Central Depository Services (India) Ltd. के निदेशक की रिपोर्ट

Mar 31, 2025

Your Governing Board is pleased to present the Twenty-Seventh (27^th) Integrated Annual Report on the business and operations of Central Depository Services (India) Limited ("CDSL/the Company"), along with the Audited Financial Statements (Standalone and Consolidated) for the Financial Year ended March 31, 2025 ("FY 2024-25").

1. State of Company''s Affairs:

A. Financial Highlights:

('' in Lakh)
Particulars	Consolidated		Standalone
	Year ended March 31, 2025	Year ended March 31, 2024	Year ended March 31, 2025	Year ended March 31, 2024
Revenue from Operations	1,08,220.80	81,225.66	84,820.91	64,095.70
Other Income	11,707.43	9,504.73	13,636.84	10,193.31
Total Income	1,19,928.23	90,730.39	98,457.75	74,289.01
Expenditure	45,803.55	32,297.55	35,048.98	24,887.71
Profit before Depreciation, share of Profit/(Loss) from Associates and Taxation	74,124.68	58,432.84	63,408.77	49,401.30
Depreciation and amortization expenses	4,898.43	2,723.37	4,055.49	2,121.89
Profit before share of profit / (Loss) from Associates and Taxations	69,226.25	55,709.47	59,353.28	47,279.41
Share of Profit/(Loss) of associates	264.04	(108.31)	0.00	0.00
Profit Before Tax	69,490.29	55,601.16	59,353.28	47,279.41
Taxations	16,857.65	13,645.75	13,143.73	10,947.49
Profit after Tax	52,632.64	41,955.41	46,209.55	36,331.92
Other Comprehensive Income (Net of Tax)	26.01	(229.23)	(78.85)	(209.70)
Total Comprehensive Income	52,658.65	41,726.18	46,130.70	36,122.22

B. Financial Performance:

(i) Consolidated Results:

On a consolidated basis, the revenue from operations of the Company for the year ended March 31, 2025 is at '' 1,08,220.80 Lakh as against '' 81,225.66 Lakh for the previous year ended March 31, 2024, higher by 33%, resulting in total income of '' 1,19,928.23 Lakh for the year ended March 31, 2025 as against '' 90,730.39 Lakh for the previous year ended March 31, 2024. Profit before Tax (PBT) for the year ended March 31, 2025, is '' 69,490.29 Lakh as against '' 55,601.16 Lakh for the previous year ended March 31, 2024. Similarly, Profit after Tax (PAT) for the year ended March 31, 2025 is at '' 52,632.64 Lakh as against '' 41,955.41 Lakh for the previous year ended March 31, 2024. Thus, PAT for the year ended March 31, 2025, has increased by 25%, as against the previous year ended March 31, 2024.

(ii) Standalone Results:

On a standalone basis, the revenue from operations of the Company for the year ended March 31, 2025 is at

'' 84,820.91 Lakh as against '' 64,095.70 Lakh for the previous year ended March 31, 2024, higher by 32%, resulting in total income of '' 98,457.75 Lakh for the year ended March 31, 2025 as against '' 74,289.01 Lakh for the previous year ended March 31, 2024. The income from operations largely comprises of transaction charges, annual issuer charges, CAS income, e-voting income, corporate action charges, etc.

The other income includes dividend received from subsidiary of '' 4,750.00 Lakh during the year ended March 31, 2025 as against '' 2,950.00 Lakh during the previous year ended March 31, 2024. Pursuant to Regulation 73 of the SEBI (Depositories and Participants) Regulations, 2018 [SEBI (D&P) Regulations], the contribution to Investor Protection Fund (IPF) is determined at '' 2,594.11 Lakh. The Profit before Tax (PBT) for the year ended March 31, 2025, is '' 59,353.28 Lakh as against '' 47,279.41 Lakh for the previous year ended March 31, 2024. Similarly, Profit after Tax (PAT) is '' 46,209.55 Lakh for the year ended March 31, 2025 as against '' 36,331.92 Lakh for the

previous year ended March 31, 2024. Thus, PAT for the year ended March 31, 2025 has increased by 27% as against the previous year ended March 31, 2024.

During the year, the Governing Board of the Company reviewed the affairs of its subsidiary companies. In accordance with Section 129(3) of the Companies Act, 2013, your Company has prepared its consolidated financial statements and of all subsidiary and associate companies in the same form and manner as that of its own and in accordance with applicable accounting standards, which forms part of this Integrated Annual Report. Further, a separate statement containing the salient features of the financial statements of our subsidiary and associate companies in the prescribed format of Form AOC-1 is appended as Annexure-A to the Board''s Report. The statement also provides details of the performance and financial position of each of the subsidiary and associate companies.

In accordance with Section 136 of the Companies Act, 2013, the Audited Financial Statements (Standalone and Consolidated) and all other related documents and information of the Company and separate audited accounts in respect of each of the subsidiary companies are available on our website https://www.cdslindia.com/ InvestorRels/AnnualReports.html. These documents will be available for inspection till the date of AGM during working hours at the registered office of the Company.

C. General Reserves:

The Company has not transferred any amount out of the profits of the year to General Reserves.

D. Dividend:

The Board of Directors has recommended Final Dividend of '' 12.50 per Equity Share of the face value of '' 10 per share for the Financial Year 2024-25, subject to the approval of the Shareholders. The Company had issued bonus shares in the ratio of 1:1 during Financial Year 2024-25. (For the year ended March 31, 2024 : a Dividend of ^ 19 per Equity Share and Special Dividend of ^ 3 per Equity Share of the face value of ^ 10 per share.).

The Final Dividend, if approved, would result in a cash outflow of '' 26,125.00 Lakh and Dividend payout ratio at 61.30%.

The Dividend recommended is in accordance with the principles and criteria as set out in the Dividend Distribution Policy. The Policy can also be accessed on the Company’s website at https://www.cdslindia.com/ InvestorRels/CorporateGovernance.html

2. Share Capital:

Change in Capital Structure:

The Authorized Share Capital of your Company is '' 3,00,00,00,000/- divided into 30,00,00,000 Equity Shares of '' 10/- each whereas the Issued and Paid-up Share Capital is '' 2,09,00,00,000 divided into 20,90,00,000 Equity Shares of '' 10/- each.

As of March 31, 2025, all the shares are in dematerialized form.

During the year under review, Bonus Shares were allotted as on August 25, 2024 of '' 1,04,50,00,000/- (Rupees One Hundred and Four Crore and Fifty Lakh Only) of '' 10/-(Rupees Ten Only) each in the proportion of1:1, i.e. 1 (One) new fully paid-up Equity Share of '' 10/- (Rupees Ten Only) each for every 1 (One) existing fully paid-up Equity Share of '' 10/- (Rupees Ten Only).

3. Business Performance and Overview:

Indian Capital Markets:

In Fiscal Year 2024-25, the Indian capital market showed solid performance, contributing to capital formation and supporting wealth creation. The stock market reached new highs and performed well compared to its emerging market peers despite geopolitical uncertainties. Key indicators suggest a stable economy with growth across various sectors, including IPOs, foreign investment, and capital expenditure.

The International Monetary Fund (IMF) projected that the Indian economy will grow by 6.2% in 2025 and 6.3% in 2026. The IMF emphasized that the growth outlook for 2025 is relatively stable at 6.2%, supported by private consumption, especially in rural areas. India has become the world’s fourth-largest economy in 2025, surpassing Japan. This growth is driven by strong export performance, particularly in services, and a rebound in rural demand.

According to the Economic Survey 2024-25, India''s stock markets have achieved new records in FY 24-25 despite challenges such as geopolitical tensions, currency fluctuations, and domestic market volatility. This growth was driven by an increasing number of investors, active listing activities, and regulatory support.

Operational Performance:

A. Depository Participants and Service Centers:

As on March 31, 2025, 574 Depository Participants (DP) held valid registration certificates of Securities and Exchange Board of India (SEBI) as compared to 580 valid SEBI registrations as on March 31, 2024. Further, investors have access to 18,918 DP service centers spread across India.

B. Beneficial Owner Accounts:

During the year under review, 3.74 Crore net Beneficial Owner (BO) accounts were added, taking the total number of such accounts to 15.30 Crore as on March 31, 2025, making us the first depository to cross the 15 Crore demat accounts milestone.

The comparative figures of net BO accounts as on March 31, 2025, and March 31, 2024, are given in the following table:

Year ended March 31,	Year ended Increase over the previous March 31, year’s cumulative figure
2025	2024 Number Percentage (%)
15,29,84,202	11,56,05,419 3,73,78,783 32.33

C. Securities Admitted:

Securities like equity shares, preference shares, mutual fund units, debt instruments, government securities, certificates of deposit, commercial papers and a host of other instruments are available for dematerialisation by the investors. Details of the securities admitted with CDSL are given below:

Securities	Year ended March 31, 2025	Year ended (%) change March 31, over the 2024 previous year
Equity Shares	32,584	21,576 51.02
Debt Instruments	12,383	11,463 8.03
Other Securities	53,469	39,328 35.96
Total	98,436	72,367 36.02
D. Position of Securities held in the System: The value and volume of securities held with CDSL in the year under review as compared to the previous year are indicated below:
Holding of Securities	Year ended March 31, 2025	Year ended Change over March 31, the previous 2024 year (%)
Value ('' in lakh Crore)	70.52	64.21 9.83
Volume (in Crore) (Number of Securities)	83,599	66,146 26.39
E. Social and Relationship Capital: Beneficial owner accounts -
FY2020-21 FY2021-22 FY 2022-23 FY 2023-24 FY 2024-25
3,34,37,873 6,29,97,046 8,30,01,541 11,56,05,419 15,29,84,202

F. Manufactured Capital: Securities admitted -
FY2022-23 FY2023-24		FY2024-25
Equity shares	19,304 21,576	32,584
Debt instruments	10,399 11,463	12,383
Other securities	26,648 39,328	53,469
Total	56,351 72,367	98,436
Position of securities held -
Custody Value in Crore) -
FY2022-23	FY2023-24	FY2024-25
39,71,126.90	64,20,627.63	70,52,401.88
Custody Volume in Crore) -
FY2022-23	FY2023-24	FY2024-25
61,285	66,146	83,599

4. Initiatives Towards Enabling and Empowerment of Investors:

Several key developments were implemented during FY

2024-25 that enabled in sustaining the growth trajectory:

Key Developments:

i. Harmonization of file formats:

Earlier each Market Infrastructure Institution ("MII") used its own file formats, causing complexities in reporting. To address these issues, the Securities and Exchange Board of India ("SEBI") initiated a project to harmonize and standardize these formats. This initiative intended to provide ease of doing business and facilitate cost effective "operations".

The harmonization of file formats aims to streamline and standardize file formats across depositories in the Indian securities market. Central Depository Services (India) Limited ("CDSL") has introduced Unified Distilled File Formats ("UDiFF") to standardize data exchange between DPs and CDSL. This initiative includes the release of new harmonized file formats for various reports. By adopting UDiFF, depositories can manage customer interactions, improve data accuracy, and comply with regulatory requirements more effectively.

ii. Direct Payout of Securities:

The Market Infrastructure Institutions ("MIIs"), comprising Exchanges, Clearing Corporations and Depositories have successfully implemented the Direct Payout Settlement mechanism for securities w.e.f. February 25, 2025, under the guidance of Securities and Exchange Board of India ("SEBI").

This initiative ensures seamless direct credit of securities to the clients'' demat accounts thereby enhancing market integrity, operational efficiency, transparency and investor protection.

iii. Investor Application:

CDSL has upgraded the Investor application by introducing new unified features. CDSL''s MyEasi mobile app now offers a single, secure, and convenient platform that integrates financial data from both depositories, CDSL and NSDL as well as clearing corporations NCL and ICCL, empowering investors to make informed decisions with ease. This unified feature was officially launched by the SEBI Chairperson on February 20, 2025.

The upgraded CDSL investor application now provides users with access to the following additional information:

• Consolidated Holding and Transaction Statement: Allows users to view consolidated holdings and transaction details across their accounts with both CDSL and NSDL.

• Open Positions and Margin Details:

Facilitates monitoring of open positions and margin details across multiple exchanges and clearing corporations.

• Statement of Financial Transactions (SFT):

Enables users to access the Statement of Financial Transactions submitted to Central Board of Direct Taxes (CBDT).

5. Initiatives on Education & Empowerment of Investors:

A. Investor Awareness/Education Seminars:

CDSL Investor Protection Fund ("CDSL IPF"), along with SEBI, Market Infrastructure Institutions ("MIIs"), and other entities such as Depository Participants ("DPs") and educational institutions, conducts Investor Awareness Programmes ("IAPs") across the country, throughout the year. These programmes are held in both online and offline formats, targeting current and potential investors across diverse demographic segments.

During the Fiscal Year 2024-25, CDSL IPF conducted a comprehensive series of 2,526 IAPs in English, Hindi, and 13 regional languages.

Through these programmes, CDSL IPF successfully engaged with a broad spectrum of investors and potential investors, including, students, self-help groups, members of the armed forces, professionals, nursing staff, & Anganwadi workers. Of the 2,526 programmes conducted, 324 sessions were dedicated exclusively for women participants. In total, over 1.47 lakh participants were reached across the

country. These IAPs served as a vital platform for fostering meaningful engagement and enhancing participants'' understanding of the Indian capital markets.

B. Empowering Communities through Targeted Financial Literacy Campaigns:

In FY 2024-25, CDSL IPF launched impactful initiatives to promote financial literacy among key segments. The ''Empowering Our Protectors’ campaign, launched in September 2024, focused on armed forces, police personnel and their families, conducting 51 awareness programmes across 9 states and 19 districts, reaching over 5,300 individuals. In March 2025, the AtmanirbHER initiative was introduced to empower women through digital content, awareness programmes, and on-ground engagement. A highlight was the Nukkad Natak campaign at Maha Kumbh Mela 2025, Prayagraj, under the #BanoAI initiative. Performed by professional artists, the plays used humor and relatable storytelling to raise awareness about scams and promote informed investing via SEBI-registered platforms.

To further empower investors, an informative booklet titled "Guide to Securities Market and Safe Investing" was collaboratively developed by Securities and Exchange Board of India ("SEBI"), CDSL and other Market Infrastructure Institutions ("MIIs"). This booklet was distributed to investors to enhance their knowledge and serve as a valuable reference guide.

C. Social Media Campaign:

I n response to evolving media consumption trends, CDSL IPF strategically leveraged social media platforms to engage a younger demographic and broaden investor awareness. Central to this initiative was the flagship campaign ‘Atmanirbhar Investor'', which served as a key pillar of our various digital outreach.

I n FY 2024-25, CDSL IPF launched several impactful campaigns including AI Talks, AtmanirbHER Investor, and Bano AI, aimed at enhancing financial literacy and promoting informed investing. These campaigns addressed key topics such as "Slam the Scam," nominations, DDPI, pledging, eVoting, eCAS, account freezing, and mutual fund benefits in Demat accounts. To ensure inclusivity and regional reach, most content was released in six regional languages. A diverse mix of content formats—including videos, reels, static posts, quizzes, OTT integrations, and more—was curated to capture attention and sustain engagement. The overarching objective was to educate and empower investors through engaging, informative, and accessible content.

In addition to campaign-specific initiatives, our social media presence across Facebook https://www.facebook.com/cdslindia. X [formerly

Twitter] https://x.com/cdslindia, LinkedIn https:// www.linkedin.com/companv/cdslindia. Instagram https://www.instagram.com/cdslindia, YouTube https://www¦voutube¦com/@CDSLIndiaLtd¦

and WhatsApp Channel: https://whatsapp.com/ channel/0029Vao84Nu11ulQQx43so3p played a critical role in disseminating important updates. These included reminders for nomination, updates on the six KYC attributes, voluntary freeze options, and information on upcoming Investor Awareness Programmes ("IAPs").

To further strengthen outreach, WhatsApp and email communications were actively used, ensuring a holistic and far-reaching investor engagement strategy. This integrated digital approach reflected our ongoing commitment to fostering financial literacy and investor participation through innovative and accessible channels.

D. Website Resources:

As a critical digital touchpoint, the Company''s website continues to play a central role in delivering timely and

relevant information to investors. It is regularly updated using modern technologies to ensure accessibility, usability, and responsiveness.

In its continued efforts to promote financial inclusion and investor empowerment, CDSL has undertaken initiatives to connect with investors in regional languages, thereby simplifying their journey towards self-sufficiency. The official website of CDSL (www.cdslindia.com) is now available in 11 regional languages, enhancing accessibility and support for investors across diverse linguistic backgrounds.

In addition, the website serves as a comprehensive resource hub, providing valuable information on Depository activities, Investor Charter, and details of upcoming IAPs, further strengthening our commitment to investor education and empowerment.

6. New Advancements:

Detailed note on technological advances for the empowerment of Indian capital markets is covered under our business section.

B. Change in Composition of the Governing Board and Key Management/Managerial Personnel (KMPs) during the Financial Year ended March 31, 2025:

The changes taken place in the composition of Governing Board and KMPs including Senior Management of CDSL are as follows:

Appointment of Directors:

i. SEBI, vide its letter dated May 31, 2024, had accorded its approval for the appointment of Prof. Varsha Apte as Public Interest Director/Independent Director on the Governing Board of the Company for a period of three years. Her appointment was effective from June 05, 2024 up to May 30, 2027 and she shall not be liable to retire by rotation as per the extant regulations.

ii. SEBI, vide its letter dated November 25, 2024, had accorded its approval for the appointment of Shri Bharat Vasani as Public Interest Director/ Independent Director on the Governing Board of the Company for a period of three years. His appointment was effective from November 27, 2024 up to November 24, 2027 and he shall not be liable to retire by rotation as per the extant regulations.

Re-appointment of Director:

i. Shri Nehal Vora has been re-appointed as Managing Director and CEO vide Shareholders'' approval through Postal Ballot dated December 14, 2024. SEBI, vide its letter dated August 29, 2024, had accorded its approval to the re-appointment of Shri Nehal Vora as Managing Director and CEO on the Governing Board of CDSL, who shall not be liable to retire by rotation and accordingly, the re-appointment of Shri Nehal Vora for the second term was effective for a period of 5 (five) years from September 18, 2024 up to September 17, 2029.

Retirement by rotation and subsequent re-appointment:

i. Ms. Kamala Kantharaj, Non-Independent Director, was

liable to retire by rotation at the 26^th Annual General Meeting (“AGM”) of the Company held on August 17, 2024. She was re-appointed as Non-Independent Director of the Company by the Shareholders at the 26^th AGM of the Company held on August 17, 2024, and further, approval was received from SEBI vide its letter dated September 12, 2024 and accordingly her re-appointment was effective from September 12, 2024.

Resignation of Directors:

Resignation of Prof. (Dr.) Bimalkumar N Patel (DIN: 03006605) as a Public Interest Director/ Independent Director:

Prof. (Dr.) Bimalkumar N Patel has resigned from the position of Public Interest Director/Independent Director with effect from May 04, 2025, due to personal reasons and there are no material reasons other than personal reasons.

Changes in Key Management/Managerial Personnel (KMPs)/Senior Management:

i. Appointment of Key Management/Managerial

Personnel/Senior Management:

• Shri Sachin Nayak, Vice President-Operations, was appointed w.e.f. April 04, 2024.

• Shri Nilesh Lodaya, Senior Vice President-Chief of Business Development & New Projects, was appointed w.e.f. August 21, 2024.

• Shri Joy Banerjee, Senior Vice President-Head Human Resource & Administration, was appointed w.e.f. December 23, 2024.

• Shri Rajat Srivastav, Senior Vice President-General Counsel, was appointed w.e.f. January 29, 2025.

ii. Cessation of Key Management/Managerial

Personnel/Senior Management:

• Shri Ravi Kumar, Assistant Vice President -Information Technology, ceased to be Key Management Personnel/Senior Management w.e.f. June 05, 2024.

• Shri Ashwin Lalchandani, Assistant Vice President - Risk Management, ceased to be Key Management Personnel/Senior Management w.e.f. June 05, 2024.

iii. Changes in designation of Key Management/

Managerial Personnel/Senior Management:

• Pursuant to the appointment of Shri Joy Banerjee, Head Human Resource & Administration, the designation of Shri Girish Amesara was changed from Chief Financial Officer & Head Human Resource to Chief Financial Officer w.e.f. December 23, 2024.

• Pursuant to the appointment of Shri Joy Banerjee, Head Human Resource & Administration, the designation of Shri Amit Mahajan was changed from Chief Technology Officer & Head Administration to Chief Technology Officer w.e.f. December 23, 2024.

• Pursuant to the appointment of Shri Rajat Srivastav, General Counsel, the designation of Shri Nilay Shah was changed from Company Secretary & Head Legal to Company Secretary & Compliance Officer w.e.f. January 29, 2025.

Retirement by Rotation:

As per the provisions of Section 152(6) of the Companies Act, 2013, Shri Masil Jeya Mohan P, Non-Independent Director, being liable to retire by rotation at the ensuing AGM, has expressed his desire to not offer himself for re-appointment. The Governing Board places on record its deep appreciation and gratitude towards the valuable contributions made by Shri Masil Jeya Mohan P during his tenure as Non-Independent Director of the Company.

C. Declaration from Directors:

a) The Company has received necessary declarations from the Public Interest Directors/Independent Directors as required under Section 149 of the Companies Act, 2013 and under clause (b) of sub-regulation (1) of Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The Public Interest Directors/ Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013. There has been no change in the circumstances affecting their status as Public Interest Directors/Independent Directors.

b) The Company has received necessary declarations from the Public Interest Directors/Independent Directors in adherence to the Code of Conduct for Directors and Senior Management as formulated by the Company.

c) In the opinion of the Governing Board, all Public Interest Directors/Independent Directors possess requisite qualifications, experience (including proficiency), expertise and hold high standards of integrity required to discharge their duties with an objective, independent judgement and without any external influence. List of key skills, expertise and core competencies of the Governing Board, including the Independent Directors, forms a part of the Corporate Governance Report of this Integrated Annual Report.

d) I n terms of Regulation 25(8) of SEBI Listing Regulations, the Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties.

e) Further, the Public Interest Directors/Independent Directors have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

D. Declaration by the Company:

None of the Directors of the Company are disqualified from being appointed as Directors as specified in sub-section (1) or sub-section (2) of Section 164 of the Companies Act, 2013 read with Rule 14 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

The Certificate from M/s. Vatsal Doshi & Associates, Practicing Company Secretaries, in this regard, forms part of the Corporate Governance Report of this Integrated Annual Report.

E. Number of Meetings of the Governing Board and its various Committees:

16 (Sixteen) Meetings of the Governing Board were held during FY 2024-25. The details of Meetings of Governing Board and Committees held during the year, attendance of Directors at the Meetings and constitution of various Committees of the Governing Board as per the Companies Act, 2013 and SEBI Listing Regulations are included separately in the Corporate Governance Report, which is enclosed as Annexure-B.

F. Audit Committee Recommendations:

During the year, all recommendations of the Audit Committee were approved by the Governing Board.

G. Performance Evaluation of the Governing Board:

The Governing Board of the Company on the recommendation of Nomination and Remuneration Committee, adopted the Board Evaluation Policy (the Policy) to comply with the various provisions of the Companies Act, 2013, SEBI Listing Regulations, SEBI (D&P) Regulations, SEBI circular dated January 05, 2017, February 05, 2019 and any other applicable provisions, SEBI letters and/or circulars issued thereunder.

The Policy has been framed with an objective to ensure Individual Directors of the Company and the Governing Board as a whole, work efficiently and effectively in achieving their functions, for the benefit of the Company and its Stakeholders. Accordingly, the Policy provides guidance on evaluation of the performance on an annual basis, of:

(i) Non-Independent Directors, except Managing Director and CEO;

(ii) Public Interest Directors/Independent Directors ;

(iii) Managing Director and CEO;

(iv) Chairperson of the Governing Board;

(v) the Governing Board as a whole; and

(vi) various Committees of the Governing Board.

The criteria for evaluation for each of the above are as follows:

Internal Evaluation:

The Governing Board of the Company carried out the annual evaluation of the Governing Board as a whole, Committees of the Governing Board, Non-Independent Directors, Public Interest Directors/Independent Directors, Managing Director and CEO and Chairperson of the Governing Board as per the regulatory requirements and the Board Evaluation policy on the basis of a structured questionnaire, drafted in accordance with the guidelines issued by SEBI, which comprises evaluation criteria taking into consideration various performance related parameters. All the Directors participated in the evaluation process. Feedback was provided by the Chairperson and the same was deliberated upon by the Governing Board to enhance its overall effectiveness and optimize the individual strengths of the Directors.

A separate Meeting of the Public Interest Directors/ Independent Directors was held wherein the performance of the Non-Independent Directors, performance of the Governing Board as a whole (including the Committees), the Managing Director and CEO and also that of the Chairperson of the Governing Board in terms of the provisions of the Companies Act, 2013, the SEBI Listing Regulations and the SEBI (D&P) Regulations was discussed.

External Evaluation:

SEBI vide its circular dated February 05, 2019, has mandated that the Public Interest Directors/Independent Directors shall also be subject to an external evaluation during the last year of their first term by a management or a human resource consulting firm.

As per the SEBI (D&P) Regulations, Public Interest Directors/Independent Directors can be appointed with the prior approval of SEBI on the Governing Board of a Depository for an initial term of three years, extendable by another term of three years subject to performance review as prescribed by SEBI.

For the year under review, none of the Public Interest Directors/Independent Directors were eligible to be evaluated by External Agency.

Disclosures as prescribed under SEBI circular dated May 10, 2018 are given below:

1. Observations of Board evaluation carried out for the year:

No observations.

2. Previous year''s observations and actions taken:

Since no observations were received, no actions were taken.

3. Proposed actions based on current year observations:

Since no observations were received, no actions were taken

H. Performance Evaluation of the MII and Statutory Committees thereof:

External Performance Evaluation of the MII & Statutory Committees:

In accordance with Regulation 31(6) of the SEBI (D&P) Regulations, and SEBI Circular No. SEBI/HO/MRD/POD-III/ CIR/P/2024/127 dated September 24, 2024, your Company is required to undergo an independent external evaluation of its overall performance and that of its statutory committees, once in every three years. The first such independent external evaluation will cover the Financial Year 202425. Subsequent evaluations will be conducted for each successive block of three Financial Years.

Internal Performance Evaluation of MII & Statutory Committees:

Furthermore, as per Regulation 31(5) of SEBI (D&P) Regulations and SEBI Circular no. SEBI/HO/MRD/ POD-III/CIR/P/2025/12 dated January 30, 2025, your Company is required to conduct an internal evaluation of its performance and the performance of its statutory committees every year. The first internal evaluation was for the Financial Year 2024-25. Accordingly, the report on internal evaluation of the Company and its statutory committees was approved by the Governing Board on June 21, 2025.

I. Directors’ Responsibility Statement:

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Governing Board reports that:

i. in preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided;

ii. accounting policies have been selected and applied them consistently and the judgements and estimates made 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 of the Company for that period;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv. the annual accounts have been prepared on a going-concern basis;

v. internal financial controls to be followed by the Company are laid down and that such internal financial controls are adequate and were operating effectively;

vi. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

J. Company''s Policy on Director''s Appointment and Remuneration:

The Nomination and Remuneration Policy has been framed in order to set out principles, parameters and governance framework of the appointment, re-appointment and remuneration of Directors, Managing Director and CEO, Key Management/Managerial Personnel, Independent External Professionals and employees of the Company. The Nomination and Remuneration Policy can be accessed on website of the Company at https://www.cdslindia. com/InvestorRels/CorporateGovernance.html

The salient features of the Policy, along with changes made during the Financial Year 2024-25, pursuant to the SEBI Circular on Terms of Reference of Statutory Committees of Market Infrastructure Institutions (MIIs) dated June 25, 2024, are briefly specified hereinbelow:

• General Principles: Covering appointment, re-appointment, tenure, removal, retirement, resignation and remuneration of Directors and Key Management Personnel (including Senior Management).

• Public Interest Directors: Guidelines on appointment, re-appointment, tenure, removal, retirement, resignation and remuneration.

• Managing Director and CEO: Provisions regarding appointment, re-appointment, tenure, removal, retirement and remuneration.

• Independent External Professionals (IEPs): Provisions regarding appointment and remuneration.

• Succession Planning: NRC assesses orderly succession planning for Directors and Key Management/ Managerial Personnel and make recommendations to the Governing Board.

K. I nternal Financial Control Systems and their Adequacy:

The details in respect of adequacy of internal financial controls with reference to the Financial Statements forms part of the Management Discussion and Analysis Report enclosed as Annexure-C.

L. Compliance with Secretarial Standards:

During the year under review, your Company has complied with applicable Secretarial Standards i.e. SS-1 and SS-2, relating to "Meetings of the Board of Directors" and "General Meetings", respectively issued by the Institute of Company Secretaries of India pursuant to Section 118(10) of Companies Act, 2013.

M. Annual Return:

The Annual Return of the Company as on March 31, 2025 in Form MGT-7 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://www.cdslindia. com/InvestorRels/GeneralMeeting.html

N. Implementation of Corporate Action:

During the year under review, the Company has complied with the specified time limit for implementation of Corporate Action.

9. Major Events Occurred During the Year:

A. Material changes and commitments affecting the financial position which have occurred between the end of the Financial Year and the date of the report:

No material changes and commitments affecting the financial position have occurred between the end of the financial year to which the financial results refer and the date of the report.

B. Change in the nature of business:

The Company has not undergone any changes in the nature of the business during the FY 2024-25.

C. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future:

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

D. Financial Disincentives:

During the year under review, the below-mentioned financials disincentives were imposed on your Company:

i. SEBI Standard Operating Procedure (“SOP”) dated August 28, 2019 - Non-compliance with SEBI''s cyber security policies and guidelines and failure to report Cyber Security breaches, incidents and deficiencies within the timelines stipulated by the SEBI in the matter of the malware incident occurred on November 18, 2022.

The Company has transferred the Financial Disincentive amount of '' 10 Lakh to the Investor Protection and Education Fund administered by SEBI on September 16, 2024. The Management has submitted the Root Cause Analysis ("RCA") which was approved by the Standing Committee on Technology ("SCOT")/Governing Board and also presented to SEBI''s High Powered Steering Committee on Cyber Security ("HPSC"). The forensic analysis for the same was carried out by M/s KPMG. All the actions from the RCA and forensic analysis have been completed thereby ensuring that such instances do not recur.

ii. SEBI Master Circular dated October 06, 2023 -Failure to complete the procedure for pay-in for rolling settlement within the timelines stipulated by the SEBI on January 30, 2024.

The Company has transferred the Financial Disincentives amount of '' 50 Lakh to the "CDSL Investor Protection Fund" on September 23, 2024. The Management has submitted the RCA which was approved by SCOT/Governing Board and also presented to SEBI Technical Advisory Committee ("TAC"). All the actions from the RCA have been completed thereby ensuring that such instances do not recur.

iii. SEBI Master Circular dated October 06, 2023 -Technical glitches occurred in the systems of the CDSL between years 2021 to 2024.

The Company has transferred the Financial Disincentives amount of '' 3 Crore to CDSL Investor Protection Fund on April 15, 2025. The Management has submitted the RCA which was approved by SCOT/ Governing Board and also presented to SEBI TAC. All the actions from the RCA have been completed thus ensuring such instances do not recur.

Further, shares which have remained unclaimed for seven consecutive years will also be transferred to IEPF.

Shareholders who wish to claim their Unpaid/Unclaimed Dividend(s) may send a written request to the Secretarial & Compliance Department on e-mail ID: shareholders@ cdslindia.com or to the RTA of the Company on e-mail ID: [email protected] or by post to RTA''s address at C-101, 247 Park, L.B.S. Marg, Vikhroli West, Mumbai - 400 083, Maharashtra, India.

11. Public Deposits:

A. Deposits:

Your Company has not accepted any deposits within the meaning of Section 73 to 76 of the Companies Act, 2013 and the Rules made thereunder. There are no deposits remaining unpaid or unclaimed as at the end of the year and there has been no default in repayment of deposits or payment of interest thereon during the year.

B. Details of deposits not in compliance with the requirements of the Companies Act, 2013:

Since the Company has not accepted any deposits during the Financial Year ended on March 31, 2025, there has been no non-compliance with the requirements of the Companies Act, 2013.

12. Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013:

Details of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013 are disclosed in the notes to the financial statements.

13. Auditors:

A. Statutory Auditors & Audit Report:

M/s. S. R. Batliboi & Co. LLP (Firm Registration No. 301003E/ E300005), Chartered Accountants, Mumbai were appointed as Statutory Auditors of the Company in the Twenty Fifth Annual General Meeting held on September 01, 2023 to hold office from the conclusion of the 25^th Annual General Meeting till the conclusion ofthe 30^th Annual General Meeting. Accordingly, M/s. S.R. Batliboi & Co. LLP are the Statutory Auditors of the Company for the FY 2024-25 and shall continue as Statutory Auditors of the Company till the conclusion of the 30^th Annual General Meeting.

The Statutory Auditor''s Report does not contain any qualifications, reservations or adverse remarks or disclaimers.

B. Details in respect of frauds reported by Statutory Auditors:

There are no frauds reported by Statutory Auditors under Section 143(12) of the Companies Act, 2013, during the Financial Year ended March 31, 2025.

C. Internal Auditors:

In terms of the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, the Governing Board, based on the recommendation of the Audit Committee at its Meeting held on March 21, 2025, had appointed M/s. Mukund M. Chitale & Co. (Firm Registration No. 106655W) as Internal Auditors & Concurrent Auditors of the Company for the period from April 01, 2024, to March 31, 2025, as Internal Auditors & Concurrent Auditors of the Company.

The Internal Auditor''s and Concurrent Auditor''s report does not contain any qualifications, reservations or adverse remarks or disclaimers.

D. Secretarial Auditors and Secretarial Audit Report:

I n compliance with Regulation 24(A) of SEBI Listing Regulations and Section 204 of the Companies Act, 2013 read with Rules made thereunder, the Governing Board at its Meeting held on May 03, 2025, based on the recommendation of the Audit Committee, approved the appointment of M/s. Vatsal Doshi & Associates (C.P.No. 22976/ Membership No. A50332), Practicing Company Secretaries, Mumbai for a period of 5 (five) consecutive Financial Years commencing from FY 2025-26 upto ensuing FY 2029-30, subject to approval of the Shareholders at the ensuing 27^th AGM of the Company. A copy of the Secretarial Audit Report issued in Form MR-3 by M/s. Vatsal Doshi & Associates, Secretarial Auditors is enclosed as Annexure-D to this report. The Secretarial Audit Report of CDSL Ventures Limited, material unlisted subsidiary of the Company issued in Form MR-3 by M/s. Vatsal Doshi & Associates, Secretarial Auditors is enclosed as Annexure-E to this report.

M/s. Vatsal Doshi & Associates (C.P.No. 22976/ Membership No. A50332) has confirmed that his appointment, if made, will comply with the eligibility criteria in terms of SEBI Listing Regulations. Further, he has confirmed that he holds a valid certificate issued by the Peer Review Board of ICSI.

The Secretarial Auditor''s Report mentioned in Annexure-D to this report does not contain any qualifications, reservations, or adverse remarks or disclaimers. However, the report mentions about the settlement amount of approximately '' 1.3 Crore and three financial disincentives matters.

A detailed proposal for appointment of Secretarial Auditor forms part of the Notice convening this AGM.

E. Annual Secretarial Compliance Report:

Your Company has undertaken an audit for the FY 2024-25 for all applicable compliances as per SEBI Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report has been submitted to the Stock Exchange within 60 days of the end of the Financial Year 2024-25 and is available on the website of the Company at https://www.cdslindia.com/InvestorRels/ CorporateGovernance.html

F. Cost Records:

Your Company is not required to maintain cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and accordingly such accounts and records are neither made nor maintained.

14. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

A. Conservation of energy & technology absorption:

Considering the nature of the operations of your Company, provisions with respect to conservation of energy and technology absorption of Section 134(3)(m) of the Companies Act, 2013, are not applicable, though the Company uses all the possible ways in conserving energy. The Company has, however, used information technology extensively in its operations.

B. Foreign exchange earnings and outgo:

Details of foreign exchange earnings and outgo during the year under review are as under:

Rules, 2014, reflects our dedication to ethical governance and transparency in all our initiatives.

This year, we have reaffirmed our vision to enrich the lives of citizens across India. We understand that true progress is not just about financial growth; it is about fostering a society where social, environmental, and economic advancements coexist harmoniously. In the Financial Year 2024-25, we proudly partnered with 16 (sixteen) esteemed CSR organizations (mentioned below), amplifying our impact in critical areas such as Education, Healthcare, Environment, Rural Development & Livelihood and others. Together, we have reached out to socially and economically disadvantaged communities in every State and Union Territory of India, ensuring that our efforts resonate far and wide.

('' in Lakh)
Particulars	For the year	For the year
	ended March	ended March
	31, 2025	31, 2024
Foreign Exchange Earnings	-	-
Foreign Exchange Outgo	83.25	20.27
Total	83.25	20.27

15. Risk Management and Compliance:

CDSL''s Enterprise Risk Management (ERM) Framework, outlined in the Risk Management Policy, provides a structured approach to identify, assess and manage risks across all business areas. It comprises of four key components: Risk Assessment, Risk Treatment, Risk Reporting & Monitoring and Risk Remediation & Oversight.

The Risk Management Function operates independent of business and operational units, ensuring objective oversight and adherence to best practices.

To strengthen risk culture, CDSL promotes awareness through internal initiatives, trainings, and stakeholder engagement, embedding risk aware culture into daily operations.

Together, the ERM Framework and supporting initiatives enable proactive risk management, enhance prioritization, and improve overall effectiveness. Further details are available in the Management Discussion and Analysis Report attached as Annexure-C.

16. Corporate Social Responsibility (CSR):

At CDSL, we believe that our responsibilities extend beyond the realm of business. Guided by our commitment to CSR, we strive to make a meaningful difference in the communities we serve. Our CSR Policy, framed in accordance with Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy)

We continue to reinforce our commitment to responsible corporate citizenship. Our established framework provides clear procedures for selecting themes and partners that align with our mission. We maintain comprehensive guidelines for conducting due diligence, monitoring and evaluation, and developing exit strategies from our CSR partnerships. This structured approach ensures that our initiatives are not only impactful but also sustainable in the long run.

Each initiative we undertake is a step towards building a brighter future for all. We remain committed to listening, learning, and evolving, as we work hand in hand with our partners and stakeholders to create lasting change.

The Corporate Social Responsibility Policy can be accessed on website of the Company: (https://www.cdslindia. com/About/CSR.html).

During FY 2024-25, the Company has sponsored various projects and the report on CSR activities pursuant to Section 135 and Schedule VII of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure-F.

To further strengthen the governance and oversight of sustainability initiatives, the existing CSR Committee has been renamed as CSR & ESG Committee w.e.f. June 21, 2025.

17. Vigil Mechanism/Whistle Blower Policy:

The Company has formulated a Whistle-Blower Policy pursuant to Regulation 22 of the SEBI Listing Regulations and Section 177(10) of the Companies Act, 2013 read with SEBI Circular dated November 22, 2024 enabling Stakeholders to report any concern of unethical behaviour

or any alleged wrongful conduct, suspected fraud or violation.

The said policy inter-aliaprovides safeguard against

Directors, Employees etc.

During the year under review, no Stakeholder was denied access to the Chairperson of the Audit Committee.

The said policy is available on the website of the Company at https://www.cdslindia.com/InvestorRels/ CorporateGovernance.html

18. Insider Trading Regulations:

Pursuant to the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015 (as amended from time to time), your Company has formulated a Code of Conduct for Prohibition of Insider Trading and Code of Conduct to Regulate, Monitor and Report Trading in Securities of other Listed Entities by Designated Persons as an Intermediary and Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information ("UPSI"). The Code of Practices and Procedures for Fair Disclosure of UPSI is available on the website of the Company at https://www.cdslindia.com/InvestorRels/ CorporateGovernance.html

19. Related Party Transactions:

All Related Party Transactions ("RPT") that were entered during the FY were on arm''s length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Act and the SEBI Listing Regulations. There was no material significant RPT transacted by the Company during the year that required Shareholders'' approval under Regulation 23 of the SEBI Listing Regulations. None of the transactions with related parties fell under the scope of Section 188(1) of the Companies Act, 2013. The disclosure of RPTs as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company for FY 2024-25.

The Policy on RPT is available on the website of the Company at https://www.cdslindia.com/InvestorRels/ CorporateGovernance.html

The Disclosures of Related Party Transactions pursuant to clause 2 of para A of Schedule V of the SEBI Listing Regulations are stated below:

20. Prevention of Sexual Harassment of Women at the Workplace:

Your Company has an Internal Complaints Committee in place as prescribed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year, the Committee has received one complaint and the same has been disposed of.

Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 are as follows:

a	Number of complaints filed during the Financial Year	1
b	Number of complaints disposed of	1
	during the Financial Year
c	Number of complaints pending as on	NIL
	end of the Financial Year

There were no complaints which were pending for more than 90 (ninety) days.

21. Human Resource:

A. Human Resource Development:

The Company recognizes its Human Assets as a critical resource essential for the growth of the Company. It, therefore, accords high importance to human resource development and consciously endeavors to enhance the quality and competence of its employees across cadres. It conducts induction program for new entrants and also nominates employees for training at reputed institutions for attending seminars in capital market related areas, particularly relating to depositories and also for various behavioral trainings. We are committed to investing in their growth and development and creating a positive and inclusive work environment for them. Industrial relations during the year continued to be cordial.

We remain steadfast in our commitment to nurturing employee growth and professional advancement by fostering an empowering environment. In addition to in-house behavioral development initiatives, the organization places emphasis on enhancing functional competencies and advancing strategic leadership through targeted programmes.

B. Particulars of Employees:

Information as required under Section 197(12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed to this report as Annexure-G.

C. Material developments in Human Resources/ Industrial Relations front, including number of people employed:

Human resources are the most valuable asset for our Organization and to engage the employees we continued our best practices on training and development and employee engagement for the entire Financial Year. During FY 2024-25, the Company focused on the employees'' wellness, physical & mental fitness by conducting in person and offline sessions on various topics including

Yoga, Meditation, Diet, Eyecare, Dental care, Breathing & Stretching Workouts, etc. We have successfully conducted various training programmes from time to time focusing on improving the behavioral competencies, skill enhancement and the technical competencies of our employees. Approximately 350 employees attended these training programmes.

In order to ensure that the remuneration of employees are fair, competitive and aligned with the Indian capital market industry, CDSL had undertaken a comprehensive salary benchmarking exercise and implemented the same for the eligible employees.

During the FY 2024-25, 105 employees were hired, and 37 employees left, or retired. There were 403 employees as on March 31, 2025.

22. Other Disclosures:

A. Management Discussion and Analysis Report:

The Management Discussion and Analysis Report for the year under review as stipulated in SEBI Listing Regulations for the year ended March 31, 2025 is enclosed as Annexure-C.

B. Business Responsibility and Sustainability Report:

As stipulated under Regulation 34 of the SEBI Listing Regulations, the BRSR describing the initiatives taken by your Company from an Environmental, Social and Governance (ESG) perspective is enclosed as Annexure-H.

C. Corporate Governance Report:

The Corporate Governance Report for the year ended March 31, 2025 is enclosed as Annexure-B.

D. Credit Rating of Securities:

Not Applicable.

E. Awards & Recognition:

The details of the awards have been mentioned in the corporate overview section on Page No. 12 of this Integrated Annual Report.

F. Prevention of Money Laundering Act:

The Prevention of Money Laundering Act, 2002 ("PMLA") has been brought into force with effect from July 01, 2005. Subsequent amendments have been made to the PMLA and Prevention of Money-laundering (Maintenance of Records) Rules, 2005 over the years. CDSL, its Depository Participants (DPs) and CDSL Ventures Limited ("CVL") fall under the category of ''intermediaries'' under Section 12 of the SEBI Act, 1992 and hence, PMLA and the policy guidelines issued by the regulators to combat money laundering are applicable to depository operations. As required under the guidelines, CDSL has designated a Principal Officer, Alternate Officer and Designated Director to ensure compliance with these guidelines. CDSL has prepared policy guidelines for implementation of PMLA and the same is reviewed periodically. CDSL has conducted training programmes across the country and updated DPs and their internal auditors on compliance with PMLA provisions and filing of Suspicious Transaction Reports ("STR").

On regular basis, CDSL updates DPs about the new guidelines issued by FIU-IND and advisory issued by SEBI

in reference to FATF Public statement and press release issued by the United Nations Security Council ("UNSC"). Further CDSL conducts analysis of High-Risk alerts and files Suspicious Transaction Reports ("STR"), if deemed fit.

G. Disclosures under SEBI (Depositories and Participants) Regulations, 2018:

The disclosures required to be made under the provisions of the SEBI (D&P) Regulations are part of the Corporate Governance Report enclosed as Annexure-B.

H. Other Disclosures:

During the year under review:

• No proceedings are made or pending under the Insolvency and Bankruptcy Code, 2016 and there is no instance of one-time settlement with any Bank or Financial Institution.

• No shares with differential voting rights and Sweat Equity Shares have been issued.

• Your Company complies with the provisions of Maternity Benefit Act, 1961.

ACKNOWLEDGEMENT:

The Directors express their sincere gratitude for the support, guidance, and cooperation received from the Ministry of Finance, Ministry of Corporate Affairs ("MCA"), Government of India, Securities and Exchange Board of India ("SEBI"), Reserve Bank of India ("RBI"), Insurance Regulatory and Development Authority of India ("IRDAI"), Warehousing Development and Regulatory Authority ("WDRA"), Pension Fund Regulatory and Development Authority ("PFRDA""), Unique Identification Authority of India ("UIDAI") and other regulatory agencies. They also extend their appreciation to BSE Limited, the Promoter, all other Shareholders, Beneficial Owners, Depository Participants, Issuers, Registrar and Share Transfer Agents, and Market Infrastructure Institutions such as Stock Exchanges, Clearing Corporations, and Commodities Exchanges. Additionally, the Directors commend the unwavering dedication of the employees, whose performance, professionalism, and commitment to providing high-quality services to the Company’s clientele have been exemplary.

---

Mar 31, 2024

Your Board of Directors are pleased to present the Twenty-Sixth (26^th) Annual Report on the business and operations of Central Depository Services (India) Limited ("CDSL/the Company"), along with the Audited Financial Statements (Standalone and Consolidated) for the financial year ended March 31, 2024 ("FY 2023-24").

