term loan review format

7/29/2019 Term Loan Review Format

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CREDIT ADMINISTRATION DEPARTMENT

FORMAT FOR REVIEW OF TERM LOAN

SANCTIONING AUTHORITY:

MCB/CMD /ED/Others

FOR APPROVAL AGENDA ITEM No.

REF. NO. DATE

The proposal falls under the powersof

Head Office

Date of receipt of Proposal 29.10.2011Date of receipt of RO

recommendationDate of receipt of FGMrecommendation

Date of receipt of last reply

ED ED CMD

Date : 04.11.2011

Name of the Account :

Branch :Region :Line of activity :

Date of sanction & Authority :

Date of last review & authority

Validity extended, if any :

Asset Classification :Banking/ Financing arrangement :

Lead Bank, if consortium :

Our Banks share in consortium :

Credit Rating

Aggregate Group Exposure(from our Bank)


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1. SUMMARY OF THE PROPOSAL:

Memorandum for

a. Review of Term Loans:(Rs. in Crores)

b. Concessions/ Value of the Account

Facility &Limit

ExistingRate

ProposedRate

ApplicableRate

Amount of Income Earned

Last Year Current yearupto30.09.2011

Rate of interest

(a) Interest Income

Review Fee (sanctionamendment charges)

(b) Non InterestIncome

Total Income (a + b)

c. Confirmation / Ratification of action, if any:

Confirmation/ Ratification sought Comments with Justification

2. BORROWERS PROFILE:-

Group Name RELIGARE

Address: Corporate Office

Regd. Office

Constitution & Date of constitution / Commencementof business

Dealing with the bank since

Management/Main Person behind the Group 1.

Net Worth of the Borrower as on 31.03.2011

Nature of facilities ExistingLimit

Balance O/s ason 30.09.11

Overdue,If any

Proposed Limit

Term Loan-I

Term Loan-II

Total


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Whether Priority sector / Export/ Others

Type & Size of industry

Industry/Trade to which the borrower belongs

Latest Market value of the Share (if listed) of the

borrower as on

a. NAMES OF PARTNERS/DIRECTORS:-

Name Status Net worth As on

1. Whether the Borrower / directors / partners are inDefaulters/ Willful Defaulters List of RBI/CIBIL/ ECGCSAL/ Caution List (If yes, give details)

2. If any of the directors/ partners connected in the past withany NPA/ OTS/ Compromise/ unscrupulous defaulters

3. If any of them, related to Directors/Senior Officers of ourbank

4. Management Change since last sanction, if any5. Succession Plan

b. Share Holding Pattern as on:

Name of the Promoters/

Major Share holders

No. of shares Rs. In Crores. % Holding

Promoters Holding

FIs/ Mutual Funds/UTI/Banks/FIIs

NRIs/OCBsPublic

Others

Total

c.Whether Shares pledged to any Bank/FI/others NoIf yes, Percentage of shares pledged


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Institution

Purpose

3. MANAGEMENT (MAIN PROMOTERS AND THEIR EXPERIENCE):-

Present composition of the Management/ Board of Directors with their Brief profile is given below:

S.No. Name of the Director Designation Brief Details

1.

2.

3.

4.

4.1 Key Management Personnel

Name Designation Educational

Qualification

Date of

joining

Previous

employer

4. BRIEF HISTORY OF THE PROJECT INCLUDING PURPOSE FOR WHICH THE TERM LOAN(S)BEING REVIEWED WAS/ WERE SANCTIONED:-


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5. CREDIT FACILITIES SANCTIONED TO THE BORROWER BY OTHER BANKS/ FINANCIALINSTITUTIONS (including Lease, ICDs, Corporate Loans, Debentures etc.):-

6. DETAILS OF CREDIT FACILITIES SANCTIONED TO GROUP CONCERNS BY OUR BANK:(Rs. in crore)

Sr.No.

Name of Concern Term Loan(o/s)

Fundbased

Non-fundbased

Total

7. COMPLIANCE WITH EXPOSURE NORMS:

(Rs. in Crore)IndividualBorrower

Group

Permissible Exposure Ceiling as on 31s March_____

Internal Exposure Limit for the Borrower

(i) Fund Based Working Capital Limits (100%)

(ii) Non-Fund Based (100%)

(iii) Term Loans

(iv) Investment in Shares/Bonds of the borrower/Group(100%)

(v) Credit Equivalent of Forward Contract Limit (@ 5%)

TOTAL EXPOSURE

(- Permissible Exposure Limit shall be 15% of the Banks Capital Funds for Individual Borrower and 40% for Group. - Internal Exposure Limit as per Loan Policy based on Constitution of the Borrower to be mentioned.)

