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Central Depository Services (India) Ltd. के अकाउंट के लिये नोट

Mar 31, 2025

1. The Company has one class of equity shares having a par value of '' 10 per share. Each shareholder is eligible for one vote per share held.

2. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after discharging all its liabilities, in proportion to their shareholding.

3. Pursuant to the approval of the Shareholders in Annual General Meeting held on August 17, 2024, the company had allotted 10,45,00,000 Bonus Equity Shares of ^ 10 each in the ratio of 1 (One) Equity Share for 1 (One) Equity Share held to the Equity Shareholder(s) whose name appeared in the Register of Shareholders of the Company/List of Beneficial Owners maintained by the Depositories on August 24, 2024 i.e. "Record Date". The said Bonus Equity Shares ranked pari-passu in all respects with the existing Equity Shares of the Company including dividend entitlement. After bonus issue, the Subscribed and Paid-up Equity Share Capital as on March 31, 2025 was ^ 20,900 Lakh divided into 20,90,00,000 Equity Shares of ^ 10 each. Accordingly, as per Ind AS 33 - Earning Per Share, the calculation of basic and diluted earning per share for all periods presented have been adjusted and restated.

The general reserve is created from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in general reserve will not be reclassified subsequently to Profit or Loss .

Retained earnings reflect surplus/deficit after taxes in the Statement of Profit and Loss. The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the balance in this reserve and also considering the requirements of the Companies Act, 2013.

14.4 Distribution made and proposed

a) During the year, the company has paid final dividend of ''19 per share and special dividend of ''3 per share declared for the year ended March 31, 2024.

b) Further, the Board of Directors have recommended final dividend of ''12.50 per share for the year ended March 31, 2025, subject to the approval of shareholders.

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

There were no transfers between Level 1, 2 and 3 during the years.

The management assessed that fair value of cash and bank balances, fixed deposits, trade receivables, and trade payables and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

i. The fair value of the quoted bonds and mutual fund are based on price quotations at reporting date. The fair value of unquoted instruments and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

ii. The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The valuation requires the management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in the management''s estimate of fair value for these unquoted equity investments.

31. Financial Risk Management

The Company''s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to support its operations. The Companyâs principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations.

The Company''s activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency and interest rate risk) and regulatory risk. The Company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company''s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers.

a. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

i. Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer.

The demographics of the customer, including the default risk of the industry in which the customer operates, also has an influence on credit risk assessment.

and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company evaluates the concentration of risk with respect to trade receivables as low.

No customer has accounted for more than 10% of the receivables as at March 31, 2025 and revenue for the year ended March 31, 2025.

No customer has accounted for more than 10% of the receivables as at March 31, 2024 and revenue for the year ended March 31, 2024.

ii. Investments

The Company limits its exposure to credit risk by making investment in instruments having highest credit rating as per the investment policy. Further treasury investment review committee of the Company reviews the investment portfolio on monthly basis and recommends or provides suggestions to the management. The company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors.

b. Liquidity risk

The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The management monitors the Companyâs net liquidity position through forecasts on the basis of expected cash flows.

c. Market risk

The Companyâs business, financial condition and results of operations are highly dependent upon the levels of activity in the capital markets and in particular upon the delivery volume on stock exchanges, the number of listed securities, the number of new listings and subsequent issuances and introduction of new services which will ease in doing business in capital markets.

In addition to the above risk, market risk also include following:

i. Foreign Currency risk

The Company''s foreign currency risk arises in respect of foreign currency transactions. The Companyâs foreign currency expenses are insignificant, while a significant portion of its costs are in Indian rupees.

As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Company''s expenses measured in rupees may decrease. Due to lessor quantum of expenses from foreign currencies, the Company is not much exposed to foreign currency risk.

ii. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes/expectation of changes in interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the holding period of Company''s long-term / short- term investments.

iii. Regulatory Risk

The Company requires various regulatory approvals, registrations and permissions to operate its business, including at a corporate level as well as at the level of each of its components. Some of these approvals are required to be renewed from time to time. The Company''s operations are subject to continued review by regulator and these regulations may change from time to time in fast changing capital market environment. The Company''s compliance team constantly monitors the compliance with these rules and regulations.

32. Capital Management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Company''s objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.

The Company is equity financed which is evident from the capital structure. Further, the Company has always been a net cash Company with cash and bank balances along with investments which are predominantly investments in mutual funds being far in excess of financial liabilities.

Compliance with externally imposed capital requirements:

In accordance with regulation 14 (1)(a) of SEBI (Depositories and Participants) Regulations, 2018, the Company shall have a minimum networth of ^ 10,000 Lakh at all times. The Company has maintained net worth of ^ 10,000 Lakh at all times during the current year and previous year.

34. Contingent liabilities and legal matters:
Particulars	As at March 31, 2025	As at March 31, 2024
a) Bank Guarantee (refer note (i))	80.00	80.00
b) Claims against the Company not acknowledged as debt in respect of:
Income tax matters (refer note (ii))	-	0.57
Legal matters (refer note (iii))	886.03	419.03

Notes:

i Bank Guarantees

As per business requirements, bank guarantees are issued by banks on behalf of the Company, against 100% margin (earmarked) on fixed deposit receipts. (Refer note 44)

ii. Income Tax Matters:

Income Tax Demand of '' 0.57 Lakh raised by Income Tax Department vide Assessment order u/s 143(3) of Income Tax Act, 1961 for A.Y. 2018-19 dated March 15, 2021, against which company has filed an appeal on April 12, 2021. Company has paid the said outstanding demand of '' 0.57 lakh along with interest thereon amounting to '' 0.23 lakh under protest on August 30, 2024.

iii. Legal Matters:

a) The Hon''ble Arbitration Tribunal has passed an award by granting a claim of '' 86.03 Lakh to the Claimant and directed CDSL to pay. CDSL has challenged the said award before the Hon''ble Bombay High Court and the same is currently pending.

b) The Company had received an Arbitral Award in the matter of Anugrah Stock & Broking Private Limited (''Anugrah"), a terminated DP. As per such order, the claimant had alleged misutilization of clients'' securities by Anugrah and negligence by the Company. The said impugned award passed was challenged and is pending consideration before the Hon''ble Bombay High Court. Based its own assessment and legal advice received, the Company believes they have strong case on merits and have complied with relevant provisions of SEBI guidelines. Accordingly, the management of the Company has assessed no material impact in respect of this matter. The expected value of shares if would be required to be restored is '' 800 Lakh and this would be subject to change basis movement in stock prices.

c) During the year, the Company had received a Show Cause Notice from Securities Exchange Board of India (SEBI) highlighting certain non-compliances of applicable SEBI guidelines with respect to malware attack which occurred on a Friday, November 18, 2022. The Company under legal advice has and is engaging with the regulator including filing of a reply to the Show Cause Notice. Basis assessment and legal advice, the Company does not expect material impact at this stage and potential liability, if any, would be known on final outcome on the matter.

iv. There are various arbitration and civil cases pending in the courts with the various authorities amounting to ''47,163 Lakhs. The management believes that they have strong case on merits and crystallization of liability on CDSL is assessed as remote in these cases.

35. Commitments
Particulars	As at March 31, 2025	As at March 31, 2024
Estimated value of contracts remaining to be executed on capital account and not provided for:
a. Property, plant and equipment	1,132.68	15.71
b. Intangible assets	134.35	273.45

37.2 Compensated Absences

The employees ofthe Company are entitled to compensated absences. The employees can carry forward a portion ofthe unutilised accumulated compensated absences and utilise it in future periods or receive cash at retirement or termination of employment. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the end of the reporting period. The Company recognizes accumulated compensated absences based on actuarial valuation. Non-accumulating compensated absences are recognized in the period in which the absences occur. The Company recognizes remeasurement gains or losses immediately in the statement of profit and loss.

During the year ended March 31, 2025 an amount recognized as an expense in respect of compensated leave absences is ^ 331.10 lakh, (Previous year ended March 31, 2024 is ^ 316.31 lakh).

38. As per the rule the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2018 (the "Amended Regulations") the Company has determined the IPF contribution at 5% of profit from depository operation after making such contribution according to the Amended Regulations. The profit from depository operations has been determined by reducing the other income for the year from the Net profit before exceptional items and tax for the year after making such contribution. The movement of IPF provision is given below:

39. SEBI vide its circular no. CIR/MRD/DP/18/2015 dated December 09, 2015 had come up with a concept of Basic Services Demat Accounts (BSDA) with an objective of promoting financial inclusion and expanding the reach of depository services to tier II and tier III towns, recommended that the revenue source of the depositories may be augmented and Depository Participants (DPs) may be incentivized by having a revenue sharing mechanism between depositories and DPs. SEBI circular also prescribes that the annual issuer charges may be increased, and the incremental revenue received by the Depositories be shared suitably with their Depository Participants for promoting the BSDA and opening new accounts in tier II and tier III towns. Further in order to compensate the DPs towards the cost of opening and maintaining Basic Services Demat Accounts, the depositories shall pay an incentive of ^ 100/- for every new BSDA opened by their participants in other than the top 15 cities specified by SEBI. The incentive shall be provided at the end of the financial year only with respect to the new BSDA opened during the financial year and which displayed at least one credit in the account during the Financial Year.

Pursuant to the Circular, the Company has set aside ^ 1,704.72 lakh during the year ended March 31, 2025 ( Previous year ended March 31, 2024 is ^ 1,361.23 lakh) being 20% of the incremental revenue received from issuers during the respective years, towards the DP incentive scheme.

40. Chief Operating Decision Maker (CODM) as defined under Indian Accounting Standard 108 Operating Segments:

The Managing Director and Chief Executive Officer of the Company, has been identified as the CODM as defined by Indian Accounting Standard 108 "Operating Segments". The CODM evaluates the Company''s performance, allocates resources based on analysis of the various performance indicators of the Company as a single unit.

The principal business of the Company is of "Depository Services". All other activities of the Company revolve around its principal business. Therefore, directors have concluded that there is only one operating reportable segment as per Indian Accounting Standard 108 "Operating Segments".

The entityâs revenues are entirely attributable to customers in India. All the non-current assets of the company are located in India.

46. Events after the reporting period

There are no events that have occurred between the end of the reporting period and the date when the standalone financial statements are approved that provide evidence of conditions that existed at the end of the reporting period.

47. Other Statutory Information

a. The Company, for the current year as well as previous year, does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

b. The Company, for the current year as well as previous year, does not have any charges or satisfaction to be registered with ROC.

c. The Company, for the current year as well as previous year, has not traded or invested in Crypto currency or Virtual Currency during the financial year.

d. The Company, for the current year as well as previous year, does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

e. The Company, for the current year as well as previous year, has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

f. The Company, for the current year as well as previous year, has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

g. The Company has not been declared as willful defaulter by any bank or financial Institution or other lender, since the company has not undertaken any borrowing during the current year and previous year.

h. The company, during the current year and previous year, has not made any investment in downstream companies which are not in compliance with clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

i. The Company has not entered into any scheme of arrangement in terms of sections 230 to 237 of the Companies Act, 2013 during the current year and previous year.

j. The Company has not revalued its Property, Plant and Equipment or intangible assets or both during the current year and previous year.

k. The Company has not granted/given any loans or advances during the current year and previous year to the promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment.

48. Audit Trail

The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further current accounting software does not permit any changes or tempering in audit trail (edit log).

49. Maintenance of Books of accounts and Servers

The Company''s books of accounts and relevant books and papers are accessible in India at all times and backup of accounts and other relevant books and papers are maintained in electronic mode within India and kept in servers physically located in India on daily basis. The Company has complied with the Rule 3 of Companies (Accounts) Rules, 2014.

50. Standards notified but not yet effective

There are no standards that are notified and not yet effective as on the date.

