INTERNSHIP REPORT

2011

Summer Training Project Report On Project Appraisal

Submitted in Partial Fulfilment of the Requirement for the Degree Of MASTERS OF BUSINESS ADMINISTRATION (MBA) (Session 20010-2012) Submitted by: Name: - SYED ABDUL MAJID ANDRABI Roll No:-104072246767

Nepra (Banur), Chd.-Patiala Highway, Near Chandigarh (Punjab Technical University) Website:-www.aryans.edu.in

J&K BANK

Page 1

INTERNSHIP REPORT

2011

ACKNOWLEDEMENT

Success in any endeavour calls for cooperation and guidance from seniors and colleagues. It often happens that one is at a loss of word, when one is really thankful and sincerely wants to express ones gratitude toward someone. I thank this opportunity to extend my heartiest thanks to all people who have made the presentation to this report possible. If one want to be successful in life then a blend of the efforts and guidance is required. I enunciate my abysmal indebted to,. , (name of project guide), for his priceless and inestimable facilities, in the absence of which the accomplishment of this project would not have been possible.

Name: - Syed Abdul Majid Andrabi Roll no

104072246767

J&K BANK

Page 2

INTERNSHIP REPORT

2011

TO WHOM IT MAY CONCERN

This is to certify that the project report titled Title of project carried out by Syed Abdul Majid Andrabi, S/O Syed Mahmood-ul- Hassan Andrabi has been accomplished under my guidance & supervision as a duly registered MBA student of the Aryans Group of Colleges, Punjab. This project is being submitted by him in the partial fulfilment of the requirements for the award of the Master of Business Administration.

His dissertation represents his original work and is worthy of consideration for the award of the degree of Master of Business Administration.

Head of the Dept. Name Designation Sign Stamp

Date:

J&K BANK

Page 3

INTERNSHIP REPORT

2011

EXECUTIVE SUMMARY

An executive summary is usually no longer than 10% of the report. In the executive summary, you should summarize the key points and conclusions from your report.

J&K BANK

Page 4

INTERNSHIP REPORT

2011

CONTENTS
1 Introduction 2 Industry / Company overview 3 Review of Literature/ Theoretical Background 4 Objectives 5 Research Methodology 6 Data Analysis , Results and Interpretation 7 Conclusions 8 Limitations of the project 9 Recommendations vii) List of tables viii) List of figures ix) Abbreviations

J&K BANK

Page 5

INTERNSHIP REPORT

2011

INTRODUCTION ABOUT J & K BANK

OVERVIEW The Jammu & Kashmir Bank was founded on October 1, 1938 under letters patent issued by the Maharaja of Kashmir, Hari Singh. The Maharaja invited eminent Kashmiri investors to become founding directors and shareholders of the bank, the most notable of which were Abdul Aziz Mantoo, Pesten Gee and the Bhaghat Family, all of whom acquired major shareholdings. The Bank commenced business on July 4, 1939 and was considered the first of its nature and composition as a State owned bank in the country. The Bank was established as a semi-State Bank with participation in capital by State and the public under the control of State Government. PERFORMANCE OF THE BANK

Previous Annual Reports The Bank continued to make strides in its business operations. The Bank achieved an all-time high business turnover of Rs. 60294 crore during the year under report against the last year figure of Rs. 53935 crore recording a steady growth of 12 %. The core segments of Banks business viz. Deposits, Advances, Foreign Exchange and Treasury Operations recorded an impressive growth. The outstanding performance recorded by the Bank in its operations boosted the price of Banks share in the stock market to all time high of Rs.748 despite subdued equity market.

CAPITAL AND RESERVES The Capital & Reserves of the Bank increased by Rs. 209.26 crore to Rs. 2008.73 crore during the year from Rs. 1799.47 crore of the previous year registering an impressive growth of 11.62 %. The Statutory and other Reserves increased by 54.46% to Rs. 1195.35 crore from Rs. 889 crore of the previous year.

J&K BANK

Page 6

INTERNSHIP REPORT

2011

PROFIT

The Bank posted a net profit of Rs. 512.38 crore for the financial year 2009-10 recording an impressive increase of 25% over the last years net profit of Rs. 409.84 crore.

INCOME

The total income of the Bank at Rs. 95.81 crore for the year under report recorded a growth of 143 % over the previous year figures of Rs. 39.39 crore. The per branch and per employee income has increased to Rs. 437.39 lakhs and Rs. 24.11 lakhs respectively.

DIVIDED

In view of the sustained excellent financial results, Directors are pleased to recommend payment of 80% dividend (free of tax) for the year ended 31st March 2009 subject to approval of shareholders and Reserve Bank of India.

FOREIGN EXCHANGE The Foreign Exchange business of the Bank continued its splendid growth. During the year under report the Bank achieved Foreign Exchange business turnover of Rs. 3666.37 crore against Rs. 2954.44 crore of the previous year showing a remarkable growth of 24.10%. The contribution of this segment to the Banks gross income has been to the tune of Rs. 27.54 crore against Rs. 18.93 crore of the previous years. The export turnover of the Bank increased from Rs. 1339.11 crore to Rs. 1782.45 crore registering a growth of 33.10%. The Dealing Room and Treasury Operations recorded a turnover of Rs. 40317.02 crore and generated a net earning of Rs. 5.46 crore against Rs. 3.30 crore of the previous year, thus registering an emphatic increase of 65.45%.

J&K BANK

Page 7

INTERNSHIP REPORT
INFORMATION TECHNOLOGY

2011

To modernize Banks operations and deliver value-added services to the customers, the Bank continued its focus on application and augmentation of the information technology and covers more and more branches under the computerization programme. The number of branches brought under computerization programme has increased to 600 at the end of March 2009 covering 85% business against 546 branches of the previous year. During the year Anywhere Banking and Tele-Banking facilities were extended to many new locations/branches, thereby increasing the number of branches offering. Anywhere Banking and Tele-Banking facilities. The number of ATMs (both off-site and on-site) installed by the Bank has increased to 292 during the year under report, of these 251 ATMs were networked through IST Switch. The Bank is in the process of setting up its DATA centre at Delhi for which creation of infrastructure is in progress. With the commencing of the said data centre the Bank will be able to introduce Internet Banking.

INSURANCE BUSINESS

During the year under report the Bank formally commenced distribution of insurance products of M/S MetLife Insurance India (P) Ltd. and Bajaj Allianz General Insurance Co. Ltd. It is a matter of satisfaction that a good beginning has been made in this area of business. Bank has been able to sell 3639 life policies of MetLife and collected annualized premium amount of Rs. 410.64 lakhs in the first year. In the case of non-life business, the Bank has been able to perform even better and collected aggregate premium amount of Rs. 535.33 lakhs thereby surpassed the target of Rs. 450 lakhs fixed for the year under report. This has yielded non-interest income of Rs. 170.84 lakhs resulting in net earnings of Rs. 58.05 lakhs to the Bank during the year.

LEAD BANK RESPONSIBILITY

The Bank continued to discharge its Lead Bank Responsibility in 8 out of 14 districts of J&K State satisfactorily. Two State Level Bankers Committee meetings (SLBC) and two Subcommittee meetings of State Level Bankers Committee were convened during the year 2009-10. The block and district level meetings such as BLBC, DCC and DLRC were held as

J&K BANK

Page 8

INTERNSHIP REPORT

2011

per schedule in all the lead districts. The district credit plans were prepared in time and their implementation monitored closely at the State and district Levels.

COMMUNITY SERVICE

The Bank as a responsible corporate citizen continued its concern for poor and needy. Be it fire victims, earthquake victims, disabled or patients with serious ailments who have no means to fall back upon for their survival, the Bank continued its support and help to them. The Bank continued to adopt orphans by providing financial support to orphanage homes, and donating computer systems to enable the socially / economically deprived children to acquire IT knowledge. During the year a three days rehabilitation camp for physically disabled persons was organized by the Bank in association with Bhagwan Mahaveer Viklang Sahayata Samiti, Jaipur where 210 persons were provided with artificial limbs and appropriate treatment to many more. RATING OF BANKS DEBT INSTRUMENT

The Credit Rating Information Services of India Ltd (CRSIL) one of the leading credit rating agency of the country re-affirmed "P1+" rating to the Banks Certificate of Deposit Programme, indicating the highest degree of safety for timely payment of principal and interest.

VISION

To catalyze economic transformation and capitalize on growth.

The bank aspires to make Jammu & Kashmir the most prosperous state in the country, by helping create a new financial architecture for the J&K economy, at the centre of which will be the J&K.

