Customers Miscellaneous Approvals

(Miscellaneous Approvals LLMS ID: MA0000356502)

Chief General Manager (Circle)

General Manager (NETWORK)

Circle/ Branch/ Unit Name Part I

Circle/SBU: NBG Branch Name : CB TIRUPUR

Unit Name : NAVEEN COTTON MILLS Branch code: 4201

PVT LTD
a. Proposal for

* Financial : Interest rate concessions

* Non-Financial : Others

2. Other Approvals
Approval

Sr. No : 1

Competitive pricing of FBWC limits at 2.05 % above MCLR - 6 M, present effective

rate being 9.95% p.a. with monthly rests against applicable pricing of 5.40 % above
MCLR - 6 M i.e., 13.30 % p.a. for SB-8 rated borrower and existing pricing of 5.40 %
above MCLR - 6 M i.e., 13.30 % p.a. (For change in the existing pricing)

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
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b. Borrowing Unit's Profile
Name of NAVEEN COTTON MILLS PVT CIF No. : 80289391054
the Unit : LTD
Constitution : Private Ltd Co Group, if any : Naveen

Industry TEXTILES
Activity MFG. OF THREAD

Segment C&I

Chairman / MD / Promoter / CEO/ CFO

Official Designation Official Name

Chairman & MD Anandh Ramasamy

Banking WC TL
Arrangement MBA Sole Banking

Current IRAC Status:

IRAC Status as
19-10-2022
on
IRAC Status of: Standard IRAC Status of: Standard
2. Investments 1.Advances
Date of last
08-09-2021
review / renewal

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
2022 6.44 PM
Credit Rating: Borrower

Current Previous

CRA Based on CRA Non Trading Non Trading

31-03- 31-03- Model Simplified Regular
Balance Sheet
2020(Audite 2017(Audite
as on

Validated on 04-09-2021 07-08-2017 Current Previous

CRA Rating CRA -

(without any SB-8 SB-9
Rating
upgrade on
NA NA
account of
Overall
Navratana / 67.92 53.78
Score
Maharatna)

CRA Rating Financial

18.42 26.90
(after upgrade Score
on account of NA NA
Navratana / Minimum
19.00 23.00
Maharatna) Score

External Rating: Present

Date of Agency Long Short Valid Long Short Valid Up to
External Term Term Up to Term Term
Rating Rating Rating Rating Rating
Amount Amount

None

External Rating: Previous

Date of Agency Long Short Valid Up to Long Term Short Term
External Term Term Rating Rating
Rating Rating Rating Amount Amount

13-10- BRICKWO BBB- NA 12-01-2019 INR 32.18 INR 5.56

2017 RK Crore Crore
Rating Rationale :
BWR has essentially relied upon the audited financial results of FY 17 and
projections figures up to FY 19 and projections and publicly available information
and clarifications provided by the company.

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
2022 6.44 PM
The rating has factored extensive experience of the promoters in the textile Industry,
Increase in gross sales and long standing relationship with customers. However the
rating is constrained by increase in receivables and payables levels which results in
stressed liquidity position, stabilization of new product of new yarn product
introduced in the market and moderate Net worth.

FINANCIAL PERFORMANCE:

Total operating Income of the company has increased in the FY 17 to Rs.125.75 from
Rs.107.56 cr in FY 16. PAT of the Company has increased in FY 17 to Rs.1.30 cr.
Networth of the Company has increased in FY 17 to Rs.19.77 cr from Rs.18.54 cr in
FY 16.
Any negative events / triggers after Balance-sheet date and Borrower rating under
watch: No

c. Existing Credit Limits (Amount INR in Crore)

Existing Proposed

Facility ID/Name Curren SBI % Total Cons / SBI % Total Cons /

Facility Name by user cy MBA/ MBA/
Syndication Syndication

FB WC

F00003565001 - Cash Credit

INR 0.00 0 28.70 0.00 0 28.70
( Cash Credit )
F00003565002 - SLC-FBWC
INR 0.00 0 7.74 0.00 0 7.74
( SLC-FBWC )

