To,

The Members, ICRA Limited

Your Directors have the pleasure in presenting the 28th Annual Report of your Company along with the Audited Financial Statements for the year ended March 31, 2019.

Financial Performance

During its 28th year of operations, your Company has earned a net profit of Rs. 95.97 crore as against Rs. 100.32 crore during the previous year. Your Companys basic earnings per share for the year ended March 31, 2019 was Rs.98.36, as against Rs. 102.01 in the previous year. The financial results of your Company (standalone and consolidated) for the year ended March 31, 2019 are presented in the following tables.

Particulars	Standalone
	2017-18	2018-19
	(Rs. crore)	(Rs. crore)
Revenue from operations	222.13	230.14
Other income	50.74	44.53
Total income	272.87	274.67
Total expenses	127.03	143.60
Profit before exceptional items and tax	145.84	131.07
Exceptional items	-	-
Profit before tax	145.84	131.07
Total tax expense	45.52	35.10
Profit for the year	100.32	95.97
Total other comprehensive income, net of tax	(0.22)	(0.23)
Total comprehensive income for the year	100.10	95.74

Figures are extracted from the audited standalone financial statements as per Indian Accounting Standards (Ind AS). 1 crore = 10 million

Particulars	Consolidated
	2017-18	2018-19
	(Rs. crore)	(Rs. crore)
Revenue from operations	308.86	328.06
Other income	49.36	44.80
Total income	358.22	372.86
Total expenses	201.42	220.82
Profit before tax	156.80	152.04
Total tax expense	55.62	47.46
Profit for the year	101.18	104.58
Total other comprehensive income, net of tax	0.00	0.43
Total comprehensive income for the year	101.18	104.15

Figures are extracted from the audited consolidated financial statements as per Indian Accounting Standards (Ind AS).

1 crore = 10 million

Review of Operations

Rating Services

Market Overview

The market for the credit rating business in FY2019 faced headwinds in terms of rising interest rates and tight liquidity conditions in the first half of the year and later because of the increased risk aversion towards the debt instruments of non-banking financial companies (NBFCs), which typically account for 55-60% of the total debt issuances. Even as the economic growth is estimated to have picked up marginally during FY2019, it was primarily supported by the Governments thrust on the road sector and affordable housing even as the broad-based recovery in investment activity continued to be delayed. Bond issuances in the first half witnessed a decline of 12% on a YoY basis because of rising interest rates as well as higher base of the previous year. With rising interest rate differential between long-term debt and short-term borrowings, there was a shift to commercial paper (CP) borrowings. However, the bond issuances improved during the second half with YoY growth of 75%, as the borrowers replaced short-term debt with longer maturity debt to reduce asset-liability mismatches, there was a decline in corporate bond yields, a surge in issuances of Government of India (GoI) fully-serviced bonds by various public-sector undertakings as well as due to a favourable base effect of relatively lower issuances in H2 FY2018. Revival in bank credit growth during FY2019 was mainly driven by the demand from the NBFCs and the retail segments. A reduction in the Statutory Liquidity Ratio (SLR) holding requirements for banks, recapitalisation of public sector banks, and external rating-based risk-capital allocation by banks for more categories of NBFCs may further improve the overall bank credit growth.

Economic growth in FY2019 picked up modestly as the transition impact, witnessed on various sectors because of the GST implementation, waned and the Governments thrust on infrastructure and housing activities continued. The depreciation of the Indian rupee also provided an impetus to exports even as domestic consumption continued to remain strong. Notwithstanding the above positives, the impact of the credit squeeze witnessed by the NBFCs had an adverse impact on consumption as well as supply of credit to micro-small and medium enterprises, which was reflected in the slowing growth of industrial activity as well as the services sector, starting from the second half of FY2019. Consumption growth has slowed down quite significantly since then and with increasing concerns on trade wars, corporate leverage and the Governments fiscal constraints to scale up expenditure in infrastructure sectors, the overall sentiment has turned somewhat negative in the last few months. On the positive side, with the recapitalisation of public sector banks, a recovery in investment activity is likely to find funding support.

While bank credit growth is expected to be steady during FY2020, debt capital markets activity will be driven by factors like inflation, interest rate trajectory and the demand for corporate bonds amid a large supply of Government bonds. An increased regulatory thrust, by the RBI as well as by SEBI, to part finance incremental borrowings through the market route, in case of large borrowers, is likely to support the bond market, though the current risk aversion amongst market participants against all but the highest rated bonds, or those backed by strong parentage, may continue to act as impediments in the short run.

