HIDDEN TEXT TO MARK THE BEGINNING OF THE TABLE OF CONTENTS
Credit Proposal
(Form DD)
Name of Unit :
TRANSFORMERS AND ELECTRICALS KERALA
LIMITED
Customer Id :
C00050409
Proposal No. :
P0005040905
Sanctioning Authority :
CCSC
Branch :
CB ERNAKULAM (4062)
Business Group :
COMMERCIAL CLIENTS GROUP
Proposal Date :
21-08-2019
Proposal For :
Sanction / Approval / Confirmation
Ratings :
CRA - Rating
ECR
IRAC
Previous
Current
SB-8
SB-9
BRICKWORK / BBB / 24-10-2018
Standard
BRICKWORK / BBB / 21-02-2020
Standard
INDEX
Contents
Abbreviation
Section A - Borrower Unit’s Profile and Details of Due Diligence
Section B - Proposal for Sanction / Approval / Confirmation
Section C - Performance and Financial Indicators
Section D - Loan Policy/Deviations/Compliance/Regulatory
Prescriptions
Section E - Summary of Critical Risk Factors / Mitigations
Section F - Assessment of Fund Based Limits
Section G - Assessment of Non Fund Based Limits
Section H - Capital commitment and Pricing
Section I - Security
Section J - Other Terms and Conditions
Section K - Justification and Recommendation
Annexure - RAROC
Annexure-2 - Details of Due Diligence
Annexure-5 - Details of Diversion of Funds to Related/Unrelated
Entities or Unrelated Activities
Page No.
1
2
23
35
67
70
91
95
100
108
117
120
131
136
140
Abbreviation
Abbreviation Name
Abbreviation Description
BHEL
BHARATH HEAVY ELECTRICALS LIMITED
BIFR
BOARD FOR INDUSTRIAL AND FINANCIAL
EE .
ELECTRICAL AND EQUIPMENTS
KSEB
LT & HT CIRCUIT
BREAKERS
MCB
MCCB
KERALA STATE ELECTRICITY BOARD
LOW TENSION & HIGH TENSION CIRCUIT BREAKERS
MINIATURE CIRCUIT BREAKER
MOULDED CASE CIRCUIT BREAKER
MEIL
MEGHA ENGINEERING INFRASTRUCTURE LIMITED
NABL
NATIONAL ACCREDITATION BOARD FOR TESTING AND
CALIBRATION LABORATORIES
NLCL
Neyveli Lignite Corporation Limited
NPCIL
NUCLEAR POWER CORPORATION OF INDIA LIMITED
NTPC
NATIONAL THERMAL POWER CORPORATION
PGCIL
POWER GRID CORPORATION OF INDIA LIMITED
PPA
POWER PURCHASE AGREEMENT
RCD
RESIDUAL CURRENT DEVICE
TELK
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
UDAY
UJWAL DISCOM ASSURANCE YOJANA
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Section A
Borrower Unit’s Profile and Details of Due Diligence
Circle / SBU : CCG
Branch : CB ERNAKULAM-4062
A1. Borrowing Unit's Profile
Name of the Unit : TRANSFORMERS AND CIF No. : 78760281576
ELECTRICALS KERALA LIMITED
Whether the Unit is a Central Government PSU: Yes
Date of incorporation : 09-12-1963
Date of commencement of operations :
09-12-1963
Segment : C&I
Constitution : PSU - Unlisted
Industry : ELECTRICAL EQUIPMENT
Activity : MFG. OF MACHINES FOR
ELECTRIC DISTRIBUTN
Group, if any : NA
Chairman / MD / Promoter / CEO/ CFO : Dilip Kumar Dubey-Nominated Director,
PRASAD BHASKARAN NAIR-MANAGING DIRECTOR/ Managing Director,
PRASHANT KUMAR MOHAPATRA-Nominated Director,SHIBU SUBAIDABEEVI
ABDULRASHEED-Nominated Director,MAMMEN JACOB-Nominated Director,
VIJAYAKUMARI PAROL-Nominated Director,RAMACHANDRAN K K-Nominated
Director,MOHANAN N C-CHAIRMAN
Main Contact Person : Ajith Kumar V , Senior
Manager Finance & Accounts
Unit : Existing Unit
Contact Number :
9946660212
If Existing Connection since when : 01-01-1964
Group dealing with us since :
Date of Last Renewal/ Review : 06-022019
If Reviewed valid upto : 29-06-2019
Existing Banking Arrangement:
WC : MBA
TL :
Whether Project Loan :
Proposed Banking Arrangement:
WC : MBA
TL :
Whether Project Loan :
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
IRAC Status as on: 31-07-2019
Advances : Standard
Investments : Not Applicable
Previous IRAC Status:
Advances : Standard
Investments : Not Applicable
IRAC status of the constituent with other banks, as per CRILC data search
Advances : Standard
Investments : Not Applicable
Whether a takeover case : No
Whether the account has been restructured / CDR Account :No
A2. Addresses & Locations of the Company/ Firm / Unit
Registered Office
AP VII/336 ANGAMALY SOUTH, City: ERNAKULAM, Dist:
ERNAKULAM, State: Kerala, India, Pin: 683573
AdministrativeOffice
AP VII/336 ANGAMALY SOUTH, City: ERNAKULAM, Dist:
ERNAKULAM, State: Kerala, India, Pin: 683573
Plant / Factory
AP VII/336 ANGAMALY SOUTH, City: ERNAKULAM, Dist:
ERNAKULAM, State: Kerala, India, Pin: 683573
Names & Addresses of Promoters / Directors
DIN
Sr.
No.
Name
Design
ation
DIN
PAN
1
Dilip Kumar
Dubey
Nomina 0813716 AAIPD50
ted
3
37A
Directo
r
2
Government of
Kerala
Corpor
ate
Promot
er
3
MAMMEN
JACOB
Nomina 0825581 AAHPM8
ted
2
753H
Directo
Confidential and Property of State Bank of India
NEWFORMAT
Passport
Others
(Aadhar
Full Address
C/O V N
ubey, 92,
Aakriti
Apartments,
Plot No 62 I P
Extension,
Patparganj,
Shakarpur
Delhi East
Delhi Delhi
India 110092
TC
12/174/2,
Malayil
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
DIN
Sr.
No.
Name
Design
ation
DIN
PAN
Passport
r
Others
(Aadhar
Full Address
Mulavana
Kunnukuzhy
Vanchiyoor
PO
Thiruvananth
apuram
Thiruvananth
apuram
Kerala India
695035
4
MOHANAN N C CHAIR 0764852 AOHPM7 J250014
MAN
3
100A
6
Aramam
BROADWAY
ROAD
Perumbavoor
Ernakulam
Kerala India
683542
5
NTPC LIMITED Corpor
ate
Promot
er
NTPC
BHAWAN,
SCOPE
COMPLEX, 7
INSTITUTION
AL AREA
,LODHI
ROAD NEW
DELHI NEW
DELHI Delhi
India 110003
6
PRASAD
BHASKARAN
NAIR
Managi 0742384 AAIPN30 G736164
ng
9
09L
3
Directo
r
MOHANAM
SANKARAMA
NGALAM
COMPOUND
MANAKKARA
SASTHAMKO
TTA Kerala
India 690521
7
PRASHANT
KUMAR
MOHAPATRA
Nomina 0780072 AHNPM5 P562697
ted
2
452E
2
Directo
r
GYAN
CHAND IV,
94-B
INDIRAPURA
Confidential and Property of State Bank of India
AAACN0
255D
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
DIN
Sr.
No.
Name
Design
ation
DIN
PAN
Passport
Others
(Aadhar
Full Address
M
GHAZIABAD
GHAZIABAD
Uttar Pradesh
India 201014
8
RAMACHANDR Nomina
AN K K
ted
Directo
r
GGXPK1
515F
Karyangadan
Thalavanikka
ra Ollur
Thalore
Thrissur
Kerala India
680306
9
SHIBU
SUBAIDABEEVI
ABDULRASHEE
D
Nomina 0776676 BKKPS8
ted
9
478P
Directo
r
VARUVILA
VEEDU
NILAKKAMU
KKU
KADAKKAVO
OR POST
TRIVANDRU
M
TRIVANDRU
M Kerala
India 695306
10
VIJAYAKUMARI Nomina 0724750 ABKPV9
PAROL
ted
4
197Q
Directo
r
28/1686D
VARATHA ST
JOSEPH
CHURCH
KADAVANTH
ARA P O
ERNAKULAM
ERNAKULAM
Kerala India
682020
A3. Whether names of borrower, promoters, directors, group concerns,
guarantors figure in defaulter/willful defaulters list:
1
CICs Defaulters List (Rupees 1 Crore and above)
dated 31-03-2019
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
2
CICs Defaulters List (Rupees 25 Lacs and above)
dated 31-03-2019
No
3
ECGC Caution List
No
4
Credit Information Companies - Credit History
Yes
5
Disqualified Directors
No
6
Banned List of Promoters(SEBI)
No
7
Loan Rejection List
dated 30-06-2018
No
8
IPROBE
No
9
Credit Information Companies - Suit Filed List
No
10
Non-Cooperative Borrowers List
Not Verified
11
Other Defaulter
No
In case of 'Yes' for any of the above
Sr.
No.
1
Name
NTPC LIMITED
Profile
Defaulters
Corporate
promoter
Yes
CIN/LLPIN/
DIN
PAN/ID
AAACN0255D
In case of 'Not Verified' for any of the above
Sr.
No.
1
Name
Government of Kerala
Profile
Defaulters
Corporate
promoter
CIN/LLPIN/
DIN
PAN/ID
Not
Verified
Whether defaulter is a Director : No
Any exposure (Rs. 5 crores and above) of our Bank in the Defaulter Company
(CRILC data search to be made of use of)
Position of Accounts of applicant company with other Banks
(CRILC data search to be made of use of)
Whether reported in ECGC caution list/ Specific approval list:
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Whether reported in Banned list of promoters of SEBI:
Whether Directors are disqualified as per MCA site:
No
No
Whether information on loan Rejections/ Slippage has been obtained (for proposal of
Rs. 50 crore & above):
Yes
Whether borrower/ associate/ guarantor/ promoter/ director/ is a non-cooperative
borrower?: Not Verified
Non cooperative list cannot be verified for State Government as the same is not
covered by defaulters list .
RBI -CRILC site is verified for TELK and NTPC and both are not classified as noncooperative borrower.
Whether reported in iProbe:
No
Whether reported in IBG defaulters list: No
If yes in any of the above, give details and reasons for accepting the current proposal
Deafulter list cannot be verified for State Government who is the part promoter ,as
the same is not covered by the defaulter list.
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
A4. Capital Structure (Shareholding Pattern)
Existing
Proposed
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
% of Holding
Description
Existing
Proposed
99.16
99.16
Pvt. Corporate Bodies
0.03
0.03
Indian Public
0.79
0.79
NRI / OCB
0.02
0.02
0.00
0.00
100.00
100.00
Promoters
Mutual Funds
Banks / Financial Institutions
Foreign Institutional Investors
Others
Total
100.00
iii) Promoters' shareholding (%)
Current
99.16 %
Last Year:
99.16 %
Comment on change in shareholding pattern, if any
There is no change in shareholding pattern.
Whether Promoters' shares pledged to our Bank/ other Banks/FIs: No
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
A5. Credit Rating
Credit Rating: Borrower
Current
CRA Based on
Balance Sheet
as on
Validated on
31/03/201 31/03/201
7
6
06-09-2018 31-10-2016
CRA Rating
(without any
upgrade on
account of
Navratana /
Maharatna)
Not
Applicable
CRA Rating
(after upgrade
on accounrt of
Navratana /
Maharatna)
Non Trading
Regular
CRA
Model
Previous
Not
Applicable
Not
Applicable
Not
Applicable
Facility Rating
Facility Id and Name
Current
Previous
CRA Rating
SB-9
SB-8
Overall
Score
53.52
57.94
Financial
Score
24.20
32.30
Minimu
m Score
23.00
23.00
Current
Type and
Subtype
Non Trading
Regular
Previous
Rating
Score
Rating
Score
F00050409004
BG
NFB - WC
FR-9
40.12
FR-9
40.96
F00050409003
LC
NFB - WC
FR-10
35.92
FR-9
38.16
F00050409001
Cash Credit
FB - WC
FR-3
85.62
FR-10
34.06
Details of information / update in case of any change after the date of
NIL.
Brief comments on reasons leading to improvement/decline in last available
internal rating
CRA based on ABS 2017-18 is SB-9.
CRA has come down by 1 notch from SB-8 to SB-9 mainly on account of decrease in
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Financial risk score. There has been decline in sales during FY 2017-18 compared to
FY 2016-17and the company has achieved only 57.16% of estimated sales and
22.51% of estimated PAT.
A6. Whether subjected to any dynamic review : No
(With triggers: Applicable in case of total exposure of Rs. 10 crores and above in all
Business Groups, including IBG. Without triggers: Half yearly - all borrowers
enjoying aggregate limits of Rs. 500 crores and above.)
ii) If no, reasons and justification there for
No trigger to undertake dynamic review
A7. External Rating
Present Rating
Date of
External
Rating
Agency
Long
Term
Rating
Short
Term
Rating
BBB
A3
21-11-2018 BRICKWORK
Valid upto
21-022020
Long
Term
Rating
Amount
Short
Term
Rating
Amount
12.02
220.40
Rating Rationale : The ratings reaffirmed at BBB.
External rating is based on the audited financials of the Company up to FY17,
provisional financials of FY18 and first 6 months of FY19, management provided
projected financials up to FY20, publicly available information, and
information/clarifications provided by the management.
The ratings draw strength from reputed promoters with strong credit profile,
professional and experienced management, track record of streamlined business
operations of over 5 decades, brand value of having been in technological
collaboration with M/s. Hitachi Limited, Japan, low gearing and moderate Current
Ratio, revenue visibility through moderate order book position as on 31.10.2018, and
steady demand scenario evolving through growing economy, increasing
industrialization, and potential future growth in per capita consumption of electricity
in India.
However, the ratings are constrained by small scale of operations characterized by
low net sales, customer concentration risk, geographical concentration of business
activities in south India, deterioration in ISCR for FY18 compared to FY17, further
deterioration in already stretched Cash Conversion Cycle in FY18, thin profitability
margins, and intense competition among numerous incumbents likely to keep
pressure on margin and market share.
Going forward, ability of the Company to sustainably improve the scale of operations
and profitability margins, prudently manage working capital requirements, diversify
product and customer base, and keep up with the technological up gradations in the
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
industry would be the key rating sensitivities.
Rating Outlook: Stable
Details of bank facilities rated
Long Term Rating
1. Cash Credit-Rs.12.02 crs with State Bank of India
Short Term Rating
1. Bill Discounting (LC)-Rs.44.00 crs with State Bank of India
2. Bank Guarantee
-Rs.80.40 crs with State Bank of India
3. Letter of Credit
-Rs.16.00 crs with State Bank of India
4. Cash Credit
-Rs.15.00 crs with South Indian Bank
5. Supply Bill Purchase -Rs.10.00 crs with South Indian Bank
(Non-LC)
6. UBD (LC)
-Rs.55.00 crs with South Indian Bank
Previous Rating
Date of
External
Rating
Agency
Long
Term
Rating
Short
Term
Rating
BBB
A3
25-07-2017 BRICKWORK
Valid upto
24-102018
Long
Term
Rating
Amount
Short
Term
Rating
Amount
12.02
120.21
Rating Rationale : BWR has principally relied upon the audited financial results upto
FY16, provisional financials of Fy17, publicly available information and
information/clarification provided by the TELK's management.
The rating continues to derive strengths from the professional and experienced
management, strong credit profile of Govt. of Kerala and NTPC Ltd, joint venture
with Govt. of Kerala and NTPC Ltd leads to strong support from the promoters and
comfortable gearing profile of TELK. However, the ratings are constrained by modest
scale of operations, streched working capital cycle and intense competition in the
industry.
Going forward, the ability of the Company to improve the scale of operations, to
sustain the gearing level achieved and to withstand in the competitive market will
remain key rating sensitivities.
Comments on changes in rating, if any
Rating of the company continues to remain at BBB.
The internal rating of the company is SB 9 based on ABS 2017-18. As per circular
no:CRO/RMD-IND/7/2018-19 dated 29.12.2018 the ECR mapped to an internal
rating of SB-9 is B. TELK's external rating is better than the internal rating.Hence no
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
action required.
Are there any negative events / triggers that happened after Balance-sheet
Date and borrower rating is under watch.: No
Comments
A8. Brief Background of the Company/Group & Management:
(To include competence/reputation including recent development / news related to
company / industry and its impact on the company as well as involvement in legal
disputes, strictures passed against them by Government agencies):
Transformers and Electricals Kerala limited (TELK) was incorporated in 1963 as a
Government of Kerala (GoK) undertaking. Initially TELK was promoted by GoK and
Kerala State Industrial Development Corporation Limited(KSIDC) in collaboration
with Hitachi Limited of Japan. TELK gave India, its first 400kV Class Transformer,
First 315MVA Auto Transformer and Generator Transformer for India's first 500MW
Thermal Unit.
The Company is an ISO certified Company since 1995. TELK is currently an
approved high quality supplier to all power utilities in India and many prestigious
utilities abroad.
TELK started its commercial production in 1966 and was working satisfactorily till
1981-82.The fourth stage of expansion for manufacturing Gas Circuit Breakers led
to cost overrun. This coupled with a demand recession and a few bad years of
production due to power cut, resulted in continuous losses to the Company thus
eroding networth completely.The Company was referred to BIFR during 1995.
After several failed attempts on revival of the unit, during 2006, they had made
negotiations with NTPC for a joint venture for the revival of the unit. Since 2007,
TELK is a joint venture between GoK and NTPC Ltd, with NTPC having 44.60%
shareholding. As per the joint Venture Agreement, Board of Directors of the
Company will have four nominees from NTPC and four nominees from Government
of Kerala .The Chairman of the company is a nominee of Government of Kerala
while Managing Director is a nominee of NTPC Ltd.
The company successfully implemented the rehabilitation package of BIFR. As on
31.03.2011 it could wipe off all accumulated losses.It declared a dividend also in FY
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
11. At the request of the Company, BIFR issued orders for allowing the company to
come out of the purview of BIFR as its net worth turned positive.
Till 2014, company was making profits .However, from 2015 onwards it was
reporting losses due to the continued impact of lower demand for transformers
compared to supply in the market and resultant impact on selling price.The profit
margin of the company has substantially dropped due to the above issues faced by
Power sector.
From 2016-17 onwards the market situation has changed as the demand for
transformers increased. During the FY 2016-17,the company has reported a profit
of Rs.4.89 crs and Rs.2.64 crs during FY 2017-18.
The renewal of limits was done on 31.10.2018. As the company could not submit
the audited financials on time, continuation of the limits was sanctioned for six
months from 01.01.2019 by CCSC vide its meeting dated 06.02.2019.
The company presently enjoys working capital facilities under MBA from us and
South Indian Bank, with a total exposure of Rs.123.42 crs.The company is rated
BBB by Brickwork Ratings which is valid till 21.02.2020 .The internal rating of the
company based on ABS as on 31.03.2018 is SB-9 (pending for validation).
A9. Corporate Governance Standards
(family managed/professionally managed etc., compliance with listing agreement):
TELK is a joint venture between Government of Kerala and NTPC, with NTPC
having 44.60% shareholding since 2007.As per the Business Collaboration &
Shareholder's Agreement , the Board of Director's of the Company has been
reconstituted with four nominees of Government of Kerala and four nominees of
NTPC Ltd.The Chairman of the board shall be the nominee of the Government of
Kerala and the Managing Director shall be a nominee of NTPC Ltd.
The list of present Board of Directors is given below:
1. Shri. N.C. Mohanan- Chairman- Government of Kerala have appointed Shri. N.C.
Mohanan as Chairman and Director w.e.f. 08.09.2016.
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
2. Shri. Prasad Bhaskaran Nair- Managing Director-NTPC Nominee-Shri. Prasad B.
has taken charge as the Managing Director w.e.f 09.01.2016
3. Shri. Prasant Kumar Mohapatra, Director (Technical), NTPC Limited has been
appointed as a Part-time Director in TELK w.e.f. 21.06.2018. Shri.P.K. Mohapatra
is a graduate in Mechanical Engineering (REC Rourkela). He joined NTPC in 1980
as an Executive Trainee and has more than 37 years of experience from concept to
commissioning of power plants.
4. Shri. D.K. Dubey has been nominated by NTPC Limited as a part-time Director
on the Board of Directors of TELK w.e.f. 20.12.2018. Presently, he is serving NTPC
Limited in the capacity of RED (South) at Secunderabad. Prior to this, he was
Executive Director of NTPC-Ramagundam since November 2016. A Mechanical
Engineer from the Awadesh Pratap Singh University and also an MBA (Finance)
from FMS-Delhi, Shri. Dubey joined NTPC on September 21, 1981. He has varied
experience and has held important positions in a career spanning over three-and-a
half decades in NTPC.
5. Shri. Shibu A - Government of Kerala have appointed Shri. Shibu A.S. as a
Director on the Board of Directors of TELK w.e.f. 05.12.2018. Presently, he is in the
service of Government of Kerala as Under Secretary, Finance Department.
6. Shri. K.K. Ramachandran- Government of Kerala have appointed Shri. K.K.
Ramachandran as a Director on the Board of Directors of TELK w.e.f. 20.06.2017.
7. Smt. P. Vijayakumari- Government of Kerala have appointed Smt. P.
Vijajayakumari as a Director on the Board of Directors of TELK w.e.f. 20.07.2017.
Presently, she is in the service of KSEB Ltd, as Director, Transmission.
8. Shri. Mammen J. has been nominated by NTPC Limited as a Director on the
Board of Directors of TELK w.e.f. 10.08.2018. Presently, he is serving NTPC Limited
in the capacity of GM (Commercial), SR-HQ, NTPC.
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
A10. Brief write up on corporate actions done/to be done/proposed like
merger, demerger, corporate restructuring (not CDR), sale of undertakings etc.
NIL
A11. Existing Limits with our Bank(details of last five years)
Amount INR in Crore
Existing
Date of
Sanction
Curre
ncy
FB
NFB
WC
06-07-2012
TL
Net Sales
Average
(Only for the
utilisati
Relevant
on % @
Period)
12.02
88.90
202.37
80.00
24-09-2013
INR
Crore
12.02
88.90
154.56
85.00
31-10-2014
INR
Crore
12.02
88.90
170.00
60.00
23-03-2016
INR
Crore
12.02
88.90
154.64
60.00
18-03-2017
INR
Crore
27.02
96.40
164.74
59.10
04-04-2018
INR
Crore
12.02
0.00
96.40
182.86
89.27
31-10-2018
INR
Crore
12.02
0.00
96.40
06-02-2019
INR
Crore
12.02
0.00
96.40
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
A12. Particulars of losses incurred by Bank
Particulars
Notional Loss
Loss/Notional Loss/Haircut
suffered by the Bank on
account of write off/
Compromise
Settlements/References to
CDR in respect of previous
exposures on Companies
floated by Related parties,
Groups, Associates and
Directors (Please quantify).
Specific comments on ‘Right
to recompense’ clauses need
to be furnished
Comments
NIL
NA
A13. Conduct of Account
No.
No.
No. of days
Limit
Peak
of
of
Facility
Curr
Outstan Irregular
to adjust
with our
Irregul times days
Name & Id ency
ding
ity
Peak
bank
arity irreg irreg
irregularity
ular ular
LC /
F000504090 INR
03
16.00
12.18
0.00
Reasons for irregularity Comments : No irregularity in the account
Cash Credit
/
INR
F000504090
01
12.02
5.01
0.00
0.00
0
0
0
Reasons for irregularity Comments : No irregularities
BG /
F000504090 INR
04
80.40
55.23
0.00
Reasons for irregularity Comments : No irregularity in the account
Comment briefly on irregularities in the accounts in the past 12 months –
number of times irregular & time taken for adjustment of peak irregularity
No irregularities during the last 12 months.
