6 To 27.02.2012 Mis. Bio Green Papers Ltd 3-691/B Raghava Reddy complex, New Nagole Hyderabad 500035 Dear Sirs, SANCTION OF CREDIT FACILITIES: Wih teferenee to your application seeking enhancement of facies , we have pleasure in advising sanction ofthe following ims by the Appropriate Authority ae - Rs. in lacs) SINo. Facility Proposed Limit | Cash eredt (Stocks & Book debie) 00.00 Total | 2, The term loan and the working capital facilities are subject to the terms and Conditions detailed in the annexures to this letter and other terms and conditions as prescribed by the bank from time to time, 3. The company should also arrange to submiticomply with the following terms & conditions: > Disbursement will be made only after completing all the documentation Procedures such as execution of loan documents, Creation of Equitable Mortgage and other procedures, > The company should arrange for Registration of charges with Registrar of company and Sub-Registrar Office within one month from the date of execution of loan documents, Primary securties as well as collateral securities should have clean, unencumbered and marketable rights for creation of charges, » Certificate along with vouchers from the Chartered Accountant for the amount already spent on the projectinfused, > Please note that the cost & the items included in the Project will only be considered for disbursement of term loan, 4, Pre disbursement condition The limits of Rs200.00!acs shall be released after completion of satisfactory inspection by the Bank Officials to the Factory Premises. Other conditions ‘The Balance limit of R5100.00 lacs shall be released after submission of half yearly results for the FY2012-13 as on 30.09.2012. 5. Please retum the duplicate copy of this letter duly signed by all the Commitment charges for working capital limits - 0.25% of the ul portion of the limit willbe levied if the average utilisation of the cash credit limit is 60% or less (Levied halt-yearly) > Upfront fees for term loan — 1.50% of the limit > Commitment charges for term loan ~ 1.20% for delayed draw down beyond 2 months, > Equitable Mortgage charges ~ Rs. 15000) > Inspection charges — Actuals + 25%, subject to minimum of Rs.12000/- p.a > Non-submission of audited Balance sheet ~ Rs.1200/- per month if not ‘submitted within 6 to 8 months of year end. > Non-submission of stock statements ~ Rs,200/- if not submitted within 7 days ‘of due date. > Other charges are as per extant instructions of the Bank > Charges for obtaining opinion reports from D & B on the buyers would be recovered on actual basis from the unit, 6. Period of sanct Repayable on demand. The working capita facility is available for a period of 12 ‘months from the date of sanction (ie. upto 24822043 2//2/2079. However, the vality of sanction expires immediately if the unit does not avail the working capital advances within 3 months from the date of sanction and has to pay 50% the applicable processing fees for revalidation ofthe sanction, ‘The Bank reserves the right to revoke or cancel the facilities sanctioned and/or vary alter, modify or rescind, amend or change at any time any one or more of the terms and conditions of the facilities at our discretion with such notice as the bank may deem reasonable and without assigning any reasons. The provision of these facilties is at the sole discretion of the bank and any request foe extension/enhancementirenewal of any of the faciltiesfimit is at the discretion of the bank and on futflment of such terms and conditions as prescribed by the bank During the currency of the credit facility the bank will have the option of calling up the advance and also withdraw cheque faclty in terms of the bank's policy on dishonour of cheque, in case of incidence of frequent dishonour of chequetfailesECS (debit) due to insufficient funds is observed in the account. For further details please refer to the policy on dishonour of cheque displayed at ‘won sbi.co.in, 7. Inspection: Quarterly by CSO and half yearly by RMME/Chief Manager at regular intervals, Insurance: > All the assets charged to the Bank should aways be fully insured by the Borrower against fre, lightning, rots, strikes, floods, cyclones, earthquakes, ci ‘commotion, and other natural calamities, etc, with a company approved by t Bank in the joint names of the Bank and yourselves, at your cost for full market value. > The machinery to be purchased out of the Term Loan to be insured for the full market value. > Likewise, all collateral properties should also be insured comprehensively in the joint names of the unit & the Bank for the current market value. The policiesicover notes should be lodged with the Bank. The policies should bbe kept alive (current) during the currency of the advance. > In the event of non-compliance, the Bank reserves the right (but not be bound to exercise) to take the insurance cover as required by the Bank by debit to your account, 9. Penal interest: The Bank shall also be entitled to charge at its discretion enhanced rates of interest fon the accounts, either on the entire outstanding or on a portion thereof, for any itregularity including non observance of tems and conditions of the advances for such a period as the Bank may deem fi. 410..Chanage in the constitution of the unit: If any change in the constitution of your unit is contemplated, prior approval of the Bank for such a change should be obtained in writing, ifna, stich approval has been obtained in advance, the Bank shall have the right to suspend further operations on the account consequent upon such reconstitution/change 11. Periodical