Annexure II

FORM II - OPERATING STATEMENT

Rs. lacs
Audited Audited Provisional Projection
20011-12 2012-13 2013- 14 2014-15

1 Gross Sales 34545.40 35410.40 0.00 0.00

I) Domestic Sales 34545.40 35410.40
ii) Export Sales
2 Less : Excise Duty 3240.59 2844.52
3 Net Sales 31304.81 32565.88 0.00 0.00
4 %age rise(+) or fall (-) in net sales 3.20% 4% -100% #DIV/0!
5 Cost of Sales
I)Raw Material (incl. stores and other items 26031.41 29424.57 0.00 0.00
used in process of mfg.)
a) Imported 0.00
b) Indigeneous 26031.41 29424.57
ii) Other spares 706.94 755.93 0.00 0.00
a) Imported
b) Indigeneous 706.94 755.93
iii) Power & Fuel 8.70 24.69
iv) Direct labour (factory wages & labour) 753.71 868.05
v) Other manufacturing expenses 1102.57 1136.86
vi) Depreciation (on assets for mfg.)
vii) SUB-TOTAL 28603.33 32210.10 0.00 0.00
viii) Add : Opening stock-in-process
Sub-Total 28603.33 32210.10 0.00 0.00
ix) Deduct : Closing stock-in-process
x) Cost of Production 28603.33 32210.10 0.00 0.00
xi) Add : Opening stock of finished goods
Add: Purchase of finished goods
Sub-Total 28603.33 32210.10 0.00 0.00
xii) Deduct : Closing stock of finished goods
xiii) SUB TOTAL (Total cost of sales) 28603.33 32210.10 0.00 0.00
6 Selling, general and admns. Expenses (incl.
depr. of assets which are not used for mfg.)
7 SUB TOTAL 28603.33 32210.10 0.00 0.00
8 Operating profit before interest 2701.48 355.78 0.00 0.00
9 Interest
10 Operating profit after interest 2701.48 355.78 0.00 0.00
11 I) Add : Other non-operating income
a) Duty draw-back etc.
b) Others
Sub Total (income) 0.00 0.00 0.00 0.00
ii) Deduct other non-operating expenses
a) Transfer to export business reserve
b) Others
Sub-Total (expenses) 0.00 0.00 0.00 0.00
iii) Net of other non-operating income/expenses 0.00 0.00 0.00 0.00
(net of 11(I) & (ii))
12 Profit before tax / loss 2701.48 355.78 0.00 0.00
13 Provision for taxation
14 Net profit / loss 2701.48 355.78 0.00 0.00
15 a) equity dividend
b) Dividend rate
16 Retained profit 2701.48 355.78 0.00 0.00
17 Retained profit / Net profit (%) 100% 100% #DIV/0! #DIV/0!
 Annexure III

FORM III - ANALYSIS OF BALANCE SHEET

Rs. lacs
LIABILITIES Audited Audited Estimate Projection
20011-12 2012-13 2013- 14 2014-15

CURRENT LIABILITIES
1 Short-term borrowing from banks (incl. bill
purchased / discounted & excess borrowing
placed on repayment basis
I) From applicant bank
ii) From other banks
iii) (of which BP and BD)
TOTAL BANK BORROWINGS 0.00 0.00 0.00 0.00
2 Short-term borrowing from others
3 Sundry creditors (Trade)
4 Advance payment to customers
5 Provision for taxation
6 Dividend payable
7 Other statutory liabilities (due within one yr)
8 Deposits / instalments of term loans / DPG /
debentures (due within one year)
9 Other current liabilities and provisions due 0.00 0.00 0.00 0.00
within one year
I) Inter-corporate deposits
ii)Others
10 TOTAL CURRENT LIABILITIES 0.00 0.00 0.00 0.00
CURRENT LIABILITIES 0.00 0.00 0.00 0.00
11 Debentures (not maturing within one year)
12 Redeemable preference share (redeemaable
after one year)
13 Term Loans (excl. installments payable within 1
yr.)
14 Deferred Payment Credits (excl. installments
due within 1 year)
15 Term Deposits (repayable after 1 year)
16 Other term liabilities - Unsecured Loans
17 TOTAL TERM LIABILITIES 0.00 0.00 0.00 0.00
18 TOTAL OUTSIDE LIABILITIES (10+17) 0.00 0.00 0.00 0.00
NET WORTH
19 Ordinary Share Capital
20 Preference Share Capital (maturing after 12 0.00 0.00 0.00 0.00
yrs.)
21 A) General reserve
B) Development rebate reserve / Investment
allowance reserve
22 Other reserve (excluding provisions) 0.00 0.00 0.00 0.00
23 Surplus / deficit in P&L a/c 0.00 14.00 0.00 0.00
24 NET WORTH 0.00 14.00 0.00 0.00
25 TOTAL LIABILITIES (18+24) 0.00 14.00 0.00 0.00
 Annexure III