Confidential and Property of State Bank of India
NEWFORMAT
Page 17 / 144
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Letter of Credit applicable : Yes
Letter of Credit:
Amount INR in Crore
Particulars
Last Financial Year
Current Financial Year up to
previous month
Total No. of LC Bills
58
13
Total Amount of LC
44.95
4.66
No., days & Amount of
LC Bills that devolved
No.
Days
Amount
No.
Days
Amount
0
0
0
0
0
0
% of LC bill devolved
relative to the LC limit
No.
Amount
No.
Amount
0
0
0
0
Of the above, not
adjusted in 15 days
No.
Amount
No.
Amount
0
0
0
0
Maximum no. of days
taken for regularizing
the account
Bank Guarantees applicable : Yes
Bank Guarantees:
Particulars
Amount INR in Crore
Last Financial Year
Current Financial Year up to
previous month
No. of guarantees
invoked, if any
0
0
Amount of guarantees
invoked, if any
0
0
Whether Cash Credit
a/c was rendered
irregular, on account of
above- no. of occasions
No.
Amount
No.
Amount
0
0
0
0
Maximum no. of days
taken for regularisation
Confidential and Property of State Bank of India
0
NEWFORMAT
0
Page 18 / 144
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Comments on conduct of account
( LC devolvement, BG invocation, return of bills negotiated, irregularity in CC/OD
account, delay in servicing interest / instalments of term loan) routing of sales
proceeds through the account in proportion to sanctioned limit including comments
in last credit audit report and early warning signals, if any.
No irregularities during the last 12 months.
(Adhoc CC of Rs.15.00 crs released by e-SBT should have been liquidated by
10.09.2017. Due to cash flow mismatch company could not liquidate the ad-hoc
facility.However, company has fully liquidated its Ad-hoc limit and account was
regularised on 08.11.2017.The relevant irregularity got confirmed by the
appropriate authority).
Routing of sales is proportional to our share of limits in MBA.
Credit Audit Observations dated 20.12.2018:
1. Account is irregular and in SMA from 18/09/2018 as the continuation is
available up to 17/09/2018. Renewal to be done immediately to avoid slippage in to
NPA account.
Branch reply: Continuation of limits from 18.09.2018 to 31.12.2018 and thereafter
from 01.01.2019 up to 29.06.2019 sanctioned by CCSC vide its resolution dated
31.10.2018 and 06.02.2019 respectively. The present proposal is for renewal of
limits based on ABS 2017-18 and provisional BS for FY 2018-19.
2.Total FCE is unhedged and company is not having any hedging policy.
Branch reply: The foreign currency exposure of the company as on 31.03.2018 is
Rs.0.93 cr which is only around 0.61% of the total turnover. Since the FCE is very
low, company has not formalised any hedging policy.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
3.Statutory Auditors made qualified observation:
a) Trade receivable of Rs 97.14 crs, Loans (Non-current asset) of Rs 0.19 crs, Loans
(Current Asset) of Rs 0.44 crs, Balance with Govt. authorities of Rs 2.46 crs,
Advances to supplier & contractor of Rs 0.93 crs, Provision for medical
reimbursement of Rs.0.49 crs are subjected to confirmation.
b) Shortfall in insurance of stock is observed by the statutory auditor (mentioned in
other matter paragraph.
c) Reconciliation of fixed asset with fixed asset register is not produced for
verification to statutory auditor of the company.
Branch Reply: a)The Auditors have opined that except for the possible effects of the
material weaknesses described above on the achievement of the control criteria, the
Company has maintained, in all material respects an adequate internal financial
controls system over financial reporting based on the guidelines issued by ICAI. The
auditors have further certified that these material weaknesses do not affect the
standalone IndAS financial statements of the Company.
b) The shortfall in insurance of stock was that pertaining to the stock which are
lying with fabricators. Company has confirmed that these stocks were insured by
the fabricator.
c) We have advised the company suitably in this regard. It has been informed that
necessary steps have been taken to avoid recurrence of this qualification.
4. Non operative income is noticed and is Rs. 2.52 cr and details not provided
Branch Reply: Other income consists of the following: Interest income-Rs.0.80 cr.,
Profit from sale of item of PPE & scrap-Rs.0.006 cr., Duty Draw back and duty
scrip-Rs.0.21 cr. and Miscellaneous income Rs.1.50 crs.
5. Continuation of the Limits is available up to 17/09/2018 only and renewal is
pending.
Branch Reply: Continuation of limits from 18.09.2018 to 31.12.2018 and thereafter
from 01.01.2019 up to 29.06.2019 sanctioned by CCSC vide its resolution dated
31.10.2018 and 06.02.2019 respectively. The present proposal is for renewal of
limits based on ABS 2017-18 and provisional BS for FY 2018-19.
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
6. FY 2017-18: Company could not able to achieve the sales and achieved Rs.
174.27 cr against the estimation of 273.28 cr (63.77%). Inventory level is Rs.76.64
cr which is 99.06% more than the estimations. OCA level is Rs. 52.12 cr which is
206.59% more than the estimations and OCL is Rs. 49.20cr which is 24.59% more
than the estimations. Sundry Creditors level is Rs. 17.73 cr which is 172.77% more
than the estimations.
Branch Reply: For FY 2017-18, the company had estimated higher sales of Rs.
268.28 crs based on the orders in hand for execution. For this purpose the
company had requested for enhancement of working capital limits. Since company
could not submit the audited financials, enhancement request of the company was
not considered. The company also experienced delay in realisation of receivables
from two major customers. Most of the orders received by the company for
execution during FY 2017-18 are carried over to FY 2018-19. All these factors led to
non-achievement of estimated sales for the FY 2017-18. As per PBS, the company
could register a growth of 37% in turnover during FY 2018-19.
From FY 2017-18, company started recognizing Revenue only after the goods
reached customers destination point. So all the goods which were under transit as
on 31.03.2018 from the factory gate till the customers destination point were
recognized as Goods in transit and classified along with Finished Goods under
inventory. As on 31.03.2018, Goods in transit under inventory amounts to Rs.26.98
crs.
The overall Current Assets level as per Balance sheet has improved by 6.85% over
the estimated level for FY 17-18, (from Rs.147.43 crs to Rs.157.53 crs). The overall
current liability level as on 31.03.2018 was Rs.96.78 crs which was 12.55% more
than the estimated level. The position is considered as acceptable since the current
ratio is at a comfortable level of 1.63 as on 31.03.2018.
Comments on adherence to Financial Discipline:
The company's adherence to financial discipline is satisfactory. The conduct of
credit facilities with us is satisfactory .
The company is maintaining current account with Federal Bank, which is a nonlender. Previously, the company enjoyed credit facilities under consortium and
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Federal Bank was one of the Bankers in the erstwhile consortium. The branch is
following up intensively with the company for closure of current account with
Federal bank. The Branch note to levy penal interest in case the current account is
not closed before 31.12.2019.
Details of intercompany transactions / investments, if any: No
Details of information, shared in consortium meeting under sharing of
information:
N.A .Presently the limits are under MBA .
A14. Review of Cash Credit Account for previous year:
Review of Cash Credit Account applicable : Yes
Amount INR in Crore
Sr. No.
Amount
Comments
i. Total debit
summations
249.58
ii. Total credit
summations
258.11
%of (ii) to total sales
122.87 The company is routing all transactions
through the account.
A15. Review of Term Loans (Term Loans with other Banks/FIs also to be
mentioned):
Review of Term Loans applicable - No
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Section B
B1. Proposal for Sanction / Approval / Confirmation
Proposal for Sanction
(i) Renewal of FBWC limits of Rs. 12.02 Crore and NFBWC limits of Rs.
96.40 Crore at the existing levels
Proposal for Approval
(i)continuation of 25% concession in processing charges against card rates i.e. to
recover Rs.0.26 cr+ GST as against the applicable charges of Rs.0.35 cr +GST with
sacrifice amount of Rs.0.09 cr.
Proposal for Confirmation
(i) Action in having continued the limits beyond the validity of last sanction i.e.
beyond 29-JUN-19 .
Amount INR in Crore
This proposal falls within the powers of CCSC as
(i) FB/NFB/Total indebtedness is INR 108.42 Crore
Corporate
Proposal Remark
The present proposal is for renewal of credit facilities at the existing level.
(ii) Involves Policy Level Deviations:
No
(iii) The borrower/ his relative(s) is a director in any other bank:
No
Furnish details of Directors and whether approval from ECCB obtained.
Brief Description of the borrowing entity, their activity and what the proposal
Transformers and Electricals Kerala limited (TELK) was incorporated in 1963 as a
Government of Kerala (GoK) undertaking. Initially TELK was promoted by GoK and
Kerala State Industrial Development Corporation Limited(KSIDC) in collaboration
with Hitachi Limited of Japan. TELK gave India, its first 400kV Class Transformer,
first 315MVA Auto Transformer and Generator Transformer for India's first 500MW
Thermal Unit.
The Company is an ISO certified Company since 1995. TELK is currently an
approved high quality supplier to all power utilities in India and many prestigious
utilities abroad.
TELK started its commercial production in 1966 and was working satisfactorily till
1981-82.The fourth stage of expansion for manufacturing Gas Circuit Breakers led
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
to cost overrun. This coupled with a demand recession and a few years of low
production due to power cut, resulted in continuous losses to the Company thus
eroding networth completely.The Company was referred to BIFR during 1995.
After several failed attempts on revival of the unit, during 2006, they had made
negotiations with NTPC for a joint venture for the revival of the unit. Since 2007,
TELK is a joint venture between GoK and NTPC Ltd, with NTPC having 44.60%
shareholding. As per the joint Venture Agreement, Board of Directors of the
Company will have four nominees from NTPC and four nominees from Government
of Kerala .The Chairman of the company is a nominee of Government of Kerala
while Managing Director is a nominee of NTPC Ltd.
The company successfully implemented the rehabilitation package of BIFR. As on
31.03.2011 it could wipe off all accumulated losses.It declared a dividend also in FY
11. At the request of the Company, BIFR issued orders for allowing the company to
come out of the purview of BIFR as its net worth turned positive.
Till 2014, company was making profits .However, from 2015 onwards it was
reporting losses due to the continued impact of lower demand for transformers
compared to supply in the market and resultant impact on selling price.The profit
margin of the company has substantially dropped due to the above issues faced by
Power sector.
From 2016-17 onwards the market situation has changed as the demand for
transformers increased. During the FY 2016-17,the company has reported a profit
of Rs.4.89 crs, followed by Rs.2.64 crs during FY 2017-18 and Rs.3.16 crs during
FY 2018-19.
The renewal of limits was last done on 18.03.2017. The company had submitted
Audited financials for the FY 2016-17 only in August 2018. The delay in preparation
of ABS for FY 2016-17 had spill over effect in the preparation of ABS for FY 2017-18
and the same was submitted in July 2019. As the company could not submit the
audited financials on time, continuation of the limits was sanctioned on three
occasions as follows:
a. For 180 days from 18.03.2018 by WBCC-II vide its resolution dated 04.04.2018
b. Up to 31.12.2018 by CCSC-I in its meeting held on 31.10.2018.
c. For six months from 01.01.2019 by CCSC vide its meeting dated 06.02.2019.
The company presently enjoys working capital facilities under MBA from us (Rs.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
108.42 crs) and South Indian Bank (Rs.15.00 crs), with a total exposure of Rs.
123.42 crs.The company is rated BBB by Brickwork Ratings which is valid till
21.02.2020 .The internal rating of the company based on ABS as on 31.03.2018 is
SB-9.
The present proposal is for:
Sanction:
1.Renewal of Working Capital of INR 108.42 Crore at the existing level (FB-WC:
INR 12.02 Crore, NFB-WC: INR 96.40 crore).
Approval:
1. Continuation of 25% concession in processing charges against card rates i.e. to
recover Rs.0.26 cr+ GST as against the applicable charges of Rs.0.35 cr +GST with
sacrifice amount of Rs.0.09 cr.
Confirmation:
1. Action in having continued the limits beyond the validity of last sanction i.e.
beyond 29.06.2019.
As per the extant guidelines, renewal of limits can be carried out for unlisted
companies, subject to the latest available ABS being not more than 18 months old
and Provisional Balance Sheet not older than 5/6 months. Accordingly, the present
renewal is being proposed based on ABS as on 31.03.2018 and Provisional Balance
Sheet as on 31.03.2019.
Board of directors:
1. Shri. Nellampurath Chellappan Nair Mohanan- Chairman- Government of Kerala
have appointed Shri. N.C. Mohanan as Chairman and Director w.e.f. 08.09.2016.
He is a lawyer and member of CPI(M) Ernakulam District Secretariat.
2. Shri. Prasad Bhaskaran Nair- Managing Director- NTPC Nominee- Shri. Prasad B.
has taken charge as the Managing Director w.e.f 09.01.2016. He is a B.Sc
Engineering Graduate from College of Engineering Trivandrum.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
3. Shri. Prasant Kumar Mohapatra, Director (Technical)- NTPC Limited has
appointed him as a Part-time Director in TELK w.e.f. 21.06.2018. Shri.P.K.
Mohapatra is a graduate in Mechanical Engineering (REC Rourkela). He joined
NTPC in 1980 as
an Executive Trainee and has more than 39 years of experience from concept to
commissioning of power plants.
4. Shri. Dileep Kumar Dubey has been nominated by NTPC Limited as a part-time
Director on the Board of Directors of TELK w.e.f. 20.12.2018. Presently, he is
serving NTPC Limited in the capacity of RED (South) at Secunderabad. Prior to this,
he was Executive Director of NTPC-Ramagundam since November 2016. A
Mechanical Engineer from the Awadesh Pratap Singh University and also an MBA
(Finance) from FMS-Delhi, Shri. Dubey joined NTPC on September 21, 1981. He has
varied experience and has held important positions in a career spanning over threeand- a half decades in NTPC.
5. Shri. ShibuSubaidabeevi Abdulrasheed- Government of Kerala have appointed
Shri. Shibu A.S. as a Director on the Board of Directors of TELK w.e.f. 05.12.2018.
Presently, he is in the service of Government of Kerala as Under Secretary, Finance
Department.
6. Shri. Karaingadan Kumaran Ramachandran- Government of Kerala have
appointed Shri. K.K. Ramachandran as a Director on the Board of Directors of TELK
w.e.f. 20.06.2017.
7. Smt. Parol Vijayakumari- Government of Kerala have appointed Smt. P.
Vijajayakumari as a Director on the Board of Directors of TELK w.e.f. 20.07.2017.
Presently, she is in the service of KSEB Ltd, as Director, Transmission.
8. Shri. Mammen Jacob has been nominated by NTPC Limited as a Director on the
Board of Directors of TELK w.e.f. 10.08.2018. Presently, he is serving NTPC Limited
in the capacity of GM (Commercial), SR-HQ, NTPC.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
B2. Credit Limits (Existing and Proposed)
Amount INR in Crore
Table 1A
Existing
Currency Our Bank
(i)
Proposed
Change
%
Total Cons / Our Bank
%
Total Cons /
(i /
MBA/
(iii)
(iii /
MBA/
ii)*100 Syndication
iv)*100 Syndication
(ii)
(iv)
44.49
27.02
12.02
44.49
27.02
Our Bank
(iii - i)
Total Cons /
MBA/
Syndication
(iv - ii)
0.00
0.00
Total FB-WC (i)
INR
12.02
Total FB-TL (ii)
INR
0.00
Total FB
(i)+(ii)=(a)
INR
12.02
44.49
27.02
12.02
44.49
27.02
0.00
0.00
Total NFB-WC (iii)
INR
96.40
100.0
96.40
96.40
100.0
96.40
0.00
0.00
Total NFB-TL (iv)
INR
0.00
0.00
0.00
Total Derivatives
(v)
INR
0.00
0.00
0.00
Total NFB
(iii)+(iv)+(v)=(b)
INR
96.40
100.0
0
96.40
96.40
100.0
0
96.40
0.00
0.00
Total
Indebtedness
(a)+(b)=(c)
INR
108.42
87.85
123.42
108.42
87.85
123.42
0.00
0.00
108.42
87.85
123.42
108.42
87.85
123.42
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Investments (d)
INR
Leasing (e)
INR
Total Exposure
(c)+(d)+(e)=(f)
Financial/cash collateral (as per Basel norms) (g)
Effective
Exposure (f)-(g)
Capital Charge
108.42
87.85
123.42
108.42
4.81
5.16
ROCC
26.31
21.79
RAROC
22.65
18.46
Confidential and Property of State Bank of India
NEWFORMAT
87.85
123.42
0.35
Page 27 / 144
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
B3. Individual items detailed below
1B. Working capital applicable:
Yes
Table 1B
Working Capital
Facility Name
Currency
Existing
Proposed
Change in
exposure
LTV
proposed
12.02
12.02
0.00
75.00
12.02
12.02
0.00
Existing
Proposed
Change in
exposure
LTV
proposed
F00050409003 - LC INR
( LC )
16.00
16.00
0.00
90.00
F00050409004 - BG INR
( BG )
80.40
80.40
0.00
90.00
96.40
96.40
0.00
108.42
108.42
0.00
FB Working Capital
F00050409001 Cash Credit
( CC )
INR
Fund based Sub-Total
Facility Name
Currency
NFB Working Capital
Non Fund based Sub-Total
Total Working Capital
1C. Term exposures applicable:
No
1D. Project Financing Exposure applicable:
1E. Derivatives applicable:
No
No
Inter-changeability
From Facility
To Facility
Existing
Percentage
Amount
Proposed
Percentage
Amount
None
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
B4. Credit Limits (Company and Group)
Amount INR in Crore
Company
Group
Exposure
Existing Proposed Existing Proposed
Fund Based
12.02
12.02
12.02
12.02
Non Fund Based
96.40
96.40
96.40
96.40
108.42
108.42
108.42
108.42
108.42
108.42
108.42
108.42
Bank's Share in Total Exposure (%)
87.85
87.85
87.85
87.85
Bank's Share in WC (%)
44.49
44.49
44.49
44.49
100.00
100.00
100.00
100.00
Total Indebtedness Incl. letter of Comfort #
Out of total indebtedness,outstanding of
overseas exposure, if any, against LOC or
Investments
Leasing
Total Exposure
Bank's Share in TL (%)
Bank's Share in NFB (%)
# Issued against the counter guarantee of the company/ group
B5. Banking Arrangement and Sharing Pattern
Existing
Financial
Arrangements
Proposed
Lead Bank (if
consortium /
Financial
Arrangements
Lead Bank (if
consortium /
TL
WC
MBA
MBA
Amount INR in Crore
FB
@ (Proposed)
NFB @
(Proposed)
Investments &
Leasing
(Proposed)
Total @
(Proposed)
SHARE(%) @
(Proposed)
TL (Proposed)
WC (Proposed)
0.00
12.02
96.40
0.00
108.42
87.85
(0.00)
(12.02)
(96.40)
(0.00)
(108.42)
(87.85)
SBI
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
0.00
12.02
96.40
0.00
108.42
87.85
(0.00)
(12.02)
(96.40)
(0.00)
(108.42)
(87.85)
0.00
15.00
0.00
0.00
15.00
12.15
(0.00)
(15.00)
(0.00)
(0.00)
(15.00)
(12.15)
SBI (Total)
Total Exposure of the
constituent with Other
Banks as per CRILC data
search
Top Five other Banks in terms of their Exposure
0.00
15.00
0.00
0.00
15.00
12.15
(0.00)
(15.00)
(0.00)
(0.00)
(15.00)
(12.15)
0.00
27.02
96.40
0.00
123.42
100.00
(0.00)
(27.02)
(96.40)
(0.00)
(123.42)
(100.00)
South Indian Bank
Total (SBI + Other Banks)
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Sharing Arrangement (existing &proposed)- presentation by way of Pie Chart
Existing
Proposed
Any major change proposed in sharing arrangement : No
*Action plan to reduce SBI % share if beyond the acceptable limits.
Rationale
Corrective Action Plan to bring
exposure to within norms, In case SBI
exposure exceeds the norms
B6. Group exposure particulars
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
*List activity contributing more than 20 % of group’s turnover. Club rest in other
B7. External rating analysis of the group (Below investment grade only)
Name of the
Company *
Currency
Exposure
Our Share
Amount
%
Rating
LT
Rating
Agency
ST
None
* Company having more than 20% share in the group turnover to be covered
individually and all others are to be clubbed.
B8. Risk appetite of the Bank on the industry (Risk advisory) as per latest
update
Amount INR in Crore
Industry:
ELECTRICAL EQUIPMENT
Activity:
MFG. OF MACHINES FOR
ELECTRIC DISTRIBUTN
Sub Industry: POWER TRANSMISSION
AND DISTRIBUTION EQUIPMENT
RMD Guidance Note Dated:
2019
12-06-
(i) RMD Guidance Note
Some of the factors which should be examined while appraising loan proposals are
listed below:
(a) Competitive manufacturing capabilities: The electrical equipment companies
must have a good understanding of its market, customers and their needs and
should be capable of manufacturing products in response at low cost.
(b) Collaborative Partnerships for technology and R&D: Indian firms can augment
their technological know-how and R&D capabilities through JVs and collaborative
partnerships with global majors in the field.
(c) Concentration risk: The units dependence on a single/ very limited number of
buyer(s) or product(s) may adversely impact the company. Also relying on very
limited number of suppliers may prevent manufacturers from getting raw materials
at competitive prices. This factor plays an important role in overall cost management
in rising prices scenario.
(d) Efficient working capital management: Efficient working capital management is
crucial for electrical equipment companies due to commodity risk.
e) Financial strength: In view of rising defaults, technological changes, competition
and threat of cheaper imports for the electrical equipment units ensure that the
finance is extended to units with sound financial strength and business plans.
(f) In-demand product portfolio: While considering exposures to units in Electrical
Equipment sector, it must be ascertained that the units are operating in the growing
business segments and product lines like boilers, turbines, transformers,
switchgears, energy meters, etc.
(g) Skill Development: Although inexpensive and abundant manpower is available,
focus should also be on their skill development and technical competence so that
the units are able to better cope up with technological upgradations.
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
(ii) (a) Qualitative
Approach
(ii)(b) Threshold Level
Approved Outlook:
Neutral
Approved Level
Enhancements
New Connections
SB-8 & above* / A & Better
SB-6 & above / AA &
Better
(iii) Quantative Approach
A. As per CRMD
Guidance Note
B. As per Quarterly
Exposure Norms Industry Level
Bank's Total
Advances
3103627
As On
31-03-2019
Actual Level (%)
Approved Level
(%)
Sub Industry Level
1.61
2.37
Industry Level
1.61
2.37
Bank's Total
Advances
2859517
As On
Actual Level (%)
30-09-2018
Approved Level
(%)
Industry Level
Industry Specific Risks Identified by CRMD
(iv) Comment
A head-room of Rs. 22,300 Cr for taking additional exposure on the sector is
available.
RBI Ceiling
Internal Ceiling
Proposed Exposure
Individual Company
41048.00
6157.00
108.42
Group
51310.00
28733.00
108.42
If breaching the limit, comments on risk mitigation.
The company is rated SB-9 based on ABS 2017-18 and the approved ceiling allows
an additional exposure to the tune of Rs.22300.00 Cr. for enhancements / new
connection.There is no enhancement proposed and the present proposal is for
renewal of limits at the existing level.
