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CARE Ratings Ltd.

BSE: 534804 Sector: Others
NSE: CARERATING ISIN Code: INE752H01013
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VOLUME 7217
52-Week high 744.70
52-Week low 402.75
P/E 15.85
Mkt Cap.(Rs cr) 1,453
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 476.30
CLOSE 480.00
VOLUME 7217
52-Week high 744.70
52-Week low 402.75
P/E 15.85
Mkt Cap.(Rs cr) 1,453
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

CARE Ratings Ltd. (CARERATING) - Auditors Report

Company auditors report

To the Members of

CARE Ratings Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

1. We have audited the accompanying Standalone Ind AS FinancialStatements of CARE Ratings Limited ('the Company') which comprise the standalone BalanceSheet as at March 31 2021 the standalone Statement of Profit and Loss (including OtherComprehensive Income) the standalone Statement of Changes in Equity and the standaloneStatement of Cash Flows for the year then ended and notes to the Standalone Ind ASFinancial Statements including a summary of significant accounting policies and otherexplanatory information. ('the Standalone Ind AS Financial Statements').

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Ind AS Financial Statements give theinformation required by the Companies Act 2013 ('the Act') in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 312021 and its profit(including other comprehensive income) changes in equity and its cash flows for the yearended on that date.

Basis for Opinion

2. We conducted our audit in accordance with the Standards on Auditing('SAs') specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Ind AS Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India ('ICAI') together with the ethical requirements that are relevant toour audit of the Standalone Ind AS Financial Statements under the provisions of the Actand the Rules thereunder; and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our opinionon the Standalone Ind AS Financial Statements.

Emphasis of Matter

3. Attention is drawn to Note 47 of the Standalone Ind AS FinancialStatements which describes the impacts of COVID-19 Pandemic on the financial statements asalso on business operations of the Company assessment thereof made by the management ofthe Company based on its internal external and macro factors involving certainestimation uncertainties. Our opinion is not modified in respect of this matter.

Key Audit Matters

4. Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the Standalone Ind AS FinancialStatements of the year under report. These matters were addressed in the context of ouraudit of the Standalone Ind AS Financial Statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters.

Key Audit Matters Our audit approach
Recognition measurement presentation and disclosures of revenues and other related balances in accordance with Ind AS 115 "Revenue from contracts with customers" and other regulatory requirements We assessed the entity's process to comply with the applicable Ind AS and other regulatory requirements.
The recognition measurement presentation and disclosures of revenues and other related balances in accordance with Ind AS 115 and other regulatory requirements involve significant judgements and estimation as also timing of recognition by the management of the Company. Further the recognition of revenue involves various complexities with respect to nature and category of clients of the Company. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
We determined this matter to be a key audit matter due to the complexity associated to comply with the applicable Ind AS and other regulatory requirements. [Note 1(j) to the Standalone Ind AS Financial Statements] • Evaluated the design of internal controls relating to implementation of the revenue accounting standard.
• Evaluated the report of an expert on the application of the standard on the entity as per its accounting policies.
• Evaluated the reasonableness of the significant judgements and estimation involved in the process.
• Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to timing and extent of recognition of revenue therefrom based on the policy adopted by the Company.
• Selected a sample of continuing and new contracts and performed the following procedures:
• Read analysed and identified the distinct performance obligations in these contracts.
• Compared these performance obligations with that identified and recorded by the entity.
• Sample of revenue disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts.

