Analysis of Credit Proposal

Chapter-5

Analysis of Credit Proposals
The following proposal of M/s Prestige Estates Projects Private Limited has been presented in the format followed by J & K Bank Ltd given in annexure of the project.

SUMMARISED COVER SHEET OF CREDIT PROPOSAL OF M/s Prestige Estates Projects Private Limited Proposal Sanction of term loan facility of Rs100.00 crore under consortium arrangement to part finance the completion of the construction work of Shantiniketan project of the company at Whitefield Bangalore at total project cost of Rs445.00 crore

Presenting branch office

OTC Bangalore

Date of Receipt of Proposal 30.12.2009 by Corporate Headquarters Borrowers Information

Name of the Borrower

M/s Prestige Estates Projects Private Limited

Address (Registered)

The Falcon House´ No-1, Main Guard Cross Road, Bangalore

Group

Prestige group

Constitution

Private Limited

Date of incorporation Capital

14.06.1997

(as on 31.03.2009) Authorized Paid up : Rs.12.50 crore : Rs12.50 Crore

Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals

Page 28

Analysis of Credit Proposal Names of Promoter/Directors Irfan Razack Rezwan Razack Noaman Razack Shareholding Pattern . Promoters Irfan Razack Rezwan Razack Noaman Rezack Mrs Sameera Noamam Mrs Almas Rezwan Badrunisaa Nature of Business Real Estate Development

Chapter-5 (Net worth Rs.39.35 crore) (Net worth Rs.39.52 crore). (Networth Rs.29.30 crore)

% 27.09 27.08 27.08 6.25 6.25 6.25

Sector

&

its

priority Commercial Real Estate

classification Total exposure of bank to Rs. in Crores Company Unit Existing Exposure Working Capital Total Whether such exposure is Yes within the permissible 100.00 100.00 100.00 100.00 Proposed Total

exposure limit prescribed in bank¶s credit policy/by RBI. Period of company¶s dealing New connection with the Bank Income earned Credit Utilization NA NA

Adverse Features, if any, NA pointed out in Concurrent/

Statutory/ RBI / Internal

Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals

Page 29

Analysis of Credit Proposal Audit Risk Score Financial Indicators Brief Recommendations of Corporate Headquarters. JKB-LC-1 FY 2008-2009: PAT ± Rs76.12crore, DER-1.03;1

Chapter-5

TOL/TNW 4.30,

Proposal recommended for sanction of term loan facility of Rs100.00 crore to part finance the completion of the construction work of Shantiniketan project of the company at Whitefield Bangalore at total project cost of Rs445.00 crore with debt component being Rs350.00 crore The above facility shall be secured by the following securities, term & conditions; Security: Primary 1, First charge on all the unsold residential units (169) and commercial spaces (10, 01,636 Sft) pertaining to the Developer in the Prestige Shantiniketan Project.

Collateral A, Collateral security of land situated at Sy.No. 13, Navrathna Agrahara Village, Jala Hobli , Bangalore North Taluk reported to be worth Rs.150.00 Crores owned by Prestige Reality Venture (a group concern)

B, First charge on the escrow account to be opened with one of the lenders (Preferably consortium leader, to be decided by the participating lenders of the project) wherein all the receivables outstanding out of the committed sales of the residential units and commercial spaces will be deposited, regularly by the company.

Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals

Page 30

Mr. The security shall be shared with other lenders on Par i passu basis Interest rate PLR i. Noaman Razack Net worth as on 31.52 Crores 3. 39.03.35 Crores 2.Analysis of Credit Proposal Chapter-5 C.12.Mr.e.2009 Rs.30 Crores. Date of receipt of 30. 12.2009 Rs.03.12. 39. 29.75% at present M/ S Prestige Estates Projects Pvt Ltd General Information on the proposal Name of the branch O T C Bangalore Date of receipt of 17.03. Personal guarantees of the following directors of the company 1.2009 the proposal by branch.2009 the proposal at CHQ Nature of proposal Sanction for term loan facility of Rs100. Mr.2009 Rs.00 Crore to part finance the construction of Shantiniketan project of the company at white field. Rezwan Razack Net worth as on 31. Existing arrangement Proposed arrangement Activity Sector banking Multiple banking arrangement banking Consortium arrangement for the proposed facility Real estate developer Real Estate Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 31 . Irfan Razack Net worth as on 31.

00 Crores owned by Prestige Reality Venture (a group concern) B. Navrathna Agrahara Village. 39.636 Sft) pertaining to the Developer in the Prestige Shantiniketan Project. First charge on the escrow account to be opened with one of the lenders (Preferably consortium leader.2009 Rs. Jala Hobli . C. Security: Primary 1.Mr. 01.35 Crores Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 32 . Collateral A. Irfan Razack Net worth as on 31. to be decided by the participating lenders of the project) wherein all the receivables outstanding out of the committed sales of the residential units and commercial spaces will be deposited. 13. regularly by the company. Bangalore North Taluk reported to be worth Rs.00 crore for a period of 21 months of the branch for at interest rate of 12.03.Analysis of Credit Proposal Priority classification Particulars existing of the New connection Non±priority sector Chapter-5 facilities sanctioned by our Bank.150. Personal guarantees of the following directors of the company 1. Collateral security of land situated at Sy.75%i. Recommendations Term loan facility of Rs100.No.e PLR has been recommended sanction facility of credit against following securities. First charge on all the unsold residential units (169) and commercial spaces (10.

72.30 Crores.06.No.2009 Rs. 29. office The Falcon House´ No-1. 70. 39. Whether any of Directors of the Applicant Borrower company is a director or a specified near relation of a director of a banking company. Bangalore South taluk Constitution Date of incorporation Period of dealings with the branch Private Limited Company 14. Mr. DER Moratorium Repayment period 1.77.129/2. Sy.00 crore.52 Crores 3.03. The security shall be shared with other lenders on Pari passu basis Purpose Borrowing of To part finance expenditure of Rs445.and 130 of Hoodly village. Mr.73. Main Guard Cross Road. Noaman Razack Net worth as on 31. Rezwan Razack Net worth as on 31.1997 New connection Other related information Whether name of the Applicant Borrower. Bangalore Address of Administrative office Address of the units Same as above Sy.78 in Sadarmangala Village. Krishnarajapuram Hobli.71.No.00 crore for completion of Shantiniketan (residential/commercial project at Bangalore) by term loan of Rs350. its directors is appearing in the caution / defaulter list of RBI/ CIBIL/ ECGC/.00 crore and promoter¶s contribution of Rs95. Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals No No Page 33 . 74/2.Analysis of Credit Proposal Chapter-5 2.2009 Rs.75 for the company as a whole 12 months 9 months Borrower Information Address of Head/ Regd.77/2.03.74/1.