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Section C
Performance and Financial Indicators
C1. Performance and Financial Indicators (Company as a whole & Division-wise,
if available, separately)
Amount INR in Crore
2017-18
2018-19
2019-20
2020-21
Estimated
Audited
Estimated Provisional Estimated Projected
01-04-2017 01-04-2017 01-04-2018 01-04-2018 01-04-2019 01-04-2020
to
to
to
to
to
to
31-03-2018 31-03-2018 31-03-2019 31-03-2019 31-03-2020 31-03-2021
Gross Sales (Value)
292.88
155.73
247.01
210.07
240.57
258.02
Net Sales (Value)
268.28
153.36
247.01
210.07
240.57
258.02
1.00
1.10
Subsidy in Sales
Exports (value)
0.08
Net Sales (Quantity)Units in
Exports (Quantity)Units in
Capacity Utilization
Raw Materials
169.57
143.53
119.85
92.64
138.78
152.66
5.00
3.59
4.00
3.02
4.52
4.97
Direct Labour
50.00
54.98
53.11
48.71
58.19
61.00
SG & A costs
11.55
13.69
17.27
14.64
13.26
14.59
3.00
5.81
4.85
5.66
5.82
6.40
Operating Profit(OP) After
Interest
18.73
-12.55
12.94
5.06
11.72
13.50
PBT
20.73
7.44
12.94
7.99
11.72
13.50
PAT
11.73
2.64
9.26
3.16
4.65
7.95
Cash Accruals
13.23
3.95
10.86
4.72
6.63
10.13
EBIDTA
25.23
14.56
19.39
15.21
19.52
22.08
9.40
9.49
7.85
7.24
8.11
8.56
Power and Fuel
Interest
EBIDTA Margin
If the latest Audited B/S is not available, explanation as to why they are not
available, to be given.
Since the Joint Venture partner NTPC has published the financials under IndAS,
TELK also had to prepare their accounts for FY 2016-17 under IndAS. Migration to
IndAs and finalisation of audit for the first time under the same took a lot of time.
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
The company had submitted Audited financials for the FY 2016-17 only in August
2018. The delay in preparation of ABS for FY 2016-17 had spill over effect in the
preparation of ABS for FY 2017-18 and the same was submitted in July 2019.
The present proposal is hence based on ABS as on 31.03.2018 and provisional
financials as on 31.03.2019.
@ figures in brackets denote estimates at the time of renewal
# the estimates, projections should be backed by facts / logical assumptions and
should be prepared by the person having sufficient knowledge of the economy,
industry, business and past record.
If the account has been restructured in the past, actual performance of the
unit should invariably be compared with the estimates / projections made at
the time of restructuring and commented on.
Comments on
i) Critical risks including change in accounting policies during the year and
their impact on P&L, low capacity utilization, stagnant growth etc. in sales,
profitability etc.(other than project funding, which are covered in separate
section)
Nil
ii) Reasonability of estimates/projections for Current Year/Next Year.
Performance of the company during FY 2017-18 and FY 2018-19
Net Sales
The company registered a turnover of Rs.153.36 crs during FY 2017-18, a decline of
5.53% over PY and 57.16% of the estimated turnover. For FY 2017-18, the company
had estimated higher sales of Rs.268.28 crs based on the orders in hand for
execution. For this purpose the company had requested for enhancement of working
capital limits. Since company could not submit the audited financials, enhancement
request of the company was not considered. The company also experienced delay in
realisation of receivables from two major customers. Most of the orders received by
the company for execution during FY 2017-18 are carried over to FY 2018-19. All
these factors led to non-achievement of estimated sales for the FY 2017-18.
Further, from FY 2017-18, company started recognizing Revenue only after the
goods reached customers destination point. Hence, all the goods which were under
transit as on 31.03.2018 from the factory gate till the customers destination point
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
were recognized as Goods in transit and classified along with Finished Goods under
inventory. As on 31.03.2018, Goods in transit under inventory amounts to Rs.26.98
crs and not considered under sales.
As per the provisional data, TELK had a net sales of Rs.210.07 crs during FY 201819, registering a growth of 37% over the PY level (85% of estimated sales of Rs.
247.01 crs for FY 2018-19).
Theorder position (as on 30.06.2019) of the company is as follows:
Sl No:
Equipment
No
MVA
Amount
(Rs. in crs)
1
Power
Transformers
60
54.31
197.25
2
Current
Transformers
7
0.20
3
Potential
Transformers
7
0.21
4
CSD(including
3
2.72
25.36
spares/services
)
TOTAL
77
223.02
The major customers of the company include NTPC, NPCIL, PGCIL, NHPC, state
electricity boards etc. Apart from these, M/s MEIPL and M/s GVPR Engg are two
companies to whom company has been supplying transformers since last three
years. Company's supplies to Non-PSU companies are mostly against LCs.
The quarterly sales of the company up to Q1 of FY 2019-20 is Rs.21.63 crs (Rs.
35.44 crs during Q1 of FY 2018-19). The company normally books maximum sales
during the last quarter of the financial year. During FY 2018-19, sales during
Q4was Rs.99.74 crs and that during Q4 of last FY 2017-18 was Rs.107.54 crs
which is 47.48% and 69.05% of net sales during the respective years. The
estimated sales of Rs.240.57 crs for the FY 2019-20is hence considered achievable.
Profit & Profitability
There is a Y-o-Y decline of 46.01% in PAT from FY 2016-17 to FY 2017-18 and the
company achieved only 22.50% of the estimated figure. Though there has been Y-oY growth of 11.04% in PBT (Rs.7.44 crs during FY 2017-18 as against Rs.6.70 crs
during FY 2016-17), deferred tax of Rs.4.80 crs during the year led to decline in
profit compared to previous year. Hence, profitability also declined from 3.01% (FY
2016-17) to 1.72% (FY 2017-18).
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
As per the provisional data, TELK had a net profit of Rs.3.16 crs. during FY 201819, recording a growth of 20% over the PY level.
TNW
TNW of the company has increased from Rs.58.71 crs (as at 31.03.2017) to Rs.
66.61 crs (as at 31.03.2018) on account of plough back of profits and reduction in
Deferred Tax Assets. As per the PBS, the same has improved further by Rs.7.19 crs.
TOL/TNW
The gearing ratio of the company improved from 1.64 as on 31.03.2017 to 1.60 as
on 31.03.2018 on account of improvement in TNW. The ratio is well below the
desired level of less than or equal to 3.50 (as per the CRA model). Improvement in
TNW has led to further improvement in the ratio to 1.47 as on 31.03.2019.
TOL/Adj TNW
No investment in associates and subsidiaries and hence TOL/Adj TNW is same as
the TOL/TNW of the company. The ratio is well below the desired level of less than
or equal to 3.50 (as per the CRA model).
Current Ratio
The current ratio of the company as on 31.03.2018 is 1.63 as against 1.46 as on
31.03.2017 which is above the desired level of >=1.40 (as per the CRA model). The
ratio has further improved to 1.65 as on 31.03.2019. The NWC position has also
improved from Rs.42.04 crs as on 31.03.2017 to Rs.60.75 crs. as on 31.03.2018
and to Rs.65.66 crs as on 31.03.2019.
Comparison of industry specific financial parameters[Electrical Equipments]
for Current Ratio, TOL/ Adj TNW, Interest Coverage Ratio and Long Term
Debt/ EBIDTA as per Banks guidelines and company's level as per audited
financials for 2017-18.
Current Ratio
TOL/Adj TNW
Interest
Long Term
Coverage Ratio Debt/EBIDTA
Approved level >=1.00
<=4.00
>=2.60
<=3.60
>=0.75
<=5.00
>=2.00
<=4.50
Min
Acceptable
level/*Max
Acceptable
level
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Company's
1.63
1.60
2.51
0.82
level
*Max Acceptable level for TOL/Adj TNW and Long Term Debts/EBIDTA
iii) Whether export oriented unit: No
iv)Whether the facility proposed envisages capacity expansion: No
Division-wise data exists : No
C2. Interim Financials
Amount INR in Crore
Interim Financials
Particulars
Q1 30-06-2019
Net sales
21.63
Q1 30-06-2018
Q4 31-03-2019
35.44
Q4 31-03-2018
99.74
107.54
Export
PAT
-10.75
18.84
Industry Exposure as on 30-06-2018
FBL
NFBL
Total
48986
Auditors (Membership No. of the Auditor / Firm registration number in case of
Audit firm):
Name of Auditor / Audit Firm
Membership No / Firm Regn No.
George John and Prabhu
000917S
Date of Last Audit :25-07-2019
Change in Accounting year : No
Change in Auditors : No
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Comments on financial management of the Company
The Auditors have identified the following material weaknesses
The Company did not have an appropriate internal control system for:
1.
Obtaining confirmation of balances in respect of Trade Receivables, Advances
to Suppliers and Contractors, Balance with Government Authorities and Loans as on
31.03.2018.
2.
Physical verification of material (owned by the Company) lying with fabricators
as on 31.03.2018.
3.
Authentication of vouchers and approval thereon by the superior officer is not
available in most of the cases.
However , except for the possible effects of the material weaknesses described above
on the achievement of the control criteria, the Company has maintained ,in all
material respects an adequate internal financial controls system over financial
reporting based on the guidelines issued by ICAI. The auditors have further certified
that these material weaknesses does not affect the standalone IndAS financial
statements of the Company.
C3. Market & Industry Analysis
Write up on the Product /industry/Sector and the Company’s Standing
(Comments on domestic/international standing, business strategies, competitive
advantage, price trend, competitiveness of the borrower etc. The para to conclude
with the outlook for the unit)
[Source:CRMD guidelines dated 12.06.2019]
Indian Electrical Equipment industry comprises of two segments:
1.Generation Equipment: Boilers, Turbines, Generators (BTG) and
2. Transmission & Distribution (T&D) and allied equipments: Transformers, Cables,
Transmission lines, Switchgears, Capacitors, Energy meters, Surge arrestors,
Stamping and lamination, Insulators, Insulating material, Indicating instruments,
and winding wires, etc.
1.Transformers:
Transformer is a device that helps in changing the voltage level while transmitting
electrical energy over long distances, so as to avoid energy losses during
transmission and make the required current available to consumers. Step-up
transformers are used to increase the voltage while decreasing the current during
transmission and step-down transformers are used to decrease the voltage while
increasing the current. Both these types when present in upper part of value chain
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
(i.e. transmission part) are called power transformers. Distribution transformers are
used to transmit power to the end consumer and appear in the distribution part of
the value chain. The size of transformers market is expected to expand at a CAGR of
12% over next three years.
In 2016-17, transformers category witnessed a growth of around 6% y-o-y primarily
owing to PGCIL ordering supported by expansion in rural electrification.
Transmission system is also witnessing strengthening through the centrally funded
schemes like DDUGJY and IPDS. Healthy exports, particularly to European, African
and South American countries also contributed to production growth.
Instrument transformers are used for measuring voltage and current in electrical
power systems. Its role is to provide accurate inputs to protection, control and
metering systems. It also performs the function of insulating the metering circuit
from the primary high voltage system. Instrument transformers are of two kinds,
viz. current transformers and voltage transformers. The instrument transformer
category has grown at a CAGR of 3% during the period 2012-13 to 2015-16. In
2016-17, production of instrument transformers exhibited a decline of 13% due to
sluggish ordering for state distribution utilities (mainly responsible for ordering of
distribution transformers) and delays in finalizing orders.
2. Switchgears Switchgear refers to the combination of electrical equipment like
fuses, LT & HT circuit breakers, miniature circuit breakers, control panels, switch
boards etc. The basic function of switchgear is protection, which involves
interruption of short-circuit and overload fault currents while maintaining service to
unaffected circuits. Switchgear also provides isolation of circuits from power
supplies. Key switching equipments include switch fuse units, LT & HT circuit
breakers.
The aggregate production of three main components (fuse switch units, LT & HT
circuit breakers) has declined marginally at a CAGR of 2 per cent from 2012-13 to
2015-16 mainly due to a high base of Switch fuse units in 2012-13. However during
2016-17 the segment has witnessed a growth of around 41% y-o-y on account of
revival in demand from the industrial segment.
3. Motors Electric motors convert electrical power into mechanical power and are
often a part of a motor driven system. In industrial applications, electric motor
driven systems are used for pumping, compressed air, fans, conveyance, and other
forms of mechanical handling and processing.
During FY13 to FY16, production of Motors decreased at a CAGR of 2.7%. During
FY17 production of motors crossed level of 14000MW and has y-o-y growth of 7%.
4.Transmission Line Towers Transmission line towers form the backbone of
transmission network with conductors and steel constituting the important project
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
components
The transmission tower industry's market size grew strongly by 17% year-on-year in
2017-18 to Rs 257 billion, from Rs 221 billion in 2016-17. However this strong
growth in 2017-18 was recorded on the back of almost nil growth in the previous
fiscal, where in the market size grew tepidly by ~Rs. 1 billion (i.e. from Rs. 220
billion in FY 2016 to Rs. 221 billion in FY 2017). The major driver for this growth
has been rise in the production (8% y-o-y growth in the 9M 2017-18 period) in the
domestic market coupled with rising realizations on account of rise in raw material
(rise in the cost of Steel and Zinc) cost.
Industry
Electrical Equipments industry is a sizable part of Indian manufacturing sector
contributing 9.9% by value. This industry is 1.4% of Indias GDP. It manufactures
generation, transmission and distribution equipment serving primarily to the power
sector. The sector provides direct employment to 5 lakh persons, indirect to 10
lakhs, and over 50 lakhs across the entire value chain.
Demand for the BTG segment depends on new capacity additions in Power
generation. This segment is estimated to grow at a CAGR of 24.6% over FY 15-22.
The 12th Five Year Plan had a target to add 88.5GW capacity by 2017 .Under the
12th Five Year Plan, the Government has added 93.5 GW of power generation
capacity, thereby surpassing its target. 138 GW by 2022 is expected to be added
during the 13th FYP.
Power T&D is expected to see much bigger investments and growth owing to
governments focus on electrification more particularly enhancing demand from
rural areas. This will increase power off-take, and also the capacity utilization of
generation plants thus enhancing demand for electricity. This coupled with reforms
for financial recovery of Discoms means better orders and payment receipts cycle for
T&D electrical equipment.
Electrical Equipment industry is directly dependent on projects from Power sector.
As such several factors which affect Power sector, affect Electrical Equipment
industry as well.
The following factors in Power sector may have a positive impact on Transmission
sector:
1. The new government has introduced the Deendayal Upadhyaya Gram Jyoti
Yojana (DDUGJY) with focus on improved reach and quality of electric supply to
rural areas. It encompasses threefold objectives of feeder separation, augmentation
of T&D infrastructure and rural electrification. DDUGJY allocation of Rs. 38 Bn in
2018-19.
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
2. Integrated Power Development Scheme (IPDS) has the mandate of strengthening
of sub-transmission and distribution network and metering in urban and semiurban areas. Union Budget has allocated to IPDS for Rs. 49 Bn in 2018-19. This
increased funding for Transmission and Distribution segments are expected to
boost demand for electrical equipment.
3. Increased budgetary allocation for infrastructure, particularly roads, railways
and smart cities, is expected to give a boost to the Electrical Equipments industry.
Major Challenges
1. Competition from imports:
Cheaper imports from countries like China, Korea has been a threat for the
industry. Imports have been increasing rapidly and around 1/3rd of the domestic
consumption is fulfilled by imports.
2. High working capital requirement:
Industry is working capital intensive as the SME players hold high inventory of
finished goods to meet demand from large players. Also, customers, retain part of
payment as performance guarantee which is released after satisfactory review of
work done.
3. Raw material prices:
Prices of metals used in the manufacturing of equipments are very volatile. SMEs
face threat due to price volatility as they neither have hedging strategies in place
nor the capital to stock inventory of raw materials. Prices have recovered and
recently are on a rising trend mainly for aluminium and copper.
4. Technological obsolescence:
Large firms on account of better cash accruals, credit facilities and stronger order
books can afford technology up-gradations easily. However, SME players which form
85% of the total players in the sector, have low adaptability to new technology due
to insufficient availability of cash.
5. Shortage of skilled labour:
Availability of skilled labour is a significant issue especially at plants located with
raw material proximity in mind. This can become a significant hindrance to growth
of domestic electrical equipment manufacturing industry.
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
6. Low investments in R&D:
The sector is characterized by investment in R&D as low as 1%. R&D is necessary to
keep pace with technological changes in the industry.
7. Lack of testing facilities:
SMEs in the industry face shortage of adequate testing facilities and are dependent
on testing facilities of large players like BHEL.
8. Delayed Receivables:
Delay in realization caused stalling and delaying of projects, locking up the
inventory. This is more applicable to EPC companies, undertaking projects of
stressed Discoms. Such stranded orders have negative impact on future orders and
demand. Government initiatives like UDAY are showing improvement in situation of
Discoms which is likely to mitigate this risk to a considerable extent.
Industry Prospects:
a. EE industry market size is estimated at Rs.1,58,100 Crs, registering a growth of
4% in FY 2017-18. This growth was mainly aided by demand from major end user
industries such as power, infrastructure, railways, etc., and growth in exports. Low
voltage as well as medium and high voltage switchgear, cables, transmission towers,
and insulator segments were main growth drivers of the industry, while energy
meters, distribution transformers and conductors showed a decline. Revival in
demand from realty, infrastructure, and other manufacturing industries as well as
the governments focus on capacity augmentation across generation and T&D are
expected to support growth in the medium term.
b. It is expected that sector's revenue to grow at a compounded annual growth rate
(CAGR) of 4-5% in the medium term, on the back of investments in T&D as well as
renewables sectors. SMEs export their products to large electrical equipment
manufacturers, thus acting as contractors. These exports have aided growth in
certain sectors such as cables, meters, switchgears, etc. We expect the trend of
improving exports supporting revenue growth to continue in the medium term.
Growth is also expected to be there on ground due to increased focus on
infrastructure and rural development, especially with the 100% rural electrification
target to be achieved by March 2019.
c. Utilisation is expected to rise marginally but remain in the range of 60-70% over
the next three years. Demand from the power generation segment is expected to be
weak, while that from the transmission and distribution (T&D) segment is likely to
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
grow rapidly. Also, industrial demand (steel, cement, textiles, etc.) is expected to be
weak, whereas railways and renewables will support the growth.
d. Operating margins improved on account of a marginal rise in utilisation and
stable raw material prices. Intense competition in the industry, coupled with limited
value-added nature of small and medium enterprise (SME) players, leads to low
bargaining power and small growth margins. Operating margins to remain in the
range of 8.5-9.5% for next fiscal on account of volatility in raw material prices. SME
players are susceptible to volatility in raw material prices and exchange rate.
Working capital requirements are expected to remain high. SMEs tend to hold
inventory to meet large orders.
e. Long term growth rate for the electrical equipment industry is projected to be at
25.4% CAGR from USD 21bn (FY15) to USD 102.5bn (FY22). Over the long term the
key growth drivers would be growing demand for power consumption with electricity
reaching rural and hitherto untapped regions; opportunities for replacement,
maintenance and brownfield expansions; higher investments and capacity
expansions with the increasing entry of global players through JV route; and policy
support by the Central Government.
Company;s Position
TELK is a manufacturer of High Voltage Power transformers. Being a JV between
GoK and NTPC, with very few competitors, TELK enjoys a comfortable position in
the market. The company has been awarded many quality certifications like ISO
9001,QMS,NABL etc. The main clients of the company include all state electricity
boards, NTPC, PGCIL, MEIL, GVPR Engineering etc. For the FY 2019-20, the
company has already bagged orders for power transformers to the tune of Rs.223.02
crs .
Market Share of the company
Key customers and Vendors of the Company
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
• Nuclear Power Corporation of India Ltd.
• National Thermal Power Corporation Ltd
• KSEB
• All state electricity boards
• Railways
• Cochin International Airport
• Megha Engineering Infrastructure Ltd
• GVPR Engineers Ltd, Hyderabad
• Bharath Heavy Electricals
• Power Grid Corporation of India Ltd.
Details of Key Products
The main product of the company is Extra High Voltage Power Transformer .The
range of Power transformers offered is from 20 MVA to 315 MVA(3 phase)/825 MVA
(single phase).These products conform to national and other international
standards.The company also manufactures bushings ,gear etc.
Trend in pricing of raw materials, finished goods and operating margins
The key raw materials are CRGO Steel, Copper and Aluminum. The raw material is
not abundantly available locally. Usually, EE players partly procure the materials
locally and partly through import. As key input needs to be imported for some
equipment like transformers, the industry is also subject to foreign currency
fluctuation risk. CRGO steel sheet is used in the manufacture of transformers . The
prices have been very stable for entire last fiscal (17-18) at around Rs.59000/t level.
Y-o-Y there has been a marginal 1.19% increase. The basic customs duty on MgO
coated cold rolled steel coils for use in manufacture of CRGO steel has been reduced
from 10 %to 5 % in Budget 2017-18. Reduction of BCD on CRGO steel will help in
reduction of the cost of power transformers. The Industry profitability is expected to
remain under pressure due to dependence on imports and increase in raw material
prices among other factors like intensified international competition and long
delivery schedules.
Details of Exports, if any
Details of Exports to Associate concerns, if any
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
The company's exports are meager and it exported only to Oman during FY 201718, which is a country under Medium risk category. The exports constituted only
0.05% of the total turnover.
Ability to compete against imports
The company is in existence since 1963 and is one of the industry majors in the
Power Transformer manufacturing industry.Also,with the strong backing of NTPC
,the company is still the sought after name among all the state electricity boards and
companies like NTPC, PGCIL etc.
Critical Success factors
1.The company has a long track record ranging back to 1963.
2 .Joint Venture between GoK and NTPC.
3.The firm is a preferred supplier amongst all state electricity boards, Indian
railways etc owing to a high level of quality conformations.
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
C4. Ratio Analysis
Amount INR in Crore
2017-18
2018-19
2019-20
2020-21
Estimated Provisional Estimated
01-0401-0401-042018/31- 2018/31- 2019/3103-2019
03-2019
03-2020
Projected
01-042020/3103-2021
Estimated
01-042017/3103-2018
Audited
01-042017/3103-2018
1.71
1.63
1.71
1.65
1.68
1.71
61.44
60.75
73.02
65.66
76.22
84.25
0.21
0.39
0.3
0.31
0.32
0.33
27.13
17.65
19.87
15.93
14.32
13.28
0.14
0.18
0.14
0.13
0.11
0.1
Interest Coverage Ratio *
8.41
2.51
4
2.69
3.35
3.45
FACR, if applicable
-0.66
-0.62
-0.68
-0.68
-0.74
-0.75
0
0
24.81
47.12
30.11
31.59
32.32
31.99
9.4
9.49
7.85
7.24
8.11
8.56
Long Term Loans / EBIDTA
0
0.68
0.78
0.49
0.44
0.43
Debt / Equity
0
0.15
0.2
0.1
0.1
0.1
0.01
0.04
0.02
0.03
0.03
0.03
Particulars
Liquidity Ratios
Current Ratio
NWC
NWC/sales
Bank Finance (BF) to
Current Assets (%)
BF/Gross sales
Coverage Ratios
DSCR, if applicable
Operating cost to Sales (%)
EBIDTA / Net Sales
Interest/Cost of Sales
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
2017-18
2018-19
2019-20
2020-21
Estimated
01-042017/3103-2018
Audited
01-042017/3103-2018
PBT/Net Sales%
7.73
4.85
5.24
3.8
4.87
5.23
Gross Current Assets ( as no.
of days of sales)
184
369
260
289
286
288
Net Sales to Total Tangible
Assets (times)
1.44
0.89
1.27
1.15
1.18
1.17
11.16
4.29
6.67
4.39
5.73
6.14
PBT / Tangible Net Worth
0.21
0.11
0.17
0.11
0.14
0.15
(Inventory/Net
Sales)+(Receivables/Gross
Sales)(Days)
183
346
252
232
241
244
Operating Cycle- No. of total
days
167
346
252
232
241
244
TOL/TNW
0.86
1.6
1.56
1.47
1.45
1.41
TOL/Adj. TNW
0.86
1.6
1.56
1.47
1.45
1.41
6.98
-8.18
5.24
2.41
4.87
5.23
11.06
3.2
10.05
3.68
5.13
8.06
Particulars
Estimated Provisional Estimated
01-0401-0401-042018/31- 2018/31- 2019/3103-2019
03-2019
03-2020
Projected
01-042020/3103-2021
Turnover Ratios
PBT to Total Tangible Assets
(%)
Solvency Ratios
Profitability Ratios
OPM %( OP/NS %)
ROE%
* Interest coverage ratio: Calculation method EBITDA/Interest
Comments on Adverse movements in
a. TNW
TNW of the company has increased from Rs.58.71 crs (as at 31.03.2017) to Rs.66.61
crs (as at 31.03.2018) on account of plough back of profits and reduction in Deferred
Tax Assets. As per the PBS, the same has improved further by Rs.7.19 crs.
b. TOL/TNW
The gearing ratio of the company improved from 1.64 as on 31.03.2017 to 1.60 as on
31.03.2018 on account of improvement in TNW. The ratio is well below the desired
level of =3.50 (as per the CRA model). Improvement in TNW has led to further
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
improvement in the ratio to 1.47 as on 31.03.2019.
c. TOL/Adj. TNW
No investment in associates and subsidiaries and hence TOL/Adj TNW is same as
the TOL/TNW of the company. The ratio is well below the desired level of =3.50 (as
per the CRA model).
d. Current Ratio & NWC
The current ratio of the company as on 31.03.2018 is 1.63 as against 1.46 as on
31.03.2017 which is above the desired level of >=1.40 (as per the CRA model). The
ratio has further improved to 1.65 as on 31.03.2019. The NWC position has also
improved from Rs.42.04 crs as on 31.03.2017 to Rs.60.75 crs. as on 31.03.2018.
e. Details of any significant Non Operating Income / Expenditure that
materially alters the PAT
Nil
f. Comments on variation of more than 20% from industry best figures for
EBIDTA/Net Sales
Industry figure for EBIDTA /Net Sales is not available. PBT/Net sales of TELK is
4.85% for FY 2018 and 3.80 for FY 2019.The industry average for PBT/Net salesis
2.61%for FY 2018 and 3.76 for FY 2019. Hence, there is no variation from industry
best figures.
