You are here » Home » Companies » Company Overview » ICRA Ltd

ICRA Ltd.

BSE: 532835 Sector: Others
NSE: ICRA ISIN Code: INE725G01011
BSE LIVE 15:40 | 15 Dec 3900.10 -65.55
(-1.65%)
OPEN

3900.00

HIGH

3901.00

LOW

3900.00

NSE 15:31 | 15 Dec 3921.80 -7.05
(-0.18%)
OPEN

3902.25

HIGH

3938.90

LOW

3890.10

OPEN 3900.00
PREVIOUS CLOSE 3965.65
VOLUME 19
52-Week high 4448.00
52-Week low 3726.00
P/E 42.63
Mkt Cap.(Rs cr) 3,861
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3900.00
CLOSE 3965.65
VOLUME 19
52-Week high 4448.00
52-Week low 3726.00
P/E 42.63
Mkt Cap.(Rs cr) 3,861
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

ICRA Ltd. (ICRA) - Director Report

Company director report

Directors' Report

To The Members ICRA Limited

Your Directors have the pleasure in presenting the 26th Annual Report ofyour Company along with the Audited Financial Statements for the year ended March 312017.

Financial Performance

During its 26th year of operations your Company has earned a Net Profit ofRs. 83.28 crore as against Rs. 61.46 crore during the previous year. Your Company's basicearning per share for the year ended March 31 2017 was Rs. 84.57 as against Rs.62.53 in the previous year. The financial results of your Company (standalone andconsolidated) for the year ended March 31 2017 are presented in the following tables.

Particulars Standalone
2015-16 2016-17
(Rs. crore) (Rs. crore)
Revenue from operations 193.89 209.22
Other operating income 1.47 1.68
Other income 23.69 34.03
Total revenue 219.05 244.93
Total expenditure (121.52) (132.48)
Profit before exceptional items and tax 97.53 112.45
Exceptional items (3.45) 6.81
Profit before tax 94.08 119.26
Tax expense (32.62) (35.98)
Profit for the year 61.46 83.28
1 crore = 10 million

 

Particulars Consolidated
2015-16 2016-17
(Rs. crore) (Rs. crore)
Revenue from operations 339.76 331.33
Other operating income 1.39 1.70
Other income 27.08 24.52
Total revenue 368.23 357.55
Total expenditure (250.24) (240.70)
Profit before tax and 117.99 116.85
Minority interest
Profit from continuing 111.10 114.08
Operations before tax and minority interest
Tax expenses (37.69) (40.70)
Profit from continuing operations after tax and minority interest 73.41 73.38
Profit from discontinuing operations before tax 6.89 2.77
Tax expenses (3.88) (1.76)
Profit from discontinuing operations after tax 3.01 1.01
Profit after tax and before minority interest 76.42 74.39
Minority interest 0.18 0.21
Profit for the year 76.24 74.18

Review of operations

Rating Services

Market overview

Growth in the economy in FY2017 continued to remain moderate as the recovery remainedlimited to sectors such as roads metro rail and urban infrastructure partly benefitingfrom higher capital spending by the Government of India (GoI). Moderate capacityutilisation high leverage levels of some large corporate groups and weak asset quality ofthe banking system continued to delay a broad-based recovery in investment activity. Theconsumption boost that was expected in H2 FY2017 on account of the near-normal monsoon andthe implementation of the Seventh Central Pay Commission's (SCPC's) recommendations wastemporarily affected by the note ban. The withdrawal of the legal tender status for theexisting currency notes in the denominations of Rs. 500 and Rs. 1000 from November 92016 temporarily affected economic activity in some sectors.

