CARE Ratings Ltd Directors Report.

Your Directors are pleased to present the Twenty Seventh Annual Report of your Company along with the audited Financial Statements for the year ended March 31, 2020.

Financial Performance

Your Companys Financial Performance for the year ended March 31, 2020, is summarized below:

Summary Financial Performance


For the year ended March 31,2020

For the year ended March 31,2019

Income from Operations 219.10 297.36
Other Income 31.34 29.83
Total Income 250.44 327.19
Total Expenditure 150.19 129.15
Profit Before Tax (PBT) 100.25 198.04
Provision for Tax 19.75 63.05
Profit After Tax (PAT) 80.50 134.99
Other comprehensive Income/(loss) -0.70 -2.04
Total Comprehensive Income for the period 79.80 132.95
Interim Dividend 50.08 53.03
Tax on Interim Dividend 10.29 10.90
Final Dividend 35.35 109.01
Tax on final dividend 7.27 22.41
Total (Dividend Outflow) 103.00 195.35
Transferred to General Reserve 3.22 -

• Proposed Dividend of Rs.2.50 per equity share declared in Q4 FY 20 is not considered in FY 20 as per Ind AS Accounting.

• Total income for the year is Rs 250.44 crore compared with Rs 327.19 crore in FY19.

• Other income had increased from Rs 29.83 crore in FY19 to Rs 31.34 crore in FY20.

• Total expenditure increased by 16.3% in FY20 largely on account of:

1. Depreciation costs which increased by Rs. 3.84 crore (amortization on leased properties on adoption of Ind AS 116 "Leases" and fresh capitalization of assets);

2. One-time cost on forensic audit, SEBI penalty and COVID 19 provisions (Rs. 7 crore); and

3. Salary expenses which rose by Rs.10.54 crore (due to salary revision, general increments and new hiring) that was offset by savings on ESOP costs by Rs.7.39 crores since ESOP vesting date ended on August 31, 2019 leading to net increase in employee cost by Rs. 3.15 crore.


Your Company paid a total interim dividend of Rs.17/- per equity share amounting to a payout of Rs. 60.38 crores including Dividend Distribution Tax (DDT). The Board has recommended final dividend of Rs. 2.50/- per equity share amounting to a payout of Rs.7.37 crore for FY 2019-20, to be approved at the ensuing Annual General Meeting. The dividend would be paid in compliance with the applicable rules and regulations. In terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Dividend Distribution Policy is appended as Annexure-I to the report and is available on the website of the Company at

Transfer to Reserves

On account on ESOPs lapsed on resigned employees, Rs.3.22 crore has been transferred to the General Reserve of the Company during the said period.

Share Capital

The Authorised Share Capital of your Company is 3,00,00,000 Equity Shares of face value Rs.10/- each amounting to Rs. 30,00,00,000/- (Rupees Thirty Crore only ) and the Paid-up Share Capital is 2,94,61,214 Equity Shares amounting to Rs. 29,46,12,140 /- (Rupees Twenty Nine Crore Forty Six Lakh Twelve Thousand One Hundred and Forty only). During the financial year ended March 31, 2020, the Company has not issued and allotted any equity shares.

Extract of Annual Return

Pursuant to the provisions of Section 143(3)(a) of the Companies Act, 2013, the extract of Annual Return for the financial year ended March 31, 2020 in MGT-9 in accordance with Section 92(3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014 is available on the website of the Company at and is also appended as Annexure- ll.

Economic Backdrop: 2019-20

The Indian economy slowed down with GDP growth moderating to 4.2% in 2019-20, the lowest rate in the 2011-12 GDP series and lower than 6.1% witnessed in 2018-19. The lockdown in the last week of March 2020 did impact the year end business targets achievements of several entities.

The slowdown in the economy during the year can be ascribed to sluggish growth in consumption expenditure, sharp decline in investment activity and negative exports growth. The investment rate in the economy declined during 2019-20 to 26.9%, which is the lowest rate since 2000-01. The rate is significantly lower than 34.3% achieved in 2011-12. The decline in the investment rate in the economy is also reflected in the low capacity utilization rates as per the RBIs survey. The capacity utilization has declined steeply in Q2 and Q3 of 2019-20 and the utilization rate achieved in Q3 is at its lowest level since Q1 of 2008-09.