Corporate Sector

The bank credit growth to the corporate sector was moderate in FY2019 as the pick-up in the investment cycle continued to get deferred. Borrowings through the bond route were impacted by high yields for most parts of the year and also due to increased risk aversion from debt investors in the second half of the financial year but showed a significant pick-up towards the end of the last quarter as yields subsided. Credit growth showed a revival in the second half of the year because of enhanced demand for working capital loans. Also, the capacity utilisation levels in several industries improved and fresh investments have been visible on the marginal improvement in a few capital-intensive sectors like steel and cement. Given the borrowings of the Central and state governments as well as public sector undertakings planned for the year, there are apprehensions about the manner in which yields would play out. On the positive side, the SEBI rule that large corporates with a rating of AA and above must raise 25% of their incremental borrowings through the bond market from this year onwards and, likewise, the RBI requirement to part-finance incremental borrowings in case of large exposures through the market route is expected to provide an impetus to bond issuances, provided the demand-side issues are addressed. While fund-raising through new instruments like Infrastructure Investment Trusts (InvITs), formed under the Sebi InvIT Regulations 2014, did not show adequate traction, your Company was associated with the rating of the first Real Estate Investment Trust (REIT) under the SEBI REIT Regulations, 2014.

Your Company was also involved in the Independent Credit Evaluation (ICE) of stressed assets as required under the Reserve Bank of Indias revised framework for resolution of stressed assets.

Financial Sector

The trend of rising bond yields during H1 FY2019 resulted in issuers preference for bank credit and the widening interest rate differential between short-term and long-term debt improved the attractiveness of short-term borrowings for the NBFCs. As a result, commercial paper (CP) volumes touched all-time highs during Q2 FY2019. Though, during H2 FY2019, concerns on asset-liability mismatches also prompted borrowers to raise long-term bonds during H2 FY2019 even if it was at a relatively higher cost. Because of the above factors, the bond issuances from both banks and the NBFCs, which were down during H1 FY2019, rose significantly during H2 FY2019, with a corresponding moderation in CP volumes outstanding. With recapitalisation, public sector banks (PSBs) are expected to see improved credit growth during FY2020, which, coupled with phasing out of Basel II debt capital instruments and continued growth of private banks should support bond issuances from banks. Your Company continues to maintain strong presence in debt issuances from the banking sector. With increased competition from banks, increased cost of funds for the NBFCs and increased risk aversion to them, the NBFCs may face a challenging year for growth going ahead. With likely pressure on profitability and asset quality , some of them may witness a relatively muted year of growth and hence issuances during FY2020. Your Company continues to remain active in this sector. The year under review continued to witness Tier II bond issuances from insurance companies to strengthen their regulatory solvency profile, which is in addition to the ratings done on the claims-paying ability of these companies. Your Company continued to maintain a strong position in this segment. Rating downgrades during FY2019 impacted the quality of the underlying portfolios of various debt mutual fund (MF) schemes and also resulted in higher risk aversion for investors. As a result, the asset under management for debt MFs witnessed a muted YoY growth of ~2% during FY2019. With a view to match the investors risk appetite, various new schemes like overnight funds were also launched by the MFs, which further expanded this segment during the year under review for your Company.

Structured Finance

During FY2019, the securitisation market witnessed the highest-ever issuance volumes of Rs. 1.97 lakh crore, a surge of nearly 135% over the previous fiscal (Rs. 84,000 crore in FY2018). The market particularly gained buoyancy in H2 FY2019 driven by the liquidity crisis in the financial sector, that forced the NBFCs and the HFCs to increasingly look at the securitisation route as an alternate funding tool. The relaxation of the minimum holding period (MHP) criteria for long-tenure loans by the RBI also helped, as it increased the supply of assets eligible for securitisation in the system. Continuing the trend that started in FY2017 (pursuant to the clarity on legacy tax issues and removal of the distribution tax on securitisation trusts), healthy participation from the MFs and foreign investors continued to push the non-priority sector loan volumes.

In FY2019, your Company rated the countrys first covered bond transaction and the first persistent securitisation transaction in the vehicle finance asset category. Your Company also rated the first REIT vehicle launched in the country and continued to maintain its position as a thought leader and a leading credit rating agency (CRA) in the structured finance segment. Going forward, the extent of priority sector loan (PSL) shortfall in the banking system and the availability of eligible assets with sellers are expected to be the key factors influencing securitisation /assignment volumes. However, any significant traction in the priority sector loan certificates (PSLCs) market or widespread adoption of the loan co-origination framework by banks for sourcing PSL assets could restrict issuance volumes in the medium to long term. Nonetheless, increasing appetite for non-PSL assets is a healthy trend that is expected to continue.