The moderation in retail inflation led the Reserve Bank of India (RBI) to reduce thebenchmark repo rate by 50 basis points during FY2017. With faster transmission of monetaryeasing to the debt market the trend of disintermediation continued with a number ofcorporates accessing the domestic bond and commercial paper (CP) market. Going ahead theeconomic activity in FY2018 is expected to be favourably influenced by enhanced Governmentspending on rural infrastructure affordable housing and transport as well as taxconcessions to support the MSME sector and the income tax payers in the lowest bracket.The expectation of a normal monsoon moderate hikes in minimum support prices for variouscrops and automatic stabilisers such as the rural employment guarantee scheme wouldsupport rural consumption demand. Urban consumption would benefit from pay revision forstate government employees and pensioners. A rise in capacity utilization to healthierlevels would set the stage for a revival of private sector investments. While thetransition to the Goods and Services Tax (GST) may lead to momentary disruption thepositive impact of this reform is likely to manifest by the end of the year. While bankcredit growth may revive modestly from the lows seen in FY2017 particularly for workingcapital financing finer pricing may result in continued high growth of bond issuances.This along with the implementation of various regulatory steps such as guidelinesencouraging large borrowers to access a certain portion of their financing needs throughthe market mechanism augur well for the domestic corporate bond market. The bank loanrating segment is expected to benefit to some extent from the higher risk weights forlarger unrated bank exposures.

Corporate Sector

As in the previous years the market for bank loan ratings remained sluggish in FY2017too with corporate credit growth continuing to be muted. With capacity utilisation levelsin several industries remaining low and little pick up in investment demand privatecapital expenditure did not show any meaningful recovery. The "twin balance sheetproblem" also continued to weigh on the economy in general and credit growth inparticular. While the bond markets have been showing consistent growth over the last fewyears a majority of the fund-raising has been carried out by financial sector entities.However bond and CP issuances by corporate sector entities also witnessed robust growth.Additionally the trend of SPVs in the infrastructure sector accessing the bond market torefinance bank loans continued during the year albeit at a modest pace by primarily roadand power sector entities. Additionally your Company was also involved in the issuerrating of two Infrastructure Investment Trusts (InvITs) formed under the Securities andExchange Board of India (Sebi) InvIT Regulations 2014. InvIT is a mechanism that enablesdevelopers of infrastructure assets to monetise their assets by pooling multiple assetsunder a single entity (trust structure). Given the huge capital requirement byinfrastructure players this could be an attractive option for infrastructure developersto raise funds once the various market participants are comfortable with the new product.With the availability of finer rates to raise funds the commercial paper (CP) marketcontinued to be active with better rated entities using the CP route to meet their fundingrequirements.

Financial Sector

Total domestic bond issuance by financial sector entities increased well in 2016-17driven by higher volumes by banks as well as non-bank finance companies. With weakprofitability and low valuation curbing their ability to raise sizeable equity banks usedthe bond route instead to shore up their capital adequacy. Investor appetite for suchbonds was supported by the higher spread over banks' deposits and other debt instruments.The issuance volumes were also partly aided by the relaxation provided by the regulator onservicing of these instruments. Given the sizeable capital requirements for banks as theyfully adopt the Basel III regulations your Company expects the issuance volumes to remainelevated over the medium term. The year also saw the commencement of operations ofspecialised banks particularly the small finance banks. Your Company has a strongpresence in this segment.

The non-banking finance companies (NBFCs) borrowed significantly from the debt marketwhich offered finer rates amidst steady inflows into the mutual funds and insurancesectors during 2016-17 even as the alternative funding sources like bank borrowingscontinued to remain costlier. The challenges with the banking sector helped the NBFCsexpand their activity while maintaining adequate profitability and asset quality metrics.Though the demonetisation of specified currency notes did have an adverse impact on thecollection efficiencies barring a few segments most segments have shown adequateresilience. Your Company continued to expand its presence in this space by adding newclients and also rating the incremental debt requirements of existing clients. The yearunder review also witnessed insurance companies issuing Tier II bonds to strengthen theirregulatory solvency profile. Your Company has a major share of this segment. Your Companyalso continued to expand its presence in the mutual funds space during the year underreview by adding more clients to its portfolio of rated mutual fund houses and schemes.

Your Company continued to build on the social performance assessment (SPA) servicewhich seeks to measure the social performance of a microfinance institution (MFI) -analysing the manner in which the MFI oversees manages and monitors its performance toachieve its social mission.

Structured Finance

During FY2017 the securitisation market continued the positive momentum witnessed inFY2016 with the issuance volume rising significantly over the previous fiscal year.