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
C5. Synopsis of Balance Sheet
Amount INR in Crore
Current Liabilities
2017-18
2018-19
2019-20
2020-21
Estimated
Audited
Estimated Provisional Estimated
Projected
01-04-2017 01-04-2017 01-04-2018 01-04-2018 01-04-2019 01-04-2020
1
2
1
3
1
4
to
to
to
to
to
to
31-03-2018 31-03-2018 31-03-2019 31-03-2019 31-03-2020 31-03-2021
Short term Bank
40.00
27.81
35.00
26.50
27.02
27.02
Other Current
Liabilities (B) (Total of
i,ii,iii & iv)
45.99
68.97
68.09
74.16
85.48
92.13
i. Sundry Creditors
6.50
21.27
19.86
19.19
18.35
20.18
ii. Advance Payments
7.50
1.93
2.99
2.99
5.27
5.80
iii. TL Inst. Repayable
in 12 months (incl
FCCB)
0.00
0.00
0.00
0.00
0.00
0.00
31.99
45.77
45.24
51.98
61.86
66.15
85.99
96.78
103.09
100.66
112.50
119.15
iv. Provisions &
Others CL
Total Current
Liabilities (C) =
(A+B)
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Amount INR in Crore
Term Liabilities
2017-18
2018-19
2019-20
2020-21
Estimated
Audited
Estimated Provisional Estimated
Projected
01-04-2017 01-04-2017 01-04-2018 01-04-2018 01-04-2019 01-04-2020
1
2
1
3
1
4
to
to
to
to
to
to
31-03-2018 31-03-2018 31-03-2019 31-03-2019 31-03-2020 31-03-2021
v. Term Loans - SBI
(> 12 months)
vi. Term Loans Others (>12 months)
0.00
0.00
0.00
0.00
0.00
0.00
vii. Debentures,
Redeemable Pref.
shares (<12 years),
0.00
0.00
0.00
0.00
0.00
0.00
viii. Unsecured Loans
0.00
0.00
0.00
0.00
0.00
0.00
ix. Other Term
0.00
9.84
15.09
7.52
8.68
9.54
x. DTL
0.00
0.00
0.00
0.00
0.00
0.00
Total Term
Liabilities (D) =
Total of (v to x)
0.00
9.84
15.09
7.52
8.68
9.54
Total Outside
Liabilities (E) =
(C+D)
85.99
106.62
118.18
108.18
121.18
128.69
xi. PUC (Including
Premium)
42.97
42.97
42.97
42.97
42.97
42.97
xii. Reserves &
Surplus(Other than
Revaluation
Reserves)
67.04
50.39
50.85
50.75
50.84
50.84
0.00
16.19
16.19
16.19
16.19
16.19
Net Worth (NW) (F) =
Total of (xi to xiv)
110.01
109.55
110.01
109.91
110.00
110.00
Total Liabilities (G)
= (E+F)
196.00
216.17
228.19
218.09
231.18
238.69
xiii. Share
Application Money
xiv. Others
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Amount INR in Crore
Current Assets
2017-18
2018-19
2019-20
2020-21
Estimated
Audited
Estimated Provisional Estimated
Projected
01-04-2017 01-04-2017 01-04-2018 01-04-2018 01-04-2019 01-04-2020
1
2
1
3
1
4
to
to
to
to
to
to
31-03-2018 31-03-2018 31-03-2019 31-03-2019 31-03-2020 31-03-2021
a. Cash & Bank
Balances
5.00
0.01
0.38
0.02
0.02
0.02
c. Receivables(< 6
months)
91.93
44.93
91.36
86.89
84.44
88.66
d. Investments
(Other than long
term)
4.00
5.37
5.20
6.34
5.85
6.44
e. Total Inventory
38.50
101.31
78.87
46.72
74.12
83.58
8.00
5.91
0.30
26.35
24.29
24.70
147.43
157.53
176.11
166.32
188.72
203.40
b) LC/BG Margins,
Fixed Deposit &
liquid investments
f. i. Dues from
Associate /
Subsidiaries
f. ii. Other Current
Assets - Others
Total Current
Assets (A)
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Amount INR in Crore
Fixed Assets
2017-18
2018-19
2019-20
2020-21
Estimated
Audited
Estimated Provisional Estimated
Projected
01-04-2017 01-04-2017 01-04-2018 01-04-2018 01-04-2019 01-04-2020
1
2
1
3
1
4
to
to
to
to
to
to
31-03-2018 31-03-2018 31-03-2019 31-03-2019 31-03-2020 31-03-2021
Gross Block
22.50
18.09
20.72
18.15
19.17
20.00
4.12
3.07
3.23
3.05
3.96
4.00
23.38
15.15
17.50
15.11
15.22
16.01
0.01
0.01
0.01
0.01
0.01
0.01
12.90
0.00
0.00
0.00
0.00
0.00
2.00
0.54
0.36
0.54
0.55
0.55
Non Current Assets
(C)
14.91
0.55
0.37
0.55
0.56
0.56
Total Tangible
Assets (A+B+C = D)
185.72
173.23
193.98
181.98
204.50
219.97
Intangible Assets,
including DTA (E)
6.36
15.84
16.37
12.17
7.30
7.30
Accumulated Loss,
if any (F)
3.92
27.10
17.84
23.94
19.38
11.42
Total Assets (D + E
+ F)
196.00
216.17
228.19
218.09
231.18
238.69
Less: Cumulative
Depreciation
Net Block
(excluding
revaluation
reserves) + Capital
Work in Progress (B)
Investment in
Associates,
Subsidiaries, Sister
Other Investments
Receivables > 6
months
Others
L.T Loans &
Advances
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Comments (Deterioration/improvement in financials, corrective action plan, if
financials are weak)
i) Comments on any change in capital
structure
There is no change in capital structure
ii) Comments on Short Term borrowings,
As per ABS as on 31.03.2018, STB
if not commensurate with increase in
increased by Rs.6.26 crs, increase in
value of inventory & receivables.
inventory and receivables is Rs.24.91
crs.
iii) Movements of Unsecured Loans (quasi No unsecured loan
equity)
iv) Change in investments in Group
companies / others
No investment in group companies
v) Comments on Sundry Debtors beyond
6 months - present position
Receivables beyond 6 months is Nil as
vi) Loans and advances to group
companies
Confidential and Property of State Bank of India
on 31.03.2019
Nil
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
vii) Others , if any (as on 31.03.2018)
Other current liabilities of Rs.45.77 crs
as on 31.03.2018 include:Amount
payable to employees and other dues Rs.
20.36 crs, statutory liabilities-Rs.6.91
crs, provision for tax-Rs.3.21 crs,
provision for employment benefits-Rs.
15.24 crs, Unclaimed Dividend- Rs.0.05
cr.
Other Term Liabilities of Rs.9.84 crs
include Provision for gratuity, leave
encashment and sick leave.
Others in Net Worth consists of Capital
Reserve of Rs.16.19 crs
Investments (Other than long term) of
Rs.5.37 crs include Margin Money
Deposit- Rs.5.28 crs, Unclaimed
Dividend Account- Rs.0.05, Other
deposits- Rs.0.04 crs
Other current assets of Rs.5.91 crs
include: Balance with government
authorities-Rs.3.16 crs, Employee
advances-Rs.0.29 cr, Advances to
suppliers and contractors- Rs.1.06 crs,
EMD- Rs.0.54 cr, employee advancesRs.0.86 cr.
Other Non-current Assets of Rs.0.54 crs
include Deposits- Rs.0.42 crs and Long
term government gold deposit with SBIRs.0.12 cr
Qualified opinion for ABS 2017-18:
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
The statutory auditor has made the following qualifications for the ABS 2017-18:
1. The company has not obtained confirmation of balances in respect of Trade
Receivables, Advances to suppliers and contractors, balance with Government
Authorities and Loans as on 31.03.2018.
2. a. The company has obtained a statement from the third party indicating the
details of materials held by them. Except for this, there are no records relating to
material lying with third parties.
b. Physical verification of material lying with fabricators as on 31.03.2018 has
notbeen done.
3. Authentication of vouchers and approvals thereon (except for bank vouchers) by
superior officer is not available in almost all the cases.
4. Details regarding break up of EMD and security deposit received from contractors
and retention money due to contractors are not available.
5. In some of the Fixed Assets, code nos are not seen affixed on these assets.
6. It is observed that the booking of Income Tax deduction at source (TDS) liability
has not been passed through the respective ledger accounts resulting in a higher
debit balance in TDS payable and higher credit balance in parties account.
7. GST Input Tax Credit Account, GST payable account and CENVAT credit
accounts are not reconciled with the records of the company.
The Auditors have opined that except for the possible effects of the material
weaknesses described above on the achievement of the control criteria, the company
has maintained, in all material respects an adequate internal financial control
system over financial reporting based on the guidelines issued by ICAI. The auditors
have further certified that these material weaknesses do not affect the standalone
IndAS financial statements of the company.
Comments in adverse movements only in the above: (Not to exceed 5-6 lines)
i) Comments on any change in capital structure
There is no change in capital structure
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
ii) Comments on Short Term borrowings, if not commensurate with increase in value
of inventory & receivables.
As per ABS as on 31.03.2018, STB increased by Rs.6.26 crs, increase in inventory
and receivables is Rs.24.91 crs.
iii) Movements of Unsecured Loans (quasi equity)
No unsecured loan
iv) Change in investments in Group companies / others
No investment in group companies
v) Comments on Sundry Debtors beyond 6 months - present position
Receivables beyond 6 months is Nil as on 31.03.2019
vi) Loans and advances to group companies
Nil
vii) Others , if any
Other current liabilities of Rs.45.77 crs as on 31.03.2018 include:Amount payable to
employees and other dues Rs.20.36 crs, statutory liabilities-Rs.6.91 crs, provision
for tax-Rs.3.21 crs, provision for employment benefits-Rs.15.24 crs, Unclaimed
Dividend- Rs.0.05 cr.
Other Term Liabilities of Rs.9.84 crs include Provision for gratuity, leave encashment
and sick leave.
Others in Net Worth consists of Capital Reserve of Rs.16.19 crs
Investments (Other than long term) of Rs.5.37 crs include Margin Money DepositRs.5.28 crs, Unclaimed Dividend Account- Rs.0.05, Other deposits- Rs.0.04 crs
Other current assets of Rs.5.91 crs include: Balance with government authoritiesRs.3.16 crs, Employee advances-Rs.0.29 cr, Advances to suppliers and contractorsRs.1.06 crs, EMD- Rs.0.54 cr, employee advances- Rs.0.86 cr.
Other Non-current Assets of Rs.0.54 crs include Deposits- Rs.0.42 crs and Long
term government gold deposit with SBI- Rs.0.12 cr
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
C6. Statutory dues/Other Contingent liabilities
Dues
Statutory
dues
Contingent
liabilities
Amount Quantified in
ABS as on 31-03-2018
Impact on financial
position (as % of
TNW)
Negative Score in
CRA, if any
0.63
0.00
0.00
62.85
24.62
8.00
Any legal case or any significant disclosures in the notes to account which can have
a serious impact on financials of the company: No
Unhedged exposures and extent of risk, if natural hedge not available, risk
mitigation plan
Comments, in brief, if the impact is significant
The foreign currency exposure of the company as on 31.03.2018 is Rs.0.93 cr which
is only around 0.61% of the total turnover. Since the FCE is very low, company has
not formalised any hedging policy.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
C7. Movement of NWC / Liquidity/TNW
Amount INR in Crore
2017-18
NWC
Current Ratio
2018-19
2019-20
2020-21
Estimated Provisional Estimated
Projected
Estimated
Audited
61.44
60.75
65.66
65.66
76.22
84.26
1.71
1.63
1.65
1.65
1.68
1.71
Net cash from
operating
-8.63
1.23
Net cash from
investing
3.28
2.36
Net cash from
financing
1.99
-6.97
Net increase in
cash/cash
equivalent
-3.36
-3.38
Comment on reasons for decline in NWC ( Such as Cash Losses, Diversion of
funds, insufficient cash accruals to pay TL instalment etc.), if any and action
plan to improve the position
The NWC position has improved from Rs.42.04 crs as on 31.03.2017 to Rs.60.75
crs. as on 31.03.2018 and to Rs.65.66 crs as on 31.03.2019.
The current ratio of the company as on 31.03.2018 is 1.63 as against 1.46 as on
31.03.2017 which is above the desired level of >=1.40 (as per the CRA model). The
ratio has further improved to 1.65 as on 31.03.2019 (provisional).
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Movement of Long Term Funds (Funds Flow)
Long Term Sources
Amount INR in Crore
Funds Flow
2017-18
2018-19
2019-20
2020-21
Estimated
Audited
Estimated Provisional Estimated
Projected
01-04-2017 01-04-2017 01-04-2018 01-04-2018 01-04-2019 01-04-2020
to
to
to
to
to
to
31-03-2018 31-03-2018 31-03-2019 31-03-2019 31-03-2020 31-03-2021
a) Cash Accruals
13.23
3.95
10.86
4.72
6.63
10.13
b) Equity Funds
0.00
0.00
0.00
0.00
0.00
0.00
c) Loans
-4.15
5.69
5.25
-2.32
1.16
0.86
d) Others
15.66
0.25
-0.98
-1.22
-1.07
-2.13
24.74
9.89
15.13
1.18
6.72
8.86
Total
Long Term uses
Amount INR in Crore
Funds Flow
2017-18
2018-19
2019-20
2020-21
Estimated
Audited
Estimated Provisional Estimated
Projected
01-04-2017 01-04-2017 01-04-2018 01-04-2018 01-04-2019 01-04-2020
to
to
to
to
to
to
31-03-2018 31-03-2018 31-03-2019 31-03-2019 31-03-2020 31-03-2021
a) CAPEX
10.08
0.80
2.51
-0.06
1.02
0.83
b) Others
-4.74
-9.62
0.35
-3.67
-4.86
0.00
5.34
-8.82
2.86
-3.73
-3.84
0.83
19.40
18.71
12.27
4.91
10.56
8.03
Total
Long Term
Surplus / Deficit
Comments:
As on 31.03.2018, the company has a long term surplus of Rs.18.71 crs . For the
FY 2018-19,the company has long term surplus of Rs.4.91crs. No long term deficit
is estimated/projected by the company . Hence, the position is considered
acceptable.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Movement of TNW
Amount INR in Crore
Provisional
2018-19
01-04-2018
to
31-03-2019
Estimated
2019-20
01-04-2019
to
31-03-2020
Projected
2020-21
01-04-2020
to
31-03-2021
66.61
73.80
83.33
3.17
4.65
7.95
Add. / Subtract Change in
Intangible Assets
0.04
0.03
0.00
Adjust Prior Year Expenses
0.33
0.00
0.00
3.65
4.85
0.00
73.80
83.33
91.28
Investment in Associates /
Subsidiaries (A & S)
0.00
0.00
0.00
Long Term Loans to A & S
0.00
0.00
0.00
73.80
83.33
91.28
Opening TNW (excluding SAM $)
Share Application Money ($)
Add PAT
Add. (a) Increase in Equity
(b) Increase in Share Premium
Deduct Dividend Payment
Add/Subtract: DTL/DTA
Closing TNW
Adjusted TNW
$
SAM be converted to equity by next Balance sheet date.
Comments in brief, if the impact is significant
The amount shown under prior year expenses represents 'other comprehensive
income/loss'
The amount shown in Prior year expensesperatins to decrease in other equity
(Reserves)of Rs.0.33 cr resulted on account ofOther comprehensiveincome of Rs.
0.33 cr that will not be reclassified to profit and loss.
TNW of the company has increased from Rs.66.61 crs (as at 31.03.2018) to Rs.
73.80 crs (as at 31.03.2019) on account of plough back of profits and reduction in
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Deferred Tax Assets.
TNW is estimated & projected to improve in the coming years mainly on account of
plough back of profits.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
C8. Activity-wise Cash Flow Analysis
Previous Year
Last Year
2017-18
2018-19
Profit before Tax
7.44
7.99
Add: Depreciation
1.31
1.56
4.27
5.66
-13.59
0.00
Cash Flow from Operating Activities
Misc Expenses written off
Interest Paid
Net Loss on Fixed Assets Sold
Diminution in value of Investment
Provision for doubtful debts / age base provisions
bad debts recovered
gold brought to books by crediting misc income
-0.01
impairment value of gold with Bank
Less: Dividend received
Less: Interest received
4.09
2.42
-4.67
12.79
Trade receivables
64.81
-41.96
Inventories
-73.12
54.59
Loans & Advances / Other Current Assets
0.09
-20.64
Liabilities and Provisions
4.11
Cash from Operating Activities
-8.78
Income Tax
0.15
Operating Profit before Working Capital
Working Capital
4.78
investment
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Net Cash from Operating Activities (a)
-8.63
1.23
-0.81
-0.06
Dividend received
0.00
0.00
Interest received
4.09
2.42
3.28
2.36
6.26
-1.31
-4.27
-5.66
Net Cash from Financing Activities (c)
1.99
-6.97
Net Increase / Decrease in Cash (a)+(b)+(c)
-3.36
-3.38
Previous Year
Last Year
a. Net Cash from Operations
-8.63
1.23
b. Net Cash from Investments
3.28
2.36
c. Net Cash from Financing
1.99
-6.97
d. Net increase in Cash / Cash Equivalent
-3.36
-3.38
b) Cash Flow from Investing Activities
Addition in Fixed Assets
Sale of Fixed Assets
Advances for Capital Expenditure
Sundry Creditors for Capital Expenditure
Investments
Non current assets
Net Cash from Investing Activities (b)
c) Cash flow from Financing Activities
Long Term Borrowings
Repayment of Term Loans
Short Term Borrowing
Buyback of Shares
Interest paid
Dividend paid
Corporate Dividend Tax
DTA
Consolidated Cash Flow
Comments in brief, if the impact is significant
There is a net decrease in cash by 3.36 crs during FY 2017-18 mainly due to
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
outflow from operations (Provision for doubtful trade receivables- Rs.13.59 crs).
C9. Inter - Firm Comparison
i. Finance Related
Name of
Company
Bharat Heavy
electricals
FB Lts NFB
$
Lts $
Year
Sales
CR
Cash
Net
Cycle Profit
PBT/
Net
Sales
2500.0 26000. 2018 28925. 1.62 316.00 806.60 5.48
0
00
81
TOL/
TNW
1.08
TELK
12.02 96.40
2018 153.36 1.63 346.00 2.64
4.85
1.60
Transformers
and Rectifiers
Limited
81.00 234.21 2018 685.06 0.96 302.00 4.36
1.00
2.39
$
wherever available either from our own data or external source
ii. Market Related
Name of
Company
Industry
Company
Market
Currency
/Sector
P/E
Cap
P/E
Face
Value
@
Share Price *
EPS of
Last Year
High
Low
Current
None
(* for listed companies)
@
52 weeks' High Low: face value to be mentioned, if not Rs. 10.
Comments
The TELK is a relatively small player compared to BHEL and Transformers and
Rectifiers india Limited. The profitability of TELK is better than both the other
players.The current ratio of the company is better than transformers and rectifiers
india limited.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Section D
LOAN POLICY / DEVIATIONS / COMPLIANCE / REGULATORY PRESCRIPTIONS
D1. Deviations in Loan Policy
Parameters
I. Prudential
Norms Borrower
Indicative
Min/Max Level
Company's
as per Loan
level as on 31Policy
03-2019
Manufacturing
Justifications
6157.00
108.42
Complied with.
II. Prudential
Norms - Group
28733.00
108.42
Complied with.
III. FB Exposure
to the Industry
62851.00
12.02
Complied with.
IV. Substantial
Exposure :
Borrower
10% of Bank's
capital funds
108.42
Complied with.
V. Substantial
Exposure :
group
10% of the
Bank's Capital
Funds
108.42
Complied with.
VI. Term Loan Tenor
N.A
N.A
Complied with.
VII. CRA
Minimum Score
FR-23, BR-9,
MR-13
FR-32.30,BR9.64,MR-19.07
Complied with.
VIII. Hurdle
Rate
SB-10
SB-9
Complied with.
IX. TOL/Adj
TNW
<=4.00
1.47
Complied with.
X. Current ratio
>=1.33
1.65
Complied with.
XI. Debt/Equity
2.00
N.A
N.A
XII. Promoters
Contribution
N.A
N.A
N.A
XIII. Averages
Gross DSCR
(TL)
>=1.20
N.A
N.A
XIV. Long Term
Debt / EBITDA
<=3.60
0.57
Complied with.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
XV. Interest
Coverage Ratio
>=2.60
2.69
Complied with.
N.A
N.A
N.A
RLRR+ 5%,
effective rate
being 12.65%
p.a
Card Rate
NA
.NA
XVI. Non
Compliance of
Norms for
Strategic
Schemes: viz.
Corporate
Loans, TIFS,
CRE and Others
XVII. Rate of
Interest
XVIII. Exposure
to large
specified
Borrowers, in
excess of
permitted limit
XIX. Others
D2. Other deviations:
Parameters
Complian
ce(Y/N)
i) Takeover
Norms
NA
ii) Advances
to Bank's
Directors
and the
parties
related to
Directors
NA
iii)
Advances to
Officers and
the
Relatives of
Senior
NA
Confidential and Property of State Bank of India
Deviations
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Justifications
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Officers of
SBI / Other
Banks
iv) Advances
to Directors
of Other
Bank(s) and
parties
related to
other
Bank's
Directors
NA
v) The
Undertaking
on
(Restrictions
on number
of Layers)
Rules 2017
obtained
NA
vi) The
Undertaking
on
enhancing
credit
supply for
large
borrowers
through
market
mechanism
NA
Note :
(*Refer latest RBI master Circular on Statutory and other Restrictions)
Justification for Deviations from Risk Angle
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Section E
Summary of Critical Risk Factors / Mitigations
Critical Risks
Perceived
Mitigating Factors
CRA / ECR Financial Risks
Related
Group
Related
The Financial Risk score of the company
based on ABS as on 31.03.2018 is 24.20 and
has decreased over previous year. There has
been decline in sales during FY 2017-18
compared to FY 2016-17and the company
has achieved only 57.16% of estimated sales
and 22.51% of estimated PAT.