FORM III - ANALYSIS OF BALANCE SHEET

Rs. lacs
ASSETS Audited Audited Estimate Projection
20011-12 2012-13 2013- 14 2014-15

CURRENT ASSETS
26 Cash & Bank Balances
27 Investments (other than long term) 0.00 0.00 0.00 0.00
i) Govt. & other trustee securities 0.00 0.00 0.00
ii) Fixed Deposits with banks 0.00 0.00
28 I) Receivables other than deferred &
exposrts (incl. bill purchase / disc.)
ii) Export receivables (incl.bills purchsed &
discounted
29 Installment of deferred receivables
30 Inventory 0.00 0.00 0.00 0.00
I) Raw materials (incl. stores & other items 0.00 0.00 0.00 0.00
used in the process of manufacturing

a) Imported
b) Indigenous
ii) Stock-in-process 0.00
iii) Finished Goods
iv) Other consumables stores & spares
31 Advance to suppliers
32 Advance payment of taxes
33 Other current assets
34 TOTAL CURRENT ASSETS 0.00 0.00 0.00 0.00
FIXED ASSETS
35 Gross block (land & building,machinery,
work-in-progress
36 Depreciation to date
37 Net Block 0.00 0.00 0.00 0.00
OTHER NON CURRENT ASSETS
38 Investments / book-debts / advance 0.00 0.00 0.00
deposits which are non-current assets
i) a) Investments in subsidiaries/ affiliate
b) Others
ii) Advance to suppliers of capital goods
iii) Deferred receivables (maturing after 1
year)
39 Other non consuamable stores & spares
40 Other non-current assets (int. suspense)
41 TOTAL NON-CURRENT ASSETS 0.00 0.00 0.00 0.00
42 Intangible assets (Goodwill patents, Pre-
expenses, bad & doubtful debts)
43 TOTAL ASSETS 0.00 0.00 0.00 0.00
44 TANGIBLE NET WORTH 0.00 14.00 0.00 0.00
45 NET WORKING CAPITAL 0.00 0.00 0.00 0.00
46 CURRENT RATIO #DIV/0! #DIV/0! #DIV/0! #DIV/0!
51 TOTAL OUTSIDE LIABILITIES/TNW #DIV/0! 0.00 #DIV/0! #DIV/0!

0.00 14.00 0.00 0.00

 Annexure IV
3
FORM IV - COMPARATIVE STATEMENT OF CA & CL

Rs. lacs
Norms Audited Audited Estimate Projection
20011-12 2012-13 2013- 14 2014-15
A CURRENT ASSETS
1 Raw materials (incl. stores & other items 0.00 0.00 0.00 0.00
used in the process of manufacturing

a) Imported 0.00 0.00 0.00 0.00

------- Month's consumption #DIV/0! #DIV/0! #DIV/0! #DIV/0!
b) Indigenous 0.00 0.00 0.00 0.00
------- Month's consumption 0.00 0.00 #DIV/0! #DIV/0!
2 Other consumables stores & spares 0.00 0.00 0.00 0.00
------- Month's consumption 0.000 0.00 #DIV/0! #DIV/0!
3 Stock-in-process 0.00 0.00 0.00 0.00
------- Month's cost of production 0 0.00 #DIV/0! #DIV/0!
4 Finished Goods 0.00 0.00 0.00 0.00
------- Month's cost of sales 0.00 0.00 #DIV/0! #DIV/0!
5 Receivables other than deferred & 0.00 0.00 0.00 0.00
exposrts inncl. bill purchase / disc.)
------- Month's domestic sales 0.00 0.00 #DIV/0! #DIV/0!
6 I) Receivables other than deferred & 0.00 0.00 0.00 0.00
exposrts (incl. bill purchase / disc.)
------- Month's export sales #DIV/0! #DIV/0! #DIV/0! #DIV/0!
7 Advance to suppliers 0.00 0.00 0.00 0.00
8 Other current assets 0.00 0.00 0.00 0.00
9 TOTAL CURRENT ASSETS 0.00 0.00 0.00 0.00
B CURRENT LIABILITIES (OTHER THAN
BANK BORROWINGS FOR W.C)