The predominant motive for banks—primarily domestic private sector banks andforeign banks—to invest in securitisation transactions and to acquire loan poolsthrough bilateral assignment - continued to be the need to meet shortfalls in prioritysector lending (PSL) targets. In FY2017 with more clarity and transparency on legacy taxissues and removal of the distribution tax on securitisation trusts the investor base forsecuritisation transactions expanded further with mutual funds entering the market asinvestors. Quarterly assessment of PSL targets for banks resulted in issuance volumesbeing spread throughout the year in FY2017. Prior to that there was a rush for PSL assetsin the second half of the fiscal year to meet the annual PSL targets. Return of mutualfunds as an investor segment also resulted in some pickup in non-PSL securitisationvolumes. However the share of non-PSL transactions in the overall market continued toremain low. In FY2017 your Company rated the first securitisation transaction backed bytrade receivables – a landmark transaction as it marked the return of banks asoriginators in securitisation transactions. Your Company continued to maintain itsposition as a thought leader and dominant Credit Rating Agency (CRA) in the structuredfinance segment. Going forward the extent of shortfall in PSL targets in the bankingsystem and the availability of eligible assets with sellers are expected to be the keyfactors influencing securitisation issuance/assignment volumes. Opening up of thesecuritisation market for foreign portfolio investors also bodes well for the developmentof the securitisation market. However the emergence of priority sector lendingcertificates (PSLCs) as an alternate mode for banks to meet PSL targets and any adverseimpact of adoption of Indian Accounting Standards on the originators could also hamperissuance volumes going forward.

Industry Research

Your Company has continued to strengthen its research offerings covering a largenumber of sub-segments within the corporate sector and multiple sub-segments under thefinancial services and structured finance sectors. The research reports arewell-appreciated for their in-depth analyses of industry-specific issues such as trends indemand-supply the competitive landscape and credit trends apart from their projection ofthe medium-to-long-term outlook. Being focussed and thematic these reports have been wellappreciated particularly by the senior management.

Besides the periodic off-the-shelf research publications your Company's customisedresearch offerings to meet the specific requirements of various clients have also beenwell appreciated. Your Company expects to be able to enhance the offerings under thisservice leveraging its extensive knowledge base and research capabilities.

Franchise Development

Your Company continues to make significant efforts to enhance its visibility andreinforce its brand strength through seminars conferences and media activities aimed atpromoting market awareness bridging the information gap and recognising excellence.

During the year in addition to several joint seminars with Moody's Investors Service(Moody's) to disseminate its views on developments in the domestic and global creditmarkets your Company organised a bond market conference involving panelists representingregulators issuers and investors which was very well received by the participants.Further your Company's periodic teleconferences increasing use of research and sectoralreports were all well appreciated. Apart from these your Company has been able to attaina substantial share of voice in the media through regular releases voicing our opinion oncontemporary issues.

On recognising excellence your Company continues to power the Financial AdvisorAwards along with CNBC-TV18 and the India Pride Awards an initiative torecognise the superior performing public sector entities with the Dainik Bhaskar Group.These awards are a subject of considerable pride for the winners.

Change in nature of business

During 2016-17 there was no change in the nature of business of your Company. Howeveryour Company has sold its Kolkata-based wholly-owned subsidiary which is engaged ininformation technology and business analytics services to a global client base.

Subsidiary Companies (including step down subsidiaries)

At the beginning of the year 2016-17 your Company had 11 subsidiaries including fivestep-down subsidiaries. During 2016-17 members of your Company had approved the sale ofits entire shareholding in ICRA Techno Analytics Limited (now known as Nihilent AnalyticsLimited) then a wholly-owned subsidiary of the Company inclusive of its four direct andindirect subsidiaries to Nihilent Technologies Limited which sale was consummated onOctober 7 2016. Additionally in 2016-17 PT. ICRA Indonesia surrendered its ratinglicence and your Company initiated its liquidation proceedings.

There has been no material change in the nature of the business of the subsidiaries.

