Dutch Bangla Bank Ltd

APPENDIX-C: CREDIT RISK GRADING SCORE SHEET

Reference No: Borrower: Gro# Na$e %if an&': Branch: Industry/Sector: !ate o" #inancials: Co pleted $y: %ppro&ed $y: N#$!er ' , 0 4 . 8 2 -riteria A1 2inancia" Risk '. Le&era6e: ;'.<= 0eig/t 304 )ara$eter Less than C.,.@ C.,8@ to C.0. x C.08@ to C..C x C..'@ to C.2. x C.28@ to '.,. x '.,8@ to ,.CC x ,.C'@ to ,..C x ,..'@ to ,.2. x 5ore than ,.2.@ Greater than ,.24@ ,..C@ to ,.24 x ,.CC@ to ,.4D x '..C@ to '.DD x '.'C@ to '.4D x C.DC@ to '.CD x C.-C@ to C.-D x C.2C@ to C.2D x Less than C.2C@ Greater than ,.< ,C< to ,4< '.< to 'D< 'C< to '4< 2< to D< 4< to 8< '< to 0< Less than '< '. '4 '0 ', '' 'C 2 C '. '4 '0 ', '' 'C 2 C '. '4 '0 ', 'C D 2 C XYZ Ltd. N(A Gulshan Branch Export Oriented Co posite )R*+,-.,D Date: 17-oct-2006 Aggregate Score: ___82______

Risk Grading:

Acce ta!"e

Grading Superior Good %ccepta$le 5ar6inal/7atchlist Special 5ention Su$standard !ou$t"ul Bad 9 Loss

S/ort S() G! %CC)1 5G/7L S5 SS !# BL

Score #ully cash secured* secured $y Go&ern ent/International Ban+ Guarantee -./ 2.3-4 8.324 ..384 4.3.4 0.344 :0. Score Act#a" )ara$eter .C< Score *!tained '0

!e$t E>uity ?atio ;@= 3 1i es 1otal Lia$ilities to 1an6i$le Aet Borth %ll calculations should $e $ased on annual "inancial state ents o" the $orroBer ;audited pre"erred=. ,. Li>uidity: ;'.<= Current ?atio ;@= 3 1i es Current %ssets to Current Lia$ilities

'..4

',

0. )ro"ita$ility: ;'.<= Operatin6 )ro"it 5ar6in ;<= Operatin6 )ro"it @'CC Sales

,4.8C

'4

Bangladesh Institute of Bank Management

102

Dutch Bangla Bank Ltd 4. Co&era6e: ;.<= Interest Co&era6e ?atio ;@=31i es Earnin6 Be"ore Interest 9 1ax ;EBI1= Interest on de$t .ota" Score52inancia" Risk -riteria 0eig/t B1 B#siness(7nd#str& 184 Risk '. SiEe o" Business ;Sales in B!1 crore= )ara$eter 5ore than ,.CC@ 5ore than '..'@ Less than ,.CC@ 5ore than '.,.@ Less than '..C@ 5ore than '.CC@ Less than '.,4@ Less than '.CC@ . 4 0 , C ,.80 .

30 Score Act#a" )ara$eter 42.C-

66 Score *!tained 4

1he siEe o" the $orroBerFs $usiness easured $y the ost recent yearFs total sales. )re"era$ly $ased on audited "inancial state ents ,. %6e o" Business 1he nu $er o" years the $orroBer has $een en6a6ed in the pri ary line o" $usiness. 0. Business Outloo+ % critical assess ent o" the ediu ter prospects o" the $orroBer* ta+in6 into account the industry* ar+et share and econo ic "actors. 4. Industry GroBth .. 5ar+et Co petition

G 8C.CC 0C.CC H .D.DD 'C.CC H ,D.DD ..CC H D.DD ,..C H 4.DD : ,..C G 'C years G . 3 'C years , 3 . years : , years #a&ora$le Sta$le Sli6htly (ncertain Cause "or Concern

