Your Directors are pleased to present the Thirtieth (30th) Annual Report of your Company along with the Audited Financial Statements for the year ended March 31, 2023.

FY23 was the year of chartering new paths of success and implementing lessons learnt during the past few years. Though the growing geopolitical uncertainties and surging inflation posed challenges, your Company did well to navigate through those and emerged stronger than ever. The rebranding exercise in FY22 has given us a renewed sense of purpose and direction and we are focused on leveraging our strengths to achieve our goals. We are also exploring new avenues for growth and expansion while staying true to our core values of integrity, innovation and excellence. Our Company is committed to further cementing its position as one of the leading credit rating agencies and knowledge hubs in the country.

The year started against a backdrop of heightened geopolitical uncertainties, supply chain disruptions, rising commodity prices, high consumer price inflation and tightening of financial conditions globally. Even amid these challenges, economic activities in India picked up aided by post-pandemic pent-up demand, though the recovery was uneven. Urban demand witnessed a healthy rebound whereas, rural demand struggled to pick up with high inflation levels adversely impacting purchasing power. The manufacturing sector was impacted due to high input prices and their limited ability to pass through the costs to the final consumer. The Services sector emerged as a bright spot, helping the economy to clock a GDP growth of about 7.2% in FY23. The low base also helped to prop up growth numbers in Q1 and Q2.

Inflation was the major concerning factor throughout the year. The CPI inflation in FY23 averaged at 6.7%, core inflation also remained sticky above the 6% level. The inflation at the wholesale level remained in double-digits in the first half before witnessing a significant easing in H2 FY23 aided by the easing of global commodity prices. However, the same trend was not seen at the retail level due to high food and services inflation.

To tame inflationary expectations and bring it closer to the target level, RBI raised the policy repo rate by 250 bps in consecutive six MPC meetings. The Central Bank also absorbed the surplus liquidity from the banking system. In line with these tightening measures, the yield on benchmark 10-year government security rose by 50 bps during FY23. In tandem with the pick-up in economic activity and support from the low base, credit offtake from banks improved with outstanding bank credit witnessing a growth of 15% (y-o-y) in FY23, up from 9.6% in the previous year. Retail loans were one of the major contributors to the overall bank credit growth and saw a growth of 20.6% (y-o-y) in FY23 due to growth in housing, vehicle and other personal loans.

The credit to industries grew 5.7% (y-o-y) in FY23, as against 7.5% a year ago. Credit to large enterprises, which accounted for nearly 75% of total industrial disbursement, grew at a subdued pace of 3% (y-o-y) as against 2% in the previous year. Services sector credit growth accelerated to 19.8% in FY23 compared with 8.7% a year ago, owing to robust credit offtake in trade and the NBFC sector.

The corporate bond issuances (private placement) touched a record high in FY23 after a lacklustre FY22.

It rose to Rs 8.5 lakh crore clocking a growth of nearly 33.5% (y-o-y). The higher bond issuances during the year were driven by financial institutions to meet the growing credit demand amid tight liquidity conditions.

Commercial paper issuances in FY23 dropped sharply to Rs 13.7 lakh crore from Rs 20.2 lakh crore in FY22.

The slowdown was primarily because of the sharp rise in short-term rates amid liquidity tightening.

To summarise, the year ended with modest improvement in economic output, amid persistent inflationary concerns. The impact of protracted geopolitical tensions and slowing global demand were felt in India's exports, manufacturing output and corporate's financials. Despite a significant easing in global commodity prices in the second half of the fiscal, the manufacturing sector remained in a tight spot. The Central Bank has been prudent in its war against inflation but the impact of the cumulative 250 bps repo hike on inflation will be visible more clearly in the FY24 numbers.

In the midst of prevailing global uncertainties, India has emerged as a bright spot. The economy is relatively well placed among its peers due to the resilient domestic economic activity and healthy financial markets.

While we expect growth to moderate as a consequence of slowing external demand, it is likely to remain around 6% in FY24. Some moderation in urban demand could be seen as the post-pandemic spurt in consumption cools. However, an expected healthy rebound in rural demand will keep the momentum going. Robust Rabi production this year could brighten the prospect of the agriculture sector and rural demand. However, we remain cautious about the risk of any weather-related disruptions in the agriculture sector.

A strong capex growth budgeted by the Centre for FY24 will be supportive of investment demand and growth. The private sector has been slow with the investments so far. However, with rising capacity utilization levels and the private sector showing growing intent to invest, we could see a pick-up in the private capex cycle this year. The RBI's decision to pause rate hike in the April'23 meeting after a year of continuous rate hikes also bodes well for private investment. With overall economic growth moderating, we expect the bank credit growth to moderate to around 12% in FY24

(from 15% growth in FY23).

With global growth slowing, merchandise exports will remain weak in FY24. However, strong growth in services export should help cushion the impact of falling merchandise exports. Moreover, imports have also been falling, resulting in the narrowing of the trade deficit. We expect CAD to GDP ratio to moderate to 1.6% in FY24 from an estimated 2.1% in FY23. Comfortable forex reserves and moderation in CAD will reduce India's external sector vulnerability. Likely tapering of rate hikes globally and expectation of pause in major economies such as the US will also be supportive of the Indian rupee.

