MOU OF NSIC FOR 2015-2016

1. MISSION / VISION AND OBJECTIVES OF NSIC LTD.
 1.1 VISION To be a premier organisation fostering the growth of Micro, Small and Medium Enterprises (MSMEs) sector.
 1.2 MISSION To promote and support Micro, Small and Medium Enterprises (MSMEs) sector by providing integrated support services encompassing Marketing, Technology, Finance and other services.
1.3. OBJECTIVES
1.3.1 To promote establishment and sustenance of new & existing Micro, Small and Medium Enterprises. 1.3.2 To provide opportunities and support for marketing products and services of Micro, Small and Medium Enterprises encompassing Vendor Development, Infrastructure Facilities, Capacity Building and Export of Products & Projects.
1.3.3 To facilitate identification, acquisition and upgradation of technologies of the Micro, Small and Medium Enterprises.
1.3.4 To provide training (Technical and Professional) for skill upgradation and enterprise building in Micro, Small and Medium Enterprises.
1.3.5 To provide common facilities for Micro, Small and Medium Enterprises at various Technical Services Centres.
1.3.6 To facilitate credit support to Micro, Small and Medium Enterprises for Capital Equipments, Raw Materials and Marketing.
1.3.7 To facilitate international partnerships and alliances between the Indian and foreign Micro, Small and Medium Enterprises for Business Development, Technology Exchange and Joint Ventures. 

Financial Assistance On Bar Code

Financial Assistance On Bar Code

The Ministry of Micro, Small and Medium Enterprises (MSME), Govt. of India recognizes the contribution of Micro & Small Enterprises (MSEs) in growth of Indian economy, export promotion and employment generation. In order to enhance the marketing competitiveness of MSEs in domestic as well as international market, Office of Development Commissioner (MSME), Ministry of MSME, provides the financial assistance for reimbursement of 75% of one-time registration fee (Under SSI-MDA Scheme) w.e.f. 1st January,2002 and 75% of annual recurring fee for first three years (Under NMCP Scheme) w.e.f. 1st June,2007 paid by MSEs to GS1 India for using of Bar Coding. The work of reimbursement has been decentralised and transferred to field offices i.e. MSME-DIs w.e.f. 1st April,2009 with a view to ensure speedy & timely and extensive implementation of the scheme

Bar codes are the series of black lines and white spaces printed on product packages or attached as tags which you would have noticed on consumer products. Information on a product or a consignment like its item code or serial number, expiry date, consignor/ consignee etc., can be represented through such bar codes. When these bar codes are scanned using a scanner, it enables instantaneous data capture with 100% accuracy and at great speeds.

Bar Coding can have a significant impact on the success of any enterprise/ company and organisation. Timely and accurate capture of product information and its communication electronically across the Supply Chain ahead of physical product flow is critical to lowering inventory costs, in accurate sales forecasting & dynamic production scheduling and in product track and trace.

Bar Coding not only facilitates the exchange of information between buyers and sellers, but also provides the potential for better visibility and sharing of information across an entire Supply Chain.Other benefits are-

(i) Automated data capture with 100% accuracy

(ii) Real time stock management of raw materials and finished goods

(iii) Fast and error free data recording on product/ consignment movement

(iv) Easy integration with existing software, if any

In compliance with growing requirements of leading national markets

(vi) In line with requirements of international retailers

(vii) Also gives international look and feel.

GS1 India, an autonomous body under Ministry of Commerce & Industry, Government of India is a solution provider for registration for use of Bar Coding. To become a subscriber of GS1 India, all one has to do is fill up the subscription enquiry or registration form and make the necessary payments as registration fee. Details about registration with GS1 India for use of Bar Coding are available on their website www.gs1india.org

Manufacturing Competitiveness Programme (NMCP)

Manufacturing Competitiveness Programme (NMCP)

The Government has announced formulation of National Competitiveness Programme in 2005 with an objective to support the Small and Medium Enterprises (SMEs) in their endeavor to become competitive and adjust the competitive pressure caused by liberalization and moderation of tariff rates. Para 59 of the Budget Speech 2005 are as follow:-

"Worldwide, it is manufacturing that has driven growth. In order to revive the manufacturing sector, particularly small and medium enterprises, and to enable them to adjust to the competitive pressures caused by liberalization and moderation of tariff rates, I propose to launch a new scheme that will help them strengthen their operations and sharpen their competitiveness. The scheme will be called the "Manufacturing Competitiveness Programme". The design of the scheme will be worked out by the National Manufacturing Competitiveness Council (NMCC) in consultation with the industry".

