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ICRA Ltd.

BSE: 532835 Sector: Others
NSE: ICRA ISIN Code: INE725G01011
BSE 00:00 | 20 Oct 3648.70 -64.70
(-1.74%)
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NSE 00:00 | 20 Oct 3675.55 -57.45
(-1.54%)
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OPEN 3743.50
PREVIOUS CLOSE 3713.40
VOLUME 296
52-Week high 4158.60
52-Week low 2555.00
P/E 51.06
Mkt Cap.(Rs cr) 3,521
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3743.50
CLOSE 3713.40
VOLUME 296
52-Week high 4158.60
52-Week low 2555.00
P/E 51.06
Mkt Cap.(Rs cr) 3,521
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

ICRA Ltd. (ICRA) - Auditors Report

Company auditors report

To the Members of ICRA Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of ICRA Limited ("theCompany") which comprise the standalone balance sheet as at 31 March 2021 and thestandalone statement of profit and loss (including other comprehensive income) standalonestatement of changes in equity and standalone statement of cash flows for the year thenended and notes to the standalone financial statements including a summary of thesignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the Standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Description of Key Audit Matter

a) Revenue recognition

See note 3.2 to the Standalone Financial Statements

The key audit matter How the matter was addressed in our audit
Our audit procedures included:
The revenue relating to rating and grading where customers' acceptance is required is recognized upon issuance of press release or disclosure of unaccepted ratings on the Company's website. For other cases revenue is recognized upon transfer of control of promised services to the customers. • Evaluation of the design and implementation and operating effectiveness of internal controls relating to revenue recognition process.
There is a risk that revenue is recognized for all services before the transfer of control of the service to customer is completed. • On selected sample of contracts tested revenue recognition and our procedures included:
- evaluating the identification of performance obligations;
- considering the terms of the contracts to determine the transaction price; and
- inspection of the date of transfer of control of service and recording of revenue at an appropriate date.
• Tested revenue recognition for cut-off transactions on sample basis to assess whether the customer has obtained the control of service and whether the timing of revenue recognition is appropriate.
- Assessed the adequacy of the disclosures in accordance with the relevant accounting standard.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. (A) As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31 March 2021 onits financial position in its standalone financial statements - Refer note 28 (b) and note29 to the standalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company;

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these standalone financial statements since they do not pertainto the financial year ended 31 March 2021.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants

ICAI Firm Registration No.: 101248W/W-100022

Sadashiv Shetty

Partner

Membership No.: 048648

UDIN: 21048648AAAAAS7670

Place: Mumbai

Dated: 6 May 2021

Annexure A referred to in our Independent Auditor's Report to the Members of ICRALimited on the Standalone Financial Statements for the year ended 31 March 2021

(i) (a) According to the information and explanations given to us the Company hasmaintained proper records showing full particulars including quantitative details andsituation of fixed assets (property plant and equipment).

(b) According to the information and explanations given to us the Company has aregular programme of physical verification of its fixed assets by which fixed assets areverified in a phased manner over a period of two years. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets. As informed to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) According to the information and explanations given to us the Company is aservice company primarily rendering rating research and other services to corporate andnon-corporate customers. Accordingly it does not hold any inventories. Thus paragraph3(ii) of the Order is not applicable.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies or other parties covered in theregister maintained under Section 189 of the Act. Further there are no firms and limitedliability partnerships covered in the register required under Section 189 of the Act.Accordingly para 3(iii) of the Order is not applicable.

(iv) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no loans investments guaranteesand security where provisions of Section 185 and 186 of the Act are required to becomplied with. Accordingly paragraph 3(iv) of the Order is not applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposits covered under Section 73 to 76 of the Act.

(vi) According to the information and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records by the Company under sub-section (1) ofSection 148 of the Act for any of the activities carried out by the Company.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the

Company amounts deducted/ accrued in the books of account in respect of undisputedstatutory dues including Provident Fund Employees' State Insurance Income-tax Goods andServices tax Cess and other material statutory dues as applicable have generally beenregularly deposited during the year by the Company with the appropriate authorities. Asexplained to us the Company did not have any dues on account of Duty of customs.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-tax Goods andServices tax Cess and other material statutory dues as applicable to the Company were inarrears as at 31 March 2021 for a period of more than six months from the date they becamepayable.