As of March 31 2017 your Company had namely the following subsidiaries including thestep-down subsidiary:

Sl. 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

*liquidation initiated by the Company

Highlights of performance of subsidiary companies and their contribution to the overallperformance of the Company during the year 2016-17 are provided in the ManagementDiscussion and Analysis Report. The consolidated financial statements of Group ICRAconsisting of ICRA Limited its subsidiaries and step-down subsidiary for the year2016-17 which form a part of the Annual Report are attached. The Auditors' Report on theconsolidated financial statements is also attached. In compliance with the relevantprovisions of the Companies Act 2013 a statement containing the brief financial detailsin Form AOC-1 as per Rule 5 of the Companies (Accounts) Rules 2014 of the saidsubsidiaries is annexed to the consolidated financial statements prepared in accordancewith the prescribed Accounting Standards.

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

Branches of the Company

Your Company operates its business from its offices in Delhi Gurgaon Mumbai KolkataChennai Ahmedabad Bengaluru Hyderabad and Pune.

Board meetings held during the year

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

Human Resource Development & Training

Human resource development continued to be accorded high priority during the year underreview with emphasis being placed on improving skill competence and knowledge throughregular training and in-house/external professional development programmes. Learningopportunities are extended to employees across levels which also results in the overallimproved performance of the Company. New joiners go through a systematic On-boardingprogram to equip them adequately with information and skills required to be purposeful atwork.

ICRA believes in empowering and nurturing talent. Deserving employees those whodemonstrate high performance and potential are awarded challenging assignments and higherresponsibilities. They are provided adequate training and coaching to prepare them towardsthe same.

The Company inspires its employees to be focused and result oriented. As part of theoverall Talent strategy company reviews succession plan towards critical positionsannually.

There is a harmonious relationship between the employees and the management of yourCompany. The consultative and participative management style of your Company hasfacilitated the achievement of its corporate goals. The employee morale has been highresulting in a positive contribution to your Company's progress.

Employees Stock option Scheme (eSoS)

Your Company has implemented the Employee Stock Option Scheme 2006 ("theScheme") in accordance with the erstwhile Guidelines i.e. Securities and ExchangeBoard of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)Guidelines 1999 and in conformity with the resolutions passed by the Members at theAnnual General Meetings of the Company held on June 12 2006 July 29 2008 and August12 2011. Pursuant to the resolution passed by the Members at the Annual General Meetingheld on June 12 2006 for the grant of options 906000 equity shares amounting to 9.06%of the equity share capital of your Company have been issued to the ICRA Employees WelfareTrust ("Trust") for grant of options to the eligible option grantees. Uponcompletion of ten years the Scheme has expired during 2016-17 but the expiry is unlikelyto affect the granted options and the eligible employees will have the right to exercisetill the expiry date of such options with the expiry date of the last instalment ofgranted options being November 8 2018. The options equivalent to 120250 equity sharesof your Company remained unexercised in terms of the Scheme and are not subject to anygrant or vesting to employees. These equity shares of the Company will continue to be heldby the Trust and will be dealt with in accordance with the Scheme and the Securities andExchange Board of India (Share-Based Employee Benefits) Regulations 2014. The disclosuresin terms of Regulation 14 of the Securities and Exchange Board of India (Share-BasedEmployee Benefits) Regulations 2014 read with Circular No CIR/CFD/POLICY CELL/2/2015dated June 16 2015 issued by the Securities and Exchange Board of India are available onthe Company's website and the web-link for the same ishttps://www.icra.in/InvestorRelation/ShowCorpGovernanceReport/?Id=27&Title=Corporate%20Governance&Report=Disclosures%20on%20ESOPs%20(1).pdf. There were no material changesin the Scheme and the Scheme are in compliance with the Securities and Exchange Board ofIndia (Share-Based Employee Benefits) Regulations 2014. The Scheme is administered by theESOS Compensation Committee of the Board of your Company and the ICRA Employees WelfareTrust.

Particulars of employees

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

Having regard to the provisions of Section 136(1) of the Companies Act 2013 theDirectors' 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 isbeing 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 ofthe Companies (Management and Administration) Rules 2014 is annexed with this report (AnnexureII).