The CPI inflation has likely peaked in India and is expected to moderate in the coming months supported by a high base of last year, lagged impact of past rate hikes, lower WPI inflation prints and a healthy Rabi harvest. We expect the CPI inflation to average 5.1% in FY24, lower than the average of 6.7% in FY23. However, the progress of monsoon and oil price dynamics will be the key watch-outs.

Overall, the risks are balanced for the Indian economy.

We need to be cautious of the global headwinds going forward. Our outlook for the economy hinges on the strength in domestic demand, stable commodity prices and favourable weather conditions. Any unwelcome surprises on these fronts could pose downside risks and will warrant a targeted policy intervention.

Keeping the above in mind and to make the organization increasingly future-ready, your Company's management is focused on the following measures:

1. Continuous strengthening of the rating operations;

2. Focused, transparent and effective communication with stakeholders;

3. Increased use of technology in core as well as other functions;

4. Talent attraction and retention with well thought

HR interventions;

5. Training in technical and soft skills and

6. Developing future leadership by empowering them in new positions.

With the above clarity, the management has kept its eyes firmly on bringing the Company back on the growth path. The results are expected to be seen going forward, with the beginning already made successfully in FY23.

Your Company's Financial Performance for the year ended March 31, 2023, is summarized below:

(Rs in crore)

The total income for the financial year of FY23 was Rs 285.94 crore, a 15% increase from FY22, while the other income stood at Rs 37.10 crore, a 31% increase from the previous year. Revenue from operations increased to Rs 248.84 crore in FY23. The ratings income rose by 13% in FY23.

Your Company's total expenditure in the financial year was Rs 147.80 crore, 5% higher than the previous year, due to the impairment of non-current assets by Rs 5.72 crore and an increase in travelling and conveyance cost of Rs 2.03 crore. Salary expenses at Rs 104.03 crore in FY23 were 3% less than the previous year. At Rs 103.80 crore, FY23 net profit increased as compared to the previous year aided by an increase in total income.

During the year, your Company paid an interim dividend of Rs 10/- per equity share amounting to a pay-out of Rs 29.68 crore. The Board has recommended a final dividend of Rs 7/-per equity share and a special dividend of Rs 8/- per equity share amounting to a pay-out of Rs 44.55 crore for FY2022-23, for approval of Members at the ensuing

Annual General Meeting.

The dividend recommended is in accordance with the Company's Dividend Distribution Policy and would be paid in compliance with the applicable rules and regulations. The Dividend Distribution

Policy is available on the website of the Company at https://www.careratings.com/Uploads/newsfiles/ FinancialReports/1679558992_21032023065712_ Dividend_Distribution_Policy.pdf

The Board of Directors at their meeting held on July 20, 2022, approved a proposal for buy-back of up to 23,68,000 fully paid-up equity shares of the face value of Rs 10/- each (representing 7.99% of the total issued, subscribed and paid-up equity share capital of the Company as on March 31, 2022).

This was to be done by way of a tender offer at a price of Rs 515/- per equity share, payable in cash for an aggregate amount not exceeding

Rs 1,21,95,20,000/- ("Buy-back") which was 19.30% and 19.39% of the aggregate of the fully paid-up equity share capital and free reserves (including securities premium) as per the latest audited standalone and consolidated financial statements of the Company for the financial year ended March 31, 2022, respectively, in accordance with the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018, as amended and the Companies Act, 2013 and the rules made thereunder. The Buy-back was approved by the Members of the Company by means of a special resolution through a postal ballot on September 2, 2022. Consequent to the approval of the Buy-back by the Members of the Company, a Letter of Offer was sent to eligible Members holding shares as on

Record Date i.e. September 14, 2022. The Company bought back 4,199 Equity Shares out of the shares that were tendered by the eligible shareholders and extinguished the Equity Shares on December 19, 2022.

On account of having Employee Stock Options Plans ("ESOPs") lapsed of the employee who had resigned, Rs 0.34 crore has been transferred to the General Reserve of the Company during the said period. The Company has created a Capital Redemption Reserve amounting to Rs 0.42 lakh pursuant to the extinguishment of shares as a result of the Buy-back of Equity Shares done during the year.

Pursuant to the resignation of Mr. Ajay Mahajan as the Managing Director & CEO ("MD & CEO"), Mr. Mehul Pandya, Executive Director Business Development, was appointed as the Interim CEO with effect from June 01, 2022.

Further, with effect from July 29, 2022, Mr. Mehul

Pandya was appointed as an Additional Director designated as MD & CEO of the Company for a term of five years and his appointment was approved by the shareholders of the Company at the Annual General Meeting of the Company held on September 26, 2022.

A new CEO was appointed for our subsidiary CARE Advisory Research and Training Limited.

At the senior management level, your Company has over the years hired professionals from the industry with a long and established track record in their respective fields. With these new appointments, the management team is all set to usher the Group into a new era of high growth.

The agenda that has been carried out by the management in the year can be clubbed under four headings: 1) Business Operations; 2) Group Approach; 3) Outreach and 4) Human Resources.

Completing 30 years of service to the Indian financial markets in 2023, CareEdge has made a notable contribution to increasing transparency and providing credit assessments to help lenders/investors make better decisions. In this journey, your Company has completed over 91,059 rating assignments of large, medium and small companies including banks and financial services companies/ institutions covering a total debt size of Rs 180 lakh crores.

