CARE Ratings Ltd. के अकाउंट के लिये नोट

Mar 31, 2025

m. Provisions, contingent liabilities and
contingent assets

Provisions are recognised when the Company
has a present obligation (legal or constructive)
as a result of a past event, it is probable that
an outflow of resources embodying economic
benefits will be required to settle the obligation
and a reliable estimate can be made of the
amount of the obligation.

When the Company expects some or all of a
provision to be reimbursed, the reimbursement
is recognised as a separate asset, but only
when the reimbursement is virtually certain.
The expense relating to a provision is presented
in the statement of profit and loss net of
any reimbursement.

If the effect of the time value of money is material,
provisions are discounted using a current pre¬
tax rate that reflects, when appropriate, the
risks specific to the liability. When discounting
is used, the increase in the provision due to the
passage of time is recognised as a finance cost.

Contingent liabilities are also disclosed when
there is a possible obligation arising from past
events, the existence of which will be confirmed
only by the occurrence or non-occurrence of
one or more uncertain future events not wholly
within the control of the Company. Claims
against the Company where the possibility of
any outflow of resources in settlement is remote,
are not disclosed as contingent liabilities.

Contingent assets are not recognised in
standalone financial statements since this may
result in the recognition of income that may
never be realised. However, when the realisation
of income is virtually certain, then the related
asset is not a contingent asset and is recognised.

i. Employee Benefits

(i) Short term employee benefits

Short-term employee benefits are expensed
as the related service is provided. A liability
is recognised for the amount expected
to be paid if the Company has a present
legal or constructive obligation to pay this
amount as a result of past service provided
by the employee and the obligation can be
estimated reliably.

(ii) Defined contribution plans (provident
fund, superannuation fund etc.)

A defined contribution plan is a post¬
employment benefit plan under which
an entity pays fixed contributions into
a separate entity and will have no
legal or constructive obligation to pay
further amounts.

Obligations for contributions to defined
contribution plans are expensed as the
related service is provided. Prepaid

contributions are recognised as an asset to
the extent that a cash refund or a reduction
in future payments is available.

(iii) Defined benefit plans (gratuity)

The Company’s net obligation in respect
of defined benefit plans is calculated
separately for each plan by estimating the
amount of future benefit that employees
have earned in the current and prior
periods, discounting that amount and
deducting the fair value of any plan assets.

The calculation of defined benefit obligations
is performed annually by a qualified actuary
using the projected unit credit method.
When the calculation results in a potential
asset for the Company, the recognised asset
is limited to the present value of economic
benefits available in the form of any future
refunds from the plan or reductions in
future contributions to the plan. To calculate
the present value of economic benefits,
consideration is given to any applicable
minimum funding requirements.

Remeasurement of the net defined benefit
liability, which comprise actuarial gains and
losses and the return on plan assets (excluding
interest) and the effect of the asset ceiling
(if any, excluding interest), are recognised
immediately in other comprehensive income
(OCI). Net interest expense (income) on the
net defined liability (assets) is computed by
applying the discount rate, used to measure
the net defined liability (asset). Net interest
expense and other expenses related to
defined benefit plans are recognised in
Statement of Profit and Loss.

When the benefits of a plan are changed or
when a plan is curtailed, the resulting change
in benefit that relates to past service or the
gain or loss on curtailment is recognised
immediately in Statement of Profit and Loss.
The Company recognises gains and losses
on the settlement of a defined benefit plan
when the settlement occurs.

(iv) Other long-term employee benefits (leave
encashment)

The Company’s net obligation in respect
of long-term employee benefits is the
amount of future benefit that employees
have earned in return for their service in

the current and prior periods. That benefit
is discounted to determine its present
value. Remeasurement are recognised in
Statement of Profit and Loss in the period
in which they arise.

o. Earnings per share

The basic Earnings per equity share ("EPS”)
is computed by dividing the net profit / (loss)
after tax for the year attributable to the equity
shareholders by the weighted average number
of equity shares outstanding during the year.

For the purpose of calculating diluted Earnings
per equity share, net profit/(loss) after tax for the
year attributable to the equity shareholders and
the weighted average number of equity shares
outstanding during the year are adjusted for the
effects of all dilutive potential equity shares.

p. Share based payments

The grant date fair value of options granted
to employees is recognized as an employee
expense, with a corresponding increase in
liability towards recharge arrangements with
the Parent, over the period that the employees
become unconditionally entitled to the options.
The expense is recorded for each separately
vesting portion of the award as if the award
was, in substance, multiple awards.. The amount
recognized as an expense is adjusted to reflect
the actual number of stock options that vest.

q. Segment reporting - identification of segments:

An operating segment is a component of the
Company that engages in business activities
from which it may earn revenues and incur
expenses, whose operating results are regularly
reviewed by the Company’s management to
make decisions for which discrete financial
information is available.

r. Financial Instruments

(i) Financial Assets

a) Classification

The Company classifies financial
assets as subsequently measured at
amortised cost, fair value through other
comprehensive income or fair value
through profit or loss on the basis of
its business model for managing the
financial assets and the contractual cash
flow characteristics of the financial asset.

b) Initial recognition and measurement

All financial assets (not measured
subsequently at fair value through
profit or loss) are recognised initially at
fair value plus transaction costs that are
attributable to the acquisition of the
financial asset. Purchases or sales of
financial assets that require delivery of
assets within a time frame established
by regulation or convention in the
market place (regular way trades) are
recognised on the trade date, i.e., the
date that the Company commits to
purchase or sell the asset.

c) Debt instruments at amortised cost

A ‘debt instrument’ is measured at the
amortised cost if both the following
conditions are met:

a) The asset is held within a business
model whose objective is to hold
assets for collecting contractual
cash flows, and

b) Contractual terms of the asset
give rise on specified dates to cash
flows that are solely payments of
principal and interest (SPPI) on
the principal amount outstanding.

After initial measurement, such
financial assets are subsequently
measured at amortised cost using the
effective interest rate (EIR) method.
Amortised cost is calculated by taking
into account any discount or premium
and fees or costs that are an integral
part of the EIR. The EIR amortisation
is included in finance income in the
Statement of Profit and Loss. The
losses arising from impairment are
recognised in the Statement of Profit
and Loss. This category generally
applies to trade and other receivables.

Debt instruments included within
the fair value through profit and loss
(FVTPL) category are measured at fair
value with all changes recognized in
the Statement of Profit and Loss.

d) Equity investments

All equity investments in scope of
Ind-AS 109 are measured at fair value.

Equity instruments which are held for
trading are classified as at FVTPL. For all
other equity instruments, the Company
decides to classify the same either as at
fair value through other comprehensive
income (FVTOCI) or FVTPL. The
Company makes such election on
an instrument-by-instrument basis.
The classification is made on initial
recognition and is irrevocable.

For equity instruments classified as
FVTOCI, all fair value changes on the
instrument, excluding dividends, are
recognized in other comprehensive
income (OCI). There is no recycling of
the amounts from OCI to Statement
of Profit and Loss, even on sale of
such investments.

Equity instruments included within
the FVTPL category are measured at
fair value with all changes recognized
in the Statement of Profit and Loss.

e) Derecognition

A financial asset (or, where applicable,
a part of a financial asset or part
of a Company of similar financial
assets) is primarily derecognised
(i.e. removed from the Company’s
balance sheet) when:

The rights to receive cash flows from
The asset have expired, or

The Company has transferred its rights
to receive cash flows from the asset
or has assumed an obligation to pay
the received cash flows in full without
material delay to a third party under a
‘pass-through’ arrangement; and either:

(a) the Company has transferred
substantially all the risks and
rewards of the asset, or

(b) the Company has neither
transferred nor retained
substantially all the risks and
rewards of the asset, but has
transferred control of the asset.

When the Company has transferred
its rights to receive cash flows from
an asset or has entered into a pass-

through arrangement, it evaluates if
and to what extent it has retained the
risks and rewards of ownership. When
it has neither transferred nor retained
substantially all of the risks and rewards
of the asset, nor transferred control of
the asset, the Company continues to
recognise the transferred asset to the
extent of the Company’s continuing
involvement. In that case, the Company
also recognises an associated liability.
The transferred asset and the associated
liability are measured on a basis that
reflects the rights and obligations that
the Company has retained.

Continuing involvement that takes
the form of a guarantee over the
transferred asset is measured at the
lower of the original carrying amount
of the asset and the maximum amount
of consideration that the Company
could be required to repay.

f) Impairment of financial assets

In accordance with Ind-AS 109, the
Company applies Expected Credit
Loss (ECL) model for measurement
and recognition of impairment loss
on the following financial assets and
credit risk exposure:

a) Financial assets that are debt
instruments, and are measured
at amortised cost e.g., loans,
debt securities, deposits,
and bank balance.

b) Trade receivables.

The Company follows ‘simplified
approach’ for recognition of
impairment loss allowance on trade
receivables which do not contain a
significant financing component.

The application of simplified approach
does not require the Company to
track changes in credit risk. Rather,
it recognises impairment loss
allowance based on lifetime ECLs at
each reporting date, right from its
initial recognition.

a) Classification

The Company classifies all financial
liabilities as subsequently measured
at amortised cost, except for financial
liabilities at fair value through profit
or loss. Such liabilities, including
derivatives that are liabilities, shall be
subsequently measured at fair value

b) Initial recognition and measurement

Financial liabilities are classified, at initial
recognition, as financial liabilities at fair
value through profit or loss, loans and
borrowings, payables, or as derivatives
designated as hedging instruments in
an effective hedge, as appropriate.

All financial liabilities are recognised
initially at fair value and, in the
case of loans and borrowings and
payables, net of directly attributable
transaction costs.

The Company’s financial liabilities
include trade and other payables,
loans and borrowings including bank
overdrafts, financial guarantee contracts
and derivative financial instruments.

c) Financial liabilities at fair value
through profit or loss

Financial liabilities at fair value through
profit or loss include financial liabilities
held for trading and financial liabilities
designated upon initial recognition
as at fair value through profit or loss.
Financial liabilities are classified as
held for trading if they are incurred
for the purpose of repurchasing in the
near term. This category also includes
derivative financial instruments
entered into by the Company that are
not designated as hedging instruments
in hedge relationships as defined by
Ind-AS 109. Separated embedded
derivatives are also classified as held
for trading unless they are designated
as effective hedging instruments.

Gains or losses on liabilities held
for trading are recognised in the
Statement of Profit and Loss.