Total FB-WC (a) 0.00 36.44 0.00 36.44

FB TL

F00003565005 - TL
INR 0.00 0 0.39 0.00 0 0.39
( TL )
F00003565011 - GECL-WCTL-2
INR 0.00 0 1.95 0.00 0 1.95
( GECL )
F00003565004 - TL
INR 0.00 0 14.49 0.00 0 14.49
( TL )
F00003565012 - TL
INR 2.04 0 0.00 2.04 0 0.00
( WindMill )

Total FB-TL (b) 2.04 16.83 2.04 16.83

Total FB (a) + (b) = (c) 2.04 53.27 2.04 53.27

NFB WC

F00003565003 - LC
INR 0.00 0 3.66 0.00 0 3.66
( LC )

Total NFB-WC (d) 0.00 3.66 0.00 3.66

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
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NFB Projects

None

Total NFB-Projects (e) 0.00 0.00 0.00 0.00

Derivatives (after applying CCF)

None

Total Derivatives (f) 0.00 0.00 0.00 0.00

Total NFB (d) + (e) + (f) = (g) 0.00 3.66 0.00 3.66

Total Indebtedness (c) + (g) = (h) 2.04 56.93 2.04 56.93

Investments (i)

None

Total Investments (i) 0.00 0.00

Leasing (j)

None

Total Leasing (j) 0.00 0.00 0.00 0.00

Total Exposure (h) + (i) + (j) = (k) 2.04 56.93 2.04 56.93

Sub limit
Existing Proposed

Facility ID/Name Sublimit name Curren SBI % Total Cons SBI % Total Cons
Facility Name by user cy / MBA/ / MBA/
Syndication Syndication

None

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
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d. Performance and Financial Indicators Part II
A. Company as a whole Amount INR in Crore

2019-20 2020-21 2021-22 2022-23

Audited Estimated Audited Estimated Estimated Projected
Particulars 01-04- 01-04- 01-04- 01-04- 01-04- 01-04-
0 1 2 3 4 5
2019/31-03- 2019/31-03- 2020/31-03- 2020/31-03- 2021/31-03- 2022/31-03-
2020 2020 2021 2021 2022 2023

107.32 0.00 96.92 98.52 109.92 115.65

Gross Sales (Value)

Net Sales (Value) 107.32 0.00 96.92 98.52 109.92 115.65

Subsidy in Sales 0.00 0.00 0.00 0.00 0.00 0.00

Exports (value)

Net Sales
(Quantity) in

Exports (Quantity)
in

Capacity Utilization
80.14 0.00 66.38 69.64 73.58 78.59
Raw Materials

Power and Fuel 5.27 5.18 5.15 4.30 2.69

Direct Labour 6.07 6.80 6.10 7.18 7.72

2019-20 2020-21 2021-22 2022-23

Audited
0 Estimated
1 Audited
2 Estimated
3 Estimated
4 Projected
5
Particulars 01-04- 01-04- 01-04- 01-04- 01-04- 01-04-
2019/31- 2019/31- 2020/31- 2020/31- 2021/31- 2022/31-
03-2020 03-2020 03-2021 03-2021 03-2022 03-2023

SG & A Costs 1.75 2.09 2.55 3.02 3.47

Interest 3.72 0.00 3.42 3.64 4.14 4.29

Operating
3.22 0.00 5.06 5.36 5.24 5.95
Profit(OP) After

PBT 3.23 0.00 5.26 5.48 5.44 6.15

PAT 2.31 0.00 3.44 4.38 4.24 4.31

Cash Accruals 4.04 0.00 4.82 6.18 7.09 8.46

EBIDTA 8.68 0.00 10.06 10.92 12.43 14.59

EBIDTA Margin 8.09 0.00 10.38 11.08 11.31 12.62

TOL / Adj.TNW 2.17 0.00 2.03 1.89 2.15 1.82

Current Ratio 1.58 0.00 1.80 1.92 1.66 1.66

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
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If the latest Audited B/S is not available, explanation as to why they are not
available, to be given.

