Brief Background:

M/s . Sidhhi Precision Components and Accessories Pvt .Ltd. (SPCAPL) , incorporated in
2009 , is floated by Mr. Savkar Waghmode , Mr .Karbhari Bhingare and Mr . Shihari
Tipugade. The company proposes to manufacture of precision components and tool
Accessories for use in various industries .The proposed activity is mainly for the
manufacturing of TOOL Holder , Adaptor and Work Holder which form a link between basic
machine tools and the cutting tools for all machining operations .To retain high wear resisting
property and machine accuracy , the machine tools accessories are mostly manufactured from
core hardening Alloy Steel and are hardened and ground to required specifications as per
Indian standards . The products of machine Tool Accessories are mostly used in general
purpose machines like center Lathes , Turret Lathes , drilling / milling / grinding machines
etc. The machine tool accessories are grouped machine wise lathe / drilling / milling
accessories.

The following units are the associate concerns of the company and banking with our MIDC,
Ahmednagar branch.

1 . Siddhi CNC Pvt . Ltd .

2 . Siddhi Forge Pvt .Ltd .

3 . Perfect Industries .

4 .Ahmednagar Precision Products.

All the above units are engaged on manufacturing of Forged components for Automobile and
Engineering Industries . The company’s proposed clientele base includes :

1 . Mahindra and Mahindra Ltd.

2. Tata Motors Ltd .

3. Alpha Laval Ltd.

4. ZF Steering Ltd .
SPCAPL is a new venture of Siddhi Group of Industries Located at Plot No E/2 MIDC ,
Ahmednagar. The location is in the industrial area and plenty of opportunities are available.
The company proposes to set up a factory at plot No. E/2 MIDC , Ahmednagar . On
15.12.2009 , the promoters have entered into agreement with the M/s.Rajabahadur
International Ltd,Mumbai, who is leaseholder of the land.The land admeasuring 23645 SMT
with built up area of factory shed and office building of 2365.27 SMT , is proposed to be
purchased at total cost of rs 350.00 lacs and company has paid an advance of rs 35.00 lacs as
per a suitable agreement . The balance amount of rs 315.00 lacs is to be paid before
15.02.2010.

TVSR of the Plot has been obtained from Bank;s empanelled advocate Mr.Sudhir Zarkars the
report states that ‘Agreement to Sale ‘ is valid document and the tittle deeds are genuine and
valid EM/RM can be created and the said mortgage would be enforceable. As oer valuation
report obtained from Mr .M .M Anerkar , plot area is 23315 SMT and market value is Rs .
548.54 lacs.

SPCAPL is receiving enquires from major customers of their Associate concers i.e. Mahindra
Ltd, Tata Motors Ltd and Alfa Laval Ltd. The production capacity of their proposed project
is 5000 components p.a. For this it proposes to purchase new / used. Machinery worth Rs
401.94 lacs and construction of additional factory building adm.300 SMT . The total cost of
project works out to Rs 874.58 lacs ,against which SPCAPL has approached us for sanction of
term loan of Rs500.00 lacs and working capital limits of Rs 210.00 lacs.

SHREHOLDING PATTERN
Shareholding pattern of equity shares is as under:

Sr . Name of Shareholder No of Amount % shares

shares
1 Mr .Savkar Mahadeo Waghmode 16667 16.67 9.64%
2 Mr . Karbhari Mathuji Bhingare 16667 16.67 9.64%
3 Mr . Shrihari Daulotroa Tipugade 16666 16.66 9.63%
4 Mr . Akshay Savkar Waghmode 20500 20.50 11.85%
5 Mr . Suhas Karbhari Bhingare 20500 20.50 11.85%
6 Mr . Ninad Shrihari Tipugade 20500 20.50 11.85%
7 Mrs Pramilla Karbhari Bhingare 20500 20.50 11.85%
8 Mrs Vandana Savkar Waghmode 20500 20.50 11.85%
9 Mrs Sunita Shrihari Tipugade 20501 20.50 11.84%
 Total 173001 173.00 100%

PROFILE OF DIRECTORS:
Sr Name of the director Age Qualification Experience
1 Mr .Savkar Mahadeo 54 B.E(Mech) 30 years in
Waghmode ,D.B.M ,DLL manufacturing of
& LW machine tool Auto,
Forged Components
2 Mr .Karbhari Matuji Bhingare 55 B.E. 30 years in
(Mech) manufacturing of CNC
,M.M.S. line of Bearings.
3 Mr .Srihari Daulatroa 52 B.E.(Mech), 28 Years in
Tipugade M.M.S. manufacturing
technology and product
development.

c) Indebtedness / Exposure and Capital Charge:

Company Group Proposed Exposure

Indebtedness Existing Proposed Existing Proposed Credit Risk

conversion weight %
factor %

Fund based - 710.00 - 710.00 11 100

Non fund based - - - - 11 100

TOTAL(indebtedness) - 710.00 - 710.00 11 100

Investment - - - - - -

Leasing - - - - - -

Total(exposure) - 710.00 - 710.00 11 100

Capital charge for Total exposure: 78.10

PRESENT PROPOSAL:

A . Sanction for i) Demand cash credit limit of

Rs .210.00 lacs
ii) Term loan of Rs 500.00 lacs
B . Approval for Approval for release of term loan of Rs .
129.00 lacs , payment of our share towards
purchase of land & building before
completion of mortgage formalities.
C . Confirmation -