J&K BANK

Page 9

INTERNSHIP REPORT

2011

MISSION
To provide the people of J&K international quality financial service and solutions and to be a super-specialist bank in the rest of the country

SHARE HOLDING PATTERN

as on 31-03-2010 S.NO Particulars as on 31-03-2009 Percentage of share holding 1 2 3 4 5 6 7 8 Govt .of Jammu & Kashmir Foreign institutional investors General Public Other Companies N Banks Mutual Funds Foreign NRIs Financial Institutions Others 53.17 22.95 11.49 7.19 4.07 0.48 0.45 0.19

J&K BANK

Page 10

INTERNSHIP REPORT

2011

CASE STUDY ON SHARMA PAPER LIMITED COMPANY

While doing the summer training I have studied few cases on the Project Appraisal and have learned how to assess the project (proposal) of the Borrowers who approaches the Bank. For the assessment of proposal, the Case Study I have taken SHARMA PAPER LIMITED COMPANY in my project report who requires enhancement of project appraisal and with the knowledge I have gained during this time I have researched the project which is given below

NAME OF T HE APPLICANT BORROWER: SHARMA PAPER LIMITED COMPANY

BACKGROUND AND BRIEF HISTORY OF THE COMPANY Brief History Sharma Papers Ltd. a Public Limited company is engaged in production and sale of Paper based products. The company is presently involved in the production of Writing and Printing (W&P) Paper with installed capacity of 74,250 MTPA at Village Gaundpur, Tehsil Harol, and Distt. Una, Himachal Pradesh. The plant manufactures various grades of paper ranging from 50-150 GSM for use in Copiers, Books, Magazines, Brochures, Catalogues, etc, using waste paper as raw material. The promoters of the Group are the Punjab based Sharma family with Mr. Suresh Sharma and Mr. Deepak Sharma holding majority stakes in most of the group companies either directly or through cross holding amongst group companies. The balance stake is held by other family members based in India and abroad and associates. The Group has operations in India through various Group companies viz. Sharma Paper Ltd., kapoor Paper Mills Pvt. Ltd., alpha Carton Pvt. Ltd , Sharma Packaging Pvt. Ltd., while the operations in Europe are carried out through Sharma Swiss Quality Paper, Switzerland, Sharma Lida S.r.L., Italy. For The FY-2011 company has achieved a sales turnover of Rs.254.74 crores, and a profit of Rs.15.09 crores. ( as per the provisional balance sheet & P/L statements submitted by the company).

J&K BANK

Page 11

INTERNSHIP REPORT

2011

During FY11, the company has undertaken up-gradation of the capacity of the plant, enabling the company to use cheaper grades of waste paper without having a significant impact on the quality of the output produced, thereby reducing the cost of production. As informed, the said up-gradation has been completed during March 2011 at estimated cost of Rs. 60 Crores funded by a term loan of Rs. 45 Crores from SBOP and the rest amount contributed by promoters. Brief Background of company Sharma Papers Limited (SPL), a closely held public limited company, is promoted by Mr. Suresh Sharma, Mr. Sandeep Sharma, Mr. Deepak and family members. Mr. SURESH SHARMA: Mr. Suresh Sharma, aged 45, the main promoter, is a Commerce graduate with Diploma in Marketing Management (USA) and has extensive experience in the paper and paper packaging industry. He commenced his career in the family business of timber and wood trading in the year 1986. Subsequently, in the year 1990 he acquired alpha Cartons, a company engaged in the manufacture of corrugated boxes. Mr Sharma is a Director on the board of sharia Papers Limited, kapoor Paper Mills Pvt Ltd., alpha Cartons Pvt. Limited, Sharma Swiss Quality Paper, Switzerland and Sharma Lida, Italy, all being part of Sharmas Group. Mr Sharma looks after the overall business interests of the Group and has been responsible for the Groups foray in the European markets through Sharma Swiss Quality Paper, Switzerland and Sharma Lida, Italy. Mr. DEEPAK SHARMA: Mr. Deepak Sharma, aged 32, is a Commerce graduate along with specialization in software development (OCP, Oracle Corporation USA). He has over 10 years of experience in the paper industry, particularly in manufacturing and marketing of paper and paper packaging products. He is a Director of Sharma Papers Limited, alpha Packaging Pvt. Limited (Managing Director), Sharma Swiss Quality Paper and Sharma Lida, all being part of Sharma Group. He is also the Joint Managing Director of Sharma Group. He started his career by commissioning a Greenfield project for manufacture of paper tubes for Universal Plc., a UK based bicycle manufacturer. Subsequently, he joined the business for the acquisition of JDPL in 2004. Since then he has gained extensive experience in the paper industry. Mr. Deepak Sharma is the son of Mr. Sandeep Sharma
J&K BANK Page 12

INTERNSHIP REPORT

2011

Mr. SANDEEP SHARMA: Mr. Sandeep Sharma, brother of Mr. Suresh Sharma, is an Arts graduate and is engaged in the business of timber, wood and charcoal trade for over four decades. Mr Sharma has been actively involved in the operations of Group companies viz. Sharma Packaging Pvt Ltd. and Sharma Paper Ltd.

Name Mr. Suresh Sharma (Managing Director) Mr. Deepak Sharma (Director) Mr. Satish Kumar Soin (Director)

Other Directorships Alpha Cartons Private Ltd. Sharma Paper Mills Pvt. Ltd. Sharma Swiss Quality Paper, Switzerland Sharma Banta Lida, Italy Sharma Packaging Private Ltd. Sharma Paper Mills Pvt. Ltd. Sharma Swiss Quality Paper, Switzerland Sharma Banta Lida, Italy Sharma Packaging (P) Ltd.

J&K BANK

Page 13

INTERNSHIP REPORT

2011

Overview of Group Structure

ABC GROUP

Sharma Paper Ltd

Sharma Paper Mill Pvt. Ltd.

Alpha Cartons Pvt. Ltd.

Sharma Packaging Pvt. Ltd

Delta Force Ltd.* (Cyprus SPV company)

100%

Sharma Swiss Holding AG

100% 100%

Sharma Swiss Quality Paper (Switzerland)

Sharma Banta Lida S.r.L (Italy)

General Information on the proposal: M/s Sharma Paper Limited Address of Head/ Regd. office Administrative Office Address of major units Constitution Date of incorporation _____ _____ _____
Public Limited Company ( Closely Held)

constitution/ 13th October, 2007

Date of Commencement Business

J&K BANK

of January 2010

Page 14

INTERNSHIP REPORT
Period of dealings with the Fresh Proposal branch

2011

Other related information Whether name of the Applicant Borrower, its directors is appearing in the caution / defaulter list of RBI/ CIBIL/ ECGC/. Whether any of directors of the Applicant Borrower company is a director or a specified near relation of a director of a banking company. Whether any director of the Applicant Borrower company is a specified near relation of any Senior Officer of the rank of Scale iv and above of the Bank. No

No

No

Particulars of Directors Name and address of promoters/directors: Net worth in crores of Rs. as on Status 30th Jun,2010

Name Mr. Sharma Mr. Sharma

Address

Suresh # 31, Garden Enclave, South Managing 39.98 City,Punjab Director Deepak # 31, Garden Enclave, South Director City, Punjab 42.42

30th Jun,2010

Mr. Sandeep # 31, Garden Enclave, South Director Sharma City, Punjab

27.81

31st Jan, 2011

J&K BANK

Page 15

INTERNSHIP REPORT
Share holding pattern of Promoters

2011

Name of the partners / promoter directors/ Amount promoter companies * As on 31.03.2010 (Rs in Lacs) Mr. Suresh Sharma Mr. Deepak Sharma Ms. Neelam Sharma Alpha Cartons Pvt. Ltd Other family members/Group companies Total 853.33 327.25 257.35 252.61 287.03 1977.57

% Share holding 43.15 16.55 13.01 12.77 14.52 100.00%

Capital Structure of the applicant company (Amount in crores of Rs.) Particulars Equity Existing as on 31.03.10 Authorized Capital Issued & Subscribed Capital Share Application Money 20.00 19.78 30.38 Proposed

The Proposal SPL proposes to set up a new Kraft paper manufacturing facility (Unit-II) having total installed capacity 463 TPD at Village Gonuspur, Hambran, Ludhiana, Punjab. The fresh unit is envisaged to be set up with estimated project cost of Rs.353.59 crores at debt equity ratio of 65:35. We have already issued in principal sanction for Term Loan of Rs.40 crores approved by Chairman on 30.03.2011 Product The proposed products are Kraft paper, Kraft Liner, and Absorbent Kraft paper.

J&K BANK

Page 16

INTERNSHIP REPORT

2011

Applications Kraft paper finds application mainly in industrial packaging and lamination industry. Packaging can be in various forms such as corrugated boxes, textile cones and tubes, fiber drums, wrapping, cement bags etc., while in the lamination segment, Kraft Paper is used in preparing laminations for bag and for making laminated boards/sheets. The proposed Unit II will be making Absorbent Kraft Paper for application in lamination industry. Absorbent Kraft Paper, which is a value added product, would mainly be used in the laminated board/sheet making industry. Besides, the unit will manufacture Kraft Liner for use in corrugated packaging and Kraft paper of 80~150 GSM for application in Envelopes and Kraft carry bags.

PLANT PROCESS AND TECHNOLOGY Technology SPLs proposed Kraft paper manufacturing plant is based on principle of waste paper recycling which involves reprocessing waste paper fibers into a usable paper product. As the paper industry is established for a long period of time, the manufacturing technology is standardized. Manufacturing Process Depending on the specific type of paper being recycled (cs, newspaper, mixed office waste), the Kraft Paper making process based on recycling of waste paper includes the following steps: Process flow chart of Kraft paper manufacturing

J&K BANK

Page 17

INTERNSHIP REPORT

2011

The salient features of the proposed Kraft paper mill are mentioned as under:-

New twin wire Paper machine from Wemet Paper Equipment Co. Ltd. (China) with 463 TPD capacity and design speed of 550 rpm The plant would be a fully automated incorporating Quality Controlled System (QCS) & Distributed Control System (DCS). The proposed machine has the capability to produce 50-180 GSM paper with Burst factor ranging from 16-25 BF. The proposed unit is expected to deliver benefits of economies of scale as it would be one of the single largest Kraft paper making facility in India. Steam and Power: The company would install a 65 Kg/cm2 high pressure boiler of 40 TPH based on agro waste and 4MW back pressure turbine for cogeneration of power for captive consumption Major inputs S. No. 1. 2. 3. 4. 5. Inputs Quantity required per Quantity required per Tonne of production annum of production at 463 TPD Raw Material 1.18 Tonne 1,79,288 Tonne (Waste Paper) Chemicals 122.59 Kgs 17,602,768 Kgs Power 450 KWH 68,755,500 KWH Steam 2 Tonne 3,08,880 Tonne Fresh Water 3.25 m3 4,96,567.50 m3

Cost of Project & Means of Financing Particulars Land & Site Development Civil Works Plant & Machinery Miscellaneous Fixed Assets Rs. in crores 16.36 25.45 213.10 23.39

J&K BANK

Page 18

INTERNSHIP REPORT
Particulars Preliminary & Pre-Operative expenses WC Margin Money Interest During Construction Contingency Total Project Cost

2011
Rs. in crores 5.25 20.51 25.80 13.73 343.59

Sources Source of funds Equity Share capital Debt Total

Total Amount 120.26 223.33 343.59

Percentage 35.00 65.00 100.00

The Debt Equity ratio of the company post implementation of the proposed project, as on 31st March 2013 is estimated at 1.32:1.

