Alpine Woodtech Pvt. Ltd. (Awpl)

SBI/ UMRETH BR. / AWPL

SECTION-A EXECUTIVE SUMMARY

CIRCLE/SBU: AHMEDABAD BRANCH: UMRETH COMPANY: ALPINE WOODTECH PVT. LTD. (AWPL)

Section Contents Pages

1 Borrower profile a. Name , Address, Manufacturing activity/Locations, Date of 2 incorporation, Banking arrangement etc of b. Brief Background(Company/ Group/ Promoters/ Management 2-4 including shareholding pattern ) c. Brief write up on Industry/Sector and Company’s standing 5-7 d. RMD Advisory/qualitative approach/Quantitative approach/Comments 7 e. Indebtedness/Exposure & capital charge 7 2 Present Proposal a. Proposal : For sanction/approval/confirmation 8 b. Credit limits (existing and proposed) 8 c. Sharing pattern 8 3 Performance Details a. Performance and Financial indicators 9 b. Industry exposure as on 9 c. Movement in TNW 10 d. Synopsis of balance sheet 10 4 Risk assessment : a. Credit Rating 11 b. Risk and mitigating factors 11 c. Warning signals/Major irregularities in Inspection Audit/Credit Audit/Other Reports 12 d. Security 12 e. Changes in Security if any, justification 13 5 Pricing a. Conduct of account 14 b. Income analysis 14 c. Other Bank’s/ FIs pricing 14 d. Proposed pricing 15 6 Loan Policy : Deviations & Compliance: a. Whether names of promoters, directors, company, group concern figure in defaulters/willful defaulters list 16 b. Deviation in Loan policy 16 c. Deviation in Take over norms and comments 16 d. Directors of Borrowers company: status of relation with Board/ Sr. Official of the bank etc 17 7 a. Future plans & Business Potential including cross selling/retail marketing 18 b. Environmental and sustainability implications 18 c. Earlier terms of Sanction: Compliance status 18 d. Statutory dues /Contingent Liabilities 18 8 a. Justification for the Proposal & b. Recommendations : 19

Page 1 of 37 SBI/ UMRETH BR. / AWPL

SECTION: 1

(Rs. in lacs) Circle/SBU: Ahmedabad Branch : Umreth Borrower’s Profile: Company: Alpine Woodtech Pvt. Ltd. (AWPL) Address : Regd Office: 138, Ashapurana Nagar, Opp. DPS, Pal Road, Jodhpur-342001, Rajsthan, India. Mfg facility( Locations): R. S. No.1566/2, Hamidpura, Navapura Road, Umreth, Ta.- Umreth, Dist.- Anand. (Gujarat) Ph.-(02692) 654175/ 292310 Segment: SSI Constitution: Private IRAC Status----New Connection---- Limited Company Advances: ----NA----- Investments:----NA----- Industry: Forest Products Industry. Activity: Chemically treatment and seasoning of various types wood. Date of incorporation: 05th May 2008. Banking with us since: New Connection. Banking arrangement: New Company/ New Connection. Existing Connection: No. New unit : Yes If Take over, whether all norms complied with: Not Applicable.

b) Brief Background:

M/s Alpine Woodtech Pvt. Ltd. (AWPL): AWPL incorporated on 05th May 2008 has been registered with ROC, Jaipur, vide registration no. is U20299RJ2008PTC026489 of 2008-09. AWPL has proposal to start a new seasoned wood manufacturing unit at R. S. No.-1566/2, Hamidpura, Navapura Road, At - Umreth, Dist.- Anand (Gujarat) with a view to explore new markets of Mumbai and southern part of India and also for taking raw material location advantage which helps them in reduction of transportation cost. AWPL has been registered with DIC, Anand as manufacturing Industry on 29.09.2008 and has been allotted SME No. “24-015-12-0067” on 29.09.2008. The company has also got its name registered with Central Sales Tax No.- “24650400659” and under Gujarat Value Added Tax Act, 2003 No.-“24150400659” dated: 11.09.2008. AWPL has also submitted an application to Gujarat Pollution Control Board (GPCB) for obtaining NOC, which should be submitted by them immediately after obtaining the same.

Directors of AWPL: AWPL has two directors, Shri Rakeshkumar D. Saini and Shri Sanjaykumar V. Rana. Both are postgraduates in wood technology from Forest Research Institute, Dehradun. By virtue of their education relevant to the activity and association with M/s Shri Laxmi Associates since 2002 they are technically and managerially competent to run the activity on profitable lines. Details of their education qualification, Shareholding pattern, experiences and other information are as under:

Name of Share Education Qualification/ Experience/ Other Role in the unit

Page 2 of 37 SBI/ UMRETH BR. / AWPL

Directors Holding details (Age) Pattern (%) Shri 50% • “M. Sc. in Wood Science & Overall administration, Rakeshkumar Technology” from Forest Research management, public D. Saini (32) Institute, Dehardhun (1998-2000). relation, purchase of • Worked as a wood technologist in raw material, sales, Suncity Art Export, Jodhpur for a period finance and technical of 2 years. support in production. • Has about 6 years of experience in this line of activity, as a partner in M/s Shri Laxmi Associates since 2002. • Belongs to U.P. : “S/o Dharampal Saini, H. No.-438, Nai Bastti, Bhudhana, Mujjafar Nagar, Uttar Pradesh.” • Present Address: “ 138, Ashapurna Nagar Opp. D.P.S., Pal Road, Jodhpur. Shri 50% • “M. Sc. in Wood Science & Finance, sales & Sanjaykumar Technology” from Forest Research marketing, overall V. Rana (33) Institute, Dehardhun (1998-2000). management of the • Worked as a wood technologist firm and technical (quality control) in Saraswati Art Palace support in production. Pvt. Ltd., Jodhpur for a period of 2 years. • Has experience of about 6 years in this line of activity, as a partner in M/s Shri Laxmi Associates since 2002. • Belongs to U.P.: “ S/o Virendra Rana, H.No.- A- 179, Dev-Vyaspuri , Opp. Subharthi Dental College, By-pass road, Meruth U.P. • Present Address: “ 138, Ashapurna Nagar Opp. D.P.S., Pal Road, Jodhpur.

Details of associates firm & their borrowing arrangement have been furnished in Annexure-I.

Product: The proposed unit is set up for manufacturing seasoned wood, which involves two independent processes vide (1) Chemical treatment for protecting from pest and (2) Seasoning (de-moisturisation). The wood treated as above would be highly durable and has wide application in furniture making, interior, infrastructure and handicrafts industries. Gajjar Techno-Economic Consultants Pvt Ltd have confirmed that the product and production process is feasible.

Capacity and Capacity utilization:

Page 3 of 37 SBI/ UMRETH BR. / AWPL

The capacity of the project is based on the capacity of chemical treatment plant and seasoning plant. The capacities of both the plants are furnished in the table given below CHEMICAL SEASONING TREATMENT ACTIVITY Number of Tanks / Chambers 2 4 Number of trolleys per chamber -- 4 Capacity per tank/chamber per batch 200 cu ft 400 cu ft Batch time 3 hours 7-9 days No. of days per annum 300 days 300 days No. of Batches 37 Total Capacity per annum 960000 cu ft 236800 cu ft (24 hours a day) Capacity of Chemical treatment plant 320000 cu ft --- (8 hours a day)

Capacity of chemical treatment plant and seasoning chamber are synchronized and capacity of seasoning activity being least capacity of the unit is presumed conservatively as 240000 cu ft. per annum. The economics has been worked out presuming an operating capacity of 180000 cu ft per annum. Gajjar Techno-Economic Consultants Pvt Ltd, Baroda who was entrusted with feasibility study has opined that the capacity of the unit at 240000 cu ft per annum is reasonable. DIC, ANAND IN ACKNOWLEDGEMENT FOR PART-I (FROM-67) HAS MENTIONED CAPACITY OF MANUFACTURE AS 180000 CU FT, WHICH NEEDS TO BE CLARIFIED BY THE UNIT.

Product USP/ Marketing:

The market for processed wood i.e. chemically treated and seasonal wood is ever increasing since such product enhances the life of the wood by 4 to 5 times than its normal life. Because insects do not survive after chemicals treatment and also due to seasoning of wood its moisture gets evaporated which ensure longevity of the furniture made out of processed wood in comparison with the unprocessed wood. In view of the following the unit would not have any hindrances in marketing and selling of the product.  The promoters are basically technocrats backed by experience in the similar activity.  Their associate concern M/s Laxmi Associates located at Jodhpur needs about 50000 cu ft / annum for their consumption.  Focused attention by one of the promoters Sh Sanjaykumar V Rana to sales and marketing would help the unit in exploring new markets in India and abroad.  The unit having already established contacts with potential customers located in Gujarat, UP, Haryana, Rajasthan etc., would meet their ever-increasing demand.

