Crisl Advisory, Research and Information, Index and Training Services The

Appendix 16.
APPENDIX 16
B
CRISL ADVISORY, RESEARCH AND INFORMATION, INDEX AND TRAINING
SERVICES
The CRISIL Advisory Services (CAS)

The CAS offers consultancy services that aim at identifying and mitigating risk and formulating and
executing strategies for the same. The main focus of these services is transaction and policy level assignments
in the areas of energy, transport and urban structures, banking and finance, and disinvestment, privatisation
and valuation. The CRISIL has a pact with National Economic Research Associates (NERA), USA to
strengthen its research advisory services.
These services are rendered in the form of consultancy to various State Governments in the selection
of private sector participation in infrastructure development; to the Disinvestment Commission of the
Government of India, on disinvestment plans for public sector enterprises and also as expert assistance in
the privatisation process of State Governments, major port authorities, state electricity boards and so on.
The other clients availing advisory services from the CRISIL are public sector enterprises, banks, financial
institutions, infrastructure project developers and so on.
Energy Group Services The energy group basically offers advisory services to entities engaged in
the energy sector, that is, power, coal, oil and gas. These entities could be classified into three groups:
(1) Central and state government sponsored concerns/organisations/agencies engaged in the energy sector.
Assistance is provided at two levels, that is, the policy level and the transaction level. (2) Private sector
concerns engaged as developers, to help them in project structuring, joint venture partners selection,
financial viable study. (3) Project financiers like banks, financial institutions or multilateral funding agencies,
to increase their capabilities, to understand the project, analyse project contracts and design security packages.
Policy Level Assignments Policy level assignments cover the following aspects:
Sector Reforms and Structuring This covers defining the objectives of undertaking reforms in the
sector and their translation into a specific, time-bound action plan; identifying the desired sector structure
in terms of the players and their roles, the structure of relationships between the players, nature of
competition, and nature of the regulatory framework; identifying the need for coordination with other
related sectors and various infrastructure development agencies of the state so that the integrated
development plan links with the overall development of the states economy; defining the future role of
the government in the sector and identifying the corresponding state initiatives that would be required.
There would be a need to divorce the regulatory function of the state from its role as owner and operator
of the existing facilities; evaluate the different approaches to privatisation, which would include an assessment
of various ownership and operational alternatives such as leasing, management contracts, outright sale of
assets, Build-Own-Operate-Transfer (BOT and its variants) and so on and select the optimum model of
reform given the objectives and the constraints. The model defines the roles to be played by the public
sector and private sector players, and the manner in which the changes are to be brought in.
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16.2 Financial Services
Regulatory Framework This broadly covers defining a regulatory framework that promotes competitive
market dynamics and addresses concerns relating to the quality of service and environment; development
of methodologies for setting/regulating tariffs, service standards, and so on; defining the role of the
regulator; defining the nature of the regulatory body so as to ensure autonomy in operations, and, thereby,
being acceptable to all the players.
Privatisation For inducting private sector capital and management into public sector organisations, the
CRISIL provides expert assistance in careful planning, and a step-by-step approach through a diagnostic
study of the business, organisation and the environment; valuation, under various scenarios, and identification
of the optimal process; organisational restructuring and capital restructuring; corporatisation; managing the
process of sale/management contracts and so on.
BOT Policy The CRISIL helps the state authorities in formulating BOOT/BOT/R & M policy, so as to
protect the objectives and concerns of the state; structure the Governments financial/commercial policy
on the nature of tariffs, royalties payable to the Government, performance guarantees and define the risk
sharing pattern between the Government, the private sector and financiers.
Corporate Plan The CRISIL provides expert guidance in developing corporate plans for state authorities
to enable them to take decisions in the matter of providing greater autonomy to entities like electricity
boards, coal companies and for the purpose of assessing the need for their restructuring. In this regard, the
CRISIL renders the following services: conducting diagnostic studies of business areas; developing a
strategy in line with the roles to be played by the entity; engineering an appropriate structure for the
organisation; identifying the need for systems and development of processes; identifying skill development
requirements and recommending capital restructuring, financial strategies and resource mobilisation for
ensuring financial autonomy.
Fuel Related Services Different fuels have different benefits and risks, concomitant with their uses.
A right blend of the usage of the various fuels would have to be achieved to minimise excessive dependence
on a single fuel and the resultant adverse impact. The factors that would affect the choice of a fuel would
include: domestic availability versus need for import; price volatility and the impact of foreign exchange
fluctuation in case of import; ease of transportation; availability of infrastructure for storage and
transportation; efficiency of operations, achieved by the technology involved and impact on the environment.
The CRISIL provides expert reports on these related aspects, facilitating formulation of the desired policy
framework.
Transaction Level Assignment The implementation of the policies, once laid down, becomes
important. The CRISIL provides expert assistance, for this purpose, covering the following aspects:
Project Scoping and Structuring Project structuring includes the following aspects: (i) Defining the
project parameters in terms of technology and size; (ii) Fuel option analysis; (iii) Identifying skill/strength
requirements; (iv) Selection of appropriate project participants to assemble the skill pool and (v) Sharing
of responsibilities and risk among the participants.
Bid Process Management The CRISIL renders all related services required to achieving the goal,
namely, invitation of tenders and management of the entire bid process on a competitive bidding basis.
The services cover preparation of the bid document; drafting model agreements, such as power purchase
agreement (PPA), concession and the state support agreement, which will serve as a basis for further
negotiations; evaluation of bidders on managerial, financial and technical competence; evaluation of a
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Appendix 16.3
detailed bid on a common risk platform, through the use of financial modelling techniques; negotiation of
terms; negotiations on issues of risk sharing (project contracts) with the successful bidder.
Financial Viability Analysis of Projects The financial model would determine the attractiveness of ~
projects to different parties. For example, the model would compute the tariff for the purchaser (the state
electricity boards in the case of power generation projects); IRR, for the project promoter and other equity
investors and debt-service coverage, for lenders to the project. The analysis would also be useful in
identifying the measures required to make the project viable, and in arriving at an equitable sharing of risk
and responsibilities. The analysis would, inter-alia, cover the magnitude of capital investment; financing
plan and duration of the concession period/BOT/BOOT contract.
Risk Identification and Analysis and Structuring of Project Contracts Infrastructure projects are
characterised by a number of contracts which crystallise risk sharing among various project participants.
The CRISIL advises on the concession agreement; power purchase agreement; state support agreement;
fuel supply contract and so on.
Security Package Structuring and Analysis Considering the unsatisfactory credit quality of most
of the state electricity boards (SEBs) in India, payment mechanisms are being sought to assure the projects
cash inflows. The mechanisms being discussed typically include a letter of credit, escrow account, and
guarantees by the State government and/or Central government. Assistance under this head would include:
diagnostic analysis of the SEBs financial position; analysis of their receivables; evaluation of various
escrow positions, and recommendation of the most optimal mechanism; detailing the operation of the
escrow mechanism; assistance in the allocation of receivables to different initial power providers (IPPs)
and assessing the degree of security that the envisaged mechanism provides.
Transport and Urban Infrastructure Group Services The CRISIL provides financial advisory
services to the transports and infrastructure service providers on the lines of energy groups. The main
users of these services are (1) Central and State governments, for example, the Ministry of Surface
Transport (MOST), major ports and (2) Private sector developers intending to invest in the transport
sector. These services cover both policy level and transaction level aspects.
Policy Level Assignments Major areas covered by the CRISIL are the following:
Advice on the Transport Sector Privatisation Policy of the State/Major Ports The advice covers
defining the objectives of privatisation and its translation into a specific, time bound action plan; identifying
the areas to be privatised (at existing/greenfield sites) and the criteria for privatisation; and evaluating the
different approaches to privatisation, which would include an assessment of the various options of ownership
and operational alternatives such as leasing, management contracts, outright sale of assets and so on.
Development of the BOT Principle/Risk Identification and Allocation The task to be executed
covers identification of the BOT variant to be used, and formulation of the terms and conditions so as to
protect the objectives and concerns of the state; structure the Governments financial/commercial policy
on the nature of tariffs, royalties payable, performance guarantees and revenue assurances and define the
risk sharing pattern between the Government, the private sector, financiers and users of the transport
facilities.
Long-Term Sector Plan and State Role The CRISIL has initiated a study on the long-term transport
sector development requirements of the state. The study involves coordination between the various
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infrastructure development agencies of the state so that the integrated transport development plan links
the future transport facilities to the overall development of the states economy, defining the future role of
the government in the sector and identifying the corresponding state initiatives that would be required.
There would be a need to divorce the regulatory function of the state from its role as owner and operator
of existing transport facilities, and define a regulatory framework that promotes competitive market dynamics
and protects the states concerns relating to safety, security and environment.
Restructuring of Major Ports Greater autonomy of port trusts is now being actively considered and,
in the medium-term, major port trusts are likely to undergo a structural metamorphosis. In line with the
international experience, the two routes being considered are corporatisation and restructuring. In each
area, the CRISIL would evolve a policy framework. The corporatisation would involve: a diagnostic study
of the port trust; preparation of a business plan; recommended capital structuring and financing strategies
and a corporatisation plan. Restructuring of the port management under the landlord concept would
involve: identification of areas for involvement of the private sector and formulating appropriate terms
and conditions for private sector participation.
Transaction Level Assignments The approach pursued by the CRISIL in providing advisory services
for completing transactions by the client would cover the following aspects, with different treatment as
compared to the approach followed by the energy group.
Financial Viability Analysis The financial analysis of the transport project would follow the financial
model designed by the CRISIL and take into consideration the following factors: inputs from traffic
studies; nature and flexibility of tariff structures; estimated revenues and associated costs under various
operating assumptions; magnitude of capital investment; financing plan; duration of the concession period.
The financial model would determine the financial attractiveness of the project. The analysis would also be
useful in identifying the measures required to make the project viable.
Project Structuring Developing transport projects is a complex exercise since it involves bringing together
a number of players who would play an important role in financing, constructing, operating, using and
regulating the transport. The structuring of a transport project implies defining the role of each of these
players, and clearly identifying the risk and responsibilities they will bear in the project and the corresponding
rights and benefits they can expect. The output of the project structuring exercise, for the transport
project, would include: the mode and degree of investment by the different players; the mode of sharing
of facilities between them; the tariff structure that will be applicable to the promoters; sharing, investment
and usage related risks; the mode of operation of the facilities and the revenue streams that will be
available to the transport facility.
Bid Process Management The bid process management involves activities beginning from invitation
of tenders to the management of the entire bid process on a competitive bidding basis. It covers two
phases, namely, the development phase and the privatisation phase. In the development phase, the main task
involved is the selection of maritime consultants to undertake various economic and site-specific technical
studies. In the privatisation phase, selection of the most competent private developer, offering the most
competitive BOT terms, is taken up. The services offered would include: preparation of the bid document,
drawing upon policy level inputs (the states privatisation objective and BOT principles) in framing the
terms of references for all the contracts; assistance in drafting a model concession agreement, which will
serve as a basis for further negotiations; evaluation of bidders on managerial, financial and technical
competence and evaluation of detailed bids on a common/comparable risk platform, through the use of
financial modelling techniques.
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Appendix 16.5
Negotiation of Terms with the Successful Bidder The CRISIL will attend to the following tasks:
negotiations on issues of risk sharing and other terms of concession specific to the development; construction
and operational phases of the BOT project and assistance in negotiation of key contracts such as management/
lease contracts for privatisation of port services at existing ports.
Privatisation and Disinvestment Group This group renders advisory services to central/state
governments, public sector enterprises, apex bodies mandated with public sector reforms and private
sector entities interested in participating in the privatisation programme. These services cover three basic
aspects: (i) policy level; (ii) enterprise level and (iii) reforms and restructuring.
Policy Level Services These services broadly include the formulation of policy guidelines for
privatisation and divestiture of public enterprises; developing a framework and design for an overall public
enterprise divestiture programme; planning an organisation for overseeing the privatisation/disinvestment
process and process management of the disinvestment programme.
Enterprise Level Services These services include a diagnostic study of the enterprises, prior to
privatisation; evaluation of privatisation alternatives; enterprise valuation; enterprise restructuring for values
enhancement; sales design; structuring approaches to attract private financing; selection of party for
disinvestment and bidding process management.
Reform and Restructuring The group renders restructuring exercises. Various distortions in the
functioning of public sector undertakings have led to inefficiencies that often necessitate restructuring of
the enterprise for it to continue to function effectively. The CRISILs focus has been to ensure that the
sectoral reforms and the restructuring of public sector enterprises results in making them viable entities
that can function in a liberalised and competitive environment. These services in the reform restructuring
of individual enterprises include: restructuring of the regulatory framework; financial restructuring;
restructuring of business and strategy and legal restructuring.
Banking and Finance Group The CRISIL offers a wide range of services covering restructuring/
business re-engineering, credit management, investment management and portfolio insurance, equity valuation,
resource mobilisation studies and financial feasibility assignments. These services are aimed at benefitting
banks, financial institutions, state governments, public sector units, international development agencies,
infrastructure projects developers and corporate clients. A brief account of coverage under each of the
above services is given below:
Restructuring/Business Re-Engineering The CRISIL carries out diagnostic studies that would enable
an organisation to reassess and reconstruct its businesscorporate and organisationalso as to enable it
to successfully cope up with the changing environment. This service benefits banks, financial institutions,
state level agencies and other government bodies. The emerging financial sector scenario with higher
disclosure and stricter norms, has revealed the poor financial health of many agencies. To help these
bodies begin afresh, the CRISIL carries out financial restructuring exercises. It uses comprehensive financial
models to evaluate the impact and attractiveness of various options and suggest the most appropriate
option.
Credit Management The CRISIL undertakes exercises to assist banks and institutions gear up their
credit management systems, specifically in the areas of sanction, disbursement, monitoring and recovery.
As a part of the credit management exercise, it also offers training programmes in credit evaluation for
executives of institutions. It also offers risk management services to financial institutions, banks, NBFCs
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and corporates. It has developed a credit decision support system called RAM (Risk Assessment Model)
that is a risk evaluation software, which enables lenders to evaluate the credit risk of borrowers. The RAM
also identifies focal areas for risk mitigation and surveillance.
Investment Management and Portfolio Insurance The CRISIL offers to develop the investment
management strategy in line with the business strategy of the company and redesign decision systems for
the investments department, in line with the recommended strategy. This would, additionally, involve
designing an appropriate management information system (MIS) format for efficient and effective
monitoring and control of investment decision and portfolio by senior management. The CRISIL also
remodels cash management systems for optimum movement of funds across various collection and payment
centres.
Portfolio insurance refers to a strategy aimed towards limiting the downside risk of a portfolio in the
event of a bearish trend in the market. The best tool for implementing portfolio insurance, the put option,
is not available for most scrips even in developed markets. Hence, put options have to be replicated by
trading in either the index futures or the scrips in the portfolio. The CRISIL offers to study the equity of
the fund and develop a software based tool for the fund manager. It is strongly positioned to apply the
portfolio insurance theory in the Indian conditions and, specifically, to the concerned portfolio, using its
understanding of the Indian capital markets and the financial sector reforms.
Equity Valuation Studies The CRISIL undertakes comprehensive diagnostic study and makes an
assessment of the key areas of strength and concern. An objective valuation, using suitable approaches, is
undertaken while restructuring measures leading to value enhancement are identified and evaluated. The
financial and direct business implications of each option are considered in detail.
Resource Mobilisation Studies The CRISIL undertakes resource mobilisation studies for financial
institutions, government bodies and nodal agencies. It evaluates the various funding options in the context
of the emerging financial sector scenario. The implications of each funding option, with regard to the ease
of availability, tenure, cost, legal clearance and so on, are evaluated on an independent platform. The
optimal option is then identified and suggested to the client.
Financial Feasibility Studies The CRISIL offers financial feasibility studies to corporates and
entrepreneurs to examine feasibility of new projects and enable judicious investment decisions. Specific
inputs include development of a customised computerised financial model to evaluate various scenarios
and identify the optimal scenario. It assists in identifying key risk areas and also suggests suitable mechanisms
to mitigate the same with funding and structuring alternatives for enhancing returns and minimising costs.
The CRISIL has, under this head of services, rendered the services to SFCs, PIs, joint ventures, banks,
SEBs and so on, without naming the real beneficiaries.
Rating Opinion on Industry Status The CRISIL has undertaken giving opinion on the industry status.
This is a significant opening to help entrepreneurs in the decision making process to establish a unit in a
particular industry classification, modernise the existing unit or to close down the non-profitable units. The
opinion is based on the conclusions arrived at while evaluating the risk profile of the rated players.
CRISIL Research and Information Services (CRIS)

