CREDIT APPRAISAL

INTRODUCTION

A decision as to the credit

worthiness of a proposal arrived at after considerin a co!"ination of factors

Introd#ction contd$%%
The factors to "e loo&ed into are ' The co!pan() the Pro!oters and their "ac& ro#nd Perfor!ance and *inancials of the co!pan( Ris& Assess!ent of the Proposal Pricin

Introd#ction contd$%%
+, Co!pliance of the -an&.s Loan polic( /, Appraisal of Ter! Loan 0, Assess!ent of 1or&in Capital 2, Ter!s and Conditions of sanction 3, Other Iss#es relevant to Sanction 4to "e f#rnished as Anne5#res to the Appraisal,

6% The co!pan() the Pro!oters and their "ac& ro#nd

a, Address and Location of the co!pan(% ", Na!es and Addresses of the pro!oters7 c, d, e, f, ,
directors% Details of share8holdin pattern of pro!oters7 directors% Credit 9istor( -rief "ac& ro#nd of the co!pan(7 ro#p and !ana e!ent% -rief details a"o#t Associates of the Co!pan( -rief write #p on the ind#str( 7 sector and the co!pan(.s standin

:% Perfor!ance and *inancials of the co!pan(

Act#al for previo#s : (ears 4for e5istin "#siness,) Esti!ates for C#rrent ;ear and Pro<ections for ne5t : (ears = co!!ents are necessaril( to "e f#rnished for !a<or variance a, Perfor!ance and *inancial indicators ", *#nds *low Anal(sis c, Cash *low Anal(sis d, S(nopsis of -alance Sheet e, Inter *ir! co!parison

>% Ris& Assess!ent

a) b) c) d) e)
Internal Credit Rating External Credit Rating Compliance with Banks Risk Management Department (RMD) Ad isories on the sector Cond!ct o" Acco!nt ("or existing acco!nts) Re iew o" #erm $oan ("or existing acco!nts)

Ris& Assess!ent contd$%%

f, Sec#rit( Covera e , 1arnin si nals7#nattended !a<or h, i, <,

irre #larities in -an&.s A#dit Reports 7 Stat#tor( A#dit Reports Earlier Ter!s of Sanction ? Co!pliance stat#s Stat#tor( d#es 7 other contin ent lia"ilities Other Ris&s and !iti atin factors

@% Pricin
a, Inco!e anal(sis ", Other -an&s.7*Is. pricin c, Proposed pricin d, A#stification for concession in
pricin ) if an(

+% Co!pliance of the -an&.s Loan polic(

a, Search Report on whether na!es of pro!oters) directors) co!pan( and ro#p concerns fi #re in defa#lters 7 willf#l defa#lters list of R-I and CI-IL ", Deviation fro! -an&.s Loan polic( #idelines c, A#stifications for ta&in e5pos#re on the co!pan( with deviations) if an(

/% Appraisal of Ter! Loan

a, ", c, d, e, f, P#rpose of Ter! Loan Be( Pro<ect para!eters Cost of Pro<ect and Ceans of *inance Prod#ction factors 7 Technical Aspects Car&etin and Sellin Arran e!ents Utilities 8 Power 8 1ater 8 Canpower 8 Lo istics

Appraisal of Ter! Loan contd$%

, Approvals and Clearances h, I!ple!entation Sched#le i, Dis"#rse!ent Sched#le <, Co!!ercial Dia"ilit( 4DSCR, &, Repa(!ent Sched#le l, Sec#rit( Car in !, -rea&8even Anal(sis n, Sensitivit( Anal(sis

0% Assess!ent of 1or&in Capital

a, Inventor( and Receiva"le level ", Assessed -an& *inance 4on an( of the > !ethods 8 Pro<ected -alance Sheet 4P-S, !ethod 8 Pro<ected Ann#al T#rnover 4PAT, !ethod 8 Cash -#d et !ethod c, Assess!ent of Letter of Credit 4LC, li!its d, Assess!ent of -an& E#arantee 4-E, li!its e, Assess!ent of Credit E5pos#re li!its 4*orward Contracts,

2% Ter!s and Conditions of sanction

a, Sec#rit( 8 Pri!ar( sec#rit( 8 Collateral sec#rit( ", E#arantee c, Car ins for the Credit *acilities d, Ins#rance e, Inspection of the Unit f, Covenants of sanction

4f#rnished as Anne5#res to the Appraisal,

3% Other Iss#es relevant to Sanction

a, *#t#re Plans and -#siness potential ", Ret#rns on Capital Char e c, D#e dili ence details d, -rief details on Associates e, Cond#ct of Acco#nts 4in last 6:
!onths, for e5istin #nits