Mar 31, 2024

2.2.12 Provisions

a) Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

b) The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

2.2.13 Investment income

a) Investment income consists of interest income on funds invested, dividend income and gains on the disposal of financial assets measured at FVTPL and amortised cost.

b) Interest income on bond is recognised as it accrues in the statement of Profit or Loss, using the effective interest method and interest income on deposits

with banks is recognised on a time proportion accrual basis taking into the account the amount outstanding and the rate applicable.

c) Dividend income is recognised in the Profit or Loss on the date that the Company''s right to receive payment is established.

2.2.14 Income tax

Income tax comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent it relates to items directly recognised in equity or in other comprehensive income.

i. Current income tax

Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period. The tax rates and tax laws used to compute the current tax amount are those that are enacted at the reporting date and applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognised amounts and where it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

ii. Deferred tax

Deferred tax is recognised using the balance sheet approach. Deferred tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in standalone financial statements.

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary

differences, and the carry forward of unused tax credits and unused tax losses can be utilised. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (in other comprehensive income). Deferred tax items are recognised in correlation to the underlying transaction in OCI.

The Company recognises interest levied and penalties related to income tax assessments in income tax expenses.

2.2.15 Earnings per share

The Company reports basic and diluted earnings per share in accordance with Ind AS 33 on Earnings per share. Basic earnings per share is computed using the weighted average number of equity shares outstanding during the period. There are no instruments which have effect of dilution on the EPS.

2.2.16 Operating Cycle

Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

31. Financial Risk Management

The Company''s activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency and interest rate risk) and regulatory risk. The Company''s primary focus is to foresee the unpredictability of financial markets and seek to minimise potential adverse effects on its financial performance. The Company''s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers.

a) Credit risk

i. Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer.

The demographics of the customer, including the default risk of the industry in which the customer operates, also has an influence on credit risk assessment.

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due of various types of customers (i.e. issuers, DP (Depository Participants), RTA (Registrar and Transfer agents), etc). The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company evaluates the concentration of risk with respect to trade receivables as low.

No customer has accounted for more than 10% of the receivables as at March 31, 2024 and revenue for the year ended March 31, 2024.

No customer has accounted for more than 10% of the receivables as at March 31, 2023 and revenue for the year ended March 31, 2023.

ii. Investments

The Company limits its exposure to credit risk by making investment as per the investment policy. Further investment committee of the Company reviews the investment portfolio on monthly basis and recommends or provides suggestions to the management. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors.

b) Liquidity risk

The Companyâs treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The management monitors the Company''s net liquidity position through forecasts on the basis of expected cash flows.

The details regarding the contractual maturities of financial liabilities as at March 31, 2024 and March 31, 2023 are as below:

c) Market risk

The Company''s business, financial condition and results of operations are highly dependent upon the levels of activity in the capital markets and in particular upon the trading volume on stock exchanges, the number of listed securities, the number of new listings and subsequent issuances and introduction of new services which will ease in doing business in capital markets.

In addition to the above risk, market risk also include following:

i. Foreign Currency risk

The Companyâs foreign currency risk arises in respect of foreign currency transactions. The Company''s foreign currency expenses are insignificant, while a significant portion of its costs are in Indian rupees.

ii. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term/short-term investment with floating interest rates.

All investments in Debentures and Bonds are at fixed rate of Interest and does not have material interest rate risks. The Company''s investments in floating rate are primarily in Fixed Maturity Plans (FMPs) of mutual funds, which do not expose it to significant interest rate risk. The Company''s exposure to assets having price risk is as under:-

iii. Regulatory Risk

32. Capital Management

i. Legal Claim:

a) Writ petition has been filed by Swojas Energy Foods Limited & Ors. against SEBI, CDSL & Ors. pursuant to Demat accounts of the petitioners being frozen on receipt of instructions received from BSE based on a circular issued by BSE in discussion with SEBI. Petitioners have sought monetary compensation exceeding ^ 333 Lakh for alleged illegal freezing of demat accounts as the petitioners'' allege that SEBI did not delegate any such power to BSE. There have been two hearings, however, there is no further development in the matter.

b) The Honâble Arbitration Tribunal has passed an award by granting a claim of ^ 86.03 Lakh to the Claimant and directed CDSL to pay. CDSL has challenged the said award before the Honâble Bombay High Court and the same is currently pending.

c) Arbitration and Civil Cases pending in the court/ with the authorities amounting to '' 842 Lakh, The management believes that the crystallisation of liability on CDSL is remote in these cases.

ii. Bank Guarantees

As per business requirements, bank guarantees are issued by banks on behalf of the Company, against 100% margin

(earmarked) on fixed deposit receipts. (Refer note 44)

37. Employee benefits

37.1 Defined benefits plan - Gratuity

Gratuity is administered through Gratuity Scheme with Life Insurance Corporation of India (LIC). The LIC raises demand for annual contribution for gratuity amount based on its own computation without providing entire details as required by the Ind AS 19 "Employee Benefits". Hence the Company obtains separate actuarial valuation report as required under Ind AS 19 "Employee Benefits" from an independent Actuary. The expected return on plan assets is based on market expectation at the beginning of the year, for the returns over the entire life of the related obligations.

37.2 Compensated Absences

The employees of the Company are entitled to compensated absences. The employees can carry forward a portion of the unutilised accumulated compensated absences and utilise it in future periods or receive cash at retirement or termination of employment. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the end of the reporting period. The Company recognises accumulated compensated absences based on actuarial valuation. Non-accumulating compensated absences are recognised in the period in which the absences occur. The Company recognises remeasurement gains or losses immediately in the statement of profit and loss.

During the year ended March 31, 2024 an amount recognised as an expense in respect of compensated leave absences is ^ 316.31 Lakh, (Previous year ended March 31, 2023 is ^ 217.43 Lakh).

38 . As per the rule the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2018 (the "Amended Regulations") the Company has determined the IPF contribution at 5% of profit from depository operation after making such contribution according to the Amended Regulations. The profit from depository operations has been determined by reducing the other income for the year from the Net profit before exceptional items and tax for the year after making such contribution. The movement of IPF provision is given below:

39. SEBI vide its circular no. CIR/MRD/DP/18/2015 dated December 09, 2015 had come up with a concept of Basic Services Demat Accounts (BSDA) with an objective of promoting financial inclusion and expanding the reach of depository services to tier II and tier III towns, recommended that the revenue source of the depositories may be augmented and Depository Participants (DPs) may be incentivised by having a revenue sharing mechanism between depositories and DPs. SEBI circular also prescribes that the annual issuer charges may be increased, and the incremental revenue received by the Depositories be shared suitably with their Depository Participants for promoting the BSDA and opening new accounts in tier II and tier III towns. Further in order to compensate the DPs towards the cost of opening and maintaining Basic Services Demat Accounts, the depositories shall pay an incentive of ^ 100/- for every new BSDA opened by their participants in other than the top 15 cities specified by SEBI. The incentive shall be provided at the end of the financial year only with respect to the new BSDA opened during the financial year and which displayed at least one credit in the account during the Financial Year.

Pursuant to the Circular, the Company has set aside ^ 1,361.23 Lakh during the year ended March 31, 2024 ( Previous year ended March 31, 2023 is ^ 967.24 Lakh) being 20% of the incremental revenue received from issuers during the respective years, towards the DP incentive scheme.

40. Chief Operating Decision Maker (CODM) as defined under Indian Accounting Standard 108 Operating Segments:

The entityâs revenues are entirely attributable to customers in India. All the non-current assets of the Company are located in India.

41. Option permitted under Section 115BAA of the Income-tax Act, 1961:

From the financial year 2019-20, the Company had elected to exercise the option permitted under Section 115BAA of the Income-tax Act, 1961 as introduced by the Taxation Laws (Amendment) Act, 2019.

46. Events after the reporting period

47. To maintain the consistency with the current year presentation, fixed deposits of '' 1,081 Lakh as on March 31, 2023 having original maturity of more than 12 months with remaining maturity of less than 12 months has been reclassified in current assets from bank balances other than Cash & Cash equivalents to Other financial assets. This reclassification does not have any impact on the profit for the year and the management believes that it does not have any material impact on information presented in the balance sheet.

48. Other Statutory Information

a) The Company, for the current year as well as previous year, does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

b) The Company, for the current year as well as previous year, does not have any charges or satisfaction to be registered with ROC.

c) The Company, for the current year as well as previous year, has not traded or invested in Crypto currency or Virtual Currency during the financial year.

d) The Company, for the current year as well as previous year, does not have any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

e) The Company, for the current year as well as previous year, has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

f) The Company, for the current year as well as previous year, has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

g) The Company has not been declared as willful defaulter by any bank or financial Institution or other lender, since the Company has not undertaken any borrowing during the current year and previous year.

h) The Company, during the current year and previous year, has not made any investment in downstream companies which are not in compliance with clause (87) of Section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

i) The Company has not entered into any scheme of arrangement in terms of Sections 230 to 237 of the Companies Act, 2013 during the current year and previous year.

j) The Company has not revalued its Property, Plant and Equipment or intangible assets or both during the current year and previous year.

k) The Company has not granted/given any loans or advances during the current year and previous year to the promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment.

49. The Company has used accounting software for maintaining its books of account which has a feature of recording audit

trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the

software. Further, there are no instance of audit trail feature being tampered with.

50. Standards notified but not yet effective

There are no standards that are notified and not yet effective as on the date.

Signatures to Notes 1 to 50 forming part of standalone Financial Statements

In terms of our report of even date attached For and on behalf of the Board of Directors of

Central Depository Services (India) Limited

For S. R. Batliboi & Co. LLP Balkrishna V Chaubal Nehal Vora

Chartered Accountants Chairman Managing Director & CEO

ICAI Firm registration No. 301003E/E300005 DIN: 06497832 DIN: 02769054

Per Jayesh Gandhi Nilay Shah Girish Amesara

Partner Company Secretary Chief Financial Officer

Membership No. 037924 Membership No. A20586

Place: Mumbai Place: Mumbai

Date: May 04, 2024 Date: May 04, 2024

Mar 31, 2023

1. The Company has one class of equity shares having a par value of t 10 per share. Each shareholder is eligible for one vote per share held.

3. There are no equity shares issued as bonus, no equity shares issued for consideration other than cash and no equity shares have been bought back during the period of five years immediately preceding the reporting date.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a

current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

Disclosure for Level 3

The fair values of the unquoted equity shares have been estimated based on net asset method as per latest financials available.

31. Financial Risk Management

a. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

i. Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer.

The demographics of the customer, including the default risk of the industry in which the customer operates, also has an influence on credit risk assessment.

ii. Investments

The Company limits its exposure to credit risk by making investment as per the investment policy. Further investment committee of the Company reviews the investment portfolio on monthly basis and recommends or provides suggestions to the management. The company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors.

b. Liquidity risk

when due.

The Companyâs treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The management monitors the Companyâs net liquidity position through forecasts on the basis of expected cash flows.

c. Market risk

In addition to the above risk, market risk also include following:

i. Foreign Currency risk

ii. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term / short- term investment with floating interest rates.

iii. Regulatory Risk

32. Capital Management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Companyâs objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.

34. Contingent Liabilities		(^ in Lakh)
Particulars	As at	As at
Particulars	March 31, 2023	March 31, 2022
Claims against the Company not acknowledged as debt in respect of:
Legal Claim contingency (refer note (i))	333.00	333.00
Income tax matters (refer note (ii))	1,300.40	1,883.35
Service tax matters (refer note (ii))	77.97	77.97
Bank Guarantee (refer note (iii)) (refer note 45)	75.00	75.00

Notes:

i. Writ petition has been filed by Swojas Energy Foods Limited & Ors. against SEBI, CDSL & Ors. pursuant to Demat accounts of the petitioners being frozen on receipt of instructions received from BSE based on a circular issued by BSE in discussion with SEBI. Petitioners have sought monetary compensation exceeding ^ 333 Lakh for alleged illegal freezing of demat accounts as the petitioners'' allege that SEBI did not delegate any such power to BSE. No hearing has taken place till date and therefore, there is no further development in the matter.

ii. Claims against the Company not acknowledged as debt:

H Income Tax Demand of ^ 0.57 Lakh raised by Income Tax Department vide Assessment order u/s 143(3) of Income Tax Act, 1961 for A.Y. 2018-19 dated March 15, 2021 against which company has filed an appeal on April 12, 2021 H Income Tax Demand of ^ 1,882.78 Lakh raised by Income Tax Department vide Assessment order u/s 147 of Income Tax Act, 1961 for A.Y. 2014-15 dated March 30, 2022 against which company has filed rectification letter on April 13, 2022 and appeal on April 22, 2022. Income Tax refund of ^ 582.95 Lakh for AY 2021-22 was adjusted against said demand on November 02, 2022.