Page 4 of 37 SBI/ UMRETH BR. / AWPL

 The quality of the product is the USP because the product is far superior to unseasoned wood and there is no unit carrying on similar activity in and around. Therefore the unit would not have any barriers in marketing of the product.  The unit would be having orders on on going basis from their existing connections to the tune of about 35000 – 40000 cu ft per month. Gajjar Techno-Economic Consultants Pvt Ltd, Baroda who have assessed market feasibility have opined that the product is having wide applicability and the unit could achieve projected sales. c) Brief write-up on industry/sector and company’s standing (domestic/ international) in the industry including market share, future growth strategies, comments on recent news reports, etc.

 Forests cover roughly 20% of India’s total geographical area and forestry is the second biggest land-use in India after agriculture  Estimates suggest that the demand for timber in India is likely to triple almost from 58 million cubic meters in 2005 to 153 million cubic meters in 2020, and that the supply of wood will more than double from 29 million cubic meters in 2000 to 60 million cubic meters in 2020.  India is one of the major wood-users in the Asia pacific region. India has over 4500 varieties of wood-yielding species  Most of the timber currently used in India comes from plantations but, as demand outstrips supply, India’s natural forests will come under threat.  Timber Sources 1) Imports 2. Domestic: a) Plantations b) Forests. India is net importer of wood and wood-based panel product.  India is exposed to timber imports which may have come from unsustainably managed forests or which have been illegally harvested and this, in turn, will affect India’s ability to export its manufactured wood products to Europe and the US  Most imports in India are in an unprocessed form, mainly as logs The import of timber and timber products has increased substantially from 2.45 million cubic m in 2001 to 16.7 million cubic m in 2008  Imports are mainly from Gabon, Indonesia, Ivory Coast, Malaysia, Myanmar, Nigeria, Togo, Indonesia, Brazil and New Zealand  Growth pattern of future demand of wood Year Demand (million cubic metre) % Change 2000 58 - 2005 74 127.59 2010 95 128.38 2015 123 129.47 2020 153 124.39  Wood based industry in India is an age old industry. 1) Sawn wood 2) Composite Wood Panels and 3) Pulp Wood based

 Sawn wood is the largest single category. Consumption is about 29 million cubic m. Sawn wood consumption in India is depressed and distorted by inadequate availability coupled with high prices. No integrated all India market for sawn timber. Sawn wood is mainly used for construction ( mainly housing) Sleepers, Packing Furniture, Vehicle Industry, Ship Building, Mining and Miscellaneous Uses.

 The composite panel industry comprises of plywood, veneer, particle board, Medium Density Fibre (MDF) Board. After cement and steel , it is the third most important contributor to the housing sector. Composite Panel industry depends on plantations and imports for raw material supply  India vis-à-vis China: China and India had similar approaches as regard to hefty duties and taxes. China - introduced new policies such as 1) Abolishing import tariffs 2) Reduced VAT 3) Reform of land ownership rights etc. 4) Development of industry

Page 5 of 37 SBI/ UMRETH BR. / AWPL

using integrated policy 5) Discounted loans 6) Capital subsidies for establishing 5.8 million hectares of plantations. By 2004 China exports grew by 107% from 1997 to 2004. China became a net exporter of wood based products  Wood based Industries in Gujarat  Total no. of wood based industries in Kutch 361 and in rest of Gujarat 4531 Total no. of wood based industries in Gujarat 4892. Kandla's imported timber-based units meet the needs of Rajasthan, Haryana, Punjab and Uttar Pradesh. Timber Zones in Gujarat: The Gujarat State Government has declared 4 blocks in KUTCH as Special Timber Zones. Nearly 200 plywood units and 500 saw mills are expected to come up in the special timber zones. BHUJ, ANJAR,GANDHIDHAM and BHACHAU  Kandla is the timber hub of the country - handles 55 per cent of the total national timber import. Imported timber consists of Burma teak, Gurjan wood, Keriung wood, Malaysian Saal wood, Meranti wood, Kapur wood and others. Kandla has potential to emerge as Asia's largest wood-based industry  Wood based industries continue to be shaped by shifting business policies, environmental factor. Demand for plywood and panel products is increasing proportionately to our growing economy. Need of the hour is to initiate investment by larger firms and bring in pro-active measures directed at revival and growth.  Wood based industries can be the most important contributors to the economic revolution in India. The wood based industry being an agro-forestry based industry is deprived from any central government policy directives, incentives and funding to promote it It is essential to put in place aggressive development policies so that India too can set go-getting expansion targets for its wood based industries.  An international partnership between WWF and the forest products industry - the Global Forest & Trade Network (GFTN) - has launched a new national arm, the Global Forest & Trade Network-India (GFTN-India).  GFTN-India will encourage trade links between companies which are committed to achieving responsible forestry, and will aim to create market conditions that support forest conservation whilst providing economic and social benefits for the businesses and people that depend upon them. WWF-India will work closely with Government of India to promote sustainable management of forests in line with GFTN goals and aims to promote the practices to achieve this goal.  “The new GFTN-India is an opportunity to protect India’s economy and its forests by providing chance to encourage forest certification and responsible forestry and working with the Indian government and with industry to develop credible certification for India’s forests.”  WWF’s Global Forest & Trade Network and the new GFTN-India can help to address these issues without sacrificing economic growth in India. By setting up business sectors and establishing links between buyers and suppliers, the GFTN is able to drive the market for certified wood which helps to protect forests and those who rely on them for food and income. GFTN-India can help forest owners - including the Indian government who own 90% of India’s forests - to move towards forest certification, to match buyers to suppliers nationally and globally,  The GFTN-India is an opportunity for industry and conservationists to work together to establish business networks based on certified forests and products, and create wider markets based on sustainability.  Through the GFTN, WWF is working with industry to encourage a change in purchasing behavior and hopes to encourage a switch to the production and consumption of wood and wood products from credibly certified sustainable forests. By offering certification and its associated market advantages to the forest industry, WWF is working towards a creating a better future for the world’s forests.

Recent Wood (Furniture) Industry News: Housing slowdown hits furniture sales 7 Jan 2009, 0013 hrs IST, Meghna Maiti, ET Bureau

Page 6 of 37 SBI/ UMRETH BR. / AWPL

MUMBAI: The deferment in home purchases have not only affected realty companies, but also had a bearing on the fortunes of home furniture retailers. Last festive season, these retailers logged a 15% decline in sales.

“Home purchases, especially that of the first one, have come to a standstill. We are trying to cut costs by reducing imports and sourcing more from within the country,” Mahesh Shah, chief executive of HomeTown, a Future Group subsidiary, said.

Sales during Diwali and Christmas account for nearly 25% of the net turnover for most home furnishing companies and furniture manufacturers. The demand for high-value furniture items is more elastic than the furnishings category.

The market for home furniture sales consists of ‘first home’ buyers and replacements. “While first home buyers may downgrade to a lesser value product owing to the economic downturn, this demand cannot dry up unlike replacement buys, which can be postponed indefinitely,” said Purnendu Kumar, retail consultancy firm Technopak’s associate vice-president. Sluggish sales have forced companies to go slow on their store rollout plans as well. “A 15-20% drop in sales cannot be ruled out. We have become cautious about our expansion plans. However, we are still bullish on long-term growth,” said Hiten Parekh, executive director, Nilkamal Plastics. The company operates the @Home brand of showrooms that retail furniture and furnishings.

Technopak estimates the turnover of the urban home furnishings market to be Rs 9,300 crore and expects it to reach Rs 20,000 crore by 2012 at an annual growth rate of 15-20%.

Home furniture accounts for nearly Rs 14,000 crore of the Indian furniture market. Organised players, which are growing at over 20% per annum in terms of sales, control only 10-12% of the furniture market. In the home furnishings market too their share is just 6%.

Most organised players are focussed on the bed and bath segments. Bombay Dyeing, Welspun, Westside, the Future Group, Lifestyle and Shoppers Stop are among the key players in these segments. d) i) RMD Advisory dated None ii) Qualitative approach NA iii) Quantitative approach NA iv) Comments RMD Advisory on Wood Industry is not available. RMD at Central Office has not suggested any exposure setting norms for this industry. e) Indebtedness / Exposure & Capital Charge:

Company Group Proposed exposure Indebtedness Existing Proposed Existing Proposed Credit Risk conversion weight factor Fund based -- 195.00 -- 195.00 195.00 100% Non fund based ------TOTAL -- 195.00 -- 195.00 195.00 100% (Indebtedness) Investment ------Leasing ------TOTAL -- 195.00 -- 195.00 195.00 100% (Exposure) Capital charge for Total exposure: Rs.18.70Lacs Rs.18.70Lacs (net of liquid collateral)

Page 7 of 37 SBI/ UMRETH BR. / AWPL

SECTION: 2 PRESENT PROPOSAL:

a. Proposal

Sanction For: (i) FBWC limits of Rs.75.00lacs. (ii) Term loan of Rs.120.00lacs with a repayment period of 78 months, inclusive of 6 months moratorium period from the date of first disbursement.