Corporate Governance

The report of the Board of Directors of your Company on Corporate Governance ispresented as a separate section (Annexure III) titled "Corporate GovernanceReport" which forms a part of the Annual Report. The composition of the Board theAudit Committee the Nomination and Remuneration Committee the Stakeholders RelationshipCommittee the Corporate Social Responsibility Committee and other Committees of theBoard the number of meetings of the Board and Committees of the Board and other mattersare presented in the Corporate Governance Report. The certificate of the StatutoryAuditors of your Company regarding compliance with the Corporate Governance requirementsas stipulated in the Securities Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations") is annexed tothe Directors' Report.

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) Regulations2015 as amended from time to time the Code of Conduct for prevention of insider tradingis in force in your Company. The Board of Directors of the Company has adopted the Code ofPractises and Procedures for Fair Disclosure of Unpublished Price Sensitive Information incompliance with Chapter IV of the said Regulations and the same has been uploaded on theCompany website.

Material Changes and Commitments

No material changes and commitments that would affect the financial position of theCompany have occurred between the end of the financial year to which the attachedfinancial statements relate and the date of this report. Further as per the disclosurerequired 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 theregulators or courts or tribunals impacting the going concern status and the Company'soperations in future.

Buyback of Shares

During the year 2016-17 the Board of Directors of your Company at their meeting heldon February 9 2017 had approved the buyback of the Company's fully paid-up equity sharesof the face value of Rs.10 each from its members/beneficial owners other than those whoare promoters or the persons in control of the Company and the promoter group from theopen market through stock exchange mechanism i.e. using the electronic trading facilitiesof the BSE Limited and the National Stock Exchange of India Limited where the equityshares are listed in accordance and consonance with the provisions contained in theCompanies Act 2013 ("Act") and the provisions contained in the Securities andExchange Board of India (Buy Back of Securities) Regulations 1998 ("BuybackRegulations"). As prescribed under the Buyback Regulations and the Act the buybackof your Company was for a total amount not exceeding Rs. 40.00 crores (Rupees Forty CroresOnly) (the "Maximum Buy back Size") and at a price not exceeding Rs. 4500(Rupees Four Thousand Five Hundred Only) per equity share (the "Maximum BuybackPrice") payable in cash.

The maximum buyback size represented 9.91% of the aggregate of the Company's paid-upequity share capital and free reserves based on the standalone audited financialstatements of the Company as at March 31 2016 (being the latest available auditedfinancial statements of the Company). Further since the maximum buyback size was lessthan 10% of the total paid-up equity share capital and free reserves of the Company inaccordance with the proviso to the Section 68(2)(b) of the Act approval from the membersof the Company was not necessary to be taken. The buyback commenced from March 2 2017 andclosed on April 3 2017. Till the date of closure of the buyback the Company bought back96720 equity shares at an average price of Rs. 4135.54 per equity share for a totalconsideration of Rs. 399989225/- (Rupees Thirty Nine Crore Ninety Nine Lakh Eighty NineThousand and Two Hundred Twenty Five Only) (excluding transaction costs) representing99.997% of the total approved amount of Rs. 40.00 crores (Rupees Forty Crores Only)towards the buyback.

The equity share capital of the Company before the buyback was 10000000 equityshares of Rs. 10 each and after extinguishment of 80677 equity shares; the equity sharecapital of the Company was 9919323 equity shares of Rs. 10 each as on March 31 2017.

Share Capital

As on March 31 2017 in accordance with the buyback of equity shares the Company'sissued subscribed and paid-up equity share capital stood at Rs. 99193230 (Nine CroreNinety One Lakh Ninety Three Thousand Two Hundred and Thirty Only) divided into 9919323equity shares of Rs. 10/- each. Till the year ended March 31 2017 the Company hadextinguished 80677 equity shares. Equity shares amounting to 16043 were extinguished onApril 5 2017. Post extinguishment of all the equity shares bought back under the buybackthe issued subscribed and paid-up equity share capital stood at Rs. 99032800 (NineCrore Ninety Lakh Thirty Two Thousand Eight Hundred Only) divided into 9903280 equityshares of Rs. 10/- each.