This proposal falls within the powers of NWCC-II as

(i) FB/NFB/Total indebtedness is Rs 710.00 lacs (Corporate)
(ii) Involves policy level deviations : Nil
(iii) __________-______is a director in ________-________Bank.

b. CREDIT LIMITS (EXISTING AND PROPOSED):

Existing Proposed Change

limits SBI % others SBI % other SBI others
s

FBWC - - 210.00 100 - +210.00 -

-
DCC - - - 210.00 100 - +210.00 -
Total FBWC - - - 500.00 100 - +500.00 -
TERM LOAN - - - 710.00 100 - +710.00 -
Total fund based - - - - 100 - - -
Total Fund Based - - - - 100 - - -
Total NFB - - - - - -
Total (FB + NFB) - - - 710.00 100 - +710.00 -
C. SHARING PATTERN

Financial Arrangement :Sole Banking

Lead Bnk :
FB NFB TOTAL
SBI 710.00 - 710.00
Ass.Bks. -
SBI Group 710.00 - 710.00
Others Banks - - -
Total 710.00 - 710.00

Performance Details

a. PERFORMANCE AND FINANCIAL INDICATORS:

The unit has proposed to manufacture various Precision components and accessories
of machines , such as Collets , Floating Reamer Holders , Milling Stub Arbors and
other Machine Tool Accessories.These components are manufactured as per orders
from OEM’s and other customers .Various components are used for different purpose ,
installed capacity is 5000 components are numerous and are to be manufactured as per
specification , it is difficult to fix the the quantity or the price. Commercial production
is Expected to start from June,2010.
COMMENTS:
Sales :
The year 2010 -11 will be the 10 months of operation, when sales are projected at Rs
900.78 lacs. The units has an installed capacity of 5000 components per year on
double shift basis.The precision components and machine tool accessories are of
various types as per requirement of different industries , capacity utilization will be
65%, in first full year of operations i:e: 2010-11 and thereafter. The average selling
price will be approx .Rs 3000/- Per component.

The promoters are well experienced in the line of activity of designing /manufacturing
of machines parts.The Associate concerns namely Siddhi CNC Pvt. Ltd,Siddhi Forge
Pvt Ltd, Perfect Industries and Ahmednagar Precision Products are engaged in
manufacturing of engineering/fored parts . Hence the promoters are maintaining good
rapport with the customers is being explored by the unit.

In addition to the above mentioned companies /customers , the company has contacted
Mahindra & Mahindra Ltd ,Alfa Laval Ltd , Tata Motors , who are major clients of
their associate concerns.Hence , the promoters are confident of achieving the
estimated sales.

In view of the following , the projected sales for the year 2010-2011 and for
subsequent years are considered to be realistic and achievable.
PROFITABILITY

During the first year of operation , the company has estimated profit of Rs 53.94
lacs.The projected profitability from 2011-2012 is expected to improve gradually in
subsequent years due to increased capacity utilization and reduction in interest and
depreciation costs.The profatibality is ranging between 15% to 20% , which in tune
with similar units in precision components and machine tools accessories industry.In
view of the above , the profitability projections of the company are considered
reasonable and in line with the growth in sales . Profitability of the units is projected
on a conservative basis with an increasing trend , which is considered achievable.

TNW:

The PUC of the company is Rs 173.00 lacs . The margin money required for the
project is Rs 374.83 lacs.To meet the margin ,the unit has already raised Rs
210.00 lacs as unsecured loans during the current year.With plough back of major
portion of profits into business, the TNW of the company shows an increased
trend.The same trend is projected to continue throughout the currency of our Term
Loan , as the company Hs taken a policy decision to retain internal accruals in
business and dividend , if any will be declared only after squaring off all major
liabilities.

TOL/TNW
The projected ratio as on 31.03.2011 is 4.34 , which is worse than benchmark
level.The promoters have brought in QE in the form of deposits from friends &
relatives to tune of rs 210.00 lacs. The company has undertaken not to repay these
funds without prior permission of the bank. The TOL-QE/TNW+QE ratio works out
as under

As on 31.03 2011 2012 2013 2014 2015

TOL/TNW 4.34 3.20 2.45 1.83 1.39
TOL-QE/TNW+QE 1.42 1.43 1.18 0.94 0.74
TOL-QE/TNW+QE as on 31.03.2011 is 1.42 , better than benchmark level .From
2012-2013, the position of the company is within the indicative level, solvency
position of the company is considered satisfactory amd acceptable.The ratio is
projected to be within the benchmark from the third year onwards.The proposed
retained profits are expected to strengthen the TNW in ensuring years.

CURRENT RATIO:

The CR of the company projected as on 31.03.2011 , which is below than the

benchmark level.However excluding term loan installments the same work out to 1.52,
and is expected to remain within benchmark level as on 31.03.2012.The projected CR
in ensuring years are within indicative level, with plough back of major portion of
profit.The liquidity position of the company is considered satisfactory.

In view of the experienced of the promoters in the line of activity and good rapport
with various industries, the company is expected to achive the projected sales
turnover.The overall projected performance and financial indicators are considered
acceptable.

Q/HY results as on

Prev.year Current Year

Sales New connection.

