STATE BANK OF PATIALA

REGIONAL OFFICE - III (DELHI)

FORMAT - 'S'
APPRAISAL MEMORANDUM

Company: LALSONS ENTERPRISES

Zone: DELHI - III Branch: MEERUT CITY

Segment: C&I/SIB/AGL Industry: C&I

Proposal: a) FRESH TERM LOAN AND CASH CREDIT FACILITIES

b)
c)

Credit limits (existing & proposed): IN LACS

 Limits Existing Proposed Change
  SBP % CONS. SBP % CONS. SBP CONS.
FB              
Total FBWC NIL NIL NIL 20 100 NIL 20 NIL
Term Loan NIL NIL NIL 110 NIL NIL 110 NIL
Total FB NIL NIL NIL 130 100 NIL 130 NIL
FLCs NIL NIL NIL NIL 100 Nil NIL Nil
BGs NIL Nil Nil Nil Nil Nil Nil Nil
Total NFB NIL NIL NIL NIL NIL NIL NIL Nil
FB+NFB NIL NIL NIL 130 100 NIL 130 NIL
TOTAL (FB+NFB) NIL NIL NIL 130 100 NIL 130 NIL

Note: 1. That the proposal have already been sanctioned by Central Bank of India , Jail Chungi Branch on
11-03-2005 as follows:
1. CC (Hyp. of Stock) Rs. 10 Lacs
2. Term Loan Fresh
Against Land Rs. 62.50 Lacs
Against Building Rs.22.50 Lacs Rs. 85 Lacs

The Party have already been taken up a term loan of Rs. 62.50 Lacs against land and the party had
purchased a land measuring 2724.17 sq. mtrs valued Rs. 127 Lacs including stamp duty on 16-04-2005
and started his construction for building for setting up a Petrol Pump of Reliance Industries Ltd. in their
supervision and direction.

2. We have canvassed the party to shift their proposal in our bank by offering the enhanced credit facilities
as above . Our AGM Sh. Alreja Ji has also visited the site and satisfied with the proposal and directed to go
ahead.
The proposal falls within the power of DGM as

i) FB/NFB/Total indebted is Rs. 130 Lacs or

ii) Involves policy deviations or
iii) Other reasons (specify)

1. Company profile : LALSONS ENTERPRISES

1.1 Address of the Regd. Office : 94-E, Jawahar Quarters, Begum Bridge Road,
Meerut
1.2 Corporate office : 94-E, Jawahar Quarters, Begum Bridge Road,
Meerut
1.3 Constitution : Proprietorship Firm

1.4 Activity
Dealer for Reliance Outlet* by setting up a petrol pump at Major Dhyan Chand Nagar, Main Delhi
Road, Meerut.
Activity –
Dealer for Reliance Outlet* by setting up Group/promoters 1. Sh. Yogesh Chandra
a petrol pump at Major Dhyan Chand
Nagar, Main Delhi Road, Meerut.

   
        CEO Sh. Yogesh Chandra
Date of        
Incorporation - August 1, 2004        
Banking with us     GROP Nil
since/new   EXPOSURE
connection* Take over from Central
Bank of India, Jail Chungi, Meerut
     
Date of last     FB 130 Lacs
Renewal : Not Applicable        
        NFB Nil
        Total 130 Lacs

* New unit or takeover to be mentioned

1.5 Mfg. Units/locations at: Major Dhyanchand Nagar, Main Delhi Road, Meerut
1.6 CRA (WC/TL)/Pricing) : CRA and pricing are as per circular no. dated

  Working Capital Term Loans

    Existing Proposed Existing Proposed
CRA   N.A. N.A.
As per circular no. As per circular no.
Pricing (Fixed / Dated Dated
floating)          
Other ratings, if        
available             

1.7 IRAC status

i) Advances : Standard as on 30-06-2005
ii) Investments :

2. Financial arrangement : Sole Banking

(Sole banking/consortium/multiple banking)

2.2 If consortium/MBA - Name of the lead bank/major bank : Not Applicable

Names of other banks & their shares

2.3 Indebtedness/Exposure (Rs. In Lacs)

Indebtedness Existing Proposed

Fund based  
Cash Credit (Stock) Nil 20
Sub Limit Cash Credit 10
Book Debts (on older
than 30 days) Nil
Term Loan Nil 110
Non fund based Nil Nil

 
Total (indebtedness) Nil 130

Investments   Nil
Leasing     Nil
Total (exposure)   Nil 130

2.4 Position regarding prudential exposure limits of RBI (if applicable)

2.5 Position of Account (s) : Standard as 30.06.2005

3. Performance & financial indications

(Figures in Lacs)
 Projected Projected Projected Projected
2007 2008 2009 2010
Net Sales 1328.81 1395.25 1495.01 1538.26
(exports)
Op. profits 32.41 34.15 35.86 37.60
PBT 23.09 25.80 28.56 31.43
PBT/N Sales 1.74 1.85 1.95 2.04
PAT 18.74 20.88 23.06 25.33
Cash accrual 23.74 25.39 27.41 29.25
PBDIT 38.61 40.15 41.70 43.32
PUC 70.00 70.00 70.00 70.00
TNW 87.54 106.92 128.49 152.02
TOL/TNW 1.97 1.50 1.14 0.86
TOL/Adj. 1.97 1.50 1.14 0.86
TNW 87.54 106.92 128.49 152.02
Current Ratio 2.06 2.16 2.27 2.38
NWC 41.36 47.15 53.82 61.11
Gross Block 186.00 191.00 196.00 201.00
Net Block 179.80 178.80 177.95 177.23

Note:
1. That the net sales are expected to increase atleast 5% per annum and estimated sales are calculated by
assuming 360 working days in a year and calculation of sales are as under:

Petrol Normal 1000 Ltr. x 43.08 x 360 days 155.09

Diesal 10000 Ltr. x 31.27 x 360 days 1,125.72
Lubricants 4 Lacs per months x 12 48.00
Total Rs. 1,328.81

2. That the firm is also planning to open a café and small departmental store as per specification and
direction of RIL therefore, we have planned to extension of building as and when required necessary
from our internal accruals. Hence, the above gross block shows a increasing value.
3. In spite of above all other ratios including TOL/TNW, Current Ratio as well as Cash accruals shows a
sound and satisfactory position of the firm.

