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Notes to Accounts of Crisil Ltd.

Dec 31, 2022

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the Cash Generating Unit (CGU), which benefit from the synergies of the acquisition. The chief operating decision maker reviews the goodwill for any impairment at the CGU level.

The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use, both of which are calculated by the Group using a discounted cash flow analysis. These calculations use pre-tax cash flow projections over a period of four years, based on financial budgets approved by the management. For calculation of the recoverable amount, the Group has used the following rates:

The above discount rate is based on the weighted average cost of capital of the Company. These estimates are likely to differ from future actual results of operations and cash flows.

An analysis of sensitivity of the computation to a change in key parameters (operating margins and discount rate) based on reasonably probable assumptions, did not identify any probable scenario in which recoverable amount of the CGU would decrease below its carrying amount.

As at December 31, 2022 and December 31, 2021, the estimated recoverable amount of the CGU exceeded its carrying amount, hence impairment is not triggered.

7.2 Personnel expenses to the extent of B 230 lakh (previous year : Nil) is considered for capitalisation as intangible assets.

7.3 As at December 31, 2022 and December 31, 2021 there was no project the completion of which was overdue or exceeded cost compared to original plan.

8.1 Includes deemed investment on account of share-based payment recharge to employees of subsidiary companies.

8.2 The total dividend recognised pertaining to FVTOCI instruments for the year ended December 31, 2022 was B 272 lakh and for the year ended December 31,2021 was B 429 lakh. Dividend from equity investments designated at FVTOCI relates to investments held at the end of the reporting period. For all the equity instruments that are classified by the Company as FVTOCI, fair value changes on the instrument, excluding dividends, are recognised in the OCI. The Company recognises dividend in statement of profit and loss under the head “other income”.

8.3 ‘-*’ in amounts’ columns denote amounts less than B 50,000.

Disclosure in relation to Undisclosed Income

The Company does not have any such transactions that are not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

13.1 The balance lying in unbilled receivables as at December 31,2021 is significantly billed during the current year.

13.2 The Company uses a provision matrix to determine impairment loss allowance on the portfolio trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward looking estimates. At period end, the historical observed default rates are updated and changes in the forward looking estimates are analysed.

Specific allowance for loss is also been provided by the management based on expected recovery on individual customers.

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of B 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(g) Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option scheme (ESOS) of the Company (refer to note 46).

(h) Capital management

The Company is predominantly equity financed and continues to maintain adequate amount of liquidity to meet strategic and growth objectives. The Company manages its capital to ensure that it will be able to continue as going concerns while maximising the return to its stakeholders. The Company has ensured a balance between earning adequate returns on treasury asset and need to cover financial and business risk. The Company actively monitors its portfolio and has a policy in place for investing surplus funds. Appropriate limits and controls are in place to ensure that investments are made as per policy. The Company has an overdraft and other loan facilities sanctioned from banks to support any temporary funding requirements, as and when required.

20. Explanation of reserves

a) General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to the retained earnings.

b) Securities premium

The amount received in excess of face value of the equity shares is recognised in securities premium.

c) Retained earnings

Retained earnings represent the cumulative profits of the Company and the effects of measurements of defined benefit obligation.

d) Share-based payment reserve

The share-based payment reserve account is used to record the value of equity-settled share-based payment transactions with employees. The amounts recorded in this account are transferred to share premium upon exercise of stock options by employees.

e) Other comprehensive income (OCI)

Other comprehensive income includes fair value changes in equity instruments and hedge reserve through OCI.

f) Hedge reserve

Forward contracts are stated at fair value at each reporting date. Changes in the fair value of the forward contracts that are designated and effective as hedges of future cash flows are recognised directly in OCI and accumulated under the hedging cash flow hedge reserve, net of applicable deferred income taxes.

g) Capital redemption reserve

The Company has recognised Capital Redemption Reserve on buyback of equity shares from its retained earnings. The amount in capital redemption reserve is equal to nominal amount of the equity shares bought back.

h) Share application money pending allotment

It represents the amount received on the application on which allotment is not yet made (pending allotment).

34. Financial risk management

The Company is exposed to various risks in relation to financial instruments. The Company’s financial assets and liabilities by category are summarised in note 35. The main types of risks are market risk (foreign currency exchange rate risk and price risk), business and credit risks and liquidity risk. The Company has in place a robust risk management policy with overall governance and oversight from the Audit Committee and Board of Directors. Risk assessment is conducted periodically and the Company has a mechanism to identify, assess, mitigate and monitor various risks to key business objectives.

The policies for managing specific risk are summarised below:

34.1 Market risk

Market risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate because of changes in market price. Such changes may result from changes in foreign currency exchange rates, interest rate, price and other market changes. The Company’s exposure to market risk is mainly due to foreign exchange rates and price risk.

Foreign currency exchange rate risk

The Company’s exposure to market risk includes changes in foreign exchange rates. Most of the Company’s transactions are carried out in INR. Exposures to currency exchange rates arise from the Company’s overseas operations, which are primarily denominated in US dollars (USD), EURO, Pounds Sterling (GBP) and Emirati Dirhams (AED). As at December 31, 2022 and December 31, 2021, the Company has entered into foreign exchange forward contracts to hedge the effect of adverse fluctuations in foreign currency exchange rates. The details in respect of the outstanding foreign exchange forward contracts are given (refer to note 35.2).

For the year ended December 31, 2022, every 5% increase/decrease of the respective foreign currencies compared to functional currency of the Company would impact operating margins by B 1,449 lakh ( /-5.98 %). For the year ended December 31, 2021, operating margins would increase/decrease by B 1,166 lakh ( /-4.62 %). Exposure to foreign currency exchange rate vary during the year depending upon the volume of overseas transactions. Nonetheless, the analysis above is considered to be representative of the Company’s exposure to currency risk.

Price risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The Company has adopted disciplined practices including position sizing, diversification, valuation, loss prevention, due diligence, and exit strategies in order to mitigate losses.

The Company is exposed to price risk arising mainly from investments in mutual funds recognised at FVTPL. The details of such investment are given under note 8. If the prices had been higher/lower by 5% from the market prices existing as at the reporting date, profit would increase/decrease by B 1,646 lakh and B 1,515 lakh for the year ended December 31, 2022 and for the year ended December 31, 2021 respectively.

The Company is also exposed to price risk arising mainly from investments in equity instruments recognised at FVTOCI. The details of such investment are given under note 8. If the equity prices had been higher/lower by 5% from the market prices existing as at the reporting date, OCI for the year ended December 31, 2022 would increase/decrease by B 796 lakh and B 812 lakh for the year ended December 31, 2021.

34.2 Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. For the Company, liquidity risk arises from obligations on account of financial liabilities - trade payables and other financial liabilities.

Liquidity risk management

The Company continues to maintain adequate amount of liquidity/treasury to meet strategic and growth objectives. The Company has ensured a balance between earning adequate returns on liquidity/treasury assets and the need to cover financial and business risks. The Company’s treasury department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows.

The treasury position of the Company is given below:

34.3 Business and credit risks

To mitigate the risk arising from high dependence on any one business for revenues, the Company has adopted a strategy of diversifying in new products/services and into different business segments. To address the risk of dependence on a few large clients and a few sectors in the business segments, the Company has also actively sought to diversify its client base and industry segments.

Credit risk refers to risk that a counter party will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to this risk for receivables from customers.

To manage credit risk, the Company periodically assesses the financial reliability of customers and other counterparties, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Company uses a provision margin to compute the expected credit loss allowance for trade receivables. Trade receivables are monitored on periodic basis for any non-recoverability of the dues. Bank balances are held with only high rated banks. Refer to note 13.4 for trade receivables ageing.

35.1 Fair value hierarchy

For financial reporting purpose, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

35.2 Derivative financial instruments and hedging activity

The Company’s risk management policy is to hedge substantial amount of forecast transactions for each of the major currencies presently US$, GBP £ and Euro €. The hedge limits are governed by the risk management policy. The Company uses forward foreign exchange contracts to mitigate exchange rate exposure arising from forecast sales in foreign currencies. All forward exchange contracts have been designated as hedging instruments in cash flow hedges in accordance with Ind AS 109. Details of currency hedge and forward contract value are as under :

The Company uses foreign exchange forward contracts to hedge its exposure in foreign currency risk. Hedge is broadly classified as revenue hedge and receivable hedge.