1. State of Company''s Affairs:

A. Financial Highlights:

('' in Lakh)

	Consolidated		Standalone
Particulars	Year ended March 31, 2024	Year ended March 31, 2023	Year ended March 31, 2024	Year ended March 31, 2023
Revenue from Operations	81,225.66	55,508.68	64,095.70	45,059.96
Other Income	9,504.73	6,584.83	10,193.31	9,346.79
Total Income	90,730.39	62,093.51	74,289.01	54,406.75
Expenditure	32,297.55	23,187.70	24,887.71	18,371.53
Profit before Depreciation, share of Profit/(Loss) from Associates and Taxation	58,432.84	38,905.81	49,401.30	36,035.22
Depreciation and amortisation expenses	2,723.37	1,948.04	2,121.89	1,586.33
Profit before share of net profits of investments accounted for using equity method and tax	55,709.47	36,957.77	47,279.41	34,448.89
Share of Profit/(Loss) of associates	(108.31)	(442.34)	0.00	0.00
Profit before Tax	55,601.16	36,515.43	47,279.41	34,448.89
Taxations	13,645.75	8,919.42	10,947.49	7,240.72
Profit after Tax	41,955.41	27,596.01	36,331.92	27,208.17
Other Comprehensive Income (Net of Tax)	(229.23)	162.25	(209.70)	39.68
Total Comprehensive Income	41,726.18	27,758.26	36,122.22	27,247.85

B. Financial Performance:

(i) Consolidated Results:

On a consolidated basis, the operational income of the Company for the year ended March 31, 2024 is at ^ 81,225.66 Lakh as against ^ 55,508.68 Lakh for the previous year ended March 31, 2023, higher by 46%, resulting in total income of ^ 90,730.39 Lakh for the year ended March 31, 2024 as against ^ 62,093.51 Lakh for the previous year ended March 31, 2023. Profit before Tax (PBT) for the year ended March 31, 2024, is ^ 55,601.16 Lakh as against ^ 36,515.43 Lakh for the previous year ended March 31, 2023. Similarly, Profit after Tax (PAT) for the year ended March 31, 2024, is at ^ 41,955.41 Lakh as against ^ 27,596.01 Lakh for the previous year ended March 31, 2023. Thus, Profit after Tax for the year ended March 31, 2024, has increased by 52%, as against the previous year ended March 31, 2023.

(ii) Standalone Results:

On a standalone basis, the operational income of the Company for the year ended March 31, 2024, is at ^ 64,095.70 Lakh as against ^ 45,059.96 Lakh for the previous year ended March 31, 2023, higher by 42%, resulting in total income of ^ 74,289.01 Lakh for the year ended March 31, 2024 as against ^ 54,406.75 Lakh for the previous year ended March 31, 2023. The income from operations largely comprises of transaction charges,

annual issuers charges, CAS income, E-voting income, corporate action charges, etc.

The other income includes dividend received from subsidiary of ^ 2,950.00 Lakh during the year ended March 31, 2024 as against ^ 4,150.00 Lakh during the previous year ended March 31, 2023. Pursuant to Regulation 73 of the SEBI (Depositories & Participants) Regulations, 2018, ["SEBI (D&P) Regulations"] the contribution to Investor Protection Fund (IPF) is determined at ^ 1,854.31 Lakh. The Profit Before Tax (PBT) for the year ended March 31, 2024, is ^ 47,279.41 Lakh as against ^ 34,448.89 Lakh for the previous year ended March 31, 2023. Similarly, Profit After Tax (PAT) is ^ 36,331.92 Lakh for the year ended March 31, 2024 as against ^ 27,208.17 Lakh for the previous year ended March 31, 2023. Thus, Profit after Tax for the year ended March 31, 2024 has increased by 34% as against the previous year ended March 31, 2023.

During the year, the Board of Directors of the Company reviewed the affairs of its subsidiaries. In accordance with Section 129 (3) of the Companies Act, 2013, your Company has prepared the consolidated financial statements of the Company and of all its subsidiary and associate companies in the same form and manner as that of its own and in accordance with applicable accounting standards, which forms part of this annual report. Further, a separate statement containing

the salient features of the financial statement of our subsidiary and associate companies in the prescribed format of Form AOC-1 is appended as Annexure-A to the Board''s Report. The statement also provides details of the performance and financial position of each of the subsidiary and associate companies.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements including the consolidated financial statements and all other related documents and information of the Company and separate audited accounts in respect of each of the subsidiary companies are available on our website https://www. cdslindia.com/InvestorRels/AnnualReports.html. These documents will be available for inspection till the date of AGM during working hours at the registered office of the Company.

C. General Reserves:

The Company has not transferred any amount out of the profits of the year to General Reserves.

D. Dividend:

The Board of Directors of CDSL has recommended final dividend of ^ 19 per Equity Share and to commemorate the 25-year silver jubilee celebration, a special dividend of ^ 3 per Equity Share thus totalling the dividend to ^ 22 per Equity Share of the face value of ^ 10 each fully paid up for the financial year 2023-24, (Previous year ^ 16 per Equity Share of the face value of ^ 10 each), subject to the approval of the Shareholders.

The final dividend including special dividend, if approved, would result in a cash outflow of ^ 22,990 Lakh and dividend payout ratio at 70.42%. This is the highest dividend paid by your Company in its history.

The dividend recommended is in accordance with the principles and criteria as set out in the Dividend Distribution Policy. The Policy can also be accessed on the Company’s website at https://www.cdslindia.com/ InvestorRels/CorporateGovernance.html

2. Share Capital:

A. Change in Capital Structure:

Authorised Share Capital of your Company is '' 150,00,00,000 divided into 15,00,00,000 Equity Shares of '' 10 each whereas the Issued and Paid-up Share Capital is '' 104,50,00,000 divided into 10,45,00,000 Equity Shares of '' 10 each.

As of March 31, 2024, out of 10,45,00,000 shares, 10,44,99,999 shares are in demat mode, and 1 share is in physical mode. There was no change in the Capital Structure of the Company during the FY 2023-24.

B. Proposal of issuance of Bonus Shares

Your Company, in celebration of its 25^th anniversary and with the aim to enhance Shareholder value and increase liquidity of shares, proposes to issue Bonus Shares for the first time in the history of CDSL.

The Board, in its meeting convened on July 02, 2024, approved and recommended the issuance of Bonus Shares in the ratio of 1:1 as part of the anniversary celebration. This is subject to Shareholders'' approval and is part of the Annual General Meeting notice.

The Company currently has 10,45,00,000 fully-paid-up Equity Shares with a face value of ? 10 each. Under the proposal, one Bonus Share will be allotted for every Equity Share held.

Eligible Shareholders as on the record date, to be determined by the Governing Board or Management, will receive the Bonus Shares. These new Bonus Shares will increase the paid-up capital of the Company. This will also not be considered as income in lieu of dividend.

3. Business Performance and Overview:

Indian Capital Markets

In the Fiscal Year 2023-24, Indian capital markets witnessed a robust rally, pushing the total market capitalisation beyond USD 4 trillion for the first time. By May 2024, this figure surged to USD 5 trillion, solidifying India''s position as the world''s 4^th largest equity market. The International Monetary Fund (IMF) projects India''s growth to remain strong at 6.8% for FY 2024-25.

Recent performance highlights of the Indian capital markets include a 20% growth in 2023 and a significant 28.6% increase now in FY 2024. Impressively, the market has shown positive growth in 8 out of the last 9 calendar years, with the latest trillion added within just six months.

This growth is mirrored in the surge of demat accounts, which recorded a remarkable 32% year-on-year increase. Digitisation initiatives have played a crucial role in expanding access to stock markets and depository services, benefiting individuals from across the nation - including Tier 2 and Tier 3 cities, who are now actively participating in financial markets due to ease of doing business.

To sustain this momentum in the depository business, your Company remains committed to enhancing operational efficiency, upgrading technology infrastructure, improving service quality, and placing increased emphasis on investor education through investor awareness initiatives thus underscoring our theme of educating new investors, enabling them with tools to access and overall empowering them to be an Atmanirbhar Niveshak or a self-sufficient investor.

Operational Performance:

A. Depository Participants and Service Centers:

As on March 31, 2024, 580 Depository Participants held valid registration certificates of Securities and Exchange Board of India (SEBI) as compared to 588 valid SEBI registrations as on March 31, 2023. Further, investors have access to 17,487 DP service centers spread across India.

B. Beneficial Owner Accounts:

During the year under review, 3.26 Crore net Beneficial Owner (BO) accounts were added, taking the total number of such accounts to 11.56 Crore as on March 31, 2024, making us the first depository to cross the 11 Crore demat accounts milestone.

The comparative figures of net BO accounts as on March 31, 2023, and March 31, 2024, are given in the following table:

Year ended Year ended March 31, 2024 March 31, 2023	Increase over the previous year''s cumulative figure
	Percentage Number (%)
11,56,05,419 8,30,01,541	3,26,03,878 39.28

C. Securities Admitted:

Securities like equity shares, preference shares, mutual fund units, debt instruments, government securities, certificates of deposit, commercial papers and a host of other instruments are available for dematerialisation by the investors. Details of the securities admitted with CDSL are given below:

Securities	Year ended March 31, 2024	Year ended March 31, 2023	(%) change over the previous year
Equity Shares	21,576	19,304	11.77
Debt Instruments	11,463	10,399	10.23
Other Securities	39,328	26,648	47.58
Total	72,367	56,351	28.42

D. Position of Securities held in the System:

The value and volume of securities held with CDSL in the year under review as compared to the previous year are indicated below:

Holding of Securities	Year ended March 31, 2024	Year ended March 31, 2023	Change over the previous year (%)
Value ('' in Lakh Crore)	64.21	39.71	61.68
Volume (in Crore) (Number of Securities)	66,146	61,285	7.93

4. Initiatives Towards Enabling and Empowerment of Investors:

Several key developments were implemented during FY 2023-24 that enabled in sustaining the growth trajectory.

Key Developments:

A. Introduction of T 0 Rolling Settlement Cycle:

A beta version of the T 0 rolling settlement cycle was introduced by SEBI on an optional basis alongside the existing T 1 settlement cycle in the Equity Cash Markets, effective March 2024. This was a significant step towards enhancing market efficiency, reducing risk, and aligning with global best practices. Globally, the move towards shorter settlement cycles is gaining traction.

The global trend towards faster settlement cycles encourages the importance of India''s proactive measures in advancing its financial market infrastructure, positioning our country at the forefront of global market developments.

B. Application Programme Interface (API):

CDSL has developed few more APIs viz. Early Pay-in Transactions, Margin Repledge and Destatementisation, etc. for its Depository Participants (DPs), which assist the DPs in automating their processes and backoffice operations.

APIs for Account Opening, eDIS, Common Transaction Upload (which includes off-market, on-market, early pay-in & inter depository transactions), Pledge/ Unpledge/Confiscation transactions, Margin Pledge & Margin Funding Transactions were already being used by large number of DPs. This has led to ease in operations of all the CDSL DPs and the market participants.

C. Consolidated Account Statement (CAS) -Inclusion of NPS details in CAS:

Till recently, the CAS provided investors with a consolidated statement of transactions and holdings held in both depositories'' demat accounts and units of mutual funds held in Statement of Account (SOA) form. Following directives from SEBI and Pension Fund Regulatory and Development Authority (PFRDA), NPS transactions were included in CAS/eCAS. This integration allowed Central Recordkeeping Agencies (CRAs) to work with depositories to provide NPS Subscribers the option to include NPS transactions in CAS.

Now, a consolidated account statement (CAS) including NPS is sent to investors for all three CRAs. This initiative eliminates the need for separate statements for various investments by consolidating the information into a single statement. This consolidation simplifies tracking investments and provides timely information to investors.

-Multilingual eCAS

CDSL has introduced a Multilingual Electronic Consolidated Account Statement (e-CAS) to enhance investor experience and accessibility. This initiative aims to cater to the diverse linguistic needs of investors across India, promoting inclusivity and better understanding of financial statements. The Multilingual e-CAS is available in multiple Indian languages. This allows investors to receive their account statements in their preferred regional language, making it easier to understand and manage their investments.

By providing account statements in various languages, CDSL aims to bridge the communication

gap for investors who are more comfortable with languages other than English or Hindi. This move is especially beneficial for retail investors. The multilingual feature is part of CDSL''s broader effort to make the investment process more user-friendly and transparent. It helps in demystifying financial jargon and complex transaction details for nonEnglish speaking investors. Investor can choose from any of the 23 regional languages.

The introduction of the Multilingual e-CAS by CDSL marks a significant step towards making the Indian capital market more inclusive and investor friendly. It reflects CDSL''s commitment to leveraging technology and innovation to enhance investor services and broaden market participation.

D. Account Aggregator (AA) Ecosystem - CDSL as FIP

The Account Aggregator system, a recent addition to India''s digital infrastructure, is crucial in transforming the financial services sector. CDSL is committed to RBI and SEBI''s efforts to enhance transparency, data privacy, and financial inclusion through this framework. Account Aggregator is a type of RBI regulated framework that helps an individual securely and digitally access and share information from one financial institution they have an account with to any other regulated financial institution in the AA network with their consent. Account Aggregator (AA) is the connector between Financial Information User (FIU) and Financial Information Provider (FIP) with a purpose to provide transparent information to users.

CDSL as a FIP, is live with total 14 Account Aggregators and providing the financial information for security types such as Equity, Mutual Funds (MF), Exchange Traded Funds (ETF), Indian Depository Receipts (IDR), Collective Investment Schemes (CIS), Alternative Investment Funds (AIF), Units of Infrastructure Investment Trusts (INVIT) & Units of Real Estate Investment Trusts (REIT).

5. Initiatives on Education & Empowerment of Investors:

A. Investor Awareness/Education Seminars:

CDSL Investor Protection Fund (CDSL IPF) in association with SEBI, Market Infrastructure Institutions (MIIs) and other entities like DPs, educational institutions etc. conducts Investor Awareness Programmes (IAPs) throughout the year, across the country. These programmes are conducted in both online and offline modes, covering current and potential investors across demographics.

During the Fiscal Year 2023-24, CDSL IPF conducted a comprehensive series of 2,345 IAPs in English, Hindi, and 16 other regional languages.

Through these programmes, CDSL IPF effectively engaged with a diverse range of investors and potential investors, covering salaried people, students, selfhelp groups, the armed forces, professionals and senior citizens. Out of the 2,345 programmes, 374 were conducted exclusively for existing and potential women investors. Overall, we engaged with over 1.45 Lakh investors across the country. These IAPs played a pivotal role in encouraging meaningful interactions and discussions aimed at enriching participants'' understanding of Indian capital market dynamics.

Moreover, to further empower investors, a comprehensive booklet titled "Securities Market Understanding from Investor''s Perspective" was collaboratively developed by SEBI, CDSL, and other MIIs. This informative resource, available in 13 regional languages, was distributed to investors to enhance their knowledge and serve as a valuable reference guide.

I. Social Media Campaign:

Recognising the evolving trends in media consumption, we strategically utilised social media platforms to engage with a younger demography and enhance investor awareness. At the core of this effort was the ''No Shak Niveshak’ campaign, which served as a cornerstone initiative.

Under this campaign, a diverse range of content formats, such as videos, static posts, quizzes, and more, were curated to effectively capture and sustain the audience’s interest. This approach aimed to educate and empower investors through engaging and informative content.

In addition to the campaign, our social media channels—Facebook (@cdslindia), X (formerly

Twitter) @cdslindia), LinkedIn (@cdslindia), Koo (@cdslindia), Instagram (@cdslindia), and YouTube (@CDSLIndiaLtd)—played a pivotal role. These platforms were utilised to disseminate crucial notifications, including deadlines for nominations and PAN-Aadhaar linking, updates on 6 KYC attributes, voluntary freeze options, and information on upcoming IAPs.

Furthermore, we leveraged WhatsApp and email communications effectively to ensure comprehensive outreach to investors, thereby fostering greater engagement and participation in financial markets. This integrated approach underscored our commitment to leveraging digital platforms for proactive investor education and engagement.

]. Website Resources:

As part of the digital touchpoints for investors, the Company website is a key component, which is being constantly updated to provide relevant and timely information using the latest technology. A milestone initiative was the launch of ''CDSL Buddy'',- a unique multilingual chatbot, aiming to simplify investors'' journeys toward ''Atmanirbharta'' or self-sufficiency. By offering support in currently four languages to begin

with, the chatbot is a constant companion, providing round-the-clock assistance to investors navigating the nuances of our securities markets.

The website also provides investors with information pertaining to safe investment practices and upcoming IAPs.

6. New Advancements

Detailed note on technological advances for the empowerment of Indian capital markets is covered under our business section.

7. Board of Directors and Management:

A. Directors and Key Managerial Personnels (KMPs):

The Governing Board comprises of 9 (Nine) Directors as on March 31, 2024 which are as follows:

		Board Composition as on March 31, 2024
			ooo \CDCDCDIJ
		Independent/Public Interest Director (PID)
		r	¦'' \	\
4	> 4	> 4	» 4	» 4	) 4	»
Shri Balkrishna Prof. VChauba Bimal		(Dr.) Shri Prof. Sm kumar Sidhartha Umesh Rajes			t. Shri hree Gurumoorthy
Chairp	verson N P	atel Pradhan Bellur Sabr			avis Mahalingam
				(ooo) Id cdJ
Executive Director			Non-Independent Directors
	i		4		4
Shri Nehal Vora Shri (Managing Director & CEO) Masil Jeya Mohan P				Sushri Kamala Kantharaj
Note: Prof. Varsha Apte, has been appointed as an Independent/Public Interest Director for a period of 3 (three) years as per the SEBI letter w.e.f. June 05,2024 to May 30,2027.

B. Change in Composition of the Governing Board and Key Managerial Personnels (KMPs)/Senior Management:

The term Board and Governing Board have been used interchangeably and have the same meaning.

The changes taken place in the composition of Governing Board and KMPs/ Senior Management of CDSL are as follows:

Retirement by rotation and subsequent re-appointment:

i. Shri Masil Jeya Mohan P was re-appointed as Non-Independent Director of the Company by the Shareholders at the 25^th Annual General Meeting of the Company held on September 01, 2023. SEBI vide its letter dated October 30, 2023, had approved the re-appointment of Shri Masil

Jeya Mohan P as Non-Independent Director on the Governing Board of CDSL, who shall be liable to retire by rotation and accordingly, the re-appointment of Shri Masil Jeya Mohan P was effective from October 30, 2023.

Resignation of Director:

i. Shri Nayan Mehta, Non-Independent Director resigned w.e.f. May 16, 2023. He was on the Governing Board of the Company since November 28, 2016. The Company places on record the appreciation for his guidance, mentorship and contribution to the growth of the Company throughout his tenure.

Appointment of Director:

i. SEBI vide its letter dated August 23, 2023, has accorded its approval for the appointment of

Sushri Kamala Kantharaj as Non-Independent Director in place of Shri Nayan Mehta on the Governing Board of the Company. Her appointment was effective from August 23, 2023.

ii. SEBI vide its letter dated May 31, 2024 has accorded its approval for the appointment of Prof. Varsha Apte as Public Interest Director on the Governing Board of the Company for a period of three years. Her appointment was effective from June 05, 2024 up to May 30, 2027 and shall not be liable to retire by rotation.

Changes in KMPs/Senior Management:

i. Shri Jitendra Panchal, Senior Vice President -Information Technology was designated as KMP/ Senior Management w.e.f. April 01, 2023.

ii. Shri Akhil Wadhavkar, Vice President, Chief Information Security Officer was appointed w.e.f. May 15, 2023.

iii. Shri Ravi Kumar, Assistant Vice President -Information Technology was appointed w.e.f. April 17, 2023.

iv. Shri Sunil Alvares, Managing Director and Chief Executive Officer of CDSL Ventures Limited was designated as KMP w.e.f. August 28, 2023.

v. Shri Nitin Ambure, Vice President - Admission Cell resigned w.e.f. October 18, 2023.

vi. Smt. Meena Pednekar, Vice President - Admission Cell & Regulatory Compliance was appointed w.e.f. November 09, 2023.

vii. Shri Ramkumar K., Chief of Business Development and New Projects resigned w.e.f. December 31, 2023.

viii. Shri Sachin Nayak, Vice President - Operations was appointed w.e.f. April 04, 2024.

ix. Shri Ravi Kumar, Assistant Vice President -Information Technology ceased to be KMP/Senior Management w.e.f. June 05, 2024.

x. Shri Ashwin Lalchandani, Assistant Vice President - Risk Management ceased to be KMP/Senior Management w.e.f. June 05, 2024.

Retirement by Rotation:

As per the provisions of Section 152(6)(d) of the Companies Act, 2013, Sushri Kamala Kantharaj, Non-Independent Director being liable to retire by rotation and being eligible has offered herself to be re-appointed. Accordingly, she would be considered for being re-appointed as Director at the ensuing Annual General Meeting.

C. Declaration from Directors:

a) The Company has received necessary declarations from the Independent Directors viz. Public Interest Directors as required under Section 149

of the Companies Act, 2013 and under clause (b) of sub-regulation (1) of Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The Public Interest Directors have complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013. There has been no change in the circumstances affecting their status as Independent Directors.

b) The Company has received necessary declarations from the Public Interest Directors in adherence to the Code of Conduct for Directors and Senior Management as formulated by the Company.

c) In the opinion of the Board, all Independent Directors possess requisite qualifications, experience, expertise and hold high standards of integrity required to discharge their duties with an objective independent judgement and without any external influence. List of key skills, expertise and core competencies of the Board, including the Independent Directors, forms a part ofthe Corporate Governance Report of this Annual Report.

d) In terms of Regulation 25(8) of SEBI Listing Regulations, the Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties.

e) Further, the Independent Directors have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

D. Declaration by the Company:

None of the Directors of the Company are disqualified from being appointed as Directors as specified in Section 164(2) of the Companies Act, 2013 read with Rule 14 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

E. Number of Meetings of the Board of Directors and its various Committees:

Thirteen (13) Meetings of the Board of Directors were held during FY 2023-24. The details of Meetings of Board and Committees held during the year, attendance of Directors at the Meetings and constitution of various Committees of the Board are included separately in the Corporate Governance Report, which is enclosed as Annexure-B.

F. Audit Committee Recommendations:

During the year, all recommendations of the Audit Committee were approved by the Board of Directors.

G. Performance Evaluation of the Board:

The Board of Directors of the Company on the recommendation of Nomination and Remuneration Committee, adopted the Board Evaluation Policy to comply with the various provisions of the Companies Act, 2013, SEBI Listing Regulations, SEBI D&P Regulations, SEBI circular dated February 05, 2019 and any other applicable provisions, SEBI letters and/or circulars formed thereof.

The policy has been framed with an objective to ensure individual Directors of the Company and the Board as a whole, works efficiently and effectively in achieving their functions, in the interest of the Company and for the benefit of its stakeholders. Accordingly, the policy provides guidance on evaluation of the performance of:

(i) individual Directors (including the Chairperson and Public Interest Directors);

(ii) the Board as a whole; and

(iii) various committees of the Board.

The criteria for evaluation for each of the above are as follows:

Internal Evaluation

The Board of Directors of the Company carried out the annual evaluation of the Board, Committees of the Board and individual Directors in accordance with the regulatory requirements and as per the policy of evaluating performance of the Board of Directors and of its Committees and individual Directors on the basis of a structured questionnaire, drafted in accordance of the guidelines issued by SEBI, which comprises evaluation criteria taking into consideration various performance related aspects. All the Directors participated in the evaluation process. A feedback was provided by the Chairperson and the same was deliberated upon by the Board to enhance its overall effectiveness and optimise the individual strengths of the Directors.

A separate Meeting of the Independent Directors was held wherein the performance of the Non-Independent Directors, performance ofthe Board as a whole (including the Committees) and also that of the Chairperson of the Board in terms of the provisions of the Companies Act, 2013 and the SEBI Listing Regulations issued by SEBI in this regard was discussed.

External Evaluation

As per the SEBI (D&P) Regulations, Public Interest Directors can be appointed with the prior approval of SEBI on the Board of a depository for an initial term of three years, extendable by another term of three years subject to performance review prescribed by SEBI. SEBI vide its circular dated February 05, 2019, has mandated the Public Interest Directors of a depository to be subject to an external evaluation during the last year of their first term.

For the year under review, none of the Public Interest Directors were eligible to be evaluated by External Agency.

H. Directors'' Responsibility Statement:

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors report that:

i. in preparation ofthe annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided;

ii. accounting policies have been selected and applied them consistently and the judgements and estimates made 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 of the Company for that period;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv. the annual accounts have been prepared on a going-concern basis;

v. internal financial controls to be followed by the Company are laid down and that such internal financial controls are adequate and were operating effectively;

vi. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

I. Nomination and Remuneration Policy:

The Nomination and Remuneration Policy has been framed in order to set out principles, parameters and governance framework of the appointment and remuneration for Directors, Managing Director & CEO, Key Managerial Personnels and employees of the Company. The Nomination & Remuneration Policy can be accessed on website of the Company at https://www. cdslindia.com/InvestorRels/CorporateGovernance. html.

The salient features of the policy, along with changes made during the financial year 2023-24 are briefly specified herein below:

• Definitions: Updated in accordance with amendments in SEBI D&P Amendment Regulations, 2023.

• General Principles: Covering appointment, re-appointment, removal, and remuneration of Directors, Key Managerial Personnel, Key Management Personnel, and Senior Management.

• Public Interest Directors: Guidelines on appointment, tenure, removal, retirement, and remuneration.

• Managing Director and CEO: Provisions regarding appointment, re-appointment, tenure, removal, retirement, and remuneration.

J. Internal Financial Control Systems and their Adequacy:

The details in respect of adequacy of internal financial controls with reference to the Financial Statements forms part of the Management Discussion and Analysis Report enclosed as Annexure-C.

K. Compliance with Secretarial Standards:

During the period under review, your Company has complied with applicable Secretarial Standards i.e. SS-1 and SS-2, relating to "Meetings of the Board of Directors" and "General Meetings", respectively.

L. Annual Return:

The Annual Return of the Company as on March 31, 2024 in Form MGT-7 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https:// www.cdslindia.com/InvestorRels/GeneralMeeting. html

8. Subsidiary Companies, Associate Companies and Joint Ventures

Details of Subsidiary Companies, Associate Companies and Joint Ventures:

Your Company has the following Subsidiary and Associate Companies as on March 31, 2024:

Sr. No. Name of the Company	Details of the Company
1. CDSL Ventures Limited (CIN: U93090MH2006PLC164885) -Wholly-Owned Subsidiary	CDSL Ventures Limited (CVL) is a wholly-owned subsidiary of Central Depository Services (India) Limited (CDSL). CVL began its journey in 2008 by handling Customer Profiling and Record keeping of Mutual Fund Investors on account of The Prevention of Money Laundering Act, 2002 ("PMLA") related KYC requirements. After the introduction of the KRA regulations in 2011, CVL was the first entity to register as a KYC Registration Agency (KRA) with SEBI. As a KRA, CVL provides fully digitised KYC services to all intermediaries in the Capital Markets. CVL currently holds over 7.07 Crore fully digitised KYC records. CVL is also offering the following as part of its service portfolio: 1. CKYC Services: CVL assists intermediaries to become CKYC compliant by facilitating processing of KYC documents for uploading to CERSAI 2. Aadhaar based eKYC services 3. Aadhaar based esign services 4. Registrar and Transfer Agent services (RTA) 5. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) services: Maintaining a Claim Repository and performing dedupe activity for claims under PMJJBY scheme. 6. Goods and Services Tax (GST) Suvidha Provider Services for filing GST Returns 7. Processing and handling Refund payments to investors of PACL Ltd. pursuant to Justice (Retd.) R M Lodha Committee. 8. Online Account Opening Services(OLAO) 9. Accredited Investor Agency.
2. CDSL Insurance Repository Limited (CIN: U74120MH2011PLC219665) -Subsidiary Company	CDSL Insurance Repository Limited (CIRL) is regulated by the Insurance Regulatory and Development Authority of India (IRDAI) and is in the business of enabling policy holders to hold life policies, motor policies, health policies and in the near future, all other types of general (non-life) policies in electronic form. CIRL has tied up with twenty-two (22) life insurance companies, Four (4) health insurance companies and Sixteen (16) general insurance companies, which is a total of Forty Two (42) insurance companies, for holding policies in electronic form as of March 31, 2024.
	Your Company had floated a separate subsidiary viz. CIRL, in the year 2011, under the "Guidelines on insurance repositories and electronic issuance of insurance policies” issued by IRDAI. CIRL provides policyholders a facility to keep their insurance policies in electronic form and to undertake changes, modifications and revisions in the insurance policy with speed and accuracy, to bring about efficiency, transparency and cost reduction in the issuance and maintenance of insurance policies.
	Leading public sector and private sector insurance companies have contributed to the equity capital of CIRL. At the time of launch in August 2013, the insurance repository services were restricted only to Life insurance policies. However, later, IRDAI has extended the scope of services to Health and Motor Vehicle insurance policies and soon, to all other types of general insurance. Further, initially only individual policies were allowed in electronic form but subsequently this feature is being extended to corporate and group policies.

Sr. No.	Name of the Company	Details of the Company
		As on March 31, 2024, the Company has 14,47,698 active eIAs (electronic insurance accounts) as against 9,46,724 active eIAs as on March 31, 2023, in the Repository. As on March 31, 2024, over 13,85,674 electronic policies constituting 13,15,235 life e-insurance policies, 3,401 motor e-insurance policies and 67,038 health e-insurance policies have been credited in the eIAs as against around 8,06,473 electronic policies constituting 7,49,602 life insurance policies, 2,741 motor insurance policies and 54,130 health insurance policies as on March 31, 2023. The above figures indicate that there is a positive trend in creating electronic insurance policies, with a growth rate of 58% year-on-year. The Insurance Regulatory and Development Authority of India (IRDAI), through its Protection of Policyholder Interest and Allied Matters of Insurers Regulation dated March 20, 2024, has made it mandatory for insurance companies to issue insurance policies in electronic form starting from April 01, 2024. This regulation aims to streamline business operations and is expected to bring about a significant increase in efficiency and cost savings compared to traditional methods of issuing policies via Hard copies adopted by Insurance Companies.
3.	CDSL Commodity Repository Limited (CIN: U74999MH2017PLC292113) -Subsidiary Company	Your Company has incorporated a subsidiary in the name of CDSL Commodity Repository Limited (CCRL) to establish and run a Commodity Repository on the lines of a Securities Depository. Warehousing Development and Regulatory Authority (WDRA) is the regulator for CCRL. CCRL received the certificate of commencement of business/registration from WDRA on September 26, 2017 and commenced operations from September 30, 2017. Multi Commodity Exchange of India Ltd. (MCX) and BSE Investments Ltd. have each taken up 24% of the stake in CCRL in May, 2018 and August, 2018 respectively. CCRL today exclusively serves three derivative commodity exchanges for their derivative trades in Agri-commodities. These are Multi Commodity Exchange of India Limited, Bombay Stock Exchange Limited and Indian Commodity Exchange Limited. As on March 31, 2024, CCRL has opened 3,834 client accounts and has issued 50,909 Electronic Negotiable Warehouse Receipts''.
4.	India International Bullion Holding IFSC Limited (CIN: U67100GJ2021PLC123076) -Associate Company	India International Bullion Holding IFSC Limited is an unlisted public company incorporated on June 04, 2021. It is classified as a public limited company and is located in Gandhinagar, Gujarat and received registration as Finance Company from International Financial Services Centers Authority (IFSCA) on August 09, 2021. India''s bullion market is one of the largest in the world, the second largest in terms of consumption and holds an important position globally, but it lacks organisation and structure. A bullion spot exchange is expected to address these challenges and eliminate market inefficiencies. As a prominent market, India has always aspired to be a price setter for the bullion. Honourable Finance Minister Ms. Nirmala Sitharaman in the 2020 Union Budget gave a major boost to this aspiration by announcing the setting up of India International Bullion Exchange (IIBX) at International Financial Services Centre (IFSC) at GIFT City in Gandhinagar, Gujarat. Pursuant to Memorandum of Understanding between Central Depository Services (India) Limited (CDSL), India INX International Exchange (IFSC) Limited (INDIA INX), India International Clearing Corporation IFSC Limited (INDIA ICCL), Multi Commodity Exchange of India Limited (MCX), National Securities Depository Limited (NSDL) & National Stock Exchange of India Limited (NSE) a consortium was created for setting up the holding company India International Bullion Holding IFSC Limited (IIBHL) for operationalising India International Bullion Exchange, Bullion Clearing Corporation and Depository in IFSC, GIFT City. IIBHL is setting up the Bullion Exchange and depository through its subsidiaries, India International Bullion Exchange IFSC Limited (IIBX), and India International Depository IFSC Limited encompassing the Bullion Exchange, Bullion Clearing Corporation and Depository functions at GIFT IFSC.

9. Major Events Occurred During the Year:

A. Material changes and commitments affecting the financial position which have occurred between the end of the financial year and the date of the report:

No material changes and commitments affecting the financial position have occurred between the end of the financial year to which the financial results refer and the date of the report.

B. Change in the nature of business:

The Company has not undergone any changes in the nature of the business during the FY 2023-24.

C. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future:

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

10. Investor Education and Protection Fund

A. Contribution towards Investor Education and Protection Fund (IEPF):

Amount of unclaimed/unpaid dividend and the corresponding shares;	Not Applicable
Amount of matured deposits, if any along with interest accrued thereon	Not Applicable
Application money received for allotment of any securities and due for refund along with interest accrued;	Not Applicable
Year wise amount of unpaid/unclaimed dividend lying in the unpaid account up to the Year and the corresponding shares, which are liable to be transferred to the IEPF, and the due dates for such transfer;	Please refer the table below

B. Amount of Unpaid and Unclaimed Dividend:

Financial Year
Particulars	2017-18 (Final Dividend) As on 31.03.2024	2018-19 (Final Dividend) As on 31.03.2024	2019-20 (Final Dividend) As on 31.03.2024	2020-21 (Final Dividend) As on 31.03.2024	2021-22 (Final Dividend) As on 31.03.2024	2022-23 (Final Dividend) As on 31.03.2024
Amount (in '')	5,84,927	10,19,544	17,38,258	22,01,035	45,39,614	18,78,303
No. of Shares	1,67,122	1,67,122	3,86,279	2,44,559	3,02,641	1,17,394
Due date for transfer of unpaid dividend amount	October 18, 2025	November 15, 2026	November 13, 2027	November 19, 2028	November 13, 2029	October 30, 2030
Due date for transfer of corresponding shares	November 17, 2025	December 15, 2026	December 13, 2027	December 19, 2028	December 13, 2029	November 29, 2030

11. Public Deposits:

A. Deposits:

Your Company has not accepted any deposits within the meaning of Section 73 & 76 of the Companies Act, 2013 and the Rules made thereunder. There are no deposits remaining unpaid or unclaimed as at the end of the year and there has been no default in repayment of deposits or payment of interest thereon during the year.

B. Details of deposits not in compliance with the requirements of the Act:

Since the Company has not accepted any deposits during the financial year ended on March 31, 2024, there has been no non-compliance with the requirements of the Companies Act, 2013.

12. Particulars of Loans, Guarantees or Investments under Section 186 of Companies Act, 2013:

Details of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013 are disclosed in the notes to the financial statements.

13. Auditors:

A. Statutory Auditors & Audit Report:

M/s. S. R. Batliboi & Co. LLP (Firm Registration No. 301003E/ E300005), Chartered Accountants, Mumbai was re-appointed as Statutory Auditors of the Company for a second term of five (5) years in the 25^th Annual General Meeting held on September 01, 2023 to hold office from the conclusion of the 25^th (Twenty-Fifth) Annual General Meeting till the conclusion of the 30^th (Thirtieth) Annual General Meeting. Accordingly, M/s. S. R. Batliboi & Co. LLP are the Statutory Auditors of the Company for the FY 2023-24 and shall continue as Statutory Auditors of the Company till the conclusion of the 30^th Annual General Meeting.

There are no qualifications, reservations or adverse remarks or disclaimer made by M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, Mumbai, Statutory Auditors in their report.

B. Details in respect of frauds reported by auditors:

There are no frauds reported by auditors under Section 143(12) of the Companies Act, 2013, during the financial year ended March 31, 2024.

C. Internal Auditors:

In terms of the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, the Company had appointed M/s. Dalal Doctor & Associates, Chartered Accountants (Firm Registration No. 120833W) for the period from April 01, 2023, to August 31, 2023, and M/s. Mukund M. Chitale & Co. (Firm Registration No. 106655W) for the period from September 01, 2023, to March 31, 2024, as Internal Auditors & Concurrent Auditors of the Company.

There are no qualifications, reservations or adverse remarks or disclaimers made by the Internal Auditors and Concurrent Auditors in their report.

D. Secretarial Auditors and Secretarial Audit Report:

M/s. Vatsal Doshi & Associates (C.P.No.22976/ Membership No. A50332), Practicing Company Secretaries, Mumbai was appointed as Secretarial Auditor of the Company for a period of three financial years i.e. 2023-24, 2024-25 and 2025-26. In accordance with Section 204(1) of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI Listing Regulations, a copy of the Secretarial Audit Report issued in Form MR-3 by M/s. Vatsal Doshi & Associates, Secretarial Auditors is enclosed as an Annexure-D to this report. The Secretarial Audit Report of CDSL Ventures Limited,

a material unlisted subsidiary of the Company issued in Form MR-3 by M/s. Vatsal Doshi & Associates, Secretarial Auditors is enclosed as Annexure-Eto this report.

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Vatsal Doshi & Associates, Secretarial Auditor in their report except in the report of CDSL Ventures Limited where the qualifications are mentioned in Annexure-Eto this report.

E. Annual Secretarial Compliance Report:

The Company has undertaken an audit for the FY 202324 for all applicable compliances as per SEBI Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report has been submitted to the Stock Exchange within 60 days of the end of the financial year and is available on the website of the Company at https://www.cdslindia. com/InvestorRels/CorporateGovernance.html

F. Cost Records:

The Company is not required to maintain cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and accordingly such accounts and records are neither made nor maintained.

14. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

A. Conservation of energy, technology absorption

Considering the nature of the operations of your Company, provisions with respect to conservation of energy and technology absorption of Section 134(3)(m) of the Companies Act, 2013, are not applicable, though the Company uses all the possible ways in conserving energy. The Company has, however, used information technology extensively in its operations.

B. Foreign exchange earnings and outgo:

Details of foreign exchange earnings and outgo during the year under review are as under:

('' in Lakhs)

Particulars	For the year ended March 31, 2024	For the year ended March 31, 2023
Foreign Exchange Earnings - -
Foreign Exchange Outgo	20.27	23.88
Total	20.27	23.88

15. Risk Management and Compliance:

The Company has a robust Enterprise Risk Management (ERM) Framework which includes a Risk Management Policy. The ERM Framework includes Risk Assessment, Risk Treatment, Reporting and Monitoring, and Risk Remediation & Oversight.

The Company''s dedicated risk management function is independent from the operations and business units of CDSL.

The Risk Management Policy identifying the various elements of risks is explained in detail in the Management Discussion and Analysis Report attached as Annexure-C

16. Corporate Social Responsibility (CSR):

The Board has framed a Corporate Social Responsibility (CSR) Policy in compliance with the requirements of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy), Rules, 2014. CDSL has established a robust and transparent governance framework to oversee the implementation of its CSR policy.

CDSL is dedicated to enriching the lives of the citizens of India through its CSR Initiatives. CDSL''s vision extends beyond mere growth. We strive to create a world where Social, Environmental, and Economic progress go hand in hand, fostering a society where everyone can thrive. In the financial year 2023-24, CDSL has partnered with ten esteemed CSR organisations to make a tangible impact in the areas of Education, Healthcare, Environment, and Research. Through these collaborations, we have extended our support to socially and economically disadvantaged communities, in every State and Union Territory in India.

The salient features of the policy, along with changes made during the financial year 2023-24 are briefly specified herein below:

The CSR Policy has been revised with the objective of strengthening our commitment to Corporate Social Responsibility (CSR) and to ensure effective management of our CSR initiatives. The updated policy provides its applicability and incorporates procedures for selecting CSR themes and partners. Furthermore, it includes guidelines for conducting due diligence, monitoring & evaluation, and developing exit strategies in relation to our CSR partnerships.

Below is the list of CSR partners that help achieve the social goals of the organisation:

Sr. No.	CSR Partner	Location	Description
1.	Rotary - Adult Literacy programme for Women	Palghar, Maharashtra	Adult Literacy Programme
2.	AARTH by Rotary	PAN India	Online Academy for Financial Literacy & Support
3.	Educate Girls	Maharajganj, Uttar Pradesh	Enrolment Retention & Learning model to ensure all girls go to school
4.	Yuva Unstoppable	Maharashtra, Odisha, Uttar Pradesh, Madhya Pradesh. Tamil Nadu, Karnataka, West Bengal, Delhi & Andaman and Nicobar	School Transformation Smart Classroom Project
5.	SMILE Foundation - SMILE on Wheels	Jaisalmer, Rajasthan Ladakh	Smile on Wheels - Quality Primary Healthcare Services
6.	Narayana Hrudayalaya Charitable Trust (NHCT)	Maharashtra, Karnataka, Rajasthan, West Bengal, Assam, Haryana, Chhattisgarh and Gujarat	Supporting underprivileged patients seeking treatment for life threatening conditions
7.	Lions Charitable Trust	Mumbai, Maharashtra	Life Support Ambulance for Serving needy and Below Poverty Line patients
8.	SankalpTaru Foundation	Kutch, Gujarat Pune, Maharashtra and Hyderabad, Telangana	Tree plantation Programme: Barren Land Transformation Urban Plantation
9.	Rashtriya Raksha University PAN India		Research Project - Prevention of Victimisation from Forgeries & Financial Frauds
10.	Indian Institute of Technology, Bombay	PAN India	Research Project - Threat Detection and Response in Linux and Windows End Points

The Corporate Social Responsibility Policy can be accessed on website of the Company:

Corporate Social Responsibility: fcdslindia.com)

During FY 2023-24, the Company has sponsored various projects and the report on CSR activities pursuant to Section 135 and Schedule VII of the Companies Act, 2013 read with The Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure-F.

17. Vigil Mechanism/Whistle-Blower Policy:

The Company has formulated a Whistle-Blower Policy pursuant to Regulation 22 of the SEBI Listing Regulations and Section 177(10) of the Companies Act, 2013 enabling Stakeholders to report any concern of unethical behaviour or any alleged wrongful conduct, suspected fraud or violation.

The said policy inter alia provides safeguard against victimisation of the Whistle-Blower. Stakeholders including Directors and Employees have access to the Chairperson of the Audit Committee.

During the year under review, no Stakeholder was denied access to the Chairperson of the Audit Committee.

The said policy is available on the website of the Company at https://www.cdslindia.com/ InvestorRels/CorporateGovernance.html

18. Insider Trading Regulations:

Pursuant to the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015 fas amended from time to time), the Company has formulated a Code of

Conduct for Prohibition of Insider Trading and Code of Conduct to regulate, monitor and Report Trading in Securities of Other Listed Entities by Designated Persons as an Intermediary and Code of Practices and Procedures for fair disclosure of Unpublished Price Sensitive Information ("UPSI"). The Code of Practices and Procedures for fair disclosure of UPSI is available on the website of the Company at https://www.cdslindia. com/InvestorRels/CorporateGovernance.html

19. Related Party Transactions:

All Related Party transactions entered during the FY 2023-24 were in the ordinary course of business and on an arm''s length basis. Disclosure of related party transactions pursuant to Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 are attached as Annexure-G.

The Disclosures of Related Party Transactions for Annual Report pursuant to clause 2 of para A of Schedule V of the SEBI Listing Regulations are stated below:

Sr. No.			Particulars
1	In the Accounts of Central Depository Services (India) Limited (’CDSL’) (Holding Company)
	Loans and advances in the nature of loans to		Loans and advances in the		Loans and advances in the nature of loans
	subsidiaries by name and amount.		nature of loans to associates by		to firms/companies in which Directors are
			name and amount.		interested by name and amount.
	Subsidiary Name	Amount ('' in Lakhs)	Associate Name	Amount ('' in Lakhs)	Companies where Directors are interested	Amount ('' in Lakhs)
	CDSL Ventures Limited	NIL	India International	NIL	Not applicable	NIL
	CDSL Insurance Repository Limited	NIL	Bullion Holding IFSC Limited
	CDSL Commodity Repository Limited	NIL
2	In the Accounts of Central Depository Services (India) Limited (''CDSL’) (Subsidiary Company)
	Loans and advances in the nature of loans to		Loans and advances in the		Loans and advances in the nature of loans
	subsidiaries by name and amount.		nature of loans to associates by		to firms/companies in which Directors are
			name and amount.		interested by name and amount.
	Subsidiary Name	Amount ('' in Lakhs)	Associate Name	Amount ('' in Lakhs)	Companies where Directors are interested	Amount ('' in Lakhs)
	Not applicable	NIL	Not applicable	NIL	Not applicable	NIL
3	In the Accounts of Central Depository Services (India) Limited (''CDSL’) (Holding Company)
	Investments by the loan in the shares of parent company and subsidiary company, when the Company has					NIL
	made a loan or advance in the nature of loan.

The Disclosures of transactions of the Company with any person or entity belonging to the Promoter/Promoter Group which hold(s) 10% or more shareholding in the listed entity, in the format prescribed in the relevant accounting standards for Annual Report pursuant to clause 2A of para A of Schedule V of the SEBI Listing Regulations are stated below:

('' in Lakhs)

Transactions during the year ended	March 31, 2024	March 31, 2023
BSE Limited
Income
Operational Income	38.92	79.12
Expenditure
Dividend Paid	^^^^2,508.00	3,135.00
Administrative and Other Expenses (Recoveries)	34.47	58.01
Balances as at	March 31, 2024	March 31, 2023
Trade Receivable - billed	^^^^^^0.12	0.52
Trade Receivable - unbilled	0.10	-
Stamp Duty received in advance	-	0.30

20. Prevention of Sexual Harassment of Women at the Workplace:

Your Company has an Internal Complaints Committee in place as prescribed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year the Committee has not received complaints in this regard.

21. Human Resource:

A. Human Resource Development:

The Company recognises its Human assets as a critical resource essential for the growth of the Company. It, therefore, accords high importance to human resource development and consciously endeavours to enhance the quality and competence of its employees across cadres. It conducts induction programme for new entrants and also nominates employees for training at reputed

institutions for attending seminars in capital market related areas, particularly relating to depositories. We are committed to investing in their growth and development and creating a positive and inclusive work environment for them. Industrial relations during the year continued to be cordial.

B. Particulars of Employees:

Information as required under Section 197(12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed to this report as Annexure-H.

C. Material developments in Human Resources/ Industrial Relations front, including number of people employed:

Human resources are the most valuable asset for our organisation and to engage the employees we continued our best practices on training & development and employee engagement for the entire financial year. During FY 2023-24 Company focused on the employees'' wellness, physical & mental fitness by conducting in

person and offline sessions on various topics including Yoga, Meditation, Diet, Eyecare, Dental care, Breathing & Stretching Workouts, Self-defense sessions etc. We have successfully conducted various training programmes from time to time focusing on improving the behavioural competencies, skill enhancement and the technical competencies of our employees. Approx. 200 employees attended these training programmes.

In order to ensure that the remuneration of employees are fair, competitive and aligned with the Indian capital market industry, CDSL had undertaken a comprehensive salary benchmarking exercise and implemented the same for the eligible employees.