560 001 Deputy Rezwan Razack Managing Director Rs39. Bangalore .560042 Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 34 .52 crore No. Ulsoor Road. Bangalore . Magrath Road. Rezwan Razack and Mr.560 025 No.2009 Address No. Hanumanthappa Director layout. Magrath Road. Craig M. Bangalore .12. Ulsoor Road. Noaman Razack.35 crore Park Road.30 crore Park Road.560046 1/29. Bangalore . Hanumanthappa Uzma Irfan Director layout. Bangalore . Noaman Razack Director Rs29.Analysis of Credit Proposal Whether any director of the Applicant Borrower company is a specified near relation of any Senior Officer of the rank of Scale ±iv and above of the Bank.560 025 No.21/ 22-23.8.560042 Mohamed Sadiq Zaid 1/29.21/ 22-25.03. Mr. Zackria Hashim Director Jayamahal Extension. Layout. Bangalore . Craig M. Layout. Chapter-5 No Particulars of partners /directors The Board of the company comprises of 10 directors including promoter directorsMr.G. Irfan Razack Managing Director Rs32. 4th Main Road.G.560 001 Fiaz Rezwan Director No.12. Bangalore . As per details given below: Name Directors of Designatio n Net worth as on31. Irfan Razack.

25.50 100. 31.000 6.000 Equity shares of 10/.000 Equity shares of 10/.250 6.03.Analysis of Credit Proposal Share holding pattern of promoters Names holders Irfan Razack of share Number shares held of % Holding Chapter-5 Face value of share holding (Rs) 33857500 3.25 7812500 Almas Rezwan 781.385.385.03.09 Rezwan Razack 3.25 7812500 Badrunissa Irfan 781.250 12.250 27.03.00.250 27.50 Amount Internal Rating Based on the audited financials of the company as on 31.08 33852500 Sameera Noaman 781.750 27.25.00.each Subscribed and Paid up Capital of the company: 1.25 7812500 125000000 TOTAL Capital Structure of the applicant company (Amount in crores of Rs.250 6.2008 and .2007 31.500. which qualifies for interest rate of PLR Background of the Applicant Company Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 35 .each 12.385.2009.08 33852500 Noaman Razack 3. 2009 Authorised capital of the company: 1.) Particulars as on March 31.00% 12. the risk score of the company arrives at JKB LC -1.

Sl Company Type of facility Name of the Purpose of loan Sanctioned O/s bal Amount as on Term (Months) Repayment No. Bangalore) and started the business of real estate developer under the name of prestige Estates and Properties as a partnership concern. Razack Sattar by establishing Prestige Fashions (high quality custom tailoring and retailing ready to wear garments) on Commercial Street in Bangalore. Rezwan Razack is the Joint Managing Director of Prestige Estates Private Limited. A graduate from St. Mr. Currently he is the Hon.. This rating indicates that the developer has a excellent track record in executing real estate projects as per specified quality levels within the stipulated time schedule and ability to transfer clear title. Noaman Razack is the Director of Prestige Estates Private Limited. Prestige is ISO 9001:2000 certified company and got reaffirmation of Crisil DA1 rating in 2008. It is informed by the company that the rating is affected in view of the global economic crisis which affected the real estates sector in India also. The Group forayed into the sphere of property development in 1986 by building Prestige Court (KH Road. However during 2009 CRISIL has awarded DA2 rating to the group. Noaman Razack Mr. graduate and post graduate colleges.and participates in the management of various institutions. Secretary of the Al-Ameen Educational Society. Irfan Razack is the Chairman and Managing Director of Prestige Estates Private Limited. He spearheads the marketing strategy for the group. The company is presently executing number of projects. In the year 1997 it was reconstituted as company. in Commerce is having ove thirty years of r business development experience. Joseph's College. The details of the credit facilities sanctioned by the Banks for these projects are as under. His business acumen has led to Prestige Fashions becoming a landmark in the field of fashion and style. Name Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 36 .Analysis of Credit Proposal Chapter-5 Prestige group was founded in 1956 by Mr. Mr. Rezwan Razack Mr. The youngest son of the late Razack Sattar is the heir to the legacy of Prestige retailing and the Managing Director of Prestige Fashions (P) Ltd. He is a commerce graduate and is looking after the real estate business. Irfan Razack Mr. Brief about the Promoters: Mr.

48 84 Oct '14 3 Developments Pvt.07.Ltd Prestige UBI 35 33.35 Rental discounting Rental discounting 70 67.09 (Rs.00 HDFC Project finance 70 64.86 90 Dec '07 June '15 Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 37 .00 Term Loan Prestige 6 Leisure Resorts Private Ltd Term Loan 25 5. Ltd. West Palm discounting Bank Rental discounting 2 1.65 108 Jan '09 Dec '17 Nov '07 2 ICBI (India) Rental Vijaya Rental discounting Rental discounting Pvt. Ltd.13 71 Oct '08 Jul '15 4 Garden Constructions Pvt Ltd Exora Term Loan YES Bank Project finance 30 10.00 70 Mar '11 Dec '16 Term Loan Project SBOH finance Syndicate Project Bank finance 25 5. Converted into rental discounting HDFC Rental discounting 91 89 June '07 Sep '14 77.93 108 June '08 May '17 49 48. Pvt.00 25 Aug '09 Aug '11 5 Business Parks Ltd. in Cr) Comm Closure Cessna 1 Garden Developers Pvt. Term Loan SBOP Project finance 50 20.Analysis of Credit Proposal Bank (Rs. in Cr) Chapter-5 31.