The Company proposes to raise the equity contribution of Rs. 120.26 crores for the project through funds from promoters and NRI investors related to the promoters, besides utilizing a part of internal accruals from its existing operations. The proposed investment pattern for the promoters contribution is as under: S. No. Particulars Amount (Rs. in crore) 1 2 3 4 Mr. Suresh Sharma Mr. Deepak Sharma Mr. Sandeep Sharma Sanjay Kapoor/Manoj Kapoor (NRI relatives) 6.98 9.09 24.19 55.00

J&K BANK

Page 19

INTERNSHIP REPORT
5 Internal Accruals Total

2011
25.00 120.26

The main promoters viz. Mr. Suresh Sharma, Mr. Deepak Sharma and Mr. Sandeep Sharma propose to infuse Rs. 40.26 crores to part finance the project. The same would be arranged by the promoters from their own sources. The net worth of the promoters as certified by Vinay Aggarwal & Associates, Chartered Accountants is given in table below:-

Resources of Promoters/Investors Name As on Date Mr. Suresh Sharma 30th June,2010 Mr. Deepak Sharma Mr. Sandeep Sharma Total 30th June,2010 31st January, 2011

(Rs. in Crores) Net worth 39.98 42.42 27.81 110.22

The promoters propose to meet their contribution by liquidating a part of their marketable investments/assets. Besides, a part of the internal accruals from the existing unit of SPL to the extent of Rs. 25.00 crores is proposed to be used to fund the project.

NRI Investors: As informed by the Company, the market value of the investments of Kapoor family as on 31st December, 2010 was as under :Particulars Amount (in USD) Mr. Sanjay Kapoor family Mr. Manoj Kapoor family 22,143,108 26,050,317

J&K BANK

Page 20

INTERNSHIP REPORT
Term Debt

2011

The Term Debt from Banks is envisaged to be funded through consortium arrangement. The Company has already received in principal sanctions for the entire debt requirements and State bank of Patiala with proposed share of Rs.75 crores ( i,e., 33.58% of Total Term Debt of Rs.223.33 crores ) has evinced interest to act as Lead Bank. Our share in the consortium is proposed to the extent of 17.91 % in bothTerm Debt as well as in WC requirements. Appraising agency The Techno Feasibility Report for the project has been prepared by Central Pulp and Paper Research Institute (CPPRI) Saharanpur UP.

Location of the Plant

The plant will be located in Village Gonuspur, Hambran,Ludhiana, Punjab. The Company has identified about 14.71 acres of land for this project. The promoters have entered into Agreements of Sale with Mr. Arjun Singh for purchase of land admeasuring about 83 Kanal 14 Marlas for a total consideration of Rs 95.00 lakh per acre and with Mr. Vikram Singh, Mr. Suraj Singh and Mr. Harpal Singh for purchase of land admeasuring about 4 Acre 2 Kanal for a total consideration of Rs 85.00 lakh per acre. SPL has already paid Rs. 130.00 lakhs towards advance for land. LAND AND SITE DEVELOPMENT (RS. 1,636.50 LAKH) JDPL, a Sharma group company, already has an existing manufacturing plant at Village Gonuspur, Hambran, Ludhiana, Punjab. SPL proposes to set up the Kraft paper manufacturing plant at the adjoining site. The Company has identified about 14.71 acres of land for this project. The promoters have entered into Agreements of Sale with Mr. Jaswant Singh for purchase of land admeasuring about 83 Kanal 14 Marlas for a total consideration of Rs 95.00 lakh per acre, and with Mr. Vikram Singh, Mr. Suraj Singh & Mr. Harpal Singh for purchase of land admeasuring about 4 Acre 2 Kanal for a total consideration of Rs 85.00 lakh per acre. SPL has already paid Rs. 130.00 lakhs towards advance for the land. Further, registration charges @ 5% and commission and other miscellaneous expenses have been taken @ 1.00%. The total cost of land is therefore estimated at Rs. 1436.50 lakhs.

The cost of site development has been estimated at Rs. 200.00 lakhs by S.S. Infrastructures, Consulting Engineers and Project Managers, with the following break up: (Rs in Lacs)

J&K BANK

Page 21

INTERNSHIP REPORT
S. No. 1. 2. 3. 4. 5. 6. Particulars Boundary & Fencing Earth Filling Leveling & Cutting Internal Roads & Pavements Drains & Rain water harvesting Gates & Grills Water Supply Arrangements Total:

2011
Amount 55.00 30.00 45.00 20.00 30.00 20.00 200.00

BUILDING AND CIVIL WORKS (RS. 2,544.96 LAKH) The total cost of the building and civil works (including machinery foundations) including civil works for factory shed, office buildings, drive and control room, substation, foundation and auxiliary buildings along with architects fee is estimated at Rs. 2544.96 lakhs based on the quotations obtained from A&A Build well Pvt. Ltd., Builders and Engineers and S.S. Infrastructures, Consulting Engineers and Project Managers. The detailed breakup of cost of building and civil works estimates is at Annexure VII an a summary thereof is as underFactory Building & Civil Works 1 2 3 4 5 6 7 8 9 Machine Hall 180*20*48 Machine Auxiliary Buildings Drive & Control Room Finishing Section Pulp Mill 80*20*60 Lab Finished Material Go down Mechanical Store Electrical Store & Workshop Area 39204 10000 3000 30000 17424 1000 20000 5000 5000 Rate/ unit 850 850 850 850 850 650 650 650 650 Amount (Rs. in Lakhs) 333.23 85.00 25.50 255.00 148.10 6.50 130.00 32.50 32.50
Page 22

J&K BANK

INTERNSHIP REPORT
10 11 12 13 14 15 16 17 18 19 20 21 22 Substation Weigh Bridge Panel & Distribution Section Chemical Store Submersible Raw Material Shed Mechanical Workshop Security & Time office Staff Colony Labour Quarter Civil Structure design & architect fees Foundations Husk Yard TOTAL 500 250 8000 3000 500 50000 5000 1000 650 650 650 650 650 650 750 650

2011
3.25 1.63 52.00 19.50 3.25 325.00 37.50 6.50 65.00 65.00 50.00 825.00 43.00 2544.96

PLANT AND MACHINERY (RS. 21,309.80 LAKH) The total cost of plant and machinery for the project, including imported as well as indigenous machinery has been estimated at Rs. 21,309.80 lakhs. A detailed breakup of the same is attached as Annexure VIII and a summary thereof is given below:(Rs. in Lakhs) Total

Particulars

Name of the supplier

Tri-Wire Kraft Paper Machine (Includes Head Box, Multi wire section, Press section, Drying Wemet Paper Equipment Co. 9005.00 section, Size Press, Twin-roll Ltd. (China) Calendar, Pope Reel and other auxiliary machinery). The gross capacity of the machine is
J&K BANK Page 23

INTERNSHIP REPORT
Particulars 494TPD. Complete Pulp Mill (Medium/High consistency pulper-2 nos). The machinery includes pulping & detrashing, Arjun Engineers coarse screening, fractionation, Lamort, France) long fiber cleaning & screening, thickening and hot dispersion system for long fibre sections) Starch Kitchen Centri-cleaners, Pressure screens Conveyors Machine Tanks UTM pulper, Silos, Broke pulper QCS and DCS Steam and Condensate System ETP Water Storage Tank DG set (1000 KVA) Arjun Technologies Arjun Engineers Name of the supplier

2011
Total

(Kadant

2910.50

235.00 332.20 116.60 148.00

Techno Link Conveyors Creative India

Harjit Paper & Machinery 278.00 Pvt. Ltd. Metso Automation Smurfit Townsend Hook, UK Hyper Filteration (P) Ltd. Rostfrei Sudhir Gensets Limited 245.30 325.00 800.00 105.00 101.00

Electricals and cables, MCC and Schneider Electric & Ecko panels, Plant and outdoor 770.00 Cables lightening Agitators and Valves, Vaccum Box and Pumps, Submersible Price Pump Co. pumps, Process Pumps Yard piping, air compressor and Om metals pipelines
J&K BANK

1109.00

1275.00

Page 24

INTERNSHIP REPORT
Particulars Wire, Clothing, Bearing etc Rewinder Motors EOT Cranes Machine Hood Name of the supplier

2011
Total

FAG Bearings India Ltd. Globe Radio Company Shivalik Projects & Siemen Kone Cranes MCON and services

101.20 500.00 250.00 165.00 310.00

Chemical Dosing System, SS Tanks, Chests & drawers, Dumping Towers, Fiber To be finalized Recovery System, Weigh Bridge, Hydraulic System Other miscellaneous machinery Total To be finalized