Industrial output going by the Index of Industrial production contracted by 0.7% in 2019-20, negative annual growth for the first time since the commencement of the new series in 2011-12. Industrial production had recorded a growth of 3.8% in 2018-19.

Corporate performance has been subdued during 2019-20. Our study on corporate performance for a sample of 1706 companies reveals a decline in sales by 0.7% with net profit falling by 37%.

Bank credit growth declined to 33-year low of 6.1% in 2019-20 compared with 13.3% in the previous year. The notable decline in bank credit growth has been on account of weak growth to the services and industrial segment. Growth to manufacturing was lower at 0.7% as against 6.9% in FY19, with micro, small and medium units witnessing negative growth. Growth in credit to services was lower at 7.4% as against 17.8% in FY19.

In 2019-20, total corporate bond issuances aggregated Rs 6.9 lakh crs, 6.6% higher than the issuances of Rs 6.46 lakh crs in 2018- 19. Among sectoral issuances, the highest was banking and term lending at 35%, followed by financial services (17%) and housing finance (13%). In terms of sectoral growth in issuances in 2019-20, 21% growth was recorded in the banking segment, 62% in roads and highways and 40% in the power segment. At the same time, issuances of housing finance and financial services contracted by 28% and 20% respectively from a year ago.

Commercial Paper (CP) issuances by corporates were lower in 2019-20. Fresh issuances of commercial paper amounted to Rs. 22 lakh crore, 15% lower than in 2018-19. In terms of outstanding CPs, there was a decline of 28.6% on March 31 2020 over March 31 2019. Against the background of the NBFC crisis which started in second half of 2018, interest of mutual funds in such instruments especially from NBFCs came down.

Inflation in the country recorded mixed trend during the year with retail prices increasing and wholesale prices moderating. The RBI during the year slashed the repo rate by 185 basis points from 6.25% as of end-period March2019 to 4.4% as of the end of 2019- 20. The RBI has maintained an accommodative monetary policy stance throughout the year. This has continued in the first quarter of FY21 and is expected to remain so for the rest of the year too.

The banking system liquidity surplus had widened to almost 4.8 lakh crs in March 2020. Since February 2020, the RBI had commenced with its new programme of Long-Term Repo Operations (LTRO) to provide a boost to term lending which has subsequently been targeted to specific sectors in FY21.

GSec yields broadly declined during the year to 6.73% in 2019-20, 1% lower than a year ago. The GSec yields largely fell during the first half of the fiscal on account of fall in the policy repo rate in the economy, surplus liquidity in the banking system and benign inflation in the economy. During the second half of the fiscal, GSec yields have been pressured and elevated on account of likely fiscal slippages, weakness in the domestic currency, foreign investor outflows and growth concerns amidst the COVID-19 outbreak.

The rupee witnessed significant volatility in 2019-20, ranging between Rs.68.4/$ and all-time low of Rs.76.3/$. It ended the year at around Rs.75.6/$, a depreciation of 9.3% from the start of the fiscal. In March 2020, the rupee depreciated to its all-time low level on the back of foreign investors pulling out funds and rushing towards safe haven assets amidst global growth concerns.

The performance of your company should be looked at against this background.

Major Developments

Over the past year, your company has taken various measures for strengthening the rating processes as well as analytical rigour. We had appointed external consultants for suggesting improvements in our processes and systems with a view of modernizing the same. Going forward, the processes will get augmented with the use of best digital technologies.

During the year, SEBI had directed the company to conduct a forensic audit in the matter of anonymous complaints received by it. The former MD & CEO was sent on leave and subsequently, his employment was terminated. SEBI has advised CARE to carry out an investigation in a matter relating to the former Chairman and former MD & CEO and other employees for alleged interference in the ratings. The same has been initiated.