The CRISIL Research and Information Services (CRIS) disseminates value-added research and undertakes
customised studies in four areas, namely: Indian economy, Indian capital markets, Indian industries and the
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Appendix 16.7
Indian corporate sector. It has a large client base, both in India and overseas, comprising institutional
investors, investment bankers, commercial banks, financial institutions, corporate planners, mutual funds
and asset management companies. The services rendered earlier by the CRISIL as the CRISIL Card
Services and CRISIL Economic Services have been reorganised and assimilated under the CRIS. It now
covers, inter-alia, the following set of services: (1) CRISIL sectorwise, (2) CRISIL view, (3) International
information vending and (4) CRISIL index services. It also provides marketing support to all the products
and services of the operating units of in India, S&P Financial Information Services, a subsidiary of
Standard & Poor (S&PFIS)S&P MMS and S&P Platt.
CRISIL Sectorwise The CRISIL Sectorwise is an in-depth analysis of the important and potential
growth industries in India. The contents of the CRISIL Sectorwise include the following: (i) A brief of
history of the industry; (ii) Structure of the industry, and its characteristics; (iii) An analysis of the
different projects in the industry, based on factors like product specifications, cost structure, capacities,
technology, sector use; (iv) Demand supply analysis, both present and future; (v) An analysis of the major
players in the industry; (vi) Government policies; (vii) Industry risks/constraints; (viii) International
competitiveness; (ix) Key factors and (x) the CRISILs outlook on the industry.
CRISILVIEW It provides an analysis of, and opinion on, the business and financial outlook of a company,
based on which investors can take decisions with regard to individual risk preferences. It also provides a
useful basis for fund managers in their portfolio allocation decisions. Medium term lenders can use these
reports to benchmark their exposure limits. The CRISILVIEW is based on the CRISILs in-depth
understanding of the industry in which the company operates, as well as its understanding of the relevant
qualitative and quantitative factors affecting the companys performance. It presents a powerful report on
listed corporates in India, serving as a comprehensive and interactive tool for business managers, investors,
creditors and corporate decision makers.
The product has been structured specifically to cater to the information needs of a decision maker. It
starts with a brief introduction to the company, gives an overview of the industry in which the company
operates, analyses the business and financial outlook, and deals with detailed financialsboth actuals till
date and projections in the medium term. Financial projections are for two years in the future and are
based on certain assumptions and underlying logic, all of which are outlined.
Online Services—International Information Vending To make the CRISILs research available
to its international clients as well as to reach a wider potential client base, its research and analysis is also
available via the Bloomberg (Please Type <GO>). The menus that it offers cover the rating and advisory
assignments carried out as well as research undertaken in the three divisions of the CRISIL. The Bloomberg
carries extensive research and analysis in the following areas: Indian economy, Indian capital markets, key
industries and Indian corporates.
In addition, the CRISIL also has tie-ups with all the other leading international information vendors like
Reuters Inc., Knight-Ridder Information Inc (The Dialog Corporation), Internet Securities Inc and Matrix
Service Pvt Ltd to disseminate its research and analysis worldwide.
CRISIL MarketWire The CRISIL MarketWire, established in October 2001, is the leading source of
news and commentary on Indias fixed-income market. With about 20 experienced journalists, the news
service provides a blow-by-blow account of developments in all segments of this market. It is a part of the
CRIS-Risk and Information Solutions Company Ltd (CRIS-RISC, formerly CRISIL.Com Ltd), a wholly-
owned subsidiary of CRISIL.
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Capital Markets Group The Capital Markets Group at the CRISIL provides customised research
and advisory assistance to meet specific transactional and strategic requirements of clients. The Group is
supported by the CRISIL Research and Information Services, which continuously tracks over 50 sectors
and 500 corporates.
1. Diagnostic Evaluation for Valuation of the Indian Partner of a Foreign Asset Management
Company The CRISIL was mandated by a leading private sector AMC to submit a proposal for a
diagnostic evaluation of the AMC, with a view to determine the benchmark valuation for negotiations with
its foreign partner. It conducted a prognosis of the Indian economy, with a view to determining the likely
flow of household savings into different investment avenues, including the Indian mutual fund industry
over a 10-year time horizon. A SWOT analysis of the Indian AMC was carried out in the context of the
economy outlook as well as the likely evolution of the Indian mutual fund industry, taking cognsiance of
opportunities being offered by alternative investment avenues, product offerings to Indian investors and
threats from global entrants. Based on the above analysis, key issues were identified for the AMCs future
business strategy and a detailed projected revenue statement was drawn up as the basis for arriving at the
benchmark valuation.
2. Technical Assistance to the Association of Mutual Funds in India (AMFI) for Introducing
Best Practices in the Mutual Fund Industry The CRISIL has been working closely with AMFI on
policy level issues, for the mutual fund industry, with a view to introducing best practices in the industry.
The scope to an assignment that they have been very actively working on, over the past three years, has
been the development of a uniform methodology for the valuation of non-traded debt securities. This
methodology has since been mandated by the SEBI, to be implemented by all the domestic mutual funds.
The approach for valuing non-traded debt involved identifying a suitable riskfree benchmark rate and
assigning spreads over this riskfree rate for the various risk parameters inherent on a portfolio. The risk
parameters considered were the credit risk, as measured by the credit rating assigned to the security;
interest rate risk, as measured by the duration of the security and the illiquidity risk. The CRIS evolved the
valuation matrixa credit risk-duration matrix, which assigns spreads over gilt securities in the various
duration buckets, in the different credit risk categories. The yield derived from the Valuation Matrix is
adjusted for issue specific risks, according to defined criteria, and then used to price the non-traded
security by discounting all the future cash flows of the security. The CRISIL was mandated by the AMFI
to develop softwareCRISIL Bond Valuerfor enabling the mutual fund industry to implement the
above methodology on a uniform basis. The CRISIL has installed the software at all mutual funds in India,
and provides the industry with the Valuation Matrix, every week.
3. Performance Evaluation and Portfolio Analysis for Strategy by a Leading Mutual Fund The
CRISIL was mandated by a leading AMC to evaluate the credit risk and maturity risk profile of the
schemes of their mutual fund and draw a comparison of the same with peer group schemes in the mutual
fund industry, with a view to evolving suitable investment strategies.
The methodology adopted involved analysing the risk profile of the portfolio and evaluating the
performance of the various schemes vis-à-vis peer group schemes and vis-à-vis market benchmarks. The
components of the study included an analysis of the credit risk of the fixed income portfolio; analysis of
the interest risk of the portfolio, as measured by the modified duration of the portfolio; Value at Risk
(VaR) of the portfolio, which was quantified at a certain probability level; analysis of the maturity profile
of the asset vis-à-vis the projected maturity profile of the liability of the scheme, to enable determination
of the liquidity profile of the portfolio.
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Appendix 16.9
4. CRISIL Composite Performance Ranking Service of Domestic Mutual Fund In line with its
objective of increasing investor awareness as well as enhancing the transaction capabilities of the industry
players, the CRISIL recently launched an independently designed and computed ranking of the composite
performance of mutual funds.
The key characteristics of the CRISILs methodology is to view performance, not only in terms of total
returns but in conjunction with the risk factors associated with performance, such as diversification risk,
liquidity risk and volatility risk in returns. It has developed this methodology with support and inputs from
market practitioners in the mutual fund industry as well as incorporated the underlying concepts used
internationally. The CRISIL Mutual Fund Ranking is a relative Composite Performance Rank (CPR) of
the mutual funds schemes vis-à-vis their respective peer group in each scheme category. The CPR is based
on the following criteria: (i) Risk adjusted return of the scheme portfolio; (ii) Diversification of the
scheme portfolio; (iii) Liquidity of the scheme portfolio and (iv) the Asset size of the scheme. The
CRISIL has also introduced a Mutual Fund Research Service that provides analytical insights into the
industry. It is also available on a customised arrangement.
5. Assistance to the Government of India on the Roadmap for the Development of India’s
Financial Sector The CRISIL was mandated by the Committee set up by the Government of India to
advise the Government on the key developments required, and the modalities thereof, for developing the
countrys financial sector. It made a detailed analysis of the segments constituting Indias financial sector,
namely, equity markets, debt markets, banking sector, non-banking financial services, mutual funds, housing
finance and so on. This involved a detailed review of the constraintspolicy and/or transaction related
and evolve a roadmap for addressing the key issues identified.
6. DATABASE and DATA Products The CRISIL has been tracking the Indian capital markets. Its
analysis is based on a strong understanding of the Indian capital markets, supported by a comprehensive
database developed in-house. It has also been in the forefront of the development of products for capital
markets in India and for global clients. These include:
(a) Comprehensive Database on the Indian Debt Markets The CRISIL is the bond correspondent
in India for IFC Washington, and the sole provider of Indian debt data to Reuters, globally.
(b) CRISIL DebtBase and GiltBase It is a comprehensive database querying software covering all
gilts and corporate debt securities in the Indian debt markets. The database comprises over 300 debt
securities, their basic features and historic price and yield information.
(c) CRISIL Debt Indices The CRISIL has been providing benchmarks for the markets to allow investors
to track the performance of individual market participants. The CRISIL gilt Index is the index of all
outstanding gilt securities with over 1 year residual tenor, with liquidity criteria of over 75 per cent trading
frequency. The CRISIL has also launched the countrys only AAA Corporate Bond Index. Both Indices are
market cap-weighted.
(d) Calculating Agent for Bond Issues The CRISIL has been appointed the calculating agent for the
floating rate issuances of leading corporate/state agencies like ICICI, Reliance, Bharat Petroleum, Maharashtra
State Road Development Corporation and so on.
(e) CRISIL Mutual Fund Indices These are the countrys first indices for the mutual fund industry,
serving as benchmarks for performance comparison. The index is weighted by the unit capital of each
constituent and is computed daily on the basis of the NAV movement.
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(f) CRISIL Equity Indices The countrys first non-stock exchange computed equity indices. The index
business has since been transferred to a joint venture company with the National Stock Exchange. Standard
& Poors, the leading global index services agency, has licensed the use of its brand name to these indices.
Fixed Income and Money Market CRISIL.COMs Fixed Income Research Division provides
information services and analytical solutions to corporate and capital market players. This practice leverages
on CRISILs understanding of capital markets and various economic sectors and extensive experience in
risk identification and assessment. The dedicated team of experienced analysts, supported by the largest
independent research group in India (CRIS) and a comprehensive database, enables the CRISIL to provide
high quality of research and analysis. The available products are: the CRISIL DebtBase, the CRISIL Debt-
View, the CRISIL Bond Valuer, the CRISIL GiltBase Interactive, the CRISIL BondYield Calculator-
Interactive and Bond Valuation Matrix.
Crisil DebtBase Crisil DebtBase is a computerised, comprehensive database of over 2000 Indian
Government and corporate debt securities, including private and public issuances. The data is classified
into more than 100 fields, with easy to use data files and has the facility to track portfolios and create
customised reports. That data is updated daily via Bulletin Board/Internet email.
CRISIL DebtView CRISIL DebtView is a weekly update of the fixed income and money markets in
India, covering money markets, forex markets, gilt markets, the CRISILs benchmark yields for gilts bond
marketsdomestic and international. It provides a commentary on the developments in these markets.
CRISIL Bond Valuer CRISIL Bond Valuer is primarily targeted at fixed income portfolio managers
and mutual funds to assist them in pricing non-traded debt securities in their portfolios. A traded risk free
yield curve forms the benchmark for the model.
CRISIL GiltBase Interactive CRISIL GiltBase Interactive presents online information on the G-Sec
markets in India. Nine frequently asked questions are answered with just one click. These queries are
engined by the CRISILs comprehensive and unique database on the debt markets: the CRISIL DebtBase
and the CRISIL GiltBase.
Crisil BondYield Calculator-Interactive Crisil BondYield Calculator-Interactive is an online web tool
that enables calculation of a price for any debt security for a given yield and the yield for a given price. The
datasets have been segregated into government and non-government debt securities and the valuation
modules are also different for these, although the basic underlying logic remains the same.
CRISIL Bond Valuation Matrix CRISIL Bond Valuation Matrix gives the yield of gilt and the spread
of yield over gilt for the different categories of ratings, for all duration buckets. The matrix incorporates
7 duration buckets. This matrix is supplied by the CRISIL on a weekly basis. The CRISIL BondValuer
accepts a valuation matrix comprising the benchmark yields and rating spreads.
Mutual Funds Services [MFS] The CRIS-RISC is a dominant player in the mutual fund rankings
and research services arena. The rankings provided by CRISIL.com are the industry standard in the Indian
market and are closely tracked by fund houses, fund distributors and investors. The CRISIL valuations for
illiquid corporate bonds and government securities are mandated by a market regulator, the SEBI, for the
daily valuations of illiquid securities by fund houses. Various benchmarks developed by the CRISIL have
also been mandated by the SEBI to be used by funds for benchmarking performance.
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Appendix 16.11
Industry Analysis This is a comprehensive service that seeks to keep clients informed of the current
and future state of the industry and its key players. It contains detailed information about the evolution
and current performance of the industry. It also contains assessment of the long-tem performance outlook
of the industry and includes information content on production processes, regulatory environment, cost
structure, raw material, capacities, production, imports, exports, operational efficiencies and financial
performance.
Business Intelligence Service This service is available if the information needs are vast and encompass
a thorough understanding and monitoring of a large number of companies, the industries they operate in
and the economy. It would provide:
· CRISIL ECOVIEW
· CRISIL INFAC Industry Information Service on 37 industries
· CRISIL INFAC Research Reports
· CRISIL VIEWS
· Impact Analysis: Assessment of the policy changes/announcements such as the Union budget,
credit policy, exim policy
· Training: Tailor made training programmes for clients on a variety of aspects, throughout the year,
on how to analyse industries and companies, risk analysis and forecasting of earnings.
· Presentations: Presentations on the impact of major policy announcements such as the Union
budget and its impact on Indian industries and companies.
Economic Analysis A monthly analysis of various economic parameters and their impact on the
Indian economy, providing an in-depth understanding of the trends in the Indian economy and international
trade, alongwith CRISILs outlook on the economy in particular.
Company Research Analysis of the business of a company, financial and future outlook and detailed
earnings estimates. Division-wise information on plant size and technology, production and capacity utilisation
trends, major raw material costs, other key costs like power costs, conversion margin analysis, sales volumes
and realisations, domestic and export sales, market share, major customers and the distribution network.
The document contains an earnings forecast, including detailed earnings estimates for the next two years
projected balance sheet, profit and loss account, ratios and cash flow statement. The logic and the assumptions
used are also listed. It grades the company on parameters such as industry prospects, market position,
operating efficiency and financial performance.
CRISIL Index Services

