SMERA RATING RESEARCH PROJECT Introduction SMERA is the only rating agency dedicated to provide comprehensive, transparent and reliable rating for specifically SME units in India. SMERA Ratings categorize SMEs based on size; this enables rational comparison of companies of the same size, thus ensuring that the smaller companies are not at a disadvantage while applying for credit. SMERA Rating Research Project aims to assess and quantify the value add of SMERA rating on access to finance for Small Businesses in India. The Small Enterprise Finance Center (SEFC) of the Institute of Finance Management and Research (IFMR) in Chennai and Massachusetts Institute of Technology (MIT) in US will implement the independent project with full scientific approach. Scope of the Project • • • •
•
The project will be conducted in three cities across the country- Delhi, Mumbai and Chennai. The participants SMEs will participate in the baseline survey followed by two follow-up surveys at six month’s interval each. The participants will be divided into two groups (Control and Treatment) by SEFC. SMERA will provide rating immediately to half of the participating companies, who fall under the Treatment Group with 20% discount on rating fees. The companies that fall in the Control Group will be rated after one year with higher discount (50 %) on rating fees. The improvement in performance of the business will be assessed over the project period to determine the impact of the rating.
We appreciate your interest to participate in the study. Please find our discounted rates (in case of possessing a SSI registration) for the volunteers of the study below. Rating Fee 1. For SMEs other than registered SSIs Catego Networth ry
Current Fee payable (Rs.) A 20 Crore 61,798 B 5 Crore to 20 44,944 Crore) C 1 Crore to 5 33,708 Crore) D upto 1 Crore 22,472 Including 12.36% service tax
Treatment Treatment Control groupgroup first group second first year only year (20%) year (40%) (50%) Not eligible Not eligible Not eligible 35,955 26,966 22,472 Not eligible
Not eligible
Not eligible
17,978
13,483
11,236
2. For SMEs registered as SSI units and eligible for subsidy under NSICSMERA Performance & Credit Rating (The fees and inclusion under NSIC Scheme is subject to any change NSIC may effect during the period of the study.) a. Current rating fee (in Rs) Category Networth
Turnover Application for SMERA Rating Research Project
< 50 lakh
50-200 lakh
>200 lakh
A
> Rs. 20 Crore
36,798
31,798
21,798
B
5 Crore to 20 Crore
19,994
14,944
11,236
C
1 Crore to 5 Crore)
8,708
8,427
8,427
D
upto 1 Crore
5,618
5,618
5,618
Including 12.36% service tax b. Discounted rating fee (in Rs) Treatment Treatment group first year group second (20%) year (40%)** B Category SME 200 Lakh Turnover 8,989 26,966 D Category SME 200 Lakh Turnover 4,494 13,483 Including 12.36% service tax ** Subsidy is not available during the second year of rating
Control groupfirst year only (50%) 9,997 7,472 5,618 2,809 2,809 2,809
Application process Please fill the application form and send the completed form to our contact officer in Mumbai, Chennai or Delhi before 15th of July 2007. 150 applicants from each category (B and D) would be selected on first come first serve basis. The nonrefundable fee payment will be collected after the identification of the treatment and control groups. Please do not make any payments with the application. After the identification of the treatment and control groups; all the 19 documents mentioned in Annexure 3 must be submitted by the treatment group latest by the end July 2007. Mumbai
Chennai
Delhi
Mr. Sanjay Kher Seagull House, 1st Floor, Plot No.6, Shivaji Colony, Andheri – Kurla Road, Chakala, Andheri (East), Mumbai – 400 099 Tel: 022 – 6452 4371 Fax: 022 – 6714 1142 Email:
[email protected]
Mr. Virendra Goyal Eldorado Building, No. 112, 7th Floor, Nungambakkam High Road, Nungambakkam, Chennai – 600 034 Tel: 044 – 2823 4848/ 2122 Fax: 044 – 2821 1414 Email:
[email protected]
Mr. Sumeet Mehta Ground Floor, Videocon Tower, E-1, Rani Jhansi Road, Jhandewalan Extension, New Delhi – 110 055 Tel: 011-6452 4231 Fax: 011-3052 0144 E-mail:
[email protected]
Documents to be submitted with the application form Please submit the following documents out of the 19 documents specified in the Annexure 3 with the application form. Rest of the documents would be collected from you after the identification of the treatment and control groups latest by the end of July 2007. 1. Copy of audited accounts for the latest three financial years Application for SMERA Rating Research Project
2. Copy of insurance policies along with annexure (stock, plant and machinery, building etc) 3. List of all Partners / Directors with Age, Address, Qualifications, Experience and details (Name of Co, Line of Business and address of Co) where they have interest (shareholding) in other Co. 4. Individual Networth Statement of Proprietor / all partners / all directors as format enclosed. 5. Copy of valid Small Scale Industry Registration Certificate. 6. Bank Statement of a/c for one year for all the Loans (For EMI Based Loans) 7. Sanction Letter of Credit from Existing Bank About SEFC The SEFC is one of the five research Centers in IFMR aiming to advance the research and practice of small enterprise financing and development in India to ultimately develop a vibrant SME sector. The Center: • Conducts and facilitates systematic, rigorous research projects at the small enterprise level as well as the SME banking level in partnership with banks, financial organizations and NGOs • Offers regular advanced financial training courses for the Indian banking sector in partnership with the Financial Services Volunteer Corps (FSVC). For more information on the center, please visit http://www.ifmr.ac.in/sefc
Application for SMERA Rating Research Project
Please Answer the Following Questions 1. Please tick the appropriate box for the source from which you get to know about this project i. Industrial/ Association Magazine (Mention the name)____________________________ [ ] ii. SMERA Website
[
iii. Friends ]
] [
iv. Others (Please specify) _________________________________________________ [ ]
2. What is the current net-worth of the company? i.
More than 20cr (A Category)
[
]
ii.
5 cr to 20 cr (B Category)
[
]
iii.
1cr to 5cr (C category)
[
]
iv.
Below 1 cr (D Category)
[
]
Please note that only SMEs in Chennai, Delhi and Mumbai, falling in B and D category are eligible to participate in the Research Project!
3. What is the current turnover of the company? i.
200 Lakh Turnover
[
]
4. Is the company registered and possesses a valid SSI registration certificate (in order to be eligible to receive the NSIC subsidy) i. Yes
[
]
ii. No
[
]
Application for SMERA Rating Research Project
Annexure No 1 FORMAT OF THE REQUEST FOR OBTAINING SMERA RATING To be printed on the Applicant’s Letter Head
SME Rating Agency of India Ltd. Seagull House, 1st Floor, Plot No.6, Shivaji Colony, Andheri-Kurla Road, Chakala, Andheri (East), Mumbai – 400 099 Dear Sir, I / We desire to get “SME Rating” of my/our unit by SME Rating Agency of India Ltd I / We attach herewith Application Fee of Rs ________ /- by way of Cheque / DD No ____________ Dated ________.in favour of “SME Rating Agency of India Ltd”. The Application Form as per Annexure – 2 and the documents as listed out in Annexure – 3 are enclosed herewith. I / We certify that the details given in this application are true and correct and no material fact has been concealed or withheld. Further, I / We consent to accept the rating assigned by SMERA as final. Signature & company seal __________________________ Name of the Signatory________________________________ Designation __________ ______________________________ Company Name _____________________________________ Address____________________________________________ ___________________________________________________ City _________________ Pin ___________________________ Email Id : __________________________ Tel. No.________________________ Fax No. ______________Date ________________ Place _______________________________________________
Note: 1] The application is to be submitted in duplicate. All documents should be submitted complete in all respects to avoid delay in processing.