4 Key financial indicators of the company Rs.PBT Provision for Tax ( Deferred Tax Asset) Net Profit after Tax .12 12.72 341.20 12.45 1046.PAT Paid up Capital Reserves & Surplus Total intangible assets Tangible Net-worth Fixed Assets Gross Block Net Fixed Assets including WIP Term liabilities Current Asset Current Liabilities TOL: TNW DEBT:EQUITY 214.64 70.54 146.90 966.89 401.41 22.30 1. in crore Particulars 2006-07 Audited Gross Revenue Other income (profit from sale of land) Total Income --PBDIT Financial expenses Depreciation Net Profit before Tax .54 2007-08 Audited 895.20 Comments on financial Statements: Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 38 .08 76.30 42.47 16.63 2008-09 Audited 830.39 2.50 368.04 5.02 889.43 59.26 81.21 12.91 1741.67 59.69 458.27 25.03 19.33 38.56 443.69 265.54 1079.39 485.20 1577.50 381 31.57 107.36 22.58 57.79 128.53 14.57 500.Analysis of Credit Proposal Chapter-5 TOTAL 447 333.55 4.50 120.55 1589.26 0.02 30.59 20.02 1280.86 133.50 473.81 427.08 94.75 264.

due to retention of profits. y The implementation of the project has commenced in the year 2005 & now it is in the advanced stages of completion.65 crore as against the net profit of Rs76.2009. TNW of the company has improved due to retention of profits in the system.04 450.Analysis of Credit Proposal Chapter-5 1.26 to 4. 30.98 66.11 crore for 31.2% as on 31.03. Sales of the company decreased by 7. the company has earned net profit of Rs66. The major details of the project are as under.2009 Particulars Total Income Expenditure PBT PAT Capital Reserve & surplus Net Block Amt in Crore of Rs 406.59 core Borrowing purpose The company is executive construction of township by the name of Prestige Shantiniketan spread over 105 acres comprising of 3023 residential apartments over 24 high rise towers in a total area of 62 lacs sg ft and commercial space of 36. TOL/TNW has come down from 5. 2.08.2009.50 540. 3.20% growth in turnover.30 during the year 2008-09.The total income for the first five months is Rs 406. company has been able to maintain this turnover more or less at the same level in the year 2008 and -09 also achieved 28.2008.62 Comments: During the first 5 months of the current financial year.2009.65 12.28 lacs sg ft. During the year 2007 -08.03.03. Financials of the company as on 31. y It is informed that the Developer Company has already sold 2060 apartments (4184574 sq ft of residential space) out of their entitlement of 2229 apartments and 2016898 sq ft of Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Almost 72% of the Project is completed as on Page 39 .58% growth in the profit by managing its costs effectively. the company has seen 123.06.61 78.59 327. when compared to previous year 31. Despite down turn in economic conditions.

and the developer is in need of funds to complete the project.72 crore. The Company has already received Rs. The company has approached various Banks for tie -up of the term loan requirement.Analysis of Credit Proposal Chapter-5 commercial space out of their entitlement of 3018534 sft. and the stock held will only be sold at a determined price. The total gross committed value of sales (residential + commercial) is Rs. He has got around 16 years of experience and he is associated with Prestige for the past 12 years.1644.43 crore & out of the same company has already received Rs. y The company is holding back the unsold stock of 169 apartments and Commercial space of 10. y The project is in the final stages of completion.82 crore. and the developer company has already spent an amount of Rs. PGDIM is heading the marketing team.00 crore. In addition to the primary security the company proposes to offer Collateral security worth Rs. Most of the residential stock of apartments unsold comprise premium s units i.1558. Balance of Rs.. The Company will offer charge on unsold stock aggregating to 1387707 sq ft of space. which generally fetch higher prices. He is Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 40 . which are going to be received upon completion of the project and handing over possession of the apartments and commercial spaces. which is the profit generation for the project. that the balance work would cost Rs. Swaroop Anish.1113.350 crore from Banks to complete the project. The expected realsable value of the i unsold stock is Rs. These have not been offered for sale initially and will be sold only on completion to realise better prices. Thus the balance receivables are Rs.43 crore.150 Crore to the lenders Key Persons of the Prestige Group Mr..1644. Hence.636 sft. Upper Floors/Pent Houses / Flats with better views like pool view etc.95 crore will flow either from the customers or through internal accruals/ promoters¶ contribution. out of the Gross committed sale value of Rs.350.43 crore.518.e. y Original cost of the project was estimated at Rs.445 crore.1126 crore.820. the company is looking for a short term loan of Rs.1126 crore from the buyers of the residential apartments and Commercial space as progress payments. As the receivables from the committed sales would flow only on completion of the project. 01. B Com. SWAROOP ANISH ± Senior VP (Business Development) Mr. there is a mismatch of receivables for the company at the moment. It is estimated by the company.84 crore. of Rs.

Venkat K. Busine parks. Narayana. Product planning.E. consultants. Marketing plans. acquisitions and mergers. Direct and Indirect Taxation for large as well as JV Projects which are into development of commercial complexes. GOPAL ± SR. VP (Projects & Planning) Mr. Project Budgeting and cost control and ensure quality in construction and timely delivery of all projects. Civil engineer. He is with Prestige for the past 17 years. Institution of Engineers is heading the Engineering/Construction/Planning/Value Engineering Division of Prestige Group. Project Planning and control. sales and growth of the market share. suppliers and subcontractors. Budgeting. SEZs. Arvind Pai. Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 41 . finance and PPMS and Expansion Strategies to other locations. VP (Legal) Mr. Planning of advertisements in coordination with the MD. Costing. He ss is responsible for collaborating with Private Equity Partners. NARAYANA ± CFO ± Special Projects Mr. Mr. CA. and townships.Analysis of Credit Proposal Chapter-5 instrumental for delivering higher customer satisfaction with utmost effectiveness. Fellow. CS. V. Review of drawings from quality and cost angle. Representing the company in court matters and close out of project documentations and sales Mr. He also heads the Corporate Secretarial Department and is responsible for the corporate structuring. CIE. His portfolio includes Corporate financing. ACIS (UK). Engineers at various levels. Gopal. His main responsibilities includes Identification/survey of marketing needs. he is responsible for overall functioning of the department of the Company and he is in the senior management level of the Company. He has got around 15 years of experience and he is with Prestige for the past 9 years. Preparation of customer documentation (Legal). He is heading Engineering team of about 225 His responsibilities includes Identifying/recommending. AICWA. LLB is heading the legal department as VP-Legal.VENKAT K. As head of the legal department. He is instrumental in introducing Private Equity investment in Prestige Group and entering into strategic Joint Ventures with reputed real estate investment conglomerates. T ARVIND PAI ± Sr. T. Mr. Treasury. B Com. B. architects. Co-ordination with engineering. is associated with Prestige for the past 6 years. MIS. His major responsibilities includes ensuring compliance of all statutory requirements at all stages.