Accordingly, the NMCC along with relevant stakeholders like the Ministry of MSME has conceptualized and finalized the components of the programme incorporating suitable inputs from the stakeholders in a meeting taken by Chairman, NMCC on 7.12.2005. The NMCP, as conceptualized by the NMCC was accepted by the Government and announced for implementation in the Budget 2006-07, para 68 of which state as under:-

The National Manufacturing Competitiveness Council (NMCC) has finalized a five-year National Manufacturing Programme. Ten schemes have been drawn up including schemes for promotion of ICT, mini tool room, design clinics and marketing support for SMEs. Implementation will be in the PPP model, and financing will be tied up during the course of the next year

The Small and Medium Industries form the backbone of manufacturing sector not only in this country but even in the developed countries. In India, the small scale sector contributes to 40% of manufacturing. The small industries sector also contributes substantially to the exports. In the past, the Small Scale Sector existed in a relatively sheltered environment. The levels of protection were high, several goods were reserved for production in the Small Scale Sector, special fiscal incentives were extended to the units in the sector and a number of support programmes were also drawn up to ensure the Small Industries survived.

In the post-reform era, starting from 1991, the situation for the Manufacturing Sector as a whole as well as for the Small Industries has undergone a dramatic change. The tariffs on imports have been reduced very substantially. India is gradually integrating with the world economy; new trade blocs are forming and many countries, including India, are entering into Preferential Trade Agreements, Free Trade Agreements or Comprehensive Economic Agreements to improve trade in areas of their comparative advantage. In this process the Indian economy is becoming more open and there is an urgent need for the Industry to adjust to the new situation. The Indian Industry will have to become competitive by cutting down overall costs to that extent to survive and grow. The situation confronting the Small Industries in particular provides both opportunities as well as challenges. An opportunity to grow in a global market place is available to access entry into the global value chain by virtue of their being internationally competitive. The others would need to reposition themselves and become competitive to meet the challenges if they have to survive.

Industries & Business Reform

Ø  Industries & Business Reform :

Industries & Business Reform this situation occurred when there would be little chance of it. Many industries and business entrepreneur have get themselves in trouble just because of miss management, poor leadership, patrons about new business, poor decision, low effect in subordinate and measure and very important negligent about financial aspect these are all reason for the miss allocation of organisation fund. To get away from all these problems following measures are have to be taken;

o   While running any business, weekly analysis of organisation activities are required drastically especially of production, marketing and financial department.

o   Always ask for the opinion from Supervisors and Managers from each department.

o   Always believe on subordinate, understand them and then implement your necessary decision.

o   Take care of that all departmental officials can interact with each other frequently for smooth conduct of organisation.

o   Reconciliation of Debtors & Creditors in every 15days and find out inflation among both.

o   Always be prepared for recovery before or after completion of credit period.

o   Do not put any sympathy towards clients for future business, because you will get regular business but your profit and some part of principal always in the hands of your client and it may cause you obstacles to go for any new business clients.

o   Always be in touch with Finance & Accounts department to get day to day schedule of cash flow.

o   Budgetary cash flow and application of fund flow should be controlled by Top management only.

o   One third part of the profit should be kept allied in reserve in the form any liquidate investment.

o   Do not try to conceal your income because directly have adverse effect on goodwill of your organisation.

o   Do not allocate cash flow from existing business activities to anther business activities. It would definitely get into a trouble while any of these businesses being financial sick. 

Thanks & Regards

Vinayak Gaonkar

9869621072/9869273067             

External Commercial Borrowings Approved Route

Approval Route

Application in Form ECB to be filed with the RBI, with

(i) A copy of offer letter from the overseas lender/supplier furnishing complete details of the terms and conditions of proposed ECB; and

(ii) A copy of the import contract, proforma/commercial invoice/bill of lading.

Monthly return

Borrowers are required to submit ECB-2 Return certified by the designated AD on monthly basis so as to reach DSIM, RBI within seven working days from the close of month to which it relates.

Conversion of ECBs to equity

1.   ECBs can be converted to equity subject to conditions prescribed in this behalf in the ECB guidelines. The equity shares must be valued as per the guidelines/regulations issued by SEBI/ Controller of Capital Issues in case of listed/unlisted

2.   Conversion of ECB may be reported to the Reserve Bank as follows:

(a)  Borrowers are required to report full conversion of outstanding ECB into equity in the Form FC-GPR to the concerned Regional Office of the Reserve Bank as well as in Form ECB-2 submitted to the DSIM, RBI within seven working days from the close of month to which it relates. The words "ECB wholly converted to equity" should be clearly indicated on top of the Form ECB-2. Once reported, filing of ECB-2 in the subsequent months is not necessary.

