February 18, 2008 Mumbai
CRISIL announces Audited Financial Results for financial year ended December 31, 2007 CRISIL’s Board of Directors, at its meeting held today, approved the Audited Financial Results for the year ended December 31, 2007.
CRISIL has posted a consolidated total income of Rs. 413.49 crore for the year, as against Rs. 294.03 crore in the previous year, an increase of 40.63 per cent. Consolidated Profit after Tax for 2007 is Rs.
83.66 crore, as against Rs. 61.43 crore in the previous year, an increase of 36.19 per cent. CRISIL Limited registered a standalone total income of Rs. 270.88 crore, up 72.70% per cent from Rs. 156.85 crore in the previous year, and a standalone Profit after Tax of Rs. 70.67 crore, up 89.06 per cent from Rs. 37.38 crore in 2006. The Board has recommended a dividend of 250 per cent for the year, as against 150 per cent paid out for 2006.
CRISIL’s businesses have registered yet another year of robust growth in both Indian and global markets. CRISIL Ratings’ revenue growth was driven by strong growth in the Indian structured finance market, and in borrowings by the financial sector. Moreover, the Reserve Bank of India’s guidelines on the use of external ratings for computation of capital under Basel II norms have opened up the bank loan rating market. CRISIL Ratings’ Bank Loan Rating activity got off to a brisk start in 2007.
Initiatives in the Small and Medium Enterprise (SME) Rating and Executive Training domains also gained momentum during 2007. CRISIL Ratings consolidated its market leadership, with pioneering initiatives such as assigning the first rating to a life insurance company in India, assigning the first rating to non-performing loans in India under the recently-launched recovery scale ratings, assigning a rating to the largest asset-backed securitisation transaction in the country, and completing a prestigious assignment assisting Pension Fund Regulatory and Development Authority (PFRDA) in the selection of fund managers to manage the New Pension Scheme.
CRISIL FundServices launched an online corporate bond information and analysis portal, www.indiabondwatch.com, in collaboration with the National Stock Exchange. This initiative aims to enable debt market participants to obtain reliable, transparent, and current data on issuances.
CRISIL and CNBC TV 18 recognised India’s best performing SMEs through the Emerging India Awards. CRISIL Ratings and CNBC also held award ceremonies for the Mutual Fund of the Year, and the Real Estate Awards.
CRISIL’s Global Analytical Centre (GAC), which supports Standard & Poor’s (S&P’s) Global Resource Management objective, grew well during the year, in terms of both number of people and scope of assignments.
The operations of CRISIL Research were restructured during the year. The three wholly-owned subsidiaries – CRISIL Research & Information Services Limited, Global Data Services of India Limited and Irevna Research Services Limited, were merged with CRISIL.
Irevna, registered strong growth in 2007, driven by significant expansion in the size of its business from
existing clients, and by the addition of new clients. It has consolidated its position in the equity research
domain and firmly established itself in new verticals such as derivatives and credit research. For the
CRISIL Research posted strong growth in revenues and launched research products on a number of new industries, focusing on emerging trends and sectors. These included real estate, infrastructure, airlines, domestic freight transportation services, education services, and contract research. It also undertook customised research assignments across sectors. During the year, the Securities and Exchange Board of India (SEBI) made the grading of initial public offerings (IPOs) mandatory. In line with best practices, CRISIL has set up a separate Equities team for IPO grading under the CRISIL Research business, distinct from CRISIL Ratings. CRISIL Research is strongly positioned in this space and is already the leader in the IPO grading market.
During the year, CRISIL’s advisory services were transferred to a subsidiary, CRISIL Risk and Infrastructure Solutions Ltd (CRIS), in line with the best practice of fire-walling these operations from Ratings and Research. CRIS houses CRISIL Infrastructure Advisory and CRISIL Risk Solutions.
CRISIL Infrastructure Advisory achieved significant revenue growth driven by the performance of the energy and urban sectors, and was actively engaged in reforms implementation in some cities covered under Jawaharlal Nehru National Urban Renewal Mission. International initiatives gathered momentum during the year, with mandates from Africa, Middle East and Asia.
CRISIL Risk Solutions maintained its position as the leading Indian provider of customised risk and Basel II solutions to the Indian banking sector. Its products are currently in use at more than 20 Indian banks and financial institutions. Overseas, it has completed assignments in Sri Lanka and the Caribbean, and worked with S&P Risk Solutions in delivering solutions in the Asia-Pacific region.
