Agro Industries

Guidelines to Start an Industry

STEPS FOR SETTING UP AN INDUSTRY

1. Selection of Product / Industry
For getting guidance for the selection of product/industry

The following Institutions/persons may be contacted:

 2. Approva

• The Provisional registration Certificate should be obtained by SSI units from the District Industries Centre of the concerned district
• Medium scale large scale units shall obtain SIA registration.
• If the product falls under compulsory license, the same shall be obtained.
• If the project involves foreign currency for importing capital goods, steps should be taken to obtain an import license, wherever necessary.
• If the site where the industry is to be set up is an agricultural land, it has to be reclassified for Industrial use. To get this done, the Town Planning Officer, the Tahsildar and the Deputy Commissioner or the Assistant Commissioner should be approached.
• For allotment of a shed in industrial estate, the entrepreneur has to approach SIDCO or SIPCOT.

INDUSTRIAL PROMOTIONAL AGENCIES IN TAMIL NADU

The entrepreneurs may have to register the industry with the authorities listed below as applicable:
Commissioner of Commercial Taxes Regional Provident Fund Commissioner, Collector, Central Excise Secretariat for Industrial  Approvals (SIA), New Delhi (in Respect of medium & large scale Industries) Drug Controller (Pharmaceutical Concerns) Director of  Plant Protection, Central Control and Insecticide Cell, Faridabad  (for pesticide manufacturing concerns) Director, Food and Vegetable Products ( for fruits processing concerns) F.P.O.  License. Tamilnadu Pollution Control Board (for Pollution Clearance).

REGISTRATION OF APPLICATION

INVESTIGATION FEE STRUCTURE
Application form:

The entrepreneurs shall apply in the prescribed application form obtained from Head Office or Branch Offices of the Corporation on free of cost together with the particulars required for the processing of the Application.

Where to lodge / deposit the Application form?
All applications are to be submitted at the concerned Branch Offices by paying a non-refundable registration charge of Rs.500/-

Investigation Fees:
On acceptance of the application along with required particulars, a non refundable investigation fees which is based on the amount of loan applied has to be remitted to TIIC.

DETAILS TO BE FURNISHED WHILE SUBMITTING APPLICATION
The Project Report with all particulars should be submitted along with the application. The following are the particulars required to be furnished

General:          

APPRAISAL OF THE PROJECT
TIIC appraises the applications for the technical feasibility and economic viability of the project before according sanction. The project should generate sufficient profits to service the loan. The applicant should satisfy TIIC regarding the marketability and commercial viability of the project. Market Surveys or any published materials regarding market potential, demand and supply position of the product and market tie-up letters from reputed concerns will be helpful in assessing the potential market.
For assessing the financial viability of the project, details of the cost of production and profitability and cash flow statement for the loan period are to be furnished to assess the pay back period, debt service coverage ratio and break even production level. TIIC will be assessing the promoters background by way of field enquiry.

SECURITY DOCUMENTS
The Corporation sanctions financial assistance on having the first charge of the fixed assets (viz. land, building and plant and machinery) of the industrial unit. The charge is secured by way of registered mortgage / equitable mortgage. In case of consortium finance with other financial institutions / Banks, the first charge will be on Pari Passu basis with participating institutions.
The Corporation accepts hypothecation of machinery in respect of loans Involving the purchase of machinery only. For transport loans TIIC's lien shall be endorsed / mark on the R C Book of the vehicle.

LEGAL DOCUMENTATION
The following are the security documents that will be obtained:
• Registered Mortgage.
• Equitable Mortgage.
• Deed of Hypothecation.
• Personal Guarantee.
• Deed of Undertaking.
• Deed of Power of Attorney.
For industrial term loans in respect of SSI units, the first Rs.50,000/- and in other cases the first Rs.1,00,000 is secured by way of a Registered Mortgage and the balance loan is secured by way of Equitable Mortgage.

DISBURSEMENT - GUIDELINES
Disbursement for Land: Our Panel Engineer's valuation or Auditor's Certificate or value as per document or guideline value w purpose of disbursement.
Reimbursement of building cost will be done in stages in proportion to the amount spent on the building subject to compliance of capital upfront clause and after inspection and valuation by our panel engineer.

Disbursement for Plant and Machinery:
Plant and Machinery should normally be purchased only from standard/approved suppliers of the Corporation. For the purchase of machinery, the advances paid by the borrowing unit to the machinery supplier should be routed through the Corporation. Normally, commitment letter to the machinery supplier is issued requesting them to supply the machinery to the entrepreneurs. TIIC will disburse the amount to the suppliers after inspection / valuation as required.

Release of Subsidy:
As per norms of the respective incentive schemes.
Ceding of Second Charge for getting Working Capital Assistance from Banks:
Normally second charge on the fixed assets is ceded in favour of the banker for working capital provided there are no overdue.

Insurance Coverage:
Insurance Coverage for the assets created is mandatory and will be effected on the higher of the engineer's value or the book value in the case of buildings and fabricated or second hand machinery. In case of new machinery, insurance coverage should be affected on the invoice value.