Central Depository Services (India) Ltd

To,

The Members,

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

A. Financial Highlights:

(Rs. in Lakh)

(i) Consolidated Results:

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

(ii) Standalone Results:

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

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

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

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

C. General Reserves:

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

D. Dividend:

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

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

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

A. Change in Capital Structure:

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

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

B. Proposal of issuance of Bonus Shares

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

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

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

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

Indian Capital Markets

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

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

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

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

A. Depository Participants and Service Centers:

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

B. Beneficial Owner Accounts:

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

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

C. Securities Admitted:

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

D. Position of Securities held in the System:

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

4. Initiatives Towards Enabling and Empowerment of Investors:

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

A. Introduction of T+0 Rolling Settlement Cycle:

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

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

B. Application Programme Interface (API):

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

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

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

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

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

-Multilingual eCAS

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

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

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

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

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

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

A. Investor Awareness/Education Seminars:

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

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

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

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

B. Social Media Campaign:

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

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

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

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

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

C. Website Resources:

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

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

6. New Advancements

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

A. Directors and Key Managerial Personnels (KMPs):

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

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

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

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

Retirement by rotation and subsequent re-appointment:

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

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

Resignation of Director:

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

Appointment of Director:

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

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

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

Changes in KMPs/Senior Management:

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

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

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

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

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

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

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

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

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

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

Retirement by Rotation:

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

C. Declaration from Directors:

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

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

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

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

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

D. Declaration by the Company:

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

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

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

F. Audit Committee Recommendations:

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

G. Performance Evaluation of the Board:

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

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

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

(ii) the Board as a whole; and

(iii) various committees of the Board.

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

Internal Evaluation

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

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

External Evaluation

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

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

H. Directors' Responsibility Statement:

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

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

ii. accounting policies have been selected and applied them consistently and the judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

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

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

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

I. Nomination and Remuneration Policy:

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

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

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

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

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

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

J. Internal Financial Control Systems and their Adequacy:

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

K. Compliance with Secretarial Standards:

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

L. Annual Return:

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

8. Subsidiary Companies, Associate Companies and Joint Ventures

Details of Subsidiary Companies, Associate Companies and Joint Ventures:

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

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

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

B. Change in the nature of business:

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

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

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

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

B. Amount of Unpaid and Unclaimed Dividend:

A. Deposits:

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

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

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

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

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

A. Statutory Auditors & Audit Report:

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

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

B. Details in respect of frauds reported by auditors:

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

C. Internal Auditors:

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

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

D. Secretarial Auditors and Secretarial Audit Report:

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

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

E. Annual Secretarial Compliance Report:

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

F. Cost Records:

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

A. Conservation of energy, technology absorption

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

B. Foreign exchange earnings and outgo:

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

(Rs. in Lakhs)

15. Risk Management and Compliance:

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

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

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

16. Corporate Social Responsibility (CSR):

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

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

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

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

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

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

Corporate Social Responsibility: fcdslindia.com)

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

17. Vigil Mechanism/Whistle-Blower Policy:

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

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

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

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

18. Insider Trading Regulations:

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

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

19. Related Party Transactions:

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

The Disclosures of Related Party Transactions for Annual Report pursuant to clause 2 of para A of Schedule V of the SEBI

Listing Regulations are stated below:

2 In the Accounts of Central Depository Services (India) Limited ('CDSL') (Subsidiary Company)

3 In the Accounts of Central Depository Services (India) Limited ('CDSL') (Holding Company)

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

(Rs. in Lakhs)

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

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

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

A. Human Resource Development:

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

B. Particulars of Employees:

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

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

Human resources are the most valuable asset for our organisation and to engage the employees we continued our best practices on training & development and employee engagement for the entire financial year. During FY 2023-24 Company focused on the employees' wellness, physical & mental fitness by conducting in person and offline sessions on various topics including Yoga, Meditation, Diet, Eyecare, Dental care, Breathing & Stretching Workouts, Self-defense sessions etc. We have successfully conducted various training programmes from time to time focusing on improving the behavioural competencies, skill enhancement and the technical competencies of our employees. Approx. 200+ employees attended these training programmes.

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

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

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

* Ceased to be KMP with effect from June 05,2024.

A. Management Discussion and Analysis:

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

F. Prevention of Money Laundering Act:

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

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

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

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

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

During the year under review:

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

ACKNOWLEDGEMENT:

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