final proposal alpine 13.02

8/6/2019 FINAL Proposal Alpine 13.02

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SBI/ UMRETH BR. / AWPL

SECTION-AEXECUTIVE SUMMARY

CIRCLE/SBU: AHMEDABAD BRANCH: UMRETH

COMPANY: ALPINE WOODTECH PVT. LTD. (AWPL)

Section Contents Pages

1 Borrower profilea. Name , Address, Manufacturing activity/Locations, Date of

incorporation, Banking arrangement etc ofb. Brief Background(Company/ Group/ Promoters/ Management

including shareholding pattern )c. Brief write up on Industry/Sector and Companys standingd. RMD Advisory/qualitative approach/Quantitative approach/Commentse. Indebtedness/Exposure & capital charge

2

2-4

5-777

2 Present Proposala. Proposal : For sanction/approval/confirmation

b. Credit limits (existing and proposed)c. Sharing pattern

8

88

3 Performance Detailsa. Performance and Financial indicatorsb. Industry exposure as onc. Movement in TNWd. Synopsis of balance sheet

991010

4 Risk assessment :a. Credit Ratingb. Risk and mitigating factorsc. Warning signals/Major irregularities in Inspection Audit/Credit

Audit/Other Reports

d. Securitye. Changes in Security if any, justification

1111

12

1213

5 Pricinga. Conduct of accountb. Income analysisc. Other Banks/ FIs pricingd. Proposed pricing

14141415

6 Loan Policy : Deviations & Compliance:a. Whether names of promoters, directors, company, group concern

figure in defaulters/willful defaulters listb. Deviation in Loan policyc. Deviation in Take over norms and comments

d. Directors of Borrowers company: status of relation withBoard/ Sr. Official of the bank etc

161616

17

7 a. Future plans & Business Potential including cross selling/retailmarketing

b. Environmental and sustainability implicationsc. Earlier terms of Sanction: Compliance statusd. Statutory dues /Contingent Liabilities

18181818

8 a. Justification for the Proposal & b. Recommendations : 19

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SECTION: 1

(Rs. in lacs)

Circle/SBU: Ahmedabad Branch : Umreth

Borrowers 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: PrivateLimited Company

IRAC Status----New Connection----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 normscomplied with: Not Applicable.

b) Brief Background:

M/s Alpine Woodtech Pvt. Ltd. (AWPL): AWPL incorporated on 05th May 2008 hasbeen registered with ROC, Jaipur, vide registration no. is U20299RJ2008PTC026489 of2008-09. 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 aview to explore new markets of Mumbai and southern part of India and also for takingraw material location advantage which helps them in reduction of transportation cost.AWPL has been registered with DIC, Anand as manufacturing Industry on 29.09.2008and has been allotted SME No. 24-015-12-0067 on 29.09.2008. The company hasalso got its name registered with Central Sales Tax No.- 24650400659 and underGujarat Value Added Tax Act, 2003 No.-24150400659 dated: 11.09.2008. AWPLhas also submitted an application to Gujarat Pollution Control Board (GPCB) for

obtaining NOC, which should be submitted by them immediately after obtaining thesame.

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

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

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Directors(Age)

HoldingPattern

(%)

details

ShriRakeshkumarD. Saini (32)

50% M. Sc. in Wood Science &Technology from Forest ResearchInstitute, Dehardhun (1998-2000).

Worked as a wood technologist in

Suncity Art Export, Jodhpur for a periodof 2 years.

Has about 6 years of experience inthis line of activity, as a partner in M/sShri Laxmi Associates since 2002.

Belongs to U.P. : S/o DharampalSaini, H. No.-438, Nai Bastti, Bhudhana,Mujjafar Nagar, Uttar Pradesh.

Present Address: 138, AshapurnaNagar Opp. D.P.S., Pal Road, Jodhpur.

Overall administration,management, publicrelation, purchase ofraw material, sales,

finance and technicalsupport in production.

ShriSanjaykumarV. Rana (33)

50% M. Sc. in Wood Science &Technology from Forest ResearchInstitute, Dehardhun (1998-2000).

Worked as a wood technologist(quality control) in Saraswati Art PalacePvt. Ltd., Jodhpur for a period of 2 years.

Has experience of about 6 years inthis line of activity, as a partner in M/sShri 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, AshapurnaNagar Opp. D.P.S., Pal Road, Jodhpur.

Finance, sales &marketing, overallmanagement of thefirm and technicalsupport in production.

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

Product:The proposed unit is set up for manufacturing seasoned wood, which involves twoindependent processes vide (1) Chemical treatment for protecting from pest and (2)Seasoning (de-moisturisation). The wood treated as above would be highly durable andhas wide application in furniture making, interior, infrastructure and handicrafts

industries. Gajjar Techno-Economic Consultants Pvt Ltd have confirmed that theproduct and production process is feasible.

Capacity and Capacity utilization:

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The capacity of the project is based on the capacity of chemical treatment plant andseasoning plant. The capacities of both the plants are furnished in the table given below

CHEMICALTREATMENT

SEASONINGACTIVITY

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

(24 hours a day)

236800 cu ft

Capacity of Chemical treatment plant 320000 cu ft

(8 hours a day)

---

Capacity of chemical treatment plant and seasoning chamber are synchronized andcapacity of seasoning activity being least capacity of the unit is presumedconservatively as 240000 cu ft. per annum. The economics has been worked outpresuming an operating capacity of 180000 cu ft per annum. Gajjar Techno-EconomicConsultants Pvt Ltd, Baroda who was entrusted with feasibility study has opined that thecapacity 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 BECLARIFIED BY THE UNIT.