Revenue hedge

For forecasted revenue transaction, the Company will adopt cash flow hedge and record mark to market through OCI. Effective hedge is routed through OCI in the balance sheet and the ineffective portion is immediately routed through the statement of profit and loss.

36. Details of contingent liabilities and capital commitments are as under:

(B lakh)

Particulars

As at

December 31, 2022

As at

December 31, 2021

A. Contingent liabilities

1. Bank guarantee in the normal course of business

1,229

1,455

2. Disputed income tax, sales tax, service tax and GST demand:

(i). Pending before appellate authorities in respect of which the Company is in appeal

37,651

23,306

(ii). Decided in the Company’s favour by appellate authorities and department is in further appeal

1,022

1,215

3. Provident fund

Based on the judgement by the Honorable Supreme Court dated 28 February 2019, past provident fund liability, is not determinable at present, in view of uncertainty on the applicability of the judgement to the Company with respect to timing and the components of its compensation structure. In absence of further clarification, the Company has been legally advised to await further developments in this matter to reasonably assess the implications on its financial statements, if any.

The Company periodically receives notices and inquiries from income tax authorities related to the Company’s operations in various jurisdictions. The Company evaluates these notices and inquiries and has concluded that any consequent income tax claims or demands by income tax authorities will not succeed on ultimate resolution other than what has been provided or disclosed herein.

39,902

25,976

B. Capital commitment

Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for.

135

708

Total

40,037

26,684

37. Auditors’ remuneration includes:

(B lakh)

Particulars

Year ended December 31, 2022

Year ended December 31, 2021

Audit fees (including limited review fees)

75

75

In any other matter:

Certification work

6

8

Out of pocket expenses

5

4

Total

86

87

38. Segment reporting

In accordance with Paragraph 4 of Indian Accounting Standard (Ind AS) 108 - “Operating Segments”, segment information has been given in the consolidated financial statements of the Company, and therefore, no separate disclosure on segment Information is given in these standalone financial statements.

Entity wide disclosures

None of the customers for the year ended December 31,2022 and December 31,2021 constituted 10% or more of the total revenue of the Company.

40. Leases

The Company had adopted Ind AS 116 using the modified retrospective method and has applied the standard to its leases with the cumulative impact. The Company has elected not to recognise right-to-use assets and lease liabilities for short term leases (lease term of 12 months or less) and leases of low-value and has recognised the lease payments for such leases as an expense over the lease term.

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

Rental expense recorded for short-term leases as per Ind AS 16 was B 22 lakh (previous year: B 631 lakh) for the year.

The Company has recognised interest on lease liability of B 561 lakh (previous year: B 762 lakh) under finance costs. The aggregate depreciation on ROU assets has been included under depreciation expense in the statement of profit and loss (refer to note 32).

41. Gratuity and other post employment benefits plans

In accordance with the Payment of Gratuity Act, 1972, CRISIL provides for gratuity, a defined benefit retirement plan covering eligible employees (completed continuous services of five years or more) of the Company. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment at fifteen days salary of an amount based on the respective employee’s salary and tenure of employment with the Company.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the respective plans.

47. Merger of CRISIL Risk and Infrastructure Solutions Limited (CRIS) and Pragmatix Services Private Limited (PSPL)

i) The Board of Directors of the Company has approved arrangement for amalgamation of two wholly owned subsidiaries (CRISIL Risk and Infrastructure Solutions Limited and Pragmatix Services Private Limited - Transferor Company) with the Company in its Board meeting held on December 13, 2021. The Company has filed necessary applications to the National Company Law Tribunal (NCLT) on December 27, 2021. The Scheme has been sanctioned by the National Company Law Tribunal (NCLT) with appointed date as April 1, 2022 and the Scheme became effective on September 1, 2022. Transferor Company is engaged in providing infrastructure advisory and risk solutions services.

ii) The arrangement and amalgamation have been accounted in the books of account of the Company in accordance with Appendix C to Ind AS 103 ‘Business Combination’ as specified under Section 133 of The Companies Act, 2013, read with the Companies (Accounting Standards) Amendment Rules, 2016. Accordingly, the accounting treatment has been given as follows:

- The assets, liabilities and reserves of CRIS and PSPL have been incorporated in the financial statements at the carrying values as appearing in the consolidated financial statements.

- Inter-Company balances and transactions have been eliminated.

- 49,999,970 equity share of B 1 each fully paid in CRIS and 3,140,000 equity share of B 10 each fully paid in PSPL, held as investment by the Company stands cancelled.

- The financial information in the standalone financial statements in respect of prior period have been restated as if business combination had occurred from the beginning of the preceding period.

iii) The authorised equity share capital of the Company has been increased by the authorised equity share capital of the former CRIS and PSPL in accordance with the Scheme of Merger vide Board resolution dated December 13, 2022.

iv) The impact of the merger on the financial statements is as under:

48. Additional regulatory information required by Schedule III:

i) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

ii) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.

iii) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

iv) The Company has not traded or invested in crypto currency or virtual currency during the year.

v) The Company did not have any transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the year.

vi) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

vii) The Company has not been sanctioned working capital limits by banks or financial institutions on the basis of security of current assets at any point of time during the year.

viii) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any parties with understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

49. During the previous year, the Company had sold the building for B 4,900 lakh, which has resulted in profit of B 4,582 lakh, disclosed under exceptional items.

50. The figures for the previous year have been regrouped/ rearranged wherever necessary to conform to the current year’s classification in order to comply with the requirements of the amended schedule III to the Companies Act, 2013 effective April 1, 2021.


Dec 31, 2018

1 Corporate information

CRISIL Limited (the Company or CRISIL) [CIN : L67120MH1987PLC042363] is a globally-diversified analytical Company providing ratings and research services. CRISIL is India’s leading ratings agency and the foremost provider of high-end research to the world’s largest banks and leading corporations. CRISIL delivers analysis, opinions, and solutions that make markets function better.

CRISIL Limited is a public limited Company, domiciled in India. The registered office of the Company is located at CRISIL House, Central Avenue, Hiranandani Business Park, Powai, Mumbai - 400076. The equity shares of the Company are listed on recognised stock exchanges in India- The Bombay Stock Exchange and the National Stock Exchange.

These standalone financial statements for the year ended December 31, 2018, were approved by the Board of Directors on February 12, 2019.

S&P Global Inc the ultimate holding Company, through its subsidiaries owned 67.58% as on December 31, 2018 of the Company’s equity share capital (Refer Note 18).

(a) Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of Re 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

(f) Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option scheme (ESOS) of the Company (Refer Note 47).

(g) Capital management

The Company is predominantly equity financed and continues to maintain adequate amount of liquidity to meet strategic and growth objectives. The Company manages its capital to ensure that it will be able to continue as a going concern while maximising returns for its stakeholders. The Company has ensured a balance between earning adequate returns on treasury asset and need to cover financial and business risk. The Company actively monitors its portfolio and has a policy in place to investing surplus funds. Appropriate limits and controls are in place to ensure that investments are made as per policy. The Company has a overdraft facility with banks to support any temporary funding requirements which has not been utilised as at December 31, 2018.

2. Explanation of reserves

a) General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to the statement of profit and loss.

b) Securities premium

The amount received in excess of face value of the equity shares is recognised in securities premium.

c) Retained earnings

Retained earnings represent the cumulative profits of the Company and the effects of measurements of defined benefit obligation.

d) Share-based payment reserve

The share-based payment reserve account is used to record the value of equity-settled share based payment transactions with employees. The amounts recorded in this account are transferred to share premium upon exercising of stock options by employees.

e) Other comprehensive income (OCI)

Other comprehensive income includes equity instruments through OCI and hedge reserve.

f) Hedge reserve

Forward contracts are stated at fair value at each reporting date. Changes in the fair value of the forward contracts that are designated and effective as hedges of future cash flows are recognised directly in OCI and accumulated under the hedging cash flow hedge reserve, net of applicable deferred income taxes.

g) Foreign currency monetary items translation

Exchange differences arising on translation of the long-term monetary assets are accumulated in separate reserve within equity. The cumulative amount is reclassified to the statement of profit and loss over the life of the monetary asset on a straightline basis.

h) Captal redemption reserve

The Company has recognised Capital redemption reserve on buyback of equity shares from its retained earnings. The amount in capital redemption reserve is equal to nominal amount of the equity shares bought back.

i) Special Economic Zone (SEZ) reinvestment reserve

The SEZ reinvestment reserve has been created out of the profit of eligible SEZ units in terms of the provisions of Section 10 AA(1)(ii) of the Income Tax Act, 1961. The reserve should be utilised by the Company for acquiring new plant and machinery for the purpose of business in terms of Section 10 AA(2) of the Income Tax Act, 1961.

