1
KERALA FINANCIAL CORPORATION
THIRUVANANTHAPURAM
BO
ZONE
APPRAISAL MEMORANDUM – FLATS/HOUSING
PROJECTS
Sub:- Proposal for term loan of Rs. ………………….. lakhs to
…………………. – reg.
PART – I
ABSTRACT
Application Regn. No. & Date :
Amount applied for
:
Rs.
lakhs
Amount recommended
:
Rs.
lakhs
New Loan/Additional Loan :
Sanctioning Authority
1.
2.
3.
:
Name of Applicant
Name of the Unit
Address of Firm
(a) Registered Office
:
:
Pin Code
Phone Numbers
(b) Project site
:
:
:
4.
5.
Constitution
Reasons for delay in processing application
if any
:
:
6.
Date of incorporation/ registration /
commencement of activity
7.
8.
9.
10.
Activity
Industry Classification Code
Whether new / existing
Compliance of Eligibility Criteria
a) The promoters should be financially
sound and should be successful in their
other ventures.
:
:
:
:
:
Yes / No
DOC NO. AMP1F09
PAGE
1 OF 34
NO.
DATE
15.5.2012
2
b) The project should be located at
Corporation/Municipality/
Township :
Areas and on the own premises of the
applicant
c) The project should have minimum :
five residential units
d) Sufficient parking space for vehicles
commensurate with the number of :
residential units should be provided
e) Prior approval of the plan from the
Local Authority/PCB/Fire Force/Airport :
Authority of India etc. should be
obtained where ever necessary
11. Cost of the project
:
Rs.
lakhs
12. Promoters contribution
:
Rs.
lakhs
13. Debt Equity Ratio
:
14. Debt Service Coverage Ratio
:
15. Overall Asset Coverage Ratio
:
16. Whether KYC Norms satisfactory
:
17. Whether CIBIL report satisfactory
:
18. Score/ rating in Credit Rating
:
19. Whether interest reduction allowed
(as per credit rating, SC/ST,
Women entrepreneur etc)
:
20. Whether Bank Take over involved
:
21. Floor Area Ratio (FAR)
:
22. Whether member of CREDAI
:
23. Whether the unit located in BO
3
jurisdiction area
:
If no give details of prior permission taken
:
24. Date of commencement of Commercial
operations
25. Appraisal done by
Name
:
:
Designation
PART – II
1.
INTRODUCTION
(Briefly describe the purpose for which the loan has been applied for)
2.
PROMOTERS AND MANAGEMENT
(a)
Particulars about Directors/Partners/Proprietor/Surety
Name
Position in the firm/
Company
Date of Birth
Sex
Resident/
Non Resident
Educational
Qualification
Proof of Identity
Voter Card No.
PAN No.
Passport No.
4
Ration Card No.
Any other identity
Present residential
address
House No.
House Name
Area/Locality
Post Office
District
Pin Code
Residing since
Office Phone No.
Residential Ph.No.
Mobile No.
E-mail ID
Whether KYC norms
completed
Yes/No
Annual income
based on last years
Income Tax Returns
Annual income
based on previous
years Income Tax
Returns
Value of immovable
properties as per
Affidavit
Value of movable
properties as per
Affidavit
Liabilities as per
Affidavit
Net worth as per
Affidavit
CIBIL Rating
Opinion received in
the confidential
report obtained by
appraisal team/FO
Criminal cases if any
5
(b)
Particulars regarding constitution
(i)
Partnership Firm
Date of Registration with Registrar of firms
Whether partnership deed allows the activity proposed
Name of partners
(ii)
Private or public limited companies
Date of Incorporation
Place of Incorporation
Name of company as per certificate of Incorporation
Whether Activity proposed has been allowed in the
Memorandum of Association and Articles of Association
Authorised capital
Paid up capital
Borrowing power allowed as per MoA
Details of charges created as per Search Report
Whether the details of present Directors as per statement
from ROC or search report from Company Secretary
collected
Certificate from Company Secretary that company has
complied with all provision as per Companies Act
(iii) Societies
Date of Registration
Whether certified copy of resolutions of the governing
body and general body collected
Whether byelaws of the society collected
Whether the activity proposed is allowed as per the
byelaws of the society
(iv) Trust
Specify whether Private Trust or Public Trust
6
Whether Trust Deed collected
Whether the trustees are entitled to avail loan and
mortgage the trust properties.
(c)
List of Board Members/Partners/Co-Obligants/Guarantees/Executive Members/
Directors/Trustees
Name
(d)
Designation
Contact Address
Age
Phone
Number
Relation
with chief
promoter
Whether
giving personal
guarantee
Share Holding Pattern
Name of
shareholder/
partner
No of Shares
Total Share value
Percentage
Whether giving
personal
guarantee
Total
3.