H Service Tax demand of ^ 77.97 Lakh and interest and penalty thereon raised by Service Tax Department vide Show Cause Notice issued u/s 73(1) of Chapter V of Finance Act, 1994 for F.Y. 2016-17 dated October 23, 2021 against which company has filed response to Show Cause Notice on November 30, 2021. Hearing has taken place on March 15, 2023 wherein additional documents were sought and same has been submitted on March 20, 2023.

iii. Bank Guarantees

As per business requirements, bank guarantees are issued by banks on behalf of the Company, against 100% margin (earmarked) on fixed deposit receipts. (Refer note 45)

35. Commitments		(^ in Lakh)
Particulars	As at	As at
Particulars	March 31, 2023	March 31, 2022
Estimated value of contracts remaining to be executed on capital account and not provided for:
a. Property, plant and equipment	274.73	164.04
b. Intangible assets	586.50	371.00

37. Employee benefits

37.1 Defined benefits plan - Gratuity

Company has received the Gratuity fund statement from LIC till December 2022. The Company has not received fund statement from LIC till March 2023. Hence, for the purpose of calculation of plan asset as on March 2023 company has prepared fund movement as per the company''s records and rate of return on plan asset is estimated @ 7.40% p.a. as per actuarial report.

37.2 Compensated Absences

The employees of the Company are entitled to compensated absences. The employees can carry forward a portion of the unutilised accumulated compensated absences and utilise it in future periods or receive cash at retirement or termination of employment. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the end of the reporting period. The Company recognizes accumulated compensated absences based on actuarial valuation. Nonaccumulating compensated absences are recognized in the period in which the absences occur. The Company recognizes remeasurement gains or losses immediately in the statement of profit and loss.

During the year ended March 31, 2023 an amount recognized as an expense in respect of compensated leave absences is ^ 217.43 lakh, (Previous year ended March 31, 2022 is ^ 184.26 lakh).

38 . As per the rule the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2018 (the "Amended Regulations") the Company has determined the IPF contribution at 5% of profit from depository operation after making such contribution according to the Amended Regulations. The profit from depository operations has been determined by reducing the other income for the year from the Net profit before exceptional items and tax for the year after making such contribution. The movement of IPF provision is given below:

39. SEBI vide its circular no. CIR/MRD/DP/18/2015 dated December 9, 2015 (the "Circular") has revised the annual custody/ issuer charges to be collected by the depositories from the issuers with effect from financial year 2015-16. With an objective of promoting financial inclusion and expanding the reach of depository services through depository participants (DPs) in tier II and tier III towns, the Circular recommends that the Depository Participants (DPs) be incentivised by way of two schemes. In the first scheme, the depositories shall pay the DPs an incentive of ^ 100/- for every new Basic Services Demat Accounts (BSDA) opened by their participants in specified cities mentioned in the Circular. In the second scheme, the depositories may pay ^ 2 per folio per ISIN to the respective depository participants (DPs), in respect of the ISIN positions held in BSDA across all BSDA accounts in the depository. In order to manage the aforementioned incentive schemes, the Circular has directed the Depositories to set aside 20% of the incremental revenue received from the issuers.

Pursuant to the Circular, the Company has set aside ^ 967.24 lakh during the year ended March 31, 2023 (^ 586.18 lakh during the year ended March 31, 2022) being 20% of the incremental revenue received from issuers during the respective years, towards the DP incentive scheme.

40. Chief Operating Decision Maker (CODM) as defined under Indian Accounting Standard 108 Operating Segments:

41. Option permitted under Section 115BAA of the Income-tax Act, 1961:

From the financial year 2019-20, the Company had elected to exercise the option permitted under section 115BAA of the Income-tax Act, 1961 as introduced by the Taxation Laws (Amendment) Act, 2019.

43. Long term contracts including derivative contracts

The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses during the year ended March 31, 2023 and March 31, 2022

44. Interest on income tax refund and tax provision write back.

During the current year, the Company has written back an amount of t 210.83 Lakh (Previous year t 394.04 Lakh) in respect of earlier years. Further, an amount of t 53 Lakh (Previous year t 34.75 Lakh), received as interest on refund for the earlier years has been included in other income.

47. Events after the reporting period

48 . There was a disruption in the operations of the Company on November 18, 2022 caused by a malware incident. The management has assessed that the impact was temporary and had not impacted any operational database of the Company. Further, it has no direct impact on the financial statements of the Company. The necessary measures have been taken to enhance the security of the Information Technology systems. The necessary regulatgory disclosure was made for the said incident.

49. Standards and amendments notified but not yet effective

Ministry of Corporate Affairs ("MCA")notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:

I nd AS 1 - Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the impact of the amendment on financial statements and it is likely to be insignificant in the standalone financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of'' accounting estimates'' and included amendments to IndAS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company is in the process of evaluating its impact, if any.

Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and off setting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1,2023. The Company is currently assessing the impact of the amendments.

50. Other Statutory Information

b. The Company, for the current year as well as previous year, does not have any charges or satisfaction to be registered with ROC.

c. The Company, for the current year as well as previous year, has not traded or invested in Crypto currency or Virtual Currency during the financial year.

e. The Company , for the current year as well as previous year, has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

g. The Company has not been declared as wilful defaulter by any bank or financial Institution or other lender, since the company has not undertaken any borrowing during the current year and previous year.

i. The Company has not entered into any scheme of arrangement in terms of sections 230 to 237 of the Companies Act, 2013 during the current year and previous year.

j. The Company has not revalued its Property, Plant and Equipment or intangible assets or both during the current year and previous year.

51. Previous year figures have been regrouped / reclassified and rearranged wherever necessary to correspond with the

current year classification/ disclosure.

Mar 31, 2022

The following methods and assumptions were used to estimate the fair values:

Financial Risk Management

The Company''s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to support its operations. The Company''s principal financial assets include trade and other receivables, and cash and shortterm deposits that derive directly from its operations.

Credit risk

â¢ Trade and other receivables"

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer.

The demographics of the customer, including the default risk of the industry in which the customer operates, also has an influence on credit risk assessment.

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due of various types of customers (i.e. issuers, DP, RTA, etc). The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company evaluates the concentration of risk with respect to trade receivables as low.

â¢ Investments

The Company limits its exposure to credit risk by making investment as per the investment policy. Further investment committee of the Company review the investment portfolio on monthly basis and recommend or provide suggestion to the management. The company does not expect any losses from non- performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors.

Liquidity risk

The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The management monitors the Company''s net liquidity position through forecasts on the basis of expected cash flows.

Market risk

â¢ Foreign Currency risk

The Company''s foreign currency risk arises in respect of foreign currency transactions. The Company''s foreign currency expenses is insignificant, while a significant portion of its costs are in Indian rupees.

â¢ Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term / short- term investment with floating interest rates.

Regulatory Risk

The Company requires various regulatory approvals, registrations and permissions to operate its business, including at a corporate level as well as at the level of each of it''s components. Some of these approvals are required to be renewed from time to time. The Company''s operations are subject to continued review by regulator and these regulations may change from time to time in fast changing capital market environment. The Company''s compliance team constantly monitors the compliance with these rules and regulations.

31. Capital Management

The Company is predominantly equity financed which is evident from the capital structure. Further, the Company has always been a net cash Company with cash and bank balances along with investment which is predominantly investment in mutual funds being far in excess of financial liabilities.

(i) Writ petition has been filed by Swojas Energy Foods Limited & Ors. against SEBI, CDSL & Ors. pursuant to Demat accounts of the petitioners being frozen on receipt of instructions received from BSE based on a circular issued by BSE in discussion with SEBI. Petitioners have sought monetary compensation exceeding '' 333 Lakh for alleged illegal freezing of demat accounts as the petitioners'' allege that SEBI did not delegate any such power to BSE. No hearing has taken place till date and therefore, there is no further development in the matter.

(ii) Claims against the Company not acknowledged as debt:

â¢ Income Tax Demand of '' 0.57 Lakh raised by Income Tax Department vide Assessment order u/s 143(3) of Income Tax Act, 1961 for A.Y. 2018-19 dated March 15, 2021 against which company has filed an appeal on April 12, 2021

â¢ Income Tax Demand of '' 1882.78 Lakh raised by Income Tax Department vide Assessment order u/s 147 of Income Tax Act, 1961 for A.Y. 2014-15 dated March 30, 2022 against which company has filed rectification letter on April 13, 2022 as well appeal on April 22, 2022

â¢ Service Tax demand of '' 77.97 Lakh and interest and penalty thereon raised by Service Tax Department vide Show Cause Notice issued u/s 73(1) of Chapter V of Finance Act, 1994 for F.Y. 2016-17 dated October 23, 2021 against which company has filed response to Show Cause Notice on November 30, 2021. No hearing has taken place till date and therefore, there is no further development in the matter.

36 Employee benefits36.1 Defined benefits plan - Gratuity

36.2 Compensated Absences

The employees of the Company are entitled to compensated absences. The employees can carry forward a portion of the unutilised accumulating compensated absences and utilise it in future periods or receive cash at retirement or termination of employment. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the end of the reporting period. The Company recognizes accumulated compensated absences based on actuarial valuation. Non-accumulating compensated absences are recognized in the period in which the absences occur. The Company recognizes remeasurement gains or losses immediately in the statement of profit and loss.

During the year ended March 31, 2022 an amount recognized as an expense in respect of compensated leave absences is ? 184.26 lakh, (Previous year ended March 31,2021 is ? 207.25 lakh).

37. As per the rule the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2016 (the "Amended Regulations"). The Company has determined the IPF contribution at 5% of profit from depository operation after making such contribution according to the Amended Regulations. The profit from depository operations has been determined by reducing the other income for the year from the Net profit before exceptional items and tax for the year after making such contribution. The movement of IPF provision is given below:

38. SEBI vide its circular no. CIR/MRD/DP/18/2015 dated December 9, 2015 (the "Circular") has revised the annual custody/issuer charges to be collected by the depositories from the issuers with effect from financial year 2015-16. With an objective of promoting financial inclusion and expanding the reach of depository services through depository participants (DPs) in tier II and tier III towns, the Circular recommends that the Depository Participants (DPs) be incentivised by way of two schemes. In the first scheme, the depositories shall pay the DPs an incentive of ? 100/- for every new Basic Services Demat Accounts (BSDA) opened by their participants in specified cities mentioned in the Circular. In the second scheme, the depositories may pay ? 2 per folio per ISIN to the respective depository participants (DPs), in respect of the ISIN positions held in BSDA across all BSDA accounts in the depository. In order to manage the aforementioned incentive schemes, the Circular has directed the Depositories to set aside 20% of the incremental revenue received from the issuers.

Pursuant to the Circular, the Company has set aside ? 586.18 lakh during the year ended March 31,2022 (? 437.29 lakh during the year ended March 31,2021) being 20% of the incremental revenue received from issuers during the respective years, towards the DP incentive scheme.

39. Chief Operating Decision Maker (CODM) as defined under Indian Accounting Standard 108 Operating Segments:

The Managing Director and Chief Executive Officer of the Company, has been identified as the chief operating decision maker (CODM) as defined by Indian Accounting Standard 108 "Operating Segments". The CODM evaluates the Company''s performance, allocates resources based on analysis of the various performance indicators of the Company as a single unit.

The principal business of the Company is of "Depository Services" All other activities of the Company revolve around its principal business. Therefore, directors have concluded that there is only one operating reportable segment as per Indian Accounting Standard 108 "Operating Segments".

