Format for Seeking In-Principle Approval for New Business [For credit limit (FB+NFB) more than Rs 10 Cr]

Name of the Account Branch Region Zone 1. Basic Data 1 Name of the entity 2 Group (if any) 3 Present Group Exposure with us 3 Promoters / Directors

Gama Infraprop Private Limited Regional Office, Vadodara

West West M/S Gama Infraprop Private Limited (GIPL) RLG Group Enclosed as Annexure-A. Name Position Mr. Rahul Goyal Director Mr. Raman Goyal Director Mr. K. B. Dubey Director Name of No. of Shareholding % Shareholder Shares Mr. Rahul Goyal 500 50.00 Mr. Raman Goyal Total 500 1000 50.00 100.00

Share Holding (Major share holders)

5 6 7 8

RBI caution listed (As per latest No data with date) (yes / No) Nature of business Generation of Power Place of business Kashipur, Uttarakhand Present credit request Rupee W C loan (Rs Cr) Nil Rupee Term loan (Rs Cr) 200 FCNR B loan (Equi Rs cr) Nil LC (inland/foreign) and Bank Guarantee (150) (Rs Cr) ( as sub limit of the Rupee Term Loan ) Brief Details of the company RLG Group of Industries was established in 1974 as a Plasticizer Manufacturing company by Mr. R. L. Goyal. Over the years, RLG Group has strengthened its foothold in the chemicals industry by setting up more than eight chemical plants successfully. Besides, the group owns a fast moving consumer goods (FMCG) facility in Colombo, Sri Lanka and has an operating captive gas based power plant (2X1.1MW). The group is also developing a 1.1 MW Bio-gas based power plant and Alcohol (27000 kl/annum) plant which is expected to be commissioned by December 2010. In view of huge potential in the energy space in India and experience in developing and operating captive gas based power plant, the RLG group has floated special purpose vehicle (SPV) by the name Gama Infraprop Private Limited (GIPL) to develop a 225 MW combined cycle gas based power project (Project) in Kashipur, Uttarakhand.

Board of Directors of GIPL comprises following personnel. Name Mr. Rahul Goyal Mr. Raman Goyal Mr. K.B.Dubey Type Promoter Director Promoter Director Professional Director

Key Management Personnel and their brief background are also described below. Mr. Rahul Goyal is B.E.(Mechancial) from Delhi College of Engineering and MBA (Finance) from University of Illinois-Urbabna Champaing, USA. He has been engaged in the project development and implementation for the group since last one decade. Under his leadership the company has successfully developed six projects. Mr. Raman Goyal is B.E.(Mechanical) from Delhi College of Engineering and has Certificate in International Business and Finance from Harvard Summer School. He has been engaged in business development and corporate strategy for the RLG group since last one decade. Under his leadership, the group has grown multifold and has developed business relationship with many reputed clients like Tata group, Clariant, Zydus etc. Mr. K.B.Dubey is B.Tech (Mechanical) and Certified Project Director by International Project Management Association by qualification and has more than 35 years of professional experience in power sector. Mr. Dubey started his career with Bharat Heavy Electricals Limited (BHEL) and rose to the position of Executive Director of NHPC Ltd and Director (Projects) of NTPC Ltd . During his tenure with NTPC, projects worth capacity of 3500 MW were commissioned and projects aggregating to around 13000 MW were launched. He was also the operational head of 432 MW gas based power project at Faridabad and responsible for complete development of the project. Mr. Viney Kumar is B.Tech. (Electrical) from IIT Roorkee by qualification and around 40 years of experience in power sector. He was actively associated with 135 MW Rajghat Power Plant, 270MW IP CCPP. 330MW Pragati CCPP, 1500 MW Bawana CCPP, 1500 MW Jhajjar project and proposed 750MW Bamnauli CCPP in Delhi. A 30 MW gas turbine was also installed and commissioned by him in Libya. He has held position of Director(Tech) of IPGCL, PPCL and Aravali Power Company Pvt. Ltd ( JV of NTPC, Delhi Govt. and Haryana Govt. for 1500 MW Jhajjar project).