The Board has appointed Mr Ajay Mahajan, as new MD & CEO of the Company, who has around three decades of experience in the financial sector. He will henceforth be driving the business strategies of the company.

Business operations

In FY20, in a rather challenging environment, your Companys focus was on building the client base and widening the coverage of debt rated in the market. Since inception, your company has completed a total of 81,874 rating assignments till March 31, 2020. On a cumulative basis, the amount of debt rated instruments increased to Rs. 141.10 lakh crore as of March 31, 2020.

Assignment Type (New Instruments)

Number of New debt instruments rated

Volume of new debt instruments rated (Rs. crore)





Short & Medium term 74 110 2,24,772 326,932
Long term 290 338 6,32,584 813,405
Bank Facility Ratings 4046 8,088 4,15,812 850,170
Others 933 844 -
Total 5,343 9,380 12,73,168 19,90,507

The above table provides information on the various aspects of the business profile and growth during the year. Certain key aspects are enumerated as under:

1. The total number of new rating assignments declined by 43.0% in 2019-20. The moderation can, in large part, be ascribed to the decline in bank facility ratings. Bank facilities accounted for around 76% of total assignments in 2019-20. There was a sharp drop (of about 50%) in bank facility rating assignments in 2019-20. This was more due to the adverse external environment which was typified by a slower growth rate in growth in bank credit to the manufacturing and services sectors - which are the segments relevant from a rating perspective.

2. The total volume of new debt rated decreased by 36.0% from Rs. 19.91 lakh crore in 2018-19 to Rs. 12.73 lakh crore in 2019-20, mainly on account of broad-based decrease in debt rated volume across categories. For the volume of long-term instruments which relate to the corporate bond market, the higher volume of 2018-19 relative to issuance at the macro level meant lower spill over for the current year. It must be noted that debt rated by us in a year may not necessarily be issued/ fully issued in the same year and could be done the following year.

3. In terms of number of new debt instruments rated, the bank facility ratings witnessed a decline in share from 86.2% in 201819 to 75.7% in 2019-20. On the other hand, the share of short & medium-term instrument ratings increased from 1.2% to 1.4% and that of long-term instruments ratings increased from 3.6% to 5.4% in 2019-20. Quite clearly, the subdued lending conditions in the banking system impacted the rateable debt in the market.

Business during the year

Large corporates and Mid-corporates

During the year, there was an industry wide reduction in the number of new clients rated. Our focus on the large and midcorporate segments helped in ensuring that the company does not get impacted more than the industry on this count. The important steps included constant connect with the clients and outreach to prospects.

Small and Medium Enterprises (SMEs)

The SME rating business is a small component of our business in revenue terms. However, we do attach importance to this segment considering that the SMEs of today are the large corporates of tomorrow. As highlighted, there was an industry wide decline in the number of new companies rated during the year compared with the previous year and the SME segment was relatively more impacted. CARE has put in place technology enabled models both to acquire and provide analytical services to this set of customers.

Effective from FY21, some of the product offerings on the SME side shall move to CAREs wholly owned subsidiary as a part of the regulatory requirements.

IT Initiatives:

In 2019-20, CARE Ratings IT initiatives were focused on upgrading the existing IT infrastructure in order to support rating operations. We also upgraded our Information Security Management System (ISMS) framework and successfully implemented the rating model application integrated with core rating application. Digitizing of the rating models provided us opportunities to do assessments online with greater potential towards accuracy. We have enhanced our core business application to add new features.

The development of digital technology in IT infrastructure by your company has significantly changed the business landscape. As a result, we have managed entire business operations to run smoothly during the COVID19 epidemic.

IT has successfully enabled all employees to work from home.

The focus for 2020-21 will be on building core business applications on the new technology framework, which will integrate various applications within the organization and data sourcing tools from the market. This initiative will automate various manual processes with the help of AI / ML based models.

The COVID-19 crisis has caused unprecedented disruption to normal business activity globally. In 2020-21 the IT initiatives of your company will be based on the principles of digital transformation and adoption of a holistic digital strategy, to ensure readiness for any unforeseeable future disruptions.