As part of the recruitment of key resources, the Chief Information Security Officer and Vice President - Admission Cell & Regulatory and Compliance Department (RCD) have been appointed during FY 202324. Apart from this, a total of 89 employees were hired; 33 employees left or retired, from the Company during the FY 2023-24. There were 335 employees as on March 31, 2024.

D. Disclosure of compensation paid to Key Management Personnel pursuant to Regulation 28(5) and 28(6) of the SEBI (Depositories & Participants) Regulations, 2018:

Sr. No.	Name	Designation	Compensation paid	Ratio to median salary of other employees
1	Shri Nehal Vora	Managing Director & CEO	4,44,25,530	47.83
2	Smt. Nayana Ovalekar	Chief Regulatory Officer	2,07,03,646	22.29
3	Shri Amit Mahajan	Chief Technology Officer	1,99,00,676	21.43
4	Shri Girish Amesara	Chief Financial Officer	1,72,34,425	18.55
5	Shri Vinay Madan	Chief Risk Officer	1,54,04,001	16.58
6	Shri Rajesh Saraf	Chief Data & Operations Officer	1,26,51,947	13.62
7	Shri Yogesh Kundnani	Senior Vice President - Business Development	1,04,21,817	11.22
8	Shri Vishwas Nagle	Senior Vice President - Information Technology	73,63,053	7.93
9	Shri Farokh Patel	Senior Vice President - Audit, Inspection & Compliance	85,11,417	9.16
10	Shri Jitendra Panchal	Senior Vice President - Information Technology	65,77,386	7.08
11	Shri Ashish Bhatt	Vice President - Operations	62,83,296	6.76
12	Shri Swaroopkumar Gothi	Financial Controller	58,77,914	6.33
13	Shri Nilay Shah	Company Secretary, Compliance Officer & Head Legal	70,32,365	7.57
14	Shri Akhil Wadhavkar	Chief Information Security Officer (Joined w.e.f. 15-May-2023)	55,90,408	6.02
15	Smt. Meena Pednekar	Vice President - Admission Cell & Regulatory and Compliance Department (RCD) (Joined w.e.f. 09-Nov-2023)	23,48,562	2.53
16	Shri Ashwin Lalchandani	Assistant Vice President - Risk Management*	25,16,908	2.71
17	Shri Ravi Kumar	Assistant Vice President - Information Security (Joined w.e.f. 17-Apr-2023)*	29,52,000	3.18
18	Shri Ramkumar K.	Chief of Business Development & New Projects (Resigned & relieved on 31-Dec-2023)	1,05,71,276	11.38
19	Shri Nitin Ambure	Vice President - Admission Cell (Resigned & relieved on 18- Oct-2023)	45,60,327	4.91
20	Shri Sunil Alvares	Managing Director & CEO of CDSL Ventures Limited (Key decision-making authority of Material Subsidiary of CDSL)	2,03,73,078	21.93

22. Other Disclosures:

A. Management Discussion and Analysis:

The Management Discussion and Analysis Report for the year under review as stipulated in SEBI Listing Regulations for the year ended March 31, 2024 is enclosed as Annexure-C.

Alerts and files Suspicious Transaction Reports ("STR"), if deemed fit.

B. Business Responsibility and Sustainability Report(BRSR):

As stipulated under Regulation 34 of the SEBI Listing Regulations, the BRSR describing the initiatives taken by the Company from an Environmental, Social and Governance (ESG) perspective is attached as a part of this Annual Report as Annexure-I.

C. Corporate Governance Report:

The Corporate Governance Report for the year ended March 31, 2024 is enclosed as Annexure-B.

D. Credit Rating of Securities:

Not Applicable.

E. Awards & Recognition:

The details of the awards have been mentioned in the corporate overview section on Page No 33 of this Annual Report.

F. Prevention of Money Laundering Act:

The Prevention of Money Laundering Act, 2002 (PMLA) has been brought into force with effect from July 01, 2005. Subsequent amendments have been made to the PMLA and Prevention of Money-laundering (Maintenance of Records) Rules, 2005 over the years. CDSL, its Depository Participants (DPs) and CDSL Ventures Limited (CVL) fall under the category of ''intermediaries'' under Section 12 of the SEBI Act, 1992 and hence, PMLA and the policy guidelines issued by the regulators to combat money laundering are applicable to depository operations. As required under the guidelines, CDSL has designated a Principal Officer, Alternate Officer and Designated Director to ensure compliance with these guidelines. CDSL has prepared policy guidelines for implementation of PMLA and the same is reviewed periodically. CDSL has conducted training programmes across the country and updated DPs and their internal auditors on compliance with PMLA provisions and filing of Suspicious Transaction Reports ("STR").

On regular basis, CDSL updates DPs about the new guidelines issued by FIU-IND and advisory issued by SEBI in reference to FATF Public statement and press release issued by the United Nations Security Council (UNSC). Further CDSL carries out analysis of High-Risk

G. Disclosures under SEBI (Depositories & Participants) Regulations, 2018:

The disclosures required to be made under the provisions of the SEBI (D&P) Regulations are part of the Corporate Governance Report enclosed as Annexure-B.

H. Other Disclosures:

During the year under review:

• No proceedings are made or pending under the Insolvency and Bankruptcy Code, 2016 and there is no instance of one-time settlement with any Bank or Financial Institution.

• No shares with differential voting rights and sweat Equity Shares have been issued.

ACKNOWLEDGEMENT:

The Directors express their sincere gratitude for the support, guidance, and cooperation received from the Ministry of Finance, Ministry of Corporate Affairs, Government of India Securities and Exchange Board of India (SEBI), Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India (IRDAI), Warehousing Development and Regulatory Authority (WDRA), Pension Fund Regulatory and Development Authority (PFRDA), Unique Identification Authority of India (UIDAI) and other regulatory agencies. They also extend their appreciation to BSE Limited, the Promoter, all other Shareholders, Beneficial Owners, Depository Participants, Issuers, Registrar and Transfer Agents, and Market Infrastructure Institutions such as Stock Exchanges, Clearing Corporations, and Commodities Exchanges. Additionally, the Directors commend the unwavering dedication of the employees, whose performance, professionalism, and commitment to providing high-quality services to the Company’s clientele have been exemplary.

For and on behalf of the Board Central Depository Services (India) Limited

Balkrishna V Chaubal Place: Mumbai Chairperson

Date: July 02, 2024 (DIN: 06497832)

---

Mar 31, 2023

Your Board of Directors are pleased to present the Twenty-Fifth (25^th) Annual Report on the business and operations of Central Depository Services (India) Limited ("CDSL/the Company"), along with the audited financial statements (standalone and consolidated) for the financial year ended March 31, 2023 ("FY 2022-23").

1. State Of Affairs:

A. Financial Highlights:

(Rs. in Lakh)
	Consolidated		Standalone
Particulars	Year ended March 31, 2023	Year ended March 31, 2022	Year ended March 31, 2023	Year ended March 31, 2022
Income from Operations	55,508.68	55,133.08	45,059.96	41,480.33
Other Income	6,584.83	5,456.88	9,346.79	6,537.50
Total Income	62,093.51	60,589.96	54,406.75	48,017.83
Expenditure	23,187.70	18,447.76	18,371.53	13,273.14
Profit before Depreciation, share of profit/(Loss) from Associates and Taxation	38,905.81	42,142.20	36,035.22	34,744.69
Depreciation	1,948.04	1,146.28	1,586.33	1,010.02
Profit before Share of net profits of investments accounted for using equity method and tax	36,957.77	40,995.92	34,448.89	33,734.67
Share of profit/(Loss) of associates	(442.34)	(141.20)	-	-
Profit Before Tax	36,515.43	40,854.72	34,448.89	33,734.67
Taxations	8,919.42	9,673.91	7,240.72	7,358.43
Profit after Tax	27,596.01	31,180.81	27,208.17	26,376.24
Other Comprehensive Income (Net of Tax)	162.25	(143.39)	39.68	(217.96)
Total Comprehensive Income	27,758.26	31,037.42	27,247.85	26,158.28

B. Financial Performance:

i. Consolidated Results:

On a consolidated basis, the operational income of the Company for the year ended March 31, 2023 is at ^55,508.68 Lakh as against ^55,133.08 Lakh for the previous year ended March 31, 2022, higher by 1%, resulting in total income of ^62,093.51 Lakh for the year ended March 31, 2023 as against ^60,589.96 Lakh for the previous year ended March 31, 2022. Profit before Tax (PBT) for the year ended March 31, 2023, is ^36,515.43 Lakh as against ^40,854.72 Lakh for the previous year ended March 31, 2022. Similarly, Profit after Tax (PAT) for the year ended March 31, 2023 is at ^27,596.01 Lakh as against ^31,180.81 Lakh for the previous year ended March 31, 2022. Thus, Profit after Tax for the year ended March 31, 2023, has decreased by 11%, as against the previous year ended March 31, 2022.

ii. Standalone Results:

On a standalone basis, the operational income of the Company for the year ended March 31, 2023 is at ^45,059.96 Lakh as against ^41,480.33 Lakh for the previous year ended March 31, 2022, higher by 9%,

resulting in total income of ^54,406.75 Lakh for the year ended March 31, 2023 as against ^48,017.83 Lakh for the previous year ended March 31, 2022. The income from operations largly comprises of transaction charges, annual issuers charges, CAS income, evoting income, corporate action charges, etc. The other income includes dividend received from subsidiary of ^4,150 Lakh for the year ended March 31, 2023 as against ^2,350 Lakh for the previous year ended March 31, 2022. Pursuant to Regulation 73 of the SEBI (Depositories & Participants) Regulations, 2018, the contribution to IPF is determined at ^1,255.11 Lakh. The Profit before Tax (PBT) for the year ended March 31, 2023, is ^34,448.89 Lakh as against ^33,734.67 Lakh for the previous year ended March 31, 2022. Similarly, Profit after Tax (PAT) is ^27,208.17 Lakh as against ^26,376.24 Lakh. Thus, Profit after Tax for the year ended March 31, 2023 has increased by 3% as against the previous year ended March 31, 2022.

During the year, the Board of Directors of the Company reviewed the affairs of its subsidiaries. In accordance with Section 129 (3) of the Companies Act, 2013, your Company has prepared the consolidated financial

statements of the Company and of all its subsidiary companies in the same form and manner as that of its own and in accordance with applicable accounting standards, which forms part of this annual report. Further, a separate statement containing the salient features of the financial statement of our subsidiaries in the prescribed format of Form AOC-1 is appended as Annexure-A to the Board''s Report. The statement also provides details of the performance and financial position of each of the subsidiary company.

I n accordance with Section 136 of the Companies Act, 2013, the audited financial statements including the consolidated financial statements and all other related documents and information of the Company and separate audited accounts in respect of each of the subsidiary are available on our website https://www. cdslindia.com/InvestorRels/AnnualReports.html. These documents will be available for inspection till the date of AGM during business hours at the registered office of the Company.

C. Dividend:

Considering the performance of the Company for the year under review, your Directors have recommended a final dividend of ''16 per equity share of the face value of ''10 each, fully paid for the financial year ended March 31, 2023, subject to the approval of the shareholders.

The final dividend, if approved, would result in a cash outflow of ^16,720 Lakh and dividend payout ratio at 60.06%.

T he dividend recommended is in accordance with the principles and criteria as set out in the Dividend Distribution Policy. The Policy can also be accessed on the Company’s website at the https://www.cdslindia. com/InvestorRels/CorporateGovernance.html.

2. Share Capital:

A. Change in Capital Structure:

Authorised Share Capital of your Company is ''150,00,00,000 divided into 15,00,00,000 equity shares of ''10 each whereas the Issued and Paid-Up Share Capital is ''104,50,00,000 divided into 10,45,00,000 equity shares of ''10 each.

As of March 31, 2023, out of 10,45,00,000 shares, 10,44,99,799 shares are in demat mode, and 201 shares are in physical mode. There was no change in the Capital Structure of the Company during the FY 2022-23.

3. Business Outlook and Overview:

A. The Capital Market Environment:

The FY 2022-23 was one of the most challenging years for the Indian Economy. During FY 2022-23, the S&P BSE Sensex opened at 58,530 on April 01, 2022, and touched

a high of 63,583 on December 01, 2022, and thereafter closed at 58,991 on March 31, 2023. During same period Nifty opened at 17,436 and hit a high of 18,887 on December 01, 2022, and thereafter closed at 17,359 on March 31, 2023.

The International Monetary Fund (IMF), cuts India’s GDP growth forecast for the 2024 & 2025 financial years amid a slowing global economy. The IMF projects the gross domestic product to grow 5.9% in 2023-24, 20 basis points lower than estimated in January 2023. It projects India to grow 6.3% in the 2025 fiscal, 50 basis points lower than estimated earlier.

According to IMF, the global outlook is uncertain amid the financial sector turmoil, high inflation, effects of Russia-Ukraine war and three years of Covid.

Ahe World Bank cut India’s growth forecast for FY 2023-24 to 6.3% from its December estimate of 6.6% amid global headwinds and with rising borrowing costs and slower income growth leading to a moderation in consumption, even as its country director Auguste Tano Kouame said the Indian economy continues to show strong resilience to external shocks.

The Asian Development Bank (ADB) projects growth in India’s gross domestic product (GDP) to moderate to 6.4% in FY 2022-23 and rise to 6.7% in FY 2023-24, driven by private consumption and private investment on the back of government policies to improve transport infrastructure, logistics, and the business ecosystem. The growth estimates by both multilateral agencies are close to the Reserve Bank of India’s (RBI) February 8 forecast of 6.4% growth in FY 2023-24.

B. Operational Performance:

The capital market plays a significant role in building the economy as it channelizes domestic saving into sustainable financial assets. The Indian capital markets are robust and deep. The markets have witnessed diverse magnitude of volatility and growth levels based on global and domestic scenario and investor participations. The digitization of various processes has helped to have easier access to stock markets and depository services. This led to individuals from rural area have also initiated participation in financial markets. In order to sustain the growth in its depository business, your company continues to focus on enhancement of operational efficiency, upgradation of technology, service quality and enhanced emphasis on investor education through seminars/workshops.

C. Beneficial Owner Accounts:

During the year under review, 200.04 Lakh net Beneficial Owner (BO) accounts were added, taking the total number of such accounts to 830.01 Lakh as on March 31, 2023, making us the first depository to cross the 800 Lakh milestone.

The comparative figures of net BO accounts as on March 31, 2022 and March 31, 2023 are given in the following table:

Year ended March 31, 2023	Increase over the previous Year ended year''s cumulative figure March 31, 2022 - Number Percentage (%)
8,30,01,541	6,29,97,046 2,00,04,495 31.75

D. Securities Admitted:

Securities like equity shares, preference shares, mutual fund units, debt instruments, government securities, certificates of deposit, commercial papers and a host of other instruments are available for dematerialization by the investors. Details of the securities admitted with CDSL are given below:

Securities	Year ended March 31, 2023	Year ended March 31, 2022	Change over the previous year(%)
Equity Shares	19,304	17,336	11.35
Debt Instruments	10,399	9,517	9.27
Other Securities	26,648	25,994	2.52
Total	56,351	52,847	6.63

E. Position of Securities held in the System:

The value and volume of securities held with CDSL in the year under review as compared to the previous year are indicated below:

Holding of Securities	Year ended		Change over
	March 31, 2023	March 31, 2022	the previous year (%)
Value ('' in lakh crore )	39.71	37.17	6.83
Volume (in crore) (Number of Securities)	61,285	56,757	7.98

F. Depository Participants and Service Centers:

As on March 31, 2023, 588 Depository Participants held valid registration certificates of Securities and Exchange Board of India (SEBI) as compared to 584 valid SEBI registrations as on March 31, 2022. Further, investors have access to 18,676 DP service centers spread across India.

G. Investor Awareness/Education Seminars:

CDSL Investor Protection Fund (CDSL IPF) conducts various investors awareness activities aiming at promoting financial education from the depository point of view in particular and other capital market initiatives in general to educate investors to take an informed

decision with respect to any matter related to Capital Market and become ''Atmanirbhar Niveshak'' or the selfsufficient investor.

C DSL IPF on continuous basis conducts Investor Awareness Programs (IAPs) in association with SEBI, Market Infrastructure Institutions (MIIs), Financial Institutions, Professional Entities, Mutual Funds, Colleges & Universities, Government Officials, Corporate Employees etc. for retail and potential investors as a major target groups. We believe investor education can become a significant key in achieving financial inclusion in the capital market. During FY 2022-23, CDSL IPF conducted 1,552 IAPs in English, Hindi and other 16 languages across India through online and offline mode and reached out to more than 1 Lakh investors across India including Tier 2, Tier 3 and Tier 4 Towns/Cities.

To spread the financial education on a wider scale, CDSL has also reached out to investors through various social media platforms like Facebook (@cdslindia), Twitter (@cdslindia), LinkedIn (@cdslindia), KOO App (@cdslindia), Instagram (@cdslindia) and YouTube (@cdslindiaLtd). Various posts i.e., pictures, GIFs, videos related to IAPs, awareness information about various services provided by CDSL are uploaded for the benefit of investors. CDSL also provides various information beneficial to investors on its website under the head Investors Corner.

For the benefit of Investors, Informative booklet on "Securities Market Understanding from Investor''s Perspective" which was prepared jointly by SEBI, CDSL & other MIIs in 13 regional languages namely English, Malayalam, Punjabi, Hindi, Marathi, Gujarati, Telugu, Tamil, Oriya, Kannada, Assamese, Manipuri, Bengali have been uploaded on CDSL website at https:// www.cdslindia.com/Investors/InvestorCorner.aspx. This booklet is shared with the Investors during IAPs for their knowledge building and future reference.

H. New Initiatives:

i. Application Program Interface (API):

CDSL has developed few more APIs viz. eDIS for T 1 trades etc., for its Depository Participants (DPs), which will assist the DPs in automating their processes and back-office operations. APIs for account opening, common transaction upload (which includes off-market, on-market, early pay-in & inter depository transactions), pledge/unpledge/confiscation transactions, Margin Pledge & Margin Funding transactions that were made available is being used by large number of DPs. This will lead to ease in operations of all the CDSL DPs and the market participants.

ii. System Enhancements:

C DSL believes in the power of digitization and continuously tries to enhance its systems to increase the efficiency of processes as prescribed by SEBI. Some of the important system enhancements are enumerated below -

a. I implementation of Demat Debit and Pledge Instructions (DDPI):

CEBI issued guidelines regarding execution of ''Demat Debit and Pledge Instruction'' (DDPI) for transfer of securities towards deliveries/ settlement obligations and pledging/re-pledging of securities. DDPI was thus implemented with effect from August 31, 2022.

Initially, the DDPI option was made available only for securities related market transactions and margin pledge. The transactions pertaining to mutual fund redemption and transactions pertaining to tender offer were kept out of DDPI. Considering the representations made by market intermediaries and in consultation with Broker Associations and Depositories, SEBI extended to DDPI option for the aforesaid two types of transactions too with effect from January 27, 2023.

b. Implementation of Mandatory Unique Client Code (UCC) and Block mechanism:

An investor is expected to mandatorily put UCC details i.e., UCC, Trading Member ID (TMID), Clearing Member ID (CMID), Market Segment type, Exchange ID and Clearing Corporation ID (CCID) for all types of market transaction viz. early payin, normal payin and on market. Under the block mechanism, in the case of early pay in of securities of a BO intending to make a sale transaction are blocked in the BOs demat account in favour of the concerned CM-CC combination. The actual debit from the investors account is made on the day of the settlement.

The advantage of using this system is to ensure that the investor continue getting interest, dividend, bonus, etc. on the shares till the record date. Due to the aforesaid distinct advantages and reduced paperwork at the TMs/CMs office, almost about 90% of the transactions in CDSL comes as early pay in.

c. Implementation of T 1 settlement:

SEBI vide circular no. SEBI/HO/MRD2/DCAP/P/ CIR/2021/628 dated September 07, 2021

introduced T 1 rolling settlement wherein new Market Type was introduced for T 1 settlement. Accordingly, transition of all Securities from T 2 Settlement cycle to T 1 Settlement in Equity Segment was implemented in a phased manner ending on January 27, 2023. The switch has been

adopted with ease by the investors by adopting to enter market transactions using early pay in.

d. Implementation of T 1 in eDIS:

We have introduce change in API for handling multiple settlement in the single API call.

e. I mplementation of Buyback of securities (Tender offer):

Earlier, the shares tendered by the shareholders for buyback/tender offer are required to be directly transferred to the account maintained by the Clearing Corporation (CC). Such transfer involves systematic risk, cumbersome process, time, and cost.

Block Mechanism has been implemented, which allow the tendered shares to be earmarked in the account of the BO. This allows the BO to easily modify or delete an existing offer and get its shares released. Further, upon finalization of the entitlement, only the accepted quantity of shares that are tendered will be debited from the demat account of the shareholders.

f. Implementation of Electronic Gold Receipts (EGR):

The electronic units resulting from the conversion of physical gold held with a registered safe deposit vault into electronic form is an EGR. The EGRs can be used to trade in the stock exchanges. This is equivalent to gold spot market. The system has been live since October 2022.

g. S ecurities and Covenant Monitoring using Distributed Ledger Technology (DLT):

Securities and Covenant Monitoring was the first system launched by Depository under the aegis of SEBI to use the block chain technology Distributed Ledger Technology (DLT) system. The purpose of DLT is to record and monitor all assets vis-avis life cycle of a secured bond viz. bond issuance, redemption, etc.

Some of the important advantage of the said system as enumerated below:

• Assets allocated against each secured bond

• Tracking the net worth/ability of the asset to support the underlying bond

• Ensure update of assets, charges and other details in ROC and CERSAI

iii. Transaction Cum Holding Statements:

As on March 31, 2023, 202 Depository Participants (DPs) have availed of the service of dispatch of transaction cum holding statements (DOTS and e-DOTS). In FY 202223, CDSL has processed 50.54 Lakh statements. During the FY 2022-23, 8.67 Crore statements have been sent electronically and 62.15 Lakh statements have been sent for the purpose of Consolidated Statement (CAS).

iv. Corporate Bond Database:

Your Company has details of all the debt instruments updated in the CDSL''s Corporate bond database portal in CDSL. The information of these debt instruments are in sync with the NSDL''s Corporate Bond database platform. The platform is also accessed by the Credit Rating Agencies (CRAs) Agencies to update rating details as and when there is a change in the rating of the said instrument. The corporate bond details are available at our website at https://www. cdslindia.com/CorporateBond/SearchISIN.aspxweb. Investor can access this portal to get an overall view of any given debt.

v. Technology Initiatives:

CDSL continuously works on upgrading the features and functionalities of the Depository applications. In addition, CDSL is constantly working towards upgradation of technology deployed and have upgraded our infrastructure to support the business growth and providing faster services to our customers.

CDSL has also further enhanced the appropriate cyber security framework and controls as prescribed by SEBI & CERT-In, from time to time to mitigate the cyber security risks.

vi. Continuing Professional Education (CPE) Programs - Depository Operations Certification Examination (DOCE):

National Institute of Securities Markets (NISM) has been offering Continuing Professional Education (CPE) Programs for Associated Persons in the Securities Market Intermediaries.

CDSL, as a NISM Accredited CPE Provider for conducting CPE Programs, has successfully carried out 11 programs for 168 participants during the year.

vii. E-Voting:

As on March 31, 2023, total 6,299 companies have signed agreements with CDSL to conduct e-Voting. So far, the e-Voting system recorded 35,347 instances of voting carried out by 5,567 companies.

viii. E-Notices:

I n the light of green initiative in the Corporate Governance by Ministry of Corporate Affairs, CDSL has started offering the services to companies for sending

documents to its shareholders electronically. As on March 31, 2023, a total of 1,410 companies have signed for availing these services.

ix. Recording of Debt Issues using Blockchain:

Your Company is in the final leg of creation of a state of the art system using block chain/distributed ledger technology (DLT) to record the life cycle for "listed" or "to be listed" non-convertible secured debentures (NCDs) from the time of creation of the instrument with underlying assets offering security, to the approval of the same by the Debenture Trustee (DT). The system also captures the initial rating given by the Credit Rating Agency (CRA) as well as the periodic/ad hoc updates of rating of a given instrument. Further the listing status of the instrument will also be captured. Additionally, regular/periodic interest payments up to the payment of the redemption amounts are also captured. This is likely to bring in greater transparency in the manner in which the secured instruments are issued and managed in the capital market. Issuers proposing to issue bonds may visit CDSL DLT services system at https://dltbond. cdslindia.com/login to enter details of assets, followed by details of instrument, charge creation etc. for the same to be approved by the Debenture Trustee for getting it admitted with the depository and listed with the stock exchanges.

4. Board of Directors and Management:

A. Directors and Key Managerial Personnel (KMPs):

The SEBI (Depositories and Participants) Regulations, 2018 were notified on October 03, 2018. As per regulation 25 of SEBI (Depositories and Participants) Regulations, 2018:

• the appointment and re-appointment of all Shareholder Directors on the Board of Depository shall be with the prior approval of SEBI;

• the Public Interest Directors on the Board shall be nominated by SEBI.

As per Regulation 24(9) of the SEBI D&P Regulations, no depository participant or their associates and agents, irrespective of the depository of which they are members shall be on the Governing Board of the depository.

The Board of Directors comprises of Nine Directors on the Governing Board of CDSL as on March 31, 2023 which are as follows:

Change in Composition during the Year:

The changes taken place in the constitution of Directors

and KMPs of CDSL during the FY 2022-23 are as follows:

Retirement by rotation and subsequent

re-appointment:

i. Shri Nayan Mehta was reappointed as Shareholder Director of the Company by the shareholders at the 24^th Annual General Meeting of the Company on September 15, 2022. SEBI vide its letter dated October 11, 2022, had approved the re-appointment of Shri Nayan Mehta as Shareholder Director on the Governing Board of CDSL, who shall be liable to retire by rotation and accordingly, the appointment of Shri Nayan Mehta was effective from October 11, 2022.

Extension of Term of Director:

i. SEBI vide its letter dated July 22, 2022, has accorded its approval for extension of term of Shri Balkrishna V Chaubal as Public Interest Director on the Governing Board of CDSL for a period of three (3) years from July 30, 2022 to July 29, 2025.

SEBI vide its letter dated August 03, 2022, has accorded its approval for extension of term of

Shri Balkrishna V Chaubal as Chairperson on the Governing Board of CDSL.

ii. SEBI vide its letter dated August 03, 2022, has accorded its approval for extension of term of Prof. (Dr.) Bimalkumar N Patel as Public Interest Director on the Governing Board of CDSL for a period of three (3) years from September 27, 2022 to September 26, 2025.

iii. SEBI vide its letter dated October 14, 2022, has accorded its approval for extension of term of Prof. Umesh Bellur as Public Interest Director on the Governing Board of CDSL for a period of three (3) years from November 29, 2022, to November 28, 2025.

iv. SEBI vide its letter dated November 04, 2022 has accorded its approval of the appointment of Shri Sidhartha Pradhan as Public Interest Director on the Governing Board of CDSL for a period of three (3) years from November 29, 2022, to November 28, 2025.

Resignation of Director:

i. Smt. Preeti Saran, Public Interest Director resigned w.e.f. October 17, 2022. She was on the Board of the Company since November 29, 2019. The Company

places on record appreciation for her guidance, mentoring and contribution to the growth of the Company throughout her tenure.

Appointment of Director:

i. SEBI vide its letter dated October 14, 2022, has accorded its approval of the appointment of Smt. Rajeshree Sabnavis as Public Interest Director in place of Smt. Preeti Saran on the Governing Board of the Company. The appointment of Smt. Rajeshree Sabnavis as Public Interest Director on the Governing Board of CDSL for a period of three (3) years from November 29, 2022 to November 28, 2025.

ii. SEBI vide its letter dated February 27, 2023, received on February 28, 2023, had accorded its approval for appointment of Shri Gurumoorthy Mahalingam as Public Interest Director on the Governing Board of the Company. The appointment would be for a period of three (3) years from March 09, 2023 to February 26, 2026.

Changes in KMP :

i. Shri Rajesh Saraf, Chief Data and Operations Officer was appointed w.e.f October 19, 2022.

ii. Shri Ashwin Lalchandani, AVP- Risk Management, was appointed w.e.f February 08, 2023.

iii. Shri Prithwijit Dinda, VP- Information Technology, retired w.e.f August 31, 2022.

iv. Shri Rajesh Nadkarni, Chief Information Security Officer, resigned w.e.f January 27, 2023.

Retirement by Rotation:

As per the provisions of Section 152(6)(d) of the Companies Act, 2013, Shri Masil Jeya Mohan P, the Shareholder Director being liable to retire by rotation and being eligible has offered himself to be reappointed. Accordingly, he would be considered for being re-appointed as Director at the ensuing Annual General Meeting.

B. Declaration from Directors:

i. The Company has received necessary declarations from the Independent Directors viz. Public Interest Directors as required under Section 149 of the Companies Act, 2013 and under clause (b) of sub-regulation (1) of regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations). There has been no change in the circumstances affecting their status as Independent Directors viz. Public Interest Directors of the Company; and

ii. All the Independent Directors of the Company have enrolled their names in the online database of Independent Directors by Indian Institute of Corporate Affairs maintained by the IICA.

C. Declaration by the Company:

None of the Directors of the Company are disqualified for being appointed as Directors as specified in Section 164 (2) of the Act read with Rule 14 of Companies (Appointment and Qualifications of Directors) Rules, 2014.

D. Number of Meetings of the Board of Directors and its various Committees:

Ten meetings of the Board of Directors were held during the FY 2022-23. The details of Meetings of Board and Committees held during the year, attendance of Directors at the meetings and constitution of various Committees of the Board are included separately in the Corporate Governance Report, which is enclosed as Annexure-B.

E. Audit Committee Recommendations:

D uring the year, all recommendations of Audit Committee were approved by the Board of Directors.

F. Performance Evaluation of the Board:

The Board of Directors of the Company on recommendation of Nomination and Remuneration Committee, adopted Board Evaluation Policy to comply with the various provisions of the Act, SEBI Listing Regulations, SEBI D&P Regulations, SEBI circular dated February 05, 2019.

The policy has been framed with an objective to ensure individual Directors of the Company and the Board as a whole, works efficiently and effectively in achieving their functions, in the interest of the Company and for the benefit of its stakeholders. Accordingly, the policy provides guidance on evaluation of the performance of:

(i) i ndividual Directors (including the Chairperson and Public Interest Directors);

(ii) the Board as a whole; and

(iii) various committees of the Board.

The criteria for evaluation for each of the above are as follows:

Internal Evaluation

The Board of Directors of the Company carried out annual evaluation of the Board, Committees of the Board and individual Directors in accordance with the regulatory requirements and as per the policy of evaluating performance of the Board of Directors and of

its Committees and Individual Directors on the basis of a structured questionnaire, drafted in accordance of the guidelines issued by SEBI, which comprises evaluation criteria taking into consideration various performance related aspects. All the Directors participated in the evaluation process. Recommendations arising from this entire process were deliberated upon by the Board to augment its effectiveness and optimize individual strengths of the Directors.

A separate meeting of the Independent Directors was held wherein the performance of the NonIndependent Directors, performance of the Board as a whole (including the Committees) and also that of the Chairperson in terms of the provisions of the Act, the Listing Regulations and the Guidance Note issued by the Securities and Exchange Board of India in this regard was discussed.

External Evaluation

As per the SEBI (Depositories and Participants) Regulations, 2018, Public Interest Directors can be nominated by SEBI on the Board of a depository for an initial term of three years, extendable by another term of three years subject to performance review prescribed by SEBI. SEBI vide its circular dated February 05, 2019, has mandated the Public Interest Directors of a depository to be subject to an external evaluation during the last year of their term.

Accordingly external Evaluation was conducted in accordance with aforesaid SEBI circular for those PID''s whose term were about to expire.

G. Directors'' Responsibility Statement:

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors reports that:

i. in preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided;

ii. a ccounting policies have been selected and applied them consistently and the judgements and estimates made 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 of the company for that period;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities;

iv. the annual accounts have been prepared on a going-concern basis;

v. internal financial controls to be followed by the company are laid down and that such internal financial controls are adequate and were operating effectively;

vi. p roper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

H. Nomination & Remuneration Policy for Directors:

The Nomination and Remuneration Policy has been framed in order to set out principles, parameters and governance framework for the appointment and remuneration for Shareholder Directors, Public Interest Directors, Managing Director & CEO and Key Managerial Personnel of the Company. The Nomination & Remuneration Policy can be accessed on website of the Company at https://www.cdslindia.com/InvestorRels/ CorporateGovernance.html.

I. Internal Financial Control Systems and their Adequacy:

The details in respect of adequacy of internal financial controls with reference to the Financial Statements forms part of the Management Discussion and Analysis Report enclosed as Annexure-C.

J. Compliance with Secretarial Standards:

T he Company has complied with the applicable Secretarial Standards issued by the ''Institute of Company Secretaries of India''.

K. Annual Return:

The Annual Return of the Company as on March 31, 2023, in Form MGT-7 in accordance with Section 92 (3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://www.cdslindia.com/ InvestorRels/GeneralMeeting.html

6. Major Events Occurred During The Year:

A. Material changes affecting the financial position which have occurred between the end of the financial year and the date of the report:

No material changes affecting the financial position have occurred between the end of the financial year and the date of the report.

B. Change in the nature of business:

The Company has not undergone any changes in the nature of the business during the FY 2022-23.

C. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future:

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

D. Cyber Incident:

CDSL, on Friday, November 18, 2022, detected malware in a few of its internal machines. As a matter of abundant caution, the Company immediately isolated its machines and disconnected itself from other constituents of the capital market and took immediate measures to recover & enhance the security of its existing network and system. CDSL also immediately reported the incident to SEBI and other relevant regulatory bodies. The sanitized set-up and application deployment were completed by evening of Saturday, November 19, 2022 and applications were started midnight onwards. The settlement for November 18, 2022 was conducted on Sunday, November 20, 2022 from 11:00 a.m. onwards in co-ordination with other MIIs and thereafter settlement and core depository activities were conducted successfully from Monday, November 21, 2022 onwards.

C DSL has been in compliance with the necessary requirements as prescribed for such incidence.

8. Public Deposits:

A. Deposits:

Your company has not accepted any deposits within the meaning of Section 73 & 76 of the Companies Act, 2013 and the Rules made thereunder. There are no deposits remaining unpaid or unclaimed as at the end of the year and there has been no default in repayment of deposits or payment of interest thereon during the year.

B. Details of deposits not in compliance with the requirements of the Act:

Since the Company has not accepted any deposits during the Financial Year ended on March 31, 2023, there has been no non-compliance with the requirements of the Companies Act, 2013.

9. Particulars of Loans, Guarantees or Investments Under Section 186 of Companies Act, 2013:

Details of Loans, Guarantees or investments under Section 186 of the Companies Act, 2013 are given in the notes to the financial statements.

10. Auditors:

A. Statutory Auditors & Audit Report:

M/s. S. R. Batliboi & Co. LLP (Firm Registration No. 301003E/E300005), Chartered Accountants, Mumbai was appointed as Statutory Auditors of the Company in the twentieth Annual General Meeting held on August 20, 2018 to hold office from the conclusion of the 20^th Annual General Meeting till the conclusion

of the 25^th Annual General Meeting. Accordingly, M/s. S. R. Batliboi & Co. LLP are the Statutory Auditors of the Company for the FY 2022-23 and shall continue as Statutory Auditors of the Company till the conclusion of the 25^th Annual General Meeting.

The Board, based on the recommendation of the Audit Committee, has recommended re-appointment of M/s. S. R. Batliboi & Co. LLP, as the Statutory Auditor of the Company for a further term of five years from the conclusion of the ensuing 25^th Annual General Meeting till 30^th Annual General Meeting.

There are no qualifications, reservations or adverse remarks or disclaimer made by M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, Mumbai, Statutory Auditors in their report.

B. Details in respect of frauds reported by auditors:

There are no frauds reported by auditors under Section 143(12) of the Companies Act, 2013.

C. Internal Auditors:

I n terms of the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, the Company had appointed M/s. Dalal Doctor & Associates, Chartered Accountants (Firm Registration No. 120833W) for the period from April 01, 2022, to March 31, 2023, as Internal Auditors & Concurrent Auditors of the Company.

There are no qualifications, reservations or adverse remarks or disclaimer made by the Internal Auditors and Concurrent Auditors in their report.

D. Secretarial Auditors and Secretarial Audit Report:

M/s. Vatsal Doshi & Associates (C.P.No.22976/Membership No. A50332), Practicing Company Secretaries, Mumbai, was appointed as Secretarial Auditor of the Company for the FY 2022-23. In accordance with Section 204(1) of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules, 2014, and Regulation 24A of the SEBI Listing Regulations, a copy ofthe Secretarial Audit Report issued in Form MR-3 by M/s. Vatsal Doshi & Associates, Secretarial Auditors is enclosed as an Annexure-D to this report. The Secretarial Audit Report of CDSL Ventures Limited, a material unlisted subsidiary of the Company issued in Form MR-3 by M/s. Vatsal Doshi & Associates, Secretarial Auditors also forms part of Annexure-E to this report.

E. Cost Records:

The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of Section 148 of the Companies Act, 2013 and accordingly such accounts and records are neither made nor maintained.

11. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

A. Conservation of energy, technology absorption:

C onsidering the nature of the operations of your Company, provisions with respect to conservation of energy and technology absorption of Section 134(3) (m) of the Companies Act, 2013, are not applicable, though the company uses all the possible ways in conserving energy. The Company has, however, used information technology extensively in its operations.

B. Foreign exchange earnings and outgo:

Details of foreign exchange earnings and outgo during the year under review are as under:

('' in Lakh)
Particulars	For the year ended March 31, 2023	For the year ended March 31, 2022
Earnings	-	-
Foreign Exchange Outgo:
Software license	11.74	3.74
Conference Expenses	9.4	-
Membership & Subscription	2.74	-
Total	23.88	3.74

12. Risk Management and Compliance:

A. Risk Management Policy:

The Company has a robust Risk Management Policy to effectively handle various internal and external risks that can impact our business performance.

The Company has a dedicated Risk Management function, independent from the operations and business units of the Company. The Risk Management team is responsible for assessment, monitoring and reporting of risks.

The Risk Management Policy identifying the various elements of risks is explained in detail in the Management Discussion and Analysis Report attached as Annexure-C.

13. Corporate Social Responsibility (CSR):

The Board has framed a Corporate Social Responsibility (CSR) Policy in compliance with the requirements of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy), Rules, 2014. In accordance with its CSR philosophy and the specified activities under the Act, the CSR activities of the Company has thrust areas including promotion of education; promoting gender equality and empowering women; eradicating extreme hunger and poverty; reducing child mortality and improving maternal health; combating human immunodeficiency virus, acquired immune deficiency syndrome, malaria and other diseases; ensuring environmental sustainability; employment enhancing vocational skills; social business projects; contribution to the Prime Minister''s National Relief Fund or any other fund set up by the Central Government or the State Governments for disaster relief, socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women. Our Company has constituted a robust and transparent governance structure to oversee the implementation of its CSR Policy.

C DSL works primarily by partnering with various organisations, towards supporting projects in the areas of promoting education, and enhancing vocational skills; promoting healthcare including preventive healthcare and rural development; environmental sustainability and ecological balance and research and development. CDSL, through various organisations, has extended its support to socially and economically disadvantaged communities, aiming to create a positive and lasting change.

The list of CSR activities undertaken during the year through various CSR Partners is as follows:
Sr. No.	CSR Partner	Location	Description
1.	Rotary	Palghar	Adult Literacy Program Targeting tribal non-literate adult women in Native language through Computer Based Functional Literacy solution
2.	AARTH	PAN India	Online Academy for Financial Literacy Free online webinars/seminars and certifications for learners of 18-25 years of age from Tier II & Tier III Cities
3.	Educate Girls	Robertsganj, Uttar Pradesh	Enrolment Retention & Learning model to ensure all girls go to school
4.	Swades Foundation	Raigad & Nashik	Affordable medical services for Children with special Needs: Hearing Disability, Pediatric Eye Care & Cardiac Care
5.	SMILE Foundation	Jaisalmer, Rajasthan	SMILE on Wheels: Mobile vehicle providing Quality Primary Healthcare Services in difficult terrains of the country
6.	Narayana Hrudayalaya Charitable Trust (NHCT)	Mumbai	Medical and financial support to the underprivileged patients seeking treatment for life threatening conditions
7.	Sankalptaru Foundation	Meghalaya, Rajasthan, Gujarat, Maharashtra	Tree plantation Program: Barren Land Transformation Program and Urban Plantation Program
8.	Rashtriya Raksha University	PAN India	Research Project - Prevention of Victimization from Forgeries & Financial Frauds
9.	IIT-Bombay	PAN India	Research Project - Threat Detection and Response in Linux End Points

The Corporate Social Responsibility Policy can be accessed on website of the Company: https://www.cdslindia.com/InvestorRels/CorporateGovernance.html

During FY 2022-23, the Company has sponsored various projects and the report on CSR activities pursuant to Section 135 and Schedule VII of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure-F.

14. Vigil Mechanism/Whistle Blower Policy:

The Company has formulated a Whistle Blower Policy pursuant to Regulation 22 of the SEBI Listing Regulations and Section 177(10) the Companies Act, 2013 enabling stakeholders to report any concern of unethical behaviour, suspected fraud or violation.

The said policy inter-alia provides safeguard against victimization of the Whistle Blower. Stakeholders including Directors and Employees have access to the Chairperson of the Audit Committee.

During the year under review, no stakeholder was denied access to the Chairperson of the Audit Committee.

The said policy is available on the website of the Company at https://www.cdslindia.com/InvestorRels/ CorporateGovernance.html

15. Related Party Transactions:

All Related Party Transactions entered during the FY 2022-23 were in the ordinary course of business and on an arm''s length basis. Disclosure of related party transactions pursuant to Section 134 (3) (h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 are attached as Annexure-G.

The Disclosures of Related Party Disclosures for annual results pursuant to clause 2 of para A of Schedule 5 of the SEBI Listing Regulations are stated below:

Sr. Particulars
1 In the Accounts of Central Depository Services (India) Limited (‘CDSL’) (Holding Company)
Loans and advances in the nature of loans to subsidiaries by name and amount.		Loans and advances in the nature of loans to associates by name and amount.		Loans and advances in the nature of loans to firms/companies in which directors are interested by name and amount.
Subsidiary Name	Amount (J in Lakh)	Associate Name	Amount (J in Lakh)	Companies where directors are interested	Amount (J in Lakh)
CDSL Ventures Limited	NIL	India International	NIL	Not applicable	NIL
CDSL Insurance Repository Limited	NIL	Bullion Holding
CDSL Commodity Repository Limited	NIL	IFSC Limited
India International Depository IFSC Limited (formerly CDSL IFSC Limited) (upto May 02, 2022)	NIL

Sr. Particulars
2 In the Accounts of Central Depository Services (India) Limited (''CDSL’) (Subsidiary Company)
Loans and advances in the nature of loans to Loans and advances in the nature subsidiaries by name and amount. of loans to associates by name and amount.	Loans and advances in the nature of loans to firms/companies in which directors are interested by name and amount.
Amount Amount Subsidiary Name (J in Associate Name Lakh) (J in Lakh)	Companies where directors are interested	Amount (J in Lakh)
Not applicable NIL Not applicable NIL	Not applicable	NIL
3 In the Accounts of Central Depository Services (India) Limited (''CDSL’) (Holding Company)
Investments by the loan in the shares of parent company and subsidiary company, when the company has made a loan or advance in the nature of loan.		NIL
The Disclosures of transactions of the Company with any person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the listed entity, in the format prescribed in the relevant accounting standards for annual results pursuant to clause 2A of para A of Schedule 5 of the SEBI Listing Regulations are stated below:
		('' in Lakh)
Particulars	As on March 31, 2023	As on March 31, 2022
BSE Limited
Income
BSE Limited
Operational Income	^^^^^79.12	597.76
Expenditure
Rent	-	1.10
Dividend Paid	3,135.00	1,881.00
Administrative and Other Expenses (Recoveries)	58.01	42.40
Payable/(Receivable)	(0.82)	(123.40)

16. Prevention of Sexual Harassment of Women at the Workplace:

Your company has constituted Internal Complaints Committee ''ICC'' under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year the Committee has received one complaint in this regard and the same has been disposed off.

17. Human Resource:

A. Human Resource Development:

The company recognizes its Human assets as a critical resource essential for the growth of the Company. It, therefore, accords high importance to human resource development and consciously endeavors to enhance the quality and competence of its employees across cadres. It conducts induction program for new entrants. Nominating employees for training at reputed institutions and for attending seminars in India and abroad in capital market related areas, particularly relating to depositories, has always been a part of human resource development program of the company. Industrial relations during the year continued to be cordial.

B. Particulars of Employees:

I nformation as required under Section 197(12) read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed to this report as Annexure-H.

C. Material developments in human resources/industrial relations front, including number of people employed:

As a part of recruitment of Key Resources, the Chief Data & Operations Officer has been appointed during FY 2022-23. 65 employees were hired, and 32 employees left, retired or transferred out from the Company during the FY 2022-23. There were 279 employees on the payroll of the Company as on March 31, 2023.

Sr. No.	Name	Designation	Compensation paid (in K)	Ratio to median salary of other employees
1	Nehal Vora	Managing Director & CEO	3,68,12,350	33.69
2	Nayana Ovalekar	Chief Regulatory Officer	1,82,25,123	16.68
3	Amit Mahajan	Chief Technology Officer	1,71,00,946	15.65
4	Ramkumar K.	Chief of Business Development & New Projects	1,84,55,132	16.89
5	Girish Savjibhai Amesara	Chief Financial Officer	1,27,40,191	11.66
6	Vinay Madan	Chief Risk Officer	1,14,99,481	10.52
7	Rajesh Ravindra Saraf	Chief Data & Operations Officer (joined w.e.f. October 19, 2022)	47,10,311*	4.31
8	Yogesh Kundnani	Senior Vice President - Business Development	98,28,410	9.00
9	Farokh Patel	Vice President - Audit, Inspection & Compliance	72,78,054	6.66
10	Nitin Ambure	Vice President - Admission Cell	59,25,707	5.42
11	Vishwas Nagle	Vice President - Information Technology (Interim CISO w.e.f. February 01, 2023)	59,42,538	5.44
12	Prithwijit Dinda	Vice President - Information Technology (Retired on August 31, 2022)	35,28,790*	3.23
13	Ashish Bhatt	Vice President - Operations	47,19,904	4.32
14	Rajesh Nadkarni	Chief Information Security Officer (Resigned & relieved on January 27, 2023)	43,40,199*	3.97
15	Nilay Rajendra Shah	Group Company Secretary and Head Legal	55,77,459	5.10
16	Swaroopkumar Jagadishbhai Gothi	Financial Controller	44,04,000	4.03
17	Ashwin Lalchandani	Assistant Vice President - Risk Management (joined w.e.f. February 08, 2023)	4,08,335*	0.37
* Compensation paid is on pro rata basis based on date of joining or separation as applicable.