Mr. Satwant Singh is B.E. (Electrical) and Member of IEEE by qualification and has around 25 years of experience in power sector, especially in gas based power projects. Mr. Singh has worked with Pragati Power Corporation Ltd (PPCL) and Indraprastha Power Generation Company Limited (IPGCL) both owned by Government of Delhi. In PPCL and IPGCL, he was responsible for erection, commissioning, operations and maintenance of gas based power plants with operational capacity of 330 MW and 282 MW respectively. He was also deeply involved in the detailed engineering for 1500 MW gas based project in Bawana, Delhi.

10

Credit rating (internal) Credit rating (external )

..

11

12 13 14 15

The company has been incorporated recently ( May 17, 2010) and does not have any banking facility so far; hence, the external rating is not available. However credit rating of the group companies/firms like Luna Chemical Industries Private Limited, GD Dyestuff Industries Limited and Jayjee Enterprises on consolidate basis are available. The rating of each of these companies is BBB+ by CRISIL, which is an investment grade rating. Security First charge by way of mortgage on all immovable fixed assets of the Project, both present and future, First charge by way of hypothecation on all movable fixed assets of the Project, both present and future, First charge on the escrow account opened for receiving all power sale realizations Debt Service Reserve Account for two quarters of principal and interest payment Pledge of equity shareholding of the GIPL up to 51% Zones exposure to the industry Zones NPA in the industry Present banking arrangement The Borrower does not have any banking facility so far. with details such as limits However, the banking relationships of the group companies is enclosed as Annexure-A Proposed banking arrangement Consortium banking (take over of sole banking, entry into multiple/ consortium arrangement etc)

2. Financials for last three years and projections The company has been incorporated in May 17, 2010; hence, the financials are not available. However, the financial projections upto the debt repayment period are tabulated below.

(Rs. crore)

Financial Year Year Total Income PBDITA PBDITA (%) PAT Cash Accruals Tangible Networth Term Debt Debt:Equity Ratio FACR ICR DSCR Average DSCR

Mar-12 1 140.33 58.04 41.4% 22.82 34.07 273.21 584.25 2.14 1.41 3.18 3.03 1.72

Mar-13 2 601.36 232.56 38.7% 91.41 136.52 364.62 536.05 1.47 1.45 3.18 1.77

Mar-14 3 601.65 229.86 38.2% 94.54 139.65 459.16 477.62 1.04 1.54 3.45 1.69

Mar-15 4 602.28 226.91 37.7% 97.90 143.00 557.06 407.51 0.73 1.69 3.82 1.60

Mar-16 5 603.08 223.98 37.1% 101.92 147.03 658.98 337.40 0.51 1.91 4.35 1.68

Mar-17 6 604.12 221.09 36.6% 106.99 151.08 765.97 261.45 0.34 2.29 5.11 1.67

Mar-18 7 605.54 218.37 36.1% 114.17 155.20 880.14 185.50 0.21 3.01 6.31 1.77

Mar-19 8 606.73 215.23 35.5% 118.76 159.79 998.90 103.70 0.10 4.98 8.36 1.78

Mar-20 9 608.07 212.03 34.9% 123.62 164.65 1122.5 2 21.91 0.02 21.72 12.87 1.92

Mar-21 10 609.33 208.52 34.2% 126.93 167.95 1249.45 0.00 0.00 23.61 1.89

3. For Project Finance Project appraised by Cost of project (Rs. in crs) Means of finance (Rs. in crs) Average DSCR Project IRR Scheduled commercial operation date Repayment period

Bank of Baroda
Rs 834.64 crore Equity Term Loan 1.72 17.19% 31 December 2011 Rs 250.39 crore Rs 584.25 crore

Repayment schedule

Moratorium: 2 quarters after commercial operation date (COD) Repayment : 32 quarters (starting from the end of 3rd quarter after COD) Door to Door: 38 quarters (9.5 years) % of Financial No. of total Year installments debt 2013 3 8.25% 2014 4 10.00% 2015 4 12.00% 2016 4 12.00% 2017 4 13.00% 2018 4 13.00% 2019 4 14.00% 2020 4 14.00% 2021 1 3.75% Total 32 100.00%

4. Concessions, if any recommended: Category Rate of interest Applicable

Upfront fee Other charges (please specify)

. NA

Proposed 11.50% p.a. ( fixed upto the commercial operation date. First reset on the date of commercial operation and thereafter to be reset after every third year) 0.25% of the sanctioned amount

NA

5. SWOT Matrix

Strengths a. Entire land required for the project has been acquired and possession has been taken. b. Consents for arrangement of water required for operations in place c. Terms of Agreement with Gail already signed for supply of 40% of the gas required for the project. d. Evacuation of the power is proposed from the substation of PGCIL. The application has been made to PGCIL for the evacuation arrangement.