Industry  
Exposure : FBL    
NFBL  
  Total  
No. of units    
Data Not Applicable
% of gross NF    
C & I limits at C.    
Centre    
NPA amount    
% age of NPAs to  
exposure    

QUARTERLY/HALF YEARLY PERFORMANCE AS ON

Pre. Yr. Curr. Yr. As on 30-06-2005

   

Net Sales Nil

PAT Nil
       

3.2 Movement in TNW (three year)

As on 31-03-2007 31-03-2008 31-03-2009
Opening TNW       70.00 87.54 106.92
Add PAT     18.74 20.88 23.06
Add: Increase in equity/premium   -- -- --
Add./Subtract change in intangible   -- -- --
Assets     -- -- --
Adjust prior year
expenses     -- -- --
Less: Withdrawls     1.20 1.50 1.50
Closing TNW       87.54 106.92 128.49

4. Brief (background (company/group/promoters/management ):

Name (s) of Directors with share holding pattern: -

Sh. Yogesh Chandra Gupta proprietor of M/s Lalsons Enterprises is a approved army contractor and general
order suppliers for last 20 years and effected sales 39.15 Lacs during the financial year 2003-04 and he applied for a
setting up a petrol pump on 30-08-2004 for appointment as dealer for Reliance Retail Outlet located at Delhi Road,
Meerut City (U.P.) Reliance Industries Ltd has already issued a letter of Indend (LOI) on 15-01-2005 for setting up a
petrol pump at Major Dhyan Chand Nagar, Delhi Road, Meerut by taking Rs. 3 Lacs in advance as signing amount and
proprietor have already purchased required land 2724.17 Sq. Mtr. at Major Dhyan Chand Nagar, Delhi Road, Meerut for
amounting to Rs. 127.00 Lacs and construction of Building have already been started.

The proprietor of M/s Lalsons Enterprises have already been obtained NOC from Distt. Fire Officer Meerut, Distt..
Supply Officer Meerut, Director of Industries Meerut copy of NOC’s is enclosed for your kind reference.

5. Performance & financials (whether overall financial condition is considered satisfactory including trends in sales,
profitability, tangible networth, TOL/TNW and current ratio- No. descriptive Remarks to attempted):
 Proprietor have a good reputation in Meerut, being a new proposal/establishment past records of the unit are not
available.

6. Industry Scenario : (including contemporary issues such as WTO impact/prospects of the

company - brief comments not exceeding 5-6 lines).

As we all know that these petroleum products are used to run two wheelers, motorcars, commercial vehicles, etc
and during last few years the consumption of these petroleum products had increasing very drastically as the number of
vehicles on road had increased too much. Further, the future scope of these petroleum products is also very bright as
there is no substitute to it.
Detailed Survey regarding market of the proposed products have been conducted by the Reliance Industries
Limited. Copy of the survey report with Central Bank of India, Jail Chungi Meerut it would be available after the takeover
of the proposal. The loacation of the site is highly suitable being the existing developed area. The firm has decided to
open a Coffee Shop and a Small level Departmental Store having emphasis on confectionery & other eatable products at
a later stage.
It would be pertinent to mention here that there is no petrol pump in the density of 3 to 5 km at the side of
proposed petrol pump.

6.2 Inter company comparison :

Name of the FBL* NFBL* year Sales PBT/ TOL/ CR

company     ended   Sales TNW  
                 
                 

Data Not Available

i) To be filled in only where comparable data are available

ii) In case of consortium, limits availed from the consortium to be given.

6.3 Industry average /benchmark (where available)

PBT/net sales Net Sales / total Bank finance / Inventory +
  tangible assets current assets receivables / net
            sales    
                 
                 

Data Not Available

7. Fund flow analysis: (only brief observations, regarding cash accruals vis-à-vis projections, repayment of TLs,
infusion of E/QE, investment in FA/Dividends, retention of profits and diversion if any).

The firm is engaged in petroleum products which are generally sold out in cash and estimated sales projection in
the coming years are very lower side because firm has estimated sales of 1000 Ltr. of Petrol and 10000 of Ltr. Diesal per
day. Keeping in view the situation of petrol pump it is very very justified. Hence, cash accruals as estimated in CMA are
nearby actuals because dealer firm will earn Rs. 1.20 on Diesal and Rs. 0.80 on Petrol and all the future expenditure has
already been considered including salaries to sales delivery men electricity, generator exp., repair & maintenance and
other selling expenses.

Keeping in view the cash accruals of the firm, and DSCR during the financially year 2006-07 to 2012-13 which is
not less than 1.84 and average DSCR 1.88, the repayment of term loan will be made easily. The proprietor will withdraw
only a small amount for his house hold exp. And most of the profits will be retained in the firm.

8. Term Loan/DPG : (where applicable) The proposed term loan is considered acceptable in terms of the detailed
appraisal as per Annexure-I

9. Working capital assessment : (The proposed working capital facilities are considered acceptable in terms of the
detailed appraisal as per annexure-II

10. Other details:

The proposal has already been sanctioned by Central Bank of India, Jail Chungi, Meerut and we have canvassed
to the party to shift their account in our bank.

