecured with any other Bank, financial
institution, borrower or otherwise save and except the working capital facilities, granted/to be granted by
other consortium /member banks, under consortium/multiple banking arrangement and the term loans
proposed to be obtained from financial institutions/Banks for completion of the replacement-cum-
modernization programme.

vii) Undertake guarantee obligations on behalf of other companies/ associates/ affiliates

viii) Declare dividends for any year except out of the profits relating to that year
ix) Grant loans to promoters/partners / Directors.

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5. Moneys brought in by principal shareholders/ directors / depositors / depositors will not be allowed
to be withdrawn without the Bank’s permission.

6. The borrower should not make any material change in their management set up without the
Bank’s permission. No material change in the shareholding pattern of the company which has an effect of
a possible change in the management control of the company shall be made without prior approval of the
Bank.

7. The borrower will keep the Bank informed of the happening of any event, likely to have a
substantial effect on their production, sales, profits, etc., such as labour problem, power cut, etc., and the
remedial steps proposed to be taken by the borrower.

8. Bank’s Sign Board(s) be displayed/ painted at some conspicuous place at the shop/Godown of the
borrower, mentioning our Bank’s Charge on the goods lying threat

9. The Borrower will inform the Bank if any winding up petition is filed against the Borrower.

10. The borrower will keep the Bank advised of any circumstances adversely affecting the financial
position of their subsidiaries including any action, taken by any creditor against any of the subsidiaries.

11. The borrower shall submit the declarations as regards:

V. Not to use the funds for capital market activities,
VI. That neither the Company nor the Directors face any litigation.
VII. The Directors / senior executives of the company, and/or their relatives are not
connected with the Bank (IBL) and are not directors in any other bank.
VIII. No commission has been paid to guarantors on extending their guarantee for the
advance

12. The Bank would charge the standard service charges in respect of different items of service as in
force from time to time.

13. The borrower to furnish to the Bank every year two copies of audited/printed balance sheet and
profit and loss account statements of the borrower immediately on being published / signed by the
auditors, along with the usual renewal particulars.
.

14. To forward half-yearly balance sheet and profit and loss account statements within two months
from the end of the half-year and annual audited accounts within 3 months.

15. To maintain a minimum net working capital of 25% of current assets.

16. The borrower/owner shall deposit all the title documents of the collateral security required as per
title search report (by bank’s empanelled lawyer) in case of EM/Simple/English mortgage to be
created on said collateral.

17. The borrower undertake that in the event the entity assumes foreign exchange risk, the borrower
shall submit information on unhedged forex exposure on a quarterly basis as per the Bank’s
format in terms of RBI guidelines on “Capital and Provisioning Requirements for Exposures to
entities with Unhedged Foreign Currency Exposure” or any other guidelines in force from time to
time. Failure to submit such information would attract penal interest of 2% p.a.”

32
18. Negative Lien:
The borrower /Promoters should not create, without prior consent of the Bank, charges on their any or
all properties or assets during the currency of the credit facilities granted by the Bank.

19. Insurance: -
All stocks and collateral securities like immovable properties should be kept fully insured against all risks
including fire, strikes, riot, malicious damages & natural calamities etc., with the incorporation of Bank’s
Hypothecation clause and the policies retained by the borrower.

A copy of this policy should be submitted to the Bank for their record.

A list of the current insurance policies should be submitted to us with the monthly stock statements
detailing therein the names and addresses of the insurer, brief particulars of goods covered, type of cover,
amount of cover and date of expiry of each policy.

20. Others -

(i) Non-fulfillment of above financial and non-financial covenants will trigger an event of default,
unless specifically waived in writing. Consequence of an event of default could be levy of penal interest
and/or withdrawal of the facility.

(ii) In the event of withdrawal/cancellation of the facility, the borrower accepts to fully cash
collateralize any exposure that the Bank has assumed on the client or on behalf of the client, which could
not be immediately repaid or unwound.

(iii) Borrower/facilities should conform to guidelines that have been/will be issued by RBI from time to
time.

(iv) All interest and cess are exclusive of any taxes and withholdings that may be payable on account
of prevailing statutes.

(v) The Bank has the right to change or modify the rate of interest, or alters the spread, at such
intervals or whenever it may deem fit, and a notice of the change to the Borrower will be binding on them.

(vi) The Bank reserves the right at its sole discretion without assigning
any reason whatsoever, to modify, vary or add to the terms and
conditions, or to terminate the said Banking Facilities concerned, at
any time, and to recall any or all of the amounts due under the said
Banking Facilities. All amounts due in respect of the said Banking
Facilities shall become payable forthwith on such demand.

(vii) As regards the un-utilised limits if any under the facility, Bank reserves the right at any point of
time, to revoke or cancel and/or vary, alter or modify the said un-utilised limits, at Bank’s discretion
without prior notice & without assigning any reasons therefore.

(viii) The copy of Annual Stock Audit Report should be made available to the Bank (in case of
consortium /Multiple Banking).

(ix) The company shall pay on demand to the bank the cost between the solicitors/ advocates/
company secretaries/ inspectors and clients incurred by them or any of them in connection with the
registration of the securities and clarifications/ charges thereof with the Registrar of Companies,
compilation of search/ status reports and/ or any other matter incidental to or in connection with
transactions of the Company with the Bank and also reimburse the Bank for all out-of-pocket expenses
including legal, stamping, documentation, communication and travel costs incurred in the negotiation,
documentation, and disbursement of the facility

(x) The company shall deposit sales proceeds and shall route all foreign exchange business and other
ancillary business through their account maintained with us in proportion to our share in the capital
financing.
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(xi) Moneys brought in by partners/ proprietors/ principal share holders/ directors and their friends
and relatives will not be allowed to be maintained at lower than the projected levels without Bank’s written
permission.

(xii) Company should furnish a written confirmation that the company/ its directors in the best of their
knowledge and belief are not defaulters with any bank/FI, and there are no legal proceedings initiated or
pending against them for recovery of any borrowings.

(xiii) The Borrower/Guarantor hereby expressly give consent to the Bank to disclose any information, at
any point of time, relating to conduct and operations of the account to the Reserve Bank of India and / or
any other Agency/ Authority such as Credit Information Bureau (India) Ltd. appointed/ designated by
Reserve Bank of India. The Bank, without any further notice or intimation, can disclose and supply any
information to the Reserve Bank of India and / or any Agency/Authority appointed by Reserve Bank of
India. The Borrower/ Guarantor, further agree that Reserve Bank of India and/or any other Authority so
appointed can compile such data and/or information and can convey/supply such data and/or information
and/or results thereof to Government, Reserve Bank of India, Other Banks, and/or Financial Institutions
for any reasons whatsoever, for Credit Discipline in Banking Industry in India. The Borrower/Guarantor
expressly waive their right and discharge the Bank and/or Reserve Bank of India and/or any other
Authority appointed by Reserve Bank of India from any liability for disclosure and/or use of such
information on account of breach of any secrecy clause.

In case in the opinion of the Bank’s there has been a material adverse change in the Borrower’s business
and financial condition, such as:
1. Sale  or curtailment or closure of any of the Borrowers main  businesses
2. Cash losses in any one quarter or  continuing accounting  losses in three quarters,  
3. Adverse action by any Regulatory Authority
4. Default to the Bank under any other facility or to any other lender
5. Action by any class of stakeholders which is likely to significantly impair Borrower’s business
6. Filing of winding up petition by any creditor/shareholder against the Borrower.

The Bank is entitled to withhold further disbursements and/or recall the loan in part or full.

Score Card:

Scoring Model for Business Banking Loan

Anoop Oswal Hosiery
Risk Category Risk Factors Weight Score
       
Transaction Risk Total Transaction History 20% OK
Cheque Bouncing 4 4
Credit Summations 4 4
Account Vintage 4 0
Number of Credit Transactions 4 4
Information Quality 4 4
  Total 20 16
       
Business Risk Total Business Risk 20% OK
Product Range 4 2
Suppliers Risk 4 3
Coustomer Concertration 4 4
Entity Type 4 2
Product - Market Enviornment 4 2
  Total 20 13
       
Management Risk Total Management Risk 20% OK
Managerial / Promoter Vintage 5 5
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 Management Commitment 5 1
Aggregate Net Worth 5 3
Trade Reference 5 1
  Total 20 10
       
Financial Risk Total Financial Risk 40% REJECT
Sales and EBITDA Trend 5 0
Total means/ Total assets 5 4
TNW Trend 5 3
Interest Coverage Ratio 5 3
Total Debt / Net Cash Accruals 5 1
Current Ratio 5 3
Working Capital Mgmt T/o 5 1
  PAT/Sales 5 2
    40 17
       
Final Score 100 56
Result REJECT
Category CATEGORY2
Grade BB5

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