Industry Research

During the year 2018-19, your Company has made deeper inroads with a cross section of clients across the market segments. ICRA research has regular coverage on 60+ industries with several sub-segments within the corporate sector and multiple sub-segments under the financial services and structured finance sectors. Clients continue to appreciate the analytical depth of our reports and the level of engagement with our analysts.

Franchise Development

Your Company continues to enhance its franchise through periodic conferences, seminars, webinars and media activities aimed at promoting its visibility and brand strength.

During the year, your Company organised several seminars and conferences, to disseminate its views on credit trends in specific sectors in the domestic markets. Like every year, ICRA held joint events with Moodys, involving speakers and panelists representing the broad market, which were very well received by the event participants. Further, your Companys sector-specific webinars and thematic research reports continued with a view to enhance our brand. Your Company continues to be at the forefront, in terms of share of voice, in the electronic and print media through regular releases expressing our opinion on contemporary issues with credit significance.

It continues to be a preferred partner in powering the Financial Advisor Awards along with CNBC-TV18. These awards have a strong franchise and are a matter of considerable pride for the winners.

Change in nature of business

During 2018-19, there was no change in the nature of business of your Company.

Subsidiary Companies (including step-down subsidiaries)

At the beginning of the year 2018-19, your Company had six subsidiaries, including one step-down subsidiary.

The Board of Directors of your Company had approved the merger of two of its wholly-owned subsidiaries - ICRA Management Consulting Services Limited, which is involved in consulting services, with and into ICRA Online Limited, involved in outsourcing and information services, subject to requisite approvals. Pursuant to the aforesaid approval, an amalgamation scheme has been filed for approval of the merger with the Honble National Company Law Tribunals in Delhi and Kolkata. The Honble National Company Law Tribunal, New Delhi, has sanctioned the scheme of amalgamation filed by ICRA Management Consulting Services Limited.

The said scheme of amalgamation will be effective upon sanctioning of the scheme filed by ICRA Online Limited by the Honble National Company Law Tribunal, Kolkata.

Apart from the above, there has been no material change in the nature of the business of the subsidiaries. As of March 31, 2019, your Company had namely the following subsidiaries, including the step-down subsidiary:

S. No.	Name of Subsidiary Companies	Category	Country of Incorporation
1.	ICRA Management Consulting Services Limited$	Subsidiary	India
2.	Pragati Development Consulting Services Limited	Step-down subsidiary	India
3.	ICRA Online Limited$	Subsidiary	India
4.	PT. ICRA Indonesia*	Subsidiary	Indonesia
5.	ICRA Lanka Limited	Subsidiary	Sri Lanka
6.	ICRA Nepal Limited	Subsidiary	Nepal

^$Scheme of amalgamation filed with the Honble National Company Law Tribunal

*liquidation initiated by the Company

Highlights of performance of subsidiary companies and their contribution to the overall performance of the Company during the year 2018-19 are provided in the Management Discussion and Analysis Report. The consolidated financial statements of Group ICRA, consisting of ICRA Limited, its subsidiaries, and step-down subsidiary, for the year 2018-19, which form a part of the Annual Report, are attached. The Auditors Report on the consolidated financial statements is also attached. In compliance with the relevant provisions of the Companies Act, 2013, a statement containing the brief financial details in Form AOC-1 as per Rule 5 of the Companies (Accounts) Rules, 2014, of the said subsidiaries is annexed to the consolidated financial statements, prepared in accordance with the prescribed Accounting Standards.

As required under the provisions of Section 136 (1) of the Companies Act, 2013, the financial statements, including consolidated financial statements and other documents required to be attached thereto, have been uploaded on the Companys website, www.icra.in. Further, your Company has also uploaded on its website the audited financial statements of each subsidiary company.

Branches of the Company

Your Company operates its business from its offices in New Delhi, Gurugram, Mumbai, Kolkata, Chennai, Ahmedabad, Bengaluru, Hyderabad, and Pune.

Board meetings held during the year

During the year, five meetings of the Board of Directors were held. The details of the meetings are furnished in the Corporate Governance Report attached as Annexure-III to this Report.