(Exports)

PAT
b.Industry Exposure(as on 30.09.2009) (Rs in croses)
Engineering (Precision Equipments)
Exposure:FBL 875.65
NFBL 301.58
TOTAL 1177.23
% of gross NF limits at C.Centre FBL
0.18%
NFBL
0.14%
TOTAL
0.17%

Exposure of the company as per 0.008%

prudential exposure norms
To Industrty exposure -
To total advances (domestic) 0.0007%

C) MOVEMENT IN TNW

2011 Proj. 2012 Proj. 2013 Proj.

Opening TNW 168.00 222.94 287.27
Add PAT 53.94 63.34 72.75
Add.Increase in - - -
Equity/premium
Add/Subtract change in 1.00 1.00 1.00
intangible assests
Adjust prior year - - -
expenses
Deduct Dividend - - -
Payment/Drawings
Closing TNW 222.94 287.27 361.03

The company has brought in of Rs 173.00 lacs in equity and Rs 210.00 lacs as
unsecured loans , to meet margins on term loan and working capital.The TNW as
estimated / projected is satisfactory.

d) SYNOPSIS OF BALANCE SHEET:

(Rs in lacs)

Sources of Funds 2010(Esti) 2011(Proj)

Share capital 173.00 173.00
reserves and surplus - 53.94
Secured loans:short term - 210.00
:long term 490.00 442.00
unsecured loans 210.00 210.00
Deferred tax liability - -
Total 873.00 1088.94
Applications of fund -
fixed assests(gross block) 850.00 850.00
less depreciation - 77.50
net block 850.00 772.50
Capital work in progress - -
investments 5.00 10.00
Inventories - 103.53
sundry debtors - 239.74
Cash and bank balances 23.00 15.65
Loans & advances to - -
subsidiaries and group
companies
Loans & advances to - 49.35
others
(less: current liabilities) 10.00 76.50
(less:provisions) - 29.33
Net current assests
Misc.:expenditure(to the 5.00 4.00
extent not written off or
 adjusted)
TOTAL 873.00 1098.94

Comments only on adverse movements in the above: The year 2010-11 is the first
full year of commercial operation. No other adverse movement observed.

RISK ASSESMENT
a. CREDIT RATING

Borrower rating
WC TL Facilities Existing Proposed
Exist Prop Exist Prop Hurdle WC - SB-3
rate
CRA - SB-6 - SB-6 SB-10 TL - SB-2
70/10 70/10 45/100
0 0
CRISIL - - - -
ICRA - - - -
OTHERS - - - -

(Marks scored in borrower rating /facility rating to be mentioned).

CRA based on projected balance Sheet as on Existing Proposed

Validated on NA 31.03.2011
NA NA
 b)Risks and mitigation factors:
Critical risks perceived
Comprtition from existing and upcoming The promoters are well qualified and
new units in the industry.
Mitigating factors
experienced .all the promoters are
having vast experience of more than two
decades in this line of activity. Their
associate concerns are being run on
profitable lines. They are well
established and the directors have
developed good rapport with big and
medium scale units in and around MIDC
area .Hence , the promoters of the
companyt are competent to withstand
the risk posed from new
entrants/existing units.
c.Warning signals /Major irregularities in Inspection report/Credit Audit/Other reports

Report Warning Signal/Major irregularities Comments

I/A Audit Report New connection , Hence not applicable.

Credit Audit Reports

Other Audit Reports

Qualification if any ,in Auditors reports N.A.

d) Security.
Facility Particulars basis valuation
i)primary:
DCC Hypontecation of CMA as 319.00
existing as well as future 31.03.2011 stock
entire stocks of raw +BD:343.27
materials , finished (-)S.Creditors:24.
goods ,stores and 27
spares,packing materials Total 319.00
of the unit at their
premises and at various
godowns or at some
other places including
goods in transit,
outstanding moneys,
books debts, receivable
TL Hypothecation of As per cost of 637.83
machinery to be project
purchased out of bank
Finance and Equitable
Mortgage of Lease hold
land adm.10997.65 SMT
and building
adm.2365.25 SM along
with proposed
expansion/renovation
work , situated at plot
No.E/2/1,(proposed sub
division of plot
No.E/2/1and E/2/2)
MIDC,Ahmednagar.
As the land E/2/1 Is
outside the cost of land
can be considered as
collleral.

ii)COLLETERAL:

DCC.TL 1.Equitable Mortgage of As per Sale 178.00

land admeasuring deed Dated
12647.35 SMT ,situated 15.12.2009
at Plot No.E/2 into plot (proportionate
no .E/2/1 and E/2/2) value)
MIDC , Ahmednagar,
agreed to be purchased
 from Raja Bahadur
International Ltd.
TL Extension of exclusive
hypothecation charge on
current Assests of the
units.

iii) Guarantee:

DCC,TL Personal Guarantee of the directors: As per branch opinion

1.Mr. Savkar Mahadeo Waghmode report 30.12.2009
2. Mr Karbhari Mathuji Bhingare 75.00
3. Mr Shrihari Daulatroa Tipugade 60.00
Corporate Guarntee of: 30.00
1 M/s Siddhi Forge Pvt Ltd Tnw as per balance
416.00
2 M/s Siddhi CNC Pvt Ltd sheet dated
31.03.2009 188.00

Collletaral For SBI Rs.178.00 lacs:25.07%

Coverage %
For others

Deviation from existing security (if any): N.A

PRICING

a) CONDUCT OF ACCOUNT

No of Average connection for regularity Irregularity

occasions report last
submitted
on

Irregularity New connection .Hence, not applicable

in WC:

Comments

Irregularity
in TL

Comments

Utilisation of limits:

FB Limits Average New connection .Hence , not applicable

utilization %

NFB Average
Limits utilization %
b) INVOME ANALYSIS

SBI

From Estimates Actuals Estimates Projection

( last year) (last year) (2009-10) (2010-2011)

WC int New connection. Hence , not applicable - 32.85

TL int - 66.83

LC -- -

BG - -

Bill
- -

Forex - -

others 7.09 0.84

Interst & Fls Pricing SBI Share Amount and percentage

other charges
as per latest
Balance sheet
dated

Interest other New C, not connection .Hence not

 charges applicable.

c) Other bank’s Pricing: Sole Banking, hence data not available for
comparison

Existing Proposed
Term Loan - -
Working Capital - -

d.) PROPOSED PRICING

ITEM Existing Rate Card rate Proposed rate

Int.on WC - 1.50% over At par with card rate
SBAR(SBAR11.75%
at present), 13.25%
p.a
Int on Term Loan - 2.00% over At par with card rate
SBAR(SBAR 11.75%
at present),13.75% p.a
Processing fee - Rs 84,000/- @ rs At par with card rate
400/- per lac
Upfront fee 1.25% ol laon amount At par with card rate
Rs 6,25,000/-
Commitment charges - CC:0.25% p.a on the At par with card rate
Cash crsedit entire unutilesd
portion if average
utilization is 60% or
less.
1.20% for delayed At par with card rate
draw down beyond 2
months
Justification for concession already extended /proposed.: NIL

LOAN POLICY:DEVIATIONS AND COMPLIANCE

a.whether names of promoters, directors, company, group concerns figure in defaulter/willful

defaulters list:

RBI defaulters’ list dated:31.03.2009:No

Name of the director Default in connection with: Remarks

(name of the company)

Not applicable Not applicable Not applicable

Justification for considering Not applicable

continuation /enhancement in
facilities)
RBI defaulters’ list dated:30.06.2009:No

Name of the director Default in connection with: Remarks

(name of the company)

Not applicable Not applicable Not applicable

Justification for considering Not applicable

continuation /enhancement in
facilities)

ECGC caution list 31.05.2009

CIBIL Rs 25.00 lacs and above as on 31.03.2009:No

Rs 1.00 crore and above as on 31.03.209:No

b. Deviations in Loan Policy:

Parameters Indicative ,min/max level as Companies level as on

per loan policy (Mfg.sector) 31.03.2011
1. Liquidity Min 1.33 1.29
2. TOL/TNW Max 3.00 4.34
3. Average gross Min 1.17 1.94
DSCR(TR) Min 2.00 3.74
Net DSCR
4. Debt/Equity Max 2.:1 1.33:1
5. Promoters Min 30% equity 42.83
contribution
6. Prudential norms 15%(12808.92 crores) 0.008%
7. FB exposure to the % of banks capital funds -
industry (Rs 6404.46 crores )
8. Substancial 7.5% of banks capital funds. 0.008%
exposure:borrower (Rs 6404.46 crores)
9. Substancial 15% of banks capital funds 0.008%
exposure:Group (12808.92 crores)
10. Others - -

i. Banks total capital funds as on 31.03.2009 , stood at Rs 8539.2.78 crores (as per
circular No.CCO/CPPD/PRUDENTIAL/20/2009-10 dated 09.06.2009)
ii. Domestic Adva nces as on 31.03.2009 Rs 889583.79 crores
iii. Total find basedexposure as on 31.03.2009 is Rs 759520.45 crores.

Term loan installments

Breif comments only if there is deviation:

Current Ratio
 The CR of the Company projected as on 31.03.2011 is 1.29 which is below than
the benchmark level.However excluding the same works out to 1.52 and is
expected to remain within benchmark level as on 31.03.2012.The projected CR in
ensuring years are within indicative level, with plough back of major portion of
profit.The liquidity position of the company is considered satisfactory.

In view of the experience of the promoters in the line of activity and good rapport
with various industries, the company will be able to achive the projected
performance and financial indicators are considered are acceptable.

TOL/TNW

The projected ratio as on 31.03.2011 is 4.34. Which is worse then benchmark

level, the position of the promoters have brought in QE in the form of deposits
from friends and relatives to the tune of Rs 210.00 lacs.The company has
undertaken not to withdraw these funds without prior permission of the bank.The
TOL/QE/TNW+QE ratio works out as under

As in 31.03 2011 2012 2013 2014 2014

TOL/TNW 4.34 3.20 2.45 1.83 1.39
1.42 1.43 1.18 0.94 0.74

TOL-QE/TNW+QE as on 31.03.2011 is 1.42 , is batter than benchmark level.From

2012-13 the position expected to be within the indicative level, solvency position
of the company is considered satisfactory and acceptable.The ratio is projected to
be within the benchmark from the third year onwards.The proposed retained
profits are expected to strengthen the TNW in ensuring year

Deviation Norms Proposed Remarks

1 Maturity of TLs 96 months 96 months No
Deviation
1 Exposure norms (individuals,Non corporate &
corporate)

Min CRA Risk types Existing New unit Existing New unit
Scores unit unit
(new
 CRA R S R S R S R S
model) Financial 25/ 30/ 10/ 15/ - - 13.69/25 - NO
65 70 25 35 Deviation