MANAGEMENT AND TECHNICAL COMPETENCE
(Details of Qualification & Experience of Promoters and other technical Experts)
Name
4.
Designation
Qualification
Experience
SOLVENCY OF BOARD MEMBERS /PARTNERS/ CO-OBLIGANTS/ GUARANTOR AS PER
AFFIDAVIT
(in lakhs)
Name
Details of assets
(movable &
Estimated
Value of
Details of
liabilities
Estimated
value of
Net
Asset
Annual
income
7
immovable)
5.
asset
liabilities
based on
last years IT
returns
KYC NORMS AND AML STANDARDS
(a) Details of Identity proof (to be verified with original and signed )
Name of
Promoters/
Guarantors
Voters ID
No/UID No
PAN No
Ration Card No
Other ID with
No if any
Pending criminal
cases if any
(b) Credit Report from Bank
(credit report and bank statements of all banks of all promoters/unit to be obtained
and details written here)
(c) Field Officer Report (give details with remarks)
Name
Designation
:
:
(d) Details of bank account
Name of Unit /
Promoters
Bank Name & account
No(1)
Bank Name & account
No(2)
Remarks
(e) Details of loans taken from other banks
Sl
No
Name of institution
Loan
sanctioned
/availed
Balance O/s
Arrears
Loan
category
Whether
credit rating
obtained
8
(f) Details of previous assistance from KFC (if any)
(in lakhs)
Loan No
Sanction
date
Amount
sanctioned
(a)
Amount
disbursed
Outstanding as
on----
The present
proposal
(b)
Total
a+b
(g) Group concerns/firms
(Rs. in lakhs)
Sl.
No.
Affiliated group
companies/firms
Nature
of
Business
Any financial
dealing with the
Corporation
Name and address
of the Banker
Turnover
Net
worth
(h) Details regarding CIBIL Report of Unit/ Board Members /Partners/Co-Obligants/
Guarantors
Name of Unit &
Promoters
(i)
CIBIL
Score(individuals)/Opinion
(unit/associated unit)
Remarks
RBI’s caution list /willful defaulters’ list
State if the name of the company or its promoters, directors/partners/associated
concerns appear in any of the following list.
Sl.
No
.
Name of organisations
Whether name of
unit/promoters/
associated concerns
Remarks
9
appear
1
2
6.
CIBIL list of suit filed defaulters of Rs. 1
crore and above.
CIBIL list of suit filed accounts of willful
defaulters of Rs. 25 lakh and above.
REMARKS ON MANAGERIAL APPRAISAL
(write detailed remarks on managerial competence with following information)
Necessary local enquiry regarding promoters and unit have been conducted and general
opinion about then is good. Original KYC documents are verified and photocopies are
kept in file. Advocate signed Affidavit and gazette officer signed photo verification
certificate is procured and kept in file. The managerial/technical competence/
qualification of the promoters and technical experts are sufficient to run the unit. It is
concluded that the managerial appraisal is satisfactory.
PART – III
TECHNICAL
1.
LAND AND LOCATION
The site is located near
which is KM away from
junction
towards
The plot is
meters from
----- cents of land identified by the Legal
Officer and it is sufficient for the proposed activity and only the value of the said area is taken
into account for the computation of the project cost. The site has motorable access.
2.
BUILDING AND CIVIL STRUCTURES
(a) Building permit No & date
:
(specify if it is not in the name of the loanee)
(b) Area approved
:
(c) Floor Area Ratio (FAR)
:
(d) Total estimated value
:
(e) Details attached as
:
Annexure 'C'
3.
FLOOR WISE ALLOCATION OF FACILITIES OF BUILDING
Floor type
Foundation
Basement
Ground Floor
First Floor
Facilities
Proposed
Covered Area
Rate/m2
Cost Estimated
No. of flats per
floor
10
(Give details of all floors)
(In case of villa projects give details of villas)
4.
EQUIPMENTS AND MACHINERY
The total cost of equipments and machinery is estimated at Rs.
A detailed list of Equipments and Machinery required for the unit is given in Annexure'D'
The equipments and machinery listed in Annexure- D are essential and sufficient for
the level of operations envisaged.
(In case, manufacturer/supplier selected are not known to the Corporation, a special
condition to the effect, that disbursement would be made only after physical verification/
performance evaluation may be stipulated.)
5.
OTHER ASSETS IF ANY
6.
DETAILS OF EXTERNAL VALUATION TAKEN (IF ANY)
(If value of land/building/machinery exceeds Rs. 1 Crore or if loan amount exceeds
Rs. 2.5 crore)
Name and address of approved valuer
:
7.