Human Resource Development & Training

Human resources continued to provide a variety of training & development opportunities in the year under review with an aim to build employee capacity to meet strategic needs and align with the companys strategic plan and overall mission. A fundamental belief of our management philosophy is to invest in our employees and enable them to develop new skills and capabilities which benefit them as well as the Company. A variety of training & development programmes were provided in areas of Functional & Behavioural Skills, Team Building, Managerial effectiveness with emphasis placed on improving skill, competency and knowledge. New hires go through a systematic on-boarding programme, designed to equip them adequately with the right skills and competencies to achieve their best potential. ICRA continues to focus on building a strong talent pipeline across levels through regular in-house and external programmes. Developing and strengthening capabilities of all employees has remained an ongoing priority. Deserving employees, who demonstrate high performance and potential, are awarded challenging assignments and higher responsibilities. They are provided adequate training and coaching to prepare them towards the same.

The Companys talent management strategy is focused on building leaders of tomorrow. We invest through world class leadership development programmes to build the talent bank in the organisation. The Company has a robust talent review programme and ensures a succession plan towards critical positions, annually.

There is a harmonious relationship between the employees and the management of your Company. The consultative and participative management style of your Company has facilitated the achievement of its corporate goals. The employee morale has been high, resulting in a positive contribution to your Companys progress.

Employees Stock Option Scheme (ESOS)

The Employee Stock Option Scheme 2006 (‘the Scheme) expired on June 27, 2016, after completion of 10 years. During the year under review, the eligible employees had exercised their last instalment of granted options. The members of your Company in the Annual General Meeting held on August 9, 2018, by passing a special resolution had adopted a new scheme called Employees Stock Option Scheme 2018 (ESOS 2018), under which an aggregate of 31,950 stock options are proposed to be granted. Permanent employees (excluding Promoters and Independent Directors) of your Company and its subsidiaries are eligible to participate in the ESOS 2018. An estimated 31,950 stock options (shares of which are with the ICRA Employees Welfare Trust) will be granted under the ESOS 2018.

The disclosures in terms of Regulation 14 of the SEBI (Share-based Employee Benefits) Regulations, 2014 read with Circular No CIR/CFD/POLICY CELL/2/2015, dated June 16, 2015, issued by SEBI, are available on the Companys website and the web-link for the same is:https://www.icra.in/InvestorRelation/ShowCorpGovernanceReport/?Id=27&Title=Corporate%20Governance&Report=Disclosure%20by%20Board%20of%20Directors%20(ESOP)_2018_March.pdf

Particulars of Employees

The disclosure under the provisions of Section 197(12) of the Companies Act, 2013, regarding the ratio of the remuneration of each Director to the median employees remuneration and such other details as specified in Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to the Directors Report (Annexure I). A statement showing the names of the top ten employees in terms of remuneration drawn and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as well as the names and other particulars of every employee covered under the rule are available at the registered office of the Company, and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee.

With regard to the provisions of Section 136(1) of the Companies Act, 2013, the Directors Report, excluding the information provided in compliance with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is being sent to the members of the Company.

Extract of the Annual Return

An extract of the Annual Return in Form No. MGT 9, as per Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014, is annexed with this report (Annexure II).

Corporate Governance

The report of the Board of Directors of your Company on Corporate Governance is presented as a separate section (Annexure III) titled Corporate Governance Report, which forms a part of the Annual Report. The composition of the Board, the Audit Committee, the Nomination and Remuneration Committee, the Stakeholders Relationship Committee, the Corporate Social Responsibility Committee and other committees of the Board, the number of meetings of the Board and committees of the Board, and other matters are presented in the Corporate Governance Report. The certificate of the Statutory Auditors of your Company regarding compliance with the Corporate Governance requirements as stipulated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations) is annexed to the Directors Report. Your Company has obtained a certificate from a practicing company secretary that none of the Directors on the Board of your Company have been debarred or disqualified from being appointed or continuing as directors of companies by the SEBI /Ministry of Corporate Affairs or any such statutory authority.

Management Discussion & Analysis

The Management Discussion and Analysis is annexed to the Annual Report (Annexure IV).

Insider Trading Regulations

Based on the requirements under the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time, the Code of Conduct for prevention of insider trading is in force in your Company. The Board of Directors of the Company has adopted the Code of Practises and Procedures for Fair Disclosure of Unpublished Price Sensitive Information, the policy for determination of legitimate purposes, and policy for enquiry in case of the leak of unpublished price sensitive information in compliance with the said regulations and the same have been uploaded on the Company website.