The CRISIL offers, inter-alia, the following index services, which are available online also. It has joined
hands with the National Stock Exchange (NSE) to develop, construct and maintain a whole series of equity
indices that serve as useful market performance benchmarks and are the underlying indices for derivatives
trading. The joint venture subsidiary is titled IISL. It has also entered into a licensing agreement with
Standard & Poors for licensing its trademark to the IISL indices.
CRISIL-500 Equity Index The CRISIL-500 Equity Index is a broad-based, market-value weighted
index, comprising 500 companies across 79 industries and represents about 74 per cent of the market
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capitalisation and more than 95 per cent of the turnover on the Mumbai Stock Exchange (BSE). The main
objective of the CRISIL-500 is to provide the investment community with a more accurate reflection of
the stock market movement. The index is responsive to market developments. It is computed daily and
daily historical values are available from 1991 onwards.
CRISIL MidCap 200 Equity Index The CRISIL MidCap 200 Equity Index is a benchmark for the
midcap segment of the market, comprising 200 midcap stocks, listed on the BSE. It represents 74 per cent
and 84 per cent of the turnover of medium capitalised segment of the market computed daily; historical
values of the index are available from 1993 onwards.
CRISIL Industry Indices With a view to providing regulators, investors, fund managers and market
intermediaries with a better perspective of the relative stock market performance of the various segments
in the corporate sector, the CR1SIL has developed three segment benchmark indices:
(a) CRISIL MNC Index This is a market capitalisation weighted index comprising 50 MNCs listed on
the BSE.
(b) CRISIL Indian Business Group Index This comprises 250 listed companies on the BSE,
representing 107 Indian business groups.
(c) CRISIL PSE Index This is a market capitalisation weighted index comprising 20 PSE stocks listed
on the BSE.
Customised Indices The CRISILs Customised Indices emphasises the scientific methodology of
index construction. Dynamic index maintenance is recognised by the market and the CRISIL has received
requests for developing benchmarks as well as customised indices. It undertakes development, computation
and maintenance of customised indices for clients as well as offers consultancy services for developing
indices.
CRISIL Index Bulletin The CRISIL Index Bulletin is a monthly market activity update and covers
the market performance of constituents of CRISIL indices.
CRISIL Training Services