Your Company is the leading domestic credit rating agency in India with expertise in rating different instruments/ facilities across varied sectors. Your

Company continues to maintain its leadership position in rating the Financial and Infrastructure sector. As on March 31, 2023, we have active ratings on approximately 4,500 companies. After muted growth at an industry level in the past two years, the rating industry saw good traction in FY23, backed by good growth in bank credit. Bank credit to large industries grew by 3% and services grew by 19.8%, while corporate bond issuances (private placement) recorded a growth of 33.5% on a Y-o-Y basis.

Your Company positioned itself well to grab this opportunity when it presented itself. As a result, we added many new companies to our rated portfolio, registering a good jump over the last year. The Bank Loan Ratings segment saw an increase of 30% in debt rated whereas the corporate bonds segment saw an increase of 11%.

The growth was well spread out in all the key sectors, including corporate and infrastructure, banking and financial services space as well as mid-corporates. The rated debt in each of the segments grew by 8%, 26% and 13%, respectively.

Further, your Company outperformed in niche segments like securitization, partly due to growth in the overall market and partly due to increasing our market share. The securitization market grew by 68% in FY23 after a muted growth in the past two years. We saw a significant increase in the securitization transactions for both Pass Through Certificate (PTC) and and Direct Assignment (DA) and with new originators entering the market. Your company has an impeccable track record on securitization ratings and was able to garner a higher market share in the current year while adding substantially more new originators to the portfolio.

The superior business performance posted by your company in FY23 was mainly attributable to the

"Quality-led Growth" strategy pursued by the company.

Focused efforts were taken during the year to deepen our relationship with our existing clients with targeted efforts to onboard clients from high-growth sectors. Dovetailed with these were our outreach efforts towards communicating our superior rating performance and deep credit insights into various sectors to end users of our ratings like banks, mutual funds, Private Equity players, etc. These efforts along with our well-thought-out rating criteria/methodologies, have led to even stronger acceptability of our ratings which is very critical from a long-term perspective. The regulatory environment is ever-changing with a strong emphasis on processes and timely outcomes.

Businesses are also becoming more complex and the cycles are also becoming shorter and more volatile. This is slowly but steadily resulting in the movement towards established rating agencies having strong analytical capabilities and being supported by robust processes. With three decades of presence in the credit markets, CARE Ratings is well poised to take benefit from the same.

The shift in your Company`s strategy was also well-timed to capitalise on the improvement in the operating environment. Deleveraged balance sheets of corporates, strong balance sheets of banks, steady improvement in capacity utilisation, government's push on infrastructure creation, schemes such as PLI etc will continue to drive credit growth in the coming years notwithstanding temporary aberrations induced by external factors. The Company with its "Quality-led Growth" strategy is well poised to capture the long-term growth potential of India and capture an even-bigger share in the market.

In FY23, your Company set up Disaster Recovery Site and executed Disaster Recovery (DR) for business-critical applications to provide business continuity in-event of any shut-down unexpectedly due to unforeseen circumstances, such as natural events, or security issues. This involved shutting down Core applications from the Production/Live Environment from Data Centre (DC) and routing all the Business Applications from Disaster Recovery (DR). In addition, your Company completed a total upgrade in the

Hyperconverged computer infrastructure.

Your Company improved our security posture with reference to web app security, your Company implemented Web Application Firewall (WAF) which filters, monitors and blocks any malicious HTTP/S traffic travelling to the web application and prevents any unauthorized data from leaving the app. To ensure the integrity of authorized users and devices from gaining access to a corporate or private network before they connect to the network and minimize risk and the possible spread of malware, your Company implemented Network Access Control (NAC). NAC systems allow setting finely calibrated access policies when implemented correctly and track each user's movement around networks.

In FY24, your Company would carry forward its strategy on security by implementing Privileged Access

Management (PAM) for cyber threats by controlling, monitoring and securing privileged access to critical resources. In addition, a complete DR run would be done wherein business-critical applications for a week would be run from the DR site.

Ratings is a regulated business and most of the processes are standardised across the rating agencies by regulators. However, we believe with the data and technology available today, ratings operations can become more efficient. We have started to use Machine Learning (ML) and Natural Language Processing (NLP) to read financial and operational data from publicly available corporate company filings. The data accuracy based on ML results has significantly improved but as it depends on a lot of variables, the models are being continuously revised. Once machines are properly trained on varied datasets, the lower-end data entry work could be automated to a certain extent and would help improve our efficiency and overall turnaround time. Your Company has also built a new website for the Group, rich with content and a user-friendly interface and in accordance with our new brand vision of integrating all group offerings and synergies. We had adopted the latest technology platforms for enhancing the user experience on our new website. The subsidiary company's websites are being worked upon and will be rolled out soon. In addition, business applications supporting the ratings analyst team had made significant enhancements for ratings letters, press releases and evaluation forms which would reduce the analyst operational time.

In FY24, your Company has initiated a platform modernization program with the intent to use cutting-edge technology and upgrade core business applications used by the ratings and business development team.

Building further on the continued efforts of the past few years, your Company has seen growth on multiple fronts in FY23 and this has been made possible by the combined efforts of CareEdge as a Group. Whether it is the rating business, advisory, risk solutions or our services outside India, your Company has positioned itself as one of the leading brands in the market. We have paid special attention to bringing in the right talent for the Group to further improve our services as a whole and cement our image as a knowledge hub.