8. OPERATING PERFORMANCE AND FINANCIAL POSITION OF THE BORROWER:-

(Rs. in Crores)

For the year ended / ending

Gross Income

- Income from financial activities- Other Income

Net Sales (net of excise duty)

% growth


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For the year ended / ending

Other Income

EBIDTA / PBIDTA

Profit Before Tax

Profit After Tax

Authorized Capital

Paid up Capital

Reserves & Surplus

Intangible Assets

Share Application Money

a) Tangible Net Worth (TNW)b) Deferred Tax Liability/(Asset)c) Investment in group concernsd) Adjusted TNW (a + b - c)

Unsecured Loans

Term Loans from Banks / FIs

Other Term Liabilities

Total Term Liabilities

Capital Employed

Net Block

Total Non Current Assets

Total Current Assets

Total Current Liabilities

Net Working Capital

Ratios:

Current Ratio

Debt Equity Ratio

TL / Adj. TNW

Leverage Ratio (TOL/TNW)

TOL/ Adj. TNW

Net profit to sales (%)

12. 1 CRITICAL EXAMINATION & ANALYSIS OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

Tangible Net worth


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Term liabilities

Unsecured Loans

Net Block

Intangibles

Non Current Assets/Investments

Current Assets

Current Liabilities

Current Liabilities mainly include Short Term Bank Borrowings, Trade Creditors, creditors for expenses, etc. and othe

current liabilities and provisions. The total current liabilities came down to Rs. 2639.68 Crore as on 31.09.2011 as

compared to Rs. 3800.74 Crore as on 31.03.2010 due to decline in other current liabilities which mainly include working

capital and short term borrowing from bank.

Net Working Capital

Profitability

Ratio Analysis


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a DSCR

Description Estimated at the time ofsanction for the year

ended

Actual as per auditedfigures for the year ended

PAT

Depreciation

Interest on TL

Total Cash Inflows - A

Interest on TL

Installment of TL

Total Cash Outflow B

DSCR A/B

Interest coverage ratio (4/5)

b DSCR

c. Whether the Balance Sheet is qualified: No

AuditorsQualification

Effect on NetWorth

CompanysClarification

Remarks/PossibleRemedies

d. Details of Liabilities not accounted for/Contingent liabilities:(Amt. in Crores)

Particulars Amount RemarksDisputed taxes

Corporate guarantee

Bank guarantee

Pending court cases

Claim against the company noacknowledged as debt

Assignment of receivables

Inland bills purchased/discounted by bank

e. Information on litigation, if any, against the borrower / partners/ directors:

Not available.

f. Overall likely impact of the above on the financial position of the borrowing unit:


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9. REVIEW OF EXISTING TERM LOAN(S)0.

a. Brief Details of Term Loan

Amount Sanctioned

Present O/s (Mention if TL is underdisbursement)

Date of original sanction

Date of last review

Date of recovery of upfront/Processing fee

Whether the account has been restructured ifyes, give date and details of restructuring in brief

Date of first disbursement

Moratorium Period

Existing Repayment Schedule:

(a) No. of installments(b) Due date of First installment

No. of Installments and amount due so far

Present outstanding

Overdue, if any

b. Overall Conduct of Account (Whether the borrower is regular in servicing of interest/installments)

c . Status of COD/DCCO

COD/DCCO Stipulated at the time of original sanction

Date of actual COD/DCCO (in case project has been completed)

Expected COD/DCCO on the basis of factual progress of theproject (in case the project is still under implementation)

(Reasons for delay in project in case there is delay in COD/DCCO be specified)

d. In case of projects under implementation - NA

- Physical and Financial Status of Project (as per latest CA certificate/LIE Report/Unit/SiteVisit Report/Minutes of last consortium meeting)

Particulars Originally envisaged Actually incurred till

Comments on the above:-


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(Main landmarks of implementation schedule to be compared and whether the project isprogressing/completed as per schedule)

e. Reset of Rate of Interest (If Applicable) - NAStatus of Interest Reset (Rate of Interest being charged by other term lenders if any)

10. DETAILS OF SECURITY

Primary -

Collateral - NIL

11. VALUE OF THE ACCOUNT:(In terms of interest / commission, other income, deposits etc. earned)

(a) . Deposits including Escrow / TRA account with details:

Particulars No. of A/cs Amount / Average Balance

Saving

Current (Religare finvest ltd. & ReligareSecurities Ltd.)