Material Changes and Commitments

No material changes and commitments that would affect the financial position of the Company have occurred between the end of the financial year to which the attached financial statements relate and the date of this report. Further, as per the disclosure required under Section 134 of the Companies Act, 2013 read with Rule 8(5) of Companies (Accounts) Rules, 2014, no significant and material orders have been passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations in future.

Buyback of Shares

During the year 2018-19, the Board of Directors of your Company at its meeting held on August 9, 2018, had approved the buyback of the Companys fully paid-up equity shares of the face value of Rs. 10 each from its members/beneficial owners, other than those who are promoters or the persons in control of the Company and the promoter group, from the open market through the stock exchange mechanism i.e. using the electronic trading facilities of the BSE Limited and the National Stock Exchange of India Limited, where the equity shares are listed in accordance and consonance with the provisions contained in the Companies Act, 2013 and the provisions contained in the SEBI (Buyback of Securities) Regulations, 2018 (Buyback Regulations).

The buyback commenced from October 1, 2018 and closed on December 12, 2018. Your Company bought back 2,52,049 equity shares at an average price of Rs. 3,388.18 per equity share for a total consideration of Rs. 85,39,87,926.34/- (Rupees Eighty-Five Crore Thirty-Nine Lakh Eighty-Seven Thousand Nine Hundred Twenty-Six and Thirty-Four Paisa Only) (excluding transaction costs), representing 99.9986% of the total approved amount of Rs. 85.40 crore (Rupees Eighty-Five Crore and Forty Lakh Only) towards the buyback.

Share Capital

As on March 31, 2019, the Companys issued, subscribed and paid-up equity share capital, stood at Rs. 9,65,12,310 (Nine Crore Sixty-Five Lakh Twelve Thousand Three Hundred and Ten Only) divided into 96,51,231 equity shares of Rs. 10/- each.

Conservation of Energy, Technology Absorption, and Foreign Exchange Earnings and Expenditure

As your Company is not involved in any manufacturing activity, the particulars relating to conservation of energy and technology absorption, as mentioned in the Companies (Accounts) Rules, 2014, are not applicable to it. However, emphasis is placed on the employing techniques that result in the conservation of energy. Details on the foreign exchange earnings and expenditure of your Company appear in the notes to the financial statements.

Update regarding certain ongoing matters

The Company is in the process of addressing certain ongoing matters. First, the Securities and Exchange Board of India (SEBI) has initiated adjudication proceedings (‘Adjudication Proceeding) related to the credit ratings assigned to one of the Companys customers and the customers subsidiaries. The settlement application filed in this regard by the Company has been rejected by SEBI. The Company is also cooperating with government agencies and responding to their queries in relation to this matter. Secondly, the Board of Directors of the Company appointed external experts to examine and report on anonymous representations against its officials, which were forwarded to the Company by SEBI (Representations). There have been certain allegations, during the course of the internal examination of the representation, which appear to be retaliatory in nature, for which the Board is in the process of appointing external experts to examine. Thirdly, the Company has received a letter from SEBI seeking comments on observations made in the interim report dated July 15, 2019 prepared by Grant Thornton India LLP, which was commissioned by the IL&FS group. The Company has submitted its responses to SEBI on such observations.

While the Company has made a provision for penalty on a prudent basis with regards to the Adjudication Proceeding, the Adjudication Proceedings as well as the examinations and other matters noted above remain ongoing, the results of which are not yet available or known. In the meantime, the Board of Directors of the Company, on July 1, 2019, placed its Managing Director and Group CEO on administrative leave, with immediate effect until further notice.

As on date, the Company is unable to estimate the impact, if any, that may result from a potential unfavourable conclusion of these matters or any related inquiry.

Directors and Key Managerial Personnel

During 2018-19, Ms. Farisa Zarin, Non-Executive, Non-Independent Director of your Company, resigned from the Board of your Company inclusive of membership in any and all committees of the Board. The resignation of Ms. Zarin was effective from March 29, 2019. During the year under review, the Members of the Company at the Annual General Meeting held on August 9, 2018 approved the appointment of Mr. Navneet Agarwal as Non-Executive Non-Independent Director of the Company.