Knowledge dissemination

CARE Ratings has significant knowledge at an aggregate level of economic, industrial and capital market activities and has been very proactive in reacting to events and disseminating our views immediately to our clients, regulators, government departments, opinion makers, and media houses on various issues. For this, we have three independent research teams - Economics, BFSI and Industry Insights.

CARE Ratings has continued with its monthly release of CARE Debt Quality Index (CDQI) which tracks the changes in the overall quality of debt in the economy based on a representative sample of companies in our portfolio, besides the quarterly release of Modified Credit Ratio (MCR) which looks at the trend of upgrades and downgrades. Employees are also encouraged to conduct webinars, partake in training programs and engage in outreach programs with clients on their subject, which gives them an opportunity to discuss their research with other stakeholders.


The Economics Division has always been consistent in circulating real-time domestic and global economic related updates. The division also initiates daily and monthly debt market reports- DDMU- Daily Debt Market Update and DMR- Debt Market Review. In addition, a liquidity report is published on a weekly basis. The issuances and yields in the CP and corporate bond markets are monitored on a regular basis.

Surveys have been carried out on the impact of COVID on the economy and sectors twice - before and after the lockdown, to ascertain views from industry and experts.

Sectoral Views

The Industry and BFSI research team covers over 65 sectors. Sector specialists also give their views on various developments from time to time which blend the expertise of our rating and research specialists. The inputs from Industry research team aid the rating analysts on understanding the demand-supply and outlook prospects of a particular industry.

The division also publishes thematic reports, reports on developments pertinent to the sector and updates on the tracked sectors on a regular basis. This year, the research team started publishing an Industry Confidence Index which provides an objective view of the confidence level present in the industry based on 6 touch points (of which 5 are objectively defined) for 50 industries on a quarterly basis. The 6 variables looked at are sales, profit margins, pricing power, ratings changes, interest cover and outlook. The last factor is the only subjective indicator based on our perception. This index hence reflects objectively the confidence level in industry on a quarterly basis.


In continuation of our Knowledge Dissemination series, CARE Ratings conducted 34 webinars during FY2019-20. All key sectors from economy & public finance, industrials, banking and infrastructure were covered. Each presentation was made by a Senior Director, Sector specialist from ratings and analyst (ratings or research).

Knowledge Partnerships

CARE Ratings was associated as knowledge partners for various conferences of ASSOCHAM, PHD Chambers of Commerce and Industry, ICAI, IIPF, and ET Rise. Subjects covered were diverse and included Mining in Karnataka, steel, electric vehicles, real estate and housing finance, oil and gas and capital markets.

Media interactions

CARE Ratings published reports, updates and newscasts on various sectors and economy are widely covered across all media. Our Senior Management team is regularly seen at prominent news channels and their views and quotes are published across major print editions and online news portals. CARE Ratings reports and insights have often been quoted by prominent columnists, thought leaders and influencers on social media.

Challenges to industry and our plan of action

There are always two sets of challenges for a credit rating agency. The first is the evolving regulatory framework where we proactively respond and tune our processes so as to be aligned with the rules laid down. The second is external to the system where the environment determines the perimeter of business. The lines are drawn by the overall growth impetus in the economy and the investment taking place. These two factors have a bearing on the rateable universe which in turn sets limits on growth in our business. FY20 has been challenging on both counts with GDP growth slowing down and investment rate reaching the lowest level.

Our action plan is to get more diversified through our subsidiaries so that we are better prepared to build the future edifice of the CARE Group of companies. This has the potential for growing the overall business of the Group as upside in rating business is restricted to a large extent by the buoyancy of the economy and hence, it becomes necessary to focus on the other areas to build shareholder value.

We are also focusing on areas like securitization, structured products and resolution plans within the realm of credit rating to carve a new niche for the company.

