Part: 1: Organizational & Technical overview

Page 1 of 23
 1. Company Overview:

Russel Garments [RG] and Russel Spinning Mills Ltd. [RSML] are the sister concern of
OSMAN Group. Osman Group of Industries is one of the leading companies in manufacture and
export of Garment, Textile and Spinning in Bangladesh. It was established in 1984 with a garment
manufacturing unit namely Russel Garments and within a short period the company enrolled
diversified with backward linkage facilities subsequently Washing, Spinning, Sweater, Yarn
dyeing and Zipper. Diversity has been group’s source of strength. The Group presently undertakes
eight units of diverse industrial entities down under its trend setting enterprise providing industrial
employment for nearly 8,000 workers. The Chairman & Managing Director Mr. Akkas uddin
mollah has been honored by the Ministry of Commerce, GoB as a C.I.P. on the 1st October 2014,
for outstanding contribution to export performance in readymade garments–2012. This year he
has been recognized as C.I.P. The sponsors are high net worth persons and have been involved in
RMG & Spinning sector for last 39 years with good reputation and substantial investment.

Mission Statement of RG: The mission statement of RG is “To ensure customer satisfaction by
providing best quality of products as per their requirements”. They also follow 3 other principles

1. Develop well-functioning “Quality Management System”

2. Ensure continuous training to develop employee competence.
3. Build good working environment by maintaining international compliance.

2. Technical Overview:

Russel Garments (RG) is 100% export oriented woven garments factory with two different units
Unit -1 & Unit -2 is currently under operations. Since its incorporation in 1984 Russel Garments
Unit -1 is in 56/1, S.M. Maleh Rd, [Link]. The main products of RG Unit -1 are Trousers, Shorts,
Skirt, Shirts, Blouse, Dress, Swimwear, Nightwear etc. There are 3550 people working daily in
unit -1. The rated capacity is around 1875 dozens and currently they are producing around 5.30
lakh pcs per month. There are 1571 sewing machine, 5 set of cutting table, 12 cutting machine,
around 1059 single plain needle machine, 58 bartack machine, 2 needle detection machine, and
more than 2000 varieties of machine are currently operating and utilizing maximum capacity to
fulfill their buyer requirements. H&M, OVS, OSTIN, NEXT, TOPGRADE and LIDL are most
notable buyers of Russel Garments. RG is currently exporting 70% of their production to H&M
and the rest 30 to other top brands around the world. To meet those brands requirement, they have
to ensure international standard machinery and a chain of process to follow to utilize resources to
attain maximum capacity of production.

Page 2 of 23
To understand the whole technical process from how imported raw materials turns to finished
goods of Russel Garments Unit -1 we can divide it into 5 sections. Those are 1. Cutting Section, 2.
Sewing Section, 3. Finishing Section, 4. Embroidery Machine, and 5. Quality Inspection and others
section.
2.1 Cutting Section: Russel Garments is a 100% export oriented woven garments to meet its
raw material requirements RG import woven mostly from China. They stored their imported
raw materials in their own underground go down at Osman tower (RG Unit -1). Those raw
materials are then moved to the cutting floor (2nd floor) to the Cart Pane and then to the
relaxation rack.

Photo: Relaxation Rack

From the relaxation rack the clothes are then moved to the Lay Table or Cutting Table. RG unit-1
has 5 cutting table and 12 sets of cutting machines. RG uses the Brand Knife Machine (a series of
three or more pulleys) to the fabric cutting process.

Photo: Cutting Table and Cutting Machine

Page 3 of 23
After completing the cutting process, the fabrics are being taken to the Fusing Machine – where
fabrics are being interlined and ironed and then quality of the fabrics are being inspected. There
are 5 fusing machines in a line consisting of 23 machines.

2.2 Numbering and Bundling: After completing the cutting and fusing process, Numbering and
Bundling of processed items are being done as per buyer requirements. There are 2 sets of
numbering and bundling tables as well as pattern designing tables are installed.

Photo: Numbering and Bundling

2.3 Sewing Section: After completing the cutting process now the processed items are being
moved to the Sewing Section where processed items are being sewed using 1571 sewing and
other machines. 1059 single needle plain machine are being used with each floor consisting of
23 lines where 70 machines are installed with 70 operator, 10+ helper and 4 Quality Checker
and 1 Senior QC are continuously working to ensure the best quality of product.