This proposal falls within the powers of Regional Manager as; (i) Total indebtedness is Rs.195.00lacs (including CC limit of Rs.75.00lacs & TL of Rs.120lacs), and AWPL is a Corporate. As per Circular CirDO/OP&SP?05 dt.10.05.2007 AGM is having powers to sanction CC of Rs.100.00Lacs and TL of Rs.125.00Lacs (overall Rs.200.00Lacs)

b. Credit Limits (Existing and Proposed): (Rs. in lacs) EXISTING PROPOSED CHANGE LIMITS SBI % MB SBI % MB SBI MB Fund Based Limit Cash Credit limit ------75.00 100 -- +75.00 -- Term Loan ------120.00 100 -- +120.00 -- TOTAL FB ------195.00 100 -- +195.00 -- Non-Fund Based Limit BG ------100 ------Latter of Credit ------TOTAL NFB ------Total (FB+NFB) ------195.00 100 -- +195.00 --

c. SHARING PATTERN:

Financial Arrangement: Sole Banking FB NFB Total SBI 195.00 -- 195.00 Ass. Bks. ------SBI Group ------Other Banks ------Total 195.00 -- 195.00

SECTION-3 PERFORMANCE DETAILS

Page 8 of 37 SBI/ UMRETH BR. / AWPL

a.1 PERFORMANCE AND FINANCIAL INDICATORS: (Rs. in lacs) As on 31.03 2009 2010 2011 2012 2013 2014 2015 2016 Particulars Esti. Proj. Proj. Proj. Proj. Proj. Proj. Proj. Installed Cap. 236800 236800 236800 236800 236800 236800 236800 236800 Qty. (Qty. in cubic ft.) Net Sales Qty. 180000 180000 180000 180000 180000 180000 180000 180000 Net Sales 65.00 540.00 540.00 540.00 540.00 540.00 540.00 540.00 Operating Profit 1.84 19.15 24.15 27.00 30.35 35.15 37.65 40.40 PBT 1.84 18.55 23.55 26.40 29.75 34.55 37.65 40.40 PBT/Sales (%) 2.83 3.44 4.36 4.89 5.51 6.40 6.97 7.48 PAT 1.38 12.98 16.48 18.48 20.82 24.18 26.35 28.28 Cash Accruals 8.03 31.98 33.08 34.48 36.22 37.53 39.95 41.58 PBDIT 11.77 62.55 62.65 62.65 62.65 62.65 63.25 63.25 PBDIT / Interest 3.59 2.50 2.78 3.09 3.58 4.25 5.27 6.62 Paid up Capital 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 TNW 48.38 61.96 79.04 98.12 119.54 144.32 170.67 198.95 TOL/TNW 4.45 3.75 2.64 1.95 1.44 0.98 0.66 0.50 TOL/ Quasi 2.74 2.29 1.71 1.32 1.00 0.80 0.61 0.50 equity ROCE 4.41 21.06 21.62 21.59 21.45 21.88 22.32 1.81 Current Ratio 0.97 1.14 1.26 1.30 1.36 1.41 1.47 1.78 Current Ratio 1.12 1.37 1.53 1.57 1.63 1.70 1.59 1.78 (Excl. TL installments)

Comment: AWPL will start its commercial production from Feb.2009. F. Y. 2009-10 will be the first full year of operation in the firm. Gajjar Techno-Economic Consultants Pvt Ltd who have conducted feasibility study have opined that projected annual turnover of 180000 cu ft wood could be met by the unit and the prices of raw material and finished products presumed are conservative and reasonably realizable.

Quarterly / Yearly Performance: (Rs. in lacs) Performance for the quarter 30.09.2007 30.09.2008 ended December (Total) Net Sales NA NA PAT NA NA

b) INDUSTRY EXPOSURE: (Rs. in crores) Industry Wood Industry Industry Exposure as on Data Not Available No. of units Data Not Available Fund Based Exposure Data Not Available Non Fund Based Limits Data Not Available Total Exposure Data Not Available Fund Based Exposure as a % of Bank’s total fund based Data Not Available exposure (RMD at Central Office has not suggested any exposure setting norms for this industry).

Industry average/ benchmark (Where available): N.A.

Page 9 of 37 SBI/ UMRETH BR. / AWPL

c) MOVEMENT IN TNW (Last Three years): ------New Company------(Rs. In Lacs) 31.03.06 31.03.07 31.03.08 Opening TNW N.A. N.A. N.A. Add PAT N.A. N.A. N.A. Add/ less. Increase in Equity/ premium N.A. N.A. N.A. Add./Subtract change in intangible assets N.A. N.A. N.A. Adjust prior year expenses N.A. N.A. N.A. Deduct Dividend Payment N.A. N.A. N.A. Closing TNW N.A. N.A. N.A. d. SYNOPSIS OF BALANCE SHEET: (Rs. In Lacs) Sources of funds Previous year Last year (31.03.2008) (31.03.2007) Share Capital N.A. N.A. Reserves and Surplus N.A. N.A.

Secured Loans : short term N.A. N.A. : long term N.A. N.A. Unsecured Loans N.A. N.A. Deferred Tax Liability N.A. N.A. Total N.A. N.A. Application of Funds Fixed Assets (Gross Block) N.A. N.A. Less Depreciation N.A. N.A. Net Block N.A. N.A. Capital Work in Progress N.A. N.A. Investments N.A. N.A. Inventories N.A. N.A. Sundry debtors N.A. N.A. Cash & bank balances N.A. N.A. Loans & advances to subsidiaries and group N.A. N.A. companies Loans & advances to others N.A. N.A. ( Less : Current liabilities ) (N.A.) (N.A.) (Less : Provisions ) (N.A.) (N.A.) Net Current Assets N.A. N.A. Misc. Expenditure -- -- (To the extent not written off or adjusted ) Total N.A. N.A.

Comment: New Company, Not Applicable (N.A.).

SECTION 4 RISK ASSESMENT

Page 10 of 37 SBI/ UMRETH BR. / AWPL

a. CREDIT RATING: Borrower rating WC TL Existing Proposed Existing Proposed Hurdle rate CRA NA SB-6 NA SBTL-6 SBTL-10 Mark Scored in CRA NA 74.45/100 NA 74.45/100 45/100 CRISIL NA NA NA NA NA ICRA NA NA NA NA NA Others NA NA NA NA NA

Facility rating Facilities Existing Proposed CC NA NA Existing Proposed CRA basedTL on balance SheetNA as on NA NA 31.03.2010* ValidatedLC/BG on NA NA NA NA *CRA based on Projected Balance Sheet as on 31.03.2010, the first full year of operation in the firm. Detail working of CRA is furnished in Annexure-III.

b. Risks and mitigating factors:

Critical risks perceived Mitigating factors Since AWPL is a new company Promoters are having technical background as achievement of the projection turnover well as vast experience in the activity. Wood appears to be one of the risk factors. based industry has lot of potential and the unit has location advantage by way of easy access to raw material market. The unit is promoted at Umreth basically to expand their market horizons to Mumbai and Southern India. With assured quality and competitive rates the unit could prosper well and achieve their goals. Directors of AWPL are presently Looking at the risk we have obtained third residing at Jodhpur and would not be party guarantee of Shri Mukeshbhai A. Patel available all the time at Umreth. who is a local timber merchant and having current account with our Umreth Branch. Government regulations on movement Promoters are technocrats knowing very well of timber are so stringent sometimes the ins and outs of industry. Branch the Forest Department may confiscate functionaries, ensuring that stocks are backed the stocks. by proper invoices, could mitigate the risk. Chances of diversion through inter firm Branch by carefully monitoring transactions transactions with their associate unit routed through their CC account especially poses risk. those representing transactions with associate unit could ensure end use.

Page 11 of 37 SBI/ UMRETH BR. / AWPL

c. Warning signals / Major irregularities in Inspection report / Credit Audit:/Other reports: ------Not applicable, new connection------Report Warning Signal / Major Comments irregularities I/A Audit Report N.A. N.A. Credit Audit Reports N.A. N.A. Other Audit Reports N.A. N.A. Qualification if any, in Auditors report NIL

d. SECURITY: (Rs. in Lacs) Details Value and Date of valuation/ basis of opinion report valuation Primary CASH CREDIT: Hypothecation of Security: entire current assets such as stocks & N.A. N.A. receivables of AWPL. TERM LOAN: Mortgage of proposed Based on Cost of factory building constructed and to be 162.10 project/ Estimates of constructed with bank loan on land R.S. Construction & No-1566/2 and Hypothecation of plant Quotation of plant & and machinery purchased and to be machinery. purchased from Term Loan. Collateral Registered mortgage of 11164 sq. mts Based on valuation Security: factory land * R. S. No.- 1566/2, reports: Hamidpura, Navapura Road, At- 50.24 @ Umreth, Ta.- Umreth, Dist.- Anand (M.V.) (Gujarat). Standing in the name of the directors of “Alpine Woodtech Pvt. Ltd.” Shri Rakesh kumar D. Saini and Shri Sanjay kumar V. Rana. 1st on 30.12.08 by bank empanelled valer Shri M. J. Bhatt Market Value Rs.50.24Lacs and Realisable Value Rs.40.19Lacs, 2nd Valuation on 16.01.2009, by bank empanelled valuer Hitesh Shah & Associate MV Rs.50.24Lacs and Realisable Value Rs.45.22Lacs Distress Value Rs.37.68Lacs. Lien over Bank deposits Umreth Branch. Deposit should be for 84 25.00 # months Sub Total  75.24 Guarantee: Net Worth Opinion report Rakeshkumar D. Saini (Director) 25.00 Net worth Compiled Sanjaykumar V. Rana (Director) 28.00 on 16.01.2009. Mukeshbhai A. Patel (Third Party ) 40.00 Sub Total  93.00 Total  330.34 Collateral For SBI 38.58% coverage% For others N.A