Business 12/ 10/ 16/ 20/ - - 19.92/30 -

Industry 20 20 30 40

Managemen 8/15 5/ 22/ 13/ - - 36/45 --

t 10 45 25

Agg .hurdle 45/ 45/ 48/ 48/ - - 69.61/100 -

score 100 100 100 10
0

iii Hurdle rates No SB-6 No

specifications deviation

iv Industry - - NA
specific hurdle
rates

v Takeover - - NA
norms

vi Any other - - -
deviations

C) deviations in take over norms and comments: Not applicable

d) Directors of the borrower company are relatives ( scope ot the term relative as
defined in RBI Master Circular on loans and advances – Statutory and other
Restrictions) of any member of the Banks Board /senior officer of the
Bank/Member of anny other Banks Board- No.

e) Compliance with section 20 of the Banking Regulation Act: whether any of the
directors of the Bank is Director of the borrower or is having any interest in the
same.: No
f) Pre sanction Inpection: The primary and colletaral securities were inspected by
Mr.Jayant Joshi (Credit Analyst) , CPC Credit Administrative office , Pune on
 20.01.2010.All properties are properly maintained .Present factory shed and
office building needs renovation.

a) FUTURE PLANS AND BUSINESS POTENTIALS (over a 3-5 year horizon )

Including Cross selling /Retail marketing based on Co /Groups future plans(to be
qualified)

Item Present Position Business estimated

Whether
Tied Up?
(NO)*
(i) Corporate salary - 10.00
package
(ii) P Segment Loans -
(a) Housing
(b) Auto Loans 10.00
(c) Personal Loans -

(iii) SBI credit Card - -

(iv) SBI Life - 5.00
(v) SBI Mutual Funds - -
(iv) SBI Vishwayatra - -
Foreign Travel Yatra
Cards
(vi) Vendor / Dealer Finance - -
(vii) Government Business of - -
the Company
(viii) Any Other (please - -
specify)
If no , please advice efforts made and outcome thereof.

b. Environmental and sustainability implications: The company has applied for

consent from Maharastra Pollution Control Board (MPCB) The company shall
obtain certificate of consent from MBCB ,before commencement of production
.Suitable is stipulated in this regard.

c. Earlier terms of sanction

d. Statutory Dues /Other contingent liabilities

Dues Level (Rs in lacs) Impact on Financial

position
Statutory liabilities NIL NA
Contingent liabilities NIL NA
Related Party Disclosure NIL NA
Interlocking of funds. Not observed -

e. Corporate Governance practices followed:

1. The procedure adopted for selection , orientation and succession of the
directors:
Since the company is a closely held family owned concern , the directors are
not liable to retire by rotation.

2. The directors and their core competence:

The directors are qualified and have experience in the line of activity. They are
well versed with the market conditions and are competent face future
challenges and have adequate competence in their core areas to run the
company successfully.

3. Accounting Standards followed

The companys account has been prepared in compliance with the applicable
account standards reffered to in sec 211 (3c) of the companies act, 1956.

4. Existance of independent audit committee and its functioning:

At present there is no independent audit committee.
 5. Tranparency in disclosure of financial information , executive compensation
etc:
The management is transparent in disclosure of financial information

a. Justification for the proposal:

The proposal is considered a fair banking risk and is being recommended on the
following grounds .

 The promoters are proactive and the company is well poised to record
profitable resultsin comoing years
 Promoters are qualified and possess experience of 25 years in the line of
activity
 Key financial areas are satisfactory.
 Availability of colletaral coverage of 25.07%
 The limits are commensurate with the projected levels of operations of the
company.
 CRA rating works out to SB-6 based on projected financials as on 31.03.2011
 The promoters are well established and have developed good rapport with big
and medium scale units in and around MIDC area.
 The demand for precision components and machine tool accessories
components by auto , railway and chemical industries has increased
substancially in the recent and price realization for the products is favourable.

b. Recommendation for Sanction / approval

A. Sanction for (i) Demand Cash Credit Limit of Rs 210.00 lacs

(ii) Term loan of Rs 500.00 lacs.
B. Approval for Approval for release of term loan of Rs 129.00 lacs ,
payment of our share towards purchase of land and
building before completion of mortgage formalities
C. Confirmation of -
APPRAISAL MEMORANDUM FOR TERM LOAN

Circle :Mumbai
Branch: MIDC Ahmednagar
Company; M/s Siddhi Precision Components & accessories Pvt Ltd.

Term loan;
A) proposal :Sanction of term loan of Rs.500.00 lacs
B) Project /Purpose : Purcahse of land & building ,Renovation of factory
shed ,office and purchase of machinery.
C) Appraised by: CPC (credit ) , Administrative Office , Pune.

D) Cost of project & Means of finance.

Cost Total Margin Margin(%) TL comp Means Amount

L & B(E/2/1) 172.00 43.00 25% 129.00 equity 173.00
L & B(E/2/2) 178.00 178.00 100% - Unsecur 201.58
ed loans
Renovation 38.35 9.80 25.55% 28.55
P & M (USED) 156.46 39.11 25% 117.35
P & M (New) 245.48 39.38 16.04% 206.10
Electrical 25.54 6.54 26.60% 19.00
Contingencies 5.00 5.00 100% -
Prelimanary 5.00 5.00 100%
expenses
WC Margin 48.75 48.75 100% Term 500.00
loan
Total 874.58 374.58 42.85% 500.00 Total 874.58
PROJECT DEBT /EQUITY:1.33:1
Land & Building (Rs .350.00 lacs)

The company proposes to set up a factory on plot No.E/2 (proposed E/2/1)

MIDC, Ahmednagar. The promoters have entered into agreement with the M/s
Rajabahadur International Ltd,Mumbai , is the leasehoalder of the land on
15.02.2010 Land admeasuring 23645 SMT and built up area of factory shed
and office building is 2365.27 SMT .As per the agreement purchase price of
land and Rs 172.00 lacs and open plot E/2/2 is Rs 315.00 lacs is to be paid
before 15.02.2010.The term loan of Rs 129.00 lacs proposed is against 25%
margin of the company.All infra structursl facilities like water , power ,
transport and labour etc are easily available to the unit.

