For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the 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 Company using a discounted cash flow analysis. These calculations use pre tax cash flow projections over a period of three years, based on financial budgets approved by the management. For calculation of the recoverable amount, the Company 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 31,2023 and December 31,2022, the estimated recoverable amount of the CGU exceeded its carrying amount, hence impairment is not triggered.

7.2 Personnel expenses to the extent of C 534 lakh (Previous year: C 230 lakh) is considered for capitalisation as intangible assets.

7.3 As at December 31,2023 and December 31,2022 there were 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 31,2023 was C 839 lakh (Previous year: C 272 lakh). The Company recognises dividend in statement of profit and loss under the head “other income”.

8.3 ‘-*’ in amounts column denote amount less than C 50,000.

The tax year for the Company being the year ending March 31,2024, the tax expense for the year is the aggregate of the provision made for the three month period ended March 31,2023 and the provision for the nine month period ended December 31,2023. The tax provision for the nine month period has been arrived at using effective tax rate for the period April 1,2023 to March 31,2024.

Disclosure in relation to Undisclosed Income

The Company does not have any such transactions which is 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 31,2022 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 C 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 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 (unsecured) 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) Currency fluctuation reserve

Exchange difference relating to the translation of the results and net assets of the Company’s foreign operations from their respective functional currencies to the Company’s functional currency is recognised directly in other comprehensive income and accumulated in the currency fluctuation reserve.

f) Other comprehensive income (OCI)

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

g) 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.

h) 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.

i) Share application money pending allotment

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

28.2 The Company has applied practical expedient and has not disclosed information about remaining performance obligations in contracts where the original contract duration is one year or less or where the entity has right to consideration that corresponds directly with the value of entity’s performance completed to date.

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), Pounds Sterling (GBP), EURO and Emirati Dirhams (AED). As of December 31, 2023 and December 31,2022, 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 31,2023, every 5% increase/decrease of the respective foreign currencies compared to functional currency of the Company would impact operating margins by C 1,557 lakh ( /- 4.58%). For the year ended December 31,2022, operating margins would increase/decrease by C 1,449 lakh ( /-5.98 %). 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 ah 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/iower by 5% from the market prices existing as at the reporting date, profit would increase/decrease by C 2,821 iakh and C 1,646 iakh for the year ended December 31, 2023 and for the year ended December 31,2022 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/iower by 5% from the market prices existing as at the reporting date, OCI for the year ended December 31,2023 would increase/decrease by C 1,248 iakh and C 796 iakh for the year ended December 31,2022.

34.2 Liquidity risk

Liquidity risk is the risk that the Company wiii encounter difficuity in meeting the obiigations associated with its financiai iiabiiities that are settied by deiivering cash or another financiai asset. For the Company, iiquidity risk arises from obiigations on account of financiai iiabiiities - trade payabies and other financiai iiabiiities.

Liquidity risk management

The Company continues to maintain adequate amount of iiquidity/treasury to meet strategic and growth objectives. The Company has ensured a baiance between earning adequate returns on iiquidity/treasury assets and the need to cover financiai and business risks. The Company’s treasury department is responsibie for iiquidity and funding as weii as settiement management. In addition, processes and poiicies reiated to such risks are overseen by senior management. Management monitors the Company’s net iiquidity position through roiiing forecasts on the basis of expected cash fiows.

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 matrix to compute the expected credit loss allowance for trade receivable. Trade receivables are monitored on periodic basis for any non-recoverability of the dues. Bank balances are held with only high rated banks. Refer 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).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value as at December 31,2023 and December 31,2022.

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.

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 31,2023 and December 31,2022 constituted 10% or more of the the total revenue of the Company.

Notes:

1. AH related party transactions entered during the year were in ordinary course of the business and on arm’s length basis.

2. Employee benefits that requires actuarial valuation or are linked to events or fulfilment of conditions are disclosed in managerial remuneration as and when paid.

40 Leases

The Company has elected not to recognise right of 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 116 was C 44 lakh (Previous year: C 22 lakh) for the year.

The Company has recognised interest on lease liability of C 328 lakh (Previous year: C 561 lakh) under finance costs. The aggregate depreciation on ROU assets has been included under Depreciation and amortisation expenses 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.

Proposed dividend

The Board of Directors at its meeting held on February 16, 2024 have recommended a payment of final dividend of C 28 per equity share of face value of C 1 each for the financial year ended December 31,2023. The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

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. Transferror 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.

48 Acquisition of Bridge To India Energy Private Limited

The Company has completed the acquisition of 100% stake in ‘Bridge To India Energy Private Limited’ (Bridge To India) on September 30, 2023. Bridge To India is a renewable energy (RE) consulting & knowledge services provider to financial and corporate clients in India. The acquisition will augment CRISIL’s existing offerings and bolster our market positioning in the renewable energy space. The transaction is at a total consideration of C 721 lakh. Accordingly, Bridge To India became a wholly owned subsidiary of the Company with effect from the said date.

49 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.

ix) The Company has not revalued its property, plant and equipment (including right of use assets) or intangible assets or both during the current or previous year.

50. The figures for the previous year have been regrouped/ rearranged wherever necessary to conform to the current

year’s classification.