reports: Important events like suspension of manufacturing activites, change of premises, fire in the factory, labour troublesistrikes, or any other event that is likely to affect production and endanger Bank’s security should be immediately brought to the Notice of the Bank detailing the reasons leading to such an eventuality and the steps taken to overcome i. In terms of RBI directives the following financial follow-up reports are required to be submitted at regular intervals as under a. FFR I- Quarterly within 6 weeks from the close of the quarter. », FER II - Half-yearly within 8 eight weeks from the close of the half year. 12. The Bank will have the right to examine at all times the unit's books of accounts and to have the unit's factories inspected from time to time by officers of the Bank ©)‘and/or qualified auditors and/or technical experts and/or management consultants of the Bank's choice, cost of such inspections shall be borne by your unit. 43, The unit should maintain adequate books of accounts, which should correctly Feflect its financial position and scale of operations and should not radically change its accounting system without notice to the Bank 14. The unit should submit tothe Bank such financial statements as may be required by the Bank from time to time, apart from the set of such statements to be furnished by the unit to the Bank as on the date of publication ofthe unit's annual accounts. 16.The Bank will have a first charge on the profits of the unit, after provision for taxation and dividend where applicable, for repayment of instalments under term loans grantedideferred payment guarantees executed by the Bank or other repayment obligation, if any, due from the unit to the Bank, 16.The Bank shall have the right to securitise the secured assets and in the event of such securitisation the Bank is not bound to send an individual intimation as to the Said securitisation to the borrower andor guarantors). 17. In case of default in repayment of the loan/advances or in the payment of the interest thereon or any of the agreed instalments of the loan on due datels by the borrower, the Bank and/or the RBI will have an unqualified right to disclose or Publish the borrower's name or the name of the borrower's univunit and. fis directors/partnersiproprietors as defaulter in such manner and through such medium {8 the Bank or RBI in their absolute discretion may think fit, 18. The Bank will have the right to share credit information as deemed appropriate with CIBIL or any other institution as approved by RBI from time to time. 419. The unitvcompany should not induct into its Board/Partnership a person whose name appears in the wilful defauiters list of RBICIBIL {other than ae a Nominee/Professional/Honorary director). In case such a person is already on the BoardiPartnership of the borrowing unitiCompany, it would take expeditious and effective steps for removal ofthat person from its Board/Partnership, 20. The unit shall keep the Bank informed of the happening of any event likely to have substantial effect on ther proft or business; , for instance, monthly production (of sales are substantially less than what had been indicated to the Bank. the unit wil inform the Bank accordingly, wth explanations and the remedial steps proposed to be taken. 21. Each of the following events will attract penal interest at applicable rate as indicated, over and above the normal interest applicable in the account * Iiregulariies in working capital accounts. On the entire outstanding, if Continuously irregular for a period beyond 60 days: in other cases, on the imegular portion (at 2% p.a.) + Non-submission of ‘stock statements, (delay beyond 10 days of the ‘succeeding month to be considered as non-submission) (at 1% p.a)‘+ Non-submission of renewal data beyond three months from the due date of renewal (at 1% pa) ‘+ Non-compliance with covenants (at 1% p.a.) However, the total penal interest charged on a borrower due to various non- compliances will not exceed 3% p.a 22, Besides the above, additional penal interest of 2.00% above the normal cash Credit rate applicable will be levied in case of EPC advance where exports do not ‘materialise and overdue export bil. 23. Borrower shall pay penal interest at applicable rate as indicated, on the total ‘outstandings in the event of any one or more of the following defaults during the ‘currency ofthe loan for the relevant period as mentioned there against: a) Any adverse deviation by more than 20% fom the levels stipulated as below in respect of any two of the following items for a minimum period of one year {at 1% pay + Current ratio - Not less than the projections. + Total Debt Gearing ie., Total outside liabilities divided by Tangible Net Worth (TOLITNW) as per projections till epayment of term loans, ‘+ Interest coverage ratio (PBDITHInt) as per projections til repayment of Ths. Default in payment of interest or instalment to the Bank for the period of such default (at 2% pa) ©) Default in payment of interest and/or instalment on due dates to any other lender for the period such default (at 2%). 