Product USP/ Marketing:

The market for processed wood i.e. chemically treated and seasonal wood is everincreasing since such product enhances the life of the wood by 4 to 5 times than itsnormal life. Because insects do not survive after chemicals treatment and also due toseasoning of wood its moisture gets evaporated which ensure longevity of the furnituremade 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 sellingof the product.

The promoters are basically technocrats backed by experience in the similaractivity.

Their associate concern M/s Laxmi Associates located at Jodhpur needs about50000 cu ft / annum for their consumption.

Focused attention by one of the promoters Sh Sanjaykumar V Rana to sales andmarketing 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.

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The quality of the product is the USP because the product is far superior tounseasoned 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 existingconnections to the tune of about 35000 40000 cu ft per month.

Gajjar Techno-Economic Consultants Pvt Ltd, Baroda who have assessed marketfeasibility have opined that the product is having wide applicability and the unit couldachieve projected sales.

c) Brief write-up on industry/sector and companys standing (domestic/international) in the industry including market share, future growth strategies,comments on recent news reports, etc.

Forests cover roughly 20% of Indias total geographical area and forestry is thesecond biggest land-use in India after agriculture

Estimates suggest that the demand for timber in India is likely to triple almost from58 million cubic meters in 2005 to 153 million cubic meters in 2020, and that thesupply 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, Indias 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 affectIndias 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 oftimber 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 (millioncubic metre) % Change

2000 58 -2005 74 127.592010 95 128.382015 123 129.472020 153 124.39

Wood based industry in India is an age old industry. 1) Sawn wood 2) CompositeWood 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 inadequateavailability coupled with high prices. No integrated all India market for sawn timber.Sawn wood is mainly used for construction ( mainly housing) Sleepers, PackingFurniture, Vehicle Industry, Ship Building, Mining and Miscellaneous Uses.

The composite panel industry comprises of plywood, veneer, particle board, MediumDensity Fibre (MDF) Board. After cement and steel , it is the third most importantcontributor to the housing sector. Composite Panel industry depends on plantationsand imports for raw material supply

India vis--vis China: China and India had similar approaches as regard to hefty

duties and taxes. China - introduced new policies such as 1) Abolishing import tariffs2) Reduced VAT 3) Reform of land ownership rights etc. 4) Development of industry

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using integrated policy 5) Discounted loans 6) Capital subsidies for establishing 5.8million hectares of plantations. By 2004 China exports grew by 107% from 1997 to2004. 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 unitsmeet the needs of Rajasthan, Haryana, Punjab and Uttar Pradesh. Timber Zones in

Gujarat: The Gujarat State Government has declared 4 blocks in KUTCH as SpecialTimber Zones. Nearly 200 plywood units and 500 saw mills are expected to come upin the special timber zones. BHUJ, ANJAR,GANDHIDHAM and BHACHAU

Kandla is the timber hub of the country - handles 55 per cent of the total nationaltimber import. Imported timber consists of Burma teak, Gurjan wood, Keriung wood,Malaysian Saal wood, Meranti wood, Kapur wood and others. Kandla has potential toemerge 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 increasingproportionately to our growing economy. Need of the hour is to initiate investmentby larger firms and bring in pro-active measures directed at revival and growth.

Wood based industries can be the most important contributors to the economicrevolution in India. The wood based industry being an agro-forestry based industry is

deprived from any central government policy directives, incentives and funding topromote it It is essential to put in place aggressive development policies so thatIndia too can set go-getting expansion targets for its wood based industries.

An international partnership between WWF and the forest products industry - theGlobal Forest & Trade Network (GFTN) - has launched a new national arm, the GlobalForest & Trade Network-India (GFTN-India).

GFTN-India will encourage trade links between companies which are committed toachieving responsible forestry, and will aim to create market conditions that supportforest conservation whilst providing economic and social benefits for the businessesand people that depend upon them. WWF-India will work closely with Government ofIndia to promote sustainable management of forests in line with GFTN goals andaims to promote the practices to achieve this goal.

The new GFTN-India is an opportunity to protect Indias economy and its forests byproviding chance to encourage forest certification and responsible forestry andworking with the Indian government and with industry to develop crediblecertification for Indias forests.

WWFs Global Forest & Trade Network and the new GFTN-India can help to addressthese issues without sacrificing economic growth in India. By setting up businesssectors and establishing links between buyers and suppliers, the GFTN is able todrive the market for certified wood which helps to protect forests and those who relyon them for food and income. GFTN-India can help forest owners - including theIndian government who own 90% of Indias forests - to move towards forestcertification, to match buyers to suppliers nationally and globally,

The GFTN-India is an opportunity for industry and conservationists to work togetherto 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 andconsumption 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 worlds forests.