Latest Audited B/S available.

d1. Income Analysis / Value of account

Estimates Actuals Estimates
From
31-03-2022 31-03-2021 31-03-2023
WC Int

TL Int 0.04 0.04 0.25

LC

BG

Bills

Forex
Loan processing /
0.27 0.27 0.27
upfront fee
Commitment Charge
Income from others Viz
CMP, Cross-Selling etc
For other verticals in the
bank
For Non Banking
Subsidiaries
Total earnings from the
account for
SBG(excluding banking
subsidiaries)

Comments(Interest Income):

Comments(Other Income):

e. Conduct of Account

e1. Position With our Bank: None

CIF No.: 80289391054

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
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e2. Position With Other Bank:

Applicable: Yes
(Amount INR in Crore)

Facility Id, Facility Currency Existing DP Outstand Irregul Irr.

Name, Name by User limits ing as on arity, Since(If
31-08- if any Irregular)
2021

F00003565003 - LC INR 2.00 2.00 2.00

( LC )
Remarks on the irregularity, if any:

F00003565001 - Cash INR 14.00 14.00 13.42 0.00

Credit
( Cash Credit )
Remarks on the irregularity, if any:

F00003565012 - TL INR 14.40 14.40 14.00

( WindMill )
Remarks on the irregularity, if any:

F00003565002 - SLC- INR 15.00 15.00 13.98 0.00

FBWC
( SLC-FBWC )
Remarks on the irregularity, if any:

F00003565004 - TL INR 5.10 5.10 3.95

( TL )
Remarks on the irregularity, if any:

F00003565011 - INR 6.70 6.70 6.70

GECL-WCTL-2
( GECL )
Remarks on the irregularity, if any:

f. Credit Audit / RFIA criticaL observations

1) Sworn, notarised affidavits of Assets & Liabilities have not been obtained in
eligible cases (For all loans rated SB-9 and worse and existing loans under
rehabilitation.
Branch Reply: Latest Assets and liabilites kept on record.
2) Checklist on identification and physical verification of the properties has not been
prepared on annexure - F and kept on record (Format revised since 12.12.2018).
Branch Reply: Annexure F kept on record.
3) Original Search Fee Receipt is not enclosed with the TIR.

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
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Branch Reply: Original Search Fee receipt enclosed with TIR.
4) Letter of Engagement to advocate has not been issued in prescribed format either
manually or through LLMS (Applicable since 26.03.2019).
Branch Reply: Letter of engagement from advocate obtained.
5) Following clauses are not incorporated in arrangement letter: a.The Borrower
shall always be responsible to ensure that the insurance policy in respect of the
hypothecated assets remains valid till all the dues of the Bank are repaid and to
keep such Insurance Policy renewed each year. b. The Bank shall not be liable for
any consequence arising from non-renewal of insurance in any year even if the Bank
has in any previous year renewed the Insurance of the hypothecated assets by
debiting the Borrowers account for failure of the Borrower to renew such Insurance
Policy. (Applicable since 31.07.2019).
Branch Reply: New arrangement letter with the clauses obtained and kept on record
6) An undertaking / declaration from the mortgagor/Borrower that 'no dues to the IT
department, alongwith a copy of application for issue of NOC, duly acknowledged by
the IT authorities' not obtained. (In respect of loans of Rs.1.00 cr and above, other
than P-Segment loans).
Branch Reply: Latest IT report for FY 21-22 obtained and kept on record
7) Confirmation letter is incomplete.
Branch Reply: Complete conformation letter obtained
8) Memorandum of Deposit of Title Deeds (SME-5/7) is not on record.
Branch Reply: MOD of Title Deeds kept on record
9) Confirmation letter confirming the deposit of the title deeds has not been obtained
on a date subsequent to the deposit of title deeds.
Branch Reply: Confirmation letter confirming deposit of title deeds kept on record.
10) Memorandum of Deposit of Title Deeds (SME 5/7) is not signed by two officials of
the Branch (who had signed the EM Recital).
Branch Reply: MOD of Title Deeds signed by 2 officials kept on record.
11) Supplementary TIR is not obtained after the receipt of the original document.
(Applicable only when the title deeds are created/ received after disbursement of
loan).
Branch Reply: Supplementary TIR obtained.