Term Deposit

Escrow/ TRATotal

(b).Details of other ancillary business such as Staff Salary accounts, retails loan toemployees, CMS facility, Demat facility to employees, Mutual Fund units, InsuranceProducts etc.

12. AUDIT/INSPECTION IRREGULARITIES IF ANY:-

Irregularity Pointed out or Reported Comments/ Present position of Rectification

13. STATUS/ CONFIRMATION OF COMPLIANCES:


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1. All the terms & conditions of last sanction complied with.

2. Security documents are duly vetted and enforceable

3. Proper charge on securities created

4. Branch Confirmation of Compliance (BCC) cleared

5. Confirm that payment of statutory dues is not in arrears

6. Corporate governance practices are being followed as per Auditors Report7. Consortium meetings (if applicable) are being held regularly

8. Information under Multiple Banking Arrangement (if applicable) beingexchanged as per RBI guidelines

14. DATE OF LAST VISIT TO THE UNIT & OBSERVATIONS:

15. ANY OTHER ISSUE NOT DISCUSSED ELSEWHERE:

NIL

16. CREDIT RATING:

A. Banks Internal Rating:(last two ratings with reasons for decline in rating/poor rating in brief)

Model Based on financials of (Year) Credit RatingSignifies

Reasons for decline/ low rating,if any31.03.10 31.03.11

IMaCS

B. External Rating (as per BASEL II):Agency Date of

ratingCredit ratingvalid up to

Facility Amount CreditRating

Allotted

Riskweightas perexternalrating

Rating signifies

Comments / Rationale for rating and comparison with last External Rating

17. DELEGATED POWERS: The proposal falls under the powers of Head Office.

18. RECOMMENDATIONS:-(Rs. in Crores)


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Nature of facility ExistingLimit

ProposedLimit

Existing Rateof Interest

ProposedRate ofInterest

Other issues for approval , i f any

I)

II)

Terms and Conditions:

Other Conditions

1. The executants of the legal documents on behalf of RFL to be duly empowered and authorized by a resolution

to execute the same and to perform all the obligations in accordance with the terms set out in the

agreements.

2. In Term of HO Circular No. ADV/17/2004-05 dated 29.05.04 necessary documents/declaration from the

borrower pertaining to Credit Information Bureau of India (CIBIL) shall be obtained.

3. The credit facilities shall not be utilized by the company for activities not eligible for bank credit as defined by

RBI.

4. The credit facilities sanctioned to the borrower should be availed within a period of three months of the date

of sanction failing which the sanction shall lapse.

5. Rate of interest of other banks on existing facilities & it should be enured that Rate of interest charged by the

bank is not less than the rate charged by other bank.

6. The company should submit quarterly receivables details (non-capital market) showing value of securitycharged/created along with C.A certificate that all assets are standard net of NPAs.

7. The branch may obtain declaration from the borrower [in Annx-I] about the credit facilities already enjoyed by

them from other banks and may seek the information about conduct of the account from other banks [in Annx

II] as prescribed by RBI (as per circular no. DBOD no. BP. BC 46/08.12.001/2008-09 dt. 19.09.08, DBOD no

BP. BC 94/08.12.08/2008-09 dt. 08.12.08, DBOD no. BP. BC /110/08/08.12.08/2008-09 dt. 10.02.2009).

8. The branch shall exchange information about the conduct of the borrowers accounts with other banks in the

format prescribed by RBI at atleast quarterly intervals (as per circular no. DBOD no. BP. BC 46/08.12.001/2008

09 dt. 19.09.08, DBOD no. BP. BC 94/08.12.08/2008-09 dt. 08.12.08, DBOD no. BP. BC /110/08/08.12.08/2008-

09 dt. 10.02.2009).

9. The branch shall obtain regular certification by a professional, preferably a Company Secretary/Chartered

accountants/Cost Accountants, regarding compliance of various statutory prescriptions that are in vogue, asper specimen given in annexure III prescribed by RBI. (as per circular no. DBOD no. BP. BC 46/08.12.001/2008

09 dt. 19.09.08, DBOD no. BP. BC 94/08.12.08/2008-09 dt. 08.12.08, DBOD no. BP. BC /110/08/08.12.08/2008-

09 dt. 10.02.2009).


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Loan Manager Chief Manager

ANNEXURE - A

VARIOUS UNDERTAKINGS TO BE OBTAINED FROM THE BORROWER ON LETTER PAD

The borrower shall undertake:

1. That the names of Borrower, or its Directors/Partners or Guarantors do not figure in any list of defaulters circulated

by RBI or any Bank and Financial Institution nor the names of partners/directors appear in caution list issued by

RBI/ECGC/DGFT etc.