Opportunities a. Proposition of Merchant capacity gives an excellent opportunity to the developers to encash upon the huge power deficit scenario in the country. b. In the current market regime, the merchant tariff is on a very high side. It is envisaged that the same tariff regime for merchant capacities will prevail over the next couple of years. c. The project is envisaged to earn attractive profits in the short run and a fairly higher tariff in the long run in comparison to the cot plus tariff which are approved by the State/Central Electricity Regulatory Commission. d. Gas based projects are ideal for merchant operation (meeting peak demand) because they can be ramped up and down very fast compared to coal based power plants.

e.

Orders for Gas Turbines, Heat Recovery Steam Generators and Steam Turbine Generator have been placed on General Electric, Thermax and Hangzhou Steam Turbine company (HTC) and the advance payment has been released to them. Toshibas Indian arm has been appointed as the Design and Engineering consultant for the Project. Project envisages selling power on merchant basis (125 MW) which provides an excellent opportunity to encash the highly deficit power supply scenario in the country which is likely to prevail for a next couple of years.

f.

g. The promoters have already infused around Rs. 30 crore in the project development h. In the Base Case scenario, the Project has an Average DSCR of 1.72, Project IRR of 17.21%. At the time of sensitivity analysis with respect to various potential downside scenarios the Project demonstrates

adequate financial strength.

Weaknesses

Threats

a. Power Purchase Agreement (PPA for around 50% of the capacity)y is yet to be signed; Considering the current heavy power deficit scenario in India, especially in the Northern Region ( more than 17% in terms of peak load and more than 12% in terms of energy requirement), power generation required to sustain the economic growth rate of >10% ( at least 10% growth rate in power generation required to sustain the GDP growth of 10%),, and latent demand in the unelectricifed rural areas, the demand risk is non existent. Further, the cost of generation from the plant is Rs. 2.91/kWh, which is very competitive compared to current tariff in the merchant market ( ~Rs. 5/kWh) and the tariff at which the power has been tied-up by the utilities in the recent time ( ~Rs. 2.90-3.30/kWh) for long/medium term. Hence, tie-up of power on long term would not be an issue.

With high margins available in the short term market, many other players may be attracted to it and the merchant tariff can come down in future. Mitigant: Considering that the coal based power plants take around five years from concept to commissioning, any significant capacity being planned today in private sector may not come up/may not come in time, it can be reasonable assumed that the opportunity for the attractive merchant operation of the proposed project would remain for at least next 5 years. With the attractive merchant operation, the project would be able to achieve payback in 3-4 years. Once the competition rises after 5 years, the project can enter into long term PPA can be entered into to generate long term annuity like cash flows.

b. The company has to secure the remaining quantum of gas; however given the priority to Power sector and approach of MoP (as suggested in a recent criteria decided for allocation of gas to projects commissioning in 12th plan), getting gas allocation for such projects in advance stages of development is not perceived to be a cause of concern. Mitigant: Reliance Industries Limited (RIL) is going to ramp up its production from its KG-D6 basin from current 60 mmscmd 80 mmscmd in next one year. Thus, additional 20 mmscmd of gas would be available for allocation to different sectors. Considering that: (i) criticality of the power sector for the economic development of the nation (ii) high priority to the plants getting

commissioned in the XI plan (iii) no substantial expansion in the sectors like fertilizer and LPG in near future (iv) allocation of more than 50% of the current production by RIL to the power sector, (v) securing 100% marks by the proposed project under the criteria devised by Central Electricity Authority (CEA) for gas allocation to the private sector power projects, (vi) and preference by the government for allocation of the gas to the project close to commissioning, it can be reasonably deduced that allocation of gas to the proposed project would not be an issue.