2.4

Photo: Sewing Line and Single Needle Plain Machine

After completing the sewing process processed items are being taken to the Overlock machines.
There are around 170 over lock machine with two different varieties consisting of (Thread 5,

Page 4 of 23
Thread 3&4). Some other machines like Bartack Machine (reinforcement sewing technique
machine) to sew belt loob, Flat lock machine, Kansai Special (multi needle sewing technique),
Button stich machine, Zigzag Machine and some other machines are being used in the sewing

2.5 Finishing Section:

Photo: Thread Trimming Area & Handtag Table

In this section the processed items are now almost complete as finished product and are taken
again for Quality Inspection and measurement table. And then as per buyer requirements product
goes to washing section or to the Thread Trimming Area where extra Threads are being removed.
After that Size & Measurement Label for each brand are sewed in the Hang Tag area

2.6 Others Section: Now the product is ready to ship but before that in this section Ready made
products goes through a very delicate quality inspection process. First products are being
checked by Quality Inspection Team and then if any Spots are found those products are being
delivered to the Spot Removing Table. There are 3 spot removing machine in RG Unit -1.
After completing this process, the products go through an enhance inspection by the Quality
Inspection Team and then products are being moved to the Needle Detection Machine. If any
discrepancy is found RG will have to pay USD 8000 for each discrepancy. All products go
through a Needle Detection Machine to the Needle Free Zone where Products are being
packaged and ready for shipment.

Photo: Spot Removing Room & Needle Detection Machine

Page 5 of 23
Part: 2 : Credit Memorandum

RG
Client Segment Corporate
Sector Code 902125
Page 6 of 23
SME Code 91
Economic Purpose Code 8340
Executive Summary:
Business solicited by
Prospected by RM/BM (Solicitor) OBL.
Referred by existing customer.
Solicitation reference RM/BM knows the customer in his/her previous workplaces.
Comments:
Borrower Name Russel Garments [RG]
Incorporation 1984
Key person Mr. Akkas Uddin Mollah, Managing Director of Osman Group
Legal Status of the BorrowerRG- Proprietorship
Capital structure RG- proprietorship concern
Nature of Business [Short RG: 100% export oriented woven garments factory
Description]
Relationship of client Since June 2016
/Group with OBL
Reason for submission of Annual review/Interim review; Rescheduling; New.
CM
[Tk. in crore]
Past
Particulars Existing Proposed O/S
due
Exposure of the client Funded  97.46  78.55  25.31
Non-funded  103.00  103.00  46.61
Total  174.51  155.69  71.92

i. RG [Tk. in crore]
Particulars Existing Proposed Coverage
 58.79  (58.79+54.87*) Existing:
Land & Building 113.66 Total Limit: 33.68%
OBL FDR [Face / present value]  ---- Funded:60.32-%
Security Coverage Other Bank FDR --
Proposed:
Traded Share [6 month’s average value]  --
Total Limit:37.76%
Others [Please specify]  -- Funded: 74.84%
Total  58.79  113.66
*Additional security offered for Term Loan Tk. 31.35 crore [yet to disburse]
Group Name OSMAN Group of Industries
Existing Proposed
# Group unit O/s
Fund NF Total Fund NF Total
Exposure with the group 1 RG 97.46 103.00 174.51 71.92 78.55 103.00 155.69
2 RSML 71.31 102.96 125.30 96.60 70.82 105.15 124.81
Total 168.77 205.96 299.81 168.52 149.37 205.15 280.50

Large Loan Yes No. % of Capital: ----%

Particulars Limit Conv. Factor Exposure % of Capital Remarks
Funded 149.37 100% 149.37
Single borrower exposure Non-
Funded 205.15 50% 102.57
Total 280.50 280.50

Page 7 of 23
 Income from client: [RG]
Previous year Current year
Earnings Remarks
Projection Actual projection
Income from the client / Gross -- 3.14 4.00
Group
Net -- 1.87 2.20

OBL Yes / No; If yes please fill up following table:

Director Name of the Director Position Shareholding % Remarks
/
Related
persons
Disclosure on own / other Yes / No; If yes please fill up following table:
Bank’s Directorship Name of the
Other Bank Name Position Shareholding % Remarks
Director
Bank’s Mr. Akkas Uddin Shahjala Islami EC-Chairman
Director --
director Mollah Bank Ltd

Particulars Remarks
KYC Done? Yes No.
Obtained in last two months? Yes No.
CIB
Status: ------ ; Date:-----------
Based on Audited Financial Yes No.

ICRRS Audited Financial verified by DVS Yes No.

Aggregate Score: 70.00 % [Rating]

EnvRR Category: ---- Risk grade:------

i. RG [Orange-B]: Risk grade: Low.
Regulatory compliance External Credit Name of Credit Credit Validity of Risk
Rating the rating Ratin Credit Weight
Client Agency g rating
RG NCRL AA- 20.12.2023 20%

Any breach of BB
Yes No. If yes, please mention:
circular/Guideline

Page 8 of 23
 SECTION B. FINANCIAL HIGHLIGHTS

Financial Highlights: Historical and Projected: [Russel Garments] (Fig:’000)

30.06.2020 30.06.2021 30.06.2022 Year-1
Particulars
[Historical] [Historical] [Historical] [Projected]
Audited/Mgt Audited Audited Audited Mgt.
Name of Auditor SADHAN DAS & CO. SADHAN DAS & CO. SADHAN DAS & CO.

