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Channel Financing Scheme Policy

CHANNEL FINANCING SCHEME POLICY Objective A structured program to ease payments from Dealers of DAIPL by providing them with a flexible funding facility. Purpose To be used by dealers exclusively for payments to DAIPL towards purchases of goods from DAIPL. Note – This arrangement can not be used for any other purpose(s) other than purchase of goods from DAIPL and payment towards that purchase. Applicability Clause 1. Dealers who fulfilled following criteria will be eligible for availing facility under this scheme; a. General Clause i. signed dealer agreement with DAIPL ii. deposited security deposit with DAIPL ii. completed minimum 6 months of dealership with DAIPL iv. have minimum business experience of 3 years in air conditioning industry v. no default in payment to DAIPL during preceding 1 year vi. is not under defaulter’s list of RBI/ ECGC vii. Neither of director/ promoter etc. of dealer is in arrear/ default of any facilities availed from YES BANK LTD. / group companies of YES BANK LTD. viii. non of the facilities from YES BANK LTD. / group companies of YES BANK LTD. have been restructured ix. Should not have one-time settlement with YES BANK LTD. / group companies of YES BANK LTD. x. s not a sick/ potentially sick/ referred to BIFR b. Financial Clause i. Have minimum turnover of Rs. 20 million as turnover in last audited financial. ii. Positive PAT (Profit after Tax) and Net Worth for the last 2 years. iii. TOL/ATNW should be less than 4. 2. Facility will be provided only when recommended by DAIPL and approved by YES BANK LTD. bank after completion of internal due diligence of YES BANK LTD. Note – 1. DAIPL and/or YES BANK LTD. Bank reserve(s) the right to add/change/delete any of the clause(s) at their own discretion at any time without assigning any reason(s). Limit Assessment of Dealers . Overall limit of each dealer shall be ‘limits as recommended by DAIPL’. Cash discount 1. All billings to dealers under this scheme shall attract a cash discount as per their category based on achievement of turnover (As per Daikin’s dealer credit policy). 2. This amount shall be adjusted in the invoice value. DAIPL shall not issue any credit note or cheque towards cash discount amount. 3. Change in cash discount (upward/ downward) is dependant upon decision of management. This has no relationship on change of IBAR/ interest rate/ processing fee/ any other fee charged by YES BANK LTD.

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Likely Benefits to dealers Following benefits can be derived by dealers from this scheme; 1. Unsecured facility 2. Better cash flows and liquidity 3. Reduced turnaround time 4. Competitive financing compared to other options 5. Minimal impact on working capital arrangement 6. Opportunity to expand banking relationship 7. Instant income = Cash discount ‘minus’ interest 8. 60 days credit period Billing Clause 1. An eligible dealer may opt for billing through channel financing or use DAIPL’s credit facility. A dealer can not enjoy channel financing and DAIPL’s credit facility simultaneously. . An eligible dealer can start using DAIPL’s credit facility only when he has paid whole of principal amount, interest amount and any other dues to YES BANK LTD. and submit proof of the same to DAIPL. 3. DAIPL shall not bill to dealer, who has opted for channel financing, on cash advance basis or based on its own credit policy. 4. In case a dealer wants to opt out of channel financing and wants to be under DAIPL’s credit policy, he shall be included under DAIPL’s credit policy only when all dues (principal + interest amount) are paid by the dealer to YES BANK LTD.

Facility arrangement 1. Maximum normal overall limit (called “Normal Limit”) available to each dealer shall not exceed Rs. 5millions. 2. Credit limit (called “Sanctioned Limit”) and credit days would be decided by YES BANK LTD. after doing field evaluation and due diligence of each dealer but can not exceed the credit amount allowed as per DAIPL’s credit policy. Extended credit amount shall be allowed on a case to case basis after approval of DAIPL credit committee & YES BANK LTD. 3. Tenure of credit days allowed shall be 60 days. 4.

Credit arrangement to dealers shall be reviewed every financial year and changes shall be made based on following performance criteria; a. Sale performance during previous financial year b. Repayment history of principal amount during previous financial year c. Payment history of interest amount during previous financial year d. Financial status during previous financial year Interest and processing fee 1. It is the responsibility of dealer to pay to YES BANK LTD. amount of interest, processing fee (on sanctioned limit and additional limit), renewal fee, as agreed by YES BANK LTD. and DAIPL.

The schedule of costs are as follows; a. Schedule of costs i. Interest p. a. = 10. 75% (as of now) variable for a period of 0 to 60 days. ii. Processing fee Rs. 5,000/= plus applicable taxes. 2. Interest, as agreed by YES BANK LTD. and DAIPL, shall be paid by dealer at such time as per terms and conditions of loan documents. 3. Processing fee on Sanctioned Limit shall be paid by dealer to YES BANK LTD. at the time of sanctioning the Sanctioned Limit. 4. Processing fee on Additional Limit shall be paid by dealer to YES BANK LTD. at the time of sanctioning Additional Limit. 5. Renewal fee shall be paid by dealer to YES BANK LTD. very year at the time of renewal. 6. Any principal amount defaulted to be paid will attract penalty and/or additional interest as agreed by YES BANK LTD. and dealer. Documentation 1. DAIPL, Dealer and YES BANK LTD. shall comply all documentation as required by YES BANK LTD. at the time of sanctioning normal limit. 2. Non-compliance of documentation part or full may tantamount to non-sanctioning of limit. Default by dealer to YES BANK LTD. 1. Default in payment of principal amount and interest within credit period or stipulated period, as the case may be, may tantamount to; By YES BANK LTD. a.

Freeze operation of OD account b. Appropriate funds lying in various accounts of dealer with YES BANK LTD. c. Enforce personal guarantees and/ or other securities d. Terminate this facility By DAIPL a. Cancellation of order placed on Daikin for supply of goods b. Stop supply of goods for all orders pending to be executed c. Non-payment of any dues by DAIPL to dealer (including commission, rebate, service fee, security deposit etc. ) d. Payment of all dues (after adjusting DAIPL’s dues from dealer) mentioned in (c) above to YES BANK LTD. for discharging of dealer’s liability partially or fully.

Others 1. Dealers shall open a current account (called “OD” account) with YES BANK LTD. and can be used only to make payment to DAIPL. 2. Dealers are not allowed to withdraw money from the OD account. 3. DAIPL shall not terminate dealership of any dealer without prior written intimation to YES BANK LTD. during tenure of this facility. 4. DAIPL shall not modify any of its existing arrangements with dealers without prior intimation to YES BANK LTD. 5. No other mode of billing by DAIPL or billing through any other channel is permitted to dealers covered under this facility.

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