you are here:

ICRA Ltd.

BSE: 532835 | NSE: ICRA |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE725G01011 | SECTOR: Miscellaneous

BSE Live

Jul 28, 16:00
3648.05 -71.95 (-1.93%)
Volume
AVERAGE VOLUME
5-Day
1,282
10-Day
1,778
30-Day
1,340
561
  • Prev. Close

    3720.00

  • Open Price

    3754.30

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

NSE Live

Jul 28, 15:48
3659.10 -48.50 (-1.31%)
Volume
AVERAGE VOLUME
5-Day
39,073
10-Day
40,844
30-Day
19,564
7,539
  • Prev. Close

    3707.60

  • Open Price

    3741.00

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

Annual Report

For Year :
2018 2017 2015 2014 2013 2012 2011 2010 2009

Director’s Report

Directors'' Report

Review of Operations Rating Services Market Overview

The market for credit rating business in FY2018 was positively influenced by favourable interest rates in the first five months of the year and new rating opportunities in the commercial paper and debt restructuring segments, while economic growth remained moderate as it adjusted to the Goods and Services Tax (GST) transition and the broad-based recovery in investment activity continued to be delayed.

Capital market issuances of debt in the first five months of the year grew well, supported by low interest rates. However, bond yields hardened in H2 FY2018 on account of factors such as the rise in the market borrowing programme of the Government of India (GoI), fiscal slippage relative to the previously announced targets, the uptick in the CPI inflation, as well as the hardening of global yields. This, in conjunction with the tepid recovery in private sector capex, weighed upon bond market issuance volumes in H2 FY2018, even as bank credit growth saw a modest revival, led by the base effect and higher working capital requirements.

Economic growth in FY2018 remained moderate as various sectors adjusted to the GST transition in H1 FY2018. While volume growth was low in many sectors in Q1 FY2018 to minimise inventories ahead of the GST rollout, the subsequent pace of restocking in Q2 FY2018 was modest. Subsequently, a number of sectors displayed healthy performance in Q3 FY2018, benefitting from the favourable base effect as well as a catch-up related to the low growth in H1 FY2018. Nevertheless, moderate capacity utilisation, high leverage levels of some large corporate groups and weak asset quality of the banking system continued to delay a broad-based recovery in investment activity.

Going ahead, expansion in Government spending at the Central and state level are expected to support economic activity and infrastructure creation. Furthermore, a likely normally distributed monsoon, increase in the minimum support prices (MSPs) of various crops, the improving sentiment and staggered pay revision by state governments are expected to support consumption growth. This, in turn, would support capacity utilisation in various sectors, although a broad-based capacity addition by the private sector is unlikely to emerge until H2 FY2019. Completion of the resolution process of cases admitted to the National Company Law Tribunal (NCLT) would improve utilisation of the existing capacity and promote consolidation in some sectors.

While bank credit growth in FY2019 would be supported by increasing capacity utilisation, it would be contingent upon the recapitalisation of the public sector banks (PSBs) and investment revival in the economy. An increased regulatory thrust to part-finance incremental borrowings, particularly in case of borrowers with whom banks have large exposures in capital market financing, is likely to support the bond market.

Corporate Sector

As in the previous years, the market for bank loan ratings remained sluggish in FY2018 too, although the corporate credit growth showed a marginal revival in the second half of the year because of enhanced demand for working capital loans and slowing bond market issuances. While sectoral performance in the first half of the year was impacted because of the twin effects of demonetisation and transition to the GST, volume growth has started to show an upward trend from Q3 of 2017-18, and this is expected to result in improved corporate performance going forward. Also the capacity utilisation levels in several industries are showing signs of a pick-up along with the capital goods segment, even though it would still be some time before private capital expenditure revives meaningfully.

