Kerala Financial Corporation

KERALA FINANCIAL CORPORATION

THIRUVANANTHAPURAM

BO / APPRAISAL MEMORANDUM FOR FINANCIAL ASSISTANCE TO CIVIL CONTRACTORS / DOC NO. / AMP1F13
PAGE NO. / 1 OF 27
ZONE / DATE / 15.05.2012

PART – I

Application Regn. No. & Date:

Amount applied for:Rs. lakhs

Amount recommended:Rs.lakhs

Existing loan balance outstanding:

Sanctioning Authority:

1. / Name of Applicant / :
2. / Name of the Unit / :
3. / Address of Firm
(a) Registered Office
Pin Code
Phone Numbers
(b) Project site / :
:
:
4. / Constitution / :
5. / Reasons for delay in processing application if any / :
6. / Date of incorporation/ registration / commencement of activity
7. / Activity / :
8. / Industry Classification Code / :
9. / Whether new / existing
10. / Major parameters to be checked / :
a)Whether the contractor is approved with the Government and the address of the authority with whom they have registered. / :
b)Category of contractor
A Class / B Class / C Class etc. / :
c)Registration No. / :
d)Period of expiry of Registration / :
e)Number of contracts undertaken during the last three years. Give the details of the contract work undertaken with the value of contract work. / : / Sl.
No. / Name of Contract Awards party / Nature of contract / Value
f)Details of the contracts presently under execution. / :
11. / Details of present proposal
a)The authority awarding the contract for the present proposal. / :
b)Value of contract / :
c)Time period for the contract / :
d)Whether the authority has the budgetary allocation for the work proposed. Whether maximum period for release of payment specified in contract. / :
e)Whether any delay in receiving payment anticipated. / :
f)Has the appraisal team contacted the authority and the result of the contact (Appraisal team should discuss on the possibility of getting payments on time) / :
g)Has the contractor necessary resources like manpower, equipments, materials etc. for undertaking the contract / :
h)Is the applicant willing to execute power of attorney authorizing KFC to receive the bill amount directly from the work issuing authority.
i)Are the terms of contract reasonable
(see point 3 under Part VI also)
j)Reputation of the Department and its officials in assessing contract work and releasing payments.
k)In case it is a sub contract details of main contractor also to be specified.

12. Cost of the project : Rs.lakhs

13. Promoters contribution: Rs. lakhs

14. Debt Equity Ratio:

15. Overall Asset Coverage Ratio :

16. Whether KYC Norms satisfactory:

17.Whether CIBIL report satisfactory:

18. Score/ rating in Internal Credit Rating:

19. Whether Bank Take over involved:

20. Whether the contract execution area is

within the jurisdiction area of BO:

If no give details of prior permission taken:

21. Appraisal done by:

Name Designation

PART – II

1.INTRODUCTION

(Briefly describe the purpose for which the loan has been applied for)

2.PROMOTERS AND MANAGEMENT

(a) Particulars about Directors/Partners/Proprietor/Surety

Name
Position in the firm/ Company
Date of Birth
Sex
Resident/
Non Resident
Educational Qualification
Proof of Identity
Voter Card No.
PAN No.
Passport No.
Ration Card No.
Any other identity
Present residential address
House No.
House Name
Area/Locality
Post Office
District
Pin Code
Residing since
Office Phone No.
Residential Ph.No.
Mobile No.
E-mail ID
Whether KYC norms completed
Yes/No
Annual income based on last years Income Tax Returns
Annual income based on previous years Income Tax Returns
Value of immovable properties as per Affidavit
Value of movable properties as per Affidavit
Liabilities as per Affidavit
Net worth as per Affidavit
CIBIL Rating
Opinion received in the confidential report obtained by appraisal team/FO
Criminal cases if any

(b) Particulars regarding constitution

(i) Partnership Firm

Date of Registration with Registrar of firms
Whether partnership deed allows the activity proposed
Name of partners

(ii) Private or public limited companies

Date of Incorporation
Place of Incorporation
Name of company as per certificate of Incorporation
Whether Activity proposed has been allowed in the Memorandum of Association and Articles of Association
Authorised capital
Paid up capital
Borrowing power allowed as per MoA
Details of charges created as per Search Report
Whether the details of present Directors as per statement from ROC or search report from Company Secretary collected
Certificate from Company Secretary that company has complied with all provision as per Companies Act

(iii) Societies

Date of Registration
Whether certified copy of resolutions of the governing body and general body collected
Whether byelaws of the society collected
Whether the activity proposed is allowed as per the byelaws of the society

(c)List of Board Members/Partners/Co-Obligants/Guarantees/Executive Members/ Directors/Trustees

Name / Designation / Contact Address / Age / Phone Number / Relation with chief promoter / Whether giving personal guarantee

