Loan Operation Department

No. 04.1/Mita/2011/

Date: 12/12/2011

Managing Director

M/S. Mita Brick Field Ltd.

Vairob Nodir Char,
Mulghar, Fakirhat
Dist.- Bagerhat.
Subject : Sanction of Term Loan of Tk. 400.00 Lac (Taka four crore) & IDCP of
Tk. 28.00 Lac (Taka tweenty eight lac), totaling Tk. 428.00 Lac (Taka
four crore twenty eight lac) and working capital (Hypothecation) loan
Tk. 100.00 (One crore) only to M/S. Mita Brick Field Ltd. Mulghar,
Vairab Nadir Char, Fakirhat, Bagerhat.

Dear Sir,
We have the pleasure to inform you that the competent authority of the Bank has
been pleased to sanction the aforesaid loans on the 11th December, 2011 for setting up of
a semi-automatic Brick manufacturing unit at Mulghar, Vairab Nadir Char, Fakirhat, DistBagerhat on the following terms and conditions:
1.
2.

Name of the project

Location of the project

:
:

3.

Capacity of the project

M/S. Mita Brick Field Ltd.

Vairob Nodir Char, Mulghar,
Fakirhat, Dist.- Bagerhat.

The annual rated capacity & capacity after expansion of the project based on 8
hours each per day and 250 working days in a year will be as under :
Sl. No.
1.

Item of products
Solid Brick

Unit
No.

Production Capacity
Daily
Annual
50,000
1,25,00,000

Out of total product 1st class bricks 85%, 2nd class bricks 10% & 3rd class bricks
5% has been considered.

04.

Financial Aspects :
Cost of the Project :
(Taka in
000)
Items

Incurred

To be Incurred

Total

22721
22721

66395
3761
70156

89116
3761
92877

Total fixed cost

Net Working capital
Total cost of the project:
5.

Means of Finance :
The aforesaid cost is proposed to be financed as under :Items

Incurred

Term Loans :
BDBL Loan
Interest during construction Period
Total Loan:
Equity:
Sponsors equity
Total Loan & equity:
6.

(Taka in 000)
To be Incurred
Total

40000
2800
42800

40000
2800
42800

22721
22721

27356
70156

50077
92877

Capital Structure :
(a) Authorized Capital:
Tk. 10,00,00,000.00 divided into 10,00,000 shares of Tk. 100.00 each
(b) Paid-up Capital:
Taka 500.77 lac divided into 5,00,770 ordinary share of taka 100.00 each.

7.

Amount of loan :
(a)

Taka 400.00 lac ( Taka Four crore ) only.

(b) Deferred payment of IDCP:

Taka 28.00 lac ( Taka Twenty Eight lac ) only.
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8.

Purpose of loan :
Term loan : To meet the part cost of building, machinery & transport.

9.

Period of loan:
a) Local currency :

: 8 (Five ) years (Including usual grace

period of 6 month )

b) Deferred payment of IDCP :

: 5 (five) years

10. Rate of Interest and other charges :

(a)

Local currency loan :

i)

As per CAD circular No. 10/2011 dated 13/09/2011 the rate of

interest on loan of brick manufacturing industry has been fixed
@14% per annum on quarterly basis. The actual interest rate, however,
to be charged to the borrower company shall be the rate changeable from
time to time as per policy/relevant circular of the Bank.

ii)

In case of default in payment of loan installment and interest etc. on

due date, interest will also be charged at the same rate on compound
basis on the amount so defaulted.

(b) Deferred payment of interest due :

Interest accruing on the loans disbursed during the period of construction of
project will be calculated and shown separately and will be realized at a
simple rate of interest in five annual installment after the usual grace period
to be determined by the Bank.
(c)

Other charges as per rates in force from time to time.

(d) In no case, the interest on BDBL loans will be exempted and/or reduced.