SPECIAL FACILITIES IN THE PROJECT (EXISTING / PROPOSED)
8.
UTILITY SERVICES
a)
Power: The total connected load is KW/KVA.
(Arrangements made for power supply should be explained).
The promoters have obtained/has obtained a feasibility certificate from KSEB
regarding allocation of power supply. (Extra line if any to be drawn or deposit if
any to be given etc. are to commented. DG set if any included is also to be
commented.)
b)
Water: Water is required for construction and general purposes.
Requirement
per day is about ….........ltrs. It is to be met from the
existing/proposed well or
protected water supply system.
11
c)
Transportation: The proposed site is located by the side of a …...................................
Hence transportation by road is convenient. The nearest railway station is ….......
which is about …........KM from the site.
d)
Effluent disposal
(Harmful / No harmful effluent is generated during the process. (The arrangements
provided / to be provided to be commented. State whether NOC from PCB is
required)
9.
DETAILS OF MARKETING EXPENSES
10. PRODUCT MIX/INCOME FROM SERVICES OFFERED AT 100%
The details of income adopted for computation of profitability of the concern at
installed capacity is given below for 1 shift working
Income from
Products/services
No./Area
Rate per unit/area
Total income
11. INCOME FROM OTHER FACILITIES (IF ANY)
12. MAN POWER REQUIREMENTS (in lakhs)
Sl
No.
Designation
Number of
employee
Annual Salary
per employee
Total annual
expenses
12
Total
13. DETAILS OF STATUTORY CLEARANCES
Sl
No
Certificate/clearance
Authority
Validity
Remarks
(Obtained/
Not Obtained /Not
Applicable) with
Building construction permission
Pollution Control Board
Allocation for power
supply/feasibility for giving power
supply by the KSEB
Approval by the Electrical
Inspectorate
NOC from Fire Department
Airport Authority of India
Coastal Regulation Zone Clearance
14. SCHEDULE OF IMPLEMENTATION
Sl.
N
o
1
2
3
4
5
6
7
Description
Duration in weeks/month
Current status
Land acquisition and leveling
Foundation
Construction of building (Giving Floor
wise time involved)
First Floor
Second Floor
Third Floor
Plumbing & sanitary fittings
Electrification
Installation of lift and generator
Painting
Completion of the project
It is expected that the apartment complex/villa project can be completed within a period
of ……………… weeks/months.
13
15. REMARKS ON TECHNICAL APPRAISAL
(Write opinion on technical feasibility of the project in view of the infrastructure facilities
available, land & location, power, road etc.)
PART – IV
FINANCIAL
1.
PAST PERFORMANCE OF THE UNIT (IF EXISTING)
(a) Brief description of the unit.
(The balance sheet analysis of the existing unit (if) to be annexed as Annexure 'A'.
Give comments on the income, expenditure, profit, debt, capital, DER, networth,
current ratio, quick ratio, debt ratio etc. of the concern.)
(b) Brief description of the associated / sister concern
(The stake of the promoters in the associated /sister concern to be shown)
(The balance sheet analysis of the associated / sister concern to be annexed
Annexure 'B'. Give comments on the income, expenditure, profit, debt, capital, DER,
networth, current ratio, quick ratio, debt ratio etc. of the concern.)
2.
COST OF THE PROJECT (Rs.in lakhs)
Assets taken into project cost for
finance
R
e
a
s
o
n
f
Cost
o
projected by
r
Applicant
v
a
r
i
a
t
i
14
o
n
*
*
Cost already
incurred
(a)
Cost to be
incurred
(b)
Total
(a+b)
Land (
cents)*
Landscaping
Building and civil structures
Contingency @ 10 %
Equipments
Contingency @ 10 %
Furniture and Misc.Items
Preliminary & Pre-op.expenses*
Total
**Give reasons for variations in project cost from the project report submitted by the applicant.
* The value of project land can be considered for computing project cost. However cost of land shall
not be considered for working out term loan eligibility.
3.
PRELIMINARY AND PRE-OP.EXPS. (Rs.in lakhs)
Item
Amount
Application processing fee
Company registration and other expenses including project report
Interest during construction period
Supervision charges during construction
period
Start up expenses
Total
4.
MEANS OF FINANCE (Rs.in lakhs)
Item
Promoter
contribution
Term Loan from
K.F.C
Others
(unsecured
loans, advance
Existing
Proposed
Total
Percentage
Minimum
percentage
as per
scheme
Means of
finance as
per
applicant
Reasons
for
variations
15
from customers)
Total
100
5.