TVSR of the MIDC Plot No.E/2 has been obtained from banks empalled
advovate Mr Sudhir Zarkar the report states that Agreement to sale’ is valid
equitable mortgage can be created and the said mortgage would be
enforceable.

Renovation(38.15 lacs)

The unit has proposedto expand and renovate existing shed and office
building.The reasonableness of cost has been certified by Mr.M.Anerkar
,Banks empanelled valuer .The Finance of Rs 28.55 lacs is proposed against
25.55% margin of the company.
 Plant and Machinery(401.94):Thetotal cost of plant and machinery required
by company is Rs 401.94 lacs.The reasonableness of cost of major high value
machines has been certified by M/s.Ameya Consultants , Banks empanelled
valuer .Payment will be made by the branch directly to the vendors against
submission of original bills.Finance of Rs 323.45 lacs is proposed against 25%
margin for used machinery and 16.04% for new machinery.The details of plant
and machinery proposed to be are as under.

Particulars of Machinery Name of the machinery supplier Cost

including
taxes
1 HMT make Lathe machine Kirti Technology services,Thane 18.37
2 MKL capstan Lathe machines High Q Machine tools,Thane 28.90
3 BFW Horizonal Milling High Q Machine tools,Thane 13.37
machine
4 HMT make Milling Machine Kirti Technology services,Thane 4.57
5 TOSS Vertical Milling High Q Machine tools,Thane 5.95
machine
6 Tools and cutter grinding Kirti Technology services,Thane 7.00
machines
7 Surface grinding machinesKirti Technology services,Thane 4.31
8 HMT Column Drilling machine
High Q Machine tools,Thane 7.88
9 Slotting machines Shree sai trading Company 18.64
Ahmednagar
10 Slot filing machine Shree sai trading Company 4.91
Ahmednagar
11 Chamfering machine Shree sai trading Company 2.00
Ahmednagar
12 HMT Cylindrical Grinding Kirti Technology services,Thane 36.63
machine K-17
13 HMT Cylindrical Grinding Kirti Technology services,Thane 11.24
machine K-130
14 WMW –ID Grinding machine Kirti Technology services,Thane 19.02
15 LC Testing Shree sai trading Company 2.81
Ahmednagar
16 MCO- Cut off Shree sai trading Company 2.53
Ahmednagar
17 TCO Vertical Shree sai trading Company 5.96
Ahmednagar
18 Pedestal Buffing Shree sai trading Company 1.48
Ahmednagar
19 Pedestal Slot Offset Shree sai trading Company 2.86
Ahmednagar
20 Drilling machine bench type Shree sai trading Company 1.41
Ahmednagar
21 Etching machine Shree sai trading Company 0.57
Ahmednagar
22 Reduction gear box Shree sai trading Company 0.62
Ahmednagar
23 Overhead crane Swami Samarth Engg ,Ahmednagar 2.02
24 Overhead tank for LDO Swami Samarth Engg ,Ahmednagar 0.58
25 WMW .S-4 Grinding machine High Q Machine tools,Thane 16.90
26 Cylindrical Grinding machine Micromatic Grinding Technologies 22.26
Ghaziabad
27 Sland bed CNC Lathe machine ACE Desighner, Bangalore 44.36
28 Salt Bath,Tempering Furnance Shree sai trading Company 16.98
phospating Tank Ahmednagar
29 Measuring Instruments & Shree Enterprises ,Ahmednagar 12.91
Guages
30 Jigs and Fixtures Ahmednagar Precision 41.77
Products,Ahmednagar (associate
concern)
31 Material handling equipments Trinity Techserve ,Aurangabad 15.00
32 Electrical installations for Shubhada electrical ,Ahmednagar. 28.13
machinery
33 TOTAL 401.94

These machines are second hand machinery,branch will obtain following

certificates before disbursement of term loan.Suitable convenant is stipulated
in this regard.

 No objection certificate from sellers bankers /FIs/NBFC , in case the

machinery is already pledged/hypothecated .Otherwise an affidavit by
the seller be obtained stating that he is the true owner of the assets and
no other entity has any charge or interest over these assests.
 Machinery has not changed hands more than once
 Certificate by banks approved chartered engineer should clearly cover
the vintage of the machinery, minimum residual life ,the present market
 value and the degree of obsolcence to which the machinery is likely to
be exposed
 In case it is found that the useful life of the machines are less than our
term loan period, the company should bring in additional funds to the
cost.

Electric installations (Rs 25.54) :The total cost of electrical installations is inclusive of the
cost oftransformer , cables switch gears, switch board and MSEB charges.Finance of 17.00
lacs is proposed against margin of 33.44%

Preliminary Expenses (Rs 5.00 lacs) : The project includes Rs 5.00 lacs for preliminary
expaenses during renovation ,charges/expenses like consultants fees ,Legal expenses
,Travelling an d other expenses.no finance has been proposed to meet these expenses.

