ICRA Ltd

To,

The Members,

ICRA Limited

Your Directors have the pleasure in presenting the 33^rd Annual Report of your Company along with the Audited Financial Statements for the Financial year ("year") ended March 31, 2024.

Financial Performance

Revenue from consolidated operations for the year was Rs. 44,611 lakhs, compared to Rs. 40,323 lakhs in the previous year, an increase of 10.6%. The overall Operational Expense for the year was Rs. 32,122 lakhs, against Rs. 27,157 lakhs in the previous year. Profit after tax was Rs. 15,224 lakhs, against Rs. 13,673 lakhs in the previous year.

(Rs. in Lakhs)

Market and Business Overview

The credit rating industry benefited from the buoyancy in the economy spurred by the Government's infrastructure spend and an uptick in urban consumption. This led to a better-than- expected growth in bank credit as well as bond issuances in FY2024. Each of these segments grew on a high base of the previous year as the overall borrowing cost continued to be cheaper in the domestic market than that globally. Firms chose the external commercial borrowings (ECBs) route only when diversified funding was a necessity or when these businesses had a natural hedge against the borrowed currency. Heightened geo-political crisis with new conflict in the Middle East, in addition to the continuing one involving Russia and Ukraine, offered no respite from inflation, thereby deferring possibilities of softening of interest rates in the global market.

The bank credit outstanding rose 16.3% on-year in FY2024 despite several measures by the Reserve Bank of India [RBI] to keep a tight leash on liquidity to moderate inflationary pressures. Regulatory intervention to increase risk weights on bank credit to non-banking finance companies [NBFCs] and on consumer loans segments did moderate credit to these segments in the latter part of the year. Given the Government's thrust areas, expectedly, the infrastructure and iron and steel sectors led the incremental credit growth in the industries segment.

Bond issuances were higher by 17.2% year-on-year in FY2024 with a significant growth coming in the first quarter as the yields dipped, and a large housing finance company borrowed a large amount from the market before its merger with a bank. Lower bond yields compared with the prevailing interest rates on bank credit helped better-rated NBFCs and corporates to borrow from the market. Banks issued bonds to fund the credit growth. However, there were spells - in Q2 and Q3 FY2024 - when even though the yields remained range bound, investors adopted a wait-and-watch mode with uncertainty prevailing around the movement of bond yields. Subsequently, the softening of yields in the last quarter led to an all-time high issuance level for any quarter. Commercial Paper (CP) outstanding grew 9.9% on-year even though investors continued to prefer Bank Certificate of Deposits (CDs) over CPs. Securities broking firms funded their Margin Trading Facility [MTF] and working capital requirements through CPs with this segment accounting for 19% of the CP outstanding compared with less than 5% pre-Covid.

Your Company added several new clients in FY2024 and increased its share in the bank loan segment, while it continues to be a preferred credit rating agency (CRA) in the market debt segment and specifically for securitisation

transactions. Your Company rated several novel transactions in FY2024, with a few noteworthy ones being:

• The first in-city warehouse rated in the country

• The first InvIT in education infrastructure space in the country based on securitisation of rental receipts

• The first rating assignment by a CRA for a leveraged Alternate Investment Fund

• Rating assignments for Pass-through Certificates (PTCs) originated by a corporate entity and backed by trade receivables

• Securitisation transaction of an NBFC, where pool was part of overseas bond transaction, with receivables from the pool being the security

Your Company, in FY2024, was able to grow in terms of revenue in all the key segments, namely corporate, infrastructure and financial. Going ahead, the focus would continue to be on infrastructure and financial segments and specific corporate segments that are likely to see a pick-up in investment cycle. In terms of ratings quality, your Company has been appreciated for its accuracy and timely rating actions and continues to be a rating agency of choice for the issuers and investors.

Macro economy

GDP growth outcomes remained healthy in FY2024, benefiting from robust Government capital spending, buoyant albeit uneven urban demand and services exports. At the same time, an unfavourable monsoon in 2023 dampened output of most major crops and infused caution into rural demand. Notwithstanding healthy capacity utilisation, private investment remained moderate compared to the exuberance seen in earlier cycles.

ICRA projects Indian GDP expansion (at constant 2011-12 prices) at a healthy 6.5% in FY2025. We foresee sub-6% growth in H1 FY2025, dampened by transient factors such as continuing cautiousness in rural demand, the impact of the Parliamentary Elections on activity in some sectors, and subdued merchandise exports. Thereafter, we foresee a robust pick-up in GDP expansion to 7.1-7.2% in H2 FY2025 aided by a back-ended Government capex after the General Elections and the monsoon season, a pick-up in private capex, improved rural demand if the 2024 monsoon is favourable, and healthier export growth after monetary easing sets in globally.

India's average inflation is expected to ease to 4.6% in FY2025 but may exceed the mid-point of the Monetary Policy Committee's (MPC's) medium-term target band of 2-6%. As anticipated, the MPC kept the policy repo rate unchanged at 6.5% and retained the stance of ‘withdrawal of accommodation' in its First Bi-monthly Monetary Policy Review for FY2025, both with a majority of 5:1. Given the risks to inflation, related to the anticipated heatwave during April-Jun 2024, and its potential impact on perishable prices, the recent spike in crude oil prices etc., we believe that

Monetary Policy action is likely to be back-ended in FY2025. We foresee the earliest rate cut only in October 2024, while expecting the total quantum of rate cuts to be limited to 50 bps at best in the easing cycle. Borrowing costs would in turn have a bearing on the capital expenditure budgets and the viability of infrastructure investments - both ongoing and those in the pipeline.

Corporate and Infrastructure Sector

The Indian corporate sector witnessed steady business momentum in FY2024, supported by both consumption and investment activity. While revenue growth of India Inc was impacted due to the high base of the previous year and decline in realisations during the year due to softening in commodity prices, the latter supported the improvement in earnings for the sector.