DVS verification code 2211240514AO359803

Sales / Revenue 3,026,941 2,493,006 3,179,807 3,500,000
Sales Growth (%) - (17.64) 27.55
Cost of goods Sold 2,692,299 2,241,177 2,869,466
Gross Profit 334,642 251,829 310,341
Net profit 114,919 103,574 132,492
Fixed Asset 530,148 537,102 646,698
Current Asset 424,908 456,962 209,782
Total Asset 955,056 994,064 856,480
Current liability 315,086 414,680 542,919
Term liability 270,822 111,859 47,632
Total liability 585,908 526,539 590,551
Net worth 369,148 467,525 265,929
Debt : Equity 61:39 53:47 69:31
Major Ratios:
Particulars Outcome Remarks
Leverage
Financial debt to Tangible Net Worth 1.59 1.13 2.22 Current liability+term/ Net worth
Financial debt to Total Assets Current liability+term/ avg total asset

Liquidity
Current Ratio 1.35 1.10 0.39 Current asset / current liabilities
Cash Ratio 0.65 0.64 0.10 Cash and Easily Marketable
Securities/Current Liabilities
Profitability
Net Profit Margin 3.80 4.15 4.17 Net Profit after Tax/Net Sales
Return on Assets 12.03 10.42 15.47 Net Profit after Tax/Total Assets
Operating profit to Operating Assets

Coverage
Interest Coverage (times) 2.43 5.77 7.18 Earnings Before Interest and Tax/Interest
Expense
Debt Service Coverage (times) 2.43 5.77 7.18 Earnings Before Interest Tax Depreciation
Amortization/Debts to be Serviced
Operating Cash Flow to Debt Ratio 96.64 77.75 Operating Cash Flow/Financial Debt
Cash flow coverage ratio
Operational Efficiency
Stock Turnover Days - - - Financials does not show stock
Trade Debtor Collection Days - - - Received advance TT
Trade Creditor Collection Days - 35 21
Cash conversion cycle
Assets Turnover
Earning Quality
Operating Cash Flow to Sales 4.91 5.23 - Operating Cash Flow/Sales

Page 9 of 23
Cash Flow based Accrual Ratio
SECTION C. The Proposal

1. Subject: Proposal for Renewal/review with reduction of total credit limit from Tk. 174.51 crore
[funded Tk.97.46 crore] to Tk. 155.69 crore [Funded: Tk. 78.55 crore] –A/c: Russel Garments
[RG],

i. Renewal of BBLC/Accept (Max 180 days) limit of Tk.100.00 crore at 0.15% [flat] for
BBLC and 0.10% [flat] for Accept comm. basis to import/procure r/ms viz. yarn, fabrics,
accessories etc up to 75% of ELC/Contract.
ii. Renewal of PAD (EDF)/EDF Loan limit of Tk. 20.00 crore [within BBLC] under BB-EDF
scheme.
iii. Renewal of PC limit of Tk.8.00 crore at 7% p.a. rate of interest for 120 days to meet pre-
shipment expenses up to 15% of ELC/ Contract.
iv. Renewal of OD limit of Tk.13.00 crore at 9% p.a. rate of interest to meet w/c requirement.
v. Renewal of S/ULC/Accept (Max 360 days) limit of Tk. 3.00 crore at 5% margin(cash/FDR)
at 0.15% [flat] for LC and 0.10% [flat] for Accept comm. basis with subsequent Time Loan
of Tk. 2.85 crore at 9% p.a. rate of interest for 360 days to import/procure spare parts, small
m/cs etc for the factory use.
vi. Cancellation of Term Loan – 2 limit of Tk.0.04 crore as the total o/s has been adjusted.
vii. Review with reduction of Term Loan–3 limit from Tk.0.23 crore to Tk.0.09 crore at 8.75%
p.a. rate of interest as per existing terms and condition.
viii. Review with reduction of Term Loan-4 limit from Tk.0.28 crore to Tk. 0.10 crore at 8.75%
p.a. rate of interest as per existing terms and condition.
ix. Review with reduction of Term Loan–5 limit from Tk. 0.19 crore to Tk.0.04 crore at 8.75%
p.a. rate of interest as per existing terms and condition.
x. Review with reduction of Term Loan–6 limit from Tk.0.15 crore to Tk.0.06 crore at 8.75%
p.a. rate of interest as per existing terms and condition.
xi. Review with reduction of Term Loan -7 limit from Tk.0.10 crore to Tk.0.07 crore at 8.75%
p.a. rate of interest as per existing terms and condition.
xii. Cancellation of Term Loan -8 (specific) limit of Tk.1.53 crore as total o/s has been adjusted
xiii. Cancellation of Term Loan -9 (specific) limit of Tk.0.75 crore as total o/s has been adjusted
xiv. Cancellation of Term Loan -10 (specific) limit of Tk.0.89 crore as total o/s has been
adjusted
xv. Cancellation of specific Time Loan-2 of Tk. 5.00 crore[as total o/s has been adjusted.
xvi. Review of specific Term loan 11 –limit of Tk.3.10 crore [inner limit of SLC limit of Tk.3.25
crore which to be cancelled]@ 8.75% p.a rate of interest as per existing terms and condition.
xvii. Cancellation specific Time Loan-3 of Tk. 7.00 crore as total o/s has been adjusted.
xviii. Review of specific Term Loan-12 of Tk. 31.35 crore [disbursement Tk.30.00 crore &
IDMP: Tk.1.35 crore] to re-finance construction cost of 07-storied extended factory building
[31880 sft per floor] located at Delpara, Narayangonj with a cost of Tk.64.25 crore [Debt:
Equity- 49:51] for 51/2 years including 06 months’ Grace period under Bangladesh Bank
UBSP finance, subject to regulatory approval to be repaid in 60 EMIs