As per the agreement between the developer and the Land owner. Project Details. Ltd represented by its Managing Director Mr. The representative of the company apprised that residential section shall be completed by March 2010 and commercial section by June 2010. designed to be a world class self contained mini city offering contemporary living and working ambiences that are on par with the world's best. It is spread over 105 acres of fresh. represented by its Managing Director Mr.D. K. Prestige Shantiniketan comprises 3023 residential apartments over 24 high±rise towers. 40 kms from International Airport and 30 kms from Hebbal Entire development work will have to be carried out by the Developer company and the land owner will be entitled to a share in both residential (1630535 sq ft consisting of 794 of apartments) and commercial (609469 sq ft) space. The project comprises of Residential and Commercial sections The residential section comprises of 24 towers of 18 floor and two towers of 12 floors. 20 are com plete and civil work in remaining towers was going on with 65% to 75% work already completed. retail and hospitality precincts. commercial. and Sy.2009. The land was handed over to the Developer M/S. Prestige Estates Projects Pvt. The Project was named Prestige Shantiniketan The project is located in Whitefield.12. in total area of 62 lakh sq ft and commercial space of 36.02. Prestige Shantiniketan is a unique township. Out of 24 towers.28 lakh sq ft. The appraisal memorandum has been prepared by Syndicate Bank Details of site inspection The project site was inspected by the Branch Head along with Executive (Credit) A&AP on 23. Adikesavulu ( referred to as Land Owner ) and M/s. M/s. which has appraised / prepared the Project Report. The possessions for theresidential units have been commenced from December. demarcated into residential. Chaitanya Properties Pvt.No.129/2 and 130 of Hoodly a Village. green spaces.Irfan Razack ( referred to as the Developers ) entered in to an agreement on 05. Ltd.PEPPL for development. Bangalore. 18 kms from the city centre.09 and shall be made in phased manner.Analysis of Credit Proposal Chapter-5 Name of the Bank/ Financial Institution / Consultant. Krishnarajapuram Hobli.2005 and for development of land measuring 94 acres and 1. the developer is entitled for 2229 apartments and the Page 42 Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals . out of the 3023 residential apartments.82 guntas situated in Sadaramangal Village. It was observed that the work at the project site was going in full swing.

commercial space. out of total commercial space of 36.28 lakh sq ft. ft. the developer is entitled for 2229 apartments and the land owner is entitled for 794 apartments. per month.18 lakh sft and the land owner is entitled for 6. CBD of Hyderabad. Further.82 crore.06. more than 80% area has been constructed. in total area of 62 lakh sq ft out of which the commercial space is 36.445 crore and towards this the company is looking for a Debt of Rs. Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 43 . backed by lower home loan interest rates as well as better job security owing to higher growth in the economy.7%). out of the 3023 residential apartments. which either have limited supply or have relatively attractive Lease rentals in the range of Rs 25-40 per sq. Hence. the developer is entitled for 30. As per the agreement between the developer and the Land owner.28 lakh sft. are expected to see the least amount of decline in the range of 17-23 per cent from the peak in the first half of 2008 to the end of 2 009. Present project. it is informed by the co mpany that they have already spent Rs.25 lakh sq ft of space inclusive of residential space.Analysis of Credit Proposal Chapter-5 land owner is entitled for 794 apartments. Out of the total project cost of Rs. out of 9829183 sq ft area proposed.2009. and the land owner is entitled for 6. Prestige Shantiniketan comprises 3023 residential apartments over 24 high±rise towers.17 lakh sq. ft (66. and increase during the second half of the year. Real Estate (Outlook: 2009-2011) CRISIL Research believes that demand for houses will improve in 2010. ft (66. The company has already sold as many as 2060 apartments (91.84 crore as on 30. The present project is for completion of balance of the construction work involving development of around 9. out of total commercial space of 36.1558.350 crore. and other finishing work.5%) out of total 2229 available to them. the developer is entitled for 30.18 lakh Sft.1113.17 lakh sq. The cost for the balance of construction work to complete the project is estimated by the company at Rs.5%) out of total 2229 available to them. The project µPrestige Shantiniketan¶ was started in the year 2005 and as on date.10 lakh sft.28 lakh sft. The company (developer) has informed that they have already sold commercial space to an extent of 20. club house.10 lakh sft. CRISIL Research believes that the micro-markets of the Central Business District (CBD) of Bengaluru. the Electronic City (Bengaluru) and MarathalliSarjapur (Bengaluru). Further.7%). central park. The company has already sold as many as 2060 apartments (91. The company (developer) has informed that they h already sold ave commercial space to an extent of 20. capital values are likely to stabilise in the first half of 2010.

This one-of-its-kind project is the most ambitious project of Prestige Group. designed to be a world class self contained mini city offering contemporary living and working ambiences that are the best.The total project cost inclusive of space already developed and committed to sell for the Prestige Shantiniketan is given below Cost of the project Rs. well-paved.180 3. In crore The breakup of space in terms of sq ft already developed and committed for sale and the balance space to be constructed/partially finished stock position is given below: (Rs. tinkling water bodies. It is spread over 105 acres of fresh.023 3. The cost for the balance of construction work to complete the project is estimated by the company at Rs.28 Internal accruals Advance from Prospective Admin & Selling Expenses Total project cost 37. The expansive residential precinct. the leading developers in South India. club house and other finishing work.Analysis of Credit Proposal Chapter-5 The present project is for completion of balance of the construction work involving around 16 lakh sq ft of space inclusive of mall building.which are integral to life in a city. The project envisages the best architecture. the multiplex and the business precinct .628. traffic free precincts.82 80.82 1558. opento-the-sky spaces. World-class Convention Centre. At the same time all these facilities will be in the vicinity of preliminary amenities like. design and lifestyles.82 customers Total means of finance 1478. the mall. commercial.350 crore. In crore) Residential Particulars Area (Sq ft) No.829. retail and hospitality precincts. crore Construction cost 1521.00 In Means of finance Rs.003 9. Five Screen Multiplex with truly global lifestyle are designed in such a way that 75% of total land area is comprised of fresh. The project will have the amenities such as play grounds. green lawns. Prestige Shantiniketan is a unique township. proposed Forum Mall. demarcated into residential.445 crore and towards this the company is looking for a Debt of Rs. leisure spaces. and a huge central park.201.183 Page 44 Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals . Units of Area (Sq ft) Commercial Total Area ft) (Sq Total Area (Sq ft) 6. green spaces. Business Centre.54 1558.