Business and Industry
Risks
The company manufactures extra high
voltage Power Transformers and its
accessories.The products of the company
maintain high level of quality and has ISO
and NABL certfications.
As per IEEMA report,the electrical equipment
industry,especially demand for transformers
is expected to grow in the coming years
.However,being a joint venture between GoK
and NTPC Ltd, strong support from the
promoters is available to the company.
Management Risks
TELK is a joint venture of Govt of Kerala and
NTPC Ltd .
Hurdle Rates
The CRA rating of the company based on ABS
as on 31.03.2018 is SB-9 and is above the
hurdle rate of SB-10.
The company scores 24.20 under Financial
Risk,9.64 under Business & Industry Risk &
19.07 under Management Risk , which are
above the respective hurdle score of
23.00,9.00 and 13.00.
Any other adverse
remarks in ECR
Nil. The company is rated BBB /stable by
Brickwork ratings and is valid up to
21.02.2020.
Group gearing, where
applicable
Nil
Adverse features in
Nil
Group
Concerns/Associate
entities, interlocking /
diversion of funds, if any
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Details of guarantees
extended to sister
concerns / associates.
Value of guarantees To our Bank Amount
in
To other Bank Amount
in
Sustainabili Environmental
Nil
Clearances
&
ty Concerns
Sustainability measures
Other pending
approvals, if any
Audit
Reports
RFIA Report
Credit Audit Report
Date:20-12-2018
ORM Marks
CRM Marks
55.12
Remarks(comments only
on non-complied issues)
1. Account is irregular
and in SMA from
18/09/2018 as the
continuation is
available up to
17/09/2018. Renewal to
be done immediately to
avoid slippage in to
NPA account.
2.Total FCE is unhedged
and company is not
having any hedging
policy
3.Statutory Auditors
made qualified
observation:
a) Trade receivable of Rs
Confidential and Property of State Bank of India
1. Continuation of limits from up to
29.06.2019 is sanctioned by CCSC vide its
resolution dated 06.02.2019. Renewal of
limits based on ABS 2017-18 and provisional
BS of FY 2018-19 is under progress. 2. FCE
of the company as on 31.03.2018 is Rs.0.93
cr which is only around 0.61% of the total
turnover. Since the FCE is very low, company
has not formalised any hedging policy. 3.
a)The Auditors have opined that except for
the possible effects of the material
weaknesses described above on the
achievement of the control criteria, the
Company has maintained, in all material
respects an adequate internal financial
controls system over financial reporting based
on the guidelines issued by ICAI. The
auditors have further certified that these
material weaknesses do not affect the
standalone IndAS financial statements of the
Company. b) The shortfall in insurance of
stock was that pertaining to the stock which
are lying with fabricators. Company has
confirmed that these stocks were insured by
the fabricator. c) We have advised the
company suitably in this regard. It has been
informed that necessary steps have been
taken to avoid recurrence of this
qualification. 4. Other income consists of the
following: Interest income-Rs.0.80 cr., Profit
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
PPE & scrap-Rs.0.006 cr., Duty Draw back
and duty scrip-Rs.0.21 cr. and Miscellaneous
income Rs.1.50 crs. 5. Same as point no 1. 6.
For FY 2017-18, the company had estimated
higher sales of Rs. 268.28 crs based on the
orders in hand for execution. For this
purpose the company had requested for
enhancement of WC limits. Since company
could not submit the audited financials,
enhancement request of the company was not
considered. The company also experienced
delay in realisation of receivables from two
major customers. Most of the orders received
97.14 crs, Loans (Non- by the company for execution during FY
current asset) of Rs 0.19 2017-18 are carried over to FY 2018-19. All
crs, Loans
these factors led to non-achievement of
(Current Asset) of Rs
estimated sales for the FY 2017-18.
0.44 crs, Balance with
Govt. authorities of Rs
2.46 crs,
Advances to supplier &
contractor of Rs 0.93
crs, Provision for
medical reimbursement
of Rs.0.49 crs are
subjected to
confirmation.
b) Shortfall in insurance
of stock is observed by
the statutory auditor
(mentioned in
other matter paragraph.
c) Reconciliation of fixed
asset with fixed asset
register is not produced
for verification to
statutory auditor of the
company.
4. Non operative income
is noticed and is Rs.
2.52 cr and details not
provided
5. Continuation of the
Limits is available up to
17/09/2018 only and
renewal is
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
pending.
6. FY 2017-18:
Company could not able
to achieve the sales and
achieved Rs.174.27 cr
against the estimation of
273.28 cr (63.77%).
Inventory level is
Rs.76.64
cr which is 99.06% more
than the estimations.
OCA level is Rs. 52.12 cr
which is
206.59% more than the
estimations and OCL is
Rs. 49.20cr which is
24.59% more
than the estimations.
Sundry Creditors level is
Rs. 17.73 cr which is
172.77% more
than the estimations.
Critical ESR / LRM
observations, In case of
Renewal Proposal.
RBIAFI u/s 35
Legal Audit
Dated :26-07-2018
Remarks(comments only
on non-complied issues)
Legal Audit conducted by Adv Sri K
Sivakumar.
Nil
Statutory Audit Report
Dated:15-07-2019
Name of Auditor
K Venkitachalam Aiyer
& Co
Remarks (including
availability of collaterals)
Nil
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Stock & Receivable
Audit Report Dated:
Stock & Receivable Audit waived for PSU.
Qualifications, if any,
given by the auditors in
the Balance Sheet /
financial statements
The Auditors have opined that except for the
possible effects of the material weaknesses
described above on the achievement of the
control criteria, the company has maintained,
in all material respects an adequate internal
The auditor has made
financial control system over financial
the following
reporting based on the guidelines issued by
qualifications for the
ICAI. The auditors have further certified that
ABS 2017-18:
these material weaknesses do not affect the
1.
The company has standalone IndAS financial statements of the
not obtained
company.
confirmation of balances
in respect of Trade
Receivables, Advances to
suppliers and
contractors, balance
with Government
Authorities and Loans
as on 31.03.2018.
2.
a. The company
has obtained a
statement from the third
party indicating the
details of materials held
by them. Except for this,
there are no records
relating to material lying
with third parties.
b. Physical verification
of material lying with
fabricators as on
31.03.2018 has not
been done.
3. Authentication of
vouchers and approvals
thereon (except for bank
vouchers) by superior
officer is not available in
almost all the cases.
4. Details regarding
break up of EMD and
security deposit received
from contractors and
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
retention money due to
contractors are not
available.
5. In some of the Fixed
Assets, code nos are not
seen affixed on these
assets.
6. It is observed that the
booking of Income Tax
deduction at source
(TDS) liability has not
been passed through the
respective ledger
accounts resulting in a
higher debit balance in
TDS payable and higher
credit balance in parties
account.
7. GST Input Tax Credit
Account, GST payable
account and CENVAT
credit accounts are not
reconciled with the
records of the company.
Country
Risk
Country Risk
Nil. The company's exports are meager and it
exported only to Oman during FY 2017-18,
which is a country under Medium risk
category. The exports constituted 0.05% of
the total turnover.
Compliance Compliance of earlier
sanction terms
including Security
creation (Primary /
collateral) /
maintenance of escrow
account / furnishing
personal / Corporate
Guarantee, post
sanction modification
etc
Confidential and Property of State Bank of India
The Compliance details are furnished below
in Non-compliance Section a & b
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
The foreign currency exposure of the
company as on 31.03.2018 is Rs.0.93 cr
which is only around 0.61% of the total
(i) Financial Hedge: 0 %
turnover.
of FCE
Hedged Foreign
Currency Exposure:
Foreign
Currencey
Exposure
(ii) Natural Hedge: 0 %
(FCE) of the of FCE
Company
Unhedged Foreign
Currency Exposure: 100
% of FCE
Any other
adverse
features#
# including any recent significant events, adverse press reports or market intelligence that
may affect the risk profile of the customer and aggravate the risk of lending
E2 (a). Comments on:
Borrower: Default/wilful default and any other unsatisfactory features in
conduct of accounts with us /other banks or institutions
Nil. No irregularities during last 12 months
Defaults by any associate/JV/subsidiary or any unsatisfactory features in
conduct of accounts with us/other banks or institutions
NIL
Overall market perception about promoters/company/group
TELK is a manufacturer of high voltage Power Transformers.Being a joint Venture
between GoK and NTPC, with very few competitors,the company enjoys a
comfortable position in the market.The company has also been awarded many
quality certifications like ISO:9001,QMS,NABL accredition etc.The major clients of
the company include state electricity boards, NTPC, NPCIL, PGCIL and private
players like MEIL, GVPR Engg etc.
Overall leveraging position of the group in relation to promoters equity in the
business and free reserves
Industry Risk (comment on demand supply, availability of raw materials,
import/export competitiveness, extent regulated, entry barriers ) and ability of
the borrower to meet the competition
Detailed in Market and Industry analysis-page no:11-18.
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Environmental issues, if any, and Approval status and Social Issues, if any
To track the movement of ESG (Environmental, Social and Governance)
practices in the company, rating is to be monitored as under :
Scoring System for Environment, Social and Goverance issues (Value
Statements / Scoring Bands)
1. ENVIRONMENT ISSUES
1.1 Register of Regulations
Sr.
No.
Value Statement
(iii) The legal register is maintained but rarely updated.
Score
Company
Score
2
2
Score
Company
Score
2
2
Score
Company
Score
1
1
Score
Company
Score
1
1
Score
Company
Score
1
1
1.2 Pollution Prevention
Sr.
No.
Value Statement
(iii) Pollution prevention measures are adopted and pollution
levels are meeting the prescribed standards.
1.3 Hazardous Waste Management
Sr.
No.
Value Statement
(ii) Tracking and reporting of hazardous waste is being done
to a certain extent, as per regulations. ( Partial
Compliance).
1.4 Resource Efficiency
Sr.
No.
Value Statement
(ii) Few measures have been adopted to conserve natural
resources .
1.5 Green House Gas (GHG) emissions reduction
Sr.
No.
Value Statement
(ii) The company monitors GHG emissions, but no plans to
reduce / offset GHG emissions exist.
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
1.6 Environment & Social Management System
Sr.
No.
Value Statement
(iii) The company has an environment and social
management system. (Such as ISO 14001, ISO 50001,
SA 8000,OHSAS 18001, etc.).
Score
Company
Score
2
2
Score
Company
Score
1
1
Score
Company
Score
2
2
Score
Company
Score
3
3
Score
Company
Score
2
2
Score
Company
Score
1.7 Disclosure and Reporting
Sr.
No.
Value Statement
(ii) Internal ESG monitoring reports are prepared as and
when required by the company’s management / Board of
Directors.
1.8 Environmental Management Plan
Sr.
No.
Value Statement
(iii) Environmental Management Plan (EMP) is prepared and
partially implemented by company.
2. SOCIAL ISSUES
2.1 Social Policy
Sr.
No.
Value Statement
(iv) A robust HR policy exists covering all the aforesaid
features including contractors.
2.2 Grievance Redressal Mechanism
Sr.
No.
Value Statement
(iii) A proper grievance redressal system for employees is in
place, but the grievances are not documented regularly.
2.3 Monitoring / Audits
Sr.
No.
Value Statement
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
(iii) Internal as well as External ESG audits are conducted in
the company.
2
2
2.4 Minimize Impacts and Provide Fair Compensation and Livelihood
Restoration
Sr.
No.
Value Statement
(iii) Land acquisition process does not involve significant
social issues such as physical displacement. Occasional
protests in the community with regard to the company
exist.
The company has done an assessment of impacts but
has not done anything to manage / mitigate them.
Score
Company
Score
2
2
Score
Company
Score
2
2
Score
Company
Score
2
2
Score
Company
Score
2
2
2.5 Emergency Plans
Sr.
No.
Value Statement
(iii) An emergency evacuation plan and a disaster
management plan for all the identified risks are
displayed across the company.
2.6 Health and Safety Policy and Training
Sr.
No.
Value Statement
(iii) The company has a health and safety policy in place, but
the company does not conduct health and safety training
for its employees.
3. GOVERNANCE ISSUES.
3.1 Promote a Fair and Transparent Way of Doing Business
Sr.
No.
Value Statement
(iii) The company conducts business on an arm’s length
basis with its Associate & Subsidiaries. In case of family
businesses, ownership and rights of all shareholders are
respected and terms of employment for all family
members are documented.
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
3.2 Ensure Good Governance Practices at the Company
Sr.
No.
Value Statement
(ii) It has a policy on Good Governance Practices or is ready
to, formulate and announce anti- corruption, counterfraud (ACCF) policies (in three months) and a simple
ACCF management program (in six months) with a basic
compliance mechanism.
Score
Company
Score
1
1
Score
Company
Score
1
1
3.3 Ensure Adequate Internal Checks for Managing Risks
Sr.
No.
Value Statement
(ii) There is a well- defined internal control system for key
areas of operations of the company. There is staff
entrusted with the responsibility of internal audits
Average Score Applicable for Environment issues:
Sr.No.
Sub Parameter.
Score
1.1
Register of Regulations
2
1.2
Pollution Prevention
2
1.3
Hazardous Waste Management
1
1.4
Resource Efficiency
1
1.5
Green House Gas (GHG) emissions reduction
1
1.6
Environment & Social Management System
2
1.7
Disclosure and Reporting
1
1.8
Environmental Management Plan
2
Composite score
2
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Confidential and Property of State Bank of India
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Average Score Applicable for Social issues:
Sr.No.
Sub Parameter.
Score
2.1
Social Policy
3
2.2
Grievance Redressal Mechanism
2
2.3
Monitoring / Audits
2
2.4
Minimize Impacts and Provide Fair Compensation and Livelihood
Restoration
2
2.5
Emergency Plans
2
2.6
Health and Safety Policy and Training
2
Composite score
2
Average Score Applicable for Government issues:
Sr.No.
Sub Parameter.
Score
3.1
Promote a Fair and Transparent Way of Doing Business
2
3.2
Ensure Good Governance Practices at the Company
1
3.3
Ensure Adequate Internal Checks for Managing Risks
1
Composite score
1
Average Overall Score Applicable for Environment, Social and Government
issues:
Sr.No.
Parameter.
Composite
Score
1
Environment
2
2
Social
2
3
Governance
1
Composite score
2
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Confidential and Property of State Bank of India
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Parameter
Rating
Environmental
2
Social
2
Governance
1
Rating Explanation
Rating - 0
Rating - 1
Rating - 2
Company is fully
Company does not
compliant with all
meet minimum ESG
the applicable laws
standards
& regulations
Company goes
beyond legal
requirements and
follow additional
ESG best practices
Rating - 3
Company
incorporates
international best
practices in its
procedures
Any prosecution/investigation against the
borrowers/promoters/directors going on.
No
Major Deviation, if any in respect of RBI guidelines/SEBI/stock exchange/any
other regulator (RBI guidelines on ECB/financing of JVs abroad/FDI
guidelines/financing of NBFCs etc., if applicable)
Nature of Guidelines
Details, Impact & Mitigation
None
Any unusual feature in assessment of the credit facilities which may pose more
than normal risk and is not in conformity with generally accepted lending
norms including permitting higher 'Loan To Value' ratio against
stocks/receivables, stretch in WC cycle etc.
Nil
Working capital cycle length
Existing (days): 232
Proposed (days): 241
Comment, if any stretch in working capital cycle observed and risk mitigation
There is only a marginal stretch in working capital limits estimated for FY 2019-20.
The company has estimated the working capital cycle based on the demand and
market conditions.
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Comments from Credit Audit( Executive Summary Page)/statutory auditors/
Stock Audit / Legal Audit/ RBI official/other Audits requiring attention of
sanctioning authority (only the items of pending compliances as on date need
to be furnished)
Name of
Audit Report
Credit Audit
Report
Date
20-122018
Non-compliance
Present position
Timeline for
compliance
Credit Audit
observations and
Branch Reply
discussed elsewhere
in the proposal.
Non-compliance, if any of earlier sanction terms and proposed timelines for
compliance.
Sanction
Date
Financial
Covenants
31-102018
06-022019
Target
date for
complianc
Covenant Details
Non-compliance details
Others
(i) Renewal based on
audited financials of
2017-18 to be
completed by
31.12.2018
(ii) ECR to be
obtained for entire
exposures.
(i) Present proposal is based on audited financials of 201718 and provisional financials not older than 6 months.
The company had submitted Audited financials for the FY
2016-17 only in August 2018. The delay in preparation of
ABS for FY 2016-17 had spill over effect in the preparation
of ABS for FY 2017-18 and the same was submitted in
July 2019. Hence the delay. Continuation of limits for a
further period of 180 days from 01.01.2019 has however
been approved by CCSC on 06.02.2019.
(ii) ECR covers the entire exposure for Rs.232.42 crs
(Brickworks BBB rating valid up to 21.02.2020)
Others
Renewal based on
audited financials of
2017-18 and
provisional
financials not older
than 6 months (in
case provisional
financials as on
30.11. 2018 is not
available) to be put
up to sanctioning
authority by
30.04.2019
Present proposal is based on audited financials of 2017-18
and provisional financials not older than 6 months.
The company had submitted Audited financials for the FY
2016-17 only in August 2018. The delay in preparation of
ABS for FY 2016-17 had spill over effect in the preparation
of ABS for FY 2017-18 and the same was submitted in
July 2019. Hence the delay.
b. Non-compliance status with Other terms and Conditions of earlier sanction :
Sanction Date
Sanction
Date
Non-compliance details
Target date
for
None
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Major deviation, if any from Loan Policy/ lending norms for NBFCs/ Corporate
Loan / other schematic lendings, which require sanctioning authority's
approval and rationale.
Nature of deviation
Justification for acceptance
None
For listed companies, change in capital market perception (market
capitalization for last 3 years) as also recent recommendations , available if any
from reputed brokerage houses:
Not a listed company
Capability to execute large projects (if proposal is for project funding, details in
addendum):
N.A
Any other critical risk factors requiring attention of sanctioning authority viz.
country risk, counter party risk, regulatory risk in overseas territories etc.
Nature of Risk
Factor
Details of Risks
Mitigation
None
E2 (b). Early Warning Signals:
Early warning signals, if any (as per the given list) and corrective plan in
respect of warning signal(s) observed:
Early Warning Signals observed, if any
Sr. Early Warning Signals Yes
No
/No
.
/NA
1 Persistent Irregularity in
Account
N
2 Defaults in - Repayment
Obligations Servicing of
- Periodic Interest
N
3 Devolvement of LC
liabilities/Invocation of
Guarantees
N
Confidential and Property of State Bank of India
Comments(if adverse)
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
4 Lower credit
summations in the
account.
N
5 Sales transactions not
routed through Cash
Credit account
N
6 Declining current ratio
N
7 Operating losses/net
losses
N
8 Erosion of TNW
N
9 Opening of accounts
with other banks
N
10 Default in payment to
the banks /sundry
debtors and other
statutory bodies, etc.,
bouncing of the high
value cheques
N
11 Funds coming from
other banks to liquidate
the outstanding loan
amount
N
12 Onerous clause in issue
of BG/LC/standby
letters of credit
N
13 In merchanting trade,
import leg not revealed
to the bank
N
14 Funding of the interest
by sanctioning
additional facilities
N
15 Floating front/associate
companies by investing
borrowed money
N
16 Increase in borrowings,
despite huge cash and
cash equivalents in the
borrower's balance sheet
N
17 Material discrepancies
in the annual report
N
18 Significant in
consistencies within the
N
Confidential and Property of State Bank of India
The company came out of loss during FY 2016-17.
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
18 annual report (between
various sections)
N
19 Frequent change in
accounting period
and/or accounting
policies
N
20 Frequent requests for
general purpose loans.
N
21 Movement of an account
from one bank to
another.
N
22 Frequent adhoc
sanctions.
N
23 LCs issued for local
trade/ related party
transactions.
N
24 High value RTGS
payments to unrelated
parties.
N
25 Heavy cash withdrawal
in loan accounts.
N
26 Declining profitability
N
27 Liabilities appearing in
ROC search report, not
reported by the borrower
in its annual report
N
28 Substantial related
party transactions
N
29 Delay observed in
payment of outstanding
dues
N
Only redundant charges appearing in RoC search
report.
Nil during the last FY.
There was only one instance during FY 201718.The company could not liquidate the ad-hoc
facilty on time.The account was irrregular for 59
OPERATIONAL & PHYSICAL
30 Low activity levels - in
plant
N
Low activity levels - in
Bank Account
N
31 Disorderly
diversification/frequent
changes in plans
N
32 Overdue receivables
N
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
33 Return of outward bills
unpaid/dishonoured
cheques
N
34 Low inventory
movement
N
35 Non-payment of
wages/power bills
N
36 Frequent labour
troubles
N
37 Loss of critical /
important customers
N
38 Frequent return of
finished goods
N
39 Raid by Income
tax/sales tax/central
excise duty officials
N
40 Frequent change in the
scope of the project to
be undertaken by the
borrower
N
41 Under insured or over
insured inventory
N
42 Dispute on title of the
collateral securities
N
43 Costing of the project
which is in wide
variance with standard
cost of installation of the
project
N
44 Foreign bills remaining
outstanding for along
time and tendency for
bills to remain overdue
N
45 Request received from
the borrower to
postpone the inspection
of the godown for flimsy
reasons
N
46 Higher level of claims
not acknowledged as
debt
N
47 Same collaterals
N
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
47 charged to a number of
lenders
N
48 Concealment of certain
vital documents like
master agreement,
insurance coverage
N
49 Reduction in the stake
of promoter /director
N
50 Substantial increase in
unbilled revenue year
after year
51 Large number of
transactions with inter
connected companies
and large outstanding
from such companies
N
52 Significant movements
in inventory,
disproportionately
higher growth in
turnover
N
53 Significant movements
in receivables,
disproportionately
higher than the growth
in turnover and/or
increase in age of the
receivables
N
54 Disproportionate
increase in other current
assets
N
55 Significant increase in
working capital
borrowings as a
percentage of turnover
N
56 Critical issues
highlighted in the stock
audit report
57 Increase in Fixed Assets,
without corresponding
increase in turnover
(when project is
implemented)
NA Stock Audit waived for PSUs
N
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
58 Poor disclosure of
materially adverse
information and no
qualification by the
statutory auditors
N
59 Non submission of
original bills
N
LOSS OF MARKET REPUTATION
60 Court cases against the
unit
N
61 Inability to raise
supplies on usual credit
terms
N
ATTITUDINAL CHANGES
62 Avoids contact with the
Bank
N
63 Non/ delayed
submission of data and
financials
Y
64 Fudging of financial
statements (e.g. change
in accounting practices,
qualifying remarks by
the auditors etc.)
N
65 Dissension amongst
partners/promoters
N
The company had submitted Audited financials for
the FY 2016-17 only in August 2018. The delay in
preparation of ABS for FY 2016-17 had spill over
effect in the preparation of ABS for FY 2017-18
and the same was submitted in July 2019.
