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Notes to Accounts of CARE Ratings Ltd.

Mar 31, 2017

b. Terms / rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10/- 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 approval of the shareholders at the ensuing Annual General Meeting

During the year ended March 31, 2017, interim dividends of Rs.18/- per share (Previous Year: Rs. 18/- per share) was distributed to equity shareholders and the Board of Directors has recommended a final dividend of Rs. 10/- per share ((Previous Year: Rs. 10/- per share).

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.

c. Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date

e. The Company does not have a holding Company.

f. Shares reserved for issue under options and contracts, including the terms and amounts:

For details of Shares reserved for issue under the Employee Stock Option Plan (ESOP) of the Company refer Note: 28

*The Central Government has amended the Companies (Accounting Standards) Rules. 2006, through a notification issued by the Ministry of Corporate Affairs dated March 30, 2016. On account of the amendments in Para 8.5 of AS-4 - Contingencies and Events occuring after Balance Sheet date, from April 01, 2016, the Company recognizes a liability to make cash or noncash distributions to equity holders of the Company when the distribution is authorized and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorized when it is approved by the shareholders.

*The Central Government has amended the Companies (Accounting Standards) Rules. 2006, through a notification issued by the Ministry of Corporate Affairs dated March 30, 2016. On account of the amendments in Para 8.5 of AS-4 - Contingencies and Events occuring after Balance Sheet date, from April 01, 2016, the Company recognizes a liability to make cash or non-cash distributions to equity holders of the Company when the distribution is authorized and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorized when it is approved by the shareholders.

1. Segment Reporting

The Company primarily operates in single business and geographical segment, hence, no additional disclosures required to be given as per AS 17 - Segmental Reporting other than those already given in the financial statements.

2. Disclosure as per Accounting Standard 15 (revised 2005)

a) Contribution to provident funds

Defined contribution plan

Contribution to defined contribution plan, recognized as expense as at March 31, 2017 are as under:

Employer''s contribution to provident fund Rs. 2,05,65,397 (PY: Rs. 2,14,01,368)

b) Superannuation

Superannuation benefit is contributed by the Company to Life Insurance Corporation of India (LIC) @ 10% of basic salary with respect to certain employees. Contribution to Superannuation Fund contribution is charged to Statement of Profit & Loss.

c) Gratuity

The Company accounts for the liability of future gratuity benefits based on actuarial valuation. The company has created a trust for future payment of gratuities which is funded through gratuity-cum-life insurance scheme of LIC of India (Defined Benefit Plan).

(d) Compensated Absences

Long term compensated absences are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method. Short term compensated absences are provided for based on estimates.

3. Operating Lease

The Company has taken various office premises under operating lease or leave and license agreements. These are generally non-cancelable and ranges between 11 months and 5 years under leave and license, or longer for the lease and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

The lease payments are recognized in the Statement of Profit and Loss under rent in Note 18 - Other Expenses.

4. Other Significant Notes

(i) Foreseeable Losses

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long term contracts has been made in the books of account.

(ii) Note on pending litigations

The Company''s pending litigations comprise of claims by or against the Company primarily by the suppliers and proceedings pending with tax and other government authorities. The Company has reviewed its pending litigations and proceedings and has adequately provided for where Provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made adequate provision in the financial statements and appropriate disclosure for contingent liabilities is given in Note 19.

(iii) The previous year''s figures have been reclassified / regrouped to confirm to this year''s classification.


Mar 31, 2016

1. Segment Reporting

The Company primarily operates in single business and geographical segment, hence, no additional disclosures required to be given as per AS 17 - Segmental Reporting other than those already given in the financial statements.

2. Disclosure as per Accounting Standard 15 (revised 2005)

a) Contribution to provident funds

Defined contribution plan

Contribution to defined contribution plan, recognized as expense as at March 31, 2016 are as under:

Employer''s contribution to provident fund Rs. 21,401,368 (PY: Rs. 20,816,319)

b) Superannuation

Superannuation benefit is contributed by the Company to Life Insurance Corporation of India (LIC) @ 10% of basic salary with respect to certain employees. Contribution to Superannuation Fund contribution is charged to Statement of Profit & Loss.

C) Gratuity

The Company accounts for the liability of future gratuity benefits based on actuarial valuation. The company has created a trust for future payment of gratuities which is funded through gratuity-cum-life insurance scheme of LIC of India (Defined Benefit Plan).

(d) Compensated Absences

Long term compensated absences are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method. Short term compensated absences are provided for based on estimates.

3. Operating Lease

The Company has taken various office premises under operating lease or leave and license agreements. These are generally non-cancelable and ranges between 11 months and 5 years under leave and license, or longer for the lease and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

The lease payments are recognized in the Statement of Profit and Loss under rent in Note 20 - Other Expenses.

The ESOP compensation cost is amortized on a straight line basis over the total vesting period of the options. Accordingly Rs. 38,410,096 (Previous year Rs. 52,931,954) has been charged to the current year Statement of Profit and Loss.

The weighted average remaining contractual life for the stock options outstanding as at March 31, 2016 is 1.76 years (Previous Year: 2.76 year)

The Company has granted 5,00,000 options on January 01, 2014, to the eligible employees as the Company''s Employees Stock Option Scheme (ESOS) 2013. During the quarter, eligible employees have exercised 4,01,974 options and accordingly the Company has allotted 4,01,974 equity shares of Rs. 10 each at a premium of Rs. 607/- per share.

4. Other Significant Notes

(i) Foreseeable Losses

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long term contracts has been made in the books of account.