RAISING OF PROMOTERS CONTRIBUTION
(Source of PC should be mentioned)
6.
BENCH MARK FINANCIAL PARAMETERS
Sl
No
Ratio
Benchmark
norms
(a) DER
2:1
(b) Projected DSCR
> 1.5
(c) Promoters Contribution
(d) BEP
Actual parameters
Deviation if
in case of this
any (Yes/No)
proposal
Remarks/ Justification
for inferior ratio than
Benchmark
33.00%
60%
(e) Pay back Period
(f) Debt ratio for the company
=
Total debt
Maximum
5 years
2:3
Total asset (capital employed)
(g) Asset Coverage ratio
2 times
(h) Net profit to sales
(i) IRR
7.
SECURITY AND MARGIN FOR THE LOAN (Rs.in lakhs)
Particulars
Primary
Land
Building
Plant & Machinery
Equipments
Vehicle
Others as per policy
Collateral
Land
Building
Others
Value
(a)
Percentage as
per norms
%
%
%
%
%
%
%
%
%
Margin
(b)
Eligibility
(a)-(b)
16
The overall margin on security works out to …..... %
8.
OVERALL ASSET COVERAGE
Total tangible security after margin including collateral security for first loan (if any)
+ Security for second loan
Loan amount (Balance outstanding of first loan (if any)
+ New loan (proposed)
=
9.
CASH FLOW STATEMENT
A cash flow statement to cover the loan period is given as Annexure.
(State if the repayments fixed are as per the cash flow statement).
10. CALCULATION OF NPV & IRR
Year
Net Inflow
Discounting factor
Net present value
Use discounting factor which makes Net Present Value or Discounted net inflow zero after 8
years / Repayment period whichever is less.
11. PROJECT BALANCE SHEET
A projected Balance Sheet of the unit to cover the loan period is given as Annexure.
12. CREDIT RATING HIGHLIGHTS
Sl No
Details
(a)
Name of rating agency (approved by
SEBI/RBI)
(b)
Date of rating and validity
(c )
Rating grade
(d)
(e)
Internal Credit Rating Score
Whether reduction of interest allowed
based on internal credit rating
Remarks if any
(write interpretation of
grading )
Attached as Annexure -E
Yes/No
17
13. TERMS SHEET
(Give details of the repayment period requested by the applicant and the reasons for
variations if any proposed)
The repayment period, interest rate and processing fee recommended are as follows.
(a) Repayment period
Sl No
Item
Terms
(i)
Initial Moratorium
Years
(ii)
Repayment period
Years
Maximum as per
scheme
(b) Interest rate
Sl No
Item
Terms
(i)
Gross Rate of interest(PLR + … )
%
(ii)
Reduction based on credit rating
%
(iii)
Reduction based on SC/ST, Women
entrepreneur etc
%
(iv)
Net rate of Interest
%
(v)
Rebate on prompt repayment
%
(vi)
Effective interest rate
%
Remarks , if any
(c) Processing fee
Sl No
Item
(i)
Processing Fee chargeable
(ii)
Processing fee paid
(iii)
Balance processing fee payable
Terms
Details of concession
allowed, if any
14. REMARKS ON FINANCIAL APPRAISAL
(write remarks on financial feasibility of the project )
(write whether the project is financially feasible)
(in lakhs)
18
Particulars
1st year
2nd year
3rd year
Financials projected by
the applicant for 3rd year
Reasons for
variation
Income
Expenses
Operating profit
Income Tax
Net Profit
Depreciation
Cash Profit
(Give detailed reasons for the difference if any in the financial projections given by the
applicant in the project report and the projections done by the appraisal team).
15. SENSITIVITY ANALYSIS
Matrix showing the Break Even Point at various selling price and capacity utilization has
to be done (A sample of the Matrix format is enclosed).
PART – V
COMMERCIAL
1.
THE PRESENT MARKET
(Industry & market prospects, demand & supply position, price trends, major competitor
etc)
2.
STATUS OF SIMILAR PROJECTS ASSISTED BY KFC IN THE LOCALITY /DISTRICT.
Name of the unit
Year of sanction
Loan amount in
lakhs
Present
balance
outstanding
Asset
classification
3.
DETAILS OF SELLING PRICE OF FLATS/HOUSING PROJECTS OF SIMILAR GRADE BUILDERS
IN THE LOCALITY/DISTRICT
(format given at Annexure to be filled in the case of Flats/Housing Projects). Also give
comments on the same.
4.
AVAILABILITY OF RAW MATERIALS AND CONSUMABLES
(whether the raw materials and consumables available locally etc)
19
5.