Page 10 of 23
 xix. Post fact approval for specific Time Loan- of Tk. 4.00 crore (which has been adjusted) for
10 days for meet up salary expenses for the month of August 2022 @9.00% p.a. against CM
portion of shipment made & to be made. [TAM dated: 07-09-2022]
2. Facility Schedule:
O/s
# # Facility Exist. Prop. Purpose Mar./Com./Intt. Expiry
14.05.23
Russel Garments (RG)
BBLC Commission:
180 days
1 (Usance / 100.00 100.00 20.73 To import/procure r/ms 0.15% (Flat)
Sight) viz. yarn, fabrics,
accessories etc up to Commission:
Accept. 12.01.23~
2 [100.00] [100.00] 25.88 75% of ELC/Contract 0.10% (Flat)
(#1) 03.08.23

To retire BBLC(Sight)
PAD-EDF 21.05.23~
3 [20.00] [20.00] 2.00 under EDF finance of Interest :
(#1) 31.05.23
Bangladesh Bank As per BB guideline
EDF-Loan 2%(1% for BB & 1%
BB refinance under EDF 10.07.23~
4 (#1) [20.00] [20.00] 3.16 For Bank)
scheme. 14.10.23
Time loan

Interest :
Packing To meet up pre-shipment
Revolving

5 8.00 8.00 4.01 7% p.a. 11.08.23

Credit expenses & other
expenses up to 15% of
ELC/Contract value.

Interest Rate:
To meet w/c
6 Overdraft 13.00 13.00 12.79 8.75 % p.a. 30.06.23
requirement.

Margin:
5%(Cash/FDR)
7 SLC/ULC 3.00 3.00 -- 30.06.23
Commission:
To import / procure
0.15% (Flat)
spares small m/cs. for
Acceptance-
factory use. Commission:
8 2 [3.00] [3.00] -- 30.06.23
0.10% [Flat].
(#7)
Time Loan Interest Rate:
9 [2.85] [2.85] -- 30.06.23
8.75 % p.a.
10 Term Loan-2 0.04 - - Fully adjusted and limit to be cancelled.
Allowed for settlement
of Acceptance liabilities
Interest Rate: 5 years
11 Term Loan -3 0.23 0.07 0.07 against import of capital
Specific

8.75 % p.a. 30.08.23

machinery machineries
for factory use
12 Term Loan -4 0.28 0.10 0.10 Allowed to Import of Interest Rate: 5 years
capital machinery [ 70

Page 11 of 23
 sets sewing and 19 sets
Fusing, cutting, Chain-
stitch] from Juki
8.75 % p.a. 18.09.23
Singapore PTE Ltd. and
FOCUS Garments Tech
PTE Ltd. for factory use
Allowed for refinancing
of Acceptance liabilities
against import of capital Interest Rate: 5 years
13 Term Loan -5 0.19 0.04 0.04
machineries i.e. 77 sets 8.75 % p.a. 03.06.23
sewing m/c for factory
use.
Allowed for settlement
of Acceptance liabilities
against import of capital
machinery machineries Interest Rate: 5 years
14 Term Loan -6 0.15 0.06 0.06
i.e. cables, fire box, 8.75 % p.a. 13.10.23
valve, sprinkler &Fire
alarm, Standard base
etc. for factory use.
Refinancing of
Acceptance liabilities
against import of c/m
Interest Rate: 5 years
15 Term Loan -7 0.10 0.07 0.07 i.e. 1 set pocket
8.75 % p.a. 22.09.24
pressing & creasing
machine for factory
use only.
16 Term Loan -8 1.53 -- -- Fully adjusted and limit to be cancelled.
17 Term Loan -9 0.75 -- -- Fully adjusted and limit to be cancelled.
Term Loan -
18 0.89 - -- Fully adjusted and limit to be cancelled.
10
For importing Fire
Fighting System & BBT 25.01.28~
Term Loan- for project at Delapara. Interest Rate: 28.03.2028
19 [3.10] [3.01] 3.01
11[#1) Term loan limit to be 8.75 % p.a. [multiple
change with the changes disbursement]
of Dollar rate.
To re-finance
construction of 07-
storied factory building
Yet to
20 Term Loan-12 31.35 31.35 -- [25000 sft per floor]
disburse
against total cost of
Tk.64.25 crore [Debt:
Equity - 49:51]
21 Time loan 2 4.00 -- -- Fully adjusted and limit to be cancelled.
22 Time loan 3 7.00 -- -- Fully adjusted and limit to be cancelled.