Human Resources

The level of analytical expertise has a bearing on the quality of the ratings assigned by a credit rating agency where human resources play an important role in the business. We have always believed in picking up the right talent to ensure that the appropriate skills and competencies are available for executing the business objectives and encouraging them to think independently while working in teams in order to enhance the quality of rating. We further enrich their talents by way of conducting induction and training programmes which are conducted by experts in the field. In addition, systematic training programs have been conducted to build and enhance key functional and behavioural competencies for both new recruits and existing employees.

As on March 31, 2020, we had 646 employees (compared with 633 as of March 31, 2019), with around 90% of the staff professionally qualified in the areas of management, CA, CS, legal, economics, engineering etc. holding professional or post graduate degrees.

Number of Meetings of the Board of Directors

The Board of Directors met Thirteen (13) times during the Financial Year 2019-2020 on May 21, 2019, June 21, 2019, July 17, 2019, July 31, 2019, August 19, 2019, October 01, 2019, November 04, 2019, November 18, 2019, December 20, 2019, January 14, 2020, January 27, 2020, February 07, 2020 and February 14, 2020. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.

Directors Responsibility Statement

The Board of Directors, to the best of their knowledge and ability confirm that:

i. In the preparation of the annual accounts for financial year ended March 31, 2020, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit for that period;

iii. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. They have prepared the annual accounts for financial year ended March 31, 2020 on a going concern basis;

v. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating effectively;

vi. They have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively.

Declaration by Independent Directors

The Independent Directors of the Company have submitted the declaration of Independence as required under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence under Section 149(6) of the Companies Act, 2013 and Regulation 16 (1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the field of finance, strategy, auditing, tax, risk advisory and financial services and they hold the highest standards of integrity.

Policy on Directors appointment and remuneration

The Policy of the Company on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178, is appended as Annexure - III to this Report and also available on the website of the Company at

Particulars of Loans, Guarantees or Investments under section 186

The details of Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 are given in the notes to the Financial Statements forming part of this Annual Report.

Particulars of Contracts or Arrangements with Related Parties

All transactions entered into during the Financial Year 2019-20 with Related Parties as defined under the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were in the ordinary course of business and on an arms length basis. During the year, the Company had not entered into any transaction referred to in Section 188 of the Companies Act, 2013 with related parties which could be considered material. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) of the Companies Act, 2013 in Form AOC-2 is not applicable.

Attention of the members is drawn to the disclosures of transactions with related parties as required under IND AS-24 set out in Notes to Accounts - Note No 35 of the Standalone Financial Statements forming part of this Annual Report

As required under Regulation 23 (1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Policy on Materiality of and dealing with Related Party Transactions which is available on the website of the Company at

Material Changes and Commitments affecting the Financial Position of the Company

There have been no material changes and commitments affecting the financial position of the Company which have occurred between March 31, 2020 and the date of this report other than those disclosed in this report.

Particulars regarding conservation of energy, technology absorption and foreign exchange earnings and outgo Conservation of Energy and Technology Absorption

Your Company has taken necessary steps and initiative in respect of conservation of energy to possible extent to conserve the resources as required under Section 134(3)(m) of the Companies Act, 2013 and rules framed thereunder. As your Company is not engaged in any manufacturing activity, the particulars of technology absorption as required under the section are not applicable.

Foreign Exchange Earnings and Outgo

During the year under review, the Company has earned a foreign exchange equivalent to Rs. 2.04 Crore and has spent a foreign exchange equivalent to Rs. 0.51 Crore.

Business Risk Management

The Board of Directors of the Company has constituted a Risk Management Committee consisting of members of the Board of the Company to frame, implement and monitor the risk management plan for the Company. The composition of the Committee is in compliance with Regulation 21 of the SEBI LODR Regulations. The Company has a Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companys competitive advantage.

The business risk framework defines the risk identification and its management approach across the enterprise at various levels including documentation and reporting. The framework helps in identifying risks trend, exposure and potential impact analysis on a Companys business.

Corporate Social Responsibility

As a part of CARE Ratings initiatives under Corporate Social Responsibility (CSR) in 2019-20, your Company released payments amounting to Rs.5.26 Crores (P.Y.: Rs.3.27 Crores) in areas of education, infrastructure development, community development, child welfare, art and culture and Healthcare. This also includes contribution Rs. 2 Crores to the PM CARES Fund in our countrys fight with Covid 19.