Regulations - Litigations and claims Our Audit approach in relation to the matter involved the following:
The Company is exposed to various laws and regulations. In this regulatory environment there is an inherent risk of litigations and claims. Consequently provisions and contingent liabilities disclosures may arise from direct and indirect tax proceedings legal proceedings including regulatory and other government / department proceedings as well as out of investigations by the authorities. • Review the outstanding litigations against the Company for comparing consistency with the previous years. Enquire and obtain explanations for movements during the year.
As at March 31 2021 the Company's has ascertained contingent liabilities of Rs. 72.51 Lakhs and also has unascertained liabilities (refer note 30 to the Standalone Ind AS Financial Statements) • Reading the latest correspondences between the Company and the various tax/legal authorities for significant matters.
• Management applies significant judgement in estimating the likelihood of the future outcome in each case when considering whether and how much to provide or in determining the required disclosure for the potential exposure of each matter. This is due to the highly complex nature and magnitude of the legal matters involved along with the fact that resolution of tax and legal proceedings may span over multiple years and may involve protracted negotiation or litigation. These estimates could change substantially over time as new facts emerge and each legal case progresses. • Examined selectively the Company's legal expenses and read fully the minutes of the board meetings in order to ascertain all cases have been identified.
We determined this matter to be a key audit matter due to the inherent complexity and magnitude of potential exposures across the Company and the judgment necessary to estimate the amount of provisions required and/or determine the required disclosures. • With respect to tax matters involving our tax specialists and discussing with the Company's personnel dealing with tax matters their views and strategies on significant cases as well as the related technical grounds relating to their conclusions based on applicable tax laws and precedence.
• Assessing the decisions and rationale for provisions held or for decisions not to record provisions or make disclosures.
• For those matters where management concluded that no provisions should be recognised considering the adequacy and completeness of the Company's disclosures.
• For complex regulatory litigations reviewing the relevant correspondence by the Company studying the matters in the light of past precedence and views of Company's legal advisor as made available by the Company.
• For claims made against the Company but neither acknowledged nor disclosed assessed the tenability of such claims based on reading the basis of such claims with relevant provisions of the law or regulations and considering the legal advice obtained by the Company.

Information other than the Standalone Ind AS Financial Statements andAuditors' Report Thereon

5. The Company's Management and Board of Directors are responsible forthe preparation of the other information comprising of the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and such other disclosures relatedInformation excluding the Standalone Ind AS Financial Statements and auditor's reportthereon ('Other Information'). The Other Information is expected to be made available tous after the date of this Auditors' Report. Our opinion on the Standalone Ind AS FinancialStatements does not cover the Other Information and we do not express any form ofassurance conclusion thereon.

In connection with our audit of the Standalone Ind AS FinancialStatements our responsibility is to read the Other Information when it becomes availableand in doing so consider whether the Other Information is materially inconsistent withthe Standalone Ind AS Financial Statements or our knowledge obtained during the course ofour audit or otherwise appears to be materially misstated. When we read the OtherInformation and if we conclude that there is a material misstatement therein we arerequired to communicate the matter to those charged with governance as required under SA720 'The Auditor's responsibilities Relating to Other Information'.

Responsibility of Management's & Board of Directors for StandaloneInd AS Financial Statements

6. The Company's Management and Board of Directors are responsible forthe matters stated in section 134(5) of the Act with respect to the preparation of theseStandalone Ind AS Financial Statements that give a true and fair view of the state ofaffairs profit and other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards (Ind AS) specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent;design implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind AS FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error. In preparing the Standalone Ind AS Financial Statements managementand Board of Directors are responsible for assessing the Company's ability to continue asa going concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

The Company's Management and Board of Directors are also responsiblefor overseeing the Company's financial reporting process. Auditor's Responsibilities forthe Audit of the Standalone Ind AS Financial Statements

7. Our objectives are to obtain reasonable assurance about whether theStandalone Ind AS Financial Statements as a whole are free from material misstatementwhether due to fraud or error and to issue an Auditor's Report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Ind AS FinancialStatements. Our audit process in accordance with the SAs is narrated in detail in Annexure1 to this report.

Other Matter

8. In view of the restricted movements and partial lockdown imposed bythe authorities to prevent the spread of COVID-19 Pandemic the audit finalisationprocesses were carried out from remote locations i.e. other than the Office of theCompany where the books of accounts and other records are kept based on the data/detailsmade available and based on financial information/records remitted by the managementthrough digital medium. Being constrained we resorted to and relied upon the results ofthe related alternate audit procedures to obtain sufficient and appropriate audit evidencefor the significant matters in course of our audit. Our report is not modified in respectof this matter.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditor's Report) Order 2016 ('theOrder1) issued by the Central Government of India in terms of subsection (11)of section 143 of the Act we give in the Annexure 2 a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.