018.558.201.77 37.628.201.180 917.071 169 1.534 7.645 2.179 Less : Sold by Builders Stock finished) held (partially 4.001.180 943.54 Total Project cost 6.016.(Cr) Area (Sq ft) Amount in Rs.003 615.184. 9 months repayment COST The break up of space already developed and committed for sale and the cost to be spent to complete the project is given below: Residential Particulars Area (Sq ft) Amount in Rs.50% 12 months moratorium.28 Admin & Selling Expenses 25. (Rs) Construction cost per Sft.630. (Rs) 1522 1696 1480 1663 Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 45 .54 3.574 2.060 2.589.28 1.(Cr) Commercial Total Amount in Rs.003 603.628.387.77 3.(Cr) Construction cost 6.50% Mar' 10 12.535 794 609.636 1.229 3.51 1521.50% Mar' 10 12.201.570.469 2.898 6.77 11.82 Cost per Sft.004 Builders (PEPPL) Share 4.707 Expected project completion date Rate of interest Repayment frequency Mar' 10 12.472 386.240.Analysis of Credit Proposal Chapter-5 Less: Land owners share 1.

224 crore is proposed towards commercial completion. 2009 & Selling cost 703. In crore 103.11 444.96 1.113.35 10.84 Construction cost to be spent 220.25 390.98 The break up of the project cost (present project) to be incurred is given below: Particulars Construction cost Admin Expenses Total Project cost & Selling Residential 214.03 220.43 722.445 crore.98 The cost for the company is mainly on account of civil works & minor amount towards administration and selling expenditure.221 crore is proposed to be spent towards residential construction and Rs.14 220.80 20.87 17.66 224.093.32 Total 427.63 0. The break-up of the cost element is given below: Sl.16 1. No 1 2 3 Cost Head Civil Works Finishes Services Total Say 445 crore Comments on each component of the project cost: Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Rs. The estimated total cost to be spent to complete the project is Rs.09 444.86 121.32 444.88 390.98 Page 46 .97 224.Analysis of Credit Proposal Chapter-5 Construction cost incurred Admin incurred WIP as on 30th June. As per the information provided by the company an amount of Rs.52 6.41 19.66 Commercial 213.

As the cost of construction includes all expenses. Administrative & Selling costs: Total admin & Selling cost estimated at the time of conceivement of the project were Rs. and also keeping in view that the committed sales have occurred at more than 25% of the cost price. when the project was conceived. The balance cost of Rs.25. the margin for the total project cost is 77. However a suitable condition shall Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 47 .445.77 crore for the residential units and Rs.77 crore for the Commercial spaces.2009. to finish and handover thespaces is Rs.445 crore to complete the project & the company expects the same to be funded through a combination of funds from internal accruals and advance from prospective customers and term loan from various banks.1113.But the present project is for funding the balance of the construction cost of Rs.0. a sum of Rs.80 crore only incurred.11 crore is reasonable for the balance stock of residential units and commercial space marketing.444. The remaining cost of the works.17. is completed as on 30.00 crore is proposed to be funded as under: Particulars Equity Term Loan Promoter¶s Contribution Advance from Prospective Customer/Internal accruals TOTAL 95.for the commercial space.Analysis of Credit Proposal Chapter-5 1.54% .98 crore.06. and Rs.00 445.for the commercial space.82 crore. Means of Finance The balance of project cost of Rs. The total estimated cost was Rs. 2. Out of the residential estimated cost. work worth Rs.2923.00 crore and advance from customers of Rs1128. cost of construction estimated for the project in the year 2005. the construction cost at the above rates can be accepted as reasonable.63 crore is already incurred and in respect of commercial space.00 Sources for funding The total cost of the project when envisaged was Rs1558.11.1558.2008 for Residential units. other than administrative and selling. a sum of Rs.00 Total Nil 350.2521 for the Residential units ( all Inclusive ) and Rs.83 crore.19. was Rs.1999.84 crore. out of which. Construction Cost : The per Sft.82 crore and considering the promoters contribution of Rs80. and accordingly the project was launched for sale at Rs.

Debt: Out of estimated total construction cost of 1558 crore. the company is holding back. Financial projections. it was envisaged by the company.445 crore to be spent to complete the project. to bridge the gap between receivables and balance of cost to be spent. leaving an amount of Rs.5% interest. of receivables and the company needs to spend a minimum amount of Rs.445 cores. Originally. that the project would be completed out of the receivables only. Out of the requirement of Rs. The company has already received around 69% of the sale amount from the respective buyers. ESTIMATED REVENUE : Pariculars Residential Amount Area (Sq fts) Commited Gross Sales Rate per Sft.87 2. as per the schedule. As such there is a mismatch.Analysis of Credit Proposal Chapter-5 stipulated that at least 50% of the promoters¶ contribution/ Advance from Prospective Customer shall be brought in upfront by the company.016. The company is requesting for an amount of Rs.(Rs) Gross value (A) Committed sale 4.(Cr) Expected Sales Rate per 4500 Page 48 Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals . the company is requesting a term debt of Rs.184.56 1644.445 crore to complete and handover the possession to the respective buyers. 12 months moratorium and 9 months repayment period.923 in Rs. against the security of unsold units and commercial area of the project.574 1054.43 2. stock of premium pent houses unsold. However due to the prevailing market conditions and subdued activity in the premium housing segment.521 2. as the developers normally sell such premium houses only on completion of the Project.e.350 crore.898 589. with a door to door tenor of 21 months i. Rs.(Cr) Area (Sq fts) Commercial Amount in Rs.(Cr) Total Amount in Rs..350 crore of term debt at 12.1113 cores is said to have been already incurred on the project. and the balance amo would be received from the respective buyers at unt the time of taking possession of the units / commercial spaces.