Gas Strategies Group (CRISIL’s London-based subsidiary) performed well during the year, with all its business groups registering good growth. Gas Strategies Consulting worked with a number of governments and oil and gas operators in developing economies in the development of new generation gas master plans and policies for reserve monetisation and market development.
Roopa Kudva
Managing Director & Chief Executive Officer For information, please contact:
Roopa Kudva
Managing Director & Chief Executive Officer Phone: (Direct): +91-22-66913062
1. The Consolidated accounts include accounts of CRISIL Ltd, CRISIL Risk and Infrastructure
Solutions Limited, Irevna Limited (UK) and its subsidiary Irevna LLC (US), Gas Strategies Group
About CRISIL Limited, a Standard & Poor's company (www.crisil.com)
CRISIL is India's leading Ratings, Research, Risk and Policy Advisory Company. CRISIL’s majority shareholder is Standard & Poor’s, a division of The McGraw-Hill Companies and the world's foremost provider of financial market intelligence.
CRISIL offers domestic and international customers a unique combination of local insights and global perspectives, delivering independent information, opinions and solutions that help them make better informed business and investment decisions, improve the efficiency of markets and market participants, and help shape infrastructure policy and projects. Our integrated range of capabilities includes credit ratings and risk assessment; research on India's economy, industries and companies; investment research outsourcing; fund services; risk management and infrastructure advisory services.
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CRISIL Limited
Audited Consolidated Financial Results for the quarter and year ended on 31st December, 2007
(Rs. In Lakhs)
Particulars
3 months ended 31-Dec-07
3 months ended 31-Dec-06
Current year ended 31-Dec-07
Previous year ended 31-Dec-06 Unaudited Unaudited Audited Audited
Income from Operations 11,972.52 8,521.04 40,433.26 28,732.57
Other Income 37.41 52.52 916.02 670.47
Total Income 12,009.93 8,573.56 41,349.28 29,403.04
Expenses
- Staff Expenses 4,128.15 3,677.23 15,199.68 11,458.20
- Establishment Expenses 570.51 564.01 2,033.99 1,804.10
- Rent Expenses 648.38 294.57 1,878.14 955.88
- Travel Expenses 762.97 441.07 2,469.39 1,532.14
- Professional Fees 1,677.90 862.97 4,277.74 3,022.45
- Other Expenses 627.11 665.03 2,857.56 1,899.02
- Depreciation / Amortisation(Refer Note 6(a) and (c) below) 322.12 249.17 1,569.24 785.48
Total Expenses 8,737.14 6,754.05 30,285.74 21,457.27
- Interest Expense - - - ( 0.45)
Net Profit / ( Loss ) Before Tax From Ordinary Activities 3,272.79 1,819.51 11,063.54 7,945.32
Tax Expense 1,017.90 554.69 2,697.16 1,879.08
Net Profit / ( Loss ) After Tax From Ordinary Activities 2,254.89 1,264.82 8,366.38 6,066.24
Extra-ordinary Items (Net of Tax Rs. Nil) - 76.85 - 76.85
Net Profit / (Loss) for the Period 2,254.89 1,341.67 8,366.38 6,143.09 Earnings Per Share (not annualised)
Basic Rs. 31.21 19.93 117.79 92.62
Diluted Rs. 31.21 18.84 117.79 87.78
CRISIL Limited
Audited Consolidated Segment Results for the quarter and year ended on 31st December, 2007
(Rs. In Lakhs)
Particulars
3 months ended 31-Dec-07
3 months ended 31-Dec-06
Current year ended 31-Dec-07
Previous year ended 31-Dec-06 Unaudited Unaudited Audited Audited Operating Revenue
Rating Services (Refer Note 6(b) below) 3,651.18 2,640.54 13,007.84 9,047.01
Advisory Services 3,117.82 2,517.88 10,669.68 8,939.01
Research Services 5,203.52 3,362.62 16,755.74 10,746.55
Total 11,972.52 8,521.04 40,433.26 28,732.57
CRISIL Limited
Audited Financial Results for the quarter and year ended on 31st December, 2007
(Rs. in Lakhs)
Particulars
3 months ended 31-Dec-07
3 months ended 31-Dec-06
Current year ended 31-Dec-07
Previous year ended 31-Dec-06
Unaudited Unaudited Audited Audited