3. Financial risk management

The Company is exposed to various risks in relation to financial instruments. The Company’s financial assets and liabilities by category are summarised in Note 34. The main types of risks are market risk (foreign currency exchange rate risk and price risk), business and credit risks and liquidity risk. The Company has in place a robust risk management policy with overall governance and oversight from the Audit Committee and Board of Directors. Risk assessment is conducted periodically and the Company has a mechanism to identify, assess, mitigate and monitor various risks to key business objectives.

The policies for managing specific risk are summarised below:-

3.1 Market risk

Market risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate because of changes in market price. Such changes may result from changes in foreign currency exchange rates, interest rate, price and other market changes. The Company’s exposure to market risk is mainly due to foreign exchange rates and price risk.

Foreign currency exchange rate risk

The Company’s exposure to market risk includes changes in foreign exchange rates. Most of the Company’s transactions are carried out in INR. Exposures to currency exchange rates arise from the Company’s overseas sales and purchases, which are primarily denominated in US dollars (USD), Euros (EUR) and Pounds Sterling (GBP). As of December 31, 2018, and December 31, 2017, we have entered into foreign exchange forward contracts to hedge the effect of adverse fluctuations in foreign currency exchange rates. The details in respect of the outstanding foreign exchange forward contracts are given. (Refer Note 34)

Following is the currency profile of non-derivative financial assets and financial liabilities:

For the year ended December 31, 2018, every 5% increase/decrease of the respective foreign currencies compared to functional currency of the Company would impact operating margins by Rs 503 lakh ( /-1.56 %). For the year ended December 31, 2017, operating margins would increase/decrease by Rs 598 lakh ( /-1.83%). Exposure to foreign currency exchange rate vary during the year depending upon the volume of overseas transactions. Nonetheless, the analysis above is considered to be representative of the Company’s exposure to currency risk.

Price risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The Company has adopted disciplined practices including position sizing, diversification, valuation, loss prevention, due diligence and exit strategies in order to mitigate losses.

The Company is exposed to price risk arising mainly from investments in mutual funds recognised at FVTPL. The details of such investment are given under Note 5. If the prices had been higher/lower by 5% from the market prices existing as at the reporting date, profit would increase/decrease by Rs 915 lakh and Rs 657 lakh for the year ended December 31, 2018, and for the year ended December 31, 2017, respectively.

The Company is also exposed to price risk arising mainly from investments in equity instruments recognised at FVTOCI. The details of such investment are given under Note 5. If the equity prices had been higher/lower by 5% from the market prices existing as at the reporting date, OCI for the year ended December 31, 2018, would increase/decrease by Rs 1,294 lakh and Rs 1,747 lakh for the year ended December 31, 2017.

3.2 Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. For the Company, liquidity risk arises from obligations on account of financial liabilities - trade payables and other financial liabilities.

Liquidity risk management

The Company continues to maintain adequate amount of liquidity/treasury to meet strategic and growth objectives. The Company has ensured a balance between earning adequate returns on liquidity/treasury assets and the need to cover financial and business risks. The Company’s treasury department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows. The short-term treasury position of the company is given below:

3.3 Business and credit risks

To mitigate the risk arising from high dependence on any one business for revenue, the Company has adopted a strategy of diversifying into new products/services and into different business segments. To address the risk of dependence on a few large clients and a few sectors in the business segments, the Company has also actively sought to diversify its client base and industry segments.

Credit risk refers to risk that a counter party will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to this risk for receivables from customers.

To manage credit risk, the Company periodically assesses the financial reliability of customers and other counterparties, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Company uses a provision margin to compute the expected credit loss allowance for trade receivable. Trade receivables are monitored on periodic basis for any nonrecoverability of the dues. Bank balances are held with only high rated banks.

Fair value hierarchy

For financial reporting purpose, fair value measurements are categorised into Level 1, 2, or 3; based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in their entirety, which are described as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value, as at December 31, 2018, and December 31, 2017.

Derivative financial instruments and hedging activity

The Company’s risk management policy is to hedge substantial amount of forecast transactions for each of the major currencies, presently US$, GBP £ and Euro €. The hedge limits are governed by the risk management policy. The Company uses forward foreign exchange contracts to mitigate exchange rate exposure arising from forecast sales in foreign currencies. All forward exchange contracts have been designated as hedging instruments in cash flow hedges in accordance with Ind AS 109. Details of currency hedge and forward contract value are as under :

The Company uses foreign exchange forward contracts to hedge its exposure in foreign currency risk. Hedge is broadly classified as revenue hedge.

Revenue hedge: For forecasted revenue transaction, the Company will adopt cash flow hedge and record mark to market through OCI. Effective hedge is routed through OCI in the balance sheet and the ineffective portion is immediately routed through the Statement of Profit and Loss.

4. Segment reporting

Business segments:

The Company has two major business segment: Ratings and Research. A description of the types of products and services provided by each reportable segment is as follows:

- Ratings services include credit ratings for corporates, banks, bank loans, small and medium enterprises (SME), credit analysis services, grading services and global analytical services

- Research segment includes global research and analytical services, industry reports, customised research assignments, subscription to data services, independent equity research (IER), IPO gradings and training

5. Operating lease

The Company has taken certain office premises on non cancelable operating lease basis. Some of these agreements have a price escalation clause. Details as regards payments and future commitments are as under :

6. Gratuity and other post-employment benefits plans

In accordance with the Payment of Gratuity Act, 1972, CRISIL provides for gratuity, a defined benefit retirement plan covering eligible employees (completed continuous services of five years or more) of the Company. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment at fifteen days salary of an amount based on the respective employee’s salary and tenure of employment with the Company.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the respective plans.

Net employee benefit expense recognised in statement of Profit and Loss and OCI:

The actuarial assumptions for the determination of defined benefit obligations are discount rate and salary escalation rate. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptios occuring at the end of the reporting period, holding all other assumptions constant.

The expenses for compensated absences have been recognised in the same manner as gratuity and a provision of Rs 4,822 lakh has been made as at December 31, 2018, (Rs 4,709 lakh as at December 31, 2017).

Proposed dividend

The Board of Directors at its meeting held on February 12, 2019, have recommended a payment of final dividend of Rs 11 per equity share of face value of Re 1 each for the financial year ended December 31, 2018. The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

7. Corporate Social Responsibility

Corporate Social Responsibility (CSR) expenses for the year ended December 31, 2018, include Rs 727 lakh (PY Rs 727 lakh) includes spend on various CSR schemes as prescribed under Section 135 of the Companies Act, 2013. The CSR amount based on limits prescribed under the Companies Act, 2013, for the year was Rs 723 lakh (FY. Rs 684 lakh). Key CSR activities were “education and women empowerment - financial capability building” and “conservation of environment.

8. Acquisition of Pragmatix

On January 24, 2018, CRISIL limited acquired 100% stake in Pragmatix Services Private Limited. Pragmatix is a data analytics company focused on delivering cutting edge solutions in the ‘data to intelligence’ lifecycle to the Banking, Financial Services & Insurance (BFSI) vertical. Its big data capabilities and advanced data models provide descriptive, prescriptive and predictive analytics delivered through its proprietary Enterprise Data Analytics Platform. Pragmatix provides solutions across the risk, sales and finance domains in India, Middle East and North America. The transaction is at a total consideration of Rs 5,600 lakh. This will enable CRISIL to leverage its technology platform and deep domain expertise to enhance its business intelligence, analytics and risk management offerings for financial sector clients in India and globally.

9. Capitalisation of intangible assets

Personnel expenses to the extent of Rs 160 lakh (PY. Rs 363 lakh) is considered for capitalisation as intangible assets.

10. Employee stock option scheme (“ESOS”)

The Company has formulated an ESOS based on which employees are granted options to acquire equity shares of the Company that vest in a graded manner. The options are granted at the closing market price prevailing on the stock exchange, immediately prior to the date of grant. Details of the ESOS granted are as under :

The Company had three schemes under which options have been granted in the past. Under ESOS 2011, ESOS 2012 and ESOS 2014 (8) option vest over three years at each of the anniversaries. All options are exercisable within three years from the date of vesting and are settled in equity on exercise.