10.1 Pricing by other banks/justification for the proposed pricing:

The proposal will fall under the scheme of setting up a petrol pump of Reliance Industries vide circular no.
dated

10.2 Capital market perception (price) Not Applicable

(High/Low [52 weeks])

10.3 Value of Account

  Year under Previous  

  review   Year  
Utilization of accounts/other income
 
Average utilization of fund based limits
Value of account (past 12 months)  
Not Applicable being a new account
- Interest /Discount  
- Exchange  
- Commission  
- Forex business : Sales
Purchase  
Comments on pro-rata share         

10.4 Details of retail banking / any other business generated through the account.

Bank’s sign board will be displayed on the premises of petrol pump which will attract the retail business.

10.5 Comments on associate concerns : Nil

 Particulars Comments
Interlocking of funds      N.A.
NPAs among associate concerns     
Any other adverse features      

10.6 Use of provisional/un-audited data - In case earlier renewal / encashment was based on provisional / un-audited
data whether review with audited data, as specified was carried out and appropriate steps initiated?

Not Applicable

10.7 RMD exposure norms

10.8 Loan Policy guidelines The following quantitative parameters as set out in the loan Policy Document have been
examined:

Indicative Company's level

Parameters   min/max as on 31-03-2007
      level    
Liquidity     Min. 1.33 2.06  
TOL/TNW     Max. 3.00 1.97  
Promoters'   Min. 25% 30.43%  
contribution to the        
project (TL)        
Average gross DSCR Min. 1.75 1.88  
(TL)          
Debt/equity   Max. 2:1 2.28  

If any of the above indicative minimum/maximum parameters is not met by the company, please state whether it is
considered acceptable (only brief comments):

In addition to debt/equity ratio are within acceptable level and shows a sound position of the firm. Keeping in view
the unsecured loans from relatives and friends which is part and parcel of equity because these unsecured loans will not
be the paid till the continuances of the bank term loan therefore unsecured loans should be treated as a equity/capital.
Hence, debt/equity ratio would be 0.92 only which is highly acceptable.

10.9 Deviations from loan policy

Deviation Major/minor Mitigating. factors

Maturity of TLs                
Exposure norms (individual, non-            
corporate and corporate)              
Minimum CRA scores              
Hurdle rates (other than industry    NOT APPLICABLE  
Specific hurdle                
rates
Industry specific hurdle
rates          
Take over norms                
Any othe
deviations                

10.10 Whether
a) the name of the company/directors appears in RBI's list of defaulters/RBI's list of defaulters / RBI's list of
willful defaulters: : NO

Name of the Defaulting   Capacity Our Policy Remarks

Directors Company            
                 
                 
                 

We confirm that the Board approved Bank's policy regarding granting of facilities to the company has been strictly
followed and granting of facilities to M/s Lalsons Enterprises is acceptable to the Bank.

b) the company's name figures in ECGC's caution list: : NO

If so, details and comments:

10.11 Status of auditor's remarks, which have an impact on credit risk on the unit

Particulars   Date Serious irregularities /   Action  

        adverse features   plan  
Inspection & audit report  
(covering security margin &  
Conduct of account) Not applicable being a new unit    
Credit audit report (warning  
signals)      
Company's audited balance  
sheet (qualifications)    

10.12 Corporate Governance practices followed

M/s Lalsons Enterprises is a proprietorship firm and corporate governance are not applicable but all policies of
corporate governance will be followed.

10.13 Conduct of account (covering irregularities, non-compliances, LC developments. BG invocations, etc.) :

There are no past record available in our bank. Hence, conducting of account could not be comment.
10.14 Details of other borrowing arrangements and defaults, if any (excluding information given under credit limits on
page 1)

Nil

10.15 Comparison of pricing and other terms and conditions with SBI/Associate Banks

As per circular no. dated

10.16 Legal Compliance Certificate : Legal compliance certificate will be obtained after sanction.

10.17 CIBIL clause (state whether stipulated in the terms) : will be obtained

10.18 Date Chart (State whether attached?) : As follows

Inspection of the unit. 15-06-2005

Received of Proposal 30-06-2005
Sent proposal to RO 02-07-2005

11. Status of compliance with terms & conditions of sanction/observations of HOCC/EC:

All the terms & conditions of the sanction will be followed by the firm.
12. Critical risk factors and their mitigation: Nil
13. Justifications & recommendations for the proposed facilities :
1. Term Loan

The firm is going to setup a petrol pump of Reliance Industries Ltd. and projected cost of Building and other fixed
assets have been analysied by Reliance Industires Ltd. and detailed market survey conducted by M/s Reliacne Industries
Ltd and a copy of letter indend has been issued to the party by taking Rs. 3 Lacs as signing amount. Further the Central
Bank of India sanctioned a term loan of Rs. 85 Lacs i.e. Rs. 62.50 Lacs purchasing a Land and Rs. 22.50 Lacs against
building at a margin of 50%. We have considered the cost of building Rs. 50 Lacs cost and recommended as follows:

1. Term Loan against Land Rs. 62.50 Lacs with a margin of 50%
2. Term Loan against Building Rs. 30.00 Lacs with a margin of 40%
3. Security/Advance payment to RIL Rs. 17.50 Lacs with a margin of 25%

2. Working Capital

Keeping in view the holding level of stock as well as debtors. The firm has to invest heavy funds in working capital
of the business and the firm has to maintained a level of stock for smooth running of our business. Therefore, we
recommend a working capital limit of CC(H) Rs. 20.00 Lacs with a sub limit of 10 Lacs against book debts not older than
30 days.
Calculation of Average Stock