Financial liabilities designated upon
initial recognition at fair value through
profit or loss are designated at the
initial date of recognition, and only if the
criteria in Ind-AS 109 are satisfied. For
liabilities designated as FVTPL, fair value
gains/ losses attributable to changes in
own credit risk are recognized in OCI.
These gains/loss are not subsequently
transferred to Statement of Profit and
Loss. However, the Company may transfer
the cumulative gain or loss within equity.
All other changes in fair value of such
liability are recognised in the Statement
of Profit and Loss. The Company has not
designated any financial liability as at fair
value through profit or loss.

d) Loans and borrowings

After initial recognition, interest-bearing
loans and borrowings are subsequently
measured at amortised cost using the EIR
method. Gains and losses are recognised
in Statement of Profit and Loss when the
liabilities are derecognised.

Amortised cost is calculated by taking
into account any discount or premium
on acquisition and fees or costs that
are an integral part of the EIR. The EIR
amortisation is included as finance costs
in the Statement of Profit and Loss.

This category generally applies to
interest-bearing loans and borrowings.

e) Derecognition

A financial liability is derecognised
when the obligation under the liability
is discharged or cancelled or expires.
When an existing financial liability is
replaced by another from the same
lender on substantially different terms,
or the terms of an existing liability
are substantially modified, such an
exchange or modification is treated
as the derecognition of the original
liability and the recognition of a new
liability. The difference in the respective
carrying amounts is recognised in the
Statement of Profit and Loss.

Financial assets and financial liabilities
are offset and the net amount is
reported in the balance sheet if there
is a currently enforceable legal right
to offset the recognised amounts and
there is an intention to settle on a net
basis, to realise the assets and settle
the liabilities simultaneously.

IV. Derivative financial instruments

The Company uses derivative financial
instruments, such as foreign exchange
forward contracts, interest rate swaps and
currency options to manage its exposure to
interest rate and foreign exchange risks. Such
derivative financial instruments are initially
recognised at fair value on the date on which
a derivative contract is entered into and
are subsequently re-measured at fair value.
Derivatives are carried as financial assets
when the fair value is positive and as financial
liabilities when the fair value is negative.

s. Cash and cash equivalents

Cash and cash equivalent in the balance sheet
comprise cash at banks and on hand and short¬
term deposits with an original maturity of three
months or less, that are readily convertible to
a known amount of cash and subject to an
insignificant risk of changes in value.

For the purpose of the statement of cash flows,
cash and cash equivalents consist of cash and
short-term deposits, as defined above, net of
outstanding bank overdrafts as they are considered
an integral part of the Group’s cash management.

t. Investment in subsidiaries

Investment in subsidiaries is carried at cost less
impairment in the financial statements.

u. Recent pronouncements

Ministry of Corporate Affairs ("MCA”) notifies
new standards or amendments to the existing
standards under Companies (Indian Accounting
Standards) Rules as issued from time to time.
As on the date of approval of these financial
statements, there are no new standards or
amendments to the existing standard, which
are issued but not yet effective and which
are expected to have material impact on the
financial statements of the Company.

15(f): Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares
is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. The dividend proposed
by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of
the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity
shares held by the shareholders.

15(g): Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought
back during the period of five years immediately preceding the reporting date.

The Company has not issued any bonus shares, shares for consideration other than cash during the period of five years
immediately preceding the reporting date.

(B) Provisions

The closing balance of provisions as of 31 March 2025 aggregates Rs 100.00 Lakhs (Previous year Rs. 121 lakhs)
This includes provision of Rs. 100.00 Lakhs relating adjudication proceedings initiated by Regulator / Government
agencies pertaining to certain Credit ratings assigned by the Company to its clients, which is still in the process
of being completed. In previous year the Company has created provision of Rs. 21 lakhs on accounts of regulatory
matter which is paid during the year.

Further, the Company has assessed the probability of outflow of resources on account of other pending litigations
and has concluded that the likelihood of outflow of resources in relation to such litigations is remote.

Note 30: Capital and other commitments

The amounts pending on account of contracts remaining to be executed on capital account, not provided for is Rs.
695.51 Lakhs (March 31, 2024 - 110.70 Lakhs).

The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable losses.
At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting
standards for material foreseeable losses on such long-term contracts has been made in the books of account.

Note 31: Employee benefits

A. Defined benefit plans: Gratuity:

The gratuity payable to employees is based on the employee’s service and last drawn salary at the time of leaving
the services of the Company and is in accordance with the rules of the Company for payment of gratuity. The
Company accounts for the liability based on actuarial valuation. The Company has created a trust for future
payment of gratuities which is funded through gratuity-cum-life insurance scheme of LIC of India.

Inherent risk on above:

The plan is defined in nature which is sponsored by the Company and hence it underwrites all the risks pertaining
to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, change in
demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of
providing these benefits to the employees in future. Since the benefits are lump sum in nature, the plan is not
subject to any longevity risk.

xi. Basis used to determine expected rate of return on plan assets:

Expected rate of return on Plan Assets is based on expectation of the average long-term rate of return
expected on investments of the fund during the estimated term of the obligations.

xii. Salary escalation rate:

Salary escalation rates are determined considering seniority, promotion, inflation and other relevant factors.

xiii. Asset liability matching (ALM) strategy:

The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of
Income Tax Rules, 1962, this generally reduces ALM risk.

xiv. The Company’s expected contribution during next year is 253.02 Lakhs.

B. Compensated absences:

The compensated absences cover the Company’s liability for earned leave. Long term compensated absences
are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit
credit method. Short term compensated absences are provided for based on estimates. Amount recognized as an
expense in respect of Compensated Absences is Rs. 250.67 Lakhs (March 31, 2024 - Rs. 301.93 Lakhs).

C. Defined contribution plans:

Amount recognized as an expense and included in Note 25 under the head "Contribution to Provident and other
Funds” of Statement of Profit and Loss is Rs. 519.98 Lakhs (March 31, 2024- Rs. 390.00 Lakhs).

D. Superannuation benefits:

Superannuation Benefits is contributed by the Company to Life Insurance Corporation of India (LIC) @ 10% of
basic salary with respect to certain employees.

Contribution to Superannuation Fund charged to Statement of Profit and Loss in Note 25 under the head
"Contribution to Provident and other Funds” is Rs. 45.14 Lakhs (March 31,2024 - Rs. 43.22 Lakhs).

E. Long term incentive:

Amount recognized as an expense and included in Note 25 under the head "Salaries and other allowances ” of
Statement of Profit and Loss is Rs. 138.62 Lakhs (March 31, 2024 - Rs. 126.58 Lakhs).

Note 37: Fair value measurement:

The fair values of the Financial assets and liabilities are included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to
valuation techniques used to measure fair value of financial instruments are:

Level 1:

This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities.

For financial instruments other than covered above, their carrying values approximate their fair values.

There has been no transfers between level 1, level 2 and level 3 for the year ended March 31, 2025 and March 31, 2024.
The following methods and assumptions were used to estimate the fair values:

• The fair values of the quoted investments/units of mutual fund schemes are based on market price/net asset value
at the reporting date.

• The valuation of investments in equity shares of 2 companies classified as Fair Value through Other Comprehensive
Income have been determined with reference to the market multiples derived from quoted prices of companies
comparable to the investees and expected revenue of the investees. The estimate is adjusted for the effect of
non marketability of the relevant equity securities. There were no significant unobservable inputs other the
adjustment for the effect of non marketability. The estimated fair value would reduce in case the adjustment for
non marketability is increased and vice versa.

Note 38: Financial risk management objectives and policies:

The Company is a Debt Free Company. The principal financial liabilities of the Company comprise of other liabilities
and Provisions which arise on account of normal course of business. The Company’s principal financial assets include
investments, trade receivables, cash and cash equivalents, other bank balances, loans and other financial assets.

The Company is exposed to Market Risk, Credit Risk, and Liquidity Risk. The Company’s senior management oversees
the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities
are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in
accordance with the Company’s policies and risk objectives.

The Management of the Company updates its Board of Directors on periodic basis about various risks to the business
and status of various activities planned to mitigate the risk.

The Company has exposure to the following risks arising from financial instruments:

(A) Market Risk

Market risk is the risk that the fair value or future cash flows of such financial instrument will be impacted because
of various financial and non financial market factors. The financial instruments affected by market risk include the
investment in Mutual Funds and investment in Equity Shares of companies incorporated and operating outside India.

There is no Interest rate risk since the Company does not hold any financial instrument whose fair value or future
cash flows will fluctuate because of changes in market interest rates.

Foreign currency exchange rate risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss
and other comprehensive income and equity, where any transaction references more than one currency or where
assets / liabilities are denominated in a currency other than the functional currency of the Company. Considering
the countries and economic environment in which the Company operates, its operations are subject to risks arising
from fluctuations in exchange rates in those countries. The company evaluates the impact of foreign exchange rate
fluctuations by assessing its exposure to exchange rate risks.

The following table shows foreign currency exposures in USD, MRF and MUR on financial instruments at the end
of the reporting period. The exposure to foreign currency for all other currencies are not material. The Company
does not hedge its foreign currency exposure.

(B) Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating (primarily Trade
receivables), investing and financing activities including Mutual Fund Investments, Investment in Debt Securities,
Bank Balance, Deposits with Bank, Security Deposits, Loans to Employees and other financial instruments.

The Company measures and manages its Credit Risk by diversification of its surplus funds into various mutual fund
schemes based on its investment policy.

Total Trade receivable as on March 31, 2025 is Rs.2,247.51 Lakhs (March 31, 2024 - Rs.1, 470.77 Lakhs). The Company
does not have higher concentration of credit risks to a single customer.

As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a
provision matrix to mitigate the risk of default payments and makes appropriate provision at each reporting date
wherever outstanding is for longer period and involves higher risk.

(C) Liquidity Risk

Investments, Cash and Cash Equivalent and Bank Deposit:

Credit Risk on cash and cash equivalent, deposits with the banks/financial institutions is generally low as the said
deposits have been made with the PSU Banks. Investments of surplus funds are made only based on Investment
Policy of the Company. Investments primarily include investment in units of mutual funds, Bonds issued by
Government/ Semi Government Agencies/ PSU etc. These Mutual Funds and Counterparties have low credit risk.

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The cash
flows and liquidity of Company is monitored under the control of the management. The objective is to ensure that
Company’s surplus funds are not kept idle and invested in the financial instruments only after adequate review of
such instrument and approval of the management.