The CRISIL is the only rating agency in the country that provides technical assistance and training to the
Malaysian Rating Agency (RAM) and Israeli Securities Rating Agency (MAALOT).
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Appendix 16.13
APPENDIX 16
C
ICRA INFORMATION, ADVISORY AND GRADING SERVICES
Information Services
The information services division of the ICRA focuses on providing authentic data and value-added
products used by intermediaries, financial institutions, banks, assets managers, institutional and individual
investors and others. Value-added services include corporate reports, equity assessment, mandate based
studies (customised research) and sector/ industry specific publications.
Investment Information Publications The Information Services Division of the ICRA, since
1993, has been bringing out investment information publications. These publications appear in two series.
The first, the ICRA Sector Focus Series, aims to present an in-depth analysis of different sectors/
industries, focusing on specific issues. It is oriented towards all those who are interested in contemporary
developments in the Indian economy and in the specific industries being covered. It is useful to researchers,
academics, practitioners in the financial services sector and corporate managers in industry .The second,
titled the ICRA Industry Watch Series, has a distinct corporate orientation. It is a useful information and
analytical tool for investment and portfolio managers. The key elements that govern the business environment
of the industry the likely future direction, and the performance of the major corporate entities form the
substance of the series. These reports are primarily based on information that is publicly available, such as
company annual reports, newspaper items, publications of government, private and public bodies, proceedings
of conferences/seminars, as also interactions with industry leaders and specialists in specific areas.
Corporate Review The ICRA Corporate Review (ICR) is a comprehensive document that provides
appropriate information and insightful commentary on the universe of Indian corporates. Designed
specifically with equity investors in mind, the objective is to provide credible information in one place. The
variety of value-added information provides a clear picture of the key issues facing a corporate entity.
Money and Finance The ICRA has built up a research programme to analyse contemporary
developments that characterise the Indian money and finance world, the ultimate objective being to develop
analytical models that can explain the interrelative movements of the principal macro-variables that define
the monetary and fiscal sector of the Indian economy. Money and Finance is a quarterly publication
directed towards individuals interested in understanding the reasons underlying policy initiatives and their
outcome.
Rating Profile A quarterly source of reference, it features (1) rating in use, (2) rationale for rating
assigned and (3) rating symbols and implications.
Customised Research The ICRA undertakes mandate based exercises that are customised to address
the unique needs and requirements of individual clients. The assignments include (1) due diligence studies,
(2) equity assessment/valuation, (3) group assessment, (4) industry analysis and (5) market study.
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Corporate Reports To facilitate investment decisions of large investors and information, another
important landmark in providing information to investors are corporate reports, which provide exhaustive
and reliable information and analysis by the research analysts on select corporates, covering all areas of
company background, industry background, financial performance, operational analysis and prospects.
The reports have regular updates to cover the implications due to changes in business and economic
conditions, for corporates.
Grading Services
The grading services offered by the ICRAs Information Services Division includes grading of construction
entities, real estate developers and projects, equity and mutual fund schemes.
Advisory Services
The Advisory Services Division of the ICRA offers wide ranging management advisory services. Under
the umbrella of advisory services, the ICRA seeks to share its understanding of the business processes and
relevant organisational issues with different players of financial markets such as investors, issuers, regulators,
intermediaries and the media. To acquire expertise and bring international experience and practices to the
Indian capital market, the ICRA signed an agreement with Financial Performs Inc. (FPI), a Moody company.
The advisory services range in under (1) strategic consulting/strategy practice, (2) risk management practice,
(3) regulatory practice, (4) transaction practice and (5) content. The client segment focus is on the following
sectors, based on the needs of different organisations: (i) banking and financial services, (ii) infrastructure
sector, (iii) manufacturing and services sector and (iv) government, regulatory authorities and municipalities.
Strategic Consulting Strategy practice focuses on improving an organisations competitiveness across
its value chain. The major elements in strategy consulting are formulation of goals and objectives, improving
competitiveness and profitability, entry strategy, including mergers/acquisitions and growth strategies,
improving organisational capabilities, organisational restructuring and financial strategy and systems. Strategy
planning and implementation spans the following areas:
(A) Functional areas, namely, (i) Business planning, (ii) Corporate finance, (iii) Cost reduction, (iv)
Alliances, (v) Operations improvement, (vi) Organisation design, (vii) Process re-engineering, (viii) Corporate
restructuring, (ix) Business valuation and due diligence, (x) Turnaround management, (xi) Marketing strategy,
(xii) Information system design, (xiii) Mergers and acquisitions, (xiv) E-Commerce and (xv) Human resource
management; (B) Sectors, that is; (i) Banking/Financial services/Insurance, (ii) Consumer goods, (iii)
Commodities, (iv) Metals, (v) Construction and real estate, (vi) Tourism and hospitality, (vii) Information
technology, (viii) Oil and gas (ix), Infrastructure, (x) Cement, (xi) Textiles, (xii) Pharmaceuticals, (xiii)
Healthcare, (xiv) Automobiles/Ancillaries, (xv) Food and beverage, (xvi) Retailing, (xvii) Paper, (xviii)
Telecommunication, (xix) Government, (xx) Petrochemicals, (xxi) Consumer durable/White goods, (xxii)
Media, (xxiii) Chemicals, (xxiv) Engineering and capital goods and (xxv) Mining.
Risk Management Area Risk management area of advisory services advises clients on efficient
management of credit risk, market risk and operational risk. It includes assessing project risk for investors/
developers/lenders, project structuring and financial modelling, structuring payment mechanisms, building
organisational skills in credit risk management for banks/lenders and risk audit studies. The ICRA has been
working with Moodys Risk Management Services for extending sophisticated and state-of-the-art technology
in credit risk management.
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Appendix 16.15
The clients include commercial banks, financial institutions, multilateral agencies, non-banking finance
companies, project financiers, equity investors, venture capital firms, insurance firms and manufacturing
firms. For manufacturing and service companies, the ICRA Advisory offers consultancy in risk management,
planning and control. The coverage includes:
(A) Credit Risk: (1) Regulatory compliance, (2) Processes/systems for credit risk management, (3) Internal
risk rating systems, (4) Credit monitoring systems (including MIS), (5) Moodys software for credit
risk management, (6) Organisation design for risk management, (7) Portfolio management, (8) Industry
and corporate reports and (9) Credit risk culture assessment.
(B) Market Risk: (1) Regulatory compliance, (2) Asset liability management, (3) Risk quantification, (4)
Interest rate/liquidity/currency risks, (5) Gap/VaR analysis, (6) Hedging strategies, (7) Transfer
pricing, (8) Software for ALM and (9) Integrating ALM with overall planning.
(C) Training for Risk Management: (1) Analysing financial statementsbasic/advanced, (2) Credit risk
managementmiddle/senior executives, (3) Understanding ALM and (4) Customised training for
bankers.
(D) Operations Risk: (1) Diagnostic analysis of risk for a company, (2) Systems for risk measurement
(3) Risk mitigation strategies and (4) Internal control and corporate governance.
Counterparty Risk Assessment The ICRA Advisory has developed the Counter Party Risk
Assessment (CPRA) to assess risks that counterparties are exposed to in the course of buying and selling
of goods and services in all kinds of marketplaces. The CPRA is a relative measure of a counterpartys
ability to honour the terms of trade. The ICRA Advisory offers the CPRA as an online plug-and-play
model for e-marketplaces/Virtual Private Networks and as an offline facility for organisations desiring to
assess counterparty risks of buyers/dealers and suppliers.
Regulatory Practice It advises the Government, regulatory authorities and municipalities dealing
with formulation of economic and financial policies. It also advises corporate entities in formulating their
strategies while dealing with regulatory issues. The focus is on economic issues pertaining to regulations
such as pricing of goods, competition, efficient market making mechanism, consumer protection, fair
trade practices, policies towards subsidies and public/private partnership structures. The ICRA Advisory
Services has worked on several consulting projects concerning regulatory issues in the areas of Power,
Water, Public sector, Banking, and Urban Infrastructure. For instance, in the Power sector, the ICRA has
provided consulting services in the regulatory process, to various stakeholders, such as Regulatory
Commissions, Independent Power Project Developers, State Governments, State Electricity Boards and
Licensees on various issues related to the sector. The services offered by the ICRA Advisory in different
functional areas relate to: (1) Tariff setting for public goods and services, (2) Economic development, (3)
Development of regulations, (4) Fiscal management policies, (5) Privatisation policies, (6) Institutional
strengthening, (7) Determination of subsidies and (8) Evaluation of contracts and agreements.
Transaction Practices It focuses on providing consulting services at the transaction level (vis-à-vis
policy consulting services) to infrastructure projects in areas such as power, telecommunications, gas,
airports and urban infrastructure. The services include financial modelling, risk assessment and mitigation,
designing security mechanisms, formulating bidding strategies, drafting concession agreements and structuring
solutions. The services offered by the ICRA Advisory cover the following functional areas: (1) Risk
assessment of infrastructure projects, (2) Conducting feasibility studies for infrastructure projects, (3)
Assessment of project sponsors and/or JV (joint venture) partners, (4) Assessment of incumbent utility/
government entity, (5) Financial modelling for projects, (6) Project/contract structuring for financial
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closure, (7) Designing security mechanism for projects, (8) Assistance in preparing FRQ/RFP documents,
bid process management and (9) Designing concession agreements.
Information/Content Services The ICRA Advisory has set up a vast research base for tracking the
performance of industries/companies/State Governments/financial markets. It makes available customised
research and diagnostic reports for the Government, investors, banks, financial organisations, project
developers, corporates, e-commerce websites and market places and regulations on pre-decided terms of
reference. Clients typically use the information reports for formulating investing decisions, joint venture/
alliance formation, strategic planning and finalising commercial agreements. The services include:
Corporate Research The research reports cover leading corporates in various sectors. A typical corporate
report includes analysis of product mix, markets, cost structure, profitability, financial structure, working
capital structure and outlook.
Industry Research The ICRA Advisory provides research reports on several industries. The coverage
of the reports includes an analysis of the major players in the industry, capacity, demand-supply, price
trends, technological issues, cost structure, regulatory issues, risk analysis and outlook for the industry.
States Research The ICRA Advisory researches States from an investment viewpoint, focusing on
the structure of the State economy, Government policies, industrial performance, infrastructure, State
finances and investment climate.
Fixed Income Money Markets It provides weekly and fortnightly reports analysing the developments
in fixed income markets, including movements in call/repo market gilts, non-SLR bonds, commercial
papers, foreign exchange market and money market liquidity positions. It also provides financial analytics
and tools, such as, empirical/synthetic yield curves for various classes of securities, bond indices and
inputs for pricing fixed income instruments. It also carries out analysis of important policy events like the
Union budget and monetary policy.
Customised Reports It undertakes customised studies on mutually agreed terms of reference that
may include primary and secondary data collection and analysis.
Banking and Financial Services In the context of globalisation of the Indian economy, the
increasing volatility in the financial sector, and the increase in competition, most Indian banks are having a
re-look at their organisations. The Government of India (as the principal shareholder in most public sector
banks) and the Reserve Bank of India (as the principal regulator of the Indian banking system) are
assessing the banking and financial sector organisations from their own perspectives, with regard to macro-
issues that have sector-wide implications, as well as micro-issues that pertain to specific banks and
organisations. Faced with rapid changes in the competitive and regulatory landscape in Indias increasingly
globalising economy, Indian banks are focused on some or all of the following initiatives: re-jigging strategic
plans, increasing customer focus and product development efforts, introducing portfolio management
techniques for the credit function, installing asset-liability management system, reducing non-performing
assets by adopting proactive strategies, Reducing the cost of funds, Increasing the share of fee income,
Improving the quality of human resource and their management, Restructuring the branches and the