Recent Wood (Furniture) Industry News:Housing slowdown hits furniture sales

7 Jan 2009, 0013 hrs IST, Meghna Maiti, ET Bureau

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MUMBAI: The deferment in home purchases have not only affected realty companies, but also had abearing 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 ofHomeTown, a Future Group subsidiary, said.

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

The market for home furniture sales consists of first home buyers and replacements. While first homebuyers may downgrade to a lesser value product owing to the economic downturn, this demand cannotdry up unlike replacement buys, which can be postponed indefinitely, said Purnendu Kumar, retailconsultancy firm Technopaks associate vice-president. Sluggish sales have forced companies to go slowon their store rollout plans as well. A 15-20% drop in sales cannot be ruled out. We have becomecautious 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 showroomsthat retail furniture and furnishings.

Technopak estimates the turnover of the urban home furnishings market to be Rs 9,300 crore andexpects 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 Noneii) Qualitative approach NAiii) Quantitative approach NAiv) 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

conversionfactor

Risk

weight

Fund based -- 195.00 -- 195.00 195.00 100%

Non fund based -- -- -- -- -- --TOTAL(Indebtedness)

-- 195.00 -- 195.00 195.00 100%

Investment -- -- -- -- -- --

Leasing -- -- -- -- -- --TOTAL(Exposure)

-- 195.00 -- 195.00 195.00 100%

Capital charge for Total exposure:(net of liquid collateral)

Rs.18.70Lacs Rs.18.70Lacs

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SECTION: 2PRESENT 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 BasedLimit

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

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a.1 PERFORMANCE AND FINANCIAL INDICATORS:(Rs. in lacs)

As on 31.03 2009 2010 2011 2012 2013 2014 2015 2016Particulars Esti. Proj. Proj. Proj. Proj. Proj. Proj. Proj.Installed Cap.Qty.

(Qty. in cubic ft.)

236800 236800 236800 236800 236800 236800 236800 236800

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 0.50TOL/ Quasiequity

2.74 2.29 1.71 1.32 1.00 0.80 0.61 0.50

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 1.78Current Ratio(Excl. TLinstallments)

1.12 1.37 1.53 1.57 1.63 1.70 1.59 1.78

Comment: AWPL will start its commercial production from Feb.2009. F. Y. 2009-10 willbe 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 of180000 cu ft wood could be met by the unit and the prices of raw material and finishedproducts presumed are conservative and reasonably realizable.

Quarterly / Yearly Performance:(Rs. in lacs)

Performance for the quarterended December (Total)

30.09.2007 30.09.2008

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 Banks total fund basedexposure

Data Not Available

(RMD at Central Office has not suggested any exposure setting norms for this industry).

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

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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

(31.03.2008)

Last year

(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 groupcompanies

N.A. N.A.

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

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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 45/100CRISIL NA NA NA NA NA

ICRA NA NA NA NA NA

Others NA NA NA NA NA

Existing Proposed

CRA based on balance Sheet as on NA 31.03.2010*

Validated on NA NA

*CRA based on Projected Balance Sheet as on 31.03.2010, the first full year ofoperation 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 companyachievement of the projection turnoverappears to be one of the risk factors.

Promoters are having technical background aswell as vast experience in the activity. Woodbased industry has lot of potential and the unithas location advantage by way of easy accessto raw material market. The unit is promoted atUmreth basically to expand their markethorizons to Mumbai and Southern India. Withassured quality and competitive rates the unitcould prosper well and achieve their goals.

Directors of AWPL are presentlyresiding at Jodhpur and would not beavailable all the time at Umreth.

Looking at the risk we have obtained thirdparty guarantee of Shri Mukeshbhai A. Patelwho is a local timber merchant and havingcurrent account with our Umreth Branch.

Government regulations on movementof timber are so stringent sometimesthe Forest Department may confiscatethe stocks.

Promoters are technocrats knowing very wellthe ins and outs of industry. Branchfunctionaries, ensuring that stocks are backedby proper invoices, could mitigate the risk.

Chances of diversion through inter firmtransactions with their associate unitposes risk.

Branch by carefully monitoring transactionsrouted through their CC account especiallythose representing transactions with associateunit could ensure end use.

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Facility rating

Facilities Existing Proposed

CC NA NA

TL NA NA

LC/BG NA NA


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d. SECURITY:(Rs. in Lacs)

Details Value andbasis of

valuation

Date of valuation/opinion report

PrimarySecurity:

CASH CREDIT: Hypothecation ofentire current assets such as stocks &

receivables of AWPL.

N.A. N.A.

TERM LOAN: Mortgage of proposedfactory building constructed and to beconstructed with bank loan on land R.S.No-1566/2 and Hypothecation of plantand machinery purchased and to bepurchased from Term Loan.

162.10Based on Cost ofproject/ Estimates ofConstruction &Quotation of plant &machinery.

CollateralSecurity:

Registered mortgage of 11164 sq. mtsfactory land * R. S. No.- 1566/2,Hamidpura, Navapura Road, At-Umreth, Ta.- Umreth, Dist.- Anand

(Gujarat). Standing in the name of thedirectors of Alpine Woodtech Pvt. Ltd.Shri Rakesh kumar D. Saini and ShriSanjay kumar V. Rana.

50.24 @

(M.V.)