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
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g(i). Present Proposal Part III
* Financial : Interest rate concessions

* Non-Financial : Others

2. Other Approvals
Approval

Sr. No : 1

Competitive pricing of FBWC limits at 2.05 % above MCLR - 6 M, present effective

rate being 9.95% p.a. with monthly rests against applicable pricing of 5.40 % above
MCLR - 6 M i.e., 13.30 % p.a. for SB-8 rated borrower and existing pricing of 5.40 %
above MCLR - 6 M i.e., 13.30 % p.a. (For change in the existing pricing)

g(ii). Present Proposal other than above

h. Justification

1. Industry: Textile
2. Internal Rating: SB-8 as per ABS as on 04.09.2021
3. Renewal / Sanction Date: 08.09.2021
5. Activity: Manufacturing of thread
6. Financial Arrangement: Private Limited Co
7. IRAC Status: Standard
8. Turnover: Rs.150 Cr/yr.
9. Brief Background & Conduct of the Account:
M/s. Naveen Cotton Mill Private Limited [NCMPL] was incorporated in 2005 by Shri.
Gandhimathi Anandh Promoter, one of the reputed export business houses in
Tirupur.
NCMPL is the leading producers of Fancy and Melange Yarns at the plant is located

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
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at Pungampalli Village, Sathyamangalam Taluk, Erode Dist. The registered office of
the company is located at No. 8/1456, RS Puram, Ist Street, Near Pandiyan Nagar
Bus Stop, P.N. Road, Tirupur
Company has an installed capacity of 19,680 spindles, producing 3000 tons of Yarn
per annum. NCMPL produces a wide range of Melange and Fancy Yarns ranging
from Ne 16 to Ne 60 in ring-spun Yarns. The company also produces value added
yarns like Organic GOTS, OCS, BCI & OEKOTE certified yarns. Company also has
got dedicated feeder line from Tamil Nadu Electricity Board and unit continuously
running 24 hours without any power cuts and achieved projected capacity
utilization.
NCMPL has availed term loan limits with State Bank of India. The Company's limits
with our bank were sanctioned under SBI Solar Term Loan by RCCC on 08.09.2021
which is valid for 8 years.

BUSINESS RELATIONSHIP WITH OUR BANK

a) Credit Facilities:
(Amount in INR_ Crores)
Sr. Facility Limit Outstandin Average Interest Fee income
No. g Utilisation income * *
(past 12
months)
i. Solar Term 2.10 2.04 0.06 0.12 0.03
Loan
* Previous Year in case of Existing Unit, Annual estimation for new connection

Bankwise Outstanding as on 18.10.22 (Rs in Crores)

S.N Faciliti Federal On ICICI On SBI On Toal On

es Bank 18.10.2 Bank 18.10.2 18.10.2 18.10.2
2 2 2 2
Sanctio Outsta Sanctio Outsta Sanctio Outsta Sanctio Outsta
ned nding ned nding ned nding ned nding
1 WCTL 3.45 1.95 0.00 0.00 0.00 0.00 3.45 1.95
2 Term 0.60 0.39 0.00 0.00 0.00 0.00 0.60 0.39
Loan
3 ECGL 2.90 2.90 6.70 4.84 0.00 0.00 9.60 7.74
4 Term 7.29 7.29 7.20 7.20 0.00 0.00 14.49 14.49
Loan -
Solar