833.00

1335.00 21309.80

MISCELLANEOUS FIXED ASSETS (RS. 2339.00 LAKH) The cost of Miscellaneous Fixed Assets, which comprises of power plant set-up along with other machinery, for the proposed project is estimated at Rs. 2339 lakhs. This includes high pressure boiler of 40 TPH complete with structure and civil and 4 MW back pressure turbine. The costs mentioned are based on quotations from the proposed supplier, Industrial Boilers Ltd. PRELIMINARY & PRE-OPERATIVE EXPENSES (RS. 525.00 LAKH) Preliminary expenses mainly include debt raising expenses (Rs. 125 lakhs), project consultancy charges (Rs. 150 lakhs), salaries and wages during implementation period (Rs. 100 lakhs) and other miscellaneous expenses (travelling, lodging & boarding during implementation period) of Rs. 150 lakhs. MARGIN MONEY FOR WORKING CAPITAL (RS. 2050.51 LAKH) The requirement of Working capital for the project for the first year of operation has been estimated at Rs. 8202 lakh and margin requirements thereof work out at Rs.2050.51 lacks at 25%

J&K BANK

Page 25

INTERNSHIP REPORT

2011

INTEREST DURING CONSTRUCTION (RS. 2580.13 LAKH) Interest during construction (IDC) of Rs. 2580.13 lakhs has been calculated based on the debt draw down schedule and the same is based on the implementation plan of the project. CONTINGENCY (RS. 1373.31 LAKH) SPL has obtained quotations for major items of plant, machinery and other miscellaneous fixed assets. Prices of other items have been estimated by the company based on its in-house assessment and experience. Contingency @ 5.0% of the cost of plant & machinery and miscellaneous fixed assets and @ 7.5% of the cost of building and civil works have been provided. TECHNICAL ARRANGEMENTS SPL has appointed reputed consultants for technical services related to commissioning of the project and their details are as under:Technical Arrangement for the Project S. No. 1 Consultant/Organization Scope of services Central Pulp & Paper Research Institute (CPPRI) Assessment of the technical suitability of the unit for desired product and quantity. Verification of equipment and

machinery specifications and their adequacy production. Assessment of adequacy of the for the proposed

proposed utilities and infrastructure facilities to be installed Verification of the process flow sheets for the plant. 2 A&A Buildwell Pvt. Ltd., Ludhiana as builders and engineers and S.S. Infrastructures as consulting engineers and project managers Preparation of design, drawings and layout for the plant buildings and associated civil structures Cost estimates for the civil works for the plant, including site development, machine foundations, etc.
J&K BANK Page 26

INTERNSHIP REPORT
-

2011

Construction supervision

Central Pulp and Paper Research Institute (CPPRI) was appointed for conducting a technical feasibility study for the proposed project. The conclusions of the study conducted by CPPRI, as per its final report are mentioned as under: The proposed plant & machinery would be adequate to produce 463 TPD of Kraft paper. The equipment and machinery specifications are adequate and complete for the proposed objectives. The equipments are as per the requirement for production of high quality pulp from waste paper obtained from various sources for production of high BF Kraft paper. The commercial offers for the plant & machinery are from reputed manufacturer & suppliers and well in the range for a modern 463 TPD fiber line and paper machine, with state of art process technologies. All required infrastructure and utilities (power from PSEB, fuel and water) are available in the existing location of the unit in the state of Punjab. The proposed fiber line and paper machine will be one of the largest single facilities in North India to produce High BF Kraft paper. INPUTS FOR PRODUCTION Raw materials The main raw material for Kraft paper manufacturing will be waste paper, of which 80% of the requirement would be met through imports. Waste paper will mainly be imported from Europe, US, Dubai, Singapore and other developed countries, while some part of the requirement will be sourced locally. In addition to the waste paper, chemicals like Caustic Soda, Poly Aluminum Chloride (PAC), Starch, Fortified Rosins and colors will be used in the manufacturing process. Mostly imported waste paper will be used as it is of better quality and is also available in bulk. The promoters of SPL have been in the paper business for a long time and having existing relationships with raw material suppliers, no problem is envisaged in sourcing additional raw material for the proposed new unit. Major Inputs for Kraft paper S. No. 1. 2. 3. 4. 5. Inputs Quantity required per Quantity required per Tonne of production annum of production at 463 TPD Raw Material 1.18 Tonne 1,79,288 Tonne (Waste Paper) Chemicals 122.59 Kgs 17,602,768 Kgs Power 450 KWH 68,755,500 KWH Steam 2 Tonne 3,08,880 Tonne 3 Fresh Water 3.25 m 4,96,567.50 m3
Page 27

J&K BANK

INTERNSHIP REPORT

2011

Utilities Power The total power requirement of the plant for the production of Kraft paper in terms of connected load would be around 9,000 KW, while the peak consumption will be 8,681 KW. SPL proposes to meet its future power requirement through supply from Punjab State Electricity Board (PSEB) as well as generation of about 4,000 KW from back pressure turbine based captive power plant which will be installed in the mill as a part of the project. SPL will obtain a connection from PSEB to meet the additional power requirement of 4,681 KW. The power generated through 4,000 KW back pressure turbine would cost less compared to state grid resulting in reduction in the cost of production. To overcome the difficulty of inconsistent power supply on existing state government supply line, SPL proposes to install direct feeder which would ensure uninterrupted and quality power to the mill. SPL proposes to install one DG set of capacity of 1000 KVA as stand-by for auxiliary load. Fuel and Steam Steam would be generated using a multi fuel boiler of 40 TPH capacity to be installed under the project. Rice husk and other seasonal agro based fuel such as bagasse, wheat straw etc. are proposed to be used in the multi-fuel boiler to produce steam. The steam generated through the Boiler will be used to drive the back pressure turbine for generation of power and will then be used for process. One tonne of saturated steam at 65 Kg/cm pressure will be produced from 275 Kgs of rice husk. To meet the total steam requirement of 39 TPH at 65 Kg/cm for the proposed plant, the annual requirement of husk would be around 84,942 tonnes, which would be sourced locally and is available in close proximity.

Water The total water requirement of the mill will be met by bore wells to be dug at the site. The plant will have zero discharge and almost all the water used in the process will be recycled and reused. However fresh water input will be required as makeup since substantial amount will be lost in evaporation from various operations. The computation of fresh water requirements is as under:-

S. Process No.
J&K BANK

Fresh Water Losses of water requirement as vapor

Page 28

INTERNSHIP REPORT
(m3/Day) 1 2 3 4 5 6 Paper machine showers Paper machine dryers exhaust Paper Boiler makeup water Steam blow down and line losses Cooling tower evaporation losses Miscellaneous activities Total 926.00 115.75 463.00 1504.75

2011
(m3/Day) 578.75 115.75 463.00 347.25 1504.75

Effluent treatment facilities Paper making from recycled waste paper is relatively environment-friendly as compared to paper making from virgin material mainly because the generation of caustic soda rich black liquor is eliminated in the pulping process. As per the Bureau of International Recycling (BIR), paper recycling uses 64% less energy, and causes 35% less water pollution, and 74% less air pollution. SPL proposes to install an Effluent Treatment Plant (ETP) having total capacity of 500 Kiloliter per day at its plant conforming to the BIS norms and requirements stipulated by Punjab Pollution Control Board (PPCB). SPL shall obtain necessary clearance from PPCB. The pollutants generated by the recycled paper plant and their management would be as under:Air Pollution:Air pollution from the plant will mainly emanate from the Boiler. Flue gases from the Boiler will be passed through dust collectors which restrict the dust particles released in the atmosphere and help maintain the desired level of carbon particulate matter at the out let of chimney as per the norms prescribed by Punjab Pollution Control Board (PPCB). Water Pollution:The liquid effluents from the mill, generated during the initial processes will be treated in an Effluent Treatment Plant to remove suspend solids to correct the pH.
J&K BANK Page 29

INTERNSHIP REPORT

2011

The effluents from the pulping and bleaching section are mixed with excess effluents from the paper machine section which is then passed through a screen to remove solid and other stringy material. After the screen the effluent is treated with acid in a mixing vessel to correct the pH. The removal of suspended solids results in a reduction of Biological Oxygen demand (BOD) by approximately 20%. The clarified effluent emanating from the launder is further subjected to serial oxidation in lagoons before releasing into open fields / drain.

Solid waste:Solid waste, mainly in the form of waste fiber and stringy material, can be recycled and used as packing material such as paper trays for packing fruit, eggs, etc. and will be disposed off accordingly.

Manpower The total manpower requirement for three shifts (each shift is of 8 hours) of Kraft Paper manufacturing is estimated at around 248 comprising of Senior Managers (4), Administrative & Commercial Staff (16), Production Staff/Supervisors (98), Skilled / Semi-skilled/unskilled workers (130). Most of the workforce will be sourced locally from the nearby areas.

Current Status
The promoters of SPL have already entered into Agreements of Sale of land. For Plant & Machinery and other equipments the company will be placing the orders as proposed in the project. The company has incurred an expenditure of Rs. 2.01 crore till February 28th, 2011, as per details given below:(Rs. in Crore) Description Amount Advance towards land 1.35 Pre-Operative expenses Total expenditure incurred 0.66 2.01

The above expenditure has been met out of the funds from share application money.

J&K BANK

Page 30

INTERNSHIP REPORT
Status of Debt Tie Up

2011

As informed by the branch, the debt tie up is in initial stage and finalisation of consortium shall be decided upon financial closure .However, State bank of Patiala with sanction of Rs.75 crores as Term Loan has evinced interest to Lead the Consortium. As informed by the arrangers SBI Caps, Credit Committee of SBOP has given clearance for Term Loan of Rs.75 crores, however, a formal approval shall be issued by them upon clearance by their EC by the end of this week.

GOVERNMENT APPROVALS & STATUS The details of major statutory/regulatory approvals and clearances along with their status are given below: S. No. Item Agency Status Ministry of Applied* Secretariat of Industry, Govt. of Industrial Assistance India Permission for use of land for industrial State Government purpose

1.

2.

3.

The proposed project is State falling in the industrial Government/ area. However, it will Department of obtain necessary Approval of Factory Housing and clearances as may be Layout & Building Urban required. Plan Development /Director of Factories SPL will obtain the Punjab State necessary clearances as Electricity Board may be required. SPL will obtain the Control Punjab Pollution necessary clearances as Control Board may be required.

4.

Power supply

5.

Pollution Clearance

J&K BANK

Page 31

INTERNSHIP REPORT
S. No. Item Foreign investment Agency

2011
Status

6.

SPL will obtain the equity Reserve Bank of necessary clearances as India may be required.

The Company has already applied for approval for setting up a Kraft Paper Manufacturing unit with Secretariat of Industrial Assistance, Ministry of Commerce & Industry. The company proposes to apply for other clearances subsequently.

IMPLEMENTATION SCHEDULE The project is proposed to be implemented as per the schedule given below: Particular Start Date End Date Land & Site development Project Engineering Building and Civil Works Factory Building Machinery Foundation Plant and Machinery Placement of Order Delivery at Site Erection and Commissioning Trial runs Commercial Production January 2011 April 2011 July 2011 January 2012 April 2011 January 2012 July 2012 February 2013 April 2013 December 2011 January 2013 June 2012 July 2012 September 2011 September 2012 January 2013 March 2013

Industry Scenario Paper has many uses, though its most important contribution to modern civilization has been its use as a medium to record information. Paper has varied application and plays an important role in communication besides having wide application in domestic and industrial segments and as a packaging material. The demand for paper is closely linked to the economic conditions prevalent in the economy. Strong economic growth boosts demand for paper and vice versa. Indian paper industry is the 15th largest in the world and provides employment to more than 1.2 lac people directly and 3.4 lac people indirectly. The estimated turnover of the industry is around Rs. 25,000 Crore and its contribution to the exchequer is around Rs. 2900

J&K BANK

Page 32

INTERNSHIP REPORT

2011

crore.1 Paper industry has a direct correlation with the economy and has grown at an average rate of 6.6 per cent over the last few years. The paper sector is expected to record a growth rate that is similar to the expected Gross Domestic Product (GDP) growth. The Government of India had completely de-licensed the paper industry with effect from 17th July, 1997 thus permitting foreign participation. The entrepreneurs are now required to only file an Industrial Entrepreneur Memorandum with the Secretariat for Industrial Assistance for setting up a new paper mill or substantial expansion of the existing mill in permissible locations.

INDIAN SCENARIO

The Indian Paper industry accounts for about 2 per cent of the global production of paper and paperboard with a turnover of Rs. 25,000 crore approximately. With added capacity of approximately 1.0 million tonnes during 2008-09, the operating capacity of the industry during 2009-10 stood at approximately 9.2 million tonnes with an estimated production level of around 7.8 million tonnes.
KRAFT PAPER Kraft Paper, commonly known a brown paper, accounts for nearly 54 per cent of the total demand of industrial paper. Of the total production, over 60 per cent of Kraft paper is produced by small capacity mills in the unorganized sector and 25-30 per cent by medium size paper mills. The larger paper mills, mostly consuming forest based resources, account for just about 10 per cent of the total Kraft paper produced. Specifications of Kraft Paper The basic parameter based on which Kraft Paper is produced is its basis weight (grams per square meter; GSM). The rate of production of Kraft Paper on a machine is inversely proportional to its basis weight. The following specifications as a measure of quality are important for each variety of Kraft Paper: Burst Factor calculated as a ratio of bursting strength and basis weight of paper. It indicates the inherent strength of Paper which determines its enduse applications Tear Factor indicates the puncture resistance of the paper while being used. Kraft Paper is extensively used in packaging material, which are subject to

J&K BANK

Page 33

INTERNSHIP REPORT

2011

puncture hazards. Thus, tear factor is an important parameter to be considered for selection of packaging material Cobb Value indicates water absorption/penetrative capacity of paper. It is the quantity, by weight of water in mg absorbed by a surface of 100 sq cm of the specific head of paper. The Cobb value judges the performance of adhesive while sticking the Kraft Liners in corrugated boards. Kraft paper is available in various varieties as mentioned below:Kraft Paper is differentiated by properties of strength (Burst Factor, Tear Factor, Cobb Value) and basis weight (measured in GSM). Kraft paper with basis weight up to 80 GSM is classified as lower GSM variety whereas the Kraft paper with basis weight above 180 GSM is termed as Kraft board Normal Kraft Paper is strong and relatively course. It has high tensile strength and has weight of approximately 40-135 GSM Absorbent Kraft Paper is manufactured with high absorbency and has high uniformity. Absorbent Kraft Paper is well suited for the manufacture of decorative/industrial laminates, tube making and also in defence applications. Key applications for Kraft Paper Kraft Paper is mainly used in manufacture of corrugated boxes, textile cones and tubes, fibre drums, laminations for bags, wrapping, cement bags, and as packaging material in various segments such as hosiery, consumer durables, pharmaceuticals, FMCG, personal care products, household cleaning products and food processing, etc. Used in coatings to impart strength to various industrial packaging applications Plain Kraft paper and laminated Kraft Paper can be converted into bags and envelopes Absorbent Kraft is exclusively used for manufacture of high value added decorative and industrial laminates.

Raw Material for Kraft Paper Majority of the production of the Kraft paper involves waste paper as the basic raw material (around 55 per cent) whereas nearly 35 per cent uses agro based resources. The remaining 10 per cent is produced by using forest based raw material, viz., wood pulp. The share of forest based production is significantly less due to the concessional excise duty structure framed by the government in order to promote paper production based on unconventional raw material (20 per cent excise duty for forest based raw material as compared to 5 to 10 per cent for unconventional raw material based). As 90 per cent of Kraft paper production is based on unconventional resources, like agricultural residues and waste paper, the mills based on them are concentrated in close proximity to the area of availability of these raw materials. The centres of production are in the Western region (Vapi, Dombivili) accounting for 34 per cent, Northern region (primarily in the states of Uttar Pradesh, Punjab and Haryana)
J&K BANK Page 34

INTERNSHIP REPORT

2011

accounting for 31 per cent and Southern region (Godavari district of Andhra Pradesh) accounting for 24 per cent of total production. The Western and Northern region continue to be large consumption centres together accounting for nearly two-third of the total consumption.

DEMAND FOR PAPER PRODUCTS The variety wise demand forecast for industrial paper from 2008-09 to 2013-14 is as given in the table below: Variety wise demand forecast of industrial paper (000 tonnes) 2008- 2009- 2010- 2011- 2012- 201309 10E 11P 12P 13P 14P Tertiary (Kraft/ board) packaging Corrugated 2,407 2,553 2,713 2,887 3,076 5,731

CAGR (%) 6.4

Consumer Packaging (Recycled board and 1,643 virgin boards) Others Total E Estimate; P- Projected Source: CRISIL Research 351 4,401

1,731 1,834 387 428

1,967 481 5,335

2,114 541 5,731

2,272 609 6,160

6.7 11.6 7.0

4,671 4,975

MARKETING & SELLING ARRANGEMENTS The demand for Kraft paper is expected to rise with the rise in industrial production, as growth in demand of Kraft Paper is closely linked to the industrial growth rate. Kraft paper is currently sold through distributors. The promoters have experience in the paper and paper packaging industry. SPL and its sister/group companies already have extensive dealer network across India for marketing of their existing products such as paper and paper board. SPL proposes to utilize the same distribution network for marketing the products. The group is also engaged in manufacturing and selling of corrugated cartons already through Alpha Cartons Limited and has an established network for sales, which will be utilized for marketing SPLs proposed production. The company is presently selling its products through a network of about 20 dealers and distributors across the country, majority of the sales being through the dealers located in the Northern region, mainly in Punjab, Delhi, etc .
J&K BANK Page 35

INTERNSHIP REPORT

2011

SENSITIVITY ANALYSIS A sensitivity analysis has been carried out on the projected financials for the project to ascertain the effect of the following variables on the major financial parameters:Average DSCR 1.70 10.00% 5.00% 5.00% 1.00% 1.55 1.41 1.48 1.65 Minimum DSCR 1.36 1.23 1.11 1.18 1.30

Case Base Case Decrease in Capacity Decrease in Selling Prices Increase in Raw Material prices Increase in Interest Rate

Factor

The sensitivity analysis shows that project is most sensitive to decrease in selling prices by 5% . However, the cash flow projections in all the scenarios remain satisfactory to service the debt. RISK ANALYSIS & MITIGATION MECHANISM The risk associated with the project and proposed mitigants are discussed below: Risk Analysis and Mitigation Measures Risk Factor Implementation Capability Experience Proposed Mitigation Mechanism

The promoters of the company are in the paper & industry and are already managing various paper manufacturing units in Europe/India held through various companies. In addition, the company has engaged qualified technical personnel with paper project implementation experience for execution of the proposed project. Considering the experience of the promoters in the paper manufacturing industry, the implementation risk may be considered low Cost & Time Over- The company has professionals with extensive run experience in project implementation to enable timely implementation of the project. Further, contingency
J&K BANK Page 36