Average Stock Capacity Average Rate Value

In Ltr. Stock 50 %
 Petrol
Normal 20000 10000 43.08 430800
Premium 20000 10000 44.64 446400

Diesal
Normal 40000 20000 31.27 625400
Premium 40000 20000 33.12 662400

Lubricants
Mobile Oils, Lubricants etc. 585000

Total 2750000

14. Submitted for sanction.

(A) Term Laon: 1. Term Loan against Land Rs. 62.50 Lacs
2.Term Loan against Building Rs. 30.00 Lacs
3.Term Loan for security to RIL Rs. 17.50 Lacs

(B) Working Capital Limit

CC(H) Rs. 20.00 Lacs
With a Sub Limit of Rs. 10.00 Lacs
Against book debts not older than 30 days.

15. Pre-Sanction visit comments: Pre-Sanction visit was conducted by Branch Manager alongwith Field Officer.
16. Comments on opinion Report of Existing Banker (s) if any:
Existing banker Central bank of India Jail Chungi, Meerut will try their best to retain his accounts but and their
opinion are seems to be good.

Signature :

Designation of the recommending authority:

Date:
Place:

Should briefly cover (not more than 10 to 12 lines)

a) Why the proposal is considered a fair banking risk and is being recommended.
b) b) Why after due consideration of various deviations and risk factors, the proposal is being considered
acceptable and is being recommended.
c) Why changes in terms and conditions, if any, are being recommended.

Annexure – I
ZONE : Delhi - III
Branch : Meerut City
Company : M/s LALSONS ENTERPRISES

Term Loan/DPG :

a) Proposal : Term Loan

b) Project/Purpose : To set up a petrol pump of RIL
c) Appraised by : Sh. F.C. Sharma, Branch Manager and Sh. R.K. Verma Field Officer
d) Cost of project & means of finance
Cost       Means     
Prop. 70.00
LAND 127.00 Capial
BUILDING  50.00
Actual Cost
Interest
during
construction 5.00 Unsecured  50.00
period     Loans    
 Term Loan
against
P&M      2.00 Land     62.50
Term Loan
against
Other assets    25.50 Building      30.00
 Term Loan
for
Security/Ad
vance
WC margin    20.50 payment      17.50
Total      230.00 Total      230.00

e) Remarks on cost of project & means of finance (in brief)

The investment in Land have already been incurred of Rs. 127 Lacs while the projected cost of Construction of
Building of Rs. 50 Lacs are estimated by Reliance Industries Ltd.’s architect and detailed map have already been
submitted for your kind reference which was also appraised by Central Bank of India and the detailed architect estimate
was submitted to Central Bank of India and Rs. 5 Lacs approx. for interest of construction period has been estimated
which will be capitalized in the cost of building.
The cost of Plant & Machinery Rs. 2 Lacs includes, DG Set, Water cooler, Air Compressor Machine and other
tools which is required smooth running of petrol pump.
The cost of other assets Rs. 25.50 Lacs includes Rs. 23.50 Lacs of security/advance payment to Reliance
Industries Ltd. and Rs. 2 Lacs for computer, fax, furniture & fixture etc.

f) Project implementation schedule

Particulars Commencement Completion

Land purchase July 2004 March 2005

Building Civil Work April 2005 September 2005
Installation of Plant & Machinery October 2005 November 2005
Trial Run December 2005 February 2005
Commercial Activity March 2006 ----

Repayment of Term Loan in

 84 equated monthly installments of April 2006 March 2013
Rs. 1.70 Lacs started from

g) Production factors

The petrol pump is not a production unit, it is a retail outlet of M/s Reliance Industries Ltd. located on national
highway Delhi Meerut Road, Meerut and is surrounding by well developed industrial area as well as well developed new
colonies.

h) Marketing

The firm will perform its activity under the proprietorship of Shri Yogesh Chandra and will be trading in various
petroleum products viz Petrol, Diesel, Mobile Oils, Lubricants, etc. These petroleum products are extensively used to run
two wheelers, motor cars, commercial vehicles, etc. During last few years the consumption of these petroleum products
had increasing very drastically as the number of vehicles on road had increased too much. Further, the future scope of
these petroleum products is also very bright as there is no subsitute to it and there is no petrol pump within two three five
K.M. in the side of proposed unit. Hence, no problem for selling the petroleum products.

I) Commercial viability Figures in Lacs

Capacity utilization % 31-03-07 31-03-08 31-03-09 31-03-10 31-03-11 31-03-12 31-03-13

Sales      1328.81  1395.25 1465.01 1538.26 1615.18 1695.94 1780.73
Net Profit    18.74 20.88 23.06 25.33 27.67 30.12 32.65
Cash accruals    23.74 25.39 27.41 29.25 31.48 33.65 36.11
Interest    7.82 6.85 5.80 4.66 3.44 2.12 0.70
Total      31.56 32.24 33.21 33.91 34.92 35.77 36.81
TL/DPG repayments 12.58 13.55 14.60 15.74 16.96 18.28 18.29
Interest    7.82 6.85 5.80 4.66 3.44 2.12 0.70
Total     20.40 20.40  20.40  20.40  20.40  20.40  18.99
Gross DSCR   1.55 1.58 1.63 1.66 1.71 1.75 2.01
Net DSCR    1.89 1.87 1.88 1.86 1.86 1.84 1.97

Comments on DSCR (in brief)

The gross DSCR are continuously increasing this seems to a strong position of the firm and the minimum gross
DSCR 1.55 have been increased upto 2.01 while the net DSCR Average is 1.88 which is more than the acceptable level.