Under ESOS 2014 (1-7) options vest over five years starting from third anniversary of the grant. Options are exercisable within two years from the date of vesting and are settled in equity on exercise.

The Company has used Black-Scholes option pricing model for the purpose of estimating fair value of the options granted during the year.

Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the period. The measure of volatility used in the Black Scholes option-pricing model is the annualised standard deviation of the continuously compounded rates of return on the stock over a period of time. The Company has considered the daily historical volatility of the Company’s stock price on NSE over the expected life of each vest.

Risk-free rate: The risk-free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero-coupon yield curve for government securities.

Expected life of the options: Expected life of the options is the period for which the Company expects the options to be live. The minimum life of a stock option is the minimum period before which the options cannot be exercised and the maximum life of the option is the maximum period after which the options cannot be exercised. The Company has calculated expected life as the average of the minimum and maximum life of the options.

Dividend yield: Expected dividend yield has been calculated as a total of interim and final dividend declared in last year preceding date of grant.

Cash inflow on exercise of options at the weighted average share price at the date of exercise.

There are no cash settled plans implemented by the Company and hence there is no further liability booked in the books. The estimates of future cash inflow that may be received upon exercise of options.

11. During the year, the Company received export benefits amounting to Rs 2,417 lakh in the form of duty free saleable scrips under the Service Export Incentive Scheme (SEIS) from the government authorities and the same has been accounted for as “Other income” in the standalone financial statements.


Dec 31, 2017

a) Dividend (including dividend tax)

Under Ind AS, dividend to holders of equity instruments is recognized as a liability in the period in which the obligation to pay is established. Under the Previous GAAP, dividend payable is recorded as a liablity in the period to which it relates.

That has resulted in an increase of equity by Rs. 7,727 lakhs and Rs. 8,571 lakhs as at December 31, 2016 and January 1, 2016 respectively.

b) Fair valuation of Investments

Under the Previous GAAP, current investments were measured at lower of cost or fair value and long term investments were measured at cost less diminution in value which is other than temporary, under Ind

AS financial assets other than amortised cost are subsequently measured at fair value.

The Company has made an irrevocable election to present in OCI subsequent changes in fair value of equity investments not held for trading. This has resulted in increase in equity by Rs. 2,995 lakhs and Rs. 2,477 lakhs as at December 31, 2016 and January 1, 2016 respectively and increase in total comprehensive income by Rs. 518 lakhs for the year ended December 31, 2016.

Investment in mutual funds have been classified as fair value through profit and loss and fair value changes are recognized in the statement of profit and loss. This has resulted in increase in equity by Rs. 554 lakhs and Rs. 1,309 lakhs as at December 31, 2016 and January 1, 2016 respectively and decrease in total comprehensive income by Rs. 755 lakhs for the year ended December 31, 2016.

c) Employee benefits

Under the Previous GAAP, actuarial gains and losses were recognized in the statement of profit and loss. Under Ind AS, the acturial gains and losses form part of remeasurement of net defined benefit liability/ assets which is recognized in other comprehensive income in the respective periods. The amount recognized in OCI for the year ended December 31, 2016 was Rs. 331 lakhs.

There is no impact on total comprehensive income and total equity for the year ended and as at December 31 2016 and January 1, 2016 respectively.

d) Share based payment to employees

Under the Previous GAAP, the cost of equity - settled employee share-based plan were recognized using the intrinsic value method. Under Ind AS, the cost of equity-settled employee share-based plan is recognized based on the fair value of the options as at the grant date. Consequently, the total comprehensive income for the year ended December 31, 2016 decreased by 1,164 lakhs. There is no impact on total equity as at January

1, 2016, whereas total equity has increased by Rs. 463 lakhs as at December 31, 2016 on account of share based payment recharge to employees of subsidiary companies.

e) Adjustment for straight lining of lease rentals

Under Ind AS, straight-lining of rentals is not required if the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases. Hence the lease equalisation reserve created as per the Previous GAAP is reversed which resulted in decrease in total comprehensive income for the year ended December 31, 2016 by Rs. 168 lakhs. Total equity has increased by Rs. 1,113 lakhs and Rs. 1,281 lakhs as at December 31, 2016 and January 1, 2016 respectively.

f) Reconciliation of statement of cash flow

There are no material adjustments to the statement of cash flows as reported under the Previous GAAP.

g) Others

Other adjustments include revenue deferred and the impact of discounting of security deposits.

h) Tax adjustments including deferred tax

Tax impact resulted on account of above adjustments lead to decrease in total equity under Ind AS by Rs. 1,874 lakhs and Rs. 1,561 lakhs as at December 31, 2016 and January 1, 2016 respectively, and decrease in total comprehensive income by Rs. 314 lakhs for the year ended December 31, 2016.

The market value of quoted investments is equal to the carrying value

* Includes deemed investment on account of ESOS, share based payment recharge to employees of subsidiary companies (Refer note 3)

** The total dividend recognized pertaining to FVTOCI instruments for the year ended on December 31, 2017 was Rs. 321 lakhs and for the year ended December 31, 2016 was Rs. 47 lakhs. Dividend from equity investments designated at FVTOCI relates to investments held at the end of the reporting period. For all the equity instruments that are classified by the Company as FVTOCI, fair value changes on the instrument, excluding dividends, are recognized in the OCI. The Company recognises dividend in statement of profit and loss under the head “other income”.

*** ''-'' in amounts'' columns denote amounts less than Rs. 50,000.

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of Re.1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(f) Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option scheme (ESOS) of the Company (Refer note 47).

(g) Capital management

The Company is predominantly equity financed and continues to maintain adequate amount of liquidity to meet strategic and growth objectives. The Company manages its capital to ensure that it will be able to continue as going concerns while maximizing the return to its stakeholders. The Company has ensured a balance between earning adequate returns on treasury asset and need to cover financial and business risk. The Company actively monitors its portfolio and has a policy in place for investing surplus funds. Appropriate limits and controls are in place to ensure that investments are made as per policy. The Company has a overdraft facility with banks to support any temporary funding requirements which has not been utilized as at December 31, 2017.

1. Explanation of reserves:

a) General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to the Statement of Profit and Loss.

b) Securities premium

The amount received in excess of face value of the equity shares is recognized in securities premium reserve.

c) Capital reserve

Any profit or loss on purchase, sale, issue or cancellation of the Company''s own equity instruments is transferred to capital reserve

d) Share-based payment reserve

The share-based payment reserve account is used to record the value of equity-settled share based payment transactions with employees. The amounts recorded in this account are transferred to share premium upon exercise of stock options by employees.

e) Other comprehensive income (OCI)

Other comprehensive income includes equity Instruments through OCI, Hedge reserve and actuarial gains and losses form part of remeasurement of net defined benefit liability/ assets.

Hedge reserve -These forward contracts are stated at fair value at each reporting date. Changes in the fair value of these forward contracts that are designated and effective as hedges of future cash flows are recognized directly in OCI and accumulated under the hedging cash flow hedge reserve, net of applicable deferred income taxes.

f) Foreign currency monetary items translation

Exchange differences arising on translation of the long-term monetary assets is accumulated in separate reserve within equity. The cumulative amount is reclassified to the statement of profit and loss over the life of the monetary asset on a straight-line basis.

g) Capital redemption reserve

The Company has recognized capital redemption reserve on buyback of equity shares from its retained earnings in 2015. The amount in capital redemption reserve is equal to nominal amount of the equity shares bought back.

h) Special Economic Zone (SEZ) reinvestment reserve

The Special Economic Zone (SEZ) reinvestment reserve has been created out of the profit of eligible SEZ units in terms of the provisions of Section 10 AA(1)(ii) of the Income Tax Act, 1961. The reserve should be utilized by the Company for acquiring new plant and machinery for the purpose of business in terms of Section 10 AA(2) of the Income Tax Act, 1961.

2. Financial risk management

The Company is exposed to various risks in relation to financial instruments. The Company''s financial assets and liabilities by category are summarized in Note 33. The main types of risks are market risk (foreign currency exchange rate risk and price risk), business and credit risks and liquidity risk. The Company has in place a robust risk management policy with overall governance and oversight from the Audit Committee and Board of Directors. Risk assessment is conducted periodically and the Company has a mechanism to identify, assess, mitigate and monitor various risks to key business objectives.