Income from Operations (Refer Note 5, 6(b) and 8 below) 8,468.10 4,181.20 25,532.28 14,674.58
Other Income (Refer Note 10 below) 201.04 68.06 1,555.73 1,010.72
Total Income 8,669.14 4,249.26 27,088.01 15,685.30
Expenses
- Staff Expenses 2,880.84 1,625.15 10,104.59 5,360.21
- Establishment Expenses 390.50 347.08 1,404.71 1,061.43
- Rent Expenses 533.60 183.88 1,373.40 545.65
- Travel Expenses 578.98 123.50 1,399.42 578.77
- Professional Fees 203.32 343.91 814.67 1,076.24
- Other Expenses 316.28 305.02 1,509.99 1,016.96
- Depreciation / Amortisation (Refer Note 6(a) and (c) below) 251.69 201.33 1,333.87 655.01
Total Expenditure 5,155.21 3,129.87 17,940.65 10,294.27
- Interest Expense - - - (0.45)
Net Profit / ( Loss ) Before Tax From Ordinary Activities 3,513.93 1,119.39 9,147.36 5,390.58
Tax Expense (Refer Note 9 below) 764.18 417.10 2,080.28 1,652.90
Net Profit / ( Loss ) After Tax From Ordinary Activities for
continued operations 2,749.75 602.23 7,012.70 3,205.14
Net Profit / ( Loss ) After Tax From Ordinary Activities for
discontinued operations - 100.06 54.38 532.54
Net Profit / (Loss) for the Period 2,749.75 702.29 7,067.08 3,737.68
Paid up Equity Share Capital (Face Value of Rs.10 each) 722.50 675.54 722.50 675.54 Reserves (excluding revaluation reserves)
(Refer Note 7 below) - - 26,098.51 15,622.36
Earnings Per Share (not annualised) (including discontinued operations)
Basic Rs. 38.06 10.43 99.50 56.35
Diluted Rs. 38.06 9.86 99.50 53.41
Earnings Per Share (not annualised) (excluding discontinued operations)
Basic Rs. 38.06 10.43 98.73 48.33
Diluted Rs. 38.06 9.86 98.73 45.80
Aggregate of public shareholding
(A) Number of shares 3,504,052 3,034,492 3,504,052 3,034,492
(B) Percentage of holding (to total shareholding) 48.50 44.92 48.50 44.92
CRISIL Limited
Audited Segmental Results for the quarter and year ended 31st December, 2007
(Rs. in Lakhs)
Particulars
3 months ended 31-Dec-07
3 months ended 31-Dec-06
Current year ended 31-Dec-07
Previous year ended 31-Dec-06 Unaudited Unaudited Audited Audited Operating Revenue
Rating Services (Refer Note 6(b) below) 3,651.18 2,648.58 13,007.84 9,055.05
Advisory Services (Refer Note 8 below) - 915.77 876.88 3,623.20
Research Services (Refer Note 5 below) 4,816.92 616.85 11,647.56 1,996.33
Total 8,468.10 4,181.20 25,532.28 14,674.58
Less: Inter Segment Revenue - - - -
Net Income from Operations 8,468.11 4,181.20 25,532.28 14,674.58
Segment Profits
Rating Services (Refer Note 6(b) below) 1,394.99 875.62 5,487.01 3,849.41
Advisory Services (Refer Note 8 below) - 221.81 88.71 841.33
Research Services (Refer Note 5 below) 2,007.88 173.51 3,693.96 466.05
Total 3,402.87 1,270.94 9,269.68 5,156.79
Add / (Less):
1. Interest Expense - - - (0.45)
2. Unallocable Income net of unallocable expense 362.75 49.78 1,211.55 889.25 3. Depreciation / Amortisation (Refer Note 6(a) and (c) below) (251.69) (201.33) (1,333.87) (655.01)
Profit Before Tax 3,513.93 1,119.39 9,147.36 5,390.58
Notes:
1. The above results were reviewed by the Audit Committee and approved by the Board of Directors of the Company at its meeting held on 18th February, 2008.
2. The Board has recommended a dividend of Rs. 25 per share having nominal value of Rs. 10 each.
3. The Company’s operations predominantly relate to providing rating, advisory and research services. Accordingly, revenues earned through rendering of these services represent the primary basis of segment information set out above.
4. The fixed assets used in the Company’s business and liabilities contracted have not been identified to any of the reportable segments as the fixed assets and services are used interchangeably between segments. The Company believes that it is currently not practicable to provide segment disclosure relating to total assets and liabilities since a meaningful segregation of available data is not feasible.