Contingencies:( Rs 5.00 lacs) has been proposed for contingencies in the project cost.No
finance has been proposed under this head .Variation ,If any will be borne by the
promoters .An undertaking to this effect will be obtained before disbursl of term loan ,which
is stipulated as one of the convenants.

Margin for working capital (Rs 49.00 lacs)

The margin requirement of FBWC as per Nayak Committee recommendations works out as
under:

Rs in lacs

2010-2011
 1.total gross sales projected for the year 975.00
2. total working capital required(25% of 1) 243.75
3. borrowers Margin minimum (5% of 1 or 20% of 2) 48.75

The unit has to bring Rs 48.75 lacs as a margin for ing capital to meet the working capital
requirements for the first full year of operation i:e.2010-2011 , which is considered reasonable
.the unit will be able to meet this margin from unsecured loans proposed to be raised .Hence
no finance is proposed under this head.

f)Project implementation schedule: The company has entered into an agreement to purchase
the land and factory building.The details of project implementation schedule given by the
company are as under:

Description Expected date of completion

Land and factory building Entered in to sale agreement on
15.02.2009
Sale deed 15.02.2010
Renovation work March 2010
Electrical installations April 2010
Placement of orders for machinery Already placed
Receipt and installation of machinery April 2010
Trial production. Second week of may 2010
Commencement of commercial production
As the factory building and part of machines are available, the period considered for
commencement of commercial operation though short ,is workable

g) Production Factors:
 h) Production Capacity:
i) The capacity utilization will be mainly based on the efficiency factors
considering the various plant capacitiesand the operation time taken for each
operation.the unit has proposed to manufacture various precision components
and other accessories of machines such as Collets Floatinr Reamer
Holders,milling stub Arbors and other machine Tool Accessories.These
components are manufactured as per orders from OEMs and other
customers .Various components are used for different purposes installed
capacity is 5000 component of p.a.Projected sales are based on assumption of
Rs 3000 components p.a @ average selling price of Rs 3000 per component
thereafter 5% growth in sales projected on conservative basis.commercial
production is expected to start from June 2010.

ii)RAW MATERIALS
the basic raw materials required is ALLOY steel which is readily available in
ample quantity in open market at subdued rates .Their Pune,Mumbai based
major suppliers are Kalyani Steels Ltd and Sunflag Iron and Steel company
Ltd.

iii)Electricity :the unit will require power supply of 190 KW as total load for
proposed plant and machinery .the unit has alredy applied to MSEDCL for
required power connection.

iv)Water : the total water consumption is estimated at 1500 litres per day which is
available through private bore well as well as from MIDC Ahmednagar.

iv) Marketing : Promoters are in the business of manufacturing of engineering

precision products since 25 years .At present the directors are running 4 associate
concerns successfully and on profitable lines .They maintain good rapport with
various industrial houses .The major clients of associate concern of the company
are Mahindra & Mahindra Ltd ,Tta Motors Ltd and Alfa laval Ltd located at
pune ,Nasik , and Mumbai. Therefore the promoters do not envisage any difficulty
in Marketing of their products.

1) Commercial Viability
(Rs in lacs)
 As on 31st 2011 2012 2013 2014 2015 2016 2017 2018
March
Reciepts 900.7 946.9 993.1 1039.3 1090.1 1145.6 1201.0 1261.09
8 7 7 6 7 0 4 *
Net profit 53.94 63.34 72.75 92.81 108.76 137.92 143.83 153.97
Cash 132.4 130.7 130.6 142.55 151.56 173.78 189.61 212.14
accounts 4 1 2
Interest 66.83 62.91 56.43 49.14 41.04 30.92 18.77 6.35
TOTAL 199.2 193.6 187.0 191.69 192.60 204.69 208.37 218.49
6 2 5
TL 10.00 48.00 48.00 60.00 60.00 84.00 84.00 106.00
Repayment
s
Interest 66.83 62.91 56.43 49.14 41.04 30.92 18.77 6.35
TOTAL 76.83 110.9 104.8 109.14 101.04 114.92 102.77 112.35
1 3
Net DSCR 13.24 2.72 2.72 2.38 2.53 2.07 2.26 2.00
Gross 2.59 1.75 1.79 1.76 1.91 1.78 2.03 1.94
DSCR
Average 3.74
Net DSCR

Average 1.94
Gross
DSCR

Comments on DSCR (in brief0 :Average Gross DSCR at 1.94 is within the acceptable level
and implies availability of sufficient of cash margin for meeting repayment obligations.

J) Security Margin:

Particulars 2010 2011 2012 2013 2014 2015 2016 2017 2018
(Year >)
WDV of 850.0 772.5 706.1 649.2 600.5 558.7 522.8 527.0 608.9
fixed assets 0 0 3 6 1 2 6 9 2
Agg .TL 500.0 490.0 442.0 394.0 334.0 274.0 190.0 106.0 -
outstanding 0 0 0 0 0 0 0 0
% of Margin 41% 37% 37% 39% 445 5!% 64% 80% 100%
Avg 54.78
Security %
Margin
Comments on Security margin ,in brief :The average security margin available during the
currency of banks loan will be 54.78% , which may be treated as acceptable.