j) Security margin

Particulars              
WDV of fixed assets              
Agg. TL/DPG outstanding            
Security margin available            
% of margin              

Comments of security margin, in brief:

k) Break - even and sensitively analysis and whether acceptable: Not applicable being a trading unit.

i) CRA & Pricing: As per circular no. dated

m) Pricing by other major banks/Fls and justification of the proposed pricing

n) Overall viability and acceptability of the proposal:

1. Term Loan

The firm is going to setup a petrol pump of Reliance Industries Ltd. and projected cost of Building and other fixed
assets have been analysied by Reliance Industires Ltd. and detailed market survey conducted by M/s Reliacne Industries
Ltd and a copy of letter indend has been issued to the party by taking Rs. 3 Lacs as signing amount. Further the Central
Bank of India sanctioned a term loan of Rs. 85 Lacs i.e. Rs. 62.50 Lacs purchasing a Land and Rs. 22.50 Lacs against
building at a margin of 50%. We have considered the cost of building Rs. 50 Lacs cost and recommended as follows:

1. Term Loan against Land Rs. 62.50 Lacs with a margin of 50%
2. Term Loan against Building Rs. 30.00 Lacs with a margin of 40%
3. Security/Advance payment to RIL Rs. 17.50 Lacs with a margin of 25%

Annexure-II

Assessment of WC facilities

(If the assessment of the WC limits is based on any other parametrs, please specify them
alongwith an explanation)

a. Inventory & receivables : (days)

Inventory/Payments Projected Projected Projected

  31-03-2007 31-03-2008 31-03-2009
Raw material    
-Imported    
-Domestic     
SIP     
FG    7.61 8.05 8.95
Receivables   6.87 7.32 7.47
Sundry Creditors    
-Import    
-Domestic (for exp.)     1.00 1.00 1.00

b. Assessed bank finance

(Figures in lacs)
Assessed Bank Finance 31-03-2007 31-03-2008 31-03-2009
      Projected Projected Projected
TCA     80.29 87.78 96.26
OCL     18.93 20.63 22.44
WCGap 61.36 67.15 73.82
     
NWC 41.36 47.15 53.82
   
BF     20.00 20.00 20.00 
NWC/TCA %   51.52 53.71 55.91
BF/TCA %   24.91 22.78 20.78
OCL/TCA %   23.57 23.50 23.31

c. Assessment of EPC/FBD limits: Not Applicable

d. Computation of LC limits for WC : Not Applicable

Annual RM cons. Under LC

Monthly RM purchases
Usance
Lead time
LC Limit required
Recommended LC limit

e. Assessment of BG limit : Not Applicable

Outstanding BGs as on ……………….  

Add: BGs required during the period  
Less : Estimated maturity /   
cancellation of BGs during the period   
 
…………….    
Requirements of BGs    
Recommended BG limit    
 f. Efficiency ratios

P P P P
Particulars 31-03-2007 31-12-2008 31-03-2009 31-03-2010
     
Net sales to total tangible assets (times) 5.10 5.23 5.34 5.44
PBT to total tangible assets (%) 8.87 9.67 10.41 11.11
Operating cost to sales (%)     97.56 97.55 97.55 97.56
Bank finance to CA (%) 24.91 22.78 20.78 18.96
Inventory + receivables to net sales  
(days)         14 15 16 17

g. Brief comments on the assessment of above limits.

All the above ratios shows a improving position of the firm. While inventory+receivable to net sales (days) a
slightly go up by one day in one year, which is acceptable due to increase in working of the firm.

Calculation of Average Stock

Average Stock Capacity Average Rate Value

In Ltr. Stock 50 %

Petrol
Normal 20000 10000 43.08 430800
Premium 20000 10000 44.64 446400

Diesal
Normal 40000 20000 31.27 625400
Premium 40000 20000 33.12 662400

Lubricants
Mobile Oils, Lubricants etc. 585000

Total 2750000

Keeping in view the above calculation CC Limit of Rs. 20 Lacs are justified and acceptable with a sub limit of Rs.
10 Lacs against book debts not older than 30 days.

Annexure – III
ZONE : Delhi - III
Company : M/s Lalsons Enterprises

A. Security

Facility Primary Collateral Guarantees

Term Commercial Land at 1. Equitable Mortgage of Residential House situated Personal guarantee of Smt. Sushma
Loan – I Major Dhyan Chadn at A-4, Jawahar Quarters, Begum Bridge Road, Chandra W/o Sh. Yogesh Chandra
Rs. 62.50 Nagar, Main Delhi Meerut measuring around 306.85 Sq. Mrts. In the Net worth 66.60 Lacs as on 31-03-
Lacs Raod, Meerut. name of Sh. Yogesh Chandra valued Rs. 71.16 2005
Measuring 2724.17 as per valuation report dated 21-02-2005.
sq. mtr. in the name of 2. Equitable Mortgage of Residential House situated
 Sh. Yogesh Chandra
S/o Late Sh. Nursing
Bihari Lal R/o A-4,
Jawahar Quarters,
Kutchery Road,
Meerut valued Rs.
127.00 Lacs
Term Building to be
Loan - II constructed for
Rs. 30.00 amounting to Rs. 50
Lacs Lacs at Major Dhyan
Chand Nagar, Main
Delhi Road, Meerut.
at 94-E, Jawahar Quarters, Begum Bridge Road,
Meerut measuring around 160.00 Sq. Mts. In the
name of Sh. Yogesh Chandra. Valued Rs. 9.52
Lacs as pr valuation report dated 21-02-2005
3. Shop No. 15/6 at Part of Banglow 47/H1-New 20
Jawahar Quarters, Civil Lines, Meerut. Valued Rs.
4.05 Lacs as per valuation report dated 21-02-
2005
4. Equitable mortgage of commercial property
situated at Shop no. 16 part of Banglow 47/H-1,
(Old) 20 New Jawahar Quarters, Meerut city in
the name of Sh. Yogesh Chandra valued Rs. 3.96
lacs as per valuation report dated 21-02-2005

Term Security/Advance
Loan – III payment to RIL of Rs.
Rs. 17.50 23.50 Lacs
Lacs

CC(H) Hypothecation of all

Rs. 20 kind of stock such as
Lacs with petrol, diesal,
a sub limit lubricants and other
of Rs. 10 goods.