10 Sundry creditors (Trade) 0.00 0.00 0.00 0.00

------- Month's purchase 0.00 0.00 #DIV/0! #DIV/0!
11 Advance from customers 0.00 0.00 0.00 0.00
12 Other statutory liabilities 0.00 0.00 0.00 0.00
(due within one yr)
13 Other current liabilities and provisions due 0.00 0.00 0.00 0.00
within one year
14 TOTAL CURRENT LIABILITIES 0.00 0.00 0.00 0.00
 Annexure V

FORM V - COMPUTATION OF MPBF

Rs. lacs
WORKING CAPITAL ASSESSMENT Audited Audited Estimate Projection
20011-12 2012-13 2013- 14 2014-15
1 Total Current Assets 0.00 0.00 0.00 0.00
2 Other CL (other than bank borrowing) 0.00 0.00 0.00 0.00
3 WCG 0.00 0.00 0.00 0.00
4 Minimum stipulated NWC (25% of WCG / 0.00 0.00 0.00 0.00
25% of total CA as the case may be)

5 Actual / projected NWC 0.00 0.00 0.00 0.00

6 Item 3 minus Item 4 0.00 0.00 0.00 0.00
7 Item 3 minus Item 5 0.00 0.00 0.00 0.00
8 MPBF (Item 6 or 7 whichever is lower) 0.00 0.00 0.00 0.00
9 Excess borrowing representing shortfall in 0.00 0.00 0.00 0.00
NWC (4-5)

TURN-OVER METHOD

Rs. lacs
Audited Audited Estimate Projection
WORKING CAPITAL ASSESSMENT

20011-12 2012-13 2013- 14 2014-15

1 Gross Sales 34545.40 35410.40 0.00 0.00
2 25% of gross sales 8636.35 8852.60 0.00 0.00
3 5% of gross sales 1727.27 1770.52 0.00 0.00
4 Actual / projected NWC 0.00 0.00 0.00 0.00
6 Item 2 minus Item 3 6909.08 7082.08 0.00 0.00
7 Item 2 minus Item 4 8636.35 8852.60 0.00 0.00
8 Permissible bank finance(Item 5 or 6909.08 7082.08 0.00 0.00
6,whichever is lower)
E. FINANCIAL POSITION

22 Rs. lacs
Audited Audited Estimate Projection

a) Paid up Capital : 0.00 0.00 0.00 0.00

- Equity 0.00 0.00 0.00 0.00
- Preference Share 0.00 0.00 0.00 0.00
b) Tangible Net worth (Excl. rev. reserve & 0.00 14.00 0.00 0.00
c) net of intangible
Investment assets)
in cos.(of which associated 0.00 0.00 0.00 0.00
d) companies/
Adjusted TNW subsidiaries) 0.00 14.00 0.00 0.00
e) Quasi Capital
f) Capital Employed*(total funds employed) 0.00 14.00 0.00 0.00
g) Net Block 0.00 0.00 0.00 0.00
h) Net sales : Domestic 34545.40 35410.40 0.00 0.00
Exports 0.00 0.00 0.00 0.00
Total 34545.40 35410.40 0.00 0.00
i) Other Income 0.00 0.00 0.00 0.00
j) Depreciation 0.00 0.00 0.00 0.00
k) Gross Profit/Loss 2701.48 355.78 0.00 0.00
l) Net profit/loss 2701.48 355.78 0.00 0.00
m) Cash Accruals (l+k) 2701.48 355.78 0.00 0.00
n) Net profit / Capital Employed (%) #DIV/0! 2541.26% #DIV/0! #DIV/0!
o) Current Assets 0.00 0.00 0.00 0.00
p) Current Liabilities 0.00 0.00 0.00 0.00
RATIOS :
q) Current Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0!
r) Debt/Equity :
Total Term Liab./TNW #DIV/0! 0.00 #DIV/0! #DIV/0!
Total Outside Liab./ TNW #DIV/0! 0.00 #DIV/0! #DIV/0!
s) Profitability %: PAT/Net Sales 8.63% 1.09% #DIV/0! #DIV/0!
t) DSCR a) Company as a whole 13.82 3.46
b) For specific TL
u) Interest Coverage #DIV/0! #DIV/0! #DIV/0! #DIV/0!
v) Inventory + Receivables/ Sales 0.00% 0.00% #DIV/0! #DIV/0!