Conservation of energy Technology Absorption and Foreign exchange earnings andexpenditure

As your Company is not engaged in any manufacturing activity the particulars relatingto conservation of energy and technology absorption as mentioned in the Companies(Accounts) Rules 2014 are not applicable to it. However emphasis is placed on employingtechniques that result in the conservation of energy. Details on the foreign exchangeearnings and expenditure of your Company appear in the notes to the financial statements.

Directors and Key Managerial Personnel

During 2016-17 Mr. Robert Scott Fauber Non-Executive Non-Independent Director ofyour Company resigned from the Board of your Company. The resignation of Mr. Fauber waseffective from June 14 2016. The Board placed on record its deep appreciation of thevaluable advice and guidance provided by Mr. Fauber throughout his tenure with yourCompany.

During the year under review the Board of your Company appointed Ms. Farisa Zarin asAdditional Director with effect from June 15 2016 under the category of Non-ExecutiveNon-Independent Director. Further the members of your Company at the Annual GeneralMeeting held on August 11 2016 approved the appointment of Ms. Zarin as Non-ExecutiveNon-Independent Director of your Company.

Pursuant to the provisions of Section 152 of the Companies Act 2013 and the Articlesof Association of your Company Mr. Simon Richard Hastilow is due to retire by rotationand being eligible has offered himself for reappointment.

Proposals for the above appointment forms a part of the Agenda for the forthcomingAnnual General Meeting and the resolution is recommended for your approval. The profile ofMr. Simon Richard Hastilow is presented in the Notice of the 26th AnnualGeneral Meeting as required under the Companies Act 2013 and the Listing Regulations.

Independent Directors' Declaration

As required under Section 149(7) of the Companies Act 2013 read with Schedule IV ofCompanies Act 2013 the Company has received a confirmation/declaration from each of theIndependent Directors stating that they meet the criteria of independence. The followingNon-Executive Directors of the Company are independent in terms of Section 149(6) of theCompanies 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 2013your Directors hereby confirm that: (i) in the preparation of the Annual Accounts for theyear ended March 31 2017 the applicable accounting standards have been followed andthere are no material departures from the same; (ii) the Directors had selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the financial year and of the profit and loss of the Company forthat year;

(iii) the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting frauds andother 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 Companyand that such internal financial controls are adequate and were operating effectively; and

(vi) the Directors had devised proper systems to ensure compliance with the provisionsof 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 theappropriate characteristics skill and experience that are required of the members of theBoard. The members of the Board should possess the expertise skills and experience neededto manage and guide the Company in the right direction and to create value for allstakeholders. The members of the Board will need to consist of eminent persons of provencompetency and integrity with an established track record. Besides having financialliteracy experience leadership qualities and the ability to think strategically themembers of the Board of Directors are required to have a significant degree of commitmentto the Company and should devote adequate time in preparing for the Board meeting andattending the same. Members of the Board of Directors are required to possess theeducation expertise skills and experience in various sectors and industries needed tomanage and guide the Company. The members of the Board are required to look at strategicplanning and policy formulations.

The members of the Board should not be related to any executive or independent directorof the Company or any of its subsidiaries. They are not expected to hold any executive orindependent positions in any entity that is in direct competition with the Company. Boardmembers are expected to attend and participate in the meetings of the Board and itsCommittees as relevant. They are also expected to ensure that their other commitments donot interfere with the responsibilities they have by virtue of being a member of the Boardof the Company. While reappointing Directors on the Board and Committees of the Board thecontribution and attendance record of the Director concerned shall be considered inrespect of such reappointment. The Independent Directors shall hold office as a member ofthe Board for a maximum term as per the provisions of the Companies Act 2013 and theListing Regulations. The appointment of Directors shall be formalised through a letter ofappointment.

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

Board and Directors Performance evaluation

The Board of Directors of the Company based on the recommendations of the Nominationand Remuneration Committee has formulated a Board and Director Performance EvaluationPolicy thereby setting out the performance evaluation criteria for the Board and itsCommittees and each Directors' performance including the Chairman of the Company.Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard of Directors has carried out an internal evaluation of its own performance itscommittees independent directors individual directors including the Chairman. Theexercise of performance evaluation was led by the Chairman of the Company along with thechairperson of the Nomination and Remuneration Committee of the Board.