In contrast to the trend seen in the previous years, borrowings through the bond route also showed a slowdown, especially in the second half of the year due to rising yields. However, we believe that this was a temporary phenomenon, and as yields stabilise we should see increased traction in the bond market, given the ability to borrow at lower rates and the strong regulatory support for the growth of the bond markets. During the year, the trend of special purpose vehicles (SPVs) in the infrastructure sector accessing the bond market to refinance bank loans continued, primarily driven by entities in the road sector and to some extent the power sector. Contrary to expectations, though, fund raising through new instruments like Infrastructure Investment Trusts (InvITs), formed under the Securities and Exchange Board of India (Sebi) InvIT Regulations 2014, did not show traction, possibly because of the muted investor response to the first two offerings.

Your Company has also been involved in the Independent Credit Evaluation (ICE) of stressed assets as required under the Reserve Bank of India''s revised framework for resolution of stressed assets. Given the large quantum of stressed assets in the banking sector, we expect that this service has the potential to grow in the coming year.

Till the third quarter of last year, the commercial paper (CP) market continued to be active with better rated entities using the CP route to meet their funding requirements, though activity levels were subdued in the last quarter because of higher interest rates. Your Company gained significantly from the Reserve Bank of India (RBI) mandating dual rating of CPs for issuances above a certain threshold, adding prominent corporates to its client list, and providing opportunities in the future as well.

Financial Sector

Total domestic issuances by the financial sector entities witnessed a slowdown during 2017-18 after three consecutive years of strong growth. Banks as well as non-bank finance companies (NBFCs) witnessed lower issuance volumes in 2017-18.

The year witnessed reduced bond issuances by PSBs as investors became risk averse to their bond issuances amid their mounting losses. Announcement by PSBs of recapitalisation improved the capital position for the PSBs and later the GoI instructions restricting PSBs to issue Tier-I capital bonds impacted bond issuances from PSBs. The slowdown in bond issuances by PSBs was largely offset by the growth in bond issuances from private sector banks (PVBs), as they locked in the borrowings at lower rates. With abundant liquidity in the banking system, the issuance of certificate of deposits also remained muted during most part of the year. Going forward, the debt capital issuances from banks is expected to be largely driven by banks pursuing credit growth, which is expected to be largely driven by PVBs, which have demonstrated relatively better financial performance in comparison to PSBs. Your Company has a strong presence in the banking segment.

The NBFCs borrowings from debt capital markets also witnessed a moderation during 2017-18 with the rise in interest rates in the latter half of the financial year and a higher base on the back of strong growth in the last few years. An increased appetite for credit by banks, especially in the H2 2017-18, also contributed to lower issuance volumes as some of the NBFCs shifted back to borrowings from banks. The inflows in the debt mutual funds have also been stagnating after the increase witnessed post demonetisation. This may also constrain the growth of debt issuances. The challenges with the banking sector helped the NBFCs expand their activity while maintaining adequate profitability and asset quality metrics, though the aftereffects of demonetisation and the GST implementation did have an adverse impact on the collection efficiencies, especially in the micro finance sector, small and medium enterprise loans and loans against property segments. Your Company continued to expand its presence in this space by adding new clients and rating the incremental debt requirements of existing clients.

The year under review continued to witness Tier II bond issuances from insurance companies to strengthen their regulatory solvency profile, which is in addition to the ratings done on the claims-paying ability of these companies. Your Company continued to maintain a major share of this segment.

Ratings on mutual fund schemes continued to gain traction for your Company as it further expanded during the year under review.

Structured Finance

During FY2018, the securitisation market witnessed a marginal de-growth after showing a positive momentum in FY2016 and FY 2017.

The predominant motive for banks to invest in securitisation transactions and acquire loan pools through bilateral assignment continued to be the need to meet shortfalls in priority sector lending (PSL) targets and achieve balance sheet growth, respectively. This was, however, offset by the availability of the priority sector lending certificates (PSLCs) as an alternate tool available to banks for meeting their PSL requirements. PSLCs were the primary cause for the reduced securitisation volumes in FY2018.

Continuing the trend that started in the previous fiscal (pursuant to more clarity on legacy tax issues and removal of the distribution tax on securitisation trusts), mutual funds and foreign portfolio investors (FPIs) continued to push the non-PSL volumes.