(ii) Note on pending litigations

The Company''s pending litigations comprise of claims by or against the Company primarily by the suppliers and proceedings pending with tax and other government authorities. The Company has reviewed its pending litigations and proceedings and has adequately provided for where Provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made adequate provision in the financial statements and appropriate disclosure for contingent liabilities is given in Note 21.

(iii) The previous year''s figures have been reclassified / regrouped to confirm to this year''s classification.


Mar 31, 2014

1 Contingent Liability & Capital Commitment Amount Rs.

Particulars As at As at March 31,2014 March 31,2013

Contingent Liability on account of Income Tax 10,445,022 22,942,143

Bank Guarantees Issued 910,000

2. Segment Reporting

The Company primarily operates in single business and geographical segment, hence, no additional disclosures required to be given as per A5 17 - Segmental Reporting other than those already given in the financial statements.

3 Operating Lease

The Company has taken various office premises under operating lease or leave and license agreements. These are generally non-cancelable and range* between 11 months and 5 years under leaue and license, or longer for the lease and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

The lease payment are recognized in the statement of profit and loss under rent in Note 19 - other Expenses.

4 The Company has completed its Initial Public Offer (IPO) through an Offer for Sale of 7,199,700 equity shares at a price of Rs. 750 per share (including a share premium of Rs. 740 per equity Share) on December 26, 2012- Since this was an offer for sale, ail the share issue expenses relating to IPO are recovered / recoverable from selling shareholders.

5 During the year the company, alloted 446,310 equity shares of Rs. 10 each to Ascent India Fund III at a price of Bs. 560.15 per share (including Rs. 550.15 towards share premium) aggregating to Rs. 25,00,00,547/-, to comply with Reserve Bank Of India''s norms on minimum capitalization applicable to non-fund based non-banking finance companies in connection with the IPO of the Company undertaken In December 2012. These funds have been utilised for business operations.

The ESOP compensation cost is amortized on a straight line basis over the total vesting period of the options. Accordingly Rs. 14,286,874 has been charged to the current year Statement of Profit and Loss. The weighted average remaining contractual life for the stock options outstanding as at 31st March 2014 is 3.76 vea rs (P nevious year: Nilyear)

6 The previous year''s figures have been reclassified / regrouped to confirm to the current year''s classification.


Mar 31, 2013

1 Segment Reporting

The Company primarily operates in single business and geographical segment, hence, no additional disclosures required to be given as per AS 17 - Segmental Reporting other than those already given in the financial statements.

2 Micro, Small and Medium Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises.

On the basis of information and records available with the management, there are no outstanding dues to the Micro, Small and Medium Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) as set out below:

3 Operating Lease

The Company has taken various office premises under operating lease or leave and license agreements. These are generally non-cancelable and ranges between II months and 5 years under leave and license, or longer for the lease and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

The lease payment are recognized in the statement of profit and loss under rent in Note 20 - Other Expenses.

4 During the year, the Company has completed its Initial Public Offer (IPO) through an Offer for Sale of 7,199,700 equity shares at a price of Rs. 750 per share (including a share premium of Rs. 740 per equity share). Since this was an offer for sale, all the share issue expenses relating to IPO are recovered / recoverable from selling shareholders.

5 The previous year''s figures have been reclassified / regrouped to confirm to the current year''s classification.


Mar 31, 2012

A Terms / rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10 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 approval of the shareholders at the ensuing Annual General Meeting.

During the year ended March 31, 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs.10 (March 31, 2011: Rs. 6.50)

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.

b Shares reserved for issue under options / commitments

The Board of Directors and shareholders of the Company through their resolutions dated February I8, 20I2 and April I8, 20I2, respectively, approved the Stock Option Scheme of Credit Analysis and Research Limited, 20I2 to issue stock options only to erstwhile Managing Director in accordance with the Grant Proposal. Accordingly, a grant letter dated April 20, 20I2 was issued to him.

In terms of the Grant Letter, I,94,622 stock options equivalent to I,94,622 Equity Shares (including adjustments for prior issue of bonus shares made by the Company in the year 20I0 and 20II) were granted to him on April 20, 20I2. In terms of the Scheme and the Grant Letter, he was required to exercise the stock options within the exercise period specified therein.

In accordance with the terms of the Scheme and the Grant Letter, the exercise period expired on May 5, 20I2, he did not exercise the stock options that were granted under the Grant Letter. Therefore, stock options granted to him lapsed in accordance with the terms of Scheme and the Grant Letter and there are no outstanding options as on date.

1 Contingent Liability

Capital commitments not provided for - Rs. Nil (Previous Year - Rs. I,245,808)

Claims against the Company not acknowledged as debts - Rs. 26,579,038/- (Previous Year - Rs.12,578,380).

Nature of dues Period Amount Rs.

TDS Demands 2006-07, 2007-08, 2009-10, 2011-12 21,533,286

Tax Assessments 2007-08, 2009-10 5,045,752

Total 26,579,038

2 Micro, Small and Medium Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises.

On the basis of information and records available with the management, there are no outstanding dues to the Micro, Small and Medium Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) as set out below:

3 Operating Lease

The Company has taken various office premises under operating lease or leave and license agreements. These are generally non-cancelable and ranges between II months and 5 years under leave and license, or longer for the lease and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

The lease payment are recognized in the profit and loss account under rent in Note 20

4 The financial statements for the year ended March 3I, 20II were prepared as per the then applicable pre-revised schedule VI to the Act. Consequent to the notification of Revised Schedule VI under the Companies Act, I956, the financial statements for the year ended March 3I, 20I2 are prepared as per Revised Schedule VI. Accordingly, the previous year''s figures have also been reclassified to confirm to this year''s classification. Also, certain disclosures under the pre-revised Schedule VI which are not required as per the revised Schedule VI have not been made. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

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