credit rating agencies

Credit Ratings Methodology

Business Risk Profile

Analysis

FinancialRisk Profile

Analysis

Business Risk

Country Risk

Company Position

Industry Factors

Profitability / Peer GroupComparisons

• Political • Economic• Industry – Specific factors• Foreign exchange

• Industry Trends• Industry Structure• Market Size• Growth Potential• Competition• Changing Technology

• Competitive Factors• Market position• Keys to Success• Size• Diversification• Management

• Validation of “Company Position”

• Trends• Quality of Earnings

& Analytical adjustments• Peer Group Comparisons

FinancialRisk

Accounting

Cash Flow Adequacy

Governance Risk

Liquidity / Short-term

Factors

• Accounting Regime • Reporting & Disclosure• Analytical adjustments

• Ownership• Board of directors• Management practices• Financial Strategy• Risk Tolerance• Accounting Practices• Internal controls

• Focus on debt service capability

• Analytical distinctions with profitability

• Cash flow measures / • ratios

• Operating sources & uses Of liquidity

• Debt Characteristics• Bank credit facilities

CRISIL(CREDIT RATING AND INFORMATION SERVICES OF INDIA LTD.)

A global analytical company.

Incorporated in year 1987.

Provides ratings research and policy advisory services.

CRISIL is India's leading rating agency, and is the fourth largest in

the world.

Offerings-real Timenews, Analysed data , incisive insights & opinions

&expert advice.

So far CRISIL has 30000 debt instruments covering the entire debt

market.

DEBT OBLIGATIONS RATED BY CRISIL INCLUDE

FUNCTIONS OF CRISIL

CRISIL LONG TERM RATING SCALE

CRISIL SHORT TERM RATING SCALE

ICRA was set up by IFCI on 16th january 1991.

A public limited company.

An authorized share capital of rs.10crores, rs. 5 crores is paid up.

To provide information & guidance to investors.

ICRA’S major shareholders IFCI (26%).

Determines the credit risk associated with a debt instrument.

ICRA : INVESTMENT INFORMATION & CREDIT RATING AGENCY OF INDIA LIMITED.

ICRA LONG TERM RATING SCALE

ICRA SHORT TERM RATING SCALE