Page 12 of 37 SBI/ UMRETH BR. / AWPL

* Title Clearance report obtained from the panel advocate dt.7/1/2009 certifies that both the directors of Alpine Woodtech P Ltd have clear and marketable title and they could create EM (Registered). Branch to seek clarification from advocate whether the company has to create EM or the directors in their personal capacity. If it is directors in their individual capacity then a lease deed executed by the directors in favour of the company to be obtained with lease period covering more than the loan repayment period. @ From title clearance report it is observed that the directors have purchased land on 04.09.2008 after the land was converted into NA land on 14.08.2008 at a price of Rs.23.12 Lacs. The panel valuers have assessed the market value as Rs.50.24lacsin December and January 2009. BM and FO should visit the site and ensure that the value indicated in the valuation reports is reasonable and accordingly a certificate of having visited the unit and satisfied with the value should be added at the end of valuation certificates. # No loan / OD should be sanctioned against the security. Lien should be properly fed in the system as Rs.25Lacs is BASEL security. Period of deposit should be 84 months to avoid mismatch between loan and security maturities. e. Changes in security if any, Justification: N.A.

SECTION-5

Page 13 of 37 SBI/ UMRETH BR. / AWPL

PRICING:

a) CONDUCT OF ACCOUNT: Not Applicable, New Connection (last year) No. of occasions Average period for Irregularity report regularization last submitted on Irregularity in WC : N.A. N.A. N.A. Comments: Irregularity in TL N.A. N.A. N.A. Comments : Utilisation of limits: FB Limits Average utilization N.A. N.A. % NFB Limits Average utilization N.A. N.A. %

b) INCOME ANALYSIS: (Rs. in lacs) SBI From Estimates Actuals Estimates ( last year) (last year) (current year) 2007-08 2007-08 2008-09 WC Int. N.A. N.A. 1.50 N.A. N.A. 2.00 N.A. N.A. -- N.A. N.A. -- N.A. N.A. -- N.A. N.A. -- N.A. N.A. 1.87

Interest & Other Charges as per SBI Share Amount and percentage latest Balance Sheet dated Interest Not Applicable, New Connection Other Charges

c. Other Bank’s/ FIs Pricing:

Existing Proposed Term Loan NA NA Working Capital NA NA

d. PROPOSED PRICING:

ITEM Existing Card rate Proposed rate

Page 14 of 37 SBI/ UMRETH BR. / AWPL

Rate Int. on WC N.A. 1.50% Over SBAR, i.e. 1.50% Over SBAR, i.e. 13.75% 13.75% Int. on TL N.A. 2.00% Over SBAR, i.e. 2.00% Over SBAR, i.e. 14.25% 14.25% Processing fee N.A. Rs.500/- per lac, Rs.500/- per lac, Commit charges N.A. CC: 0.25% p.a. on the CC: 0.25% p.a. on the entire unutilized portion entire unutilized portion if if average utilization is average utilization is less less than 60%. than 60%. TL: 1.20% for delayed draw down beyond 2 TL: 1.20% for delayed month. draw down beyond 2 month. Upfront fee N.A. 1.25% of Loan Amt. 1.25% of Loan Amt. LC N.A. N.A. N.A. BG N.A. N.A. N.A.

[SBAR is 12.25% at present, effected from dated: 01.01.2009.]

Justification for Concessions Proposed: N.A.

SECTION 6 LOAN POLICY: DEVIATIONS AND COMPLIANCE:

Page 15 of 37 SBI/ UMRETH BR. / AWPL a. Whether names of promoters, directors, company, group concerns figure in defaulter/willful defaulters list: RBI defaulters’ list dated : “Mar.2008” : No Name of the director Default in connection with: Remarks (Name of the company) No No No Justification for considering continuation / No enhancement in facilities)

Willful defaulters’ list dated: Mar. 2008: No Name of the director Default in connection with: Remarks (Name of the company) No No No Justification for considering continuation / No enhancement in facilities)

ECGC caution list: No CIBIL report dt. 13.01.2009 No b. Deviations in Loan Policy:

Parameters Indicative Min/Max level Company's level as on as per loan policy 31.03.2010 1. Liquidity Min. 1.33 1.14 2. TOL/TNW Max. 3.00 3.75 3. Average gross DSCR (TL) Min. 1.75 1.77 4. Debt / equity Max. 2:1 1.58: 1 5. Promoters contribution Mini. 20% 25.97% 6. Prudential norms Complied with 7. FB exposure to the N.A. N.A. industry 8. Substantial exposure: 7.5% (Rs.5232.20 Cr.) With in Limit Borrower 9. Substantial exposure: 15% (Rs.10464.39 Cr.) With in Limit Group 10. Others N.A. N.A.

The Current ratio of the firm projected as on 31.03.2010 at 1.14 and the level of TOL/ TNW at 3.75. The TOL/TNW (considering unsecured loans as quasi equity) projected at 2.29 and the Current ratio excluding term loan installment at 1.37 as on 31.03.2010, could be considered acceptable. All other parameters are within the indicative levels. c. Deviations in Take over norms and comments: N.A. d. Directors of the borrower company are relatives (scope of the term ‘relative as defined in RBI Master Circular on loans and advances- Statutory and other Restrictions) of any member of the Bank’s Board/Senior Officer of the Bank/ Member of any other Bank’s Board - NA

Page 16 of 37 SBI/ UMRETH BR. / AWPL e. Compliance with Section 20 of the Banking Regulation Act: Whether any of the Directors of the Bank is Director of the borrower company or is having any interest in the same: NA

SECTION-7 a. Future Plans & Business potential (over a 3-5 year horizon) including Cross selling / Retail Marketing based on Co / Group’s future plans: (to be quantified).

Page 17 of 37 SBI/ UMRETH BR. / AWPL

Item Present Position – Business Whether Tied Up? estimated (Yes / No) * (i) Corporate Salary Package No No (ii) P Segment Loans (a) Housing No Would try to (b) Auto Loans No tap the P- (c) Personal Loans No Segment (iii) SBI Credit Card No Business (iv) SBI Life No (v) SBI Mutual Funds No (vi) SBI Vishwayatra Foreign Travel Yatra No -- Cards (vii) Vendor/ Dealer Finance No -- (viii) Any Other (Please specify) No -- b. Environmental and sustainability implications:

AWPL complies environmental and sustainability implications. c. Earlier terms of Sanction: Compliance status:

Not Applicable, New Connection. d. Statutory dues/other contingent liabilities:

Dues Level (Rs in crores) Impact on financial position Statutory NO NO dues Contingent NO NO liabilities

Page 18 of 37 SBI/ UMRETH BR. / AWPL

SECTION-8

a. Justification for the proposal:

1) The credit rating of the firm is SB/SBTL-6 (mapped to old SB/SBTL-3) and the promoters have adequate experience in the line of activity.

2) There is potential to enhance the SME, PER segment and Cross Selling business of the branch through this opportunity.

3) Looking at the good market potential and the experience of the promoters, the proposal for the sanction/approval of the following is considered a fair banking risk.

b. In view of the foregoing, considering the proposal a fair banking risk we recommend for according

Sanction For: (i) WC limit of Rs.75.00lacs. (ii) Term loan of Rs.120.00lacs with a repayment period of 78 months, inclusive of 6 months moratorium period from the date of first disbursement.

Appraised by Assessed by

Neeraj Sahu G.K.V. Rao CRE-ME Chief Manager V.U.Nagar Branch RBO, Anand Date: 13.02.2009 Date: 13.02.2009

Page 19 of 37 SBI/ UMRETH BR. / AWPL

SECTION-B APPRAISAL MEMORANDUM FOR TERM LOAN:

Circle: Ahmedabad Branch: Umreth Company: M/s Alpine Woodtech Pvt. Ltd.

