Page 1

CREDIT APPROVAL MEMO (CAM) Review Customer Name Address Web Page Borrower Grade External Rating

Initial CAM No. Aryan enterprise prop:- Krupal CAM Date tribhovam Patel 33,raghukul bungalows, opp gulag Revision Date tower sola road Thaltej zoneAhmedabad Credit Labeling Asset Classification Not applicable as not rated

CREDIT FACILITY EXPOSURE

Gujarat / march/ 2012-13 28.06.2013 30.06.2014 Normal Standard

(INR M)

Fac. No and Description

Proposed

+ Inc / (Dec)

Overdraft (backed by 100% Fixed Deposit)

10

+10

Letter of Credit (Import) backed by Fixed Deposit.

150

+150

Total exposure

160

+160

Recommended by

----------------------Rajash shah

Approvals

-----------------------

-----------------------

-----------------------

Mahesh Taparia

Shital Khanna

S Anantharaman


SPECIFIC COVENANTS FACILITY

TERMS AND CONDITIONS Interest/

Primary

Commission

Security

Secondary Collateral

Overdraft (backed by 100% Fixed At prevailing Fixed Deposit Deposit) rates Letter of Credit (Import) backed by At Prevailing 100% Fixed Fixed Deposit Margin Rate Deposit

-

Tenor

Margins

On Demand

5%

Up to 180 days.

-

Interest on FD to be to be accumulated. Recommended by

----------------------Rajash shah

Approvals

-----------------------

-----------------------

-----------------------

Mahesh Taparia

Shital Khanna

S Anantharaman


SPECIFIC COVENANTS Interest on FD to be to be accumulated

2. GENERAL COVENANTS Insurance

-

NA

Stock inspections-

NA

Plant visit

NA

-

Call memo-

As per Product Program

Stock Statements Financial end of

-

-

3. DOCUMENTATION As per Standard Documentation

NA Quarterly – Requested to be waived / Annual – Within 180 days from FY. Booklet / copy of Annual report


CREDIT ASSESSMENT MEMORANDUM Aryan enterprise

Company Background:• Aryan enterprise was established on 15th april 2008 and commenced business operation in FY09.

• The firm is promoted by Mrs. Krupal Appu Patel is engaged in trading of edible & non edible oils, oil seeds, oil cakes, general grain merchant & fats product. . Presently the firm mainly deals into trading of crude palm oil / refined oils. • The firm sources crude palm oil largely through imports from South East Asian countries and sells it to large edible/non edible oil refining companies in India mainly G-One Agro Products Ltd , sister concern. • Aryan enterprise is having balances of debtors and creditors are subject to confirmation by parties concern.

Management:-

Share Capital:Financial:-

Audit Qualifications if any with comments – Nil

Changes in accounting policy and its quantification – Nil

(INR M)

2009-10

Net Sales

FY 2010-11 FY 2011-12 FY 2012-13 (Prov)

1366.86

OPBDIT

674.02

0.00

11.00

1866.23 944.15

2067.46 0.00

OPBDIT %

0.00

0.016

0.059

0.00

Other Income (Net)

215.7078

16.4345

133.924

141.13

Finance Cost

0

0

0

0

PBT

26.36

26.36

31.306

79.233

PAT

0.00

0.00

0.00

0.00

Interest Cover

22.317

120.37

198.0422

178.688

Cash Accrual

53.838

402.654

285.077

83.871


Net sales:The company during FY 2011-12, achieved sales of INR 1866.23 M as against actual of INR 674.02 M as on 31.03.2011. Sharp growth in sales is attributed largely to operations of new palm fractionation unit for full year. The company has estimated sales against this company has achieved net sales of INR 2067.46 M as on 31.3.13 as per provisional balance-sheet Bulk sales are done to Vijay solvex, Godrej Industries, Aquagel. Retail sales are done thru retail depo. Bulk sales are like cash and carry. Company receives payment in advance. Aryan enterprise has estimated net sales of INR 11000 M for FY 2013-14. Interest Cover:Interest Cover was 120.37 as on 31.3.11 which was again reduced to 198.0 as on 31.3.12. The same was again increased to 178.688 as on 31.3.13 as per provisional balance-sheet. The increase in interest cover is due to reduction in interest cost and improvement of profitability. Capital Structure:-

(INR M) Tangible Net Worth

FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 (Prov)