18. Other Disclosures:

A. Management Discussion and Analysis:

The Management Discussion and Analysis Report for the year under review as stipulated in SEBI Listing Regulations for the year ended March 31, 2023 is enclosed as Annexure-C.

B. Business Responsibility and Sustainabilty Report:

As stipulated under Regulation 34 of the SEBI Listing Regulations, the Business Responsibility Sustainability Report describing the initiatives taken by the Company from an Environmental, Social and Governance (ESG) perspective is attached as a part of this Annual Report as Annexure - I.

C. Corporate Governance Report:

The Corporate Governance Report for the year ended March 31, 2023 is enclosed as Annexure-B.

D. Credit Rating of Securities:

Not Applicable.

E. Awards & Recognition:

The details of the award has been mentioned in the corporate overview section of this Annual Report.

F. Prevention of Money Laundering Act:

The Prevention of Money Laundering Act, 2002 (PMLA) has been brought into force with effect from July 01, 2005. Subsequent amendments have been made to the PMLA and Prevention of Money-laundering (Maintenance of Records) Rules, 2005 over the years. CDSL, its depository participants and CDSL Ventures Limited (CVL) fall under the category of ''intermediaries'' under Section 12 of the SEBI Act, 1992 and hence, PMLA and the policy guidelines issued by the regulators to combat money laundering are applicable to depository operations. As required under the guidelines, CDSL has designated a Principal Officer, Alternate Officer and Designated Director to ensure compliance with these guidelines. CDSL has prepared policy guidelines for implementation of PMLA and the same is reviewed periodically. CDSL conducted training programs across the country and updates depository participants and their internal auditors on compliance with PMLA provisions and filing of Suspicious Transaction Reports ("STR").

On regular basis, CDSL updates depository participants about the new guidelines issued by FIU-IND and advisory issued by SEBI in reference to FATF Public statement and press release issued by the United Nations Security Council (UNSC).

G. Disclosures under SEBI (Depository & Participants) Regulations, 2018:

The disclosures required to be made under the provisions of the SEBI (Depository and Participants) Regulations, 2018 are part of the Corporate Governance Report enclosed as Annexure-B.

ACKNOWLEDGEMENT:

Your Director’s place on record their sincere gratitude for the support, guidance and cooperation received from Ministry of Finance, Ministry of Corporate Affairs, Securities and Exchanges Board of India (SEBI), Reserve Bank of India (RBI), Insurance Regulatory Development Authority (IRDA), Warehousing Development Regulatory Authority (WDRA), UIDAI and other regulatory agencies. The Directors also acknowledge with thanks the continued support of the BSE Ltd., the Promoter, all other shareholders, Beneficial Owners, Depository Participants, Issuers, and Registrar and Transfer Agents, Market Infrastructure Institutions like the Stock Exchanges, Clearing Corporations, Depository and Commodities Exchanges. The Directors also express their appreciation for the unflinching dedication of the employees whose performance, professionalism and commitment for rendering high quality services to the clientele of the Company has been commendable.

For and on behalf of the Board Central Depository Services (India) Limited

Balkrishna V Chaubal Chairperson (DIN: 06497832)

Place: Mumbai Date:June 24, 2023

---

Mar 31, 2022

Your Directors are pleased to present the Twenty-Fourth Annual Report on the business and operations of Central Depository Services (India) Limited ["CDSL / the Company"], along with the audited financial statements (standalone as well as consolidated) for the year ended March 31,2022 ("FY 2021-22").

1. STATE OF AFFAIRS:

A. FINANCIAL HIGHLIGHTS:

('' in lakhs)
Particulars	Consolidated		Standalone
	Year ended	Year ended	Year ended	Year ended
	March 31, 2022	March 31, 2021	March 31, 2022	March 31, 2021
Income from Operations	55,133.08	34,371.71	41,480.33	27,058.39
Other Income	5,456.88	5,691.70	6,532.76	4,176.60
Total Income	60,589.96	40,063.41	48,013.09	31,234.99
Expenditure	18,447.76	13,191.02	13,268.40	9,869.43
Profit before Depreciation, share of profit / (Loss) from Associates and Taxation	42,142.20	26,872.39	34,744.69	21,365.56
Depreciation	1,146.28	920.05	1,010.02	728.98
Profit before Share of net profits of investments accounted for using equity method and tax	40,995.92	25,952.34	33,734.67	20,636.58
Share of profit/(Loss) of associates	(141.20)	0.00	0.00	0.00
Profit before Tax	40,854.72	25,952.34	33,734.67	20,636.58
Tax Expense	9,673.91	5,825.61	7,358.43	4,630.82
Profit after Tax	31,180.81	20,126.73	26,376.24	16,005.76
Other Comprehensive Income (Net of Tax)	(143.39)	(8.90)	(217.96)	(4.63)
Total Comprehensive Income	31,037.42	20,117.83	26,158.28	16,001.13

B. FINANCIAL PERFORMANCE:

(i) CONSOLIDATED RESULTS:

On a consolidated basis, the operational income of the Company for the year ended March 31, 2022 is at ? 55,133.08 lakhs as against ? 34,371.71 lakhs for the previous year ended March 31,2021, higher by 60%, resulting in total income to ? 60,589.96 lakhs for the year ended March 31, 2022 as against ? 40,063.41 lakhs for the previous year ended March 31, 2021. Profit before Tax (PBT) for the year ended March 31, 2022, is ? 40,854.72 lakhs as against ? 25,952.34 lakhs for the previous year ended March 31, 2021. Similarly, Profit after Tax (PAT) for the year ended March 31, 2022 is at ? 31,180.81 lakhs as against ? 20,126.73 lakhs for the previous year ended March 31, 2021. Thus, Profit before Tax & Profit after Tax for the year ended March 31,2022, has increased by 57% and 55% respectively, over the previous year ended March 31,2021.

(ii) STANDALONE RESULTS:

On a standalone basis, the operational income of the Company for the year ended March 31, 2022 is at ? 41,480.33 lakhs as against ? 27,058.39 lakhs for the previous year ended March 31,2021, higher by 53%, resulting in total income to ? 48,013.09 lakhs for the year ended March 31, 2022 as against ? 31,234.99 lakhs for the previous year ended March 31, 2021. The income from operations comprising of transaction charges, annual issuers charges, account maintenance charges, settlement charges, corporate action charges, etc. . Pursuant to Regulation 73 of the SEBI (Depositories & Participants) Regulations, 2018, transfer of ? 1,360.10 lakhs is made to CDSL Investor Protection Fund (IPF). After contribution to CDSL Investor Protection Fund, Profit before Tax (PBT) for the year ended March 31,2022, is ? 33,734.67 lakhs as against ? 20,636.58 lakhs for the previous year ended March 31, 2021. Similarly, Profit after Tax (PAT) is at ? 26,376.24 lakhs as against ? 16,005.76 lakhs. Thus, Profit before Tax & Profit after Tax for the year ended March 31,2022 has increased by 63% and 65% respectively over the previous year ended March 31,2021.

During the year, the Board of Directors of the Company reviewed the affairs of its subsidiaries. In accordance with section 129 (3) of the Companies Act, 2013, your Company has prepared the consolidated financial statements of the Company and of all its subsidiary companies in the same form and manner as that of its own and in accordance with applicable accounting standards, which forms part of this annual report. Further, a separate statement containing the salient features of the financial statement of our subsidiaries in the prescribed format of Form AOC-1 is appended as Annexure-A to the Board''s Report. The statement also provides details of the performance and financial position of each of the subsidiary company.

In accordance with section 136 of the Companies Act, 2013, the audited financial statements including the consolidated financial statements and all other related documents and information of the Company and separate audited accounts in respect of each of the subsidiary are available on our website https://www.cdslindia.com/InvestorRels/AnnualReports.html. These documents will be available for inspection till the date of AGM during business hours at the registered office of the Company.

C. DIVIDEND:

Considering the performance of the Company for the year under review, your Directors have recommended a final dividend of '' 15/- per equity share of the face value of '' 10/- each, fully paid for the financial year ended March 31, 2022, subject to the approval of the shareholders as compared to the final dividend of '' 9/- per equity share of the face value of '' 10/- each paid in the previous year ended March 31,2021.

The final dividend, if approved, would result in a cash outflow of ? 15,675 lakhs with a dividend payout ratio at 59.43% of the standalone profits of the Company.

The dividend recommended is in accordance with the principles and criteria as set out in the Dividend Distribution Policy. The Policy can also be accessed on the Company''s website at https://www.cdslindia.com/ InvestorRels/CorporateGovernance.html.

2. SHARE CAPITAL:

A. CAPITAL STRUCTURE:

Authorised Share Capital of your Company is '' 150,00,00,000 divided into 15,00,00,000 equity shares of '' 10/- each whereas the Issued and Paid-Up Share Capital is '' 104,50,00,000 divided into 10,45,00,000 equity shares of '' 10/- each. As of March 31, 2022, out of 10,45,00,000 shares, 10,44,99,689 shares are in demat mode and 311 shares are in physical mode. There was no change in the capital structure of the Company during the FY 2021-22.

3. BUSINESS OUTLOOK AND OVERVIEW:

A. THE CAPITAL MARKET ENVIRONMENT:

The FY 2021-22 was one of the most challenging years for the Indian Economy. During FY 2021-22, the S&P BSE Sensex opened at 49,868 on April 01, 2021 and touched a high of 62,245 on October 19, 2021 and thereafter closed at 58,568 on March 31, 2022. During same period Nifty opened at 14,798 and hit a high of 18,604 on October 19, 2021 and thereafter closed at 17,464 on March 31,2022.

The International Monetary Fund (IMF), in its latest World Economic Outlook report, has slashed its forecast for India''s FY 2022-23 gross domestic product growth to 8.2% from 9.0%, saying that the higher commodity prices will weigh on private consumption and investments. This was one of the steepest cuts for emerging economies compared to IMF''s earlier forecast. Global Economic prospects have worsened significantly due to commodity price volatility and disruption of supply chains caused by the war in Europe, IMF has cut its global growth outlook for calendar year 2022 to 3.6% from 4.4% and said that both Russia and Ukraine could experience large GDP contractions.

The World Bank has slashed the GDP growth forecast for India in FY 2022-23 to 8.0% in bi-annual "South Asia Economic Focus" report, due to the negative impact of the war in Ukraine on FY 2022-23 growth. Earlier in January 2022, the growth forecast for FY 2022-23 was estimated at 8.7%.

B. OPERATIONAL PERFORMANCE:

The capital market plays a significant role in building the economy as it channelizes domestic saving into sustainable financial assets. The Indian capital markets are robust and deep. The markets have witnessed diverse magnitude of volatility and growth levels based on global and domestic scenario and investor participations. The digitization of various processes has helped to have easier access to stock markets and depository services. This has led to increased participation from Tier I and Tier II cities in financial markets. In order to sustain the growth in its depository business, your Company continues to focus on enhancement of operational efficiency, upgradation of technology, service quality and enhanced emphasis on investor education through seminars / workshops.

C. BENEFICIAL OWNER ACCOUNTS:

During the year under review, 295.59 lakhs net Beneficial Owner (BO) accounts were added, taking the total number of such accounts to 629.97 lakhs as on March 31, 2022, making us the first depository to cross the 600 lakhs milestone.

D. SECURITIES ADMITTED:

Securities like equity shares, preference shares, mutual fund units, debt instruments, government securities, certificates of deposit, commercial papers and a host of other instruments are available for dematerialization by the investors. Details of the securities admitted with CDSL are given below:

E. POSITION OF SECURITIES HELD IN THE SYSTEM:

The value and volume of securities held with CDSL in the year under review as compared to the previous financial year are indicated below:

F. DEPOSITORY PARTICIPANTS AND SERVICE CENTERS:

As on March 31, 2022, 584 Depository Participants held valid registration certificates of Securities and Exchange Board of India (SEBI) as compared to 592 valid SEBI registrations as on March 31, 2021. Further, Investors have access to 21,728 DP service centers spread across India.

The comparative figures of net BO accounts as on March 31, 2021 and March 31, 2022 are given in the following table:

Year ended	Year ended	Increase over the previous year''s
March 31, 2022	March 31, 2021	cumulative figure
		Number	Percentage (%)
6,29,97,046	3,34,37,873	2,95,59,173	88.40

Securities	Year ended March 31, 2022	Year ended March 31, 2021	(%) change over the previous year
Equity Shares	17,336	15,619	10.99
Debt Instruments	9,517	9,154	3.97
Other Securities	25,994	25,474	2.04
Total	52,847	50,247	5.17

Holding of Securities	Year ended		Change over the previous year(%)
	March 31, 2022	March 31, 2021
Value ('' in lakh crore)	37.17	27.44	35.47
Volume (in crore) (Number of Securities)	56,757	47,449	19.63

G. INVESTOR AWARENESS / EDUCATION SEMINARS:

CDSL conducts various investors awareness activities aiming at promoting financial education from the depository point of view in particular and other capital market initiatives in general to educate investors to take an informed decision with respect to any matter related to Capital Market and become ''Atmanirbhar Niveshak'' or the self-sufficient investor.

CDSL regularly conducts Investor Awareness Programs (IAPs) in association with SEBI, Market Infrastructure Institutes (MIIs), market intermediaries like Depository Participants (DPs), Associations of Brokers & DPs and financial educational institutions like Institute of Company Secretaries of India (ICSI), Colleges and Universities. for retail and potential investors as a major focus area. We believe investor education can become a significant key to achieving financial inclusion in the capital market. During FY 2021-22, CDSL Investor Protection Fund (CDSL IPF) conducted 1,076 IAPs in English, Hindi and 20 other regional languages viz. Marathi, Gujarati, Tamil, Kannada, Malayalam, Bengali and Telugu, etc., through online and offline mode and reached to almost 78,372 investors across India including Tier 2, Tier 3 and Tier 4 Towns / Cities. This initiative allows CDSL to reach investors across geographies, professions and age groups including students, corporate employees, government employees. This year, even during the national lockdown due to the pandemic of COVID-19, CDSL IPF conducted IAPs to educate the investors on continuous basis.

CDSL has also reached out to investors in various social media platforms like Facebook (@cdslindia), Twitter (@ cdslindia), LinkedIn (@cdslindia). On September 10, 2021, we extended our social media reach by adding to KOO App (@cdslindia), Instagram (@cdslindia) and YouTube (@cdslindiaLtd). Various posts i.e. pictures, GIFs, videos related to IAPs, posts, awareness materials about various services provided by CDSL are uploaded for the benefit of retail investors in these social media channel.

CDSL also provides various information beneficial to investors on its website under the head Investors Corner. Informative booklet on "Securities Market Understanding from Investor''s Perspective" which was prepared jointly by Securities and Exchange Board of India (SEBI), BSE Limited (BSE), National Securities Depository Limited (NSDL), National Stock Exchange of India Limited (NSE), Metropolitan Stock Exchange of India Limited (MSEI) and Central Depository Services (India) Limited (CDSL) in 13 languages namely English, Malaya lam, Punjabi, Hindi, Marathi, Gujarati, Telugu, Tamil, Oriya, Kannada, Assamese, Manipuri, Bengali to reach out to investors. This booklet is

shared with Investors during lAPs and is also available on the CDSL website at https://www.cdslindia.com/Investors/ InvestorCorner.aspx

3. NEW INITIATIVES

A. APPLICATION PROGRAM INTERFACE (API):

CDSL has developed few more APIs viz. eDIS for T 1 trades etc., for its Depository Participants (DPs), which will assist the DPs in automating their processes and back-office operations. APIs for account opening, common transaction upload (which includes off-market, on-market, early pay-in & inter depository transactions), pledge / unpledge / confiscation transactions, Margin Pledge & Margin Funding transactions that were made available is being used by large number of DPs. This will lead to ease in operations of all the CDSL DPs and the market participants.

B. SYSTEM ENHANCEMENTS:

CDSL believes in the power of digitization and continuously tries to enhance its systems to increase the efficiency of processes as pescribed by SEBI. Some of the important system enhancements are enumerated below -

a) Validation of Standard reason codes for off-market was implemented.

b) Implementation of T 1 Settlement of the securities in the depository system.

c) E-Voting system:

i. Provision was made available to issuer companies to update the details of AGM viz. record date, E-Voting start date, E-Voting end date, Meeting date, etc.

ii. On the Issuer entering the detail of E-Voting, SMS and emails are sent by the depository to all the shareholders having account in the depository intimating them about the E-Voting event.

iii. Enabling the demat account holders to vote for any company irrespective of the E-Voting service provider.

d) Block mechanism in demat account of clients undertaking sale transactions.

C. TRANSACTION CUM HOLDING STATEMENTS:

As on March 31, 2022, 225 Depository Participants (DPs) have availed of the service of dispatch of transaction cum holding statements (DOTS and e-DOTS). In FY 202122, CDSL has processed 54.13 lakhs statements. During the FY 2021-22, 6.52 crore statements have been sent electronically and 55.17 lakhs statements have been sent for the purpose of Consolidated Statement (CAS).

D. CORPORATE BOND DATABASE:

Your Company is in the process of creating a state of the art system using block chain/distributed ledger technology (DLT) to chart the life cycle of the non-convertible secured debts from the time of creation of the instrument with underlying assets offering security, to the approval of the same by the Debenture Trustee to the rating given by the Credit Rating Agency to the listing of the instrument to the regular/periodic interest payments to the ultimate step of payment of the final redemption amount. This is likely to bring in greater transparency in the manner in which the secured instruments are handled in the capital market.

E. TECHNOLOGY INITIATIVES:

As a part of continual upgradation process, CDSL continuously works on upgrading the technology, features and functionalities of the Depository applications. We have recently upgraded our storage and server infrastructure to support the business growth and providing faster services to our customers.

CDSL has also further enhanced the appropriate cyber security framework and controls as prescribed by SEBI from time to time to mitigate the cyber security risks.

F. CONTINUING PROFESSIONAL EDUCATION (CPE) PROGRAMS - DEPOSITORY OPERATIONS CERTIFICATION EXAMINATION (DOCE):

National Institute of Securities Markets (NISM) has been offering Continuing Professional Education (CPE) Programs for Associated Persons in the Securities Market Intermediaries.

CDSL, as a NISM Accredited CPE Provider for conducting CPE Programs, has successfully carried out 4 programs for 66 participants during the year.

G. E-VOTING:

As on March 31, 2022, total 6,145 companies have signed agreements with CDSL to conduct e-Voting. So far, the e-Voting system recorded 31,801 instances of voting carried out by 5,408 companies.

H. E-NOTICES:

In the light of green initiative in the Corporate Governance by Ministry of Corporate Affairs, CDSL has started offering the services to companies for sending documents to its shareholders electronically. As on March 31, 2022, a total of 470 companies have signed for availing these services.

4. MANAGEMENT:

A. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The SEBI (Depositories and Participants) Regulations, 2018, were notified on October 03, 2018. As per Regulation 25

B. CHANGE IN COMPOSITION DURING THE YEAR:

The changes taken place in the constitution of Directors and KMPs of CDSL during the FY 2021-22 are as follows:

Shri Masil Jeya Mohan P. was re-appointed as Shareholder Director of the Company by the shareholders at the Annual General Meeting of the Company on September 21,2021. SEBI vide its letter dated October 26, 2021, had approved the re-appointment of Shri Masil Jeya Mohan P. as Shareholder Director on the Governing Board of CDSL, who shall be liable to retire by rotation and accordingly, the re-appointment of Shri Masil Jeya Mohan P. was effective from October 26, 2021.

Smt. Amita Paunikar, Vice President - Legal and Company Secretary and Compliance Officer resigned w.e.f. April 05, 2021.

Shri Nilay Shah, Group Company Secretary and Head Legal was appointed w.e.f. August 02, 2021.

Shri Vinay Madan, Chief Risk Officer was appointed w.e.f. August 10, 2021.

C. DECLARATION FROM DIRECTORS:

a. The Company has received necessary declarations from the Independent Directors viz. Public Interest Directors as required under sub-section (6) of section 149 of the Companies Act, 2013 and under clause (b) of sub-regulation (1) of Regulation 16 of the SEBI

of SEBI (Depositories and Participants) Regulations, 2018, the appointment and re-appointment of all Shareholder Directors on the Board of the Depository shall be with the prior approval of SEBI. The Public Interest Directors on the Board shall be nominated by SEBI. As per Regulation 24(9) of the SEBI (Depositories and Participants) Regulations, 2018, no depository participant or their associates and agents, irrespective of the depository of which they are members shall be on the Governing Board of the depository.

Directors on the Governing Board of CDSL as on March 31, 2022 are as follows:

Name	Category
Shri Balkrishna V Chaubal, Chairperson	Public Interest Director
Prof. (Dr.) Bimalkumar N Patel	Public Interest Director
Smt. Preeti Saran	Public Interest Director
Shri Sidhartha Pradhan	Public Interest Director
Prof. Umesh Bellur	Public Interest Director
Shri Masil Jeya Mohan P.	Shareholder Director
Shri Nayan Mehta	Shareholder Director
Shri Nehal Vora	Managing Director & CEO

(Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations). There has been no change in the circumstances affecting their status as Independent Directors viz. Public Interest Directors of the Company; and

b. They have registered themselves with the Independent Director''s database maintained by the Indian Institute of Corporate Affairs (IICA) and have passed the proficiency test or are exempted from the same.

As per the provisions of Section 152(6)(d) of the Companies Act, 2013, Shri Nayan Mehta, the Shareholder Director is liable to retire by rotation and being eligible has offered himself for reappointment. Accordingly, he would be considered for being re-appointed as Shareholder Director at the ensuing Annual General Meeting.

D. DECLARATION BY THE COMPANY:

None of the Directors of the Company are disqualified for being appointed as Directors as specified in Section 164 (2) of the Act read with Rule 14 of Companies (Appointment and Qualifications of Directors) Rules, 2014.

E. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND ITS VARIOUS COMMITTEES:

14 (Fourteen) meetings of the Board of Directors were held during the year under review. The details of Meetings of Board and Committees held during the year, attendance of Directors at the meetings and constitution of various Committees of the Board are included separately in the Corporate Governance Report, which is enclosed as Annexure-G.

F. AUDIT COMMITTEE RECOMMENDATIONS:

During the year, all recommendations of Audit Committee were approved by the Board of Directors.

G. BOARD EVALUATION:

The Board of Directors of the Company carried out annual evaluation of its own performance, Committees of the Board and individual Directors in accordance with the regulatory requirements and as per the policy of evaluating performance of the Board of Directors and of its Committees and Individual Directors on the basis of a structured questionnaire, drafted in accordance of the guidelines issued by SEBI, which comprises evaluation criteria taking into consideration various performance related aspects. All the Directors participated in the evaluation process. Recommendations arising from this entire process were deliberated upon by the Board to augment its effectiveness and optimize individual strengths of the Directors. The detailed criteria for evaluation for each of the above is enumerated in the Corporate Governance Report.

H. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors reports that:

i. in preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided;

ii. accounting policies have been selected and applied them consistently and the judgements and estimates made 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 of the company for that period;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities;

iv. the annual accounts have been prepared on a going-concern basis;

v. internal financial controls to be followed by the company are laid down and that such internal financial controls are adequate and were operating effectively;

vi. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

I. NOMINATION & REMUNERATION POLICY FOR DIRECTORS:

The Nomination and Remuneration Policy has been framed in order to set out principles, parameters and governance framework for the appointment and remuneration for Public Interest Directors, Shareholder Directors, Managing Director & CEO, Key Managerial Personnel, Key Management Personnel and Senior Management of the Company. The Nomination & Remuneration Policy can be accessed on website of the Company at https://www.cdslindia.com/InvestorRels/CorporateGovernance.html.

J. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The details in respect of adequacy of internal financial controls with reference to the Financial Statements forms part of the Management Discussion and Analysis Report enclosed as Annexure-H.

K. COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company has complied with the applicable Secretarial Standards issued by the ''Institute of Company Secretaries of India''.

ANNUAL RETURN:

The Annual Return of the Company as on March 31, 2022 in Form MGT-7 in accordance with section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://www.cdslindia.com/InvestorRels/ GeneralMeeting.html

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

Details of Subsidiary Companies, Associate and Joint Venture Companies:

Your Company has following Subsidiary / Associate Companies as on March 31, 2022:

Sr.	Name of	CIN	Subsidiary/
No	Company		Associate
1.	CDSL Ventures Limited	U93090MH2006PLC164885	Subsidiary
2.	CDSL Insurance Repository Limited	U74120MH2011PLC219665	Subsidiary
3.	CDSL Commodity Repository Limited	U74999MH2017PLC292113	Subsidiary
4.	CDSL IFSC Limited	U65990GJ2021PLC121672	Subsidiary
5.	India International Bullion Holding IFSC Limited	U67100GJ2021PLC123076	Associate

(i) CDSL VENTURES LIMITED ("CVL"):

CDSL Ventures Limited ("CVL") is registered with Securities Exchange Board of India (SEBI), Goods and Services Tax Network (GSTN), Unique Identification Authority of India (UIDAI) and Controller of Certifying Authorities (CCA).

CVL is the first KYC Registration Agency (KRA) registered with SEBI. CVL is also registered with SEBI as a Registrar & Transfer Agent (RTA) to provide RTA services to corporates. CVL is registered as GST (Goods and Service Tax) Suvidha Provider (GSP) with GSTN to facilitate entities to file their GST returns. CVL is registered as an Authentication User Agency AUA/eKYC User Agency (KUA) with UIDAI for offering Aadhaar based eKYC services. CVL is registered as a Certifying Authority (CA) with the CCA for offering Aadhaar based eSign services. CVL is registered as Accredited Agency with SEBI to provide Accredited Investor services.

CVL is a wholly owned subsidiary of Central Depository Services (India) Limited (CDSL).

CVL began its journey in 2008 by handling Customer Profiling and Record keeping of Mutual Fund Investors on account of the Prevention of Money Laundering Act, 2002 (PMLA Act, 2002) related KYC

requirements. After the introduction of the KRA regulations in 2011, CVL was the first entity to register as a KYC Registration Agency (KRA) with SEBI. As a KRA, CVL provides fully digitized KYC services to all intermediaries in the Capital Markets. CVL currently holds over 4 Crores fully digitized KYC records.

CVL is also offering the following as part of its service portfolio:

1. CKYC Services: CVL assists intermediaries to become CKYC compliant by facilitating upload of KYC documents to CERSAI

2. Aadhaar based eKYC services

3. Aadhaar based esign services

4. Registrar and Transfer Agent services

5. Pradhan Mantri Jeevan Jyoti Bima Yojna (PMJJBY) services: Maintaining a Claim Repository and performing dedupe activity for claims under PMJJBY scheme.

6. GST Suvidha Provider Services for filing GST Returns

7. Processing and handling Refund payments to investors of PACL Ltd. pursuant to Justice (Retd.) R M Lodha Committee. CVL has received approval for reappointment for a period of 5 years with effect from April 01, 2022.

8. CVL has received recognition from SEBI as an Accreditation Agency for a period of 3 years with effect from February 01,2022.

CVL aims to be globally respected as an Information Technology Enabled Services company. Ethics, values and are vital to its philosophy. CVL lays special emphasis on integrity of its people because of the trust reposed by its clients. CVL derives confidence from its team, which has a ''Securities Market Domain Expertise''. CVL, believes in empowering its people so that they handle challenging assignments and exceed customer expectations.

CVL has in place a stringent policy and systems to ensure confidentiality of data. Strong electronic and physical security measures ensure security of confidential data. CVL databases are maintained inhouse with proper mechanism in place to monitor server capacity utilization and augmentation. There is a proper backup and archival process being followed as per the backup policy defined. CVL has a Primary Data Center and Disaster Recovery ("DR") Center for all its critical IT Operations. The Disaster Recovery Center is located in a different seismic zone and the data is mirrored on near real time basis. DR drills are conducted once a quarter and an audit trail of

the same is maintained. The network management at CVL ensures that the bandwidth requirement is monitored to handle processing of large volumes across multiple processes. CVL is ISO 27001 compliant and is regulated by multiple regulators for different projects.

Since CVL is managing a large number of projects, it has initiated a risk identification and assessment of its projects to strengthen its risk management framework.

Being a subsidiary of a Market Infrastructure Intermediary, the infrastructure, security and risk management practices of CVL are benchmarked to the best in the industry.

(ii) CDSL INSURANCE REPOSITORY LIMITED ("CIRL"):

CDSL Insurance Repository Limited ("CIRL") is regulated by Insurance Regulatory and Development Authority of India (IRDAI) and is in the business of enabling policy holders to hold life policies, motor policies, health policies and in the near future, all other types of general (non-life) policies in electronic form. CIRL has arrangements with several life insurance companies, health insurance companies and general insurance companies enabling the policy holders to hold policies in electronic form.

Your Company had under the "Guidelines on insurance repositories and electronic issuance of insurance policies" issued by IRDAI, floated a separate subsidiary viz. CIRL, in the year 2011. CIRL provides policyholders a facility to keep their insurance policies in electronic form and to undertake changes, modifications and revisions in the insurance policy with speed and accuracy, to bring about efficiency, transparency and cost reduction in the issuance and maintenance of insurance policies.

Leading public sector and private sector insurance companies have contributed to the equity capital of CIRL. At the time of launch in August 2013, the insurance repository services were restricted only to Life insurance policies. However, later, IRDAI has extended the scope of services to Health and Motor Vehicle insurance policies and soon, to all other types of general insurance. Further, initially only individual policies were allowed in electronic form but subsequently this feature is being extended to corporate and group policies.

As on March 31, 2022, the Company has 7.11 lakhs active eIAs (electronic insurance accounts) as against 6.03 lakhs active eIAs as on March 31, 2021, in the Repository.

As on March 31, 2022, over 5.59 lakhs electronic policies constituting 5.22 lakhs Life e-insurance policies, 1,593 Motor e-insurance policies and 35,187 Health e-insurance policies have been credited in the eIAs as against around 4.22 lakhs electronic policies constituting 4.00 lakhs life insurance policies, 883 motor insurance policies and 20,602 health insurance policies as on March 31, 2021. The above figures indicate that there is a positive trend in creating electronic insurance policies, with a growth rate of 33%.

CIRL has tied up with twenty-two life insurance companies, five health insurance companies and fourteen general insurance companies, which is a total of forty-one insurance companies, for holding policies in electronic form.

CIRL has received a contract from an Insurance company, to operate remote offices on their behalf and provide outsourcing services. Such centers have been established at present and more centers are in the pipeline. We are also interacting with other insurance companies to provide similar services. Considering the trend of companies outsourcing their activities, these services contracts will provide your Company with new revenue streams, apart from the Insurance Repository (IR) business.

(iii) CDSL COMMODITY REPOSITORY LIMITED ("CCRL"):

CDSL Commodity Repository Limited ("CCRL") was establish to run a Commodity Repository on the lines of a securities depository. Warehousing Development and Regulatory Authority ("WDRA") is the regulator for CCRL. CCRL received the certificate of commencement of business/registration from WDRA on September 26, 2017 and commenced operations from September 30, 2017. Multi Commodity Exchange of India Ltd. ("MCX") and BSE Investments Ltd. have each taken up 24% of the stake in CCRL in May, 2018 and August, 2018 respectively.

CCRL today exclusively serves three derivative commodity exchanges for their derivative trades in Agri-commodities. These are Multi Commodity Exchange of India Limited, Bombay Stock Exchange Limited and Indian Commodity Exchange Limited. As on March 31, 2022, CCRL has opened close to 2,046 client accounts and has issued about 38,033 Electronic Negotiable Warehouse Receipts.

(iv) CDSL IFSC LIMITED:

CDSL, the parent Company has incorporated a wholly owned subsidiary company in the name of CDSL IFSC Limited ("CDSL IFSC") on March 30, 2021.

CDSL IFSC was set up primarily as a depository of securities in IFSC. With an intent to operate a single depository in GIFT IFSC, CDSL accorded its approval for the divestment of shares held by CDSL in CDSL IFSC Limited to India International Bullion Holding IFSC Limited ("IIBHIL") owned by the consortium of CDSL, India International Exchange (IFSC) Limited, National Stock Exchange of India Limited, Multi Commodity Exchange of India Limited and National Securities Depository Limited. On May 02, 2022, CDSL has divested 92.5% in CDSL IFSC Limited to IIBHIL and accordingly, CDSL IFSC Limited ceased to be the subsidiary of CDSL with effect from May 02, 2022.

6. MAJOR EVENTS OCCURRED DURING THE YEAR:

A. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:

No material changes affecting the financial position have occurred between the end of the financial year and the date of the report.

B. CHANGE IN THE NATURE OF BUSINESS:

The Company has not undergone any changes in the nature of the business during the FY 2021-22.

C. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE:

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

7. INVESTOR EDUCATION AND PROTECTION FUND

A. CONTRIBUTION TOWARDS INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

1. Amount of unclaimed/unpaid Not Applicable

dividend and the corresponding

shares;

2. Amount of matured deposits, if any; Not Applicable

3. Application money received for Not Applicable

allotment of any securities and due

for refund along with interest accrued;

4. Year wise amount of unpaid/ Please refer the

unclaimed dividend lying in the table below

unpaid account upto the Year and

the corresponding shares, which are liable to be transferred to the IEPF, and the due dates for such transfer;

B. AMOUNT OF UNPAID AND UNCLAIMED DIVIDEND:
Particulars			Financial Year
	2017-18 (Final Dividend) As on 31.03.2022	2018-19 (Final Dividend) As on 31.03.2022	2019-20 (Final Dividend) As on 31.03.2022	2020-21 (Final Dividend) As on 31.03.2022
Amount	5,86,852.00	10,40,748.00	17,53,127.50	25,57,256.00
No. of Shares	1,67,672	2,60,187	4,09,501	3,14,882
Due date for transfer of unpaid dividend amount	October 18, 2025	November 15, 2026	November 15, 2027	November 19, 2028
Due date for transfer of corresponding shares	November 17, 2025	December 15, 2026	December 15, 2027	December 19, 2028

8. PUBLIC DEPOSITS:

A. DEPOSITS:

Your Company has not accepted any deposits within the meaning of Section 73 and 76 of the Companies Act, 2013 and the Rules made thereunder. There are no deposits remaining unpaid or unclaimed as at the end of the year and there has been no default in repayment of deposits or payment of interest thereon during the year.

B. DETAILS OF DEPOSITS NOT IN COMPLIANCE WITH THE REQUIREMENTS OF THE ACT:

Since the Company has not accepted any Deposits during the Financial Year ended on March 31, 2022, the compliance of the requirements of the Companies Act, 2013 is not applicable to CDSL.

9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT, 2013:

Details of Loans, Guarantees or investments under section 186 of the Companies Act, 2013 are given in the notes to the financial statements.

10. AUDITORS:

A. STATUTORY AUDITORS & AUDIT REPORT:

M/s. S. R. Batliboi & Co. LLP (Firm Registration No. 301003E/ E300005), Chartered Accountants, Mumbai were appointed as Statutory Auditors of the Company in the

Twentieth Annual General Meeting held on August 20, 2018 to hold office from the conclusion of the 20^th Annual General Meeting till the conclusion of the 25^th Annual General Meeting.

There are no qualifications, reservations or adverse remarks or disclaimer made by M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, Mumbai, Statutory Auditors in their report.

B. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS:

There are no frauds reported by auditors under subsection (12) of section 143 of the Companies Act, 2013.

C. INTERNAL AUDITORS:

In terms of the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, the Company had appointed M/s. Dalal Doctor & Associates, Chartered Accountants (Firm Registration No. 120833W) for the period from April 01,2021 to March 31,2022, as Internal Auditors & Concurrent Auditors of the Company.

There are no qualifications, reservations or adverse remarks or disclaimer made by the Internal Auditors and Concurrent Auditors in their report.

D. SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT:

M/s. Vatsal Doshi & Associates (C.P.No.22976/Membership No. A50332), Practicing Company Secretaries, Mumbai was appointed as Secretarial Auditor of the Company for the FY 2021-22. In accordance with Section 204(1) of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI Listing Regulations, a copy of the Secretarial Audit Report issued in Form MR-3 by M/s. Vatsal Doshi & Associates, Secretarial Auditors is enclosed as an Annexure-B to this report. The Secretarial Audit Report of CDSL Ventures Limited, a material unlisted subsidiary of the Company issued in Form MR-3 by M/s. Vatsal Doshi & Associates, Secretarial Auditors also forms part of to this report and the same is enclosed Annexure-C.

E. COST RECORDS:

The Company is not required to maintain cost records as specified by the Central Government under sub-

section (1) of section 148 of the Companies Act, 2013 and accordingly such accounts and records are neither made nor maintained.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

A. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Considering the nature of operations of your Company, the provisions of Section 134(3) (m) of the Companies Act, 2013 are not applicable, though the Company uses all the possible ways in conserving energy. The Company has, however, used information technology extensively in its operations.

B. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Details of foreign exchange earnings and outgo during the year

under review are as under:

('' in lakhs)
Particulars	For the	For the
	year ended	year ended
	March 31, 2022	March 31, 2021
Others (Software license)	3.74	4.39
Total	3.74	4.39

12. RISK MANAGEMENT AND COMPLIANCE:

A. Risk Management Policy:

The risk management policy identifying the various elements of risk is explained in detail in the Management Discussion and Analysis Report attached as Annexure-H.

13. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Board has framed a Corporate Social Responsibility (CSR) Policy in compliance with the requirements of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy), Rules, 2014. In accordance with its CSR philosophy and the specified activities under the Act, the CSR activities of the Company has thrust areas including

promotion of education; promoting gender equality and empowering women; eradicating extreme hunger and poverty; reducing child mortality and improving maternal health; combating human immunodeficiency virus, acquired immune deficiency syndrome, malaria and other diseases; ensuring environmental sustainability; employment enhancing vocational skills; social business projects; contribution to the Prime Minister''s National Relief Fund or any other fund set up by the Central Government or the State Governments for disaster relief, socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women. Your Company has constituted a robust and transparent governance structure to oversee the implementation of its CSR Policy.

The Corporate Social Responsibility Policy can be accessed on website of the Company https://www.cdslindia.com/InvestorRels/CorporateGovernance.html. During FY 2021-22, your Company has sponsored various projects and the report on CSR activities pursuant to section 135 and Schedule VII of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure-D.

14. WHISTLE BLOWER POLICY:

The Company has formulated a Whistle Blower Policy pursuant to Regulation 22 of the SEBI Listing Regulations and Section 177(10) of the Companies Act, 2013 enabling stakeholders to report any concern of unethical behaviour, suspected fraud or violation.

The said policy inter-alia provides safeguard against victimization of the Whistle Blower. Stakeholders including Directors and Employees have access to the Chairperson of the Audit Committee.

During the year under review, no stakeholder was denied access to the Chairperson of the Audit Committee.

15. RELATED PARTY TRANSACTIONS:

All Related Party transactions entered during the FY 202122 were in the ordinary course of business and on an arm''s length basis. Disclosure of related party transactions pursuant to section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 are attached as Annexure-E.

16. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE:

Your Company has constituted an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year the Committee did not receive any Complaint in this regard.

17. HUMAN RESOURCE:

A. HUMAN RESOURCE DEVELOPMENT:

The Company recognizes its Human assets as a critical resource essential for the growth of the Company. It, therefore, accords high importance to human resource development and consciously endeavors to enhance the quality and competence of its employees across cadres. It conducts induction program for new entrants. Nominating employees for training at reputed institutions and for attending seminars in India and abroad in capital market related areas, particularly relating to depositories, has always been a part of human resource development program of the Company. Industrial relations during the year continued to be cordial.

B. PARTICULARS OF EMPLOYEES:

Information as required under Section 197(12) read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed to this report as Annexure-F.

18. OTHER DISCLOSURES:

A. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report for the year under review as stipulated in SEBI Listing Regulations for the year ended March 31, 2022 is enclosed as Annexure-H.

B. BUSINESS RESPONSIBILITY REPORT:

As stipulated under Regulation 34 of the SEBI Listing Regulations, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as a part of this Annual Report.

C. CORPORATE GOVERNANCE REPORT:

The Corporate Governance Report for the year ended March 31,2022 is enclosed as Annexure-G.

D. CREDIT RATING OF SECURITIES:

Not Applicable.

E. AWARDS & RECOGNITION:

The details of the Award has been mentioned in the Corporate Overview section of this Annual Report.

F. PREVENTION OF MONEY LAUNDERING ACT:

The Prevention of Money Laundering Act, 2002 (PMLA Act, 2002) has been brought into force with effect from July 01, 2005.

Subsequent amendments have been made to the PMLA Act, 2002 and Prevention of Money-laundering (Maintenance of Records) Rules, 2005 over the years.

CDSL, its depository participants and CDSL Ventures Limited (CVL) fall under the category of ''intermediaries'' under section 12 of the SEBI Act and hence, PMLA and the policy guidelines issued by the regulators to combat money laundering are applicable to depository operations.

As required under the guidelines, CDSL has designated a Principal Officer, Alternate Officer and Designated Director to ensure compliance with these guidelines. CDSL has prepared policy guidelines for implementation of PMLA and the same is reviewed periodically.

CDSL conducted training programs across the country and updates depository participants and their internal auditors on compliance with PMLA provisions and filing of Suspicious Transaction Reports ("STR").

G. DISCLOSURES UNDER SEBI (DEPOSITORY AND PARTICIPANTS) REGULATIONS, 2018:

The disclosures required to be made under the provisions of the SEBI (Depository and Participants) Regulations, 2018 are part of the Corporate Governance Report enclosed as Annexure-G.

ACKNOWLEDGEMENT:

Your Directors place on record their sincere gratitude for the support, guidance and cooperation received from Ministry of

Finance, Ministry of Corporate Affairs, Securities and Exchange Board of India ("SEBI"), Reserve Bank of India ("RBI"), Insurance Regulatory Development Authority ("IRDA"), Warehousing Development Regulatory Authority ("WDRA"), UIDAI and other regulatory agencies. The Directors also acknowledge with thanks the continued support of the BSE Ltd., the promoter, all other shareholders, beneficial owners, depository participants, issuers, and registrar and transfer agents, market infrastructure institutions like the stock exchanges, clearing corporations, depository and commodities exchanges,. The Directors also express their appreciation for the unflinching dedication of

the employees whose performance, professionalism and commitment for rendering high quality services to the clientele of the Company has been commendable.

For and on behalf of the Board Central Depository Services (India) Limited

Balkrishna V Chaubal Chairperson (DIN: 06497832)

Place: Mumbai Date: June 25, 2022

---

Mar 31, 2021

Your Directors have pleasure in presenting the Twenty-third Annual Report on the business and operations of the Company ("Central Depository Services (India) Limited" or and "CDSL" or "Company"), along with Audited Finanacial Statements of your Company for the year ended March 31,2021 ("year under review").

Financial Highlights

(? in Lakhs)
Particulars	Consolidated		Standalone
	Year ended March 31, 2021	Year ended March 31, 2020	Year ended March 31, 2021	Year ended March 31, 2020
Income from Operations	34,371.71	22,510.53	27,058.39	16,815.16
Other Income	5,691.58	5,914.58	4,176.60	4,323.78
Total Income	40,063.29	28,425.11	31,234.99	21,138.94
Expenditure	12,367.90	13,337.42	9,046.43	10,283.44
Profit before Depreciation and Taxation	27,695.39	15,087.69	22,188.56	10,855.50
Depreciation	920.05	1,173.24	728.98	868.69
Profit before contribution to IPF & Tax	26,775.34	13,914.45	21,459.58	9,986.81
Contribution to IPF	823.00	269.67	823.00	269.67
Profit Before Tax	25,952.34	13,644.78	20,636.58	9,717.14
Provision for Taxation	5,693.30	2,646.30	4,454.00	1,744.90
Provision for Deferred Tax for the year	132.31	326.66	176.82	240.43
Profit after Tax	20,126.73	10,671.82	16,005.76	7,731.81
Other Comprehensive Income (Net of Tax)	(8.90)	8.97	(4.63)	14.97
Total Comprehensive Income	20,117.83	10,680.79	16,001.13	7,746.78

Financial Performance

1. Consolidated Results

On a consolidated basis, the operational income of the company has increased from '' 22,510.53 Lakhs to '' 34,371.71 Lakhs, higher by 53%, resulting in an increase of total income from '' 28,425.11 Lakhs to '' 40,063.29 Lakhs. Profit before Tax (PBT) for the year ended March 31,2021 is '' 25,952.34 Lakhs as against '' 13,644.78 Lakhs of previous year. Similarly, Profit after Tax (PAT) is at '' 20,126.73 Lakhs as against '' 10,671.82 Lakhs. Thus, Profit before Tax & Profit after Tax for the year ended March 31, 2021 has increased by 90% and 89% respectively over the previous year.

2. Standalone Results

On a standalone basis, the operational income of the company has increased from '' 16,815.16 Lakhs to '' 27,058.39 Lakhs, higher by 61%, resulting in an increase of total income from '' 21,138.94 Lakhs to '' 31,234.99 Lakhs.

The income from Operations comprising of Transaction charges, Annual Issuers Charges, Account Maintenance Charges, Settlement Charges, Corporate Action Charges, etc. during the year 2020-21 increased from '' 16,815.16 Lakhs to '' 27,058.39 Lakhs, recording an increase of 61% over the year 2019-20. Pursuant to regulation 73 of the SEBI (Depositories & Participants) Regulations, 2018, transfer of '' 823 Lakhs is made to Investor Protection Fund (IPF). After contribution to Investor Protection Fund, Profit before Tax (PBT) for the year ended March 31,2021 is '' 20,636.58 Lakhs as against '' 9,717.14 Lakhs of previous year. Similarly, Profit after Tax (PAT) is at '' 16,005.76 Lakhs as against '' 7,731.81 Lakhs. Thus, Profit before Tax & Profit after Tax for the year ended March 31,2021 has increased by 112% and 107% respectively over the previous year.

Dividend

Considering the performance of the Company for the year under review, your Directors have recommended a final dividend of '' 9/- per equity share of the face value of '' 10/-each, fully paid for the financial year ended March 31, 2021, subject to the approval of the shareholders.

The final dividend, if approved, would result in a cash outflow of '' 9,405 Lakhs with a dividend payout ratio at 59% of the standalone profits of the Company.

The Board of Directors of your Company has approved and adopted the dividend distribution policy of the Company and dividend declared/recommended during the year are in accordance with the said policy. The Policy can also be accessed on the Company''s website at the https://www.cdslindia.com/InvestorRels/CorporateGovernance.html

Capital Structure and changes therein

Authorised Share Capital of your Company is '' 150,00,00,000 divided into 15,00,00,000 equity shares of '' 10 each whereas the Issued and Paid Up Share Capital is '' 104,50,00,000 divided into 10,45,00,000 equity shares of '' 10 each. As of March 31, 2021, out of 10,45,00,000 shares, 10,44,99,690 shares are in demat mode and 310 shares are in physical mode.

The Capital Market Environment

The FY 2020-21 was one of the most challenging years for the Indian Economy, during FY 2020-21, BSE-30 Sensex opened at 29,505 on April 01, 2020 and touched a high of 52,516 on February 16, 2021 and thereafter closed at 49,509 on March 31, 2021.

According to the International Monetary Fund (IMF), India''s growth forecast for FY 2020-21 is slashed to -8% due to COVID-19, Nationwide lockdown. India''s growth is projected to improve to 12.5% in 2021 and 6.9% in 2022 supported by monetary and fiscal stimulus. Since April, 2021 the country has been facing the second wave of COVID-19 which may delay the economic recovery.

The World Bank (WB) January 2021 Global Economic Prospect''s report projected India''s economic growth for FY 2021-22 to be in the 7.5% to 12.5% range. The Indian economy had started to bounce back from the effects of the coronavirus crisis, but the country was still not "out of the woods". Secondly, depending on how the ongoing vaccination campaign proceeds, whether new restrictions to mobility are required, and how quickly the world economy recovers.

As per Prime Database, 69 public issues have raised '' 74,707 crores in FY 2020-21 as compared to 39 public issues mobilizing '' 37,677 crores in FY 2019-20.

Operational Performance

The capital market plays a significant role in building the economy as it channelizes domestic saving into sustainable financial assets. The Indian capital markets are robust and deep. The markets have witnessed diverse magnitude of volatility and growth levels based on global and domestic scenario and investor participations. The digitization of various processes has helped to have easier access to stock markets and depository services. This led to individuals from rural area have also initiated participation in financial markets. In order to sustain the growth in its depository business, your company continues to focus on enhancement of operational efficiency, upgradation of technology, service quality and enhanced emphasis on investor education through seminars / workshops.

Beneficial Owner Accounts

During the year under review, 133.24 lakhs Beneficial Owner (BO) accounts were added, taking the total number of such accounts to 404.91 lakhs with the net BO accounts at 334.38 lakhs as on March 31, 2021, making us the first depository to cross the 300 lakhs milestone. The comparative figures of gross and net BO accounts as on March 31,2020 and March 31,2021 are given in the following table:

Year ended March 31,	Year ended March 31, 2020	Increase over the previous year''s cumulative figure
2021		Number	Percentage (%)
(Gross)	(Gross)	13,323,925	49.04
40,491,245	27,167,320
(Net)	(Net)	12,255,936	57.86
33,437,873	21,181,937

Securities admitted

Securities like equity shares, preference shares, mutual fund units, debt instruments, government securities, certificates of deposit, commercial papers and a host of other instruments are available for dematerialization by the investors. Details of the securities admitted with CDSL are given below:

Securities	Year ended March 31, 2021	Year ended March 31, 2020	(%) change over the previous year
Equity Shares	15,619	14,018	11.42
Debt Instruments	9,154	8,532	7.29
Other Securities	25,474	25,479	(0.02)
Total	50,247	48,029	4.62

Position of Securities held in the System

The value and volume of securities held with CDSL in the year under review as compared to the previous year are indicated below:

Holding of Securities	Year ended March 31, 2021	Year ended March 31, 2020	Increase over the previous year (%)
Value ('' in million)	2,74,39,356	1,67,19,723	64.11
Volume (in million) (Number of Securities)	4,74,426	4,55,726	4.10

Depository Participants and Service Centers

As on March 31, 2021, 592 depository participants held valid registration certificates of Securities and Exchange Board of India (SEBI) as compared to 599 valid SEBI registrations as on March 31,2020. Further, investors have access to 20,689 DP service centers spread across India.

Investor Awareness / Education Seminars

CDSL regularly conducts Investor Awareness Programs (IAPs) in association with SEBI, Market Infrastructure Institutes (MIIs) and various market intermediaries. Capital Market Awareness for retail investors through such programs has been a major focus area. We believe investor education can become a significant key to achieving financial inclusion in the capital market. During the FY 2020-21, CDSL Investor Protection Fund (CDSL IPF) conducted 276 IAPs in English, Hindi and other regional languages viz. Marathi, Gujarati, Tamil, Kannada, Malayalam, Bengali and Telugu, etc. through online mode and reaching to almost 37,672 investors across Pan India. This initiative allowed investors across geographies, professions and age groups including students, corporate employees, government servants to come together and learn the basics of Capital Markets, advantages of holding securities in demat form, importance of Financial Planning, Investment avenues available, etc.

CDSL IPF has also conducted online webinars in association with SEBI, financial institutions, ICSI, Mutual Funds, colleges, universities etc. in various cities of the country. CDSL IPF has provided details of IAPs various Social Media platforms like Facebook (@cdslindia), Twitter (@cdslindia) & LinkedIn (@cdslindia) and in the CDSL''s website in Investors Corner. CDSL IPF also conducted IAPs in various regional languages to attract larger number of investors to attend these IAPs. During the IAPs, informative booklets in English, were shared through email for the benefit of investors. These booklets are also available on the CDSL website at https://www.cdslindia.com/.

Investor Education and Protection Fund (IEPF) and Investor Awareness Activities by the Company

Contribution towards Investor Education and Protection Fund (IEPF)
Details of the transfer/s to the IEPF made during the year as mentioned below:
1.	amount of unclaimed/unpaid dividend and the corresponding shares;	Not Applicable
2.	amount of matured deposits, if any;	Not Applicable
3.	application money received for allotment of any securities and due for refund along with interest accrued;	Not Applicable
4.	Year wise amount of unpaid/unclaimed dividend lying in the unpaid account upto the Year and the corresponding shares, which are liable to be transferred to the IEPF, and the due dates for such transfer;	Please refer the table below

Amount of unpaid and unclaimed Dividend
Particulars	Financial Year
	2017-18 (Final Dividend)	2018-19 (Final Dividend)	2019-20 (Final Dividend)
Amount	'' 5,94,202	'' 10,46,776	'' 17,85,282
Shares	169772	261694	396729
Due date for transfer of unpaid dividend amount	October 24, 2025	November 23, 2026	December 4, 2027
Due date for transfer of corresponding shares	November 23, 2025	December 23, 2026	January 3, 2028

Credit Rating of Securities

Nil

New Initiatives

Application Program Interface (API)

CDSL has developed APIs for its Depository Participants (DPs), which will help DPs to automate their processes and back-office operations. APIs have been developed for Account Opening, Common Transaction Upload (Which includes Off-market, On-Market, Early Pay-in & Inter Depository Transactions), Pledge/ Unpledge/Confiscation transactions, Margin Pledge & Margin Funding transactions and your company has advised its DPs to get in touch with their Relationship Managers (RMs) to get to know the entire suite of transactions on which APIs are made available. This will lead to ease in operations of all the CDSL DPs and the market participants.

System Enhancements

CDSL believes in the power of digitization and continuously tries to enhance its systems to increase the efficacy of processes. Some of the important system enhancements are enumerated below -

a) To strengthen the integrity of system in processing of dematerialization requests in respect of remaining physical shares, systems were enhanced to enable RTAs to upload the details of their members holding shares in physical form of listed companies, so that dematerialization requests can be validated against the said details. Additionally, your Company is in the process of doing a real time reconciliation of the paid up capital and listed capital of the company as reported to the depository and as available with the exchanges where the Company''s shares are listed.

b) Standardization of reason codes for off-market including inter-depository transactions.

c) Implemented collection of Stamp Duty through Depositories on behalf of State Government in such manner as the Central Government may, by rules, provide came into force on July 01,2020.

d) Implementation of Margin Pledge /Repledge facility for Trading Members (TMs) and Clearing Members (CMs) to accept collateral from clients in the form of securities, only by way of Margin Pledge.

e) Successfully implemented e-DIS Phase-I i.e. acceptance of electronic transfer instructions using the online portal provided by Depository Participants with a security feature of TPIN provided to the client by CDSL.

f) Successfully implemented various APIs -

i. BO authentication API (real time),

ii. API for BO Setup (upload),

iii. API for BO Modify (upload),

iv. API for Normal Pledge Setup (real time),

v. API for Margin Pledge / Margin Funding Pledge (real time) and

vi. API for BO account opening (real time)

g) Implementation of a system of obtaining client''s consent through One Time Password (OTP) for off-market transfer of securities from client''s demat account.

Transaction Cum Holding Statements

As of March 31, 2021, 219 Depository Participants (DPs) have availed of the service of dispatch of transaction cum holding statements (DOTS and e-DOTS). In FY 2020-21, CDSL has processed 48.95 Lakh statements.

Corporate Bond database

Your Company is in the process of creating a state of the art system using block chain/distributed ledger technology to chart the life cycle of the secured debentures, bonds, etc. from the time of creation of the instrument with underlying assets offering security, to the approval of the same by the Debenture Trustee to the rating given by the Credit Rating Agency to the listing of the instrument to the regular/periodic interest payments to the ultimate step of payment of the final redemption amount. This is likely to bring in greater transparency in the manner in which the secured instruments are handled in the capital market.

Technology Initiatives

As a part of continual upgradation process, CDSL continuously works on upgrading the technology, features and functionalities of the Depository applications. We have recently shifted our Disaster Recovery (DR) Site to a new premise with better facilities. Further considering new threat vectors and to strengthen the cyber security posture of your Company, we have recently upgraded the Cyber Security and Operations centre at CDSL. CDSL has also further enhanced the appropriate cyber security framework and controls as prescribed by SEBI from time to time to mitigate the cyber security risks.

Major IT Developments

• ISO 27001: 2013 (Information Security Management System) ISMS - CDSL has received the recertification

• ISO 22301:2019 (Business Continuity Management System) BCMS - CDSL has upgraded to ISO 22301:2019 standard

• ISO 9001:2015 (Quality Management System) QMS - Continuation of the certificate for the e-voting services.

• Core depository application is being migrated to latest. net core technology and will be completed this year.

Awards & Recognition

Data Centre Award for Innovation and IP Creation, awarded by Express Computers.

Steps taken pursuant to COVID-19 Pandemic

On March 20, 2020, the Ministry of Corporate Affairs issued an Advisory to all companies /LLPs to implement the "Work from home" policy in their headquarters and field offices to the maximum extent possible, including conduct of meetings through video conference or other electronic/ telephonic/ computerized means. It was further advised that even with the essential staff on duty, staggered timings may be followed so as to minimize physical interaction. Apart from that, the other preventive measures, including Dos & Don''ts advised by public health authorities may be strictly followed.

Keeping in view the safety of the staff members of CDSL, ''work for home'' policy was implemented with effect from March 23, 2020 and staff members were provided with secure means to connect to CDSL applications to carry out their daily operations and to ensure that Depository''s and its subsidiaries'' operations are carried out smoothly. The administration department is also ensuring that during this period housekeeping and deep cleaning of the premises are being regularly carried out, so as to ensure a clean and safe office space is available to the employees whenever lockdown restrictions are relaxed.

Continuing Professional Education (CPE) Programs -Depository Operations Certification Examination (DOCE)

National Institute of Securities Markets (NISM) has been offering Continuing Professional Education (CPE) Programs for Associated Persons in the Securities Market Intermediaries.

CDSL, as a NISM Accredited CPE Provider for conducting CPE Programs, has successfully carried out 9 programs for 219 participants during the year.

e-Voting

As on March 31, 2021, 5,968 companies have signed agreements with CDSL to conduct e-Voting. So far, the e-Voting system recorded 28,424 instances of voting carried out by 5271 Companies.

e-Notices

In the light of Green Initiative in the Corporate Governance by Ministry of Corporate Affairs, CDSL has started offering the services to companies for sending documents to its shareholders electronically. As on March 31,2021, a total of 370 companies have signed for availing these services.

Corporate Social Responsibility (CSR)

The Board has framed a CSR Policy in compliance with the requirements of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy)

Rules, 2014. In accordance with its CSR philosophy and the specified activities under the Act, the CSR activities of the Company has thrust areas including eradicating extreme hunger and poverty; promotion of education; promoting gender equality and empowering women; reducing child mortality and improving maternal health; combating human immunodeficiency virus, acquired immune deficiency syndrome, malaria and other diseases; ensuring environmental sustainability; employment enhancing vocational skills; social business projects; contribution to the Prime Minister''s National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women. Your Company has constituted a robust and transparent governance structure to oversee the implementation of its CSR Policy.

The Corporate Social Responsibility Policy can be accessed on website of the Company https://www.cdslindia.com/InvestorRels/CorporateGovernance.html.

The Company has been actively associated with various NGOs in providing various facilities involving capital expenditure for a sustainable impact of CSR activities. During the FY 2020-21, your Company has sponsored various projects and the report on CSR activities pursuant to section 135 and Schedule VII of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure A.

Risk Management Policy

The risk management policy identifying the various elements of risk is explained in detail in the Management Discussion and Analysis Report attached as Annexure G. The Risk Management Policy of your Company can be accessed on the website of the Company https://www.cdslindia.com/InvestorRels/CorporateGovernance.html.

Change in the Nature of Business

The Company has not undergone any changes in the nature of the business during the FY 2020-2021.

Material changes affecting the financial position which have occurred between the end of the financial year and the date of the report

No material changes affecting the financial position have occurred between the end of the financial year and the date of the report.

Prevention of Money Laundering Act

The Prevention of Money Laundering Act, 2002 (PMLA) has been brought into force with effect from July 1,2005.

Subsequent amendments have been made to the PMLA Act 2002 and Prevention of Money-laundering (Maintenance of Records) Rules 2005 over the years.

CDSL, its depository participants and CVL fall under the category of ''intermediaries'' under section 12 of the SEBI Act and hence, PMLA and the policy guidelines issued by the regulators to combat money laundering are applicable to depository operations.

As required under the guidelines, CDSL has designated a Principal Officer, Alternate Officer and Designated Director to ensure compliance with these guidelines. CDSL has prepared policy guidelines for implementation of PMLA and the same is reviewed periodically.

CDSL conducted training programs across the country and updates depository participants and their internal auditors on compliance with PMLA provisions and filing of Suspicious Transaction Reports

Details of Subsidiary Companies

Your Company has following subsidiary Companies as on March 31,2021

1. CDSL Ventures Limited (CIN U93090MH2006PLC164885)

2. CDSL Insurance Repository Limited (CIN U74120MH2011PLC219665)

3. CDSL Commodity Repository Limited (CIN U74999MH2017PLC292113)

4. CDSL IFSC Limited (CIN U65990GJ2021PLC121672)

> CDSL Ventures Limited (CVL)

CDSL Ventures Limited (CVL) is a wholly owned subsidiary of Central Depository Services (India) Limited (CDSL).

CVL began its journey in 2008 by handling Customer Profiling and Record keeping of Mutual Fund Investors on account of the PMLA Act related KYC requirements. After the introduction of the KRA regulations in 2011, CVL was the first entity to register as a KYC Registration Agency (KRA) with SEBI. As a KRA, CVL provides fully digitised KYC services to all intermediaries in the Capital Markets. CVL currently holds over 2.79 Crores fully digitized KYC records.

CVL is also offering the following as part of its service portfolio:

1. CKYC Services : CVL assists intermediaries to become CKYC compliant by facilitating upload of KYC documents to CERSAI

2. Aadhaar based eKYC services

3. Aadhaar based esign services

4. Registrar and Transfer Agent services (RTA)

5. PMJJBY services: Maintaining a Claim Repository and performing dedupe activity for claims under PMJJBY scheme.

6. GST Suvidha Provider Services for filing GST Returns

7. Processing and handling Refund payments to investors of PACL Ltd. pursuant to Justice (Retd.) R M Lodha Committee

CVL aims to be globally respected as an ITES company. Ethics, values and reputation are vital to its philosophy. CVL lays special emphasis on integrity of its people because of the trust reposed by its clients. CVL derives confidence from its team, which has a ''Securities Market Domain Expertise''. CVL, believes in empowering its people so that they handle challenging assignments and exceed customer expectations.

CVL has in place a stringent policy and systems to ensure confidentiality of data. Strong electronic and physical security measures ensure security of confidential data. CVL databases are maintained inhouse with proper mechanism in place to monitor server capacity utilization and augmentation. There is a proper backup and archival process being followed as per the backup policy defined. CVL has a Primary Data Center and Disaster Recovery Center for all its critical IT Operations. The Disaster Recovery Center is located in a different seismic zone and the data is mirrored on near real time basis. DR drills are conducted once a quarter and an audit trail of the same is maintained. The network management at CVL ensures that the bandwidth requirement is monitored to handle processing of large volumes across multiple processes. CVL is ISO 27001 compliant and is regulated by multiple regulators for different projects.

Being a subsidiary of a Market Infrastructure Intermediary, the infrastructure, security and risk management practices of CVL are benchmarked to the best in the industry.

> CDSL Insurance Repository Limited (CDSL IR)

Our Company had under the "Guidelines on Insurance repositories and electronic issuance of insurance policies" issued by IRDAI, floated a separate subsidiary viz:- CDSL Insurance Repository Ltd. ("CIRL"), in the year 2011. CIRL provides policyholders a facility to keep their insurance policies in electronic form and to undertake changes, modifications, and revisions in the insurance policy with speed and accuracy, to bring about efficiency, transparency and cost reduction in the issuance and maintenance of insurance policies.

Leading public sector and private sector insurance companies have contributed to the equity capital of CIRL. At the time of launch in August 2013 the

insurance repository services were restricted only to Life insurance policies. However, later, IRDAI has extended the scope of services to Health insurance policies and Motor Vehicle insurance policies and thereafter to all other types of general insurance. Further, initially the insurance was applicable only to individuals but had subsequently been extended to corporates.

As on March 31, 2021, the company has 6.03 lakh active eIAs (electronic insurance accounts) as against 5.50 lakh active eIAs as on March 31, 2020, in the Repository. As on March 31,2021, around 4.22 lakh electronic policies constituting 4.00 lakh Life e-insurance policies, 883 Motor e-insurance policies and 20,602 Health e-insurance policies have been credited in the eIAs as against 3.07 lakh electronic policies constituting 2.96 lakh life insurance policies, 216 motor insurance policies and 10,366 health insurance policies as on March 31, 2020. The above figures indicate that there is a positive trend in creating electronic insurance policies, with a growth rate of 38%.

CIRL has tied up with twenty-two life insurance companies, five health insurance companies and fifteen general insurance companies, that is a total of forty-two insurance companies, for holding policies in electronic form.

CIRL has received a contract from an Insurance Company, to operate remote offices on their behalf and provide outsourcing services. Three such centers have been established at present and four more centers are in the pipeline. We are also interacting with other Insurance Companies to provide similar services. Considering the trend of companies outsourcing their activities, these services contracts will provide your Company with new revenue streams, apart from the IR business.

> CDSL Commodity Repository Limited (CCRL)

Your Company has floated a subsidiary in the name and style of CDSL Commodity Repository Limited (CCRL) to establish and run a Commodity Repository on the lines of a Securities Depository. Warehousing Development and Regulatory Authority (WDRA) is the regulator for CCRL. CCRL received the certificate of commencement of business/registration from WDRA on September 26, 2017 and commenced operations from September 30, 2017. Multi Commodity Exchange of India Ltd. (MCX) and BSE Investments Ltd. have each taken up 24% of the stake in CCRL in May, 2018 and August, 2018 respectively.

CCRL today exclusively serves three derivative commodity exchanges for their derivative trades in

Agri-commodities. These are MCX, BSE Limited and ICEX. As on March 31, 2021, CCRL has opened close to 1728 client accounts and has issued about 26,308 Electronic Negotiable Warehouse Receipts.

> CDSL IFSC Limited

CDSL, the parent company has floated a wholly owned subsidiary company in the name and form of ''CDSL IFSC Limited'' (CIL). This company operates a depository in the IFSC at GIFT City. CIL is a foreign depository and caters to a global audience of investors. CIL operates under the regulatory oversight of IFSCA.

All investors who are eligible/allowed to hold and transact in securities in the IFSC space are identified as Eligible investors. Both Indian resident individuals (under LRS scheme limitations) and foreign entities and non-resident Indians (NRIs) are identified as Eligible investors. In addition to be registered as an FPI (Foreign portfolio investor) a foreign entity can also be an Eligible Foreign investor (EFI) and stay invested in IFSC.

Investor will able to hold eligible securities viz. Equity shares of a company incorporated outside India; Depository receipt(s); Debt securities issued by eligible issuers and any other type of security as permitted allowed by IFSCA.

During the year, the Board of Directors of the Company reviewed the affairs of its subsidiaries. In accordance with section 129 (3) of the Companies Act, 2013, your Company has prepared the consolidated financial statements of the Company and of all its subsidiaries companies in the same form and manner as that of its own and in accordance with applicable accounting standards, which forms part of this annual report. Further a separate statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC 1 is appended as Annexure B to the Board''s report. The statement also provides details of the performance and financial position of each of the subsidiary Company.

In accordance with section 136 of the Companies Act, 2013, the audited financial statements including the consolidated financial statements and all other related documents and information of the Company and separate audited accounts in respect of each of the subsidiary are available on our website https://www.cdslindia.com/InvestorRels/AnnualReports.html These documents will be available for inspection till the date of AGM during business hours at the registered office of the Company.

Deposits

Your company has not accepted any deposits within the meaning of Section 73 & 76 of the Companies Act, 2013 and

the Rules made thereunder. There are no deposits remaining unpaid or unclaimed as at the end of the year and there has been no default in repayment of deposits or payment of interest thereon during the year.

Details of Deposits not in Compliance with the Requirements of the Act

Since the Company has not accepted any deposits during the Financial Year ended on March 31,2021, there has been no noncompliance with the requirements of the Companies Act, 2013.

Directors and KMPs

The SEBI (Depositories and Participants) Regulations, 2018 were notified on October 3, 2018. As per regulation 25 of SEBI (Depositories and Participants) Regulations, 2018, the appointment and re-appointment of all Shareholder Directors on the board of depository shall be with the prior approval of SEBI. The Public Interest Directors on the board shall be nominated by SEBI. As per Regulation 24(9) of the SEBI (Depositories and Participants) Regulations, 2018 no depository participant or their associates and agents, irrespective of the depository of which they are members shall be on the governing board of the depository.

Directors on the governing Board of CDSL as on March 31,2021 are as follows:

Category	Name
Public Interest Director	Shri Balkrishna V Chaubal - Chairperson
Public Interest Director	Prof (Dr.) Bimalkumar N Patel
Public Interest Director	Smt. Preeti Saran
Public Interest Director	Shri Sidhartha Pradhan
Public Interest Director	Prof. Umesh Bellur
Shareholder Director	Shri Masil Jeya Mohan P.
Shareholder Director	Shri Nayan Mehta
Managing Director & CEO	Shri Nehal Vora

Number of meetings of the Board of Directors:

Eleven meetings of the Board of Directors were held during the year under review. For details of meetings of the Board, please refer to the Corporate Governance Report, which is enclosed as Annexure F.

Change in composition during the year:

There had been no changes taken place in the constitution of the Board of Directors. The changes taken place in the constitution of KMPs of CDSL during the FY 2020-21 are as follows: -

Smt. Amita Paunikar, VP-Legal and Company Secretary and Compliance Officer resigned w.e.f. April 05, 2021

During the year, Smt. Nayana Ovalekar was appointed as the Chief Regulatory Officer of CDSL and Compliance Officer for CDSL for the purpose of SEBI (D&P) Regulations, 2018.

During the year, Shri Ramkumar Krishnan was appointed as Chief of Business Development, Operations & New Projects. Declaration from Directors

1. The Company has received necessary declaration from the Independent Directors as required under sub-section (6) of section 149 of the Companies Act, 2013 and under clause (b) of sub-regulation (1) of regulation 16 of the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company; and

2. They have registered themselves with the Independent Director''s Database maintained by the IICA.

As per the provisions of Section 152(6) (d) of the Companies Act, 2013, Shri Masil Jeya Mohan P, the Shareholder Director being liable to retire by rotation and being eligible offered himself to be reappointed was considered for being re-appointed as Directors at the ensuing Annual General Meeting. A brief resume of Shri Masil Jeya Mohan P is enclosed as an Annexure C.

Nomination & Remuneration Policy for Directors

The Nomination & Remuneration Policy was approved by SEBI on December 6, 2018 and the same can be accessed on website of the Company https://www.cdslindia.com/InvestorRels/CorporateGovernance.html.

In compliance with the requirements set out under Section 178 of the Companies Act, 2013 and Regulation 19(4) read with Part D of Schedule II of the Listing Regulations and SEBI (Depositories and Participants) Regulations, 2018, the Nomination and Remuneration Policy has been framed in order to set our principles, parameters and governance framework of the appointment and remuneration for Shareholder Directors, Public Interest Directors, Managing Director & CEO and Key Managerial Personnel of the Company. The Policy encompasses the various factors laid down under Section 178(4) of the Companies Act, 2013 including the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully; relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and remuneration to Directors and Key Managerial Personnel involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals. The Policy also includes the criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178.

Statutory Auditors & Audit Report

M/s. S. R. Batliboi & Co. LLP (Firm Registration No. 301003E/ E300005), Chartered Accountants, Mumbai were appointed as Statutory Auditors of the company in the twentieth Annual General Meeting held on August 20, 2018 to hold office from the conclusion of the 20^th Annual General Meeting till the conclusion of the 25^th Annual General Meeting. Accordingly, M/s. S. R. Batliboi & Co. LLP are the Statutory Auditors of the Company for the FY 2020-21 and shall continue as Statutory Auditors of the Company till the conclusion of the 25^th Annual General Meeting.

There are no qualifications, reservations or adverse remarks or disclaimer made by M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, Mumbai, Statutory Auditors in their report. There are no frauds reported by auditors under sub-section (12) of section 143 of the Companies Act, 2013.

Internal Auditors

In terms of the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, the Company had appointed M/s. Ray & Ray, Chartered Accountants (Firm Registration No. 301072E) for the period April 1, 2020 to June 30, 2020 and M/s. Dalal Doctor & Associates, Chartered Accountants (Firm Registration No. 120833W) for the period July 1, 2020 to March 31, 2021, as Internal Auditors & Concurrent Auditors of the Company.

There are no qualifications, reservations or adverse remarks or disclaimer made by the Internal Auditors and Concurrent Auditors in their report.

Secretarial Auditors and Secretarial Audit Report

M/s. Vatsal Doshi & Associates (C.P.No.22976/Membership No. A50332), Practicing Company Secretaries, Mumbai was appointed as Secretarial Auditor of the Company for the FY 2020-2021. In accordance with Section 204(1) of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the Listing Regulations, a copy of the secretarial audit report issued in form MR-3 by M/s. Vatsal Doshi & Associates, Secretarial Auditors is enclosed as an Annexure D to this report. The secretarial audit report of CDSL Ventures Limited, a material unlisted subsidiary of the Company issued in form MR-3 by M/s. Vatsal Doshi & Associates, Secretarial Auditors also forms part of Annexure D to this report.

Secretarial Auditor has made and mentioned the following observation in its report:

1. In terms of the Regulation 30(6) read with sub-para 4 of Para A of Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, submission of outcome of the Board Meeting held on Saturday (Non-Trading Day), May 16, 2020 to consider financial results and dividend was delayed by 20 minutes as against the requirement of submission within 30 minutes of the closure of the Board Meeting. The delay was due to the technical challenges faced by the Company due to lockdown imposed in view of the COVID-19 pandemic.

2. In terms of the Regulation 18(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company had three Independent Directors as against the requirement of having two-third of the total number of Members i.e. 3.33 rounded off to 4 as there were five members in the Audit Committee of the Company. The Company appointed one additional Independent Director in the Audit Committee on April 30, 2020 to comply with the provisions of the Regulation 18(1). The National Stock Exchange of India Limited (NSE) vide letter dated August 20, 2020 had levied fine to the Company for delayed/non-compliance of Regulation 18(1) w.r.t. composition of the Audit Committee for a period of 29 days. Further, during the reporting period i.e. FY 2020-21, no meeting of the Audit Committee was held before April 30, 2020.

Related party transactions:

All related party transactions entered during the FY 2020-21 were in the ordinary course of business and on an arm''s length basis.

Disclosure of related party transactions pursuant to section 134 (3) (h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in form AOC 2 are attached as Annexure E.

The Disclosures of Related Party Disclosures for annual results pursuant to clause 2 of para A of Schedule 5 of the Listing Regulations are stated below:

Sr.	Particulars
1	In the Accounts of Central Depository Services (India) Limited (CDSL) (Holding Company)
	Loans and advances in the nature of loans to subsidiaries by name and amount.		Loans and advances in the nature of loans to associates by name and amount.		Loans and advances in the nature of loans to firms/companies in which directors are interested by name and amount.
	Subsidiary Name	Amount ('' in Lakhs)	Associate Name	Amount ('' in Lakhs)	Companies where directors are interested	Amount (? in Lakhs)
	CDSL Ventures Limited	NIL	Not applicable	NIL	Not applicable	NIL
	CDSL Insurance Repository Limited	NIL
	CDSL Commodity Repository Limited	NIL
	CDSL IFSC Limited	NIL
2	In the Accounts of Central Depository Services (India) Limited (CDSL) (Subsidiary Company)
	Loans and advances in the nature of loans to subsidiaries by name and amount.		Loans and advances in the nature of loans to associates by name and amount.		Loans and advances in the nature of loans to firms/companies in which directors are interested by name and amount.
	Subsidiary Name	Amount ('' in Lakhs)	Associate Name	Amount ('' in Lakhs)	Companies where directors are interested	Amount (? in Lakhs)
	Not applicable	NIL	Not applicable	NIL	Not applicable	NIL
3	In the Accounts of Central Depository Services (India) Limited (CDSL) (Holding Company)
	Investments by the loan in the shares of parent company and subsidiary company, when the company has made a loan or advance in the nature of loan.					NIL

The Disclosures of transactions of the Company with any person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the listed entity, in the format prescribed in the relevant accounting standards for annual results pursuant to clause 2A of para A of Schedule 5 of the Listing Regulations are stated below:

('' in Lakhs)
Particulars	As on March 31, 2021	As on March 31, 2020
Income BSE Limited Operational Income	341.98	146.28
Expenditure
BSE Limited
Rent	1.20	1.20
Dividend Paid	940.50	1,003.20
Administrative and Other Expenses (Recoveries)	66.60	51.70
Payable/(Receivable)
BSE Limited	(305.85)	(53.39)

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Considering the nature of operations of your company, the provisions of Section 134(3) (m) of the Companies Act, 2013 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to information to be furnished on conservation of energy and technology absorption are not applicable though the Company uses all the possible ways in conserving energy. The company has, however, used information technology extensively in its operations.

Foreign Exchange Earnings and Outgo

Details of foreign exchange earnings and outgo during the year under review are as under:

(? in Lakhs)
Particulars	Year ended March 31, 2021	Year ended March 31, 2020
Earnings	Nil	Nil
Travel expenses	Nil	19.98
Others	4.39	10.44
Total	4.39	30.42

Cost Records

The Company is not required to maintain cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and accordingly such accounts and records are neither made nor maintained.

Directors'' Responsibility Statement

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors reports that:

i) in preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided;

ii) accounting policies have been selected and applied them consistently and the judgements and estimates made 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 of the company for that period;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities;

iv) the annual accounts have been prepared on a going-concern basis.

v) internal financial controls to be followed by the company are laid down and that such internal financial controls are adequate and were operating effectively.

vi) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Corporate Governance Report

The Corporate Governance Report for the year ended March 31, 2021 is enclosed as Annexure F

Management Discussion and Analysis

The Management Discussion and Analysis for the year ended March 31,2021 is enclosed as Annexure G.

Board Evaluation

The Board of Directors of the Company carried out annual evaluation of its own performance, Committees of the Board and individual Directors pursuant to section 178(2) of the Act as well as regulation 17, 19 and Schedule II of the Listing Regulations and based on the SEBI circular dated January 5, 2017 which contained a guidance note on the process of board evaluation ("SEBI Guidance Note").

The Company has implemented a policy of evaluating performance of the Board of Directors and of its Committees and individual Directors on the basis of a structured questionnaire, drafted in accordance of the guidelines issued by SEBI, which comprises evaluation criteria taking into consideration various performance related aspects. The detailed criteria for evaluation for each of the above has been mentioned in the Corporate Governance report enclosed as Annexure F.

Disclosures under SEBI (Depository and Participants) Regulations, 2018

The disclosures required to be made under the provisions of the SEBI (Depository and Participants) Regulations, 2018 are part of the Corporate Governance Report enclosed as Annexure F.

Report by Internal Complaints Committee

Your company has constituted Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year the Committee did not receive any complaints in this regard.

Particulars of Employees

Information as required under Sec. 197(12) read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed to this report as Annexure H.

Human Resource Development

The company recognizes its Human assets as a critical resource essential for the growth of the company. It, therefore, accords high importance to human resource development and consciously endeavors to enhance the quality and competence of its employees across cadres. It conducts induction programme for new entrants. Nominating employees for training at reputed institutions and for attending seminars in India and abroad in capital market related areas, particularly relating to depositories, has always been a part of human resource development programme of the company. Industrial relations during the year continued to be cordial.

Business Responsibility Report

As stipulated under Regulation 34 of the Listing Regulations, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as a part of this Annual Report.

Particulars of Loans, Guarantees or investments under section 186

Details of Loans, Guarantees or investments under section 186 of the Companies Act, 2013 are given in the notes to the financial statements.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.

Annual Return

The Annual Return of the Company as on March 31, 2021 in Form MGT-7 in accordance with section 92 (3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://www.cdslindia.com/InvestorRels/AnnualReports.html.

Corporate Policies

The details of the policies approved and adopted by the Board are mentioned in the Corporate Governance Report enclosed as Annexure F.

Adequacy of internal financial controls

The details in respect of adequacy of internal financial controls with reference to the Financial Statements forms part of the Management Discussion and Analysis Report enclosed as Annexure G.

Audit Committee Recommendations

During the year, all recommendations of Audit Committee were approved by the Board of Directors.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards issued by the ''Institute of Company Secretaries of India''.

Acknowledgement

Your Directors place on record their sincere gratitude for the support, guidance and cooperation the company received from Ministry of Finance, Ministry of Corporate Affairs, Securities and Exchanges Board of India (SEBI), Reserve Bank of India (RBI), Insurance Regulatory Development Authority (IRDA), Warehousing Development Regulatory Authority (WDRA), UIDAI and other regulatory agencies. The Directors also acknowledge with thanks the continued support of the BSE Ltd, the Promoter, all other shareholders, Beneficial Owners, Depository Participants, Market Infrastructure Institutions like the Stock Exchanges, Clearing Corporations, Depository, Commodities Exchanges, Issuers, and Registrar and Transfer Agents. The Directors also express their appreciation for the unflinching dedication of the employees whose performance, professionalism and commitment for rendering high quality services to the clientele of the company has been commendable.

For and on behalf of the Board

Balkrishna V Chaubal

Chairperson (DIN: 06497832)

Place : Mumbai Date: July 31,2021

---

Mar 31, 2018

BOARD OF DIRECTORS'' REPORT

The Directors have pleasure in presenting the Twentieth Annual Report, along with Audited Statement of Accounts of your company for the year ended March 31, 2018. Due to improved market conditions, the operational income of the company has increased from Rs, 12,161.89 Lakhs to Rs, 15,416.79 Lakhs, resulting in an increase of total income from Rs, 15,522.41 Lakhs to Rs, 17,887.12 Lakhs.

Financial Highlights

Particulars	Year ended March 31, 2018 (Rs, in Lakhs)	Year ended March 31, 2017 (Rs, in Lakhs)
Income from Operations	15,416.79	12,161.89
Other Income	2,470.33	3,360.52
Total Income	17,887.12	15,522.41
Expenditure	6,194.17	5,529.74
Profit before Depreciation and Taxation	11,692.95	9,992.67
Depreciation	646.42	349.27
Profit before exceptional items and tax	11,046.53	9,643.40
Exceptional items (Income)	-
Profit before contribution to IPF & Tax	11,046.53	9,643.40
Contribution to IPF	408.39	459.75
Profit Before Tax	10,638.14	9,183.65
Provision for Taxation	2,962.40	2,700.00
Provision for Deferred Tax for the year	(92.96)	(301.41)
Profit after Tax	7,768.70	6,785.06
Other Comprehensive Income (Net of Tax)	(0.45)	(31.34)
Total Comprehensive Income	7,768.25	6,753.72
Balance brought forward	35,779.49	32,170.12
Profit available for appropriation	43,547.74	38,923.84
Dividend	3,135.00	2,612.50
Tax (including surcharge and education cess on dividend)	638.21	531.85
Surplus carried to Balance Sheet	39,774.53	35,779.49

The income from operations comprising of transaction charges, annual issuers fees, account maintenance charges, settlement charges, corporate action charges, etc. during the year under review increased from Rs, 12,161.89 Lakhs to Rs, 15,416.79 Lakhs, recording an increase of 27% over the year 2016-17. As per SEBI (Depositories & Participants) (Amendment) Regulations, 2012, transfer of Rs, 408.39 Lakhs is made to investor protection Fund. After contribution to Investor Protection Fund, Profit Before Tax (PBT) for the year ended March 31, 2018 is Rs, 10,638.14 Lakhs as against Rs, 9,183.65 Lakhs of previous year. Similarly, Profit After Tax (PAT) is at Rs, 7,768.70 Lakhs as against Rs, 6,785.06 Lakhs. However, Profit before Tax & Profit after Tax for the year ended March 31, 2018 has increased by 16% and 14% respectively over the previous year after excluding exceptional income earned in the previous year.

Dividend

Looking into the performance of the Company for the year under review and taking note of the buoyancy in the Capital Market at present, your Directors have recommended a dividend of Rs, 3.50 (Rupees Three and paise fifty only) per share (35%) for the year ended March 31, 2018.

Share Capital and Shareholding

As on March 31, 2018 the Share Capital of the Company is as given hereunder:

Authorised Share Capital: 150,00,00,000 divided into 15,00,00,000 equity shares of Rs 10 each.

Issued and Paid Up Share Capital: 104,50,00,000 divided into 10,45,00,000 equity shares of Rs 10 each.

Demat holding of Shareholders

As of March 31, 2018, out of 10,45,00,000 shares, 10,44,99,490 shares are in demat mode and 510 shares are in physical mode.

The Capital Market Environment

During FY 2017-18, the stock markets witnessed a bullish sentiment due to which the BSE-30 Sensex opened at 29,910 on April 3, 2017 and touched a high of 36,443 in Jan 2018 only to close at 32,968 on March 28, 2018. From the high of 36,443, market has corrected due to implementation of Long Term Capital Gain Tax (LTCG), political uncertainty and global factors including rising oil prices

According to World Bank, India’s growth forecast for FY 2018-19 is projected at 7.3% and is seen bottoming out from the impact of demonetisation and GST. India is still forecasted to retain its position as the world’s fastest growing major economy ahead of China, which is forecasted to grow at 6.4%. India’s growth rate in FY 2018-19 is projected to hit 7.3% and 7.5% in the subsequent year according to the World Bank, as the country has “enormous growth potential” compared to other emerging economies with the implementation of comprehensive reforms.

Correspondingly, capital raised from equity markets has gone up 3.46 times compared to the previous year. The total equity capital raised during FY 2017-18 was about Rs, 1,77,116 crores as against about Rs,51,120 crores raised during FY 2016-17. Of the above, the funds raised through IPOs was Rs,84,357 crores while the funds raised through Qualified Institutional Placement (QIP) route was Rs, 62,358 crores and through Offer for Sale (OFS) was Rs, 18,438 crores.

Operational Highlights

With the buoyant market conditions and greater retail participation, your company could register a good growth in its depository operations during the FY 2017-18. Due to positive sentiment prevailing in the capital markets, the primary market has seen encouraging response from retail as well as institutional investors. Such positive outlook is reflected in the increase in the number of demat accounts opened in the Depository. The move towards digitisation of various processes has also helped in offering a convenient, hassle-free and cost effective depository services. In order to sustain the growth in its depository business, your company continues to focus on enhancement of operational efficiency, upgradation of technology, service quality and enhanced emphasis on investor education through seminars / workshops.

Securities admitted

Securities like equity shares, preference shares, mutual fund units, debt instruments, government

securities, certificates of deposit, commercial papers and a host of other instruments are available for dematerialisation by the investors. Details of the securities admitted with CDSL are given below:

Securities	Year ended March 31, 2018	Year ended March 31, 2017	(%) change over the previous year
Equity Shares	9938	9240	7.55
Debt Instruments	8503	8792	-3.28
Other Securities	22257	23371	-4.76
Total	40698	41403	-1.70

Position of Securities held in the System

The value and volume of securities held with CDSL in the year under review as compared to the previous year are indicated below:

Holding of Securities	Year ended March 31, 2018	Year ended March 31, 2017	Increase over the previous year (%)
Value (in million Rs,)	19,839,810	17,735,853	11.86
Volume (in million)	283,920	255,227	11.24

Depository Participants and Service Centers

As on March 31, 2018, 594 depository participants held valid registration certificates of Securities and Exchange Board of India (SEBI) as compared to 588 valid SEBI registrations as on March 31, 2017. During the year, new registrations were received for 9 DPs and registrations of 3 DPs were withdrawn/ cancelled. With a large DP network, investors spread across 28 States and 7 Union Territories can avail of CDSL’s depository services. Further, investors have access to 17,473 DP service centers spread across India.

Beneficial Owner Accounts

During the year under review, 29.08 Lakh Beneficial Owner (BO) accounts were added, taking the total number of such accounts to 194.04 Lakhs with the net BO accounts at 148.40 Lakhs as on March 31, 2018. The comparative figures of gross and net BO accounts as on March 31, 2017 and March 31, 2018 are given in the following table:

Year ended	Year ended	Increase over the previous year’s cumulative figure
March 31, 2018	March 31, 2017	Number	Percentage (%)
(Gross) 19,404,479	(Gross) 16,496,447	2,908,032	17.62
(Net) 14,840,058	(Net) 12,267,432	2,572,626	20.97

Investor Awareness / Education Seminars

CDSL regularly conducts Investor Awareness Programs in association with various market intermediaries, MIIs and SEBI. Capital Market Awareness for retail investors through such programs has been a major focus area. We believe investor education can become a significant key to achieving financial inclusion in the capital market. To this end, CDSL IPF has conducted more than 300 Investor Awareness Programs (IAPs) in this year. Out of these more than 200 programs are conducted in tier 2 & tier 3 cities and towns. This initiative allowed investors across geographies, professions and age groups including students, corporate employees, government servants to come together and learn the basics of Capital Markets, advantages of holding securities in demat form, importance of Financial Planning, Investment avenues available, etc. CDSL IPF has also conducted IAPs in association with financial institutions, ICSI, AMCs and regional Seminars & IAPs with SEBI in various cities. We have also conducted webinar to reach investors digitally. Although, these IAPs reach out to investors in major metros, we have focus to reach the investors in tier-2 and tier-3 cities to inculcate the habit of investment in securities. CDSL IPF has tied up with various regional newspapers to attract large number of investors to attend these IAPs. During the IAPs, informative booklets in English, Hindi and other regional languages were distributed for the benefit of investors.

New Initiatives

Awards and recognition

During the year 2017-2018, your Company has won the following awards:

Award	Category	Organiser
InfoSec Maestros Award	Information Security	BitStream Mediaworks
Express Uptime champion Award	Infrastructure	Indian Express
Data Center Innovation Award	Infrastructure Management	UBS
Digital Leadership and CIO Award	CIO of the year	Business World
Networking pioneer Award	Business scalability	IDG
Innovative CIO Award	CIO	BitStream Mediaworks
BFSI IT Leadership Award	IT Leadership	Exito
BFSI Digital Innovation Award	Enterprise Application	Indian Express
Big50 CISO Award	CISO	Trescon
BFSI Innovative Technology Award	Leadership	Eletsonline
NetApp Innovation Award	Data Visionary	NetApp

Consolidated Account Statement (CAS) Your company provides to a demat account holder holding mutual fund units in Statement of Account (SOA) form, the CAS with information about transactions and securities held across multiple demat accounts with various Depository Participants - across depositories along with mutual fund units held in SOA form. The CAS also provides additional information with respect to mutual fund investments like total purchase value / cost of investment in each scheme of mutual fund in monthly transaction CAS and information like the amount of actual commission paid by AMCs/Mutual Funds (MFs) to distributors (in absolute terms) during the halfyear period against the concerned investor’s total investments in each MF scheme, the scheme’s average Total Expense Ratio (in percentage terms) for the half-year period, etc. CDSL also provides a facility to its demat account holders to access its website and download CAS after providing certain security information. The demat account holders can also update/ modify the email ID and opt for receipt of electronic CAS using CDSL’s website.

System Enhancements

During the year your company released a number of system enhancements for increasing the efficacy of processes

a. Online registration of demat account holder for easiest facility enabling the demat account holder to submit electronic instructions through CDSL website, eliminating need of submission physical registration form to the respective DPs.

b. Recording of Non-Disposal Undertaking (NDU), where NDUs are undertakings given by a shareholder, generally promoters (Borrowers), not to transfer or otherwise alienate the securities and are in the nature of negative lien given in favour of another BO (Lender).

c. Transfer in favor of demat account of the Investor Education and Protection fund Authority of securities in respect of which dividend has not been paid or claimed for a period of seven consecutive years or more. CDSL maintains the details of shareholders whose securities have been transferred and the subsequent corporate actions thereon.

d. Implementation of various other SEBI initiatives like (i) Tender offers through settlement mechanism (ii) Enhanced supervision of brokers

(iii) Electronic book mechanism for issuance of securities on private placement basis.

Transaction Cum Holding Statements

As of March 31, 2018, 196 DPs have availed of the service of dispatch of transaction cum holding statements (DOTS and e-DOTS). In FY 2017-18, CDSL has processed 22.39 Lakh statements.

Corporate Bond database

The Corporate Bond database maintained by your company as mandated by SEBI vide its Circular No. CIR/IMD/DF/17/2013 dated October 22, 2013, contains information on over 20,701 bonds issued in demat form by over 2,280 Issuers. The database provides comprehensive information on the corporate debt instruments including details of Issuers, Instruments issued along with the listing status, Redemption details, Names of Debenture Trustees and Credit Ratings along with the names of the Rating Agencies.

The credit rating agencies CRISIL, CARE, ICRA and India Rating are accessing your company’s corporate bond database through the secure login and are verifying the credit rating displayed and also updating subsequent rating migrations. The comprehensive and updated information disseminated by your company at a single place provides valuable information to the investors and assists them in taking a more informed investment decision.

Trade Repository of Corporate Bonds

Your company is pleased to inform you that the trade repository for primary issuances was launched in November, 2016. Your company has data of about 6,710 ISINs for primary market issuances and about 7,443 ISINs pertaining to secondary market being traded in the stock exchanges.

Technology Initiatives:

In order to keep pace with the new technology and provide greater flexibility and ease of use, CDAS application has been made available to the users as a browser based service. As a part of continual upgrade process, CDSL has commenced migrating its front end to new technology using Dot Net. Further considering growth over next 5 years, CDSL has procured and deployed new servers at Main and DR site. To strengthen security, your depository has implemented APT solution from McAfee and has implemented SOC for proactive and continuous monitoring of security events. CDSL always benchmarks its practices against ISO standards and accordingly has undergone recertification audit for ISO 27001 conducted by DNV and is now certified for ISO 27001:2013 for 3 years. Further CDSL has also undergone periodic audit for ISO 22301:2012 (Business Continuity Management System) and has been recommended for continuation of the Certificate. CDSL’s e-Voting Service has also undergone periodic audit for ISO 9001:2015 certification and has been recommended for continuation of the Certificate.

Continuing Professional Education (CPE) Programs - Depository Operations Certification Examination (DOCE)

National Institute of Securities Markets (NISM) has been offering Continuing Professional Education (CPE) Programs for Associated Persons in the Securities Market Intermediaries.

CDSL, as a NISM Accredited CPE Provider for conducting CPE Programs, has successfully carried out 35 programs for 566 participants during the year.

CVL’s National Academic Depository(C-NAD)

The Union Cabinet approved establishing a Digital Depository of Academic Awards (X & XII Certificates, Diplomas, Degrees, Marksheets, Transcripts, etc.) on the pattern of Securities Depository to be known as National Academic Depository (NAD). Government of India, Ministry of Human Resources Department (MHRD) designated University Grants Commission (UGC) as the authorised body for implementation of NAD. NAD, a Project of national importance, was officially launched by Hon’ble President of India, Shri Pranab Mukherjee on July 9, 2017.

CVL NAD renders its services to all of its Stakeholders [Academic Institutions (AIs), Students and Verifiers (Employers, Consulates, VISA issuing Authorities, Background Checkers, etc.)] under one platform. CVL NAD provides secured and online access for AIs to upload Academic Awards, enables Students to store & share their Awards with Verifiers for online verification. In a span of one year, over 240 AIs have registered and benefitted by using CVL’s NAD services.

e-Voting

As on March 31, 2018, 5,037 companies have signed agreements with CDSL to conduct e-Voting. So far the e-Voting system recorded 16,561 instances of voting carried out by 4,405 Companies.

e-Notices

In the light of Green Initiative in the Corporate Governance by Ministry of Corporate Affairs, CDSL has started offering the services to companies for sending documents to its shareholders electronically. As on March 31, 2018, a total of 309 companies have signed for availing this service.

Corporate Social Responsibility (CSR)

The Ministry of Corporate Affairs (MCA) vide its circular dated February 27, 2014 notified Section 135 and Schedule VII of the Companies Act 2013 relating to Corporate Social Responsibility (CSR) the provisions of which came into effect from April 1, 2014. The CSR provisions require companies satisfying certain criteria to spend 2% of its average net profits of the last three years on CSR activities defined in the rules framed in this regard. The Company has been actively associated with various NGOs in providing various facilities involving capital expenditure for a sustainable impact of CSR activities. Even during the FY 17-18, your company has sponsored various projects and the report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure A.

Prevention of Money Laundering Act

The Prevention of Money Laundering Act, 2002 (PMLA) has been brought into force with effect from July 1, 2005. Subsequent amendments had been done to the PMLA Act 2002 and Prevention of Money-laundering (Maintenance of Records) Rules 2005 vide SEBI circular CIR/MIRSD/1/2014 dated March 12,

2014. CDSL and its depository participants fall under the category of ‘intermediaries’ under section 12 of the SEBI Act and hence, PMLA and the policy guidelines issued by the regulators to combat money laundering are applicable to depository operations.

As required under the guidelines, CDSL has designated Principal Officer, Alternate Officer and Designated Director to ensure compliance with these guidelines. CDSL has prepared policy guidelines for implementation of PMLA and the same is reviewed periodically.

CDSL conducts training programs and updates depository participants on compliance with the aforesaid guidelines. During FY 2017-18, CDSL organised special training programmes wherein the Additional Director from FIU-IND updated DPs in the matter of compliance with PMLA provisions, filing of Suspicious Transaction Reports and directly interacted with Principal Officers of DPs at 4 metro cities.

Details of Subsidiary Companies

Your Company has following subsidiary Companies as on March 31, 2018

1. CDSL Ventures Limited

(CIN U93090MH2006PLC164885)

2. CDSL Insurance Repository Limited (CIN U74120MH2011PLC219665)

3. CDSL Commodity Repository Limited (CIN U74999MH2017PLC292113)

0 CDSL Ventures Limited

Your company’s wholly owned subsidiary, CDSL Ventures Limited’s main business continues to be KYC business for the capital market intermediaries. CVL continues to be the largest KYC Registration Agency (KRA) controlling about 60% of the market share in the KYC of capital market. In addition to its core business of being a KRA for capital market, CVL has also initiated work on the following business lines, which are in various stages of implementation / completion.

1. National Academic Depository (NAD)

2. eKYC as KYC User Agency (KUA) and Authentication User Agency (AUA)

3. eSign (electronic signature based on aadhaar number)

4. Claim registry for life insurance companies that offer Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

5. GST Suvidha Provider Services

Further, CVL has also received approval from SEBI to act as a Registrar and Transfer Agent (RTA).

0 CDSL Insurance Repository Limited (CDSL IR)

Your Company had under the “Guidelines on Insurance repositories and electronic issuance of insurance policies” issued by IRDAI, floated a separate subsidiary viz:- CDSL Insurance Repository Ltd. (CDSL IR), in the year 2011 to provide policyholders a facility to keep insurance policies in electronic form and to undertake changes, modifications and revisions in the insurance policy with speed and accuracy in order to bring about efficiency, transparency and cost reduction in the issuance and maintenance of insurance policies. Leading public sector and private sector insurance companies have contributed to the equity capital of CDSL IR. At the time of launch in August 2013 the insurance repository services was restricted only to Life insurance policies. However, later on during the current year IRDAI has extended the scope of services to Health insurance policies and Motor insurance policies. As on March 31, 2018 the repository has opened about 3.50 Lakh e-Insurance Accounts (e-IA) in which it holds about 85,000 life insurance, Health insurance and Motor insurance policies in electronic form. CDSL IR had tied up with twenty-four life insurance companies, four health insurance companies and twenty nine general insurance companies for holding policies in electronic form.

0 Central Commodity Repository Limited (CCRL):

Your company has floated a new subsidiary in the name and style of CDSL Commodity Repository Limited (CCRL) to establish and run a Commodity Repository on the lines of a Securities Depository. In this regard, Warehousing Development and Regulatory Authority (WRDA) has shortlisted CCRL as one of the two Repositories for undertaking the Commodity Repository activity.

CDSL Commodity Repository Limited has received a formal registration certificate as Commodity Repository on September 26, 2017 from Shri. Ram Vilas Paswan, Hon’ble Union Minister of Consumer Affairs, Food and Public Distribution at a function organised by Warehousing Development and Regulatory Authority (WDRA) for the launch of WDRA portal and electronic Negotiable Warehouse Receipts (eNWR).

Multi Commodity Exchange of India Ltd. (MCX) and BSE Investments Ltd. have expressed their desire to take up each 24% of the stake in CCRL and accordingly MCX picked up 24% stake in CCRL in the month of May, 2018.

During the year, the Board of Directors of the Company reviewed the affairs of the subsidiaries. In accordance with section 129 (3) of the Companies Act, 2013, we have prepared the consolidated financial statements of the Company, which forms part of this annual report. Further a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC 1 is appended as Annexure B to the Board’s report. The statement also provides details of the performance and financial position of each of the subsidiary.

In accordance with section 136 of the Companies Act, 2013, the audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of each of the subsidiary are available on our website www.cdslindia.com. These documents will be available for inspection till the date of AGM during business hours at the registered office of the Company.

Listing of Securities

As at the start of the financial year on April 1, 2017, your company was a subsidiary company of BSE Ltd. The Company got its shares listed on National Stock Exchange on June 30, 2017 through Offer for Sale where BSE Ltd. divested its stake from 50.05 % to 24 %. Consequently, your company has become an Associate Company of BSE Ltd.

Fixed Deposits

Your company has not accepted any deposits within the meaning of Section(s) 73, 74, 75 & 76 of the Companies Act, 2013 and the Rules made thereunder.

Directors and KMPs

As per SEBI (Depositories and Participants) (Amendment) Regulations, 2012, the appointment and re-appointment of all Shareholder Directors on the board of depository shall be with the prior approval of SEBI. Further the Public Interest Directors on the board shall be nominated by SEBI.

Accordingly, SEBI vide its letter dated April 24, 2017 approved appointment of Smt. Usha Narayanan as Public Interest Director/ Independent Director.

SEBI vide its letter dated June 16, 2017 approved appointment of Shri Nayan Mehta, Chief Financial Officer-BSE Ltd as Shareholder Director of the company.

Further SEBI vide its letter dated February 14, 2018 approved appointment of Shri Kumarapuram Venkateswaran Subramanian, Head-Strategy, Process & Governance for Standard Chartered Bank as Shareholder Director of the company.

During the year under review, Shri Balasubramaniam Venkataramani ceased to be a shareholder Director w.e.f April 24, 2017.

Shri Anant Narayan Gopalakrishnan, Regional Head, Financial Markets, ASEAN & South Asia-Standard Chartered Bank who was the shareholder Director resigned vide letter dated July 29, 2017.

The Board has placed on record its appreciation for the valuable services rendered by Shri Balasubramaniam Venkataramani and Shri Anant Narayan Gopalakrishnan during their tenure as Directors of the company.

The Independent Directors have given declaration under sub-section (7) of section 149 of the Companies Act, 2013 confirming that they satisfy the criteria of “independence” under section 149(6) the Companies Act, 2013.

As per the provisions of Section 152(6) (d) of the Companies Act, 2013, Shri C. Venkat Nageswar, the Shareholder Director was considered for Director liable to retire by rotation and being re-appointed at the ensuing Annual General Meeting. A brief resume of Shri C. Venkat Nageswar is enclosed as an Annexure C.

The term of Shri P.S. Reddy, MD & CEO expired on March 31, 2018. On the recommendation of Nomination and Remuneration/Compensation Committee, the Board of Directors in its meeting dated January 20, 2018 approved reappointment of Shri Reddy for a period of five years w.e.f. April 1, 2018 subject to approval of SEBI and shareholders. SEBI vide its letter dated March 28, 2018 has granted an extension of one year i.e. up to March 31, 2019 and has advised the Company to frame policy on appointment /reappointment of MD & CEO keeping in view the recommendations of Gandhi Committee.

During the year under report Shri Nirogi Venkata Sesha Pavan Kumar, VP-Legal and Group Company Secretary and Compliance Officer resigned from his duties w.e.f. July 31, 2017 and Shri Amol Purandare was appointed as AVP-Legal and Company Secretary and Compliance Officer w.e.f. August 7, 2017. Shri Amol Purandare also resigned w.e.f. June 26, 2018.

Statutory Auditors & Audit Report

M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai were last re-appointed as Statutory Auditors of the company for the year 2017-2018 to hold office from the conclusion of the 19^th Annual General Meeting till the conclusion of the 20^th Annual General Meeting.

There are no qualifications, reservations or adverse remarks or disclaimer made by M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, Statutory Auditors in their report.

Considering the provisions of Sections 139, 141, 142, 143 and 144 of the Companies Act, 2013 read with Rule 5 & 6 of the Companies (Audit and Auditors) Rules, 2014, the Board of Directors based on recommendations of the Audit Committee considered and approved the appointment of M/s. S. R. Batliboi & Co as Statutory Auditors of the Company who have expressed their willingness and confirmed their eligibility for being appointed as Statutory Auditors of the Company.

Accordingly, M/s. S. R. Batliboi & Co will hold office as Statutory Auditors of the Company from the conclusion of the 20^th Annual General Meeting till the conclusion of the 24^th Annual General Meeting for FY 2018-19, subject to approval of shareholders.

Internal Auditors

In terms of the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, the Company had appointed M/s. Mittal & Associates, Chartered Accountants as Internal Auditors & Concurrent Auditors of the Company for the FY 2017-18. The Board of Directors have approved the appointment of M/s. Ray & Ray, Chartered Accountants as Internal Auditors and Concurrent Auditors of the Company for the FY 2018- 2019.

There are no qualifications, reservations or adverse remarks or disclaimer made by the Internal Auditors and Concurrent Auditors in their report.

Secretarial Auditors and Secretarial Audit Report

M/s. Pramod Shah & Associates, Practicing Company Secretaries, Mumbai were as Secretarial Auditor of the Company for the FY 2017-18. A copy of the secretarial audit report issued in form MR-3 by M/s Pramod Shah & Associates, Secretarial Auditors is enclosed as an Annexure D to this report.

The Board of Directors have approved the appointment of M/s. Ragini Choksi & Company, Practicing Company Secretary, as Secretarial Auditors of the Company for a period of three years from April 1, 2018 to March 31, 2021 subject to ratification every year.

Related party transactions:

The Members of the Company have, vide an Ordinary Resolution passed in the 19^th Annual General Meeting held on May 29, 2017, consented to the Company entering into Related Party Transactions to the extent of '' 1,133.07 Lakhs during the year 2017

18. In accordance with the Members’ consent your company has entered into transactions with related party within the aforesaid limit. All such transactions were in the ordinary course of business and on an arm’s length basis. Although the provisions of Section 188 of the Companies Act, 2013 are not attracted, your company had sought Members’ approval for all related party transactions as a measure of good corporate governance. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements. Similarly, an Ordinary Resolution has also been proposed in the Notice convening 20^th Annual General Meeting seeking Members’ approval for related party transactions to the extent of '' 1,598.27 Lakhs to be entered into with related parties during the FY 2018-19

Disclosure of related party transactions is required to be made u/s 134 (3) (h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in form AOC 2 which is attached as Annexure E

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Considering the nature of operations of your company, the provisions of Section 134(3) (m) of the Companies Act, 2013 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to information to be furnished on conservation of energy and technology absorption are not applicable though the Company uses all the possible ways in conserving energy. The company has, however, used information technology extensively in its operations.

Foreign Exchange Earnings and Outgo

Details of foreign exchange earnings and outgo during the year under review are as under:

Particulars	Year ended March 31, 2018 ('' in Lakhs)	Year ended March 31, 2017 ('' in Lakhs)
Earnings	Nil	Nil
Travel expenses	19.25	25.15
Others	8.18	78.67
Total	27.43	103.82

Directors’ Responsibility Statement

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors reports that:

i) in preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided;

ii) accounting policies have been selected and applied them consistently and the judgements and estimates made 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 of the company for that period;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies

Act, 2013, for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities;

iv) the annual accounts have been prepared on a going-concern basis.

v) internal financial controls to be followed by the company are laid down and that such internal financial controls are adequate and were operating effectively.

vi) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Implementation of Code of Corporate Governance

As per the SEBI (Depositories and Participants) (Amendment) Regulations, 2012, the disclosure requirements and corporate governance norms as specified for the listed companies mutatis mutandis are applicable to the depository. Your company has been, observing the Code of Corporate Governance by adopting most of the good corporate governance policies as under Schedule V, Regulation 34(3) and 53(f) of Securities Exchange Board of India (Listing Obligation & Disclosure Requirement) Regulation, 2015. The status of implementation of the Code of Corporate Governance is enclosed as Annexure F.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the year ended March 31, 2018 is enclosed as Annexure G.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013, the Nomination and Remuneration/Compensation Committee and the Independent Directors have carried out separately an annual performance evaluation of its Directors individually, the Board as a whole and its Committees and the Chairperson of the Company. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Report by Internal Complaints Committee

As per The Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the Act) it is mandatory for every employer to constitute a Committee to be known as the ‘Internal Complaints Committee’. Accordingly, the Committee was constituted by Board and it meets periodically to review the complaints, if any, received from female employees.

During the year the Committee did not receive any complaints in this regard.

Particulars of Employees

Information as required under Sec. 197(12) read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed to this report as Annexure H.

Human Resource Development

The company always recognised its Human assets as a critical resource essential for the growth of the company. It, therefore, accords high importance to human resource development and consciously endeavors to enhance the quality and competence of its employees across cadres. It conducts induction programme for new entrants. Nominating employees for training at reputed institutions and for attending seminars in India and abroad in capital market related areas, particularly relating to depositories, has always been a part of human resource development programme of the company. Industrial relations during the year continued to be cordial.

Particulars of Loans, Guarantees or investments under section 186

Details of Loans, Guarantees or investments under section 186 of the Companies Act, 2013 are given in the notes to the financial statements.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future:

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

Extract of Annual Return

In accordance with provisions of section 134(3)(a) of the Companies Act, 2013, the extract of the Annual Return in Form MGT 9 is enclosed as Annexure I.

Acknowledgement

Your Directors place on record their sincere gratitude for the support, guidance and cooperation the company received from Ministry of Finance, SEBI and other regulatory agencies. The Directors also acknowledge with thanks the continued support of the BSE Ltd, the Promoter, sponsors, all other shareholders, Beneficial Owners, Depository Participants, Stock Exchanges, Clearing Houses, Issuers, and Registrar and Transfer Agents. The Directors also express their appreciation for the unflinching dedication of the employees whose performance, professionalism and commitment for rendering high quality services to the clientele of the company has been commendable.

For and on behalf of the Board

Taruvai Subbayya Krishna Murthy

Place : Mumbai Chairman

Date : April 21, 2018 (DIN: 00279767)

---

Mar 31, 2017

The Directors have pleasure in presenting the Nineteenth Annual Report, along with Audited Statement of Accounts of your company for the year ended 31^st March, 2017. Due to improved market conditions , the operational income of the company has increased from Rs.1017.37 million to Rs.1216.19 million, resulting in an increase of total income from Rs.1331.29 million to Rs.1552.24 million.

Financial Highlights

Particulars	Year ended 31st March, 2017 (Rs. million)	Year ended 31st March, 201 6 (Rs. million)
Income from Operations	1216.19	1017.37
Other Income	336.05	313.92
Total Income	1552.24	1331.29
Expenditure	552.97	493.96
Profit before Depreciation and Taxation	999 .27	837.33
Depreciation	34 .93	34.35
Profit before exceptional items and tax	964 .34	802.98
Exceptional items (Income)	-	33 1.04
Profit before contribution to IPF & Tax	964 .34	1134.02
Contribution to IPF	45.97	2 3.12
Profit Before Tax	918 .37	1110.90
Provision for Taxation	270.00	324.80
Provision for Deferred Tax for the year	(30 .14)	1 7.62
Profit after Tax	678 .51	768.48
Other Comprehensive Income	(3 .13)	(0.51)
Total Comprehensive Income	675.38	767.97
Balance brought forward	3217.01	2725.75
Profit available for appropriation	3892.39	3493.72
Dividend	261.25	229.90
Tax (including surcharge and education cess on dividend)	53.19	46.80
Transfer to General Reserve	-	-
Surplus carried to Balance Sheet	3577.95	3217 .01

The income from operations comprising of transaction charges, annual issuers fees, account maintenance charges, settlement charges, corporate action charges, etc. during the year under review increased to Rs.1216.19 million from Rs.1017.37 million, recording a increase of 20% over the year 2014-15. As per SEBI (Depositories & Participants) (Amendment) Regulations, 2012, transfer of Rs.45.97 million is made to investor protection Fund. After contribution to Investor Protection Fund, Profit Before Tax (PBT) for the year ended 31^st March, 2017 is Rs.918.37 million as against Rs.1110.90 million of previous year. Profit After Tax (PAT) is at Rs.678.51 as against Rs.768.48 million. However, Profit Before Tax & Profit After Tax for the year ended 31^st March, 2017 has increased by 18% & 23% respectively over the previous year after excluding exceptional income earned in the previous year.

Dividend

Looking into the performance of the Company for the year under review and taking note of the buoyancy in the Capital Market at present, your directors have recommended a dividend of Rs. 3.00 (Rupees Three only) per share (30%) for the year ended 31^st March, 2017.

Details of Subsidiary Companies

Your Company has following subsidiary Companies as on 31^st March, 2017

1. CDSL Ventures Limited (CIN U93090MH2006PLC164885)

2. CDSL Insurance Repository Limited (CIN U74120MH2011PLC219665)

3. CDSL Commodity Repository Limited (CIN U74999MH2017PLC292113)

Share Capital and Shareholding

As on 31^st March, 2017 the Share Capital of the Company is as given hereunder: Authorised Share Capital: 150,00,00,000 divided into 15,00,00,000 equity shares of Rs 10 each.

Issued and Paid Up Share Capital: 104,00,00,000 divided into 10,04,00,000 equity shares of Rs 10 each.

Demat holding of Shareholders

As on the date of this report, all your shareholders are holding the entire share capital in electronic form.

The Capital Market Environment

During FY 2016-17, the stock markets witnessed a bullish sentiment due to which the BSE-30 Sensex opened at 25,301 on 1^st April, 2016 and touched a high of 29,824 in March 2017 only to close at 29,620 on 31^st March, 2017.

According to World Bank, India’s growth forecast for 2017 is 7% from 7.6% estimated earlier, attributing it partly to demonetization of high value currency notes. India is still forecast to retain its position as the world’s fastest growing major economy ahead of China, which is forecast to grow 6.7%. India and the rest of emerging Asia are generally projected to continue growing at a robust pace, with some countries likely to face strong headwinds from China’s economic rebalancing and global manufacturing weakness.

Correspondingly, capital raised from equity markets has gone up 5% compared to the previous year. According to Prime Database, the total equity capital raised during FY 2016 - 17 was about Rs.51,288 crores as against Rs.48,952 crores raised during FY 2015 - 16. Of the above, the funds raised through IPOs was Rs.29,018 crores while the funds raised through Qualified Institutional Placement (QIP) route was Rs.13,871 crores and through Offer for Sale (OFS) was Rs.8,390 crores.

Operational Hghlights

With the capital market looking up, your company could register a good growth in its depository operations during the latter part of 2016 - 17. Due to positive sentiment prevailing in the capital markets, the primary market has also performed well during this period. Such positive outlook is reflected in the increase in the number of demat accounts opened in the Depository. In order to sustain the growth in its depository business, your company continues to focus on enhancement of operational efficiency, upgradation of technology, service quality and enhanced emphasis on investor education through seminars / workshops.

Securities admitted

Securities like equity shares, preference shares, mutual fund units, debt instruments, government securities, certificates of deposit, commercial papers and a host of other instruments are available for dematerialization by the investors. Details of the securities admitted with CDSL are given below

Securities	Year ended 31st March 2017	Year ended 31st March 2016	(%) change over the previous year
Equity Shares	9240	8,814	4.83
Debt Instruments	8792	9,77 7	-10.07
Other Securities	23371	21,08 3	10.85
Total	41403	39,674	4.3 5

Position of Securities held in the System

The value and volume of securities held with CDSL in the year under review as compared to the previous year are indicated below:

Holding of Securities	Year ended 31 s t March 2017	Year ended 31 s t March, 2016	Increase over the previous year (%)
Value (in million Rs.)	17,735,853	13,267,966	33.67
Volume (in million)	255,227	227,549	12.1 6

Depository Participants and Service Centers

As on 31^st March, 2017, 588 depository participants held valid registration certificates of Securities and Exchange Board of India (SEBI) as compared to 583 valid SEBI registrations as on 31^st March 2016. During the year, new registrations were received for 16 DPs but registrations of 11 DPs were withdrawn/ cancelled. With a large DP network, investors spread across 28 States and 7 Union Territories can avail of CDSL’s depository services. Further, investors have access to 17,489 DP service centers spread across more than 2000 cities / towns as on 31^st March 2017.

Beneficial Owner Accounts

During the year under review, 19.85 lakh Beneficial Owner (BO) accounts were added, taking the total number of such accounts to 164.96 lakhs with the net BO accounts at 122.67 lakhs as on 31^st March, 2017. The comparative figures of gross and net BO accounts as on 31^st March, 2016 and 31^st March, 2017 are given in the following table :

Year ended 31st March 2017	Year ended 31 st March, 2016	Increase over the previous year’s cumulative figure
		Number	Percentage %
(Gross) 16,496,447	(Gross) 14,510,902	1,985,545	13.68
(Net) 12,267,432	(Net) 10,790,738	1,476,694	13.68

Investor Awareness / Education Seminars

Financial inclusion through retail participation has been a major focus area of your company. We believe investor education can become a significant key to achieving financial inclusion in the capital market. To this end, CDSL conducted around 285 Investor Awareness Programs (IAPs) in the year. This initiative allowed investors across geographies, professions and age groups to come together and learn the basics of Capital Markets, advantages of holding securities in demat form, importance of Financial Planning, Investment avenues available, etc. CDSL has also conducted IAPs in association with AMCs and regional Seminars with SEBI. CDSL also participate in Indian International Trade Fair (IIFT) at Delhi with other intermediaries in capital market for mass investor education. Although, these IAPs reach out to investors in major metros, we have already initiated steps to reach the public in tier-2 and tier-3 cities to inculcate the habit of investment in securities. CDSL has tied up with various regional newspapers to attract large number of investors to attend these IAPs. During the IAPs, informative booklets in English, Hindi and other regional languages were distributed for the benefit of investors.

Awards and recognition

During the year 2016-2017, your Company has won the following awards:

- BFSI TECH Maestros Award- Risk/ Security and compliance

- Dell EMC Transformers Award- Security Transformation

- Exito BFSI IT leadership Award- IT Leadership

- IDG’s Intelligent Enterprise Champions Awards- Infrastructure

- Innovative CIO Award CIO

- Express Security Strategist Award - Information Security

- FinTec India Award- Security

New Initiatives

Consolidated Account Statement (CAS)

As directed by SEBI, certain additional information with respect to mutual fund investments like total purchase value / cost of investment in each scheme of mutual fund in monthly transaction CAS and information like the amount of actual commission paid by AMCs/Mutual Funds (MFs) to distributors (in absolute terms) during the half-year period against the concerned investor’s total investments in each MF scheme, the scheme’s average Total Expense Ratio (in percentage terms) for the half-year period, etc. was included in the CAS to increase transparency of information to investors

System Enhancements

During the year your company released many system enhancements for increasing the efficacy of processes

One of the important development was implementation of system driven disclosures pertaining to acquisition, sale and pledge of securities under the SEBI (SAST Regulations) 2011 and SEBI (PIT) Regulations 2015 as a parallel system. CDSL enabled update of Promoter / Promoter group PANs by RTAs / Exchanges on the basis of which, the transaction data of promoters / promoter group is informed on a daily basis directly to the stock exchanges for dissemination of the necessary disclosures.

Your company also released the facility to appoint multiple nominees in a demat account. You can now record the entitlement of securities for each such nominee in terms of percentage. At the time of transmission in favor of such nominees, the DP shall divide all the securities at ISIN level in the same proportion as recorded at the time of nomination. The fractional entitlements if any shall be transferred to the first holder, in the event of absence of nomination for fractions.

Transaction Cum Holding Statements

As of 31^st March, 2017, 193 DPs have availed of the service dispatch of transaction cum holding statements (DOTS and e-DOTS). Dispatch of Bill-Cum-statement services (DBS) are being provided for 21 DPs. In 2016-17, CDSL has processed 15.87 lakh statements.

Corporate Bond database and Trade Repository

The Corporate Bond database maintained by your company as mandated by SEBI vide its Circular No. CIR/IMD/DF/17/2013 dated October 22, 2013, contains information on over 17,000 bonds issued in demat form by over 2000 Issuers. The database provides comprehensive information on the corporate debt instruments including the following:

- Issuer details: Name, type and nature of the Issuer, Business sector, Name of the company secretary etc.

- Instrument details: Face value and tenure, whether tax free, whether guaranteed, type of convertibility, seniority in payment etc.

- Redemption details: Redemption Date, whether full redemption, redemption premium details, total quantity, value redeemed etc.

- Debenture Trustee Details: Name of the debenture trustee etc

- Stock Exchange Details: Name of the exchange, Listing status (to be listed, listed) with date of listing.

- Credit Rating Agency Details: Name of the credit rating agency along with credit rating and date.

The credit rating agencies CARE, ICRA, India Rating etc. are accessing your company’s corporate bond database through the secure login provided to them and are verifying the credit rating displayed and also updating subsequent rating migrations. The comprehensive and updated information disseminated by your company at a single place provides valuable information to the investor and assists him in taking a more informed and valued decision.

Trade Repository

Your company is pleased to inform you that the trade repository for primary issuances was launched in November, 2016. Your company has data of about 3450 ISINs for primary market issuances and about 4000 ISINs pertaining to secondary market being traded in the stock exchanges.

Customer Communication Management System

For CAS generation which was outsourced since Feb 2015, CDSL has implemented a Customer Communication Management System which is capable of statement generation of CAS and any other statements that CDSL and group companies need to send out to customers. Design layout of the electronic and physical communication, complete tracking and web-hosting of statements are automated through this software. The system allows us to engage with multiple print vendors in a secure manner. Due to in-house generation of CAS statement, significant cost savings is expected out of this project in addition to the capability of consolidation of all future customer communication through one platform.

Implementation of Advanced Persistent Threat (APT) at CDSL

Your Company is implementing Advance Threat Detection (ATD) system for strengthening Cyber security protec tion of CDSL infrastructure.

Mobile App Development for e-Voting

The e-Voting system which was available on web, is now available on mobile platform on Android, Apple iOS and Windows. The login credentials of web is also used for the mobile application making it convenient for shareholders to use the channel of their choice.

Implementation of two factor authentication for CDASWeb login As per regulatory guideline, CDSL has done implementation of two-factor authentication at the login of CDSL depository application. This has enabled the CDSL DP / RTA to access CDSL application through Intranet as well as from Internet with same security measures.

Continuing Professional Education (CPE) Programs - Depository Operations Certification Examination (DOCE)

National Institute of Securities Markets (NISM) has been offering Continuing Professional Education (CPE) Programs for Associated Persons in the Securities Market Intermediaries.

CDSL, as a NISM Accredited CPE Provider for conducting CPE Programs, has successfully carried out 39 programs for 607 participants during the year.

ISO 27001:2013 Certification

Your Company has undergone Periodic audit for IS027001:2013 conducted by DNV, and have been recommended for continuation of the Certificate.

ISO 22301:2012 Certification

Your Company has undergone Periodic audit for ISO 22301:2012 (Business Continuity Management System) conducted by DNV, and have been recommended for continuation of the Certificate.

ISO 9001:2015

Your Depository has undergone periodic audit for ISO 9001:2015 certification by DNV for e-Voting Service and has been recommended for continuation of the Certificate

CVL’s National Academic Depository(C-NAD)

National Academic Depository (NAD) is an initiative of Government of India facilitated by Ministry of Human Resources Department (MHRD) / University Grants Com mission (UGC). We are pleased to inform you that CVL, one of the subsidiaries of your comp any has been selected by MHRD/UGC to offer services of NAD. Accordingly, CVL has signed an agreement with MHRD/UGC on November 28, 2016 to facilitate this initiative.

e-Voting

As on 31 ^st March, 2017, 4654 companies have signed agreements with CDSL to conduct e -Voting. So far the e-Voting system recorded 12200 instances of voting carried out by 4091 Companies. You will be pleased to note that CDSL has successfully renewed STQC (Standardization Testing and Quality Certification) for a further period of three years. This is the second renewal.

e-Notices

In the light of Green Initiative in the Corporate Governance by Ministry of Corporate Affairs, CDSL has started offering the services to companies for sending documents to its shareholders electronically. As on 31^st March, 2017, a total of 288 companies have signed for availing the services.

Corporate Social Responsibility (CSR)

The Ministry of Corporate Affairs (MCA) vide its circular dated 27^th February, 2014 notified Section 135 and Schedule VII of the Companies Act 2013 relating to Corporate Social Responsibility (CSR) the provisions of which came into effect from 1^st April, 2014. The CSR provisions require companies satisfying certain criteria to spend 2% of its average net profits of the last three years on CSR activities defined in the rules framed in this regard. During the year the company was required to spend Rs. 292 lakhs on CSR activities inclusive of Rs. 162 lakhs unspent amount of previous year. As per the recommendation of the CSR Committee and approval of the Board, for the financial year 201 6-17 the company contributed Rs. 105.19 Lakhs, to a registered Charitable Trust, Association of Parents of Mentally Retarded Children, Mumbai named as ADHAR. Balance amount of Rs. 186 lakhs would be spent on other CSR project like:

i) Additional Support to ADHAR

ii) Varasidhi Visual Vidhyashram Trust

iii) The Nest India Foundation

The report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure A.

Prevention of Money Laundering Act

The Prevention of Money Laundering Act, 2002 (PMLA) has been brought into force with effect from 1 ^st July, 2005. Subsequent amendments had been done to the PMLA Act 2002 and Prevention of Money-laundering (Maintenance of Records) Rules 2005 vide SEBI circular CIR/MIRSD/1/2014 dated 12^th March, 2014. CDSL and its depository participants fall under the category of ‘intermediaries’ under section 12 of the SEBI Act and hence, PMLA and the policy guidelines issued by the regulators to combat money laundering are applicable to depository operations.

As required under the guidelines, CDSL has designated Principal Officer, Alternate Officer and Designated Director to ensure compliance with these guidelines. CDSL has prepared policy guidelines for implementation of PMLA and the same is reviewed periodically .

CDSL conducts training programs and updates depository participants on compliance with the aforesaid guidelines. CDSL organized special training programmes wherein the Additional Director from FIU-IND updated DPs in the matter of compliance with PMLA provisions, filing of Suspicious Transaction Reports and directly interacted with Principal officers of DPs at 4 metro cities.

Subsidiaries of CDSL

- CDSL Ventures Limited

Your company’s wholly owned subsidiary, CDSL Ventures Limited’s main business continues to be KYC business for the capital market intermediaries. CVL continues to be the largest KRA controlling about 65% of the market share in the KYC of capital market. In addition to its core business of being a KRA for capital market, CVL has al s o initiated work on the following business lines, which are in various stages of implementation / completion.

1. National Academic Depository (NAD)

2. eKYC as KYC User Agency (KUA) and Authentication User Agency (AUA)

3. CKYC (Central KYC)

4. eSign (electronic signature based on aadhaar number)

5. OLAO (On line account Opening)

6. Claim registry for life insurance companies that offer Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

Further, CVL has also applied to SEBI to act as a Registrar and Transfer Agent (RTA). The application is under consideration by SEBI.

- CDSL Insurance Repository Limited (CDSL IR)

Your Company had under the “Guidelines on Insurance repositories and electronic issuance of insurance policies” issued by IRDAI, floated a separate subsidiary viz:- CDSL Insurance Repository Ltd. (CDSL IR), in the year 2011 to provide policyholders a facility to keep insurance policies in electronic form and to undertake changes, modifications and revisions in the insurance policy with speed and accuracy in order to bring about efficiency, transparency and cost reduction in the issuance and maintenance of insurance policies. Leading public sector and private sector insurance companies have contributed to the equity capital of CDSL IR. As on March 31, 2017 the repository has opened about 3.21 lakh e-Insurance Accounts (e-IA) in which it holds 66,648 life insurance policies in electronic form. Due to non-participation of LIC, about 38,000 insurance policies are pending conversion into electronic form. CDSL IR had tied up with twenty-two life insurance companies, two health insurance companies and five general insurance companies for holding policies in electronic form.

- CDSL Commodity Repository Limited (CCRL):

Your company has floated a new subsidiary in the name and style of CDSL Commodity Repository Limited (CCRL) to establish and run a Commodity Repository on the lines of a Securities Depository. In this regard, Warehousing Development and Regulatory Authority (WRDA) has shortlisted CCRL as one of the two Repositories for undertaking the Commodity Repository activity. A formal registration as Repository will be issued by WDRA after inspection of systems and other supporting infrastructure set up by CCRL. It is expected that the Repository will be operational by the end of the first quarter of the current financial year.

In terms of the regulatory requirements, CCRL must have a continuous networth of Rs. 25 crores and minimum paid up capital of Rs. 50 crores to function as a Repository. Accordingly, CCRL was established initially with a paid up capital of Rs. 50 crores. Multi Commodity Exchange of India Ltd. (MCX) and BSE Ltd, have expressed their desire to take up each 24% of the stake in CCRL.

Ownership Pattern

As at the end of the year under review, the shareholding pattern of your company is as under:

Category of shareholders	Equity Share Capital (Rs. in ‘000)	Percentage of shareholding
Banks	468,646	44.84
Stock Exchanges	522,979.85	50 .05
Others	53374.15	5.11
Total	1,045,000	100. 00

Details of the equity shares held by the shareholders of the company are given under shareholding pattern which is a part of Annexure B to the Directors’ Report. terms of directions issued by SEBI on the strength of the recommendations of the Jalan Committee, effective steps are under way to ensure that the Stock Exchange does not hold more than 24% of the equity shares in a depository.

Listing of Securities

During the year under review, the members of the Company at their Extra Ordinary General Meeting held on 24^th November 2016 approved the Initial Public Offering (IPO) through Offer for Sale of Shares (OFS) by the Promoter Selling Shareholder (BSE Limited) and the other Selling Shareholders viz., Bank of Baroda, State Bank of India and Calcutta Stock Exchange. The Selling Shareholders proposed to offer up to 3,51,67,208 equity shares of Rs.10 each held by them in the Company by way of a book building process in an IPO through OFS. Post the offer, Promoters (BSE Limited) who is currently holding 5,22,97,850 equity shares (50.05%) will hold 2,50,80,000 equity shares equivalent to 24% of the paid up share capital of the Company. The other Selling shareholders who are currently holding 1,63,00,000 equity shares (15.6%), will hold 83,50,642 equity shares equivalent to 7.99% of the paid up share capital of the Company. A detailed shareholding and the changes during the financial year are given as an annexure to this report in MGT-9 enclosed as an Annexure F.

Subsequent to the approval of the members of the Company, the Board of Directors at their meeting held on 24^th December, 2016 have approved the Draft Red Herring Prospectus for the IPO through OFS and the same was submitted with the Securities and Exchange Board of India (SEBI) on 27^th December 2016 and obtained clearance to go ahead with the further process o f IPO subject to necessary compliances under ICDR regulations of the SEBI. The Company has also obtained the in-principle approval from the National Stock Exchange of India (NSE) for the listing of the securities of the Company. The Board of Directors of the Company have deliberated the necessary compliances and accordingly the Company represented to the SEBI for further extension of time for the completion of IPO process beyond 31 ^st March 2017 to enable compliance under the Securities and Exchange Board of India (Depositories & Participants) Regulations, 1996. SEBI vide its letter dated 24^th April, 2017 has granted extension of time to comply with the aforementioned regulations by 3 0^th June, 2017.

Fixed Deposits

Your company has not accepted any deposits within the meaning of Section(s) 73, 74, 75 & 76 of the Companies Act, 201 3 and the Rules made thereunder.

Directors

As per SEBI (Depositories and Participants) (Amendment) Regulations, 2012, the appointment and re-appointment of all Shareholder Directors on the board of depository shall be with the prior approval of SEBI. Further the Public Interest Directors on the board shall be nominated by SEBI. Accordingly, SEBI vide its letter dated 30^th March, 2016 had approved appointment of Shri Nehal Vora, Chief Regulatory Officer-BSE Ltd. as Shareholder Director on the Board of the Company. SEBI vide its letter dated 10^th June, 2016 approved appointments of Shri Aravamudan Krishnakumar and Shri Rajender Mohan Malla as Public Interest Director/ Independent Director. Further SEBI vide its letter dated 7 ^th October, 2016 approved appointment of Shri Bontha Prasada Rao as Public Interest Director/ Independent Director on the Board of the Company.

SEBI vide its letter dated 23^rd December, 2016 approved appointment of Shri Venkat Nageswar Chalasani, DMD, State Bank of India, as Shareholder Directors on the Board of the Company.

SEBI vide its letter dated 24^th April, 2017 approved appointment of Smt. Usha Narayanan as Public Intere st Director/ Independent Director. She is also nominated as a member of Audit Committee, Nomination and Remuneration / Compensation Committee, Ethics Committee, Public Interest Director Committee and Corporate Social Responsibility (CSR) Committee w.e.f. 24^th April, 2017.

During the year under review, Smt. Anshula Kant, Deputy Managing Director & GE (GM) & CFO - State Bank of India who was the shareholder director of SBI had resigned w.e.f. 17^thJune, 2016.

Shri Rangachary Nambiar Iyengar, Dr. Ram Narain Nigam and Shri Tharmapuram Subramaniam Narayanasami ceased to be Public Interest Directors on Board of the Company due to completion of their tenure on 7^th April, 2016 as per SEBI approval letter No. MRD/DP/OW/8444/2013 dated 8^th April, 2013. Further, Smt. Jayshree Vyas ceased to be Public Interest Director as well as Woman Director on Board of the Company due to completion of her tenure on 17^th January , 2017 .

As per the provisions of Section 152(6) (d) of the Companies Act, 2013, Shri Nehal Naleen Vora and Shri Balasubramaniam Venkataramani, the shareholder directors were considered as directors liable to retire by rotation at the ensuing Annual General Meeting. The company was in receipt of communication from BSE Ltd. stating that Shri Nehal Naleen Vora being eligible offered himself for reappointment and Shri Balasubramaniam Venkataramani expressed his unwillingness to be reappointed. Upon his unwillingness to be reappointed and withdrawal by BSE Ltd. he ceases to be a shareholder director w.e.f 24^th April, 2017.

The Board has placed on record its appreciation of the valuable services rendered by Shri Rangachary Nambiar Iyengar, Dr. Ram Narain Nigam and Shri Tharmapuram Subramaniam Narayanasami, Smt. Anshula Kant, Smt. Jayshree Vyas and Shri Balasubramaniam Venkataramani during their tenure as directors of the company.

Statutory Auditors & Audit Report

M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai were last reappointed as Statutory Auditors of the company for the year 2016-2017 to hold office from the conclusion of the 18^th Annual General Meeting till the conclusion of the 19^th Annual General Meeting.

Considering the provisions of Section(s) 139, 141, 142, 143 and 144 of the Companies Act, 2013 read with Rule 5 & 6 of the Companies (Audit and Auditors) Rules, 2014, the Board of Directors based on recommendations of the Audit Committee considered and approved the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai (ICAI Firm Registration No. 117365W as Statutory Auditors of the Company who have expressed their willingness and confirmed their eligibility for being appointed as Statutory Auditors of the Company.

Accordingly, M/s Deloitte Haskins & Sells, Chartered Accountants, Mumbai (ICAI Firm Registration No. 117365W as Statutory Auditors of the Company will hold office from the conclusion of the 19 ^th Annual General Meeting till the conclusion of the 20^th consecutive Annual General Meeting for financial year 2017-2018 subject to approval of shareholders.

There are no qualifications, reservations or adverse remarks or disclaimer made by M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, Statutory Auditors in their report .

Internal Auditors

In terms of the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, the Company had appointed M/s Sarda & Pareek, Chartered Accountants as Internal Auditors& Concurrent Auditors of the Company for the period 2014-15 to 2016-2017. The Board of Directors have approved the appointment of M/s. Mittal & Associates, Chartered Accountants as Internal Auditors and Concurrent Auditors of the Company for the financial year 2017- 2018.

There are no qualifications, reservations or adverse remarks or disclaimer made by the Internal Auditors and Concurrent Auditors in their report.

Secretarial Auditors and Secretarial Audit Report

M/s. Pramod Shah & Associates, Practicing Company Secretaries, Mumbai have been appointed as Secretarial Auditor of the Company for the period 2016-17 to 2017-2018. A copy of the secretarial audit report issued in form MR-3 by M/s Pramod Shah & Associates, Secretarial Auditors is enclosed as an annexure to this report.

There are no qualifications, reservations or adverse remarks or disclaimer made by the Secretarial Auditors in their report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Considering the nature of operations of your company, the provisions of Section 134(3) (m) of the Companies Act, 2013 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to information to be furnished on conservation of energy and technology absorption are not applicable. The company has, however, used information technology extensively in its operations.

Other Green Initiatives

The company provides securities depository services and depository related services through robust IT infrastructure. Company has even advised its Depository Participants to restrict the use of paper, go paperless wherever possible and to send to those clients statement of accounts electronically who have opted to receive statements electronically by email. The company is popularizing execution of instructions electronically by the Depository Participants as a green initiative.

The company is encouraging corporates to conduct e-Voting in general meetings as well as voting on certain resolutions electronically by providing them a system on cost effective basis. The company is also sending notices, annual reports on behalf of corporates to their investors. Filings are made by the companies electronically with CDSL using document manager.

Whenever the company purchases servers, storages and computer machines, it is ensured that they are energy-efficient products using safer materials and reducing the environmental impact of technology and design for recyclability.

The company entirely replaced traditional fluorescent tubes and Compact Fluorescent light fittings with environmental friendly, energy efficient, most economical and non-hazardous LED fittings.

Directors’ Responsibility Statement

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors reports that:

i) in preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided;

ii) accounting policies have been selected and applied consistently and the judgements and estimates made 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 o f the company for that period;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities;

iv) the annual accounts have been prepared on a going-concern basis.

v) internal financial controls to be followed by the company are laid down and that such internal financial controls are adequate and were operating effectively.

vi) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

The Independent Directors have given declaration under sub-section (6) of section 149 of the Companies Act, 2013 confirming that they satisfy the criteria of “independence”.

Implementation of Code of Corporate Governance

As per the SEBI (Depositories and Participants) (Amendment) Regulations, 2012, the disclosure requirements and corporate governance norms as specified for the listed companies mutatis mutandis are applicable to the depository. Your company has been, observing the Code of Corporate Governance by adopting most of the good corporate governance policies as under Schedule V, Regulation 34(3) and 53(f) of Securities Exchange Board of India (Listing Obligation & Disclosure Requirement) Regulation, 2015. The status of implementation of the Code of Corporate Governance is enclosed as Annexure B.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the year ended 31^st March, 2017 is enclosed as Annexure C.

Appointment of Directors

A brief resume of Shri Nehal Naleen Vora, the shareholder Director who retires by rotation and being re-appointed at the ensuing Annual General Meeting is enclosed as an Annexure D.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013, the Nomination and Remuneration/Compensation Committee and the Independent Directors have carried out separately an annual performance evaluation of its directors individually, the Board as a whole and its Committees and the Chairperson of the Company. The manner in which the evaluat ion has been carried out has been explained in the Corporate Governance Report.

Report by Internal Complaints Committee

As per The Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the Act) it is mandatory for every employer to constitute a Committee to be known as the ‘Internal Complaints Committee’. Accordingly, the Committee was constituted by Board and it meets periodically to review the complaints, if any, received from female employees.

During the year the Committee did not receive any complaints in this regard.

Particulars of Employees

Information as required under Rule (5) (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed to this report as Annexure E.

Human Resource Development

The company always recognized its Human assets as a critical resource essential for the growth of the company. It, therefore, accords high importance to human resource development and consciously endeavors to enhance the quality and competence of its employees across cadre s. It conducts induction programme for new entrants. Nominating employees for training at reputed institutions and for attending seminars in India and abroad in capital market related areas, particularly relating to depositories, has always been a part of human resource development programme of the company. Industrial relations during the year continued to be cordial.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT 9 is enclosed as Annexure F.