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11. Disbursement schedule :Term loan of Tk.. 400.00 lac (Taka Four crore) only:
1st installment of Tk. 100.00 lac (Taka one crore) only:
To be disbursed for
Towards civil construction (part).
Total =

(Tk. in 000)
100.00
100.00

Subject to Investment of Sponsors:i)

Completion of documentation formalities with the Bank ;
ii)

depositing with the BDBL the 2 (Two) advanced dated cheques for
payment of 2 (two) installments of loan to be disbursed (IDCP/normal
interest or installment, whichever falls earlier) as per repayment schedule ;

iii) Asserting the position of electric connection to the project at this stage ;
iv)

In addition to the existing investment of Tk. 227.21 lac, the sponsors have
to made further investment of Taka 135.60 lac for the following purposes:
(Taka in '000')
-Transfer/Registration cost of the project land in the
name of the company
-Survey, plan & drawing
-Legal & Documentation expenses
-Security deposit for power
-Civil construction of the project (Part)
Total:

29.25
0.75
2.00
3.60
100.00
135.60

Producing registered mortgage deed, power of attorney regarding transfer of the

project land in the name of the company.

Raising the capital of the company to the tune of Tk. 362.81 lac and producing
documentary evidence to that effect.

Depositing with BDBL as collateral security 100% share certificates to be issued

by the company in the name of the sponsoring directors and share holders as and
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when raised along with blank share transfer deeds duly verified, signed and
sealed and the same will be retained by the bank till such time BDBL's loans
are fully liquidated. BDBL will be liberty to use these towards liquidation of
loan(s) in case of default.
2nd installment of Taka. 74.98 lac (Taka Seventy Four lac Ninety Eight
thousand ) only:
Taka. 74.98 lac will be disbursed for the following purpose :- Completion of all remaining civil works of the project

(Taka in 'lac')
74.98

Total:

74.98

Subject to companys :i)

Proper utilization of 1st installment of loan and producing documentary
evidence thereof ;
ii)

Further investment of Taka 92.35 lac for following purpose.

- Civil construction of the project (Part)
- Furniture, Fixture & Equipment
- Safety equipment
- Connection charge for power
- Advance payment of imported m/c. & equip. which
procured locally & producing documentary evidence
to that effect.
- Advance payment of locally m/c. & equip. &
producing documentary evidence to that effect.
- Advance payment of 3 Nos 10 ton capacity each truck
& producing documentary evidence to that effect.
Total:

(Taka in 'lac')
9.08
1.50
1.00
3.00
7.42
14.25
56.10
92.35

Raising the capital of the company to the tune of Tk. 455.16 lac and producing
documentary evidence to that effect.

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3rd installment of Taka. 225.02 lac (Taka Two Crore Twenty Five Lac Two
thousand ) only :
Taka. 225.02 lac will be disbursed for the following purpose :
(Taka in '000')
225.02

- Payment of imported machinery & equipment which

procured locally, part payment of local machinery
& equipment and part payment of truck (payment
to be made direct to the supplier).
Total:

225.02

Subject to companys :i)

Proper utilization of 2nd installment of local currency loan and producing

documentary evidence thereof ;

ii)

Further investment of Taka 45.61 lac for following purpose.

(Taka in '000')
- Civil, mechanical & electrical installation
- Trial run
- Investment of net working capital
Total:

6.00
2.00
37.61
45.61

Raising the capital of the company to the tune of Tk. 500.77 lac and producing
documentary evidence to that effect.

Depositing with BDBL as collateral security 100% share certificates to be issued

by the company in the name of the sponsoring directors and share holders as and
when raised along with blank share transfer deeds duly verified, signed and
sealed and the same will be retained by the bank till such time BDBL's loans
are fully liquidated. BDBL will be liberty to use these towards liquidation of
loan(s) in case of default.

Page # 6

12.

