IFCI Limited New Delhi. Sugar Development Fund. Dated: 16/08/2018

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1 IFCI Limited New Delhi Sugar Development Fund Dated: 16/08/2018

IFCI Ltd. is the Nodal Agency for channelizing the Sugar development Fund (SDF) of the Government of India since inception of the Fund in 1986.

2 IFCI Ltd. is the Nodal Agency for channelizing the Sugar development Fund (SDF) of the Government of India since inception of the Fund in IFCI monitors the SDF loans sanctioned to private sugar factories for modernization-cum-expansion, setting-up of bagasse based cogeneration power projects, manufacture of ethanol from alcohol/molasses, zero liquid discharge (ZLD) distillery projects, cane development schemes. Dr. Emandi Sankara Rao MD & CEO

3 As a Nodal agency of GOI, IFCI is primarily responsible for examination/execution of loan proposals and security documents, recommendation to GOI for release of funds, undertaking site visits for verification of physical and financial progress, verification of utilization of loan monies released by SDF, maintaining loan accounts of borrowers, recovery of SDF dues, taking legal actions against defaulters, etc.

The Sugar Development Fund Act, 1982 provides for the following purposes for which the fund shall be applied: (i) Making loans for facilitating the rehabilitation and modernization of any sugar

4 The Sugar Development Fund Act, 1982 provides for the following purposes for which the fund shall be applied: (i) Making loans for facilitating the rehabilitation and modernization of any sugar factory or any unit thereof, including to a potentially viable sugar undertaking. (ii) Making loans for undertaking any scheme for development of sugarcane in the area in which any sugar factory is situated, including to a potentially viable sugar undertaking. (iii) Making grants for the purpose of carrying out any research project aimed at the promotion and development of any aspect of Sugar Industry. (iv) Defraying expenditure to a sugar factory on internal transport and freight charges on export shipment of sugar with a view to promoting its export. Cont..

(v) Making loans to any sugar factory having an installed capacity of 2500 TCD or higher to implement a project of bagasse based cogeneration of power.

5 (v) Making loans to any sugar factory having an installed capacity of 2500 TCD or higher to implement a project of bagasse based cogeneration of power. (vi) Making loans to any sugar factory having an installed capacity of 2500 TCD or higher for production of anhydrous alcohol or ethanol from alcohol or molasses with a view to improving its viability. (vii) Defraying expenditure to a sugar factory for the purpose of building up and maintenance of buffer stock with a view to stabilizing price of sugar. (viii) Defraying expenditure for the purpose of financial assistance to sugar factories towards interest on loans given in terms of any scheme approved by the Central Government from time to time. (ix) Defraying any other expenditure for the purpose of the Act. (x) Making loans to any sugar factory for conversion of existing ethanol plant into Zero Liquid Discharge plant.

Cumulative Figures Total Sanction : Rs. 6670.00 crore Total Disbursement : Rs. 5409.78 crore Agency Commission : Rs. 218.

6 Cumulative Figures Total Sanction : Rs crore Total Disbursement : Rs crore Agency Commission : Rs crore Current Status Total Exposure : Rs crore Number of Cases monitored : 131 Number of Accounts monitored : 331

2 5 9 22 21 14 19 7 8 5 9 7 14 16 6 4 15 3 11 12 8 18 40 25 41 49 24 52 19 8 12 17 11 0 10 20 30 40 50 60 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96

7 Year wise number of cases Sanctioned No. of Cases

Year wise Amount Sanctioned Rs. in Crore 1.79 4.46 6.24 46.24 49.70 40.97 96.26 24.93 37.17 27.82 42.49 54.44 89.03 154.19 67.49 42.57 135.66 34.54 164.96 142.39 73.97 374.25 759.87 502.63 829.88 297.

8 Year wise Amount Sanctioned Rs. in Crore

Year wise Disbursement 1.79 4.46 6.24 46.24 49.70 40.97 89.09 24.39 37.17 26.93 42.49 54.44 82.69 151.26 67.49 42.57 132.58 34.54 163.56 126.49 71.72 342.81 268.18 441.94 521.31 543.07 340.49 353.

