CRISIL

CRISIL is India's leading Ratings, Research, Risk and Policy Advisory company. At the core of CRISIL are its unimpeachable credibility and unmatched analytical rigour. Leveraging these core strengths CRISIL delivers opinions and solutions that: Make markets function better, and, Help clients mitigate and manage their business & financial risks Help shape public policy. CRISIL offers domestic and international customers a unique combination of local insights and global perspectives, delivering independent information, opinions and solutions that help them make better informed business and investment decisions, improve the efficiency of markets and market participants, and help shape infrastructure policy and projects. Its integrated range of capabilities includes credit ratings; research on India's economy, industries and companies; investment research outsourcing; fund services; risk managementinfrastructure advisory services more . and CRISIL's majority shareholder is Standard & Poor's, the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data.

Distinctive features of CRISIL Ratings

Offers a reliable and independent view Focuses on substance rather than form Looks at actual practices through an interactive process rather than an audit of regulatory compliance Takes into account the perspectives of all stakeholders (shareholders, debt holders, employees, customers, suppliers

and society at large) Quantifies the value created on account of good governance practice Recognises crucial role of stakeholders in value creation for shareholders Provides an appropriate balance of quantitative and qualitative factors

CRISIL 's rating activities:

Rating of bonds and debentures, which are long term instruments, structured obligations, preference shares are rated by CRISIL. It also rates fixed deposits. Short term instruments like short term deposits as well as programs related to commercial paper are also rated by CRISIL. With regard to ratings of bank loans, the facilities of credit offered to the customers are also rated by CRISIL. CRISIL has the credit of rating the state governments of Andhra Pradesh, Maharashtra, Karnataka and Gujarat. It has rated several joint ventures as well as subsidiaries of many multinational companies. CRISIL also rates real estate projects of several real estate companies. It works in association with the National Real Estate Development Council.

Who We Are We are a global analytical company providing ratings, research, and risk and policy advisory services.

We are India's leading ratings agency. We are also the foremost provider of high-end research to the world's largest banks and leading corporations. With sustainable competitive advantage arising from our strong brand, unmatched credibility, market leadership across businesses, and large customer base, we deliver analysis, opinions, and solutions that make markets function better. Our defining trait is our ability to convert data and information into expert judgements and forecasts across a wide range of domains, with deep expertise and complete objectivity. At the core of our credibility, built up assiduously over the years, are our values: Integrity, Independence, Analytical Rigour, Commitment and Innovation. Our majority shareholder is Standard and Poor's. Standard & Poor's, a part of The McGraw-Hill Companies, is the world's foremost provider of credit ratings. Who We Serve We address a rich and globally-diversified client base. Within India our customers range from small enterprises to the largest corporations and financial institutions; outside India our customers include the world's largest banks and leading corporations. We also work with governments and policy-makers in India and other emerging markets in the infrastructure domain. How We Add Value We empower our customers, and the markets at large, with independent analysis, benchmarks and tools. These help lenders and borrowers, issuers and investors, regulators, and market intermediaries make better-informed investment and business decisions. Our offerings allow markets and market participants to become more transparent and efficient - by mitigating and managing risk, taking pricing decisions,

generating more revenue, reducing time to market and enhancing returns. By helping shape public policy on infrastructure in emerging markets, we catalyze economic growth and development in these countries. Our People We carefully nurture a fungible talent pool that can rotate seamlessly across businesses, providing the domain expertise and cultural cement that holds our many businesses together. We are able to provide business leadership opportunities to an increasing number of our talented employees because of our rapidly-growing businesses, range of services, and geographical footprint. Our people remain the factor that makes the totality of the CRISIL group far more valuable than the sum of its parts.

CRISIL is the largest credit rating agency in India. CRISIL pioneered ratings in India more than 20 years ago, and is today the undisputed business leader, with the largest number of rated entities and rating products: CRISIL's rating experience covers more than 41,738 entities, including 20,000 small and medium enterprises (SMEs). As on June 30, 2011, we had more than 13,787 ratings (including over 6,800 SMEs) outstanding. CRISIL Global Research & Analytics (GR&A) is the largest and top-ranked provider of high end research and analytics services to the world's leading commercial and investment banks, insurance companies, corporations, consulting firms, private equity players and asset management firms. CRISIL GR&A operates from research centers in Argentina, China, India and Poland, providing research support across several time zones and in multiple languages to global organizations. The CRISIL GR&A team has deep expertise in the areas of equity research, fixed income research (covering global economies, 150 global

sectors and over 3000 global companies), valuations, pricing complex derivatives, structured finance, risk management, actuarial analysis and business intelligence. This expertise enables our clients enhance revenues, accelerate time to market, take pricing decisions and improve operational efficiencies. Being part of the CRISIL platform enables CRISIL GR&A to attract and retain top quality talent. CRISIL GR&A has over 2,000 employees, 75% of whom hold advanced degrees in finance, accounting and management. It has the largest teams of equity research analysts and derivative analysts outside of investment banks and the largest team of fixed income/credit analysts outside of banks/rating agencies. CRISIL GR&A has served more than 500 firms over the last decade. Our clients include:

12 of the top 15 global investment banks 2 of the top 10 global consulting groups 3 of the top 10 global Asset Management Companies 3 of the top 15 global insurance companies Several fortune 500 companies

CRISIL Research is India's largest independent research house. Through constant innovation, and comprehensive research offerings covering economy, industry, companies CRISIL Research meets the requirements of more than 750 Indian and global clients. Apart from off the shelf research reports, CRISIL also provides incisive, customised research that allows clients to take informed business and investment decisions.

Comprehensive research coverage on over 65 industries and 150 corporates makes CRISIL a preferred service provider to

90% of India's commercial banks 4 of the world's largest consulting firms All the leading brokers, investment banks and private equity players

CRISIL is an eminent player in the capital markets space with detailed perspective covering both debt and equity markets. CRISIL's capital market offerings can be categorised under equity research, initial public offer grading, mutual fund services, and fixed income services. Additionally, CRISIL provides customised research solutions as well. CRISIL Equities Offerings under CRISIL Equities are classified as - independent equity research (globally a unique concept) and initial public offer (IPO) grading. CRISIL equities also provide equity outsourcing and customised research for information memoranda and offer documents that are prepared by companies as part of their fund-raising initiatives. Mutual Fund Services CRISIL FundServices (CFS) is India's leading provider of rankings, desktop and valuation tools, indices and market benchmarks and customised investment research. Its Mutual Fund Rankings have been the industry standard for mutual fund evaluation in India for more than a decade. CFS has executed various policy level prestigious assignments

Assisted Employee Provident Fund Organisation (EPFO) in selection of fund managers to manage the EPFO's funds and provide better returns to its members. Assisted Provident Fund Regulatory and Development Authority (PFRDA) in framing regulations under the PFRDA act.

CRISIL Infrastructure Advisory* provides practical and innovative solutions to governments, donor funded agencies and leading organizations in over 20 emerging economies across the world to:

Transform efficiency of public institutions and sector Design and strengthen reform programmes to catalyse private sector participation Improve infrastructure service delivery

Some of the key assignments executed :

CRISIL Infrastructure Advisory strategized the takeout finance scheme - a method of making long term debt financing available to large infrastructure projects for India Infrastructure Company Ltd (IIFCL). CRISIL Infrastructure Advisory's Energy Practice has designed and implemented first of its kind novel Electricity Distribution Franchisee Contract in Maharashtra.

* Effective April 01, 2007, CRISIL transferred its advisory and risk consulting business into a wholly owned subsidiary, CRISIL Risk and Infrastructure Solutions Ltd (CRIS). CRISIL Risk Solutions

CRISIL Risk Solutions* (CRS) provides comprehensive risk management services to banks, financial institutions, and corporates across all areas of risk including: credit, market and operational. In addition to providing innovative software products, it also extends consultancy services and analytical insights. Ranked as the No. 1 Risk Solution provider in the last Indian Banks' Association (IBA) Finsight media survey, CRISIL Risk Solutions has delivered risk solutions to about 50 financial institutions in India and

abroad and has largest user base of more than 100000 users. CRS's flagship product RAM is the largest deployed Internal risk rating solution in India. * Effective April 1, 2007, CRISIL transferred its advisory and risk consulting business into a wholly owned subsidiary, CRISIL Risk and Infrastructure Solutions Ltd (CRIS).

CRISIL Rating Symbols For Fixed Deposits FAAA ("F Triple A") Highest Safety FAA ("F Double A") High Safety FA Adequate Safety This rating indicates that the degree of safety regarding timely payment of interest and principal is very strong. This rating indicates that the degree of safety regarding timely payment of interest and principal is strong. However, the relative degree of safety is not as high as for fixed deposits with 'FAAA' ratings. This rating indicates that the degree of safety regarding timely payment of interest and principal is satisfactory. Changes in circumstances can affect such issues more than those in the higher rated categories. This rating indicates inadequate safety of timely payment of interest and principal. Such issues are less susceptible to default than fixed deposits rated below this category, but the uncertainties that the issuer faces could lead to inadequate capacity to make timely interest and principal payments. This rating indicates that the degree of safety regarding timely payment of interest and principal is doubtful. Such issues have factors at present that make them vulnerable to default; adverse business or economic conditions would lead to lack of ability or willingness to pay interest or principal.