While the pace of private sector capital expenditure is expected to be moderate in H1 FY2025 due to the likely pause in the infrastructural activities, ahead of the General Elections, over the near to medium term, private capex will continue to be supported by the general uptick in macroeconomic activity, as well as several supportive policy measures such as Performance-Linked Incentive (PLI) schemes.

ICRA expects the pick-up in private capex to be more visible in select sectors. For example, several metals players have announced expansion plans, while capacity addition in the renewables energy space is also gaining momentum. In the automotive sector, demand pick-up, coupled with investments for localisation under several schemes are supporting investments. The regulatory push for green environment augurs well for investment in related infrastructure such as green hydrogen, scrappage centres and charging infrastructure. However, global macro-economic indicators remain monitorable, especially for export-oriented sectors. Accordingly, India Inc.'s ability to navigate these challenges remains critical.

The National Infrastructure Pipeline's (NIP) target investment has been increased by ~45% to Rs. 160 trillion from the earlier target of Rs. 111 trillion, along with an increase in the number of projects by ~2,665 to ~9,500. The initial plan was to complete by 2025, which now got extended with the addition of more projects. Overall, NIP investments are concentrated in five major sectors - roads, railways, renewable energy, affordable housing and irrigation (aggregating to ~60%) and 15 major states, which account for ~70%. To meet the NIP targets of Rs. 160 trillion, a significant ramp-up in budgetary allocations would be required in the next couple of years.

This is also reflected in the increase in capex allocations by the Government of India to Rs. 11.1 trillion in FY2025 BE, a growth of 16.9% from the Rs. 9.5 trillion estimated in FY2024 RE, which augurs well for the sector.

While a large share of the funding will be coming from the Central and state allocations and public-sector infrastructure NBFCs, the corporate bond market is also expected to play a modest role. Moreover, asset monetisation through InvITs is expected to gain traction and is estimated at Rs. 1.5 trillion in the next three years, which will benefit both the bond market issuances as well as bank loans through refinancing.

The bond issuances from non-financial sector entities reached an all-time high since FY2021, the year when bond issuances were aided by the regulatory support extended during Covid. The bond issuances stood at Rs. 3.3 trillion during FY2024, a YoY growth of 21% and accounted for approximately one third of the overall corporate bond issuances during the year. From the issuers' perspective, despite an increase in interest rates, the borrowing costs from the domestic debt capital market remained competitive compared to the external commercial borrowings (ECBs). Moreover, bank funding for general corporates and the infrastructure sector continued apace helping capital formation. Nonetheless, banks are likely to face challenges of elevated funding costs amid heightened competition for deposits, which shall constrain their ability to reduce their lending rates. This shall increase the domestic debt capital market issuances and bonds may continue to remain a preferred funding source over bank loans for the large well-rated corporates.

Financial Sector

The banking sector continued its robust growth momentum into FY2024 as well with a YoY credit growth of 16.3%, driven primarily by growth in the services and personal loan segments. The growth rate would be higher, factoring in the merger of a large housing finance company (HFC) into a bank during FY2024. The incremental credit deposit ratio for the banking system continued to remain over 100% for the second consecutive year, despite a sizeable liquidity boost, following the withdrawal of the Rs. 2000 note in early 2024.

Accordingly, after the record increase in FY2024, the incremental bank credit is expected to moderate in FY2025 compared to the previous year as banks seek to correct their high credit deposit ratio amid regulatory interventions to curb credit growth. Following such regulations in Q3 FY2024, the credit growth to NBFCs and small ticket unsecured lending dipped sharply in the last few months of the previous financial year. While the absolute credit growth of banks could remain over Rs. 20 lakh crore in FY2025, the higher base would moderate the YoY bank credit growth to 11.7-12.6% against 16.3% for FY2024.

Similar to banks, the non-banking financial companies (NBFCs) sector is estimated to have robust assets under management (AUM) growth of around 16% in FY2024 with the retail focussed NBFCs (including HFCs) estimated to grow at around 22%. The growth was aided by improved access to funds from the banking sector, partly aided by the merger of a large HFC into a bank and a slow pick-up in corporate credit exposure of banks. The regulatory measures introduced in Q3 FY2024 to slow down bank lending to NBFCs is expected to result in a lower AUM growth of around 13-15% in FY2025 (17-19% for retail focussed NBFCs).

The NBFC bond issuance volumes are likely to sustain in FY2025 as they seek to diversify their sources of funds to support their growth aspirations while bank bond issuances may remain muted as banks are comfortably placed on capitalisation levels and relatively low volume of Additional Tier I bonds are due for call option in FY2025.

As expected, the taxation changes announced in Union Budget for FY2024 slowed down the new business premium growth of the life insurance sector in FY2024 after the strong FY2023. The general insurance sector, however, continued to witness strong gross premium written growth, primarily driven by growth in the health insurance segment, however, higher number of catastrophic events adversely impacted their profitability. The growth of the life insurance sector could continue to face headwinds in FY2025 amid attractive returns on alternate saving products.

The mutual funds industry also saw a moderation in fresh inflows across debt schemes, post the taxation changes in Union Budget for FY2024. However, the flows in the alternate investment funds (AIFs) witnessed strong inflows, which boosted demand of debt capital instruments from high yield instruments and widened the issuer base in this segment. The online bond platforms have also aided the increase in retail participation in debt capital market instruments, which otherwise was limited to public issuances of these instruments.