5. Amalgamation of Companies
6. Changes in Accounting Policy: During the current year, the Company has changed its accounting policy with respect to depreciation / amortisation of assets, lease improvements and revenue recognition of Initial Rating Fees.
The effect of these changes are as below:
a. Depreciation / Amortisation:
1) During the current year, the Company has changed the method of depreciation from written down value method to straight line method with retrospective effect.
2) Depreciation on Trademark and Copyrights was changed from 25% written down value method to 25%
on straight line method based on estimated useful life.
3) Goodwill was amortized at 5% on straight line method based on estimated useful life. During the current year, the Company revised the estimated useful life of Goodwill and fully amortized the balance in Goodwill account
Had the Company continued to use the earlier method of providing depreciation/ amortization, the Profit after tax for the current quarter and year ended December 31, 2007, would have been higher by Rs.11.50 Lakhs and Rs 302.78 Lakhs respectively.
b) Revenue recognition: In the current year, the Company has changed revenue recognition policy for initial rating fees. Uptill now, initial rating fee were recorded upfront 100%, when the rating was awarded. However in the current year, management has estimated that 94% of initial rating fee is to be recognised upfront on the date the rating is awarded and balance 6% is recorded equally over 11 months subsequent from the month of awarding rating to commensurate with the efforts involved in assigning and monitoring such ratings. Had the Company continued to use the earlier basis of accounting for initial rating fees, Profit after tax for the quarter and year ended 31st December, 2007, would have been higher by Rs.14.92 Lakhs and Rs. 77.86 Lakhs respectively.
c) Lease Improvements: In the current year, the Company changed its method of expensing lease improvement costs in the period in which they were incurred to amortising such costs over the primary lease period. Had the Company continued to use the earlier method of accounting for leasehold improvements, the Profit after tax for the quarter and year ended 31st December, 2007, would have been lower by Rs. 5.32 Lakhs and Rs. 267.27 Lakhs respectively.
7. During the year ended 31st December, 2007, the Company has made an additional provision for employee benefits amounting to Rs. 190.80 Lakhs (for the quarter ended 31st December, 2007, Rs. Nil) as per revised Accounting Standard 15 (AS) issued by the Institute of Chartered Accountants of India. The additional obligation of the Company as on 1st January, 2007, was Rs. 709.05 Lakhs which, after adjusting for deferred tax asset of Rs. 238.67 Lakhs, has been adjusted against reserves in accordance with the transitional provisions of AS -15.
8. Pursuant to the Board and Shareholder approval dated 27th April 2007, the Advisory Division of the Company has been transferred to CRISIL Risk and Infrastructure Solutions Limited, a wholly owned subsidiary of CRISIL Limited, with effect from 1st April, 2007 with a consequential effect on revenues and profits.
9. Details of provision for tax are as under :
(Rs. in Lakhs)
Particulars
3 months ended 31-Dec-07
3 months ended 31-Dec-06
Current year ended 31-Dec-07
Previous year ended 31-Dec-06
Unaudited Unaudited Audited Audited
Income Tax 672.00 442.00 2,240.00 1,619.00
Wealth Tax 1.25 1.25 5.00 5.00
Fringe Benefit Tax 37.00 21.70 114.50 72.90
Deferred Tax Liability / (Asset) 11.00 (47.85) (322.15) (44.00)
Income Tax for earlier years 42.93 - 42.93 -
Total 764.18 417.10 2,080.28 1,652.90
10. Other income for the year ended December 31, 2007 includes dividend of Rs.594.22 Lakhs from a subsidiary company (Previous year - Rs.450.05 Lakhs).
11. Consolidated Profit and Loss Account includes accounts of CRISIL Limited and its wholly owned subsidiaries CRISIL Risk and Infrastructure Solutions Limited, CRISIL Credit Information Services Limited, Gas Strategies Group Limited (UK) and its subsidiaries, Irevna Limited (UK) and its subsidiary Irevna LLC (US) and proportionate share in income
12. The status of investor complaints pursuant to clause 41 of the listing agreement for the quarter ended 31st December, 2007 is as follows.
Opening Balance Addition Disposals Closing Balance
0 18 18 0
13. Previous year's figures have been regrouped where necessary to conform to current year's classification.
For and on behalf of the Board of Directors of CRISIL Limited
Roopa Kudva
Managing Director & Chief Executive Officer Mumbai, 18th February, 2008