Application for SMERA Rating Research Project
Annexure No 2 APPLICATION FORM PARTICULARS OF INDUSTRIAL CONCERN 1. Name of the Applicant and Address of Head Office Pin code_________ Phone____________Fax___________ * Factory: Please give address of all the factories / works
Pin code_________ Phone____________Fax___________
Registered Office Address Phone____________Contact Person___________ Branches / Others Pin code___________ Phone__________Fax ___________ 2. 3. 4.
Constitution: Proprietorship/ Partnership/ Private Ltd/ Limited Co./ Coop. Society Established in year: (a) Nature of Industry Is the unit an SSI
Yes / No
(b) Products 5
* Details of Promoters : S.No.: Name(s) of Proprietor / Partner / Director: Address : Phone Nos / Mobile Nos: Name of contact Person for SMERA Rating : Phone No & Mobile No :
6.
Name and Address of Associate Concerns
7
Details of existing borrowings / banking arrangements Name & Address of Fin. Instts. / Account Nature of Loan Amount Bank / Lenders (from whom the unit Number assistance & (Rs.) has availed loan / credit limit) Address / loan limit & Address availed
* For details please attach separate sheets. Signature __________________
Application for SMERA Rating Research Project
Name of the Signatory ________________________ Designation ___________
Annexure No 3 CHECK LIST 1
2 3 4 5 6
7 8
Copy of the audited accounts for the latest three financial years (i.e. 2003-04, 2004-05, 2005-06) along with schedules, auditors report, Director’s report , notes to account and Form 3 CD & 3 CB, wherever applicable. Copy of Insurance policies along with annexure (stock, plant & machinery, building, etc). Banker's confidential letter in sealed envelope from all the existing Bankers. Production Capacity & Actual Production breakup - Product wise for FY 2004, 2005 & 2006.
Employee base with bifurcation of Contractual & Permanent employees for the year 2005 and 2006.
10
Copy of Small Scale Industry Registration Certificate.
11
Copy of Central Sales Tax Registration Certificate and State Sales Tax Reg. certificate. Brief write-up about products manufactured, end users, marketing tie-up and orders in hands. Copy of Quality certificates, Pollution Control Certificate , awards won, membership of any associations. Details of subsidy, tax concession available to the applicant
13 14 15
In case of new project/expansion, copy of the project report containing a brief project profile, cost of project, source/means of finance.
16
You may provide any other information for better understanding of your business. Bank Statement of a/c for one year for all the Loans and Banks)
17 18 19
FY 05 3CD &CB
FY 06 3 CD & CB
2004
2005
2006
2005
2006
Central ST Brief of Product
State ST Marke ting
Orders in Hands
Cash Credit
Term Loan
Hire purchases and Others
Partnership Deed / Memorandum & Article of Association ; Details of Shareholding / profit-sharing ratio. List of all Partners / Directors with Age, Address, Qualifications , Experience and details(Name of Co , Line of Business and address of Co, )where they have interest(shareholding) in other Co.(In attached format) Individual Networth Statement of Proprietor / all partners / all directors along with annexure . List of plant and machineries as on date.
9
12
FY 04 3CD & CB
History of Change in Constitution , Name ( History for Change in Capital for Pvt Ltd and Ltd Co as per format attached). Sanction Letter of Credit from Existing Bank