6. i) Date of visit to the Promoters: 11th October 2010 ii) Name of the official met : Mr. R.L.Goyal, Group chairman 7. Other Information A. Details of the current project GIPL is developing a 225 MW gas based combined cycle power project in Kashipur, Uttarakhand. Detailed Project Report (DPR) for the Project has been prepared by Tata Consulting Engineers Limited (TCE), a Tata group company with long standing experience in design and engineering of the power projects. The Project is in advanced stage of development. The company has acquired 25 acres of industrial land which suffices the requirement for setting up the Project. The clearance for boring of wells has also been secured from the Government of Uttarakhand on June 9, 2010. The Terms of Reference (ToR) for the Environment clearance has been approved by Ministry of Environment & Forest, and the final clearance is expected shortly. Evacuation of the power is proposed from the substation of Power Grid Corporation of India Limited (PGCIL) located at around 6 KM from the Project site. The application has been made to PGCIL for the evacuation arrangement. 0.30 metric million standard cubic meter per day (mmscmd) of gas has been tied-up with GAIL (India) Limited (GAIL) on long term basis and balance gas would be tied-up from Reliance Industries Limited (RIL)/similar gas fields at the time commissioning in line with Government of India (GoI)s Gas Utilization Policy. Transportation of the gas tied-up with GAIL would be from Oil & Natural Gas Corporation Limited (ONGC)s Vasai gas fields in Maharasthra. The gas would be transported through ~3000 KM Hazira-Vijaipur-Jagdishpur (HVJ) gas pipeline upto Karanpur in Uttar Pradesh, which is operational since more than last two decades. From Karanpur the gas would be transported through KaranpurKashipur section (~ 100 KM) of the spur pipeline network, which is under construction by GAIL and would be commissioned in March 2011, much before the scheduled commissioning of the Project ( December 2011). RILs gas from KG-D6 basin would be transported upto Hazira through its already operational Kakinada-Hazira pipeline, and thereafter using GAILs network upto the Project site.

Orders for Gas Turbines, Heat Recovery Steam Generators and Steam Turbine Generator have been placed on world renowned original equipment manufacturer (OEMs) like General Electric, Thermax and Hangzhou Steam Turbine company (HTC) and the advance payment has been released to them. Toshibas Indian arm has been appointed as the Design and Engineering consultant for the Project. 100 MW of the capacity would be tied-up on long term basis before commissioning of the Project and balance capacity would be sold in the merchant market (short term sale) to ensure higher revenue realization. B. (Information about the previous project of the company, if any) New company. Not Applicable C. Information of the subsidiaries and other group concerns, their activity with their brief financials and present banking arrangement RLG Group of Industries was established in 1974 as a Plasticizer Manufacturing company by Mr. R. L. Goyal. Over the years, RLG Group has strengthened its foothold in the chemicals industry by setting up several chemical manufacturing units.Presently, the Groups total strength of Factory Staff is about 500 Nos. & Office Staff of around 60 personnel.In the last decade itself the group has successfully developed more than eight projects. Details of the projects commissioned by the group are tabulated below.
Project/Product Acetic Anhydride Acetanilide Acetic Anhydride Acetanilide Power Alcohol Aniline Oil Nitro Benzene Alcohol Bio-gas based power plant Captive gas based power plant Monochloro Acetic Acid Vinyl Sulphone Capacity 5000 MT 10000 MT 5000 MT 25,000 MT 27,000 kl 15,000 MT 18,000 MT 27000 kl 1 MW 2.2 mw 5,000 MT 2500 MT Location Silvassa, Dadra & Nagar Haveli Silvassa, Dadra & Nagar Haveli Bharuch, Gujarat Silvassa, Dadra & Nagar Haveli Surat, Gujarat Dahej, Gujarat Dahej, Gujarat Dahej, Gujarat Surat, Gujarat Dahej, Gujarat Bharuch, Gujarat GD Dye Stuff Industries Limited Shri Padmavati Chemicals Limited Luna Chemical Industries Private Limited Company Jayjee Enterprises Current Status Commissioned in Jan 2010 Commissioned in January10 To be commissioned by December 2010 Commissioned in January10 Commissioned in November 10 Commissioned in October 2007 Commissioned in October 2007 50%-commissioned in 2007 and balance by March 2011 To be commissioned by March 2011 50% commissioned in May 2010 & balance by March 2011 Technology Partner is being finalized. Already operational