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
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5 Working 14.00 13.81 15.00 14.89 0.00 0.00 29.00 28.70
Capital
- CC
6 Term 0.00 0.00 0.00 0.00 2.10 2.04 2.10 2.04
Loan -
Windmil
l
7 Working 5.00 0.49 2.00 1.13 2.10 2.04 9.10 3.66
Capital
- LC
Total 33.24 26.83 30.90 28.06 4.20 4.14 68.34 59.03

10. Value of Account

(Previous Year in case of Existing Unit, Annual estimation for new connection)
Interest Income
(Amount in INR_ Crores)
Facility Limit Interest Interest Cost of Net Interest Net Interest
(A) (B) Rate Rate % Funds Income income
%(C) after % (E) before after
concession concession concession
(D) (F) =B*(C-E) (G) =B*(D-E)
/100 / 100
TL 2.10 13.3 9.95 6.7 0.14 0.07

Other Income (existing):

Fee / Charges Card Annualized Concession (K) Annualized
Details (H) Rate Income at card Income after
(I) rate (J) passing
concession (L)
Processing 1.30% 0.03 0% 0.03
Charges
Facility Fee -- -- -- --
BG/LC -- -- -- --
Commission
Documentation, -- -- -- --
EM
Charges &
Interchangeabili
ty Fee
Interest rate 13.3% 0.13 9.95% 0.10
concession

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
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TOTAL 0.16 0.13

Annualized income Annualized income after Total Concession % =(M-

without concession passing concession N)/M*100
(Net Interest + other (interest + other income)
income) N = Total of G & L
M = Total of F & J
0.30 0.20 33.33%

11. Proposed concessions in Interest Related Charges:

i. Concessions details:
Charges Card Rate Calculated Proposed Expected
details Income before Concessions Income after
passing (%) passing
concession concession
Interest Related 0.10% 0.14 25% 0.07
Charges

TOTAL 0.14 0.07

ii. a. RAROC before concessions: 22.7% b. RAROC after
concessions: 5.7%

12. Remarks & Recommendations for the proposed concession:

There are only a few Melange Yarn players in the Tirupur market such as
Sulochana Cotton Mills, Amarjothi Spinning Mills and Naveen Cotton Mills Pvt Ltd
(NCMPL). Due to consistent heavy orders domestically and internationally, company
has invested in latest art of technology plant and machineries. Their unit is one
among the leading manufacturers of Melange and Fancy yarn varieties in Tirupur.
1. Naveen Cotton Mill Private Limited had been banking with our Bank since
2005 with exposure of Rs 51.41 till 2018 but the same was taken over by Kotak
Mahindra Bank which offered better pricing
2. Presently the customer is enjoying credit facilities with Federal Bank, ICICI
Bank & SBI with exposure of 68.34 Cr. and SBI has only 2.1 Cr. exposure in total.
3. Company is in the same line of activity since 2005 clocking a turnover of Rs.
150 Crores /year.
4. Average gross DSCR is estimated at 1.70.
5. The unit has been timely servicing the borrowing obligations and the conduct

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
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of the company's accounts is uniformly satisfactory with all the member Banks.
6. The unit is unhappy with the service rendered by Federal Bank but is hesitant
to move to SBI as the interest rates at both Federal Bank and ICICI are sub-10.
7. Promoters of the Company are educated, experienced and successful
entrepreneurs having a rich experience of two decades.
8. The proposed concessions will enable the branch in garnering more business
from the unit.
9. In light of the above, we herewith recommend for concession of 335 bps in
applicable interest rate on the term loan from 13.30% to 9.95%, which falls within
the discretionary powers of GM of the circle as per the Circular No. NBG/SMEBU-
INT RATE M/1/2022 -23 dated 01/04/2022.

i. Recommendation
Designation Name Signature Mobile Place Date

Appraised by:
Manager Manipal Singh 9779901880 Tirupur 20-10-2022

Assessed by:
Chief Manager Arumugam N 8838030110

Recommended by:

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Miscellaneous Approval Proposal No. MA0000356502 Generated by Manipal Singh (7674228), CB TIRUPUR (4201) On 25-10-
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