The Board has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The CSR Policy has been devised on the basis of the recommendations made by the CSR Committee. The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure-IV of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is available on the website of the Company at

Vigil Mechanism - Whistle Blower

The Company has established a vigil mechanism for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, to report their genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. During the year your Company affirms that no employee of the Company was denied access to the Audit Committee. The said policy is also available on the website of the Company at www.

Annual Evaluation of Performance of the Board

Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations, the Board has carried out an annual evaluation of the performance of Board, Individual performance of the Directors as well as the evaluation of the working of its Committees.

The Nomination & Remuneration Committee and the Board has defined the evaluation criteria for the Board, its Committees and Directors.

The Boards functioning was evaluated after taking inputs from the Directors on various aspects, including inter alia degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.

The Committees of the Board were evaluated after taking inputs from the Committee members on the basis of criteria such as degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.

The Board reviewed the performance of the individual directors on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/support to the management outside Board/ Committee Meetings.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole.

In a separate meeting of independent directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive director and non-executive director.


A. CARE Advisory Research and Training Limited

CARE Advisory Research and Training Limited (CART) is a wholly owned subsidiary of your Company which was incorporated on September 06, 2016. CART is in the business of Advisory, Research and Training.

Advisory division

CART offers services in the field of transaction advisory (valuation, IM preparation), banking services support (TEV, LIE, vetting of resolution plans, machinery cost vetting), corporate advisory (DPR, Business plan preparation, financial improvement plan, financial appraisal) and risk management services (risk related policy documents, credit assessment models).

Research Division

CART services a variety of business needs of its domestic and multinational clients with credible, high-quality research and analysis on various facets of the economy and industries.

Training Division

The Company caters to the training needs of corporates and professionals through its training programmes which are offered through on-line as well class room mode.

B. CARE Risk Solutions Private Limited

Our wholly owned subsidiary CARE Risk Solutions Pvt. Ltd (CRSPL) is a leading fin-tech company which provides risk management and financial compliance software solutions for Banking, Financial Services and Insurance (BFSI) sector with its Enterprise Risk Management suite (ERM), Asset Liability Management (ALM), Fund Transfer Pricing (FTP), International Financial Reporting Standards (IFRS) & Financial Reporting Application, lending suite and early warning systems. The focus of the organization is multi-fold and is directed at innovative disruption, digitization and hence enable financial institutions meet the compliance norms and move towards leveraging risk management from a strategic perspective. It involves robust effort on technology R&D and product compliance to central banks regulation across geographies and rapid and timely implementation.

CRSPL has the soul of an agile start up and the maturity of an established specialist in creating and delivering advanced technology solutions for its customers. CRSPLs exceptional product and immaculate implementation framework has helped them to partner with the best names in the Financial Technology globally and regionally.

C. CARE Ratings (Africa) Private Limited

CARE Ratings (Africa) Private Limited (CRAF) is the first credit rating agency to be licensed by the Financial Services Commission of Mauritius from May 7, 2015. It is also recognized by Bank of Mauritius as External Credit Assessment Institution (ECAI) from May 9, 2016. In February 2020, CRAF has received the approval of the Capital Markets Authority of Kenya to operate as a Credit Rating Agency in Kenya under the Capital Markets Act and the Regulations and Guidelines issued thereunder.

During FY20, the Company has assigned ratings to 28 corporates of Mauritius including renowned Corporates like The Mauritius Commercial Bank Ltd., Bank One, CIEL, CIM, Leal, Omnicane, Alteo, MUA and ENL. In FY20, CRAF has assigned credit ratings to bank facilities and bond issues aggregating to around MUR 40.0 billion (MUR 21.0 billion in FY19). There has been an increase in awareness about the concept of credit rating among Banks and Corporates and clear understanding of the benefits from ratings.