66 Invoices devoid of TAN
and other details
67 Resignation of the key
personnel and frequent
changes in the
management
OTHERS
68 Adverse impact of
change in government
policy
N
69 Emergence of new
competitors /technology
N
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
70 Financing the unit far
away from the branch
N
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Section F
ASSESSMENT OF FUND-BASED LIMITS
F1. Assessment of Working capital Limit
(If the assessment of the WC limit is based on any other parameters, like Cash
Budget Method, Nayak Committee-Turnover Method, please specify them along with
an explanation)
i. Inventory & receivable levels: (Amount)(Days)
Inventory/Payments
Audited
2017-18
Provisional
2018-19
Estimated
2019-20
Projected
2020-21
Raw Material
Imported
Amount
Day
Domestic
FG
86
Receivables
(Domestic)
Amount
Receivables
(Export)
Amount
Receivables
(Total)
Amount
Day
Day
Day
0
69
74
11.76
86.89
0.00
44.93
26
133
0
88.66
124
0.00
0
86.89
156
16.10
84.44
0.00
0
11.80
19
20
156
109
14.75
15.61
44.93
55.68
131
26
30
109
47.61
13.46
30.18
0.00
0
124
29
74
0.00
17.65
36.41
Amount
Day
0
34.37
Amount
Day
0.00
0
Amount
Day
SIP
0.00
0.00
0
84.44
133
88.66
124
S.Creditors
Import
Amount
Day
Domestic
Amount
Day
21.27
48
Other Current Amount
Assets
Comments on holding
level
19.19
91
4.85
18.35
40
25.49
20.18
45
21.91
22.32
Majority of the RM used in the manufacture of transformers
are procured indigenously, except for a few items like
bushing oil and sometimes CRGO steel. However the
company had not imported any raw material during FY
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Comments on holding
level
2018-19. The normal holding period of the company is
around 2 to 3 months and it is estimated to increase to
around 4 months. As the high value raw materials are very
much subject to price volatility, the company has estimated
to make procurement in advance in the coming years, even
though raw materials may be utilised later only - as per the
production plan.
Since the company is engaged in manufacture of heavy
electrical equipment like transformers which are specialty
products, procurement of raw materials and manufacture is
based on work orders in hand. The company has informed
that there might be instances where they hold production of
some transformer for a particular period, even after
commencement of production and give priority to some other
transformers for a particular year (which may not be true for
another year / period). Hence there could be variation in raw
material holding period Y-o-Y.
The company manufactures high voltage power transformers
and the estimated levels of 26 days for SIP is acceptable.
The holding levels of finished goods are considered at
acceptable levels.
There was a stretch in holding level of receivables in FY
2018-19. The receivable holding levels were more than 5
months during FY 2018-19. In majority of the cases,
realization of a part of receivables happen only after
commissioning and successful testing of equipment at the
customer end. Hence there is variation in receivable level for
different years. The company has estimated the receivables
holding level to be below 5 months for FY 2019-20.
The sundry creditors level estimated around 1-1.5 months is
reasonable and in line with the normal working of the
company.
The overall WC cycle of the company is estimated to increase
marginally from 232 days in FY 2018-19 to 241 days in FY
2019-20.
Comments /
Justification
The holding levels estimated by the company are based on
the current market and demand and the order received .The
levels are realistic and may be accepted.
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
ii. Assessed Bank Finance
Assessed Bank Finance
Amount INR in Crore
Audited
2017-18
Net Sales
Inventory / Net sales +
Receivables / Gross sales
Provisional
2018-19
153.36
346
210.07
232
Estimated
2019-20
Projected
2020-21
240.57
258.02
241
244
Net Sales to Total tangible
Assets
0.89
1.15
1.18
1.17
Total Current Asset (TCA)
157.53
166.32
188.72
203.40
Other Current Liabilities
(OCL)(excluding sundry
creditors)
47.81
55.09
67.24
72.07
WC Gap (TCA-OCL)
88.56
92.16
103.24
111.27
NWC (TCA-TCL)
60.75
65.66
76.22
84.25
Bank Finance ( WC Gap –
NWC)
27.81
26.50
27.02
27.02
FBWC
27.81
26.50
27.02
27.02
NFBWC
96.40
96.40
96.40
96.40
NWC/TCA(%)
38.56
39.48
40.39
41.42
Sr Cr / TCA (%)
13.43
11.47
9.67
9.86
BF/TCA(%)
17.65
15.93
14.32
13.28
OCL (excluding Sundry
Creditors) /TCA %
30.35
33.12
35.63
35.43
3.07
15.32
11.60
10.97
OCA/TCA(%)
Brief Comments:
The BF to TCA is estimated to remain at the same level of around 14%. The present
proposal is for renewal of FB and NFB working capitals at the existing level. The
company is yet to submit the audited financials for the FY 2018-19 .
The present proposal is based on ABS as on 31.03.2018 and Provisional financials as
on 31.03.2019.
EPC/FBD limits applicable : No
F2. Appraisal Memorandum for Term Loan
(The format provided in Annexure 'A' for Project Term Loans to be used for other Term
Loans also.)
Assessment of Credit Facility under ELECTRONIC DEALER FINANCING
SCHEME (e-DFS)
Applicable: No
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Assessment of Stand by Line of Credit
Applicable: No
Assessment of the Limits under e-DFS:
Applicable: No
Additional Assessment for Peak Level Limit (if required)
Applicable: No
Additional Assessment for Non Peak Level Limit
Applicable: No
Confidential and Property of State Bank of India
NEWFORMAT
Page 94 / 144
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
SECTION - G
ASSESSMENT OF NON-FUND BASED LIMITS
G1. Computation of LC limit:
Amount INR in Crore
Foreign LCs
Domestic LCs
Total Purchases of RM (Esti/Proj)
Total LCs
6.00
132.78
138.78
60.00
60.00
60.00
0.30
6.64
6.94
a) Usance (Average) (in days)
90.00
40.00
65.00
b) Lead time (Average) (in days)
30.00
25.00
28.00
120.00
65.00
LC Limit Required (M × T)
1.20
14.39
15.59
LC Recommended (A)
1.00
14.00
15.00
LC for Lead Time for which Creditors
are not Created (Monthly RM out of
LC*b/30) (B)
0.30
5.53
5.83
Level of Creditors (LC backed) (A-B)
0.70
8.47
9.17
Recommended LC Limit
1.00
14.00
15.00
Procurement out of LC (%)
Monthly RM Purchases out of LC *
(M)
Total Time (a + b) (T)
Our Share
15.00
Documentary : 15
Margin(%)
Non Documentary :
Existing : 10
Usance / Sundry Creditors
Proposed : 10
40/40
Maximum Usance Period of LC estimates
No of days
Domestic LCs
40
Foreign LCs
90
* In case of foreign LCs, purchases should be net of duties.
Comments on mismatch, if any, between Usance available & Sundry Creditors
The majority of company's purchases are domestic purchases and accordingly, the usance
period of 40 days considered for assessment of domestic LCs is same as the estimated
holding level of sundry creditors. Import purchases happen only rarely and generally
maximum usance of 90 days is available for the same.
Comments on assessment of LC Limits
The company is currently enjoying an LC limit of Rs.15.00 crs as per previous sanction.The
proposed LC limits of the company is assessed at the existing level.
The LC limit is utilized by the company for procuring CRGO (Cold Rolled Grain Oriented)
steel which is the main raw material and for purchase of various other components used in
the manufacture of Power Transformers. The company may also require foreign LCs for
purchase of some parts like CRGO steel from Korea and Japan .Hence an import LC limit of
Rs.1.00 cr is proposed for sanction as a sub limit of LC limit of Rs.15.00 crs.
Confidential and Property of State Bank of India
NEWFORMAT
Page 95 / 144
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
G2. Assessment of BG Limit
Amount INR in Crore
Outstanding BGs as on 14-08-2019
55.23
Add: BGs required during the period from 01-09-2019 to 31-08-2020
33.50
Less : Estimated maturity/cancellation of BGs during the period from 0109-2019 to 31-08-2020
8.30
Requirements of BGs
80.43
Our share in BG Limit
80.40
Recommended BG limit
80.40
Financial : 80.4
Performance : 80.4
Margin (Existing / Proposed): 10 / 10
Comments on assessment of BG Limits
The company was enjoying BG limits to the tune of Rs.80.40 crs as per previous sanction.The
total BG limit is assessed at the existing limit only.
The Bank Guarantee limits are mainly used for getting advance payment from customers
and for contract performance (During the last FY no Financial BG has been issued).
As on 14.08.2019, the company has an outstanding BG of Rs.55.23 crs and has estimated an
additional requirement of Rs.33.50 crs. BGs amouting to Rs.8.30 crs is expected to mature
during the next twelve months and hence a BG limit of Rs.80.40 crs is assessed for the next
twelve months.
The company may be permitted to utilize the BG limits as Performance or Financial Bank
Guarantee as required.Hence Financial Guarantee of Rs.80.40 crs is considered as a sub
limit of Performance Bank Guarantee.
Assessment of BG limits for EPC contractors/ Construction Industry
(In case of EPC Contractors/ Construction industry detailed assessment in respect of
Guarantees issued for Bid bond, Mobilization, Performance, Retention, Other BGs be
Confidential and Property of State Bank of India
NEWFORMAT
Page 96 / 144
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Amount INR in Crore
1
Total Value of tenders participated at any point of time - next 12
months
(A)
2
Success/ Strike rate @ (m)%
(B)
3
Bid Bonds @ (n)% on value of the tenders participated (C)
calculated on the assumption that the EMD BGs are rotated once
in (p) months.
[(C) = A × n% × p ÷ 12] (where, A=Total Value of Bid bonds, p =
no of months)
4
Performance Guarantees @ (q)% of item 2
[D= B × q% × nn ÷ 12 ]
nn (where, n = no of months)
(D)
5
Mobilisation advance guarantees @ (r)% of item 2
[E= B × r% × nn ÷ 12]
nn (where, n = no of months)
(E)
6
Retention money guarantees @ (s)% on completion of works for
next (n) months
(S)
7
Requirement of Guarantees for miscellaneous purposes
8
Guarantees required for new & existing projects (3+4+5+6+7)
9
Add: Outstanding Bank Guarantees as on
Total Bank Guarantees (8+9)
10 Less: Bank Guarantees expiring during next months including return
of bid bonds
Bank Guarantees Required
Recommended
Comments on mismatch, if any, between Mobilization BGs given and Advance payment
Comments on assessment of BG Limits (for EPC contractors/ Construction Industry)
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
G3. Assessment of Credit Exposure Limit (Forward Contract/ Derivative Limit)
I. Past Performance Method (PP Method)
Amount INR in Crore
Note: Only revenue exposures for the year are considered under this component
Year
Exports T/O
Imports T/O
* Pr Year-2
* Pr Year-1
* Pr Year
Total T/O (3 years)
Average T/O (3 Years)
Eligible Notional
Note: Eligible Notional is higher of the average of previous 3 years T/O or previous year's
T/O.
Applicable CCF=2% (< 1 Year)
Purchase Limits (PFE)
Sales Limits (PFE)
PFE on Eligible Notional
Note: PFE on eligible notional is the Limit. Separate sub-limits for Sales and Purchases are to
be assessed.
CEL under PP component
A
II) Documentary Evidence Method (DE Method)
Amount INR in Crore
Eligible Notional based on various contracts and obligations on hand. (Revenue contracts
both short & long term, repayments other inflows or outflows).
Exchange Rate Contracts
Tenor
Eligible Notional (Actual)
* II. a) Exchange Rate Contracts
Revenue (Current Year)
Applicable CCF
<1 Year
2%
CEL under DE (Revenue current year)
>1 Year <=5 Years
> 5 Years
NA
NA
NA
NA
B
Note: Higher of the A or B is added to the other components of exposures and limits
Higher of A or B
Amount INR in Crore
II. b) Exchange Rate Contracts DE Others (Repayment/ Revenue other than II (a) &
Tenor
<1 Year
>1 Year <= 5
> 5 Years
2%
10%
15%
i
ii
iii
* Amount
Applicable CCF
PFE
DE Others (i+ii+iii)
C
Total Exchange Rate Contracts (Higher of (A or B) +C)
(1)
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Notes:
(i) Eligible Notional arrived at on aggregate repayments / receipts for the relevant years basis.
(ii) Receipts out of long term revenue contracts for first year are considered only under DE
eligibility
Amount INR in Crore
III. Interest Rate Contracts
Tenor
Eligible Notional(Actual)
<1 Year
>1 Year <=5 Years
> 5 Years
0.50%
1.00%
3.00%
i
ii
iii
* Amount (ECB etc.)
Applicable CCF (Max Period)
PFE on Eligible Notional
Total CEL IR Contracts (i+ii+iii)
2
* Add Negative MTM of Existing Contracts
3
Total Forward/Derivative Limits (1) + (2) + (3)
4
Summary
Derivative Limits - Forward Contract
Exports
Imports
Total Limit
Options
Swaps
I. Past Performance( Revenue) *
II. Documentary Evidence
II(a). Exchange Rate Contracts
II(b). Exchange Rate Contracts(DE
III. Interest Rate Contracts
IV. Sub Total {[( I or II (a)] +II (b)+III}
V. Negative MTM of Existing
Total (IV + V)
Comments on assessment of Derivative Limits
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Section H
H1. Capital requirement (details to be furnished for all facilities individually)
(Amount INR in Crore)
Nature of the
facilities
proposed
Estimated
Capital
Capital
Pricing
Net
outstanding requirement requirement proposed
Interest
as on 31% (@)
– Amount
(@)
Income/fe
03-2020 of
(@)
e based
the current
income *
/ Previous
(@)
year (@)
Funded Exposures Working Capital
Est
5.50
11.50
0.93
12.65
0.38
Act
0.58
11.50
0.58
10.70
0.21
BD BD under Est
LC
Act
4.50
11.50
0.27
8.25
0.02
2.99
11.50
0.26
8.45
0.02
0.00
1.10
Cash Credit
CC
Non Funded Exposures
Est
56.21
11.50
2.64
Act
56.21
11.50
2.64
Est
7.34
11.50
0.10
Act
7.34
11.50
0.10
BG BG
1.33
0.00
0.13
LC LC
0.13
Unhedged exposures in the balance sheet of the borrower
INR
0.00
0.00
0.00
0.00
0.00
Est
73.55
3.94
1.63
Act
67.12
3.58
1.69
Total
ROCC
21.79
( 26.31 )
RAROC
18.46
( 22.65 )
Hurdle rate for
RAROC
20.00
( 20.00 )
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Note
*
Net Interest Income (Interest Income net of Market Related Funds Transfer
Pricing System) & earnings by way of Commission charged on non funded
exposures, Forex turnover only to be shown.
@
Actual as on 31 st March last year to be shown in brackets.
Comment on acceptability of lower returns if RAROC is less than Hurdle rate for
RAROC, including potential for cross sell opportunities
RAROC is above the hurdle rate. The RAROC of the company for FY 2018-19 was
29.20% and is estimated at 21.88% for the FY 2019-20 (Excel sheets for RAROC
calculations annexed with the proposal).
Further we have other businesses from the company as given below:
1.The salary of around 500 employees are routed through our Angamally Branch
under Corporate Salary Package.
2.A part of the retail loan requirements like personal loan, Housing Loan, Car loan
etc of the employees are also being provided by our Bank .
The income from the above are not quantified and reckoned for RAROC calculation.
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
H2. Income Analysis / Value of account
From
(Amount INR in Crore)
Estimates
Actuals
Estimates
WC Int.
4.37
1.34
1.37
TL Int
0.00
0.00
0.00
LC
0.10
0.13
0.13
BG
1.15
1.33
1.10
Bills
0.00
0.00
0.00
0.00
0.00
0.31
0.23
0.35
0.00
0.00
0.00
5.93
3.02
3.04
Forex
Loan processing / 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)
H3. Loss / Income on account of Concessions and Additional Business during
the period of reporting (only in case of renewal proposal)
(A) Sacrifice
Amount INR in Crore
Concession
Facility Id
Nature (Facility
Name)
F0005040 Cash Credit ( CC )
9001
Confidential and Property of State Bank of India
Currency
Average
Monthly
Incomes
per Card
Rate (i)
Average
Monthly
Income at
Approved
Rate (ii)
Average
Monthly
Sacrifice
till Date
after date
of sanction
(i-ii)
INR
0.14
0.14
0.00
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Amount INR in Crore
Concession
Nature
Average
Monthly
Incomes per
Card Rate (i)
Average
Average
Monthly Income
Monthly
at Approved
Sacrifice till
Rate (ii)
Date after date
of sanction(i-ii)
Remittance
Processing Charges
0.00
1.25
1.25
0.00
Mortgage creation Charges
0.00
Upfront fee for TL
0.00
LC / BG commission
0.10
0.10
Any Other (Please Specify)
Total Average Monthly Sacrifice (A)
Confidential and Property of State Bank of India
0.00
0.00
1.35
NEWFORMAT
1.35
0.00
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
(B) Income from Additional Business
Nature / Type of
Cross Selling
Product
Expected
Additional
Business
for the
year
during
last
Sanction
/Renewal
Actual
Average
Additional Monthly
Business
Income
in the last
during
year (
Previous
after last
FY (B)
Sanction
/
Renewal)
Average Monthly
Income during
current FY
Up to the
date of
Sanction
(C)
Additional
Avg.
Monthly
Income
After the
after
date of
sanction
sanction
(D-C)=E
(D)
SBI Mutual fund
0.00
0.00
0.00
0.00
0.00
0.00
SBI Life Insurance
0.00
0.00
0.00
0.00
0.00
0.00
SBI General
Insurance
0.00
0.00
0.00
0.00
0.00
0.00
Personal Accidental
Insurance of staff
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Fee income from
Wealth
Salary accounts of
all employees of Co.
6.00
0.00
0.00
0.00
0.00
Loan and advances
to staff of company
5.00
0.00
0.00
0.00
0.00
Group Insurance to
All employees
0.00
0.00
0.00
SBI Credit Card
0.00
0.00
0.00
SBI Viswayatra
Foreign Travel Card
0.00
0.00
0.00
Vendor-Dealer
Finance
0.00
0.00
0.00
SBI Capital Market
Ltd.
0.00
0.00
0.00
CMP
0.00
0.00
0.00
Any other business
(Please Specify)
0.00
0.00
0.00
0.00
0.00
0.00
Total
11.00
Net Income / Loss: (E) – (A)
0.00
0.00
0.00
H4. Proposed Pricing (All individual Fund based facilities to be furnished)
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Interest Rates:
Facility
Facility Id
Facility Name
Name
Existing Pricing terms
Facility Account Rate
Currenc No.
(Rate
y
Type)
F00050409001 - Cash
Credit
CC
8.55
(MCLR 1 Y)
INR
Proposed Pricing terms
Card Rate
Concession Existing Rate
Reset
Card/
Card Rate
Concession Proposed Rate
Reset
Extended, if
Periodicity Proposed
Extended, if
Periodicity
Spread Effective any (Basis Spread Effective
Spread Effective any (Basis Spread Effective
Rate
Rate
Rate
Rate
Rate
Rate
Rate
Rate
Points)
(Rate Type) Rate
Points)
2.00
10.55
0.00
2.00
10.55
12M
RLLR
(7.65)
2.00
9.65
0.00
2.00
9.65
12M
H5. Other Concessions Already Extended / Proposed
i. Service Charges
Existing Terms
Income Head
Processing Fee
Card Rate
Card Rate.
0.30% of the
limit+GST
maximum Rs.0.30
cr
Consession
Extended,
if any (%)
25
Proposed Terms
Existing Rate
Rs.22.50 lacs +GST 0.35% of the loan
Amount (Maximum
of Rs 35 Lac )
0.00
UpfrontFee
0.00
N.A
Card Rate
Consession
Extended,
if any (%)
Proposed Rate
25
Rs.26.25 lacs +GST
0.00
0.00
N.A
0.00
N.A
0.00
0.00
0.00
Commit Charges
card rate
0
card rate
i) If the average
utilization is more
than 75%- No
charges
ii)If the average
utilization is
between 50-75%0.25% p.a to be
recovered on entire
unutilized portion
on a quarterly
basis.
iii)If the average
utilization is less
than 50%- 0.50%
p.a. on entire
unutilized portion
on a quarterly
basis.
0
Card Rate
LC
Card Rate
0
Card Rate
0
Card Rate
BG
Card Rate
0
Card Rate
1.40% p.a
(Minimum
Commission per
LG- Rs 2000.00)
PBG- 1.80% p.a
(Minimum
Commission per
BG- Rs 600.00)
FBG- 2.10% p.a
(Minimum
Commission per
BG- Rs 600.00)
0
Card Rate
Comments / Justification:
LC/BG charges are proposed at card rates.
25% concession is proposed for processing charges. Justification is provided in section 10 of the
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
proposal.
Details of interest rate and other Service Charges offered by other banks (in case of MBA/Consortium)
ii. Movement of RAROC/ROCC
Previous Year
Existing Year
Estimates
Actual
Estimates
RAROC
17.31
22.65
18.46
ROCC
22.14
26.31
21.79
Comment on infirmities in security creation, if any
Nil
iii. Pricing of our Bank vis-a-vis pricing of other Banks
Facility Id
Facility Name - Name
Facility
Account Proposed
Currenc
No.
Rate
y
Bank 1
Bank 2
Bank 3
Bank 4
Bank 5
None
Comment
H6. Utilization of Limits
Average
Utilization %
FB Limits
92.01
NFB Limits
68.32
Comments in brief, if utilisation is less than
60%
Utilization ismore than 60%.
H7. Justification based on Cost Benefit analysis
25% concession in processing charges against card rates i.e. to recover Rs.
0.26 cr+ GST as against the applicable charges of Rs.0.35 cr +GST with
sacrifice amount of Rs.0.09 cr.
As per last sanction by CCSC, the company was sanctioned with the following
concessions:
Processing Fee
Card Rate
Approved Rate
Concession
0.30 cr + GST
0.23 cr + GST
25%
The company has requested for concession in processing charges at par with the
previous rate.
The total income from the account during FY 2018-19 is Rs.3.02 crs and the
RAROC was 29.20% which is above the hurdle rate of 20%. RAROC is estimated at
26.09% with a total anticipated income of Rs.2.95 crs. (All other charges are
assumed at card rates)
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Cost benefit analysis of the same is given below:
Card Rate
Amount
Interest
RLRR (5.40%) 1.01
earned on CC + Mark up
(2.25%) +
5.00 %
1.40% p.a
0.13
LC income
(Minimum
Commission
per LG- Rs
2000.00)
PBG- 1.80%
1.10
p.a (Minimum
BG income
Commission
per BG- Rs
600.00)
FBG- 2.10%
p.a (Minimum
Commission
per BG- Rs
600.00)
Processing fee 0.35% of the 0.35
limit +GST;
maximum Rs.
0.35 cr+GST
Other Income Card Rate
0.45
(Bill
Discounting
commission)
3.04
Aggregate
Proposed
Rate
Card Rate
Amount
Sacrifice
1.01
0.00
Card Rate
0.13
0.00
Card Rate
1.10
0.00
25%
concession
0.26
0.09
Card Rate
0.45
0.00
2.95
0.08
Income
The total sacrifice is Rs.0.09 cr.
TELK is one of the few investment grade PSUs in Kerala. Apart from the credit
facilities, the company is routing the salary of around 500 employees through our
Angamally Branch under Corporate Salary Package. Also,the retail loan
requirements likepersonal loan, Housing Loan, Car loan etc. of the employees are
also being provided by our Bank
In view of the long standing relationship and the value of connection we recommend
for approval of concession of 25% in processing charges.