organisation, Improving overall governance and management control, and increasing the use of information
technology to improve customer service and enable better MIS reporting. A broad overview of the
services that the ICRA Advisory provides to banks, financial service players and insurance companies is
presented below. Over the past few years, the ICRA Advisory has been rendering consultancy services to
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Appendix 16.17
several State-owned and private banks and other organisations in the Indian financial services sector, both
at the behest of the Reserve Bank of India and on the request of individual clients. Several organisations
in the banking and financial sector have retained the ICRA as advisors in a wide variety of assignments.
Specifically, it offers the following services to the banking and financial sector:
Formulating Credit Strategy/Policy It assists banks in formulating credit strategies that fit well with
their overall business strategy and the prevailing economic environment. Its analysis helps clients in putting
in place the building blocks of credit strategy, such as, the focus segments, risk tolerance limits, growth
rates, credit marketing strategies, norms for exposure, client service policy, delivery methods and the
necessary organisation design. It also factors in regulatory requirements while fine tuning the credit policy.
Designing Lending Policy Guidelines It helps banks evolve their lending policy guidelines for different
industry segments. Lending policy guidelines cover the norms that each bank determines as appropriate for
its credit officers to make judgements on credit risk components, such as debt-equity ratio, debt service
coverage, working capital, profitability indicators and so on. The lending policies tend to be bank-specific,
in line with managements appetite and tolerance for risk the ability of the bank to take risks and the
peculiarities of the different industries that the bank seeks to lend to. Increasingly, over the past few years,
lending policy guidelines have moved away from being regulation-driven to becoming bank-specific and
bank-determined standards. In a competitive banking environment, the correct fixing of lending policy
guidelines is a key to building and maintaining the health of the credit portfolio.
Diagnostic Audit of Credit Portfolio There is strong empirical evidence on credit failures being the
single largest cause of banking crisis. Senior management in banks desire to conduct an independent and
objective review of their credit portfolios (particularly large and marginal credits), from time to time, to
assure themselves, the shareholders, and regulators that the credit risks are under control. The ICRA
Advisory has one of the finest capabilities and experience in analysing credit portfolios (both performing
and non-performing assets) while focusing on key parameters such as, distribution pattern, risk profile,
segment-wise profitability, risk concentration, interest rate sensitivity, asset quality, potential performance
in terms of slippage, diversity of income and other parameters that the bank may like to cover.
Improving the Credit Appraisal Process Bank management is seeking to improve the quality of
their credit portfolios by focusing on the underlying business processes and the skill sets of human resources
in the credit function. The ICRA Advisory offers expert consulting services to banks to improve the
quality of the appraisal process across the entire credit value chain. It has extensive experience and expertise
in designing processes governing loan origination, risk definition and quantification, loan structuring, pricing,
loan covenants and the like. It studies the credit process and evaluates the comprehensiveness of the credit
appraisal system, the extent of compliance and the quality of analysis. Based on its analysis, it suggests
improvement in credit processes, appraisal forms and training needs.
Designing a Credit Monitoring Process The rate of generation of NPAs in many Indian banks is
unacceptably high, and both bank management and regulators are keen on improving their capabilities in
this area. The ICRA Advisory, perhaps, has the widest experience of having analysed NPAs in the Indian
banking sector at the individual loan level (about 20 per cent of aggregate NPAs), and is uniquely positioned
to recommend bank-specific monitoring systems to minimise slippage. Its focus, in such exercises, is on
analysing the individual factors (skills and motivation levels) and organisational factors (processes, systems,
and HR processes) in banks, which lead to NPA generation, besides examining the external economic
environment. It also assists banks in designing the requisite MIS and the appropriate organisation structure
for executing the recommended action points.
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Installing Calibrated and Validated Internal Risk Rating Models According to the proposed Basel
norms, banks have a big economic incentive to evolve internal risk rating systems for credit and market
risks. The ICRA Advisory has developed capabilities to design and implement risk management systems
for quantifying credit risk in the corporate, trade, retail, agriculture and banking segments, which are
relevant in the Indian context. For corporate credit (including small scale industries), the ICRA Advisory
helps banks implement software solutions for credit risk, using software developed by Moodys Risk
Management Systems, with appropriate customisation for the Indian context. It also works with the banks
own internally developed risk rating models and helps them calibrate and validate the models. The models
are caliberated and validated to the banks individual data and are useful tools for quantifying credit risk in
a bank loan portfolio, pricing loans and monitoring the health of the credit portfolio.
Risk Based Pricing Indian banks are increasingly moving towards scientific pricing of risks. Based on
risk scoring models, credits can be segregated into various risk categories. By analysing the default distribution
and loss estimates for a given default, the ICRA Advisory assists banks in arriving at an appropriate price
model. As the market is getting increasingly competitive, for full pricing of risks, it assists banks in building
capabilities for loan structuring, to reduce the facility risk when the overall borrower risk may be higher
than desired.
Designing Loan Review Mechanism The ICRA Advisory assists banks in designing loan review
mechanisms, which helps them predict default in advance. This provides opportunities to banks to take a
proactive action to minimise losses, and to undertake portfolio management.
Capital Allocation Model It assists banks in determining the economic capital required to provide for
expected and unexpected losses. The expected loss is a function of a banks exposure to its borrower, the
probability of default associated with the risk rating of the borrower, and the expected loss given default.
The unexpected loss is the variance of actual losses around the expected loss. These unforeseen losses
could occur because of portfolio concentration in exposures (such as to industries and groups) and their
correlation, or due to the correlation between credit risk and the underlying economic factors. Such exercises
are data intensive, but the rewards are wroth the effort, as senior bank management are able to get a better
handle on the embedded risks in their portfolio, besides being able to provide the right level of capital to
cover these risks.
Software for Credit Risk Management The ICRA, in partnership with Moodys Risk Management
Services (MRMS), provides Indian banks with a world-class system and software for credit risk management.
The system has been modified to suit Indian requirements. Currently, 4,000-plus banks, including several
Indian banks, are using the products and services of MRMS.
Developing Strategies for Management of NPA It assists banks in designing appropriate strategies
for improving recovery from non-performing assets. It studies the underlying obligor, reasons for accounts
turning non-performing, the actual and potential recovery patterns, the security details and other factors to
suggest the best possible recovery options so as to maximise recovery or improve the rehabilitation success
rate.
Asset-Liability Management The ICRA Advisory offers comprehensive consulting services to banks
and financial institutions to manage market risks, covering diagnostic studies, risk mitigation strategies and
implementation. The diagnostic studies would typically include constructing a risk profile of the balance
sheet covering the salient risks, such as interest rate risk, liquidity risk, yield curve risk, foreign exchange
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Appendix 16.19
risk and the like. It also recommends appropriate risk mitigation strategies, organisation structures to
manage these risks and MIS for monitoring and controlling risks.
Designing an Organisation Structure It assists banks in designing organisation structure(s) in line
with their business strategies. It ensures that the designed organisation structure also conforms to risk
management principles. It assists banks in defining the roles and responsibilities of key functions, besides
identifying different committees, their responsibilities, their composition and their specific roles.
Branch Restructuring It assists banks in organising and restructuring their branch networks in line
with their business strategy and the opportunities provided by the external environment.
Restructuring/Turnaround Exercises It designs turnaround strategies for financial institutions
performing below their potential. The exercise involves a detailed diagnostic to understand the reasons for
the weakened financial position and subsequently arriving at realistic stretch-targets to improve performance.
If required, it quantifies the amount of re-capitalisation required under various scenario analyses.
Economic Valuation and Strategies for Mergers/De-mergers, Restructuring Equity Capital It
undertakes economic valuations and formulates merger/de-merger strategies for banks and financial
institutions. The scope of work extends to evaluating the strategic reasons for a merger/de-merger,
undertaking economic valuations, evaluating technological constraints and HR issues and so on.
Industry/Corporate Reports The ICRA Advisory tracks 30 key industries on a continual basis and
offers industry updates in electronic/conventional formats to banks who wish to have access to an
independent and objective view of credit risks. The focus of the industry reports is on identifying the key
success factors in the industries concerned, and on providing an outlook from a credit perspective. It also
tracks about 500 corporates and provides updates on their performance and prospects. Besides, it undertakes
customised research on industries/corporates, to meet the specific needs of banks and financial institutions.
Benchmark Data It provides peer data on important parameters, measuring the performance of
industries. Currently, it is tracking the performance of 92 industries in India. Banks find this benchmark
data a sort of ready reckoner for the performance comparisons of individual accounts in their credit
portfolios.
Manufacturing and Service Sector The ICRAs advisory services cover the following aspects.
Strategy Formulation The rapid changes being ushered in the Indian economy over the past few years
have necessitated a shift in the strategic thinking of Indian businesses. The need to remain profitable has
brought to the forefront the concept of focusing on ones core competencies, and the need to hone ones
competitive strengths. By virtue of its insights into different sectors and businesses, specifically keeping in
mind the ground realities in the Indian context, the ICRA Advisory offers strategic consulting services to
organisations in the manufacturing and services sectors. In specific cases, it also associates itself with the
organisation in implementation. Its research and analytical capabilities, in select sectors, enable prospective
clients to gain access to a wide variety of management concepts and tools for analysing myriad business
issues, and evolving cogent strategies.
Improving Competitive Strengths and Organisational Capabilities The ICRA Advisory helps
clients compete more effectively through the creation of new strategies and new organisational structures,
for enhancing effectiveness. Enhancing competitiveness can be achieved in many ways, such as, cost
reduction, superior product portfolio management, improved financial strategies, leveraging knowledge/
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technology management, improved working capital management, better demand forecasting, improving
financial internal control systems, and superior management of new ventures. The ICRA Advisory associates
with organisations in diagnosing barriers to superior performance, and implementing effective solutions in
a variety of functions.
Turnaround and Restructuring Studies The ICRA Advisory offers its services to managements and
stakeholders of loss-making organisations to conduct diagnostic studies, with a view to evaluating the
options and resources required to make them financially viable. Its strengths in this area principally arise
from its expertise in analysing the causes of sickness, arriving at appropriate benchmarks, and working
through the organisational imperatives for framing a turnaround plan that addresses the legitimate demands
of various stakeholders.
Economic and Business Valuation as a Prelude to Mergers/Acquisitions The increasing
competition in most sectors of the Indian economy has led to increasing realisation among Indian corporates
regarding the need for reorganising their businesses. For any form of business restructuring, an independent
and objective valuation of the business, brands, marketing/distribution strengths, or manufacturing capabilities
is an imperative, both for the seller and the acquirer. The ICRA Advisory is well placed to conduct an
economic valuation of a wide variety of businesses, by virtue of its strong research base and understanding
of economic transactions, broking deals or business negotiators for any of its clients.
Financial Strategy and Systems Indian organisations, across different industries and sectors, are
realising the value that good financial strategy and appropriate financial systems contribute to overall
competitiveness. By virtue of its strong research into the competitiveness of various industries, the ICRA
Advisory offers consulting services in the areas of:
· Formulating financial strategies that complement the chosen business strategies,