23 Time Loan4 4.00 -- -- Fully adjusted and limit to be cancelled.

Page 12 of 23
 Sub-total 174.51 155.69 71.92  Relationship since: 2016
Funded 97.46 78.55 25.31  Relationship Manager:
Non-Funded 103.00 103.00 46.61  Business solicitor:
3. Security Schedule:
a) Summary of security & Collateral
Forced Sales
Perfection
Value/Present
Facility(ies) Status/Defer
Security MV/Face Value Value/Average of
tagged with ral valid
last 6 months
upto:
market value
Eligible as per BB rules
Cash Margin against LC/BG
Lien on OBL FDR /Deposit/Sinking
Fund
Lien on Other Bank FDR /Deposit
Shares Traded in Stock Exchange
Registered Mortgage of Properties 75.53 58.75 All facilities --
Total
Non eligible as per BB rule Value/Claim/NW
Guarantee/SBLC from Bank operating outside Bangladesh
Guarantee/SBLC from Bank operating in Bangladesh
Sinking Fund Built as Collateral but not under lien
Registered Charge with RJSC
Unregistered/Notarized Hypothecation
Corporate Guarantee
Personal Guarantee of all director of the company 291.93
Others
b) Details of Collateral
GL
# Area Location Owner MV
V
FSV Remarks
 It is the project land of RG. 10-storied
Russel factory bldg measuring 1,96,514.29 sft is
56/1, S M Garments on the land.
Maleh Road
1 F49.44 Prop: 75.7 --  It has wide access road & demarcated by
(Osman 58.79
Akkas boundary wall.
Tower),
Uddin  All utilities viz. electricity, water is
Narayanganj
Mollah) available.

*Additional collateral Security for Term Loan #12 of Tk. 31.35 Crore
*134.3 (78.75+55.58)= Akkas Uddin 71.52 54.87  It is the project land of RG-2. of factory
3 Mollah, Prop: building measuring Factory-1 -07
134.33 decimals storied.
land along with Russel  It has wide access road & demarcated
07 stroried Garments by boundary wall.
(under  All utilities viz. electricity, water is
construction) & available.
06 stroried
Building at

Page 13 of 23
 GL
# Area Location Owner MV
V
FSV Remarks
Deulpara,
Fatullah,
Narayangonj.

[Link] Earnings:
Russel Garments: Figure in crore

Facility Limit Utilization Rate Gross Income COD Cost Net Income
All facilities 155.69 3.14 5.50 - 1.87
Total

[Link] Information
 Business Background:
Russel Garments [RG] and Russel Spinning Mills Ltd.[RSML] are the sister concern of OSMAN
Group. Osman Group of Industries is one of the leading companies in manufacture and export of
Garment, Textile and Spinning in Bangladesh. It was established in 1984 with a garment manufacturing
unit namely Russel Garments and within a short period the company enrolled diversified with backward
linkage facilities subsequently Washing, Spinning, Sweater, Yarn dyeing and Zipper. Diversity has been
group’s source of strength. The Group presently undertakes eight units of diverse industrial entities down
under its trend setting enterprise providing industrial employment for nearly 8,000 workers. The
Chairman & Managing Director Mr. Akkas uddin mollah has been honored by the Ministry of
Commerce, GoB as a C.I.P. on the 1st October 2014, for outstanding contribution to export performance
in readymade garments–2012. This year he has been recognized as C.I.P. again. The sponsors are high
net worth persons and have been involved in RMG & Spinning sector for last 39 years with good
reputation and substantial investment.

 Group’s Business and Performance:

 Group Financial Position:   (As on 30.06.2021)  [Tk. in

crore]
Name Business YO TO NP TA TL NW
I (NPBT
)
Russel Garments 100% export oriented woven 198 249.3 10.35 99.4 52.72 46.68
Garments. 4
Russel Apparels 100% export oriented woven 201 58.07 2.38 27.89 12.73 15.15
garments 2
Ekram Sweaters 100% export oriented sweater 200 169.5 3.74 168.85 130.2 38.59
Ltd 3 1 4

Page 14 of 23
Topaz Dress Ltd. 100% export oriented woven 202 1.38 -0.95 50.65 51.27 -0.62
garments 0
Sub-Total -RMG 478.2 15.52 346.79 246.9 99.83
6 6
Russel Spinning Spinning mill [local] 201 117.6 2.26 175.59 131.4    44.15
Mills Ltd. 2 3
Nurul Islam Spinning Mill of 50,000 spindles 201 65.7 4.21 214.26 159.0 55.23
Spinning Mills for local Sari, Voile, Poplin, etc. 8 2
Ltd.
Tania Cotton Spinning Mill of 42,432 spindles 201 174.7 6.7 274.4 301.5 -23.18
for RMG 9 5 8
Sub-Total -Spinning 358.0 13.17 664.25 592.0 32.05
5 3
PnR Industries RMG accessories manufacturing 200 75.57 3.36 82.1 67.65 14.44
Ltd 7
Helal Textile Pocketing Fabrics for Garments 201 1.42 -0.07 1.8 0.28 1.51
Industries 7
Sub Total- Accessories 76.99 3.29 83.9 67.93 15.95
Others-Concern
Goodman Drug Mgf. Co.), 201 10.14 -8.68 50.24 50.79 -0.64
Pharma 9
Total as on 30.06.2021 923.4 23.30 1145.1 957.7 187.47
4 8 1