10. As required by section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b. In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c. The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the Statement of Changes in Equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.

d. In our opinion the aforesaid Standalone Ind AS Financial Statementscomply with the Accounting Standards specified under section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014.

e. On the basis of the written representations received from thedirectors as on March 312021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312021 from being appointed as a director in termsof section 164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in Annexure 3.

g. In terms of provisions of Section 197(16) of the Act as per theinformation and explanations given we report that the managerial remuneration paid by theCompany to its Directors is in accordance with provisions of Section 197 of the Act.

h. With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Standalone Ind AS Financial Statements - Refer Note 30 to theStandalone Ind AS Financial Statements;

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts; the company does not have any derivative contracts - Refer Note 31 to theStandalone Ind AS Financial Statements;

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For Khimji Kunverji & Co LLP
Chartered Accountants
FRN: 105146W/W100621
Sd/-td>
Hasmukh B Dedhia
Partner
M. No.- 033494
UDIN: 21033494AAAAIJ4505
Place: Mumbai
Date: June 12 2021

Annexure 1

(Referred to in paragraph 7 of Independent Auditors' Report)

As part of our audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of theStandalone Ind AS Financial Statements whether due to fraud or error to design andperform audit procedures responsive to those risks and obtain audit evidence that issufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error asfraud may involve collusion forgery intentional omissions misrepresentations or theoverride of internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures in the standalone Ind ASfinancial statement made by the Management and Board of Directors

• Conclude on the appropriateness of the Management and Board ofDirectors use of the going concern basis of accounting and based on the audit evidenceobtained whether a material uncertainty exists related to events or conditions that maycast significant doubt on the Company's ability to continue as a going concern. If weconclude that a material uncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the Standalone Ind AS Financial Statementsor if such disclosures are inadequate to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor's report. However futureevents or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theStandalone Ind AS Financial Statements including the disclosures and whether theStandalone Ind AS Financial Statements represent the underlying transactions and events ina manner that achieves fair presentation.

• Communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

• From the matters communicated with those charged withgovernance we determine those matters that were of most significance in the audit of theStandalone Ind AS Financial Statements of the current period and are therefore the keyaudit matters. We describe these matters in our Auditor's Report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Annexure 2

(Referred to in paragraph 9 of Independent Auditors' Report)

i (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The Company has a policy of verifying all fixed assets in a phasedmanner over a period of two years. However no physical verification of fixed assets couldbe carried out over the last two years. According to the information and explanationsgiven to us no material discrepancies were noticed in last such verification carried outby the Company.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.

ii. The Company does not hold any inventory or securities as stock intrade hence clause 3(ii) of the Order is not applicable to the Company.

iii. According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of the Act

Accordingly the provisions of clause 3 (iii) (a) (b) and (c) of theOrder are not applicable to the Company.

iv. In our opinion and according to the information and explanationsgiven to us provisions of Section 185 and 186 of the Act in respect of loans to directorsincluding entities in which they are interested and in respect of loans and advancesgiven investments made and guarantees and securities given have been complied with by theCompany.

v. According to the information and explanations given to us theCompany has not accepted any deposits from the public.

vi. According to the information and explanations given to us theCompany is not required to maintain any cost records as prescribed by the CentralGovernment under sub-section (1) of Section 148 of the Act.

vii. (a) According to the information and explanations given to us andbased on the records of the Company examined by us the Company is regular in depositingthe undisputed statutory dues including Provident Fund Employees' State InsuranceIncome-tax Goods and Service Tax and other material statutory dues as applicable withthe appropriate authorities in India. There are no undisputed statutory dues payable inrespect to the above statues outstanding as at March 312021 for a period exceeding sixmonths from the date they became payable.

As informed the Company is not liable to pay Custom Duty and Cessduring the year under report.