· Financial restructuring to enhance overall shareholder value,
· Improving working capital management,
· Recommending strategies to reduce costs of funds and
· Recommending financial systems that aid organisations in the areas of (1) building competitiveness,
(2) regulatory compliance and (3) internal control.
Demand Estimation The 1990s have been a decade that opened Indias economy like never before,
with the result that the, hitherto, secular and predictable growth in demand and supply for most sectors
changed abruptly. Many of the companies that have downed shutters or projects that have become unviable
owe their plight principally to unscientific methods of estimation of demand and supply. For most sectors,
while there is a lot of financial data, there is little organised information available pertaining to key drivers
of growth and evolution of the industry. There is little clarity in the actual pattern of data-shifts, the
underlying determinants of demand of various products and services from different consumer groups
and how they would change in the future. With a view to addressing this information gap, the ICRA
Advisory offers expert services in demand estimation and forecasting to facilitate more informed business
decision making for the industry and for investors/lenders. Depending on the nature and scope of work,
it may commission a reputed market research agency for collection of ground level data. It brings to the
table a high level of economic research and financial modelling skills that are needed for accurate demand
estimation.
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Appendix 16.21
Government, Regulatory Authorities and Municipalities The ICRA Advisory services relate, inter-
alia, to the following:
· Diagnostic studies as a prelude to corporatisation, privatisation and deregulation;