During 2016-17 the Board devised a process to get anonymous feedback on thefunctioning and performance of the Board as a whole the chairperson of the Board theindividual directors and every committee of the Board. The results of the feedback werediscussed with the Board and its respective committees. Individual feedback was shared bythe Chairman with each Board member separately.

The Board of Directors of the Company believes that the effectiveness of its governanceframework can continue to be improved through periodic evaluation of the functioning ofthe 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 Auditorsof your Company at the 24th Annual General Meeting to hold office until theconclusion of the 28th Annual General Meeting subject to ratification in eachAnnual General Meeting. The Company has received their written consent and a certificatethat they satisfy the criteria provided under Section 141 of the Companies Act 2013 andthat the appointment if ratified shall be in accordance with the applicable provisionsof the Companies Act 2013 and the Rules framed thereunder. The Board of Directors interms of Section 139 of the Companies Act 2013 on the recommendation of the AuditCommittee has recommended ratification of appointment of M/s B S R & Co. LLPChartered Accountants as the Statutory Auditors of the Company from the conclusion of theensuing Annual General Meeting till the conclusion of 27th Annual GeneralMeeting of the Company.

Comments on Auditors' Report

The notes to the financial statements referred to in the Auditors' Report are selfexplanatory and do not call for any further comments. The Statutory Auditors have notreported any incident of fraud to the Audit Committee of the Company in the year underreview.

Secretarial Audit

The Board of Directors of the Company has appointed M/s. Y.J. Basrar & Co. CompanySecretaries (Membership No. FCS 2754) as the Secretarial Auditor of the Company for thefinancial year 2016-17 in terms of Section 204 of the Companies Act 2013. The SecretarialAudit Report for financial year 2016-17 has been annexed to this Report (Annexure V).The Secretarial Audit Report does not contain any qualifications reservations or adverseremarks.

Transfer to Reserves

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

Dividend

The Board of Directors recommends for approval of the Members at the forthcoming AnnualGeneral Meeting payment of dividend of Rs. 27 per Equity Share for the financial yearended March 31 2017. If the members approve the dividend at the forthcoming AnnualGeneral Meeting the dividend shall be paid to: (i) all those members whose names appearin the Register of Members as on July 31 2017; and (ii) all those members whose namesappear on that date as beneficial owners as furnished by National Securities DepositoryLimited and Central Depository Services (India) Limited.

Dividend Distribution Policy

Your Company has formulated a Dividend Distribution Policy (‘the Policy') pursuantto Regulation 43A of the Listing Regulations. The objective of the Policy is to maintainstability in the dividend payout of the Company subject to the applicable laws and toensure a regular dividend income for the members and long term capital appreciation forall stakeholders of the Company. Your Company would ensure to strike the right balancebetween the quantum of dividend paid and the amount of profits retained in the businessfor various purposes. The Board of Directors refers to this Policy while declaring/recommending dividends on behalf of the Company. Through this Policy the Company wouldtry to maintain a consistent approach to dividend pay-out plans subject to the applicablelaws. The Policy has been annexed to this report (Annuexure VI) and also uploaded on thewebsite of the Company www.icra.in.

Transfer to Investor education and Protection Fund

The Company sends reminder letters to all members whose dividends are unclaimed so asto ensure that they receive their rightful dues. Your Company has also uploaded on itswebsite www.icra.in information regarding unpaid/ unclaimed dividend amounts lying withyour Company. During 2016-17 the unclaimed dividend amount of Rs. 85812 towards theunpaid dividend account of the Company for the financial year 2008-09 was transferred toInvestor Education and Protection Fund. The said amounts had remained unclaimed for sevenyears 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 andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 and itsamendment Rules 2017 all shares in respect of which dividend has not been paid or claimedfor seven consecutive years or more shall be transferred by the Company in the demataccount of Investor Education and Protection Fund ("IEPF") Authority (the"Authority") within a period of thirty days of such shares becoming due to betransferred to the IEPF as per the procedure mentioned in the said Rules. The Companyshall transfer/credit such shares to the demat account of the Authority and in terms ofthe said Rules all benefits accruing on such shares viz. bonus shares splitconsolidation fraction shares etc. except the right issue shall also be credited to suchdemat account.