(d) Share Holding Pattern

Name of shareholder/ partner / No of Shares / Total Share value / Percentage / Whether giving personal guarantee
Total

3. MANAGEMENT AND TECHNICAL COMPETENCE

(Details of Qualification & Experience of Promoters and other technical Experts)

Name / Designation / Qualification / Experience

4. SOLVENCY OF BOARD MEMBERS /PARTNERS/ CO-OBLIGANTS/ GUARANTOR AS PER AFFIDAVIT

(in lakhs)

Name / Details of assets
(movable & immovable) / Estimated
Value of asset / Details of
liabilities / Estimated value of liabilities / Net
Asset / Annual income based on last years IT returns

5. KYC NORMS AND AML STANDARDS

(a) Details of Identity proof (to be verified with original and signed )

Name of Promoters/ Guarantors / Voters ID No/UID No / PAN No / Ration Card No / Other ID with No if any / Pending criminal cases if any

(b) Credit Report from Bank

(credit report and bank statements of all banks of all promoters/unit to be obtained and details written here)

Name:

Designation:

(d) Details of bank account

Name of Unit / Promoters / Bank Name & account No(1) / Bank Name & account No(2) / Remarks

(e) Details of loans taken from other banks

Sl No / Name of institution / Loan sanctioned /availed / Balance O/s / Arrears / Loan category

(f) Details of previous assistance from kfc (if any)

(in lakhs)

Loan No / Sanction date / Amount sanctioned
(a) / Amount disbursed / Outstanding as on---- / The present proposal
(b) / Total
a+b

(g)Group concerns/firms

(Rs. in lakhs)

Sl.
No. / Affiliated group companies/firms / Nature of Business / Any financial dealing with the Corporation / Name and address of the Banker / Turnover / Net worth

(h)Details regarding CIBIL Report of Unit/ Board Members /Partners/Co-Obligants/ Guarantos

Name of Unit & Promoters / CIBIL Score(individuals)/Opinion (unit/associated unit) / Remarks

6. REMARKS ON MANAGERIAL APPRAISAL

(write detailed remarks on managerial competence with following information)

Necessary local enquiry regarding promoters and unit have been conducted and general opinion about then is good. Original KYC documents are verified and photocopies are kept in file. Advocate signed Affidavit and gazette officer signed photo verification certificate is procured and kept in file. The managerial/technical competence/ qualification of the promoters and technical experts are sufficient to undertake the proposed contract work. It is concluded that the managerial appraisal is satisfactory.

PART – III

TECHNICAL

Location of the contract work

Nature of contract

(Describe in detail the nature of contract and the quantum of work involved)

Value of contract

Time period for completion of the contract

Equipments, manpower, materials etc. available with the contractor to execute the contract work.

Whether power of attorney can be executed with the work awarding authority.

Penalty clauses for delay in completing the project on time.

Details of clearances if any required to execute the contract.

Schedule of the implementation of the contract work.

Remarks on the Technical capacity of the promoter to undertake the contract work.

PART – IV

FINANCIAL

Past performance of the unit (If existing)

(a)Brief description of the unit.

(The balance sheet analysis of the existing unit to be annexed as Annexure 'A'. Give comments on the income, expenditure, profit, debt, capital, DER, networth, current ratio, quick ratio, debt ratio etc. of the concern.)

(b) Brief description of the associated / sister concern

(The stake of the promoters in the associated /sister concern to be shown)

(The balance sheet analysis of the associated / sister concern to be annexed as Annexure 'B'. Give comments on the income, expenditure, profit, debt, capital, DER, networth, current ratio, quick ratio, debt ratio etc. of the concern.)

Cost of the contract work with split up wherever available

(deduct from the cost of work, the cost of materials supplied by work issuing authority).

Means of Finance (Rs. in lakhs)

Item / Existing / Proposed / Total / Percentage / Minimum percentage as per scheme / Means of finance as per applicant / Reasons for variations
Promoter contribution
Term Loan from K.F.C
Others (unsecured loans, advance from customers)
Total / 100

Raising of Promoters contribution

(Source of PC should be mentioned)

FINANCIALS

The total income, expenses, operating profit, income tax and net profit during the contract period shall be given as follows:

(in lakhs)

Particulars / 1st year / 2nd year / 3rd year / Financials projected by the applicant / Reasons for variation
Income
Expenses
Operating profit
Income Tax
Net Profit
Depreciation
Cash Profit

BENCH MARK FINANCIAL PARAMETERS

Sl
No / Ratio / Benchmark norms / Actual parameters in case of this proposal / Deviation if any (Yes/No) / Remarks/ Justification for inferior ratio than Benchmark
(a) / DER / 2 : 1
(b) / Projected DSCR / > 1.5
(c) / Promoters Contribution / 33.00%
(d) / Asset Coverage ratio / 1.5 times
(e) / Net profit to income
(f) / IRR