In accordance with our efforts to improve the visibility and credibility of your Company, we scaled up our outreach activities at all possible touchpoints in FY23.

Be it our research reports or speaker sessions, your Company saw traction increase in all departments.

Highly regarded and attended by senior industry leaders, your Company conducted as many as 21 webinars and took part in 36 speaker sessions and 76 Knowledge Sharing Forums.

After a pandemic-induced gap of over two years, CareEdge hosted its flagship event "Conversations" in Pune. The occasion was graced by multiple industry leaders and experts.

CareEdge was a ‘Process Partner' at CNBCTV18's Business Leaders – 40 under 40 Awards. The awards honoured the outstanding performances of 40 young achievers who demonstrated excellence and portrayed an abiding commitment to the world of Chartered Accountancy. As a process partner, CareEdge Ratings assisted in the planning process to design award rules and regulations, evaluate parameters and framework and conduct a comprehensive process review.

CareEdge was a Knowledge Partner at Assocham's 14^th Capital Market Summit: The Reset of Globalization Capital Formation@2047 for New India, February 22. Mehul Pandya, MD & CEO, CARE Ratings Limited, delivered the keynote address at the inaugural session and unveiled a knowledge paper along with other dignitaries. Revati Kasture, Executive Director, was a part of the panel discussion at the event.

Mehul Pandya, MD & CEO, CARE Ratings Limited, delivered the keynote address on ‘Board's Strategy in Making CSR Inclusive' and ‘International Trends in CSR' at the 17^th International Conference on Corporate Social Responsibility hosted by the Institute of Directors. CareEdge worked on

vetting the ranking methodology for the MSME Banking Excellence Awards, which was organised by the Chamber of Indian Micro, Small and Medium Enterprises.

CareEdge associated with ASSOCHAM as the Knowledge Partner for their conference titled Odisha Minerals & Metals Industry: Exploring Opportunities & Addressing Concerns.

Mehul Pandya, MD & CEO of CARE Ratings Limited, was among the jury members for the 2022 edition of India's Best CEOs awards organised by Business Today. Mehul Pandya, MD & CEO, CARE Ratings Limited, spoke on ESG adoption at the ESG Infra Mint Conclave. Sachin Gupta, Chief Rating Officer, spoke on Indian Infrastructure - Coming of Age at Edelweiss Annual Investor.

CareEdge associated as ‘Knowledge Partner' at Assocham's Conference on ‘Indian Mineral Reforms-Step towards Atmanirbhar Bharat'. CareEdge won the bronze award at the National CSR Summit & Awards Amrit Mahotsav Series organised by Vision India Forum.

Rajani Sinha, Chief Economist, participated in a panel discussion on ‘Changing Geopolitical Dynamics: An opportunity for EU-India Cooperation' at the 30^th Annual General Meeting of The Council of EU Chambers of Commerce in India.

Nehal Shah, Senior Director & Head of Compliance at CARE Ratings Limited, was invited as the Chief Guest at the Centre for Corporate Governance, Research & Training of the Institute of Company Secretaries of India (CCGRT - ICSI) to inaugurate the Management Skills Orientation Program for fresh graduated Company

Secretaries.

Rajashree Murkute, Senior Director, CARE Ratings Limited was invited as a speaker at SEBI's outreach programme on Municipal Bonds.

With a view to ensuring CareEdge is one of the best places to work, your Company has been focusing on enhancing the quality of work life via multiple engagement and training programmes throughout the year. Continuing with the aim to deliver efficient and quality services, your Company has paid special attention to retaining talent and roping in fresh hands.

As of March 2023, there were 517 full-time employees compared with 491 last year, with voluntary attrition at

28% for FY23.

The focus on retention of our workforce is built on approaches such as employee engagement, training interventions, Rewards & Recognition programmes and employee connect communication through multiple platforms. Your Company conducted 60 training programmes under the supervision of subject matter experts in the current year, covering employees.

a) During the year, your Company introduced the CareEdge Leadership Assimilation Program (CLAP) a globally renowned HR intervention for leaders and people managers who have taken on a new role of enhanced responsibility and/or where there is a deemed need to foster greater alignment/assimilation of a team with its leader. The unique aspect of this program is that it drastically shortens the process of team formation and bonding (forming - storming norming performing) and team alignment is achieved within a couple of months, which may otherwise take several months to achieve system for teams to share anonymous feedback to leaders about their managerial style.

b) Another thoroughly cheered initiative this year was that of our Managing Director & CEO, Mehul Pandya meeting with all employees who belong to the A1-A3 grade in a planned and systematic manner, seeking their feedback. Ever since the start of this, many of the suggestions received during the meetings have been acted upon.

c) Your Company has adopted a talent management and succession planning framework, which is built on the world-famous "Performance vs Potential Matrix" model, leading to the creation of a 9-Box Grid. It assesses employees on performance and potential. d) Your Company introduced a long-term incentive plan across the functions.

As on March 31, 2023, the Company has 4 subsidiaries i.e., CARE Ratings (Africa) Private Limited, CARE Ratings Nepal Limited, CARE Advisory Research and Training Limited and CARE Risk Solutions Private Limited.