24. During the currency of the Bank's credit facilites, your unit, shall not, without the Bank's prior permission in wing i) Effect any change in the unit's capital structure; In all cases of term loans, where a condition prohibiting disinvestments by promoters of their quota in the equity of the borrower unit, without the prior approval of the Bank, all the promoters of the unit should furnish an undertaking on the lines specified for this purpose, On the basis of the letter of undertaking, promoters should also furnish each year in the frst week of Apri the latter's confirmation together with the Auditor's cerificate as on 31" March ‘every year for record of the Bank i) Formulate any scheme of amalgamation or reconstruction, i) Undertake any new project, implement any scheme of expansion or acquire fixed assets except those indicated in the funds flow statement submitted to the Bank from time to time and approved by the Bank, iv) Invest by way of share capital in or lend or advance funds to or place deposits with any other concem (including group companies); normal trade credit or securitydeposits in the normal course of business or advances to employees can, however, be extended, ¥) Enter into borrowing arrangement either secured or unsecured with any other bank, financial institution, unit or otherwise or accept deposits apart from the arrangement indicated in the funds flow statements submitted to the Bank from time to ime and approved by the Bank Wi) Undertake any guarantee obligation on behalf of any other unit (including group companies) vil) Declare dividends for any year out of the profits relating to that year or of the previous years. It is however necessary for the borrower to ensure first that provisions are made and that no repayment obligations remain unmet at the time of ‘making the request for Bank's approval for the deciaration of dividend. vill Create any charge, lien or encumbrance over its undertaking or any part thereof in favour of any financial institution, bank, unit, unit or persons. ix) Sell, assign, mortgage or otherwise dispose off any of the fixed assets charged to the Bank. %) Enter into any contractual obligation of a long-term nature or affecting the unit financially 1 a significant extent. x) Change the practice with regard to remuneration of directors by means of ordinary remuneration or commission, scale of siting fees ete, xi) Undertake any trading activity other than the sale of products arising out of its ‘own manufacturing operations. xi) Permit any transfer of the controlling interest or make any drastic change in the ‘management set-up. xiv) Repay monies brought in by the promotersidirectors/principal shareholders and thetr friends and relatives by way of depositsoans/advances. Further, the rate of interest, if any, payable on such depositsloansiadvances should be lower than the rate of interest charged by the Bank on its term loan and payment of such interest wil be subject to regular repayment of instalments under term loans grantedideferred payment guarantees executed by the Bank of other repayment ‘obligations, if any, due from the unit to the bank. All unsecured loans/deposits raised by the unit for financing a project are always ‘subordinate to the loans of the banksifinancial institutions and should be permitted to be repaid only with the prior approval of all the banks and the financial institutions ‘concerned. 25, The unit shall keep the Bank advised of any circumstance adversely affecting the financial position oftheir subsidiaries/group companies or companies in which it has invested, including any action taken by any creditor against the said companies, legally of otherwise28. The Units entire banking transactions are to be confined to us in case of sole banking arrangements and prior approval should be obtained for mutiple banking arrangements, 27. Interest on bills negotiatedi/discounted will be as per RBI instructions/FEDAI Rules. 28. In the event of the estimated profits not being achieved resulting in a shortfall of the projected tangible net worth, the deficit will be made good by introduction of capital 29, The unit will not lend or advance monies to its associate concerns other than by ‘way of normal operational transactions. 30. Unpaid stocks will be excluded for computation of drawing power if the sundry Creditors levels are above the levels considered in the working capital assessment. 34. The Stocks coresponding to LC remaining unpaid will not be reckoned for ariving at the drawing power for cash credivEPC limits. 32. The company should ensure currency of all statutory approvals and submit Copies of the same periodically to the bank ‘STATE BANK OF INDIA, Abid Road Branch. CASH CREDIT LIMIT (STOCKS & BOOK DEBTS): Rs 200.00lacs, NAME OF THE UNIT: Mis Bio Green Papers Lid ‘The terms and conditions goveming the advances, in addition to those stipulated in the arrangement leer of which this annexure forms an integral par, are as under: 41. Drawings in CC account willbe permitted subject to availabilty of sufficient stocks and Book debts against value of goods hypothecated / pledged and the value of book debis after making margin of 40% for book debts with a cover period of 45, days. 2. Ifthe stocks pledged with the Bank are placed in a godown under the Bank's lock and key, a) The godown should be independent and if there be partition walls separating it from and adjoining room, such walls should have been built up to the roof with any suitable material in such a manner that access to itis prevented except through the main doors to the godowns locked by the Bank. ) The Bank will be entitled to paint its name and godown number on the door of the godown. ©) Any retum of the pledged goods by the Bank should be promptly verified by borrowers and receipted for by them,3. Where the godown in which the stocks pledgedMypothecated happen to have been hired by the borrower, the borrower should produce to the Bank periodically for inspection rental receipts evidencing regular payment of the rent in respect of the godowns, 4. All stocks hypothecatedipledged to the Bank and stored