The policies for managing specific risk are summarized below:-

3 Market risk

Market risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate because of changes in market price. Such changes may result from changes in foreign currency exchange rates, interest rate, price and other market changes. The Company''s exposure to market risk is mainly due to foreign exchange rates and price risk.

Foreign currency exchange rate risk

The Company''s exposure to market risk includes changes in foreign exchange rates. Most of the Company''s transactions are carried out in INR. Exposures to currency exchange rates arise from the Company''s overseas sales and purchases, which are primarily denominated in US dollars (USD), EURO and Pounds Sterling (GBP). As of December 31, 2017 and December 31, 2016, we have entered into foreign exchange forward contracts to hedge the effect of adverse fluctuations in foreign currency exchange rates. The details in respect of the outstanding foreign exchange forward contracts are given under note 33.

For the year ended December 31, 2017, every 5% increase/decrease of the respective foreign currencies compared to functional currency of the Company would impact operating margins by /- Rs. 598 lakhs ( /-1.77%). For the year ended December 31, 2016, operating margins would increase/decrease by Rs. 1,175 lakhs ( /- 3.33%). Exposure to foreign currency exchange rate vary during the year depending upon the volume of overseas transactions. None the less, the analysis above is considered to be representative of the Company''s exposure to currency risk.

Price risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The Company has adopted disciplined practices including position sizing, diversification, valuation, loss prevention, due diligence, and exit strategies in order to mitigate losses.

The Company is exposed to price risk arising mainly from investments in mutual funds recognized at FVTPL. The details of such investment are given under note 6. If the prices had been higher/lower by 5% from the market prices existing as at the reporting date, profit would increase/decrease by Rs. 657 lakhs and Rs. 2,116 lakhs for the year ended December 31, 2017 and for the year ended December 31, 2016 respectively.

The Company is also exposed to price risk arising mainly from investments in equity instruments recognized at FVTOCI. The details of such investment are given under note 6. If the equity prices had been higher/lower by 5% from the market prices existing as at December 31, 2017, OCI for the year ended December 31, 2017 would increase/decrease by Rs.1,747 lakhs.

4. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. For the Company, liquidity risk arises from obligations on account of financial liabilities - trade payables and other financial liabilities.

Liquidity risk management

The Company continues to maintain adequate amount of liquidity/treasury to meet strategic and growth objectives. The Company has ensured a balance between earning adequate returns on liquidity/treasury assets and the need to cover financial and business risks. The Company''s treasury department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

5. Business and credit risks

To mitigate the risk arising from high dependence on any one business for revenues, the Company has adopted a strategy of diversifying in new products/services and into different business segments. To address the risk of dependence on a few large clients and a few sectors in the business segments, the Company has also actively sought to diversify its client base and industry segments.

Credit risk refers to risk that a counter party will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to this risk for receivables from customers.

To manage credit risk, the Company periodically assesses the financial reliability of customers and other counterparties, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Company uses a provision margin to compute the expected credit loss allowance for trade receivable. Trade receivables are monitored on periodic basis for any no recoverability of the dues. Bank balances are held with only high rated banks.

The Company uses foreign exchange forward contracts to hedge its exposure in foreign currency risk. Hedge is broadly classified as revenue hedge.

Revenue hedge: For forecasted revenue transaction, the Company will adopt cash flow hedge and record mark to market through OCI. Effective hedge is routed through OCI in the balance sheet and the ineffective portion is immediately routed through the statement of profit and loss.

6. Segment reporting

Business segments:

The Company has two major business segment: Rating and Research. A description of the types of products and services provided by each reportable segment is as follows:

- Rating services includes credit ratings for corporate, banks, bank loans, small and medium enterprises (SME), credit analysis services, grading services and global analytical services.

- Research segments includes global research and analytical services, industry reports, customized research assignments, subscription to data services, independent equity research (IER),IPO grading and training.

Notes to segmental results :

* Other income which have been allocated to business segments have not been considered in determining unallocable income.

**Assets and liabilities used interchangeably between business segments have been classified as unallocable. The Company believes that it is currently not practical to allocate these assets and liabilities since a meaningful segregation of the available data is not feasible.

#Total asset for the purpose of geographical segment does not include deferred tax asset and tax asset.

The Company recovered certain common expenses from subsidiaries based on management estimates and the same form a part of the segment results.

The top two customers of the research segment contributed to more than 10% of the standalone revenue of the Company. These entitties are under common control of the Company.

The following table gives details in respect of revenues generated from top two customers:

7. List of related parties

Particulars Relationship Related parties where control exists

S&P Global Inc. The Ultimate Holding Company

CRISIL Risk and Infrastructure Solutions Limited Subsidiary

CRISIL Irevna UK Limited Subsidiary

CRISIL Irevna US LLC Subsidiary of CRISIL Irevna UK Limited

CRISIL Irevna Poland Sp.zo.o Subsidiary of CRISIL Irevna UK Limited

CRISIL Irevna Argentina S.A. Subsidiary

CRISIL Irevna Information & Technology (Hangzhou) Co. Limited Subsidiary

Pipal Research Analytics and Information Services India Private Subsidiary (Refer note 46)

Limited

Coalition Development Systems (India) Private Limited Subsidiary (Refer note 46)

Mercator Info-Services India Private Limited Subsidiary (Refer note 46)

Coalition Development Limited Subsidiary of CRISIL Irevna UK Limited

Coalition Development Singapore Pte Limited Subsidiary of Coalition Development Limited

CRISIL Foundation Controlled Trust Other Related parties

S&P India, LLC Fellow Subsidiary

Standard & Poor''s LLC Fellow Subsidiary

Standard & Poor''s International LLC Fellow Subsidiary

Standard & Poor''s South Asia Services Private Limited Fellow Subsidiary

S&P Global Asian Holdings Pte. Limited Fellow Subsidiary

S&P Global Canada Corp. Fellow Subsidiary

S&P Global International LLC Fellow Subsidiary

S&P Global UK Limited Fellow Subsidiary

J.D. Power and Associates Fellow Subsidiary (up to September 8, 2016)

Standard & Poor''s Credit Market Services Europe Limited Fellow Subsidiary

Standard & Poor''s Financial Services, LLC Fellow Subsidiary

Standard & Poor''s Singapore Pte. Ltd. Fellow Subsidiary

Standard & Poor''s Hong Kong Limited Fellow Subsidiary

Standard & Poor''s (Australia) Pty. Ltd. Fellow Subsidiary

Standard & Poor''s Global Ratings Japan Inc. Fellow Subsidiary

S&P Global Market Intelligence LLC Fellow Subsidiary

Standard & Poor''s Ratings Services Fellow Subsidiary

Asia Index Private Limited Fellow Subsidiary

S&P Global Market Intelligence Inc. Fellow Subsidiary

JM Financial Asset Reconstruction Company Private Limited * Common Director

Global Healthcare Systems Private Limited * Common Director

Care India Solutions for Sustainable Development * Common Director

Key Management Personnel

Ravinder Singhania Alternate Director

Girish Paranjpe Independent Director (with effect from October 17,

2017)

Nachiket Mor Independent Director

Vinita Bali Independent Director

M. Damodaran Independent Director

H. N. Sinor Independent Director (up to October 25, 2017)

Ewout Steenbergen Director (with effect from October 17, 2017)

Martina Cheung Director

John L Berisford Chairman (with effect from October 17, 2017)

Douglas Peterson Chairman (up to October 17, 2017)

Ashu Suyash* Managing Director and Chief Executive Officer

Amish Mehta* Chief Financial Officer

Minal Bhosale * Company Secretary

* Related party as per the Companies Act, 2013

8. Gratuity and other post employment benefits plans

In accordance with the Payment of Gratuity Act, 1972 CRISIL provides for gratuity, a defined benefit retirement plan covering eligible employees (completed continuous services of five years or more) of the Company. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment at fifteen days salary of an amount based on the respective employee''s salary and tenure of employment with the Company.

The following tables summaries the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the respective plans.

Proposed dividend

The Board of Directors at its meeting held on February 13, 2018 have recommended a payment of final dividend of Rs.10 per equity share of face value of Re. 1 each for the financial year ended December 31, 2017.