Structured Finance

The domestic securitisation market witnessed muted overall growth at about Rs. 1.9 trillion in FY2025 against Rs. 1.8 trillion in FY2024, mainly due to the exit of a large HFC from the securitisation market, which was the leading originator for the past few years. However, the securitisation market, excluding the HFC, witnessed a growth of ~25% YoY in FY2024 supported by the healthy credit demand for the NBFCs and the HFCs, the growing reliance on securitisation as a tool for fund-raising, and the increase in investor base. The increase in volumes was driven by both - existing large originators, who securitised higher volumes during the year, and new originators. The market saw a sharp increase in securitisation by small finance banks as well as initial steps taken by a few private sector banks in this space to support their portfolio growth, given the recent challenges in deposit growth rates.

Following the exit of a large HFC from the securitisation market, the dominant asset class shifted from mortgage loans to vehicle loans in FY2024. Microfinance loans also had a healthy share in the securitisation market supported by strong collections being reported by most of the microfinance institutions. Small business loans and personal loans have been consistently increasing their participation in the market, though the overall participation still remains relatively lower. There has also been a rise in securitisation volumes originated by non-financial sector entities, where trade receivables and lease rentals are being securitised, which would help in widening and diversifying the securitisation market in the future.

The securitisation market is poised for a healthy growth in FY2025 supported by favourable domestic economic conditions and growing business activities of the NBFCs and the HFCs coupled with the emergence of new originators from the banking sector. The securitisation volumes will further be supported by the requirement of banks to meet their PSL requirements. The increase in the purchase of non-PSL pooled loans is also a healthy trend that will result in healthy growth in issuances. Nonetheless, the increasing adoption of the co-lending model by the NBFCs and the HFCs would continue to challenge the growth in the securitisation market. Further, any significant traction in the priority sector loan certificates (PSLCs) market could also restrict issuance volumes in the medium to long term.

Trends in Credit Quality of ICRA-rated Companies

India Inc. bore the direct and the indirect effects of multiple challenges in FY2024, including inflation, rise in borrowing costs, sub-par monsoons, supply-effects of the continued war between Russia and Ukraine, start of another conflict between Israel and Palestine, the Red Sea crisis, besides sluggish exports. Yet, these did not feel heavier as domestic consumption demand across several sectors, Government spending on public infrastructure, and healthy balance sheets lent support to the credit profiles of entities.

During the last fiscal, ICRA upgraded two entities for every entity downgraded, in continuation of the upgrade momentum that had been set in motion in FY2022, on the heels of the first year of the pandemic. The rating action trends in FY2024 marked the normalisation of the rating change rate with the proportion of rating reaffirmations at 80% converging with the past 10-year average.

The reaffirmation rate had been between 75%-78% in the preceding two fiscals. Also, a large majority of rating upgrades were driven by company-specific factors such as expansion in market share or order book, improvement in the cost structure, reduction in project risk, or fresh equity infusion that strengthened the balance sheet. Aviation, Hospitality, Auto & Auto Components, and Banks were the only few sectors in FY2024 where the rating upgrades were induced mostly by industry tailwinds.

ICRA maintains a Positive outlook on the Hospitality sector for FY2025 as well. In contrast, the sectors where industry headwinds played spoilsport in FY2024 and may continue to do so in the near term include Chemicals, Cut & Polished Diamonds, and Bulk Tea.

Overall, as credit profiles continued to improve last year, the number of instances of defaults dipped to five in FY2024, compared with 22 in FY2023 and 42 in FY2022. The severity of rating actions, as measured by the Large Rating Change Rate¹, also reduced to 0.7% in FY2024 from 1.4% in FY2023 and 2.3% in FY2022.

Looking ahead, the macroeconomic conditions in India appear promising, which along with relatively stable commodity prices, would be supportive of the credit profiles. Corporate India has shown a high resilience to withstanding the rise in borrowing costs over the past two years and is seen to have the capacity to bear the current level of interest rates, before the rate cut cycle likely begins in the latter part of the year. The asset quality of banks and NBFCs has also been at its decadal best with the profitability and the capitalisation indicators expected to remain healthy in the near term.

The series of proactive actions taken by the regulators (RBI and SEBI) in the recent years would work to further strengthen the financial system and the capital markets.

The key downside factors that could throw a spanner in the works to this radiant prognosis would be how the monsoons pan- out this year and how the complicated geopolitical landscape evolves.

Rating accuracy trends

The performance of any credit rating system is measured by metrics like default rates, stability rates and the average default position. ICRA's robust methodologies and their consistent application over the years is reflected in the low default rates in the investment grade suggesting that ICRA's ratings have done well to distinguish between safer and riskier credits. The default rates along the rating scale, from AAA to C, have shown ordinality, which reflects the ability at differentiating among credits across the risk spectrum.

This apart, ICRA's ratings demonstrated a healthy one-year rating stability depicted across all investment grade rating categories—a high rating stability suggests that ICRA's rating decisions do not get influenced by the stage of the business cycle but remain strongly focused on assessing the credit worthiness of entities through the cycle. Finally, the average default position (ADP) of ICRA-assigned ratings—a measure of the tendency of a rating agency to commit type-1 and type-2 errors—remains healthy and has systematically improved over the years.

Latest short-run average default rates for long-term instruments (reflects an average of two years; computation approach as defined by SEBI)

 ¹ Large Rating Change Rate is defined as the proportion of ratings that were downgraded or upgraded by a cumulative of three or more notches during the year.

Latest short-run average default rates for short-term instruments (reflects an average of two years; computation approach as defined by SEBI)

Latest five-year average of one-year rating transition rates for long-term ratings (computation approach as defined by SEBI)

Industry Research

In FY2024, your company's research revenue benefitted from the acquisition of new clients as well as a good renewal rate. The steady growth in revenue had subscriptions coming in from various client segments - mutual funds, banks, NBFCs, corporates, multilateral organizations, consulting firms, and management institutes.