Debt quasi equity ratio #DIV/0! 0.00 #DIV/0! #DIV/0!

Workout (d) if item (c) is above 10% of Net Worth.

* Adjusted TNW plus M.T./L.T liabilities.
Details of quarterly published results, if any,
in case of listed companies to be given as a separate column.

Share price : Rs. as on

(52 week's High/Low : Rs. /Rs. - Source:
BRANCH :
ACCOUNT :

CREDIT RATING (with aggregate FBL plus N-FBL of Rs.100 lacs & above)

I FINANCIAL RISK (STATIC) BASED ON LATEST BALANCE SHEET (Audited / Prov.) 20 5

Current Ratio 1.33 & above 5
Less than 1.33 but more than 1.25 4
1.24 to 1.10 2
Less than 1.10 0 0
Total liabilities to tangible Less than 2.00 5
net worth 2.00 to 3.00 4
3.01 to 4.00 2
More than 4.00 0 0
Interest service coverage More than 3.00 5
ratio 3.00 to 2.00 4 4
1.99 to 1.50 2
Less than 1.50 1
PAT / Net Sales 5% & above 5
Average between 4% to 5% 4
Between 3% and 4% 2
Less than 3% 1 1
Loss 0

II FINANCIAL RISK (MOVING AVG-DYNAMIC) BASED ON LATEST B/S (Audited / Prov 17 5

Current Ratio 1.33 & more during last 3 years with 4
incresing trend
1.33 & more during last 3 years with 3
uneven or decreasing trend
Between 1.33 and 1.10 during last 3 2
years with increasing trend
Between 1.33 and 1.10 during last 3 1
years with decreasing trend
All others 0 0
Total liabilities to tangible 3 & less during the last 3 years with 4
decreasing trend
net worth 3 and less during last years with 3
uneven or increasing trend
More than 3 but less than 4 during the 2
last 3 years with decreasing trend

More than 3 but less than 4 during last 1

3 year with uneven or incresing trend

All others 0 0
Interest service coverage 3 and more during last 3 years with 4
increasing trend
ratio 3 and more during last 3 years with 3
uneven or decreasing trend
Between 3 and 2 during last 3 years 2 2
with uneven or decreasing trend
All others 0
Net Sales Increasing trend and last year's 5
achievement more than 90% of
projection
Uneven or decresing trend & last year's 4
achievement more than 90% of
projection
 Increasing trend and last years's 3 3
achievement more than 75% of
projection but less than 90%
Increasing trend and last years's 2
achievement more than 75% of
projection but less than 90%
Others 0

III MARKET RISK 9 8

Competion including threat Monopoly situation / highest market 3
share
from Imports Increasing market share 2 2
Supply exceeds the demand yet the 1
unit has a niche market of its own
Low capacity utilisation and company 0
with insignificant market share / high
threat from imports
Industry Cycles Fairly stable industry cycle with long 2 2
term prospects
Susceptible to unfavourable charges in 0
the market / industry cycle on the
upswing / downswing
Regulatory Risk Not affected by regulatory framework 2 2
Regulatory and legislative issues likely 1
to create stress but company has got
the capacity to tackle them
approrpriately
Regulatory changes likely to threaten 0
Technology viability
Proven technology, not subjected to 2 2
changes in the immediate future /
leading technology in the industry
Technology likely to undergo changes 1
and the company is capable of
surviving the change
Outdated technology / technology not 0
tested / substitutes are many

IV MANAGERIAL RISK 9 8
Expertise Promoter / Directors / Owners of the 5 5
unit are highly qualified professionals or
employing qualified
Owner managed professional
with no professionals 3
but by persons with experience

Owner-managed (with no 0
professionals)/ new company / firms
Track Record Financially disciplined, commitments to 4
lenders honoured timely and no
defaults in the group companies
Accounts are regular but repayment 3 3
are slightly delayed. Group companies
are not doing well but management co-
operates in settling them

Repayment are delayed but account 2

continues to be standard; overall
performance of the group compnaies is
average
 No financial discipline, poor adherence 0
to sanction terms, accounts are
frequently irregular, group companies in
default

V SECURITY VALUE 6 4
Assets (incl. Collaterals, >175 4
cash margins etc.) >150 but <175 3 3
coverage ratio % (this is to >100 but <150 2
total exposure incl. NFB < 100 0
limits)
Guarantees Central Govt. / Reputed Fis / Reputed 2
Schedule Banks
Promoter- Directors guarantee / 3rd 1 1
party guarantee
No guarantee 0