The Board of Directors of your Company appointed Mr. David Brent Platt as an Additional Director of your Company under the category of Non-Executive Non-Independent. Mr. Platts appointment is effective from April 30, 2019. The Nomination and Remuneration Committee and the Board of your Company recommend appointment of Mr. Platt under the category of Non-Executive Non-Independent Director, liable to retire by rotation, for approval of the Members of the Company at the forthcoming Annual General Meeting. The resolution seeking Mr. Platts appointment as Director has been included in the Agenda of the Annual General Meeting. On the basis of the recommendation of the Nomination and Remuneration Committee, the Board of Directors, in its meeting held on May 9, 2019, has considered the matter of re-appointment of Mr. Arun Duggal, Ms. Ranjana Agarwal and Ms. Radhika Vijay Haribhakti, Independent Directors who are to complete their first term in 2019. The Board had decided to place the proposal for re-appointment of Mr. Arun Duggal, Ms. Ranjana Agarwal and Ms. Radhika Vijay Haribhakti, as Independent Directors for a further term of five years, for approval of the members at the forthcoming Annual General Meeting. Pursuant to the provisions of Section 152 of the Companies Act, 2013, and the Articles of Association of your Company, Dr. Min Ye is due to retire by rotation, and being eligible, has offered himself for reappointment.

Proposal for the above appointment/re-appointment forms a part of the Agenda for the forthcoming Annual General Meeting and the resolutions are recommended for your approval. The profiles of Mr. Duggal, Ms. Agarwal, Ms. Haribhakti, Dr. Ye, and Mr. Platt are presented in the Notice of the 28th Annual General Meeting, as required under the Companies Act, 2013, and the Listing Regulations.

On July 1, 2019, the Board of Directors of your Company, pending the completion of the examination of the concerns raised in the anonymous representation that was forwarded to the Company by the Securities and Exchange Board of India (SEBI), placed Mr. Naresh Takkar, Managing Director & Group CEO, on administrative leave, effective from July 1, 2019, until further notice.

In addition, the Board of Directors of your Company appointed Group Chief Financial Officer (Group CFO), Mr. Vipul Agarwal, as Interim Chief Operating Officer of the Company, effective from July 1, 2019. Mr. Agarwal has assumed responsibility for the day-to-day operations of your Company and, during Mr. Takkars period of leave, reports to the Board of Directors. Mr. Agarwal continues to hold his position as the Group CFO.

Independent Directors Declaration

As required under Section 149(7) of the Companies Act, 2013 read with Schedule IV of Companies Act, 2013, the Company has received a confirmation/declaration from each of the Independent Directors stating that they meet the criteria of independence. The following Non-Executive Directors of the Company are independent in terms of Section 149(6) of the Companies Act, 2013, and the Listing Regulations:

1. Mr. Arun Duggal

2. Ms. Ranjana Agarwal

3. Ms. Radhika Vijay Haribhakti

Directors Responsibility Statement

As required under the provisions contained in Section 134 of the Companies Act, 2013, your Directors hereby confirm that: (i) in the preparation of the Annual Accounts for the year ended March 31, 2019, the applicable accounting standards have been followed and there are no material departures from the same (ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that year (iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities (iv) the Directors had prepared the Annual Accounts on a going concern basis (v) the Directors had laid down the internal financial controls, followed by the Company and that such internal financial controls are adequate and were operating effectively; and (vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

Policy on Directors Appointment

The Nomination and Remuneration Committee works with the Board to determine the appropriate characteristics, skill and experience that are required of the members of the Board. The members of the Board should possess the expertise, skills and experience needed to manage and guide the Company in the right direction and to create value for all stakeholders. The members of the Board will need to consist of eminent persons of proven competency and integrity with an established track record. Besides having financial literacy, experience, leadership qualities and the ability to think strategically, the members are required to have a significant degree of commitment to the Company and should devote adequate time in preparing for the Board meeting and attending the same. The members of the Board of Directors are required to possess the education, expertise, skills and experience in various sectors and industries needed to manage and guide the Company. The members are also required to look at strategic planning and policy formulations.

The members of the Board should not be related to any executive or independent director of the Company or any of its subsidiaries. They are not expected to hold any executive or independent positions in any entity that is in direct competition with the Company. Board members are expected to attend and participate in the meetings of the Board and its Committees, as relevant. They are also expected to ensure that their other commitments do not interfere with the responsibilities they have, by virtue of being a member of the Board of the Company. While reappointing Directors on the Board and Committees of the Board, the contribution and attendance record of the concerned Director shall be considered in respect of such reappointment. Each Independent Director shall hold office as a member of the Board for a maximum term as per the provisions of the Companies Act, 2013 and the rules made thereunder, in this regard from time to time, and in accordance with the provisions of the Listing Regulations. The appointment of the Directors shall be formalised through a letter of appointment.