40. Covid-19 Pandemic:

The management has, at the time of approving the standalone financial statements, assessed the potential impact of the COVID-19 on the Company. Based on the current assessment, the management is of the view that impact of COVID 19 on the operations of the Company and the carrying value of its assets and liabilities is minimal.

41. Options permitted under Section 115BAA of the Income-tax Act, 1961:

From the financial year 2019-20, the Company had elected to exercise the option permitted under section 115BAA of the Income-tax Act, 1961 as introduced by the Taxation Laws (Amendment) Act, 2019.

43. Long term contracts including derivative contracts

The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses during the year ended March 31,2022 and March 31,2021

44. Interest on income tax refund and tax provision write back.

The Company has written back an amount of ? 394.04 Lakh in respect of earlier years. Further, an amount of ? 34.75 Lakh, received as interest on refund for the said years have been included in other income.

45. During the financial year 2020-21 Company has changed its estimate of useful life of property, plant and equipment and intangible assets with effect from January 1,2021, such change has resulted in a higher profit before tax by ? 104.34 Lakh for the year ended March 31,2021.

48. Events after the reporting period

There are no events that occur between the end of the reporting period and the date when the standalone financial statements are approved that provide evidence of conditions that existed at the end of the reporting period.

49 Standards notified but not yet effective

Ministry of Corporate affairs have made amendments on March 23, 2022 in certain Indian Accounting Standards (Ind AS) namely Ind AS 101, Ind AS 103, Ind AS 109, Ind AS 16, Ind AS 37 and Ind AS 41. The same are effective from April 01,2022.

50 Other Statutory Information

(i) The Company, for the current year as well as previous year, do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company, for the current year as well as previous year, does not have any charges or satisfaction to be registered with ROC.

(iii) The Company, for the current year as well as previous year, has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(iv) The Company, for the current year as well as previous year, has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(v) The Company , for the current year as well as previous year, has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(vi) The Company, for the current year as well as previous year, has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(vii) The Company has not been declared as wilful defaulter by any bank or financial Institution or other lender, since the company has not undertaken any borrowing during the current year and previous year.

(viii) The company, during the current year and previous year, has not made any investment in downstream companies which are not in compliance with clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

(ix) The Company has not entered into any scheme of arrangement in terms of sections 230 to 237 of the Companies Act, 2013 during the current year and previous year.

(x) The Company has not revalued its Property, Plant and Equipment or intangible assets or both during the current year and previous year.

(xi) The Company has not granted/given any loans or advances during the current year and previous year to the promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment.

51. Previous year figures have been regrouped / reclassified and rearranged wherever necessary to correspond with the current year classification/ disclosure.

Mar 31, 2021

Leases

Effective April 1, 2019, the Company has adopted Ind AS 116 ''Leases'' and applied the same to all eligible lease contracts existing on April 1,2019 using the modified retrospective approach with right-of-use asset recognised at an amount equal to the adjusted lease liability. Accordingly, comparative figures for the corresponding periods, for the year ended and as at March 31,2020 have not been retrospectively adjusted.

On transition, the adoption of the new standard resulted in recognition of ''Right of Use'' asset of '' 48.50 lakhs and a lease liability of '' 45.63 lakhs.

The company has elected not to apply the requirement of Ind AS 116 to short term leases of all assets that have a lease term of 12 months or less. The lease payments associated with these leases are recognised as an expenses on a straight line basis over the lease term.

The following is the summary of practical expedients elected on initial application:

a) Applied a single discount rate to a portfolio of leases of similar assets.

b) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

c) Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

d) Applied the practical expedient to grandfather the assessment of which transactions are leases. Accordingly for all contracts as on April 1,2019, Ind AS 116 is applied only to contracts that were previously identified as leases under Ind AS 17.

The discount rate applied to lease liabilities as at April 1,2019 is 7% and same is continued till March 31,2021.

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

There were no transfers between Level 1,2 and 3 during the years.

The following methods and assumptions were used to estimate the fair values:

a) The fair value of the quoted bonds and mutual fund are based on price quotations at reporting date. The fair value of unquoted instruments and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

b) The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The valuation requires the management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in the management''s estimate of fair value for these unquoted equity investments.

Credit risk

â¢ Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer.

The demographics of the customer, including the default risk of the industry in which the customer operates, also has an influence on credit risk assessment.

â¢ Investments

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The management monitors the Company''s net liquidity position through forecasts on the basis of expected cash flows.

The Company manages contractual financial liabilities and contractual financial assets on net basis.

Market risk

In addition to the above risk, market risk also include following:

â¢ Foreign Currency risk

â¢ Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term / short- term investment with floating interest rates.

Regulatory risk

(i) The Company is a party in certain legal proceedings filed by beneficial owners/third parties in the normal course of business. The Company does not expect the outcome of these proceedings to have any material adverse effect on its financial conditions, results of operations and cash flow. The amount is not ascertainable.

(ii) Claims against the Company not acknowledged as debt: Income Tax

Demand of '' 0.57 Lakh raised by Income Tax Department vide Assessment order u/s 143(3) of Income Tax Act, 1961 for A.Y. 2018-19 dated 15.03.2021 against which company has filed an appeal on 12.04.2021.

(iii) Bank Guarantees

As per business requirements bank guarantees of '' 80 lakhs issued by banks on behalf of Company against 100% margin (earmarked) on fixed deposit receipts. (Refer note 45).

35. Employee benefits

35.1 Defined benefits plan - Gratuity

Gratuity is administered through Gratuity Scheme with Life Insurance Corporation of India. The LIC raises demand for annual contribution for gratuity amount based on its own computation without providing entire details as required by the Ind AS 19 "Employee Benefits". Hence the Company obtains separate actuarial valuation report as required under Ind AS 19 "Employee Benefits" from an independent Actuary. The expected return on plan assets is based on market expectation at the beginning of the year, for the returns over the entire life of the related obligations.

Such plan exposes the Company to actuarial risks such as: investment risk, interest rate risk, demographic risk and salary risk.

Investment The present value of the defined benefit plan liability is calculated using a discount rate determined by

risk reference to market yields at the end of the reporting period on government bond yields; if the return

on plan asset is below this rate, it will create a plan deficit. Currently the plan has a relatively balanced investment in equity securities and debt instruments.

Interest risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.

Demographic This is the risk of variability of results due to unsystematic nature of decrements that include mortality, risk withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is

not straight forward and depends upon the combination of salary increase, medical cost inflation, discount rate and vesting criteria.

Salary risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

Company has received the Gratuity fund statement from LIC till September 2020. Due to COVID-19 lockdown, Company has not received fund statement from LIC till March 2021. Hence, for the purpose of calculation of plan asset as on March 2021 company has prepared fund movement as per the company''s records and rate of return on plan asset is estimated @ 6.45% p.a. as per actuarial report.

35.2 Compensated absences

The employees of the Company are entitled to compensated absences. The employees can carry forward a portion of the unutilised accumulating compensated absences and utilise it in future periods or receive cash at retirement or termination of employment. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the end of the reporting period. The Company recognizes accumulated compensated absences based on actuarial valuation. Nonaccumulating compensated absences are recognized in the period in which the absences occur. The Company recognizes remeasurement gains or losses immediately in the statement of profit and loss.

During the year ended March 31, 2021 an amount recognized as an expense in respect of compensated leave absences is '' 207.25 lakh, (Previous year ended March 31,2020 is '' 303.48 lakh).

36. As per the rule the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2016 (the "Amended Regulations"). The Company has determined the IPF contribution at 5% of profit from depository operation after making such contribution according to the Amended Regulations. The profit from depository operations has been determined by reducing the other income for the year from the Net profit before exceptional items and tax for the year after

37. SEBI vide its circular no. CIR/MRD/DP/18/2015 dated December 9, 2015 (the "Circular") has revised the annual custody/issuer charges to be collected by the depositories from the issuers with effect from financial year 2015-16. With an objective of promoting financial inclusion and expanding the reach of depository services through depository participants (DPs) in tier II and tier III towns, the Circular recommends that the Depository Participants (DPs) be incentivised by way of two schemes. In the first scheme, the depositories shall pay the DPs an incentive of ? 100/- for every new Basic Services Demat Accounts (BSDA) opened by their participants in specified cities mentioned in the Circular. In the second scheme, the depositories may pay ? 2 per folio per ISIN to the respective depository participants (DPs), in respect of the ISIN positions held in BSDA across all BSDA accounts in the depository. In order to manage the aforementioned incentive schemes, the Circular has directed the Depositories to set aside 20% of the incremental revenue received from the issuers.

Pursuant to the Circular, the Company has set aside ? 437.29 lakh during the year ended March 31,2021 (? 438 lakh during the year ended March 31,2020) being 20% of the incremental revenue received from issuers during the respective years, towards the DP incentive scheme.

38. Chief Operating Decision Maker (CODM) as defined under Indian Accounting Standard 108 Operating Segments:

The Managing Director (MD) and CEO of the Company, has been identified as the chief operating decision maker (CODM) as defined by Indian Accounting Standard 108 "Operating Segments". The CODM evaluates the Company''s performance, allocates resources based on analysis of the various performance indicators of the Company as a single unit.

39. COVID-19 Pandemic:

The novel coronavirus (COVID-19) pandemic continues to spread across the globe including India. COVID-19 has taken its toll on not just human life, but business and financial markets too. With substantial increase in COVID-19 cases across different parts of the country, governments have introduced a variety of measures to contain the spread of the virus, including, lockdowns and restrictions on movement of people and goods across different geographies.

Certain establishments including securities market intermediaries are permitted to operate and continue to remain exempted from restrictions. In case there is a disruption in the functioning of the capital markets, the business of the Company may be affected.

The management has, at the time of approving the financial statements, assessed the potential impact of the COVID-19 on the Company. Based on the current assessment, the management is of the view that impact of COVID-19 on the operations of the Company and the carrying value of its assets and liabilities is minimal.

40. Options permitted under Section 115BAA of the Income-tax Act, 1961:

The Company had elected to exercise the option permitted under section 115BAA of the Income-tax Act, 1961 as introduced by the Taxation Laws (Amendment) Act, 2019. Accordingly, the Company has recognised a Provision for Income Tax for the year ended March 31,2020 and re-measured its Deferred Tax Assets basis the rate prescribed in the said section, resulted into a charge of '' 84.22 Lakh to statement of profit and loss during FY 2019-20. There is no such impact during the FY 2020-21.

41. Corporate Social Responsibility

As per the provisions of the Section 135 of the Companies Act, 2013, the Company is required to spend ''191.59 lakh on CSR activities. To discharge its obligation, the Company has contributed ? 158.46 lakhs to PM CARES Fund and ? 31.50 lakhs paid for Creation of Online Learning Academy for Financial Literacy in the age group of 18-25 years in tier II and tier III cities

through M/s. Awarathon Awareness Initiatives Private Limited. The project of Creation of Online Learning Academy has been categorized as an Ongoing Project by the Board in their meeting held on March 25, 2021 and an amount of ? 1.63 Lakh as recognised has been transferred to a separate bank account on April 7, 2021 as per the provisions of the Companies Act, 2013 and Rules made thereunder

42. Long term contracts including derivative contracts

Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses during the year ended March 31,2021.

43. Interest on income tax refund and tax provision write back.

During the year FY 2019-20, the Company had written back an amount of ? 174.10 Lakh in respect of assessment year 2013-14 and the same was netted off from tax expense. Further, an amount of ? 223.45 Lakh, received as interest on refund has been included in other income during the year ended March 31,2020.

44. During the year Company has changed its estimate of useful life of property, plant and equipment and intangible assets with effect from January 1,2021, such change has resulted in a higher profit before tax of '' 104.34 Lakh for the year ended March 31,2021.

46. ''The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

47. Previous year figures have been regrouped / reclassified and rearranged wherever necessary to correspond with the current year classification/ disclosure.