CARE Ratings (Africa) Private Limited ("CRAF") has been licensed by the Financial Services Commission of Mauritius from May 7, 2015. It is the first Credit Rating Agency to be so recognized. It is also recognized by the Bank of Mauritius as an External Credit Assessment Institution (ECAI) on May 9, 2016. In February 2019, CRAF received the approval of the Capital Markets Authority of Kenya to operate as a Credit Rating Agency in Kenya under the Capital Markets Act and the Regulations and Guidelines issued thereunder. CRAF's revenue grew by 27% in FY23 on account of an increase in the total volume of debt rated with contributions coming from both new assignments and surveillance exercises.

CRAF is now planning to expand its presence in other geographies of Africa, principally in the countries falling under the Southern African Development

Community (SADC). The focus of the company is to leverage upon the experience of the CareEdge group in the Indian & Mauritius markets and utilise the same for popularising the concept of credit rating in the capital market ecosystem of Africa through training, advisory and strong technology-enabled analysis.

CARE Ratings Nepal Limited ("CRNL"), incorporated in Kathmandu, Nepal, is a subsidiary of your Company and offers a wide range of rating services, which includes the rating of debt instruments primarily bank borrowings, issuer rating, fund management quality rating etc. CRNL is an authorised credit rating agency licensed by the Securities Board of Nepal w.e.f. November 16, 2017. CRNL uses the technical expertise of its parent company and has also developed its capabilities in various sectors which comprise banking and insurance, manufacturing, trading, construction, power etc. CRNL's total revenue grew by 15% in FY23. The growth in business was supported by CRNL's efforts to improve awareness about credit rating among various stakeholders by organizing various training sessions and seminars coupled with better execution of initial cases.

Being a credit rating agency, CRNL's business depends on the overall size of the rateable universe, which is directly impacted by the regulatory framework, financial market and economic growth in Nepal. The outlook, remains impacted by the slow pace of economic recovery, owing in part to the muted government spending so far this fiscal. Demand across various sectors is declining and amid tightened regulatory supervision, growth in lendable funds of

Banks and Financial Institutions (BFI) remains meagre.

The growth trend in inward remittance provides some relief to the economy. Furthermore, a more stable government could go a long way towards improving the pace of economic growth going forward. However, with increasing competition coupled with the low credit appetite of BFIs, business growth in the near term is likely to see some moderation in growth.

CARE Advisory Research and Training Limited ("CART") is a wholly-owned subsidiary of your Company which was incorporated on September 6, 2016 and is in the business of Advisory, ESG and Research. CART offers

(i) advisory and consultancy services in the areas of risk advisory, policy advisory, business improvement plans, TEV studies, enterprise valuations, business and financial restructuring, markets & industry studies, financial modelling, diagnostic studies, feasibility studies, design of credit appraisal systems;

(ii) ESG services ranging from ESG Assessments and grading to ESG strategy and comprehensive advisory offerings (iii) Industry Research including Industry Research Outlook and Industry Risk Scores on over 80 Sectors and Customised Industry Research; (iv) Grading Services like MFI Grading, NGO Grading and AIF

Grading to name a few.

Continuing its journey to position itself as a knowledge and quality research-driven institution, CART took steps to build an Advisory, ESG and Research Business in FY22. In the last year, CART has scaled up its offerings in ESG with services relating to ESG Assessments and ESG Strategy, Roadmap and Reporting. CART has also developed India's first tech-enabled, on-demand, comprehensive data platform that brings together company, industry and ESG insights. This platform currently provides ESG scores for over 900 listed entities. CART has also been empanelled with the Association of Mutual Funds in India (AMFI) as an ESG Rating provider for AMCs. CART has been offering services in the field of infrastructure project evaluation and independent viability and feasibility studies and corporate advisory

(business plan preparation, financial improvement plan, financial appraisal). This division has undertaken bespoke assignments, especially with Multilateral Organisations like World Bank and ADB. The Research Division of CART services a variety of business needs of its domestic and multinational clients with credible and customised research and analysis on various facets of the economy and industries in addition to providing

Industry Research Outlook and Industry Risk Scores on over 80 Sectors. The Grading services being offered by the company have also exhibited good growth across offerings in MFI Grading, AIF Grading and NGO Grading. In FY23, total revenue increased to Rs 8.02 crore from Rs 7.41 crore in FY22.

CARE Risk Solutions Private Limited ("CRSPL"), a wholly owned subsidiary of your Company, with over 15 years of global experience in providing cutting-edge risk and compliance solutions for banks and financial institutions. CRSPL has undertaken a digital transformation journey to primarily position itself as a leading risk and compliance product company.

CRSPL started reengineering its products in risk and compliance in FY22, reinventing its product strategy with the latest technology and suited to the RBI-prescribed regulatory framework. CRSPL is on a mission to enhance the complete range of risk offerings, including the new version of Credit Risk, ALM, FTP and risk modelling that are in the advanced stage of development and ready for GTM in FY24. It is planning to launch new-age digital products under its data and analytics division like the intelligent data platform. For the last three years, CRSPL has regularly featured amongst Risktech100 companies across the globe (Chartis Research).