Existing O/s as on 14.05.23 Proposed

# Concern Name
Funded NF Total Funded NF Total Funded NF Total
1. Russel Garments 97.46 103.00 174.51 25.31 46.61 71.92 78.55 103.00 155.69
2 Russel Spinning Mills Ltd 71.31 102.96 125.30 42.95 53.65 96.60 70.82 105.15 124.80
Total 168.77 205.96 299.81 68.26 100.26 168.52 149.37 205.15 280.50
Total funded 168.77

Single Borrower Cap:

[Tk. in Crore]
% of
Proposed Conversion exposure to Bank’s Capital
# Type Exposure 2795.00
limit factor Bank's [31.12.21]
capital
A Total Funded 149.37 1.00 149.37 5.34% Large loan 10% 279.50
B Total Non-funded [Other] 205.15 0.50 102.58 3.67% Fund (Max) 15% 419.25

Page 15 of 23
 Non-funded [excluding funded
C 0.50 F+NF (Max) 25% 698.75
inner limit] [Other]

D Total Non-funded [Power] 0.25 -- -- --

Non-funded [excluding funded

E 0.25 -- -- --
inner limit] [Power]
Total[A+C+E]  -- --

6. Borrower Information:

RG
Particulars
Unit -1 Unit-2

Legal Status Proprietorship

Business 100% export oriented woven garments factory
nature
Commercial 1984 2010
Operation
Capital

Shareholding RG: Proprietorship concern [Proprietor: Akkas Uddin Mollah

Line of Ready succession by the family member’s i.e, Elder son, daughter and Grandson are actively
Succession involved with the business.
56/1, S.M. Maleh Rd, [Link] East Delpara, Fatullah, [Link]
Location

Land & Land: 49.44 dec, Bldg: 197,058 180 dec, Bldg: 63,500 sft
Buildings sft
Plant & 1571 Sewing 588 Sewing
m/cs
Equity : Tk. 26.59 crore
Project cost Bank Loan : Tk. 59.06 crore
Total Cost : Tk. 85.65 crore
Means of Debt: Equity : 69:31
finance
Manpower 2350 1550
Rated Capacity 1,875 dozens 1,200 dozens
Attainable 1,875 dozens 1,200 dozens
Capacity
Utility 3 Disel Generator; Total Capacity: 1050 KW

Page 16 of 23
 RG
Particulars
Unit -1 Unit-2

Production Fabrics to RMG

Process
Product & Trousers, Shorts, Skirt, Shirts, Blouse, Dress, Swimwear, Nightwear etc.
pricing
Raw materials Yarn, Fabrics, Dyes, Chemical, Accessories, packing material etc.
RM source & From Local & Foreign sources
Pricing
Profitability Profitable
Industry 100% export oriented woven garments
Market Good
demand
Regulatory Obtained
Permission

Buyers: Russel Garments (RG)

# Name of the Country Relationship Mode of order Ratio

Buyer

1 H&M Sweden 19 years Delivery against payment 70%

Major Buyers basis under URC 522
2 OVS Italy 12 years 5%

3 O’STIN Russia 9 years 12%

4 TOPGRADE Brazil 13 years Replace by ELC before 8%

15 days of shipment

5 LIDL Netherland 02 year Replace by ELC 5%

Major Zaber & Jubayer,Gulshan, Tahrmex Yarn Fabrics, Nayapaltan, Dhaka, SIM Fabrics Ltd,
suppliers Baridhara DOHS, Dhaka, Padda Industrial Park, Nekunja, Dhaka etc.
Major Shovon Group, Fariha Group, Ibrahim Knit Garments, Model group etc.
Competitors

Name Position Concerned Area Experience

Mr. Rejwanul Hoque DGM Finance 08 yrs
Key
professional Tapan Kumar Saha Chief Account Acc & Fin 31 yrs
T.M. Saiful Islam GM-Production Production 47 yrs
Prodip Kumar Sarker Manager-Compl Audit 16 yrs