Mar 31, 2018

1. Leases

2 Obligations under finance lease

The Company has building situated at Belapur, Maharashtra which is classified as finance lease. The Company has made an upfront payment and there are no lease obligations to be paid in future periods. Therefore, disclosures with respect to Minimum lease payments and Present value of Minimum lease payments have not been given.

3 Operating lease arrangements

Lease payments recognised in the profit or loss for the year is Rs 180.70 Lakhs (year ended March 31, 2017 Rs, 259.81 Lakhs). The agreements are executed for a period ranging from 12 to 60 months with renewable clause and also provide for termination at will by either party giving a prior notice period between 1 to 3 months.

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

There were no transfers between Level 1 and 2 during the years.

The management assessed that fair value of cash and bank balances, fixed deposits, trade receivables, trade payables and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The following methods and assumptions were used to estimate the fair values:

The fair value of the quoted bonds and mutual fund are based on price quotations at reporting date. The fair value of unquoted instruments and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The valuation requires the management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in the managementâs estimate of fair value for these unquoted equity investments.

4. Financial risk management

The Companyâs principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to support its operations. The Companyâs principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations. The Companyâs activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency and interest rate risk) and regulatory risk. The Companyâs primary focus is to foresee the unpredictability of financial markets and seek to minimise potential adverse effects on its financial performance. The Companyâs exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

- Trade and other receivables

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer.

The demographics of the customer, including the default risk of the industry in which the customer operates, also has an influence on credit risk assessment.

None of the customers accounted for more than 10% of the receivables for the years ended March 31, 2018 and March 31, 2017 and revenue for the years ended March 31, 2018 and March 31, 2017.

- Investments

Liquidity risk

The Companyâs treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The management monitors the Companyâs net liquidity position through forecasts on the basis of expected cash flows.

* Investment does not include investments in equity instruments of subsidiaries.

The Company manages contractual financial liabilities and contractual financial assets on net basis.

Market risk

The Companyâs business, financial condition and results of operations are highly dependent upon the levels of activity in the capital markets and in particular upon the trading volume on stock exchanges, the number of listed securities, the number of new listings and subsequent issuances and introduction of new services which will ease in doing business in capital markets.

Our securities depository business competes closely with our competitor for DPs, investor accounts and number of instruments on our systems. We rely heavily on technological equipment and IT at our facilities. Interruptions in the availability of IT systems could adversely impact our business. Shift in consumer preferences away from investing in securities market to other financial products, may dampen prospects of our business.

- Foreign Currency risk

The Companyâs foreign currency risk arises in respect of foreign currency transactions. The Companyâs foreign currency expenses is insignificant, while a significant portion of its costs are in Indian rupees.

As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Companyâs expenses measured in rupees may decrease. Due to lessor quantum of expenses from foreign currencies, the Company is not much exposed to foreign currency risk.

- Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs long-term / short- term investment with floating interest rates.

Interest rate risk primarily arises from floating rate investment. The Companyâs investments in floating rate are primarily in FMPs of mutual funds, which do not expose it to significant interest rate risk. There is also a reinvestment risk in the current scenario, as the rates are going downwards.

Regulatory risk

The Company requires various regulatory approvals, registrations and permissions to operate its business, including at a corporate level as well as at the level of each of itâs components. Some of these approvals are required to be renewed from time to time. The Companyâs operations are subject to continued review by regulator and these regulations may change from time to time in fast changing capital market environment. The Companyâs compliance team constantly monitors the compliance with these rules and regulations.

5. Capital management

The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Companyâs objective when managing capital is to maintain an optimal structure so as to maximise shareholder value.

The Company is predominantly equity financed which is evident from the capital structure. Further, the Company has always been a net cash company with cash and bank balances along with investment which is predominantly investment in liquid and short term mutual funds being far in excess of financial liabilities.

6. Information on related party transactions as required by Ind AS 24 - âRelated party disclosuresâ for the year ended 31^st March, 2018.

Description of relationship Name of the related party

Subsidiaries CDSL Ventures Limited

CDSL Insurance Repository Limited CDSL Commodity Repository Limited Entity having significant influence (from 30.06.2017) BSE Limited (Parent Company up to 29.06.2017)

Subsidiaries of the entity having significant influence Marketplace Technologies Private Limited (from 30.06.2017) Indian Clearing Corporation Limited

(Fellow Subsidiaries up to 29.06.2017)

Description of relationship Name of the related party

Key Management Personnel (KMP) Shri P. S. Reddy - MD & CEO

Shri T S Krishna Murthy

Shri R. M. Malla

(appointed w.e.f. July 30, 2016)

Shri B. Prasada Rao

(appointed w.e.f. October 21, 2016)

Smt Jayshree Vyas

(ceased to be director w.e.f. January 17, 2017) Shri A. Krishna Kumar (appointed w.e.f. July 30, 2016)

Smt Usha Narayanan (appointed w.e.f. April 24, 2017)

Shri C. Venkat Nageswar (appointed w.e.f. June 28, 2016)

Smt Nehal Vora Shri Nayan Mehta Shri K.V. Subramanian

(ii) The Commissioner of Service Tax, Mumbai has issued Order on 19^th August 2016 to CDSL demanding service tax amount of Rs, 2,112.18 Lakhs and Penalty of ''Rs,1,866.63 Lakhs.

(iii) The Commissioner of Service Tax, Mumbai has issued Show cause cum Demand Notice (SCN) on 23rd April 2012 to CDSL demanding service tax amount of ''Rs,5.91 Lakhs on the charges recovered by CDSL for wrong availment of Cenvat Credit on Group Mediclaim policy in respect of staff for FY 2007-08 to FY 2011-12. Order has been issued on 20^th December, 2017 by Commissioner (Appeals)-I CGST& CX, Mumbai, allowing CENVAT credit of Rs,5.91 Lakhs in companies favour.

(iv) Claims against the Company not acknowledged as debt : Service Tax

The Commissioner of Service Tax, Mumbai has issued Show cause cum Demand Notice (SCN) on 21^st October 2009 to CDSL demanding service tax amount of Rs,1,791 Lakhs on the charges recovered by CDSL for providing âDepository servicesâ to DPs and RTAs for the period 2004-05 to 2008-09.

The Commissioner of Service Tax, Mumbai has issued Show cause cum Demand Notice (SCN) on 4^th October 2010 to CDSL demanding service tax amount of Rs,465 Lakhs on the charges recovered by CDSL for providing âDepository servicesâ to DPs and RTAs for the period 2009-10.

(v) Claims against the Company not acknowledged as debt : Income Tax

Appeal pending with Commissioner of Income Tax (Appeals) for the AY 2011-12 amounting to Rs,4.92 Lakhs.

7. Employee benefits

8 Defined benefits plan - Gratuity

Gratuity is administered through Gratuity Scheme with Life Insurance Corporation of India. The LIC raises demand for annual contribution for gratuity amount based on its own computation without providing entire details as required by the Ind AS 19 âEmployee Benefitsâ. Hence the Company obtains separate actuarial valuation report as required under Ind AS 19 âEmployee Benefitsâ from an independent Actuary. The maximum amount as per these two valuation reports is recognised as liability in the books of accounts. The expected return on plan assets is based on market expectation at the beginning of the year, for the returns over the entire life of the related obligations.

Such plan exposes the Group to actuarial risks such as: investment risk, interest rate risk, demographic

risk and salary risk.

Investment risk The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to market yields at the end of the reporting period on government bond yields; if the return on plan asset is below this rate, it will create a plan deficit. Currently the plan has a relatively balanced investment in equity securities and debt instruments.

Interest risk A decrease in the bond interest rate will increase the plan liability; however, this

will be partially offset by an increase in the return on the planâs debt investments.

Demographic risk This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, medical cost inflation, discount rate and vesting criteria.

9.Compensated absences

The employees of the Company are entitled to compensated absences. The employees can carry forward a portion of the unutilised accumulating compensated absences and utilise it in future periods or receive cash at retirement or termination of employment. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the end of the reporting period. The Company recognises accumulated compensated absences based on actuarial valuation. Non-accumulating compensated absences are recognised in the period in which the absences occur. The Company recognises actuarial gains or losses immediately in the statement of profit and loss.

During the year ended March 31, 2018 an amount recognised as an expenses in respect of compensated leave absences is Rs,26.75 Lakhs, (Previous year ended March 31, 2017 is Rs, 52.32 Lakhs).

10. SEBI had issued Depositories and Participants (Amendment) Regulations, 2012 on September 11, 2012 (the â2012 Regulationsâ). According to the 2012 Regulations, depositories were required to establish and maintain an Investor Protection Fund (the âIPFâ) for the protection of interest of beneficial owners and every depository was required to credit 25% of its profits every year to the Investor Protection Fund. On January 21, 2016, SEBI has issued the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2016 (the âAmended Regulationsâ). According to these Amended Regulations, every depository shall credit 5% or such percentage as may be specified by the Board, of its profits from depository operations every year to the IPF. These Amended Regulations shall be deemed to have come into force from September 11, 2012.

11. From the year ended March 31, 2016 onwards, the Company has determined the IPF contribution at 5% of profit from depository operation after making such contribution according to the Amended Regulations. The profit from depository operations has been determined by reducing the other income for the year from the Net profit before exceptional items and tax for the year after making such contribution. From FY 2012-13 to FY 2014-15 however, as per the 2012 Regulations, the Company calculated IPF contribution at 25% of the profits of the Company before tax, available after making such contribution. The amount contributed to IPF determined over the reported period is as under:

* During the year ended March 31, 2017, the Company has also contributed a sum of Rs, 168.75 Lakhs being the interest income from investments to be contributed to the IPF pursuant to SEBI Circular SEBI/HO/MRD/DP/CIR/P/2016/58 dated June 07, 2016. Thus, the total contribution during the year ended March 31, 2017 amounts to ''Rs,459.75 Lakhs.

12. SEBI vide its circular no. CIR/MRD/DP/18/2015 dated December 9, 2015 (the âCircularâ) has revised the annual custody/issuer charges to be collected by the depositories from the issuers with effect from financial year 2015-16. With an objective of promoting financial inclusion and expanding the reach of depository services through depository participants (DPs) in tier II and tier III towns, the Circular recommends that the Depository Participants (DPs) be incentivised by way of two schemes. In the first scheme, the depositories shall pay the DPs an incentive of '' 100/- for every new Basic Services Demat Accounts (BSDA) opened by their participants in specified cities mentioned in the Circular. In the second scheme, the depositories may pay Rs,2 per folio per ISIN to the respective depository participants (DPs), in respect of the ISIN positions held in BSDA across all BSDA accounts in the depository. In order to manage the aforementioned incentive schemes, the Circular has directed the Depositories to set aside 20% of the incremental revenue received from the issuers.

Pursuant to the Circular, the Company has set aside '' 307.03 Lakhs during the year ended March 31, 2018 (Rs,288.12 Lakhs during the year ended March 31, 2017) being 20% of the incremental revenue received from issuers during the respective years, towards the DP incentive scheme.

13. The Managing Director (MD) and CEO of the Company, has been identified as the chief operating decision maker (CODM) as defined by Indian Accounting Standard 108 âOperating Segmentsâ. The CODM evaluates the Companyâs performance, allocates resources based on analysis of the various performance indicators of the Company as a single unit.

The principal business of the Company is of âDepository Servicesâ. All other activities of the Company revolve around its principal business. Therefore, directors have concluded that there is only one operating reportable segment as per Indian Accounting Standard 108 âOperating Segmentsâ.

14. Information about services: - Refer note 1

15. nformation about geographical areas: There is no revenue from external customers and noncurrent assets outside India.

16.Information about customers: No single external customer amounts to 10% or more of Companyâs revenue.

Mar 31, 2017

1. Company Overview

Central Depository Services (India) Limited (âCDSLâ) herein after referred to as the âThe Companyâ is a limited company incorporated in India. Its Parent company is BSE Limited (Formerly known as Bombay Stock Exchange Limited)

The registered office of the Company is at 17th floor, P. J. Towers, Dalal Street, Mumbai 400 001, Maharashtra, India. CDSL was set up with the objective of providing conv enient, dependable and secure depository services at affordable cost to all market participants.