REPAYMENT SCHEDULE:
a)

Term Loan (Principal):

To be repaid in 28 (Twenty eight) quarterly installments. Repayment shall
commence after the date of 1st. disbursement of loan or twelve months
after the project goes into commercial operation, whichever is earlier,
provided that the banks decision based on factual evidence as to whether
the project has gone into commercial operation or not from a particular date
shall be final and conclusive and shall be binding on the borrowers;

b)

Deferred payment of interest on BDBL loans that will be

accrued during the construction period of the project:
Interest to be accrued on BDBL loan during the period of construction of
the project will be realized from the borrowers in five equal annual
installments after the expiry of the construction period and usual grace
period. The bank's decision regarding construction period of the project and
grace period there of shall be final and conclusive and shall be binding on
the borrower.

c)

Interest on loan outstanding :

The interest to be accrued on the outstanding loan amount after the expiry
of the grace period shall be charged as usual on quarterly basis.

Page # 7

13(a)

Security of loan :
BDBL loan will be secured in the following way :Mortgage/hypothecation by way of 1st charge on the tangible fixed assets of
the project both existing and future value estimated at Tk 857.70 lac. as
under:
(Taka in '000')
25425
28556
22929
8610
250
85770

Land
Building
Machinery
Vehicle
Other Assets.
Total :

Valid mortgage/hypothecation will be created by the borrower after installation of

machinery.
(i) The sponsors shall submit registered power of Attorney in favour of
BANGLADESH DEVELOPMENT BANK LTD. towards mortgage of tangible
fixed assets of the project. ; and
(ii) Personal guarantee of the proprietor of the project in his individual capacity
including the following which will be vacated after liquidation of loan :Name of the sponsor

1.
2.

Sheikh Mohammad Ali

F/N: Sheikh Ibrahim Hossain
M/N: Mrs. Jarina Begum.
S. M. Mehedy Hasan Mookut,
F/N: Sheikh Mohammad Ali
M/N: Rojina Yasmin.

Address

Status

Vill: Attaki, P.O: Fakirhat,

P.S: Fakirhat, Dist: Bagerhat.

Managing
Director

Vill: Attaki, P.O: Fakirhat,

P.S: Fakirhat, Dist: Bagerhat.

Director

Page # 8

13. (b) Working Capital :

For working capital loan the sponsor offered land measuring 170 decimal adjacent to the
project land. The value of land has been estimated at Tk. 153.00 lac by the bank officials.
The value of proposed mortgage property is 1.53 times to the proposed working capital loan
of Tk. 100.00 lac.
14.

Special Conditions :
A:

Project Deposit:
The sponsors shall-

i)

make a deposit of Tk. 27.36 lac (Incremental equity of Tk. 273.56 lac)
being 10% equity to be invested by the sponsor with BDBL;

ii)

invest further 10% of the equity to be invested in the project towards civil
construction. Such deposit and investment should be made within three
months from the date of sanction of loan(s), otherwise the sanction will be
treated as cancelled automatically.

B:

The sanction of loan will be made after obtaining of satisfactory CIB report
from Bangladesh Bank.

C:

Before signing the loan agreement, the sponsor shall(a)

submit an undertaking assuring that he will meet any shortfall in the

cost of the project;

(b)

submit an undertaking assuring that he will maintain the quality of

construction at his own risk & responsibility;

______________________________________________________________
Note : The project deposit of Tk. 27.36 lac, being 10% of equity of incremental
considered not require to deposit to the bank, since the sponsors have
already invested an amount of Tk. 227.21 lac in the project which is about
54% of the total equity. As such, condition A(i) may be treated as fulfilled.

Page # 9

(c)

undertake to execute all the documents with BDBL creating charge

in favour of the bank on the tangible fixed assets of the project, both
existing and future;

(d)

grant the BDBL right to nominate at the option of the latter one or
more persons as a Director(s) of the company and to replace such
person from time to time. For this, if so needed, the company will
amend and/or modify the Memorandum of Association and Articles
of Association forthwith. The Director(s) nominated by the bank will
be entitled to reimbursement of traveling and daily allowances at the
rates prescribed by the BDBL from the company for attending
meetings of the Board of Directors of the company. Provision to this
effect will have to be made in the Memorandum of Association and
Article of Association of the company.