(b) In case of partial conversion of outstanding ECB into equity, borrowers are required to report the converted portion in Form FC-GPR to the concerned Regional Office as well as in Form ECB-2 clearly differentiating the converted portion from the unconverted portion. The words "ECB partially converted to equity" should be indicated on top of the Form ECB-2. In subsequent months, the outstanding portion of ECB should be reported in Form ECB-2 to DSIM.

1.   The policy for ECB is also applicable to FCCB in all respects including reporting requirements. Further FCCBs issue must be in compliance with the guidelines prescribed in the Regulation 21 FEMA 120/2004-RB dated July 7, 2004 and the Schedule 1 there under. The issue size of the FCCBs cannot exceed USD 500 million as per the present policy. Issues exceeding USD 500 million would require prior approval of the Reserve Bank of India.

2.   The primary responsibility to ensure that ECB raised / utilised are in conformity with the ECB guidelines and the Reserve Bank regulations / directions is that of the borrower concerned and any contravention of the ECB guidelines will be viewed seriously and will invite penal action under FEMA 1999 (cf. A. P. (DIR Series) Circular No. 31 dated February 1, 2005). The designated AD bank is also required to ensure that raising / utilisation of ECB is in compliance with ECB guidelines at the time of certification.

Any changes in the terms and conditions of the ECB after obtaining LRN is required to be reported to designated AD Category-I banks to approve the same. Following requests from the ECB borrowers, subject to specified conditions:

·         Changes/modifications in the drawdown/repayment schedule Designated AD Category-I banks may approve changes/modifications in the drawdown/repayment schedule of the ECBs already availed, both under the approval and the automatic routes, subject to the condition that the average maturity period, as declared while obtaining the LRN, is maintained. The changes in the drawdown/repayment schedule should be promptly reported to the DSIM, RBI in Form 83. However, any elongation/rollover in the repayment on expiry of the original maturity of the ECB would require the prior approval of the Reserve Bank.

·         Changes in the currency of borrowing Designated AD Category-I banks may allow changes in the currency of borrowing, if so desired, by the borrower company, in respect of ECBs availed of both under the automatic and the approval routes, subject to all other terms and conditions of the ECB remaining unchanged. Designated AD banks should, however, ensure that the proposed currency of borrowing is freely convertible.

·         Change of the AD bank Designated AD Category-I banks may allow change of the existing designated AD bank by the borrower company for effecting its transactions pertaining to the ECBs subject to No-Objection Certificate (NOC) from the existing designated AD bank and after due diligence.

·         Changes in the name of the Borrower Company Designated AD Category-I banks may allow changes in the name of the borrower company subject to production of supporting documents evidencing the change in the name from the Registrar of Companies.

 

External Commercial Borrowings

Automatic route:

·         ECB can be given by only recognized lenders and can be availed by eligible buyers only.

·         The proposed ECB must satisfy the general conditions (such as the end use restrictions, average maturity and all in cost ceilings etc) prescribed under the ECB guidelines for qualifying under the Automatic Route.

·         Software companies can avail ECB for the purpose of import of capital goods.  The borrower can draw-down the loan only after obtaining the loan registration number (‗LRN‘) from Department of Statistical and Information Systems (DSIM), Reserve Bank of India  

·         Form 83 (in duplicate), duly certified by the Company Secretary or Chartered Accountant is required to be filed with Authorised dealer. One copy is to be forwarded by the designated AD bank to the Director, Balance of Payments Statistics Division, DSIM, Mumbai. Submission of copy of loan agreement is not required.

·         The amount that can be availed under automatic route under ECB is USD 500 Million one financial year. The maturity of ECB in case the amount upto USD 20 million cannot be less than three years and in case of ECB above USD 20 million or equivalent and up to USD 500 million or its equivalent with a minimum average maturity of five years.

·         There is also ceiling on the all in cost that can be incurred by the borrower towards the cost like rate of interest, other fees and expenses in foreign currency except commitment fee, pre-payment fee, and fees payable in Indian Rupees etc. The cost is specified to be LIBOR for the respective currency of borrowing of 6 months + 300 basis points in case the period of maturity is 3 years and upto 5 years and it can be LIBOR of 6 months + 500 basis points in case period of maturity is 5 years or more.