(b) According to the information and explanations given to us there are no dues inrespect of Goods and Services tax Sales tax and Value added tax which have not beendeposited with the appropriate authorities on account of any dispute. However accordingto the information and explanation given to us the following dues of Income-tax andService tax have not been deposited by the Company on account of disputes:

Name of the statute Nature of dues Amount in (Rupees in lakhs) * Payment under protest in (Rupees in lakhs) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 19.97 Nil F.Y. 2000 - 2001 The Assessing Officer
0.44 Nil F.Y. 2002 - 2003
2.00 Nil F.Y. 2003 - 2004
7038.41 Nil F.Y. 2017 - 2018
282.80 Nil F.Y. 2018 - 2019
278.62 Nil F.Y. 2010 - 2011 Income Tax Appellate
462.04 Nil F.Y. 2011 - 2012 Iribunal
366.93 Nil F.Y. 2013 - 2014
66.82 Nil F.Y. 2014 - 2015
206.21 Nil F.Y. 2015 - 2016
320.98 Nil F.Y. 2012 - 2013 The Commissioner Income Tax (Appeals)
389.37 Nil F.Y. 2016 - 2017 Designated authority under Vivad Se Vishwas scheme
41.96 Nil F.Y. 2003 - 2004 High Court
Finance Act 1994 Service Tax 1.99 Nil F.Y. 2001 - 2002 Assistant Commissioner of Central Excise
11.40 11.40 F.Y 2001 - 2002 to 2004 - 2005 The Commissioner (Appeals) of Central Excise

* Amount as per demand orders including interest and penally wherever indicated in theorder.

According to the information and explanations given to us the Company did not have anydues on account of Duty of excise and Duty of customs.

(viii) According to the information and explanations given to us the Company did nothave any outstanding dues to any financial institutions banks government or debentureholders during the year. Accordingly paragraph 3(viii) of the Order is not applicable.

(ix) According to the information and explanations given to us the Company did notraise any money by way of initial public offer or further public offer (including debtinstruments) and did not have any term loans outstanding during the year. Accordinglyparagraph 3(ix) of the order is not applicable.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the managerial remuneration has been paid/provided by the Company in accordance with provisions of Section 197 read with Schedule Vof the Act.

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Accordingly paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the transactions with the related partiesare in compliance with Section 177 and 188 of the Act where applicable and the detailshave been disclosed in the standalone financial statements as required by the applicableaccounting standards.

(xiv) According to information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3(xiv) of the Order is not applicable.

(xv) According to information and explanations given to us the Company has not enteredinto any non-cash transactions with directors or persons connected with them. Accordinglyparagraph 3(xv) of the Order is not applicable.

(xvi) According to information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

For B S R & Co. LLP

Chartered Accountants

ICAI Firm Registration No.: 101248W/W-100022

Sadashiv Shetty

Partner

Membership No.: 048648

UDIN: 21048648AAAAAS7670

Place: Mumbai

Dated: 6 May 2021

Annexure B to the Independent Auditors' report on the standalone financial statementsof ICRA Limited for the period ended 31 March 2021

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

(Referred to in paragraph 2(A)(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to standalone financialstatements of ICRA Company Limited ("the Company") as of 31 March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols were operating effectively as at 31 March 2021 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note").

Management's and Board of Directors' Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding 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").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the standalone financial statementswhether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to standalone financial statements.

Meaning of Internal Financial controls with Reference to Standalone FinancialStatements

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to standalone financial statements include thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the standalone financial statements.

Inherent Limitations of Internal Financial controls with Reference to StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Co. LLP

Chartered Accountants

ICAI Firm Registration No.: 101248W/W-100022

Sadashiv Shetty

Partner

Membership No.: 048648

UDIN: 21048648AAAAAS7670

Place: Mumbai Dated: 6 May 2021

.