(e)

submit an affidavit to the effect that he has no liability with any other
Bank & development financial institutions beyond the declaration
already made ;

(f) submit project building layout plan(approved by the appropriate

authority) with details structural drawings etc. for approval of the Bank.
D:

15.

(i)

Make registered mortgage of the project land with the Bank ;

(ii)

Make registered Power of attorney in favour of BDBL for selling

project assets by the bank.

Before disbursement of loan, the sponsors shalla)

submit an undertaking to the effect that they will not raise any objection in
future as regards quality, price and technical acceptability of the finally
approved/selected machinery;

b)

open an account with BDBL (if not opened earlier) and operate it smoothly
to mobilize all the business transactions related to the concerned project ;

Page #10

c)

undertake to give BDBL the right to appoint Auditor(s) for the company and
determine terms of service thereof as and when considered ;

d)

appoint one Chief Accountant-cum- Secretary for the project whose

appointment and terms of service shall be determined with due approval of
BDBL;

e)

undertake to maintain computerized accounting system and Management

Information System (MIS) on a permanent and compulsory basis; and

16.

In addition to supervision & monitoring of the project by the bank's officers,

professional expert(s) will be deputed by the bank to the project for a particular
period of time. The sponsor shall undertake to the effect that the salaries &
allowances for the deputed professional expert(s) will be borne by him.

17.

The directors shall make proper and adequate arrangement for training the project
personnel. The cost of training will be borne by the sponsor' from his own
sources.

18.

Besides, the sponsors of this project will make a undertaking that they will avail
cash credit (Hypo) loan from this Bank.

19.

Before signing of the loan agreement, the company shalla)

submit an undertaking assuring the BDBL that the sponsors shall meet any
short-fall in the cost of the proposed project out of his own resources;

b)

execute personal guarantee in the individual capacity by the directors ;

c)

undertake to execute all the documents creating the bank's charges

on the tangible assets of the project, both existing and future;

d)

give an undertaking to the effect that the project site shall not be
changed without the prior approval of the bank in writing;

e)

furnish an undertaking to effect that the project shall not be transferred

to any one without the prior approval of the BDBL in writing;

f)

undertake to submit the monthly operational results and cash flow

statement of the project.
The sponsor shallPage #11

20.

a)

complete and commission the project within 12(Twelve) months

from the date of construction start ;

b)

display a signboard at conspicuous place at the project site indicating that the
project has been financed by BANGLADESH DEVELOPMENT BANK
LTD.;

c)

abide by the rules and regulations of the Department of Environment Pollution

Control, Govt. of the People's Republic of Bangladesh;

d)

create a loan redemption fund particularly for servicing the project's loan
liabilities to BDBL;

e)

maintain all books of accounts properly which may be inspected by the BDBL
or any other national/foreign/international financing agency as and when
required;

f)

submit quarterly progress report on the project regularly direct to the bank on
the prescribed proforma;

g)

submit to the BDBL the audited balance sheet together with the profit and loss
accounts of the project for every financial year within four months from the
close of the project's financial year;

h)

agree that the bank shall always have the right to transfer to an individual,
bank or other authority the ownership of the loans/credits together with all
collateral given/to be given by the borrower;

i)

agree that the bank shall always be at liberty to obtain and gather full financial
and credit information on the borrower from other financial institutions;

j)

agree that the bank shall have the right to share information on the status of
the borrower's loan and debt-service record with other financial institutions;

k)

agree that the bank shall be at liberty to publish notice and information on the
borrower if there are arrears for more than one year and in that case the
expenses incurred therefore will be borne by the borrower ; and
furnish such other data on the project to the BDBL and/or other agency as the
BDBL may require.