In FY2018, your Company rated the first collateralised loan obligation (CLO) transaction, post the 2006 RBI guidelines on securitisation. Your Company continued to maintain its position as a thought leader and a dominant credit rating agency (CRA) in the structured finance segment.

Going forward, the extent of the shortfall in PSL targets in the banking system and the availability of eligible assets with sellers are expected to be the key factors influencing securitisation /assignment volumes. However, continued traction in the PSLC market and any adverse impact of adoption of the Indian Accounting Standards on the originators, could hamper issuance volumes going forward. Nonetheless, the market has seen a number of new asset classes getting securitised in the non-PSL segment and this trend is expected to strengthen further.

Industry Research

Your Company has added several new clients as it continues to strengthen its research offerings, covering a large number of sub-segments within the corporate sector and multiple sub-segments under the financial services and structured finance sectors. Being focussed and thematic, these reports have been well appreciated, particularly by the senior management.

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

Franchise Development

Your Company has made significant strides to enhance its franchise through seminars, conferences and media activities aimed at promoting its visibility and brand strength.

During the year, your Company organised several seminars and conferences, including a few with industry associations like Assocham, CII etc to disseminate its views on credit trends in specific sectors in the domestic markets. Like each year, the Annual ICRA Bond Market and the Moody''s-ICRA credit conferences, involving speakers and panellists representing the market participants, were very well received by the participants.

Further, your Company''s sector-specific webinars and thematic research reports, were all well appreciated. Apart from these, your Company has been able to attain significant visibility in both electronic and print media - it has maintained its leading position in the latter in terms of share of voice through regular releases voicing our opinion on contemporary issues.

Your Company continues to be a preferred partner in powering the Financial Advisor Awards along with CNBC-TV18, and the India Pride Awards, an initiative to recognise the superior performing public sector entities, with the Dainik Bhaskar Group. These awards have a strong franchise and are a subject of considerable pride for the winners.

Change in nature of business

During 2017-18, there was no change in the nature of business of your Company.

Subsidiary Companies (including step-down subsidiaries)

At the beginning of the year 2017-18, your Company had six subsidiaries, including one step-down subsidiary.

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

As of March 31, 2018, your Company had namely the following subsidiaries, including the step-down subsidiary:

S.

No.

Name of Subsidiary Companies

Category

Country of Incorporation

1.

ICRA Management Consulting Services Limited

Subsidiary

India

2.

Pragati Development Consulting Services Limited

Step-down subsidiary

India

3.

ICRA Online Limited

Subsidiary

India

4.

PT. ICRA Indonesia*

Subsidiary

Indonesia

5.

ICRA Lanka Limited

Subsidiary

Sri Lanka

6.

ICRA Nepal Limited

Subsidiary

Nepal

Highlights of performance of subsidiary companies and their contribution to the overall performance of the Company during the year 2017-18 are provided in the Management Discussion and Analysis Report.

The consolidated financial statements of Group ICRA, consisting of ICRA Limited, its subsidiaries, and step-down subsidiary, for the year 2017-18, which form a part of the Annual Report, are attached. The Auditors'' Report on the consolidated financial statements is also attached. In compliance with the relevant provisions of the Companies Act, 2013, a statement containing the brief financial details in Form AOC-1 as per Rule 5 of the Companies (Accounts) Rules, 2014, of the said subsidiaries is annexed to the consolidated financial statements, prepared in accordance with the prescribed Accounting Standards.

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

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

Board meetings held during the year

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

Human Resource Development & Training

Human resource development continued to be accorded high priority during the year under review, with emphasis being placed on improving skill, competency and knowledge through regular training and in-house/external professional development programmes. Learning opportunities are extended to employees across levels which also results in the overall improved performance of the Company. New joiners go through a systematic on-boarding programme to equip them adequately with information and skills required to be purposeful at work.

ICRA believes in empowering and nurturing talent. Deserving employees, those who demonstrate high performance and potential, are awarded challenging assignments and higher responsibilities. They are provided adequate training and coaching to prepare them towards the same.

The Company inspires its employees to be focused and result-oriented. As part of the overall talent strategy, the Company reviews a succession plan towards critical positions, annually.