60.33

72.79

126.88

194.02

-

-

-

-

Adjusted TNW

60.33

72.79

126.88

194.02

Long Term Debt

47.66

76.78

46.00

149.89

Short Term Debt

242.64

253.34

266.90

95.59

18.60

18.60

9.60

Investment, loans and advances to associates and subsidiaries

LT Debt repayable in one year (part of STD) Total Debt / TNW

4.81

4.53

2.47

1.27

TOL / TNW

7.03

5.97

4.19

3.84

TOL / Adjus TNW

2.57

2.22

2.94

2.48

Leverage:- Leverage of company was 5.99 which was reduced to 4.19 as on 31.3.12. As per Provisional balance-sheet as on 31.3.13 was 3.84. The reduction in leverage was due to increase in net worth and decrease in liability. Net worth:Net worth of company has increased from INR 72.79 lacs in FY 2010-11 to INR 126.88 lacs in FY 2011-12 which again increased to INR 194.02 lacs in FY 2012-13 as per provisional balance-sheet. CAPEX:-


Aryan is planning for capacity enhancement of palm oil fractionation capacity from the existing 400 TPD to 800 TPD by installing additional fractionation equipment. Aryan is planning for CAPEX of INR 45 M and project is funded by equity of INR 11.50 M and term loan of INR 33.50 M.

Non-Fund Based Facilities:Letters of Credit

(INR M)

Total Annual Purchases

2970

Total Purchases under LCs – (70% of A)

2080

Average Lead Time (in months) – B

2

Average Usance Period (in months) – C

4

Total Period (in months) – B + C = D

6

Estimated LC requirement (A/D)

1040

LC recommended

300

Justification of Limits

Activity being agro based, it relies on agricultural produce which in turn ultimately depends on good climatic conditions. Compare to demand of Oil seeds/crude oil in India, production is very less and oil industries have to rely on imported raw materials. Performance of the company during last few years has improved and in growth mode, the company needs more working capital funds. The company has managed needs of increased operations with the same level of FB limits. However, the company has requested for additional NFB WC limits. Crude Palm Oil is mainly imported from Malaysia & Indonesia. The company enjoy NFBWC limit for a specific purpose of direct imports of crude oil/oil deeds. This arrangement is cheaper than buying the same on a high seas sale basis from the traders. This will also help the company in saving at least 1 to 1.5% per year in the cost of


purchases. Aryan is having regular direct import of INR 600 lacs and high seas purchase of INR 6000 lacs in FY 2012-13.. payments and making payment from spot buying. However, lately they have started hedging payments. Aryan is doing Suppliers credit at L + 65-75 bps. Considering 100% FD backed transaction, we recommend for approval of INR 300 lacs limit

Overdraft – Backed by Fixed Deposit

Aryan has FDs of about INR 350 – 400 M with various banks (keeps varying). Aryan to meet short term cash flow mismatch in its day to day operations without going for breaking FD, has requested for overdraft limits against FDs. In view of same we request Sanction of FDOD limits of INR 10 M with 5% margin. Recommendation:-

• • •

Aryan has started its operation since 2001 and is a closely held company. Aryan is growing with steadily and conduct of account is satisfactory with their existing bankers. Aryan Promoters are having good market reputation and having rich experience in this business segment.

Rajash Shah Relationship Manager

Industry Scenario The financial performance of players in the Indian edible oil industry is expected to improve during 2012 because of expected lower production and increase in product prices. Prices of vegetable oils are expected to tend higher during FY2012 because of expected decline in FY2012 production, depletion in stocks, expected increase in world prices, and higher import costs. Proposals of established players may be considered on the strength of their financials. The production of edible oils in India is dependent on the production and availability of oilseeds, either domestic or imported. For oil year (OY) 2012 from November 2011 to October 2012, oilseeds’ oilseeds’ production target has been set at 33.6 million tonnes (mt), comprising kharif production of 22.1 mt, and rabi production of 11.5 mt. During Kharif 2011-12, for the country as a whole, the rainfall for the season (June-September) was 101% of LPA. Seasonal rainfall was 107%, 110%, 100% and 86% of their respective LPA over North-West India, Central India, South Peninsula and North-East (NE) India. The two major kharif crops are groundnut and soyabean. For kharif 2011-12, kharif area under groundnut declined 14% to 4.28 million hectares (mha) primarily because of lower acreage in Gujarat (14% decline to 1.43 mha).