The Company manages liquidity risk by maintaining adequate reserves, continuously monitoring forecasted
and actual periodic cash requirement and matching the maturity profiles of financial assets and liabilities.

The Company generally has investments and liquids funds more than its forecasted and current liabilities and has
not faced shortage of funds at any point of time. The Liquidity risk on the Group is very less.

The table below summarizes the maturity profile of the Company’s financial liabilities & financial assets based on
contractual undiscounted payments.

Note 40: Capital management:

The Company has a cash surplus position and has no capital other than Equity. The Company is not exposed to any
regulatory imposed capital requirements.

The cash surplus is currently invested in income generating Mutual funds units, Fixed Deposits and Government
Securities which in line with its Investment Policy. Safety of Capital is of prime importance to ensure availability of
capital for operations. Investment objective is to provide safety and adequate return on surplus funds.

The Company does not have any borrowings.

Note 41: Micro, small and medium enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into force from October
2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises.

Note 44: Disclosure as per Section 186(4) of the Companies Act, 2013
A. Details of Inter-Corporate Loans / Guarantees granted during the year as below:

The company had granted unsecured loan amounting to its wholly owned subsidiary CARE Analytics and Advisory
Private Limited formerly known as CARE Risk Solutions Private Limited for meeting working capital requirements
& for increase in authorised capital. During the year no repayment has been made (previous year = Rs. 150 Lakhs).
The rate of interest was to be determined with reference to specific benchmark rates. There are no specified
repayment dates for these loans.

Note 46:

(a) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries”),
with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or
indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company
("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) No funds have been received by the company from any person(s) or entity(ies), including foreign entities ("Funding
Parties”), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or
indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding
Party ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note 47: Segment reporting:

In accordance with the requirements of Ind AS 108 "Operating Segments", the Company has disclosed details in the
consolidated financial statements.

Note 48: Impairment

Impairment loss of non current assets are as follows:
a) Impairment of Investment in subsidiaries

Impairment of Investment in subsidiaries - During the year ended March 31, 2025, the Company has not recognized
an impairment loss in relation to investments in subsidiaries (FY 24 Rs. 350.00 Lakhs).

During the year ended March 31, 2024, the performance of a subsidiary company along with relevant economic
conditions and conditions of the market in which the entity operates, resulted in indicators of impairment.
Accordingly, the Company determined the recoverable amount of the entity i.e. Rs. 4,663.00 Lakhs which is based
on fair value less cost of disposal and recorded an impairment loss of Rs. 350.00 lakhs for the year ended March
31, 2024. The valuation of investment is considered in the nature of level 3 valuation. The value in use calculation
use discount rate of 15% on median EV / Revenue multiple of the comparable companies.

Note 50: Additional regulatory information pursuant to the requirement in Division II of Schedule
III to the Companies Act 2013

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against
the Company for holding any Benami property

(ii) The Company does not have any transactions with companies struck off

(iii) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible
assets or both during the current or previous year

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

vii) The Company has not any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961

Viii) None of the entities in the Company have been declared wilful defaulter by any bank or financial institution or
government or any government authority

(ix) The Company has complied with the number of layers prescribed under the Companies Act, 2013

(x) The Company has not entered into any scheme of arrangement which has an accounting impact on current year.

(xi) The Company does not have borrowings from bank & financial institutions on the basis of security of current assets.
The accompanying notes are an integral part of the standalone financial statements.

As per our attached report of even date For and on behalf of the Board of Directors of CARE Ratings Limited
For B S R & Co. LLP

Chartered Accountants Najib Shah Mehul Pandya Venkatadri Chandrasekaran

Firm registration No.: 101248W/W-100022 Chairman Managing Director & Group CEO Independent Director

DIN No. - 08120210 DIN No. - 07610232 DIN No. - 03126243

Ajit Viswanath

Partner

Membership No. 067114 Jinesh Shah Manoj Kumar CV

Chief Financial Officer Company Secretary
M No.- 117833 M No.- A15140

Mumbai Mumbai

Date : May 12, 2025 Date : May 12, 2025

---

Mar 31, 2024

m. Provisions, contingent liabilities and contingent assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company. Claims against the Company where the possibility of any outflow of resources in settlement is remote, are not disclosed as contingent liabilities.

Contingent assets are not recognised in standalone financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognised.

n. Employee Benefits

(i) Short term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(ii) Defined contribution plans (provident fund, superannuation fund etc.)

A defined contribution plan is a postemployment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts.

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

(iii) Defined benefit plans (gratuity)

The Company''s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses and the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income (OCI). Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset). Net interest expense and other expenses related to defined benefit plans are recognised in Statement of Profit and Loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in Statement of Profit and Loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iv) Other long-term employee benefits (leave encashment)

The Company''s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurement are recognised in Statement of Profit and Loss in the period in which they arise.

o. Earnings per share

The basic Earnings per equity share ("EPS”) is computed by dividing the net profit / (loss) after tax for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted Earnings per equity share, net profit/(loss) after tax for the year attributable to the equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

p. Share based payments

The grant date fair value of options granted to employees is recognized as an employee expense, with a corresponding increase in liability towards recharge arrangements with the Parent, over the period that the employees become unconditionally entitled to the options. The expense is recorded for each separately vesting portion of the award as if the award was, in substance, multiple awards.. The amount recognized as an expense is adjusted to reflect the actual number of stock options that vest.

q. Segment reporting - identification of segments:

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Company''s management to make decisions for which discrete financial information is available.

r. Financial Instruments (i) Financial Assets a) Classification

The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

b) Initial recognition and measurement

All financial assets (not measured subsequently at fair value through profit or loss) are recognised initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

c) Debt instruments at amortised cost

A ''debt instrument'' is measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the Statement of Profit and Loss. The losses arising from impairment are recognised in the Statement of Profit and Loss. This category generally applies to trade and other receivables.

Debt instruments included within the fair value through profit and loss (FVTPL) category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

d) Equity investments

All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at fair value through other comprehensive income (FVTOCI) or FVTPL. The Company makes such election on an instrument-byinstrument basis. The classification is made on initial recognition and is irrevocable.

For equity instruments classified as FVTOCI, all fair value changes on the instrument, excluding dividends, are recognized in other comprehensive income (OCI). There is no recycling of the amounts from OCI to Statement of Profit and Loss, even on sale of such investments.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

e) Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company''s balance sheet) when:

The rights to receive cash flows from The asset have expired, or

The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either:

(a) the Company has transferred substantially all the risks and rewards of the asset, or

(b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

f) Impairment of financial assets

In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, and bank balance.

b) Trade receivables.

The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component.

The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

(ii) Financial Liabilities

a) Classification

The Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value

b) Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.

c) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities

designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind-AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in Ind-AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/loss are not subsequently transferred to Statement of Profit and Loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the Statement of Profit and Loss. The Company has not designated any financial liability as at fair value through profit or loss.

d) Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in Statement of Profit and Loss when the liabilities are derecognised.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

This category generally applies to interestbearing loans and borrowings.

e) Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such

an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

IV. Derivative financial instruments

The Company uses derivative financial instruments, such as foreign exchange forward contracts, interest rate swaps and currency options to manage its exposure to interest rate and foreign exchange risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

s. Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and shortterm deposits with an original maturity of three months or less, that are readily convertible to a known amount of cash and subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group''s cash management.

t. Recent pronouncements

Ministry of Corporate Affairs ("MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

(B) Provisions

The closing balance of provisions as of March 31, 2024 aggregates Rs 121.00 lakh. This includes provision of Rs 100.00 lakh relating adjudication proceedings initiated by Regulator / Government agencies pertaining to certain Credit ratings assigned by the Company to its clients, which is still in the process of being completed. In addition to this, provision of Rs 21.00 lakh has been recognised during the year on account of certain process related regulatory observations. During the year ended March 31, 2024 Rs 225.92 lakh provided in FY 22-23 relating to contract with a vendor providing technology services, have been paid towards termination of contract.

Note 30: Capital and other commitments

The amounts pending on account of contracts remaining to be executed on capital account, not provided for is Rs 110.70 lakh (March 31, 2023 - Rs 21.22 lakh).

The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable loss- es on such long-term contracts has been made in the books of account.

Note 31: Employee benefits

A. Defined benefit plans: Gratuity:

The gratuity payable to employees is based on the employee''s service and last drawn salary at the time of leaving the services of the Company and is in accordance with the rules of the Company for payment of gratuity. The Company accounts for the liability based on actuarial valuation. The Company has created a trust for future payment of gratuities which is funded through gratuity-cum-life insurance scheme of LIC of India.

xi. Basis used to determine expected rate of return on plan assets:

Expected rate of return on Plan Assets is based on expectation of the average long-term rate of return expected on investments of the fund during the estimated term of the obligations.

xii. Salary escalation rate:

Salary escalation rates are determined considering seniority, promotion, inflation and other relevant factors.

xiii. Asset liability matching (ALM) strategy:

The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

xiv. The Company’s expected contribution during next year is Rs 332.11 lakh.

B. Compensated absences:

The compensated absences cover the Company''s liability for earned leave. Long term compensated absences are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method. Short term compensated absences are provided for based on estimates. Amount recognized as an expense in respect of Compensated Absences is Rs 301.93 lakh (March 31, 2023 -Rs 384.26 lakh).

C. Defined contribution plans:

Amount recognized as an expense and included in Note 28 under the head "Contribution to Provident and other Funds” of Statement of Profit and Loss is Rs 390.00 lakh (March 31, 2023- Rs 327.84 lakh).

D. Superannuation benefits:

Superannuation Benefits is contributed by the Company to Life Insurance Corporation of India (LIC) @ 10% of basic salary with respect to certain employees.

Contribution to Superannuation Fund charged to Statement of Profit and Loss in Note 28 under the head "Contribution to Provident and other Funds” is Rs 43.22 lakh (March 31, 2023 - Rs 36.49 lakh).

E. Long term incentive:

The Company had introduced Long Term Incentive Plan (LTIP) in FY 22-23 for certain employees. The total cost of LTIP is recognized over the period of scheme.

During the year, the Company has recognized an expense in the statement of Profit and Loss amounting Rs 126.58 lakh (March 31, 2023 - Rs 12.41 lakh). The Company has paid first tranche of LTIP amounting Rs 62.00 lakh.