A depository facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry by a Depository participant (DP) who as an agent of the depository, offers depository services to investors.

The financial statements were approved for issue by the board of directors on April 24 2017.

2 Explanation of Transition to Ind AS

The transition as at April 1, 2015 to Ind AS was carried out from Previous GAAP. The exemptions and exceptions applied by the Company in accordance with Ind AS 101 Firsttime Adoption of Indian Accounting Standards, the reconciliations of equity and total comprehensive income in accordance with Previous GAAP to Ind AS are explained below.

2.1 First time adoption - Mandatory exception, Optional exemptions:

3.1.1 Deemed Cost for Property, plant and equipment and intangible assets

The Company has elected to continue with the carrying value of all the property, plant and equipment and intangible assets recognised as of April 1, 2015 (transition date) measured as per the previous GAAP and used that carrying value as its deemed cost as of the transition date.

2.1.2 Classification of debt instruments

The Company has determined the classification of debt instruments in terms of whether they meet amortised cost criteria or the FVTOCI criteria based on the facts and circumstances that existing as of transition date.

2.1.3 Impairment of financial assets

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognise d in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.

2.1.4 Determining whether an arrangement contains a lease

The Company has applied Appendix C of Ind AS 17 determining whether an arrangement contains a Lease to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date.

2.1.5 Equity investments at FVTPL

The Company has designated investment in equity shares as at FVTPL on the basis of facts and circumstances that existed at the transition date.

Notes to Reconciliations

a Under previous GAAP, dividends on equity shares recommended by the board of directors after the end of the reporting period but before the financial statements were approved for issue were recognised in the financial statements as a liability. Under Ind AS, such dividends are recognised when declared by the members in a general meeting. The effect of this change is an increase in total equity as at March 31, 2016 of Rs. 3,144.35 lakh (as at April 01, 2015 of Rs. 2,767.03 lakh), but does not affect profit before tax and total profit for the year ended March 31, 2016.

b Under previous GAAP, interest bearing long term investments including current maturity of interest bearing long term investments were measured at cost less diminution in value which is other than temporary. Under Ind AS, these financial assets have been classified at amortised cost and interest income is accounted as per effective interest rate method . On the date of transition to Ind AS, these financial assets have been measured at value which would have been the value if these investment would have accounted as per Ind AS. The net effect of these changes is an increase in total equity as at March 31, 2016 of Rs. 3.05 lakh (as at April 01, 2015 decrease of Rs. 3.94 lakh) and there is a increase in profit before tax of Rs. 6.99 lakh for the year ended March 31, 2016.

c Under previous GAAP, non interest bearing non-current investments were measured at cost less diminution in value which is other than temporary and current investments were measured at cost less diminution in value. Under Ind AS, these financial assets have been classified at FVTPL on the date of transition to Ind AS. The fair value changes are recognised in profit or loss. On transitioning to Ind AS, these financial assets have been measured at their fair values which is higher than cost as per previous GAAP. The corresponding deferred taxes have also been recognised as at March 31, 2016 and as at April 1, 2015. The effect of this change is an increase in total equity as at March 31, 2016 of Rs. 3,688.73 lakh (as at April 1, 2015 of Rs. 1,962.05 lakh ), increase in profit before tax of Rs. 1,709.51 lakh.

d Under previous GAAP, non interest bearing non-current investments were measured at cost less diminution in value which is other than temporary and current investments were measured at cost less diminution in value. Under Ind AS, these financial assets have been classified at FVTPL on the date of transition to Ind AS. The fair value changes of investments earmarked are recognised in profit or loss and credited to respective earmarked liabilities for investment earmarked against them. The earmarked liability is in respect of bonus payable to Managing Director of the Company (Mr. P. S. Reddy), held for specific purposes as per the SEBI letter viz. MRD/DP/OW/31553/2013 dated December 05, 2013. These amounts are invested in mutual fund units and the same are earmarked as liability. The effect of this change is an increase in earmarked liability by 4.02 lakh (for April 1, 2015 of Rs. 1.13 lakh).

e Under previous GAAP deferred taxes are computed for the timing differences in respect of recognition of items of profit or loss for the purpose of financials reporting and for income taxes. Under Ind AS, deferred taxes are computed for the temporary differences between carrying amount of an asset or liability in the Balance Sheet and its tax base. On the date of transition deferred taxes have been calculated as per the approch defined under Ind AS and accordingly difference has been accounted in balance sheet, profit or loss account and other comprehensive income. The effect of this change is an decrease in total equity as at March 31, 2016 of Rs. 836.92 lakh (as at April 1, 2015 of Rs. 443.24 lakh), and decrease in profit after tax Rs. 394 lakh for the year ended March 31, 2016.

f Under previous GAAP the profit was booked as a difference between cost and sales value, whereas under Ind AS investments are carried at market value, therefore profit will only be booked to the extent of market value changes in current period. Hence the amount reversed is in relation to those investments which were sold and for whom excess profit was booked.The effect of the same is decrease in profit of Rs. 11.46 lakh for the year ended March 31, 2016.

g Under previous GAAP investments were carried at cost and diminution in value of investment been provided in Statement of Profit or Loss. However under Ind AS, investments are measured at fair value and corrosponding gain / loss is accounted in Profit or Loss. Accordingly Company has accounted for Rs. 28.65 lakh as decrease in Fair value of investments and removed the provision for diminution of Rs. 28.65 lakh. There is no impact on net profit on account of same.

h Under previous GAAP, actuarial gains and losses were recognised in profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability / asset which is recognised in other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive income under Ind AS instead of profit or loss. The actuarial loss for the year ended March 31, 2016 were Rs. (7.84) lakh and the tax effect thereon is Rs. 2.71 lakh.

This change does not affect total equity, but there is a increase in profit before tax of Rs. 5.13 lakh for the year ended March 31, 2016.

ⁱ Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expense, gains, or losses are required to be presented in other comprehensive income.

3. Cash and cash equivalents and other bank balances

For the purpose of statement of cashflows, cash and cash equivalents includes cash on hand and in banks. Cash and cash equivalents at the end of the reporting period as shown in the statement of cashflow can be reconciled to the related items on the balance sheet as follows:

The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

On June 01, 2016, a dividend of Rs. 2.50 per share (total dividend including dividend distribution tax of Rs. 3,144.35 lakh) was paid to the holders of equity shares. On June 11, 2015, the dividend paid was Rs. 2.20 per share (total dividend including dividend distribution tax of Rs. 2,767.03 lakh).

The Board of Directors, at its meeting on April 24,2017, have proposed a final dividend of ? 3.00/- per equity share of face value ? 10/- per share for the financial year ended March 31, 2017. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held and if approved would result in a cash outflow of approximately ? 3,773.21 lakh, including dividend distribution tax.

4.1.Income tax expense

The major components of income tax expense for the year ended March 31, 2017 and 2016 are as under:

5.1. Obligations under finance lease

5.2. Operating lease arrangements

Lease payments recognised in the profit or loss for the year is Rs. 259.81 lakh (year ended March 31, 2016 Rs. 264.36lakh). The agreements are executed for a period ranging from 12 to 60 months with renewable clause and also provide for termination at will by either party giving a prior notice period between 1 to 3 months.

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2- Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

There were no transfers between Level 1 and 2 during the years.

Except as detailed in the following table, the directors consider that the carrying amounts of financial assets and financial liabilities recognised in the balance sheet approximate their fair values .

The management assessed that fair value of cash and bank balance s, fixed deposits, trade receivables, trade payables and other current financial assets and liabilities approximate their carrying amounts largely due to the short - term maturities of these instruments.

The following methods and assumptions were used to estimate the fair values:

6. Financial risk management

The Companyâs principal financial liabilities, comprise trade and other payables. The main purpose of these financial liabilities is to support its operations. The Companyâs principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations.

The Companyâs activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency and interest rate risk) and regulatory risk. The Companyâs primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Companyâs exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

- Trade and other receivables

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer.

The demographics of the customer, including the default risk of the industry in which the customer operates, also has an influence on credit risk assessment.

None of the customers accounted for more than 10% of the receivables for the years ended March 31, 2017, March 31, 2016 and March 31, 2015 and revenue for the years ended March 31, 2017 and March 31, 2016.

- Investments

The Company limits its exposure to credit risk by making investment as per the investment policy. Further investment committee of the Company review the investment portfolio on monthly basis and recommend or provide suggestion to the management. The company does not expect any losses from non - performance by these counter - parties, and does not have any significant concentration of exposures to specific industry sectors.

Liquidity risk

The Companyâs treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The management monitors the Companyâs net liquidity position through forecasts on the basis of expected cash flows.

The table below provides details regarding the contractual matu rities of significant financial liabilities as at March 31, 2017, March 31, 2016 and April 1, 2015

* Investment does not include investment s in equity instruments of subsidiaries.

The Company manages contractual financial liabilities and contractual financial assets on net basis.

Market risk

Foreign Currency risk

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs long -term / short - term investment with floating interest rates.

Interest rate risk primarily arises from floating rate investment. The Companyâs investments in floating rate are primarily in FMPs of mutual funds, which do not expose it to significant interest rate risk. There i s also a reinvestment risk in the current scenario, as the rates are going downwards .

Regulatory risk

7. Capital management

8. Disclosure on Specified Bank Notes (SBNs)

Pursuant to the MCA notification G.S.R. 308 (E) dated March 30, 2017, the details of Specified Bank Notes (SBNs) held and transacted during the period from November 08, 2016 to December 30, 2016 are given below.

(ii) The Commissioner of Service Tax, Mumbai has issued Order on 19^thAugust 2016 to CDSL demanding service tax amount of Rs.2,112.18 lakh and Penalty of Rs.1,866.63 lakh.

(iii)The Commissioner of Service Tax, Mumbai has issued Show cause cum Demand Notice (SCN) on 23rd April 2012 to CDSL demanding service tax amount of Rs.5.91 lakh on the charges recovered by CDSL for wrong availment of Cenvat Credit on Group Mediclaim policy in respect of staff for FY 2007- 08 to FY 2011^- 12.

(iv) Claims against the Company not acknowledged as debt : Service Tax

The Commissioner of Service Tax, Mumbai has issued Show cause cum Demand Notice (SCN) on 21^st October 2009 to CDSL demanding service tax amount of Rs.1,791 lakh on the charges recovered by CDSL for providing âDepository servicesâ to DPs and RTAs for the period 2004-05 to 2008-09.

The Commissioner of Service Tax, Mumbai has issued Show cause cum Demand Notice (SCN) on 4^thOctober 2010 to CDSL demanding service tax amount of Rs.465 lakh on the charges recovered by CDSL for providing âDepository servicesâ to DPs and RTAs for the period 2009-10.

(v) Claims against the Company not acknowledged as debt : Income Tax Appeal pending with Commissioner of Income Tax (Appeals) for the AY 2011^-12 amounting to Rs.4.92 lakh.

9. Employee benefits:

9.1 Defined benefits plan - Gratuity

Gratuity is administered through Gratuity Scheme with Life Insurance Corporation of India. The LIC raises demand for annual cortribution for gratuity amount based on its own computation without providing entire details as required by the Ind AS 19 âEmployee Benefitsâ. Hence the Company obtains separate actuarial valuation report as required under Ind AS 19 âEmployee Benefitsâ from an independent Actuary. The maximum amount as per these two valuation reports is recognized as liability in the books of accounts. The expected return on plan assets is based on market expectation at the beginning of the year, for the returns over the entire life of the related obligations.

9.2 Compensated absences

The employees of the Company are entitled to compensated absences. The employees can carry forward a portion of the unutilised accumulating compensated absences and utilise it in future periods or receive cash at retirement or termination of employment. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the end of the reporting period. The Company recognizes accumulated compensated absences based on actuarial valuation. Nonaccumulating compensated absences are recognized in the period in which the absences occur. The Company recognizes actuarial gains or losses immediately in the statement of profit and loss.