VI CAPITAL MARKET PERCEPTION NA NA

Dividend payment Continuous for last 3 years 2
2 years 1
Less than 2 year 0
P/E Ratio Above sector / industry average 2
At average 1
< Average 0

VII CONTINGENT RISK 5 5

Balance sheet practices Unqualified audit report for last 3 years 2 2

2 years 1
other cases 0
Contingent liabilities (% to < 10 2 2
TNW) (only such liabilities > 10 < 30 1
which may affect net worth / > 30 0
profit of the borrower to be
taken into account)
Reliability / accuracy of No deviation / deviation moderate 1 1
data incl. QIS etc.furnished Deviation to considerable extent 0

VIII COMPLIANCE 10 5
Submission of stock Timely submission 2 2
statements, various state- Delayed / Irregular submission upto 30 days 1
ments undee QIS & MSOD Non-submission / delayed submission beyond 30 0
(wherever applicable)
Submission of audited b/s & Timely submission i.e., at-least 1 month 2
P&L a/cs & financial data before due date of review

in CMA forms Delayed / Irregular submission (within 2 1

Overlimit business
months after due date for review)
Non-submission / delayed submission 0 0
beyond 2 months after due date for
review
No occasions generally for overlimits / 3 3
adhocs / drawals beyond sanctioned /
drawing limits without prior approval /
no return of cheques for financial
reasons
 No occasions generally for overlimits / 2
adhocs / drawals beyond sanctioned /
drawing limits without prior approval /
return of cheques for financial reasons
for not more than twice in year
No occasions generally for overlimits / 0
adhocs / drawals beyond sanctioned /
drawing limits without prior approval /
return of cheques for financial reasons
for more than twice in year
Compliance with terms of Complied with - no deviation 3
sanction Major terms / creation of securities 2
complied
Major terms- pending 0 0
RISK RATING
PARAM E T E R Maxim Max. Mark's
um appli- scored
Score cable
score
FINANCIAL RISK (STATIC) 20 20 5
FINANCIAL RISK (DYNAMIC) 17 17 5
MARKET RISK 9 9 8
MANAGERIAL RISK 9 9 8
SECURITY VALUE 6 6 4
CAPITAL MARKET PERCEPTION 4 NA NA
CONTINGENT RISK 5 5 5
COMPLIANCE 10 10 5
T O TAL 80 76 40
Percentage of Risk Factors 52.63%

IX ADDITIONAL FACTORS TO DETERMINE PRICE 20 12

General observations in Excellent conduct of account trouble- 5
conduct and ancillary free nature of operations, gross
business business / all the business routed
through us
Satisfactory conduct of account with 3 3
some ancillary business
Unsatisfactory conduct of account, 0
ancillary business diverted to others
with or without bank's approval
Leanght of satisfactory More than 10 years 3 3
relationship More than 5 years but less than 10 years 2
More than 3 years but less than 5 years 1
Less than 3 years 0
Share in non-fund based 100% share with our bank 3 3
business Proportionate to our share in FBL 2
Others 0
Collateral coverage More than 100% cover avilable for total limits 3
Between 90% to 100% 2
Between 70% to 90% 1
Others 0 0
Threat of loss of business Significant 2
due to competition Not much significant 1 1
No threat 0
Rater's perception about Substantial - large 2
long-term benefit to bank Not large but definite benefits expected 1 1
from the borrower / group Others 0
Overall image / reputation Excellent image 2
 of the group / company No adverese factors 1 1
Others 0
GRAND SUMMARY OF PRICING
PARAM E T E R Maxim Max. Mark's
um appli- scored
Score cable
score
RISK FACTORS 80 76 40
ADDITIONAL FACTORS FOR PRICING 20 20 12
T O TAL 100 96 52
Percentage of Risk Factors 54.17%

Percentage Obtained Final Rating

80% and above "AAA"
65% and above but below 80% "AA"
50% and above but below 65% "A"
Below 50% "B"
ANNEXURE TO HEAD OFFICE BRANCH CIRCULAR NO. DATED

SBS SCORING MODEL FOR BRANCHES

Parameters Actual (i) Measure SCORE Assigned WEIGHT TOTAL
% Score SCORE
increase (Assg. Weight x
or (ii) ratio Score) Assg.
as the Score
case may (Colm.5 x
be Colm. 6)