MARKETING OF PRODUCTS/SERVICES
(Marketing strategy, selling & distribution arrangements etc)
6.
SWOT ANALYSIS
(a) Strengths of the project
(b) Weakness of the project
(c) Opportunities
(d) Threats
7.
REMARKS ON COMMERCIAL APPRAISAL
(write whether the project is commercially feasible)
PART – VI
LEGAL
1.
CONSTITUTION OF FIRM
(Opinion regarding AOA, MOA, partnership deed, trust deed etc)
(Opinion on resolutions of company, assignment of land to the name of firm, charges of
the company with ROC etc, second charge etc )
2.
PRIMARY SECURITY (INDUSTRIAL)
(a) DETAIL OF PRIMARY LAND
Item
No.
Sy. No.
Extent
Tandaper
No
Village
Taluk
Total
* Applicable if value exceed Rs. 100 lakhs.
(b) DETAILS OF OWNERSHIP OF PRIMARY LAND
District
Value
assessed by
Corporation
Value
assessed by
external
valuer*
20
Item
No.
3.
Sy. No.
Tandaper No
Owned by
SRO No. with
date
Whether Original & Prior
documents available
COLLATERAL SECURITY
(a) LOCATION OF COLLATERAL SECURITY
(describe about the location of the land and marketability of the land)
(b) DETAIL OF COLLATERAL LAND
Item
No.
Sy. No.
Extent
Tandaper
No
Village
Taluk
District
Value
assessed by
Corporation
Value
assessed by
external
valuer*
Total
* Applicable if value exceed Rs. 100 lakhs.
(c) DETAILS OF OWNERSHIP OF COLLATERAL
Item
No.
Sy. No.
Tandaper No
SRO No. with
date
Owned by
Whether Original &
Prior documents
available
(d) DETAILS OF BUILDING AND CIVIL STRUCTURES IN COLLATERAL SECURITY
Name of
Panchayath/
Muncipality/
Corporation
Building No &
Ward No
Plinth Area
* Applicable if value exceed Rs. 100 lakhs.
Age
Depreciated
value
Value assessed
by external
valuer*
21
(e) DETAILS OF OTHER COLLATERAL SECURITIES (IF ANY)
4.
REMARKS ON LEGAL APPRAISAL
(remarks on various legal certificates accepted and any deviation from norms etc)
PART – VII
1.
DISBURSEMENT PATTERN SUGGESTED
2.
WHETHER ACCEPTED BY THE PROMOTERS
PART – VIII
DEVIATIONS IN THE PROPOSAL (IF ANY)
(Clearly specify all deviations (Managerial, technical, legal & commercial ) in the project with
sanctioning authority for the deviations)
PART – IX
RECOMMENDATIONS
(Give briefly the reasons for recommending the loan)
Based on the value of the existing and proposed assets and as per the financing pattern
suggested at para a term loan of Rs......... lakhs is recommended for consideration to M/s
…………………………………………………….. on credit line basis subject to usual terms and conditions
and on the following special conditions:1.
Utilisation of the term loan
For acquisition of fixed assets
2.
(a) Rate of Interest
22
Interest rate will be …...% p.a. With …...% penal interest for the defaulted amount
for the defaulted period on monthly compound basis and …....% rebate for prompt repayment
of interest. Further ….% reduction will be allowed based on credit rating.
Floating rate of interest based on the PLR fixed from time to time, depending on the
market conditions will be applicable to this proposal. The rate of rebate can
be
revised
(increased/decreased) by the Corporation from time to time and the borrower hereby agrees
to such revision in the rate of rebate and that intimation of such revision shall be deemed to
be served on the borrower when sent by post to the address of the borrower.
2.
(b) Interest reduction based on credit rating will be subject to annual review and will be
continued only if the firm satisfies the norms for interest reduction applicable at the time
of review.
2.
(c) Rebate for prompt payment will be paid only if the insurance of all fixed assets is
current and the policy is taken in the joint name of the firm and KFC.
3.
Repayment Period
Term Loan: To repay in ….... monthly instalments commencing at the end of
………………………. month of drawal of the 1st Instalment of the term loan.. The principal amount
will fall due on 1st day of every month.
4.
The applicant has remitted Rs……….. + service tax as initial processing fee. Further
sum of Rs…………….. + service tax is to be remitted.
5.
Period of completion of project: …......... months
6.
Personal Guarantee should be given by :
7.
Before drawing any portion of the loan amount the applicant/Company should satisfy
the following conditions:
1.
2.
3.
4.
5.
6.
7.
Approval by the local authorities
Approval by the Pollution Control Board
Allocation for power supply/feasibility for giving power supply by the KSEB
Approval by the Electrical Inspectorate.