· Assistance in policy formulation on issues such as pricing, subsidiaries, concessions, guarantees and
fiscal management;
· Assistance in preparation of licence and PFQ/PFR documents for large projects, and in evaluating
bid documents;
· Formulating strategies for improving financial position and performance and
· Formulating perspective and strategic plans.
Power Sector Creation of the regulatory institution has been the major milestone in the power sector
reforms, in recent years, in India. The first regulatory commission was established in the State of Orissa,
under the Orissa Electricity Reforms Act 1995. Subsequently, the Government of India enacted the
Electricity Regulatory Commissions Act in 1998. More than 14 states have established regulatory
commissions since then. The ICRA Advisory Services has been at the forefront of these developments,
and has successfully completed many consulting engagements, assisting the various stakeholders in the
regulatory process, all over India. The ICRA has also assisted Independent Power Producers, State
Governments, State Electricity Boards, Licensees on various issues related to the power sector. The various
services offered by the ICRA Advisory are described below.
Independent Assessment of Project Risks Infrastructure projects involve large outlays of funds,
besides the prospect of uncertainty of regulatory risks, environment risks, operating risks, commercial
risks and construction risks. Since the gestation period of most infrastructure projects is over three years,
the risks tend to get magnified and usually devolve over an extended period, when it might be very
expensive to make corrections or withdraw from commitments already made. The ICRA has one of the
best knowledge bases in India for analysing project risks, built up in the course of evaluating project risks.
It offers diagnostics and advisory services to project sponsors, developers, regulators, financiers and other
interested parties by making a comprehensive analysis of project risks. It derives its credibility in making
such assessments by virtue of the fact that it does not associate itself with the project in any manner that
might compromise its objectivity or independence in making such assessments available.
Structuring Solutions to Address Payment Risk and Other Risks Many governments have ceded
their dominant roles in the implementation of infrastructure projects to the private sector. However, the
size of these projects calls for resources that are beyond the capacity of any individual entity, which
increases the number of project participants multifold. But the involvement of several entities introduces
a number of new risks. There are several instances of infrastructure projects, where the sponsor or lender
bears the risk of a dominant consumer, or the extant regulation is relatively inadequate to protect the
interests of investors. The ICRA has developed a strong knowledge base and a refined analytical capability
to assess the capacity of each project participant, be it a lender, the government or a bank, to meet the
contractual commitments that provide the supporting matrix for the project. Many projects offer a fair
degree of leeway to structure the cash flows and roles of different stakeholders, to allow risks to be
apportioned to the entity best positioned to absorb the same. Such solutions require the active participation
of an entity that is looked upon as credible and neutral by the stakeholders and project participants. It
offers advisory services in structuring infrastructure projects and addressing risk allocation in a transparent
and optimal manner.
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Financial Modelling for Investment Decisions Project finance involves a high degree of financial
analysis and risk taking with lenders having limited or no recources to the balance sheet of the developer,
in the event of the project failing to generate the anticipated cash flows. Hence, it is essential that the
lenders subject the project cash flows to scenario analysis, stress testing and also goal-seek analyses. The
quality of strategic decision depends on the quality and timeliness of inputs made available to the team
analysing the project. The high degree of complexity and uncertainty associated with infrastructure projects
calls for sophisticated models for simulating the operations and cash flows of large projects. The ICRA
consultants are adept for designing comprehensive financial models that capture all kinds of project risks,
which can be used for preparing project forecasts during various stages of a project, such as flexibility,
negotiation with stakeholders (EPC, O&M, fuel suppliers, and so on), financial closure, sale of stake to
other equity holders etc.
Regulatory Consulting Formation of independent regulatory institutions to regulate the various aspects
of naturally monopolistic industries is a relatively recent phenomenon in India. The ICRA has developed
expertise in assisting several regulatory institutions, utilities, and other organisations on regulatory issues
ranging from licensing to tariff regulations. Its focus is predominantly on economic regulation (rather than
technology, environment or social issues).
Assistance During Tariff Determination The ICRA has gained experience in assisting the regulatory
commissions in determination of tariffs for various types of utilities like State Electricity Board (SEBs),
Licensees and Sanction holders. As part of these engagements, it has developed complex tariff models that
take into account various factors like consumer mix, fuel mix, cross-subsidy policies and subventions
committed by the Government. It also provides assistance to the utilities in approaching the regulators for
tariff determination and other issues.
Diagnostic Studies It has carried out several diagnostic studies to determine the nominal values for the
operating/financial parameters of the utility.
Evaluation of Contracts and Agreements It provides assistance to the regulatory commissions in
analysing the contracts for generation and transmission capacity. This involves analysis of the contracts
taking into account macro issues like state objectives, reforms agenda, tariff policy, demand forecast and
the like.
Development of Regulations The ICRA has assisted Regulatory Commissions in developing the
regulations covering tariff, conduct of business regulations, quality of supply and the like, for different
industries.
Privatisation The ICRA assists governments and government organisations in identifying the changes
required in regulatory and legal framework for implementing corporatisation/privatisation programmes.
The ICRA also has substantial expertise in business and financial restructuring, which can enhance valuations.
It also offers post-corporatisation assistance by way of hand-holding the entity in redefining corporate
objectives and installing governance models.
Assessment of Project Sponsors and JV Partners Since the investment required in power projects
is large, project developers seek co-sponsors who aspire to participate in such projects. Such investors are
typically international lending institutions, insurance companies, mutual funds, banks and even private
parties. Many such investors seek an independent assessment of the project sponsors before committing
their funds. The ICRA offers its services to prospective investors to carry out an independent assessment
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Appendix 16.23
of the project sponsors on mutually acceptable terms of engagement. Such due diligence exercises by the
ICRA typically cover the capability of the sponsor to manage similar projects, the ability to raise the
required financial and non-financial resources, track record in executing similar projects and an analysis of
the business and financial history of the sponsor.
Assessment of State Governments and Electricity Boards Any contract is only as strong as the
contracting parties. In India, the State Electricity Boards (SEBs) and State Governments are parties to key
contracts like Power Purchase Agreement and Implementation Agreement. While the SEBs are very often
the sole customer for an IPP, the SEBs payments are often backed by a State Government guarantee. The
ability of the state government to honour the guarantee depends on its financial health and its commitments.
It is, therefore, important for developers to assess the ability of these two entities to meet their obligations.
The ICRA maintains ongoing research on the operational and financial status of SEBs/State Governments,
and has developed strong analytical capabilities to evaluate the investment risks associated with SEBs/State
Governments. Its assessment methodology for State Governments, inter-alia, looks at the States income
and economic structure, the growth prospects for its economy, price stability, its fiscal performance,
financing requirements and contingent liabilities. The credit quality of a SEB is assessed by looking the
market structure, growth in market segments, operational performance, tariff policy, tariff flexibility,
financial performance and future prospects.
Restructuring of Utilities The financial health of most SEBs has been impaired by their regulatory
regimes and operating environment. Budgetary support from the State Governments, which would have
helped mitigate the problem, is also no longer easily forthcoming. This has forced many SEBs to approach
other sources of finance for funding their capital expenditure programmes. Unlike governments, lenders
have a greater commercial orientation and are interested in securing the funds advanced. Considering the
importance of a vibrant power sector in ensuring economic growth, most state governments are looking to
reforming and restructuring their respective electricity sectors. The ICRAs involvement with and assessment
of several SEBs has allowed it to gain insights into the intricacies of SEBs and the sources of their
manifold problems. It offers analytical skills for unbundling of SEBs, structuring unbundled entities and
valuing the assets of these individual corporations, to deriving maximum value for the governments.
Valuation of a Project Company Projects are exposed to substantial risks during the construction
phase. Most investors are averse to bearing these risks. Usually, the developer along with the EPC and
O&M contractor, take up the bulk of the project equity, and implicitly underwrite the construction risk.
The risks reduce substantially as the project moves into the operational phase. The risks at the stage fit the
risk appetite of a larger investor population. Developers encash on this and divest a significant part of
their holding in the project company. Potential investors are interested in the opinion of an independent
and objective valuer. The ICRA has carried out a number of assignments in the power sector as well as in
other sectors, on behalf of both buyers and sellers. It offers objective and independent valuation services
to investors and developers planning to divest their stakes in projects, in favour of other investors.
Financial Evaluation of Bids The multiplicity of contractual agreements and their interlocking nature
makes bid evaluation a complex process. Engaging an independent and credible agency like the ICRA
assists the developer in three ways. Firstly, a second opinion from an independent agency minimises the risk
of oversight of a project parameter. Secondly, it improves the bankability of the project. Lenders and
investors derive greater comfort from the evaluation reports of a non-partisan agency like the ICRA.
Thirdly, it introduces transparency into the process of evaluation, thus enhancing the credibility of the
selection process and minimsing the chances of disputes.
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Evaluation of Credit Structure Since the credit quality of many SEBs is weak, lenders, investors and
developers generally seek credit enhancements to improve project bankability. These credit enhancements
take the form of letters of credit, escrow covers and government guarantees. These enhancements improve
the seniority of the lender or developer vis-à-vis other claimants to the SEBs revenues. The ICRA has
structured credit enhancement mechanisms, collection systems and legal validity of various security
mechanisms. It works with reputed solicitors who provide the necessary legal inputs for different structures.
Assistance in Preparing RFQ, RFP Documents and PPA The qualification process is essentially a
screening process to qualify credible partieswho have the necessary financial, managerial and technical
capabilities of executing/operating the project in questionfor final bid submission. A carefully designed
RFQ document with a list of desirable qualifying criteria will ensure that only competent bidders are
shortlisted to begin with. This will help ease the work involved in the immediately succeeding stage.
The Request for Proposal (RFP) is one of the key documents in the bidding process. The RFP for a
power project is normally provided with a copy of the proposed Power Purchase Agreement (PPA) and/
or a copy of the Implementation Agreement (IA). These documents are provided to help the bidders in
gaining a clear understanding of the project and in ensuring that bids are prepared using a common set of
assumptions. The RFP typically contains details on the size of the project, site characteristics, environmental
requirements, fuel quality and so on.
The PPA forms the core of the risk-return sharing relationship governing a power project. The PPA
guarantees the developer a minimum off-take and sets out the revenues for the power sold. It also defines
the rights and responsibilities of the project developer and the concerned SEB during the development,
construction and operational phases of the plant. It allocates the risks to the different stakeholders of the
project. The PPA comprises provisions relating to technology, payment mechanisms and computations,
Force Majeure situations and legal issues. The ICRA has gained substantial experience in analysing these
documents in numerous assignments, and is in a position to share its experience with various clients.
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Appendix 16.25
APPENDIX 16
D
INFORMATION TO BE SUBMITTED BY CLIENT RATING ASSIGNMENT
(MANUFACTURING COMPANIES)
I. General
1. Name of the company; Registered office; Head/controlling/administrative office; Dates of
incorporation and commencement of business; private/public/joint; Constitution; public limited/
private limited. (Enclose a copy of the memorandum and articles of association); Location(s) of
manufacturing facilities.
2. A brief history of the company: A note on the history of the company since inception.
3. Group: Name of the business house/group to which the company belongs; whether the company
has any holding/subsidiary company. Names of other group companies along with the latest annual
reports of each of them. Give a note on the background of the group and the promoters.
II. Management and Organisation

