Ref: BANK/CB/2016/214 8 July 2016

The Chief Manager,

Canara Bank,
Bhogal,
New Delhi

Sub: Our Proposal for Renewal of Credit Facilities

Dear Sir,

This has reference to your mail dated 01/07/2016 on the captioned subject. In this connection, as
desired we are submitting herewith the following information/documents:-

Reasons substantiating decline in Sales & Profit :-

As you are aware that during past few years there has been a general recession across
India and also in the Real Estate which is a symbol of growth of any economy. The Country was
passing through a period of political uncertainty compounded by indecisiveness/ inertia during
the period 2012 13 onwards resulting into negative business sentiment across various sectors of
economy. The real estate Industry in particular could not remain unaffected by the overall
economic recessionary scenario and in fact stands plunged into a very critical stage due to a
number of reasons, such as :-

 General recession affecting the overall economic activities, in the recent past;

 Disappearance of a large number of buyers in the real estate because of lack of

potential appreciation;

 Investors opting for alternate investments rather than in real estate;

 Prevailing uncertainty and negative sentiments in the real estate industry, in

particular;

 Falling land prices;

 More availability of supplies than the demands ;

The depression in the real sector has reached such a stage that the Govt. is resorting to
reducing the Circle rates by 15% to 20 % from the existing levels.

As submitted during personal meetings also that It is not only our Company which has
gone through difficult times, the whole of real estate and the construction industry in
particularly are facing rough times. Because of recession there are no buyers in the real
estate sector, very few new projects are being launched, builders/promoters are shy of
pumping in any money. Our Company is no exception in this regard and could not remain
aloof from the effects of recession.

The acute recession in real estate is having a corresponding severe adverse effect on the
construction activities in particular . A lot many reasons are assignable to the prevailing
acute depressing state of construction industry which is , some which are enumerated,
as under:-

 General recession effected the progress in the Industry thereby launch of new
projects had slowed down;

 Many ongoing projects were being abandoned , around Delhi due to issues with
land Owners and other issues etc., especially in Noida/Greater Noida;

 Court Order restraining use of Underground Water for Construction activity in and
around Gurgaon;

 Labour (mostly migrant from eastern part of India) being not available in and around
Delhi;

All the above and many more factors have contributed immensely in restricting the
annual value of Turnover/ Work Done of the Company, immensely. Some of the factors
which have directly affected the performance of the Company are :-

a) Shortfall in award of new works to the Company;

b) Stiff competition amongst Construction Companies for procurement of whatever

New Projects are being launched ;

c) Unpractical terms are being proposed by the Launchers of the new project since the
supply (Job Seekers) are more than the Demand (Launchers);

d) All energies and resources were getting bogged down in recovering Company’s dues
and organizing optimum utilization of funds and financial resources;

After considering the aforesaid factors and many more, the achievement of
Turnover/ Work Done of Rs.5,202.26 Lacs and Rs.4,509.42 Lacs during the FY 2013-14 in
FY 2014-15, respectively is no less an achievement. A period when the Companies had
been fighting for survival & existence, the Company’s performance has been adequate
enough to sustain.

During the referred period, the effect of all these factors severely affected the
finances, profitability, tendering capacity of the Company, work execution efficiency, its
reputation with suppliers since the Company had to buy costlier materials, paid for idle
costs/overheads accompanied by arm twisting by our Clients as we were finding it
difficult to make adequate & desired progress on the projects And all that compounded
by exorbitant interest costs.

This situation affected the Company on two fronts, one in reducing the Turnover
of the Company and other on depletion in the net profits of the Company.
 In any case, in view of the Company’s strong background, technical capability &
history of successful execution of large number of Projects over the period of past more
than six decades, the Company’s operations are exhibiting a turnaround and the
Company is very much confident of procuring some good contracts from the parties with
whom negotiations are at advance stage. A list of new Projects awarded to the Company
during last one year are , as under :-

1. Commercial Building for Sindhu Realtors Ltd New Delhi 18.62.Crores

2. Commercial Building for Four Corner Dev. Pvt Ltd New Delhi 14.22 Crores
3. JC World Mall Building for JC World Hospitality Pvt Ltd Noida 18.25 Crores
4. Residential Building for Mr. Siddhath Sareen B-101 GK -1N.Delhi 3.15 Crores
5. Institutional Building for Petro IT Ltd Sec-44 Gurgaon 8.29 Crores
6. Residential Floors & Villas For Jindal Realty Ltd Sonipat Haryana 20.00 Crores
7. Residential Building for Mr..D.S Barar Sundar Nagar New Delhi 2.00 Crores
8. DIT University Deheradun Girls Hostel – 24.50 Crores
9. Office Building of CIC for NBCC Limited Old JNU Campus N.Delhi 3.57 Crores
10. NBCC-Residential Quarter of CRPF Kathgodam Uttrakhand Work 52.00 Crores
11. Office Building Imperia Structures Ltd Sec-62 Gurgaon 20.00 Crores
12. Office Building Industrial Containers & Closures at Okhla N. Delhi 8.00 Crores

The Turnover/ work done in FY 2015-16 Rs.60.46 Crores, for the Qtr, ended June 2016,
has been Rs. 15.71 Crores And the projected turnover of the Company for FY 2016 17 is
Rs. 80.00 Crores

The Company foresees substantial amounts flowing into the Company from the
aforesaid processes which would improve the overall financial health of the Company.

Thanking you,

Yours faithfully,
For GSBA Builders Pvt. Ltd.,

(Authorised Signatory)