Note 37: Fair value measurement:

The fair values of the Financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1:

This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2:

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates. The investment in mutual funds are valued using the closing Net Asset Value based on the mutual fund statements received by the company. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3:

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. The fair valuation of investment in Equity Shares of Malaysian Rating Corporation Berhad and ARC Ratings Holdings Limited is classified under Level 3. The details are given in the table below:

For financial instruments other than covered above, their carrying values approximate their fair values.

There has been no transfers between level 1, level 2 and level 3 for the year ended March 31, 2024 and 2023.

The valuation of investments in Malaysian Rating Corporation Berhad and ARC Ratings Holding Limited has been

done by registered valuer.

The following methods and assumptions were used to estimate the fair values:

• The fair values of the quoted investments/units of mutual fund schemes are based on market price/net asset value at the reporting date.

• The valuation of investments in equity shares of 2 companies classified as Fair Value through Other Comprehensive Income have been determined with reference to the market multiples derived from quoted prices of companies comparable to the investees and expected revenue of the investees. The estimate is adjusted for the effect of non marketability of the relevant equity securities. There were no significant unobservable inputs other the adjustment for the effect of non marketability. The estimated fair value would reduce in case the adjustment for non marketability is increased and vice versa.

Note 38: Financial risk management objectives and policies:

The Company is a Debt Free Company. The principal financial liabilities of the Company comprise of other liabilities and Provisions which arise on account of normal course of business. The Company''s principal financial assets include investments, trade receivables, cash and cash equivalents, other bank balances, loans and other financial assets.

The Company is exposed to Market Risk, Credit Risk, and Liquidity Risk. The Company''s senior management oversees the management of these risks. The Company''s senior management ensures that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives.

The Management of the Company updates its Board of Directors on periodic basis about various risks to the business and status of various activities planned to mitigate the risk.

The Company has exposure to the following risks arising from financial instruments:

(A) Market risk

Market risk is the risk that the fair value or future cash flows of such financial instrument will be impacted because of various financial and non-financial market factors. The financial instruments affected by market risk include the investment in Mutual Funds and investment in Equity Shares of companies incorporated and operating outside India.

There is no Interest rate risk since the Company does not hold any financial instrument whose fair value or future cash flows will fluctuate because of changes in market interest rates.

(B) Foreign currency exchange rate risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the Company.

Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.

The following table shows foreign currency exposures in USD, MRF and MUR on financial instruments at the end of the reporting period. The exposure to foreign currency for all other currencies are not material. The Company does not hedge its foreign currency exposure.

(B) Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating (primarily Trade receivables), investing and financing activities including Mutual Fund Investments, Investment in Debt Securities, Bank Balance, Deposits with Bank, Security Deposits, Loans to Employees and other financial instruments.

The Company measures and manages its Credit Risk by diversification of its surplus funds into various mutual fund schemes based on its investment policy.

Total Trade receivable as on March 31, 2024 is Rs 1,470.77 lakh (March 31, 2023 - Rs 1,518.95 lakh ). The Company does not have higher concentration of credit risks to a single customer.

As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

Refer note 9 Trade receivables for ageing of trade receivables which reflects credit risk exposure of the Company. As per the provision matrix receivables are classified into different bucket based on the overdue period, buckets range from 0 to 6 months, 6 months to 9 months, 12 months - 18 months and more than 18 months. The norms of provisioning on the same range are from 25% - 100% (which was 25% - 100% in previous year). The management, on a case to case basis may decide to provide or write off at a higher rate with reasons whenever felt necessary.

Investments, Cash and Cash Equivalent and Bank Deposit:

Credit Risk on cash and cash equivalent, deposits with the banks/financial institutions is generally low as the said deposits have been made with the PSU Banks. Investments of surplus funds are made only based on Investment Policy of the Company. Investments primarily include investment in units of mutual funds, Bonds issued by Government/ Semi Government Agencies/ PSU etc. These Mutual Funds and Counterparties have low credit risk.

(C) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The cash flows and liquidity of Company is monitored under the control of the management. The objective is to ensure that Company''s surplus funds are not kept idle and invested in the financial instruments only after adequate review of such instrument and approval of the management.

The Company manages liquidity risk by maintaining adequate reserves, continuously monitoring forecasted and actual periodic cash requirement and matching the maturity profiles of financial assets and liabilities.

The Company generally has investments and liquids funds more than its forecasted and current liabilities and has not faced shortage of funds at any point of time. The Liquidity risk on the Group is very less.

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments.

Note 40: Capital management:

The Company has a cash surplus position and has no capital other than Equity. The Company is not exposed to any regulatory imposed capital requirements.

The cash surplus is currently invested in income generating Mutual funds units, Fixed Deposits and Government Securities which in line with its Investment Policy. Safety of Capital is of prime importance to ensure availability of capital for operations. Investment objective is to provide safety and adequate return on surplus funds.

The Company does not have any borrowings.

Note 46

(a) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) No funds have been received by the company from any person(s) or entity(ies), including foreign entities ("Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note 47: Segment reporting:

In accordance with the requirements of Ind AS 108 "Operating Segments”, the Company has disclosed details in the

consolidated financial statements.

Note 48 Impairment

Impairment loss of non current assets are as follows:

a) Impairment of Investment in subsidiaries

- Impairment of Investment in subsidiaries - During the year ended March 31, 2024, the Company has recognized an impairment loss in relation to investments in subsidiaries of Rs 350.00 lakh.

During the year ended March 31, 2024, the performance of a subsidiary company along with relevant economic conditions and conditions of the market in which the entity operates, resulted in indicators of impairment. Accordingly, the Company determined the recoverable amount of the entity i.e. Rs 4,663.00 lakh which is based on fair value less cost of disposal and recorded an impairment loss of Rs 350.00 lakh (FY 2023: Rs 173.26) for the year ended March 31, 2024. The valuation of investment is considered in the nature of level 3 valuation. The value in use calculation use discount rate of 15% on median EV / Revenue multiple of the comparable companies.

Note 50 Audit trail

For the year ended March 31, 2024, the following matters relating to the requirements of audit trail were relevant:

• Audit trail was not enabled in case of an accounting software used for maintaining general ledger for the period April 1, 2023 to December 31, 2023.

• The independent auditor''s reports for accounting softwares, used for maintaining general ledger (operated from 1 January 2024 to March 31, 2024) and maintaining payroll records which are operated by respective third- party software providers were not available.

• • For an accounting software used for maintaining revenue related records, the Company has implemented an access management tool w.e.f. June 6, 2023 which has a feature of recording audit trail (edit log) facility.

However, the management has appropriate controls in place with respect to Internal financial controls for these

respective processes.

Note 51 Additional regulatory information pursuant to the requirement in Division II of Schedule III to the

Companies Act 2013

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property

(ii) The Company does not have any transactions with companies struck off

(iii) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

vii) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

(viii) The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the books of accounts.

(ix) None of the entities in the Company have been declared wilful defaulter by any bank or financial institution or government or any government authority

(x) The Company has complied with the number of layers prescribed under the Companies Act, 2013

(xi) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

The accompanying notes are an integral part of the standalone financial statements.

As per our attached report of even date For and on behalf of the Board of Directors of CARE Ratings Limited For B S R & Co. LLP

Chartered Accountants Firm registration No.:

101248W/W-100022

Ajit Viswanath Najib Shah Mehul Pandya Adesh Kumar Gupta

Partner Chairman Managing Director & Group CEO Independent Director

Membership No. 067114 DIN No. - 08120210 DIN No. - 07610232 DIN No. - 00020403

Jinesh Shah Nehal Shah

Chief Financial Officer Company Secretary

M No.- 117833 M No.- A18077

Mumbai Mumbai

Date : May 09, 2024 Date : May 09, 2024

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Mar 31, 2023

Terms/Right attached to Equity Shares:

The Company has only one class of equity shares having a par value of Rs 10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date.

The Company has not issued any bonus shares, shares for consideration other than cash during the period of five years immediately preceding the reporting date.

Note 32: Provisions and Contingent Liabilities (A) Contingent Liabilities Claims against the Company not acknowledged as debts (to the extent not provided for):		(Rs in lakh)
Particulars	As at	As at
	March 31, 2023	March 31, 2022
Contingent Liability on account of Income Tax	-	72.51

(B) Provisions

The closing balance of provisions as of March 31, 2023 aggregates Rs 325.92 lakh. Of such amount, provisions amounting Rs 100 lakh (March 31, 2022 - Rs 100 lakh) relates to adjudication proceedings initiated by Regulator / Government agencies pertaining to certain Credit ratings assigned by the Company to its clients, which is still in the process of being completed. Further, provision of Rs 225.92 lakh has been recognised in the current year towards expected cost of cancellation of a long term contract for procurement of services.

Further, the Company has assessed the probability of outflow of resources on account of other pending litigations and has concluded that the likelihood of outflow of resources in relation to such litigations is remote.

Particulars	As at March 31, 2023	As at March 31, 2022
Opening balance	100.00	125.00
Charge/(Reversal) for the year	225.92	(15.00)
Payment	-	(10.00)
Closing balance	325.92	100.00

C) Guarantees given by Bank on behalf of the subsidiary company in respect of lien marked Deposits placed by the Company for Rs 141.35 lakh (Previous Year Rs 141.35 lakh)

Note 33: Capital and other commitments

The amounts pending on account of contracts remaining to be executed on capital account, not provided for is Rs 21.22 lakh (March 31, 2022 - 43.53 lakh).

The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable loss- es on such long-term contracts has been made in the books of account.

Note 34: Employee benefits

A. Defined benefit plans: Gratuity:

The gratuity payable to employees is based on the employee''s service and last drawn salary at the time of leaving the services of the Company and is in accordance with the rules of the Company for payment of gratuity. The Company accounts for the liability based on actuarial valuation. The Company has created a trust for future payment of gratuities which is funded through gratuity-cum-life insurance scheme of LIC of India.

Inherent risk on above:

The plan is defined in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to the employees in future. Since the benefits are lump sum in nature, the plan is not subject to any longevity risk.