72 Total Revenue(A+B) 4.09 15.500 Sale value 386.00 2.071 233.76 1.001.39 880.19 VAT & Service Tax 25.19 57. 2009 (C) Balance receivables against committed sales (D)=(A-C) 224.500 4.87 293.20 820.(Rs) Weighted average selling rate considered 5.Analysis of Credit Proposal Sft.11 Value of Upgradation - 57. It is informed Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 49 .56 518.00 Total receivables (B+D) 458.43 830.534 1.02 18.570.39 3.86 Expected realisable value of stock (B) 386.071 204.15 Amount received upto 30th June.00 BESCOM / BWSSB charges 3.2521 per sq ft & for commercial at Rs.52 1. The Committed gross sales rate for residential is Rs..74 655.25 87.56 Value of Car parks - 2.001.636 450.4500 per sq ft.176.00 296.00 1126.The company has assumed average selling price/ rate for residential space in the range between Rs.61 62.2923 per sq ft.288.339.645 1.4500 to 5500 per sq ft & for commercial @ Rs.305 5500 Chapter-5 4.15 Revenues: The proposed revenues will accrue from the progress payments from the already committed sales and sale of balance of commercial space & sale of balance of residential space.018.82 1.636 587.76 2.465.

43 crore and out of which.1126 crore.518. the repayment of the debt will be made from the sale proceeds of the space. The gross committed sales value is Rs. The initial launch price for residential space was at Rs.1850 per sq ft in 2005 which later on increased due to the market conditions.75.2009 audited B/S Term Debt Existing Term Debt of 350. Company has already committed for sale of 4184574 sq ft of Residential space and 2016898 sq ft of commercial space.89 31.54 company as on 31. Debt Equity Ratio for the company as a whole.03. is calculated as per the following Particulars Rs.43 crore is estimated to be received from July 2009 till January 2011 in a phased manner along with the sale proceeds of the balance space (386071 sq ft of residential space and 1001636 sq ft of commercial space) proposed to be sold.00 he 500. Normally a pent house costs more than an ordinary flat building.54 1. o The project was launched in the year 2005 when the market prices were not too high however the prices skyrocketed during 2006 to 2008. The balance amount of Rs. In crores TNW of the company as on 485. for the company as a whole Present Status of the project.75 The debt Equity Ratio is satisfactory at 1.03.1644. the company has already received Rs. o The balance of the commercial space will fetch more price as already many other players have purchased 2/3 rd of the commercial space Cash flow during repayment period: As the project involves sale of entire space developed/to be developed. Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 50 .2009 Total Term Debt Debt Equity Ratio 850.Analysis of Credit Proposal Chapter-5 by the company that the reason for assuming higher sales price for the proposed sale of stock/ space as compared to the sales price already committed is as below: o The stock of residential flats mainly includes only pent houses located at the top floors of each tower.

The repayment of the same is proposed from the term loan to be raised from Banks for the project Debt Draw Down schedule: Rs. Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 51 .071 Sft. expenses and other monies and all other amounts stipulated and payable to the Lenders of the Project of the company. the reliance is only on the cash flow statementsas submitted by the company. The said loan carries interest at 24%.636 Sft.89 38. after a moratorium period of 12 months. In crore Particulars Jan2010 150 Feb-10 50 March10 50 Dec-09 50 TOTAL Debt drawl 350 Debt service Coverage Ratio: The ratio has no relevance here.89 38.Analysis of Credit Proposal Chapter-5 Due to delay in the financial closure for the proposed debt of Rs350. As the company is escrowing the cash flows with the leader of consortium.89 350 Security Coverage The term Debt Facility.89 38. thecompany as an interim measure has obtained Bridge loan of Rs180.00 crore from India Bulls so that the construction activity is not hampered.01.89 38.) and commercial spaces ( 10. ) pertaining to the Developer in the prestige Shantiniketan Project. Hence. since the Term Debt is proposed to be cleared in 9 months. Debt Repayment schedule: Rs.00 crore. charges.86. with a door to door tenor of 21 months.89 38. the control mechanism shall be exercised by the leader of the consortium by getting the receivables assigned from the buyers¶/buyers¶ bankers. as most o the sales are backed by f Housing Loans. costs.89 38.89 38.89 38. shall be secured by: y A first pari-passu charge on all the unsold residential units (169 in an area of 3. In crore MarParticulars 11 April11 May11 June11 July11 Aug11 Sept11 Oct11 Nov11 TOTAL Repayment 38.

regularly by the company. which generally fetch higher price.. Lenders shall obtain guarantee from the partnership firm µPrestige Realty Ventures¶ before release of the facility.e.5500. 3.2521 ( all inclusive ) for residential units and Rs. The company has assumed Rs. Legal opinion shall be obtained on the property proposed to be mortgaged as collateral security 4.No. 2. Comments: Most of the unsold residential units comprise premium units i. These units have not been initially released for sale in order to realise higher prices on completion of the project. y Collateral security of property(Land) situated at Sy. pertaining to the Developer (the Company) shall be obtained and valid and enforceable mortgage shall be created. The company has assumed Rs. Upper Floors/Pent Houses/Flats with better views like pool view etc.150 crore The collateral security (land) is reported to be held in the name of Prestige Realty Ventures a partnership firm.for the residential units based on the prevailing market rates. Legal opinion on the mortgage ability of the unsold residential units and commercial space.Analysis of Credit Proposal y Chapter-5 A first pari passu charge on the escrow account to be opened with the leader of the consortium wherein all the receivables outstanding out of the committed sales of the Residential units and commercial spaces will be deposited.13. In addition to above the company shall fulfil following conditions: 1.for the commercial space. Navrathna Agrahara Village.2923. The committed sales have happened at Rs.4500 Rs. Minimum Security coverage ratio of 2. The estimated rates can be accepted in view of the same.4500 for the commercial space. the company is confident of selling the balance of stock at the envisaged rates. Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 52 . As such. Jala Hobli. An undertaking letter shall be obtained from the company undertaking to deposit all the receivables in the escrow account to be opened with the leader of the consortium.1 shall be maintained till the repayment of entire Loan proposed. Bangalore North taluk at Rs.

Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 53 . Five Screen Multiplex. high speed elevators. including Our Bank as under. entertainment.Analysis of Credit Proposal Chapter-5 Present position of tie up The company is proposing to tie-up the debt from the various banks. Name of Bank United Bank of India Amount in crore 75 Andhara Bank 75 Syndicate Bank 100 J&K Bank Yes Bank Total 100 125 475 United Bank of India and Andhra Bank has already sanctioned term loan of Rs75. state of art Convention Centre.Signature Tower. 100% power back -up. a world class compendium of hospitality. which offers 3 million plus Sft. Yes Bank has agreed in principle to sanction term loan of Rs125 crore. of office and commercial space   Retail & Hospitality space ± has an entertainment and retail complex Global Lounge. contains four towers in total. It has further been reported that proposal with Syndicate Bank for sanction of term loan of Rs100. containing from 2 to 4 bedrooms with general facilities such as security system.00 Crore each. continuous supply of drinking water. well designed apartments in a different range of sizes. Others - (a) Central Park ± internationally styled large. PROJECT SPECIFICATION & FACILITIES:  Residential precinct ±(Soul Space) 3023 apartments over 24 high-rise towers. green space named Central Park is being designed over 10 acres of land along the lines of New York¶s Central park. two towers of 12 levels tall. which will comprise Forum Mall. retail and general business offerings.World Trade Centre tower and other two towers of 16 levels tall . broadband connection and also special faclity of i gas piping for supply of cooking gas.  Commercial complex ± Commercial Crescent.00 Crore is at final stage. .

Additionally there is full DG power back up. Additionally water supplies can be augmented through bore wells. LPG yard ± Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 54 . Urban Den facilitates well equipped fitness centre. More than 75% of the sale proceeds have already been received from the customers. restaurant. Post dated cheques have been received from the customers towards the balance 25% of consideration payable. sauna. Electricity ± This project has its own 66KVA Electric Sub-station. indoor and outdoor games and also a party hall. STPs ± The company for the project shall develop its own set of SewageTreatment Plants. Commercial: The commercial complex to the tune of 67% is already sold. lounge library. for which work is under progress. The premium apartments and pent houses are held as stocks which have agood demand and can fetch a premium price.Analysis of Credit Proposal Chapter-5 (b) Club House ± named. for which civil works are completed and installation works are in progress. The work is in progress and sub-station is expected to be ready by this year end. The water will be supplied by BWSSB for which necessary inspections are carried out and deposits have been paid. strategy. The strategy adopted to sell the remaining portion is as follows:  Tap existing relationships & expansion requirements  Identifying new clients directly and through references  Participation in industry specific trade shows if required  Referrals The referrals or advertisement is adopted as a measure of Works under progress: Water ± The main underground sump along with sumps for groups of towers is under construction. The treated water will be recycled for flushing and Parks and Plants. MARKETING STRATERGY Residential: Residential Units to the tune of 92% are already sold in record time. gymnasium.

the company could not complete the project as envisaged.5 months . y y y y y Delay in obtaining approval of Ministry of Environment Truck Strike (around) Raw material shortage Grace Period provided in the agreement Extension period agreed by the customers through letter Total .5 months It is informed by the company that the above mentioned delay will fall under force majeure clause mentioned in the agreement. The required approvals that were to be taken by the Company and their respective status are as under: Sl No. as the same was in built in the agreements entered in to between the com pany and the purchasers. The reasons for delays are enumerated below.2.350 crores. The original envisaged completion date was June 2008 and due to certain unavoidable circumstances.9 months .3 months .8 months 25. It is informed that they are no claims against the company for the delay. The work is under progress and arrangement for gas supply has been done with HPCL.Analysis of Credit Proposal Chapter-5 The Residential development has centralized LPG yard and piped gas will be supp to the lied Residents. STATUS OF APPROVALS: Approvals are required from various Statutory and Government Agencies for setting up the facilities. Implementation Schedule. The balance work of the project is proposed to be completed in a time schedule of 9 months from the date of financial closure (Zero Date) of the Term Debt of Rs. 1 2 3 Type of Approval Ministry of Environment & Forests Airport Authority of India Karnataka Board Bangalore Water Supply & Sewerage Board Bharat Sanchar Nigam Ltd Bangalore Electricity Supply Co Ltd State Pollution Control Status Obtained Obtained Obtained 4 5 6 Obtained Obtained Obtained Page 55 Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals .3 months .

4. and received Rs. The company has all the necessary statutory approvals for the project. the company has already received Rs. Already around 75% of the project is complete.1644. It has already completed 184 projects. This factor is of temporary nature and the demand is picking up since couple of months. Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 56 . 3. and committed receivables of Rs. As such.1126 crores against these sales and the receivables from the sold units will be sufficient to complete the project. That is to say.518. The project is executed by a reputed 1. the company is having committed sales.Analysis of Credit Proposal 7 8 Karnataka Fire & Emergency Services Bangalore Development Authority Chapter-5 Obtained Obtained It is also informed by the company that all the approvals have been obtained and no further approvals are required SWOT Analysis: The SWOT analysis for the project is as under STRENGTHS WEAKNESSES 1. 2. It has credibility and is able to absorb the best clients in the market which includes 500 fortune companies global economic recession.43 crores. Already 2/3 of the commercial space and more than 92% of the residential space is booked.43 crores. The company has already made committed sales of Rs. Excess of supply over demand due to group who are already in this field and have executed many other projects in Bangalore. The Prestige Group is well experienced in property development activity.1126 crores against the committed sales.