(1) Primary Security

Receivables/Dues from contract awarding party which is mortgaged

Approximate value:

(Monthly Returns with acknowledgement of Department to be submitted)

(2) Collateral Security

Land:Rs. ……………………. Lakhs

Building:Rs. ……………………. Lakhs

Others:Rs. ……………………. Lakhs

------

TOTAL:Rs. ……………………. Lakhs

(3) SECURITY AND MARGIN FOR THE LOAN (Rs.in lakhs)

Particulars / Value
(a) / Percentage as per norms / Margin
(b) / Eligibility
(a)-(b)
Land / %
Building / %
Others as per Loan Policy

The overall margin on security works out to …..... %

OVERALL ASSET COVERAGE

Total tangible security after margin including collateral security for first loan (if any)

+ Security for second loan

Loan amount (Balance outstanding of first loan (if any)

+ New loan (proposed)

INTERNAL CREDIT RATING SCORE

(Attached as Annexure)

TERMS SHEET

The repayment period, interest rate and processing fee recommended are as follows.

(a)Repayment period

Sl No / Item / Terms / Maximum as per scheme
(i) / Initial Moratorium / Months/Years
(ii) / Repayment period / Years

(Give details of the repayment period requested by the applicant and the reasons for variations if any proposed)

(b) Interest rate

Sl No / Item / Terms / Remarks , if any
(i) / Gross Rate of interest(PLR + … ) / %
(ii) / Reduction based on credit rating / %
(iii) / Reduction based on SC/ST, Women entrepreneur etc / %
(iv) / Net rate of Interest / %
(v) / Rebate on prompt repayment / %
(vi) / Effective interest rate / %

Sl No / Item / Terms / Details of concession allowed, if any
(i) / Processing Fee chargeable
(ii) / Processing fee paid
(iii) / Balance processing fee payable

REMARKS ON FINANCIAL APPRAISAL

(write remarks on financial feasibility of the project )

(write whether the project is financially feasible)

PART – V

COMMERCIAL

Give comments on existing contractor loans assisted by KFC in the Locality/District.

Remarks on Commercial Appraisal.

(Write whether the project is commercially feasible).

PART – VI

LEGAL

1. CONSTITUTION OF FIRM

(Opinion regarding AOA, MOA, partnership deed, trust deed etc)

(Opinion on resolutions of company, assignment of land to the name of firm , charges of the company with ROC etc, second charge etc )

2. COLLATERAL SECURITY

(a) LOCATION OF COLLATERAL SECURITY

(describe about the location of the land and marketability of the land)

(b) DETAIL OF COLLATERAL LAND

Item No. / Sy. No. / Extent / Tandaper No / Village / Taluk / District / Value assessed by Corporation / Value assessed by external valuer*
Total

* Applicable if value exceed Rs. 100 lakhs.

Item No. / Sy. No. / Tandaper No / Owned by / SRO No. with date / Whether Original & Prior documents available

(d) DETAILS OF BUILDING AND CIVIL STRUCTURES IN COLLATERAL SECURITY

Name of Panchayath/ Muncipality/ Corporation / Building No & Ward No / Plinth Area / Age / Depreciated value / Value assessed by external valuer*

* Applicable if value exceed Rs. 100 lakhs.

(e) DETAILS OF OTHER COLLATERAL SECURITIES (IF ANY)

3.TERMS ON WHICH CONTRACT AWARDED

1)Relating to deposit

2)Release of payment

3)Arbitration / Dispute Resolution class

4)Procedure for Quality checking of contract

5)Penal clause on delay / substandard work

6)State whether conditions are reasonable. If not give reasons and how it will affect the contractor in getting money.

4. REMARKS ON LEGAL APPRAISAL

(remarks on various legal certificates accepted and any deviation from norms etc)

PART – VII

1. DISBURSEMENT PATTERN SUGGESTED

2. WHETHER ACCEPTED BY THE PROMOTERS

PART – VII

DEVIATIONS IN THE PROPOSAL (IF ANY)

(Clearly specify all deviations (Managerial, technical, legal, financial & commercial ) in the project with sanctioning authority for the deviations)

PART – VIII

RECOMMENDATIONS

Based on the financing pattern suggested at para a term loan of Rs...... lakhs is recommended for consideration to M/s …………………………………………………….. on credit line basis subject to usual terms and conditions and on the following special conditions:-

1. Utilisation of the term loan

For undertaking contract work

2. (a) Rate of Interest

Interest rate will be …...% p.a. With …...% penal interest for the defaulted amount for the defaulted period on monthly compound basis and …....% rebate for prompt repayment of interest. Further ….% reduction will be allowed based on credit rating.