ICRA Research has coverage on more than 60 sectors spanned across corporate, financial, infrastructure, and structured finance sectors. Your company published many high impact reports creating a buzz in the market in FY2024. These reports helped position ICRA as a leading voice in the field. Some of these reports were on emerging themes and their timing of release and analytical depth helped clients gain timely and valuable insights. These were reports like Green Hydrogen, Round The Clock (RTC) renewable projects, Data Centers, Securitized debt instruments, Non-Banking Finance Company-Microfinance Institutions (NBFC-MFIs), impact of Carbon Border Adjustment Mechanism (CBAM) on various sectors, The ICRA Business Activity Monitor, Investment Tracker, Interest Rate Outlook, The Climate Series reports, etc. The analytical rigor and depth of ICRA's Industry Reports and Credit Perspective Reports (on companies) has been well appreciated by all stakeholders. During the year FY2024, your Company hosted multiple webinars on industry trends and outlook, macro economy and rating performance, maintaining high levels of engagement with investors and clients alike.

Franchise Development

Your Company took several initiatives to strengthen its franchise through outreach efforts. We organised physical conferences on contemporary topics such as Electric Vehicles, Renewable Energy, the Infrastructure and Financial sectors etc., which attracted widespread participation by investors, intermediaries, and issuers. We also continued with our practice of organising webinars on various industry-related developments, with a good mix of internal and external panellists, which saw robust participation from various stakeholders.

Automation Initiatives at ICRA

ICRA's focus on technology leadership propelled significant advancements in FY2024. In alignment with our strategic roadmap, we've invested in modernising infrastructure, enhancing business resilience, and establishing a robust IT security posture. These efforts position ICRA to deliver value to our clients as we navigate the dynamic landscape of risk and investment analytics.

The rapid evolution of Generative Artificial Intelligence (GenAI) presents a wealth of untapped potential. ICRA is exploring the integration of GenAI across various domains to unlock deeper, more actionable insights than ever before.

Process automation remains a central pillar of our strategy. Increased automation and compliance monitoring directly translates to heightened accuracy, and rigorous adherence to Standard Operating Procedures (SOPs). These improvements enable a streamlined and reliable operating model throughout the company.

Change in Nature of Business

During FY2024, there was no change in the nature of business of your Company. The CRAs are not allowed to carry out any non-rating activity, except only those that are specifically permitted by SEBI or any of the specified financial sector regulators.

ESG Rating Provider registration

SEBI has granted its approval for registration of Pragati Development Consulting Services Limited (PDCSL), a wholly-owned subsidiary of ICRA, as a Category-I ESG Rating Provider (ERP) under the SEBI's Credit Rating Agencies Regulations, in April 2024. PDCSL had applied for the ERP registration in September 2023.

Following the registration as ERP, PDCSL will commence its environmental, social, and governance (ESG) ratings.

This development positions the ICRA Group among the few Indian entities offering holistic risk-monitoring solutions, including ESG ratings and scores.

Analytics Business

During the year under review, ICRA Analytics Limited (ICRA Analytics), a material subsidiary of your Company, registered a 2.8% growth in operating revenue to Rs. 17,908 lakhs (previous year Rs. 17,413 lakhs) and profit after tax (PAT) going up by 0.9% to Rs. 6,309 lakhs (previous year Rs. 6,254 lakhs).

ICRA Analytics has three lines of business - Knowledge Services, Market Data and Banking & Grading.

Knowledge Services caters to global clients for their data management requirements, Market Data provides bond valuation and houses the mutual fund data analytics business, while the Banking & Grading business provides risk management tools for BFSIs and corporates.

The Knowledge Services business continued to remain the largest business for ICRA Analytics although growth rate moderated during FY 24. This was driven by some headwinds in the ESG business which was compensated by good growth seen in other key segments like structured finance/ analytics and ratings support. Structured finance space, which has been a key growth driver in the recent past, saw intensified trend of a shift in focus from traditional data-centric work towards more value-added services such as deal modelling, advisory, tool testing and adopting new tools or technologies for transformation of analytics business. As a result, the business mix has exhibited a healthy trend of shift towards more value-added services. This transition necessitates upskilling our existing workforce and bringing in experienced talent to ensure we stay ahead of the curve.

The ratings support space remained the largest segment within Knowledge Services and continued to show steady growth in FY 24 over a larger base. A similar shift towards value added services was seen here as well, reflected in more independent sign-off assignments.

As Gen-AI and automation initiatives gather steam, the traditional processes in Knowledge Services are susceptible to being automated. In light of this, IAL's ability to capitalise on the shift in demand towards more of value-added services during FY24, which are less susceptible to being impacted by AI, has been positive. In addition, Knowledge Services continues to partner client segments in business transformation initiatives including migration of legacy systems and processes into new-age platforms, adopting new technologies in existing processes to drive efficiency and ensuring seamless change management workflow systems.

As technology advancement continues unabated, the endeavour to explore initiatives into newer verticals and client segments both in the domestic and global markets remains a key focus area.

The Market Data business saw mixed trends during FY 24. While the overall AUM of Mutual Funds went up significantly by around 35% to Rs. 53.40 trillion driven by small and mid cap funds, growth in Debt MF remained muted at 6%. Regulatory changes in taxation structure of MLD and Debt MF led to some headwinds. Yields remained elevated during most of the year, inflows into AIFs were strong being up 44% y-o-y to Rs. 10.84 trillion as of Dec 2023 and bond issuances were also up 17.2% during FY 24 thereby positively impacting the business. Your company added several new clients during FY 24- both in the domestic space and also through new collaborations with global data providers. Regulatory intervention to deepen and broaden the bond market along with the need for higher disclosures and risk management has created a new opportunity for Market Data business in the area of valuation, research products and structured data all of which were well capitalized upon. During FY 24, your company developed models for sub-investment grade valuation which has been a growing ask of the market. Also, it has collaborated with the mutual fund industry body to provide stress testing of their debt schemes. Leveraging Technology, automation of processes have been significantly strengthened using an enhanced ETL (Extract, Transform, Load) tool. This has helped the business to improve productivity as well as accuracy through lower turnaround times which has helped your company achieve higher client satisfaction levels.