Lacs Hypothecation of all

against kind of book debts,
book receivables, claims
debts etc.

Deviation from existing security (if any);

New Proposal

B. ECGC cover : Not Available

C. Margins : (for each facility as applicable)

Cash credit       Existing Proposed  

Raw material        
-Domestic    
-Imported    
SIP          
FG       25 %    
Receivables (cover 30 33.33%  
days)    
Letter of credit (Forign)        
BG      
Term Loan            
Against Land 50%
Against Building 40%
Against Security/Advance payment 25%

Justification for deviation from existing margins, if any to be provided in the proposal under item 13.

The Central Bank of India has sanctioned a fund based limit of Rs. 95 Lacs which is in the Regional Manager and
considered the margins 50% for building. While we have considered a reasonable margin of 40% against construction of
building and 25 % margin for against security/advance payment RIL.

D. Rate of interest (Floating): 7.5% per annum on monthly rest as per circular no. dated

E. Repayment : 1. Term Loan

84 equated monthly installments of Rs. 1.70 Lacs started from April 2007
2. Working Capital Limit
On Demand

F. Other critical covenants: Nil

Note: Any change in the terms and conditions should be justified in the proposal under item 13.

Annexure – D
Review, based on audited financials, of credit limits earlier renewed / enhanced on the basis of provisional / un-
audited data NOT APPLICABLE BEING A NEW UNIT

1. Zone/Credit App. Deptt./Commercial branch

2. Branch : Meerut City
3. Company Profile: M/S LALSONS ENTERPRISES

4. Date or renewal / enhancement:

5. Sanctioned by :

6. Financial arrangement : sole banking / consortium / multiple banking : Sole Banking

7. Credit limits

Limits SBP Others % share of SBP

Fund based
-WC
-TL
Total (FB)
Non fund
based
-LCs (Import)
-BGs
Total (NFB)
Total
(FB+NFB)

8. Performance / financial indicators

(Figures in Lacs)
Prov./una
udited Actuals Estimated Projected
31-03-2007 31-03-2008 31-03-2009 31-03-2010
Net sales
(exports)
PBT
PBT/N sales
PAT
Cash
accruals
PUC
TNW Half yearly perf. As on 30-09-2004
TOL/TNW Prev. Curr. year
year
Current Net sales
Ratio
TOL/Adj. PAT
TNW

9. Quality aspects

9.1 Any significant deviations observed from the provisional / un-audited data submitted earlier which may have
impact on company’s credit worthiness.

NIL

9.2 Any adverse comments by the company’s auditors having impact on the company’s credit worthiness

NIL

9.3 Any adverse comments in the Credit Audit, I & A, Statutory Audit, RBI inspection subsequent to the renewal /
enhancement.
 NOT APPLICABLE.

9.4 Indications on achievement of the estimated performance as observed from quaterly/half yearly data.

NOT APPLICABLE.

9.5 Any change in the CRA rating /risk perception

10. Recommendations (To include any specific action considered necessary):

A) Term Laon
1. Term Loan against Land Rs. 62.50 Lacs
2.Term Loan against Building Rs. 30.00 Lacs
3.Term Loan for security to RIL Rs. 17.50 Lacs

(B) Working Capital Limit

CC(H) Rs. 20.00 Lacs
With a Sub Limit of Rs. 10.00 Lacs
Against book debts not older than 30 days.

On the following additional terms & Conditions

Periodicity of Stock Statement : At monthly Intervals .

Inspection : As per bank norms

Insurance : Comprehensive for full value with agreed bank clause

Documents : As required by the bank

Period of Sanction : TERM LOAN FOR 7 YEARS

WORKINF CAPITAL LIMITS FOR ONE YEAR

Processing Fee : As per Bank norms

Equitable Mortgage Charges : As per Bank norms

Other Stipulations:

1. The Term loan for construction of Petrol pump building should be disbursed in three stages. After completing the
every stage the company will submit architect’s certificate for completing of work alongwith cost incurred for the
same with provisional Balance Sheet duly verified by C.A. The branch shall make an inspection and after
satisfying about the progress of construction and end use of the amount already disbursed, may disburse the
installment for the subsequent stage of construction. The company shall also submit bills/receipts in taken of
having incurred such expenses. After completion of the construction in final certificate form architech shall be
obtained within 10 days for the due completion of work with the senior manager finance inspection report to this
 effect. Inspection report of Senior Manager of the branch should be submitted before the disbursement of
installment of the the term loan.
2. Book Debt finance will be granted only against Book Debts pertaining to first class parties.
3. Drawings will be allowed only against paid-up stocks.
4. The company will deal withus exclusively.
5. Branch Manager will ensure, before release, to obtain legal opinion reports in respect of properties accepted as
collateral securities and will also ensure that valid equitable mortgage is created
6. General Terms and conditions as applicable to such advances will also apply.