CRSPL has acquired 20+ new customers across offering around risk products, consulting, BI & Analytics services, Liferay implementation and MLD valuations. CRSPL has also formed strategic alliances with global tech MNCs like IBM, Oracle, Liferay and Feedzai for their Risk product stack across data & analytics, enterprise portals and fraud management. It is launching a new offering for the CFO community on Enterprise budgeting, planning and performance management, treasury and analytics. It is planning joint GTM around these offerings with respective OEM Partners. To increase its market reach, CRSPL has entered strategic partnerships with 3i Infotech, IDBI Intech and Saraswat Infotech, etc.

In FY23, total revenue was Rs 9.89 crore.

The details of loans, guarantees and investments covered under Section 186 of the Act read with Companies (Meetings of Board and its Powers) Rules, 2014 are given in the notes to the Financial Statements forming part of this Report.

All transactions entered into during the Financial Year

2022-23 with Related Parties as defined under Section 188 of the Act and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract/ arrangement/transaction referred to in Section 188 of the Act with related parties which could be considered material. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) of the Act in Form AOC-2 is not applicable.

Details of transactions with related parties as required under IND AS-24 set out in Notes to Accounts-Note No. 36 of the Standalone Financial Statements forming part of this Report.

As required under Regulation 23 (1) of the SEBI Listing Regulations, the Company has formulated a Policy on the Materiality of and dealing with Related Party

Transactions which is available on the website of the Company at https://www.careratings.com/Uploads/ newsfiles/FinancialReports/1679040518_Policy%20 on%20Materiality%20of%20and%20dealing%20 with%20Related%20Party%20Transactions.pdf

There are no applications made or any proceedings pending against the Company under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.

There are no instances of one-time settlements during the financial year.

During the year under review, Mr. Ajay Mahajan (DIN:05108777) resigned as MD & CEO of the Company with effect from May 31, 2022. Pursuant to the resignation of Mr. Ajay Mahajan as MD & CEO, Mr. Mehul Pandya (DIN:07610232) was appointed as an Interim Chief Executive Officer of the Company with effect from June 1, 2022. Subsequently, Mr. Mehul Pandya was appointed as MD & CEO of the Company with effect from July 29, 2022.

Further, the term of office of Mr. Najib Shah (DIN:08120210), Ms. Sonal Desai (DIN:08095343) and Dr. M. Mathisekaran (DIN:03584338), Non-Executive Independent Directors concluded at the 29^th Annual General Meeting. They were subsequently appointed as a Non-Executive Independent Directors for a second term from the conclusion of the 29^th Annual General Meeting upto the conclusion of the 32^nd Annual General

Meeting of the Company to be held for the financial year 2024-25, who shall not be liable to retire by rotation.

Mr. Ananth Narayan Gopalakrishnan (DIN:05250681) resigned as a Non-Executive Independent Director of the Company with effect from September 5, 2022, pursuant to his appointment as a Whole-time Member of the Securities and Exchange Board of India. Ms. Subhangi Soman (DIN:09476059) resigned as a Non-Executive Non-Independent Director of the Company with effect from November 24, 2022, due to pre-occupation and other engagements.

Mr. Gurumoorthy Mahalingam (DIN:09660723) was appointed as an Additional Director in the category of

Non-Executive Independent Director of the Company with effect from November 21, 2022. Further, his appointment was approved by the Members of the

Company through a postal ballot on January 21, 2023. Mr. V. Chandrasekaran (DIN:03126243) was re-designated as a Non-Executive Independent Director of the Company from Non-Executive Non-Independent Director of the Company with effect from December 7, 2022, pursuant to shareholders approval through postal ballot.

Mr. Sobhag Mal Jain (DIN:08770020) was appointed as Additional Director in the category of Non-Executive Non-Independent with effect from January 28, 2023. Further, his appointment was approved by the Members as Non-Executive Non-Independent Director of the Company through a postal ballot on April 15, 2023. In accordance with the Articles of Association of the Company and provisions of Section 152(6)(e) of the Act, Mr. Mehul Pandya will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment.

The Independent Directors of the Company have submitted their declaration of independence as required under Regulation 25 (8) of the SEBI Listing Regulations and Section 149(7) of the Act confirming that they meet the criteria of independence under

Section 149(6) of the Act and Regulation 16 (1)(b) of SEBI Listing Regulations.

The Board is of the opinion that the Independent Directors fulfil the conditions specified in these Regulations and are independent of the management.

There has been no change in the circumstances affecting their status as Independent Directors of the Company. Further, the Independent Directors of the Company possess requisite qualifications, experience and expertise in the field of finance, strategy, auditing, tax, risk advisory and financial services and they hold the highest standards of integrity.

The Board of Directors met 10 (Ten) times during the Financial Year ended 2022-23 on April 11, 2022, April 26, 2022, May 28, 2022, July 20, 2022, July 29, 2022, August 17, 2022, November 8, 2022, December 7, 2022, January 28, 2023 and March 16, 2023. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report. The intervening gap between two consecutive Board Meetings did not exceed 120 days.

The Company has established a vigil mechanism for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the SEBI Listing Regulations to report their genuine concerns and to provide for adequate safeguards against victimisation of persons who may use this mechanism. During the year, your Company affirms that no employee of the Company was denied access to the Audit Committee. The said policy is also available on the website of the Company at https://www.careratings. com/Uploads/newsfiles/FinancialReports/1679040341_ Whistle%20Blower%20Policy.pdf

The Policy of the Company on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178, is appended as

Annexure - I to this Report and is also available on the website of the Company at https://www.careratings.com/Uploads/newsfiles/ FinancialReports/1679040649_NOMINATION%20&%20 REMUNERATION%20POLICY.pdf

Pursuant to the provisions of the Act and SEBI Listing Regulations, an annual performance evaluation of the Board and its Committees and other individual

Directors is required to be undertaken to assess the performance of the Board and its Committees with the aim to improve effectiveness.