Floating rate of interest based on the PLR fixed from time to time, depending on the market conditions will be applicable to this proposal. The rate of rebate can be revised (increased/decreased) by the Corporation from time to time and the borrower hereby agrees to such revision in the rate of rebate and that intimation of such revision shall be deemed to be served on the borrower when sent by post to the address of the borrower.

2. (b) Interest reduction based on credit rating will be subject to annual review and will be continued only if the firm satisfies the norms for interest reduction applicable at the time of review.

2. (c) Rebate for prompt payment will be paid only if the insurance of all fixed assets is current and the policy is taken in the joint name of the firm and KFC.

3. Repayment Period

Term Loan: To repay in ….... monthly instalments commencing at the end of ………………………. month of drawal of the 1st Instalment of the term loan. The principal amount will fall due on 1st day of every month.

4. The applicant has remitted Rs……….. + service tax as initial processing fee. Further sum of Rs…………….. + service tax is to be remitted.

5. Period of completion of project: …...... months

6. Personal Guarantee should be given by :

7. Before drawing any portion of the loan amount the applicant/Company should satisfy the following conditions:

1.Execution of power of attorney authorizing KFC to receive the bill amount directly from the work issuing authority.

2.Credit report from Bank

3.Others (Please specify).

8. No preclosure premium will be charged.

9. The asset mortgaged should be insured annually with New Assurance Company Limited, under the Agency Code 90145/900145 or any other agency approved by IRDA and evidence thereof should be produced. No rebate will be allowed if insurance is not taken.

10. All statutory charges including Sales tax, P.F contributions, Land tax, Building tax and each other payments due to the Government or concerned authorities shall be paid and kept current by the borrower/co-obligants every year during the tenure of the loan.

11. The capital should be raised at least to the minimum level of Rs...... Lakhs as shown in the financing pattern.

12. The sanction is subject to the availability of refinance from SIDBI/Banks/ FIs and such other conditions as may be imposed by them.

13. The loan amount should not be utilized for any kind of money laundering activities.

14. The loan will be disbursed through a no-lien bank account only.

15.Disbursement will be made on pro-rata basis as per investments made in the project after ensuring the required P.C and DER of ….... and keeping the required security margin.

16. All other usual terms and conditions will also apply.

17. The Borrower and Co-obligant should give consent to the Corporation for the disclosure by the Corporation of information and data relating to them, of the credit facility availed of/to be availed, by them, obligations assumed/to be assumed, by the them in relation thereto and default, if any, committed by the them, in discharge thereof, to Credit Information Bureau (India) Limited (CIBIL) or any other agency authorized in this behalf by Reserve Bank of India and consent to furnish the information by CIBIL or any other agency, so authorized, to any banks/financial institutions and other credit grantors or registered users.

18. A Board should be displayed in front of the project stating that the project is financed by Kerala Financial Corporation.

19.External valuation to be arranged as and when necessary.

Legal Officer Technical Officer Project Officer

BRANCH MANAGER/CHIEF MANAGER

Reviewed by GM / Approved by CMD / Issued by MR

ANNEXURE 'A'

ANALYSIS OF FINANCIAL STATEMENT OF UNIT

Name of Unit:

Balance sheet as at 31st March

Rs. in lakhs

201 / 201 / 201
ASSETS
1. Fixed assets
2. Investments
3. Current assets
4. Others ( current account)
Total
LIABILITIES
1. Capital
2. Reserves and surplus
3. Current liabilities
4. Secured loans
5. Unsecured loan
Total
III. Profit and loss account
1. Sales
2. Net profit after tax
3. Depreciation
4. Cash profit
Analysis / Benchmark*
Quick ratio / 2 : 1
DER / 2 : 1
Net worth / > 3 times of loan proposal
ROI (EBIT / Net Assets) / > 15
Net Profit to sales (PBIT) / > 10
Debt Ratio / 2 : 3

* Justification for interior ratio than benchmark may be explained as a footnote.

ANNEXURE 'B'

ANALYSIS OF FINANCIAL STATEMENT OF ASSOCIATED CONCERN

Name of concern :

Balance sheet as at 31st March

Rs. in lakhs

201 / 201 / 201
ASSETS
1. Fixed assets
2. Investments
3. Current assets
4. Others ( current account)
Total
LIABILITIES
1. Capital
2. Reserves and surplus
3. Current liabilities
4. Secured loans
5. Unsecured loan
Total
Profit and loss account
1. Sales
2. Net profit after tax
3. Depreciation
4. Cash profit
Analysis / Benchmark*
Current ratio / 2 : 1
Quick ratio / 1 : 1
DER / 2 : 1
Net worth / > 3 times of loan proposal
ROI (EBIT / Net Assets) / > 15
Net Profit to sales (PBIT) / > 10
Debt Ratio

* Justification for interior ratio than benchmark may be explained as a footnote.