Column 1 Column 2 Column 3 Colm4 Column 5 Colm 6 Column 7

A. Financial Risk Score - Based on Latest Balance Sheet (Audited/ Provisional)
1. SALES
GROWTH 15% & above increase over previous year 1
5% & above but below 15% increase over previous year 2 4 0
0% & above but below 5% increase over previous year 3
Negative over previous year 4
2.
PROFITABILIT 25% & above increase over previous year 1
Y ( PBITDA/ 15% & above but below 25% increase over previous year 2 4 0
Sales * 100) 0% & above but below 15% increase over previous year 3
Negative over previous year 4
3. LIQUIDITY
( Current 1.50 & above 1
Ratio) (Current 1.33 & above but below 1.50 2 4 0
Assets/Current 1.00 & above but below 1.33 3
Liabilities) below 1.00 4
4. LEVERAGE
(TOL/ 0.00 above but below 1.00 1
TNW) 1.00 & above but below 3.00 2 4 0
3.00 & above but below 4.00 3
4.00 & above 4
5.COVERAGE )
(a) (Debt Service Coverage Ratio)
2.00 & above 1
1.50 & above but below 2.00 2 4 0
1.00 & above but below 1.50 3
-1.00 & above but below 1.00 4
(b) (Interest Service Coverage Ratio)
(Profit before 2.00 & above 1
tax+Interest+D 1.50 & above but below 2.00 2 4 0
epreciation 1.00 & above but below 1.50 3
+loan -1.00 & above but below 1.00 4
installment/
interest cost SUB-TOTAL OF FINANCIAL RISK SCORE (A1 TO A5 ABOVE) XXXXXX 0
(B) Management Risk Score
(1) Management Character
a) Diversion of
funds (a) There is no possibility of diversion of funds and there are no group
companies 1
(b) Diversion of funds is unlikely, though there are group entities
4 0
marginal amounts may be diverted for personal use 2
(c ) Diversion of funds is likely on a regular basis to group entities and
for personal
(d) use entity is only a front for diversion to the rest of the
The borrowing 3
group or for personal use 4

b) Integrity-
(a)Well-established member of the community whose integrity is
unquestionable 1
(b)Generally respected by peers and by the community 2
4 0
(c)Does not always act in an upright and honest manner. 3
(d) Should repayment capacity be impaired, management may not co-
operate with lender or no information could be obtained about
managements integrity 4

c) Business exposure in the business and the business contributes significantly to

Commitment his overall business
(b) Promoter is fairlyinvestment
committed to this business but has substantial 1
investment in other businesses 2

4 0
c) Business
Commitment

(c) This business occupies only a small portion of his time and 4 0
investment and his most significant business interest lies elsewhere 3

(d) No involvement by the promoter; business merely a legacy or

promoter diversifying into other areas where his involvement will
increase in future or unable to gauge commitment 4
B1 SUB-TOTAL MANAGEMENT CHARACTER SCORE (1a to 1c above) XXXXXX 0

(2) Management Capacity

a) Financial
Strength entities (if any) 1
or short-term personal problems 2 4 0
the borrowing
(d) Very entity
poor financials or financial strength could not be ascertained 3
or widely differing opinions obtained 4
b)
Competence (a) Management is very good. Person is well organised and
knowledgeable about the company and the industry in which he
operates 1

(b)Person has reasonable management skills but weakness in one or

2 0
two areas is evident. Tasks are performed satisfactorily. 2
Person exhibits limited managerial skills. Individual does not have
a complete understanding of the business. 3
(d) Person exhibits a total lack of skill. Decisions are illogical and
loan repayment could be at risk. 4
c) Business
Experience (a) Several years of sound business experience in the same line and
extremely successful 1
(b) Fairly long experience in the same line of business with limited 2 0
success 2
Fair experience but in related line of business 3
(d) Very short or no experience in any business 4

d) Internal
Controls (a) Internal control is fairly good and is dependent on the owners long
standing relationship with his employees 1
(b) Internal control is not very tight and employees have too much
discretion 2
2 0
(c)Internal control is totally dependent on the owners presence in the
business location and his personal supervision
3
(d) No internal control at all - the owner does not have a clue to what
is happening 4
e) Employee (a) Motivated and loyal employees who have a sound understanding 1
quality of the business
(b) Employees are loyal but do not have much experience 2
Employees are not motivated and do not contribute their best 2 0
3
(d) Employees are neither motivated nor competent 4