The Board Evaluation Cycle for FY2022-23 was completed by the Company internally which included the Evaluation of the Board as a whole, Board Committees and other individual Directors of the Company. The Board's functioning is evaluated after taking inputs from the Directors on various aspects, including inter alia degree of fulfilment of key responsibilities, board structure and composition, establishment and delineation of responsibilities to various committees, the effectiveness of board processes, information and functioning.

The Committees of the Board were evaluated after taking inputs from the Committee members based on criteria such as degree of fulfilment of key responsibilities, adequacy of committee composition and effectiveness of meetings.

The Board reviewed the performance of the individual Directors on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings.

Further, a separate meeting of Independent Directors was held by the Independent Directors on March 28, 2023, where they reviewed the performance of the Board and the quality, quantity and timeliness of the flow of information between the Company, Management and the Board was assessed.

As on March 31, 2023, the Board has the following committees: i. Audit Committee; ii. Nomination and Remuneration Committee; iii. Stakeholders Relationship Committee; iv. Corporate Social Responsibility and Sustainability Committee; v. Risk Management Committee; vi. Rating Sub-Committee; vii. Strategy and Investment Committee and viii. Technology Committee During the period under review, the Board constituted its Techonology Committee in order to have more focus on critical IT projects and implementation.

A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report.

The Company has an Internal Financial Control System commensurate with the size, scale and complexity of its operations.

The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 and other applicable provisions, if any, of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.

The Company, in preparing its financial statements, makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates is also approved by the Statutory Auditors and Audit Committee.

The Internal Auditor evaluates the efficacy and adequacy of internal control systems, accounting procedures and policies adopted by the Company for the efficient conduct of its business, adherence to the Company's policies, safeguarding of the Company's assets, prevention and detection of fraud and errors and timely preparation of reliable financial information, etc. Based on the report of the internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

M/s. BSR & Co. LLP (Firm Registration No. 101248W/ W-100022) were appointed as the Statutory Auditors of the Company for a period of five years up to the conclusion of the 33^rd Annual General Meeting of the Company.

The Notes on the financial statement referred to in the Auditor's Report are self-explanatory and do not call for any further comments. The Auditor's Report does not contain any qualification, reservation, adverse remark or disclaimer.

The disclosure relating to fees paid to Statutory

Auditors is provided in Corporate Governance Report annexed to this Report.

During the year under review, there have been no instances of fraud reported by the Auditors under

Section 143(12) of the Act and rules framed thereunder either to the Company or to the Central Government.

The Board of Directors of your Company has appointed A. K. Jain & Co., Company Secretaries, Mumbai, to conduct the Secretarial Audit of the Company for FY2022-23. The Secretarial Audit Report is appended to this Report as Annexure - II.

There are no qualifications, reservations or adverse remarks or disclaimers made by A. K. Jain & Co., Company

Secretaries in their secretarial audit report.

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section

148(1) of the Act is not applicable for the business activities carried out by the Company.

Your Company has taken necessary steps and initiative in respect of the conservation of energy to a possible extent to conserve the resources as required under Section 134(3)(m) of the Act and rules framed thereunder. As your Company is not engaged in any manufacturing activity, the particulars of technology absorption as required under the section are not applicable and hence are not provided.

During the year under review, the Company has earned a foreign exchange equivalent of Rs 95.53 lakh and has spent Rs 10 lakh on foreign exchange.

There have been no material changes and commitments affecting the financial position of the Company which have occurred between March 31, 2023 and the date of this report other than those disclosed in this Report.

There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of your Company and its future operations.

The Management's Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of the SEBI Listing Regulations with the Stock Exchanges, is annexed as

Annexure - III to this Report.

Disclosures with respect to the remuneration of

Directors and employees as required under Section 197 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been appended as

Annexure - IV to this Report. The information required pursuant to Section 197 of the Act read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of your Company is available for inspection by the Members. Any

Member interested in obtaining such information may address their email to investor.relations@careedge.in

A Business Responsibility and Sustainability Report as per Regulation 34(2) of the SEBI Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front is provided as

Annexure – V and forms an integral part of this Report.

As required under Section 129 of the Act and Regulation 33 of the SEBI Listing Regulations, the Consolidated

Financial Statements have been prepared by the

Company in accordance with the applicable Accounting Standards and form part of the Annual Report. Statement on the highlights of the performance of the subsidiary companies and their contribution to the overall performance of the Company are given in Form AOC-1 has been appended as Annexure- VI to this Report. Pursuant to provisions of Section 136 of the Act, the financial statements of the subsidiaries, as required, are available on the Company's website and can be accessed at https://www.careratings.com/financial-performance The Company has formulated a Policy for determining Material Subsidiaries. The Policy is available on the Company's website and can be accessed at https://www.careratings.com/Uploads/ newsfiles/FinancialReports/1679040466_Policy%20 for%20determining%20material%20subsidiaries.pdf

The Company is committed to maintaining the highest standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by the Securities and Exchange Board of India. The Report on Corporate Governance as per Regulation 34 (3) read with Schedule V of the SEBI Listing Regulations forms part of the Annual Report. The Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under Schedule V (E) of the SEBI Listing Regulations, a Certificate by the Managing Director affirming the compliance of Code of Conduct and a Certificate of Non-disqualification of Directors provided by the Practicing Company Secretary form part of the Corporate Governance Report which has been appended as

Annexure-VII.