Date:
Branch Head:

11. Controller’s directions

Controlling Authority

FORMAT “AS”

STATE BANK OF PATIALA

MEERUT CITY BRANCH

Appraisal Note / Executive Summary / Control Report

( To be used as appraisal note for reviews, ad hoc limits, corporate loans, interchangeability, changes in security / margin
and other matters. For corporate loan, repayment schedule and DSCR are to be furnished.)

ZONE : Delhi - III BRANCH : Meerut City

1. Company profile : M/s Lalsons Enterprises

 Name : Lalsons Enterprises Constitution: Proprietorship
Firm
Activity : Dealer for Reliance Outlet* by Banking with us since : Take
setting up a petrol pump at Major Dhyan over from Central Bank of
Chand Nagar, Main Delhi Road, Meerut. India, Jail Chungi, Meerut.
Group, if any / promoter: Nil CEO : Sh. Yogesh Chandra

2. CRA:

Working Capital Term Loan

Existing Proposed Existing Proposed
N.A. SB-I N.A. SB-1

2.2 Pricing : (Fixed/Floating) : As per circular no. dated

Working Capital Term Loan

Existing Proposed Existing Proposed
--- --- --- ---

3. IRAC Status : Standard as on 30-06-2005

4. Date of last review/renewal : Not Applicable

5. Proposal : a) Fresh Term Loan and Cash Credit Facilities

b)
c)

Credit limits (existing & proposed) : Rs. In Lacs

Limits Existing Proposed Change

SBP % CONS. SBP % CONS. SBP CONS
FB
Total FBWC Nil Nil Nil 20 100 Nil 20 Nil
Term Loans Nil Nil Nil 110 Nil Nil 110 Nil
Total FB Nil Nil Nil 130 100 Nil 130 Nil
LCs Nil Nil Nil Nil 100 Nil Nil Nil
(import)
BGs Nil Nil Nil Nil Nil Nil Nil Nil
DPGs Nil Nil Nil Nil Nil Nil Nil Nil
Total NFB Nil Nil Nil 130 100 Nil 130 Nil
FB+NFB Nil Nil Nil 130 100 Nil 130 Nil
Note: 1. That the proposal have already been sanctioned by Central Bank of India , Jail Chungi Branch on
11-03-2005 as follows:
1. CC (Hyp. of Stock) Rs. 10 Lacs
3. Term Loan Fresh
Against Land Rs. 62.50 Lacs
Against Building Rs.22.50 Lacs Rs. 85 Lacs

The Party have already been taken up a term loan of Rs. 62.50 Lacs against land and the party had
purchased the land of Rs. 127 Lacs including stamp duty on 16-04-2005 and started his construction for
building for setting up a Petrol Pump of Reliance Industries Ltd. in their supervision and direction.

3. We have canvassed the party to shift their proposal in our bank by offering the above credit facilities. Our
AGM Sh. Alreja Ji has also visited the site and satisfied with the proposal and directed to go ahead.

6.2 The proposal falls within the powers of DGM because total credit facilities required 130 Lacs submitted for
sanction.

7. Indebtedness/Exposure :
(Rs. In lacs)
Indebtedness Existing as on 30-06-2005 Proposed
Fund based Nil 20
Non fund based Nil 110
Total (indebtedness) Nil 130
Leasing Nil Nil
Investments Nil Nil
Total Exposure Limits Nil 130

8.Financial arrangement :
(sole banking /consortium/multiple banking) : Sole Banking

Name of lead bank/Major Bank

With their shares

9. Performance & financial indicators (Rs. In Lacs)

Projected Projected Projected Projected

31-03-2007 31-03-2008 31-03-2009 31-03-2010
Net sales 1328.81 1395.25 1465.01 1538.26
(exports)
PBT 23.09 25.80 28.56 31.43
PBT/N sales 1.74 1.85 1.95 2.04
PAT 18.74 20.88 23.06 25.33
Cash accruals 23.74 25.39 27.41 29.25
PBDIT 38.61 40.16 41.71 43.32
PUC 70.00 70.00 70.00 70.00
TNW 87.54 106.92 128.49 152.02
Adjusted TNW 87.54 106.92 128.49 152.02
TOL/TNW 1.97 1.50 1.14 0.86
TOL/adjusted TNW 1.97 1.50 1.14 0.86
Current ratio 2.06 2.16 2.27 2.38
Net working capital 41.36 47.15 53.82 61.11
Gross block 186.00 191.00 196.00 201.00
Net block 179.80 178.80 177.95 177.23

Industry
Exposure
- FB DATA NOT AVAILABLE
- NFB
Total number of units
% of gross non food credit
NPA in the exposure
% age of NPA

10. Security
i) Primary

Security margin
Nature Existing Proposed
Working Capital Limit
Hypothecation of all kind of stock 25%
such as petrol, diesal, lubricants
and other goods.
33.33 %
Receivables (cover 30 days)
Letter of credit (Import)

Term Loan
Against Land 50%
Against Building 40%
Against Security/Advance 25%
Payment

ii) Collateral

Nature Existing Proposed

Value Basis Value Basis
1.Equitable Mortgage of 71.16 Lacs Valuation Report
Residential House 21-02-2005 and
situated at A-4, Jawahar individual
Quarters, Begum Bridge assessment of
Road, Meerut measuring branch manager
around 306.85 Sq. Mrts. and field officer.
In the name of Sh.
Yogesh Chandra
 2. Equitable Mortgage 9.52 Lacs Valuation Report
of Residential House 21-02-2005 and
situated at 94-E, individual
Jawahar Quarters, assessment of
Begum Bridge branch manager
Road, Meerut and field officer.
measuring around
160.00 Sq. Mts. In
the name of Sh.
Yogesh Chandra.