INTERNSHIP REPORT
Risk Factor Proposed Mitigation Mechanism

2011

Operating Risks

Environmental Risks

@7.5% for Building and Civil works, 5% for Plant & Machinery and Miscellaneous Fixed Assets has been provided in order to take care of any cost overruns. The project is proposed to be implemented over a period of 24 months in phased manner and the same could be considered reasonable. Moreover, the promoters have successfully commissioned a paper manufacturing unit in SPL, in January 2010 and are well equipped with the skills required for handling any implementation issues in timely completion of the project. Further, it is stipulated that cost overrun ,if any, shall be met through infusion of additional funds by promoters. Hence the said risk may be considered low. The promoters are into Paper business for many years and are well placed to handle the operating risks. The paper machine is being imported from Wemet, China for manufacturing various paper products. The proposed supplier, Wemet is one of the reputed suppliers of machines used in manufacturing and has also supplied similar machines to other manufacturing units in India/overseas. Other plant and machinery items for the project are proposed to be procured from reputed manufacturers of paper industry machinery. Further, SPL has appointed key technically qualified and experienced personnel to look after the operations. Further appointments will be made once the project is operational. Considering the above mentioned factors, the operational risk may be considered low. SPL proposes to set up the project conforming to all pollution (air, water, noise, solid etc.) control norms stipulated by Punjab Pollution Control Board. The project being based on waste paper recycling would generate much lesser pollutants as compared to paper making from virgin raw material. SPL will install an ETP for treating liquid effluent, which will meet the desired norms. Dust collectors will be installed for maintaining air pollution from the Boiler within prescribed limits. The Group already has a Kraft Paper manufacturing facility under Sharma Paper Mills Pvt Ltd. which is

J&K BANK

Page 37

INTERNSHIP REPORT
Risk Factor Proposed Mitigation Mechanism

2011

operating adjacent to the proposed site for the project and envisaged no difficulty in getting the necessary clearances/approvals. Hence this risk may be considered low. Raw Material Raw material required for the project is mainly waste paper, which will be procured through both domestic Availability market and imported from dealers abroad. The promoters are in the paper business and have existing relationships with suppliers. SPL will also use chemicals in the manufacturing process, which are commonly available through dealers in the market. Considering the presence of international and domestic market for procuring the required raw material, the said risk may be considered low. Availability of Power, The company is in the process of getting approval from Water and other utilities PSEB for its additional power requirement of 5 MW. The remaining power requirement will be met from the back pressure turbine of 4 MW which will be installed in the mill as a part of the expansion program. To overcome the difficulty of inconsistent power supply on existing state government supply line, SPL proposes to install a direct feeder which would ensure uninterrupted and power to the mill. Considering that the promoters have the requisite experience for implementation of the project and have been successfully running a Kraft paper manufacturing unit in an adjacent facility, the said risk may be considered low.

J&K BANK

Page 38

INTERNSHIP REPORT
Risk Factor Off take Risk Proposed Mitigation Mechanism

2011

Demand for Kraft paper has shown healthy growth in the past and is likely to witness a growing trend due to growth in the industrial production. As per CRISIL Research, the demand for Industrial Paper would grow at a rate of around 7% in the next 4-5 years. Further increasing demand for consumer durables, agricultural packaging, laminates in furniture, pharmaceuticals industry, electronics and automobile sector, demand due to exports and restrictions on use of wooden packaging as also plastic bags will act as drivers for growth. Although some of the market players are currently envisaging setting up industrial paper units, it is expected that the increase in demand would balance out the fresh supply and reduce the dependence on high quality paper products currently imported from other countries. Considering the aforesaid factors, the off-take risk may be considered low.

Price Risk

The prices of Kraft paper move in tandem with raw material prices. As company has ample sources/fallback for procurement of raw material, the risk is considered to be substantially mitigated. The project is sustainable with a reduction in selling prices by 5% even without corresponding reduction in raw material prices. Considering that the raw material prices are subject to market forces internationally, the said risk may be considered as medium

Plant Performance

Force Majeure

The company proposes to use waste paper recycling technology which is well established and being widely used. Therefore the technology risk is considered low. Adequate insurance cover shall be obtained by the company for insurable Force Majeure risks.

J&K BANK

Page 39

INTERNSHIP REPORT

2011

SWOT ANALYSIS Strengths The promoters having extensive experience in Paper business and are successfully managing paper units in India as well as abroad. The Group has in place a strong technical team in its domestic and overseas operations, who have extensive experience in setting up and operating paper units. SPL has established strong dealer network which would enable it to market its products without any difficulty. With respect to absorbent Kraft Paper, Sharma Group already has strong network of customers (business houses) demanding premium quality Kraft Paper catering to the industrial requirement etc. The project also includes setting up of a captive power plant to generate power at a cheaper rate compared to the power from state board. Also inconsistency in state government power supply will be overcome by direct feeder being installed in the mill. The project envisages paper production by recycling waste paper involving lesser polluting process which consumes lesser energy and results in protection of the green cover, thereby being eco-friendly. SPL corrugation plant will be fully automatic and will produce absorbent Kraft paper having better quality compared to semi-automatic and manual operations in most manufacturing units in the unorganized sector. Moreover, existing relationships of the group (through sister company sharma Paper Mills Pvt Ltd.) with companies like Godrej, Trident, Whirlpool etc will help SPL in getting high volume long term contracts which will minimize the threat from competition. Weaknesses The project is scheduled to commence commercial production by 1st April, 2013. As the terms of the agreement for procurement of paper machine are yet to be finalized with the supplier (Wemet), there could be delay in implementation. The management has extensive experience in setting up similar projects. SPL would be deputing its representatives from the project implementation team drawn from the Groups overseas/domestic operations to be stationed in China to oversee the quality aspects in assembling the paper machine and also ensure the timely delivery.

Opportunities The industrial paper market in general is growing steadily and the market for Kraft paper is projected to grow at a rate of around 7%.
J&K BANK Page 40

INTERNSHIP REPORT

2011

Demand for paper made from recycled waste paper is likely to grow faster due to restricted availability of wood based raw material and rising environmental concerns. Increase in use of Kraft paper as an environment friendly alternative to plastic would also contribute significantly to the increasing demand of Kraft Paper and related products. Demand for Industrial paper is likely to increase due to replacement of wood by Kraft based laminates in the reality business. Also with the imposition of ban on plastic usage, Kraft paper usage in making brown paper bags for consumer packaging is expected to increase.

Threats Competition in the domestic market due to new investments proposed in the industry The market share of organized players in Kraft paper industry is less than 10%. The management of SPL has extensive experience in the industry and have a developed network for marketing and distribution of the products. SPL is setting up modern and automated facilities which would enable it to manufacture high quality products will lower wastage. SPL proposes to use imported waste paper as raw material besides domestic waste paper and prices/availability of the same could be affected by change in import levies/competition from other importing countries. As waste paper recycling is an eco-friendly activity, it is unlikely that Government levies would be altered to the disadvantage of recyclers. As regards supply, the promoters are in the business of manufacturing/trading of paper and have existing relationship

Projected Balance Sheet

SOURCES OF FUNDS Equity Reserves & Surplus Net-worth Term Loan WC Loan

(Rs. in lacs)

'11-12

12-13

13-14

14-15

15-16

16-17

17-18

18-19

19-20

20-21

5819

12026

12026

12026

12026

12026

12026

12026

12026

12026

0 5819 10807 0

0 12026 22333 0

34 12060 20738 6152

1897 13922 17548 7284

5439 17465 14357 8705

8986 21011 11167 8705

12768 24794 7976 8705

16856 28882 4786 8705

21174 33200 1595 8705

25689 37715 0 8705

J&K BANK

Page 41

INTERNSHIP REPORT
Deferred Tax Liability Total Liabilities USES OF FUNDS Gross Block Acc Depreciation Net Block CWIP Current Assets Cash & Bank Balances Preliminary Exp. Total Assets 0 0 0 16102 0 0 0 0 31784 0 31784 2912 28872 0 8202 31784 5824 25959 0 9712 31784 8737 23047 0 11607 31784 11649 20135 0 11607 0 16627 0 34359 475 39425 741 39495 831 41358 769 41652

2011
577 42053 276 42649 -118 43382 -593 45827

31784 14561 17223 0 11607

31784 17473 14311 0 11607

31784 20385 11398 0 11607

31784 23297 8486 0 11607

0 525 16627

2051 525 34359

1931 420 39425

3509 315 39495

6494 210 41358

9805 105 41652

13223 0 42053

16731 0 42649

20377 0 43382

25734 0 45827

Profitability Projections
The basic assumptions for profitability projections are:Selling Prices Particular Kraft Liner Absorbent Kraft Paper Envelopes and Carry Bags Sales Price (Rs. per Tonne) 24,000 37,000 27,000 Share of Production 25% 20% 55%

J&K BANK

Page 42

INTERNSHIP REPORT

2011

Raw material prices for Kraft Paper manufacturing

Consumption Chart in Tonne/Tonne Particulars Rs/Tonne Yield Envelopes & Carry Bags Absorbent Kraft Paper

Kraft Liner

Kraft Paper DSOCC NDLKC/NCC KCB

9,000 15,500 15,500 16,000

80% 85% 88% 88%

0.63 0.47 0.11 -

0.38 0.47 0.17 0.17

0.47 0.23 0.45

Prices of Chemicals for Kraft paper manufacturing Consumption Chart in Kgs/Tonne Particulars Rs/Kg Envelopes & Carry Bags 30 2 240 21 41 5.27 82.50 1.00 13.79 0.00 Absorbent Kraft Paper 6.5 95.0 1.0 17.5 1.5

Kraft Liner

Fortified Rosin PAC Colour Starch Caustic Soda

6.00 90.00 1.00 15.50 1.22

Capacity Utilization Assumptions Particulars Capacity Utilization Year 1 65% Year 2 75% Year 3 onwards 90%

Implementation Schedule Activities

J&K BANK

Proposed Project
Page 43

INTERNSHIP REPORT
Start of Construction Construction Period Completion Date Commercial production End of First Year of Operations No. of months in first year of operation 1st Quarter Ending after Start of Construction 1st Quarter Ending after Start of Operations

2011
01-Apr-11 8 Quarters 31-Mar-13 01-Apr-13 31-Mar-14 12 Months 31-Jun-11 30-Jun-13

Debt Assumptions Door-to-Door Tenure Repayment Period Moratorium Period Moratorium End Date 1st Repayment Date Last Repayment Date Rate of Interest on Term Loan Rate of Interest on Working Capital Loan Upfront Fee as a % of Total Debt 9.25 Years 28 Quarters 3 Quarters 30-Dec-13 31-Dec-13 30-Sep-20 11.75% 11.75% 0.50%

Operating Assumptions Capacity in TPD No. of days in a year No. of hours in a day Finishing Losses 463 330 24 3%

J&K BANK

Page 44

INTERNSHIP REPORT

2011

Depreciation Depreciation Items Land Building & Civil Works Plant & Machinery Misc. Fixed Assets SLM WDV Amortization of Preliminary/Preoperative. Expenses SLM 0.00% 3.34% 10.34% 10.34% WDV 0.00% 10.00% 15.00% 15.00%

95% value of asset can be depreciated No limit 20% each over 5 years

Internal Rating ( applicable in case of Applicant Borrower is enjoying credit facilities from the Bank Internal Rating History Original Rating Rating as per Last Review Current Rating

Rating

Rating LC-

Interest Rate

Proposed Interest Rate BR + 375% ( 13.25%)

J&K BANK

Page 45

INTERNSHIP REPORT

2011

The Company has started operations from the existing unit in the month of January 2010 and the financials for the year 2009-10 are for a brief period of three months only. Also, the financial statements for the FY 2010-11 are not available as such the Proposal has been rated on the basis of financial data for the 1st Operational year 2013-14 in the following manner:-

Sponsor Risk Assessment Construction Risk Assessment Supply Risk Assessment Project Cost And Viability Regulatory, Political And Legal Risk Assessment Basic Borrower Risk Score Borrower Risk Score (with Project Status Cap) Final Risk Grade Probability of Default

1.00 1.00 1.00 1.00 1.50 1.01 1.01 JKB-INFRA1 (2) 3.16%

Risk rating model of the Bank has rated the account in rating Grade of JKB-Infra1 (2) . The debt requirement for the Project has been assessed/ analysed at floating based interest rate of 11.75%, however, the BU has recommended interest rate of BR+ 3.75% ( current effective 13.25% ) for the facility. In view of the fact that Company is yet to receive any formal sanction letter from any Bank, we may go ahead with the interest rate recommended by the branch.

Projected Profitability Statement

FY Revenue Raw Material 13-14 28374 16941 14-15 35096 19548 15-16 42006 23457 16-17 42550 23457 17-18 42550 23457 18-19

(Rs. In lacs)
19-20 42550 23457 20-21 42550 23457

42550 23457

J&K BANK

Page 46

INTERNSHIP REPORT
Chemicals Packaging and other consumables Stores and Spares Water Expense Power and Fuel Personnel expenses (operational) Miscellaneous Factory Expense Repair maintenance Insurance Factory Cost Add: Opening Stock of WIP and FG Less: Opening Stock of WIP and FG Cost of Goods Sold Administrative Expenses Selling expenses Cost of Sales EBITDA Depreciation and Amortization Interest on Term Loan Interest on Working Capital Loan EBT Tax Deferred Tax PAT 981 1132 1359 1359

2011
1359 1359 1359 1359

50 567 20 3137

58 702 23 3620

69 840 28 4344

69 851 28 4344

69 851 28 4344

69 851 28 4344

69 851 28 4344

69 851 28 4344

329

356

384

415

448

484

523

564

15 318 217 22576

16 318 195 25966

17 318 173 30988

17 318 151 31009

18 318 129 31021

19 318 107 31036

20 318 85 31054

21 318 64 31075

1679

1962

2341

2341

2341

2341

2341

1679 20897 173 567 21637 6737

1962 25683 184 702 26569 8527

2341 30610 195 840 31645 10361

2341 31009 208 851 32067 10483

2341 31021 221 851 32093 10457

2341 31036 235 851 32122 10428

2341 31054 250 851 32155 10395

2341 31075 266 851 32192 10358

3017 2577

3017 2249

3017 1874

3017 1500

3017 1125

2912 750

2912 375

2912 47

506 636 127 475 34

599 2662 533 267 1862

716 4753 1122 89 3542

716 5250 1765 -62 3547

716 5600 2008 -191 3783

716 6050 2264 -301 4087

716 6392 2469 -395 4318

716 6683 2643 -475 4515

J&K BANK

Page 47

INTERNSHIP REPORT
Cash Flow Statement
Particulars 11-12 12-13 13-14 14-15 15-16 16-17

2011

17-18

18-19

19-20

20-21

Cash Inflows PAT Depreciation Amortization Deferred Tax Liability Increase in Term Loan Increase in Equity Increase in WC Borrowing Total Inflow Cash Outflows Capex Preliminary/Preoperative Expenses Term Loan Repayment Increase in Current Assets Deferred Tax Asset Total Outflow Opening Cash Balance Surplus/(Deficit) during the year Closing Balance 16102 15682 0 0 0 0 0 0 0 0 0 0 0 0 0 0 34 2912 105 1862 3542 2912 2912 105 105 3547 2912 105 3783 2912 105 4087 2912 0 4318 2912 0 4515 2912 0

475

267

89

10807 5819

11526 6206

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0 16627

0 17732

6152 9678

1132 1422 6279 8070

0 6564

0 6800

0 7000

0 7231

0 7427

525

1595

3190 3190

3190

3190

3190

3190

1595

0 0 16627

0 0 15682

8202 0 9797

1510 1896 0 0

0 62 3253

0 191 3382

0 301 3491

0 395 3585

0 475 2070

4700 5086

2051

1931 3509

6494

9805

13223

16731 20377

0 0

2051 2051

-120 1931

1578 2984 3509 6494

3311 9805

3418 13223

3508 16731

3645

5357

20377 25734

J&K BANK

Page 48

INTERNSHIP REPORT
Debt Service Coverage Analysis
FY PAT Add: Depreciation Add: Amortization Add: Deferred Tax Liability Add: Interest on Term Loan Cash Available for Servicing Term Loan Obligation Principle Repayment Interest Repayment Total 1595 3190 3190 3190 3190 2013-14 34 2912 2014-15 1862 2912 2015-16 3542 2912 2016-17 3547 2912 2017-18 3783 2912

2011

2018-19 4087 2912

2019-20 4318 2912

2020-21 4515 2912

105

105

105

105

105

475

267

89

-62

-191

-301

-395

-475

2577

2249

1874

1500

1125

750

375

47

6104

7396

8523

8001

7734

7448

7211

3500

3190

3190

1595

2577 4173

2249 5440

1874 5065

1500 4690

1125 4315

750 3940

375 3565

47 1642

DSCR Minimum DSCR Average DSCR

1.46 1.36

1.36

1.68

1.71

1.79

1.89

2.02

2.13

1.70

J&K BANK

Page 49

INTERNSHIP REPORT

2011

WORKING CAPITAL REQUIREMENTS The requirement of Working capital for the project for the first year of operation has been estimated at Rs. 8202 lacs as per details below:Holding Period Particulars (Days) Raw Material Chemicals and stores Rice Husk Stock in Progress Finished Goods Receivables Gross current assets Margin Money (25% of Gross current assets) 60 30 60 10 15 45 3080 141 351 684 995 2950 8202 2051 Rupees in lacs

As per the practice in vogue for proposals under consortium, the WC limits shall be sanctioned upon COD, and our share shall be in proportion to our share in Term debt.

Recommendations of Branch The Branch has recommended the proposal for Term loan of Rs.40.00 crores sub-limit of Rs.17.91 crores for capex LC as per details below:Nature Limit Rate of Commission Up-front Moratorium of Interest/Margin on NFB fee facility on NFB Facilities Term Loan. RTL of Rs. 40 Crore with a sub-limit for the
J&K BANK

with a Total tenor of TL D-T-D

13.25% p.a. linked 0.50% p.a. to Base rate of the Bank (Base RATE (9.50+375 BPS) or the rate charged

0.50% Plus taxes as

3 Quarters 9.25 after PCOD years.

Page 50

INTERNSHIP REPORT
(LC) facility OF Rs.17.91 crores at NIL margin. by any other member bank. The interest rate shall be fixed for one year from the date of documentation .

2011
applicable.

The proposed Term Loan of Rs.40.00 crores work out around 17.91% of Total Term Debt of Rs.223.33 crores for part financing the project cost of Rs.343.59 crores.

Compliance of Exposure norms Compliance of Exposure norms Applicant Borrower /Group Whether complied with

Applicant Borrower Group Industry

Status of Compliance of lending policy Key parameters guidelines

Yes Yes Yes

Whether complied with

Current Ratio DER DSCR

Yes Yes Yes

EXPOSURE DETAILS

J&K BANK

Page 51

INTERNSHIP REPORT

2011

Total Exposure (Existing + proposed) Total Exposure (Existing + proposed) to the applicant Borrower as a % age to the Group as a % of Banks Net of Banks capital funds as on worth as on 31.03.2011. 31.03.2011. Capital fund of the bank as on 31.03.2011 was Rs 4169.06 crores 0.96% 0.96%

Recommendations of A&AP, CHQ, Srinagar Subsequent to issuance of In-Principal sanction, the Proposal is recommended for Term Loan of Rs.40.00 crores ( Rupees forty crore only) with Sub-limit of Rs. 17.91 crores for capex LC in favour of the Company for part financing setting up a new craft paper manufacturing unit under consortium arrangement . The Facility is proposed as per details below:-

Facility Purpose Tenor Project Cost

Rupee Term Loan Rs.40 crores with a sub-limit of Rs.17.91 crores for capex LC at 10% margin. Setting up a new Kraft Paper manufacturing unit of capacity 463 TPD at Ludhiana, Punjab 9.25 Years. Particulars Rupees in crores Land & Site Development 16.36 Civil Works Plant & Machinery Miscellaneous Fixed Assets Preliminary & Pre-Operative expenses WC Margin Money Interest During Construction Contingency Total Project Cost 25.45 213.10 23.39

5.25 20.51 25.80 13.73 343.59 Rupees in Crores

Page 52

Means of Finance
J&K BANK

Particulars

INTERNSHIP REPORT
Equity Share capital Debt Total Financing Arrangement Project Commercial Operation Date Upfront Equity Purpose Mandated Arranger (MLA) Interest Rate

2011
120.26 223.33 343.59

The sanction shall be subject to financial closure under Consortium arrangement. Project Commercial Operation Date (PCOD) April 1, 2013.

25% of the promoter contribution i.e. Rs. 30.06 Crores before seeking the first disbursement from Banks The proposed Facility shall be used to part finance the Project Cost Lead SBI Capital Markets Ltd. (SBICAP) BR+ 3.75% current effective 13.25% , payable at monthly rests or any higher rate charged by other Bank within the consortium The interest shall be fixed for one year from the date of documentation. Banks shall have the right to reset the interest rate annually, on the anniversary dates beginning from the 1st anniversary date of Documentation of the proposed facility

Upfront fee Availability Period Moratorium Period Repayment

Upfront fees of 0.50% plus applicable taxes shall be paid by Borrower on the date of Documentation. The fund based facility shall be available for drawdown till 6 months after PCOD, i.e. till 30th September 2013. 3 Quarters after PCOD Repayment in 28 equal quarterly installments commencing on 31st December 2013.
Date of Amount Date of Repayment (Rs in Repayment Crore) Amount (in Rs Crore) 3.57% 3.57% 3.57% 3.57% 3.57%

31-Dec-13 31-Mar-14 30-Jun-14 30-Sep-14 31-Dec-14

3.57%
3.57% 3.57% 3.57% 3.57%

30-Jun-17 30-Sep-17 31-Dec-17 31-Mar-18 30-Jun-18

J&K BANK

Page 53

INTERNSHIP REPORT
31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 31-Mar-16 30-Jun-16 30-Sep-16 31-Dec-16 31-Mar-17 Door to Door Tenor Drawdown
3.57% 3.57% 3.57% 3.57% 3.57% 3.57% 3.57% 3.57% 3.57%

2011
30-Sep-18 31-Dec-18 31-Mar-19 30-Jun-19 30-Sep-19 31-Dec-19 31-Mar-20 30-Jun-20 30-Sep-20
3.57% 3.57% 3.57% 3.57% 3.57% 3.57% 3.57% 3.57% 3.61%

9.25 years The Drawdown for the Facility shall be as per the Drawdown Schedule provided by the Borrower on Documentation with revision thereafter as notified to the Lenders. Part disbursement of the facilities, including issuance of Letter of Credit (LC), may be allowed for advances to major machinery suppliers pending full debt tie up after creation of hypothecation charge but before creation of mortgage over immovable fixed assets, which would be completed within 3 months from the date of loan documentation

Commitment Fee:

Commitment charges of 1.20% shall be levied for drawdowns delayed beyond two months from the notified drawdown schedules. However, no commitment fee payable in case there is no deviation in drawdown from the Drawdown schedule submitted at the time of Documentation, and revised thereafter from time to time as notified to the banks, atleast one month prior to the scheduled drawdown. (i) First charge on all fixed assets of proposed manufacturing unit by way of equitable mortgage of immovable fixed assets and hypothecation of movables, both present and future, ranking pari-passu with other term lenders for the proposed Project. (ii) Personal Guarantees of Mr. Suresh Sharma and Mr. Deepak Sharma
Page 54

Security

J&K BANK

INTERNSHIP REPORT

2011

A time period of 3 months from the date of Loan documentation may be allowed for creation of mortgage security. The Company shall furnish No Objection Certificate (NOC) from existing lenders of SPL as may be necessary, to the lenders of the project, within a period of 3 months from the date of documentation of the proposed facility Conditions Precedent 1. The sanction shall be subject to financial closure and to first disbursement formation of consortium of Lenders. 2. The promoters would bring in at least 25% of their envisaged contribution in the project, before seeking disbursement out of the term loan. 3. The company shall have acquired the necessary land for the project and be in possession of the same 4. Creation of security as stipulated above. 5. The main promoters, viz., Mr. suresh Sharma and Mr. Deepak Sharma shall furnish an undertaking to meet any overrun in the cost of the project from their own sources. 6. The main promoters shall furnish an undertaking that the management control of the company shall be retained by the existing promoters and the equity stake of the promoters shall not fall below 51% of the total equity share capital of SPL during the tenor of the loan Additional Interest Additional Interest of 1% p.a. shall be payable on the entire outstanding amount of the loan, in case of delay in creation of security as stipulated, from the scheduled date for security creation till the date of compliance. Insurance Comprehensive insurance cover for the full value of stocks, building, plant and machinery and other assets (primary as well as collateral) against theft, riots, civil commotion, floods, terrorist, transit risks shall be obtained in the joint names of bank and the firm at the latters cost and Bank will retain the relative policies. Default Interest Rate/Liquidated Damages In case of default in payment of any installment of principal amount of the loan, interest thereon or other monies becoming due on their respective due dates, the company shall pay on the entire outstanding amount, Default Interest/Liquidated damages at the rate of 2 p.a. over and above the applicable interest rate, for the period of default.

Establishment of Import LCs

J&K BANK Page 55

INTERNSHIP REPORT

2011

Commitment charges 0.15% for every quarter or part thereof. for full validity of the credit i.e. from the date of opening of LC to last date of its validity. Usance charges for LCs Up to Rs.2 crores 0.0750% per month in excess of 3 months. Above Rs. 2 crores Up to Rs.2 crores at full rate as specified above.

Over Rs.2.00 crores to Rs.16.00 crores- 1/2 of the above specified rate.

Over Rs.16 crores- 1/4 of the above specified rate. Terms Conditions Import LCs and for 1. FLC established on behalf of the party to be backed by 100% forward cover. 2. A satisfactory credit report on the foreign seller should be obtained and kept on record. 3. Branch to strictly adhere to KYC norms of the bank. 4. All exchange and trade control regulations to be observed by the branch. 5. All other guidelines circulated by Foreign Exchange Business Deptt. CHQ from time to time be adhered with. (i) The company shall obtain applicable statutory/nonstatutory clearances/ approvals required for commencement of Project implementation (ii) Bank will have the right to examine at all times the company's books of accounts and to have the company's factories inspected, from time to time, by officer(s) of the Bank and / or qualified auditors and/ or technical experts and / or management consultants of the Bank's choice. Cost of such inspection shall be borne by the company. The company should maintain adequate books of accounts, which should correctly reflect its financial
Page 56

Other Conditions

(iii)

J&K BANK

INTERNSHIP REPORT

2011

position and scale of operations and should not radically change its accounting system without notice to the Bank. (iv) The company should submit to the Bank such financial statements as may be required by the Bank from time to time, apart from the set of such statements to be furnished by the company to the Bank as on the date of publication of the company's annual accounts. The Bank will have a first charge on the profits of the company, after provision for taxation and dividend where applicable, for repayment of installments under term loans granted/deferred payment guarantees executed by the Bank or other repayment obligation, if any, due from the company to the Bank. In case of default in repayment of the loan / advances or in the payment of the interest thereon or any of the agreed installments of the loan on due date/s by the borrower, the Bank and / or the RBI will have an unqualified right to disclose or publish the borrower's name or the name of the borrower's company / unit and its directors/ partners / proprietors as defaulter in such manner and through such medium as the Bank or RBI in their absolute discretion may think fit. The Bank will have the right to share credit information as deemed appropriate with CIBIL or any other institution as approved by RBI from time to time.

(v)

(vi)

(vii)

(viii) The company should not induct into its Board a person whose name appears in the willful defaulters list of RBI/ CIBIL (other than as a Nominee/ Professional/ Honorary director). In case such a person is already on the Board of the borrowing company, it would take expeditious and effective steps for removal of that person from its Board.

J&K BANK

Page 57

INTERNSHIP REPORT
CONCLUSION OF THE CASE

2011

The bank appraised the project and allowed enhancement in the existing Fund Based limit of Rs.40.00 crores (Rupees fourth crores only) in favor of M/S Sharma Paper Limited Company. Against terms, conditions and securities required as per banks policy.

CONCLUSION: Since the J&K Bank Ltd. was the first state bank in the state, which obviously has helped it to dig its roots very much deep. The bank from its very beginning has proved itself. It is working hard and is improving itself day-by-day. Its market share is very high in the state which indicated its dedication towards its customers. The most important thing is that the bank is showing progress. The bank has also achieved excellence in many respects. The policies and strategies are being formulated by the elite personalities, which are discharging their duties and responsibilities in the right perspective. From the entire project work it can be concluded that the bank is really discharging its responsibilities and duties and is making efforts to help the state to become the most prosperous in the country.

J&K BANK

Page 58

INTERNSHIP REPORT

2011

BIBLIOGRAPHY
INTERNET

www.netbank.org www.rushabhinfosoft.com www.advancedbusinesscapital.com

en.wikipedia.org

BOOKS

Corporate Finance: Theory and Practice by S. R. Vishwanath Corporate Credit Management and Business Risk Management by Ashok Choubey Financial Management by I.M.Panday

J&K BANK

Page 59