The Executive Directors, with the prior approval of the Board, may serve on the Board of any other entity if there is no conflict of interest with the Companys business.

Board and Directors Performance Evaluation

The Board of Directors of the Company, based on the recommendations of the Nomination and Remuneration Committee, has formulated a Board and Directors Performance Evaluation Policy, thereby setting out the performance evaluation criteria for the Board and its Committees and each Directors performance, including the Chairman of the Company. Your Companys Board had undertaken a formal performance evaluation in a comprehensive and structured manner as a part of the strengthening exercise. Based on the recommendations of the Nomination and Remuneration Committee, the Board has adopted a process of receiving anonymous feedback and discussing the same at the meeting to ensure the Directors collective participation and meaningful discussion over the performance of the Board, its Committees, individual Directors and Chairperson of the Board. Your Companys Board believes that trust in the evaluation process and its confidentiality is critical for the success of the evaluation exercise, therefore, the Board encourages fair and transparent evaluations and maintains anonymity of those providing the feedback.

During the evaluation process, various suggestions were made by individual Board members to further enhance the effectiveness of your Companys Board. The results of the feedback were discussed with the Board and its respective committee members. Individual feedback was shared by the Chairman with each Board member separately.

The Board of Directors of the Company believes that the effectiveness of its governance framework can continue to be improved through periodic evaluation of the functioning of the Board as a whole, its committees and individual directors performance evaluation.

Auditors

M/s. B S R & Co. LLP, Chartered Accountants, were appointed as Statutory Auditors of your Company, at the 24th Annual General Meeting to hold office until the conclusion of the 28th Annual General Meeting. The Audit Committee and the Board of Directors have considered and recommended the appointment of Statutory Auditors to the Members of the Company. The disclosures, as required under Regulation 36(5) of the Listing Regulations, will be presented in the Notice of the 28th Annual General Meeting.

Comments on Auditors Report

The notes to the financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments, except for the disclosure pertaining to certain ongoing matters, as provided under ‘Update regarding certain ongoing matters and ‘Directors and Key Managerial Personnel of this report of the Board of Directors.

The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

Secretarial Audit

The Board of Directors of the Company has appointed M/s. Chandrasekaran Associates, Company Secretaries (Certificate of Practice No. 13725), as the Secretarial Auditor of the Company for the financial year 2018-19 in terms of Section 204 of the Companies Act, 2013 and Regulation 24A of the Listing Regulations. The Secretarial Audit Report for financial year 2018-19 has been annexed to this Report (Annexure V). The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.

As per the requirement of the Listing Regulations, material subsidiary has appointed a secretarial auditor, who has undertaken secretarial audit of the material subsidiary for the financial year ended March 31, 2019.

Transfer to Reserves

Your Company proposes not to transfer any amount to the General Reserve.

Dividend

The Board of Directors recommends for approval of the Members at the forthcoming Annual General Meeting, payment of dividend of Rs. 30 per equity share for the financial year ended March 31, 2019. If the members approve the dividend at the forthcoming Annual General Meeting, the dividend shall be paid to: (i) all those members whose names appear in the Register of Members as on Wednesday, September 25, 2019; and (ii) all those members whose names appear on that date as beneficial owners as furnished by the National Securities Depository Limited and Central Depository Services (India) Limited.

Dividend Distribution Policy

Your Company has formulated a Dividend Distribution Policy (‘the Policy) pursuant to Regulation 43A of the Listing Regulations. The objective of the Policy is to maintain stability in the dividend payout of the Company, subject to the applicable laws and to ensure a regular dividend income for the members and long-term capital appreciation for all stakeholders of the Company. Your Company would ensure to strike the right balance between the quantum of dividend paid and the amount of profits retained in the business for various purposes. The Board of Directors refers to this Policy while declaring/recommending dividends on behalf of the Company. Through this Policy, the Company would try to maintain a consistent approach to dividend pay-out plans, subject to the applicable laws. The Policy has been annexed to this report (Annexure VI) and also uploaded on the Companys website - www.icra.in.

Transfer to Investor Education and Protection Fund

The Company sends reminder letters to all members whose dividends are unclaimed to ensure that they receive their rightful dues. Your Company has also uploaded on its website, www.icra.in, information regarding unpaid/unclaimed dividend amounts lying with your Company. During 2018-19, the unclaimed dividend amount of Rs. 90,389 towards the unpaid dividend account of the Company for the financial year 2010-11 was transferred to the Investor Education and Protection Fund. The said amount had remained unclaimed for seven years, despite reminder letters having been sent to each of the members concerned.