Break even and sensitivity analysis and whether acceptable;

Year 2011 2012 2013 2014 2015 2016 2017 2018

Sales 900.78 946.97 993.17 1039.36 1090.17 1145.60 1201.94 1261.09
Variable 568.16 615.89 654.64 683.16 720.20 752.25 793.42 833.92
costs
Fixed 248.34 236.38 225.07 213.54 202.76 194.92 198.77 204.60
costs
BE level 672.55 676.10 660.10 623.10 597.46 567.67 585.68 604.01
of sales
% to 75% 71% 66% 60% 55% 50% 49% 48%
sales
Cash 459.96 483.39 490.55 477.95 471.35 463.25 450.81 432.28
BE of
sales
% to 51% 51% 49% 46% 43% 40% 38% 34%
sales

When sales go down by 10 % and variable costs go down by 10 %

Year 2011 2012 2013 2014 2015 2016 2017 2018

Sales 810.701 852.27 893.85 935.42 981.15 1031.04 1080.9 1134.98
3
Variabl 511.35 554.30 589.18 614.85 648.18 677.02 714.08 750.53
e costs
Fixed 248.34 236.38 225.07 213.54 202.76 194.92 198.77 204.60
costs
BE 627.55 676.10 660.33 623.10 597.46 567.67 585.68 604.01
level of
sales
% to 83% 79% 74% 67% 61% 55% 54% 53%
sales

When RM cost goes up by 10% and 65 passed on to the customers:

 Year 2011 2012 2013 2014 2015 2016 2017 2018
Sales 954.8 1003.79 1052.76 1101.72 1155.58 1214.34 1273.10 1336.75
2
Variable 619.7 672.06 714.30 745.40 785.84 820.46 865.22 909.39
cost 1
Fixed 248.3 236.68 225.07 213.54 202.76 194.92 198.77 204.60
cost 4
BE level 707.5 715.26 700.08 660.25 633.70 600.93 620.42 639.97
of sales 9
5 to sales 74% 71% 66% 60% 55% 49% 49% 48%

When variable costs go up by 10% and 6% passes on to customers.

Year 2011 2012 2013 2014 2015 2016 2017 2018

Sales 903.94 950.22 996.65 1043.01 1094.00 1149.81 1205.56 1265.84
Variable 573.43 621.31 660.45 689.24 726.57 759.26 800.96 841.83
costs
Fixed 248.34 236.38 225.07 213.54 202.76 194.92 198.77 204.60
costs
BE level 679.22 682.89 667.22 629.58 603.72 573.85 529.27 610.81
of sales
% to 75% 72% 67% 60% 55% 50% 49% 48%
sales
The sensitivity analysis indicates that , there is sufficient cushion to meet adverse variations of
10% in prices ,raw material costs and variable caost.

1)CRA & Pricing

Facility CRA Pricing

Cash Credit SB-6 1.50% over SBAR, effective
rate 13.25% p.a
Term loan SB-6 2.00% over SBAR, effective
rate 13.75 p.a

m) Repayment schedule:
The MTL of Rs 500.00 lacs will be repaid in 84 months , excluding the moratorium of 12
months .Interest will be recovered as and when applied.Repayment is as under.

Period No of installments Installments Total

monthly
Feb 2010 to Jan 2011 12 Moratorium
Feb 2011 to Mar 2 5.00 10.00
2011
Apr 2011 to Mar 12 4.00 48.00
2012
Apr 2012 to 12 5.00 48.00
Mar2013
Apr 2013 to Mar 12 5.00 60.00
2014
Apr 2014 to Mar 12 7.00 60.00
2015
Apr 2015 to Mar 12 7.00 84.00
2016
Apr 2016 to Mar 12 10.60 84.00
2017
Apr 2017 to Mar 10 106.00
2018
Apr 2018 to Mar 96 500.00
2019

n) Compliance of the project with environmental /social / statutory requirements:

The units possesses the following licenses required for the activity.

Sr no Particulars Date
1 Certificate of incorporation 19.05.2009
2 SSI registration To be obtained
3 PAN AANCS 1109G
4 TIN allotment 28.07.2009
5 MISEDCL power supply Applied on 13.01.2010
letter
o) Environment and Sustainbility implications:The company has applied for consent from
Maharashtra Pollution Control Board .The company shall obtain certificate of consent from
MPCB, before commencement of production .Suitable covenant is stipulated in this regard.

p) Overall viability and acceptability of the proposal:

The proposal is considered a fair banking risk and is recommended on the basis of following:

 The prospects for the project are considered favourable

 The proposed loan exposure is secured by 25.07% of colletaral security
 The projected financials/performance is conservatively worked out and resultants
AKFIs are satisfactory
 CRA of the unit is SB-6, based on projected balance sheet of 2010-2011
 The projected D/E & DSCR of the project are acceptable.
 Promoters are in the business of manufacturing of engineering products since 25
years.They maintain good rapport with various industrial houses.The associate
Concerns of the company are banking with us and their conduct of account is
satisfactory.

ASSESSMENT OF WC FACILITIES

Inventoty Projected Projected Projected

payments 2011 2012 2013
Raw material 30 30 30
SIP 15 15 15
FG 15 15 15
Receivable 90 19 90
S.Creditors 15 15 15

Comments
Raw Materials; The main RM required by the is alloy steel which is available locally
and from Pune Mumbai based suppliers .It is projected to maintain raw material stock
of 30 days.considering past volatility in prices of steel and varied nature of
components to be manufactured , the company proposes to purchase it in
bulkwhenever prices are favorable.
SIP:

FINISHED GOODS:

RECEIVABLES:

SUNDRY CREDITORS:

ASSESSED BANK FINANCE: