Code of Conduct
Code Of Conduct (Code Of Ethics) For Directors And Senior Management
A credit rating agency is expected to observe highest standards of integrity and fairness in all its dealings. The directors and senior management personnel are expected to articulate the high standards of honesty, integrity, ethical and law abiding behaviour in the organisation. All the Directors and Senior Management personnel of the Company are expected to read and understand the Code of Conduct and follow these standards in performance of their duties and comply with all applicable laws, rules and regulations. All the Board members and Senior Management personnel shall affirm compliance with the Code on an annual basis. For this purpose, “Senior Management” shall mean members of management at the level of Deputy General Manager and above.

Honesty and Integrity
The Directors/senior management shall act honestly and with integrity in all of their dealings for the company. They should not make any promise or commitments which the company does not intend to or would be unable to honour. Directors and senior management will not use company information obtained by them for personal gain whether financial or otherwise or for the benefits for any other person or business.

Directors and senior management will ensure that confidential information relating to customers, employees and Company’s operations is not given either inadvertently or deliberately to third parties without consent of the Company obtained in writing and subject to confidentiality agreement entered into with the client.

Conflict of interest
Directors and senior management shall fully disclose active private or other business interests promptly and any other matters which may lead to potential or actual conflicts of interests with CARE Ratings. No personal benefit shall be derived by influencing any decisions of the company on any commercial transaction.

Protection and proper use of assets
The Company expects each Director and Senior Management Personnel to use all reasonable endeavours to protect any Company asset and to ensure its efficient use.

Compliance with laws, regulations, policies and procedures

Each Director and Senior Management Personnel must:
  • Comply with applicable laws, rules and regulations;
  • Comply with the policies and procedures of the Company, including its corporate code of conduct and code of conduct for insider trading; and
  • Encourage other officers and employees to do the same.

Reporting of any illegal or unethical behaviour
Directors and senior management shall promptly contact the Chairman of the Audit Committee or Managing Director or the Compliance Officer if any director or senior management personnel believe that he or she has observed illegal or unethical behaviour by any employee, officer or director, or by anyone purporting to be acting on Company’s behalf. Whistle Blower policy of the Company provides adequate protection to employees raising bonafide issues.

Payments, Gifts, Entertainment and Travel
Directors and senior management shall not use their status to seek personal gain from those doing business or seeking to do business with the Company. Directors and senior management shall not accept any gift or other benefits.

Waivers and Modifications
Waivers of this Code of Conduct will be granted only when determined to be appropriate under the circumstances and in accordance with applicable law, and only upon approval by the Board of Directors or an authorised committee thereof. This Code of Conduct is also subject to modification by the Board of Directors at any time in order to ensure continued compliance with applicable laws, rules and regulations.
ACRAA Best Practices Checklist - CARE Ratings' Position
CARE Ratings is a founder member of Association of Credit Rating Agencies in Asia (ACRAA). ACRAA was formed on September 14, 2001 by Asian Credit Rating Agencies and it is assisted by Asian Development Bank (ADB). ACRAA was formed to promote:

  • Exchange of skills and ideas amongst Asian rating agencies
  • Establishment of best practices and norms of conduct among Asian rating agencies
  • Development of financial markets in Asia
A significant initiative undertaken by the Best Practices Committee of ACRAA was to create the ACRAA Best Practices Checklist. All Member Agencies are expected to declare their positions on each of the items in the checklist. CARE Ratings’ position on these items is set out below.


1) Specification and description of Rating Process and Criteria
CARE Ratings has a clearly specified and publicly disclosed rating processes and criteria for arriving at a rating.

2) Published and explicit Ratings Review / Appeal Process
CARE Ratings has put in place a structured review and appeal process.

3) Policy on Rating Withdrawals
Ratings are normally withdrawn only when the rated instrument is fully repaid or extinguished. Exceptions are made only in case of specific instruments/ratings; such exceptions are disclosed in Withdrawal Policy on our website. Further, CARE Ratings may suitably revise the ratings based on available information before withdrawing the assigned ratings. In extreme cases of issuer non co-operation, when the issuer does not provide the information sought by CARE Ratings for monitoring the rating in a timely manner, despite adequate efforts by CARE Ratings, CARE Ratings shall categorize the issuer as ‘non-cooperating’. In case of non-cooperating clients, CARE Ratings reviews the rating of instrument(s)/facilities on the basis of the ‘best available information’. CARE Ratings discloses the aspect of non-cooperation in its press release along with the reasons for non-cooperation, details of follow-up done by CARE Ratings for getting the information etc.

4) Policy on Disclosure of unaccepted ratings
CARE Ratings started publishing details of unaccepted credit ratings assigned from January 1, 2017. Details include name of the issuer, name/type of instrument, size of the issue, rating and outlook assigned, date of rating. These disclosures are a part of the ‘Regulatory disclosures’ and continue for a period of one year from date of such disclosure. Additional details about the unaccepted ratings would be disclosed by CARE Ratings and its employees only to Government/regulatory authorities, if required by law and formally requested for by the agencies or in case of misrepresentation by rated entity. Such disclosure of ratings in exceptional circumstances is provided for in the rating mandate obtained from rated entity. Further, CARE Ratings does not monitor unaccepted ratings.

5) Policy on surveillance
CARE’s credit ratings are normally kept under surveillance during the life of the instrument with a detailed annual review involving interaction and discussion with the management of the rated entity. Rating review can also be triggered by any major development in the company or in the industry, which may have a significant bearing on the creditworthiness of the issuer.