Pursuant to Section 124(6) of the Companies Act, 2013 and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and its amendments, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more, shall be transferred by the Company in the demat account of Investor Education and Protection Fund (IEPF) Authority (the Authority) within a period of thirty days of such shares becoming due to be transferred to the IEPF, as per the procedure mentioned in the said Rules. Accordingly, your Company has transferred 142 equity shares to the demat account of the Authority and in terms of the said rules. All benefits accruing on such shares viz. bonus shares, split, consolidation, fraction shares etc. except the right issue shall also be credited to such a demat account. Members may note that unclaimed dividend and shares transferred to the demat account of the Authority can be claimed back by them from the Authority by following the procedure mentioned in the said Rules.

Risk Management Policy

Your Company has formulated a risk management policy. This policy is a formal acknowledgement of the commitment of your Company to risk management. The aim of the policy is not to have the risk eliminated completely from the Companys activities, but rather to ensure that every effort is made by the Company to manage risks appropriately to maximise potential opportunities and minimise the adverse effects of risk. The Board and the Risk Management Committee monitor and review the risk management plan.

Internal Control System and their Adequacy

Your Company has an internal control system, commensurate with its size, nature of its business and complexities of its operations. The Board of Directors of your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of your Companys business. The Board of Directors of your Company has laid down Internal Financial Controls to provide reasonable assurance with regard to recording and providing reliable financial and operational information, adherence to the Companys policies, safeguarding of assets and prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable information. The Board and the Audit Committee regularly evaluate internal financial controls.

Corporate Social Responsibility

Your Company 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 composition of the CSR Committee, the CSR policy of the Company, details about the development and implementation of the policy and initiatives taken by the Company during the year as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, have been annexed to this report (Annexure VII).

Business Responsibility Report

Your Company, in accordance with the provisions of Regulation 34(2)(f) of the Listing Regulations has prepared a Business Responsibility Report for the year 2018-19. The Business Responsibility Report describes the initiatives taken by the Company from the environmental, social and governance perspective. The Business Responsibility Report has been annexed to this report (Annexure VIII) and forms a part of the Directors Report.

Particulars of Contracts or Arrangements with Related Parties

Your Company has entered into contracts or arrangements with its related parties. The related-party transactions are disclosed in the financial statements for the year ended March 31, 2019. There have been no material-related party transactions as per Section 188(1) of the Companies Act, 2013 and as per Regulation 23 of the Listing Regulations, and the required disclosures of information in Form AOC-2 in terms of Section 188 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are annexed to this report (Annexure IX).

Policy on Prohibition, Prevention and Redressal of Sexual Harassment

Your Company has formulated a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. The Company has constituted an Internal Committee for prevention and redressal of sexual harassment at the workplace separately for all the branches. The Company has not received any complaints. The disclosures in relation The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013, has also been made in the Corporate Governance Report.

Deposits

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

Particulars of Loans, Guarantees and Investments

The particulars of loans, guarantees and investments are disclosed in the financial statements for the year ended March 31, 2019.

Vigil Mechanism/Whistle-Blower Policy

Your Company has established a vigil mechanism in compliance with the provisions of Section 177 (9) of the Companies Act, 2013, and Regulation 22 of the Listing Regulations. Your Company has adopted a Whistle-Blower Policy to report unethical/ illegal/improper behaviour. Your Company has made employees aware of the whistle-blower policy to enable them to report instances of leak of unpublished price sensitive information.

The said whistle-blower policy also provides for adequate safeguards against victimisation of persons who use such vigil mechanism and makes provision for direct access to the chairperson of the Audit Committee in exceptional cases. Further, no stakeholders have been denied access to the Audit Committee.

Composition of the Audit Committee

Your Company has constituted an Audit Committee, the composition of which has been provided in the Corporate Governance Report. During the financial year 2018-19, the Board accepted all the recommendations of the Audit Committee.

Litigations

There are two pending cases in the Honble High Court at Madras, which are for injunction petitions by clients against publishing of surveillance rating by your Company.

Acknowledgements

Your Directors acknowledge the cooperation and assistance received from various institutions, Government agencies, members and professionals from different disciplines.

Your Directors also wish to place on record their appreciation of the contribution made by the members of the staff of your Company.

	For and on behalf of the Board of Directors
	(Arun Duggal)
	Chairman
	DIN: 00024262
Place : Gurugram
Date : August 22, 2019