l)

21. The sponsor shall not

Page #12

a)

appoint managing agent without obtaining prior approval of the BDBL in

writing;

b)

undertake civil construction work of the project without obtaining

BDBL`s prior approval in writing on the building layout plans;

c)

raise any other loans for this project without obtaining the BDBL's approval in
writing to the terms and conditions thereof. This condition will not, however,
apply to the loans to be raised by the borrower from the commercial banks
against pledge/hypothecation of the project's current assets to meet its working
capital requirement;

d)

provide any loans and/or make any investment for other purpose out of the
funds of the project without obtaining prior approval of the BDBL in writing;

e)

change the management of the project without obtaining the BDBL's prior
approval in writing.

22. The sanction of loan(s) is subject to the availability of local currency

resources with the bank.
23. under no circumstances, shall this sanction of loan be sold or management
transferred to any other individual, party or organization without the BDBL's
prior approval in writing.
24. The documentation of loan(s) shall be completed within 3(three) month`s
from the date of communication of the sanction thereof, otherwise the
sanction is liable to be withdrawn.
25. If at any time during the subsistence of the BDBL loan, the company raises its
paid-up capital by issue of shares, the BDBL at its option, shall be given
preferential allotment of shares at par value up to 20% of the amount of
loan(s) sanctioned. The company shall undertake to inform the BDBL will in
advance of its intention to raise its paid-up capital and to obtain the decision
of the BDBL in writing in respect of the BDBL's right to exercise the option
for preferential allotment of shares referred to above.
26. The BDBL shall have the option to convert its loan into equity of the company
at any time during the currency of the BDBL loans. For enabling BDBL to do
this, amendments of the company's Memorandum of Association and Articles
of Association will be made by the company forthwith.
Page #13

27. The sanction of loan will be treated to have been withdrawn if the sponsors of
the project fail to qualify for disbursement fulfilling all relevant terms and
conditions of loan(s) within 6 (six) months from the date of issue of sanction
letter.
28. INSURANCE:
(i)

The proprietor shall insure the project assets during implementation

period with the Sadharan Bima Corporation in the joint name of the
bank and the project covering the following risks :(a)
(b)
(c)
(d)
(e)
(f)

(ii)

Fire (with re-instatement clause);

Riot;
Strike;
Damages;
Cyclone; and
Flood.

After successful commercial operation, the company shall insure with

the Sadharan Bima Corporation and/or any Bangladeshi Insurance
Company enlisted with BDBL, in the joint names of the bank and the
company as mortgagee and mortgagor respectively, all fixed assets of
the project, both existing and future, covering the following risks :(a)
(b)
(c)
(d)
(e)
(f)

Fire (with re-instatement clause);

Riot;
Strike;
Damages;
Cyclone; and
Flood.

Page #14

(iii)

The sponsor shall, in addition to the above mentioned risks, insure

other assets and properties which form the security for the BDBL
loan(s),against any risk in such amount or amounts and in such a
manner with the Sadharan Bima Corporation and/or any other
Bangladeshi Insurance Company acceptable to BDBL as shall be
required by the bank from time to time ; and

(iv)

The cost of the insurance premium will be borne by the sponsors.

29. The above mentioned sanction of loan(s) and the terms & conditions thereof
are subject to amendment, modifications and/or withdrawal without notice at
the discretion of the BDBL.
If the above mentioned terms and conditions of the loan are acceptable to you, you may
contact Branch office, Khulna within 15 (fifteen) days from the date of issuance of this
letter for completion of documentation formalities with the Bank.
Thanking you,
Yours faithfully,

( Syed Md Nazrul Islam )

Assistant General Manager
Encl:

i)
ii)
iii)

Details of Civil Construction

List of Imported & Local Machinery .
Implementation Schedule

Page #15