The recent announcement of India's inclusion in )PMorgan's Government Bond Index-Emerging Markets Global CORE (GBIEM Global CORE) and Bloomberg Emerging Market Local Currency Index starting from June 2024 and January 2025 respectively is expected to lead to increased capital flows into Indian Debt Market which will support the Market Data business. The sharp growth in inflows into the AIF segment is also expected to positively impact the business opening up new opportunities in valuation of high yield securities.

The Banking and Grading business showed good growth during FY 24, supported by increased regulatory supervision on Risk Management and Controls in Banks as well as on NBFCs.

The trend towards automation of credit life-cycle in Banks continued to benefit the business. This, along with improving financial position of the Banking system, a robust credit growth of 16.2% in Banks during FY 24 and similar growth rate in AUM of NBFCs supported growth during the year. Your company upgraded its flagship Internal Rating Solution (IRS) product to a new version IRS 3.0 during the year which was well received by the market. IRS 3.0 has improved tech stack which assists in quick implementation and timely maintenance and has seamless API integration with third party systems like LoS, EWS and CBS. This best in class product is expected to assist Banks in meeting their advanced needs for Credit Risk identification, assessment, monitoring and reporting- which is fully in compliance with RBI Regulations and EASE parameters. The year also saw interest from NBFCs and small banks for Model validation and implementation of workflow-based borrower internal rating solution by replacing usual practice of using excel based risk models. NBFCs are now keen to adopt solution based ECL computations. This has positively benefitted the business and the NBFC segment saw several implementations successfully completed during the year. The Grading business saw demand from Global players as well as from large domestic players using upgraded solutions based on availability of alternate data. Your company received several new orders for Risk Management Products during FY 24 and given the strong demand for such products, it is expected to grow the business well during the coming year.

During the year, ICRA Analytics acquired a majority stake in D2K Technologies India Private Limited - an established provider of software solutions to banks and other financial institutions in India. Backed by deep domain expertise, D2K helps financial institutions meet regulatory compliances, enhance their business processes, improve customer acquisition and retention, and build robust analytical platforms.

ICRA Analytics order book continues to be robust made possible by significant wins from new and existing clients. Apart from extending the out-reach activities, roll-out of new and enhanced solutions like cloud-hosted workflow and analytical solution for corporate treasuries, mutual fund ranking tool, capability assessment of fund management all added to the product repository of your Company. In addition, we will continue to explore new products and services in the area of Risk Management, Data Analytics, Customized Research, Climate Risk and ESG.

ICRA Analytics demonstrates a strong process and compliance orientation, as evident from its ISO27001:2013 and ISO9001:2015 certifications. ICRA Analytics has been certified as a Great Place to Work for CY2024, for the fifth consecutive year.

Subsidiary Companies (including step-down subsidiaries)

At the beginning of the year 2023-24, your Company had five subsidiaries, including one step-down subsidiary. There are no associates and/or joint ventures, as defined under the Companies Act, 2013 (the ‘Act').

During the year 2023-24, your Company acquired 100% equity shares of Pragati Development Consulting Services Limited (PDCSL), a step-down wholly-owned subsidiary of your Company held by ICRA Analytics Limited (ICRA Analytics), without any change in ultimate ownership of the Company over the said subsidiaries.

Additionally, consequent to acquisition of a majority stake in D2K Technologies India Private Limited (D2K) by ICRA Analytics, a wholly-owned subsidiary of your Company, D2K has become a step-down subsidiary of your Company.

Further, in the year 2023-24, the Company initiated a voluntary liquidation of its subsidiary, ICRA Lanka Limited, a wholly-owned subsidiary, incorporated in Sri Lanka.

The liquidation is currently under process.

In addition to the above, PT. ICRA Indonesia, a subsidiary incorporated in Indonesia, has been liquidated during the year 2023-24.

There has been no material change in the nature of the business of the Company & its subsidiaries during the year 2023-24.

As of March 31, 2024, your Company had the following subsidiaries, including the step-down subsidiary:

* Under liquidation

Highlights of performance of subsidiary companies and their contribution to the overall performance of the Company during the year 2023-24 are provided in the Management Discussion and Analysis Report, which forms a part of the Annual Report.

The consolidated financial statements of Group ICRA, consisting of ICRA Limited, its subsidiaries, including step-down subsidiary, for the year 2023-24, 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 Act, a statement containing the salient features of the financial statements 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 Act, 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.

Branches of the Company

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

Board Meetings Held During the Year

During the year, five (5) meetings of the Board of Directors of your Company were held, on May 24, 2023, August 3, 2023, October 20, 2023, )anuary 23, 2024 and March 22, 2024.

The details regarding the attendance of Directors at the Board meetings are furnished in the Corporate Governance Report attached as Annexure-II to this Report.

Human Resources

Our Values - I AM ICRA (Innovative, Aspirational, Mutual Trust, Integrity, Client Centric, Respectful and Agile) are at the heart of whatever we do at ICRA. The objective of all people initiatives is to ensure that we are able to achieve our business goals as well as increase the employee engagement levels. During the year, the HR Department continued to work on initiatives, which helped in creating a ‘win-win' for the organisation and the employees. Our state-of-art facilities in Ahmedabad and Mumbai (Airoli) were revamped with the objective of creating a more efficient and positive workplace for our employees.

Performance management is a crucial part of the HR process, which helps us to achieve the organisation's objectives. Mid-year performance reviews were introduced, which helped the employee have a fruitful discussion with their Reporting Manager and helped them re-align, to be able to achieve individual's as well as the organisation's goals.

Our compensation and benefits structure aim to attract best talent in the industry and it also contribute towards wellbeing of our employees through range of benefits which include Group Health/Accident Insurance health check-ups, discounted consultation, top-up for insurance cover.