9 Year wise Disbursement Rs. in Crore

Agency Commission Structure The commission for actual recovery is 2% The Commission for Outstanding Amount is as detailed under: Commission (%) of Outstanding Loans Commission is applicable for

10 Agency Commission Structure The commission for actual recovery is 2% The Commission for Outstanding Amount is as detailed under: Commission (%) of Outstanding Loans Commission is applicable for following period Commission(%) applicable for remaining period Modernization 0.5% 3 Yr 0.25% Cogeneration 0.5% 2 Yr 0.25% Ethanol 0.5% 1 Yr 0.25% Cane Development 0.20% 2 Yr 0.10% No commission are paid by SDF/GOI for default cases (i.e.) cases where company is in default for 2 or more due dates

Year wise Commission earned by IFCI 0.01 0.03 0.08 0.33 0.54 0.84 1.22 1.38 1.65 2.06 2.26 2.61 3.02 3.75 4.24 4.69 5.33 5.63 5.97 6.75 7.01 11.28 8.17 11.40 14.59 16.91 17.56 19.33 18.23 16.04 15.

11 Year wise Commission earned by IFCI Rs. in Crore

Rs. in Crore 1,400 1,200 1,000 800 600 400 200 0 Total Outstanding as on 31/03/2018 : Rs.2449.

12 Rs. in Crore 1,400 1,200 1, Total Outstanding as on 31/03/2018 : Rs Crore 1, % % 50% % % 30% 20% % 8.833% 6.659% 0%

RS. In Crore Total Outstanding as on 30/06/2018 : Rs.2670.

13 RS. In Crore Total Outstanding as on 30/06/2018 : Rs Crore % 50% 40% 30% 20% 10% 0% % % 9.911% 5.943%

S.No Type No. of cases Outstanding Position as on 30/06/2018 No. of Actt. Principal OS Interest OS Total OS % of OS 1 Regular Cases 53 192 1014.99 125.86 1140.85 42.73% 2 Default Cases 78 139 904.

14 S.No Type No. of cases Outstanding Position as on 30/06/2018 No. of Actt. Principal OS Interest OS Total OS % of OS 1 Regular Cases % 2 Default Cases % Total % Default Position as on 30/06/2018 Rs. In Cr. Rs. In Cr. S.No Type No. of No. of Principal Interest Funded Total % of cases Actt. Default Default Interest Default Default 1 Single Instalment Default % 2 Legal Action Taken % 3 Legal Action under initiation % Approval to be obtained for Legal Action % 4 5 Others (Close Monitoring) % Total %

15 An over view of the accounts Period No. of Regular Accounts No. of Default Accounts Total No. of Accounts Default Amount in crore Security Prior to 30/06/ After 30/06/ Total Loans are secured by way of second charge Loans are mainly secured by way of First pari-passu charge

16 Challenges for Sugar Factory Cyclical Industry Low Yield of Sugarcane Old and obsolete machinery Low rate of recovery Low per capita consumption Short crushing season Fluctuating Production Trends Mismatch between cost of production and sale price

Limitations in SDF Rules No provision for One time Settlement of default cases No Restructuring facility by way of any wavier DRT Process is time consuming and post issuance of RC, even if we

17 Limitations in SDF Rules No provision for One time Settlement of default cases No Restructuring facility by way of any wavier DRT Process is time consuming and post issuance of RC, even if we go for sale, proceed will first go to 1 st charge holder and residual, if any, will come for 2 nd Charge Holder. Companies cannot be declared as wilful defaulter under SDF as RBI is not agreeable

18 Suggestions to SDF/GOI Provision in SDF rules for OTS and resolution through NCLT which may entail sacrifice, if necessitate. (IFCI is in the process of submitting a proposal)

19 Contact Details: Jagdish Garwal Manoranjan Sarma Deputy General Manager Manager Sugar Development Fund Sugar Development Fund j.garwal@ifciltd.com m.sharma@ifciltd.com Mobile : Mobile :

ACTS AND RULES RELATING TO SUGAR INDUSTRY [Amendments Incorporated Till October, 2017] SDF Act and Rules

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