Acknowledgement

Your Directors place on record their sincere gratitude for the support, guidance and cooperation the company received from Ministry of Finance, SEBI and other regulatory agencies. The Directors also acknowledge with thanks the continued support of the BSE Ltd. the Promoter and the holding company, Beneficial Owners, Depository Participants, Stock Exchanges, Clearing Houses, Issuers, and Registrar and Transfer Agents. The Directors also express their appreciation for the unflinching dedication of the employees whose performance, professionalism and commitment for rendering high quality services to the clientele of the company has been commendable.

For and on behalf of the Board

Taruvai Subbayya Krishna Murthy

Place : Mumbai Chairman

Date : 24^th April, 2017 (DIN:00279767)

---

Mar 31, 2011

The Directors are pleased to present the Thirteenth Annual Report, along with Audited Statement of Accounts of your company for the year ended 31st March, 2011. Despite not so favorable capital market conditions your company has posted good performance, as evidenced by the financial highlights mentioned below.

Financial Highlights

Particulars Year ended Year ended 31th March, 31st March, 2011 2010 (Rs. million) (Rs. millions)

Income 1,020.91 1,013.85

Expenditure 281.07 284.86

Profit before Depreciation and Taxation 739.84 728.99

Depreciation 54.20 54.80

Profit before Tax 685.64 674.19

Provision for Taxation 205.00 205.81

Provision for Deferred Tax for the year 0.25 (6.81)

Profit after Tax 480.39 475.9

Balance brought forward 1,263.87 935.03

Tax Adjustment for earlier years - (0.12)

Profit available for appropriation 1,744.26 1,410.10

Proposed dividend 125.40 125.40

Tax (including surcharge and education cess on dividend) 20.34 20.83

Surplus carried to Balance Sheet 598.52 1,263.87

Your company registered a gross income of X 1,020.91 million, an increase of 0.70% over the previous year. The income from operations comprising of transaction charges, annual issuers fees, account maintenance charges, settlement charges, corporate action charges, etc. during the year under review increased from Rs. 812.12 million to Rs. 841.89 million, recording a growth of 3.67% over the year 2009-10. Profit Before Tax (PBT) for the financial year 2010-11 atRs. 685.64 million is higher than the previous year''s level of Rs. 674.19 million. Profit After Tax (PAT) amounted to Rs. 480.39 million as against the net profit of Rs. 475.19 million in the previous year, reflecting an increase in the bottom line by 1.09%.

Dividend

In view of the fact that net profit of the company has increased only marginally, your Directors recommend a dividend of Rs. 1.2 per share (12%) for the year ended 31st March, 2011 which is same as previous year. The dividend will be subject to dividend distribution tax to be paid by the company.

The Capital Market Environment

During the financial year 2010-11, the capital market witnessed significant volatility and remained range bound for most part of the year. The BSE-30 SENSEX which opened at 17,555 on 1st April, 2010, touched a high of 21,108 in November 2010 only to close at 19,445 on 31th March, 2011. The BSE Sensex, which registered a gain of 80.5% during the financial year 2009-10, could thus make only a gain of 10.76% for the whole financial year 2010-11. Subdued activities of Fills, inflation, hike in interest rates, rising crude prices, a series of scams and the impact of the tsunami on Japan were some of the major reasons for the Sensex to remain range bound during Financial Year 2010-11.

The performance of the primary market has also remained subdued during 2010-2011 although the resources mobilized were higher at Rs. 70,735 crores (Sources SEBI bulletin April 2011) as against Rs. 49,264 crores in the previous year primarily due to mega issues of public sector units such as Coal India, National Hydro Power Corporation, SBI, etc. Many IPO''s were not oversubscribed multiple times as it used to be earlier primarily due to low retail participation.

Operational Highlights

In spite of volatile market conditions and lack of enthusiasm on the part of investors towards new capital issues, your company could register a very good growth in its depository operations during the year 2010-11 .This is reflected in the increase in the number of Demat accounts opened, securities admitted and increase in the number of Depository Participants, as shown below. In order to sustain the growth in its depository business, your company continues to focus on enhancement of operational efficiency, up gradation of technology, user friendly approach and investor education through seminars.

Securities Admitted

Securities like equity shares, preference shares, mutual fund units, debt instruments, government securities, certificates of deposit, commercial papers and a host of other instruments are available for dematerialization by the investors. The number of such : securities increased from 13,444 on 31st March, 2010 to 26,291 on 31st March, 2011. Details of the securities admitted with CDSL are given below:

Securities Year ended Year ended Increase over 31th March, 31th March, the Previous 2011 2010 year (%)

Equity Shares 6,341 6,154 3.03

Debt Instruments 5,210 4,818 8.14

Other Securities 14,740 2,472 496.28

TOTAL 26,291 13,444 95.56

Position of Securities held in the System

The value and volume of the securities held with CDSL in the year under review as compared to the previous year are indicated below:

Holding of Year ended Year ended Increase over Securities 31st March, 31th March, the Previous 2011 2010 year (%)

Value (in million Rs.) 10,814,170 8,389,280 28.90%

Volume (in millions) 105,310 77,950 35.10%

Depository Participants, their Branches and Service Centers

During the year 2010-11, 47 new Depository Participants (DPs) were registered as compared to 38 new registrations in the previous financial year. With this, the number of Depository Participants holding valid Securities and Exchange Board of India (SEBI) registration certificates increased to 544. Consequently, investors spread across 28 States and 7 Union Territories can now avail of CDSL''s depository services. Further, investors have access to 10,052 DP service centers spread across 1,572 cities/towns as on 31st March, 2011 as against 8,590 DP service centers as on 31st March, 2010.

Beneficial Owner Accounts

During the year under review, 13.15 lakhs Beneficial Owner (BO) accounts were added, taking the total number of such accounts to 94.44 lakhs and the net BO accounts to 74.79 lakhs as on 31st March, 2011. The comparative figures of gross and net BO accounts as on 31st March, 2010 and 31st March, 2011 are given in the following table:



Year ended Year ended Increase over the 31st March,2011 31st March, Previous year''s cumulative figure 2010 Number Percentage (%)

(Gross) (Gross) 1,315,376 16,18 1,44,953 8,129,577

(Net) (Net) 4,179,3l6 6,585,746 893,570 13.57

Investor Awareness/Education Seminars

With a view to creating awareness of the dematerialisation facility and its benefits among the investors across the country your company conducted 220 Investors Awareness Programmers (IAPs) in the year 2010-11 some of which were in association with Bombay Stock Exchange Limited and some Depository Participants. During these IAPs, investors were educated on the procedures and precautions to be followed regarding their demat accounts,

on-line trading, ASBA, demat of open ended mutual funds etc. Many of these IAPs were conducted with the print and electronic media, which ensured a good turnout of investors and also excellent pre- event and post-event publicity of the IAPs. During the seminars information pamphlets in English, Hindi and other regional languages were distributed for the benefit of investors.

New Initiatives

- Access to Demat Account through GPRS enabled mobile phone

Your company has provided a facility which allows BOs to access their demat accounts through a GPRS enabled mobile phone. User is given following facilities:

- Portfolio valuation - Total portfolio valuation is displayed

- Balance for a selected ISIN - Free balance for the selected ISIN is displayed

- Balance View - Free balances for all the ISINs in the account are displayed

- Balance Transfer to a trusted account - On market/Normal pay-in/Early pay-in transfers to a trusted CM account (for easiest users)

- Easiest Transaction Inquiry

- Uploading during End of Day (EOD) process

In order to increase system uptime to users, your company has deployed facility to allow users to upload transaction files even when EOD of the system is under process, thereby extending the time window for uploading transaction files for processing.

- De-statementization /Res-tatementization of Mutual Fund Units

Your company has provided a facility to receive allotment of mutual fund units in same demat account as equity holding and also for redemption of mutual fund units through stock exchange platform. This has enabled an investor to get rid of multiple statements issued by different mutual funds with an option to have Statement of Account (SoA) if he chooses to do so at a later date.

- Single Report for transactions

Your company has provided a single report report download for different types of transactions which is generated multiple times during the day. This will obviate necessity of downloading multiple reports by DPs for updating of their back office. Number of reports required to be imported by DPs is reduced and back office updating is simplified.

Status of PAN compliance

As per SEBI directive, with effect from 1st January, 2007, existing account holders are not allowed to operate their demat accounts if they do not produce their PAN card for verification by the concerned Depository Participant. In accordance with these regulatory requirements, approximately 84,000 Demat accounts were in frozen status as on 31st March, 2010. CDSL continued its efforts to make the demat accounts PAN-compliant. Consequently, the total number of frozen accounts was reduced to 62,000 out of which 59,000 accounts have securities holding.

Regulatory Reforms

Transactions in Mutual Fund schemes through the Stock Exchange Infrastructure SEBI vide its communication to the stock exchanges and depositories instructed that settlement of the units of open ended mutual funds transacted through the order entry platform should be similar to settlement of equity transactions on the stock exchanges. Accordingly, your company launched Mutual Fund Phase 2 settlement with effect from 24th December, 2010.

Your company was instrumental in formulating the process of handling ELSS through the settlement system. This was started by the stock exchanges and the depositories with effect from 4th March 2011.

Corporate Social Responsibility (CSR)

As a part of its Corporate Social Responsibility, your company had decided to empower ''Physically Challenged'' and ''Under Privileged'' individuals by providing them training in capital market and depository operations and thereafter arrange for their suitable employment, to the extent possible.

Towards this Endeavour, your company launched its first CSR program called "COPE-CDSL''s Outreach Program For Empowerment" from 5* April, 2010 to 7th May, 2010. The selected candidates were imparted training on primary and secondary market operations, clearing and settlements, basics of mutual fund investments, compliance aspects, etc and a 5-day full-time training program on depository operations. The successful candidates were, thereafter, placed as ''Interns'' with some of the DPs of CDSL for a period of 3 months. In order to ensure that the DPs partnering CDSL in this initiative were not inconvenienced, a monthly stipend was paid to the candidates by CDSL.

After successful completion of the internship, all 18 candidates were successfully placed at various CDSL DPs. At a valedictory function held on 6th October, 2010, certificates were given to the candidates who successfully completed the training program as well as the internship. The entire cost of the training program, including internship, was borne by CDSL.

After the success of the COPE - I, your company has launched its COPE - II on 14th February, 2011.

New Projects: * Setting-up a Depository in Nepal

Your company had signed an agreement with Nepal Stock Exchange Limited (NEPSE) to set-up a depository and clearing and settlement system in Nepal, last year. The project is funded partly by Government of India. Your company has assisted Nepal in drafting their Central Securities Depository Regulations and Bye Laws. The depository system was successfully installed in Nepal on 31st March, 2011. The depository software was handed over by Indian Ambassador in Nepal to The Governor of Nepal Rashtra Bank on 31st March, 2011 at a function in Kathmandu.

- E-Certificates

In the year under review, your company has bid for the prestigious project of National Academic Depository. You will be pleased to know that your company has been selected by Central Board for Secondary Education (CBSE) to deploy the pilot project. The application development for the project has been done jointly with Infosys Technologies Ltd. The pilot is expected to be launched shortly.

Prevention of Money Laundering Act ,

The Prevention of Money Laundering Act, 2002 (PMLA) has been brought into force with effect from 1st July, 2005. CDSL and its Depository Participants fall under the category of ''intermediaries'' under Section 12 of the SEBI Act and hence, PMLA and the policy guidelines issued by the regulators to combat money laundering are applicable to their depository operations. As required under the guidelines, CDSL has designated Principal Officer and an Alternate Officer to ensure compliance with these guidelines. CDSL conducts training programmers and updates Depository Participants on compliance of the aforesaid guidelines.

Subsidiary of CDSL

CDSL Ventures Limited (CVL), the wholly owned subsidiary of your company, earned an income of Rs. 897.94 lakhs, for the financial year 2010-11 as against Rs. 328.41 lakhs in the previous year. Mandatory requirement of KYC norms for all investors in mutual funds irrespective of amount of investment has helped strengthen top line of CVL.

Ministry of Corporate Affairs has granted a general exemption to companies from complying with the provision of Section 212(8) of the Companies Act, 1956 pertaining to filing of separate financial statements for each subsidiary, subject to fulfillment of certain conditions. Accordingly, your company has presented the annual report with stand alone financial results of your company and the consolidated financial statements duly audited by the Statutory Auditors. The consolidated financial statements are prepared in strict compliance with applicable Accounting Standards. The annual accounts of the subsidiary company and the related detailed information is available to shareholders of the holding company i.e. CDSL and subsidiary company at any point of time. The annual accounts of the subsidiary company are also kept for inspection by any shareholder at the Registered office of the holding company and of the subsidiary company.

Ownership Pattern

As at the end of the year under review, the shareholding pattern of your company is as under:

Category of shareholders Equity Share Percentage Capital of (Rs. in 000) shareholding

Banks 468,646 44.84

Stock Exchanges 576,346 55.16

Others 8 Negligible

Total 1,045,000 100.00

Details of the equity shares held by the shareholders of the company are given in Annex A to the Directors'' Report.

Fixed Deposits

Your company has not accepted/renewed any deposits within the meaning of Section 58A of the Companies Act, 1956 and the Rules made there under.

Directors

During the year under review, Shri N. Rangachary, who had been appointed as director on 7th July, 2010, was appointed as Chairman of

your Company on 16th August, 2010. He is an independent director and non-executive Chairman of the company. Shri L. P. Aggarwal sponsor director of BSE Limited resigned with effect from 16th September, 2010. The Board has placed on record its appreciation of the valuable services rendered by Shri L. P. Aggarwal during his tenure as director of the company.

Shri Madhu Kannan and Shri A. D. M. Chavali retire by rotation at the Thirteenth Annual General Meeting and are eligible for re-appointment.

Auditors

M/s. M. P. Chitale & Co., Statutory Auditors of your company, retire at the Thirteenth Annual General Meeting and are eligible for re-appointment. The Auditors have furnished a certificate to the effect that their appointment, if made, would be in accordance with the limit specified under Section 224(IB) of the Companies Act, I9S6. Their appointment as Statutory Auditors of the company is required to be made by a Ordinary Resolution pursuant to Section 224A of the said Act.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Considering the nature of operations of our company, the provisions of Section 217( I )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to information to be furnished on conservation of energy and technology absorption are not applicable. The company has, however, used information technology extensively in its operations.

Details of foreign exchange earnings and outgo during the year under review are as under:



Particulars Year ended Year ended 31st March, 31st March, 2011 2010 (Rs. million) (Rs. in millions)

Earnings Nil Nil

Outgo

Travel expenses 1.47 1.04

Others 0.27 1.11

TOTAL 1.74 2.15



Directors Responsibility Statement

Pursuant to Section 2I7(2AA) of the Companies Act, 1956, the Board of Directors reports that:

(i) in preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided;

(ii) accounting policies have been selected and applied consistently and the judgments and estimates made 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 or loss of the company for that period;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities; and

(iv) the annual accounts have been prepared on a going-concern basis.

Implementation of Code of Corporate Governance

Code of Corporate Governance prescribed in the listing agreement of Stock Exchange is not applicable to your company since it is not listed on any stock exchange. However, it has voluntarily adopted most of good corporate governance policies. The status of implementation of the Code of Corporate Governance is given in Annex A. Our company has also constituted Nomination Committee as per the recommendation made in the ''Corporate Governance-Voluntary Guidelines 2009'', issued by the Ministry of Corporate Affairs.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the year ended 31st March, 2011 is attached as Annex B.

Appointment of Directors

A brief resume of each director who is retiring and is eligible for re-appointment at the ensuing Annual General Meeting is given in Annex C.

Particulars of Employees

Information as required under Section 2I7(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, is enclosed to this report.

Human Resource Development

Our company recognizes the value of its human assets as a critical resource. The company, therefore, continues to accord high importance to human resource development and consciously endeavors to enhance the quality and competence of its employees across cadres. It conducts induction programmers for new entrants. Nominating employees for training at reputed institutions and for attending seminars in India and abroad in capital market related areas, particularly relating to depositories, has always been a part of human resource development programmed of the company. During the year under review the company organized programmers on effective communication skills, IT products and nominated for training programmers conducted by DTCC, USA and Asia Pacific CSD groups. Industrial relations during the year continued to be cordial.

Acknowledgement

Your Directors place on record their sincere gratitude for the support, guidance and cooperation the company has received from Ministry of Finance, SEBI and other regulatory agencies. The Directors also acknowledge with thanks the continuing support of the Beneficial Owners, Depository Participants, Stock Exchanges and Clearing Houses. The Directors also express their appreciation for the dedicated services of the employees whose performance, professionalism and strong commitment for rendering high quality services to the clientele of the company has been commendable. For and on behalf of the Board

N. Rangachary

Chairman

Place : Mumbai

Date : 26th April, 2011

---

Mar 31, 2010

The Directors have pleasure in presenting the Twelfth Annual Report, along with Audited Statement of Accounts of your company for the year ended 31st March, 2010. The company has posted impressive performance, as evidenced by the financial highlights mentioned below.

Financial Highlights Particulars Year ended Year ended 31st March, 2010 31st March, 2009 (Rs. million) (Rs. million)

Income 1,013.85 754.39

Expenditure 284.86 249.02

Profit before Depreciation and Taxation 728.99 505.37

Depreciation 54.80 39.64

Profit before Tax 674.19 465.73

Provision for Taxation 205.81 127.89

Provision for Deferred Tax for the year (6.81) (2.37)

Profit after Tax 475.19 340.21

Balance brought forward 935.03 717.08

Tax Adjustment for earlier years (0.12) 0.00

Profit available for appropriation 1,410.10 1,057.29

Transfer to Beneficial Owners Protection

Reserve - -

Proposed dividend 125.40 104.50

Tax (including surcharge and education cess on dividend) 20.83 17.76

Surplus carried to Balance Sheet 1,263.87 935.03



Your company registered an income of Rs. 1,013.85 million, an increase of 34.39% over the previous year. The income from operations comprising of transaction charges, annual issuers fees, account maintenance charges, settlement charges, corporate action charges, etc. during the year under review increased from Rs. 585.25 million to Rs. 812.12 million, recording a growth of 38.76% over the year 2008-09. Other income comprising of interest on fixed deposits, income from mutual funds, etc. increased from Rs. 169.13 million to Rs. 201.74 million registering a growth of 19.28%. Profit Before Tax (PBT) for the financial year 2009- 10 at Rs. 674.19 million is higher than the previous years level of Rs. 465.73 million. Profit After Tax (PAT) amounted to Rs. 475.19 million as against the net profit of Rs. 340.20 million in the previous year, reflecting an increase in the bottom-line by 39.68%.

Dividend

Keeping in view the robust performance your Directors recommend a dividend of Rs. 1.20 per share (12%) for the year ended 31st March, 2010 as against a dividend of Re. 1 per share (10%) paid for the previous year. The dividend will be subject to dividend distribution tax to be paid by the company.

The Capital Market Environment

During the financial year 2009-10, the capital market witnessed significant buoyancy and remained vibrant for most part of the year. The BSE-30 SENSEX jumped from 9,633 on 1st April, 2009 to 17,527 on 31st March, 2010. After registering a decline of 38% in financial year 2008-09, the BSE Sensex gained 80.5% during the financial year 2009-10. Foreign Institutional Investors who were net sellers in the financial year 2008-09 returned with renewed vigor and were net purchasers in equities. Strong foreign fund inflows, robust economic growth and impressive corporate earnings were the major drivers behind the buoyancy in the stock market since April 2009. The performance of the primary market also improved substantially as compared to the previous year and witnessed an upsurge in public equity offerings which mobilized resources aggregating to Rs. 49,264 crores as against Rs. 3,582 crores in 2008-09. However, participation by retail investors was subdued and therefore many IPOs were not oversubscribed multiple times as it used to be earlier. The financial year 2010-11 has commenced on a positive note. Fund flows and risk appetite remain strong so far. With progressive globalization of the Indian economy, the domestic capital market has shown a significant correlation with the developed markets.

Operational Highlights

Despite the investors apathy towards new issues for mobilization of capital, your company could register a reasonable growth in its depository operations during the year 2009-10. This is reflected in the increase in the number of demat accounts opened, securities admitted and increase in the number of depository participants, as detailed below. In order to sustain the growth in its depository business the company continues to focus on enhancement of operational efficiency, upgradation of technology, user friendly approach and investor awareness education through seminars.

Admission of Securities

The number of securities available for dematerialisation during the year increased from 11,361 on 31st March, 2009 to 13,444 on 31st March, 2010. Equity shares, preference shares, debt instruments, government securities, certificates of deposit, commercial papers and a host of other instruments are available for dematerialization by the investors. Details of the securities admitted with CDSL are given below:

Securities Year ended Year ended Increase over 31st March, 31st March, the previous year 2010 2009 (%)

Equity Shares 6,154 6,213 (0.94)

Debt Instruments 4,818 4,432 8.71

Other Securities 2,472 716 245.25

Total 13,444 11,361 18.33

Holding of Dematerialized Securities

The value and volume of the securities held with CDSL in the year under review as compared to the previous year are indicated below:

Holding of Securities Year ended Year ended Increase over 31st March, 31st March, the previous year 2010 2009 (%)

Value (in million Rs.) 8,389,280 4,594,480 82.59

Volume (in million) 77,950 70,810 10.08

Depository Participants and their Branches

During the year 2009-10, 38 new depository participants (DPs) were registered as compared to 51 new registrations in the previous financial year. With this, the number of depository participants holding valid Securities and Exchange Board of India (SEBI) registration certificates increased to 497 after taking into account the withdrawal / expiry /cancellation of the certificates of registration of 9 depository participants during the year. Consequently, investors spread across 23 States and one Union Territory can now avail of CDSLs depository services.

Beneficial Owner Accounts

During the year under review, 13.74 lakh Beneficial Owner (BO) accounts were added, taking the total number of such accounts to 81.30 lakhs and the net outstanding number of BO accounts to 66.20 lakhs as on 31st March, 2010. The comparative figures of gross and net BO accounts as on 31st March, 2010 and 31st March, 2009 are given in the following table:

Year ended Year ended Increase over the previous years 31st March, 2010 31st March, 2009 cumulative figure

Number Percentage

(Gross) (Gross)

8,129,577 6,754,840 1,374,737 20.35

(Net) (Net)

6,585,746 5,527,479 1,058,267 19.15

Investor Awareness Education Seminars

As in the past, your company conducted several Investor Awareness Programmes (IAPs) in 2009-10 with a view to creating awareness of the dematerialisation facility and its benefits among the investors across the country. During these IAPs, investors are informed about the procedures and precautions to be followed regarding their demat accounts. During the financial year 2009-10, your company has conducted 90 such IAPs across the country. During the seminars, booklets such as Investors Guide and Q & A - Demat the CDSL Way in English, Hindi, Marathi and Gujarati are also distributed for the benefit of investors.

Hardware, Software and Network Enhancements

In order to enable your company to provide more efficient and uninterrupted services to its customers, it has upgraded its hardware including servers and storages having latest technology. The operating systems are also upgraded to ensure better performance and security.

To increase the scope of functionalities as per the market requirements your company has introduced additional functionalities such as uploads by clearing members through "Easiest" system. As a risk management measure, it has also introduced SMS alerts to the DPs for compliance related matters and to the demat account holders for debit and credit transactions. Further, the network for system to system traffic between the main site and DR site has been re-designed.

Business Continuity and Disaster Recovery Enhancements

- Data Replications Automation

In order to ensure the business continuity and speedy disaster recovery, your company has deployed data replication facilities supported by Oracle and ECM2. Data replication through these softwares is achieved in an automated manner and with assured data integrity. This has enabled your company to switch over the application to the Disaster Recovery site within a very short span of time in case of contingencies.

- Long Distance Disaster Recovery Site (DRS)

Your company has established a long distance DRS at a state of the art Data Centre located at a different seismic zone. The Data Centre and DRS are operational since 1st December, 2009 and the facilities are put to use at regular intervals by shifting the operations to DRS.

- Business Continuity Centre

Your company has also established its Business Continuity Centre from where operations at main site as well as operations at DRS can be carried out. The said centre is an alternate site for operations where a part of operating staff reports for operations on regular basis. At this centre the provision of infrastructure for the entire operations of production system is made in case the main site is not available to the operating staff.

Status of PAN compliance

As per SEBI directive, on or after 1st April, 2006, all new accounts had to be opened by depository participants only after obtaining a copy of PAN card and verification of the same on the database of Income Tax Department. SEBI had also directed that with effect from 1st January, 2007, existing account holders would not be able to operate their demat accounts in case they do not produce their PAN card for verification by the concerned depository participant. In accordance with these regulatory requirements, approximately 99,000 demat accounts were in frozen status as on 31st March, 2009 out of which approximately 95,000 contained holdings of securities. CDSL continued its efforts to make the demat accounts PAN-compliant. Consequently, as on 31st March, 2010, the number of demat accounts suspended for debit transactions was reduced to approximately 84,000.

Registration of CDSLs Beneficial Owners Protection Fund (CDSLs BOPF) as a Public Charitable Trust

Your company constituted BOPF on 30th September, 2004 with the objective, interalia, to provide monetary relief and/or compensate the loss caused to the beneficial owners (BOs) by wrongful act, negligence or default of CDSL and its depository participants or any of their employees and also to take measures to protect the interest of the BOs. The Fund was granted recognition as a Public Trust by the Deputy Charity Commissioner, Greater Mumbai Region on 2nd January, 2010.

Regulatory reforms

- Transactions in Mutual Fund schemes through the Stock Exchange Infrastructure

SEBI vide its circular dated 13th November, 2009 allowed purchase and redemption of units of open ended Mutual Fund schemes through the Stock Exchange infrastructure. Accordingly, NSE and BSE launched platforms for mutual fund transactions from 30th November, 2009 and 4th December, 2009 respectively. Your company has facilitated such transactions by admitting units of various Mutual Fund schemes. Presently, CDSL has admitted 355 mutual fund schemes of 27 Mutual Funds.

- Interest Rate Futures (IRF)

A new product Interest Rate Futures (IRF) was introduced by National Stock Exchange in July 2009 for settlement of transactions in government securities. The first payin and payout of government securities was conducted in CDSL in December 2009 and the settlement process is being done on a regular basis.

- Mandatory Nomination

SEBI has directed that all demat accounts held by resident individuals, non resident individuals or foreign individuals irrespective of the number of account holders should mandatorily nominate an individual. If the demat account holders do not wish to nominate any individual, it should be explicitly stated that nomination is not required. The DP in turn is required to mark the nomination or the No nomination in the nomination register.

- SMS mandatory for demat accounts operated by Power of Attorney holders

SEBI has directed that updation of mobile number is mandatory for all the demat accounts where Power of Attorney has been given. Whenever any debit transaction is executed from such demat accounts, SMS should be sent to the concerned account holders.

- Corporate Bond Market

SEBI has directed that all transactions in listed corporate bonds of the value of Rs. 1,00,000 or above, are required to be reported to the corporate bond reporting platform. For Reserve Bank of India & SEBI mandated entities, settlement of transactions in corporate bonds, should necessarily be through Clearing Corporation of the exchanges. Settlement facility is provided for listed, proposed to be listed and unlisted corporate bonds. The stock exchanges have given the participants an option of delivering the same, depending on settlement type, on T day or T+1 day or T+2 day. In the case of Bombay Stock Exchange, continuous settlement facility is provided to market participants, which runs on DVP1 basis, with no settlement guarantee.

- Unclaimed shares Account

SEBI has directed that all unallotted shares resulting from an issue should be kept in a separate demat account called Unclaimed Shares Account. Shares that remain unallotted pursuant to IPO, FPO, Rights, etc. are held in such accounts and distributed to the allottees as and when details of their demat accounts are received from them.

Corporate Social Responsibility (CSR)

In the current scenario, unemployment is a key problem afflicting the youth, particularly under-privileged and physically-challenged individuals. Being a responsible corporate entity, your company, as a part of its corporate social responsibility, has decided to provide training in capital market and depository operations to candidates falling in this category and thereafter arrange for them suitable employment, to the extent possible. For this purpose your company identifies under-privileged and physically challenged individuals with the assistance of Pratham, a well known Non-Governmental Organisation.

Towards this endeavour, your company in association with BSEs Training Institute has designed a specialized, practical, hands-on one-month training programme on stock brokers back office operations. The selected candidates are imparted training on primary and secondary market operations, clearing and settlements, basics of mutual fund investments, compliance aspects, etc. and also a 5-day full-time training programme on depository operations. The participants are placed as interns with depository participants at Mumbai, to provide an opportunity to learn depository and broker back office operations for a period of three months. The entire cost of the training programme, including internship, is borne by CDSL.

Memorandum of Understanding

During the year under review, your company entered into a Memorandum of Understanding (MoU) with the Bursa Malaysia Depository Sdn. Bhd. (Bursa Malaysia Depository) to develop co-operative relationship for sharing information, exchange of views, providing training, etc. in depository related areas.

Setting-up a Depository in Nepal

Your company has signed an agreement with Nepal Stock Exchange Limited (NEPSE) to set- up a depository and clearing and settlement system in Nepal. Under the terms of the agreement, CDSL shall provide to NEPSE technical assistance for setting up depository and clearing and settlement system. Your company will also provide assistance in finalising draft laws, regulations, bye-laws and operating instructions, preparing business requirement specifications, evaluation and selection of vendors for hardware, networking, training, etc. The project which is being partly financed by the Government of India is under way.

Prevention of Money Laundering Act

The Prevention of Money Laundering Act, 2002 (PMLA) has been brought into force with effect from 1st July, 2005. CDSL and its depository participants fall under the category of intermediaries under section 12 of the SEBI Act and hence, PMLA and the policy guidelines issued by the regulators to combat money laundering are applicable to their depository operations. As required under the guidelines, CDSL has designated Principal Officer and an alternate officer to ensure compliance with these guidelines. CDSL conducts training programmes and updates depository participants on compliance of the aforesaid guidelines.

Subsidiary of CDSL

CDSL Ventures Limited, the wholly owned subsidiary of your company, earned a profit before depreciation and taxation of Rs. 131.27 lakhs and booked a profit of Rs. 119.46 lakhs for the financial year 2009 - 10 as against the loss of Rs. 65.72 lakhs registered in the previous year. Recovery of annual maintenance charges for KYC records verified by Mutual Fund Houses and reduction in operating expenses and depreciation were the main factors that led to the turnaround. The subsidiary is expected to improve its financial performance further in the next financial year.

Ownership Pattern of CDSL

As at the end of the year under review, the shareholding pattern of your company was as under:

Category of shareholders Equity Share Capital Percentage of (Rs. in 000) shareholding

Banks 652,446 62.43

Stock Exchanges 392,546 37.57

Others 8 0.00

Total 1,045,000 100.00

Details of the equity shares held by the shareholders of the company are given in Annexure A to the Directors Report. Bombay Stock Exchange Limited has recently increased its equity stake in CDSL from 36.61% to 54.20%. Your company has therefore become the subsidiary of Bombay Stock Exchange Limited.

Fixed Deposits

Your company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the Rules made thereunder.

Directors

During the year under review, Shri Madhu Kannan, Shri Ashishkumar Chauhan and Mr. James E. Shapiro nominated as sponsor directors by Bombay Stock Exchange Limited (BSE) were appointed on 12th June, 2009, 29th March, 2010 and 16th July, 2010 respectively. Shri N. Rangachary and Shri T. S. Narayanasami were appointed as Independent Directors on 7th July, 2010. Shri Ashishkumar Chauhan, Shri N. Rangachary, Shri T. S. Narayanasami and M r. James E. Shapiro will hold office till commencement of the Twelfth Annual General Meeting.

Shri A. P. Ghugal, nominated as sponsor director by Bank of India, resigned from the directorship on 15th September, 2009. Shri A. R. Kuppuswamy, nominated in place of Shri Ghugal by Bank of India was appointed as a sponsor director on 21st November, 2009. Shri A. R. Kuppuswamy has resigned with effect from 30th June, 2010. Shri Prakash R. Kacholia, nominee of Bombay Stock Exchange Ltd was appointed as director on 12th June, 2009. He ceased to be a director with effect from 9th July, 2010.

The Board has placed on record its appreciation of the valuable services rendered by Shri A. P. Ghugal, Shri A. R. Kuppuswamy and Shri Prakash R. Kacholia during their tenure as directors of the company.

The company has received necessary notices under Section 257 of the Companies Act, 1956 from the shareholders proposing the candidature of Shri Ashishkumar Chauhan, Shri N. Rangachary, Shri T. S. Narayanasami and Mr. James E. Shapiro. Shri Anjan Barua and Shri M. R. Mayya retire by rotation at the Twelfth Annual General Meeting. Shri M. R. Mayya is not seeking his reappointment. The Board has placed on record its appreciation of the valuable services rendered by Shri M. R. Mayya. Shri Anjan Barua being eligible, offers himself for re-appointment as director of the company. The resolutions in this regard form part of the notice of the Twelfth Annual General Meeting and are recommended for approval by the members.

Auditors

M/s. M. P. Chitale & Co., Statutory Auditors of your company, retire at the Twelfth Annual General Meeting and are eligible for re-appointment. The Auditors have furnished a certificate to the effect that their appointment, if made, would be in accordance with the limit specified under Section 224(1B) of the Companies Act, 1956. Their appointment as Statutory Auditors of the company is required to be made by a Special Resolution pursuant to Section 224A of the said Act.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Considering the nature of operations of your company, the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to information to be furnished on conservation of energy and technology absorption are not applicable. The company has, however, used information technology extensively in its operations.

Details of foreign exchange earnings and outgo during the year under review are as under:

Particulars Year ended Year ended 31st March, 2010 31st March, 2009 (Rs. in million) (Rs. in million)

Earnings Nil Nil

Outgo

Travel expenses 1.04 1.38

Others 1.11 1.61

Total 2.15 2.99

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of Directors reports that:

i) in preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided;

ii) accounting policies have been selected and applied consistently and the judgements and estimates made 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 or loss of the company for that period;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities; and

iv) the annual accounts have been prepared on a going-concern basis.

Implementation of Code of Corporate Governance

Being an unlisted company, the SEBI Code of Corporate Governance is not applicable to your company. However, it has voluntarily decided to adopt the same. The status of implementation of the Code of Corporate Governance is given in Annexure A. Your company has also constituted Nomination Committee as per the recommendation made in the Corporate Governance-Voluntary Guidelines 2009, issued by the Ministry of Corporate Affairs.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the year ended 31st March, 2010 is attached as Annexure B.

Appointment of Directors

A brief resume of each director who is retiring and is eligible for re-appointment at the ensuing Annual General Meeting is given in Annexure C.

Particulars of Employees

Information as required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, is furnished in Annexure D.

Human Resource Development

Human assets are a critical resource of your company. Therefore, the company accords high importance to human resource development and consciously endeavors to enhance the quality and competence of its employees across cadres. It conducts induction programmes for new entrants. Nominating employees for training at reputed institutions and for attending seminars in India and abroad in capital market related areas, particularly relating to depositories, has always been a part of human resource development programme of the company. During the year under review the company organized a two day programme on team work, customer satisfaction, relationship building and management orientation for its employees

Acknowledgement

Your Directors express their gratitude for the support, guidance and co-operation the company has received from SEBI and other regulatory authorities and place on record their appreciation for the continuing support of the Beneficial Owners, Depository Participants, Stock Exchanges and Clearing Houses. The Directors also express their deep sense of appreciation for the dedicated and committed team of employees for their laudable work ethics, excellent performance, professionalism and strong commitment for rendering high quality services to the clientele of the company. This has contributed immensely to the steady and healthy growth in the business operations of the company.

For and on behalf of the Board

Sd/-

Place: Mumbai S. S. Thakur

Date : 16th July, 2010 Chairman

---

Mar 31, 2009

The Directors have pleasure in presenting the Eleventh Annual Report, along with Audited Statement of Accounts of your company for the year ended 31st March, 2009. The company has despite adverse capital market conditions posted satisfactory performance, as evidenced by the financial highlights mentioned below.

Financial Highlights

Particulars Year ended Year ended 31st March,2009 31st March,2008 Rs.million Rs.million

Income 753.21 784.40 Expenditure 247.84 215.75 Profit before Depreciation and Taxation 505.37 568.65 Depreciation 39.64 50.20 Profit before Tax 465.73 518.45 Provision for Taxation 127.89 163.94 Provision for Deferred Tax for the year (2.37) (13.03) Profit after Tax 340.21 367.54 Balance brought forward 717.08 477.60 Profit available for appropriation 1057.29 845.14 Transfer to Beneficial Owners Protection Reserve - 5.80 Proposed dividend 104.50 104.50 Tax (including surcharge and education cess on dividend) 17.76 17.76 Surplus carried to Balance Sheet 935.03 717.08

Your company registered an income of Rs. 753.21 million. The income from operations comprising of transaction charges, annual issuers fees, account maintenance charges, settlement charges, corporate action charges, etc. during the year under review decreased from Rs. 650.52 million to Rs. 585.25 million, recording a fall of 10.03 % over the year 2007-08.

However, other income comprising of interest on fixed deposits, income from mutual funds, etc. increased from Rs. 133.87 million to Rs. 167.95 million registering a growth of 25.45%.Profit Before Tax (PBT) for the financial year 2008-09 at Rs. 465.73 million was lower than the previous years level of Rs. 518.45 million. Profit After Tax (PAT) amounted to Rs. 340.20 million as against the net profit of Rs. 367.54 million in the previous year, reflecting reduction in the bottom-line by 7.43%.

Dividend

Your Directors recommend a dividend of Re.1/- per share for the year ended 31st March, 2009. As a stable dividend policy it is proposed to maintain the same rate of dividend as in the previous year, notwithstanding lower net profit for the year 2008 - 09. The dividend will be subject to dividend distribution tax to be paid by the company.

The Capital Market Environment

The turmoil in the global financial markets led to a sharp fall in Indian stock markets as reflected by a 37.90% decline in the bellwether BSE Sensex over the year, bringing an end to the spectacular four year bull run. The stock markets recorded new lows and the Sensex crashed to an intraday low of 7,697.39 on 27th October, 2008. The impact of the unprecedented global financial meltdown initiated by the US sub-prime crisis, massive repatriation of funds from India by Flls close to Rs. 50,000 crores and sharp drop in foreign fund in- flows were the major setbacks for the capital market in the year under review. The sheer scale of value destruction in a short span of time led to retail investors staying away from stock markets. The markets remained generally bearish throughout the year 2008-09 and the Sensex finally closed at 9,708.50.

The meltdown in stock markets also adversely impacted the performance of the primary market. The financial year 2008-09 recorded a sharp decline in the number of public issues which mobilized resources aggregating Rs. 2,082 crores as against Rs.54,511 crores in 2007-08 with rights issues also recording a sharp fall. The total capital raised during the year was just Rs. 14,720 crores as against Rs. 87,029 crores during the previous year.

Operational Highlights

Despite the meltdown in the global and Indian equity markets, your company could register a reasonable growth in its depository operations during the year 2008 - 09. This is reflected in the increase in the number of demat accounts opened, securities admitted and increase in the number of the depository participants, as detailed below. In order to sustain the growth in its depository business the company continues to focus on enhancement of operational efficiency, upgradation of technology, user friendly approach and investor awareness education through seminars.

Admission of Securities

The number of securities available for demat during the year increased from 10,763 on 31st March, 2008 to 11,361 on 31st March, 2009. Equity shares, preference shares, debt instruments, government securities, certificates of deposit, commercial papers and a host of other instruments are available for dematerialization by the investors. Details of the securities admitted with CDSL are given below:

Securites Year ended Year ended Increase over 31st March,2009 31st March,2008 the previous year %

Equity Shares 6,213 5,943 4.54 Debt Instruments 4,432 4,392 0.91 Other Securities 716 428 67.29 Total 11,361 10,763 5.56

Holding of Dematerialized Securities

The value and volume of the securities held with CDSL in the year under review as compared to the previous year are indicated below:

Holding of Securites Year ended Year ended Increase over 31st March,2009 31st March,2008 the previous year %

Value (in million Rs.) 4,594,480 5,966,070 (22.99) Volume (in million) 70,810 49,820 42.13

Depository Participants and their Branches

During the year 2008-09, 51 new depository participants (DPs) were registered as compared to 59 new registrations in the previous financial year. With this, the number of depository participants holding valid SEBI registration certificates increased to 468 after taking into account the withdrawal / expiry of the certificates of registration of 3 depository participants during the year. Consequently, investors from 123 cities spread across 23 States and one Union Territory can now avail of CDSLs depository services.

Beneficial Owner Accounts

During the year under review, 12.75 lakh Beneficial Owner (BO) accounts were added, taking the total number of such accounts to 67.55 lakhs and the net outstanding number of BO accounts to 55.27 lakhs at the end of the year. The comparative figures of gross and net BO accounts as on 31st March, 2009 and 31st March, 2008 are given in the following table:

Year ended Year ended Increase over the previous years 31st March,2009 31st March,2008 cumulative figure Number Percentage

(Gross) (Gross) 6,754,840 5,480,245 1,274,595 23.26% (Net) (Net) 5,527,479 4,798,222 729,257 15.20%

Investor Awareness Education Seminars

With a view to creating awareness amongst investors of the dematerialisation facility, and the rights and responsibilities of investors across the country, your company conducted several investor awareness programmes in 2008-09. CDSL officials explained the advantages of dematerialization, procedures to be followed and precautions to be taken by the investors in the form of DOs & DONTs. CDSL conducted 130 such investor awareness programmes, which received wide spread publicity in the print media and encouraging response from the investing public. Further, CDSL officials participated in television programmes on dematerialisation of securities. Your company also brought out a special edition of its bi-monthly newsletter "CDSL Infoline" in September 2008 with a focus on investor awareness.

Software Enhancements

CDSL has upgraded operating systems of the production servers for achieving compatibility with future technology and also upgraded its database storages with the latest technology. This has enabled the company to service its customers more efficiently, provide better performance and cater to higher volumes of transactions during peak periods. The company has introduced additional features in settlement module viz. settlement pocket for the clearing members for better management of their settlement obligations and stock lending / borrowing module.

Additional features in web-based facilities easi and easiest

Your company has deployed state-of-the-art technology for speedy processing of transactions and for ensuring business continuity. In pursuance of its aim of adding value to the services, the company has provided settlement pocket related reports for clearing members through easi / easiest system and auto easi registration facility to the investors opening demat accounts with CDSL. Both the internet facilities have gained further popularity during the year and are appreciated by users for their beneficial features in terms of customer convenience and protection.

Status of PAN compliance

As per SEBI directive, on or after 1st April, 2006, all new accounts had to be opened by Depository Participants only after obtaining copy of PAN card and verification of the same on IT database. SEBI had also directed that with effect from 1st January, 2007, existing account holders would not be able to operate their demat accounts in case they do not produce their PAN card for verification by the concerned Depository Participant. In accordance with these regulatory requirements, 3.34 lakh demat accounts were in frozen status as on 31st March, 2008 out of which 1.2 lakh accounts contained holdings of securities. All the remaining PAN non-compliant accounts with nil balances have been closed during the year under review. As regards the accounts with securities balances, CDSL continued its efforts to make the demat accounts PAN-compliant. Consequently, as on 31st March, 2009, the number of demat accounts suspended for debit was reduced to 0.95 lakh accounts.

Settlement Pockets

CDSL has introduced a new feature on 5th December, 2008 to enable the clearing members to hold securities settlement-wise in their settlement accounts. This will enable the clearing members to efficiently monitor and manage the settlements through Clearing Houses / Clearing Corporations.

Upload through easiest by Clearing Members having Power of Attorney

CDSL has introduced a facility to clearing members, who have obtained Power of Attorney (POA) from their clients to upload transactions through CDSLs web based facility easiest. This facility enables the clearing members who are registered for easiest to enter through easiest debit instructions on behalf of clients who may have accounts with any DP of CDSL. Currently, a clearing member who is desirous of uploading on-market debit instructions using POA, has to approach as many DPs with whom his clients are maintaining accounts and upload DP specific instructions. The new facility eases the process flow by obviating the need to coordinate with several DPs. No other transactions including inter depository transactions will be allowed to be entered on behalf of the investor by the clearing member. As the transactions are uploaded using e-token, the transactions will be secure. This facility will introduce ease of operations for the clearing members without the necessity of approaching the DP thereby ensuring speedier operations.

Multiple Power of Attorney

CDSL has provided additional functionalities in the POA module aimed at fulfilling the requirements of DPs and clearing members in order to facilitate smooth functioning. The features available in the module are creation of POA master ID, multiple POA for single BO account, capturing details of authorized signatories, auto cancellation of POA, multiple signature file types, etc.

Memorandum of Understanding

During the year under review, the company entered into Memorandum of Understanding (MoLI) with the Japan Securities Depository Center, Inc. and The National Depository Center (Russia) to develop co-operative relationship for sharing information, exchange of views, providing training, etc. in depository related areas.

Prevention of Money Laundering Act (PMLA)

In January 2006, SEBI had announced policy guidelines to comply with the provisions of Prevention of Money Laundering Act, 2002 (PMLA) which came into force from 1st July, 2005. CDSL has taken necessary action to comply with the said guidelines.

Subsidiary of CDSL

CDSL Ventures Limited, the wholly owned subsidiary of your company, earned a profit before depreciation and taxation of Rs 56.30 lakhs and booked a loss of Rs. 66.25 lakhs after providing for depreciation of Rs.122.50 lakhs in the year 2008 - 09. The progress of the subsidiarys maiden project relating to centralized record keeping of the identity of mutual fund investors, known as the "KYC Project", in terms of the volume of KYC documents got affected due to reduction in fresh investments in mutual funds caused by the slow down in the economy and fall in the capital market. However, the buoyancy in the capital market witnessed since the commencement of the current financial year is expected to enhance investments in mutual funds and the volume of KYC records, resulting in increased revenue earnings of the subsidiary. Your Directors consider the project as financially viable.

Ownership Pattern of CDSL

As at the end of the year under review, the shareholding pattern of your company was as under:

Category of shareholders Equity Share Capital Percentage of share (Rs. in 000) holding

Banks 652446 62.40 Stock Exchanges 392546 37.56 Others 8 0.04 Total 1045000 100.00

Details of the equity shares held by top ten shareholders of the company as on 31st March, 2009 are given in Annexure A to the Directors Report. Currently, the sponsors of CDSL collectively hold 96.14% of equity shares of the company.

Fixed Deposits

Your company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the Rules made thereunder.

Directors

During the year under review, Shri Ashok Kumar Rout, nominated as sponsor director by Bombay Stock Exchange Limited (BSE), resigned from the directorship and Shri L. P. Aggarwal, Chief Financial Officer of BSE was appointed as a sponsor director in his place on 23rd July, 2008. Shri L. P. Aggarwal will hold office till commencement of the Eleventh Annual General Meeting.

Shri Rajnikant Patel, nominated as sponsor director by Bombay Stock Exchange Limited (BSE), ceased to be sponsor director on the Board of CDSL with effect from 26th August, 2008 upon withdrawal of his nomination by BSE.

Shri Narendra Prasad, nominated as sponsor director by Bank of India, resigned from the directorship and Shri A. P. Ghugal, General Manager of the bank was appointed as a sponsor director in his place on 15th November, 2008. Shri A. P. Ghugal will hold office till commencement of the Eleventh Annual General Meeting.