B2 SUB-TOTAL MANAGEMENT CAPACITY SCORE (2a to 2e above) XXXXXX XXXXXX 0

(3) Management Succession

a) Successor
Identification (a) Well-defined succession plan in place; business not dependent on
one person 1
(b) Business dependent on one person at present, but in the event of
incapacitation of that person a good succession plan is in place 2
Succession is not addressed adequately and hence dealing with a 4 0
change in the management team could adversely affect the
companys performance; however the damages can be contained 3
(d) Succession has not been addressed and in the even of
incapacitation of the key person, the business would suffer financial
setbacks 4
b) Successor
Preparedness (a) Successors have far more than the necessary skills, experience
and knowledge about the business. 1
(b) Successors have adequate skills, experience and knowledge
about the business even though there would be some learning and
adjustment needed to be fully capable of replacing current
management. 2 4 0
 4 0
(c ) Successors have some skills and knowledge about the business
but a lot of learning and adjustment needed to be fully capable of
replacing current management. 3
(d) Successors are poorly prepared for assuming the role of current
management and are not currently, nor could they be made capable
of replacing current management. 4
B3 SUB-TOTAL MANAGEMENT SUCCESSION SCORE (3a & 3b above) XXXXXX 0

(4) Management Reputation

a) Business (a) Obligations to creditors are met before or within agreed terms 1
Loan History (b) Payments have extended beyond agreed upon terms on an
infrequent basis 2
(c ) Often borrower allows bills to extend 60-90 days beyond payment
date 3 4 0
(d) Credit checks indicate the borrower is consistently late, without
cause, in paying its suppliers or Information could not be obtained on
how the borrower handles its payment responsibilities 4

b) Credit Track a) Company has never violated any term and condition of it's loan
Record agreement 1
b) Company rarely does not meet all terms and conditions of its loan
agreement 2
c) Now and then the company breaches a significant term or condition 4 0
of the credit agreement 3
d) Company consistently violates loan agreement covenants 4

c) Firm's age a) Firm in existence for more than 10 years 1

b) Firm in existence for more than 5 years 2
c) Firm in existence for more than 2 years 3 8 0
d) Firm in existence for less than 2 years 4

d) Reputation
with customer (a) Excellent relationship with suppliers with no disruption of supplies.
and suppliers Excellent reputation with customers resulting in growth and timely
payments. 1
(b) Good relationship with suppliers with some disruption of supplies.
Good reputation with customers resulting in growth and generally
timely payments. 2
4 0
(c ) Fair relationship with suppliers with frequent disruption of
supplies. Fair reputation with customers but increase in credit period
and some defaults. 3
(d) Poor relationship with suppliers. Poor reputation with customers
with substantial increase in credit period and high defaults. 4

B4 SUB-TOTAL MANAGEMENT REPUTATION SCORE (4a to 4d above) XXXXXX 0

SUB-TOTAL MANAGEMENT RISK SCORE (B1 TO B4 ABOVE) XXXXXX 0
( C ) Business/ Industry Risk Score
a) Customer
Quality and (a) Diversified customer base having reasonable size, stable
Concentration purchase pattern from the firm and likely to pay outstanding invoices
on a timely basis. 1
(b) Generally diversified customer base who maynot have either a
reasonable size or a stable purchase pattern from the firm but is likely
to pay outstanding invoices on a timely basis. There maybe a few
large customers. 4 0
2
(c ) Customer has has neither reasonable size nor a stable purchase
pattern from the firm but is likely to pay outstanding invoices on a
timely basis. The firm may have only a few customers with little
product diversification 3
(d) Customers are not expected to pay on time. The firm may have
only 1-2 customers. 4
b) Supplier
Quality and (a) Firm has a choice of suppliers supplying quality goods & services.
Concentration 1
(b) Firm has a choice of suppliers supplying average quality goods &
services. 2 4 0
(c ) Firm has very few suppliers supplying goods & services. Quality
of goods & services is not very good. 3
(d) Monopsonistic situation with no control over quality. 4
c) Impact of
Competition on
GP Margins
c) Impact of
Competition on (a) Current Industry structure not expected to lead to decline in GP
GP Margins margin 1
(b) Industry competition may result in marginal decline in margins. 2 4
(c ) Industry competition has resulted/may result in significant decline
in margins. 3
(d) GP margins have declined significantly due to competition and
expected to decline further. 4
d) Sales Trend
(product) (a) Product has no substitutes, regulatory threats demand will remain
stable or grow 1
(b) Product has limited substitutes (other brands or other products)
and regulatory threats; however, this will not pose a threat to the 4 0
borrower 2
(c ) Demand for product may be affected by lower-price substitutes
and regulation; however the threat is unlikely 3
(d) Demand faces serious threat due to substitutes and regulation 4
e) Regulatory /
Fiscal risk- (a) There are no foreseen changes in the direct/indirect tax structure
Impact of or import/export restrictions which could impact the industry
duties profitability. 1
(product)
b) While some changes in the direct/ indirect tax structure or import/
export restrictions which impact the industry are foreseen,these may
have some impact on industry profitability 2
(c ) Some changes are foreseen in the direct/indirect tax structure or 4 0
import/export restrictions which impact the industry. These may have
a major impact on industry profitability and affect viability of marginal
players. 3
(d) Significant changes are foreseen in the direct/indirect tax structure
and/or import/export restrictions which impact the industry. These
may have a significant impact on industry profitability and viability of
players. 4