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognized as a liability.

9. Corporate Social Responsibility (CSR) expenses for the year ended December 31, 2017 includes Rs. 727 lakhs ( Rs. 604 lakhs for the year ended December 31, 2016) includes spend on various CSR schemes as prescribed under Section 135 of the Companies Act, 2013. The CSR amount based on limits prescribed under the Companies Act, 2013 for the year was Rs 684 lakhs (Rs 619 lakhs for the year ended December 31, 2016). Key CSR activities were “education and women empowerment - financial capability building” and “conservation of environment”.

10. Acquisition of Pragmatix

On November 15, 2017, CRISIL had entered into a definitive agreement to acquire 100% of the equity shares of Pragmatix Services Private Limited (''Pragmatix''). CRISIL has completed the acquisition of 100% stake in Pragmatix on January 24, 2018. Pragmatix is a data analytics company focused on delivering cutting edge solutions in the ''data to intelligence'' lifecycle to the Banking, Financial Services & Insurance (BFSI) vertical. Its big data capabilities and advanced data models provide descriptive, prescriptive and predictive analytics delivered through its proprietary Enterprise Data Analytics Platform. Pragmatix provides solutions across the risk, sales, and finance domains in India, Middle East and North America. The transaction is at a total consideration of upto Rs. 5,600 lakhs. This will enable CRISIL to leverage its technology platform and deep domain expertise to enhance its business intelligence, analytics and risk management offerings for financial sector clients in India and globally.

11. Personnel expenses to the extent of Rs. 363 lakhs (Rs. 47 lakhs for the year ended December 31, 2016) is considered for capitalization as intangible assets.

12. Amalgamation

a) Pipal Research Analytics and Information Services India Private Limited (Pipal) is engaged in providing low risk IT Enabled Services in the area of corporte research. Coalition Development Systems (India) Private Limited (Coalition India) and Mercator info-Services India Private Limited (Mercator) is engaged in the business of providing Researched Data Processing Services. The Company held 100% voting power of Pipal Research Analytics and Information Services India Private Limited, Coalition Development Systems (India) Private Limited and Mercator info-Services India Private Limited.

b) Pipal Research Analytics and Information Services India Private Limited, Mercator Info-Services India Private Limited and Coalition Development Systems (India) Private Limited (together transferor) have been amalgamated with the Company with effect from April 1, 2016 (''appointed date'') in terms of the scheme of amalgamation (''the scheme'')

approved vide order dated September 8, 2016, by the Hon''ble Bombay High Court. Pursuant thereto all assets and liabilities of transferor have been transferred to and vested in the Company retrospectively with effect from April 1,2016.

Pursuant to the scheme coming into effect, all the equity shares held by the Company in Pipal Research Analytics and Information Services India Private Limited, Mercator Info-Services India Private Limited and Coalition Development Systems (India) Private Limited stand automatically cancelled.

c) The amalgamation has been accounted for under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. Accordingly the assets, liabilities and reserves of Pipal Research Analytics and Information Services India Private Limited, Mercator Info-Services India Private Limited and Coalition Development Systems (India) Private Limited have been accounted at their carrying values.

The difference between the carrying value of investments in the books of the Company and the amount of the share capital of Pipal Research Analytics and Information Services India Private Limited, Coalition Development Systems (India) Private Limited and Mercator info-Services India Private Limited have been adjusted in Capital Reserve / General Reserve as per the scheme.

* At the end of 3rd, 4th & 5th year in equal tranches

**Weighted average price of options as per Black -Scholes Option Pricing model at the grant date.

The Company had three schemes under which options have been granted in the past. Under ESOS 2011 and ESOS 2012 option vest over three years at each of the anniversaries. All options are exercisable within three years from the date of vesting and are settled in equity on exercise.

Under ESOS 2014 options vest over five years starting from third anniversary of the grant. Options are exercisable within two years from the date of vesting and are settled in equity on exercise.

The Company have used Black-Scholes option pricing model for the purpose estimating fair value of the options granted during the year.

Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the period. The measure of volatility is used in the Black Scholes option-pricing model is the annualized standard deviation of the continuously compounded rates of return on the stock over a period of time. The Company has considered the daily historical volatility of the Company''s stock price on NSE over the expected life of each vest.

Risk free rate: The risk-free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero-coupon yield curve for Government Securities.

Expected life of the options: Expected Life of the options is the period for which the Company expects the options to be live. The minimum life of a stock option is the minimum period before which the options cannot be exercised and the maximum life of the option is the maximum period after which the options cannot be exercised. The Company has calculated expected life as the average of the minimum and maximum life of the options.

Dividend yield: Expected dividend yield has been calculated as an total of Interim and final dividend declared in last year preceding date of Grant.

There are no cash settled plans implemented by the Company and hence there is no further liability booked in the books.

13. The Company has a process of identification of ''suppliers'' registered under the “The Micro, Small and Medium Enterprises Development (''MSMED'') Act, 2006” by obtaining confirmations from suppliers. There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006 to whom any amount was payable on account of principal amount or interest, accordingly no additional disclosures have been made


Dec 31, 2016

1. Terms/ rights attached to equity shares

The company has only one class of equity shares having par value of Re.1/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

I n the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

2. Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option scheme (ESOS) of the Company ( Refer note 37).

3. The tax year of the Company being the year ending March 31, 2017, the tax expense for the year is the aggregate of the provision made for the three months ended March 31, 2017 and the provision for the nine months up to December 31, 2016. The tax provision for nine months has been arrived at using the effective tax rate for the period April 1, 2016 to March 31, 2017.

4. The Company has a process of identification of ''suppliers'' registered under the “The Micro, Small and Medium Enterprises Development (''MSMED'') Act, 2006” by obtaining confirmations from suppliers. There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006 to whom any amount was payable on account of principal amount or interest, accordingly no additional disclosures have been made.

5. Operating Lease

The Company has taken certain office premises on non-cancellable operating lease basis. Some of these agreements have a price escalation clause. Details as regards payments and future commitments are as under :

6. Gratuity and other post-employment benefit plans

In accordance with the Payment of Gratuity Act, 1972 CRISIL provides for gratuity, a defined benefit retirement plan covering eligible employees (completed continuous services of five years or more) of the Company. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment at fifteen days salary of an amount based on the respective employee''s salary and tenure of employment with the Group.

The following tables summarize the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the Balance Sheet for the respective plans.

Statement of Profit and Loss:

Net employee benefit expense (recognized in Personnel expenses)

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Broad category of plan assets as per percentage of total plan assets of the gratuity

7. Profit on sale of current investments are net of reduction in carrying value of current investment.

8.. The Company, in accordance with its risk management policies and procedures, has a hedge programme in place to mitigate foreign exchange (forex) related risk. Accounting for revenue hedge is done as per principles “Guidance Note on Accounting for Derivative Contracts” issued by the Institute of Chartered Accountants of India (ICAI). Recognition and Measurement wherein mark to market on forward contracts entered to hedge highly probable future transactions are routed through hedging reserve account. The counter party is generally a bank. These contracts are for a period between one day and one year.

Foreign currency risk is identified based on forecasted revenue in foreign currency. The management regularly monitors foreign currency risk based on periodic reports giving details on hedged/ unhedged positions, mark-to-market open contracts and available cash position. The use of derivative for hedging purpose is governed by Risk management policy of the Company. Hedge limits are governed by Risk Management Policy and are reviewed periodically.

Derivatives contracts are entered to hedge the foreign currency risk of firm commitment or highly probable forecast transactions. Derivative financial instruments, which qualify for cash flow hedge accounting, are fair valued at the balance sheet date and the resultant gain / loss is credited / debited to the Hedging Reserve Account included in the Reserves and Surplus. This gain / loss would be recorded in the Statement of Profit and Loss when the underlying transactions affect earnings. Any profit or loss arising on the cancellation or renewal of derivative contracts is recognized as income or as expense for the year. Derivative contracts are structured in a way that they bear an opposite an offsetting impact with respect to foreign currency movement of underlying transactions. Derivative contracts are fair valued based on mark to market position sent by respective counterparty banks with whom such contracts are entered into.