TERM LOAN (RS.120.00LACS):

a) Proposal: Sanction of term loan of Rs.120.00lacs with a repayment period of 78 months including 6 month moratorium period for meeting part cost of construction of new factory building, and Plant & Machinery project cost estimated at Rs.196.12Lacs

b) Project / purpose for Term Loan: AWPL is proposing to set up a new manufacturing unit involving chemical treatment and seasoning of various types of wood. They have acquired land and started civil works for erecting tanks for chemical treatment, chambers for seasoning activity and other constructions for office building etc., They are acquiring machinery for the processing activities. The term loan is for meeting part cost of construction of sheds and buildings and for acquiring machinery.

c) Appraised by: Appraised by CRE-ME Vithal Udyognagar Branch as AWPL has projected a turnover of Rs.5.40Crore during 2009-10, which is its first full year of operation and the total fund base indebtedness is Rs.195.00lacs. The turnover and profitability have been projected conservatively at lower level than what was estimated in the project report prepared by the Charted Accountant in consultation with one of the directors of the company. Gajjar Techno-Economic Consultants P Ltd who has conducted product and market feasibility study have opined that the product and production process is feasible and the projected turnover is achievable. d) Cost of project & means of finance:

COST OF PROJECT MEANS OF FINANCE Item Cost Particulars Amount Cost of Land * 26.52 Director’s Capital 50.00 Building and Civil work 77.37 Plant & machineries inclusive 65.48 Unsecured Loan/ Deposits 26.12 accessories (from friends & relatives ) Electrification 12.75 SUB TOTAL 76.12 Furniture & Fixtures 1.50 Testing Equipments & 2.00 miscellaneous Fixed Assets Proposed Term Loan 120.00 Preliminary & Preoperative Exp. 3.00 WC Margin 7.50 TOTAL 196.12 TOTAL 196.12 * Item not applied for term loan.

The project Debt/Equity ratio works out as 1.58 : 1

Page 20 of 37 SBI/ UMRETH BR. / AWPL

Margins and loan amount:

Item Cost (C) Margin (M%) Loan amount Building and Civil work 77.37 20.89 (27%) 56.48 Plant & Machinery 65.48 16.38 (25%) 49.10 Electrification 12.75 3.20 (25%) 9.55 Furniture & Fixtures, Testing 6.50 1.63 (25%) 4.87 Equipment, Misc. Fixed Assets Preliminary & Preoperative Exp. TOTAL 162.10 42.10 (25.97%) 120.00

Overall margin will be 25.97%, and project debt / equity ratio at 1.58:1 considered satisfactory. e) Remarks on cost of project: Branch has to obtain detailed civil estimates for the constructions taking into account approved plans and measurements of each construction because the estimates and plans submitted are not furnishing full details. Branch should obtain project cost of their existing Jodhpur unit and the cost of constituent elements of Plant & Machinery may be compared with the quotations submitted. Any aberration in costs to be accordingly factored into the proposal and disbursement should be made accordingly.

(i) Land: AWPL has purchased N.A. land at R. S. No.1566/2, Hamidpura - Navapura Road, Umreth, Ta.- Umreth, Dist.- Anand (Gujarat) admeasuring area of 11164 Sq. M. in the names of directors of AWPL. AWPL has met the cost of land from own sources, and offered land as collateral security for the bank finance. Before disbursement Branch Manager has to 1) obtain NA permission for industrial purpose, 2) ensure that the conditions stipulated by the District Collector, Anand in their NA order are meticulously followed and 3) obtain permission from Factory Inspectorate approving the building plans.

(ii) Building and civil work: AWPL has estimated cost of construction of new factory buildings and other constructions at Rs.77.37lacs which includes seasoning chamber (Rs.11.53Lacs, open shed Rs.40.17Lacs, electricity & guard room, office & staff room (Rs.6.80Lacs), chemical U/G tank (Rs.4.00Lacs), parking and compound wall (Rs.14.87Lacs). As per financials ason 8/1/2009 submitted by AWPL they have already incurred an amount of Rs.25.58Lacs for meeting cost of construction of compound wall, seasoning chambers and civil works in erecting chemical tanks. AWPL has obtained permission from Umreth Nagar Palika for construction of factory and other civil works. AWPL has to obtain permission from office of Factory Inspectorate for the proposed constructions. Branch Manager should ensure that the constructions are as per approved plans and NA order. Branch Manager has to obtain a certificate for the cost incurred so far and further disbursements should also be done based on the completion certificate issued by any chartered engineer on the panel. Bills submitted by the unit should be supported by a certificate from the Chartered Accountant to the affect of having incurred and accounted for in the books of the company.

(iii) Plant and Machinery:

Page 21 of 37 SBI/ UMRETH BR. / AWPL

The total cost of plant and machinery as per quotations produced by AWPL comes to Rs.65.48lacs. AWPL will contribute Rs.16.38lacs and remaining by term loan of Rs.49.10lacs. AWPL has paid advance payment of Rs.12.03lacs to suppliers for booking the plant & machinery. Term loan of Rs.49.10lacs would be disbursed directly to the suppliers of machinery with keeping rest margin of Rs.4.35lacs.

Detail list of Plant & Machinery is furnished in Annexure-II.

(iv) Electrification: AWPL will be required electrification works at new factory estimated of Rs.12.75lacs, including MGVCL 60 HP power connection of Rs.5.14lacs. AWPL has applied MGVCL connection and paid charges of Rs.5.14lacs, the expense has been incurred against their margin of Rs.3.20lacs in electrification work. Term loan of Rs.9.55lacs would be disbursed directly to supplier/ contractor of electrification, as they have contributed margin upfront. Additional margin Rs.1.94lacs would be considered margin for other item and adjusted in overall margin of AWPL.

(v) Furniture & Fixtures/ Testing Equipment/ Misc. Fixed Assets/ Preliminary & Preoperative Exp.: AWPL has estimated cost for furniture & fixtures/ testing equipment/ misc. fixed assets/ preliminary & pre-operative expanses of Rs.6.50lacs. AWPL will contribute margin of Rs.1.63lacs and term loan is proposed of Rs.4.87lacs against these items. Term loan would be disbursed against the each item separately as mentioned above in Para.d with maintaining the margin. f. Remark on Means of Finance:

(i) Equity/ Capital (Rs.50.00lacs): Directors would raise authorized & paid-up share capital of AWPL of Rs.50.00lacs for the proposed project. They would raise capital before 31/03/2009 and an undertaking to that affect has been obtained from the directors of AWPL.

(ii) Unsecured Loan/ Deposits (Rs.26.12lacs): AWPL would raise friends & family deposits of Rs.26.12lacs for their project. An undertaking from the depositors of Rs.20.00lacs has been obtained confirming that these deposit are interest free and would not be withdraw during the currency of term loan availed. And also an undertaking would be obtain from AWPL that they will maintain the level of unsecured deposit as foresaid, during the currency of Bank finance.

(iii) Term Loan (Rs.120.00lacs): AWPL has requested term loan of Rs.120.00lacs for to part finance in the new project, same has been assessed and recommended for sanction. g) Project implementation schedule: Activity Expected Completion Date Purchase of Land 04.09.2008 Factory Building, compound wall Civil work 15.12.2008 Office, Labour Quarters, Shed construction 31.03.2009 Electric Connection 22.01.2009 Installation of Machinery 25.01.2009 Commencement of trial production 25.01.2009 Commencement of commercial production 15.02.2009 h) Production factors:

Page 22 of 37 SBI/ UMRETH BR. / AWPL

Raw Material: The basic raw material for seasoning wood is raw wood of mango, babool etc. and chemicals. Raw wood is abundantly available in Kheda & Anand districts, mostly in Nadiad and Umreth Taluka. The associate firm of AWPL M/s Shri Laxmi Associate (engaged in similar activity), located at Jodhpur Rajsthan, has been procuring raw material regularly from Umreth & Nadiad. Since director of AWPL has good experience in this line of activity, having good contacts with raw material suppliers, there is no problem in procurement of raw material.

Water: To meet the requirement of water needed in boiler and also for sanitation purpose a bore well has already been installed. The size of the bore is 4”diameter. This will ensure sufficient and uninterrupted supply of water required in the industry.

Electricity: AWPL has already obtained 60HP power connection from MGVCL.

i) Marketing: Brief Comment furnished in Section-A, Sub Section-1.

j) Commercial viability of Term Loan (Project): (Rs. in Lacs) Particular 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015.16 Net Sales 540.00 540.00 540.00 540.00 540.00 540.00 540.00 Net profit 12.98 16.48 18.48 20.82 24.18 26.35 28.28 Depreciation 19.00 16.60 16.00 15.40 13.35 13.60 13.30 Cash Accruals 31.98 33.08 34.48 36.22 37.53 39.95 41.58 Interest 16.01 13.48 10.76 7.98 5.23 2.48 0.22 TOTAL (a) 47.99 46.56 45.24 44.20 42.76 42.43 41.80 TL repayments 11.67 20.00 20.00 20.00 20.00 20.00 8.33 Interest 16.01 13.48 10.76 7.98 5.23 2.48 0.22 TOTAL(b) 27.68 33.48 30.76 27.98 25.23 22.48 8.55 Gross DSCR 1.73 1.39 1.47 1.58 1.69 1.89 4.89 Av. Gross DSCR 1.77 Net DSCR 2.74 1.65 1.72 1.81 1.88 2.00 4.99 Av. Net DSCR 2.12 Comments on DSCR: Gross average DSCR of 1.77 and net average DSCR of 2.12 for the project are above the indicative benchmark levels and are considered satisfactory.