In a knowledge-driven business like ours, we understand that our employees need to have higher analytical rigor and sectoral knowledge and we have introduced programmes to hone the skills and capabilities of the campus and lateral hires. The Organisation Training Matrix was designed and implemented based on the inputs from all the business leaders.

In alignment with the Company's long-term strategic plan, the Management Development Programme was introduced to develop the middle management employees within their enhanced roles as people managers. A focused development plan for enhancing soft skills of junior level employees and for campus hires was also developed and executed.

The Annual Talent Review process was implemented, which contributes to succession planning for critical positions. Leadership Accelerator Management Programme (LAMP) - was executed which helped provide a growth framework to individuals identified as High Potential.

During the year, we celebrated various festivals together, which helped us promote collaboration and strengthened bonds between employees. The team get-togethers were also introduced so that the leaders could engage with the team members from different locations, which received good feedback from the employees. Over time, these shared experiences have helped everyone collaborate and work towards achieving a common organisational objective.

Employees Stock Option Scheme (ESOS)

The members of your Company in the Annual General Meeting ("AGM") held on August 9, 2018, by passing a special resolution, adopted a new scheme called the Employees Stock Option Scheme 2018 (‘ESOS 2018'), in compliance with SEBI (Share-based Employee Benefits) Regulations, 2014, under which an aggregate of 39,993 stock options were proposed to be granted. Permanent employees (excluding promoters and Independent Directors) of your Company and its subsidiaries are eligible to participate in the ESOS 2018. An estimated 39,993 stock options (shares of which are with the ICRA Employees Welfare Trust) may be granted under the ESOS 2018.

During the year, there were no changes in the ESOS 2018.

A certificate from the Secretarial Auditors of your Company certifying that the schemes are implemented in accordance with the Securities and Exchange Board of India (Share-Based Employee Benefits and Sweat Equity) Regulations, 2021, and the resolutions passed by the members of the Company will be made available in electronic mode to the members of the Company for inspection at the AGM.

The disclosures in terms of Regulation 14 of the SEBI (Share-Based Employee Benefits and Sweat Equity) Regulations, 2021 read with Circular No CIR/CFD/POLICY CELL/2/2015, dated )une 16, 2015, issued by SEBI, are available on the Company's website; the web-link for the same is: https:// www.icra.in/InvestorRelation/ ShowCorporateGovernanceFile?Id=77

Particulars of Employees

The disclosure under the provisions of Section 197(12) of the Act, 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.

With regard to the provisions of Section 136(1) of the Act, 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. The said information would be available for inspection, by members, at the registered office of the Company or through electronic mode, during business hours on working days up to the date of the 33^rd AGM of the Company. Any member interested in obtaining a copy thereof may write in this regard to the Company Secretary of the Company.

Annual Return

In terms of Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, the Annual Return is available on the Company's website at https:// www.icra.in/InvestorRelation/ ShowAnnualReturnFile?Id=685

Corporate Governance

The report of the Board of Directors of your Company on Corporate Governance is presented as a separate section (Annexure II) 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, the Risk Management Committee and other committees of the Board, the number of meetings of the Board and committees of the Board, and other matters are presented in the Corporate Governance Report.

The certificate of the Statutory Auditors of your Company regarding compliance with the Corporate Governance requirements as stipulated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations') is annexed to the Directors' Report.

Your Company has obtained a certificate from a practising company secretary that none of the Directors on the Board of your Company have been debarred or disqualified from being appointed or are continuing as directors of companies by the SEBI /Ministry of Corporate Affairs or any such statutory authority.

Management Discussion & Analysis

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

Insider Trading Regulations

The Board of Directors of the Company has adopted the Code of Conduct for prevention of insider trading, the Code of Practises and Procedures for Fair Disclosure of Unpublished Price Sensitive Information, the policy for determination of legitimate purposes, and policy for enquiry in case of the leak of unpublished price sensitive information in compliance with the SEBI's Regulations for Prohibition of Insider Trading, and the same have been uploaded on the Company's 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.

Share Capital

As on March 31, 2024, the Company's issued, subscribed and paid-up equity share capital stood at Rs. 965.12 lakhs divided into 96,51,231 equity shares of Rs. 10/- each.

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

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

Directors and Key Managerial Personnel

Mr. Arun Duggal, Ms. Ranjana Agarwal, and Ms. Radhika Vijay Haribhakti had been re-appointed as Independent Directors of your Company to hold office for a second term of five consecutive years on the Board of your Company in 2019.

Mr. Duggal and Ms. Agarwal's term as Independent Directors are nearing the end on November 10, 2024, and Ms. Haribhakti's terms as an Independent Director is nearing the end on December 3, 2024. The Board places on record its appreciation for the valuable contributions made by Mr. Duggal, Ms. Agarwal, and Ms. Haribhakti to the Board of your Company.

In order to maintain orderly succession of the Board of Directors, the Nomination & Remuneration Committee has identified the desired attributes for the selection of the Independent Director(s). Basis those attributes, the Nomination & Remuneration Committee has recommended the candidature of Mr. PS )ayakumar, Ms. Anuranjita Kumar, and Mr. Pradip Kanakia for appointment as Independent Directors of the Company.

The Board of Directors of your Company at its meeting held on May 15, 2024 based on the recommendations of the Nomination and Remuneration Committee, recommended the appointment of Mr. Jayakumar and Mr. Kanakia, as Independent Directors on the Board of the Company for a term of five consecutive years effective from November 1, 2024 to October 31, 2029 (both days inclusive), and the appointment of Ms. Kumar as an Independent Director on the Board of the Company for a term of five consecutive years effective from December 1, 2024 to November 30, 2029 (both days inclusive) to the members of the Company for their approval by way of passing a special resolution in the ensuing AGM.