Based on valuationreports:

1st on 30.12.08 by bank empanelled valer Shri M. J. Bhatt Market ValueRs.50.24Lacs and Realisable Value Rs.40.19Lacs, 2nd Valuation on16.01.2009, by bank empanelled valuer Hitesh Shah & Associate MVRs.50.24Lacs and Realisable Value Rs.45.22Lacs Distress ValueRs.37.68Lacs.

Lien over Bank deposits UmrethBranch. Deposit should be for 84

months

25.00 #

Sub Total 75.24Guarantee: Net Worth Opinion report

Rakeshkumar D. Saini (Director) 25.00 Net worth Compiledon 16.01.2009.Sanjaykumar V. Rana (Director) 28.00

Mukeshbhai A. Patel (Third Party ) 40.00

Sub Total 93.00Total 330.34

Collateralcoverage%

For SBI 38.58%

For others N.A

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c. Warning signals / Major irregularities in Inspection report / Credit Audit:/Otherreports: ----------------Not applicable, new connection-----------------------

Report Warning Signal / Major irregularities

Comments

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


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* Title Clearance report obtained from the panel advocate dt.7/1/2009 certifies that boththe directors of Alpine Woodtech P Ltd have clear and marketable title and they couldcreate EM (Registered). Branch to seek clarification from advocate whether thecompany has to create EM or the directors in their personal capacity. If it is directors intheir individual capacity then a lease deed executed by the directors in favour of thecompany 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 on04.09.2008 after the land was converted into NA land on 14.08.2008 at a price ofRs.23.12 Lacs. The panel valuers have assessed the market value as Rs.50.24lacsinDecember and January 2009. BM and FO should visit the site and ensure that the valueindicated in the valuation reports is reasonable and accordingly a certificate of havingvisited the unit and satisfied with the value should be added at the end of valuationcertificates.# No loan / OD should be sanctioned against the security. Lien should be properly fed inthe system as Rs.25Lacs is BASEL security. Period of deposit should be 84 months toavoid mismatch between loan and security maturities.

e. Changes in security if any, Justification: N.A.

SECTION-5

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PRICING:

a) CONDUCT OF ACCOUNT: Not Applicable, New Connection(last year)

No. of occasions Average period forregularization

Irregularity reportlast 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( last year)

2007-08

Actuals(last year)2007-08

Estimates(current year)

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 perlatest Balance Sheet dated

SBI Share Amount and percentage

InterestOther Charges

Not Applicable, New Connection

c. Other Banks/ FIs Pricing:

Existing Proposed

Term Loan NA NA

Working Capital NA NA

d. PROPOSED PRICING:

ITEM Existing Card rate Proposed rate

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Rate

Int. on WC N.A. 1.50% Over SBAR, i.e.13.75%

1.50% Over SBAR, i.e.13.75%

Int. on TL N.A. 2.00% Over SBAR, i.e.14.25%

2.00% Over SBAR, i.e.14.25%

Processing fee N.A. Rs.500/- per lac, Rs.500/- per lac,

Commit charges N.A. CC: 0.25% p.a. on theentire unutilized portionif average utilization isless than 60%.TL: 1.20% for delayeddraw down beyond 2month.

CC: 0.25% p.a. on theentire unutilized portion ifaverage utilization is lessthan 60%.

TL: 1.20% for delayeddraw down beyond 2month.

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 6LOAN POLICY: DEVIATIONS AND COMPLIANCE:

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b. Deviations in Loan Policy:

Parameters Indicative Min/Max levelas per loan policy

Company's level as on31.03.2010

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: 15. Promoters contribution Mini. 20% 25.97%

6. Prudential norms Complied with

7. FB exposure to theindustry

N.A. N.A.

8. Substantial exposure:Borrower

7.5% (Rs.5232.20 Cr.) With in Limit

9. Substantial exposure:Group

15% (Rs.10464.39 Cr.) With in Limit

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 at2.29 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 relativeas defined in RBI Master Circular on loans and advances- Statutory and otherRestrictions) of any member of the Banks Board/Senior Officer of the Bank/Member of any other Banks Board - NA

Page 16 of 37

a. Whether names of promoters, directors, company, group concerns figure indefaulter/willful defaulters list:

RBI defaulters list dated : Mar.2008 : No

Name of the director Default in connection with:(Name of the company)

Remarks

No No No

Justification for considering continuation /enhancement in facilities)

No

Willful defaulters list dated: Mar. 2008: No

Name of the director Default in connection with:(Name of the company)

Remarks

No No No

Justification for considering continuation /enhancement in facilities)

No

ECGC caution list: NoCIBIL report dt. 13.01.2009 No


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e. Compliance with Section 20 of the Banking Regulation Act: Whether any ofthe Directors of the Bank is Director of the borrower company or is having any interestin the same: NA

SECTION-7

a. Future Plans & Business potential (over a 3-5 year horizon) includingCross selling / Retail Marketing based on Co / Groups future plans: (to be

quantified).

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Item Present Position

Whether Tied Up?(Yes / No) *

Businessestimated

(i) Corporate Salary Package No No

(ii) P Segment Loans

(a) Housing No Would try totap the P-SegmentBusiness

(b) Auto Loans No

(c) Personal Loans No

(iii) SBI Credit Card No

(iv) SBI Life No

(v) SBI Mutual Funds No

(vi) SBI Vishwayatra Foreign Travel YatraCards

No --

(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:

Page 18 of 37

Dues Level (Rs in crores) Impact on financial positionStatutorydues

NO NO

Contingentliabilities

NO NO


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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 thepromoters have adequate experience in the line of activity.