3. Shop No. 15/6 at a. Valuation Report

Part of Banglow L 21-02-2005 and
47/H1-New 20 individual
Jawahar Quarters, assessment of
Civil Lines, Meerut. branch manager
and field officer.
4. Equitable mortgage
of commercial Valuation Report
property situated at 21-02-2005 and
Shop no. 16 part of individual
Banglow 47/H-1, 3.96 Lacs assessment of
(Old) 20 New branch manager
Jawahar Quarters, and field officer.
Meerut city in the
name of Sh. Yogesh
Chandra

Total Rs. 88.69 Lacs

i) Gurantee

Name Net means as on 31-03-2005

1. Personal Guarantee of 66.60 Lacs
Smt. Sushma Chandra

Justification for change, if any, from the existing position: New Proposal

11. Salient features and justification for the proposal :

1. Term Loan

The firm is going to setup a petrol pump of Reliance Industries Ltd. and projected cost of Building and other fixed
assets have been analysied by Reliance Industires Ltd. and detailed market survey conducted by M/s Reliacne Industries
Ltd and a copy of letter indend has been issued to the party by taking Rs. 3 Lacs as signing amount. Further the Central
Bank of India sanctioned a term loan of Rs. 85 Lacs i.e. Rs. 62.50 Lacs purchasing a Land and Rs. 22.50 Lacs against
building at a margin of 50%. We have considered the cost of building Rs. 50 Lacs cost and recommended as follows:

4. Term Loan against Land Rs. 62.50 Lacs with a margin of 50%
5. Term Loan against Building Rs. 30.00 Lacs with a margin of 40%
6. Security/Advance payment to RIL Rs. 17.50 Lacs with a margin of 25%

2. Working Capital

Keeping in view the holding level of stock as well as debtors. The firm has to invest heavy funds in working capital
of the business and the firm has to maintained a level of stock for smooth running of our business. Therefore, we
recommend a working capital limit of CC(H) Rs. 20.00 Lacs with a sub limit of 10 Lacs against book debts not older than
30 days.

12. a) compliance with regard to Loan policy guidelines

b) Earlier prescriptions of sanctioning authority
c) RMD exposure norms
d) Figuring in RBI/ECGC defaulters list No

(We confirm that the Board approved Bank’s Policy regarding granting of facilities to the company has been
strictly following and granting of facilities of M/s Lalsons Enterprises is acceptable to the Bank”

e) Major inspection/Audit irregularities : New Proposal

f) Other risk factors : The implementation of WTO rules and Patents etc in
2007, can adversally effect the working of the Company.

g) Coming under any specific schemes like, Take-over, TUFS etc. : No

h) Obtention of legal compliance certificate : Nil

i) CIBIL clause : will be obtained

13. Recommended for sanction /approval/confirmation/submitted for control : (In case of control report, date of
sanction and sanctioning authority to be indicated) :

1. Term Loan of Rs. 110 Lacs

2. Working Capital Limit Rs. 20 Lacs

14. HOCC conditions/observations, if any :

 DY. General Manager GENERAL MANAGER (CB/OP)

Place :

Date :

DETAILS ABOUT ASSOCIATED CONCERNS/SUBSIDIARIES

Nil
 ANNEXURE ‘A’

INDICATIVE CHECKLIST

- SSI Registration Certificate, where applicable.

- Partnership deed/trust deed/Registration Certification from the Registrar of Societies/certificate of
Incorporation/Memorandum and Articles of Association as the case may be.
- Certificate of commencement of business in the case of Public Limited Companies and Private Limited
Companies wholly owned by Public Limited Companies.
- Brief details of proprietor/Promoters/Directors viz.,

Full name, Father/Husband's name

Address (Residence & office ) with telephone No.
Academic qualification, Experience, Functional responsibilities in the unit, Capital/Loan contribution in the
unit. Other concern (s) with which he/she is associated, alongwith brief details: Management/ Organizational
structure.

- Key managerial and Technical Staff with their Qualification/Experience.

- Technical Consultants, if any.
- Copies of Licence, permission/ approval by Regulatory Authority, where applicable.
- Availability of utilities like Power, Water, Labour, Transport.
- Marketing arrangement; report of any study/survey conducted.
- Suppliers of machinery (copies of invoices), their reputation, experience in the field, Details of other major
users, any warranty available etc.
- Effluent disposal arrangement (permission for effluent disposal, where necessary)
- Pollution control arrangements (ISO Certificate).
- Project cost & means of finance with break-up.
- If some portion of the expenditure has already been incurred necessary proof (cash receipts).
- Schedule of implementation.
- Future projection
- Details of Technology employed, Manufacturing process
- If TL has been tied up with FI, details of the same with a copy of the sanction letter. Report from Merchant
Bankers, if capital market is being accessed.
- Production data
- Source and availability of raw material.
- Major players and market share.
- Any specific strategies, unique selling proposition, if any.
- Project report, CMA data
- Details of associate concerns with their borrowing arrangements.

- If it is a running unit
- Details of its existing borrowing arrangements
- Past performance – 3 years financial statements
- Details of major shareholders

- In case of switch-over from another Bank/FI reasons for the same

- Full details of collateral security offered, photo copies of the title deeds
- Personal guarantees along with full details of the guarantor and Assets & Liabilities statement with IT/Wealth
tax return.
- Details of pending litigations, if any, against and by the concern.
- In case of exports details of orders, raw material procurements etc.
- Legal/regulatory issues.
- Impact of WTO/Globalisation.
- Any special/crucial features of the industry; industry profile and its growth prospects.
- SWOT analysis by the borrower and mitigating measures for perceived threats/risks.