Approval from Airport Authority.
Credit report from Bank
Others (Please specify).
23
8.
Clearance from Coasted Regulation Zone Authority if applicable.
8.
Sanction letter for electrical installation and installation of diesel generator set from
Electrical Inspectorate should be produced before availing any amount for equipment
and generator set. Approval from the Electrical Inspectorate shall be obtained after
installation of DG set.
9.
Payment for equipments supplied by manufacturers/suppliers not known to the
corporation will be made only after physical verification/ performance evaluation.
10. Partial release of security (Flats, Villas, Apartments) will be allowed on remittance of the
proportionate amount based on the loan outstanding.
11. No preclosure premium will be charged.
12. The assets of the company and collateral security building should be insured annually
with New Assurance Company Limited, under the Agency Code 90145/900145 or any
other agency approved by IRDA and evidence thereof should be produced. No rebate will
be allowed if insurance is not done.
13. All statutory charges including Sales tax, Excise duties. P.F contributions, Land tax,
Building tax and each other payments due to the Government or concerned authorities
shall be paid and kept current by the borrower/co-obligants every year during the tenure
of the loan.
14. The capital should be raised at least to the minimum level of Rs.........Lakhs as shown in
the financing pattern.
15. The sanction is subject to the availability of refinance from SIDBI/Banks/ FIs and such
other conditions as may be imposed by them.
16. The loan amount should not be utilized for any kind of money laundering activities.
17. The loan will be disbursed through a no-lien bank account only.
18. Disbursement will be made on pro-rata basis as per investments made in the project
after ensuring the required P.C and DER of ….... and keeping the required security margin.
19. All other usual terms and conditions will also apply.
20. The Borrower and Co-obligant should give consent to the Corporation for the disclosure
by the Corporation of information and data relating to them, of the credit facility availed
of/to be availed, by them, obligations assumed/to be assumed, by the them in relation
thereto and default, if any, committed by the them, in discharge thereof, to Credit
24
Information Bureau (India) Limited (CIBIL) or any other agency authorized in this behalf
by Reserve Bank of India and consent to furnish the information by CIBIL or any other
agency, so authorized, to any banks/financial institutions and other credit grantors or
registered users.
21. A Board should be displayed in front of the project stating that the project is financed by
Kerala Financial Corporation.
22.
The annual report/audited financial statements pertaining to the previous financial year shall be
furnished to this office within six months from the 1st of April every year.
23.
External credit rating by approved agency (if applicable) shall be furnished within a period of six
months.
24.
External valuation to be arranged as and when necessary.
Legal Officer.
Technical Officer
Project Officer
BRANCH MANAGER/CHIEF MANAGER
Reviewed by GM
Approved by CMD
Issued by MR
ANNEXURE 'A'
ANALYSIS OF FINANCIAL STATEMENT OF UNIT
25
Name of Unit:
Balance sheet as at 31st March
Rs. in lakhs
201
201
ASSETS
1. Fixed assets
2. Investments
3. Current assets
4. Others ( current account)
Total
LIABILITIES
1. Capital
2. Reserves and surplus
3. Current liabilities
4. Secured loans
5. Unsecured loan
Total
III. Profit and loss account
1. Sales
2. Net profit after tax
3. Depreciation
4. Cash profit
Analysis
Current ratio
Quick ratio
DER
Net worth
ROI (EBIT / Net Assets)
Net Profit to sales (PBIT)
Debt Ratio
Benchmark*
2:1
1:1
2:1
> 3 times of loan
proposal
> 15
> 10
2:3
* Justification for inferior ratio than benchmark may be explained as a footnote.
201
26
ANNEXURE 'B'
ANALYSIS OF FINANCIAL STATEMENT OF ASSOCIATED CONCERN
Name of concern :
Balance sheet as at 31st March
Rs. in lakhs
201
201
ASSETS
1. Fixed assets
2. Investments
3. Current assets
4. Others ( current account)
Total
LIABILITIES
1. Capital
2. Reserves and surplus
3. Current liabilities
4. Secured loans
5. Unsecured loan
Total
Profit and loss account
1. Sales
2. Net profit after tax
3. Depreciation
4. Cash profit
Analysis
Current ratio
Quick ratio
DER
Net worth
ROI (EBIT / Net Assets)
Net Profit to sales (PBIT)
Debt Ratio
Benchmark*
2:1
1:1
2:1
> 3 times of loan
proposal
> 15
> 10
* Justification for inferior ratio than benchmark may be explained as a footnote.
201
27
ANNEXURE-'C'
BUILDING AND CIVIL STRUCTURES
ANNEXURE-'D'
LIST OF PLANT AND MACHINERY AND EQUIPMENTS
Sl.