2. To declare dividend only after obtaining approval from the bank (in case of default in payment o

interest/installments of Term Loan).

3. Not to pay any consideration, in whatever form, to the guarantors/guaranteeing directors, either directly o

indirectly (except without prior approval of the Bank) for the guaranteeing of credit limits sanctioned by the bank

Similar undertaking shall also be obtained from the guarantors.4. Not to obtain any financial assistance from any other source without express approval of the bank/other consortium

member banks in writing.

5. Not to effect any change in promoter directors or in the core management team nor any merger/ acquisition/

amalgamation shall be done without express permission of the Bank in writing. A confirmation to this effect shall be

obtained from the borrower.

6. Not to extend finance to associate concerns during the currency of the Banks advance without the banks prio

written consent.

7. Not to effect any change in the companys capital structure.

8. Not to implement any scheme of expansion/modernization/diversification/ renovation or acquire/sell any fixed

assets during any accounting year, except under such scheme, which have already approved by the bank.

9. Not to Invest in shares/debentures or lend or advance funds to or place deposits with any other concern excep

normal trade credit or security deposits in the normal course of business or advances to employees.

10.Not to undertake guarantee obligations on behalf of any other company, firm or person.

11.Not to effect/permit withdrawals of deposits or withdrawals by family members, friends or directors during the

currency of the bank advance without the prior approval of the bank.

12.Not to create any further charge, lien or encumbrance over the assets and properties of the firm charged/to be

charged to the bank in favour of any other bank, financial institution, Company, firm or person.

13.To keep the Bank informed of the happening of any event likely to have a substantial effect on their profits or

business.


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14.To maintain adequate books and records which should correctly reflect their financial position and scope o

operations and should submit to the Bank at regular intervals such statements as may be prescribed by the Bank in

terms of RBI instructions issued from time to time or otherwise. The borrower shall give an undertaking that the

Bank reserves the right to periodically inspect their records and books of accounts to ensure the correctness o

information furnished by them.

15.To submit Audited Financial Statements etc. to the Bank within the stipulated period of time. The company will be

liable to pay penal rate of interest in case of any delay in submission of the data in question.

16.That none of their associate/group concerns are classified as willful defaulters by other Banks/Financial Institution.

17. I/ we undertake that I/ we would not induct any person, who is a director on the Board of a Company which has

been identified as willful defaulter and further undertake that in case, such a person is found to be on Board of

Borrower Company, I /we would take expeditious and effective steps for removal of any such person from the Board

of the Company within 30 days of such fact coming to its notice.

18. I/ we undertake to issue appropriate undertaking /affidavits/ certificates as the Bank may require from time to time

certifying that the funds comprising of entire amount of loan/ facility/sum due/ amount outstanding in the account

have been used exclusively for the purpose for which they were obtained and the same have not been diverted /

siphoned and no misrepresentation has been caused of any kind or accounts falsified/any fraudulent transaction

have been carried out etc.

19. I /we undertake that upon identification of aforesaid account as a willful defaulter on account of any of the reasonsstated above including any similar reason as stated above, that I / we would be debarred from availing bank finance

for floating new ventures for a period of 5 years from the date the name of willful defaulter is disseminated in the

list of willful defaulter by RBI. I/ we agree that in case of any false /wrong information, the Bank may consider any

legal proceedings, civil /criminal as may be necessary.

20.To confine companys entire banking business relating to activity including deposit, bill business, foreign exchange

business to the BANK/member banks of the consortium and in case of Multiple Banking arrangements, pro-rata

share of the banking business shall be routed through the Bank.

21.An undertaking shall be obtained from the owners of the properties mortgaged to the Bank that there are no arrear

of tax including interest leviable thereon under various provisions of Income Tax Act against them.

22.As the facility is secured by receivables, adequate care should be taken for identification of good quality assets

whose receivables are charged to bank. The company should also undertake for substitution with other assets incase of default.

23.The company would undertake to administer the individual accounts and be responsible for the collection and

recovery, inclusive of repossession and resale, filing of court cases for bounced cheques/ recovery of overdue. N

compensation/ fees would be paid by the Bank for the same.

24.The company would undertake to foreclose accounts, which are prepaid. Any asset, which is NPA in the books of the

company, should be substituted by a performing asset.

25.An undertaking to the effect that the Bank loan raised from us would not be utilized for any activity/purpose, which

is excluded for Bank Finance to NBFC as prescribed by RBI.

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