High cotton prices caused a switch in acreage from groundnut to cotton. Acreage also declined because of delayed rainfall in the main growing states of Gujarat, Karnataka and AP. However, acreage under soyabean increased 6.1% to 10.2 mha because of higher plantings in MP. Favourable planting conditions helped extend the window for planting, contributing to higher kharif season soyabean acreage in MP, Maharashtra and Rajasthan. Lower acreage for groundnut was accompanied by lower yields resulting in kharif groundnut production declining 23.3% to 5.1 mt in OY2011. Lower acreage and yields also resulted in a 3.6% decline in soyabean output. As a result, India’s kharif oilseeds output declined 5.2% during OY2012 to 20.79 mt. In area-wise distribution, 68% area of the country received excess/normal rainfall. Although the rainfall deficit has narrowed in recent weeks, during June-July 2012, actual rainfall received across India was 19% below normal. Rainfall distribution is especially critical to promote crop growth. The situation is of particular concern for sugarcane, cotton, rice, groundnut, millet, sorghum, and pulse crops, as their major growing regions have received deficient rains. Poor rainfall in northern India could also adversely affect planting of rabi crops such as wheat, rapeseed and pulses in the fall, unless the region receives excellent rainfall during August-September 2012. The two major kharif crops are groundnut and soyabean. As of August 30, 2012, area under kharif oilseeds declined 4.4% to 16.72 mha primarily because of declines for groundnut and sesamum, partially offset by modest increase for soyabean. Acreage under groundnut declined 12.2% (yoy) to 3.7 mha primarily because of lower acreage in Gujarat. India was self-sufficient in edible oils during the 1950s. However, sustained growth in population, higher disposable incomes, stagnation in oilseeds production, and inability of domestic edible oil production to keep up with demand growth has led to increased imports of edible oil since the late-1990s. As a result, India’s self-sufficiency has declined to about 54% during 2007-11. At present, India is the world’s second largest importer of edible oils (after China) and demand-supply fluctuations from India have a major bearing on international edible oil prices. India is also the world’s second largest importer of soyabean oil (accounting for 13% of world imports), and the largest importer of palm oil, with India’s imports accounting for 19% of world palm oil imports. In recent years, edible oil imports have accounted for a rising share of India’s agricultural imports. During OY2011, imports declined 5.1% to 8.37 mt because of substantial decline in crude soyabean imports. Increased profitability in India’s crushing sector, caused by higher vegetable oil prices and renewed interest in soyabean meal exports, expanded supplies of domestically produced soyabean oil. India’s oil imports are expected to forecast to increase during OY2012 to around 9.1-9.4 mt, with the increase attributable to an expected 7.6% decline in oilseeds production, and 2% decline in domestic edible oils production. Imports are forecast to increase 7-8% during OY2013 to around 10 mt because of expected 3-4% decline in oilseeds production. Domestic oilseeds and edible oil prices are linked to international and domestic demand-supply conditions in oilseeds and edible oils. The global market for oilseeds and derived products is characterized by a high degree of geographic and product concentration. Soyabean have accounted for 56% of world oilseed output over the last decade (2003-12) and around 81% of soybean output is concentrated in three countries on the American Continent (US, Brazil, and Argentina). Similarly, palm oil (along with soybean oil) occupies a key role in global vegetable oil production cumulatively accounting for 60% of world vegetable oil production. Nearly 90% of the world palm oil output is accounted for by two countries in South-East Asia (Indonesia and Malaysia). Given the size of production and exports of these oils by the above countries, any weather anomalies, important shocks to their economies or radical policy decisions have had huge consequences on world markets and prices for oilseeds and oilseed products. On the demand side, vegetable oil consumption (and import) growth has been heavily concentrated in a few, import dependent countries (primarily China and India), which has again led to increased market instability as any unexpected developments in these countries strongly affect global market and prices.


Unlike oilseeds, the market for edible oils has been characterized by a tight supply and demand situation. Although vegetable oil production increased 5.2% in OY2010, growth slowed down to 4.7% in OY2011, and 4% in OY2012. Lower growth in export supplies from 2009-10 and reduced output of high oilyielding oilseeds coincided with revived growth in global demand for oils from both the food as well as the energy sector. While food use demand growth declined from 5% in OY2010 to 3.8% in OY2012, industrial demand growth was high at 6% in OY2012 (albeit lower than the 11.7% growth in OY2010). Early prospects for OY2013 point to substantial tightening in supply during OY2013, especially for soyabean. Recently planted US soyabean crop is reported to be in very poor conditions due to exceptionally hot and dry weather. US soyabean oilseeds output is forecast to decline 11.9% (or by 9.9 mt) during OY2013 to a nine-year low of 73.3 mt. The decline is mainly related to disappointing crops for much of south-eastern Europe, Ukraine, southern Russia, and Moldova. Since early July 2012, minimal rainfall and extended heat waves in the region have dominated and are causing severe stress to crops. The combination of these elements are likely to result in continued hike in soyabean and oilseeds/oil prices over the remainder of 2012.


Annexure I - Critical Regulatory Information

CREDIT & REGULATORY INFORMATION SHEET BORROWER NAME

Aryan enterprise

1

Constitution

Closely held Public Limited Company

2

PAN Number

3

RAM ID

NA

4

APR Code

New client

5

External Rating (if any)

Crisil INR 508.10 M Long Term Loan BB-/Stable (Reaffirmed) Short term rating CRISIL A4+ (Assigned) Rating for CARE under process and is expected to be BBB.