No
Description
Name of
supplier/
manufacturer
Connecte
d load
KW/KVA
Basic price
as per
invoice
quotation
28
Annexure E
INTERNAL CREDIT RATING FORMAT FOR TERM LOANS
Name of the Unit :
Loan No:
Name of chief promoter:
Rating period (FY):
Rating done by :
Rating points
1.
Constitution
2.
Qualification of
promoter (CEO,
principal partner)
Experience of
promoter/ company
Asset Coverage
Ratio ( ACR) for
proposed project
DSCR
3.
4.
5.
Profit after tax +
depreciation +
Interest on term loan
Repayment of term
loan + Interest on
term loan
6.
7.
8.
9.
IRR (%) for project
ROI – Last 5 years
Average
EBT / Net Assets
General reputation
Past Record
(Repayment of
earlier loan.
Dealing with other
Banks, CIBIL
Report etc.)
5
Govt/. Public
Ltd. company
4
Pvt. Ltd. co./
Pvt. Trust/
Society/
AOP
Post
Graduate
3
Partnership
2
Proprietor/
Individual
1
Graduate
+2
Others
> 5 < 10 yrs
> 3 < 5 yrs
< 3 yrs
New
> 1.5 < 2
> 1.25 < 1.5
> 1.1 < 1.25
< 1.1
>2
> 1.5 < 2
> 1.25 < 1.5
> 1.1 < 1.25
< 1.1
>17
13 – 16
9 – 12
5–8
1–4
> 15
11 - 15
6 – 10
1–5
<1
Very Good
Good
Average
Adverse
Very Good
Good
Average
Adverse
Professional
CA / Doctor /
Engineer etc.
> 10 years
> 2 times of
loan
Excellent
Excellent
29
10.
Net worth of the
company
Promoters
Contribution in the
project
DER for the
company
Total Debt /
Net Worth of the
concern
BEP(% )
Period of
Repayment
> 3 times of
loan proposal
15
Tie up for
marketing
Existing
16
Net Profit to sales%
(PAT)
Exposure to the
sector
Credit report from
existing Bankers
>10
Availability of
Audited financial
statements
Risk factor
(As perceived by
BO/ Appraising
Authority)
11
12
13
14
17
18
19
20
>2.5 < 3
> 2 < 2.5
> 1.5 < 2.5
< 1.5
> 50%
41% - 50%
33% - 40%
25% - 32%
< 25%
Upto 1
Upto 1-5
Upto 2
Upto 3
>3
<35
Upto 4 years
35- 40
5-6 years
41-50
7-8 years
51-55
9-10 years
>55
> 10 years
Firm
arrangement
made
>5≤10
Under
process
To be made
>3≤5
<3
No
arrangement
made so far
<1
Very low
Low
Normal
High
Very High
Excellent
Very good
good
average
Up to the latest
financial year
One year
arrear
Two year
arrear
Three year
arrear
Report not
available/
Adverse
> 3 years
arrear
Negligible
Very low
low
High
Very high
Rating Given
Col.No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Rating
Point
Out of 100 =
─
100
═
Signature of the officers who have done the rating :
*
1.
Appraisal Team can give higher grade than the actual rating point with proper
justification with the approval of HO.
Total
Out
of
100
30
2.
3.
4.
Only units which have rating of 70 and above are eligible for 1% reduction in interest
rate. The reduction in interest rates will be available for these units as long as they are
in the standard category.
Rating to be carried out on annual basis.
Total rating points shall not be reduced from 100.
FORMAT
Details of Selling price of Flats/Housing projects of similar projects functioning in the locality
Sl. No.
Name of builder
Name of project
Selling rate
per sq.ft
*Asset classification in case the unit is assisted by KFC.
No. of flats in
the project
Remarks*
31
METHOD OF CALCULATION OF RATIOS FOR INTERNAL RATING
(1) Experience of promoter
Relevant experience of promoter in senior management position like Director etc. can be
considered, but proof of experience is to be collected.
(2) Asset Coverage Ratio (ACR)
Asset Coverage Ratio =
Capital Investment in the project +
Collateral security for proposed loan
Proposed loan
The value of the security to be taken for the proposed loan will be after deducting the margin
on security. For calculating the value of assets the preliminary and pre operative expenses need not be
taken. An example for calculation of ACR is given below.
A.
B.
Land
Building
Pre-operatives expenses
capitalized
100
200
10
100%
85%
-
Rs. in lakhs
Value to be taken
for the purpose of
Asset coverage
100
170
-
C.