. 4 0 , ' C 0 , ' C 0 , ' C

#a&oura$le

Stron6 ;'C</= Good ;G.< 3 'C<= 5oderate ;'< 3 .<= Ao GroBth ;:'<= !o inant )layer 5oderately Co petiti&e Ii6hly Co petiti&e !i""icult %&era6e Easy

0 , ' C , ' C , ' C 18

Good

5oderately Co petiti&e !i""icult

'

8. Entry/Exit Barriers

.ota" Score-B#siness(7nd#str& Risk -riteria 0eig/t )ara$eter

12

Score

Act#a"

Score

Bangladesh Institute of Bank Management

103

Dutch Bangla Bank Ltd -1 8anage$ent 124 Risk '. Experience 5ore than 'C years in the ;5ana6e ent 9 5ana6e ent related line o" $usiness 1ea = .H'C years in the related line o" $usiness 1he >uality o" ana6e ent 'H. years in the related line $ased on the a66re6ate o" $usiness nu $er o" years that the Ao experience Senior 5ana6e ent 1ea has $een in the industry. ,. Second Line/ Succession ?eady Succession Succession Bithin '3, years Succession Bithin ,30 years Succession in >uestion Jery Good 5oderate )oor ?e6ular Con"lict )ara$eter . 0 , C '4 years *!tained .

4 0 , C 0 , ' C 12

'3, years

0. 1ea

7or+

5oderate

.ota" Score-8anage$ent Risk

10

-riteria 0eig/t D1 Sec#rit& 104 Risk '. Security Co&era6e ;)ri ary=

Score )ara$eter #ully pled6ed "acilities/su$stantially cash co&ered/?e6. 5ort6* "or IBL ?e6istered Iypothecation ;'st char6e/'st )ari passu char6e= ,nd Char6e/In"erior char6e Si ple hypothecation/ne6ati&e lien on assets. Ao security ?e6istered 5ort6a6e on 5unicipal Corporation/)ri e area property. ?e6istered 5ort6a6e on )ourasha&a/se i3ur$an area property E>uita$le 5ort6a6e or Ao property $ut plant 9 achinery as collateral Ae6ati&e lien on collateral Ao collateral )ersonal 6uarantee Bith hi6h net Borth or Stron6 Corporate Guarantee )ersonal Guarantees or Corporate Guarantee Bith a&era6e "inancial stren6th Ao Support/Guarantee 4 0 , ' C 4 0 , ' C

Act#a" )ara$eter ?e6d. Iypo.

Score *!tained 0

,. Collateral Co&era6e ;)roperty Location=

?5 on )orasha&a area

0. Support ;Guarantee=

' C 10

.ota" Score- Sec#rit& Risk

8 104

Bangladesh Institute of Bank Management

Dutch Bangla Bank Ltd

-riteria 0eig/t ,1 104 Re"ations/i Risk '. %ccount Conduct

)ara$eter 5ore than 0 ;three= years accounts Bith "aultless record Less than 0 ;three= years accounts Bith "aultless record %ccounts ha&in6 satis"actory dealin6s Bith so e late pay ents #re>uent )ast dues 9 Irre6ular dealin6s in account 5ore than 8C< 4C< 3 8C< Less than 4C< #ull Co pliance So e Aon3Co pliance Ao Co pliance

Score . 4 , C , ' C , ' C '

Act#a" )ara$eter 4

Score *!tained 4

,. (tiliEation o" Li it ;actual/proKection= 0. Co pliance o" Co&enants / Conditions 4. )ersonal !eposits

AeB

)ersonal accounts o" the +ey $usiness Sponsors/ )rincipals are 1he extent to Bhich the aintained in the $an+* Bith $an+ aintains a personal si6ni"icant deposits $an+in6 relationship Bith the Ao depository relationship +ey $usiness sponsors/principals. .ota" Score-Re"ations/i Risk Grand .ota"- A"" Risk

C 10 100 8 82

Bangladesh Institute of Bank Management

105