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

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

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. RaoCRE-ME Chief Manager V.U.Nagar Branch RBO, AnandDate: 13.02.2009 Date: 13.02.2009

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SECTION-BAPPRAISAL MEMORANDUM FOR TERM LOAN:Circle: AhmedabadBranch: UmrethCompany: 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 including6 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 andseasoning of various types of wood. They have acquired land and started civil works for

erecting tanks for chemical treatment, chambers for seasoning activity and otherconstructions for office building etc., They are acquiring machinery for the processingactivities. The term loan is for meeting part cost of construction of sheds and buildingsand for acquiring machinery.

c)Appraised by:Appraised by CRE-ME Vithal Udyognagar Branch as AWPL has projected a turnover ofRs.5.40Crore during 2009-10, which is its first full year of operation and the total fundbase indebtedness is Rs.195.00lacs. The turnover and profitability have been projectedconservatively at lower level than what was estimated in the project report prepared bythe Charted Accountant in consultation with one of the directors of the company. GajjarTechno-Economic Consultants P Ltd who has conducted product and market feasibilitystudy have opined that the product and production process is feasible and the projectedturnover is achievable.

d)Cost of project & means of finance:

COST OF PROJECT MEANS OF FINANCE

Item Cost Particulars Amount

Cost of Land * 26.52 Directors Capital 50.00

Building and Civil work 77.37

Plant & machineries inclusive

accessories

65.48 Unsecured Loan/ Deposits

(from friends & relatives )

26.12

Electrification 12.75 SUB TOTAL 76.12

Furniture & Fixtures 1.50

Proposed Term Loan 120.00Testing Equipments &miscellaneous Fixed Assets

2.00

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

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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%) 9.55Furniture & Fixtures, TestingEquipment, Misc. Fixed AssetsPreliminary & Preoperative Exp.

6.50 1.63 (25%) 4.87

TOTAL 162.10 42.10 (25.97%) 120.00

Overall margin will be 25.97%, and project debt / equity ratio at 1.58:1 consideredsatisfactory.

e)Remarks on cost of project: Branch has to obtain detailed civil estimates for theconstructions 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 ofconstituent elements of Plant & Machinery may be compared with the quotationssubmitted. Any aberration in costs to be accordingly factored into the proposal anddisbursement should be made accordingly.

(i) Land: AWPL has purchased N.A. land at R. S. No.1566/2, Hamidpura - NavapuraRoad, 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 disbursementBranch Manager has to 1) obtain NA permission for industrial purpose, 2) ensure

that the conditions stipulated by the District Collector, Anand in their NA orderare meticulously followed and 3) obtain permission from Factory Inspectorateapproving the building plans.

(ii)Building and civil work: AWPL has estimated cost of construction of new factorybuildings 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 alreadyincurred 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 proposedconstructions. Branch Manager should ensure that the constructions are as perapproved plans and NA order. Branch Manager has to obtain a certificate for thecost incurred so far and further disbursements should also be done based on thecompletion certificate issued by any chartered engineer on the panel. Billssubmitted by the unit should be supported by a certificate from the CharteredAccountant to the affect of having incurred and accounted for in the books of thecompany.

(iii) Plant and Machinery:

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

Detail list of Plant & Machinery is furnished inAnnexure-II.

(iv) Electrification: AWPL will be required electrification works at new factory estimatedof Rs.12.75lacs, including MGVCL 60 HP power connection of Rs.5.14lacs. AWPL hasapplied MGVCL connection and paid charges of Rs.5.14lacs, the expense has beenincurred against their margin of Rs.3.20lacs in electrification work. Term loan ofRs.9.55lacs would be disbursed directly to supplier/ contractor of electrification, as theyhave contributed margin upfront. Additional margin Rs.1.94lacs would be consideredmargin 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/ testingequipment/ 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.4.87lacsagainst these items. Term loan would be disbursed against the each item separately asmentioned 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 sharecapital of AWPL of Rs.50.00lacs for the proposed project. They would raise capitalbefore 31/03/2009 and an undertaking to that affect has been obtained from thedirectors of AWPL.

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

(iii) Term Loan (Rs.120.00lacs): AWPL has requested term loan of Rs.120.00lacs forto part finance in the new project, same has been assessed and recommended forsanction.

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:

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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 & Ananddistricts, mostly in Nadiad and Umreth Taluka. The associate firm of AWPL M/s ShriLaxmi Associate (engaged in similar activity), located at Jodhpur Rajsthan, has beenprocuring 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 sanitationpurpose a bore well has already been installed. The size of the bore is 4diameter. Thiswill 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 2015.16Net Sales 540.00 540.00 540.00 540.00 540.00 540.00 540.00Net profit 12.98 16.48 18.48 20.82 24.18 26.35 28.28Depreciation 19.00 16.60 16.00 15.40 13.35 13.60 13.30Cash Accruals 31.98 33.08 34.48 36.22 37.53 39.95 41.58Interest 16.01 13.48 10.76 7.98 5.23 2.48 0.22TOTAL (a) 47.99 46.56 45.24 44.20 42.76 42.43 41.80TL repayments 11.67 20.00 20.00 20.00 20.00 20.00 8.33Interest 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 8.55Gross 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 4.99Av. Net DSCR 2.12

Comments on DSCR: Gross average DSCR of 1.77 and net average DSCR of 2.12 forthe 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 2016WDV 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 0.00Security marginavailable

51.67 55.07 69.07 73.67 90.32 116.72 121.75

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 at62.30% during the currency of the Banks term loans and the same can be consideredsatisfactory.