Shri B. A. Prabhakar, nominated as sponsor director by Bank of Baroda, resigned from the directorship and Shri K. D. Lamba, Deputy General Manager (Treasury) of the bank was appointed as a sponsor director in his place on 15th November, 2008. Shri K. D. Lamba resigned as Director of the company with effect from 10th June, 2009.

Shri P. S. Reddy was appointed as whole-time director and designated as Executive Director for a period of 3 years with effect from 1st April, 2009 subject to the approval of members of the company in the Eleventh Annual General Meeting.

In terms of Article 108 of the Articles of Association of the company, Shri Siddharth Shah who was a director of a corporate member of Bombay Stock Exchange Ltd, and who was appointed on 9th May. 2006 on the Board of CDSL upon nomination by BSE, ceased to be the Director of the company on 8th May, 2009 on completion of his tenure of 3 years.

Shri Prakash Kacholia, nominated by BSE as sponsor director, was appointed as director on 12th June, 2009 in place of Shri Siddharth Shah. Shri Madhu Kannan, nominated by BSE as sponsor director was appointed on 12th June, 2009 in place of Shri Rajnikant Patel. Shri A. D. M. Chavali nominated as sponsor director by Bank of Batoda in place of Shri K. D. Lamba was appointed as director on 12th June, 2009. Shri Prakash Kacholia, Shri Madhu Kannan and Shri A. D. M. Chavali will hold office till commencement of the Eleventh Annual General Meeting.

The Board has placed on record its appreciation of the services rendered by Shri Ashok Kumar Rout. Shri Rajnikant Patel, Shri Narendra Prasad, Shri B. A. Prabhakar, Shri Siddharth Shah and Shri K. D. Lamba during their tenure as directors of the company.

The company has received necessary notices under Section 257 of the Companies Act, 1956 from shareholders proposing the candidature of Shri L. P. Aggarwal. Shri A. P. Ghugal and Shri P. S. Reddy. Similar notices in respect of Shri Prakash Kacholia, Shri Madhu Kannan and Shri A. D. M. Chavali for appointment as directors are awaited. Shri S. S. Thakur retires by rotation at the Eleventh Annual General Meeting and being eligible, offers himself for re-appointment as director of the company. The resolutions in this regard form part of the notice of the 11th Annual General Meeting and are recommended for approval by the members.

Auditors

Lodha St Co., Statutory Auditors of your company, retire at the Eleventh Annual General Meeting. They have been the statutory auditors of the company for the last 10 years. As a good corporate governance practice, your Directors recommend the appointment of M. P. Chitale & Co , Chartered Accountants in place of the retiring auditors. The new Auditors have furnished a certificate to the effect that their appointment, if made, would be in accordance with the limit specified under Section 224(1B) of the Companies Act, 1956. Their appointment as Statutory Auditors of the Company is required to be made by a Special Resolution pursuant to Section 224A of the said Act.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Considering the nature of operations of your company, the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to information to be furnished on conservation of energy and technology absorption are not applicable. The company has, however, used information technology extensively in its operations.

Details of foreign exchange earnings and outgo during the year under review are as under:

Particulars Year ended 31st March,2009 Year ended 31st March,2008 Rs.in million Rs.in million

Earnings Nil Nil Outgo Travel expenses 1.38 1.15 Others 1.61 0.25 Total 2.99 1.40

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of Directors report that:

i) in preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided;

ii) accounting policies have been selected and applied consistently and the judgements and estimates made 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 or loss of the company for that period;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities; and

iv) the annual accounts have been prepared on a going-concern basis.

Implementation of Code of Corporate Governance

Being an unlisted company, SEBI Code of Corporate Governance is not applicable to your company. However, it has voluntarily decided to adopt the same. The status of implementation of the Code of Corporate Governance is given in Annexure A.

Particulars of Employees

Information as required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, is furnished in Annexure D.

Human Resource Development

Human assets are a critical resource of your company. Therefore, the company accords high importance to human resource development and consciously endeavors to enhance the quality and competence of its employees across cadres. Nominating employees for training at reputed institutions and for attending seminars in India and abroad in capital market related areas, particularly relating to depositories, has always been a part of human resource development programme of the company. During the year under review the company organized a two day programme on "problem solving and decision making" by experts in the field of management to help its senior executives upgrade their managerial skills. A similar programme was also conducted for the middle management officers.

Acknowledgement

Your Directors express their gratitude for the support, guidance and co-operation the company has received from SEBI and other regulatory agencies and place on record their appreciation for the continuing support of the Beneficial Owners, Depository Participants, Stock Exchanges and Clearing Houses. The Directors also express their appreciation for the dedicated and committed team of employees which has rendered high quality services to the clientele of the company and has contributed to the steady and healthy growth in its business operations.

For and on behalf of the Board

Sd/- Mumbai S. S. Thakur 12th June, 2009 Chairman

---

Mar 31, 2008

The Directors are pleased to present the Tenth Annual Report, along with Audited Statement of Accounts of your company for the year ended 31st March, 2008. The Company has posted best ever results since inception, as evidenced by the financial highlights mentioned below.

Financial Highlights

Particulars Year ended Year ended

31st March 2008 31st March 2007

(Rs. million) (Rs. million)

Income 784.40 483.68 Expenditure 215.75 171.58 Profit before Depreciation and Taxation 568.65 312.10 Depreciation 50.20 48.92 Profit before Tax 518.45 263.18 Provision for Taxation 163.94 84.42 Provision for Deferred Tax for the year (13.03) (9.46) Profit after Tax 367.54 188.22 Tax adjustment of earlier years - 4.52 Balance brought forward 477.60 361.81 Profit available for appropriation 845.14 554.55 Transfer to Beneficial Owners Protection Reserve 5.80 3.60 Proposed dividend 104.50 62.70 Tax (including surcharge and education cess on dividend) 17.76 10.65 Surplus carried to Balance Sheet 717.08 477.60

The income from operations during the year increased from Rs. 377.05 million to Rs. 650.52 million, recording a growth of 72.53% over the year 2006-07. Income from transactions rose from Rs. 194.11 million to Rs. 374.13 million, registering an increase of 92.74% over the previous year. Profit Before Tax (PBT) for the financial year 2007-08 at Rs. 518.45 million was also significantly higher than the previous year’s level of Rs. 263.18 million. Profit After Tax (PAT) amounted to Rs. 367.54 million as against the net profit of Rs. 188.22 million in the previous year, reflecting an increase in the bottom-line by impressive 95.27%.

Dividend

In recognition of the robust financial performance, your Directors are pleased to recommend a dividend of 10% for the year ended 31st March, 2008 as against 6% for the previous year. The dividend will be subject to dividend distribution tax to be paid by the company.

The Capital Market Environment

The stock markets witnessed a sustained rise for the greater part of the year, and scaled new peaks. From sub-13,000 levels in April, 2007, the BSE Sensex went past 21,000 in intra-day trade in January 2008. Strong foreign fund inflows, robust economic growth, impressive corporate earnings and cut in interest rates in the U.S.A. were the major drivers of the Sensex since April 2007.

Retail involvement was also significant and contributed in large measure to the resurgence of trading volumes. However, after the January 2008 peak, the stock markets witnessed increased volatility and substantial decline in stock valuations and trading volumes. At the end of the year Sensex closed at 15,644.44.

The primary market too witnessed spectacular growth. The year 2007-08 recorded a strong upsurge in public issues which mobilized resources aggregating to Rs.54,511 crores as against Rs. 29,797 crores in 2006-07 and Rs. 23,294 crores in 2005-06.

Operational Highlights

Your company achieved sharp growth during the year in its depository operations. This is amply reflected in the increase in the numbers of demat accounts opened, securities admitted, securities dematerialized and the depository participants, as detailed below. Our focus on enhancement of operational efficiency, upgradation of technology, user friendly approach and investor awareness education through seminars has resulted in remarkable progress in the company’s depository business.

Admission of Securities

The number of securities admitted during the year increased from 10,454 as on 31st March, 2007 to 10,763 as on 31st March, 2008. Equity shares, preference shares, debt instruments, government securities, certificates of deposit, commercial papers and a host of other instruments are available for dematerialization by the investors. Details of the securities admitted with CDSL are given below:

Securities Year ended Year ended Increase over 31st March, 2008 31st March, 2007 the previous year (%)

Equity Shares 5943 5589 6.33 Debt Instruments 4392 4389 0.07 Other Securities 428 476 (10.08)

Total 10763 10454 2.96

Holding of Dematerialized Securities

The value and volume of the securities held with CDSL witnessed a substantial growth in the year under review as indicated below:

Securities Year ended Year ended Increase over 31st March, 2008 31st March, 2007 the previous year (%)

Value (in million Rs.) 5,966,070 2,938,650 103.02 Volume (in million) 49,820 31,250 59.42

Depository Participants and their Branches

During the year 2007-08, 59 new depository participants (DPs) were registered as compared to 53 new registrations in the previous financial year. With this, the number of depository participants holding valid SEBI registration certificates increased to 420 after taking into account the withdrawal / expiry of the certificates of registration of four depository participants during the year. Consequently, investors from 123 cities spread across 23 States and one Union Territory can now avail of CDSL’s depository services.

Beneficial Owner Accounts

During the year under review, 26.06 lakh Beneficial Owner (BO) accounts were added, taking the total number of accounts opened to 54.80 lakhs. The comparative figures of gross and net of BO accounts as on 31st March, 2008 and 31st March, 2007 are given in the following table:

Year ended Year ended Increase over the previous years cumulative figure 31st March, 2008 31st March, 2007 Number Percentage (Gross) (Gross) (Gross) (Gross)

5,480,245 2,873,508 2,606,737 90.72 (Net) (Net) (Net) (Net) 4,798,222 2,368,101 2,430,121 102.62

Securities Settled through CDSL System

During the year 2007-08, there has been significant growth both in the volume and value of securities settled through the CDSL system over the corresponding figures of the previous year. Details are given below:

Securities Year ended Year ended Difference over Settled 31st March, 2008 31st March, 2007 the previous year

Value (in million Rs.) 3,831,786 1,970,501 1,861,285 Volume (in million) 32,666 17,090 15,576

Connectivity with Stock Exchanges for Settlement of Securities

On-market transactions are settled through the clearing house of BSE viz. BOI Shareholding Ltd., (BOISL) and National Securities Clearing Corporation Ltd., (NSCCL), the clearing corporation of NSE.

Investor Awareness Education Seminars and Exhibitions

As in the past, your company conducted several investor programmes and seminars in 2007-08 with a view to creating awareness of the dematerialisation facility and its benefits among the investors across the country. CDSL conducted 78 such investor awareness programmes and two seminars. In addition, CDSL officials also participated in a television programme on dematerialisation of securities.

Software enhancements:

CDSL has enhanced the capacity of its production servers and data storages to cater to higher volumes of transaction loads during peak periods. It has upgraded its databases to the latest version and enhanced the processing speed of some of its vital processes like end of day, settlements, uploads, IPO and inter-depository transactions through software tuning. This has enabled your company to service its customers more efficiently and provide a larger time window for system usage.

Additional features in easi and easiest

Your company has deployed state-of-the-art technology for speedy processing of transactions and ensuring business continuity. In pursuance of its aim of adding value to the services, the company has provided easy access to corporate announcements through BSE to its easi / asiest users.

Both the internet facilities have gained further popularity during the year and are appreciated by users for their beneficial features in terms of customer convenience and protection. As on 31st March, 2008, CDSL had 81,191 demat account holders registered for easi and 8,805 users registered for asiest.

Introduction of SMS Alerts

CDSL has introduced SMS facility whereby demat accountholders who register for the service with their DPs, can receive messages via SMS of debit transactions and credit transactions arising from corporate actions and IPOs. The facility, titled ‘SMART’, is viewed as an informative and risk-management tool that has been well-received by DPs and demat accountholders alike.

Status of PAN compliance

As per SEBI directive verification of PAN cards by depository participants is compulsory in respect of all demat accounts opened on or after 1st April, 2006. SEBI has also directed that with effect from 1st January, 2007 existing account holders would not be able to operate their demat accounts in case they do not produce their PAN card for verification by the concerned depository participant. In accordance with these regulatory requirements, 6.07 lakh demat accounts were frozen on 1st January, 2007 out of which 2.61 lakh accounts contained holdings of securities.

CDSL has continued its efforts to make the demat accountholders PAN-compliant. Consequently, as on 31st March, 2008, the number of demat accounts suspended for debit was reduced to 3.34 lakh. Of these accounts, 1.2 lakh accounts contained holdings of securities.

Prevention Of Money Laundering Act (PMLA)

In January 2006, SEBI had announced policy guidelines to comply with the provisions of Prevention of Money Laundering Act, 2002 (PMLA) which came into force from 1st July, 2005. PMLA and the said policy guidelines are applicable both to CDSL and depository participants.

During the year, CDSL took the following steps in accordance with the advice of Financial Intelligence Unit - India (FIU-IND) of the Government of India to the depositories:

Reviewed the scope and quality of alerts and finalized revised criteria for generation of alerts that are being sent to DPs to enable them to identify suspicious transactions and report them to FIU-IND.

Provision has been made for disclosure of ‘Financial Status’ and Nature of Business’ of investors in the demat account opening form completed by them.

Provision has been made for disclosing “Consideration and Reasons / Purpose for off market transfers” in the delivery instruction slips used for such transfers.

Conducted awareness seminars jointly with BSE, NSE and NSDL for depository participants and brokers at Mumbai, New Delhi, Kolkata and Chennai, emphasizing the need for implementation of the anti-money laundering measures.

Memorandum of Understanding

During the period under review the company has entered into Memorandum of Understanding with Depository Trust and Clearing Corporation (USA), Korea Securities Depository (Seoul), Euroclear SA/NV (Brussels), Taiwan Depository and Clearing Corporation, National Depository Center (Russia) and Japan Securities Depository Center to develop co-operative relationship for sharing information, exchange of views, providing training facilities, etc. in depository related areas.

Subsidiary of CDSL

CDSL Ventures Limited, the wholly owned subsidiary of your company, has earned profit before depreciation and taxation of Rs. 78.12 lakhs and booked loss of Rs. 87.74 lakhs after providing for depreciation of Rs. 165.82 lakhs. Implemention of the subsidiary’s maiden project relating to centralized record keeping of the identity of mutual fund investors, known as the “KYC Project”, got delayed due to clarifications needed about the documents to be obtained for the KYC process. The project was re-launched on 1st February, 2008 and since then it has witnessed encouraging progress. The subsidiary is expected to register significant growth in its revenue earnings in the financial year ending March 2009.

SEBI Regulations on Shareholdings in Depositories

SEBI has notified on 17th March, 2008 Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2008 governing the shareholding pattern in depositories. The salient features of these regulations are as under:

a. The sponsor(s) shall, at all times, hold atleast 51% equity capital of a depository.

b. No person other than a sponsor, whether resident in India or not, shall at any time, either individually or together with persons acting in concert, hold more than 5% of the equity share capital in the depository.

c. The combined holding of all persons resident outside India in the equity share capital of the depository shall not exceed, at any time, 49% of the total equity share capital, subject further to the following:

(i) The combined holding of such persons acquired through the foreign direct investment route is not more than 26% of the total equity share capital at any time.

(ii) The combined holding of the foreign institutional investors is not more than 23% of the total equity share capital at any time.

(iii) No foreign institutional investor acquires shares of the depository otherwise than through the secondary market.

d. No foreign institutional investor shall have any representation on the Board of Directors of the depository.

Ownership Pattern of CDSL

As at the end of the year under review, the shareholding pattern of your company was as under:

Category of shareholders Equity Share Capital Percentage of (Rs. in ‘000) shareholding

Banks 652446 62.40 Stock Exchanges 392546 37.56 Others 8 0.04

Total 1045000 100.00

Details of the equity shares held by top ten shareholders of the company as on 31st March, 2008 are given in Annexure A to the Directors’ Report. Currently, the sponsors of CDSL collectively hold 96.14% of equity shares of the company. No person resident outside India holds any shares of CDSL at present.

Fixed Deposits

Your company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the Rules made thereunder.

Directors

During the year under review, Shri C. M. Vasudev, nominated as sponsor director by Bombay Stock Exchange Limited (BSE), resigned from the directorship and Shri Ashok Kumar Rout, Chief Operating Officer of BSE was appointed as a sponsor director in his place on 28th September, 2007. Shri Ashok Kumar Rout resigned with effect from 23rd May, 2008.

Shri Anil D. Parulkar, nominated as a sponsor director by Bank of Baroda, resigned from the directorship and Shri S. S. Mundra, General Manager (Treasury & Resource Management) of the bank was appointed as a sponsor director in his place on 28th September, 2007. Subsequently, Shri S. S. Mundra tendered his resignation and Shri B. A. Prabhakar, General Manager – Treasury Operations of the said bank was appointed as a sponsor director in his place on 18th March, 2008. Shri B. A. Prabhakar will hold office till the commencement of the ensuing Annual General Meeting.

Shri S. Sampath nominated as sponsor director by Bank of India resigned from the directorship and Shri Narendra Prasad, General Manager (Treasury) of the bank was appointed as a sponsor director in his place on 18th March, 2008. Shri Narendra Prasad will hold office till the commencement of the ensuing Annual General Meeting.

The Board has placed on record its appreciation of the services rendered by Shri C. M. Vasudev, Shri Ashok Kumar Rout, Shri Anil D. Parulkar, Shri S. S. Mundra and Shri S. Sampath during their tenure as directors of the company.

The company has received necessary notices under Section 257 of the Companies Act, 1956 from shareholders proposing the candidature of Shri B. A. Prabhakar and Shri Narendra Prasad for appointment as directors. Shri Rajnikant Patel and Shri Siddharth Shah retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment as director of the company. The resolutions in this regard form part of the notice of the 10th Annual General Meeting and are recommended for approval by the members.

Auditors

Lodha & Co., Statutory Auditors of your company, retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Auditors have furnished a certificate to the effect that their re-appointment, if made, would be in accordance with the limit specified under Section 224(1B) of the Companies Act, 1956. Their re-appointment is required to be made by a Special Resolution pursuant to Section 224A of the said Act.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Considering the nature of operations of your company, the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to information to be furnished on conservation of energy and technology absorption are not applicable. The company has, however, used information technology extensively in its operations.

Details of foreign exchange earnings and outgo during the year under review are as under:

Particulars Year ended Year ended 31st March, 2008 31st March, 2007 (Rs. in million) (Rs. in million)

Earnings Nil Nil Outgo Travel expenses 1.15 0.06 Others 0.25 0.06

Total 1.40 0.12

Directors’ Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of Directors report that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided;

ii) accounting policies have been selected and applied consistently and the judgements and estimates made 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 or loss of the company for that period;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities; and

iv) the annual accounts have been prepared on a going-concern basis.

Implementation of Code of Corporate Governance

Your company has voluntarily decided to adopt the SEBI Code of Corporate Governance, although the same is not applicable to it, being an unlisted company. The status of implementation of the Code of Corporate Governance is given in Annexure A.

Particulars of Employees

Information as required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, is furnished in Annexure D.

Human Resource Development

Your company recognizes the value of its human assets as a critical resource. The company, therefore, continues to accord high importance to human resource development and consciously endeavors to enhance the quality and competence of its employees across cadres. As part of the human resource development programme, the company nominates selected employees for training at reputed institutions and for attending seminars in India and abroad in capital market related areas.

Acknowledgement

Your Directors place on record their sincere gratitude for the support, guidance and co- operation CDSL has received from SEBI and other regulatory agencies. The Directors also acknowledge with thanks the continuing support of the Beneficial Owners, Depository Participants, Stock Exchanges and Clearing Houses. The Directors also express their appreciation for the dedicated services of the employees whose contribution in achieving steady and healthy growth in the business operations and earnings of the company is commendable.

For and on behalf of the Board

sd/- Mumbai S. S. Thakur 23rd May, 2008 Chairman

---

Mar 31, 2007

The Directors have great pleasure in presenting the Ninth Annual Report along with Audited Statement of Accounts of your company for the year ended 31st March, 2007. The Company has posted encouraging results and registered a healthy growth in all the spheres of its operations.

Financial Highlights

Particulars Year ended Year ended 31st March 2007 31st March 2006 (Rs.million) (Rs.million)

Income 483.68 393.80 Expenditure 171.58 124.53 Profit before Depreciation and Taxation 312.10 269.27 Depreciation 48.92 46.30 Profit before Tax 263.18 222.97 Provision for Taxation 84.42 76.66 Provision for Deferred Tax for the year (9.46) (5.11) Profit after Tax 188.22 151.42 Tax adjustment of earlier years 4.52 Nil Balance brought forward 361.81 212.21 Profit available for appropriation 554.55 363.63 Transfer to Beneficial Owners Pratection Reserve 3.60 1.81 Proposed dividend 62.70 Nil Tax (including surcharge and education cess on dividend) 10.65 Nil Surplus carried to Balance Sheet 477.60 361.82

The income from operations during the year increased from Rs. 316.32 million to Rs. 377.05 million, recording a growth of 19% over the year 2005-06. Income from transactions rose from Rs. 161.20 million to Rs. 194.1 2 million, thus registering a substantial increase of 20% over the previous year. Profit Before Tax (PBT) for the financial year 2006-07 at Rs. 263.1 8 million was also significantly higher than the previous years level of Rs. 222.97 million. Profit After Tax (PAT) amounted to Rs. 188.22 million as against Rs. 151.42 million, reflecting an increase of 25% over the previous year.

Dividend

Your Directors are pleased to recommend a maiden dividend of 6%, keeping in view the healthy growth in the companys earnings and profits.

The Capital Market Environment

The stock markets continued to be buoyant, albeit with a few corrections during the course of the year. The BSE Sensex powered past the 14,700 mark in the second week of February, 2007 before settling down at 13072 at the end of the financial year. Economic fundamentals remained strong. Flls and domestic mutual funds invested with renewed vigor in the stock markets. Retail involvement also did not lag behind and contributed in large measure to the resurgence of trading volumes. After the short-term slump in June-August 2006, a significant increase in trading volumes was witnessed, particularly during December 2006 to February 2007. The year 2006-07 also witnessed an upsurge in public equity offerings which mobilized resources aggregating to Rs. 24,993 crores as against the mobilization of Rs. 23,676 crores in 2005-06 and Rs. 21,432 crores in 2004-05. The equity mobilization in the year under review was in fact the highest in the history of the Indian capital market. Thus, the primary market has significantly enhanced the vibrancy of the capital market.

Operational Highlights

Your company has achieved significant growth in its depository operations. This is amply reflected from the increase in the number of demat accounts opened, securities admitted, securities dematerialized and increase in the number of depository participants, as detailed below. Our focus on enhancement of operational efficiency, upgradation of technology, user friendly approach and investor education through seminars has resulted in the progress of the depository business.

Admission of Securities

The number of securities admitted during the year increased from 10,168 as on 31st March, 2006 to 10,454 as on 31st March, 2007. Equity shares, preference shares, debt instruments, government securities, certificates of deposit, commercial papers and a host of other instruments are available for dematerialization by the investors. Details of the securities admitted with CDSL are as follows :

Securtites Year ended Year ended Increment over 31st March 2007 31st March 2006 the previous

Equity Shares 5589 5479 2.01 Debt Instruments 4389 4325 1.48 Other Securities 476 364 30.77 Total 10454 10168 2.81

Holding of Dematerialized Securities

The value and volume of the securities held with CDSL witnessed a substantial growth in the year under review as indicated below:

Holding of Year ended Year ended Incerement over Securites 31st March 2007 31st March 2006 the pervious year

Value (in million Rs.) 29,38,650 21,82,420 34.65 Volume (in million) 31,250 27,220 14.81

Depository Participants and DP Branches

During the year 2006-07, 53 new depository participants were registered as compared to 48 new registrations in the previous financial year. With this, the number of depository participants holding valid SEBI registration certificates has increased to 365 after taking into account the withdrawal / expiry of certificates of registration of 3 depository participants during the year. Consequently, investors from 123 cities spread across 25 States and one Union Territory can now avail of CDSLs depository services.

Beneficial Owner Accounts

Your Directors are pleased to report that during the year under review, 10.12 lakh Beneficial Owner (BO) accounts were added (8.16 lakh net accounts), taking the total number of accounts opened to 28.73 lakh (23.68 lakh net accounts). The comparative figures of the

total number of BO accounts as on 31st March, 2007 and 31s March, 2006 are given in the following table:



Year ended Year ended Increment over the previous Years Cumulative figure 31st March 2007 31st March 2006 Number Percentage

(Gross) (Gross) (Gross) (Gross)

28,73,508 18,61,288 10,12,220 54.38 (Net) (Net) (Net) (Net) 23,68,101 15,51,171 8,16,930 52.66

Securities Settled through CDSL System

During the year 2006-07, value of securities settled through the CDSL system registered growth, while the volume of securities settled through CDSL declined over the corresponding figure of the previous year. Details are given below:

Securites Year ended Year ended Difference over Settled 31st March 2007 31st March 2006 the pervious year

Value (in million Rs.} 19,70,501 16,71,982 2,98,519 Volume (in million) 17,090 22,450 (5,360)

Connectivity with Stock Exchanges for Settlement of Securities

On-market transactions are settled through the clearing house of BSE viz. BOI Shareholding Ltd. (BOISL) and National Securities Clearing Corporation Ltd. (NSCCL), the clearing corporation of NSE.

Investor Awareness Education, Seminars and Exhibitions

As in the past, your company conducted several investor programmes and seminars in 2006-07 with a view to creating awareness of the dematerialisation facility and its benefits among the investors across the country. CDSL conducted 17 such investor seminars. In addition, CDSL officials participated in 14 radio programmes and 2 television programmes on the subject of dematerialisation. CDSL also participated in an Investor Mela at Indore, where advantages of dematerialization, procedures to be followed and precautions to be taken by the investors in the form of Dos & Donts were explained.

Revision of Tariff

Your company earlier used to levy a debit transaction charge of Rs. 5/- per transaction. After a detailed review of the existing tariff structure, and in view of the escalating cost of operations and compliance, CDSL decided to modify the same to the industry level by charging Rs. 6/- per debit transaction with effect from 1st December, 2006.

ISO 27001 Certification

Your Directors are pleased to inform that Det Norske Veritas (DNV) after conducting detailed audit of the information security management system for depository services, awarded ISO 27001 Certification to CDSL on December 22, 2006. This certification is in line with the CDSL policy objective of achieving world class standards in its Information Security Management System. CDSL had earlier received BS7799 Certification and the ISO 27001 Certification is a step ahead in the same direction.

Software Enhancements

Your company has enhanced the processing speed of the main application CDAS, including the Inter - Depository Transactions by fine-tuning some of the vital processes like End of Day, Online Inter-depository, reports generation and Pay - out. This has enabled CDSL to service the users more efficiently with enhanced transaction time window.

Network Connectivity Enhancements

CDSL has also upgraded the networking equipment and deployed layer-3 switching technology for centralized management, better control of network connectivity and network security. This has greatly enhanced the availability and speed of system access to the users.

easi and Easiest

The two internet facilities - electronic access to securities information (easi), and electronic access to securities information and execution of secured transactions (easiest) introduced by your company continue to offer useful services to the users, easi allows Beneficial Owners and Clearing Members to view the status of their accounts, while easiest facilitates them to enter demat transactions over the Internet. During the year, your company introduced an upload facility for easiest transactions. Both the internet facilities have gained further popularity during the course of the year and are being viewed by the users as beneficial features in terms of customer convenience and protection. As on 31st March, 2007, CDSL had 53,953 demat account holders registered for easi and 5,563 users registered for easiest.

Depository Reforms

The year under review witnessed significant reforms in the depository related areas at the initiative of SEBI. Some of the important reforms are as follows:

a) Strengthening of Surveillance Mechanism

SEBI had advised the depositories to enhance and adopt a multi-faceted approach in their surveillance mechanism. Accordingly, your company has taken several steps in this direction, some of which are mentioned below.

CDSL carries out a process of identifying multiple demat accounts based on name, address and PAN card details of the holders. Depository participants are then instructed to verify the genuineness of such demat accountholders. Further, PAN card details provided by account holders are independently verified by CDSL with the Income Tax Department and instances where PAN card details are not matching with the Income Tax Departments database, are brought to the notice of the concerned depository participant, to get the same rectified.

b) PAN Card made Compulsory for Opening / Operating of Demat Accounts

Last year SEBI had directed that verification of PAN card by depository participants was compulsory in respect of all demat accounts opened on or after 1st April, 2006. Further, SEBI had directed that with effect from 1st October, 2006 existing account holders would not be able to operate their demat accounts in case they do not produce their PAN card for verification by the concerned depository participant. On receipt of representation in this regard, SEBI extended the last date of submission of the PAN cards to 31st December, 2006 for the purpose of operation of the existing accounts which did not have PAN cards. In accordance with these directions, 6.07 lakh demat accounts were frozen on 1st January,

2007 out of which 2.61 lakh accounts contained holdings of securities.

CDSL continued its efforts to make the demat accountholders PAN-compliant. Consequently, as on 31st March, 2007 the number of demat accounts suspended for debit was reduced to 4.91 lakh. Of these accounts, 1.85 lakh accounts contained holdings of securities.

Risk Management Measures

In order to address the concerns arising out of transfer of securities from the beneficial owners accounts without proper authorization by the concerned investors, SEBI decided to introduce safeguards in this regard and instructed the depositories in February, 2007 to put in place safeguards relating to issue and processing of delivery instruction slips. Accordingly, CDSL has issued necessary communique to the depository participants to implement the aforesaid SEBI direction.

Prevention of Money-Laundering Act (PMLA)

SEBI intimated policy guidelines to comply with the provisions of Prevention of Money Laundering Act - 2002 (PMLA) which has come into force from 1st July, 2005. PMLA and the said policy guidelines are applicable to CDSL and depository participants also. CDSL has taken the following steps in this regard:

- Designated a Principal Officer and an Alternate Officer, who would be responsible for ensuring compliance with the provisions of the said Act and the guidelines referred to above.

- Formulated internal policy guidelines as applicable to CDSL.

- Advised DPs to prepare a proper policy framework for verification of client identity and address on the basis of the prescribed KYC documentation, retention of records, identification of suspicious transactions as per the guidelines on anti-money laundering measures and reporting of such transactions to Financial Intelligence Unit - India (FIU-IND), Ministry of Finance, New Delhi.

- Conducted awareness seminars for depository participants at 7 centres across the country on anti-money laundering measures and their implementation by them.

Formation of Subsidiary

During the year, your company floated a subsidiary viz. CDSL Ventures Limited with the main object to establish, set up, operate and maintain an electronic system for creating, holding or maintaining any information, records, documents or database in electronic form. The subsidiary was incorporated on 25th September, 2006 and the Certificate of Commencement of Business was received on 14th November, 2006. The subsidiary has taken up the project of Centralized Record Keeping of Data relating to investors in Mutual Funds and the same is under implementation.

Fixed Deposits

Your company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the Rules made thereunder.

Directors

During the year under review, Shri S. Jambunathan, nominated as a sponsor director by Bombay Stock Exchange Limited, resigned from the directorship and Shri C. M. Vasudev was appointed as a sponsor director in his place on 28th November, 2006. Shri C. M. Vasudev will hold office till the commencement of the ensuing Annual Genera) Meeting.

Shri N. Raja, nominated as sponsor director by State Bank of India, resigned from the directorship and Shri Anjan Barua, Chief General Manager (Treasury) of the said bank was appointed as a sponsor director in his place on 20th December, 2006. Shri Anjan Barua will hold office till the commencement of the ensuing Annual General Meeting.

The Board of Directors has placed on record its appreciation of the services rendered by Shri S. Jambunathan and Shri N. Raja during their tenure as directors of the company.

The company has received necessary notices under Section 257 of the Companies Act, 1956 from shareholders proposing the candidature of Shri Anjan Barua and Shri C. M. Vasudev for appointment as directors. Shri S.S. Thakur and Shri M.R. Mayya retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment as director of the company. The resolutions in this regard form part of the notice of the 9,th Annual General Meeting and are recommended for approval by the members.

Auditors

Lodha & Co., Statutory Auditors of your company, retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Auditors have furnished a certificate to the effect that their re-appointment, if made, would be in accordance with the limit specified under Section 224(1 B) of the Companies Act, 1956. Their re-appointment is required to be made by a Special Resolution pursuant to Section 224A of the said Act.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Considering the nature of operations of your company, the provisions of Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to information to be furnished on conservation of energy and technology absorption are not applicable. The company has, however, used information technology extensively in its operations.

Details of foreign exchange earnings and outgo during the year under review are as under:

Particulars Year ended Year ended 31st March 2007 31st March 2006 (Rs.in million) (Rs.in million)

Earnings Nil Nil Outgo Traveling expenses 0.06 1.06 Expenditure on training 0.06 0.04 Total 0.12 1.10

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of Directors report that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided;

ii) accounting policies have been selected and applied consistently and the judgements and estimates made 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 or loss of the company for that period;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

iv) the annual accounts have been prepared on a going-concern basis. Implementation of Code of Corporate Governance

Your company has voluntarily decided to adopt the SEBI Code of Corporate Governance, although the same is not applicable to it, being an unlisted company. The status of implementation of the Code is given in Annexure A.

Particulars of Employees

Information as required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, forms part of this report. However, the annual report and accounts are being sent to all the members excluding the statement containing the particulars of employees to be provided under section 217 (2A) of the Act. Any member interested in obtaining such particulars may inspect the same at the Registered Office of the Company or write to the Company Secretary in this regard.

Human Resource Development

Employees are a critical resource for any organization, more so for a service provider like CDSL. Your company, therefore, continues to accord high importance to human resource development and makes efforts to enhance the quality and competence of its employees in different cadres. As part of the human resource development programme, the company nominates selected employees for training at reputed institutions connected with capital markets.

Acknowledgement

Your Directors would like to place on record their sincere gratitude for the guidance and co-operation CDSL received from SEBI and other regulatory agencies. The Directors also acknowledge with thanks the continuing support of the Beneficial Owners, Depository Participants, Stock Exchanges and Clearing Houses, and express their appreciation for the valuable services and dedicated efforts of the employees of the company which have enabled it to achieve impressive results on all fronts.

For and on behalf of the Board sd/-

Place : Mumbai S. S. Thakur Date : 17th May, 2007 Chairman

---

Mar 31, 2005

The Directors are pleased to present the Seventh Annual Report and Audited Statement of Accounts of your company for the year ended 31st March, 2005. The company has completed yet another successful year and recorded an overall growth in its operations.

Financial Highlights Year ended Year ended Pariticulars 31st March 2005 31st March 2004 (Rs.millions) (Rs.milions)

Income 288.95 288.35 Expenditure 114.63 118.17 Profit before Depreciation 174.32 170.18 and Taxation Depreciation 35.81 32.43 Profit before Tax 138.51 137.75 Provision for Taxation 46.51 32.90 Provision for Deferred Tax (3.95) 2.77 for the year Profit after Tax 95.95 102.08 Balance brought forward 117.46 16.57 Profit available for 213.41 118,65

appropriation

Your Directors are happy to inform that the income from operations during the year increased from Rs. 1 35.76 millions to Rs. 210.90 millions, registering a growth of 55 % over the year 2003-04. More significant is the fact that the income from business operations exceeded the total expenditure including depreciation and taxation. Income from transactions rose from Rs. 70.74 millions to Rs. 103.80 millions, thus showing a remarkable increase of 47% over the previous year. Profit Before Tax (PBT) for the financial year 2004-05 at Rs. 1 38.51 millions was higher than the previous years level, despite the sharp decrease in the investment income due to lower yields on the surplus funds deployed by the company. Profit After Tax (PAT) amounted to Rs. 95.95 millions as against Rs. 102.08 millions forthe previous year.

Dividend

Keeping in view the need to retain the profits for expansion of the companys business, the Board has not recommended payment of dividend for the year under review.

Operational Highlights

Your company has considerably strengthened its position in the securities market. This is the result of concerted and systematic efforts in several areas such as up- gradation of technology, enhancement of operational efficiency through It, benchmarking of quality processes, cost reduction measures and aggressive marketing efforts. Continued focus on these key areas has resulted in improving the overall performance of the company during the year under review. The focus on building up a nationwide DP network has paid off as there was appreciable increase in the number of BO accounts and the number of transactions processed during the year 2004-05.

Admission of Securities

Your company achieved a growth of VI .86% in the number of securities admitted during the year under review. The securities that are available for dematerialisation include equity shares, debt instruments, government securities, preference shares, certificates of deposit as well as units of mutual funds and exchange-traded funds. The details of the securities admitted with CDSL are given below:

Year ended Securities 31st March 2005

Equity Shares 5033 Debt Instruments 3953 Other Securities* 340 Total 9326

Year ended Inecrement over 31st March 2004 the prveious year (%)

4810 4.64 3226 22.54 301 12.96 8337 11.86

* Other securities include preference shares, convertible warrants, units of mutual funds, exchange-traded funds and government securities.

The value and volume of the securities held with CDSL witnessed a substantial growth in the year under review as indicated below:

Holding of Year ended Securities 31st March 2005

Value 11,47,750 (in millions Rs.)

Volume 19,080 (in millions)

Increment over Year ended the previous year 31st March 2004 (%)

10,64,430 7.83 14,010 36.19

Depository Participants and DP Branches

During the year 2004-05, 68 new Depository Participants (DPs) were registered as compared to 23 new registrations during the previous financial year. This significant expansion of CDSL DP network has taken the total number of DPs to 271 as on 31st March, 2005 after taking into account the withdrawal of 8 DPs during the year. As at the end of March, 2005, CDSL services were available at 244 locations in 124 cities across 22 states and 1 union territory.

Beneficial Owner Accounts

Your Directors are pleased to report that the number of Beneficial Owner (BO) accounts opened with CDSL crossed the one million mark during the year under review. Your company has thus reached a crucial milestone in its life span. During the year 2004-05, 3,76,613 BO accounts were opened with the company reflecting a growth of 59.33% over the previous year. The comparative figures of the total number of BO accounts as on 31st March 2004 and 31st March 2005 are given in the following table:

Securities Settled through CDSL System

During the year 2004-05, the value and volume of securities settled through the CDSL system registered a growth of 6.79 % and 36.09 % respectively over the corresponding figures of the previous year.

Connectivity with Stock Exchanges

CDSL is having live connectivity with 17 stock exchanges. However, due to the sharp decline in the volume of trading activities on the regional stock exchanges, settlement of transactions is effected mostly through the stock exchanges having nationwide trading terminals.

Investor Awareness Education, Seminars and Exhibitions

Your company has continued its active participation in the "Securities Market Awareness Campaign" (SMAC) initiated by SEBI to empower investors through education. The company conducted and participated in over 100 investor seminars in association with BSE, Depository Participants and Investor Associations at various places in Karnataka, Maharashtra, Kerala, Goa, Gujarat, Punjab, UP and Delhi. The Seminars were also conducted independently by the company in Mumbai and Kolkata.

Your company also released investor education advertisement in 50 cities and towns in English, Hindi and 6 other regional languages viz. Marathi, Gujarati, Tamil, Telugu, Kannada and Malayalam.

Technology Initiatives

Given your companys role in the securities market matrix and the mission-critical nature of its functions, technology has always been a pivotal facet of its products and delivery thereof. In recent years, the advance of technology has been tpirresistible and the solutions available, exciting. In such a scenario, user expectations have not lagged behind. On the ground, users expect offering of new products, increased system availability, more efficient processing, assurance of business continuity and fortification of security standards. In fulfillment of these expectations, during the year, your company augmented the system processing and storage capacity, strengthened security levels by deploying Virtual Private Network solution and high-capability back-up solution. In a year characterized by significant increase in transaction volumes, the uninterrupted system performance was noteworthy.

easi and easiest

Your company had introduced two Internet facilities - electronic access to securities information (easi) and electronic access to securities information and execution of secured transactions (easiest) in previous years, easi allows investors and clearing members to view the status of their accounts while easiest facilitates them to enter demat transactions over the Internet. Both have gained in popularity during the course of the year and are being viewed as beneficial features both in terms of convenience and risk management. As at 31st. March 2005, CDSL had 26265 demat accountholders registered for easi and 1 203 registered for easiest. Software Enhancement

Several new features and functionalities have been added to the application software to cater to the changing market practices and user needs. The front-end CDAS application is being upgraded to VB.Net and the Operating System of front- end machines to Win-2000 / Win-XP, for better performance and enhanced features. While the important modules like Pledge upload, Freeze of BO accounts and Auto-corporate action have already been put in place, modules for other activities such as securities lending and borrowing through clearing houses would be released in the near future.

Business Continuity Plan and Disaster Recovery

Your company has taken appropriate steps to prepare the Business Continuity Plan (BCP) and move towards rigorous implementation of the same. As an important step towards Disaster Recovery, the normal system operations of the users (DPs / RTAs) have been successfully shifted to Disaster Recovery Site (DRS). The users could operate the system run from DRS withoutany problem.

Depository Reforms

Due to the initiatives taken by SEBI and the Government of India for the benefit of investors, the year witnessed several reforms in depository related areas. Some of these are as follows:

a) Review of Demat Charges

SEBI, after careful consideration of the recommendations of Secondary Market Advisory Committee (SMAC), reviewed dematerialisation charges and notified in January 2005 that no investor shall be required to pay any charges towards opening of a BO account (except for statutory charges as may be applicable) or for credit of securities to his/ her BO account with effect from 1st February 2005. Custody charges should also not be levied on any investor opening a BO account on or after 15t February 2005. SEBI has, however, allowed the depositories to levy and collect custody charges annually from all issuers with effect from 1st April 2005 based on the total number of folios (ISIN positions) as on 31st March of the previous financial year, at the rate of Rs. 5/- per ISIN position subject to the minimum charges computed on the basis of nominal value of the admitted securities as indicated below:

Namial value admirted Minimum Annual Custodial Fee Securities(Rs) Payable by a issuer to each Depository(Rs)

Upto 5 Crore 4,000 Above 5 Crore and upto 10 Crore 10,000 Above 10 Crore and upto 20 Crore 20,000 Above 20 Crore 30,000

*Plus service tax as applicable.

Failure to pay the custody charges to the depository on or before 30th April in respect of the securities held in custody as on 31st March of the previous financial year would attract penal interest subject to a maximum of 12% p.a.

b) Amendments to the Depositories Act, 1996

The Securities Laws Amendment Ordinance, 2004 has amended the Depositories Act, 1 996 so as to provide for penalties which may be imposed on defaulting depositories, depository participants and issuers of securities. This is a welcome step taken by the Government as there was no provision for penalty in the said statute.

Change in shareholding pattern

With a view to broadbasing the shareholding pattern of your company, the Stock Exchange, Mumbai (BSE), one of the major promoters of the company, transferred 6,74,46,000 shares in favour of Canara Bank. As on 31st March 2005, the shareholding pattern of the company was as under:

Category of shareholders Percetge of shareholding

Banks 62.40 Stock Exchanges 37.56 Others 0.04 Total 100.00

Shifting of Registered Office

Since its inception, your company was functioning from the 27th and 28th floors of P. J. Towers, Dalai Street, Mumbai 400 023 with its registered office located on the 28th Floor of that building. Over the years, the business volumes of the company increased substantially which necessitated it to acquire larger office space. The office premises have therefore been relocated recently to the 16th and 17th floors of the said building which provide more office space. The registered office of the company has also been shifted to the 17th Floor, P. J. Towers, Dalai Street, Mumbai 400023.

Fixed Deposits

Your company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the Rules made thereunder.

Directors

During the year under review, Shri K. H. Vora, General Manager, Bank of India resigned from the directorship on 2nd July 2004 and Shri S. Hariharan, General Manager, Bank of India was appointed as a sponsor director in his place. Shri S. Hariharan will hold office upto the commencement of the ensuing Annual General Meeting. The company has received necessary notice under Section 257 of the Companies Act, 1956 from a shareholder proposing the candidature of Shri S. Hariharan for appointment as a director. The Board of Directors places on record its appreciation of the services rendered by Shri K. H. Vora during his tenure as a director of the company. Shri S. S. Thakur and Shri S. B. Patankar retire by rotation at the Seventh Annual General Meeting and being eligible, offer themselves for re- appointment. The resolutions for their re-appointment as director form part of the notice of the Seventh Annual General Meeting and are recommended for approval of the members.

Pursuant to the decision taken by the shareholders at the Extra-Ordinary General Meeting held on 13th June 2003, Shri B. G. Daga ceased to be the Managing Director of the Company with immediate effect. The writ petition filed by Shri Daga against this decision isstill pending before the Honble High Court of Mumbai.

Auditors

Lodha & Co., Statutory Auditors of your company, retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Auditors have furnished a certificate to the effect that their re-appointment, if made, would be in accordance with the limit specified under Section 224(1 B) of the Companies Act, 1956. Their re-appointment is required to be made by a Special Resolution pursuant to Section 224A of the Companies Act, 1956.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

Considering the nature of operations of your company, the provisions of Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1 988, for information to be furnished on conservation of energy and technology absorption are not applicable. The company has, however, used information technology extensively in its operations.

Details of foreign exchange earnings and outgo during the year under review are asunder:

Year ended Year endede Pariticulars 31st March 2005 31st MArch 2004 (Rs.in. millions) (Rs.in.millions)

Earnings Nil Nil Outgo Travelling expenses 0.21 0.35 Expenditure on training 0.16 0.11 Software development 0 4.01 expenses 0 4.01 Total 0.37 4.47

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of Directors report that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided;

ii) accounting policies have been selected and applied consistently and the judgements and estimates made 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 or loss of the company for that period;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1 956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going-concern basis.

Implementation of Code of Corporate Governance

Your company has voluntarily decided to adopt the SEBI Code of Corporate Governance, although the same is not applicable to it, being an unlisted company. The status of implementation of the Code is given in Annexure A.

Particulars of Employees

Your company had 111 employees at the end of the year 2004-05. None of the employees of the company employed throughout the financial year was in receipt of remuneration aggregating more than Rs. 24 lakhs per annum or if employed for part of the financial year was in receipt of Rs. 2 lakhs per month. The provisions relating to disclosure under section 217(2A) of the Companies Act, 1956 are, therefore, not applicable to your company.

Human Resource Development

Employees are a critical resource for any organisation, more so for a service provider like CDSL. Your company, therefore, accords high importance to human resource development and is continuing its efforts to enhance the quality and competence of its employees in different cadres.

Acknowledgement

The Board of Directors sincerely compliments the employees of the company for their valuable services and dedicated efforts, which have enabled it to achieve impressive financial results. The Board also places on record its appreciation for the continuing support of the Beneficial Owners, Depository Participants, vendors of the company, Stock Exchanges and Clearing Houses and also acknowledges with deep appreciation the cooperation and guidance the company has received from the Securities and Exchange Board of India, Reserve Bank of India and other government and regulatory authorities.

For and on behalf of the Board

sd/- Place : Mumbai S. S. Thakur Date : 16th June 2005 Chairman