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Section I
Security
I1. Primary Security ( all existing securities and those proposed to be brought
in, to be mentioned)
Existing
Sr. Security SAR Type
Value **
Date of Basis of
No
ID &
FAE
&
Valuatio Valuatio
SBI
. Facilitie SI Priori Apportio Total
n
n
ned
to
Value
Share
s
Com ty of
of
in Total
plian ROC Facilitie
s
of
SBI
Securit
Value
t
Charg
y
(Y/N
e
1
S00050 Yes
409000
1 CC,
LC, BG
ROC
ROC CERSAI
Charg Search
Date
e
Report
Status Date
(Creat
ed on)
Hypo
INR
INR
INR 31/03/ Balance Yes
Sheet
theca 117.37 133.61 117.37 2019
tion
Crore
Crore Crore
&
Paripass
u 1st
Char
ge
11-052016
Details of Security * : ., STOCKS AND RECEIVABLESHypothecation of Stock &
Receivables
Creation / perfection of Security Completed : Yes
2
S00050 Yes
409000
4 CC,
BG, LC
Hypo
theca
tion
&
Paripass
u 1st
Char
ge
INR
3.42
Crore
INR
3.89
Crore
INR 31/03/ Balance Yes
Sheet
3.42 2019
Crore
14-082018
Details of Security * : Name of the security holder : Transformers and Electricals
Kerala Limited, Relationship with Borrower : Borrower, Security Description : ., Name of
the security holder : Transformers and Electricals Kerala Limited, Relationship with
Borrower : Borrower, Security Description : Hypothecation of other current assets,
Hypothecation of Other Current Assets
Creation / perfection of Security Completed : Yes
Total 120.79
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Security Id
Security Type
Security subtype
TIR Obtained
from
TIR Date
None
Proposed
Sr. Security SAR Type
Value **
Date of Basis of
No
ID &
FAE
&
Valuatio Valuatio
Apportio
Total
SBI
. Facilitie SI Priori
n
n
Value
Share
s
Com ty of ned to
of
in Total
plian ROC Facilitie
s
of
SBI
Securit
Value
t
Charg
y
(Y/N
e
1
S00050 Yes
409000
1 CC,
BG, LC
ROC
ROC CERSAI
Charg Search
Date
e
Report
Status Date
(Creat
ed on)
Hypo
INR
INR
INR 31/03/ Balance Yes
Sheet
theca 117.37 133.61 117.37 2019
tion
Crore
Crore Crore
&
Paripass
u 1st
Char
ge
14-08- 20-032018
2018
Details of Security * : STOCKS AND RECEIVABLES, .Hypothecation of Stock &
Receivables
2
S00050 Yes
409000
4 CC,
LC, BG
Hypo
theca
tion
&
Paripass
u 1st
Char
ge
INR
3.42
Crore
INR
3.89
Crore
INR 31/03/ Balance Yes
Sheet
3.42 2019
Crore
14-08- 20-032018
2018
Details of Security * : Name of the security holder : Transformers and Electricals
Kerala Limited, Relationship with Borrower : Borrower, Security Description : ., Name of
the security holder : Transformers and Electricals Kerala Limited, Relationship with
Borrower : Borrower, Security Description : Hypothecation of other current assets,
Hypothecation of Other Current Assets
Total 120.79
Security Id
Security Type
Security subtype
TIR Date
TIR Obtained
from
None
Confidential and Property of State Bank of India
NEWFORMAT
Page 109 / 144
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
I2. Collateral Security (1st Charge) (only exclusive collateral securities to be
furnished, residual values of primary securities not to be furnished) ( all
existing securities and those proposed to be brought in, are mentioned)
Existing
Sr. Security SAR Type
Value **
Date of Basis of
No
ID &
FAE
&
Valuatio Valuatio
SBI
. Facilitie SI Priori Apportio Total
n
n
ned
to
Value
Share
s
Com ty of
of
in Total
plian ROC Facilitie
s
of
SBI
Securit
Value
t
Charg
y
(Y/N
e
1
S00050 Yes
409000
2 BG,
LC, CC
Hypo
theca
tion
&
Paripass
u 1st
Char
ge
INR
1.40
Crore
INR
1.59
Crore
ROC#
ROC CERSAI
Charg Search
Date
e
Report
Status Date
(Creat
ed on)
INR 31/03/ Balance Yes
Sheet
1.40 2019
Crore
14-08- 20-032018
2018
Details of Security * : Description of Machinery : Movable Fixed Assets of the company,
Make : FIXED ASSETS, Description of Machinery : Movable Fixed Assets of the
Company , Make : FIXED ASSETS, Hypothecation of Fixed Assets
Creation / perfection of Security Completed : Yes
Total
1.40
# 15(ii) below
Security Id
Security Type
Security subtype
TIR Obtained
from
TIR Date
None
Proposed
Sr. Security SAR Type
Value **
Date of Basis of
No
ID &
FAE
&
Valuatio Valuatio
SBI
. Facilitie SI Priori Apportio Total
n
n
ned
to
Value
Share
s
Com ty of
of
in Total
plian ROC Facilitie
t
Charg s of SBI Securit Value
y
(Y/N
e
1
S00050 Yes
409000
2 BG,
LC, CC
Hypo
theca
tion
&
Pari-
INR
1.40
Crore
Confidential and Property of State Bank of India
INR
1.59
Crore
ROC#
ROC CERSAI
Charg Search
Date
e
Report
Status Date
(Creat
ed on)
INR 31/03/ Balance Yes
Sheet
1.40 2019
Crore
NEWFORMAT
14-08- 20-032018
2018
Page 110 / 144
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
pass
u 1st
Char
ge
Details of Security * : Description of Machinery : Movable Fixed Assets of the Company
, Make : FIXED ASSETS, Description of Machinery : Movable Fixed Assets of the
company, Make : FIXED ASSETS, Hypothecation of Fixed Assets
Total
1.40
#15(ii) below
Security Id
Security Type
Security subtype
TIR Date
TIR Obtained
from
None
I3. Collateral Security (2nd Charge) (only exclusive collateral securities to be
furnished, residual values of primary securities not to be furnished)
Existing
Sr. Security SAR Type
Value **
Date of Basis of
No
ID &
FAE
&
Valuatio Valuatio
SBI
. Facilitie SI Priori Apportio Total
n
n
ned
to
Value
Share
s
Com ty of
of
in Total
plian ROC Facilitie
t
Charg s of SBI Securit Value
y
(Y/N
e
ROC#
ROC CERSAI
Charg Search
Date
e
Report
Status Date
(Creat
ed on)
None
Total
0.00
# If not filed, time permitted and by whom
Security Id
Security Type
Security subtype
TIR Date
TIR Obtained
from
None
Proposed
Sr. Security SAR Type
Value **
Date of Basis of
No
ID &
FAE
&
Valuatio Valuatio
SBI
. Facilitie SI Priori Apportio Total
n
n
ned
to
Value
Share
s
Com ty of
of
in Total
plian ROC Facilitie
t
Charg s of SBI Securit Value
y
(Y/N
e
ROC#
ROC CERSAI
Charg Search
Date
e
Report
Status Date
(Creat
ed on)
None
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Total
0.00
# If not filed, time permitted and by whom
Security Id
Security Type
Security subtype
TIR Obtained
from
TIR Date
None
Note
* To include detail like Khata no./Survey No./Patrta No.etc, Flat No.,House No,Area/extent of land,
address
** In case of Consortium/MBA Accounts our share to be provided. Details of Total security for the
I4. Guarantees (Personal / Corporate / Others)
Existing Personal Guarantees
Sr.
No.
Security
Id
Facilities
Name of
Guarantor
Net Means
Excluding
Investment
As on
Compiled
on
As on
Compiled
on
Including
Investment
None
Proposed Personal Guarantees
Sr.
No.
Security
Id
Facilities
Name of
Guarantor
Net Means
Excluding
Investment
Including
Investment
None
Existing Corporate Guarantees
Sr. Security Facilities Name of
No.
Id
Guarantor
TNW
As on
External
Rating, if
any
LT
ST
External
Rating Valid
Upto
LT
Interna Rated
l CRA
on
Rating
ST
None
Proposed Corporate Guarantees
Sr. Security Facilities Name of
No.
Id
Guarantor
TNW
As on
External
Rating, if
any
LT
ST
External
Rating Valid
Upto
LT
Interna Rated
l CRA
on
Rating
ST
None
Confidential and Property of State Bank of India
NEWFORMAT
Page 112 / 144
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Existing Government Guarantees: Central Govt / State Govt (name of State)
Sr.
No.
Security ID
Facilities
Government/Dep
artment Name
Amount
Valid Upto
None
Proposed Government Guarantees: Central Govt / State Govt (name of State)
Sr.
No.
Security ID
Facilities
Government/Dep
artment Name
Amount
Valid Upto
None
Existing ECGC/CGTMSE/others
Sr.
No.
Security ID
Facilities
Nature of Guarantee
Guarantee Amount
None
Proposed ECGC/CGTMSE/others
Sr.
No.
Security ID
Facilities
Nature of Guarantee
Guarantee Amount
None
Comments on change in Security (Primary / Collateral /Guarantees) from the
last sanction:
No change in security proposed.
I5. Additional information on Security
(i) Loan to value ratio
a. Stocks
75.00
b. Receivables
50.00
c. Receivable from Associates & Subsidiaries, if any
0.00
d. Fixed assets (for term loans)
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
(ii) If ROC has not been filed, time permitted and by whom:
Not Applicable
(iii) Total value of immovable property:
Whether Agricultural property : No
Particulars
Existing
Proposed ( to be
filled in, only when
any change is
being
Basis of Valuation
Agricultural
Residential
Commercial
Factory land &
building
Plant & machinery
13.27
Provisional Balance
Others
(iv) Our Share of security in the Immovable property:
Existing : 0%
Proposed: 0%
Value of the property, which has not been valued as stipulated:
Not Applicable
Date by which valuation will be complete, if pending in respect of any item:
Not Applicable
(v) Confirm enforceability i.e. whether SARFAESI compliant : Yes
Movables like shares (other than those of borrowing entity), mutual funds, fixed
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Movables
Currency
Total Value
Our Share
None
(vi) Total Collateral security percentage in relation to facility extended (first
First Charge on immovable property as % of exposure
0%
First Charge on liquid instruments as % of exposure
0%
Total collateral coverage by way of second charge on fixed assets /
immovable property, if any
0%
FACR (in case of TLs) - Min
Year
I6. Security Coverage
Existing
Proposed
Security
Coverage SBI:
Including
Residual
Value(%)
Excluding
Residual
Value(%)
Including
Residual
Value(%)
Excluding
Residual
Value(%)
Term Loan (%)
0
0
0
0
120.5
120.5
120.5
120.5
0
0
Working Capital
(%)
Comment on
infirmities in
security
creation, if any
Nil
Fixed Asset
Coverage Ratio
Nil
0
0
a) Please indicate time frame allowed for perfection of security
Not Applicable
b) Charges to be levied in case of delay in security creation (other
than the time permitted by the sanctioning authority): 1 % on the
entire outstanding till such time the formalities are completed.
To be collected by :
Remarks
c) Deviation from existing security (if any) to be mentioned in the proposal,
Nil
Confidential and Property of State Bank of India
NEWFORMAT
Page 115 / 144
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
d) Percentage of Non - SARFAESI Compliant Security, if any out of total
collateral security: 0
The properties mentioned have been visited by
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Section J
a. Security
Details as mentioned under Section I
b. ECGC Cover
Pre - shipment Credit Guarantee
Post - shipment Credit Guarantee
NA
NA
SCR Policy with Buyer Wise Limit NA
c. Margins: (For Each Facility as Applicable)
Cash Credit
Existing
Proposed
RM: Domestic
25.00 %
25.00 %
RM: Imported
25.00 %
25.00 %
SIP
25.00 %
25.00 %
FG
25.00 %
25.00 %
Receivables Cover 180 days
50.00 %
50.00 %
Letter of Credit
10.00 %
10.00 %
45
40
10.00 %
10.00 %
TL / DPG
%
%
Project LC
%
%
EPC
%
%
PCFC
%
%
LC usance period
BG
Justification for deviation from existing margin (in brief), if any
No deviations from existing margin proposed.
As per last sanction,the company was enjoying 10% cash margin for NFB limits as
against the requirement of 25%. The company is in existence since 1963 and has a
relation of around five decades with us. There has not been any case of LC
devolvement or BG invocation in the past. Moreover, the company has strong
backing from its promoters viz GoK and NTPC Ltd.Hence continuation of existing
margin of 10% for LC and BG limits is proposed.
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
d. Insurance
Existing Insurance
Security Insurance
Latest
Insurance Insurance
Id
Policy
Valuation
Waiver
Cover
S000504 KSID/F1/1
090001 0031/2019
133.61
165
Risks
Covered
Risks
Excluded
Fire
Proposed Insurance
Security Insurance
Latest
Insurance Insurance
Id
Policy
Valuation
Waiver
Cover
S000504 KSID/F1/1
090001 0031/2019
133.61
165
Risks
Covered
Risks
Excluded
Fire
Comments :
Justification for Waiver (if any)
NIL
e. Inspection
Inspection Periodicity
Quarterly
Comments
As per the previous sanction, inspection periodicity was quarterly.We propose for
continuation of quarterly inspection in view of the following:
(i)TELK is a state government owned enterprise with strong backing from NTPC with
BBB rating.
(ii)The company is banking with us for more than five decades.
(iii)Except for a single instance of irregularity during FY 2017-18, the conduct of the
account is satisfactory.
f. Repayment Schedule
Term Loan
Facility
Start
Date/End
Date
Repaymen Facilit
t or
y
Moratoriu Curren
Confidential and Property of State Bank of India
Period
NEWFORMAT
No. of
Installm
ents
Installment
Amount
Total Repayment
Amount
Page 118 / 144
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Facility
Start
Date/End
Date
m
cy
Period
No. of
Installm
ents
Installment
Amount
Total Repayment
Amount
Total Period in Months:
Comment :
None
Corporate Loan
Facility ID
Facility Name
Name
Facility
Name
Facility
Name
Facility
None
Other Term Loan
Facility ID
Facility Name
None
Working Capitals
Facility ID
Facility Name
None
g. Critical covenants, if proposed to be diluted ( * Only if from the list of
specified critical covenants )
Nature of covenant to be
diluted
Justification for acceptance
None
h. Modification, if any, required from Standard Covenants, all other covenants
will apply
Justification for deviation ( in brief), if any, to be furnished
Confidential and Property of State Bank of India
NEWFORMAT
Page 119 / 144
Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Section - K
K1. SWOT Analysis of the Proposal
Strength :
Borrowing Unit :
1.TELK is a PSU under joint venture with NTPC.
2.The Joint venture with NTPC in 2007 had benefitted the company to improve its
performance and come out of BIFR.
3.An ISO certified company since 1995.The company also has NABL certification.
4.The company is in existence since 1963 .
5.The company registered profits from 2016-17 onwards after two consecutive
years of loss.
Borrower(s)
(Proprietor/Partner/Director)
N.A
Weakness :
Borrowing Unit :
The demand for electrical equipments is dependent on projects from Power
Sector.
The company's fortune is closely linked to performance of power sector.
Mitigation:
The company's major clients include National Thermal Power Corporation (NTPC),
Nuclear Power Corporation of India Ltd(NPCIL), Power Grid Corporation of India Ltd
(PGCIL), National Hydroelectric Power Corporation Ltd (NHPC), MEIPL, GVPR
Engineers etc. At present,TELK has orders worth Rs.223.00 crs in hand . Moreover,
strong support from promoter NTPC is also available.Further, Power sector is
estimated to perform well in view of the thrust given by the Govt on 100%
electrification.
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Revamping of transmission system being implemented by Power Utilities across the
country also has a positive impact on demand for transformers, which is beneficial
for TELK.
Borrower(s)
(Proprietor/Partner/Director)
Opportunities :
Borrowing Unit :
1. At present the company is mainly supplying to MEIL, NTPC and KSEB,majority
share being that of the private player,MEIL. Apart from these, TELK is also
supplying to SIEMENS, Karnataka Power Corporation Limited, NLCL and NPCIL
only .The company has opportunity to supply Power Transformers to other state
electricity boards also.
2.Due to the recent heavy rainfall in Kerala and resultant floods, KSEB has
suffered huge damage and presently there is a sudden rise in demand for
transformers. Being a PSU and the only high voltage Power Transformer
manufacturer based in Kerala,company has enough opportunity to tap the orders
from KSEB.
Borrower(s)
(Proprietor/Partner/Director)
Threat :
Borrowing Unit :
1.Threat of cheaper imports:
2.Competition from Private sector companies.
Mitigation:
The company in collaboration with NTPC is taking efforts for product innovation,
cost reduction & improvement in technology to overcome competition.
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Relationship established with major consumers through active market presence
spanning over 50 years and strict insistence on quality of products.
Borrower(s)
(Proprietor/Partner/Director)
K2. Justification for the proposal :
1. Transformers and Electricals Kerala Limited (TELK) is a Public Sector Enterprise,
a Joint venture of Government of Kerala (54.56 % shareholding) and National
Thermal Power Corporation Ltd (44.60% shareholding).
2. TELK is in existence since 1963 and dealing with us since 1964.
3. The company is rated BBB/stable by Brickwork Ratings, whichis valid till
21.02.2020.
4. The JV with NTPC has benefitted the company to come out of sick company
status.
5. The company is rated SB-9 based on ABS as on 31.03.2018.
6. The company could register profits during FY 2016-17, FY 2017-18 and FY 201819 after two consecutive years of loss.
7. The conduct of the account is satisfactory with no history of devolvement of LCs
or invocation of BGs.
8. RAROC for FY 2018-19 was 29.20% and estimated to be 21.88% for FY 2019-20.
9. Bank Finance to Total Current Assets is only around 15%. Further, ABF is only
around 12% of estimated turnover.
10. The present proposal for renewal of limits at the existing level is based on ABS
2017-18 (less than 18 months old) and Provisional Balance Sheet (less than 5
months old), as permitted under our extant guidelines. The Provisional Balance
Sheet has been signed by Chartered Accountant. The present WC limits are
considered need based to sustain the current level of activities. Liquidity, solvency
and profitability ratios are at comfortable levels as per Audited and Provisional
financials. Once ABS for FY 2018-19 is submitted by the company, we note to test
the same against provisional on four parameters viz. sales, EBIDTA, Current Ratio
and TOL/Adj TNW. A one time penalty of 0.50% shall be levied if actuals vary
adversely by more than 10% from the provisional in respect of more than two of the
above four parameters.
In view of the above we recommendthe following:
SANCTION FOR:
1. Renewal of FBWC limits of Rs.12.02 Crore and NFBWC limits of Rs.96.40
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Crore at the existing levels.
1.a. Renewal of Cash Creditlimit at the existing level of Rs.12.02 crs.
The company is presently enjoying credit facilities under MBA from SBI and South
Indian Bank. The last full fledged renewal was done on 18.03.2017 and on delayed
submission of ABS, continuation of limits was permitted on three occasions as
shown below:
a. For 180 days from 18.03.2018 by WBCC-II vide its resolution dated 04.04.2018
b. Up to 31.12.2018 by CCSC-I in its meeting held on 31.10.2018.
c. For six months from 01.01.2019 by CCSC vide its meeting dated 06.02.2019.
Currently the company is enjoying FBWC limit of Rs.12.02 crs. and NFBWC limits
of Rs.96.40 crs. from us.
Based on the provisional financials the turnover of the company has improved by
36.98% over the previous year level. The company has already bagged orders worth
Rs.223.00 crs during the current FY and has estimated a turnover of Rs.240.57 crs
based on the same.
The order book position (as on 30.06.2019) of the company is as follows:
Sl No:
Equipment
No
MVA
Amount
(Rs. in crs)
1
Power
Transformers
60
54.31
197.25
2
Current
Transformers
7
0.20
3
Potential
Transformers
7
0.21
4
CSD(including
3
2.72
25.36
spares/services
)
TOTAL
77
223.02
The major customers of the company include NTPC, NPCIL, PGCIL, NHPC, state
electricity boards etc. Apart from these, M/s MEIPL and M/s GVPR Engg are two
companies to whom company has been supplying transformers since last three
years.
The assessed ABF of Rs.27.02 crsis only 12% of the estimated sales turnover.
The company's request is found to be need basedandas per assessmentmade in
Annexure-Iwe recommend for renewal of cash creditlimit at existing level of Rs.
12.02 crs.
1.b Renewal of LC limit at the existing level of Rs.16.00 crs.
1.c Renewal of Bank Guarantee limit at the existing level of Rs.80.40 crs.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
The LC limit is utilized by the company for procuring CRGO (Cold Rolled Grain
Oriented) steel which is the main raw material and for purchase of various other
components used in the manufacture of Power Transformers. Earlier, the company
used to import CRGO steel from Japan and Korea, but for last two years the
company is obtaining the same from inland suppliers like M/s Kryfs Power
Components Ltd and M/s Mahindra Steel. During FY 2018-19, 57 LCs amounting
to Rs.44.10 crs were issued in favour of suppliers of TELK.
The Bank Guarantees are mainly utilized for getting advance payments from NTPC,
electricity boards, MEIL and GVPR Engineers Ltd and for contract performance.
During FY 2018-19, our Angamally Branch had issued 29 Bank Guarantees to the
tune of Rs.10.19 crs and also 41 renewals of BGs amounting to Rs.56.06 crs.
The NFB limits are conducted satisfactorily and there has not been any devolvement
of LCs or invocation of BGs in the past.
The company's request is considered need based and is eligible for renewal of Non
Fund Based working capital facilities at the existing levels as per the detailed
assessment made in Annexure -II of this proposal. Hence we recommend for
sanction of renewal of non-fund based facilities at the existing level of Rs.96.40 crs.
NOTE:
(i) Proposal for clearance from RMD for exposure on State Government & State
Government owned / guaranteed entities, as per Circular No.: CCO/CPPDADV/20/2018 19 dated 10.05.2018, has been submitted on 14.08.2019 and the
clearance is awaited. The present proposal, does not envisage any additional
exposure since the limits are being renewed at the existing level.
2. Continuation of 25% concession in processing charges against card rates i.
e. to recover Rs.0.26 cr+ GST as against the applicable charges of Rs.0.35 cr
+GST with sacrifice amount of Rs.0.09 cr.
As per last sanction by CCSC, the company was sanctioned with the following
concessions:
Processing Fee
Card Rate
Approved Rate
Concession
0.30 cr + GST
0.23 cr + GST
25%
The company has requested for concession in processing charges at par with the
previous rate.
The total income from the account during FY 2018-19 is Rs.3.02 crs and the
RAROC was 29.20% which is above the hurdle rate of 20%. RAROC is estimated at
21.88% with a total anticipated income of Rs.2.86 crs. This is the only concession
being proposed and interest rate and other charges are being recommended as per
card rates.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Cost benefit analysis of the same is given below:
Card Rate
Amount
Interest
RLRR (5.40%) 0.92
earned on CC + Mark up
(2.25%) +
2.00 %
1.40% p.a
0.13
LC income
(Minimum
Commission
per LG- Rs
2000.00)
PBG- 1.80%
1.10
p.a (Minimum
BG income
Commission
per BG- Rs
600.00)
FBG- 2.10%
p.a (Minimum
Commission
per BG- Rs
600.00)
Processing fee 0.35% of the 0.35
limit +GST;
maximum Rs.
0.35 cr+GST
Other Income Card Rate
0.45
(Bill
Discounting
commission)
3.04
Aggregate
Proposed
Rate
Card Rate
Amount
Sacrifice
0.92
0.00
Card Rate
0.13
0.00
Card Rate
1.10
0.00
25%
concession
0.26
0.09
Card Rate
0.45
0.00
2.95
0.09
Income
The total sacrifice is Rs.0.09 cr, which is only 3% of the estimated total income from
the company
TELK is one of the few investment grade PSUs in Kerala. Apart from the credit
facilities, the company is routing the salary of around 500 employees through our
Angamally Branch under Corporate Salary Package. Also,the retail loan
requirements likepersonal loan, Housing Loan, Car loan etc. of the employees are
also being provided by our Bank
In view of the long standing relationship and the value of connection we recommend
for approval of concession of 25% in processing charges.