6) Policy on code of ethics of ratings agency and its staff
All our staff members are governed by staff rules which also includes ethical conduct. Staff members, directors and rating committee members are required to comply with an elaborate code of conduct. As per company’s policy, compliance of the code of conduct has to be certified annually by all staff members, directors and rating committee members.

7) Validity of ratings
Once accepted, CARE’s credit ratings are valid for the life of instrument or till their withdrawal. Also, a rating may be revised based on a periodic review by CARE Ratings during the life of the instrument.

8) Publication on the Limitations of
i) Rating Rigour
ii) Information adequacy
iii) Currency

Limitations of rating are disclosed in our brochure and website

9) Assurance or guarantee of ratings
CARE does not, either implicitly or explicitly, give any assurance or guarantee of a particular rating prior to a rating assessment. This policy, however, does not preclude us from developing prospecting assessments used in structured finance and similar transactions.

10) Policy on Compliance Officer
We have policies and procedures that specify the role of a compliance officer. Policies have also been instituted that encourage employees to report activities illegal, unethical, or in any way contrary to the CRA’s code of conduct to the Compliance Officer.

11) Separation of analyst compensation and revenue from issuer
The compensation of individual analysts is not based on the amount of revenue that the CRA derives from the issuers that the analysts rate or with whom the analysts regularly interact.

12) Published Policy on dependence on third parties:
i) Auditors
ii) Trustees
iii) Consultants
iv) Experts

CARE generally relies on authenticated information furnished to it while undertaking the rating exercise. Nevertheless, reasonable due diligence is carried out to cross check and verify the reliability of information. CARE also makes suitable adjustments to the financial statements, where required to ensure that a meaningful rating exercise is done.

13) Disclosure of Interests
In case CARE's rating committee/board and the board of the rated entity have any common member, such members do not participate in the rating process of the concerned entity. This is also disclosed publicly wherever applicable.

14) Separation of businesses
Our credit rating business and rating analysts are operationally separated from any other business that may have a potential for conflict of interest.

15) Disclosure of general nature of fee arrangements with rated entities
We disclose the general nature of fee arrangements with rated entities on our website.

16) Disclosure of non-rating revenues from rated entities
CARE Ratings discloses the “Issuer wise percentage share of non-rating income of CARE Ratings and its subsidiaries to the total revenue of CARE Ratings and its subsidiaries from that Issuer” on its website.

17) Trading Policy for CRA employees
CARE Ratings’ Code of Conduct for its employees includes trading policy, which, amongst other things, prohibits employees from transacting in securities when they possess confidential information concerning the issuer.

18) Policy on employees directly involved in the rating process initiating, or participating in, discussions regarding fees or payments with the rated entity.
It is our policy to exclude rating analysts from business development activities. The business development team and senior management are involved in Business development.

19) The Ownership of the agency
The ownership profile of CARE Ratings is disclosed on our website.

20) The agency’s Management and Board Structure
Composition of board members is disclosed on our website and in corporate brochures. Analyst contact is also available on the website.

21) Constitution of the Rating Committee
Composition of rating committee is disclosed on our website and in corporate brochure.

22) Disclosure of what Ratings issued by the agency mean
CARE’s ratings for debt instruments indicate the probability of default of the rated instruments.

23) Policy on time to communicate ratings
New ratings are made public on acceptance by the issuer. With regard to surveillance of outstanding ratings, a reasonable time is provided to issuers to appeal for a review. Dissemination of ratings is done adhering to timelines specified under the SEBI circular on Monitoring and Review of Ratings by Credit Rating Agencies (CRAs) dated June 30, 2017.

24) Guidelines on Rating Rationale: timeliness
CARE Ratings' press releases are published simultaneously with the announcement of rating.

25) Guidelines on Rating Rationale: content
Our Press Releases provide details including factors taken into account while arriving at the rating which encompasses the key rating drivers and their description encapsulating both strengths and weaknesses, rating outlook, key rating sensitivities, the analytical approach taken, applicable criteria, factual details of the entity along with major financial information, and rating history for the last three years.

26) Publication of Default and Transition statistics
Rating transition and Default statistics are regularly compiled and disseminated to public.

27) Existence and publication of a Policy on Unsolicited Ratings: whether they will be undertaken, if so based on what information.
CARE does not undertake unsolicited ratings.

28) Policy on preserving confidentiality of privileged information (and exceptions for regulatory queries)
CARE Ratings does not reveal confidential information obtained during the rating exercise to anyone under any circumstances, except when required by law to specified authorities. CARE Ratings’ Confidentiality Policy is disclosed on the website.

29) Publication of the CRA code of conduct
CARE Ratings has an elaborate Code of Conduct for its staff members, directors and rating committee members. The Code of Conduct for Board/Senior Management of CARE Ratings is disclosed on our website.

30) Existence of a dedicated function/group within the organization charged with informing market participants and public regarding any questions, concerns, or complaints that the CRA may receive.
Senior Management and Sector Heads interact/respond to market participants and public regarding any questions, concerns or complaints that CARE Ratings may receive.
CARE Ratings’s Code Of Conduct – IOSCO Compliance
CARE has aligned its code of conduct with ‘Code of Conduct Fundamentals for credit rating agencies’ (the ‘IOSCO Code’) issued by the International Organization of Securities Commissions (IOSCO), as amended upto July 2018. The same is attached here.
CARE Ratings Corporate Social Responsibility (CSR) policy