* The sensitivity analysis has been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognized in the balance sheet. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

xi. Basis used to determine expected rate of return on plan assets:

Expected rate of return on Plan Assets is based on expectation of the average long-term rate of return expected on investments of the fund during the estimated term of the obligations.

xii. Salary escalation rate:

Salary escalation rates are determined considering seniority, promotion, inflation and other relevant factors.

xiii. Asset liability matching (ALM) strategy:

The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

xiv. The Company’s expected contribution during next year is Rs 271.44 lakh

B. Compensated absences:

The compensated absences cover the Company''s liability for earned leave. Long term compensated absences are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method. Short term compensated absences are provided for based on estimates. Amount recognized as an expense in respect of Compensated Absences is Rs 384.26 lakh (March 31, 2022 -Rs 657.98 lakh)

C. Defined contribution plans:

Amount recognized as an expense and included in Note 28 under the head "Contribution to Provident and other Funds” of Statement of Profit and Loss is Rs 327.84 lakh (March 31, 2022- Rs 307.49 lakh).

D. Superannuation benefits:

Superannuation Benefits is contributed by the Company to Life Insurance Corporation of India (LIC) @ 10% of basic salary with respect to certain employees.

Contribution to Superannuation Fund charged to Statement of Profit and Loss in Note 28 under the head "Contribution to Provident and other Funds” is Rs 36.49 lakh (March 31, 2022 - 36.29 lakh).

Note 35: Segment reporting:

The Company is exclusively engaged in the business of ratings. As per Ind AS 108 "Operating Segments”, there are no reportable operating or geographical segments applicable to the Company. There are no customers who contribute to more than 10% of the aggregate revenue of the Company.

Other liabilities amounting Rs 172.33 lakh pertaining to payments outstanding in relation to development work performed for certain intangible assets under development (refer note on impairment - note 52). During the year, the same has been reversed and adjusted with intangible assets under development and the balance amount of intangible assets under development has been impaired during the current year.

The ESOS compensation cost is amortized on a straight-line basis over the total vesting period of the options. Accordingly for ESOS, an amount of Rs 14.73 lakh (Previous Year 629.01 lakh) has been charged to the current year Statement of Profit and Loss.

B. Investments in equity instruments designated at Fair Value through other comprehensive income

As on March 31, 2023 and March 31, 2022, The Company has investments in ARC Ratings holding Limited of 20 Ordinary Shares of USD 22,600 each and 20,00,000 ordinary shares of RM 1 each in Malaysian Rating Corporation Berhad. The Company has opted to designate these investments at Fair Value through Other comprehensive income since these investments are not held for trading.

Note 41: Fair value measurement:

The fair values of the Financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1:

This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2:

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates. The investment in mutual funds are valued using the closing Net Asset Value based on the mutual fund statements received by the company. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

For financial instruments other than covered above, their carrying values approximate their fair values.

There has been no transfers between level 1, level 2 and level 3 for the year ended March 31, 2023 and 2022.

The valuation of investments in Malaysian Rating Corporation Berhad and ARC Ratings Holding Limited has been

done by registered valuer.

The following methods and assumptions were used to estimate the fair values:

• The fair values of the quoted investments/units of mutual fund schemes are based on market price/net asset value at the reporting date.

• The valuation of investments in equity shares of 2 companies classified as Fair Value through Other Comprehensive Income have been determined with reference to the market multiples derived from quoted prices of companies comparable to the investees and expected revenue of the investees. The estimate is adjusted for the effect of non marketability of the relevant equity securities. There were no significant unobservable inputs other the adjustment for the effect of non marketability. The estimated fair value would reduce in case the adjustment for non marketability is increased and vice versa.

• The fair value of the remaining financial instruments is determined using discounted cash flow analysis. The discount rates used is based on management estimates.

Note 42: Financial risk management objectives and policies:

The Company is a Debt Free Company. The principal financial liabilities of the Company comprise of other liabilities

and Provisions which arise on account of normal course of business. The Company''s principal financial assets include

investments, trade receivables, cash and cash equivalents, other bank balances, loans and other financial assets.

The Company is exposed to Market Risk, Credit Risk and Liquidity Risk. The Company''s senior management oversees

the management of these risks. The Company''s senior management ensures that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives.

The Management of the Company updates its Board of Directors on periodic basis about various risks to the business and status of various activities planned to mitigate the risk.

The Company has exposure to the following risks arising from financial instruments:

(A) Market risk

Market risk is the risk that the fair value or future cash flows of such financial instrument will be impacted because of various financial and non-financial market factors. The financial instruments affected by market risk include the investment in Mutual Funds and investment in Equity Shares of companies incorporated and operating outside India.

There is no Interest rate risk since the Company does not hold any financial instrument whose fair value or future cash flows will fluctuate because of changes in market interest rates.

Foreign currency exchange rate risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the Company.

Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.

The following table shows foreign currency exposures in USD, MRF and MUR on financial instruments at the end of the reporting period. The exposure to foreign currency for all other currencies are not material. The Company does not hedge its foreign currency exposure.

(B) Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating (primarily Trade receivables), investing and financing activities including Mutual Fund Investments, Investment in Debt Securities, Bank Balance, Deposits with Bank, Security Deposits, Loans to Employees and other financial instruments.

The Company measures and manages its Credit Risk by diversification of its surplus funds into various mutual fund schemes based on its investment policy.

Total Trade receivable as on March 31, 2023 is Rs 1,632.26 lakh (March 31, 2022 - Rs 1,360.54 lakh ). The Company does not have higher concentration of credit risks to a single customer.

As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

Refer note 8 Trade receivables for ageing of trade receivables which reflects credit risk exposure of the Company.

As per the provision matrix receivables are classified into different bucket based on the overdue period, buckets range from 12 months - 18 months, 18 months - 24 months and more than 24 months. The norms of provisioning on the same range are from 50% - 100% (which was 25% - 100% in previous year). The management, on a case to case basis may decide to provide or write of at a higher rate with reasons whenever felt necessary.

Investments, Cash and Cash Equivalent and Bank Deposit:

Credit Risk on cash and cash equivalent, deposits with the banks/financial institutions is generally low as the said deposits have been made with the PSU Banks. Investments of surplus funds are made only based on Investment Policy of the Company. Investments primarily include investment in units of mutual funds, Bonds issued by Government/ Semi Government Agencies/ PSU etc. These Mutual Funds and Counterparties have low credit risk.

(C) Liquidity Risk

Liquidity riskisthe risk that the Companywillnot be able to meetitsfinancialobligations as they falldue. The cash flowsandliquidity of Company is monitored under the control of the management. The objective is to ensure that Company''s surplus funds are not keptidle andinvested inthe financialinstruments only afteradequate reviewof such instrumentandapproval of the management.

The Company manages liquidity risk by maintaining adequate reserves, continuously monitoring forecasted and actual periodic cash requirement and matching the maturity profiles of financial assets and liabilities.

The Company generally has investments and liquids funds more than its forecasted and current liabilities and has not faced shortage of funds at any point of time. The Liquidity risk on the Group is very less.

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments.

Note 44: Capital management:

The Company is cash surplus and has no capital other than Equity. The Company is not exposed to any regulatory imposed capital requirements.

The cash surplus is currently invested in income generating Mutual funds units, Fixed Deposits and Government Securities which in line with its Investment Policy. Safety of Capital is of prime importance to ensure availability of capital for operations. Investment objective is to provide safety and adequate return on surplus funds. The Company does not have any borrowings.

Note 45: Micro, small and medium enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises.

Note 48: Disclosure as per Section 186(4) of the Companies Act, 2013

A. Details of Inter-Corporate Loans / Guarantees granted during the year as below:

During the year FY22-23, the company had granted unsecured loans amounting to Rs 707 lakh to its wholly owned subsidiary CARE Risk Solutions Private Limited for meeting working capital requirements. CARE Risk Solutions Private Limited had repaid the entire outstanding loan amounting to Rs 1,639.40 lakh on August 3, 2022. This repayment was made from capital infusion of Rs 33.50 crores made in the form of equity shares by Care Ratings Limited on August 1, 2022.

Further, Care Ratings Limited had granted unsecured loan in November 2022 amounting to Rs 110.60 lakh (previous year = Rs 592.40 lakh) (closing balance - Rs 110.60 lakh, previous year - Rs 932.40 lakh) to CARE Risk Solutions Private Limited. The rate of interest was to be determined with reference to specific benchmark rates. There are no specified repayment dates for these loans.

(a) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) No funds have been received by the company from any person(s) or entity(ies), including foreign entities ("Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

The Board of Directors at its meeting held on July 20, 2022, approved a proposal for buy-back of up to 23,68,000 fully paid-up equity shares of face value of Rs 10/- each (representing 7.99% of the total issued, subscribed and paid-up equity share capital of the Company as on March 31, 2022) by way of a tender offer at a price of Rs 515/- per equity share, payable in cash for an aggregate amount not exceeding Rs 1,21,95,20,000/- ("Buy-back”), in accordance with the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018, as amended and the Companies Act, 2013 and the rules made thereunder. The Buy-back was approved by shareholders by means of a special resolution through postal ballot on September 2, 2022. The Tendering Period of the Buy-back was concluded on December 1, 2022. Capital Redemption Reserve was created to the extent of share capital extinguished (Rs 0.42 lakh). The Company bought back 4,199 equity shares out of shares that were tendered by the eligible shareholders and extinguished the Equity Shares on December 19, 2022. The related expenses were appropriately recognized directly in other equity (adjusted against securities premium).

Note 52: Impairment

Impairment loss of non current assets are as follows

a) Impairment of intangible assets under development

b) Impairment of Investment in subsidiaries

a) Impairment of intangible assets under development - During the year ended March 31, 2023, the Company has recognised an impairment loss in relation to an intangible asset under development (after adjustment for related liabilities) amounting to Rs 398.29 lakh. The impairment was based on the Management''s assessment of the development completed in context of the related ratings'' business requirements except for intangible asset under development amounting Rs 40.00 lakh which is expected to developed in the subsequent periods.

b) Impairment of Investment in subsidiaries - During the year ended March 31, 2023, the Company has recognized an impairment loss in relation to investments in subsidiaries of Rs 173.26 lakh.

During the year ended March 31, 2023, the performance of a subsidiary company along with relevant economic conditions and conditions of the market in which the entity operates, resulted in indicators of impairment. Accordingly, the Company determined the recoverable amount of the entity i.e. Rs 5,013.00 lakh which is based on fair value less cost of disposal and recorded an impairment loss of Rs 173.26 lakh (FY 2022: Nil) for the year ended March 31, 2023. The valuation of investment is considered in the nature of level 3 valuation. The value in use calculation use discount rate of 15% on median EV / Revenue multiple of the comparable companies.