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

Employees Stock Option Scheme (ESOS)

Your Company has implemented the Employee Stock Option Scheme 2006 (the Scheme) in accordance with the erstwhile Guidelines i.e. the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, and in conformity with the resolutions passed by the Members at the Annual General Meetings of the Company held on June 12, 2006, July 29, 2008, and August 12, 2011. The Scheme came into force on June 27, 2006 and expired on June 27, 2016, after completion of 10 years, but the expiry shall not affect the granted options and the eligible employees will have the right to exercise till the expiry date of such options, with the expiry date of the last instalment of granted options being November 8, 2018.

The disclosures in terms of Regulation 14 of the Securities and Exchange Board of India (Share-Based Employee Benefits) Regulations, 2014 read with Circular No CIR/CFD/POLICY CELL/2/2015, dated June 16, 2015, issued by the Securities and Exchange Board of India, are available on the Company''s website and the web-link for the same is:

https://www.icra.in/InvestorRelation/ShowCorpGovernanceReport/?Id = 27&Title = Corporate%20 Governance&Report=Disclosures%20on%20ESOPs_03-07-2017.pdf.

Particulars of Employees

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

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

Extract of the Annual Return

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

Corporate Governance

The report of the Board of Directors of your Company on Corporate Governance is presented as a separate section (Annexure III) titled Corporate Governance Report, which forms a part of the Annual Report.

The composition of the Board, the Audit Committee, the Nomination and Remuneration Committee, the Stakeholders Relationship Committee, the Corporate Social Responsibility Committee and other Committees of the Board, the number of meetings of the Board and Committees of the Board, and other matters are presented in the Corporate Governance Report.

The certificate of the Statutory Auditors of your Company regarding compliance with the Corporate Governance requirements as stipulated in the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is annexed to the 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) Regulations, 2015, as amended from time to time, the Code of Conduct for prevention of insider trading is in force in your Company. The Board of Directors of the Company has adopted the Code of Practises and Procedures for Fair Disclosure of Unpublished Price Sensitive Information in compliance with Chapter IV of the said Regulations and the same has been uploaded on the Company website.

Material Changes and Commitments

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

Buyback of Shares

During the year 2016-17, the Board of Directors of your Company at their meeting held on February 9, 2017, had approved the buyback of the Company''s fully paid-up equity shares of the face value of Rs.10 each from its members/beneficial owners, other than those who are promoters or the persons in control of the Company and the promoter group, from the open market through the stock exchange mechanism i.e. using the electronic trading facilities of the BSE Limited and the National Stock Exchange of India Limited, where the equity shares are listed in accordance and consonance with the provisions contained in the Companies Act, 2013 (Act) and the provisions contained in the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 (Buyback Regulations).

The buyback commenced from March 2, 2017 and closed on April 3, 2017. The Company bought back 96,720 equity shares at an average price of Rs. 4,135.54 per equity share for a total consideration of Rs. 39,99,89,225/- (Rupees Thirty Nine Crore Ninety Nine Lakh Eighty Nine Thousand and Two Hundred Twenty Five Only) (excluding transaction costs), representing 99.997% of the total approved amount of Rs. 40.00 crore (Rupees Forty Crore Only) towards the buyback.

Share Capital

As on March 31, 2018, the Company''s issued, subscribed and paid-up equity share capital, stood at Rs. 9,90,32,800 (Nine Crore Ninety Lakh Thirty Two Thousand Eight Hundred Only) divided into 99,03,280 equity shares of Rs. 10/- each.

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

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

Directors and Key Managerial Personnel

During 2017-18, Mr. Simon Richard Hastilow, Non-Executive, Non-Independent Director of your Company, resigned from the Board of your Company inclusive of membership in any and all committees of the Board. The resignation of Mr. Hastilow was effective from November 1, 2017. The Board placed on record its deep appreciation of the valuable advice and guidance provided by Mr. Hastilow throughout his tenure with your Company.

During the year under review, the Board of your Company appointed Mr. Navneet Agarwal as Additional Director, effective from November 2, 2017.