k) Security margin: The security margin available is as under: (Rs. in Lacs) AS ON 31.03.  2010 2011 2012 2013 2014 2015 2016 WDV of fixed assets 160.00 143.40 137.40 122.00 118.65 125.05 121.75 Agg. TL o/s 108.33 88.33 68.33 48.33 28.33 8.33 0.00 Security margin 51.67 55.07 69.07 73.67 90.32 116.72 121.75 available Security Margin % 32.29 38.40 50.27 60.39 76.12 93.34 100.00 Avg. Security Margin% 62.30%

Comments on security margin: The overall average security margin is estimated at 62.30% during the currency of the Bank’s term loans and the same can be considered satisfactory.

l) Break – even Analysis: (Rs. in lacs)

Page 23 of 37 SBI/ UMRETH BR. / AWPL

As on - 31.03.10 31.03.11 31.03.12 31.03.13 31.03.14 31.03.15 31.03.16 Net Sales (A) 540.00 540.00 540.00 540.00 540.00 540.00 540.00 Variable costs

Raw material 423.00 397.80 398.25 398.15 404.20 398.10 398.25 Consumable spares 12.00 12.00 12.00 12.00 12.00 12.00 12.00 Power and Fuel 19.00 19.00 19.00 19.00 19.00 19.00 19.00 Other operating Exp. 25.00 25.00 25.00 25.00 25.00 25.00 25.00 Stock Changes -24.65 0.45 0.00 0.10 -5.95 0.15 0.00 Total Variable Cost (B) 454.35 454.25 454.25 454.25 454.25 454.25 454.25 Fixed Costs Direct Labour 9.00 9.00 9.00 9.00 9.00 9.00 9.00 Selling, Admin. & General Expenses 13.50 13.50 13.50 13.50 13.50 13.50 13.50 Interest Expenses 25.00 22.50 20.25 17.50 14.75 12.00 9.55 Depreciation 19.00 16.60 16.00 15.40 13.35 13.60 13.30 Total Fixed Cost ( C) 66.50 61.60 58.75 55.40 50.60 48.10 45.35 Contribution (D=A-B) 85.65 85.75 85.75 85.75 85.75 85.75 85.75 Contribution ratio (E=D/A) 0.16 0.16 0.16 0.16 0.16 0.16 0.16 BE sales (F=C/E) 415.63 385.00 367.19 346.25 316.25 300.63 283.44 BE sales as % of Net Sales 76.97 71.30 68.00 64.12 58.56 55.67 52.49

m) Sensitivity Analysis: If, the Variable Cost Up by 3%: AS ON 31.03. -> 2010 2011 2012 2013 2014 2015 2016 Net Sales(A) 540.00 540.00 540.00 540.00 540.00 540.00 540.00 Total Variable Cost (B) 467.98 467.88 467.88 467.88 467.88 467.88 476.96 Total Fixed Cost (C) 66.50 61.60 58.75 55.40 50.60 48.10 45.35 Contribution (D=A-B) 72.02 72.12 72.12 72.12 72.12 72.12 63.04 Contribution ratio (E=D/A) 0.13 0.13 0.13 0.13 0.13 0.13 0.12 BE sales (F=C/E) 511.54 473.85 451.92 426.15 389.23 370.00 377.92 BE sales as % of Net 94.73 87.75 83.69 78.92 72.08 68.52 69.99

If, the Net Sales Down by 5%: AS ON 31.03. -> 2010 2011 2012 2013 2014 2015 2016 Net Sales(A) 513.00 513.00 513.00 513.00 513.00 513.00 513.00 Total Variable Cost (B) 431.63 431.54 431.54 431.54 431.54 431.54 431.54 Total Fixed Cost (C) 66.50 61.60 58.75 55.40 50.60 48.10 45.35 Contribution (D=A-B) 81.37 81.46 81.46 81.46 81.46 81.46 81.46 Contribution ratio (E=D/A) 0.16 0.16 0.16 0.16 0.16 0.16 0.16 BE sales (F=C/E) 415.63 385.00 367.19 346.25 316.25 300.63 283.44 BE sales as % of Net 81.02 75.05 71.58 67.50 61.65 58.60 55.25

Comments: The projects are expected to have adequate resilience to withstand adverse movements in cost and revenues. AWPL has projected their sales and profitability conservatively. Moreover, AWPL would get 5% interest subsidy on term loan

Page 24 of 37 SBI/ UMRETH BR. / AWPL for their new project from D.I.C., which has not been considered in account for project appraisal. Overall the proposal is considered satisfactory. o) Moratorium for TL: AWPL has requested moratorium period of 6 months form the first disbursement of loan, looking at the new activity moratorium period 6 month has been recommended. p) Repayment Schedule: The proposed TL of Rs.120.00lacs is to be repaid in 72 monthly installments, 71 of Rs.166700/- each and 72nd of Rs.164300/-, commencing from the month September 2009 or 6 month after first disbursement whichever earliest. Interest is to be paid as and when debited to the account. q) CRA (TL) / Pricing: Facility Working Capital Term Loans Existing Proposed Existing Proposed CRA * N.A. SB-6 N.A. SBTL-6 Pricing* N.A. 1.50% over SBAR, i.e. N.A. 2.00% over SBAR, i.e. 13.75% at present. 14.25% at Present. *CRA model Based on projected financial as on 31.03.10, is SB-6(mapped to old SB-3). r) Pricing by other major banks/ FIs and justification of the proposed pricing: N.A. s) Compliance of the project with environmental/ social/ statutory requirements: AWPL has applied to Gujarat pollution control Board for pollution control clearance, copy of application has been obtained. AWPL has got its registration in DIC for SSI unit, R.No- “24-015-12-00067” dated: 29.09.2008. AWPL has registered under Central Sales Tax, No.-“24650400659” dated: 17.06.2008. AWPL has registered under Gujarat Value Added Tax Act, 2003, No.-“24150400659” dated: 17.06.2008. AWPL is complying all norm and statutory. t) Environment and Sustainability implications: AWPL complies environmental and sustainability implications. u) Overall viability and acceptability of the proposal:

The Credit rating of AWPL is a SB/SBTL-6 and the promoters have good experience in the line of activity. The average Gross DSCR of 1.77 and average security margin of 62.30% is considered acceptable. The turnover has been estimated are on conservative basis. Considering the various financial parameters viz. commercial analysis, Risk analysis, Sensitivity Analysis, and various financial ratios, the proposal is considered as viable and acceptable.

****************

SECTION-C Assessment of WC facilities:

Page 25 of 37 SBI/ UMRETH BR. / AWPL

Circle: Ahmedabad Branch: Umreth Company: M/s Alpine Woodtech Pvt. Ltd.

ASSESSMENT OF WC FACILITIES (CC-Rs.75.00lacs):

(a) Inventory & Receivable levels: Levels / (Months)

Inventory/Payments Actual Estimated Projected Projected Year As on 31.03. 2008 2009 2010 2011 Raw material: -Imported N.A. -- -- -Domestic N.A. 4.50 2.00 2.00 SIP: N.A. 0.50 0.35 0.35 FG: N.A. 1.50 0.50 0.50 Receivables: N.A. 1.50 0.50 0.75 S Creditors: - Import N.A. ------Domestic N.A. Nil 0.35 0.35

Comments:

The raw materials for seasoning wood are raw wood and chemicals. The major suppliers of raw wood are M/s Galaxy Traders (Nadiad), M/s Satguru Timber Mart (Nadiad), M/s Shivdas Traders (Nadiad), M/s Jalaram Timber (Surat), M/s Laxmi Vijay Industry (Umreth), M/s Gajanan Timber Mart (Ahmedabad), and M/s Savitri Vijay Sawmill (Nadiad), and Chemicals from M/s Jim Agro Services (Ahmedabad). AWPL has to maintain at least two months raw material at any point of time for to meet orders without any interruption.

SIP has been reckoned at 7 to 9 days for chemical treatment & seasoning of raw wood.

Finished goods stocking of 15 days presumed for assessing limits is reasonable.

AWPL would extend 15-20 days credit to its customers, which is normal in any trade generally, and more for a new unit to establish long term relations and regular dealing with the customers.

Considering the nature of business, the inventory and receivable levels are considered acceptable.

AWPL has requested us for sanction of cash credit limit of Rs.75.00lacs for meeting their working capital requirement. Same has been found reasonable and recommended for sanction.

(b) Assessed Bank Finance: (Rs. in Lacs)

Page 26 of 37 SBI/ UMRETH BR. / AWPL

Actual Estimated Projected Projected Year As on 31.03. 2008 2009 2010 2011 TCA N.A. 84.84 134.61 144.64 OCL N.A. 12.13 43.32 39.67 WC Gap N.A. 72.71 91.29 104.97 NWC N.A. -2.29 16.29 29.97 BF N.A. 75.00 75.00 75.00 NWC/TCA(%) N.A. -2.70 12.10 20.72 BF/TCA(%) N.A. 88.40 55.72 51.85 SC/ TCA N.A. 0.00 10.21 8.02 OCL/TCA(%) N.A. 14.30 21.97 19.41

Comments: AWPL is a new firm starting commercial production from Feb.2009, and 2009-10 will be the first full year of operation in AWPL. Working capital limit has been assessed for the projected F. Y. 2009-10. The working capital gap is expected to go up in subsequent years with the increase in the level of activity. The NWC to TCA, projected will improve in the ensuing years with plough back of profits in the business.