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

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for their new project from D.I.C., which has not been considered in account for projectappraisal. Overall the proposal is considered satisfactory.

o) Moratorium for TL: AWPL has requested moratorium period of 6 months form thefirst disbursement of loan, looking at the new activity moratorium period 6 month hasbeen recommended.

p) Repayment Schedule:The proposed TL of Rs.120.00lacs is to be repaid in 72 monthly installments, 71 ofRs.166700/- each and 72nd of Rs.164300/-, commencing from the month September2009 or 6 month after first disbursement whichever earliest. Interest is to be paid as andwhen 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.13.75% at present.

N.A. 2.00% over SBAR, i.e.14.25% at Present.

*CRA modelBased 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 forSSI unit,R.No- 24-015-12-00067 dated: 29.09.2008. AWPL has registered under CentralSales Tax, No.-24650400659 dated: 17.06.2008. AWPL has registered under

Gujarat Value Added TaxAct, 2003, No.-24150400659 dated: 17.06.2008. AWPL iscomplying all norm and statutory.

t) Environment and Sustainability implications: AWPL complies environmental andsustainability implications.

u) Overall viability and acceptability of the proposal:

The Credit rating of AWPL is a SB/SBTL-6 and the promoters have good experiencein 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-CAssessment of WC facilities:

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Circle: AhmedabadBranch: UmrethCompany: 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 majorsuppliers 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 LaxmiVijay Industry (Umreth), M/s Gajanan Timber Mart (Ahmedabad), and M/s SavitriVijay 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 tomeet orders without any interruption.

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

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 tradegenerally, and more for a new unit to establish long term relations and regulardealing with the customers.

Considering the nature of business, the inventory and receivable levels areconsidered acceptable.

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

(b) Assessed Bank Finance:

(Rs. in Lacs)

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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 75.00NWC/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, and2009-10 will be the first full year of operation in AWPL. Working capital limit has beenassessed for the projected F. Y. 2009-10. The working capital gap is expected to go upin 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 2009-10Proj.

2010-11Proj.

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 daysfor the F. Y. 2009-10 and 2010-11 respectively according to the production cycle andlevel of activity of AWPL.

(g) Fund Flow Analysis:

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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 onacceptable levels of current assets and current liabilities. These are consideredreasonable and realistic keeping in view the projected level of production and sales.

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

SECTION DTerms & Conditions:

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Circle: AhmedabadBranch: UmrethCompany: M/s Alpine Woodtech Pvt. Ltd.

d. SECURITY:(Rs. in Lacs)

Details Value andbasis ofvaluation

Date of valuation/opinion report

PrimarySecurity:

CASH CREDIT: Hypothecation ofentire current assets such as stocks &receivables of AWPL.

N.A. N.A.

TERM LOAN: Mortgage of proposedfactory building constructed and to beconstructed with bank loan on land R.S.No-1566/2 and Hypothecation of plantand machinery purchased and to be

purchased from Term Loan.

162.10Based on Cost ofproject/ Estimates ofConstruction &Quotation of plant &machinery.

CollateralSecurity:

Registered mortgage of 11164 sq. mtsfactory land * R. S. No.- 1566/2,Hamidpura, Navapura Road, At-Umreth, Ta.- Umreth, Dist.- Anand(Gujarat). Standing in the name of thedirectors of Alpine Woodtech Pvt. Ltd.Shri Rakesh kumar D. Saini and ShriSanjay kumar V. Rana.

50.24 @

(M.V.)

Based on valuationreports:

1st on 30.12.08 by bank empanelled valer Shri M. J. Bhatt Market ValueRs.50.24Lacs and Realisable Value Rs.40.19Lacs, 2nd Valuation on

16.01.2009, by bank empanelled valuer Hitesh Shah & Associate MVRs.50.24Lacs and Realisable Value Rs.45.22Lacs Distress ValueRs.37.68Lacs.

Lien over Bank deposits UmrethBranch. Deposit should be for 84months

25.00 #

Sub Total 75.24Guarantee: Net Worth Opinion report

Rakeshkumar D. Saini (Director) 25.00 Net worth Compiledon 16.01.2009.Sanjaykumar V. Rana (Director) 28.00

Mukeshbhai A. Patel (Third Party ) 40.00

Sub Total 93.00Total 330.34

Collateralcoverage%

For SBI 38.58%

For others N.A

* Title Clearance report obtained from the panel advocate dt.7/1/2009 certifies that boththe directors of Alpine Woodtech P Ltd have clear and marketable title and they couldcreate EM (Registered). Branch to seek clarification from advocate whether thecompany has to create EM or the directors in their personal capacity. If it is directors intheir 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 repaymentperiod.