The Nomination and Remuneration Committee and the Board of your Company recommend the appointment of Mr. Agarwal, under the category of Non-Executive, Non-Independent Director, liable to retire by rotation, for approval of the shareholders of the Company at the forthcoming Annual General Meeting. The resolution seeking Mr. Agarwal''s appointment as Director has been included in the Agenda of the Annual General Meeting.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, and the Articles of Association of your Company, Mr. Thomas John Keller Jr. is due to retire by rotation, and being eligible, has offered himself for re-appointment.

Proposals for the above appointments form a part of the Agenda for the forthcoming Annual General Meeting and the resolution is recommended for your approval. The profile of Messrs. Keller and Agarwal are presented in the Notice of the 27th Annual General 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 of Companies Act 2013, the Company has received a confirmation/declaration from each of the Independent Directors stating that they meet the criteria of independence. The following Non-Executive Directors of the Company are independent in terms of Section 149(6) of the Companies Act, 2013, and the Listing Regulations:

1. Mr. Arun Duggal

2. Ms. Ranjana Agarwal

3. Ms. Radhika Vijay Haribhakti

Directors'' Responsibility Statement

As required under the provisions contained in Section 134 of the Companies Act, 2013, your Directors hereby confirm that:

(i) in the preparation of the Annual Accounts for the year ended March 31, 2018, the applicable accounting standards have been followed and there are no material departures from the same;

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

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors had prepared the Annual Accounts on a going concern basis;

(v) the Directors had laid down the internal financial controls, followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Policy on Directors'' Appointment

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

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

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

Board and Directors'' Performance Evaluation

The Board of Directors of the Company, based on the recommendations of the Nomination and Remuneration Committee, has formulated a Board and Directors'' Performance Evaluation Policy, thereby setting out the performance evaluation criteria for the Board and its Committees and each Directors'' performance, including the Chairman of the Company.

Your Company''s Board had undertaken a formal performance evaluation in a comprehensive and structured manner as a part of the strengthening exercise. Based on the recommendations of the Nomination and Remuneration Committee, the Board has adopted a process of receiving anonymous feedback and discussing the same at the meeting to ensure the Directors'' collective participation and meaningful discussion over the performance of the Board, its Committees, individual Directors and Chairperson of the Board.

Your Company''s Board believes that trust in the evaluation process and its confidentiality is critical for the success of the evaluation exercise, therefore, the Board encourages fair and transparent evaluations and maintains anonymity of those providing the feedback.

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

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

Auditors

M/s. B S R & Co. LLP, Chartered Accountants, were appointed as Statutory Auditors of your Company, at the 24th Annual General Meeting to hold office until the conclusion of the 28th Annual General Meeting, subject to ratification in each Annual General Meeting. In accordance with the Companies (Amendment) Act, 2017, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

Comments on Auditors'' Report

The notes to the financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

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

Secretarial Audit

The Board of Directors of the Company has appointed M/s. Y.J. Basrar & Co., Company Secretaries (Membership No. FCS 2754), as the Secretarial Auditor of the Company for the financial year 2017-18 in terms of Section 204 of the Companies Act, 2013. The Secretarial Audit Report for financial year 2017-18 has been annexed to this Report (Annexure V). The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.

Transfer to Reserves

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

Dividend

The Board of Directors recommends for approval of the Members at the forthcoming Annual General Meeting, payment of dividend of Rs. 30 per Equity Share for the financial year ended March 31, 2018. If the members approve the dividend at the forthcoming Annual General Meeting, the dividend shall be paid to: (i) all those members whose names appear in the Register of Members as on Friday, August 17, 2018; and (ii) all those members whose names appear on that date as beneficial owners as furnished by National Securities Depository Limited and Central Depository Services (India) Limited.

Dividend Distribution Policy

Your Company has formulated a Dividend Distribution Policy (''the Policy'') pursuant to Regulation 43A of the Listing Regulations. The objective of the Policy is to maintain stability in the dividend payout of the Company, subject to the applicable laws and to ensure a regular dividend income for the members and long term capital appreciation for all stakeholders of the Company.