Note 53:

There are no funds advanced or loaned or invested by the Company or received by the Company to / from any other persons or entities, including foreign entities (Intermediaries / Funding Parties).

---

Mar 31, 2018

Note 1 :

Company Overview and Significant Accounting Policies Company Overview:

CARE Ratings Limited (Formerly known as Credit Analysis & Research Limited) (the Company), commenced its operations in April 1993 has established itself as the leading credit rating agency of India. The Company provides various credit ratings that helps corporate to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own risk-return expectations. The Company has its registered office and head office both located in Mumbai. In addition, CARE Ratings has regional offices at Ahmedabad, Bengaluru, Chandigarh, Chennai, Coimbatore, Hyderabad, Jaipur, Kolkata, New Delhi, Pune.

Note 1(A):

Use of Estimates and Judgements

The preparation of the financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are included in the following notes:

a) Useful Lives of Property, Plant & Equipment:

The Company uses its technical expertise along with historical and industry trends for determining the economic life of an asset/component of an asset. The useful lives are reviewed by management periodically and revised, if appropriate. In case of a revision, the unamortised depreciable amount is charged over the remaining useful life of the assets.

b) Fair value measurement of Financial Instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs for valuation techniques are taken from observable market where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.

c) Revenue

The Company recognizes portion of rating fee income commensurate with the efforts involved based on percentage completion method.

The Company uses various judgments and estimates to assess the efforts required for completion of various activities in the rating process. Based on assessment, the Company defines the percentage completion to be applied to measure income to be recognized from initial rating and surveillance during the year.

As a matter of prudent policy and on the basis of past experience of recoverability of income, fees in respect of certain defined categories of clients are recognized when there is reasonable certainty of ultimate collection.

Change in Accounting Estimates:

During the year ended March 31,2018, the Company has reviewed efforts required for completion of various activities in the rating process. Based on review, the Company has changed its effort estimates for rating activities as above due to change in Regulations, Business-Mix and Technological Enhancements as compared to previous year.

Accordingly, the revenue recognized for the year ended on March 31, 2018 based on revised efforts estimation is higher by Rs.186,186,612 as compared to revenue that would have been recognized based on earlier efforts estimation.

d) Defined benefit plans

The cost of the defined benefit gratuity plan and other employment benefits and the present value of the gratuity obligation and other employment benefits are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

e) Expected Credit Losses on Financial Assets

The impairment provisions of financial assets are based on assumptions about risk of default and expected timing of collection. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history, customer’s creditworthiness, existing market conditions as well as forward looking estimates at the end of each reporting period.

f) Share-Based Payments

The Company measures the cost of equity-settled transactions with employees using Black-Scholes model to determine the fair value of the liability incurred on the grant date. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 34.

2(a): The Company does not have a Holding Company

2(b): Shares reserved for issue under options and contracts, including the terms and amounts:

For details of Shares reserved for issue under the Employee Stock Option Plan (ESOP) of the Company: Refer Note 34

2(c): Terms/Right attached to Equity Shares :

The company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The Description of the Nature and Purpose of each reserve within equity is as follows:

a. Capital Redemption Reserve

Capital Redemption Reserve represents nominal value of shares credited at the time of buyback of shares

b. Securities Premium Reserve

Securities Premium Reserve is credited when the shares are issued at premium. It is utilized in accordance with the provision of the Companies Act, to issue bonus shares, to provide for premium on redemption of shares, equity related expenses like underwriting costs, etc.

c. Employees Stock Options Outstanding Reserve

The Company has Share Options Scheme under which option to subscribe for the Company’s shares have been granted to selected employees. Refer Note 34 for further details of this plan.

d. General Reserve

The Company has transferred a portion of the net profits of the Company before declaring dividends to General Reserve. Mandatory transfer to General Reserve is not required under the Companies Act, 2013

Note 3: Contingent Liabilities (Ind AS 37)

(A) Claims against the Company not acknowledged as debts (to the extent not provided for):

(B) In one case of rating given by the Company during one of the earlier financial year, there is an inquiry / investigation being carried out by a government agency. The matter is still under investigation / inquiry and the Company has not received any order from the government with respect to the said matter.

(C) Guarantees given by Bank on behalf of the Company in respect of lien marked Deposits is Nil (March 31, 2017 - Rs. 2,96,850) (April 1, 2016 - Nil)

Note 4: Capital and Other Commitments

There are no amounts pending on account of contracts remaining to be executed on capital account, not provided for (net of advances) is Nil (March 31, 2017 - Nil) (April 1, 2016 - Nil)

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long term contracts has been made in the books of account.

Note 5: Employee Benefits (Ind AS 19)

(A) Defined Benefit Plans:

Gratuity:

The gratuity payable to employees is based on the employee’s service and last drawn salary at the time of leaving the services of the Company and is in accordance with the rules of the Company for payment of gratuity. The Company accounts for the liability based on actuarial valuation. The Company has created a trust for future payment of gratuities which is funded through gratuity-cum-life insurance scheme of LIC of India.

Inherent Risk on above:

The plan is defined in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to the employees in future. Since the benefits are lump sum in nature, the plan is not subject to any longevity risk.

* The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognized in the balance sheet. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

(xi) Basis used to determine Expected Rate of Return on Plan Assets:

Expected rate of return on Plan Assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

(xii) Salary Escalation Rate:

Salary escalation rates are determined taking into account seniority, promotion, inflation and other relevant factors.

(xiii) Asset Liability Matching (ALM) strategy:

The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

(xiv) The Company’s expected contribution during next year is Rs. 1,61,15,072

(B) Compensated Absences:

“The compensated absences cover the Company’s liability for earned leave. Long term compensated absences are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method. Short term compensated absences are provided for based on estimates.

Amount recognized as an expense in respect of Compensated Absences is RS.45,831,370 (March 31, 2017 - RS.58,756,247)”

(C) Defined Contribution Plans:

Amount recognized as an expense and included in Note 25 under the head “Contribution to Provident and other Funds” of Statement of Profit and Loss is RS.2,21,51,442 (March 31, 2017 - RS.2,05,65,397)

(D) Superannuation Benefits:

Superannuation Benefits is contributed by the Company to Life Insurance Corporation of India (LIC) @ 10% of basic salary with respect to certain employees.

Contribution to Superannuation Fund is charged to Statement of Profit & Loss in Note 25 under the head “Contribution to Provident and other Funds” is RS.4,287,890 (March 31, 2017 - RS.47,03,252)”

Note 6: Segment Reporting (Ind AS 108):

The Company is exclusively engaged in the business of ratings. As per Ind AS 108 “Operating Segments”, specified under Section 133 of the Companies Act, 2013, there are no reportable operating or geographical segments applicable to the Company.

Note 7: Related Party Disclosures pursuant to Ind AS 24

(A) List of Related Parties where control exists:

No amount in respect of the related parties have been written off/back are provided for during the year. Related party relationship have been identified by the management and relied upon by the auditors.

Remuneration does not include provision made for compensated absence, leave travel allowance, gratuity since the same is provided for the company as a whole based on independent actuarial valuation except to the extent of amount paid. *Share based payments refer to amounts charged to the statement of Profit & Loss account, being charge on ESOP granted to Key Management Personnel as per ESOS 2017 scheme based on Fair Value method.

i) ESOS 2017: The weighted average remaining contractual life for the stock options outstanding as at March 31, 2018 is 1.42 years (Previous Year: Nil)

ii) ESOS 2013: The weighted average remaining contractual life for the stock options outstanding as at March 31, 2018 is Nil years (Previous Year: 0.76 years)

The ESOS compensation cost is amortized on a straight line basis over the total vesting period of the options. Accordingly for ESOS 2017,an amount of Rs. 8,64,89,983 (Previous Year Nil ) has been charged to the current year Statement of Profit and Loss. In respect of ESOS 2013, an amount of Nil (Previous Year Nil ) has been charged to the current year Statement of Profit and Loss.

(C) Fair Valuation:

The fair value of the options used to compute proforma net profit and earnings per share have been done by an independent valuer on the date of grant using Black - Scholes Formula . The key assumptions and the Fair Value are as under:

(B) Investments in equity instruments designated at Fair Value through Other Comprehensive Income

As on April 01, 2016, the Company was holding 53,000 Equity Shares of USD 10 each of ARC Ratings Holdings PTE Limited. In FY 2016-17, pursuant to internal structuring, the Company received 20 Equity Shares of USD 22,600 each of ARC Ratings Holdings Limited in lieu of its existing investment in ARC Ratings Holdings PTE Limited.

As on March 31, 2017 and March 31, 2018, The Company has investments in ARC Ratings holding Limited of 20 Ordinary Shares of USD 22,600 each and 20,00,000 ordinary shares of RM 1 each in Malaysian Rating Corporation Berhard. The Company has opted to designate these investment at Fair Value through Other Comprehensive Income since these investments are not held for trading.

The Company has received RS.37,17,089 (Previous Year RS.49,98,709) as Dividend and has recognized in the Statement of Profit & Loss under Note 24 - Other Income. There has been no transfer in investment during any period.

Note 8: Fair Value measurement (Ind AS 113):

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1:

This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities. The company does not have any such asset or liabilities.

Level 2:

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates. The investment in mutual funds are valued using the closing Net Asset Value based on the mutual fund statements received by the company. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3:

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. The fair valuation of investment in Equity Shares of Malaysian Rating Corporation Berhard and ARC Ratings Holdings Limited and investment in Preference share of CARE Risk Solutions Private Limited (Formerly known as CARE Kalypto Risk Technologies & Advisory Services Pvt Ltd.) is classified under Level 3. The details are given in the table below:

The Company has utilized the expertise of the in-house team to value the investments in ARC Ratings Holdings Limited & Malaysian Rating Corporation Berhard. For investment in Preference Shares of CARE Risk Solutions Private Limited (Formerly known as CARE Kalypto Risk Technologies & Advisory Services Pvt Ltd.), the Company has availed services of external valuer. The auditors have relied upon the reports provided by the said valuers.

The following methods and assumptions were used to estimate the fair values:

The fair values of the quoted investments/units of mutual fund schemes are based on market price/net asset value at the reporting date

The fair value of the remaining financial instruments is determined using discounted cash flow analysis. The discount rates used is based on management estimates

The significant unobservable inputs used in the fair value measurement of the fair value hierarchy together with a quantitative sensitivity analysis as at March 31, 2018, March 31, 2017 and April 01, 2016 are as shown below:

The Company had adopted Net Asset Method for Valuation of Investments in MARC Malaysia and ARC Ratings Holdings Ltd. as on April 01, 2016 and March 31, 2017.