(c) Working as per Nayak Committee: (Rs. in lacs) Particulars 2009-10 2010-11 Proj. Proj. Sales Turnover (Gross) 540.00 540.00 Working Capital Required (25% of the projected turnover) 135.00 135.00 Less: Working Capital Margin (5% of the projected turnover) 27.00 27.00 Working Capital limit 108.00 108.00 Working Capital Limit recommended* 75.00 75.00 *AWPL has requested working limit of Rs.75.00lacs and the same has been assessed and recommended. Branch has to obtain a letter-confirming adequacy of limits.

(d) LC limit: Not applicable

(e) BG limit: Not applicable

(f) Efficiency Ratio:

As on 31.03. 2010 2011 Particulars Projected Projected Net Sales / Total Tangible Assets (Times) 1.83 1.87 PBT / Total Tangible Assets (%) 6.30 8.17 Operating cost to Sales (%) 12.31 12.31 Bank Finance to Current Assets (%) 55.72 51.85 (Inventory + Receivables) to Net Sales (Days) 88 92

Comments: Inventory + Receivables to Net sales worked out to 88 days and 92 days for the F. Y. 2009-10 and 2010-11 respectively according to the production cycle and level of activity of AWPL.

(g) Fund Flow Analysis:

Page 27 of 37 SBI/ UMRETH BR. / AWPL

For the year 31.03.2009 31.03.2010 31.03.2011 Long Term Sources 186.36 32.58 33.68 Long Term Uses 188.65 14.00 20.00 Long term Surplus/ deficit -2.29 18.58 13.68

Comments: Part of LTS from term liabilities repayable in next 12 months has been shown as Current Liability. Therefore deficit in 2008-09 has resulted. h) Brief comments on the assessment of above limits:

The working capital limit of Rs.75.00lacs is recommended and justified based on acceptable levels of current assets and current liabilities. These are considered reasonable and realistic keeping in view the projected level of production and sales.

****************

SECTION D Terms & Conditions:

Page 28 of 37 SBI/ UMRETH BR. / AWPL

Circle: Ahmedabad Branch: Umreth Company: M/s Alpine Woodtech Pvt. Ltd.

Page 29 of 37 SBI/ UMRETH BR. / AWPL

@ From title clearance report it is observed that the directors have purchased land on 04.09.2008 after the land was converted into NA land on 14.08.2008 at a price of Rs.23.12 Lacs. The panel valuers have assessed the market value as Rs.50.24lacsin December and January 2009. BM and FO should visit the site and ensure that the value indicated in the valuation reports is reasonable and accordingly a certificate of having visited the unit and satisfied with the value should be added at the end of valuation certificates. # No loan / OD should be sanctioned against the security. Lien should be properly fed in the system as Rs.25Lacs is BASEL security. Period of deposit should be 84 months to avoid mismatch between loan and security maturities.

B. ECGC COVER: Not applicable.

C. MARGINS AND BASIS OF VALUATION:

Facility Existing Proposed Basis of valuation (%) (%) (whichever is lower) Raw Material NIL 25% Cost price/Market value/controlled price. Stock in process NIL 25% Cost of production. Finished Goods NIL 25% Cost of sales/Market price/controlled price. Receivables NIL 50% At Invoice Value. (cover period 60 days) Term Loan NIL 25.97% Actual Cost incurred/ Bill/ Receipts, etc.

D. RATE OF INTEREST:

Facility Working Capital Term Loans Existing Proposed Existing Proposed CRA * N.A. SB-6 N.A. SBTL-6 Pricing N.A. 1.50% over SBAR, i.e. N.A. 2.00% over SBAR, i.e. 13.75% at present. 14.25% at Present. *CRA model Based on projected financial as on 31.03.10 is SB-6(mapped to old SB-3).

[SBAR is 12.25% at present, effective from 01.01.2009.]

E. Insurance:

(i) Stocks to be comprehensively insured for full market value against fire, earth quake, flood along with usual SRCC clause. The policy should be in the name of the company and the Bank. Insurance to be arranged through The New India Assurance Company with whom we have tie-up arrangement.

(ii)Plant & Machinery, Building and other Collateral securities will also be comprehensively insured for full market value in the name of the firm and the Bank.Our charge should be recorded in the books of the insurance company.

F. Inspection: Monthly inspection by Field Officer/ Branch Manager.

Page 30 of 37 SBI/ UMRETH BR. / AWPL

G. REPAYMENT SCHEDULE:

Limit Repayment Schedule CASH CREDIT 75.00 Payable on demand. TERM LOAN 120.00 72 monthly installments, 71 installments of Rs.166700/- each and 72nd of Rs.164300/-, commencing from the month September 2009 or 6 month after first disbursement whichever earlier. Interest is to be serviced by the AWPL as and when debited to the account.

F. OTHER COVENANTS:

Commission As per extant instructions. Processing CASH CREDIT: Rs.500/- per lac, Charges/Upfront fees TERM LOAN: 1.25% of the loan amount. Periodicity of Monthly statement to be submitted latest by the 10th of the following Stock/ book month failing which penal interest @ 1% would be charged on the debts statements entire outstanding during the month. Documentation SME-1, SME-2, SME-3, SME-5 and SME-6. Resolution for exercising borrowing power must contain specific resolution 1) to borrow 2) to create security 3) the nature and extent of loan required 4) to execute loan documents 5) the names of directors authorized to execute documents, balance confirmation letters, revival letters 6) names of directors authorized to operate the accounts 7) the names of the directors who are authorized to create mortgage and to deposit the title deeds and 8) authorized directors to affix common seal on documents executed on behalf of the company. Drawdown The loan has to be fully availed before 31st August2009. Delayed period of the draw down beyond 2 months will attract commitment charges as per term loan revised instructions. Commitment CASH CREDIT: 0.25% p.a. on the entire unutilized portion if average charges utilization is 60% or less. TERM LOAN: 1.20% for delayed draw down beyond 2 month.

G. Financial covenants:

The borrower shall pay penal interest at 1 % p.a. on the total outstanding in term loan accounts in the event of any one or more of the following defaults during the currency of the loan for the relevant period as mentioned there against :-

(a) Any adverse deviation by more than 20 % from the levels stipulated as below in respect of any two of the following items for a minimum period of one year or till restoration of the levels, whichever is higher: Current Ratio - As per CMA (2009-10 =1.14) ii) TOL/TNW ratio - As per CMA (2009-10 =3.75) iii) Interest coverage ratio (PBDIT/Interest) - As per CMA (2008-09 =2.50)

(b) Default in payment of interest or installment to the Bank for the period of such default.

Page 31 of 37 SBI/ UMRETH BR. / AWPL

(c) Default in payment of interest and/or installments on due dates to any other lender for the period of such default. J. Disbursement:

Working Capital: With gradual built up of stocks and receivables commensurate with the level of activity.

Term Loan: would be disbursed on request of payment by AWPL, against the proposed item mention in Section-B.

K. Period of sanction:

WC: 12 months but payable on demand.

TL: 78 months (inclusive of 6 month moratorium period from the first disbursement).

L. Other Critical covenants/ special conditions:

1 Branch to explore business opportunity of P-segment loan and deposits to group of AWPL. 2 All transactions should be routed through their account and accounts with other banks/branches should not be opened without controller’s permission. Existing accounts with other branches and banks, if any, should be closed before disbursement of loan. 3 Unconditional Cancellability Clause in the loan documents to be incorporated. 4 Drawing will be permitted against book debt of the company outstanding up-to 60 days. 5 Asset & liability Statement of Guarantor Shri Mukeshbhai A. Patel to be notarized. 6 The promoters should replenish the shortfall if any in the cash accrual estimated for FY 09-10. 7 Disbursal to be made only after documentation formalities are completed as per extant instructions of the Bank and after creation of registered mortgage. 8 Branch to ensure that proposed deposit of Rs.25.00lacs in the form of TDR to be kept before disbarment of loan. 9 All the original Bills & invoices to be verified before disbursement of term loan by the Branch Manager and kept on record. 1 BM should advise date of disbursement and confirm that all stipulations mentioned in 0 the sanction and bank’s guidelines governing advances are meticulously followed. 1 Chartered Engineer certificate for reasonableness of expenses related to building construction to be obtained at the time of each disbursal. Chartered Accountants 1 certificate confirming incurrence of capital expenditure to be held on record. 1 Plans for building constructions approved by the local authority as well as Factory inspectorate must be held on record. 2 1 All licenses (SSI Registration, CST, VAT certificate, pollution control board certificate/ permission, N.A. permission of land) to be kept on record. 3 1 Undertaking from the company that they would maintain unsecured loan during the currency of bank loan to be obtained. 4