Most of the towers in the project are completed and 92% of residential & 67% of commercial complex have already been sold. PSUs. a huge township consisting of residential 2.Analysis of Credit Proposal Chapter-5 5. Residential & commercial space also growing very fast. the company is confident of completing the project as envisaged Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 57 . As such. commercial complexes. Almost 60% of the buyers of the housing units. world class convention centre and multiplex with true global style. central park. The slowing down of US & global precinct. the demand for retail business are associated with the business of the company and objective of the proposed project. The company has taken post dated cheques for balance payment OPPORTUNITIES THREATS 1. The challenge lies in completing this massive project within the timelines The company is known for its timely execution and delivery of the projects. The project is one-of-its kind. 2. The inherent threats to Software/ IT & for MNCs. Bangalore being a favorite destination 1. mall. Business Houses due to its easy approach and planned infrastructure. economy and its effect on Retail/ IT/ ITES/ BPO sector in India will have an adverse effect on the profitability of the company. have availed housing loans which assures timely receipt of payment 7. 6. 3. club house.

they are expected to bring in adequate project management skills for the smooth completion of the balance of the project. Risk Perception : LOW Pre-Completion Risks: Allocated To Proposed Mitigation Mechanism Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 58 . Considering the promoters' vast experience in the line of activity. Chapter-5 Risk Analysis: The analysis of various risks and the proposed mitigation are summarized below: Risk Factor Management Risks: Promoters¶ Experience PEPPL The group is in existence for more than two decades.Analysis of Credit Proposal now and deliver.

and 20. is not foreseen as a weakness for the company. From unsecured borrowings. the project has already generated profits of Rs. and receipt of Rs. or 2.95 crores is proposed to be met by ± 1. who make stage wise payments.95 crore will not pose any problem. receivables from customers. or 3.06.2009.175 crore till 30.898 Sft.189 crore as on 30. of commercial space and received an amount of Rs. As such. as explained by the company.82 crore.2009. contribution of Rs.534 Sft. of commercial space out of their share of 30. As against a project cost of Rs.Analysis of Credit Proposal Risk Factor Allocated To Chapter-5 Proposed Mitigation Mechanism The promoters have sold out 2060 residential units out of their share of 2229 units.350 crores and Rs.1126 crores out of the committed sales and spent the entire amount on the Project.18.16. Balance of Project cost is estimated at Rs.1126 crore is already received as Infusion of margin PEPPL for the project - progress payment from the buyers.95 crore in the next few months to complete the balance work.445 crores out of which they are seeking a term debt of Rs. Risk Perception : MEDIUM Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 59 . More so.06. which is lying in the form of unsold stock of re sidential units and commercial space. Promoters bring in additional funds through internal accruals as and when required. Such stock is valuated at Rs.1558. an amount of Rs.

Risk Perception : MEDIUM However. Considering the past performance of the group the risk perceived is low. United Bank of India and Andhra Bank has already committed to an extent of Rs. an undertaking shall be obtained from the company undertaking that the company shall bear any cost over run in the estimated cost of completion of the project. Risk Perception : LOW Financial Closure PEPPL Risk Total debt required for the project is Rs.00 crore. the company does not foresee any problem in achieving the financial closure.Analysis of Credit Proposal Risk Factor Cost Overrun Allocated To PEPPL Chapter-5 Proposed Mitigation Mechanism The project is in final stages of completion and the estimates are submitted now. The project is estimated to be completed by March 2010. no cost over run is envisaged at this moment. bank Completion of the PEPPL Project Contractors / The Group has successfully implemented many Residential. Considering the reputation of the company.75 crores each for completion of the project. As such. Risk Perception: MEDIUM Post-Completion Risks: Environmental/ Safety Risks PEPPL PEPPL has received all the approvals and hence no problem is envisaged in this regard. commercial projects. without resorting to any further borrowings. and the company is approaching various Bankers for the same.350. Risk Perception: LOW Market Risks: Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 60 .

The company has already sold out 2060 residential units out of 2229. also. out of 30. no major risk is perceived. commercial. Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 61 .18.534 Sft.03. the receivables of the already committed sales would be sufficient to service the debt.2008 and 31. of commercial space and hence selling the balance stock of premium segment of residential units and commercial spaces. the Risk score rating of the company arrives at JKBLC-1 The risk score achieved on different parameters is as under. and 20. Lenders may stipulate a condition for the same.2007.0 3.2009 along with the subjective parameters submitted by the branch .898 Sft. others etc. Even other wise. Risk Perception: LOW Risk Rating: Based on the financials of the company as on 31. 31. at a very competitive and affordable price. Risk Perception : MEDIUM Pricing Risk PEPPL The company has already committed sale of around 81% of the project space. The stock held by the company is premium segment and they are confident of selling the same at a determined price.03. The group has already completed more than 180 projects in various areas like Residential.Analysis of Credit Proposal Risk Factor Off take Risk Allocated To PEPPL Chapter-5 Proposed Mitigation Mechanism The promoters are in the real estate business for more than two decades & have established themselves in the industry. Risk Perception : LOW Other Risks: Force Majeure PEPPL Insurers / Adequate insurance cover would be obtained for insurable force Majeure risks.16.

03% Chapter-5 Pricing: As per the Risk rating score.00 0.00 0.33 1.81% To tal 100.00 100.00 100.00 100.00 2. the recommendation for interest rate of PLR is endorsed for approval.00 2. The branch has recommended the facility at interest rate of PLR.Analysis of Credit Proposal Financial risk score Management risk score Business risk score Industry Risk Basic borrower risk score Project Risk Basic borrower risk score (With Project) Conduct of account risk score Final Risk Grade Probability of Default 3. not less than 12.00 2.e.38 1. the interest rate on the facility is to be charged at PLR i.75%. no Name of the Company Existing exposure FB NF B Prestige Estates Projects (P) Ltd Exposure details Exposure(existing and proposed) to the Applicant Borrower as a % of Bank¶s Net worth 3.00 1.00 JKB-LC-1 0. Bank¶s exposure to the Applicant Borrower and the Group (Amount in crores of Rs.00 FB NFB Total FB NFB Total Proposed exposure Total Exposure Particulars Information on exposure to the Borrower/Group Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 62 .) Sl.38 1.

A The current ratio is marginally below the benchmark level. DER DSCR Yes Yes N.A Credit Appraisal: An Evaluation and Analysis of Corporate Lending Proposals Page 63 .Analysis of Credit Proposal Compliance of Exposure norms Applicant Group Applicant Borrower Group Borrower& the Whether complied with Yes Yes Chapter-5 Reasons for recommending the facility in case of deviations NA N.A Status of Compliance of lending policy guidelines Key parameters Whether with complied Reasons for recommending the facility in case of deviations TOL / TNW Current Ratio Yes No N. However adequate security cover has been proposed for the facility.A N.A Risk score Yes N.

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer: Get 4 months of Scribd and The New York Times for just $1.87 per week!

Master Your Semester with a Special Offer from Scribd & The New York Times