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@ From title clearance report it is observed that the directors have purchased land on04.09.2008 after the land was converted into NA land on 14.08.2008 at a price ofRs.23.12 Lacs. The panel valuers have assessed the market value as Rs.50.24lacsinDecember and January 2009. BM and FO should visit the site and ensure that the valueindicated in the valuation reports is reasonable and accordingly a certificate of havingvisited 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 inthe system as Rs.25Lacs is BASEL security. Period of deposit should be 84 months toavoid 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/Marketvalue/controlled price.

Stock in process NIL 25% Cost of production.

Finished Goods NIL 25% Cost of sales/Marketprice/controlled price.

Receivables(cover period 60 days)

NIL 50% At Invoice Value.

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.13.75% at present.

N.A. 2.00% over SBAR, i.e.14.25% at Present.

*CRA modelBased 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 companyand the Bank. Insurance to be arranged through The New India Assurance Companywith whom we have tie-up arrangement.

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

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

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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 monthSeptember 2009 or 6 month after first disbursementwhichever earlier. Interest is to be serviced by the AWPL asand when debited to the account.

F. OTHER COVENANTS:

Commission As per extant instructions.

ProcessingCharges/Upfrontfees

CASH CREDIT: Rs.500/- per lac,

TERM LOAN: 1.25% of the loan amount.

Periodicity ofStock/ bookdebts statements

Monthly statement to be submitted latest by the 10 th of the followingmonth failing which penal interest @ 1% would be charged on theentire outstanding during the month.

Documentation SME-1, SME-2, SME-3, SME-5 and SME-6.Resolution for exercising borrowing power must contain specificresolution 1) to borrow 2) to create security 3) the nature and extent ofloan required 4) to execute loan documents 5) the names of directorsauthorized to execute documents, balance confirmation letters, revivalletters 6) names of directors authorized to operate the accounts 7) thenames of the directors who are authorized to create mortgage and todeposit the title deeds and 8) authorized directors to affix common

seal on documents executed on behalf of the company.Drawdownperiod of theterm loan

The loan has to be fully availed before 31st August2009. Delayeddraw down beyond 2 months will attract commitment charges as perrevised instructions.

Commitmentcharges

CASH CREDIT: 0.25% p.a. on the entire unutilized portion if averageutilization 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 currencyof the loan for the relevant period as mentioned there against :-

(a) Any adverse deviation by more than 20 % from the levels stipulated as below inrespect of any two of the following items for a minimum period of one year or tillrestoration 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.

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(c) Default in payment of interest and/or installments on due dates to any other lenderfor 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 proposeditem 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 otherbanks/branches should not be opened without controllers permission. Existingaccounts with other branches and banks, if any, should be closed before disbursementof 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

0

BM should advise date of disbursement and confirm that all stipulations mentioned in

the sanction and banks guidelines governing advances are meticulously followed.

1

1

Chartered Engineer certificate for reasonableness of expenses related to buildingconstruction to be obtained at the time of each disbursal. Chartered Accountantscertificate confirming incurrence of capital expenditure to be held on record.

1

2

Plans for building constructions approved by the local authority as well as Factoryinspectorate must be held on record.

1

3

All licenses (SSI Registration, CST, VAT certificate, pollution control board certificate/permission, N.A. permission of land) to be kept on record.

1

4

Undertaking from the company that they would maintain unsecured loan during the

currency of bank loan to be obtained.

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1

5

Bank loan portion along with borrowers margin should be directly disbursed tosuppliers.

1

6

BM should ensure to obtain borrowers consent to all the covenants prescribed as percircular no. e-circular- CPP/RSN/CIR/50 dt. 26.09.2006 (e- circular Sl. no. 351/2006-07dt.29.09.06).

1

7

Drawings in the account should be monitored closely especially those with the units

associate M/s Laxmi Assciates, Jodhpur.

1

8

In the valuation report submitted by Hitesh Shah & Associates it was mentioned underpara 10 that as per NA order Land/NA/SR/152/2007-08 dt.14.08 2008 the permissionappears to have been given for commercial stock shed and store godown foragriculture use. In one of the correspondences with the unit, Gajjar Techno-EconomicConsultants Pvt Ltd mentioned that the NA permission has been given for commercialactivities and not for industrial activities. Branch should thoroughly peruse the NA orderand satisfy and ensure, before releasing disbursement, that usage of land is notcontravening the NA order.

1

9

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 thesame would affect functioning of AWPL.

2

0

Obtain opinion reports on suppliers of plant & machinery from their bankers

2

1

Gajjar Techno-Economic Consultants Pvt Ltd in their e-mail dt.04/02/2009 have soughtcertain information / clarifications from the company for providing TEV report. BranchManager has to go through them and satisfy by interacting and verifying the companysbooks/invoices/licences/plans/approvals. In case of necessity written commitments fromcompany to comply with the observations to be obtained.

2

2

Branch Manager should ensure that company arranges registration of our charge onthe assets of the company with the Registrar of Companies with in 30 days from the

date of documentation.2

3

Any change in the management of the company need to be informed to the Bank andconsent obtained from the Bank before affecting change.

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

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 asunder:

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S.No.