f) Technology
Dependence (a) Technology is tested and not expected to change in the long run. 1
(product)
(b) Technology is tested and unlikely to change in the medium term. 2
2 0
(c ) Technology tested but likely to change in the medium term. 3
(d) Outdated technology or technology subject to very fast
obsolescence or technology as yet untried/untested. 4
g)
Environmental (a) Unlikely to face pollution related problems in future. 1
impact (b) Limited likelihood of facing pollution related problems in future. 2
(product) 2 0
(c ) Polluting industry but complies with current norms which are
subject to change. 3
(d) Polluting industry and does not comply current norms. 4
SUB-TOTAL BUSINESS/ INDUSTRY RISK SCORE (Ca to Cg above) XXXXXX XXXXXX 0

CUSTOMER RATING SCORE 0

(A) FINANCIAL RISK SCORE 0

(B) MANAGEMENT RISK SCORE 0
( C ) BUSINESS/ INDUSTRY RISK SCORE 0
FINAL RISK SCORE (A+B+C) 0
Credit Rating Grade based on Final Risk Score SBS 1
( Please refer to Final Risk Score Annexure for Credit Rating Grade)

Parameters to be considered for calculating the required ratios INSTRUCTIONS FOR COMPILING THE
RATING SHEET
1. Current Ratio=(Debtors<=180 days+Inventory+Other Current 1) Branches are advised to fill in the
Assets+Cash & Bank)/(Cash Credit+ICD/STD+Current Portion of Long actuals in column no 2 under
Term Debt+Sundry Creditors+Provision+Other Current Liabilities) Financial Risk Score 1 to 5(b).

2. Total Outside Liabilities/Networth=TOL/(Net Capital-Misc. Expenditure- 2) As regards descriptive items in

Accumulated Losses) Management Risk Score & Business/
Industry Risk Score, branches are
3. DSCR=(Net Profit+Interest+Depreciation +loan installment/Current O/S advised to allot marks which fits best
of Term Loan+interest) (closest) to the parameter
4.Interest Coverage=(PBT+Interest Expenses)/ Interest Expenses)
5.Capital Gearing=(TOL+[LC+BG+Other Contingent Liabilities])/(Net
Capital-Investment in group companies-Other Investments-Other Current
Assets-Misc.Expenditure-Accumulated Losses)

Prepared by: Checked by:

Approved by:

OVERALL RISK GRADE ANNEXURE to SBS MODEL

FINANCIAL RISK SCORE MANAGEMENT RISK SCORE B BUSINESS/ INDUSTRY FINAL RISK SCORE
A
Financial Rating Financial Management Rating Score Managem RISK SCORE
Business/ Business/ Final Rating
Score Rating ent Rating Industry Industry Score
Rating Score Rating
0 to 28 1 0 to 51 1 0 1 0
29 to 33 2 52 to 77 2 24 2 120
34 to 37 3 78 to 103 3 36 3 140
38 to 42 4 104 to 120 4 48 4 160
43 to 50 5 121 to 138 5 56 5 180
51 to 58 6 139 to 155 6 64 6 213
59 to 63 7 156 to 172 7 72 7 247
64 to 68 8 173 to 190 8 80 8 268
69 to 95 9 191 to 207 9 88 9 287
96 10 208 10 96 10 400
RISK SCORE
Overall
Rating
Grade
SBS 1
SBS 2
SBS 3
SBS 4
SBS 5
SBS 6
SBS 7
SBS 8
SBS 9
SBS 10