1. Pattern of shareholding, as on a recent date: Break-up of shareholding among promoters,
collaborators, banks, financial institutions, multilateral institutions, public etc. History of the buildup
of equity share capital. Also, enclose a copy of the prospectus in case any public/rights issue has
been made in the past two years.
2. Particulars of directors, as specified.
3. Organisation chart and particulars of key executives: An organisation chart along with a brief
description of the functions of each department. Give particulars such as age, qualifications, service
with the company and prior experience of key executives.
4. Personnel policies: Staff strength. Also, briefly describe the salient features of the personnel policies.
III. Product Information

1. Nature of industry: Nature and size of industry, including particulars of key players. Existing demand-
supply position. End-use applications of the industrys products. Details of substitute products, if
any.
2. Nature of the product: Names of products, market share of the company. Break-up of the sales
turnover of the companys product/s by end-use applications. Whether the distribution channels or
prices of the companys products are controlled by the government. If so, elaborate. The process
flowchart for each of the major products of the company.
3. Cost structure: The variable cost structure and contribution of the major products of the company.
4. Indirect tax structure: Structure of excise and customs duty on the main raw materials and finished
products of the company.
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5. Details of the collaborators, if any: In case of any collaboration (technical/financial), furnish a

brief write-up regarding the arrangement and information regarding the collaborator company,
indicating its activities, size and turnover, particulars of the existing plants, other projects, in India
and abroad, set up with the same collaboration etc.
6. Installed capacities: Historical background of the installed capacity buildup of the company showing,
inter-alia, cost of the project, capacity, location etc.
IV. Financial Information

1. Financial position and working results: Enclose annual reports for the previous five years and
statement of accounts as on a recent date, if the latest annual report is more than six months old.
Also furnish copies of published half yearly results of the last three years.
2. Tax status: Indicate current tax status, including the year up to which tax assessment is complete, and
computation of income for the latest year.
3. Borrowing from institutions/banks and defaults, if any: Full particulars (nature of facility, amount
sanctioned/disbursed, outstanding, repayment schedule etc.) of all facilities availed from banks/
financial institutions as on a recent date. Also, give details of defaults, if any. Also, furnish the loan
amount repaid in the last four years. Give particulars of off-balance sheet transactions, if any, for
example, lease rentals.
4. Inter-corporate deposits/fixed deposits: Full particulars of all inter-corporate loans/deposits from/
to the group companies. Give the amount of deposits repayable within one year, as on the end of
each of the last four years.
5. Particulars of defaults, if any, in meeting statutory obligations.
6. Name(s) of the stock exchanges where the companys shares are listed. Also, indicate the high and
low prices at which the shares were traded during the previous 12 months.
7. Rating information: In case any instrument, issued by the company, been rated by a rating agency in
India/abroad in the past provide a copy of the rating advice.
8. Terms and conditions of the issue to be rated: Enclose a copy of the draft prospectus or other
issue/offer document, if available.
9. Particulars of existing litigations by/against the company, if any.
V. Projections
1. Industry outlook and market share: (i) Furnish a note on the prospects of the industry, possible
competition, estimates of future demand and supply, present and projected market share and the
strategy to be adopted for achieving the projected marketshare; (ii) Existing and projected export
performance and export commitments, as per the Government stipulation.
2. Business plans: Give a note on the corporate objectives and strategic plans for the future growth/
expansion/diversification.
3. Ongoing projects: A detailed note about the ongoing projects, covering aspects like cost of each
project, means of financing, proposed products/capacities, technical arrangements, progress already
made, likely date of completion of project and so on.
4. Estimates of profitability for the tenure of the instrument, plus one year [two years in all, in case of
commercial papers (CP) issue] with underlying assumptions.
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Appendix 16.27
5. Projected cash flow for the tenure of the instrument, plus one year (two years in case of a CP issue).
In case of a CP issue, cash flow, is to be given on a quarterly basis.
6. Projected balance sheets for the tenure of the instrument, plus one year (two years in case of a CP
issue).
7. Any other relevant information.
While this form lists out some of the essential items on which information is required, it is not an
exhaustive list. The issuers should feel free to provide additional information on any relevant aspect.
Additional information may be asked for after studying the data furnished or during the process of
interaction with the issuers representative.
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APPENDIX 16
E
INFORMATION TO BE SUBMITTED BY CLIENT FOR RATING ASSIGNMENT
(FINANCIAL SERVICES COMPANY)
I. General
1. Name of the company; registered office; head/controlling/ administrative office; dates of
incorporation and commencement of business.
2. A brief history of the company: A note on the history of the company, since inception.
3. Nature of the business and operational details: RBI classification as to the nature of business of the
company specified. Give operational details.
4. Group: Name of the business house/group to which the company belongs; whether the company
has any holdings/subsidiary company. Please give a note on the background of the group and the
promoters.
5. Name of other group companies if any: Latest annual reports for each of them.
II. Management and Organisation

1. Pattern of shareholding as on a recent date: Break-up of shareholding among promoters, collaborators,
banks, financial institutions, multilateral institutions, public etc.
2. Particulars of directors, as specified.
3. Organisation chart and particulars of key executives: An organisation chart, along with a brief
description of the functions of each department. Please give particulars such as age, qualifications,
service with the company and prior experience of key executives.
4. Personnel policies: Staff strength. Also, briefly describe the salient features of the personnel policies.
III. Financial Information

1. Financial position and working results: Annual reports for the previous five years and statement of
accounts as on a recent date, if the latest annual report is more than six months old. Also, furnish
copies of the published half-year1y results for the last three years.
2. Asset quality and recovery performance: (i) The norms followed by the company towards exposure
to any particular company and industry, (ii) Asset classification system followed (as to the recoverability)
and break-up of assets for the last four years, (iii) A list of the major problem accounts/non-
performing assets and (iv) Recovery statement, as specified.
3. Maturity profile: Maturity-wise analysis of assets and liabilities: (i) Less than one year, (ii) two to
three years, (iii) four to five years, (iv) five to seven years and (v) seven years and above.
4. Accounting policies: A detailed note on the accounting policies, with particular reference to depreciation,
income recognition, off-balance sheet claims and provisioning, write-off of bad and doubtful debts
etc.
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Appendix 16.29
In case the depreciation policy is not according to the ICAI guidelines, the reworked depreciation and
consequential changes for the past four years, as per ICAI guidelines, should be listed.
1. Tax status: Current status, including the year up to which assessment is complete, estimated unassessed
liability, concessions available etc.
2. Borrowing from institutions/banks and defaults, if any: Full particulars (nature of facilities, amounts
sanctioned/disbursed, outstanding etc.) of all facilities availed of from banks/financial institutions.
Also, give details of defaults, if any.
3. Particulars of defaults, if any, to meet the statutory obligations.
4. Particulars of the existing litigations by/against the company, if any.
5. Name(s) of the stock exchanges where companys shares are listed.
6. Rating information: has any instrument issued by the company been rated by a rating agency in
India/abroad in the past? If so, provide a copy of the rating advice.
7. Terms and conditions of the issue to be rated: enclose copy of the prospectus or other issue/offer
document, wherever applicable.
IV. Projections
1. Industry outlook and market share: Note on the prospects of the industry, present and projected
market share.
2. Business plans: A detailed note on the corporate objectives and strategic plans for future growth/
diversification.
3. Estimates of profitability of the tenure of the instrument, plus one year (two years in all, in the case
of a CP issue), with underlying assumptions, as specified.
4. Projected cash flow for the tenure of the instrument, plus one year (two years in all, in the case of
CP issues), as specified. In case of a CP issue, the cash flow may be given on a quarterly basis.
5. Projected balance sheets for the tenure of the instrument, plus one year (two years in all, in the case
of a CP issue), as specified.
6. Any other relevant information.
While this form lists out some of the essential items on which information is required, it is not an
exhaustive list. The issuer should feel free to provide additional information on any relevant aspect.
Additional information may be asked for after studying the data furnished or during the process of
interaction with the issuers representative.
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Appendix 16.

The CRISIL Advisory Services (CAS)

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CRISIL Research and Information Services (CRIS)

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CRISIL Index Services

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CRISIL Training Services

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· Formulating financial strategies that complement the chosen business strategies,

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· Diagnostic studies as a prelude to corporatisation, privatisation and deregulation;

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II. Management and Organisation

III. Product Information

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5. Details of the collaborators, if any: In case of any collaboration (technical/financial), furnish a

IV. Financial Information

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II. Management and Organisation

III. Financial Information

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