Baroda, Gujarat

Vinyl Sulphone

2500 MT

Bharuch, Gujarat

Already operational

Provided below are the financials of the three flagship companies of the RLG Group: (Rs. in crore) Luna Chemical Industries Private Limited Particulars 2006-07 Audited
Capital Tangible Net Worth Sales Net Profit (after Tax) Current Ratio DER 35.57 37.02 113.63 3.94 1.87

2007-08 Audited
46.02 48.39 157.77 4.55 2.08

2008-09 Audited
51.26 54.98 152.66 5.24 1.70

2009-10 Provisional
66.73 71.91 169.94 6.27 2.10

0.79

0.90

0.86

0.85 (Rs. in crore)

Jay Jee Enterprises Particulars

Capital Tangible Net Worth Sales Net Profit (after Tax) Current Ratio DER

2006-07 Audited
24.51 24.51 110.40 5.14 28.67

2007-08 Audited
24.27 24.27 108.60 5.29 16.71

2008-09 Audited
29.16 29.16 110.75 3.45 4.63

2009-10 Provisional
29.08 29.08 90.91 4.25 3.51

0.23

0.72

0.35

0.26 (Rs. in crore)

GD Dyestuff Industries Limited Particulars 2006-07 Audited

Capital Tangible Net Worth Sales Net Profit (after Tax) Current Ratio DER 11.41 12.23 43.29 0.06 2.91

2007-08 Audited
11.98 12.70 44.71 0.57 2.58

2008-09 Audited
12.19 12.88 35.40 0.21 1.37

2009-10 Provisional
12.36 13.04 20.96 0.18 1.37

1.07

1.60

0.57

0.39

8. Recommendations / comments of Zonal Office (please confirm that the proposal complies with applicable norms such as take over norm, real estate policy, prudential exposure cap etc)

Date

Zonal Head

In-Principle approval is hereby granted subject to compliance with Banks policy guidelines, proper assessment/ appraisal of the facilities and consideration by Competent Authority on merits on receipt of comprehensive proposal. This approval is valid for one month and Bank reserves the right to modify terms and conditions at the time of actual sanction of facilities depending upon market conditions.

General Manager (Wholesale Banking)

Executive Director

Annexure-1: Banking Arrangement of RLG Group companies

A.
S.NO.

BANK OF BARODA (BOB)

Compan ys name GD Industries Private Limited Type of limit Sanctioned limit 7.00 12.50 2.00 0.50 3.90 25.90 19.35 2.71 10.50 10.14 4.74 6.72 10.00 5.65 1.00 1.00 71.81 10.80 2.00 3.00 1.00 16.80 114.51 Rs. in crore Availed as on 31st August 2010 5.50 0.32 5.82 17.14 1.86 8.48 9.48 PAID 5.40 8.63 5.65 0.80 1.00 58.44 9.74 1.10 2.11 0.25 13.20 77.46

PC/PCFC/CC F.B.P. L/C BANK GUARANTEE GOLD CARD Total C/C TERM LOAN -I (PANOLI) TERM LOAN -II (PANOLI) TERM LOAN - (OLPAD) TERM LOAN-ECB LOAN (OLPAD) TERM LOAN - I (DAHEJ) TERM LOAN - II (DAHEJ) L/C BANKN GUARANTEE BILL DISCOUNTING Sub Total C/C BILL DISCOUNTING L/C BANK GUARANTEE Sub Total TOTAL (BOB)

Luna Chemical Industries Private Limited

Jay Jee Enterpris es

B.
1

IDBI Bank
LUNA C/C (SHORT TERM) L/C Sub Total BILL DISCOUNTING Sub Total Total ( IDBI) GROSS TOTAL 5.00 15.00 20.00 5.00 5.00 25.00 139.51 20.00 97.46 5.00 15.00 20.00 -

JAY JEE