D. CARE Ratings Nepal Ltd.

CARE Ratings Nepal Ltd. (CRNL) is incorporated in Kathmandu, Nepal as a credit rating agency and is licensed by Securities Board of Nepal w.e.f. November 16, 2017. CRNL has done 93 rating assignments in FY20. In a short span of time, CRNL has been able to expand its operations and has, since inception, added more than 200 clients till March 31, 2020.

Material Non-Listed Indian Subsidiary

There is no material (non-listed) Indian subsidiary of your Company as on March 31, 2020

Performance and Financial Position of Subsidiary, Associate and Joint Venture Company and their contribution to the overall performance of the Company

As required under Section 129 of the Companies Act, 2013 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards and form part of the Annual Report. Statement on the highlights of performance of the subsidiary companies and their contribution to the overall performance of the Company are given in the Form AOC-1 has been appended as Annexure-XI to this report.

Details relating to Deposits covered under Chapter V of the Companies Act, 2013

Your company has not accepted any deposits within the purview of Chapter V of the Companies Act, 2013 during the year under review.

Significant and Material Orders passed by the Regulators or Courts or Tribunals

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of your Company and its future operations.

Instances of fraud, if any reported by the Auditors

There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.

Adequacy of Internal Control with reference to Financial Statements

The Company has an Internal Financial Control System commensurate with the size, scale and complexity of its operations.

The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 and other applicable provisions, if any, of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.

The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.

The Internal Auditor evaluates the efficacy and adequacy of internal control system, accounting procedures and policies adopted by the Company for efficient conduct of its business, adherence to Companys policies, safeguarding of Companys assets, prevention and detection of frauds and errors and timely preparation of reliable financial information etc. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

Directors and Key Managerial Personnel

In accordance with the Articles of Association of the Company and provisions of the Section 152(6) (e) of the Companies Act, 2013 Mr. V. Chandrasekaran (DIN: 03126243) will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment.

Further, Mr. Nitin Kumar Agarwal, Chief Financial Officer of the Company resigned from the services of the Company with effect from July 18, 2019, and your Company has appointed Mr. Bharat Adnani, as the Chief Financial Officer with effect from August 19, 2019.

During the year, Mr. Najib Shah, Dr. M Mathisekaran and Mr. Ananth Narayan Gopalakrishnan were appointed as Non-Executive (Independent Directors) and whose appointment was also approved by the shareholders at the 26th AGM held on September 30, 2019. Further, Ms. Sadhana Dhamane, Non-Executive Director and Mr. S B Mainak, Non-Executive (Independent Directors) of the company resigned from the Board on August 08, 2019 and February 11, 2020 respectively.

During the year, the Company initiated forensic audit as advised by SEBI in the matter of anonymous complaints received by it. Pending investigation, Mr Rajesh Mokashi, the former MD and CEO was sent on leave on July 17, 2019.

Mr. Rajesh Mokashi suo-moto resigned from the services of the Company with effect from December 20, 2019. The Board of CARE took the resignation on record, without prejudice to the ongoing examination of anonymous complaints and any action, if required, to be taken pursuant thereto. Mr S.B. Mainak also tendered his resignation as Director of CARE on February 11, 2020, which was accepted by the Board.

In February, 2020, the Board considered the forensic audit report and independent of any legal assessment, decided to terminate the employment of Mr. Rajesh Mokashi with effect from the date he was sent on leave in July, 2019. The Board also reviewed various measures for improvement in its systems and processes to ensure that CARE maintains highest standards of professional quality and integrity.

As advised by SEBI, the Company has instituted a full-fledged inquiry by Justice (Retd) B. N. Srikrishna, a retired Supreme Court Justice, for alleged interference in the ratings by erstwhile Chairman and MD and other employees and to take appropriate action, if required. The said inquiry is going on.

Based on the recommendation of the Nomination & Remuneration Committee, the Board of Directors have appointed Mr. Ajay Mahajan as an Additional Director and as Managing Director & Chief Executive Officer of the Company with effect from April 15, 2020 for a period of five years subject to the approval of the shareholders at the ensuing Annual General Meeting.