FB Inadequate Safety

FC High Risk

FD Default NM Not Meaningful

This rating indicates that the fixed deposits are either in default or are expected to be in default upon maturity. Instruments rated 'NM' have factors present in them, which render the outstanding rating meaningless. These include reorganisation or liquidation of the issuer, the obligation being under dispute in a court of law or before a statutory authority etc.
1) CRISIL may apply '+' (plus) or '-' (minus) signs for ratings from FAA to FC to indicate the relative position within the rating category.

Note:

2) CRISIL may assign rating outlooks for the ratings from 'FAAA' to 'FB'. Ratings on Rating Watch will not carry outlooks. A rating outlook indicates the direction in which a rating may move over a medium-term horizon of one-totwo years. A rating outlook can be 'Positive', 'Stable' or 'Negative'. A 'positive' or 'negative' rating outlook is not necessarily a precursor of a rating change.

3) The contents within parenthesis are a guide to the pronunciation of the rating symbols.

Credit Rating-full coverage on various ratings in India

There are four ratings agencies In India-CRISIL, ICRA, Fitch and CARE.every rating agency has its own scale of credit ratings to indicate the probability of default. How Credit Rating Works?

Although it is not mandatory for a debt security to have a credit rating,but for investor it becomes easy to analyse different debt securities on the basis of credit rating. Credit ratings also determine the rate at which the borrower can borrow from the market. A debt security with AAA can borrow at the lowest rate in the markets, as one moves down the rating scale, the borrower needs to pay a higher interest rate to compensate for the higher risk.
Long-Term Debt Ratings-

It refers to the debt wherein the maturity of the security is greater than one year. The long-term credit rating scale ranges from AAA to D. AAA is the best credit rating possible for a non-government debt security. This rating indicates that the borrower will repay the principal and the interest on time and has adequate reserves to fulfill debt payments. D indicates that the borrower is in default, or will most likely default. An additional + or sign is affixed to the ratings (except for AAA and D) to indicate higher or lower quality among the debts of the same rating. For instance, a debt security rated AA+ has better quality than AA. A debt security rating of AA- is of lower quality than a rating of AA.
Investment Grade

Ratings from AAA to BBB- are considered investment-grade ratings & are mostly purchased by mutual funds and institutional investors.
Speculative grade

Any rating below BBB- (i.e., BB+ and below) is considered speculative grade. These debt securities are for people who can take high risk as the risk of default is considerably higher in comparison to investment-grade debt securities. Such speculative securities are more commonly known as high-yield securities. Globally, there are special mutual funds called high-yield funds that

invest into these speculative-grade securities. As of now, there are no high-yield mutual funds in India.

Long Term Credit Ratings From Rating Agencies in India.

PRIME FITCH AAA AA+ AA AAA+ A ABBB+ BBB BBBBB+ BB BBB+ B BC SPECULATIVE GRADE DEFAULT DANGEROUSLY SPECULATIVE D DEFAULT CRISIL AAA AA+ AA AAA+ A ABBB+ BBB BBBBB+ BB BBB+ B BC+ C CD NM CARE AAA AA+ AA AAA+ A ABBB+ BBB BBBBB+ BB BBB+ B BC+ C CD

HIGH GRADE

UPPER MEDIUM GRADE

INVESTMENT GRADE

LOWER MEDIUM GRADE

NON INVESTMENT GRADE

HIGHLY SPECULATIVE

Short-Term Debt Ratings While long-term debt ratings are similar across the four ratings agencies, short-term debt ratings vary far more. The length of the scale is different for different ratings agencies. The rating scale ranges from 1 (highest quality) to 5 (lowest quality). The rating agency can use + or - to indicate better or lower quality. The use of the signs is more common in the longterm debt ratings than in short-term debt ratings.

Short term Credit Ratings From Rating Agencies in India

FITCH F1+ F1 Best F2+ F2 Better F3 Average F4 Worse Worst CRISIL P1+ P1 P1P2+ P2 P2P3+ P3 P3P4 CARE PR1+ PR1 PR1PR2+ PR2 PR2PR3+ PR3 PR3PR4+ PR4 F5 P5 PR4PR5 ICRA A1+ A1 A2+ A2 A3+ A3 A4+ A4 A5

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