9. In accordance with provisions of the Companies Act, 2013 and pursuant to the public announcement for buy back made by the Company, during the previous year, the Company bought back and extinguished shares as under:

10. Employee Stock Option Scheme (“ESOS”)

The Company has formulated an ESOS based on which employees are granted options to acquire the equity shares of the Company that vests in a graded manner. The options are granted at the closing market price prevailing on the stock exchange, immediately prior to the date of grant. Details of the ESOS granted are as under :

The company had three schemes under which options have been granted in the past.

Under ESOS 2011 and ESOS 2012 option vest over three years at each of the anniversaries. All options are exercisable within three years from the date of vesting and are settled in equity on exercise.

Under ESOS 2014 options vest over five years starting from third anniversary of the grant. Options are exercisable within two years from the date of vesting and are settled in equity on exercise.

Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the period. The measure of volatility is used in the Black Scholes option-pricing model is the annualized standard deviation of the continuously compounded rates of return on the stock over a period of time. We have considered the daily historical volatility of the Company''s stock price on NSE over the expected life of each vest.

Risk free rate: The risk-free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero-coupon yield curve for Government Securities.

Expected life of the options: Expected Life of the options is the period for which the Company expects the options to be live. The minimum life of a stock option is the minimum period before which the options cannot be exercised and the maximum life of the option is the maximum period after which the options cannot be exercised. We have calculated expected life as the average of the minimum and maximum life of the options.

Dividend yield: Expected dividend yield has been calculated as an total of Interim and final dividend declared in last year preceding date of Grant.

There were no modification made to the share based payment arrangement during the period.

The Company uses intrinsic value method to record compensation cost arising on account of grant made under ESOS . The Company has not recorded any compensation cost as the grant has been given at 100% of the closing market price immediately prior to the date of grant on the stock exchange which recorded highest trading volume.

Had the Company recorded the compensation cost on the basis of Fair Valuation method instead of intrinsic value method, employee compensation cost would have been higher by Rs. 239,837,183 (P.Y. Rs. 360,854,250) and EPS would have been as under:

There are no cash settled plans implemented by the company and hence there is no further liability booked in the books. The estimates of future cash inflow that may be received upon exercise of options.

11. Amalgamation

12. Nature of business

Pipal Research Analytics and Information Services India Private Limited (Pipal) is engaged in providing low risk IT Enabled Services in the area of corporate research. Coalition Development Systems (India) Private Limited (Coalition India) and Mercator info-Services India Private Limited (Mercator) is engaged in the business of providing Researched Data Processing Services. The Company held 100% voting power of Pipal Research Analytics and Information Services India Private Limited, Coalition Development Systems (India) Private Limited and Mercator info-Services India Private Limited.

13. Pipal Research Analytics and Information Services India Private Limited, Mercator Info-Services India Private Limited and Coalition Development Systems (India) Private Limited (together transferor) have been amalgamated with the Company with effect from April 1, 2016 (''appointed date'') in terms of the scheme of amalgamation (''the scheme'') approved vide order dated September 8, 2016, by the Hon''ble Bombay High Court. Pursuant thereto all assets and liabilities of transferor have been transferred to and vested in the Company retrospectively with effect from April 1,2016.

Pursuant to the scheme coming into effect, all the equity shares held by the Company in Pipal Research Analytics and Information Services India Private Limited, Mercator Info-Services India Private Limited and Coalition Development Systems (India) Private Limited stand automatically cancelled.

14. The amalgamation has been accounted for under the ''pooling of interest'' method as prescribed under Accounting Standard - 14 (AS-14) notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. Accordingly the assets, liabilities and reserves of Pipal Research Analytics and Information Services India Private Limited, Mercator Info-Services India Private Limited and Coalition Development Systems (India) Private Limited have been accounted at their carrying values.

The difference between the carrying value of investments in the books of the Company and the amount of the share capital of Pipal Research Analytics and Information Services India Private Limited, Coalition Development Systems (India) Private Limited and Mercator info-Services India Private Limited have been adjusted in Capital Reserve / General Reserve.

Accordingly the amalgamation has resulted in transfer of assets, liabilities and reserves in accordance with the terms of the scheme at the following summarized values :

15. Corporate Social Responsibility (CSR) expenses for the year ending 2016 includes Rs. 60,410,823 (P.Y. Rs. 41,402,075) includes spend on various CSR schemes as prescribed under Section 135 of the Companies Act, 2013. The CSR amount based on limits prescribed under the Companies Act, 2013 for the year was Rs. 61,860,000 (P.Y. Rs. 58,258,000). Key CSR activities were “education and women empowerment - financial capability building” and “conservation of environment”.

16. Personnel expenses to the extent of Rs.4,728,115 (P.Y. Rs. Nil) is considered for capitalization as Intangible assets.

17. CRISIL Standalone financial figures for the year ended December 31, 2015 do not include the figures of erstwhile Pipal Research Analytics and Information Services India Private Limited, Coalition Development Systems (India) Private Limited and Mercator Info-Services India Private Limited which is amalgamated with the Company with effect from April 1, 2016. Consequently, the figures for the year ended December 31, 2016 are not comparable with previous period ended December 31, 2015.

18. Previous Year Comparatives

Previous year''s figures have been regrouped where necessary to conform to current year''s classification.


Dec 31, 2015

(a) Terms/ rights attached to equity shares

The company has only one class of equity shares having par value of Re.1/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

(b) Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option scheme (ESOS) plan of the Company (Refer note 37).

1. The tax year of the Company being the year ending March 31, 2016, the tax expense for the year is the aggregate of the provision made for the three months ended March 31, 2015 and the provision for the nine months up to December 31, 2015. The tax provision for nine months has been arrived at using the effective tax rate for the period April 1, 2015 to March 31, 2016.

2. The Company has a process of identification of 'suppliers' registered under the "The Micro, Small and Medium Enterprises Development ('MSMED') Act, 2006" by obtaining confirmations from suppliers. There are no Micro, Small and Medium Enterprises, as defend in the Micro, Small, Medium Enterprises Development Act, 2006 to whom any amount was payable on account of principal amount or interest, accordingly no additional disclosures have been made.

3. SEGMENT REPORTING

Business Segments:

The Company has two major business segment : Ratings and Research. A description of the types of products and services provided by each reportable segment is as follows:

Rating services includes credit ratings for corporate, banks, bank loans, small and medium enterprises (SME), credit analysis services, grading services and global analytical services

Research segments includes global research and analytical services, industry reports, customized research assignments, subscription to data services, independent equity research (IER), IPO grading and training.

Notes to Segmental Results :

*Assets and liabilities used interchangeably between business segments has been classified as unallowable. The Company believes that it is currently not practicable to allocate all assets and liabilities since a meaningful segregation of the available data is not feasible.

The Company recovered certain common expenses from subsidiaries based on management estimates and disclosed as Recoveries in Notes to the Statement of Profit and Loss.

4. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

In accordance with the Payment of Gratuity Act, 1972 CRISIL provides for gratuity, a defend benefit retirement plan covering eligible employees of the Company. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and tenure of employment with the Group.

The following tables summaries the components of net benefit expense recognized in the Statement of Proof and Loss and the funded status and amounts recognized in the Balance Sheet for the respective plans.

5. The Company has a hedge programmed in place to mitigate foreign exchange (force) related risk. Accounting for revenue hedge is done as per principles of AS 30 "Financial Instruments : Recognition and Measurement wherein mark to market on forward contracts entered to hedge highly probable future transactions are routed through hedge reserve account. Details of currency hedge and forward contract value are as under :

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Broad category of plan assets as per percentage of total plan assets of the gratuity

* At the end of 3rd, 4th & 5th year in equal tranches

**Weighted average price of options as per Black -Schools Option Pricing model at the grant date.

The company had three schemes under which options have been granted in the past. Under ESOP 2011 and ESOP 2012 option vest over three years at each of the anniversaries. under ESOP 2014 options vest over fve years starting from third anniversary of the grant. All options are exercisable within two years from the date of vesting and are settled in equity on exercise.

We have used Black-Scholes option pricing model for the purpose estimating fair value of the options granted during the year.

Volatility: volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the period. The measure of volatility is used in the Black Scholes option-pricing model is the annualized standard deviation of the continuously compounded rates of return on the stock over a period of time. We have considered the daily historical volatility of the Company's stock price on NSE over the expected life of each vest.

Risk free rate: The risk-free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero-coupon yield curve for Government Securities.

Expected life of the options: Expected Life of the options is the period for which the Company expects the options to be live. The minimum life of a stock option is the minimum period before which the options cannot be exercised and the maximum life of the option is the maximum period after which the options cannot be exercised. We have calculated expected life as the average of the minimum and maximum life of the options.