Page 32 of 37 SBI/ UMRETH BR. / AWPL

1 Bank loan portion along with borrower’s margin should be directly disbursed to suppliers. 5 1 BM should ensure to obtain borrower’s consent to all the covenants prescribed as per circular no. ”e-circular- CPP/RSN/CIR/50 dt. 26.09.2006 (e- circular Sl. no. 351/2006-07 6 dt.29.09.06). 1 Drawings in the account should be monitored closely especially those with the unit’s associate M/s Laxmi Assciates, Jodhpur. 7 1 In the valuation report submitted by Hitesh Shah & Associates it was mentioned under para 10 that as per NA order Land/NA/SR/152/2007-08 dt.14.08 2008 the permission 8 appears to have been given for commercial stock shed and store godown for agriculture use. In one of the correspondences with the unit, Gajjar Techno-Economic Consultants Pvt Ltd mentioned that the NA permission has been given for commercial activities and not for industrial activities. Branch should thoroughly peruse the NA order and satisfy and ensure, before releasing disbursement, that usage of land is not contravening the NA order. 1 Branch Manager should ensure that conditions stipulated in NA order issued by the Collecotor, Anand District are followed by the AWPL in to as any deviation from the 9 same would affect functioning of AWPL. 2 Obtain opinion reports on suppliers of plant & machinery from their bankers 0 2 Gajjar Techno-Economic Consultants Pvt Ltd in their e-mail dt.04/02/2009 have sought certain information / clarifications from the company for providing TEV report. Branch 1 Manager has to go through them and satisfy by interacting and verifying the company’s books/invoices/licences/plans/approvals. In case of necessity written commitments from company to comply with the observations to be obtained. 2 Branch Manager should ensure that company arranges registration of our charge on the assets of the company with the Registrar of Companies with in 30 days from the 2 date of documentation. 2 Any change in the management of the company need to be informed to the Bank and consent obtained from the Bank before affecting change. 3

*********************

ANNEXURE-I

Associate concerns and their Borrowing Arrangements

Directors of AWPL are also partners of Shri Lakshmi Associte. The firm is maintaining their current account and having credit facility in other banks details of which are as under:

Page 33 of 37 SBI/ UMRETH BR. / AWPL

S. Name of Address Name of partners Borrowing Means No. Associate of Assoc. Arrangement/ As per concern Concern Banking with B/S Dt. (Year of 31.03.2008 Establishment) 1 M/s Shri Laxmi G-372, 4th i) Shri Rakesh D. Having Cash Rs.36.65 Associate Phase, Saini Credit limit of Lacs. (2002) Boranada, ii) Shri Sanjay V. Rs.135.00lacs, Jodhapur Rana with ICICI Bank, (Rajsthan) At Jodhapur

 Deepak Gehlot (presently branch manager of Changa branch) who visited the above unit at Jodhpur on 27.01.2009 has commented the following in his report dt 30.01.2009. 1. He met the bankers of the unit and the account with them is conducted satisfactorily. 2. They have not released full limits sanctioned as the unit has yet to comply with certain formalities as to creation of mortgage. 3. There has been excess stocking of finished goods to the extent of Rs.75- 80Lacs which is mainly due to stocking of finished goods converted from Mango and Seasom wood procured in bulk in peak season.  It is learnt that Dr.Harish Patel, OMR, Umreth branch has also visited the above unit and his observations, if any, submitted to the Branch Manager are to be scrutinized by Branch Manager.  Confidential opinion reports on the above unit from their present and past bankers are sought but ICICI Bank has furnished which is found satisfactory. UCO bank has given no dues certificate only.  When we spoke over phone with Sh R B Meena, Branch Manager, UCO Bank Jodhpur during fourth week of January he told the unit was initially enjoying limits with them. CC: Rs.44.00lacs & TL: Rs.18.00lacs. The Unit has switched over their connection to ICICI Bank, Jodhpur consequent upon UCO Bank’s denial to enhance limits as requested by the unit for lack of sufficient collateral security. They have paid their Housing Loans also totally. We reminded him again to furnish their opinion on IBA format.

ANNEXURE-II

A. List of Plant & Machinery: (Rs.in lacs) S. Description Name of Supplier Qty. Total No. Cost 1 Thermic Fluid Heater(6 lacs kg/ Hr )Rs.5.50lacs

Page 34 of 37 SBI/ UMRETH BR. / AWPL

Chimney- Rs.2.00lacs Furnace with refectory- Rs.1.50lacs M/s Sumeru -- 10.20 M.D.C.- Rs.0.70lacs Enterprises, Jodhpur. Erection and Commisioning- Rs.0.50lacs (Coil with fluid cell + Fan + Pump + Chimney total system will 15’L x 5’W x 6’H. Power for Pump - 7.1/2 HP + ID Fan – 5HP = 12.1/2HP.) 2 Seasoning chamber: The Capacity of the unit is based on Capacity of Seasoning Chambers. M/s Sumeru Internal Size 19,1/2 L x 23’ x 17’ H, Capacity – Enterprises, Jodhpur. 4 20.00 1600 Cubic Ft. Period - 8 to 10 Days continuous. Process. 9 HP /Chamber (3HP x 3 PCS) for running Fan for air circulation 36 HP (Rate per klin- 0.50lacs) 3 Trolley Track Transfer system: a. Trolley- 500kg.@80/- = Rs.40000 x 32 No. (9 x 9 ft.) Rs.12.80lacs M/s Sumeru -- 20.30 b. Track- 10 Tone@ Rs.55per kg. 1400 Running Enterprises, Jodhpur. Ft./ 7 Feet (50pound) Rs.5.50lacs c. Installation Commission Rs.2.00lacs 4 Chemical treatment plant (Tank) Dimension: 15’L X 5’W X 5’H (Round Shape) Capacity: 175 Cubic ft per cycle of 4 Hours i.e.6 M/s Sumeru Cycle / day Enterprises, Jodhpur. 2 8.50 Power required: 5 HP per Machinery.i.e.10HP Function: This will treat wood in chemicals, which will ensure disinfectants. [Tank(2)- 4 Tonne@ 85kg, Compressor with Moter(2), Pipe Line with Valve & Fitting(2), Earection & Fitting(2)] 5 Sal Wood Crosser: (1” X 1.5”X 3ft to up) M/s Jain Timber, Lati -- 6.48 72 Ton @ 9000 = Rs.6.48lacs. Bazar, Joravarnagar. Total  65.48

B. Electrification:

S. Description Name of Supplier Qty. Total No. Cost 1 Various Electric Materials as per Quotation. (Dt 09.09.08)- Rs.6.89lacs M/s J.V. Thakor & Co. -- 7.61

Page 35 of 37 SBI/ UMRETH BR. / AWPL

Plus Labour Charges for Electric work Extra- (approx.) Rs.0.72lacs 2 60HP Power Connection MGVCL -- 5.14 Total  12.75

C. Furniture & Fixtures: Estimated cost of Rs.1.50lacs Testing Equipment: Estimated cost of Rs.1.00lacs Misc. Fixed Assets : Estimate cost of Rs.1.00lacs Preliminary & Preoperative Exp: Estimated cost of Rs.3.00lacs

(Bills and receipts would be submitted at the time of cost incurred against Furniture & Fixtures, Testing Equipment, Misc. Fixed Assets Preliminary & Preoperative Exp.)

D. Building Construction & Civil work (Estimate):

1. Proposed Seasoning Chamber: Rs.11.53lacs 2. Open Shed: Rs.40.17lacs 3. Elec. & Guard Room: Rs.2.33lacs 4. Office & Staff Room: Rs.4.47lacs 5. Chemical U/G Tank: Rs.4.00lacs 6. Parking: Rs.0.48lacs 7. Compound Wall: Rs.14.39lacs

Total cost  Rs.77.37lacs

ANNEXURE-III

TEV Study Report:

Page 36 of 37 SBI/ UMRETH BR. / AWPL

Product and Market Feasibility Study on Project of Alpine Woodtech Pvt. Ltd. has been obtained from the Bank’s approved Techno- Economic Consultant “Gajjar Techno-Economic Consultants Pvt. Ltd.”

As per the conclusion of Report:

• Alpine has the already established market contact and net-work.

• Comparatively better quality product proposition, through establishing the project at the door-step of raw material supplies.

• The automated and sophisticated, to the extant possible, manufacturing process including material handling for better quality out put with less wastage.

• Having multiple utilities and application of the products in small segment as well in bulk, domestic and industrial, locally as well in foreign countries.

• Already demanded/ expressed volume of products, higher than the projected level of production, i.e. almost 2-3 times than the projected production.

• Diversifying the existing operations of Jodhpur Unit for Mango and Babul Wood processing to the New Unit in Gujarat, and accordingly the existing orders could be fully executed from the Gujarat Unit.

• The Comparable sales price projections to the local market also. The projected sales price is similar or lower by almost 10% of the prevailing level of sales price in the local market of Gujarat. Through comparatively better price, in the initial stages of Gujarat Unit, the Management’s contention is to grab the new market, especially in Central and South India, over and above their existing market and demand in North India as well the Indirect Export.

As per their opinion that, the product and production process is feasible and the projected sales is achievable.

Page 37 of 37