During the year ended March 31, 2017 an amount recognized as an expenses in respect of compensated leave absences is Rs.52.32 lakh, for the year ended March 31,2016 is Rs.59.15 lakh and for the year ended March 31, 2015 is Rs.48.83 lakh.

On January 21, 2016, SEBI has issued the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2016 (the âAmended Regulationsâ). According to these Amended Regulations, every depository shall credit 5% or such percentage as may be specified by the Board, of its profits from depository operations every year to the IPF. These Amended Regulations shall be deemed to have come into force from September 11, 2012. Pursuant to the aforesaid Amended Regulations, the amount to be credited to the IPF as at March 31, 2015 should have been Rs.541.86 lakh. Consequently, the excess amounts of Rs.3,310.40 lakh credited earlier to the IPF has been written back and the same has been disclosed as exceptional item in the Statement of Profit and Loss for the year ended March 31, 2016.

*During the year ended March 31, 2017, the Company has also contributed a sum of Rs.168.75 lakh being the interest income from investments to be c ontributed to the IPF pursuant to SEBI Circular SEBI/H0/MRD/DP/CIR/P/2016/58 dated June 07, 2016. Thus, the total contribution during the year ended March 31, 2016 amounts to Rs.459.75 lakh.

12. SEBI vide its circular no. CIR/MRD/DP/18/2015 dated December 9, 2015 (the âCircularâ) has revised the annual custody/issuer charges to be collected by the depositories from the issuers with effect from financial year 2015-16. With an objective of promoting financial inclusion and expanding the reach of depository services through depository participants (DPs) intier II and tier III towns, the Circular recommends that the Depository Participants (DPs) be incentivised by way of two schemes. In the first scheme, the depositories shall pay the DPs an incentive of Rs.100/- for every new Basic Services Demat Accounts (BSDA) opened by their participants in specified cities mentioned in the Circular. In the second scheme, the depositories may pay Rs.2 per folio per ISIN to the respective depository participants (DPs), in respect of the ISIN positions held in BSDA across all BSDA accounts in the depository. In order to manage the aforementioned incentive schemes, the Circular has directed the Depositories to set aside 20% of the incremental revenue received from the issuers.

Pursuant to the Circular, the Company has set aside Rs.288.12 lakh during the year ended March 31, 2017 (? 281.52 lakh during the year ended March 31, 2016) being 20% of the incremental revenue received from issuers during the respective years, towards the DP incentive scheme.

13. The principal business of the Company is ofâDepository Servicesâ. All other activities of the Company revolve around its principal business. The Managing Director (MD) and CEO of the Company, has been identified as the chief operating decision maker (CODM). The CODM evaluates the Companyâs performance, allocates resources based on analysis of the various performance indicators of the Company as a si ngle unit. Therefore, directors have concluded that there is only one operating reportable segment as defined by Ind AS 108 ^- Operating Segments.

14.1 Information about services:- Refer note 22

14.2 Information about geographical areas : There is no revenue from external customers and non -current assets outside India.

14.3 Information about customers : No single external customer amounts to 10% or more of Companyâs revenue .

Mar 31, 2011

Central Depository Services (India) Limited (CDSL) was set up with the objective of providing convenient, dependable and secure depository services at affordable cost to all market participants. A depository facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry by a Depository participants (DP) who as an agent of the depository, offers depository services to investors.

1. Contingent liability not provided for:-

Claims against the Company not acknowledged as debts:

(a) The Company is a party in certain legal proceedings filed by beneficial owners/third parties in the normal course of business.

The Company does not expect the outcome of these proceedings to have any material adverse effect on its financial conditions, results of operations and cash flow. Amount is not ascertainable.

(b) (i) The Commissioner of Service Tax, Mumbai has issued Show cause cum Demand Notice (SCN) on 21st October, 2009 to CDSL demanding service tax amount of Rs. 17.91 crores on the charges recovered by CDSL for providing "Depository services" to DPs and RTAs for the period 2004-05 to 2008-09.

(ii) The Commissioner of Service Tax, Mumbai has issued Show cause cum Demand Notice (SCN) on 04th October, 2010 to CDSL demanding service tax amount of Rs. 4.65 crores on the charges recovered by CDSL for providing Depository services" to DPs and RTAs for the period 2009-10.

(iii) Company has obtained two legal opinions which states that CDSL is not liable for the service tax as demanded in the aforesaid notice. Company has filed a comprehensive reply based on jurisdiction and merits, vide its letter dated November 25, 2009 and November 2, 2010 to the SCNs respectively and requested for personal hearing in the matter. Till date no reply from Service Tax Department has been received.

(c) Bank Guarantee issued on behalf of the Company ''50,00,000. (Previous year Nil) for the purpose of allotment of UIDAI Project.

2. Estimated amount of contracts to be executed on capital account and not provided for (net of advances) Rs. 47,32,012 (Previous Year Rs. 60,46,498).

3. Fees towards users facilities (Schedule 7) are on account of facilities provided such as telecom leased lines, software and insurance.

4. VSAT connectivity facilities provided by the Bombay Stock Exchange Limited (BSE) are used by the Company as also by the Company''s Depository Participants (DP''s) and other users. As agreed with the BSE the user charges invoiced by the Company to the DPs and other users are recovered by the Company and passed on to the BSE and therefore, are not recognised as Company''s revenues: Rs. 1,03,42,305 (Previous Year Rs. 1,46,85,757)

5. (a) Investor Education and Awareness Programmer:

During the year, out of the penalty collected on account of late transfer of securities by Depository Participants to beneficial owner accounts, Rs. 3,35,163 (Previous Year Rs. 4,25,563) utilized for conducting various investor education and awareness programmers. Balance of Rs. 16,71,647 (Previous year Rs. 10,27,873) is to be utilised for the said programmers has been grouped under "Other Liabilities" in Schedule 6.

6. (a) In the opinion of the Management, the Current Assets, Loans & Advances have a value on realisation in the ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and other known liabilities is adequate and is not in excess of what is required.

(b) The accounts of certain sundry debtors, creditors and deposits are subject to confirmation/reconciliation and adjustments, if any. In the opinion of the management, adjustments as may be required in the above cases, to the stated values of the assets and liabilities on these accounts, would not be significant.

7. The Company is engaged in the business of providing depository services and there is no separate reportable segment as per Accounting Standard-17 on "Segment Reporting" prescribed in Companies (Accounting Standards) Rules, 2006.

8. The Company has made a strategic and long term investments of Rs. 1,00,00,000 in the equity shares of the subsidiary company CDSL Ventures Limited. The management is confident of realising its investments.

9. The Company has determined the liability for Employee Benefits as at 31st March, 2011 in accordance with the revised Accounting Standard-15 on "Employee Benefits" prescribed in Companies (Accounting Standards) Rules, 2006.

10. As at March 31, 2011, no supplier has intimated the company about its status as Micro or Small Enterprises or its Registration with appropriate authority under the Micro, Small and Medium Enterprises Development Act, 2006.

11. During the year, company has changed its accounting policy in respect of providing for short term employee benefits of Performance Linked Bonus (PLB). Due to this change, the PLB provision ofRs. 41,79,137 outstanding as on 31-03-2010 was no longer required and hence written back to relevant expense head. Due to change in policy in respect of PLB, unlike earlier year no provision has been made as on 31-03-2011 for PLB (Previous year PLB provision was Rs. 1,21,82,725/-). Due to this change in the policy, profit for the year 2010-11 is more and provisions are less to that extent. However the exact impact of non-provision of PLB on the profits of the company cannot be quantified.

12. Previous year''s figures have been regrouped and rearranged wherever necessary, to conform to the current year''s presentation.

Mar 31, 2010

1. Contingent liability not provided for:- Claims against the Company not acknowledged as debts:

a) The Company is a party in certain legal proceedings filed by beneficial owners/third parties in the normal course of business. The Company does not expect the outcome of these proceedings to have any material adverse effect on its financial conditions, results of operations and cash flow. Amount not ascertainable.

b) The Commissioner of Service Tax, Mumbai has issued Show cause cum Demand Notice (SCN) on 21st October 2009 to CDSL demanding service tax amount of Rs. 17.91 crores on the charges recovered by CDSL for providing "Depository services" to DPs and RTAs for the period 2004-05 to 2008-09.

Company has obtained a legal opinion which states that CDSL is not liable for the service tax as demanded in the aforesaid notice. Company has filed a comprehensive reply based on jurisdiction and merits, vide its letter dated November 25, 2009 to the SCN and requested for personal hearing in the matter. Till date no reply from Service Ta x Department has been received.

2. Estimated amount of contracts to be executed on capital account and not provided for (net of advances) Rs.6047 thousands (Previous Year Rs.2818 thousands).

3. Fees towards users facilities (Schedule 7) are on account of facilities provided such as telecom leased lines, software and insurance.

4. VSAT connectivity facilities provided by the Bombay Stock Exchange Limited (BSE) are used by the Company as also by the Companys Depository Participants (DPs) and other users. As agreed with the BSE the user charges invoiced by the Company to the DPs and other users are recovered by the Company and passed on to the BSE and therefore, are not recognised as Companys revenues: Rs 14686 thousands (Previous Year Rs. 16271 thousands)

5. (a) Investor Education and Awareness Programme:

During the year, out of the penalty collected on account of late transfer of securities by Depository Participants to beneficial owner accounts, Rs.426 thousands (Previous Year Rs.461 thousands) utilized for conducting various investor education and awareness programme. Balance of Rs.1028 thousands (Previous year Rs. 206) is to be utilised for the said programme has been grouped under "Other Liabilities" in Schedule 6.

c) Investor Education & Protection Fund:

No amount is required to be credited to Investor Education & Protection Fund as contemplated under section 205C of the Companies Act, 1956.

6. a) In the opinion of the Management, the Current Assets, Loans & Advances have a value on realisation in the ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and other known liabilities is adequate and is not in excess of what is required.

b The accounts of certain sundry debtors, creditors and deposits are subject to confirmation/reconciliation and adjustments, if any. In the opinion of the management, adjustments as may be required in the above cases, to the stated values of the assets and liabilities on these accounts, would not be significant.

7. The Company is engaged in the business of providing depository services and there is no separate reportable segment as per Accounting Standard 17 on "Segment Reporting" prescribed in Companies (Accounting Standards) Rules, 2006.

8. The Company has made a strategic and long term investments of Rs. 10000 thousands in the equity shares of the subsidiary company CDSL Ventures Limited and also has a outstanding loan of Rs.13500 thousands to the said subsidiary company. The management is confident of realising its investments and recovering the loan in due course.

9. The Company has determined the liability for Employee Benefits as at March 31, 2010 in accordance with the revised Accounting Standard 15 on "Employee Benefits" prescribed in Companies (Accounting Standards) Rules, 2006.

10. As at March 31, 2010, no supplier has intimated the company about its status as Micro or Small Enterprises or its Registration with appropriate authority under the Micro, Small and Medium Enterprises Development Act, 2006.

11. In the operational income, under the head Others, unavailed input CENVAT credit amounting to Rs. 6052 thousands is recongnised as income as there exist certainty of setting it off against the service tax liability.

12. Related Party Disclosures:

(a) List of related parties and their relationship:

(i) Entities where control exists:

CDSL Ventures Limited - Wholly owned subsidiary

(ii) Associates:

Bombay Stock Exchange Ltd - Shareholder with substantial interest in voting power.

(iii) Key Managerial Personnel:

Shri V V Raut - MD & CEO

13. Previous years figures have been regrouped and rearranged wherever necessary, to conform to the current years presentation.

Mar 31, 2009

Central Depository Services (India) Limited (CDSL) was set up with the objective of providing convenient, dependable and secure depository services at affordable cost to all market participants. A depository facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry by a Depository participants (DP) who as an agent of the depository, offers depository services to investors.

1. Contingent liability not provided for:-

Claims against the Company not acknowledged as debts:

The Company is a party in certain legal proceedings filed by beneficial owners/third parties in the normal course of business. The Company does not expect the outcome of these proceedings to have any material adverse effect on its financial conditions, results of operations and cash flow. Amount not ascertainable.