*** If any item is not applicable Please strike it off in check list and provide us separately rational for the same.
Application for SMERA Rating Research Project
Annexure No 4
CAPACITY AND PRODUCTION OUTPUT SAMPLE FORMAT PRODUCT NAME
: ****************
Period : 2003 to 2004 Actual Output : ***** Units per year Production Capacity : ***** Units per year Period : 2004 to 2005 Actual Output : ***** Units per year Production Capacity : ***** Units per year Period : 2005 to 2006 Actual Output : ***** Units per year Production Capacity : ***** Units per year
Annexure No 5 LIST OF ORDERS IN HAND AS ON / /2006 SAMPLE FORMAT Customer Name
Product Description
Quantity (in pieces
Order Value (in INR)
Annexure No 6 LIST OF PLANT & MACHINERY SAMPLE FORMAT
S.No
Descriptio n
Quantity
Year of Installation
Original Cost
1 2 3 4 5 6 7 8 Total
Application for SMERA Rating Research Project
Annexure No 7 Net Worth Statement as on **/**/2006 SAMPLE FORMAT
S.NO
AMOUNT IN INR(Lakhs)
DESCRIPTION
Whether Charged Mortgaged/Hypo to Bank/FIs
1
Movable Assets Cash & Bank Balance Govt. Securities Shares Life Insurance Policies Post Office Annuity Deposited Jewellery Investment In Business Investment in Associate (Please specify movable assets in detail) 2
Immovable Assets Land & Building (Please specify immovable assets in detail) 3
Total Assets
(A)
4
Total Liabilities (B) (Please specify all liabilities in detail)
5
Net Worth
(A –B)
Please provide details of personal guarantees offered and the corresponding liabilities.
Annexure No 8 DETAILS OF EMPLOYEES SAMPLE FORMAT
No. of Employees : Type of Employees
Current year Permanent Permanent
Previous year Temporary Temporary
1. Production Workers 2. Other TOTAL
Application for SMERA Rating Research Project
Annexure No 9
Banker’s Confidential Report Please attach to the form a confidential credit report from your principal banker placed in a sealed envelope. This credit report should be in the following format: (Note: in the following format, “subject” refers to your company as a client of the bank)
To be printed on Bank’s Letterhead Date : ________________ To SME Rating Agency of India Ltd Mumbai Dear Sir We submit herewith “Banker’s Report” as required by you, for our client M/s ________________________ __________________________________ (Your company name with address). With respect to the above mentioned subject we state as under: • How long has the subject been your customer? Are the dealings with the subject and its sister companies satisfactory? ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ Has the interest payment from the subject been timely? Have their been any defaults by the subject or its sister companies? If yes, please give the details during last one year. _______________________________________________________________________________________ _______________________________________________________________________________________ _______________________________________________________________________________________ ______________________________________________________________________________________ •
A brief profile of the subject’s financial relationships with its suppliers and customers (any dishonoring of cheques due to insufficient fund) during last one year. _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ ____________
Loan Particulars: Amount Sanctioned / Limit (Rs in _________)
Amount Disbursed (Rs in _______) as of current date
Amount overdrawn (Rs in _________)
Cash Credit/Working Capital Demand Loan Any other Fund based Non-fund Based
Yours truly, Authorised Signatory For __________________Bank
Application for SMERA Rating Research Project
Annexure No 10 Background Information on Chief Executive Officer/Proprietor/Partners/ Directors Name :_ ________________________ Designation :_ ________ Address : __________________________ Telephone : ________________________ Email ID :_ Passport No : ____________________________ DOB / Age : ____________ Education Qualifications : ________________________________________________________________________ Date of Joining the Subject : ______ Date on which assumed the Current Position : ___ Whether Founder of Subject : Yes/ Years in Related Field ___ Total Experience: ___ Whether active in day to day Operations/ Business : Yes/ No Whether retired/ Resigned : __________________________________________________________________ Past Work Experience : 1 .Name of the Company: __ Last Position Held : ____ Period _ 2. Name of the Company: __________________________ Last Position Held : ____________ Period ________ Other Directorships (Please give particulars) ___________________________________________________________________________________________
Annexure No 11 History of Change of Capital for Private Limited and Limited Company Please provide details of Change in Capital in below format DATE OF CHANGE CAPITAL TYPE NATURE OF CHANGE FROM TO
: : Authorized Capital : Increased : Initial Capital as per MOA : ****
DATE OF CHANGE CAPITAL TYPE NATURE OF CHANGE FROM TO CONSIDERATION
: : Paid-up Capital : Increased : **** : **** : Cash /Right issue/Bonus
Application for SMERA Rating Research Project