Pursuant to the provisions of Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014 and Section 134(3)(a) of the said Act, the Annual Return containing details as on March 31, 2023 is available on the Company's website on: https://www. careratings.com/annual-reports

There was no change in Authorised Share

Capital during the Financial Year that ended on March 31, 2023. The Authorised Share Capital of the Company is Rs 35,00,00,000/- (3,50,00,000 Equity Shares of face value of Rs 10/- each). During the Financial Year ended March 31, 2023, the Company has allotted 58,264 equity shares on account of the exercise of Stock Options under the Employee Stock Option Scheme, 2020, the details of which are given below:

Further during the financial year, pursuant to the shareholders' resolution passed on September 2, 2022, the Company bought back 4,199 equity shares of the Company as per the provision of the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018.

In view of this, the paid-up share capital as on March 31, 2023, was Rs 29,70,06,120 which consisted of 2,97,00,612 equity shares of Rs 10/- each.

As required in terms of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the disclosure relating to CARE Ratings Limited ESOP Schemes is available on the Company's website at: https://www.careratings. com/annual-reports

Your Company has not accepted or renewed any deposits within the purview of Chapter V of the Act during the year under review.

The following are the update on certain matters:

A. SEBI initially imposed a penalty of Rs 25 lakh and subsequently enhanced it to Rs 1 crore in respect of an adjudication proceeding initiated by it in relation to the credit ratings assigned to one of the Company's customers and the customer's subsidiaries under Section 15HB of SEBI Act, 1992. An appeal has been filed before the SAT. The case is pending as on date.

B. In the suit filed by 63 Moons Technologies Ltd., the Hon'ble Madras High Court passed an Order dated February 1, 2023, directing the Company amongst other respondents to deposit 10% of the total value of the suit claim in Madras High Court, as a means of furnishing security, failing which the interim order dated June 24, 2020 of injunction restraining the Company from dealing with any of its assets will continue till the suit is disposed of. The Company has filed appeals against the said order before the Division Bench of Madras High Court.

During the Financial Year 2022-23, there was no change in the nature of business of the Company.

Your Company has always believed in providing a safe and harassment-free workplace for every individual working on the Company's premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

Your Company has a policy on the Prevention of Sexual

Harassment at the Workplace. The policy aims at the prevention of harassment of employees and lays down the guidelines for the identification, reporting and prevention of undesired behaviour. An Internal

Complaints Committee ("ICC") has been set up as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 in order to investigate any complaints/ issues related to sexual harassment. ICC is responsible for the redressal of complaints related to sexual harassment and follows the guidelines provided in the Policy.

During the year ended March 31, 2023, the ICC did not receive any complaint pertaining to sexual harassment.

The Board of Directors of the Company has constituted a Risk Management Committee consisting of members of the Board of the Company to frame, implement and monitor the risk management plan for the Company. The composition of the Committee is in compliance with Regulation 21 of the SEBI Listing Regulations and the detailed composition is provided in the

Corporate Governance Report. The Company has a Risk Management framework to identify and evaluate internal and external risks faced by your Company. The risk management framework defines risk identification and its management across the enterprise at various levels including documentation and reporting. The framework helps in identifying risk trends, exposure and potential impact analysis on a Company's business in order to minimize the adverse impact of any type of risk on the business objectives.

As a part of CARE Ratings' initiatives under Corporate Social Responsibility ("CSR") in FY2022-23, your Company released payments amounting to Rs 1.92 crores (P.Y.: Rs 2.37 crores) in areas of healthcare, education, community development, mid-day meals, nutritional food to Anganwadi children.

The Board has constituted a Corporate Social Responsibility and Sustainability (CSR) Committee in accordance with Section 135 of the Act. The CSR Policy has been devised based on the recommendations made by the CSR Committee. The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in

Annexure – VIII of this Report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is available on the website of the Company at https://www.careratings.com/Uploads/newsfiles/ FinancialReports/1679039991_Corporate%20Social%20 Responsibility%20(CSR)%20Policy.pdf

There was no material (non-listed) Indian subsidiary of your Company as on March 31, 2023.

As required under Section 134 (5) of the Act, the Board of Directors, to the best of their knowledge and ability confirm that:

1. In the preparation of the annual accounts for the financial year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the said year;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. They have prepared the annual accounts for the financial year ended March 31, 2023, on a going concern basis;

5. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating effectively;

6. They have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively.

The Company has complied with the applicable Secretarial Standards 1 & 2 issued by ICSI related to the Board and General Meetings.

The Directors are thankful to the Members for their confidence and continued support. The Board places on record its appreciation of the contribution of its employees to the Company's operations and the trust reposed in it by market intermediaries, issuers and investors. The Board also appreciates the support provided by the Reserve Bank of India, the Securities Exchange Board of India and the Company's Bankers.