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 7. Account conduct:
 Account Activity (Past 12 months):
Russel Garments:
 Opened 1021 BBLCs for Tk.168.31 crore against limit of Tk.100.00 crore.
 Booked 1030 Acceptances for Tk.167.78 crore against limit of Tk.100.00 crore.
 OD Swing was 9.59 times against limit of Tk. 13.00 crore
 Export performance of Russel Garments (export of H & M, LIDL, OVS, Defecto are routed through
OBL while export of Ostein and Next are routed through UCBL):
2018 : US$ 38.50 mn (monthly US$ 3.20 mn); with OBL: US$ 28.57 mn i.e. 74%
2019 : US$ 40.00 mn (monthly US$ 3.33 mn); with OBL: US$ 30.12 mn i.e. 75%
2020 : US$ 36.03 mn (monthly US$ 3.00 mn); with OBL: US$ 26.00 mn i.e. 72%
2021 : US$ 32.00 mn (monthly US$ 2.70 mn); with OBL: US$ 22.48 mn i.e. 70%
2022 : US$ 33.25 mn (monthly US$ 2.77 mn); with OBL: US$ 28.38 mn i.e. 85%
2023(April) : US$ 11.16 mn (monthly US$ 2.79mn); with OBL: US$ 10.41 mn i.e. 93%

8. ICRRS

ICRRS Summary:
Score
Indicators Scale ICRR
Obtained %
Quantitative Assessment 60 42 70.00 Good

Qualitative Assessment 40 32.75 81.90 Excellent

Aggregate Score 100 74.75 74.80 Good

ICRRS Details:

Particulars Scale Score ICRR Risk & Mitigates for Marginal &
Obtained % Unacceptable in ICRR
Quantitative 60 42 70 Good
Assessments
A Leverage 10 8 80 Excellent
Debt to Tangible Net 7.00 5 71.40 Good
Worth (DTN)
Debt to Total Assets 3.00 3 100 Excellent
(DTA)
B Liquidity 10 0 0.00 Unacceptable Current liability is in higher side.
Current Ratio (CR) 7.00 0 0.00 Unacceptable Next year this situation may be

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 Particulars Scale Score ICRR Risk & Mitigates for Marginal &
Obtained % Unacceptable in ICRR
Cash Ratio (Cash) 3.00 0 0.00 Unacceptable improved.

C Profitability 10 7 70.00 Good

Net Profit Margin 5.00 2 40.00 Unacceptable Operational expenses went in higher side
(NPM) affecting net profit.
Return on Assets 3.00 3 100.00 Excellent
(ROA)
Operating Profit to 2.00 2 100.00 Excellent
Operating Assets
(OPOA)
D Coverage 15 13 86.70 Excellent

Interest Coverage (IC) 3.00 2 66.70 Marginal Debt is being depleting gradually. Burden
on interest will be overcome from next
year.
Debt Service Coverage 5.00 4 80.00 Excellent
Ratio (DSCR)
Operating Cash Flow 4.00 4 100.00 Excellent
to Financial Debt Ratio
(OCDR)
Cash Flow Coverage 3.00 3 100.00 Excellent
Ratio (CCR)
E Operational 10 10 100.0 Excellent
Efficiency
Stock Turnover Days 4.00 4 100.0 Excellent
(STD)
Trade Debtor 3.00 3 100.0 Excellent
Collection Days
(TDCD)
Asset Turnover (AT) 3.00 3 100.0 Excellent

F Earnings Quality 5 4 80.0 Excellent

Operating Cash Flow 3.00 2 66.70 Marginal Operating expenses suppressed operating
to Sales (OCFS) profit this year. Next year it improved.
Cash Flow based 2.00 2 100.0 Excellent
Accrual Ratio (CFAR)
Qualitative 40 32.75 81.90 Excellent
Assessments
G Performance behavior 10 10 100.0 Excellent
H Business & Ind. Risk 7 4.25 60.70 Marginal This industry is very closely related to
word market. So there remains some
inherent risk in this sector.
I Management Risk 7 7 100.0 Excellent
J Security Risk 11 6.50 59.1 Unacceptable In case of valuation of collateral, security
risks may see but asset quality is pretty

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 Particulars Scale Score ICRR Risk & Mitigates for Marginal &
Obtained % Unacceptable in ICRR
good.
K Guarantee 3 3 100.0 Excellent
L Compliance Risk 2 2 100.0 Excellent
Aggregate 100 74.75 74.75 Good

9. Justification of proposals:
 RG is the sister concerns of OSMAN Group, a renowned group in manufacturing and export of RMG in
Bangladesh. RG & RSML have been banking us since June, 2016. Now the client has requested us to
renew with reduction of the total limit for further one year.
A/c: Russel Garments:
 Justifications for renewal/ review are as follows:
 Justification of renewal of BBLC/ Accept. limit of Tk. 100.00 Crore:

Particulars Unit-1 (1,571 sets) Unit-2 (588 sets)

 Production capacity [rated] 1,875 dozens / day 1,200 dozens / day
 Production line 22 11
 Total production capacity 3075 dozens/day[rated]
 Capacity utilization 90%
 Actual production capacity 2768 dozens / day
 Average FOB value US$ 60 / dozen
 BBLC entitlement 75 % of export LC.
 One cycle 6 months/180 days.
 BBLC requirement / cycle 2768 dozens x 26 days x 6 months x 75% x US$ 60 / dozens
= US$194.31 lac  Tk.204 crore. [1 USD=Tk. 105.00];
Last year they have executed export for Tk.262.83 Crore through us out of Tk.
317.00 and next year projection is Tk.350.00 Crore.
So, we are recommending for renewal of BBLC/Accept limit for Tk. 100.00
crore.