2. Estimated amount of contracts to be executed on capital account and not provided for (net of advances) Rs.2818 thousands (Previous Year Rs.10183 thousands).

3. Fees towards users facilities (Schedule 7) are on account of facilities provided such as telecom leased lines, software and insurance.

4. VSAT connectivity facilities provided by the Bombay Stock Exchange Limited (BSE) are used by the Company as also by the Companys Depository Participants (DPs) and other users. As agreed with the BSE the user charges invoiced by the Company to the DPs and other users are recovered by the Company and passed on to the BSE and therefore, are not recognised as Companys revenues: Rs 16271 thousands (Previous Year Rs. 15068 thousands)

5. (a) Investor Education and Awareness Programme :

During the year, out of the penalty collected on account of late transfer of securities by Depository Participants to beneficial owner accounts, Rs.461 thousands (Previous Year Rs.2983 thousands) utilized for conducting various investor education and awareness programme. Balance of Rs.206 thousands (Previous year Rs. Nil) is to be utilised for the said programme has been grouped under "Other Liabilities" in Schedule 6.

(b) Beneficial Owners Protection Fund :

As advised by SEBI, the Company had set up a Trust called "CDSL Beneficial Owners Protection Fund"(BOPF) with the object of indemnification of losses suffered by Beneficial Owners. As per the rules of the said Fund, corpus is constituted mainly out of (a) penalties collected from Depository Participants (DPs) and (b) amount funded by the Company from time to time based on certain percentage of annual issuer fees and interest earned on security deposit from DPs. Details of the Fund account grouped under "Other Liabilities" in Schedule 6 are given below:

c) Investor Education & Protection Fund :

No amount is required to be credited to Investor Education & Protection Fund as contemplated under section 205C of the Companies Act, 1956.

6. a) In the opinion of the Management, the Current Assets, Loans & Advances have a value on realisation in the ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and other known liabilities is adequate and is not in excess of what is required.

b) The accounts of certain sundry debtors, creditors and deposits are subject to confirmation/reconciliation and adjustments, if any. In the opinion of the management, adjustments as may be required in the above cases, to the stated values of the assets and liabilities on these accounts, would not be significant.

7. The Company is engaged in the business of providing depository services and there is no separate reportable segment as per Accounting Standard 17 on "Segment Reporting" prescribed in Companies (Accounting Standards) Rules, 2006.

8. The Company has made a strategic and long term investments of Rs. 10000 thousands in the equity shares of the subsidiary company CDSL Ventures Limited and also given a loan of Rs.20000 thousands to the said subsidiary company. The management is confident of realising its investments and recovering the loan in due course.

9. The Company has determined the liability for Employee Benefits as at March 31, 2009 in accordance with the revised Accounting Standard 15 on "Employee Benefits" prescribed in Companies (Accounting Standards) Rules, 2006.

10. As at March 31, 2009, no supplier has intimated the company about its status as Micro or Small Enterprises or its Registration with appropriate authority under the Micro, Small and Medium Enterprises Development Act, 2006.

11. Previous years figures have been regrouped and rearranged wherever necessary, to conform to the current years presentation.

Mar 31, 2008

1. Contingent liability not provided for :-

a) Claims against the Company not acknowledged as debts;

The Company is a party in certain legal proceedings filed by beneficial owners/third parties in the normal course of business. The Company does not expect the outcome of these proceedings to have any material adverse effect on its financial conditions, results of operations and cash flow. Amount not ascertainable.

b) In IPO related matter, a penalty of Rs. 3 crores has been imposed by the Adjudication Officer, SEBI. CDSL has disputed the tenability of the order and the appeal before the Securities Appellate Tribunal (SAT) is pending.

2. CDSL Beneficial Owners Protection Fund set up in 2003-04 as advised by SEBI for indemnification of losses to the beneficial owners in accordance with the Depositories Act, 1996 read with SEBI (Depositories and Participants) Regulation, 1996 and as prescribed in the relevant rules, is funded every year by the way of transfer from Beneficial Owners Protection Reserve. The FundÂs application for registration as public charitable trust is pending with Joint Charity Commissioner, Greater Mumbai Region, Mumbai.

3. Estimated amount of contracts to be executed on capital account and not provided for (net of advances) Rs.10183 thousands (Previous Year Rs.2350 thousands).

4. Fees towards users facilities (Schedule 7) are on account of facilities provided such as telecom leased lines, software and insurance.

5. VSAT connectivity facilities provided by the Stock Exchange, Mumbai (BSE) are used by the Company as also by CompanyÂs Depository Participants (DPÂs) and other users. As agreed with the BSE the user charges invoiced by the Company to the DPs and other users are recovered by the Company and passed on to the BSE and therefore, are not recognised as CompanyÂs revenues: Rs.15068 thousands (Previous Year Rs. 14019 thousands)

6. a) ÂOther LiabilitiesÂ in Schedule 6 include the balance of Rs.Nil (Previous year Rs. 680 thousands) net of Rs.2983 thousands (Previous year Rs.3459 thousands) spent during the year out of the penalty collected on account of late transfer of securities by Depository Participants to beneficial owner accounts and to be utilised for Investor Education and Awareness Programme as per SEBI requirements.

b) No amount is due to be credited to Investor Education & Protection Fund as required under section 205C of the Companies Act, 1956.

7. In the opinion of the Management, the Current Assets, Loans & Advances have a value on realisation in the ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and other known liabilities is adequate and not in excess of what is required.

8. During the year, the rates of depreciation on fixed assets has been revised as stated in para no. A (iv) above. In compliance with the Accounting standard6 Depreciation Accounting, the unamortised depreciable amount of the asset is charged to revenue over the revised remaining useful life. Accordingly, charge of depreciation to the Profit & Loss A/c for the year is higher by Rs.26,387 thousands and profit before tax and net block of fixed assets is lower to that extent.

9. The Company has made a strategic and long term investments of Rs.10000 thousands in the equity shares of the subsidiary company CDSL Ventures Limited and also given a loan of Rs.19600 thousands to the said subsidiary company. The management is confident of realising its investments and recovering the loan in due course.

10. The Company has determined the liability for Employee Benefits as at 31st March, 2008 in accordance with the revised Accounting Standard 15 - Employee Benefits issued by ICAI.

11. As at 31st March, 2008, no supplier has intimated the company about its status as Micro or Small Enterprises or its Registration with appropriate authority under the Micro, Small and Medium Enterprises Development Act, 2006.

Mar 31, 2007

1. Contingent liability not provided for :-

a) In the matter of writ petition filed during the year 2003-04 before the Honble High Court of Bombay by Mr. B. G. Daga, the then Managing Director for his alleged wrongful removal, inter alia, having financial consequences, which is pending.

b) Claims against the Company not acknowledged as debts;

The Company is a party in certain legal proceedings filed by beneficial owners/third parties in the normal course of business. The Company does not expect the outcome of these proceedings to have any material adverse effect on its financial conditions, results of operations and cash flow.

c) In the IPO related matter, a penalty of Rs. 3 crores has been imposed by the Adjudication Officer, SEBI. CDSL disputes the tenability of the order and is in the process of preferring an appeal before the Securities Appellate Tribunal (SAT).

2. SEBI passed Disgorgement Order on 21t November,2006 directing CDSL and two of its depository participants to jointly and severally disgorge a sum of Rs.25.80 crores . On an appeal, Securities Appellate Tribunal (SAT) has passed an interim order staying the operation of the said order.

3. Estimated amount of contracts to be executed on capital account and not provided for (net of advances) Rs.2350 thousands (Previous Year Rs. 1 136 thousands).

Notes :

a) Appointment of Shri V.V.Raut as Managing Director & CEO is subject to any order that may be passed by the Bombay High Court in a writ petition as mentioned in para no.B(1)(a) above.

b) The above figures exclude provision for leave encashment, contribution to the approved gratuity fund and group mediclaim, which are actuarially determined for the Company as a whole.

c) * * Includes Rs.415 thousands towards performance linked bonus subject to the approval of shareholders.

6. Fees towards users facilities (Schedule 7) are on account of facilities provided such as telecom leased lines, software and insurance.

9. VSAT connectivity facilities provided by the Stock Exchange, Mumbai (BSE) are used by the Company as also by Companys Depository Participants (DPs) and other users. As agreed with the BSE the user charges invoiced by the Company to the DPs and other users are recovered by the Company and passed on to the BSE and therefore, are not recognised as Companys revenues: Rs 14019 thousands (Previous Year Rs. 14450 thousands)

10. (a) "Other Liabilities" in Schedule 6 include the balance of Rs. 680 thousands (Previous year Rs. 2675 thousands) net of Rs.3459 thousands (Previous year Rs.2173 thousands) spent during the year out of the penalty collected on account of late transfer of securities to beneficial owner accounts and to be utilised for Investor Education and Awareness Programme as per SEBI requirements.

(b) No amount is due to be credited to Investor Education & Protection Fund as required under section 205C of the Companies Act, 1956.

11. In the opinion of the Management, the Current Assets, Loans & Advances have a value on realisation in the ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and other known liabilities is adequate and not in excess of what is required.

12. During the year, the rates of depreciation on fixed assets has been revised as stated in para no. A (iv) above. In compliance with the Accounting standard - 6

"Depreciation Accounting ",such change has been given effect to retrospectively and accordingly, charge of depreciation to the Profit & Loss A/c for the year is higher by Rs.21,659 thousands (including Rs. 16,575 thousands for the earlier years) and profit before tax and net block of fixed assets is lower to that extent.

13. During the year the Company has made a strategic and long term investments of Rs. 10000 thousands in the equity shares of the subsidiary company CDSL Ventures Limited and also given a loan of Rs. 13000 thousands to the said subsidiary company. The management is confident of realising its investments and recovering the loan in due course.

14. Previous years figures have been regrouped and rearranged wherever necessary, to conform to the current years presentation.

Mar 31, 2005

1) Contingent Liability not provided for, being not ascertainable, in the matter of writ petition filed during the year 2003-2004 before the Honble High Court of Bombay by Mr. B G Daga, the then Managing Director for his alleged wrongful removal, which is pending.

2) Estimated amount of contracts to be executed on capital account and not provided for (net of advances) Rs. 1 2722 thousands (Previous Year Rs.234 thousands).

b) Loans & Advances include Rs.1248 thousands (Previous Year Rs. 1248 thousands) due from the Ex. Chairman & Managing Director (CMD) Late Shri M.G. Damani being excess remuneration paid in earlier years as a result of the Central Governments refusal to approve the remuneration (though approved by the shareholders). The efforts made by the company to recover the excess amount from the legal heirs of late Shri M.G.Damani have not yielded the desired results. The company has since made an application to the Central Government to permit the waiver of recovery of amount of excess remuneration from the said legal heirs in terms of provisions of section 309(5B) of the Companies Act, 1956.

3) Fees towards users facilities are on account of facilities provided such as telecom leased lines, software maintenance and insurance.

4) VSAT connectivity facilities provided by the Stock Exchange, Mumbai (BSE) are used by the Company as also by Companys Depository Participants (DPs) and other users. As agreed with the BSE the user charges invoiced by the Company to the DPs and other users are recovered by the Company and passed on to the BSE and therefore, are not recognised as Companys revenues: Rs. 14990 thousands (Previous Year Rs. 15012 thousands).

5) (a) "Other Liabilities" in Schedule 6 includes the balance of Rs. 2448 thousands (Previous year Rs. 3465 thousands) net of Rs. 2657 thousands (Previous year Rs. 613 thousands) spent during the year out of the penalty collected on account of late transfer of securities to beneficial owner accounts and to be utilised for Investor Education and Awareness Programme as per SEBI requirements

(b) No amount is due to be credited to Investor Education & Protection Fund as required under section 205C of the Companies0 Act, 1956.

6) In the opinion of the Management, the Current Assets, Loans & Advances have a value on realisation in the ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and other known liabilities is adequate and not in excess of what is required.

7) Previous years figures have been regrouped and rearranged wherever necessary.

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