Accordingly, there are no significant unobservable inputs.

Note 9: Financial Risk Management Objectives and Policies (Ind AS 107):

The Company is a Debt Free Company. The principal financial liabilities of the Company comprise of Other liabilities and Provisions which arise on a account of normal course of business. The Company’s principal financial assets include Investments, Trade Receivables, Cash and Cash Equivalents and Other Bank Balances.

The Company is exposed to Market Risk, Credit Risk, Liquidity Risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

The Management of the Company updates its Board of Directors on periodic basis about various risks to the business and status of various activities planned to mitigate the risk.

The Company has exposure to the following risks arising from financial instruments:

(A) Market Risk

Market risk is the risk that the fair value or future cash flows of such financial instrument will be impacted because of various financial and non financial market factors. The financial instruments affected by market risk include the investment in Mutual Funds and investment in Equity Shares of companies incorporated and operating outside India.

The investment in mutual funds are fair valued using the closing Net Asset Value based on the mutual fund statements received by the company at the end of each reporting period.

There is no Interest rate risk since the Company does not hold any financial instrument whose fair value or future cash flows will fluctuate because of changes in market interest rates.

The following table shows foreign currency exposures in USD, MRF, RM, NPR and GBP on financial instruments at the end of the reporting period. The exposure to foreign currency for all other currencies are not material. The company does not hedge its foreign currency exposure.

(B) Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating (primarily Trade Receivables), investing and financing activities including Mutual Fund Investments, Investment in Debt Securities, Bank Balance, Deposits with Bank, Security Deposits, Loans to Employees and other financial instruments.

The Company measures and manages its Credit Risk by diversification of its surplus funds into various mutual fund schemes based on its investment policy.

Total Trade receivable as on March 31, 2018 is RS.371,809,714 (March 31, 2017 - RS.231,907,837) (April 01, 2016 - RS.222,355,117) The Company does not have higher concentration of credit risks to a single customer.

As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

As per the provision matrix receivables are classified into different bucket based on the overdue period, buckets range from 12 months - 18 months, 18 months - 24 months and more than 24 months. The norms of provisioning on the same range are from 25% - 100%. The management, on a case to case basis may decide to provide or write of at a higher rate with reasons whenever felt necessary.

Investments, Cash and Cash Equivalent and Bank Deposit:

Credit Risk on cash and cash equivalent, deposits with the banks/financial institutions is generally low as the said deposits have been made with the PSU Banks.

Investments of surplus funds are made only based on Investment Policy of the Company. Investments primarily include investment in units of mutual funds, Bonds issued by Government/ Semi Government Agencies/ PSU etc. These Mutual Funds and Counterparties have low credit risk.

(C) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The cash flows and liquidity of Company is monitored under the control of the management. The objective is to ensure that Company’s surplus fund are not kept idle and invested in the financial instruments only after adequate review of such instrument and approval of the management.

The Company manages liquidity risk by maintaining adequate reserves, continuously monitoring forecasted and actual periodic cash requirement and matching the maturity profiles of financial assets and liabilities.

The Company generally has investments and liquids funds more than its forecasted and current liabilities and has not faced shortage of funds at any point of time. The Liquidity risk on the Company is very less.

The table below summarizes the maturity profile of the Company’s financial liabilities & investments based on contractual undiscounted payments.

Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognized as a liability (including Divided Distribution Tax thereon) as at March 31 of respective year.

Note 10: Capital Management (Ind AS 1):

The Company is cash surplus and has no capital other than Equity. The Company is not exposed to any regulatory imposed capital requirements.

The cash surplus are currently invested in income generating Mutual funds units and Government Securities which in line with its Investment Policy . Safety of Capital is of prime importance to ensure availability of capital for operations. Investment objective is to provide safety and adequate return on surplus funds.

The Company does not have any borrowings.

Note 11: Operating Leases (Ind AS 17):

a. With respect to offices given on lease, there are no office given on lease.

b. With respect to office taken on lease, operating lease expense recognized in the Statement of Profit and Loss amounting to RS.26,730,960 (March 31, 2017 - RS.27,815,415)

The lease payments are recognized in the Statement of Profit and Loss under rent in Note 26 - Other Expenses.

The future minimum lease payments under operating lease is given below:

c. General Description of Leasing Agreements:

- Office Building taken on lease: Bengaluru, Chandigarh, Chennai, Delhi, Kolkata & Kochi

- Future lease rental expenses are determined on basis of agreed terms

- At expiry of lease terms, the Company has the right to vacate the property or extend the term of agreement

- Lease agreements are generally non-cancellable and ranges between 11months and 5 years

Note 12: Micro, Small and Medium Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into force from 2 OctobeRs.2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises.

Note 13: Corporate Social Responsibility

Gross Amount required to be spent by the Company during the year is RS.2,86,52,836/- (Previous Year R3,95,02,885/-)

During Previous Year, the Company has spent an amount of RS.50,00,000/- by way of contribution to Swachh Bharat Kosh and Prime Minister’s National Relief Fund of RS.25,00,000/- each

Note 14: Disclosure as per Section 186(4) of the Companies Act, 2013

a. Details of Inter-Corporate Loans / Guarantees granted during the year as below:

There is no transaction in the nature of inter-Corporate Loans/Grarantee granted during the year.

During the year FY 16-17, the Company had granted loan amounting to Rs. 1,00,00,000 to its wholly owned subsidiary CARE Risk Solutions Pvt. Ltd. (formerly known as CARE Kalypto Risk Technologies and Advisory Services Pvt. Ltd) and the same was repaid duging FY 17-18

Note 15 : Details of Specified Bank Notes (SBN) held and transacted during the period 08 Nov, 2016 to 30 Dec, 2016.[Refer Statutory requirement under notification no G.S.RS.308 (E) of MCA dated 30th March, 2017.

The above provisions are not applicable for the financial yeaRs.2017-18.

Note 16: Ind AS 115: Revenue from Contracts with Customers

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115 ‘Revenue from Contracts with Customers’, which replaces Ind AS 18 ‘Revenue’. Based on the preliminary assessment carried out by the management, except for the disclosure requirements, the application of new standard may not have any significant impact the Company’s financial statements. The amendment will come into force from April 01, 2018.

Note 17: First Time Adoption of Ind AS (Ind AS 101):

As stated in Note 1, these financial statements, for the year ended March 31, 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (IGAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at April 01, 2016, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its IGAAP financial statements, including the balance sheet as at April 01, 2016 and the financial statements as at and for the year ended March 31, 2017 and how the transition from IGAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows.

Exemption Availed:

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has availed the following exemptions:

1. Deemed cost for PPE and Intangible Assets:

The Company has elected to continue with the carrying value of all of its plant and equipment and intangible assets as recognized as of April 01, 2016 measured as per the IGAAP and use that carrying value as its deemed cost as of the transition date.

2. Share-Based Payments:

The Company has opted not to apply Ind AS 102, Share based payment to equity instruments that vested before date of transition to Ind AS and to liabilities arising from share-based payment transactions that were settled before the date of transition to Ind AS.

3. Investment in Subsidiary, Joint ventures and Associates:

The Company has elected to carry its investment in subsidiary, joint venture and associates at deemed cost which is its IGAAP carrying amount at the date of transition to Ind AS

4. Fair Value of Financials Assets and Liabilities:

As per Ind AS exemption the Company has not fair valued the financial assets and liabilities retrospectively and has measured the same prospectively.

Notes to the Reconciliation of equity as at April 1, 2016 and March 31, 2017 and Total Comprehensive Income for the year ended March 31, 2018:

(a) Investments:

The Company has measured investments other than investment in subsidaries at Fair Value and has classified the same at Fair Value through Profit and Loss (FVTPL) and Fair value through Other Comprehensive Income (FVOCI). The Company has also designated certain investment in equity instruments at FVOCI. The resulting fair value changes of these investments have been recognised in retained earnings (net of related deferred taxes) as at the date of transition and subsequently in the Statement of Profit and Loss for the year ended 31 March 2017.Refer note 35 and Note 36 for detailed disclosure regarding measurement of Investments.

The Company carries certain Tax free bonds for which the Company had paid premium. Such premium has been ammortised over the life of the bonds and same has been charged to Statement of Profit and Loss.

(b) Fair Valuation of Security Deposit

Interest-free deposits have been fair valued and are discounted using an appropriate current market rate. The difference between the nominal value and the fair value of the deposit under the lease is considered as Prepaid Rent, which is unwinded on a straight line basis over the period of the lease. The company also recognizes interest expense using the discounting rate, over the life of the deposit. These adjustments are reflected in retained earnings as at the date of transition and subsequently in the statement of profit or loss.

(c) Lease Straightlining

Under IGAAP, lease rent under an operating lease were being recognised as an expense on a straight-line basis over the lease term. Under Ind AS 17, straight lining of operating lease is not required, if the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases. Since the lease rentals as per the agreement fulfil this condition, straightlining of rent expense has not been carried out and the impact of the same given under IGAAP has been reversed.

(d) Deferred Tax

IGAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under IGAAP. In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred Tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or profit and loss respectively.

(e) Acturial Gain/Loss

Both under IGAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis.

Under IGAAP, the entire cost, including actuarial gains and losses, are charged to Statement of Profit and Loss. Under Ind AS, remeasurements (comprising of actual gains and lossses, the effect of the asset celling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts including in net interest on the net benefit liability) are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.

(f) Reclassifications

Reclassification and regrouping has been done basis the requirement of particular Ind AS and Division II of Schedule III of the Companies Act, 2013 providing the framework for the preparation and presentation of Financial Statements in accordance with Ind ASs.

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Mar 31, 2017

b. Terms / rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting

During the year ended March 31, 2017, interim dividends of Rs.18/- per share (Previous Year: Rs. 18/- per share) was distributed to equity shareholders and the Board of Directors has recommended a final dividend of Rs. 10/- per share ((Previous Year: Rs. 10/- per share).