Name ofAssociateconcern(Year of

Establishment)

Addressof Assoc.Concern

Name of partners BorrowingArrangement/Banking with

MeansAs perB/S Dt.

31.03.2008

1 M/s Shri LaxmiAssociate(2002)

G-372, 4th

Phase,Boranada,Jodhapur(Rajsthan)

i) Shri Rakesh D.Sainiii) Shri Sanjay V.Rana

Having CashCredit limit ofRs.135.00lacs,with ICICI Bank,At Jodhapur

Rs.36.65Lacs.

Deepak Gehlot (presently branch manager of Changa branch) who visited theabove unit at Jodhpur on 27.01.2009 has commented the following in his reportdt 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 complywith 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 fromMango and Seasom wood procured in bulk in peak season.

It is learnt that Dr.Harish Patel, OMR, Umreth branch has also visited the aboveunit and his observations, if any, submitted to the Branch Manager are to bescrutinized by Branch Manager.

Confidential opinion reports on the above unit from their present and pastbankers 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 limitswith them. CC: Rs.44.00lacs & TL: Rs.18.00lacs. The Unit has switched overtheir connection to ICICI Bank, Jodhpur consequent upon UCO Banks denial toenhance limits as requested by the unit for lack of sufficient collateral security.They have paid their Housing Loans also totally. We reminded him again tofurnish their opinion on IBA format.

ANNEXURE-II

A. List of Plant & Machinery:(Rs.in lacs)

S.

No.

Description Name of Supplier Qty. Total

Cost1 Thermic Fluid Heater(6 lacs kg/ Hr )Rs.5.50lacs

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Chimney- Rs.2.00lacsFurnace with refectory- Rs.1.50lacsM.D.C.- Rs.0.70lacsErection and Commisioning- Rs.0.50lacs(Coil with fluid cell + Fan + Pump + Chimney totalsystem will 15L x 5W x 6H. Power for Pump -7.1/2 HP + ID Fan 5HP = 12.1/2HP.)

M/s SumeruEnterprises, Jodhpur.

-- 10.20

2 Seasoning chamber:The Capacity of the unit is based on Capacityof Seasoning Chambers.Internal Size 19,1/2 L x 23 x 17 H, Capacity 1600 Cubic Ft.Period - 8 to 10 Days continuous.Process. 9 HP /Chamber (3HP x 3 PCS) forrunning Fan for air circulation 36 HP(Rate per klin- 0.50lacs)

M/s SumeruEnterprises, Jodhpur. 4 20.00

3 Trolley Track Transfer system:a. Trolley- 500kg.@80/- = Rs.40000 x 32 No.(9 x 9 ft.) Rs.12.80lacs

b. Track- 10 Tone@ Rs.55per kg. 1400 RunningFt./ 7 Feet (50pound) Rs.5.50lacsc. Installation Commission Rs.2.00lacs

M/s Sumeru

Enterprises, Jodhpur.

-- 20.30

4 Chemical treatment plant (Tank)Dimension: 15L X 5W X 5H (Round Shape)Capacity: 175 Cubic ft per cycle of 4 Hours i.e.6Cycle / dayPower required: 5 HP per Machinery.i.e.10HPFunction: This will treat wood in chemicals,which will ensure disinfectants.[Tank(2)- 4 Tonne@ 85kg, Compressor withMoter(2), Pipe Line with Valve & Fitting(2),

Earection & Fitting(2)]

M/s SumeruEnterprises, Jodhpur. 2 8.50

5 Sal Wood Crosser: (1 X 1.5X 3ft to up)72 Ton @ 9000 = Rs.6.48lacs.

M/s Jain Timber, LatiBazar, Joravarnagar.

-- 6.48

Total 65.48

B. Electrification:

S.No.

Description Name of Supplier Qty. TotalCost

1 Various Electric Materials as per Quotation.(Dt 09.09.08)- Rs.6.89lacs M/s J.V. Thakor & Co. -- 7.61

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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.1.50lacsTesting Equipment: Estimated cost of Rs.1.00lacsMisc. Fixed Assets : Estimate cost of Rs.1.00lacsPreliminary & 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.11.53lacs2. Open Shed: Rs.40.17lacs3. Elec. & Guard Room: Rs.2.33lacs4. Office & Staff Room: Rs.4.47lacs5. Chemical U/G Tank: Rs.4.00lacs6. Parking: Rs.0.48lacs7. Compound Wall: Rs.14.39lacs

Total cost Rs.77.37lacs

ANNEXURE-III

TEV Study Report:

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Product and Market Feasibility Study on Project of Alpine Woodtech Pvt. Ltd. hasbeen obtained from the Banks approved Techno- Economic Consultant GajjarTechno-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 projectat the door-step of raw material supplies.

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

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

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

Diversifying the existing operations of Jodhpur Unit for Mango and Babul Woodprocessing to the New Unit in Gujarat, and accordingly the existing orders couldbe fully executed from the Gujarat Unit.

The Comparable sales price projections to the local market also. The projectedsales price is similar or lower by almost 10% of the prevailing level of sales pricein the local market of Gujarat. Through comparatively better price, in the initialstages of Gujarat Unit, the Managements contention is to grab the new market,

especially in Central and South India, over and above their existing market anddemand in North India as well the Indirect Export.

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

final proposal alpine 13.02

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