1.1 As per SEBI regulations, every credit rating agency shall, during the lifetime of securities rated by it continuously monitor the rating of such securities. Accordingly all accepted ratings shall be reviewed on an ongoing basis till the maturity of the instrument. Formal surveillance of accepted ratings/gradings shall be carried out at after publication of annual audited results, unless regulatory requirements stipulate it to be more frequently. The Analysts Team/Analyst shall monitor the performance of the issuer and the economic environment in which it operates to ensure that there is no change in the rating fundamentals based on which rating has been assigned.


1.2 The surveillance process requires the Analysts Team/Analyst to maintain periodic contact with the issuer to collect the required information. Steps in the rating surveillance process include:

• communicating with the entity at regular intervals to understand developments and trends in performance to help Analysts Team/Analyst compare company performance against their own and the company’s expectations, as well as against peers;
• checking the status of issues that may affect the entity’s credit quality (such as an initial public offering or follow-up public offering), exploring the probability of such issues arising in the near future and assessing the management’s perspective on such issues;
• discussing financial performance with the entity on the declaration of interim financial results; and,
• understanding strategic plans or new initiatives that could have rating implications.

1.3 Surveillance also enables analysts to stay abreast of current developments, to discuss potential problem areas, be apprised of any changes in the rated entity’s plans, and to distinguish between realistic and over-optimistic management expectations. Ratings are subject to change at any point in time, based on changes in the business profile or financial profile of the issuer, or the prospects for the industry in which the issuer operates.



1.4 Infomerics Ratings on the first day of each month shall obtain a ‘No Default’ declaration from clients or a declaration giving details of any delay/default in debt servicing. In case of any delay/default, the Analysts Team/Analyst should immediately conduct a review and place before the ERC/IRC for a rating decision, if warranted. Such a rating decision or a rating revision on account of receipt of an information of default/delay from the Debenture Trustee/Bankers of the rated entity shall be disseminated through Press Release within the two working days from the date of receipt of such information.

1.5 Analyst should take utmost care in tracking the repayment of borrowing/principal or payment of interest on the rated instruments/facilities. The Default shall be recognised as per Default Recognition Policy of Infomerics Ratings, as detailed in this Operation Manual.


1.6 Quarterly reviews are quick reviews conducted internally by Infomerics Ratings and wherever necessary cases warranting special attention shall be taken for detailed review and taken up at the ERC meeting/IRC meeting. Quarterly review notes prepared by the rating team shall cover the following areas:

• Financial results of the company for the quarter.
• Any major expansion plans or execution of new projects.
• Any significant changes in policies, plans or operations of the company.
• Any significant changes in the industry front.
• The debt servicing history during the quarter.

1.7 Quarterly review of ratings shall be triggered by the quarterly results published by the companies. Where such results are not available (mainly in case of unlisted companies), Analysts Team/Analysts shall undertake performance review through dialogue with CFO or other responsible officer of the company. The Analyst shall send a formal communication to all issuers requesting for providing details of quarterly results. After receipt of the information, the Analyst shall verify and analyse the data and seek additional information, if required to monitor the rating. The review report shall be finalised by the Chief Rating Officer.


1.8 Annual surveillance exercise is a detailed review of the client’s performance since the previous rating involving management meeting and preparation of detailed review report. Reviews are considered by the ERC/IRC as per the delegation of powers. The annual surveillance exercise shall be carried out after publication of audited annual financial statements and shall be completed within a maximum period of 15 months from the date of initial rating or last review. In case of any delay in conducting the annual review, Infomerics Ratings shall promptly disclose on its websites the details of all such ratings mentioning therein the name of the rated entity, nature/type of debt instrument/facility, size, date of last review, reasons of delay and the same shall hyperlinked to the last Press Release.

1.9 The broad outline of these reviews shall involve:

• Analysing the financial performance of the company in the last financial year vis-à-vis that of in the earlier financial year and projected performance;
• Tracing the effects of various developments in the business;
• Assessing any concern on governance; and,
• Analysing the impact of any change in management policy or vision.
3.10 Similar to the initial rating, Infomerics Ratings will issue a Rating Letter, Rating Rationale and Press Release for surveillance of ratings. The dissemination through Press Release shall be made within five working days from the date of ERC/IRC meeting.


3.11 Infomerics Ratings may initiate a special review of rating any time if the circumstances so warrant or on the happening of material events requiring a review, as specified by SEBI. However if specific events have happened which may warrant a revision in rating, Infomerics Ratings may place the rating under rating watch till the review is completed. Rating watch to indicate that an event has occurred or there is deviation from the expected trend that has increased the probability of rating change and additional information is necessary to take rating action. Such immediate reviews may be mostly event-driven and be performed as the need arises. The Press Release pertaining to such review shall be disseminated within seven working days from the date of occurrence of such event.

3.12 The requirement of ensuring periodic surveillance until the rating is withdrawn and the publication of surveillance reports signal to the market that the rating is current and accurate, and can be relied upon for investment/lending decisions.


3.13 In case of surveillance of rating, the rated entity does not have the right to not accept the rating; however, a client may seek a review of the rating assigned based on surveillance. The same shall be considered forthwith. The Press Release of the rating decision based on such review shall be disseminated within five working days from the date of ERC/IRC meeting.


3.14 In the event of non-cooperation by the rated entity (such as, not providing the information required for review/surveillance of rating and non-payment of annual surveillance fee), Infomerics Rating shall carry out the review/surveillance exercise on the basis of best available information in public domain or otherwise.

3.15 In such cases of lack of co-operation by the issuer, if the rating has been assigned based on the best available information, investor shall be advised of the fact that the rating is based on the best available information and the rating symbol shall accompany the suffix “ISSUER NOT COOPERATING”. The rating action in such cases shall be promptly disseminated through Press Release wherein the suffix to the rating symbol shall also be explained adequately in the Press Release. Such suffix shall be read as ‘Issuer did not cooperate; Based on best available information’.


3.16 The rating already assigned and is existing in the public domain shall be withdrawn as per the Policy on Withdrawal of Rating of Infomerics Ratings, as contained in this Operation Manual and uploaded in the website of the company.