Guidelines to Start an Industry
- Steps for setting up an industry
- industrial promotional agencies in tamilnadu
- Registration of application form
- Information to be furnished with application
- Appraisal of the project
- Security documents
- Legal documentation
- Disbursement guidelines
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:
- Chief Information Officer (Technical Information) Guindy, Chennai -32.
- Industrial and Technical Consultancy Organisation of Tamilnadu Limited (ITCOT), Chennai – 6.
- Small Industries Service Institute (SISI), Guindy, Chennai - 32.
- 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
Institutions & Addresses
Director of Industries & Commerce
Electronics Corporation of Tamilnadu Limited (ELCOT)
Industrial & Technical Consultancy Organisation of Tamilnadu Ltd. (ITCOT)
Tamilnadu Small Industries Development Corporation Ltd. (SIDCO)
State Industries Promotion Corporation of Tamilnadu Limited (SIPCOT)
Small Industries Service Institute (SISI)
Tamilnadu Adi Dravida Housing Development Corporation Ltd. (TAHDCO)
Tamilnadu Corporation for Development of Women Ltd.
Tamilnadu Industrial Development Corporation Ltd. (TIDCO)
Tamilnadu Industrial Guidance and Export Promotion Bureau (Guidance)
The plan of the proposed building must be approved by the local administrative authority such as the village Panchayat, The Municipality, The City Corporation, MMDA, etc. as applicable.
Approval shall be obtained from the Inspector of Factories.
If the unit is to be located in any hill area like Nilgiris, Yercaud, Kodaikanal, etc. Special permission has to be sought from the Government of Tamilnadu.
An application for the required power supply should be made to the Executive Engineer, Tamilnadu State Electricity Board.
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
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/-
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.
AMOUNT OF LOAN
INVESTIGATION FEES ( Rs )
Rs - 250/-
Upto Rs.2.00 lakhs
Rs - 500/-
Rs.2.00 lakhs and upto Rs.5.00 lakhs
Rs - 1,000/-
Rs.5.00 lakhs and upto Rs.10.00 lakhs
Rs - 2,000/-
Rs.10.00 lakhs and upto Rs.25.00 lakhs
Rs - 5,000/-
Rs.25.00 lakhs and upto Rs.50.00 lakhs
Rs - 10,000/-
Rs.50.00 lakhs and upto Rs.90.00 lakhs
Rs - 20,000/-
Rs.90.00 lakhs and upto Rs.150.00 lakhs
Rs - 25,000/-
Rs.150.00 lakhs and upto Rs.250.00 lakhs
Rs - 30,000/-
Rs.250.00 lakhs and upto Rs.300.00 lakhs
Rs - 35,000/-
Rs.300.00 lakhs and upto Rs.800.00 lakhs
- 0.15% of the loan applied subject to a maximum of Rs.1,00,000/- /-
Above Rs.800.00 lakhs and upto Rs.2000 lakhs
- 0.10% of the loan applied subject to a minimum of Rs.1,00,000/- and a maximum of Rs.2,00,000/- lakhs
above Rs.2000 lakhs
Rs.5.00 lakhs /-
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
Details of investigation fees remitted.
Attested Photographs and detailed bio-data of the Promoters / Directors including list of Associated Companies. In case of existing companies, Audited Working results for the last 3 years to be furnished. Assets and Liabilities Statement of Promoter / Directors duly signed. If the Promoter is an NRI, necessary approvals / permisssion from RBI as required.
The names of the Principal Bankers of applicant concern and Associate concerns.
Copy of SSI Registration / SIA Registration / Industrial Licence as applicable.
Copies of Various permissions, approvals and licences from Government / Local authorities as required. Detailed estimates of the buildings to be constructed and approved building plans
Copy of Sale Deed / Lease Deed, copy of the building plan layout
Flow Chart indicating the sequence of Operations involved in the manufacturing with brief description of the process. Quotations for the machinery proposed to be purchased and reasons for selection besides competitive quotations of machinery
Raw Material tie-up letters with price evidence
Market Survey Report and Market tie-up letters.
Details of infrastructure availability viz., Water, Power, Fuel, Labour and Effluent Treatment Disposal.
Copies of returns submitted for Income Tax / Wealth Tax by Proprietor / Partners / Directors for the last 3 years. If they are not assesses, a declaration to that effect should be submitted. If the unit is located in SIDCO / SIPCOT / Government Industrial Estates, a copy of the allotment letter together with the terms and conditions of allotment. The various assumptions made in the preparation of projected profitability statement and evidence thereof. If any Director, Partner, Proprietor of the applicant concern is a Directory of TIIC or is in any way related to any directory of TIIC, the details thereof shall be furnished.
Arrangements made for Working Capital Finance and its assessment
Details of Collateral Security
Selling price evidence from prospective customers
Basis for arriving at installed capacity
Copy of Collaboration / Know-how / Turnkey Agreement, if any, and a detailed bio-data of the Collaborator / Consultant and a list of jobs / Projects executed etc
Pollution Control Clearance from Pollution Control Board for 'Red' and 'Orange' Category Industries
Partnership Deed and Firm Registration Certificate from Registrar of Firms
Limited Companies: Memorandum and Articles of Association Company Incorporation Certificate from the Registrar of Companies
By-Laws of the Society
Brief history/details of the concerns
Banker's Name and Address
Audited Balance Sheet and Profit & Loss Accounts for the past 3 years
whether availed any assistance from TIIC / Banks etc., and if so, the details.
Imported Machinery (New and Second Hand)
For New Imported Machinery:
Evidence of rate of Import duty
Copy of Import Licence.
If the imported machinery is coming under OGL, evidence thereof
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.
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.
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 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.