Prepayment of ECB

USD 500 million would be allowed by the AD bank without prior approval of RBI subject to compliance with the stipulated minimum average maturity period as applicable to the loan, while pre-payment of ECB for amounts exceeding USD 500 million would be considered by the RBI under the Approval Route.

Monthly return

Borrowers are required to submit ECB-2 Return certified by the designated AD on monthly basis so as to reach DSIM, RBI within seven working days from the close of month to which it relates.

Thanks & Regards 

Vinayak Gaonkar

9869621072/9869273067 

External Commercial Borrowings

·         Recognized Lenders and recognized borrower

·         Refinancing

·         Amount and Maturity

·         Debt Servicing

·         All in Cost ceiling

·         End use permitted/ not permitted end use

·         Guarantee Security

·         Parking of ECB Proceeds

External Commercial Borrowings

External Commercial Borrowings (ECB) refer to commercial loans in the form of bank loans, buyers‘ credit, suppliers‘ credit, securitized instruments (e.g. floating rate notes and fixed rate bonds, non-convertible, optionally convertible or partially convertible preference shares) availed of from non-resident lenders with a minimum average maturity of 3 years.

ECB can be accessed under two routes, viz., (i) Automatic Route and (ii) Approval Route. Automatic route can be availed in case the eligibility criteria for automatic route are met. In case of doubt as regards eligibility to access the Automatic Route, applicants may take recourse to the Approval Route.

 

Industrial Set Up

Ø Industrial Set Up :

It has been observe by me that many industries in India get NPA in first stage of moratorium period; this is the big hurdle among bank to finance for new industrial set up. And because of this bankers always like to prefer finance for existing established organization for newly industrial set up. So I put more attention on new industrial establishment especially in SME and agriculture sector, accordingly I pay more attention on following measures;  

o   To put major attention on geographical aspect related to each industry. For establishment of any industry water, labour, HTL electricity, raw material and easy transportation availability are very important.

o   Necessary zone for particular Industries. It is also very important on the point of cost calculation.

o   Compliance of necessary permission from each respected authorities.

o   Drafting of all technical aspect including negligent aspect also, which may or may not be part of major hurdle in future.

o   Drafting of Organization Chart to direct the responsibility of each obligates who being a part of these industry.

o   Drafting of Time Bar Chart for each unit/machinery installation till the date of factory being commission.

o   Drafting of Exact Budgetary Financial Planning, so that there would not be any adverse effect on moratorium period and it should be benefited and capitalized properly.

Thanks & Regards

Vinayak Gaonkar

9869621072/9869273067

How to Establish SME

How to establish SME/MSME and how get Finance and to Commission it:

SME/MSME

As per my 18year experience I have notice that, to establish any new entrepreneur it is very important to get atleast two to three years experienced in manufacturing process, trading and marketing. If you had been in a production process from last three to five years even though you are very lagging behind due to the trader’s monopoly and lack of marketing strategy. It is very important if you come down to the earth to indulging and to understand whole manufacturing process, traders monopolies and their policies, and to adopt a measures in very competitive market, it will definitely help you to survive in this market to the extent of breakeven point.

SME/MSME divides into three basic industries i.e. Engineering, Food Stuff & Beverages and Conceptual/Service Industries.

Finance

Indian Govt. Draft very good policies for SME/MSME, but due to lack awareness and commercial industrial illiteracy, implementation of all those policies are befitted by 15%-16% of SME/MSME only. All public sector banks fixed some priority sectors quota for all those SME/MSME to the extent of Rs.5/-lakhs to Rs.2/-crores. Central Govt. Trust Fund (CGTSME) also available to two years old establishment maximum upto Rs.1/-crores by paying extra premium above the applicable interest rates without any security to conceal the  working capital gap. 

Commission of Industries     

To Establish a New Industries is a very difficult task for every entrepreneur. Firstly you have to satisfied documental compliance to get proper permission from necessary authorities to form a new industry and then very big measure role of fund. To get funds from any bank you have to produce a technically viable project report prepared by a professional financial expert. Your new establishment or a factory building, plant & machineries and upcoming produce stock will consider as primary securities and so you have to produce collateral securities to the extent of 50% to 100% depend upon the each bank policies.  

For more information & knowledge you can join our one day training session will held at Thane. To participate please put your mobile no. in comment or contact me on;

Vinayak Gaonkar

9869621072/9869273067

Rvinternational4673@gmail.com        Industry & Business Development