EDF/PAD[EDF]:
 As per EDF policy of Bangladesh Bank an exporter is able to get the PAD[EDF] facility
equivalent to the last year’s export or USD 30.00 Million whichever is less as per Fe
circular #05 dated 27.01.2021.
 Last year the client executed export for USD 33.25 Million
 For the year 2023, Export target for USD 35.00 Million
 Renewal of PAD [EDF]/EDF Loan facility for Tk. 20.00 Crore within BBLC/Acceptance limit which
is less than USD 20.00 Million.

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 Renewal of PC / OD / limit for Tk. 8.00/13.00Crore:
The client is enjoying PC limit of Tk. 8.00 crore for meet up pr-shipment expenses & OD limit of Tk. 13.00 crore
with us to meet up daily operating expenses. Now the client has requested us to renew of PC / OD limit for Tk.
8.00/13.00 Crore for further next one year.

Particulars
Last year sales/export : Tk. 317.98 crore

Projected export in 2022 : Tk. 350.00 Crore

BBLC entitlement/year (75% of : Tk. 262.50 Crore
ELC)
One Cycle : 6 months/180 days
BBLC entitlement/Cycle : Tk. 131.50 Crore
ELC value against BBLC/Cycle : Tk. 175 Crore
Allowable funded facility : Tk.175 Crore x 15% = Tk.26.25 Crore
Justification : As per calculation eligible funded limit Tk. 26.25 Crore. Now the client
enjoying funded limit of Tk. 21.00 Crore (OD-Tk.13.00 Cr. +PC-Tk. 8.00
Cr.). So, the renewal of PC / OD limit for Tk. 8.00/13.00 Crore to meet
pre-shipment expenses.

 Renewal of SLC/ULC of Tk. 3.00 crore with sanction of subsequent Time Loan limit of Tk. 2.85 Crore:
Client wants to import / procure spare parts, small machineries etc for the factory use time to time.

Particular Time Loan(sanction)

: SLC/ULC Acceptance
s
Limit : Tk.3.00 crore (Tk. 3.00 crore) (Tk. 2.85 Crore)
Specific but partial disbursement may
Nature : Revolving
be allowed
Margin: 5%, 9% p.a.
Comm: 0.10%
Pricing : Comm: 0.15%
(flat)
flat)
Purpose : Import/finance of spare parts, small machineries for factory use time to time.
Tenor : 180 days [max] 360 days [max] 360 days [max]
SLC will be cash retirement basis and ULC From export proceeds and/or own
will be settled through creation of Acceptance sources of the proprietor
Repaymen and subsequently Acceptance liability will be
:
t adjusted by creation of Time Loan or from
export proceeds and/or own sources of the
proprietor.

 Cancellation /Renewal/proposed Term Loan

Term loan cancellation Facility Amount ( crore) Remaks

Term Loan -2 0.04 Fully adjusted and limit to be cancelled.
1.53 Fully adjusted and limit to be cancelled.
Term Loan -8

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 Term Loan -9 0.75 Fully adjusted and limit to be cancelled.

Term Loan -10 0.89 Fully adjusted and limit to be cancelled.

Total adjusted 3.21

value

Term loan Renewal Facility Existing Proposed Outstanding

Term Loan -3 0.23 0.07 0.07
Term Loan -4 0.28 0.10 0.10
Term Loan -5 0.19 0.04 0.04
Term Loan -6 0.15 0.06 0.06
Term Loan -7 0.10 0.07 0.07
Term Loan-11 3.10 3.01 3.10
Total value 3.44 3.44
Term Loan-12 31.35 31.35 --------
Term loan yet to
Disburse

 Cancellation of Time Loan-2 , Term Loan-3, Term Loan-4 as limit fully adjusted

Time loan cancellation

Facility Amount Remaks
( crore)
Time loan 2 4.00 Fully adjusted and limit to be cancelled.
Time loan 3 7.00 Fully adjusted and limit to be cancelled.

Time Loan4 4.00 Fully adjusted and limit to be cancelled.

Recommendation:
RMG sector is the prospective and priority sector of Bangladesh. OSMAN Group of Industries involved
in this line of business since 1984. The Sponsors of this group is educated and directly involved in this
business. Although RMG of our country is facing many problems for last few years but some
compliance factories of our country are doing well and have good reputation in international market
OSMAN Group have some world famous buyers like H&M, C & A, TEMA (LCWAIKIKI), NEXT,
ERNSTING’S FAMILY, LIDL, O’STIN. Etc. So the products of RG & RA of OSMAN group have a
good demand in international market.

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 Considering the prospect of the client we seek and recommend the proposal based on the followings:
- Genuine business needs of the client.
- Have a good trend/potentiality in the business;
- The company has goodwill in the market.
- Future prospect of getting Non- Funded Business
- The Managing Director has 43 years experience in Garments Business.

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