Your Company would ensure to strike the right balance between the quantum of dividend paid and the amount of profits retained in the business for various purposes. The Board of Directors refers to this Policy while declaring/recommending dividends on behalf of the Company. Through this Policy, the Company would try to maintain a consistent approach to dividend pay-out plans, subject to the applicable laws. The Policy has been annexed to this report (Annexure VI) and also uploaded on the website 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 as to ensure that they receive their rightful dues. Your Company has also uploaded on its website, www.icra.in, information regarding unpaid/unclaimed dividend amounts lying with your Company.

During 2017-18, the unclaimed dividend amount of Rs. 1,26,769 towards the unpaid dividend account of the Company for the financial year 2009-10 was transferred to Investor Education and Protection Fund. The said amount had remained unclaimed for seven years, despite reminder letters having been sent to each of the members concerned.

Pursuant to Section 124(6) of the Companies Act, 2013 and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and its amendments, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the Company in the demat account of Investor Education and Protection Fund (IEPF) Authority (the Authority) within a period of thirty days of such shares becoming due to be transferred to the IEPF, as per the procedure mentioned in the said Rules. Accordingly, your Company has transferred 207 equity shares to the demat account of the Authority and in terms of the said Rules. All benefits accruing on such shares viz. bonus shares, split, consolidation, fraction shares etc. except the right issue shall also be credited to such demat account.

Members may note that unclaimed dividend and shares transferred to the demat account of the Authority can be claimed back by them from IEPF Authority by following the procedure mentioned in the said Rules.

Risk Management Policy

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

Internal Control System and their Adequacy

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

Corporate Social Responsibility

Your Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The CSR policy has been devised on the basis of the recommendations made by the CSR Committee. The composition of the CSR Committee, the CSR policy of the Company, details about the development and implementation of the policy and initiatives taken by the Company during the year as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, have been annexed to this report (Annexure VII).

Business Responsibility Report

Your Company, in accordance with the provisions of Regulation 34(2)(f) of the Listing Regulations has prepared a Business Responsibility Report for the year 2017-18. The Business Responsibility Report describes the initiatives taken by the Company from environmental, social and governance perspective. The Business Responsibility Report has been annexed to this report (Annexure VIII) and forms a part of the Director''s Report.

Particulars of Contracts or Arrangements with Related Parties

Your Company has entered into contracts or arrangements with its related parties. The related-party transactions are disclosed in the financial statements for the year ended March 31, 2018. There have been no material-related party transactions as per Section 188(1) of the Companies Act, 2013 and as per Regulation 23 of the Listing Regulations, and the required disclosures of information in Form AOC-2 in terms of Section 188 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are annexed to this report (Annexure IX).

Policy on Prohibition, Prevention and Redressal of Sexual Harassment

Your Company has formulated a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act,

2013. The Company has constituted separately for all the branches an Internal Committee for prevention and redressal of sexual harassment at workplace. The Company has not received any complaints.

Deposits

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

Particulars of Loans, Guarantees and Investments

The particulars of loans, guarantees and investments are disclosed in the financial statements for the year ended March 31, 2018.

Vigil Mechanism/Whistle-Blower Policy

Your Company has established a vigil mechanism in compliance with the provisions of Section 177 (9) of the Companies Act, 2013, and Regulation 22 of the Listing Regulations. Your Company has adopted a Whistle Blower Policy for reporting of unethical/illegal/improper behaviour. The said whistle-blower policy also provides for adequate safeguards against victimisation of persons who use such vigil mechanism and makes provision for direct access to the chairperson of the Audit Committee in exceptional cases. Further, no stakeholders have been denied access to the Audit Committee.

Composition of the Audit Committee

Your Company has constituted an Audit Committee, the composition of which has been provided in the Corporate Governance Report. During the financial year 2017-18, the Board accepted all the recommendations of the Audit Committee.

Litigations

During the year 2017-18 there were no litigations against the Company.

Acknowledgements

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

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

For and on behalf of the Board of Directors

(Arun Duggal)

Place : Gurugram Chairman

Date : May 17, 2018 DIN: 00024262

Director’s Report