The list containing the names of members and their folio no. or DP ID and Client IDwhose shares are due to transfer to the demat account of the authority has been uploadedon the Company's website viz. www.icra.in. Pursuant to the said Rules advertisements havebeen published in newspapers and individual notices were sent to the members whose equityshares are liable to be transferred to the IEPF Suspense Account. The Company hadrequested them to encash their unclaimed dividends since financial year 2008-09 as thesame remained unclaimed for seven consecutive years.

Members may note that unclaimed dividend and shares transferred to IEPF SuspenseAccount can be claimed back by them from IEPF Authority by following the procedurementioned in the said Rules.

Risk Management Policy

Your Company has formulated a risk management policy to ensure that every effort ismade to manage risk appropriately so as to maximise potential opportunities and minimizethe adverse effects of risk. The Board and the Audit Committee monitor and review the riskmanagement plan.

Internal Control System and their Adequacy

Your Company has an internal control system commensurate with its size nature of itsbusiness and complexities of its operations. The Board of Directors of your Company hasadopted policies and procedures for ensuring the orderly and efficient conduct of yourCompany's business. The Board of Directors of your Company has laid down InternalFinancial Controls to provide reasonable assurance with regard to recording and providingreliable financial and operational information adherence to the Company's policiessafeguarding of assets and prevention and detection of frauds and errors the accuracy andcompleteness of accounting records and timely preparation of reliable information. TheBoard and the Audit Committee regularly evaluate internal financial controls.

Corporate Social Responsibility

Your Company has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Companies Act 2013. The CSR policy has been devised onthe basis of the recommendations made by the CSR Committee. The composition of the CSRCommittee the CSR policy of the Company details about the development and implementationof the CSR policy and initiatives taken by the Company during the year as required underthe Companies (Corporate Social Responsibility Policy) Rules 2014 have been annexed tothis report (Annexure VII).

Business Responsibility Report

Your Company in accordance with the provisions of Regulation 34(2)(f) of the ListingRegulations has prepared a Business Responsibility Report for the year 2016-17. TheBusiness Responsibility Report describes the initiatives taken by the Company fromenvironmental social and governance perspective. The Business Responsibility Report hasbeen 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. Therelated-party transactions are disclosed in the financial statements for the year endedMarch 31 2017. There have been no material-related party transactions as per Section188(1) of the Companies Act 2013 and as per Regulation 23 of the Listing Regulations andthe required disclosures of information in Form AOC-2 in terms of Section 188 of theCompanies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 areannexed 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 SexualHarassment of Women at Workplace in accordance with The Sexual Harassment of Women atWorkplace (Prohibition Prevention and Redressal) Act 2013. The Company has constitutedseparately for all the branches "Internal Committee" for prevention andredressal of sexual harassment at workplace. The Company has not received any complaint.

Deposits

The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of the balancesheet.

Particulars of Loans Guarantees and Investments

The particulars of loans guarantees and investments are disclosed in the financialstatements for the year ended March 31 2017.

Vigil Mechanism/Whistle-Blower Policy

Your Company has established a vigil mechanism in compliance with the provisions ofSection 177 (9) of the Companies Act 2013 and Regulation of the Listing Regulations.Your Company has adopted a Whistle Blower Policy for reporting ofunethical/illegal/improper behaviour. The said whistle-blower policy also provides foradequate safeguards against victimisation of persons who use such vigil mechanism andmakes provision for direct access to the chairperson of the Audit Committee in exceptionalcases. Further no stakeholders have denied access to the Audit Committee.

Composition of the Audit of Committee

Your Company has constituted an Audit Committee the composition of which has beenprovided in the Corporate Governance Report. During the financial year 2016-17 the Boardaccepted all the recommendations of the Audit Committee.

Litigations

During the year 2016-17 there were no litigations against the Company.

Acknowledgements

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

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

For and on behalf of the Board of Directors
(Arun Duggal)
Place: Gurgaon Chairman
Date: May 11 2017 DIN: 00024262