CONFIRMATION
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Confirmation of Branch action in having continued the limit beyond the
validity of last sanction i.e. beyond 29.06.2019:
The last renewal of credit facilities was sanctioned on 18.03.2017 by the Executive
Committee of e-SBT. The account was migrated to our Branch in July 2017.
The renewal of working capital limits before the expiry of sanction could not be
undertaken as the company could not submit the audited financials. Hence
continuation of credit facilities for 180 days from 18.03.2018 was sanctioned by
WBCC-II vide its resolution dated 04.04.2018. As the Joint Venture promoter NTPC
had published the financials for FY 2016-17 under Ind AS, TELK also had to
complete the audit under Ind AS. The auditor appointed by CAG could not carry out
the restatement of accounts under Ind AS which resulted in delay in finalization of
accounts. The audited financials for FY 2016-17 and CMA data were submitted in
August 2018 only. The branch submitted a full-fledged renewal proposal in Sep
2018, based on ABS 16-17 and PBS 17-18, and sought approval for deviation in the
stipulation contained in Circular No. CCO/CPPD-ADV/68/2018-19 dated
07.09.2018 that renewal of working capital limits to be carried out based on
provisional financials which is not more than 5 months old. However, CCSC-1 in its
meeting held on 31.10.2018 approved only continuation of limits at the existing
level upto 31.12.2018 and observed that renewal of limits based on ABS 17-18 to be
completed by 31.12.2018.
Since the company could not submit the ABS 17-18 within the above timeline of
31.12.2018, the branch put up a proposal for allowing continuation of limit for a
further period of 180 days from 01.01.2019. This was approved by CCSC-1 in the
meeting held on 06.02.2019 with an observation that renewal based on audited
financials of 17-18 and provisional financials not older than 6 months to be put
upto the sanctioning authority before 30.04.2019.
The branch has been constantly following up for ABS 17-18, but the audit process
was getting delayed. Though it was indicated that audited financials would be
finalised before 30.06.2019, the same was concluded only on 25.07.2019. CMA
data and Provisional Balance Sheet for 18-19 have also been finalised thereafter
and CRA proposal submitted to CVC on 31.07.2019, which got validated on
19.08.2019. Branch action in having continued the limits beyond the validity of last
sanction i.e. beyond 29.06.2019 may kindly be confirmed in view of the following.
1. After three consecutive approvals for continuation of limits (04.04.2018,
31.10.2018 and 06.02.2019), the branch was keenly following up with the company
to have a proper renewal of limits in place, as observed by the respective
Committees. Renewal proposal could not be submitted before expiry of validity of
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
last sanction, since the company was not able to finalise the audited financials in
June 2019, as had been assured to the branch.
2. Continuation of limits beyond 29.06.2019 was permitted at the existing level
since the conduct of account was otherwise satisfactory, without any compliance
issues relating to security perfection and documentation. Activity level was
satisfactory, sufficient DP was available and the accounts were operated well within
limits. Average utilisation from FB limit was less than 50% during this period
(minimum of Rs.0.07 crs and maximum of Rs.7.24 crs). Average utilisation of NFB
limit during the period was 70%.
3. TELK is a PSU and a joint venture between GoK and NTPC, with a BBB rating
and long standing satisfactory relationship since 1964.
K3. Recommended for
Proposals : For, sanction / approval / confirmation
Sanction for :
(i) Renewal of FBWC limits of Rs. 12.02 Crore and NFBWC limits of Rs.
96.40 Crore at the existing levels
Approval for :
(i)continuation of 25% concession in processing charges against card rates i.e. to
recover Rs.0.26 cr+ GST as against the applicable charges of Rs.0.35 cr +GST with
sacrifice amount of Rs.0.09 cr.
Confirmation for :
(i) Action in having continued the limits beyond the validity of last sanction i.e.
beyond 29-JUN-19 .
K4. It is certified that
(i) Assessment of all the credit facilities has been done to meet the genuine
requirement of the borrower.
(ii) Appraisal and Due Diligence Report placed in loan Proposal Due Diligence Format
( Format DD).
(iii) We have verified the names of the TPEs (Auditors (CAs), Lawyers, Valuers) who
are associated with the company / unit in the present proposal and confirm that
their names neither appear in the IBA caution list nor put under caution as per data
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
available in VMS.
(iv) All the critical risk factors which affect viability and acceptability of the overall
credit risk have been mentioned in the Loan Proposal Sanction Format ( Form S).
(v) Due care has been taken in cross checking annual financial statements,
ownership/title deeds of the movable/immovable property which have been charged
to the Bank for all secured exposures.
(vi) We have cross checked the financials as mentioned in the Balance Sheet from
those available on the website of Ministry of Corporate Affairs, or we confirm having
obtained independent confirmation of certification, from the Chartered Accountant
firm concerned directly by e-mail/fax.
(vii) Steps have been taken to Verify Authenticity & Reasonableness of Performance
Figures and Estimates/Projections in terms of Circular No CCO/CPPDADV/112/2015-16 dated 07.11.2015.
(viii) A compliance certificate from the CEO / CFO of the company, containing inter
alia, that there are no unauthorised diversion of funds and they have complied with
the Regulations of SEBI, Government of India, RBI etc, has been obtained.
(ix) Verification of items in Profit & Loss account and Balance Sheet has been done
in terms of Circular No CCO/CPPD-ADV/35/2014-15 dated 11.06.2014.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
(x) We certify that the proposed Corrective Action Plan (CAP) is in compliance with
our circular no. CCO/CPPD-ADV/166/2013-14 dated 24.03.2014 and subsequent
instructions on the subject. We also confirm that the asset classification of the
account is as per the IRAC norms of RBI as applicable for such exposure.
(xi) We (the appraisers) have confirmed technical (based on TEV study, if done) and
financial aspects of the project and based on their assessment, the project is
technically feasible and economically Viable.
(xii) Deviations which require sanctioning authority approval have all been
mentioned for approval.
(xiii) Overall the risk is considered to be a fair banking risk and within the risk
appetite for the borrower/group/industry.
(xiv) RAROC is above hurdle rate / or RAROC is below hurdle rate but there are
enough cross sell and other business opportunities which we intend to exploit.
(xv) The proposal has been examined from regulatory compliance perspective and
certify that it adheres to the required regulatory requirements.
(xvi) We certify that Central Fraud Registry website has been viewed and there are no
matching details related to the proposed credit proposal in any manner in the
availabe data on the CFR website.
(xvii)We clearify that all the triggers of e-circular number CCO/ CPPDADV/41/2017-18 DATED 12th july 2017 and subsequent intructions on
identification of Red Flagged Account have been examined in this account.
(xviii)The relevant Customer Appropriateness and Suitability (CAS) categorisation for
derivative transactions has been done (wherever applicable) according to the current
financials of the Customer and the relevant documents shall be obtained prior to
disbursement of the sanctioned facilities.
The conduct of account is satisfactory and therefore it has not been reported to FIC
for categorization as Red Flagged account or Fraud Account or otherwise.
We certify that there are no other changes in the terms of sanction from the previous sanction
other than those mentioned below: (Applicable for renewal / enhancement proposal)
Major terms of Sanction
Changes
proposed from
Security related: Collateral
Security, Personal Guarantee,
Corporate Guarantee.
No
ECGC cover (Applicable for export
Finance)
Insurance
No
Rate of Interest
No
Confidential and Property of State Bank of India
If “Yes”- Justification provided on Para
number of Section or Annexure Number
No
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Margins: Stocks (RM, SIP, FG),
Spares/ stores & consumables,
Receivable
No
Cover period for receivables
No
Cash Margin for NFB facilities:
LC,BG/DPG etc.
Interchangeability of limits
No
Inspection (frequency etc.)
No
Stock Statement (frequency etc.)
No
Standard Covenants
No
Change in Scope of Project if any
(Applicable for Term Loan/ Project
loan)
No
Change in COD if any (Applicable
for Term Loan/ Project loan)
Any Misc. Approval obtained after
last sanction
No
No
No
ADDITIONAL
ASSESSED BY
ASSESSMENT BY
APPRAISED BY
2ND
ADDITIONAL
ASSESSMENT BY
Signature
Name
Anand J S
Designation Management
Trainee
Place :CB Ernakulam
Remesh
Thekkethu
Sivasankaran
Nair
Asst. Gen.
Manager
Dileep S S
Asst. Gen.
Manager
Date : 19-08-2019
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Annexure-RAROC
I. Interest on Advances
Existing ( Last Financial Year )
Facility Id &
Facility Name
CCY
Rate
Type
R.O.I
Charged
%
A
Interest
Expenses
Actual
Amount
B
Annualized
Amount
C
Rate %
D
Amount
NII
Amount
F = C*(AD)/A
FB-WC
F00050409005
BD
INR
MCLR 1Y
8.45
0.45
0.45
8.15
0.43
0.02
F00050409001
Cash Credit
INR
MCLR 1Y
10.55
0.89
0.89
8.15
0.69
0.20
1.34
1.34
1.12
0.22
Working Capital Total Intt.
FB-TL
None
Term Loan Total Interest
0.00
0.00
0.00
0.00
Total Interest
1.34
1.34
1.12
0.22
Proposed ( Current Financial Year )
Facility Id &
Facility Name
CCY
Rate
Type
R.O.I
Charged
%
A
Interest
Expenses
Actual
Amount
B
Annualized
Amount
C
Rate %
D
Amount
NII
Amount
F = C*(AD)/A
FB-WC
F00050409001
Cash Credit
INR
MCLR 1Y
9.65
0.92
0.92
7.95
0.76
0.16
F00050409005
BD
INR
MCLR 1Y
8.25
0.45
0.45
7.95
0.43
0.02
1.37
1.37
1.19
0.18
Working Capital Total Intt.
FB-TL
None
Term Loan Total Interest
0.00
0.00
0.00
0.00
Total Interest
1.37
1.37
1.19
0.18
II. Fee Income
a) LC Business
Total
0.13
0.13
Total
1.33
1.10
b) BG Business
c) Bills Business
Total
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
d) Forex Business
Total
e) Others
Existing
Proposed
0.22
0.26
Total
0.22
0.26
Total
1.68
1.49
Processing Charges
Upfront Fee
Commitment Charges
III. Exposure at Default (EAD)
Long Term ECRA Rating: BBB
i) Existing (Last Year Ended Last March)
Facility Id & Facility CCY Q4 last year
Name
O/s
Avg O/s
Higher of A4
&B
Fin.
Collateral
CCF %
EAD
RW %
A4
B
C
D
E
F
=[((C*E)/100)
G
RWA
H= C x (E/100)
x (G/100)
FB-WC
F00050409005 BD
INR
2.99
11.2
11.2
0.00
100
11.2
100
11.2
F00050409001 Cash
Credit
INR
0.58
5.03
5.03
0.00
100
5.03
100
5.03
FB-TL
None
NFB-WC
F00050409004 BG
INR
56.21
57.46
57.46
5.75
50
22.98
100
22.98
F00050409003 LC
INR
7.34
8.4
8.4
0.84
20
0.84
100
0.84
NFB-Projects
None
Total
82.09
82.09
40.05
40.05
ii) Proposed (Current Year Ending Next March)
Facility Id & Facility CCY Q4 last year
Name
O/s
Avg O/s
Higher of A4
&B
Fin.
Collateral
CCF %
EAD
RW %
A4
B
C
D
E
F
=[((C*E)/100)
G
RWA
H= C x (E/100)
x (G/100)
FB-WC
F00050409001 Cash
Credit
INR
5.00
8
8
0.00
100
8
100
8
F00050409005 BD
INR
2.99
11.2
11.2
0.00
100
11.2
100
11.2
0.84
20
0.84
100
0.84
FB-TL
None
NFB-WC
F00050409003 LC
INR
7.34
8.4
Confidential and Property of State Bank of India
8.4
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
F00050409004 BG
INR
56.21
57.46
57.46
5.75
50
22.98
100
22.98
NFB-Projects
None
Total
85.06
85.06
43.02
43.02
Note
#After netting off financial / cash securities (as per Basel norms)
Confidential and Property of State Bank of India
NEWFORMAT
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
IV. LGD Calculation
Existing Exposure ( Avg Quarter End Outstanding for Year Ended Last March )
Exposure: 46.64
Security
Category
Value of Required Overcoll Required Required Effective LGD %
Security level of ateralisa Minimu Minimu
Value of
Overcoll
tion
m
m
Collateral
ateralisa Amount Collatera Collatera
If X<=Y
tion (%)
l (%)
l Amount then D = 0,
If X>Y
then D = X
LGD
Residual
Amount Exposure
(A)
(B)
X = (A x
100 / B)
(C)
Y=(C/
100 x
Previous
Residual
Value )
(D)
(E)
Eligible
Financial
Collateral
0
100
0.00
0
0.00
0.00
0.00
0.00
46.64
Eligible
Financial
Receivables
0
125
0.00
0
0.00
0.00
50.00
0.00
46.64
CRE / RRE
0
140
0.00
30
13.99
0.00
50.00
0.00
46.64
122.19
140
87.28
30
13.99
46.64
60.00
27.98
0.00
0.00
65.00
0.00
0.00
Other
Physical
Collateral
Unsecured
Total
122.19
46.64
F = (D x
G=(
E) / 100 Residual
O/S
Exposure
-D)
27.98
LGD % (Total LGD Amount / Exposure)
59.99
Proposed Exposure ( Estimated Avg Outstanding as at Next March )
Exposure: 49.61
Security
Category
Value of Required Overcoll Required Required Effective LGD %
Security level of ateralisa Minimu Minimu
Value of
Overcoll
tion
m
m
Collateral
ateralisa Amount Collatera Collatera
If X<=Y
tion (%)
l (%)
l Amount then D = 0,
If X>Y
then D = X
LGD
Residual
Amount Exposure
(A)
(B)
X = (A x
100 / B)
(C)
Y=(C/
100 x
Previous
Residual
Value )
(D)
(E)
Eligible
Financial
Collateral
0
100
0.00
0
0.00
0.00
0.00
0.00
49.61
Eligible
Financial
0
125
0.00
0
0.00
0.00
50.00
0.00
49.61
Confidential and Property of State Bank of India
NEWFORMAT
F = (D x
G=(
E) / 100 Residual
O/S
Exposure
-D)
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Receivables
CRE / RRE
Other
Physical
Collateral
0
140
0.00
30
14.88
0.00
50.00
0.00
49.61
122.19
140
87.28
30
14.88
49.61
60.00
29.77
0.00
0.00
65.00
0.00
0.00
Unsecured
122.19
Total
49.61
29.77
LGD % (Total LGD Amount / Exposure)
60.01
V. RAROC Calculation
S.No
Item Details
Existing Last
Year
Current
Proposed
Year
1
Interest on Advances
1.34
1.37
2
Expenses
1.12
1.19
3
Net Interest Income (item 1 - item 2)
0.22
0.18
4
Non-Interest Income
1.68
1.49
5
Net Income (item 3 - item 4)
1.90
1.67
6
EAD (Exposure at Default)
40.05
43.02
7
PD (Probability of Default) based on ECR (Borrower's Long Term
Rating)
1.09
0.99
8
LGD (Loss Given Default)
59.99
60.01
9
Expected Loss (item 6 x item 7 x item 8)
0.26
0.26
10
RWA (Risk Weighted Assets)
40.05
43.02
11
CRAR %
11.50
11.50
12
Credit Risk Capital (Item 10 x Item 11)
4.61
4.95
13
Operational Risk Capital (item 5 x %)
0.29
0.25
14
Regulatory Capital (item 12 + item 13)
4.90
5.20
15
Tax Rate
32.16
32.16
16
Tax Adjusted Return (item 5*(100 - item 15)/100)
1.29
1.13
17
ROCC (item 5 / item 14) x (1 - item 15)
26.31
21.79
18
Risk Adjusted Return (item 5 - item 9) x (1 - item 15)
1.11
0.96
19
RAROC % (Risk Adjusted Return on Capital) (item 18/item 14)
22.65
18.46
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Annexure-2
Details of Due Diligence
Date of PreSanction visit
Place(s) visited
Name(s) of officials, who visited
Registered Office & Factory
premises,Angamally
Whether papers required for Yes
01/08/2019
Remesh T S, AGM & RM
KYC obtained
(PAN/Articles/Memo etc)?
Date of Latest Search Report
obtained from ROC
19-08-2019
If not obtained, furnish
reasons
Whether information on loan Yes
rejections / slippages has
been obtained as per extant
circular / Circular and
position has been furnished
(Y/N)
Remarks
Formalities regarding
Yes
obtention of legal
opinion/valuation report
completed
(Yes/No)?
Whether CIRs obtained from
existing Bankers (Yes/No)?
No
If not obtained, furnish
reasons
Existing connection.
Whether Pre-screening of the No
customers has been obtained
from M/s Cubictree
Technology Solutions Pvt Ltd
( CTSPL) ( Ref- Circular No
CCO/CPPD-ADV/146/2014Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
15 dated 30.12.2014 )
Other Observations, if any
Details of Post sanction monitoring done in last 12 months, in case of renewal
/ existing relationship:
Date & Name(s) Sri Remesh T S-AGM &
of Senior
Relationship Manager
officials, who
19.06.2019
visited the unit
/ customer
Observation Discussions were held with
Mr Ajith Kumar V-Sr
Manager (F&A) of TELK
Ltd.Advised the officials to
submit the audited
financials of FY 2017-18 at
the earliest as continuation
of limits are also on the
verge of expiry. Mr Ajith
clarified that the audited
financials are in final stage
of preparation and will be
submitted in July 2019.
Creation of charge in terms of Charges for the facilities created as per ROC search
sanction
report dated 19.08.2019.
Deviations observed , if any
Nil.
Redundant charges are seen and we have advised the
company to initiate measures for removing the same.
Date & Name
(s) of the official
(s) who visited
in respect of
security
verification
Observation
Comments on insurance of
Being a PSU,the insurance of entire current assets
security as per sanction term and Fixed Assets are taken from Kerala State
Insurance Department.
Deviations observed , if any
Nil
Implementation of Project as
per schedule:
Deviations observed , if any:
Details of Business Visits,
Meeting with top company
officials, Bank’s senior
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
management meets /
discussions with PE
investors:
Comments on SMA follow-up:
Submission of irregularity
Account was irregular and in SMA from 18/09/2018
report /FFR and observations as the continuation was available up to 17/09/2018.
of the controlling authority:
Action initiated for
Continuation of limits from 18.09.2018 up to
regularisation of the account: 31.12.2018 and from 01.01.2019 up to 29.06.2019
was sanctioned by CCSC vide its resolutions dated
31.10.2018 and 06.02.2019 respectively. Present
proposal is for renewal of limits based on ABS 201718 and provisional BS of FY 2018-19.
Any other unsatisfactory
features after sanction /
renewal of the account:
Nil.
We confirm that on the basis of inspection, information and explanations obtained,
the security (mentioned in the proposal) has not suffered any significant impairment.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Date Chart
1. Nature of facility(ies) applied for:
Renewal of credit facilities at the existing levels
2. Date of receipt of the proposal:
25-07-2019
3. Information sought on changes in the revised business
plan:
29-07-2019
4. Reply received:
08-08-2019
5. Discussions held with Company's officials:
08-08-2019
6. Information received:
08-08-2019
7. In Principle Note submitted:
8. Date of receipt of complete information:
16-08-2019
9. Date of submission to sanctioning authority (for
sanctioning authorities up to the level of GM):
10. Date of submission to CCCC if proposal is to be
sanctioned by CCCC or higher authorities:
Designation
Name
APPRAISED BY
AVP
Anand J S
ASSESSED BY
Asst. Gen.
Manager
Remesh
Thekkethu
Sivasankaran
Nair
ADDITIONAL
ASSESSMENT
BY
Dy. Gen.
Manager
Dileep S S
Date
Initials
2ND
ADDITIONAL
ASSESSMENT
BY
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Annexure-5
Details of Diversion of Funds to Related/Unrelated Entities or Unrelated Activities
(On consolidated basis)
Name of the Borrower
TRANSFORMERS AND ELECTRICALS KERALA LIMITED
i. Investments made by borrowal unit in Associates / Subsidiaries / Other
related parties @ :
Name of Company where
invested
Period of
Investment(in
Amount Invested
Previous Year
Last Year
None
Total
ii. Amount of Dividend Received from Associates / Subsidiaries / Other related
parties + :
Dividend Received
Name of Company where invested
Previous Year
Last Year
None
Total
iii. Loans & Advances granted to Associates / Subsidiaries / Other related
parties $ :
Name of Company to which Loans & Advances
were granted
Loans & Advances
Previous Year
Last Year
None
Total
iv. Interest Received on Loans & Advances from Associates / Subsidiaries /
Other related parties # :
Name of Company where
invested
Rate of Interest
Previous
Year
Last Year
Interest Received
Previous
Year
Last Year
None
Total
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
v. Loans & Advances granted to Promoters / Directors of borrowal unit / Other
related parties $$ :
Loans & Advances
Name of Promoters / Directors
Previous Year
Last Year
None
Total
vi. Interest Received on Loans & Advances granted to Promoters / Directors of
borrowal unit / Other related parties @@ :
Rate of Interest
Name of Promoters /
Directors
Previous
Year
Amount Invested
Previous
Year
Last Year
Last Year
None
Total
vii. Contingent Liabilities in terms of Corporate Guarantees extended for the
debt to Associates / Subsidiaries / Other related parties ## :
Beneficiary Co.
(Associates /
Subsidiaries)
Details of Guarantee
extended
Comission Received
Previous Year
Last Year
None
Total
viii. Investment / Loans & Advances in other Un-related Activities / Entities ++
Name of Un-related Entity /
Activity
Rate of Interest
Previous
Year
Last Year
Interest / Dividend
Previous
Year
Last Year
None
Total
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
@
Details of Investments alongwith period for investment made
+
Details of Dividend received
$
Details of Loans and Advances
#
Details of Rate of Interest & Amount
$$
Details of Loans and Advances
@@ Details of Rate of Interest & Amount
##
Details of Guarantees, Beneficiaries Names and Commission received if any
++
Details of Investments/Loans and Advances in other un-related activities / unrelated entities
i. Whether Bank's prior approval was sought by parent company for investment
/ Loan & Advances in Associates / Subsidiaries? - NA
If no reasons thereof:
ii. Whether permission from Bank obtained for Corporate Guarantee extended
for Associates / Subsidiaries? - NA
If no reasons thereof:
iii. Whether the investment in Associates / Subsidiaries is more than one year?
- NA
If yes reasons thereof:
iv. Whether Loan & Advances granted to Associates / Subsidiaries are being
repaid on time? - NA
v. Whether 2% penalty has been charged for breach of convenant(s)? - NA
vi. Related Party Transactions
Adverse comments, if any, in Audited Balance Sheet in respect of related party
The related party transaction includes
1. Sale of goods and services to NTPC Ltd(JV promter) amounting to Rs.1.66 crs and
receivables outstanding as on 31.03.2018 of Rs.0.91 cr.
Confidential and Property of State Bank of India
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
2.Sale of goods and services to entities under the control of same government ie
KSEB -Rs.36.75 crs (Sale of goods and electricity charges) and to TCCL(Travancore
Cochin Chemicals Limited)-Rs.85000/-(sale of goods and purchase of goods)
3.Compensation to Key Management Personnel
4.Honorarium to Chairman,Sitting fees to Nominee Directors and Reimbursement of
Traveling expenses .
There are no adverse comments regarding this in the Audited Balance Sheet.
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
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TRANSFORMERS AND ELECTRICALS KERALA LIMITED
Confidential and Property of State Bank of India
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Form DD for Credit Proposal No. P0005040905 Generated by Anand J S (8158258), CB ERNAKULAM (4062, Team Code :
T00406201) On 21-08-2019 2.16 PM
TRANSFORMERS AND ELECTRICALS KERALA LIMITED