Detailed profile of Mr. Mahajan in line with Regulation 36(3) of the Listing Regulations is forming a part of the Notice of the Annual General Meeting.

Auditor and Auditors Report

M/s. Khimji Kunverji & Co., Chartered Accountants (Firm Registration No. 105146W) were reappointed as the Statutory Auditors of the Company at the 23rd Annual General Meeting to hold office from the conclusion of 23rd Annual General Meeting till the conclusion of the 28th Annual General Meeting to be held in 2021.

Your Company has received a confirmation from Khimji Kunverji & Co., Chartered Accountants (Firm Registration No. 105146W) to the effect that that they are not disqualified within the meaning of Section 141 and other applicable provisions of the Act and rules made thereunder.

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Khimji Kunverji & Co., Chartered Accountants, Statutory Auditors, in their report.

Status of Investors Compliant

During the financial year 2019-20, your Company has received complaints with regard to non-receipt of annual report and nonreceipt of dividend. The details of complaints are appended to this Report as Annexure-V.

Secretarial Audit Report

The Board of Directors of your Company have appointed M/s A. K. Jain & Co., Company Secretaries, Mumbai, to conduct the Secretarial Audit of the Company. The Secretarial Audit Report is appended to this Report as Annexure-VI.

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s A K Jain & Co., Company Secretaries, Mumbai in their secretarial audit report.

Maintenance of Cost Records & Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act, are not applicable for the business activities carried out by the Company.

Change in the Nature of Business

During the financial year 2019-20, there was no change in the nature of business of the Company.

Employees Stock Option Schemes

As required in terms of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, the disclosure relating to CARE Ratings Limited ("ESOS - 2013") is appended as Annexure-VII to this report.

Management Discussion and Analysis Report

The Managements Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2) (e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges, is annexed as Annexure-VIII to this report.

Particulars of Employees

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure-IX to this Report.

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of managerial Personnel) Amended Rules, 2016 in respect of employees of your Company is available for inspection by the members at the Registered Office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, whereupon a copy would be sent.

Business Responsibility Statement

A Business Responsibility Report as per regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, detailing the various initiatives taken by the Company on the environmental, social and governance front. annexed as Annexure-X and forms an integral part of this Annual Report.

Corporate Governance

The Company is committed to maintaining the highest standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by Securities and Exchange Board of India. The Report on Corporate Governance as per regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report. The Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under Schedule V (E) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Corporate Governance Report.

Audit Committee of the Company

Your Companys Audit Committee comprises the following directors as its members:

1. Mr. Adesh Kumar Gupta Chairman (Independent Director)
2. Ms. Sonal Gunvant Desai Member (Independent Director)
3. Mr. V. Chandrasekaran Member (Non-Executive Director)
4. Mr. Ananth Narayan Gopalakrishnan Member (Independent Director)

The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Disclosures under Sexual Harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013

Your Company has always believed in providing a safe and harassment free workplace for every individual working in the Companys premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

Your Company has a policy on Prevention of Sexual Harassment at Workplace. The policy aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of undesired behaviour. An Internal Complaints Committee (ICC) has been set up as per the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 in order to investigate any complaints / issues related to sexual harassment. The ICC is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the Policy.

During the year ended March 31, 2020, the ICC did not receive any complaint pertaining to sexual harassment.

Compliance of the Secretarial Standards 1 & 2 Issued by the Institute of the Company Secretaries of India (ICSI)

The relevant Secretarial Standards issued by ICSI related to the Board and General Meetings have been complied by the Company.


The Board places on record its appreciation of the contribution of its employees to the companys operations and the trust reposed in it by market intermediaries, issuers and investors. The Board also appreciates the support provided by the Reserve Bank of India, Securities Exchange Board of India and the Companys Bankers, IDBI Bank and HDFC Bank.

On behalf of the Board of Directors
Date: Mumbai Ajay Mahajan Adesh Kumar Gupta V Chandrasekaran
Place: July 10, 2020 Managing Director & CEO Director Director