6

NBFC

No

7

Priority Sector Credit

No, Non PSL Others having MIS Code 100

8

MSME Classification

No

9

Permanent SSI Certificate

No

10

Weaker Section

No

11

KCC ( Kisan Credit Card) Scheme

No

12

Minority Community

No

13

Capital Market Exposure

No

14

Real Estate Exposure

No

15

Commodities Exposure

No

16

a) Gross Inv. In P & M

INR 117 M as on 31.03.2012

b) Gross Inv. in equipments NA 17

Group exposure

No

18

PSU

No

19

Backed by Government guarantee

No

20

Government Undertaking

No


21

Banking Method

Consortium Banking

Where HDFC Bank is outside banking arrangement

Outside Consortium

Names of other banks and STATE BANK OF INDIA credit facilities & limits with ICICI BANK them Limits (As on 30.4.2013):Fund Base :- INR 240 M NFB :- INR 557 M TL :- INR 112 M Conduct of account with Conduct of accounts with other banks

Dealing with HDFC Bank since: New Relationship Satisfactory

22

Project Finance

No

23

Infrastructure Finance

No

25

Takeover case

No

26

TUFS

No

27

RBI Defaulter's List / Caution list

No (date of RBI defaulter list June 2012 / date of caution list 08.02.2013 referred to)

28

Litigations pending / contemplated by Banks / Financiers

No

29

Interest of Directors / Senor No officers (Credit Approvers ) of the Bank

30

a) Adverse remark, if any No by Internal audit of the Bank /external audit of the Bank /RBI audit b) Qualifying notes on accounts, if any, by the Statutory Auditor of the borrower

No

c) Breach, if any, in No compliance with statutory prescriptions (from CS, CA,


CWA certification) 31

Average Annual Turnover or INR 4001 M (average over immediate past 3 years) Income INR 5398 M for FY 2011-12 Annual Turnover or Income for Last FY

32

a) RBI 5 digit Industry Code 15104 b) Industry

Oils & Fats

33

Industry Exposure %

0.52%/0.44% as on 31.03.2013

34

Is the borrower a director No (including the Chairman/ Managing Director) of other banks?

35

Is the partner / guarantor of No the borrowing firm a director of other banks

36

Is the “substantial” No shareholder / director / guarantor of the borrowing company a director of other banks

37

Is the borrower a relative of No HDFC Bank’s Chairman / Managing Director or other Directors;

38

Is the borrower a relative of No the Chairman/Managing Directors or other Directors of other banks

39

Is the partner / guarantor of No the borrowing firm a relative of the Chairman /Managing Directors or other Directors of HDFC Bank or other banks

40

Is the “substantial” No shareholder / director / guarantor of the borrowing company a relative of the Chairman/Managing Directors or other Directors


of HDFC Bank or other banks

ADDITONAL CIBIL INFORMATION A)

BORROWER SEGMENT INFORMATION NAME OF THE BORROWER

Aryan enterprise

1 REGISTERED OFFICE ADDRESS & CONTACT DETAILS Address Line 1

33,raghukul bungalows,

Address Line 2

, opp gulag tower

Address Line 3

tower sola road Thaltej zone

City/Town

Ahmedabad

District

Ahmedabad

State/Union Territory

Gujarat

Pincode

380014

Telephone number/s Telephone Area Code

079

Fax number/s

-

PAN No

B) Required at least one per borrower and can RELATIONSHIP SEGMENT INFORMATION ( Refers to any Person or be “n” times per Borrower Business entity having relationship with the borrower )

1 RELATED TYPE

2 RELATED ENTITY’S PAN NUMBER

3 RELATIONS

NA


4 BUSINESS ENTITY NAME (If related type is NA business entity both registered in or outside India)

5 INDIVIDUAL NAME PREFIX ( If related type is Individual both Indian or Foreign )

6 FULL NAME ( If related type is Individual both Indian or Foreign )

7 PERCENTAGE OF CONTROL. (Percentage of Shares owned by Borrower in related business entity or percentage of shares owned by related person/Business Entity in the borrower as the case may be)

8 ADDRESS & CONTACT DETAILS OF ALL RELATIONSHIPS Address Line 1 Address Line 2 Address Line 3 City/Town District State/Union Territory Pincode Country Telephone number/s Telephone Area Code

C)

GUARANTOR SEGMENT – (OPTIONAL)


1) GUARANTOR TYPE

NA

2) GUARANTOR PAN

NA

3) GUARANTOR NAME ( If related type is NA business entity both registered in or outside India)

4) INDIVIDUAL NAME PREFIX ( If related type is Individual both Indian or Foreign )

NA

5 FULL NAME ( If related type is Individual both NA Indian or Foreign )

6 ADDRESS & CONTACT DETAILS

NA

Address Line 1

NA

Address Line 2

NA

Address Line 3

NA

City/Town

NA

District

NA

State/Union Territory

NA

Pincode

NA

Country

NA

Telephone number/s

NA

Telephone Area Code

NA

Rajash Shah Relationship Manager

1234  
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