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c. Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date

e. The Company does not have a holding Company.

f. Shares reserved for issue under options and contracts, including the terms and amounts:

For details of Shares reserved for issue under the Employee Stock Option Plan (ESOP) of the Company refer Note: 28

*The Central Government has amended the Companies (Accounting Standards) Rules. 2006, through a notification issued by the Ministry of Corporate Affairs dated March 30, 2016. On account of the amendments in Para 8.5 of AS-4 - Contingencies and Events occuring after Balance Sheet date, from April 01, 2016, the Company recognizes a liability to make cash or noncash distributions to equity holders of the Company when the distribution is authorized and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorized when it is approved by the shareholders.

*The Central Government has amended the Companies (Accounting Standards) Rules. 2006, through a notification issued by the Ministry of Corporate Affairs dated March 30, 2016. On account of the amendments in Para 8.5 of AS-4 - Contingencies and Events occuring after Balance Sheet date, from April 01, 2016, the Company recognizes a liability to make cash or non-cash distributions to equity holders of the Company when the distribution is authorized and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorized when it is approved by the shareholders.

1. Segment Reporting

The Company primarily operates in single business and geographical segment, hence, no additional disclosures required to be given as per AS 17 - Segmental Reporting other than those already given in the financial statements.

2. Disclosure as per Accounting Standard 15 (revised 2005)

a) Contribution to provident funds

Defined contribution plan

Contribution to defined contribution plan, recognized as expense as at March 31, 2017 are as under:

Employer''s contribution to provident fund Rs. 2,05,65,397 (PY: Rs. 2,14,01,368)

b) Superannuation

Superannuation benefit is contributed by the Company to Life Insurance Corporation of India (LIC) @ 10% of basic salary with respect to certain employees. Contribution to Superannuation Fund contribution is charged to Statement of Profit & Loss.

c) Gratuity

The Company accounts for the liability of future gratuity benefits based on actuarial valuation. The company has created a trust for future payment of gratuities which is funded through gratuity-cum-life insurance scheme of LIC of India (Defined Benefit Plan).

(d) Compensated Absences

Long term compensated absences are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method. Short term compensated absences are provided for based on estimates.

3. Operating Lease

The Company has taken various office premises under operating lease or leave and license agreements. These are generally non-cancelable and ranges between 11 months and 5 years under leave and license, or longer for the lease and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

The lease payments are recognized in the Statement of Profit and Loss under rent in Note 18 - Other Expenses.

4. Other Significant Notes

(i) Foreseeable Losses

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long term contracts has been made in the books of account.

(ii) Note on pending litigations

The Company''s pending litigations comprise of claims by or against the Company primarily by the suppliers and proceedings pending with tax and other government authorities. The Company has reviewed its pending litigations and proceedings and has adequately provided for where Provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made adequate provision in the financial statements and appropriate disclosure for contingent liabilities is given in Note 19.

(iii) The previous year''s figures have been reclassified / regrouped to confirm to this year''s classification.

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Mar 31, 2016

1. Segment Reporting

The Company primarily operates in single business and geographical segment, hence, no additional disclosures required to be given as per AS 17 - Segmental Reporting other than those already given in the financial statements.

2. Disclosure as per Accounting Standard 15 (revised 2005)

a) Contribution to provident funds

Defined contribution plan

Contribution to defined contribution plan, recognized as expense as at March 31, 2016 are as under:

Employer''s contribution to provident fund Rs. 21,401,368 (PY: Rs. 20,816,319)

b) Superannuation

Superannuation benefit is contributed by the Company to Life Insurance Corporation of India (LIC) @ 10% of basic salary with respect to certain employees. Contribution to Superannuation Fund contribution is charged to Statement of Profit & Loss.

C) Gratuity

The Company accounts for the liability of future gratuity benefits based on actuarial valuation. The company has created a trust for future payment of gratuities which is funded through gratuity-cum-life insurance scheme of LIC of India (Defined Benefit Plan).

(d) Compensated Absences

Long term compensated absences are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method. Short term compensated absences are provided for based on estimates.

3. Operating Lease

The Company has taken various office premises under operating lease or leave and license agreements. These are generally non-cancelable and ranges between 11 months and 5 years under leave and license, or longer for the lease and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

The lease payments are recognized in the Statement of Profit and Loss under rent in Note 20 - Other Expenses.

The ESOP compensation cost is amortized on a straight line basis over the total vesting period of the options. Accordingly Rs. 38,410,096 (Previous year Rs. 52,931,954) has been charged to the current year Statement of Profit and Loss.

The weighted average remaining contractual life for the stock options outstanding as at March 31, 2016 is 1.76 years (Previous Year: 2.76 year)

The Company has granted 5,00,000 options on January 01, 2014, to the eligible employees as the Company''s Employees Stock Option Scheme (ESOS) 2013. During the quarter, eligible employees have exercised 4,01,974 options and accordingly the Company has allotted 4,01,974 equity shares of Rs. 10 each at a premium of Rs. 607/- per share.

4. Other Significant Notes

(i) Foreseeable Losses

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long term contracts has been made in the books of account.

(ii) Note on pending litigations

The Company''s pending litigations comprise of claims by or against the Company primarily by the suppliers and proceedings pending with tax and other government authorities. The Company has reviewed its pending litigations and proceedings and has adequately provided for where Provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made adequate provision in the financial statements and appropriate disclosure for contingent liabilities is given in Note 21.

(iii) The previous year''s figures have been reclassified / regrouped to confirm to this year''s classification.

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Mar 31, 2014

1 Contingent Liability & Capital Commitment Amount Rs.

Particulars As at As at March 31,2014 March 31,2013

Contingent Liability on account of Income Tax 10,445,022 22,942,143

Bank Guarantees Issued 910,000

2. Segment Reporting

The Company primarily operates in single business and geographical segment, hence, no additional disclosures required to be given as per A5 17 - Segmental Reporting other than those already given in the financial statements.

3 Operating Lease

The Company has taken various office premises under operating lease or leave and license agreements. These are generally non-cancelable and range* between 11 months and 5 years under leaue and license, or longer for the lease and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

The lease payment are recognized in the statement of profit and loss under rent in Note 19 - other Expenses.

4 The Company has completed its Initial Public Offer (IPO) through an Offer for Sale of 7,199,700 equity shares at a price of Rs. 750 per share (including a share premium of Rs. 740 per equity Share) on December 26, 2012- Since this was an offer for sale, ail the share issue expenses relating to IPO are recovered / recoverable from selling shareholders.

5 During the year the company, alloted 446,310 equity shares of Rs. 10 each to Ascent India Fund III at a price of Bs. 560.15 per share (including Rs. 550.15 towards share premium) aggregating to Rs. 25,00,00,547/-, to comply with Reserve Bank Of India''s norms on minimum capitalization applicable to non-fund based non-banking finance companies in connection with the IPO of the Company undertaken In December 2012. These funds have been utilised for business operations.

The ESOP compensation cost is amortized on a straight line basis over the total vesting period of the options. Accordingly Rs. 14,286,874 has been charged to the current year Statement of Profit and Loss. The weighted average remaining contractual life for the stock options outstanding as at 31st March 2014 is 3.76 vea rs (P nevious year: Nilyear)

6 The previous year''s figures have been reclassified / regrouped to confirm to the current year''s classification.

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Mar 31, 2013

1 Segment Reporting

The Company primarily operates in single business and geographical segment, hence, no additional disclosures required to be given as per AS 17 - Segmental Reporting other than those already given in the financial statements.

2 Micro, Small and Medium Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises.

On the basis of information and records available with the management, there are no outstanding dues to the Micro, Small and Medium Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) as set out below:

3 Operating Lease

The Company has taken various office premises under operating lease or leave and license agreements. These are generally non-cancelable and ranges between II months and 5 years under leave and license, or longer for the lease and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

The lease payment are recognized in the statement of profit and loss under rent in Note 20 - Other Expenses.

4 During the year, the Company has completed its Initial Public Offer (IPO) through an Offer for Sale of 7,199,700 equity shares at a price of Rs. 750 per share (including a share premium of Rs. 740 per equity share). Since this was an offer for sale, all the share issue expenses relating to IPO are recovered / recoverable from selling shareholders.

5 The previous year''s figures have been reclassified / regrouped to confirm to the current year''s classification.

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Mar 31, 2012

A Terms / rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting.

During the year ended March 31, 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs.10 (March 31, 2011: Rs. 6.50)

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

b Shares reserved for issue under options / commitments

The Board of Directors and shareholders of the Company through their resolutions dated February I8, 20I2 and April I8, 20I2, respectively, approved the Stock Option Scheme of Credit Analysis and Research Limited, 20I2 to issue stock options only to erstwhile Managing Director in accordance with the Grant Proposal. Accordingly, a grant letter dated April 20, 20I2 was issued to him.

In terms of the Grant Letter, I,94,622 stock options equivalent to I,94,622 Equity Shares (including adjustments for prior issue of bonus shares made by the Company in the year 20I0 and 20II) were granted to him on April 20, 20I2. In terms of the Scheme and the Grant Letter, he was required to exercise the stock options within the exercise period specified therein.

In accordance with the terms of the Scheme and the Grant Letter, the exercise period expired on May 5, 20I2, he did not exercise the stock options that were granted under the Grant Letter. Therefore, stock options granted to him lapsed in accordance with the terms of Scheme and the Grant Letter and there are no outstanding options as on date.

1 Contingent Liability

Capital commitments not provided for - Rs. Nil (Previous Year - Rs. I,245,808)

Claims against the Company not acknowledged as debts - Rs. 26,579,038/- (Previous Year - Rs.12,578,380).

Nature of dues Period Amount Rs.

TDS Demands 2006-07, 2007-08, 2009-10, 2011-12 21,533,286

Tax Assessments 2007-08, 2009-10 5,045,752

Total 26,579,038

2 Micro, Small and Medium Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises.

On the basis of information and records available with the management, there are no outstanding dues to the Micro, Small and Medium Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) as set out below:

3 Operating Lease

The Company has taken various office premises under operating lease or leave and license agreements. These are generally non-cancelable and ranges between II months and 5 years under leave and license, or longer for the lease and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

The lease payment are recognized in the profit and loss account under rent in Note 20

4 The financial statements for the year ended March 3I, 20II were prepared as per the then applicable pre-revised schedule VI to the Act. Consequent to the notification of Revised Schedule VI under the Companies Act, I956, the financial statements for the year ended March 3I, 20I2 are prepared as per Revised Schedule VI. Accordingly, the previous year''s figures have also been reclassified to confirm to this year''s classification. Also, certain disclosures under the pre-revised Schedule VI which are not required as per the revised Schedule VI have not been made. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.