In the opinion of the Board, Mr. Jayakumar, Mr. Kanakia, and Ms. Kumar possesses requisite skills and expertise required for the business and operations of the Company. For details on skills, expertise, competencies of Mr. Jayakumar, Mr. Kanakia, and Ms. Kumar, please refer to the Notice of the 33^rd AGM.

Further, pursuant to the provisions of Section 152 of the Act, and the Articles of Association of your Company,

Ms. Shivani Priya Mohini Kak is due to retire by rotation, and being eligible, has offered herself for reappointment, subject to approval by the Members of the Company at the forthcoming AGM.

Further, the Board of Directors based on the recommendation of the Nomination and Remuneration Committee has recommended the appointment of Mr. Brian Joseph Cahill, as a Director of the Company, liable to retire by rotation, with effect from August 1, 2024.

The Board of Directors in its meeting held on May 15, 2024, based on the recommendation of the Nomination and Remuneration Committee has re-appointed Mr. Ramnath Krishnan, as "Managing Director & Group CEO" for a period of three years, effective from October 23, 2024, subject to approval of the members of the Company.

The profiles of Ms. Kak, Mr. Jayakumar, Mr. Kanakia, Ms. Kumar, Mr. Cahill, and Mr. Krishnan are presented in the Notice of the 33^rd AGM, as required under the Act, secretarial standards issued by the Institute of Company Secretaries of India on general meetings and the Listing Regulations.

Further, Mr. Michael Foley has resigned as Non-Executive and Non-Independent Director of your Company (inclusive of all membership in any and all Committees of the Board) with effective date of August 1, 2024.

Except for Ms. Ranjana Agarwal, who is serving as a Non-Executive Chairperson and Independent Director on the Board of ICRA Analytics, an unlisted material subsidiary of the Company, and who receives remuneration by way of commission, no other Directors are in receipt of any remuneration or commission from any of the subsidiaries of the Company.

During the financial year 2023-24, there was no change in the key managerial personnel of the Company.

Independent Directors? Declaration

Pursuant to the provisions of Section 149(7) of the Act read with Schedule IV of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of Act along with rules made thereunder and Regulation 16(1)(b) of the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their daties with an objective independent judgement and without any external influence and they are independent of the Management. The following Non-Executive Directors of the Company are independent in terms of Section 149(6) of the Act and the Listing Regulations:

Mr. Arun Duggal

Ms. Ranjana Agarwal

Ms. Radhika Vijay Haribhakti

Further, in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs (IICA) and have passed the proficiency test or avail the exemption from that, as applicable.

Directors? Responsibility Statement

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

(i) in the preparation of the Annual Accounts for the year ended March 31, 2024, the applicable accounting standards have been followed and there are no material departures from the same;

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

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

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

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

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

Remuneration Policy

The Board of Directors of your Company, based on the recommendation of the Nomination and Remuneration Committee, has devised a Remuneration Policy, the details of which are mentioned in the Corporate Governance Report annexed to this Report.

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 Board needs to consist of eminent persons of proven competency and integrity with an established track record. Besides having financial literacy, experience, leadership qualities and the ability to think strategically, the members are required to have a significant degree of commitment to the Company and should devote adequate time in preparing for the Board meeting and attending the same. The members of the Board of Directors are required to possess the education, expertise, skills and experience in various sectors and industries needed to manage and guide the Company.

The members are also required to look at strategic planning and policy formulations.

The members of the Board should not be related to any executive or independent director of the Company or any of its subsidiaries. They are not expected to hold any executive or independent positions in any entity that is in direct competition with the Company. Board members are expected to attend and participate in the meetings of the Board and its Committees, as relevant. They are also expected to ensure that their other commitments do not interfere with the responsibilities they have by virtue of being a member of the Board of the Company. While reappointing Directors on the Board and Committees of the Board, the contribution and attendance record of the concerned Director shall be considered in respect of such reappointment.

Each Independent Director shall hold office as a member of the Board for a maximum term as per the provisions of the Act and the rules made thereunder, in this regard from time to time, and in accordance with the provisions of the Listing Regulations. The appointment of the Directors shall be formalised through a letter of appointment.

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

Board and Directors? Performance Evaluation

The Board of Directors of the Company, based on the recommendations of the Nomination and Remuneration Committee, has formulated a Board and Directors'

Performance Evaluation Policy, thereby setting out the performance evaluation criteria for the Board and its Committees and each Directors' performance, including the Chairman of the Company.

Your 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.

The Board of Directors acknowledges that Independent Directors on the Board have integrity and possess expertise and experience, including proficiency.

Auditors

In terms of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014 (as amended), M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) ("BSR") were appointed as the Statutory Auditors of your Company for a consecutive period of five (5) years at the 28^th AGM to hold office until the conclusion of the 33^rd AGM and accordingly will complete their present term on conclusion of the ensuing AGM. Your Board places on record its appreciation for the services of BSR during their tenure as the Statutory Auditors of your Company.

The Report given by the Statutory Auditors on the Standalone Financial Statements of the Company and the Consolidated Financial Statements of the Company for the financial year ended March 31, 2024, forms a part of this Annual Report. There have been no qualification, reservation, adverse remarks or disclaimer given by the Statutory Auditors in their Report, which calls for any explanation.

The disclosures relating to fees paid/payable to BSR have been made in the Corporate Governance Report annexed to this Report.

The Board of Directors of the Company, on recommendation of the Audit Committee, has recommended the appointment of Deloitte Haskins & Sells, Chartered Accountants, (Firm Registration No. 117365W) ("Deloitte") as the Statutory Auditors of the Company, in place of retiring auditors BSR, for a period of five (5) years, to hold office from the conclusion of the 33^rd AGM till the conclusion of the 38^th AGM. Deloitte has consented to the said appointment, and have confirmed that their appointment, if made, would be within the limits laid down by or under the authority of the Act. Further, they have confirmed their eligibility and qualification required under the Act for holding the office as Statutory Auditors of the Company.

