Terms of reference of the Committees for administrating the SPTF :

Apex Monitoring Committee to be headed by Additional Secretary, Department of Commerce, Govt. of India

Terms of Reference

While the implementation of the SPTF scheme has been entrusted to the Tea Board, the Apex Monitoring Committee in the Ministry of Commerce will oversee the functioning of the SPTF and review the implementation of the programme in the following areas.

1) The year wise physical targets in terms of area to be replanted / rejuvenated (R&R) region wise

2) The actual areas taken up for R & R

3) Review of the actual funding under the programme for :

a. Loans raised by the SPTF and the borrowing rates
b. Disbursement of loans
c. Disbursement of subsidies

4) In case of short falls in the targets set for R & R and loan / subsidy disbursements analysis of the reasons therefore and     remedial measures to be taken.

5) During the course of implementation of the Scheme, there may be a requirement for deviation from the sanctioned norms     based on practical experience of industry, SPTF Officials and agents of the SPTF in certain areas. For example

a. Minimum area to be taken up for R & R may not be 2½% of target area in the initial years.
b. Certain gardens in areas like Darjeeling do not sell any tea through auctions.
c. Certain gardens sell raw leaf to the factories since they do not have manufacturing facilities.

While the policy decisions in such cases will be taken by the SPTF Committee of the Tea Board such decisions will be reported to the Apex Committee for review. From the third year onwards, i.e. when the replanted areas come into bearing, the impact of the programme in qualitative and quantitative terms may be examined in the following areas:

6) Increase in yields/ha for areas under R & R

7) Increase in price realization / kg

8) Review of overall production in the country as an outcome of the programme

The Apex Monitoring Committee will review the administrative functioning of the SPTF through the Committees set up for the purpose i.e.,

The SPTF Committee
The Screening Committee
The Monitoring Committee
The Treasury Management Committee

and suggest, if necessary, augmentation of their roles in specific areas to ensure the success of the scheme.

The Apex Monitoring Committee will also review the performance of the appointed agents who have been retained for management and supervision of the SPTF i.e. SBI Capital Markets Ltd. and Pegasus Advisory Services, on a yearly basis.

The SPTF Committee to be headed by Chairman Tea Board

Terms of reference

The SPTF Committee, which is being set-up as an Ad-hoc Committee of the Tea Board, will be responsible for laying down the policies of the Fund and approve matters relating to borrowing policy guidelines, lending norms, monitoring norms and investment policy guidelines. The Committee would be specifically responsible for raising lines of credit for the lending targets on a yearly basis for which purpose a sub committee would be constituted comprising the Chairman, Tea Board and three other members from nominees of Banks. The Committee would approve policies and operational targets in the
following areas :

Administrative reviews

The SPTF Committee will also be responsible for reviewing the entire operations of the SPTF through reviews of the reports put up on periodic basis by the Operating Committees viz.

Screening Committee
Monitoring Committee
Treasury Management Committee

The Committee will approve the Annual Operating Budget of the SPTF and approve sanctioning powers of Board Officials for incurring Operational expenses i.e., capital expenditure, administration expenses, legal expenses etc. within the overall approved annual budget.

The Committee will also review the attainment of targets for loan disbursements and physical targets for R & R and suggest remedial measures in case of shortfalls.

The Screening Committee to be headed by CEO of SPTF

Terms of Reference

The preliminary screening of applications and the technical appraisal including pre-sanction inspection will be carried out by Officials of the Tea Board. The applications along with all prescribed documents and pre-inspection reports will be handed over to SBICAPS / Pegasus for detailed financial appraisal as per the guidelines approved by the SPTF Committee.

The recommendations of SBICAP/Pegasus for loan sanctions will be put up to the Screening Committee who would be responsible for ensuring that the appraisals have been carried out in conformity with the guidelines laid down by the SPTF Committee. For this purpose a check list would be appended to each proposal by SBICAP/ Pegasus covering the main requirements viz.

1. Area covered
2. Pre-inspection details
3. Conformity to Eligibility norms
4. Credit Rating
5. Recommended Sanctioned Amount

Since the detailed technical and financial appraisal would already have been carried out, the Screening Committee would not have to undertake a fresh appraisal but merely ensure that the prescribed norms for appraisal/sanction have been adhered to.

The Bank nominees on this Committee would be responsible for providing credit information/inputs on applicants, to ensure that willful defaulters to the Banking system are not sanctioned loans by the SPTF.

The Screening Committee will record their recommendations on each appraisal for sanction by the designated Official of the Board :

Since disbursements would be at half-yearly intervals, appraisals / screening / sanctions would be carried out over a, say, three month window, prior to the R & R periods. Disbursements would, however, be bunched together for consolidated draw down from the Lines of Credit.

Applications for availment of subsidies only, without applying for loans from the SPTF, would also follow a similar procedure for sanction : pre-sanction Technical appraisal and inspection, recommendations by SBICAP/Pegasus on the basis of limited reviews and Screening by the Screening Committee before sanction by the designated Official of the Board.

The Committee will submit reports at periodic intervals to the SPTF Committee detailing:

1. No. of applications processed
2. No. of sanctions recommended
3. No. of applications rejected

The Committee will also recommend to the SPTF Committee any variations/modifications in the appraisal/eligibility norms that they find necessary.

Monitoring Committee

Terms of Reference

The Monitoring Committee will be responsible for ensuring that all post-sanction activities with respect to sanctioned loans have been carried out as per the Monitoring norms prescribed by the SPTF and would cover, inter-alia, the following areas :

1. Execution of loan documents with borrowers
2. Storage of loan documents
3. Disbursement of loans
4. Post sanction inspection
5. Escrow arrangement with the Tea Brokers
6. Repayments to Lenders to the SPTF
7. Issue of Demand notices to defaulters
8. Recovery measures instituted, including legal action

One Official of the Board on this Committee will be authorized to issue Demand Notices and initiate legal proceedings. The Committee will submit periodic status reports to the SPTF Committee on disbursements, recoveries, defaults and recovery measures.

Treasury Management Committee

Terms of Reference

SPTF Funds would comprise of

1. Capital contribution of the government
2. Contributions to default reserves by collection of one quarters interest and principal repayments in advance from the borrowers
3. Subsidies received from government to be disbursed after a period
4. The 0.5% spread between borrowing and lending rates
5. Earnings from investment of the above funds

The investment policy of the SPTF would aim to maximize returns of the investible funds to ensure that the sufficient surpluses are generated to

1. Take care of any defaults from borrowers and maintain regular repayments to the Lending Banks
2. Meet the entire operational expenses of the SPTF.

The Treasury Management Committee would be responsible for ensuring that the investible funds of the SPTF are invested as per the investment policy guidelines laid down by the SPTF Committee. Investment advisory services will be provided by SBICAP/Pegasus who will be responsible for monitoring the flow of funds into the Investment Account and recommending investment options in the approved modes. These recommendations will be approved by the Committee for investment.

The Committee will also monitor the inflows into the Escrow Account and repayments to Lending Banks

The Committee will submit periodic reports to the SPTF Committee detailing :

1. Investments : Mode, Amount, period
2. Projected expenses for the next quarter/half year/ year
3. Projected inflow of funds to meet expenses
4. Operations of the Escrow Account.