Plant & Machinery
Second hand machinery
Pre-operative expenses
200
100
30
85%
50%
170
50
Nature of Assets
Cost/Value
% value to be
taken
32
D.
E.
F.
H.
capitalized
Tools, Dies, Moulds etc.
Technical knowhow
Office equipments
TOTAL (A+B+C+D+E+F)
Collateral Security
Land
Building
TOTAL
GRAND TOTAL
100
20
20
780
25%
0
25%
25
NIL
5
520 G
200
100
300
1080
100%
85%
200
85
285
H
805
J
Loan amount proposed = Rs. 520 lakhs
Maximum Loan Eligibility based on security = G = Rs. 520 lakhs
Asset Coverage Ratio
=
J
Loan Amount
=
805 = 1.54 : 1
520
For certain business which involve huge investment in inventory, the minimum level of
inventory can be considered for calculating ACR, if it is hypothecated to KFC and after taking approval
of Credit Department.
(3) Debt Service Coverage Ratio (DSCR)
DSCR shall be calculated for the proposed project.
DSCR =
Profit after tax + Depreciation + Interest on Term Loan
Repayment of Term loan + Interest on Term loan
(4) Internal Rate of Return (IRR)
IRR has to be calculated for the proposed project. IRR is the rate of discount which would
equate the present value of the investments (cash out flows) to the present value of benefits (cash
inflows) over the period of repayment.
For (3) and (4) match the cash flow projected with repayment period and other investments
made. Please ensure that cash flows are projected on a realistic basis.
(5) Return on Investment (ROI)
The average for the last 5 years has to be taken based on the audited financial account. If a
concern is in existence for a period less than 5 years then ROI has to be calculated for the lesser period.
For new concerns the rating point will be zero.
ROI =
Earnings Before Tax (EBT) or Profit Before Tax (PBT)
33
Net Assets as per balance sheet
Net Assets is fixed assets less depreciation.
If in a particular year the company is in loss then ROI should be calculated and the negative
figures given as shown below and the average taken for rating purposes.
(a)
(b)
(c)
(d)
(e)
Fixed Assets (after depreciation)
Net profit after tax
Taxes
EBT/PBT – [(b) + (c)]
ROI (EBT/Net Assets) d/a x 100
2009
168.33
-5.87
1.99
-3.88
-2.30%
2010
162.48
2.56
0.59
3.15
1.94%
Rs. in lakhs
2011
165.96
6.56
3.48
10.04
6.05%
ROI =
- 2.30 + 1.94 + 6.05 =
5.69 = 1.90%
3
3
(6) General Reputation:- Some field report, paper cutting, magazine articles etc. can be collected for
the purpose.
(7) Net Worth
Net Worth = Paid Capital + Free Reserves – Accumulated losses
The figures have to be taken from the latest audited figures of the company.
(8) Promoters Contribution has to be considered for the proposed project.
(9) Debt Equity Ratio (DER)
DER = Total Debt / Net worth of the concern.
For calculating the DER the total debt will include the existing debt as per balance sheet. Net
worth will have to be taken from the latest audited figures of the company. This ratio shows the degree
of indebtedness and portion of assets financed by equity.
(10) Break Even Point (BEP)
BEP =
Fixed Cost
Contribution
Contribution = Sale Price – Variable Cost
34
(11) Net Profit to Sales
The Net Profit to be taken is the profit after interest and tax (PAT). This ratio is a measure of the
efficiency of the concern.
(12) Inventory Turnover Ratio =
Cost of goods sold (or sales)
Average Inventory
Average Inventory =
Closing stock + Opening stock
2
(13) Current ratio shows the short term liquidity position of a unit.
Current Ratio
=
Current Assets
Current Liability
Current assets include stock of raw material, stock in process, finished goods, receivables and
short term investments.
Current liabilities include creditors for purchases, bills discounted with bank and other short
term liabilities.
(14) Sectoral exposure shall be seen both with respect to the Branch as well as KFC as a whole.
Necessary data can be obtained from systems division.
(15) Receivable Turnover Ratio
=
Average Accounts Receivable =
(16) Quick Ratio
=
Credit Sales
Average Accounts Receivable
Opening Balance + Closing Balance
2
Current Assets – Stocks
Current Liability – Bank Borrowings (short term)
Quick ratio evaluates the preparedness/quickness with which a liquidity crisis can be managed.
It is seen that certain Branch Offices are reducing the total rating points from 100 to 90 or 80
after deleting certain items. This is not acceptable. The rating has to be out of 100.
ROI, Net worth, DER has to be analysed based on the existing financial statements. Revised
credit rating format is enclosed. The calculation will be verified by the post sanction scrutiny team.
35
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