A resolution seeking their appointment forms a part of the Notice convening the 33^rd AGM and the same is recommended for consideration and approval of the Members of the Company.

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. Chandrasekaran Associates, Company Secretaries, as the Secretarial Auditor of the Company for the financial year 2023-24 in terms of Section 204 of the Act and Regulation 24A of the Listing Regulations. The Secretarial Audit Report for financial year 2023-24 has been annexed to this Report (Annexure IV). The Secretarial Audit Report does not contain any qualifications, reservation, disclaimer or advise remark.

M/s. Chandrasekaran Associates, Company Secretaries, is also a secretarial auditor of a material subsidiary of the Company, ICRA Analytics. The Secretarial Audit Report as received from them for financial year 2023-24, is also annexed to this Report (Annexure IV-A).

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 AGM, payment of dividend of Rs. 100 per equity share of the face value of Rs. 10 each for the financial year ended March 31, 2024, which includes a special dividend of Rs. 60 per equity share. If the members approve the dividend at the ensuing AGM, the dividend shall be paid to:

(i) all those members whose names appear in the Register of Members as on July 19, 2024 (Record Date); and (ii) all those Members whose names appear as beneficial owners as per the details furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) on the close of business hours as on that date.

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 pay-out 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 uploaded on the website of your Company at:

https://www.icra.in/RegulatoryDisclosure/ShowCodePolicyReport?id=7&regulatoryDisclosureReportId=478

Transfer to Investor Education and Protection Fund

The Company sends reminder letters to all members whose dividends are unclaimed to ensure that they receive their rightful dues. Your Company has also uploaded on its website, www.icra.in, information regarding unpaid/unclaimed dividend amounts lying with your Company.

During 2023-24, the unclaimed dividend amount of Rs. 106,951 towards the unpaid dividend account of the Company for the financial year 2015-16 was transferred to the Investor Education and Protection Fund ("IEPF"). The said amount had remained unclaimed for seven (7) years, despite reminder letters having been sent to each of the members concerned.

Pursuant to Section 124(6) of the Act read with 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 Authority ("the Authority") within a period of 30 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 54 equity shares to the demat account of the Authority in accordance with the provisions of the Act and rules made thereunder. All benefits accruing on such shares viz. bonus shares, split, consolidation, fraction shares etc., except any right issue, shall also be credited to such a demat account.

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

Risk Management Policy

Your Company has formulated a risk management policy.

The policy is a formal acknowledgment of the commitment of your Company to risk management. The aim of the policy is not to have the 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 Risk Management Committee monitor and review the risk management plan. At Present, in the opinion of the Board of Directors, there are no risks which may threaten the existence of the Company.

Risks and concerns are discussed in Section E of the Management Discussion and Analysis Report.

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 Act. 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, as amended, have been annexed to this report (Annexure V).

Business Responsibility and Sustainability Report

Your Company, in accordance with the provisions of Regulation 34(2)(f) of the Listing Regulations has prepared a Business Responsibility and Sustainability Report for the year 2023-24 (BRSR). The BRSR is an effective compliance and communication tool for a company's non-financial disclosures and is the next step in mandatory Environmental, Social and Governance (ESG) reporting in India. The BRSR describes the initiatives taken by your Company from the ESG perspective. The BRSR has been annexed to this report (Annexure VI) 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, 2024. Considering the amendments to definition of the related parties effective from April 1, 2022, under the Listing Regulations, transactions between the unlisted material subsidiary of the Company, ICRA Analytics, and Moody's Corporation (including its affiliates) ("Moody's entities") for providing data outsourcing, research and IT support services, were approved by the members of the Company as per the Listing Regulations, as the transaction(s) exceeds 10% of the annual consolidated turnover of previous financial year. The transactions are in the ordinary course of business of the concerned subsidiary and at an arm's length basis. Except for this transaction, there have been no material-related party transactions as per Section 188(1) of the Act and as per Regulation 23 of the Listing Regulations. The required disclosures of information in Form AOC-2 in terms of Section 188 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are annexed to this report (Annexure VII).

Policy on Prohibition, Prevention and Redressal of Sexual Harassment

Your Company has formulated a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. The Company has constituted an Internal Committee for prevention and redressal of sexual harassment at the workplace, separately for all the branches. The Company has not received any complaints during the financial year ended March 31, 2024. The disclosures in relation to The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013 have also been made in the Corporate Governance Report.

Deposits

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

Maintenance of Cost Records

The Company is not required to maintain cost records as per sub-section (1) of Section 148 of the Act.

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, 2024. During the year no security has been provided as per Section 186 of the Act.

Vigil Mechanism/Whistle-Blower Policy

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

The said 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 2023-24, the Board accepted all the recommendations of the Audit Committee.

Secretarial Standards

During the year under review, the Company complied with all the applicable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs, Government of India.

Proceeding under Insolvency and Bankruptcy Code, 2016

The Company has not filed any application or no proceeding is pending against the Company under the Insolvency and Bankruptcy Code, 2016, during the financial year 2023-24.

Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof

The Company has not made any one-time settlement with the banks or financial institutions, therefore, the same is not applicable.

Litigations

There are certain pending cases against your Company which are sub justice in court.

Besides this, the Company had filed an appeal before the Hon'ble Securities Appellate Tribunal (the ‘SAT'), challenging the adjudication order in respect of an adjudication proceeding initiated by SEBI in relation to the credit ratings assigned to one of the Company's customers and the customer's subsidiaries (the ‘Impugned Order') and had also filed an appeal challenging the SEBI enhancement order before the SAT.

Significant and Material orders passed by the Regulators or Courts

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and operations of the Company in future.

Acknowledgements

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

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