in godowns should be stacked neatly and regularly in such a manner that their inspection would be feasible. Further, where the goods stored call for special precautions and frequent handling to prevent deterioration, borrowers should, if necessary with the permission of the Bank in each instance, take such steps as are necessary for the protection of the goods and the prevention of their deterioration, 5. In case the goods pledged/hypothecated to the Bank are stored in the open, it wll be the responsibilty of the borrower to ensure that the Bank’s name boards are displayed prominently at the entrance to the factory premisesirooms wherein the stocks pledged to the Bank are storediprocessed. While the borrower is. being allowed possession of the stocks merely for facilitating the processing thereof, itis @ ‘condition ofthis advance that they should maintain accurate and up-to-date record of all stocks in their possession including those received and delivered by them. During nights andior whenever the factory is not working, the factory gates should be locked with the Bank’s padiocks, one key of which may be retained by the borrowers in trust for and on behalf of the Bank. The padiocks should be displayed on factory gate when the factory is working. 8 i) Indigenous raw materials/packing materials/components will be valued at current market rates, invoice rates, or government controlled rates, if any, whichever be the lowest. it) Imported raw materials will be valued on the basis of the landed cost (ie. Invoice value inclusive of customs duty, or market price, whichever is lower. il) Semi-inished products will be valued on the basis of the cost incurred on their ‘manufacture, iv) Finished products manufactured by the borrowing unit will be valued at the ‘cost price oF market price, whichever is lower \) The borrower should also maintain suitable records to evidence the basis of valuation of raw materials, components, stocks in process and finished goods ‘charged to the Bank, 7. The borrowers wil have to submit Stock Statements to this Branch detailing therein particulars of the stocks pledged/hypothecated to the Bank as at the close of business of each month. These statements, which should contain the following certificates, should have been writen up from Registers maintained by the borrowers and capable of being verified from them. "We certify hereby (1) that the stocks charged to the Bank are our own proporty and no one else other than STATE. BANK OF INDIA has any lien thereon. (2) that the figures and particulars furnished herein have been wholly taken from the books of the unit and ropresent the true and correct position. (3) that the stocks, stores, ete are valued as per our arrangements with the Bank (4) that such of the stocks. which require to be comprehensively insured against fire and other risks. have been duly insured in the joint names of the STATE BANK OF INDIA and the Unit”.8. The stocks pledged/hypothecated to the Bank should be comprehensively insured ‘against fire and other risks for their full market value with an insurance firm or ‘companies approved by the Bank in the joint names of the Banks and the borrowers at the borrower's expense. The insurance policies and cover notes, premium receipts etc, should be deposited with the Bank. It will be necessary for the borrowers to make punctual payment of all the premia and to ensure that no acts/omissions occur inthis regard, which may invalidate such insurance during the currency ofthe advance, 8. Allthe collateral securities offered are to be insured wherever required, 10.There should be regular turnover in the stocks pledged to the Bank and the stocks should not be alowed to remain in stock for unduly long periods. I however, “old stocks’ are held in stock by the borrowers, they would be excluded while ‘computing drawing power on the account and the shortfalls so created will require to bbe made good immediately by the borrower. Normally, stocks lying in the unit's possession for a period over 6 months would be termed as ‘old stocks" 411. In respect of the verificationinspection of security pledged, the Bank godown keepers’ charges on a trip basis and the Bank's inspection and other incidental expenses willbe recovered from the borrowers, 42, In the event of the Bank considering it necessary to protect its security, it reserves to itself the right to appoint round the clock watchman at the borrowers factory or wherever the secutily be. The salary paid and incidental charges incurred by the Bank on this account will be debited to the borrowers’ account. 413. While taking delivery ofthe stocks charged to the Bank and stored in the open, i Will be incumbent upon the borrowers to ensure that the drawings on the account are ‘covered by the advance value of stocks charged. If any shortage of stocks in relation to the drawings on the account is noticed by the Bank, it will be construed, as a wilful breach of trust and the borrowers will render themselves lable for eriminal action against them, 14, Please note that drawings will be allowed only against receivables upto 90 days ol. 416. Except with the specific approval of the Bank, the borrowers shall not be allowed to accept and use direct payment of bils/invoices lodged with the Bank for collection/realisation. In case the proceeds of bills are received direct by the ‘borrowers, they shall immediately deposit the same with the Bank and i the amount is not immediately deposited, the omission to do so will be construed as a breach of trust and the borrowers will ender themselves lable for criminal action against ther,