(b) According to the information and explanations given to us and basedon the records of the Company examined by us there are no dues of Income Tax ServiceTax Value Added Tax Sales Tax Customs Duty Excise Duty Goods and Service Tax and Cesswhich have not been deposited on account of any disputes except the following:

Name of the statute Nature of the dues Amount (Rs. In Lakhs) Period to which the amount relates Forum where dispute is pending
The Income Tax Act 1961 Income Tax 24.66 AY 2016-17 Commissioner of Income Tax (Appeals)
The Income Tax Act 1961 Income Tax 30.55 AY 2017-18 Commissioner of Income Tax (Appeals)

viii. According to the information and explanations given to us and onthe basis of our examination of the records of the Company there are no loans taken fromfinancial institutions government and banks nor has the Company issued any debentures;hence clause 3(viii) of the Order is not applicable to it.

ix. The Company has not raised any money by way of initial public offeror further public offer (including debt instruments) and term loans during the year. Hencethe provision of clause 3(ix) of the Order is not applicable to it.

x. Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given to us by the management we report that no fraud by theCompany or no fraud on the Company by the officers and employees of the Company has beennoticed or reported during the year.

xi. According to the information and explanations given to us themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company. Therefore the provisions of clause3(xii) of the order are not applicable to it.

xiii. According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with Section 177 and 188 of the Act where applicable and thedetails thereof have been disclosed in the Standalone Ind AS financial statements asrequired by the applicable accounting standards.

xiv. According to the information and explanations given to us andbased on our examination of the records of the Company it has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under report. Hence reporting requirements under clause 3(xiv) of the Order arenot applicable to the Company.

xv. According to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith him as referred to in Section 192 of the Act.

xvi. According to the information and explanations given to us theprovisions of section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.

For Khimji Kunverji & Co LLP
Chartered Accountants
FRN: 105146W/W100621
Sd/-
Hasmukh B Dedhia
Partner
M. No.- 033494
UDIN: 21033494AAAAIJ4505
Place: Mumbai
Date: June 12 2021

Annexure 3

(Referred to in paragraph 10(f) of Independent Auditors' Report)

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ('the Act')

Opinion

In conjunction with our audit of the Standalone Ind AS FinancialStatements of the Company as of and for the year ended March 31 2021 we have audited theinternal financial controls with reference to Standalone Ind AS Financial Statements ofCARE Ratings Limited ('the Company') as of that date.

In our opinion the Company has in all material respects adequateinternal financial controls system with reference to Standalone Ind AS FinancialStatements and such internal financial controls were operating effectively as at March 312021 based on the internal financial controls with reference to Standalone Ind ASFinancial Statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (the 'Guidance Note').

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to Standalone Ind AS Financial Statements criteria established bythe Company considering the essential components of internal control stated in theGuidance Note. These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as 'the Act').

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to Standalone Ind AS Financial Statements based on ouraudit. We conducted our audit in accordance with the Guidance Note and the Standards onAuditing prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls with reference to Standalone Ind AS FinancialStatements. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls with reference to Standalone Ind AS FinancialStatements were established and maintained and whether such controls operated effectivelyin all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to Standalone Ind ASFinancial Statements and their operating effectiveness. Our audit of internal financialcontrols with reference to Standalone Ind AS Financial Statements included obtaining anunderstanding of such internal financial controls assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of theStandalone Ind AS Financial Statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols with reference to Standalone Ind AS Financial Statements.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial controls with reference to StandaloneInd AS Financial Statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of Standalone Ind ASFinancial Statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial controls with reference toStandalone Ind AS Financial Statements include those policies and procedures that;

1. pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany;

2. provide reasonable assurance that transactions are recorded asnecessary to permit preparation of Standalone Ind AS Financial Statements in accordancewith generally accepted accounting principles and that receipts and expenditures of theCompany are being made only in accordance with authorisations of management and directorsof the Company; and

3. provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the Company's assets thatcould have a material effect on the Standalone Ind AS Financial Statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls withreference to Standalone Ind AS Financial Statements including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls with reference to Standalone Ind AS Financial Statements tofuture periods are subject to the risk that the internal financial controls with referenceto Standalone Ind AS Financial Statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

For Khimji Kunverji & Co LLP
Chartered Accountants
FRN: 105146W/W100621
Sd/-
Hasmukh B Dedhia
Partner
M. No.- 033494
UDIN: 21033494AAAAIJ4505
Place: Mumbai
Date: June 12 2021

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