Dividend yield: Expected dividend yield has been calculated as an average of dividend yields for the Financial years 2014, 2013 and 2012. The dividend yield for the year is derived by dividing the dividend per share by the average price per share of the respective period.

There were no modification made to the share based payment arrangement during the period.

The Company uses intrinsic value method to record compensation cost arising on account of grant made under ESOS. The Company has not recorded any compensation cost as the grant has been given at 100% of the closing market price immediately prior to the date of grant on the stock exchange which recorded highest trading volume.

6. The Board of Directors, at their meeting held on October 17, 2015 , have approved the Scheme of Amalgamation for amalgamating three wholly-owned Indian subsidiaries of the Company – Pipal Research Analytics and Information Services India Private Limited, Mercator Info-Services India Private Limited and Coalition Development Systems (India) Private Limited with the Company, pursuant to section 391-394 of the Companies Act 1956 and the corresponding sections of the Companies Act 2013, subject to the necessary approvals and sanction by the Hon'ble Bombay High Court. The Appointed Date of the said amalgamation is proposed to be 1st April 2016 .

7. Other expenses for the year ending 2015 include Rs. 41,402,075 (P.Y. Rs. 2,930,265) spent towards various schemes of Corporate Social Responsibility (CSR) as prescribed under Section 135 of the Companies Act, 2013. The areas for CSR activities are "empowerment of rural women" and "conservation of environment". During the year funds were allocated and utilized for these activities.

8. PREVIOUS YEAR COMPARATIVES

Previous year's figures have been regrouped where necessary to conform to current year's classification.


Dec 31, 2014

1. Nature of operations

CRISIL Limited (''the Company'') is a global analytical company providing ratings and research services. CRISIL is India''s leading ratings agency and also the foremost provider of high-end research to the world''s largest banks and leading corporations. CRISIL delivers analysis, opinions, and solutions that make markets function better.

1.1 Basis of preparation of Financial Statement

The financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) under the historical cost convention on an accrual basis in compliance with all material aspect of the Accounting Standards notified under the Companies Act, 1956 read with General Circular 8/2014 dated 4 April 2014, issued by the Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

Rupees

Year ended Year ended Particulars December 31, 2014 December 31, 2013

2. Details of contingent liabilities are as under :

1. Bank Guarantee in the normal course of business 132,585,300 8,264,685

2. Disputed Income, Service & Sales Tax Demand:

(i) Pending before Appellate authorities in respect of which the Company is in appeal 83,570,108 69,882,397

(ii) Decided in Company''s favour by Appellate Authorities and Department is in 35,179,640 23,506,360 further appeal

3. Estimated amount of contracts (net of advances) remaining to be executed on 10,497,267 21,119,281 capital account and not provided for

Management believes that the ultimate outcome of above matters will not have a material adverse impact on its financial position, results of operations and cash flows.

Total 261,832,315 122,772,723

4. The tax year of the Company being the year ending March 31,2015, the provision for tax for the year is the aggregate of the provision made for the three months ended March 31,2014 and the provision for the nine months upto December 31,2014. The tax provision for nine months has been arrived at using the effective tax rate for the period April 1,2014 to March 31,2015.

5. The Company has a process of identification of ''suppliers'' registered under the "The Micro, Small and Medium Enterprises Development (''MSMED'') Act, 2006" by obtaining confirmations from suppliers. There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006 to whom any amount was payable on account of principal amount or interest, accordingly no additional disclosures have been made.

6. Payment and earnings in foreign currency

a) Value of imports calculated on C.I.F basis for capital goods is Rs. Nil (P.Y. Nil)

7. Segment reporting

Business segments :

The Company has two major business segment: Ratings and Research. A description of the types of products and services provided by each reportable segment is as follows:

- Rating services includes credit ratings for corporates, banks, bank loans, small and medium enterprises (SME), credit analysis services, grading services and global analytical services

- Research segments includes global research and analytical services, industry reports, customised research assignments, subscription to data services, independent equity research (IER), IPO gradings and training.

8. Gratuity and other post-employment benefit plans

In accordance with the Payment of Gratuity Act, 1972 CRISIL provides for gratuity, a defined benefit retirement plan covering eligible employees of the Company. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and tenure of employment with the Group.

The following tables summarise the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the respective plans.

9. Previous year comparatives

Previous year''s figures have been regrouped where necessary to conform to current year''s classification.


Dec 31, 2012

1. Nature of operations

CRISIL Limited (''the Company'') is a global analytical Company providing ratings and research services. CRISIL is India''s leading ratings agency and also the foremost provider of high-end research to the world''s largest banks and leading corporations. With sustainable competitive advantage arising from our strong brand, unmatched credibility, market leadership across businesses, and large customer base, CRISIL delivers analysis, opinions, and solutions that make markets function better.

1.1 Basis of preparation of financial statement

The financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) under the historical cost convention on an accrual basis in compliance with all material aspect of the Accounting Standards (AS) Notified by Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year except for the change in Accounting Policy explained in Point No 2.1.

(a) Terms/ rights attached to equity shares

The company has only one class of equity shares having par value of Re.1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

2. The tax year of the Company being the year ending March 31, 2013, the provision for tax for the year is the aggre- gate of the provision made for the three months ended March 31, 2012 and the provision for the nine months upto December 31, 2012. The tax provision for nine months has been arrived at using the effective tax rate for the period April 1, 2012 to March 31, 2013.

3. The Company has the process of identification of suppliers'' registered under the "The Micro, Small and Medium Enterprises Development (''MSMED'') Act, 2006" by obtaining confirmations from suppliers. There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006 to whom the company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

4. Segment reporting Business segments:

The Company has two major business segment: Ratings and Research. A description of the types of products and services provided by each reportable segment is as follows:

Rating services includes credit ratings for corporates, banks, small and medium enterprises (SME), training in the credit rating field, credit analysis services, grading services and global analytical services

Research segments includes high end equity research, industry reports, customised research assignments , subscription to data services and IPO gradings

Notes to segmental results:

*Assets and liabilities used interchangeably between segments have been classified as unallocable. The Company believes that it is currently not practical to allocate these assets and liabilities since a meaningful segregation of the available data is not feasible.

The Company recovered certain common expenses from subsidiaries based on management estimates and disclosed as recoveries in Notes to the Statement of Profit and Loss.

5. Gratuity and other post-employment benefit plans

In accordance with the Payment of Gratuity Act, 1972 CRISIL provides for gratuity, a defined benefit retirement plan covering eligible employees of the Company. The Gratuity plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and tenure of employment with the Group.

The following tables summarise the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the respective plans.

6. In accordance with Sec 77A, 77AA and 77B of the Companies Act, 1956 and pursuant to the public announcement for buy back made by the Company, the Company initiated a buy back from the open market through stock exchang- es. Details of the buy back are as under:

In the previous year, the buy back of shares was completed on December 30, 2011 but the actual extinguishment in the records of depositories happened on January,4, 2012. The Company had given the impact of the buy back of shares in the previous year''s financial statement. Out of the above Rs.6,795,885 was paid out in the current year.

7. Employee stock option scheme ("ESOS")

The Company has formulated an ESOS based on which employees are granted options to acquire the equity shares of the Company that vests in a graded manner. The options are granted at the closing market price prevailing on the stock exchange, immediately prior to the date of grant. Details of the ESOS scheme are as under:

The Company uses intrinsic value method to record compensation cost arising on account of grant made under ESOS . The Company has not recorded any compensation cost as the grant has been given at the market price.

Had the company recorded the compensation cost on the basis of Fair Valuation method instead of intrinsic value method, employee compensation cost would have been higher by Rs.66,032,202 and EPS would have been as under:

8. In all cash transaction, CRISIL Limited and its subsidiary acquired 100% stake in Coalition Development Limited along with its subsidiaries on 4th July, 2012.

9. In the current year, there was a one time impact of Rs. 7.30 crore in rating revenue pertaining to previous year on ac- count of certain price renegotiations with retrospective effect.

10. The Company has revised its estimate of recording upfront initial rating fees from 94% to 96% . However, the impact of the revision in estimate is not material .

11. Previous year comparatives

Previous year''s figures have been regrouped where necessary to conform to current year''s classification.


Dec 31, 2009

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